Abstract:
Purpose: The main aim of this research is to determine the factor which influences the bank’s
profitability in Pakistani banks. The determinants of the profitability i.e. the variables includes
(Interest rate, ROA & ROE). Based on these determinants highlighted in the literature review
the researcher is examining their impact on banks profitability (Banks Profitability)
Methodology / Sample: Deductive approach was applied and hypotheses were developed first
after careful review of relevant literature. The nature of this study is quantitative and Data was
collected through financial statements of banks while for the purpose of analysis, the researcher
uses Simple Regression to determine the impact and relationship. The sample size of 7
commercial banks listed in PSX 100 index are the target population for this research.
Findings of the Research: The results of my study indicate that there is a significant impact of
Liquidity, Inflation and concentration ratio on banks profitability while the (Non-Performing
Loans, Administrative Cost, GDP & Market Share) has insignificant relationship with
profitability. This means that, the firms should pay strong attention to Liquidity, Inflation and
concentration ratio in order to improve its profitability over the period of time. For inflation rate
the bank need to devise ways as it is an uncontrollable variable.
