ali mubeen

8/16/2019 Ali Mubeen

1/15

FINANCIAL PERFORMANCE COMPARISON

OF PUBLIC AND PRIVATE BANKS:

AN EMPERICAL STUDY

A CASE STUDY OF PAKISTAN BANKING INDUSTRYBY

ALI MUBEEN

ROLL NO: AM552787REGISTRATION NO: 11-PLE-16065

SUBMITTED THROUGH

MR RI!"AN HAMIDALLAMA I BAL OPEN UNIVERSITY


2/15

TABLE OF CONTENTS:

1 Introduction and Importance of Topic

1.1 Objectives of the Study

1.2 Significance of the Study

2 Literature Review Research !ethodo"ogy

.1 Samp"e of the Study

.1.1 #eriod of $na"ysis

.1.2 Sources of %ata& $na"ysis $nd Interpretations

&.1 %escriptive $na"ysis

&.2 'inancia" Ratio $na"ysis

&. Ran(ing of )an(s on 'inancia" #erformance )asis


3/15

5 C$%&'()*$%+ L*,*.*$% A%/

R&$,,%/.*$%

*.1 +onc"usion

*.2 Limitations of Study

*. Recommendations for 'uture Studies

R%&)


4/15

1 INTRODUCTION: 'inancia" system is serving as bac(,bone in a country and a

good faci"itator for financia" institutions. $hmad- Raa-$mjad- / $(ram- 0211 said that institutions are componentsof a good financia" system and they assist the investors forinvestment to attain an efficient capita" and money mar(et in a

country. State )an( of #a(istan 0S)# as we"" as Securitiesand 34change +ommission of #a(istan 0S3+# is a"sowor(ing for the deve"opment of a good financia" system0$"am- Raa- $5% $(ram- 211.

Therefore- +ommercia" ban(ing sector as a major component

of financia" system has an amp"e share in the financia" andeconomic growth of a country. $burime- 026 said that a"ucrative and profitab"e commercia" ban(ing sector is capab"eto to"erate the adverse distress and adds the strength and

power in the economic system.


5/15

Severa" research studies 0!+ 7nown 168- Levine 1668 havereported efficiencies of financia" system to reduce information

and transaction cost which p"ay an important ro"e indetermining the rate of savings- decisions for investmenttechno"ogica" innovations and hence the rate of economicgrowth.

Therefore- information on ban( efficiency when comparedacross nations is important- as this wi"" enab"e po"icy ma(ersto formu"ate appropriate and suitab"e po"icies to direct their

ban(ing industry. The cross country comparison of ban(efficiency in deve"oping countries is re"ative"y "ac(ing in the"iterature and there hasn9t been any intensive wor( being doneon cross country comparison for ban(s in the deve"opingcountries.


6/15

11 O34&*):

1 The main objective of this study is to investigate thefinancia" performance comparison of the ban(ing industry of

#a(istan from 26 to 21.

2 To study the Ran(ing of )an(s on the basis of 'inancia"

Ratio $na"ysis.

12 S*%**&.%& $ S(/:'inancia" ratios ana"ysis using financia" ratios is the most important and

used for ban(ing industry ana"ysis. 'inancia" ratios ana"ysis is used toeva"uate the performance of the ban(s. It aims to determine the strong

and wea( points of ban(ing Industry. $ "arge number of standards and

various financia" ratios can be used when ana"ying the credit and

financia" position of ban(s. This study fi""s up the research gap by doing

the cross section ana"ysis.


7/15

2 L*.( R* The operating efficiency has an affect on the ban( sie. #i""offand Rhoades 022 said a positive re"ationship e4ist betweenthe profitabi"ity and ban( sie. Sufian 026: !o"yneu4 andSeth 0166;: Ram"a"" 026 a"so found an affirmative re"ationof ban( sie and e4amine the dependence of ban( sie upon

economies of sca"e because sma""er ban(s were "ess profitab"ethan "arger ban(s.


8/15

'inancia" measures such as return on assets 0RO$- interest

margins 0I!- and capita" ade>uacy 0+$ has positive re"ation

with customer service >ua"ity 03"iabeth / 3""iot 2&. Raa-'arhan- / $(ram- 0211 c"assified the investment ban(s in

his study using return on tota" assets 0RO$ and return on

owners? e>uity 0RO3. 3ffectiveness and effeciency are the

independent factors 0Tarawneh- 2@: 0Raa- 'arhan- /

$(ram- 211. There is no boundness that efficient ban( a"so

has effectiveness a"ways.

$ccording to $"am- $"i and $(ram found affirmative re"ationof ban( sie and e4amine the re"ationship of ban( sie upon

economies of sca"e because sma""er ban(s were "ess profitab"e

then "arger ban(s 0211- a"am- a"i and a(ram


9/15

9 R).& M$/$'$:

91 S.,;' $ )(/:

In this study )an(ing Sector of #a(istan were ta(en as asamp"e for the purpose of Investigation of financia"

performance comparison from 26 to 21 for the purpose ofthis research study. There were five pub"ic ban(s and twenty

two private ban(s and seven foreign ban(s which werewor(ing and a"" ban(s are se"ected for ana"yses.

911 P*$/ $ A%.')*)A

This study investigates the financia" performance of the ban(ing sector of #a(istan )etween 26 to 21.

912 S$(&) $ /..:

%ata has been co""ected from 'inancia" Statement $na"ysis of

'inancia" Sector 26,21 issued by the State )an( of#a(istan $nnua" re orts and from #ub"ished data.


10/15


11/15

(*/* R.*$)

i. +ash and +ash 3>uiva"ents to Tota" $ssets Ratioii. Investment to Tota" $ssets Ratio

iii. $dvances to Tota" $ssets Ratio

iv. Tota" Liabi"ities to Tota" $ssets Ratio

uity Ratio


12/15


13/15

5CONCLUSION+ LIMITATION AND

RECOMMENDATION

*.1 +onc"usion

*.2 Limitations of Study

*. Recommendations for 'uture Studies


14/15

R%&):

1 $hmad- C. 7.- Raa- $.- $mjad-


15/15

THANK YOU

ali mubeen

Documents