Beruflich Dokumente
Kultur Dokumente
1-12
TI Journals
ISSN:
xxxx-xxxx
www.tijournals.com
Muhammad Ilyas
Lecturer in Finance Abdul Wali Khan University Mardan, Pakistan.
*Corresponding author: zamrad.sagar@gmail.com
Keywords
Abstract
Banking Sector
Pakistan
Karachi Stock Exchange
In this study the researchers evaluate the financial performance of the commercial banks of Pakistan for the
period 2007-2012. Selected seven commercial banks, nature of data is secondary and used from financial
statements of listed banks. Different financial ratio used to check the financial performance of the
commercial banks such as Return on Assets, Return on Equity and other ratios for the assessment of
financial performance that is Return on advances. Return on deposits to assets, Return on investment to
assets, Return on operating fixed assets that how the banks using their asset for the performance. From the
result of analysis we conclude that the banks having more average assets, equity, advances, deposits, fixed
assets have better financial performance.
Introduction
As we know that finance is the life blood of every business, now-a-days banking sector act as the backbone of modern business in general and
specially in whole economy. Development of mot countries mainly depends upon the efficient banking system. In old days, European money
lenders or money changers used to display coins of different countries in big heaps means quantity on benches or tables for the purpose of
lending or exchanging, and other related services. It receives money from those who want to save in the form of deposits and it lends money to
those who need it.
After independence from British Raj in 1947, and the emergence of Pakistan as a country in the globe, the scope of banking in Pakistan has been
increasing and expanding continuously. In Pakistan the overall banking sectors are managed and controlled by State Bank of Pakistan which is
also called Central Bank of Pakistan. There are more than twenty five schedule banks and all of these are busy now-a-days to contribute their
share in development of the economy. In other word businessmen want to achieve their goal and promote their business activities and they are
easy to mange with help of banks. In Pakistan many types of banks are doing working. The banks normally earn profit from lending of money.
There are different parameters and skills to checks the financial performance of the banks. The financial performance of the banks can be
elevate through different ratio analysis such as like total assets, total shareholder equity by comparing with profit of the banks. The profitability
indicates the financial performance of the banks. The bank having high profit rate is performing well.
Literature Review
[1] Minh (2002) in this research work the researcher used this article to reviews the factors that affecting the performance of foreign-owned
banks in New Zealand, where they control 99.2% of all banking system assets. On the basis of econometric analysis they used cross-sectional
data for both period of banks in which seven banks for the period of 10 years (1991-2000) and the other eight bank for the period of eight years
(1991to1998).they suggested that the length of time is important variables for the bank performance the foreign bank had been in New Zealand
and the parent banks return on assets.
[2] CHIRW (2003) in this research Chirwa investigate the relationship between market structure and profitability Of commercial banks in
Malawi by using a long time period from (1970-1994).It used the techniques of integration and error-correction mechanism to test the collusion
hypothesis and determine whether along-run relationship exists between profits of commercial banks and concentration in the banking industry.
The results conclude that in a long run positive relationship between the concentration and performance but short run analysis also shows a high
speed of adjustment in profitability.
[3] Tarawneh (2006) the aim of the study is to classify the commercial banks in Oman on the basis of their financial ratios. There are five Omani
commercial banks and more than 260 branches were financially analyzed, identified and simple regression model was used to eovalvat the
impact of asset management, operational efficiency, and bank size on the financial performance of these banks. The author study that the bank
with higher total capital, or total assets does not always mean that has better profitability performance
[4] Okpara (2010) overall focused of the author to identify the critical factors that influence the banking system of Nigeria. By using factor
analysis and techniques, the researcher fined that undue interference from board members. political crises, Under capitalization, and fraudulent
practices are considered the most critical factors that impact the performance of banking system in Nigeria Simply stated, that the current
bank performance literature describes the objective of financial organizations as that of earning acceptable returns and minimizing the risk taken
to earn this return on the other hand The researcher calls on the monetary authorities to put in place the financial super structure necessary for
making mandatory the establishment of banks in every community, if poverty will be aggressively against.
