Impact of inflation on banking sector in Pakistan

Abstract

Inflation has dependably been a concern for the approach producers as it makes questionable matter in the economy that may unfavorably influence budgetary development. There for supporting noninflationary stable investment development has been at the center of macroeconomic strategies in Pakistan like in numerous other advancing nations. The concern with swelling stem not just from the need to keep up in largely macroeconomic solidness, additionally from the way that expansion harms the poor especially hard, as they do not hold adequate expansion supports. Inflation is presently a huge budgetary issue. Not just it has an impact on nation's economy yet it likewise change the reasoning to normal individual in the nation, the impact of inflation on banks are individuals begin withdrawing their cash from ledgers and attempt to put their cash in solid items or purchase an in number money. It likewise influences, the individuals altered salary, and for example, retired people, and retirees, the healthiest measure of reserve funds today might not have same buying control over the period. This study is interested in how inflation policy impact on banking performance and profitability, and also the effect of inflation on Return on Asset, Return on equity and as well as Profit before tax . In order to evaluate the effect of inflation on banking industry of Pakistan, I choose four banks from Pakistani banking industry. The banks are MCB, ABL, FBL and askari bank limited. In this thesis, I hope to answer the following What is impact of inflation on banks performance? How inflation affect the Return on asset of every bank? How inflation effect the Return on Equity of four banks? How inflation effect the Profit before tax of Mcb, Abl, Fbl and askari bank?