Determinants of Banking Sector Performance in Pakistan

Beenishameer M.Ameer
Beenishameer M.Ameer * § BBA(HONS), MS(FINANCE)
Contact
§ The Islamia University of Bahawalpur The Islamia University of Bahawalpur

Send Message

To: Author

Determinants of Banking Sector Performance in Pakistan

Article Fingerprint

ReserarchID

MBRYYY59

Determinants of Banking Sector Performance in Pakistan Banner

AI TAKEAWAY

Connecting with the Eternal Ground
Access Review Comments
  • English
  • Afrikaans
  • Albanian
  • Amharic
  • Arabic
  • Armenian
  • Azerbaijani
  • Basque
  • Belarusian
  • Bengali
  • Bosnian
  • Bulgarian
  • Catalan
  • Cebuano
  • Chichewa
  • Chinese (Simplified)
  • Chinese (Traditional)
  • Corsican
  • Croatian
  • Czech
  • Danish
  • Dutch
  • Esperanto
  • Estonian
  • Filipino
  • Finnish
  • French
  • Frisian
  • Galician
  • Georgian
  • German
  • Greek
  • Gujarati
  • Haitian Creole
  • Hausa
  • Hawaiian
  • Hebrew
  • Hindi
  • Hmong
  • Hungarian
  • Icelandic
  • Igbo
  • Indonesian
  • Irish
  • Italian
  • Japanese
  • Javanese
  • Kannada
  • Kazakh
  • Khmer
  • Korean
  • Kurdish (Kurmanji)
  • Kyrgyz
  • Lao
  • Latin
  • Latvian
  • Lithuanian
  • Luxembourgish
  • Macedonian
  • Malagasy
  • Malay
  • Malayalam
  • Maltese
  • Maori
  • Marathi
  • Mongolian
  • Myanmar (Burmese)
  • Nepali
  • Norwegian
  • Pashto
  • Persian
  • Polish
  • Portuguese
  • Punjabi
  • Romanian
  • Russian
  • Samoan
  • Scots Gaelic
  • Serbian
  • Sesotho
  • Shona
  • Sindhi
  • Sinhala
  • Slovak
  • Slovenian
  • Somali
  • Spanish
  • Sundanese
  • Swahili
  • Swedish
  • Tajik
  • Tamil
  • Telugu
  • Thai
  • Turkish
  • Ukrainian
  • Urdu
  • Uzbek
  • Vietnamese
  • Welsh
  • Xhosa
  • Yiddish
  • Yoruba
  • Zulu
Font Type
Font Size
Font Size
Bedground

Abstract

The purpose of this research is to examine the relationship between bank-specific and macro-economic indicator over bank performance by using data of ten Pakistani banks including five conventional banks and five Islamic banks over the period 2010-2014. Dependent variable taken for this study is Return on assets, Return on Equity to measure the Banking Sector Performance and independent variable taken for this study including specific factors (Size, Capital, Loan, Deposits, Expenses, Credit Risk and Liquidity) and macroeconomic factors (Gross Domestic Product, Foreign Direct investment and Inflation).This paper uses the correlation and regression method to investigate the impact of size, loans, capital, deposits, liquidity, credit risk, expenses, economic growth, inflation and foreign direct investment on major performance indicators. The empirical results have found strong evidence that both internal and external factors have a strong influence on the performance. A result of study denotes that credit risk, expenses and inflation have indirect link with the bank performance, whereas size of bank, capital, deposit and loan have a significant positive relation with bank’s performance and liquidity have insignificant positive relation with Performance of bank. This study reveals the positive insignificant relation between GDP and performance but significant relation between FDI and performance and indirect relation between inflation and profitability. The results of the study are of value to both academics and policy makers.