[5] Tamimi (2010) Determine some factors that show differences in UAEs Islamic and conventional national banks during the period 19962008.Useing of regression model in which ROE and ROA as dependent variables. The researcher determines that liquidity and concentration
were the most significant determinants of conventional national banks performance. On the other hand, cost and number of branches were the
most significant determinants of Islamic banks performance
[6] Salem (2011) in this research determines the major factors that affecting the performance of commercial banks in the Middle East region.
The author selected 23 variables and checks them according to factor analysis techniques. There are six different factors which must for the
banks performance well. The first factor (banks characteristics) is the most important factor of banks. The results showed that higher loan
concentrate banks face will lower profitability level. The contrary higher income from non-interest sources, and higher profit the performance
commercial banks are efficient.
[7] Ahmed (2011) the researcher examine the profitability of public and private commercial banks in Pakistan in the period of 2006-2009. The
author used some ratio for the profitability measurement like return on assets (ROA) and return on equity (ROE).The correlation and regression
analysis results are discus with the help of SPSS. Both models are (measured by ROA & ROE). The high credit risk and capitalization lead to
lower profitability measured by return on assets (ROA). The profitability level as measured by return on equity. The technological, time and
productivity are changing this is the anther extension study of banks. The aim of study is to providing empirical evidence and profitability in
case of Commercial Banks of Pakistan to cover the gap between demanding and literature.
[8] Abbas (2012) in this study eovalvat the financial performance of banking sectors in Pakistan by completing the period of five years from
2007 to 2011. The reasons for selecting this period is rapidly growth of the banking sector in Pakistan and in coming change in financial
performance of banks. There are more than twenty procedure banks in Pakistan and out of those he have selected top five scheduled banks. Their
network are consist of more than 4000 branches. The researchers used different financial ratio to eovalvat the financial performance of the
banks such like Return on assets (ROA), Return on Equity (ROE), Return on Capital (ROC) and by using some other operating and efficiency
ratios. But in this study, he used another ratios for assessment of financial performance that is Return on Operating Fixed Assets (ROFA).
Return on Fixed Assets shows that how the banks are using their Operating Fixed Assets and what is the parts of the Operating Fixed Assets in
the performance of the banks. This study indicates that banks having more Total Assets, Total equity and Total operating fixed assets have good
financial performance or not. It not means that the banks having higher total assets; higher total operating fixed assets and higher equity have
good performance.
[9] Raza (2012) the aim of the study to compare the financial performance of Pakistani public banks sector and rank them to the financial
indictor. Some variables such as total assets, advance, deposit, investment, profit before tax and return on assets has been selected for the
evaluating of the study. There are five sectors four public sectors were selected for the currently working in Pakistan. The period of four years
(2006-2010) author analyzed secondary data. The researcher concludes that the public sector differ as the financial measures or ratio differs the
aim of this study is academic.
[10] In their study Dhanabhakyam and Kavitha (2012) examined that in every country banks is important for the economic development. Banks
control over the supply of money in circulation. A bank is a financial intermediary that accepts deposits and channels those deposits into
lending activities. Banks are a fundamental part of the financial system, and like warier in financial markets. The achievement of
profitability is the financial performance of banks. The profitability of a bank can define the efficiency with which a bank optimize its net
profits. The author analyzed ratio, correlation and regression for the financial performance of public sector banks. For this purpose six Public
Sector Banks are selected in Indian which faces several different challenges. Public sector banks have performed well on the sources of growth
rate and financial efficiency during the study period. The old and new private sector banks play a vital role in marketing.
[11] RUI (2012) the banking system is important for modern economies to maintain the stability. And achieve their goal China's banking
industry has experienced a long-term reformed process. The aim of study is to cover some vital factors that influence the performance of
commercial banks in China. This study analyzed the variable on banks performance. Which are the real growth rate, inflation rate, exchange
rate, banks size, and equity ratio, The ROE is measured by the banks performance. The results show that the variables contribute 85.8% to
the commercial bank performance in China.
