Abstract:
Purpose
The purpose of this study was to find the impact of macroeconomic factors on the Islamic and
conventional banks profitability in Pakistan.
Methodology & Design
A panel data from 14 banks of Pakistan was collected for a time period of 2005-2020. Research
design includes positivist approach. Data was collected through bank’s annual reports and later on
multiple linear regression has been used to analyze the data.
Findings
Macroeconomics variables, i.e. GDP, FDI, Inflation rate and Interest rate have no sufficient impact
on the profitability of both type of banking sector working in Pakistan.
Limitations
One of the major limitations in the field ofresearch is data collection. Availability, relevancy and
reliability, of data very important and thus encountered the same as were not fully able to collect
significant data such as quarterly financial statements etc. also accessibility to data as well some
ofthe resources ask money to provide reliable data which made us unable to collect larger samples.
Recommendations
We recommended the policy makers of banking sector of Pakistan to include more variables to
analyze their impact on profitability. In future this research could be expanded b analyzing the
impact offinancial and economic indicators on performance rather than profitability.
