Impact of Macroeconomic Factors on the Performance Of conventional and Islamic Banks of Pakistan

Abstract

Pakistan is one of the countries where dual banking systems have been adopted. Pakistan has become one of the world's most important fmancial hubs as the Islamic banking system has developed. The purpose of this research is to look at the impact of macroeconomic conditions on the pe1formance of Pakistan's conventional and Islamic banks. For the period 2010-2019, the study's sample includes 20 banks listed on the Pakistan Stock Exchange. From 2010 to 2019, secondary data was gathered from the financial rep01ts of 15 conventional banks and five Islamic banks in Pakistan. Inflation, exchange rate and interest rate are macroeconomic factors. The dependent variable is performance which is being measured by ROE and Non markup to total mcome. Design and methodology Quantitative research approach has been used and secondary data has been gathered from the financial statements of conventional and Islamic banks of Pakistan. Analyzing has been done through statistical model by using eviews. Findings The research fmds the impact of macroeconomic factors on the performance of conventional and Islamic banks of Pakistan. Practical implications The outcome of this journal can be helpful for the banking sector of Pakistan. Keywords Economy, Inflation, exchange rate, interest rate, return on equity, non-mark up to total income