Banking sector profitability, before, during and after Global Financial Crisis: Evidence from a developing economy

Shoaib Nisar, Ke Peng, Susheng Wang and Jaleel Ahmed
Additional contact information
Shoaib Nisar: School of Economics and Management, Harbin Institute of Technology, Shenzhen Graduate School, Shenzhen, China
Ke Peng: School of Economics and Management, Harbin Institute of Technology, Shenzhen Graduate School, Shenzhen, China
Susheng Wang: School of Economics and Management, Harbin Institute of Technology, Shenzhen Graduate School, Shenzhen, China
Jaleel Ahmed: Department of Management Sciences, Capital University of Science and Technology, Islamabad, Pakistan

International Journal of Finance & Banking Studies, 2017, vol. 6, issue 3, 22-38

Abstract: This study grants empirical support to the fact that profitability of the Pakistani banking sector was reduced during 2008-2009 and among other factors this reduction was accredited to the global financial crisis and resulting increased investments portfolio in total assets. We have used panel data of all Pakistani scheduled banks during 2005-2012. We proved theoretically and empirically that fixed effects model is appropriate for this study. Second stage analysis confirms the above results and shows that the profitability of Pakistani banking sector was higher in pre and post crisis years than in financial crisis period. Profitability was relatively lower in the after crisis years then in before crisis years because of the residual effects of the global financial crisis. In third stage analysis we found that private and foreign banks were more affected by financial crisis than public sector, specialized and Islamic banks. Our results are robust to alternate measures of profitability. In context of developing countries this study will help bank managers and the regulators to stay better prepared to face any financial crisisin future.

Keywords: Global Financial Crisis; Investments; Banking Sector Profitability; Fixed Effects Model. Pakistan (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.ssbfnet.com/ojs/index.php/ijfbs/article/view/25/26 (application/pdf)
https://www.ssbfnet.com/ojs/index.php/ijfbs/article/view/25 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rbs:ijfbss:v:6:y:2017:i:3:p:22-38

Access Statistics for this article

International Journal of Finance & Banking Studies is currently edited by Prof.Dr.Hasan Dincer

More articles in International Journal of Finance & Banking Studies from Center for the Strategic Studies in Business and Finance IJFBS Editorial Office, IMU, School of Business. Contact information at EDIRC.
Bibliographic data for series maintained by Hasan Dincer ().