Impact of Internal and External Factors on Bank Performance in Pakistan

Khurram Aziz Fani; Vina Javed Khan; Bezon Kumar; Bidur Kumar Pk

doi:doi:10.11648/j.ipa.20180204.11

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Impact of Internal and External Factors on Bank Performance in Pakistan

Khurram Aziz Fani, Vina Javed Khan, Bezon Kumar, Bidur Kumar Pk

Published in International and Public Affairs (Volume 2, Issue 4)

Received: 26 October 2018 Accepted: 12 November 2018 Published: 10 December 2018

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Abstract

The study mainly explores the impact of banks’ internal (CAMEL factors) and external factors (inflation, GDP, and stock market performance) on banks’ performance targeting all PSX listed commercial banks. To achieve the objective, the study uses the sample period from 2012 to 2016 and employs the Feasible Generalized Least Squares (FGLS) panel data model. The study finds that capital adequacy, asset quality, liquidity, and inflation have strong but indirect correlation with banks’ performance while management efficiency, earning quality, GDP, and stock market performance have positive correlation though the significant impact on bank performance. FGLS also exhibits that CAMEL factors along with economic indicators statistically affects the banks’ performance significantly over the studied period. The findings of the study evoke the management of banks to be concerned about CAMEL factors for rallying their performances, as good banking performance may be important for investors and shareholders for investment decisions.

Published in	International and Public Affairs (Volume 2, Issue 4)
DOI	10.11648/j.ipa.20180204.11
Page(s)	66-77
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2018. Published by Science Publishing Group

Keywords

Internal Factor, External Factor, Bank Performance, Pakistan

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Khurram Aziz Fani, Vina Javed Khan, Bezon Kumar, Bidur Kumar Pk. (2018). Impact of Internal and External Factors on Bank Performance in Pakistan. International and Public Affairs, 2(4), 66-77. https://doi.org/10.11648/j.ipa.20180204.11

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ACS Style

Khurram Aziz Fani; Vina Javed Khan; Bezon Kumar; Bidur Kumar Pk. Impact of Internal and External Factors on Bank Performance in Pakistan. Int. Public Aff. 2018, 2(4), 66-77. doi: 10.11648/j.ipa.20180204.11

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AMA Style

Khurram Aziz Fani, Vina Javed Khan, Bezon Kumar, Bidur Kumar Pk. Impact of Internal and External Factors on Bank Performance in Pakistan. Int Public Aff. 2018;2(4):66-77. doi: 10.11648/j.ipa.20180204.11

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@article{10.11648/j.ipa.20180204.11,
  author = {Khurram Aziz Fani and Vina Javed Khan and Bezon Kumar and Bidur Kumar Pk},
  title = {Impact of Internal and External Factors on Bank Performance in Pakistan},
  journal = {International and Public Affairs},
  volume = {2},
  number = {4},
  pages = {66-77},
  doi = {10.11648/j.ipa.20180204.11},
  url = {https://doi.org/10.11648/j.ipa.20180204.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ipa.20180204.11},
  abstract = {The study mainly explores the impact of banks’ internal (CAMEL factors) and external factors (inflation, GDP, and stock market performance) on banks’ performance targeting all PSX listed commercial banks. To achieve the objective, the study uses the sample period from 2012 to 2016 and employs the Feasible Generalized Least Squares (FGLS) panel data model. The study finds that capital adequacy, asset quality, liquidity, and inflation have strong but indirect correlation with banks’ performance while management efficiency, earning quality, GDP, and stock market performance have positive correlation though the significant impact on bank performance. FGLS also exhibits that CAMEL factors along with economic indicators statistically affects the banks’ performance significantly over the studied period. The findings of the study evoke the management of banks to be concerned about CAMEL factors for rallying their performances, as good banking performance may be important for investors and shareholders for investment decisions.},
 year = {2018}
}

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TY  - JOUR
T1  - Impact of Internal and External Factors on Bank Performance in Pakistan
AU  - Khurram Aziz Fani
AU  - Vina Javed Khan
AU  - Bezon Kumar
AU  - Bidur Kumar Pk
Y1  - 2018/12/10
PY  - 2018
N1  - https://doi.org/10.11648/j.ipa.20180204.11
DO  - 10.11648/j.ipa.20180204.11
T2  - International and Public Affairs
JF  - International and Public Affairs
JO  - International and Public Affairs
SP  - 66
EP  - 77
PB  - Science Publishing Group
SN  - 2640-4192
UR  - https://doi.org/10.11648/j.ipa.20180204.11
AB  - The study mainly explores the impact of banks’ internal (CAMEL factors) and external factors (inflation, GDP, and stock market performance) on banks’ performance targeting all PSX listed commercial banks. To achieve the objective, the study uses the sample period from 2012 to 2016 and employs the Feasible Generalized Least Squares (FGLS) panel data model. The study finds that capital adequacy, asset quality, liquidity, and inflation have strong but indirect correlation with banks’ performance while management efficiency, earning quality, GDP, and stock market performance have positive correlation though the significant impact on bank performance. FGLS also exhibits that CAMEL factors along with economic indicators statistically affects the banks’ performance significantly over the studied period. The findings of the study evoke the management of banks to be concerned about CAMEL factors for rallying their performances, as good banking performance may be important for investors and shareholders for investment decisions.
VL  - 2
IS  - 4
ER  -

