Impact of Internal and External Factors on Bank Performance in Pakistan
International and Public Affairs
Volume 2, Issue 4, December 2018, Pages: 66-77
Received: Oct. 26, 2018; Accepted: Nov. 12, 2018; Published: Dec. 10, 2018
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Authors
Khurram Aziz Fani, Department of Commerce, University of the Punjab, Gujranwala, Pakistan
Vina Javed Khan, Department of Commerce, University of the Punjab, Gujranwala, Pakistan
Bezon Kumar, Department of Economics, Varendra University, Rajshahi, Bangladesh
Bidur Kumar Pk, Bangladesh Bank, Rajshahi, Bangladesh
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Abstract
The study mainly explores the impact of banks’ internal (CAMEL factors) and external factors (inflation, GDP, and stock market performance) on banks’ performance targeting all PSX listed commercial banks. To achieve the objective, the study uses the sample period from 2012 to 2016 and employs the Feasible Generalized Least Squares (FGLS) panel data model. The study finds that capital adequacy, asset quality, liquidity, and inflation have strong but indirect correlation with banks’ performance while management efficiency, earning quality, GDP, and stock market performance have positive correlation though the significant impact on bank performance. FGLS also exhibits that CAMEL factors along with economic indicators statistically affects the banks’ performance significantly over the studied period. The findings of the study evoke the management of banks to be concerned about CAMEL factors for rallying their performances, as good banking performance may be important for investors and shareholders for investment decisions.
Keywords
Internal Factor, External Factor, Bank Performance, Pakistan
To cite this article
Khurram Aziz Fani, Vina Javed Khan, Bezon Kumar, Bidur Kumar Pk, Impact of Internal and External Factors on Bank Performance in Pakistan, International and Public Affairs. Vol. 2, No. 4, 2018, pp. 66-77. doi: 10.11648/j.ipa.20180204.11
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Copyright © 2018 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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