THE IMPACT OF MACROECONOMIC VARIABLES ON THE PROFITABILITY OF LISTED COMMERCIAL BANKS IN PAKISTAN
Journal Title: European Journal of Business and Social Sciences - Year 2013, Vol 2, Issue 9
Abstract
Based on vital contribution of the commercial banks to economic progress of Pakistan, this study investigates the impact of macroeconomic variables on profitability of public limited commercial banks in Pakistan for years 2001- 2011. Pooled Ordinary Least Square (POLS) method is used to examine the effect of 3 major external factors; inflation rate, real gross domestic product (GDP) and real interest rate on profitability indicators; return on assets (ROA), return on equity (ROE) and equity multiplier (EM) ratios in 3 separate models. The empirical findings indicate a strong positive relationship of real interest rate with ROA, ROE and EM. Secondly, real GDP is found to have an insignificant positive effect on ROA, but an insignificant negative impact on ROE and EM. Inflation rate on the other hand, has a negative link with all 3 profitability measures. Overall, the selected macroeconomic factors are found to have a negligible impact on earnings of commercial banks.
Authors and Affiliations
Sara Kanwal| University of Central Punjab Lahore sara.kanwal89@gmail.com, Muhammad Nadeem| (Corresponding Author) University of Central Punjab Lahore nadeem_umt@hotmail.com
Keywords
Related Articles
- EP ID EP10335
- DOI -
- Views 324
- Downloads 14
INFLUENCE OF COMMUNICATION ON STAKEHOLDERS STRATEGY IMPLEMENTATION IN GARISSA COUNTY, KENYA
While the benefits of effective strategic implementation in government cannot be disputed, there are several concerns about its success as well as the strategies to be adopted in implementation of strategic plans in v...
NON-INDUSTRIALIZED FARMS OF OIL PALM (ELAEIS GUINEENSIS JACQ. LILIOPSIDA ARECACEAE) TO SONGON IN SOUTHERN CÔTE D'IVOIRE: ANALYSIS AND PROSPECTS
This work explains the activity of smallholder’s oil palm, the area of Songon in the south of Côte d'Ivoire. It highlights the different areas studied; reveal the impact of the size and age of the palm on the param...
ECOLOGICAL TAXATION ON SUSTAINABILITY CONTEXT FOR LOCAL INTEGRATED DEVELOPMENT
The objective of this work aims to verify, the contribution of the Ecological VAT for environmental sustainability in the municipality of Guajará-Mirim. This innovative instrument for allocating tax revenue in Brazil...
THE ROLE OF CONSUMER HOSTILITY AND CONSUMER ETHNOCENTRISM ON THE INTENTION OF BUYING FOREIGN GOODS: A CASE STUDY ON IRANIAN, TURKISH AND AZERBIJANI CONSUMERS
Having an antipathy to some countries, which stem from land conflicts, economic events, diplomatic, regional and religious conflicts as well as the past or current military relations, is emerging as a mode of thought...
FLEXIBLE DAINTINESS MANAGEMENT IN TECHNOLOGICAL ORGANIZATIONS
Flexible daintiness management, referring to the internal systematic approach of the organization’s management and management to strive for daintiness performance excellence, and flexible daintiness policy referring...