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Identifying The Antecedents Of Profitability Of Banks In Pakistan: A Comparative Analysis Of Conventional And Islamic Banks

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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)

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.

Suggested Citation

  • Tooba ASIF & Mehwish SHEHZAD & Abid Shahzad ASLAM & Waqas KHAN & Abdul SATTAR, 2017. "Identifying The Antecedents Of Profitability Of Banks In Pakistan: A Comparative Analysis Of Conventional And Islamic Banks," European Journal of Accounting, Finance & Business, "Stefan cel Mare" University of Suceava, Romania - Faculty of Economics and Public Administration, West University of Timisoara, Romania - Faculty of Economics and Business Administration, vol. 5(13), pages 30-47, June.
    • Handle: RePEc:scm:ejafbu:v:5:y:2017:i:14:p:30-47
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    References listed on IDEAS

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    1. Athanasoglou, Panayiotis P. & Brissimis, Sophocles N. & Delis, Matthaios D., 2008. "Bank-specific, industry-specific and macroeconomic determinants of bank profitability," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 18(2), pages 121-136, April.
    2. Brunilda Duraj & Elvana Moci, 2015. "Factors Influencing the Bank Profitability - Empirical Evidence from Albania," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(3), pages 483-494, March.
    3. Brunilda DURAJ & Elvana MOCI, 2015. "Factors Influencing The Bank Profitability – Empirical Evidence From Albania," Romanian Economic Business Review, Romanian-American University, vol. 10(1), pages 60-72, March.
    4. Brunilda Duraj & Elvana Moci, 2015. "Factors Influencing the Bank Profitability - Empirical Evidence from Albania," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(3), pages 483-494.
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