Abstract:
Purpose- The aim of this study was to determine and analyze the internal bank-specific
factors that affect the profitability of the banks. The relationship of the independent
variables with profitability and its study was the reason to conduct this research.
Methodology/sample- . The bank selected to carry on with the research is Allied Bank
Ltd. The quarterly financial statements (from 2008 till 3rd quarter of 2013) were selected.
The variables chosen from the quarterly reports were T-Bills, Non Markup Interest
Income and Taxation, which were the independent variables while Profit after Tax (PAT)
is the dependent variable. The software used for this study was MINITAB. In order to
study the impact of variables, multiple regression was run against the dependent variable
and independent variables.
Findings- This study concluded that the T-bills have a positive and significant
relationship with profitability. The Non Markup Interest Income had a positive and
significant relationship with the profitability. Moreover, the empirical results indicated
that the taxation affects profitability positively.
Practical Implications- This research might help the decision makers of Allied Bank
Ltd., other Pakistani commercial banks to and others related quarters to have a significant
knowledge about the impact of the internal variables on PAT and predict their
profitability.