[12] Tabari (2013) financial system Banks, and financial institutions, are important for the society wealth. Therefore, the author checked the
performance of commercial banks and examines the effect of liquidity risk on the performance of commercial banks by using of panel data
which related to commercial banks of Iran for the period of seven years (2003-2010). Two variable used in this research model, bank-specific
variables and macroeconomic variables. The researcher show that the variables of bank's size, bank's asset, and inflation will improve the
performance of banks but credit risk and liquidity risk will not improve the performance of bank.
[13] Madishetti (2013)The purpose of this study to determine those factors which influence banks profitability they categorized in to two,
internal determinants and external determinants. Variables which were selected to represent internal factors were Liquidity risk, operating
efficiency, credit risk, business mix, bank assets and capital adequacy. The variables which were used in this research representing external
factor were annual Gross Domestic Product growth rate and annual inflation rate. The data are combined from the annual reports of banks for
the period of seven years (from 2006-2012).the author sued SPSS software and multiple regression model for checking the relationship
between banks profitability and internal determinants and external determinants. The internal determinants which influence banks
profitability are especially capital adequacy, operating efficiency, liquidity risk, and bank size And their relation with banks performance were
not statistically. This study show the additional information about Tanzanian commercial banking sector which will be used policy makers in
the future.
Research Methodology
For every research work methodology is essential part and every research has its own methodology, therefore we explained the methodology of
our research work in this section of research.
Population of this study is the commercial banks of Pakistan and due to time limitation we cannot include all banks. Data is secondary in nature
and source is state bank site, collected from the financial statement analysis. We used non-probability sampling in the non-probability sampling
we selected purposive sampling. The sample for this study was select top seven commercial banks including all branches in Pakistan. The
banking sector is one of the major service sectors in Pakistan there are different categories of banks in Pakistan but we have selected commercial
banks for this research. In this research we use different financial variables such like return on equity which show the overall performance of
banks. The formula for ROE is net profit after taxes divided by shareholders equity second variable is return on assets which show the
profitability of banks the formula is net profit after taxes divided by total assets. The variable is return on equity (ROC). The research is made for
Financial Performance of Banking Sector in Pakistan (A Study of Listed Banks on Karachi Stock Exchange)
General Scientific Researches Vol(2), No (1), December, 2014.
the same purpose. Therefore we selected top seven commercial banks from Pakistan which is more than twenty scheduled banks with wide
network of branches. Financial performance is the dependent variable which is measured by return on equity (ROE), return on assets (ROA),
Return on operating fixed assets (ROFA) Growth and Average of the assets and equity. Other variables Investment to total assets which were
used for financial performance of banks and ratio of advances to assets and ratio of capital to deposits are also used for the financial performance
of banks.
Source of Data
Secondary data was collected from the annual reports of banks by using the consolidated balance sheet and profit and loss accounts of the banks
for the period six years (2007-2012). Data are used from state bank of Pakistan web site (publications-Financial statement analysis of companies
(Non-financial) listed at Karachi Stock Exchange).
Variables
The variable used for the financial performance of banks are Return on Assets, It is a measure of profit per dollar of assets and also called
profitability ratio. Return on Equity measure earning power on shareholders equity. Return on Operating Fixed Assets indicates that how the
banks using their operating fixed assets and what are the contribution of the operating fixed assets in the performance of the banks. Ratio of
Advances to assets is the major resources with the help of which banks are able to increase their earnings. Ratio of Capital to Deposits with the
help of deposits banks are able to lend more and generate income and on the other hand pay interest on the deposits, Investment to total assets
ratio, The ratio is used to recognize the segment of total assets which is used for investment in various areas.
