IDENTIFYING THE ANTECEDENTS OF PROFITABILITY OF BANKS IN PAKISTAN: A COMPARATIVE ANALYSIS OF CONVENTIONAL AND ISLAMIC BANKS

Tooba Asif (), Mehwish Shehzad (), Abid Shahzad Aslam (), Waqas Khan () and Abdul Sattar ()
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Tooba Asif: University of Lahore, Lahore, Pakistan
Mehwish Shehzad: University of Lahore, Lahore, Pakistan
Abid Shahzad Aslam: University of Lahore, Lahore, Pakistan
Waqas Khan: University of Lahore, Lahore, Pakistan
Abdul Sattar: University of Lahore, Lahore, Pakistan

European Journal of Accounting, Finance & Business, 2017, vol. 5, issue 13, 30-47

Abstract: The survival of the banks is mainly based upon profits earned from its loans issued to the general public. The purpose of this research is to study the impact of nonperforming loans, loan loss provisions, loan to deposit and size of the bank on the profitability of both Islamic and conventional banks of Pakistan. Secondary data was used from the annual report of the selected banks from (2007-2014). Ordinary least square regression was used and results showed that profitability of conventional banks has negative relationship with non-performing loan and positive relationship with size of the bank and loan to deposit. On the other hand, the profitability of Islamic banks showed positive and significant relationship with size of the bank while nonperforming loans, loan loss provisions and loan to deposits were found insignificant in Islamic banking sector.

Date: 2017
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