Impact of privatization on the performance of banks: taking the case of MCB and HBL for consideration

Abstract

Privatization is important factor to enhance the profitability and competencies of the banks when they are under performed. The study is set to evaluate the collision of privatization on the banks financial performance in Pakistan. The study discovered literature on the privatization, financial performance of financial institutions of the banking sector and also explained the relationship of the privatization and pre and post financial performance of the banks in the banking sector of Pakistan. The current study critically analyzes the impact of privatization on two of the large and firstly privatized banks namely Muslim commercial bank and Habib bank limited Pakistan. The study analyzed major impacts of privatization on selected banks in terms of financial performance. It has been found a very encouraging effect of privatization towards the productivity and financial sector development through financial ratio analysis. The ratios taken for study are return on assets, return on equity and earnings per share. The results show that privatization has a positive impact on the financial performance of firms. At the end researcher also provide the recommendation and suggested area for future research.