2007
2008
2009
2010
2011
2012
Growth Rate
Average
MCB
762,193,593
817,758,326
946,253,269
1,038,018,467
ABL
320,109,723
320,109,723
320,109,723
320,109,723
1,153,480,100
770282541
7.453135578
914,664,383
320,109,723
320,109,723
97.52655436
320,109,723
HBL
655,838,856
717,282,010
863,924,793
UBL
530,283,956
620,707,389
640,421,911
924,699,403
1,139,554,205
1,610,308,572
145.5341823
985,267,973
726,422,551
807,204,788
960,210,415
81.07476271
714,208,502
NBP
762,193,593
817,758,326
946,253,269
1,038,018,467
1,153,480,100
1,316,160,457
72.68059835
1,005,644,035
BOP
234,974,195
185,909,120
185,909,120
229,131,774
280,889,692
332,110,474
41.3391262
241,487,396
BOK
29,739,717
31,338,989
38,810,570
50,794,303
68,424,466
82,177,638
176.3228648
50,214,281
The growth of the banks is calculated by taking 2007 as a basis year and find that BOK is a leading bank in growth during these years, HBL is at
position two, ABL is at position three, UBL is at position four, NBP is at position five, BOP is at position six, MCB is at position seven. Now
on the basis of average total assets NBP is at position one, HBL is at position two, MCB is at position three, UBL is at position four, ABL is at
position five, BOP is at position six and BOK is at position seven.one of the important factors is that all the banks have positive growth rate but
the average assets of the banks and growth rate of the banks are different. In the above table the results have similarities with other research work
like Raza and Faisal Abbas have the same position NBP is at position one in average total assets.
In the above figure NBP is leading bank in average total assets during these year, HBL is at position two, MCB is at position three, UBL is at
position four, ABL is at position five, BOP is at position six and BOK is at position seven.one of the important factors is that all the banks have
positive growth rate but the average assets of the banks and growth rate of the banks are different. In the above figure the results have similarities
with other research work like Raza and Faisal Abbas have the same position NBP is at position one in average total assets.
2007
2008
2009
2010
2011
2012
Average
MCB
2.00284575
1.88009092
1.65551904
1.625599114
1.673412745
2.756811153
1.932379786
ABL
1.27336276
1.13355198
1.70896769
1.84098565
1.988059585
1.879224251
1.637358652
HBL
1.2261268
1.39428842
1.55114764
1.842153239
1.959803395
1.388289201
1.560301449
UBL
2.34399945
1.3605849
1.48151583
1.517150725
1.844279571
2.007870744
1.759233536
NBP
2.49723603
1.89036168
1.84401392
1.708871813
1.535281363
1.283054578
1.793136563
BOP
1.89196052
5.41097984
5.41097984
1.766037913
0.104996377
0.525293882
2.518374728
BOK
0.7378584
0.43826557
1.64177697
1.109348818
1.274848093
1.308386352
1.085080701
The return on assets ratio are given for the period of six years (2007 to 2012) for the commercial banks of Pakistan which have already selected
on the basis of ratio BOP is leading bank in return on assets during these year with average ratio is 2.5183, MCB is at position two, NBP is at
position three, UBL is at position four, ABL is at position five, HBL is at position six and BOK is at position seven.
In the above figure return on assets ratio are given for the period of six years (2007 to 2012) for the commercial banks of Pakistan which have
already selected on the basis of ratio BOP is leading bank in return on assets during these year with average ratio is 2.5183, MCB is at position
two, NBP is at position three, UBL is at position four, ABL is at position five, HBL is at position six and BOK is at position seven.
Table 3. Total Equity and Their Growth (Values in thousand)
Banks/years
2007
2008
2009
2010
2011
2012
Growth Rate
Average
MCB
45,414,156
52,244,865
63,120,371
71,225,105
81,034,402
90,630,601
99.56464896
67,278,250
ABL
18,408,391
20,805,117
25,857,515
31,191,174
37,761,572
43,275,849
135.0876239
29,549,936
HBL
50,741,564
61,290,814
75,133,715
86,842,059
100,147,132
119,025,317
134.5716364
82,196,767
UBL
34,009,411
45,076,576
55,914,736
63,919,969
73,945,411
82,772,301
143.3805778
59,273,067
NBP
69,270,631
81,367,002
95,855,355
105,687,665
112,671,683
119,434,799
72.41765706
97,381,189
BOP
15,110,453
5,056,520
5,056,520
7,111,043
6,976,480
6,267,811
-58.52003246
7,596,471
BOK
5,568,253
5,677,816
5,040,633
5,604,119
9,700,427
10,775,628
93.51900857
7,061,146
In the above table the average equity of the banks is clear so NBP is a leading position with highest average of equity, HBL is at second position,
and MCB is at position three. UBL is at position four. ABL is at position five. BOP is at position six. And BOK is at position seven. On the
other hand growth rate are calculated on by taking 2007 as a basis year UBL is leading bank in growth, ABL is at position two. HBL is at
position three. MCB is at position four, BOK is at position five. NBP is at position six. And BOP is at position seven with negative growth. The
above table results have matching results with research result of Faisal Abbas.