References

78 Cites in Article
  1. K Abhor (2005). Factors influencing the profitability of domestic and foreign commercial banks in the European Union.
  2. C Alexio,V Sofoklis (2009). Determinants of Bank Profitability: Evidence from the Greek Banking Sector.
  3. M Ali (2010). Evaluating the Effects of Deposit Dollarization in Bank Profitability.
  4. F Allen,D Gale (2004). Financial intermediaries and markets.
  5. I Anis Chowdhury (2013). The Great Recession, jobs and social crises: policies matter.
  6. Anon (2013). Unknown Title.
  7. Y Anwar (2011). Role of Financial Institutions and Capital Markets in Pakistan's Economy. Governor's Speeches.
  8. Panayiotis Athanasoglou,Sophocles Brissimis,Matthaios Delis (2005). Bank-Specific, Industry-Specific and Macroeconomic Determinants of Bank Profitability.
  9. Carlos Barros,Candida Ferreira,Jonathan Williams (2010). Analysing the determinants of performance of best and worst European banks: A mixed logit approach.
  10. Allen Berger,David Humphrey (2003). Efficiency of financial institutions: International survey and directions for future research.
  11. Jacob Bikker,H Hu (2002). Cyclical Patterns in Profits, Provisioning and Lending of Banks.
  12. P Bologna (2013). Is there a role for funding in explaining recent US bank failures? IMF working paper.
  13. Philip Bourke (2013). Concentration and other determinants of bank profitability in Europe, North America and Australia.
  14. C Brooks (2008). Introduction of economic finance.
  15. D Alper -A (2011). Unknown Title.
  16. A Burki,G Niazi (2006). The Effects of Privatization, Competition and Regulation on Banking Efficiency in Pakistan, 1991 -2000.
  17. A Campbell (2007). Banking solvency and the problem of nonperforming loans.
  18. V Chiorazzo,C Milani,F Salvini (2008). Income diversification and bank performance: Evidence from Italian banks.
  19. C Chris (2006). Is Islamic banking religiously sound?.
  20. A Deger,A Adem (2011). Bank Specific and Macroeconomic Determinants of Commercial Bank Profitability.
  21. B Deloof (2013). The determinants of European bank profitability.
  22. A Demirguc-Kunt,H Huizinga (2001). Determinants of Commercial Bank Interest Margins and Profitability: Some International Evidence.
  23. Disinter (2012). Deflation causes unemployment.
  24. Dr,Ahmed Salman,B (2010). Profitability of domestic Pakistani Banks: PANELDATA EVIDENCE FOR THE PERIOD.
  25. M Francis (2001). Impact of price instability on unemployment and Pakistan economic growth: An econometric approach.
  26. A García,S Gavila,D Santabárbara (2009). What explains the low profitability of Chinese banks.
  27. Linda Goldberg (2004). Financial-Sector Foreign Direct Investment and Host Countries: New and Old Lessons.
  28. D Grigorian,V Manole (2002). Determinants of Commercial Bank Performance in Transition.
  29. S Gul,F Irshad,K Zaman (2011). Factors Affecting Bank Profitability in Pakistan.
  30. K Hamdani (2011). Inward FDI in Pakistan and its policy context.
  31. Ahasanul Haque,Jamil Osman,Ahmad Hj Ismail (2003). Factor Influences Selection of Islamic Banking: A Study on Malaysian Customer Preferences.
  32. M Hasan,J Dridi (2009). The effects of the global crisis on Islamic and conventional banks: a comparative study.
  33. D Haskell (2012). Profitability of domestic Pakistani Banks.
  34. M Hassan,A.-H Bashir (2003). Determinants of Islamic banking profitability.
  35. A Hunjra,A Bashir (2014). Comparative Financial Performance Analysis of Conventional and Islamic Banks in Pakistan.
  36. H Hussain,G Bhatti (2010). Evidence on conduct Performance Hypothesis in Pakistani Commercial Banks.
  37. B Ibe (2013). Microfinance Profitability: Does financing choice matter.
  38. M Jaffar,I Manarvi (2005). Performance Comparison of Islamic and Conventional Banks Pakistan.
  39. Anwar Javaid,Zaman,Gaffor (2011). Analyzing the determinants of performance of best and worst European banks.
  40. John Boyd,Ross Levine,Bruce Smith (2000). The impact of inflation on financial sector performance.
  41. José Brambila Macias,I (2009). Cross-border bank lending versus FDI in Africa's growth story.
  42. S Kablan,O Yousfi (2012). Efficiency of Islamic and Conventional Banks in countries with Islamic banks.
  43. S Kakakhel,F Raheem,M Tariq (2013). Performance comparison between Conventional and Islamic Banking in Pakistan.
  44. Delta Khoirunissa (2007). Consumers’ Preference toward Islamic Banking (Case Study in Bank Muamalat Indonesia and Bank BNI Syariah).
  45. H Khrawish (2011). The Determinants of CEO Cash Compensation in Commercial Banks: Evidence from Jordan.
  46. K Kosmidou (2008). The determinants of banks' profits in Greece during the period of EU financial integration.
  47. R Levine,N Loayza,T Beck (2000). Financial intermediation and growth: Causality and causes.
  48. S Li (2011). The Causality and Economic Impact of FDI inflows from trade partners in pakistan.
  49. G Mamatzakis (2010). The determinants of the Tunisian deposit banks performance.
  50. D Mancka (2011). LAS VEGAS SANDS CORP., a Nevada corporation, Plaintiff, v. UKNOWN REGISTRANTS OF www.wn0000.com, www.wn1111.com, www.wn2222.com, www.wn3333.com, www.wn4444.com, www.wn5555.com, www.wn6666.com, www.wn7777.com, www.wn8888.com, www.wn9999.com, www.112211.com, www.4456888.com, www.4489888.com, www.001148.com, and www.2289888.com, Defendants..
  51. A Mobarek,A Kalonov (2013). Comparative Performance Analysis between Conventional and Islamic banks: empirical evidence from OIC countries.
  52. P Molyneux,J Thorton (2008). The determinants of European bank profitability.
  53. P Muriu (2011). Microfinance Profitability: Does financing choice matter.
  54. Samy Naceur,Mohamed Goaied (2001). The determinants of the Tunisian deposit banks' performance.
  55. D Olson,T Zoubi (2008). Using accounting ratios to distinguish between Islamic and conventional banks.
  56. S Parashar,J Venkatesh (2010). How did Islamic banks do during global financial crisis?.
  57. F Pasiouras,K Kosmidou (2007). Factors influencing the profitability of domestic and foreign commercial banks in the European Union.
  58. Dr Subhan,Muhammad Gulzar (2010). Impact of Education on Economic Growth of Pakistan.
  59. I Ramlall (2009). Bank-Specific, Industry-Specific and Macroeconomic, Determinants of Profitability in Taiwanese Banking System.
  60. L Ratnovski,R Huang (2009). Why are Canadian Banks more resilient.
  61. S Rattray (2012). study-big-data-can-predict-price-inflation.
  62. Waliur Rehman,Goher Fatima,Waqar Ahmad (2011). An Empirical Analysis of Financial Reforms in Pakistan: Does it Affect Economic Growth?.
  63. C Robson (2002). Real world research.
  64. R Said,M Tumin (2013). Ratios of Commercial Banks in Malaysia and China.
  65. A Samad (2004). Performance of Interest-free Islamic banks vis-à-vis interest based Conventional Banks of Bahrai.
  66. S Sasrosuwito (2011). Post Crisis Indonesian Banking System Profitability: 1Bank Specific, Industry-Specific, and Macroeconomic Determinants.
  67. M Saunders,P Lewis,Thron Hill,A (2009). Research methods for business students 6.
  68. Sbp (2012). BANKING SUPERVISION AND INSIDER DEALING.
  69. K Siraj,S Pillai (2012). Comparative study on performance of Islamic and Conventional Banks in GCC region.
  70. C Staikouras,G Wood (2003). The Determinants of Bank Profitability in Europe.
  71. (2012). State bank of Pakistan.
  72. Fadzlan Sufian (2009). Determinants of bank efficiency during unstable macroeconomic environment: Empirical evidence from Malaysia.
  73. T Syed Imran Rais (2012). PUBLIC DEBT AND ECONOMIC GROWTH IN PAKISTAN.
  74. A Trujillo-Ponco (2012). What determines The Profitability of Banks? Evidence from Spain.
  75. Wdi (2012). IMF working paper number.
  76. R Yin (2003). Case study research: Design and method.
  77. Yong Tan,Christos Floros (2012). Bank profitability and inflation: the case of China.
  78. Rami Zeitun (2012). Macro and Micro Determinants of Islamic and Conventional Banks Performance and Financial Crises in GCC Countries.
Show All References
Download References

Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

Data Availability

Not applicable for this article.

How to Cite This Article

Beenishameer M.Ameer. 2015. "Determinants of Banking Sector Performance in Pakistan". Global Journal of Management and Business Research - C: Finance GJMBR-C Volume 15 (GJMBR Volume 15 Issue C6).

More Citation Formats

Download Citation

  • Open Access
  • CC-BY-ND-NC 4.0
Download Article
Access OJS
Journal Specifications

Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

Keywords
Not Found
Classification
GJMBR-C Classification JEL Code: E59
  • Submission ReceivedFebruary 11, 2015
  • Peer Review Double Blind
    Handling Editor
  • Accepted March 5, 2015
  • Published March 15, 2015
Version of record

v1.2

Issue date
July 20, 2015

Language
English
Order Article Reprint
Experiance in AR

Explore published articles in an immersive Augmented Reality environment. Our platform converts research papers into interactive 3D books, allowing readers to view and interact with content using AR and VR compatible devices.

View in VR
Read in 3D

Your published article is automatically converted into a realistic 3D book. Flip through pages and read research papers in a more engaging and interactive format.

View in 3D
Article Matrices
Total Views: 1.1K
Total Downloads: 85
All Trends

Request Access

Please fill out the form below to request access to this research paper. Your request will be reviewed by the editorial or author team.
X

This is the heading

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.

High-quality academic research articles on global topics and journals.

Determinants of Banking Sector Performance in Pakistan

Beenishameer M.Ameer
Beenishameer M.Ameer <p>The Islamia University of Bahawalpur</p>
  • Submission ReceivedFebruary 11, 2015
  • Peer Review Double Blind
    Handling Editor
  • Accepted March 5, 2015
  • Published March 15, 2015