Abstract:
The purpose ot the study is to investigate the impact of financial leverage & asset efficiency
sustainable growth rate of MCB Bank Limited, mediating role of financial risk management
encompassing credit risk, liquidity risk and operational risk. The data is based on analysis ofannual
financial time series data ofMCB Bank Limited from 2008 to 2022.The sustainable growth rate,
assessed through return on equity, serves as the dependent variable, while financial leverage and
asset efficiency are treated as independent variables. The multiple regression analysis indicate a
negative impact offinancial leverage on the sustainable growth rate, suggesting that an excessive
reliance on financial leverage can impede MCB bank’s ability to generate the necessary earnings
to sustain future growth rate. Conversely, the study reveals an affirmative influence of both asset
efficiency and effective financial risk management on the sustainable growth rate of MCB Bank
Limited through regression model and mediation analysis in compliance with Baron and Kenny
(1986). These factors contribute positively to the bank’s growth and stability. Based on these
conclusions, it is crucial for MCB Bank Limited to exercise prudent control over its financial
leverage in order to thrive in the market.