Financial Performance of Banking Sector in Pakistan (A Study of Listed Banks on Karachi Stock Exchange)
General Scientific Researches Vol(2), No (1), December, 2014.
In the above figure the average equity of the banks is clear so NBP is a leading position with highest average of equity, HBL is at second
position, and MCB is at position three. UBL is at position four. ABL is at position five. BOP is at position six. And BOK is at position seven.
Table 4. Return on Equity (values in thousand)
Banks/Years
2007
2008
2009
2010
2011
2012
Average
MCB
33.6141048
29.4279639
24.8182999
23.69111144
23.82010914
23.43053534
26.46702076
ABL
22.1429347
19.9791522
27.6488673
26.55820842
27.16034438
27.45727068
25.15779628
HBL
15.847789
16.3172576
17.8358664
19.61535712
22.30021125
18.78234023
18.44980359
UBL
36.5482748
18.7353427
16.9686073
17.24175586
20.13257185
23.29255532
22.15318465
NBP
27.4774067
18.9985985
18.203513
16.78379875
15.71749399
14.13914298
18.55332565
BOP
29.4208188
198.941268
198.941268
56.90521067
4.227404078
27.83357699
86.04492439
BOK
3.94085901
2.41902873
12.6409322
10.0548543
8.992470125
9.97808202
8.004371063
According to table number 4 the average ratio of equity is clear that the BOP is at position one with a highest ratio of equity, MCB is at position
two, ABL is position three, UBL is at position four, NBP is at position five, HBL is at position six, and BOK is at position seven. In the above
table UBL is at position four and NBP is at position five in average ratio of equity as like same in the Faisal Abbas paper UBL is at position four
and NBP is at position five.
In the above figure average ratio of equity is clear that the BOP is at position one with a highest ratio of equity, MCB is at position two, ABL is
position three, UBL is at position four, NBP is at position five, HBL is at position six, and BOK is at position seven. In the above figure UBL is
at position four and NBP is at position five in average ratio of equity as like same in the Faisal Abbas paper UBL is at position four and NBP is
at position five.
2007
2008
2009
2010
2011
2012
Growth Rate
Average
MCB
16,024,123
17,263,733
18,099,010
21,061,787
22,418,450
24,144,242
50.67434268
19,835,224
ABL
7,548,628
11,134,436
12,459,586
15,371,118
18,095,123
18,475,755
144.7564644
13,847,441
HBL
13,582,240
33,490,506
16,766,668
16,155,290
19,167,654
23,632,324
73.99430433
20,465,780
UBL
16,918,844
19,926,915
23,734,082
24,684,566
25,722,481
27,460,839
62.30919205
23,074,621
NBP
25,922,979
24,217,655
25,200,870
27,620,697
29,064,564
29,714,221
14.62502438
26,956,831
BOP
3,252,759
3,471,838
3,471,838
3,534,660
3,597,483
3,473,491
6.78599306
3,467,012
BOK
213,025
187,589
1,013,670
1,121,554
1,301,822
1,359,149
538.0232367
866,135
In table 5 growth are calculated by taking 2007 as a basis year with comparison of 2012. By assigning the data of the banks on the basis of
average total fixed assets NBP is at position one, UBL is at position two, HBL is at position three, MCB is at position four, ABL is at position
five, BOP is at position six and BOK is at position seven. On the other hand all growth rates of banks are positive but different from each other.
On the basis growth BOK is at position one, ABL is at position two, HBL is at position three, UBL is at position four, MCB is at position five,
NBP is at position six and BOP is at position seven, in the above table and Faisal Abbas paper have some similarity in average total fixed assets
NBP, UBL and ABL have at same position.
