Determinants of Bank Profitability

Abstract

Banks are the most vital financial intermediaries in economy, which has a profitable banking industry; in order to survive undesirable shock as well as subsidize the constancy under the whole economy. However, the main purpose of this research is in the direction of analyzing factors affecting banks’ effectiveness all over Pakistan by means of sets of targeted facts and figures of twenty panels from 2005 to 2015. This study is developed with the help of AOLS technique which is used to examine the effect of different factors such as resources, debts, justice, securities, economic growth, price increases, price decreases, and market capitalization on major profitability signs such as (ROA), (ROE), (ROCE) and (NIM). The experimental consequences analyzed solid facts which stated the following conclusion, i.e., internal factors and external factors create an adverse impact on the level of profitability. An outcome by this research is important to different researchers. This research study proposed that by the concentration & reengineering the internal drivers the banks can improve its profitability and performance.

Market Capitalisation and Financial Performance: Evidence from Banking Listed Company in Indonesia

“…Higher the ROE means banks are efficient in generating income and growth from its equity financing (Y. Sultan, 2021). ROE as a profitability ratio indicates the issuer's ability to generate profits, if ROE increases, then market capitalization also increases, and vice versa; in other words, ROE and market capitalization have a unidirectional relationship (Zhou & Shon, 2012).…”

Influence of Liquidity and Profitability on Profits Growth of Nigerian Pharmaceutical Firms

“…They can withstand different measurements, requirements, and time frames. Sultan (2021), using sets of targeted data from 20 panels between 2005 and 2015, examined factors affecting banks' performance throughout Pakistan. The AOLS technique, which is used to examine the impact of various variables like funds, repayments, securities, economic expansion, increased prices, price declines, and share price on key financial indicators such as (ROA), (ROE), (ROCE), and other metrics, was used by him to establish the study (NIM).…”