Analysis of Profitability of Banks; Comparatives Study of Domestic and Foreign Banks in Pakistan

Amanullah  Parhyar; Muhibullah  Nahrio; Raza Ali  Tunio; Waqar Ahmed  Sethar

Analysis of Profitability of Banks; Comparatives Study of Domestic and Foreign Banks in Pakistan

Authors

Amanullah Parhyar Lecturer, Department of Business Administration, Government College University Hyderabad. Author
Muhibullah Nahrio Lecturer, Department of Business Administration Shaheed Benazir Bhutto University, Sanghar Campus. Author
Raza Ali Tunio Lecturer, Department of Business Administration, Government College University Hyderabad. Author
Waqar Ahmed Sethar Lecturer, Institute of Science, Technology and Development, Mehran University of Engineering and Technology, Jamshoro. Author

Keywords:

return on assets, equity to total assets, deposits to total assets, loan to total assets

Abstract

This study was conducted to observe the determinants of profitability among domestic banks and foreign banks, owned organizations listed in Pakistan, whatever the analysis which dependents variable return on assets, others independent variables equity assets, deposit to total assets and loans to total assets which are the measured with annual financial statements reports of bank's organizations. The research aimed among the domestic banks as well as foreign banks, sampling of data is based on the availability of data, annual financial statements of the bank's listed companies, because reliability and availability of data source are selected, such as data is analyzed by using descriptive and multivariate statistical techniques containing descriptive correlation and regression model techniques. According to the results abstracted from analysis, equity to assets have a negative relationship with return on assets in term of both foreign banks and domestic banks, while the loan to assets and deposit to assets have a positive relationship with return on assets with a high significance level, while these variables have same sought of relationship with lowest significance level. That’s why the hypotheses related to the foreign banks are accepted and the hypotheses related to the domestic banks may be challenged. From this study, we have conducted recommendations to enterprises as well as executives banking sector of Pakistan. Financial statements through return assets increase their profitability; banks should decrease the level of baking kinds of loans. The interest rate of domestic and foreign banks is high level, difficult for a customer who took a loan from that organization.

https://doi.org/10.5281/zenodo.10351633

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