Abstract:
Purpose
This thesis evaluates the impact of bank size, operating efficiency, liquidity, earning assets
and Non-performing assets to Non-performing assets & total equity (NPA) on credit risk
managing of commercial banks of Pakistan. Secondary data for the period of 2007 to 2017 is
used, which was taken from the most reliable source for banks in Pakistan, the official
website of State bank ofPakistan.
Methodology & Design
The research design in this paper is explanatory in nature and we are using panel data a
combination of cross sectional and time series. Explanatory research deals with pre-existing
phenomenon with different data set, variables and time period or different region etc.
Findings
The study found that relationship of bank size and operating efficiency are insignificant with
credit risk. The results further show that the relationship of Liquidity with credit risk is
negative and significant. The relationship of MGT and NPA with credit risk is positive and
significant in commercial banks of Pakistan.
Limitations:
Our current study would not include all commercial banks which are currently working due
to non-availability of data from period 2007 to 2017.
Implications:
Results are instants for policy makers. As we know credit risk management is the demand of
all banks.