In figure 5 growth are calculated by taking 2007 as a basis year with comparison of 2012. By assigning the data of the banks on the basis of
average total fixed assets NBP is at position one, UBL is at position two, HBL is at position three, MCB is at position four, ABL is at position
five, BOP is at position six and BOK is at position seven. In the above figure and Faisal Abbas paper have some similarity in average total fixed
assets NBP, UBL and ABL have at same position.
Table 6. Return on Operating Fixed Assets
Banks/Years
2007
2008
2009
2010
2011
2012
Average
MCB
95.2661309
ABL
53.9986604
89.0572161
86.553922
80.11674888
86.10088119
87.95154969
87.50774147
37.3318056
57.3799964
53.89209165
56.6792113
64.31329599
53.93251023
HBL
59.2053741
UBL
73.4675076
29.8621347
79.924938
105.4414993
116.5141128
94.59814447
80.92436722
42.3811262
39.9760648
44.64702762
57.87588297
70.2082846
54.75931564
NBP
73.4243275
63.8319028
69.2398397
64.22142425
60.93043405
56.8315656
64.74658232
BOP
136.672253
289.745806
289.745806
114.4821284
8.198065147
50.22486023
148.1781531
BOK
103.009975
73.2175128
62.8590172
50.24153986
67.00670291
79.10839798
72.57385768
In the above table show that return on operating fixed assets of the banks are different, on the basis of average ratio BOP is a leading bank, MCB
is at position two, HBL is at position three, BOK is at position four, NBP is at position five, UBL is at position six and ABL is at position seven.
In the above table and Faisal Abbas paper only MCB at same position in operating fixed assets.
Financial Performance of Banking Sector in Pakistan (A Study of Listed Banks on Karachi Stock Exchange)
General Scientific Researches Vol(2), No (1), December, 2014.
In the above figure show that return on operating fixed assets of the banks are different, on the basis of average ratio BOP is a leading bank,
MCB is at position two, HBL is at position three, BOK is at position four, NBP is at position five, UBL is at position six and ABL is at position
seven. In the above figure and Faisal Abbas paper only MCB at same position in operating fixed assets.
Table 7. Advances to Assets and Their Growth (Values in thousand)
Banks/years
2007
2008
2009
2010
2011
2012
Growth Rate
Average
MCB
ABL
229,732,772
178,524,257
272,847,325
223,639,777
269,721,034
249,925,187
274,157,806
268,532,972
249,907,060
262,143,554
262,597,534
288,920,715
14.30564813
61.83835175
259,827,255
245,281,077
HBL
380,751,226
460,244,672
490,010,583
502,445,637
503,453,704
545,788,112
43.34507015
480,448,989
UBL
294,725,035
397,736,446
390,493,953
376,480,024
382,115,775
430,694,442
46.13432551
378,707,613
NBP
375,090,202
457,828,029
531,103,507
540,130,378
595,630,955
734,349,374
95.77940722
539,022,074
BOP
BOK
136,530,003
12,174,026
153,226,251
14,925,119
153,226,251
14,820,746
150,117,159
21,272,033
153,430,862
25,284,711
175,880,046
29,708,787
28.82153529
144.0342004
153,735,095
19,697,570
According to table number 7 the growth rate of the banks is calculated by taking 2007 as a basis year. BOK is leading bank in growth, NBP is at
position two, ABL is at position three, UBL is at position four, HBL is at position five, BOP is at position six, and MCB is at position seven.
Now on the basis of average advances to assets NBP is a leading bank, HBL is at position two, UBL is at position three, MCB is at position four,
ABL is position five, BOP is at position six, and BOK is at position seven. In the table and Raza paper has only NBP is a same position in
average advances to assets.
According to figure number 7 the growth rate of the banks is calculated by taking 2007 as a basis year. BOK is leading bank in growth, NBP is
at position two, ABL is at position three, UBL is at position four, HBL is at position five, BOP is at position six, and MCB is at position seven.
Now on the basis of average advances to assets NBP is a leading bank, HBL is at position two, UBL is at position three, MCB is at position four,
ABL is position five, BOP is at position six, and BOK is at position seven. In the above figure and Raza paper has only NBP is a same position
in average advances to assets.
