Bank Peculiar, Macroeconomic Causes and Profitability of Banks: An Evidence from Pakistan

Malik, R., Baig, S. A., Abbass, Z., & Zia-ur-Rehman, M. (2015). Bank Peculiar, Macroeconomic Causes and Profitability of Banks: An Evidence from Pakistan. International Journal of Information, Business and Management, 7(4), 14.

28 Pages Posted: 16 Dec 2019

See all articles by Robina Malik

Robina Malik

Government College University - Faisalabad

Sajjad Baig

National Textile University

Zaheer Abbas

International Islamic University

Dr. Muhammad Zia ur Rehman

National Textile University, Faisalabad; International Islamic University, Islamabad

Date Written: November 1, 2015

Abstract

Banks play an important and vital role in the development of the economies. Its importance can’t be neglected. The aim of this study is to investigate the impact of internal and external causes which affect the profitability. Internal causes include Size (LnTA), Capital (CAP), Liquidity (LQD), debt to equity ratio (DE), Non performing loan to Gross advances (NPL), portfolio composition (PC), Loan to Total Assets (LA) whereas external causes include Gross Domestic Product(GDP), Inflation(INF), and Unemployment (UNMP). Return on Assets and Return on Equity are used as a measure of profitability. Data is collected for twelve (12) variables of twenty one (21) banks including four (4) public and seventeen (17) private banks, for the year of 2006-2011, from the annual reports of banks, index mundi and financial statement analysis of State Bank of Pakistan (SBP). EViews is used for deriving the results of descriptive, correlation and panel Regression analysis. Results show that size has positive significant effect in both models (ROA&ROE).

Keywords: Profitability; Internal and External causes; Public and Private Banks of Pakistan

JEL Classification: B22

Suggested Citation

Malik, Robina and Baig, Sajjad and Abbas, Zaheer and Zia ur Rehman, Muhammad, Bank Peculiar, Macroeconomic Causes and Profitability of Banks: An Evidence from Pakistan (November 1, 2015). Malik, R., Baig, S. A., Abbass, Z., & Zia-ur-Rehman, M. (2015). Bank Peculiar, Macroeconomic Causes and Profitability of Banks: An Evidence from Pakistan. International Journal of Information, Business and Management, 7(4), 14., Available at SSRN: https://ssrn.com/abstract=3495251

Robina Malik

Government College University - Faisalabad ( email )

Allama Iqbal Road
Faisalabad, NM Punjab 38000
Pakistan

Sajjad Baig

National Textile University ( email )

National Textile University
Faisalabad, Punjab 38000
Pakistan

Zaheer Abbas

International Islamic University ( email )

Pakistan

Muhammad Zia ur Rehman (Contact Author)

National Textile University, Faisalabad ( email )

Sheikhupura Road, Faisalabad
Faisalabad, Punjab 38000
Pakistan

International Islamic University, Islamabad ( email )

Islamabad, 44000
Pakistan

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