Determinants of profitability in banking sector

The purpose of this research is to examine the relationship between bank specific and macro-economic characteristics over bank profitability by using data of forty-four Pakistani banks over the period 2005-2009. This paper uses the pooled series method to investigate the impact of assets, loans, equity, deposits, economic growth, Inflation and market capitalization on major profitability indicators i.e. Spread ratio. The empirical results have found strong evidence that both internal and external factors have a strong Inflation on the profitability. The results of the study are of value to both academics and policy makers.

Hafiz Waqas Kamran, Zermen Johnson and Mamoona Sammer
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