Factors Affecting Bank Profitability in Pakistan

Sehrish Gul, Faiza Irshad () and Khalid Zaman ()
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Faiza Irshad: COMSATS Institute of Information Technology, Abbottabad, Pakistan
Khalid Zaman: COMSATS Institute of Information Technology, Abbottabad, Pakistan

Romanian Economic Journal, 2011, vol. 14, issue 39, 61-87

Abstract: The purpose of this research is to examine the relationship between bank-specific and macro-economic characteristics over bank profitability by using data of top fifteen Pakistani commercial banks over the period 2005-2009. This paper uses the pooled Ordinary Least Square (POLS) method to investigate the impact of assets, loans, equity, deposits, economic growth, inflation and market capitalization on major profitability indicators i.e., return on asset (ROA), return on equity (ROE), return on capital employed (ROCE) and net interest margin (NIM) separately. The empirical results have found strong evidence that both internal and external factors have a strong influence on the profitability. The results of the study are of value to both academics and policy makers.

Keywords: Financial Institutions; Banks; Profitability; Return on Assets; Correlation; Pooled OLS; Pakistan. (search for similar items in EconPapers)
JEL-codes: G21 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (57)

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Persistent link: https://EconPapers.repec.org/RePEc:rej:journl:v:14:y:2011:i:39:p:61-87

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