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Author Information

Khurram Aziz Fani

Department of Commerce, University of the Punjab, Gujranwala, Pakistan
Vina Javed Khan

Department of Commerce, University of the Punjab, Gujranwala, Pakistan
Bezon Kumar

Department of Economics, Varendra University, Rajshahi, Bangladesh
Bidur Kumar Pk

Bangladesh Bank, Rajshahi, Bangladesh

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APA Style

Khurram Aziz Fani, Vina Javed Khan, Bezon Kumar, Bidur Kumar Pk. (2018). Impact of Internal and External Factors on Bank Performance in Pakistan. International and Public Affairs, 2(4), 66-77. https://doi.org/10.11648/j.ipa.20180204.11

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ACS Style

Khurram Aziz Fani; Vina Javed Khan; Bezon Kumar; Bidur Kumar Pk. Impact of Internal and External Factors on Bank Performance in Pakistan. Int. Public Aff. 2018, 2(4), 66-77. doi: 10.11648/j.ipa.20180204.11

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AMA Style

Khurram Aziz Fani, Vina Javed Khan, Bezon Kumar, Bidur Kumar Pk. Impact of Internal and External Factors on Bank Performance in Pakistan. Int Public Aff. 2018;2(4):66-77. doi: 10.11648/j.ipa.20180204.11

Copy | Download

@article{10.11648/j.ipa.20180204.11,
  author = {Khurram Aziz Fani and Vina Javed Khan and Bezon Kumar and Bidur Kumar Pk},
  title = {Impact of Internal and External Factors on Bank Performance in Pakistan},
  journal = {International and Public Affairs},
  volume = {2},
  number = {4},
  pages = {66-77},
  doi = {10.11648/j.ipa.20180204.11},
  url = {https://doi.org/10.11648/j.ipa.20180204.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ipa.20180204.11},
  abstract = {The study mainly explores the impact of banks’ internal (CAMEL factors) and external factors (inflation, GDP, and stock market performance) on banks’ performance targeting all PSX listed commercial banks. To achieve the objective, the study uses the sample period from 2012 to 2016 and employs the Feasible Generalized Least Squares (FGLS) panel data model. The study finds that capital adequacy, asset quality, liquidity, and inflation have strong but indirect correlation with banks’ performance while management efficiency, earning quality, GDP, and stock market performance have positive correlation though the significant impact on bank performance. FGLS also exhibits that CAMEL factors along with economic indicators statistically affects the banks’ performance significantly over the studied period. The findings of the study evoke the management of banks to be concerned about CAMEL factors for rallying their performances, as good banking performance may be important for investors and shareholders for investment decisions.},
 year = {2018}
}

Copy | Download

TY  - JOUR
T1  - Impact of Internal and External Factors on Bank Performance in Pakistan
AU  - Khurram Aziz Fani
AU  - Vina Javed Khan
AU  - Bezon Kumar
AU  - Bidur Kumar Pk
Y1  - 2018/12/10
PY  - 2018
N1  - https://doi.org/10.11648/j.ipa.20180204.11
DO  - 10.11648/j.ipa.20180204.11
T2  - International and Public Affairs
JF  - International and Public Affairs
JO  - International and Public Affairs
SP  - 66
EP  - 77
PB  - Science Publishing Group
SN  - 2640-4192
UR  - https://doi.org/10.11648/j.ipa.20180204.11
AB  - The study mainly explores the impact of banks’ internal (CAMEL factors) and external factors (inflation, GDP, and stock market performance) on banks’ performance targeting all PSX listed commercial banks. To achieve the objective, the study uses the sample period from 2012 to 2016 and employs the Feasible Generalized Least Squares (FGLS) panel data model. The study finds that capital adequacy, asset quality, liquidity, and inflation have strong but indirect correlation with banks’ performance while management efficiency, earning quality, GDP, and stock market performance have positive correlation though the significant impact on bank performance. FGLS also exhibits that CAMEL factors along with economic indicators statistically affects the banks’ performance significantly over the studied period. The findings of the study evoke the management of banks to be concerned about CAMEL factors for rallying their performances, as good banking performance may be important for investors and shareholders for investment decisions.
VL  - 2
IS  - 4
ER  -

Copy | Download