2007
2008
2009
2010
2011
2012
Average
MCB
30.1410001
33.3652763
28.5041059
26.41165015
21.66548517
34.09106659
29.02976405
ABL
55.7697078
60.9878425
59.7419989
59.67844871
50.81398347
45.69348972
55.4475785
HBL
58.0556066
64.1650934
56.719125
54.33610483
44.17988208
33.89338674
51.89153311
UBL
55.57872
64.07793
60.9744836
51.82658819
47.33814525
44.85417313
54.10834002
NBP
49.2119332
55.9857374
56.1269931
52.03475614
51.63773133
55.79482122
53.46532874
BOP
58.104254
82.4199754
82.4199754
65.51564472
54.62317286
52.95829544
66.0068863
BOK
40.9352449
47.6247622
38.1873959
41.87877723
36.95273413
36.15191155
40.28847099
As above the advances to assets ratio are given for the period of six years (2007 to 2012) on the basis of average ratio all of the banks have
different ratio. BOP is leading bank in average ratio, ABL is at position two. UBL is at position three, NBP is at position four. HBL is at position
five. BOK is at position six and MCB is at position seven. In the above table and Raza paper BOP is at same position in Advances to assets ratio
the other ratio are different from each other.
In the above figure advances to assets ratio are given for the period of six years (2007 to 2012) on the basis of average ratio all of the banks have
different ratio. BOP is leading bank in average ratio, ABL is at position two. UBL is at position three, NBP is at position four. HBL is at position
five. BOK is at position six and MCB is at position seven. In the above figure and Raza paper BOP is at same position in Advances to assets
ratio the other ratio are different from each other.
Table 9. Deposits and Their Growth (Values in thousand)
Bank/&years
2007
2008
2009
2010
2011
2012
Growth Rate
Average
MCB
292,098,066
330,181,624
367,581,075
431,295,499
491,146,798
544,988,091
86.57709668
409,548,526
ABL
263,972,382
297,475,321
328,872,559
371,280,948
399,560,790
514,702,444
94.9834449
362,644,074
HBL
508,986,541
572,399,187
682,750,079
747,374,799
933,631,525
1,214,963,700
138.70252
776,684,305
UBL
401,637,816
492,267,898
503,831,672
567,611,258
633,889,416
755,264,264
88.04610371
559,083,721
NBP
591,907,435
624,939,016
727,513,013
832,134,054
927,410,553
1,038,094,985
75.38130519
790,333,176
BOP
191,968,909
164,072,532
164,072,532
208,176,902
237,896,692
266,055,761
38.59315156
205,373,888
BOK
21,410,828
24,732,195
26,285,794
36,981,351
45,548,423
60,043,083
180.4332602
35,833,612
In the above table the growth is calculated by taking 2007 as a basis year and at clearly shows that all of the banks have different growth rate. On
the basis of growth BOK is leading bank in these year, HBL is at position two, ABL is at position three. UBL is at position four, MCB is at
position five, NBP is at position six and BOP is at position seven. Now on the basis of average NBP is at position one, HBL is at position two,
UBL is at position three, MCB is at position four, ABL is at position five, BOP is at position six and BOK is at position seven. In the above table
and Raza paper only NBP is at same position in average Deposits.
Financial Performance of Banking Sector in Pakistan (A Study of Listed Banks on Karachi Stock Exchange)
General Scientific Researches Vol(2), No (1), December, 2014.
In the above figure the growth is calculated by taking 2007 as a basis year and at clearly shows that all of the banks have different growth rate.
On the basis of growth BOK is leading bank in these year, HBL is at position two, ABL is at position three. UBL is at position four, MCB is at
position five, NBP is at position six and BOP is at position seven. Now on the basis of average NBP is at position one, HBL is at position two,
UBL is at position three, MCB is at position four, ABL is at position five, BOP is at position six and BOK is at position seven. In the above
figure and Raza paper only NBP is at same position in average Deposits.
