IMPACT OF LIQUIDITY CREATION & CORPORATE GOVERNANCE ON THE BANK’S PROFITABILITY

Abstract

Objective of the study The study investigates the i impact of liquidity creation and corporate governance on banks' profitability in Pakistan. Data & Method To achieve the research objectives, was a quantitative research design was adopted. Secondary data gathered from 2004 to 2022. Multiple regression techniques were used to identify the impact of liquidity creation and corporate governance on banks' profitability. Results The study s findings suggest that liquidity creation has a negative significant impact on bank profitability. This means that when banks prioritize profit over liquidity creation, liquidity decreases in Pakistan. Furthermore, corporate governance also has a negative significant impact on the bank's profitability. Conclusion This study explores the relationship between liquidity creation, corporate governance, and bank profitability in Pakistan's commercial banking sector. It emphasizes the importance of effective governance, prudent risk management, transparent governance, and strategic decision-making for long-term profitability. Policy implication The study provides valuable insights for policymakers, regulators, and stakeholders aiming to enhance the financial stability and performance research may explore additional factors.