Abstract:
operational & credit risks will affect overall profitability/financial performances of different commercial banks in Pakistan. Due to this reason, 15 banks have been selected which represents the entire banking sector/industry of Pakistan and desired data is extracted from financial statement and annually published reports of banks. Due to availability, compatibility and market competition the fifteen banks are selected. As good techniques of risk mitigation are important because due to downturns in Pakistani economy which is due to pandemic, unstable political situations in Pakistan and different time to time polices of state banks regulation which consist of BASEL amendments. Data has analyzed by using certain statistical techniques which are Descriptive statistics, correlation, anal data regression analysis Result of studied factors shows that liquidity and credit risk has significant positive affect on financial performance of selected banks as measured by return on assets(ROA),return on equity ROE, Tobins,q and one of the risk factor which is operational risk Factor diverts from hypothesis which shows significant negative effect on financial outcomes/performances of commercial banks in Pakistan. The results of this study have shown that mostly credit risk affects the financial outcome/performances of Pakistani commercial banks. Credit risk allows mangers to find strategic systematic financial solutions that can increase the performance/profitability of banking sector. From results of analysis it is advised that banks should adhere to BASEL regulations and strict risk disclosure in order to deal with market changing conditions.
