Abstract
This study examines comparison of how profitability of firms, in the Islamic Banking & Conventional Banking of Pakistan, is influenced to nominated financial and economic indicators, i.e. Liquidity, GDP, Inflation, Capital Adequacy & Size of the firm. For this purpose, the authors select five leading Islamic banks and seventeen conventional banks & choose annual data from 2009 to 2018 to study the behavior of dependent variables toward independent variable i.e. Return On Asset. By employing Panel Regression, the author concluded that macro-economic variables have insignificant impact on profitability of both types of banks. Size has found significantly negative impact on profitability of Islamic banks. The authors have also found that liquidity has a significant and positive impact on Islamic banks whereas liquidity and capital adequacy have significantly negative with conventional banks’ profitability. The conclusions will be helpful for the banking sector to implement their policies accordingly in order to generate more profit in future.
Muhammad Asad Ullah, Masood Hassan, Mehboob Moosa. (2019) Comparison of Impact of Macroeconomic & Bank-Specific Variables on Pakistan’s Islamic & Conventional Banks’ Profitability, AFKĀR (Journal of Islamic & Religious Studies) , Volume 3, Issue 2.
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