Abstract
The study tends to examine the financial performance of Pakistani banks by using financial ratios, inflation and corporate governance. To examine the impact of ratios, inflation and corporate governance on performance of banks, data of seventeen years from 2000 to 2016 of financial sector of Pakistan is used. The major sources of data used in this study are World Bank, IMF and Pakistan Statistics Bureau. However major data is collected from the financial reports issued by State Bank of Pakistan i.e. FSA and BSA. The study tend to used descriptive summary and correlation matrix for diagnostic testing. However linear regression method also applied to examine the cause and effects relationship. Regression result analyze that CG have significant relationship with profitability. Inflation rate also has significant relationship with profitability of firms. Financial ratios i.e. cost income ratio, loan loss reserve ratio and total loan ratio have significant relationship with profitability of firms. There are some limitations in this study as there are factors other than inflation rate and corporate governance that affect performance of banks which are not included in this study. This study provide a clear thoughtful to the policy makers, researchers and corporations. They can build their assurance and can make more rational decisions towards policy formulation after understanding the financial performance of banks accurately. They will also be able to understand the role of inflation rate and CG in measuring the performance of banks.
Keyword(s)
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