Table 10: Ratio of Capital to Deposits (Values in thousand)
Banks/Years
2007
2008
2009
2010
2011
2012
Average
MCB
15.5475716
15.8230686
17.1718228
16.51422404
16.49901869
16.62983146
16.36425622
ABL
6.97360491
6.99389681
7.86247265
8.400962712
9.450770182
8.407935401
8.014940445
HBL
9.96913669
10.7077046
11.0045707
11.61961296
10.7266228
9.796615076
10.63737713
UBL
8.46768149
9.15691967
11.0979002
11.26122291
11.66534874
10.95938269
10.43474261
NBP
11.70295
13.0199907
13.1757581
12.70079797
12.14906199
11.50518986
12.37562478
BOP
7.87130222
3.08188088
3.08188088
3.415865512
2.932567049
2.355826078
3.789887105
BOK
26.0067149
22.957186
19.176263
15.15390555
21.29695467
17.94649352
20.42291961
According to table 10 the average ratio of capital to deposits is as under BOK is leading bank in these year, MCB is at position two, NBP is at
position three, HBL is at position four, UBL is at position five. ABL is at position six and BOP is at position seven so all of the banks have
different average ratio.
10
According to figure number 10 the average ratio of capital to deposits is as under BOK is leading bank in these year, MCB is at position two,
NBP is at position three, HBL is at position four, UBL is at position five. ABL is at position six and BOP is at position seven so all of the banks
have different average ratio.
Table 11. Investment and Their Growth (Values in thousand)
Bank/&years
2007
2008
2009
2010
2011
2012
Growth Rate
Average
MCB
113,089,261
96,631,874
169,484,647
215,747,844
319,005,983
405,601,313
258.6559054
219,926,820
ABL
83,958,463
82,646,595
94,673,100
121,158,730
195,789,638
267,682,679
218.8275124
140,984,868
HBL
171,932,281
127,786,754
216,467,532
254,909,116
418,604,147
267,682,679
55.69076234
242,897,085
UBL
115,585,646
115,057,090
137,734,578
231,717,214
301,106,877
381,245,903
229.8384498
213,741,218
NBP
210,787,868
170,822,491
217,596,037
301,078,498
319,527,254
342,964,635
62.70606001
260,462,797
BOP
73,461,695
22,711,980
22,711,980
56,359,404
92,492,813
129,552,044
76.35319196
66,214,986
BOK
8,945,856
8,985,441
17,925,911
19,852,730
36,684,689
45,671,700
410.5347101
23,011,055
In the a bove table it is celearly show that the growth rate and average of the banks are diifferent. The growth rate are calculated by taking 2007
as abasis year on the basis of growth BOK is leading bank, MCB is at position two, UBL is at position three. ABL is at position four,BOP is at
position five,NBP is at position six and HBL is at position seven. On the basis of average investment NBP is at position one,HBL is at position
two, MCB is at position three, UBL is at position four, ABL is at position five, BOP is at position six and BOK is at position seven. In the above
table and Ali raza paper only NBP is at same poition in average investment.
In the a bove figure it is celearly show that the growth rate and average of the banks are diifferent. The growth rate are calculated by taking 2007
as abasis year on the basis of growth BOK is leading bank, MCB is at position two, UBL is at position three. ABL is at position four,BOP is at
position five,NBP is at position six and HBL is at position seven. On the basis of average investment NBP is at position one,HBL is at position
two, MCB is at position three, UBL is at position four, ABL is at position five, BOP is at position six and BOK is at position seven. In the above
figure and Raza paper only NBP is at same poition in average investment.
Table 12. Investment to Total Assets Ratio
Banks/Years
2007
2008
2009
2010
2011
2012
Average
MCB
15
12
18
21
28
53
24
ABL
26
23
23
27
38
42
30
HBL
26
18
25
28
37
17
25
UBL
22
19
22
32
37
40
28
NBP
28
21
23
29
28
26
26
BOP
31
12
12
25
33
39
25
BOK
30
29
46
39
54
56
42
11
Financial Performance of Banking Sector in Pakistan (A Study of Listed Banks on Karachi Stock Exchange)
General Scientific Researches Vol(2), No (1), December, 2014.
As above the investment to total assets ratio are given for the period of six years (2007 to 2012) for each selected commerical bank of pakistan.
On the basis of average ratio BOK is a leading bank, ABL is at position two, UBL is at position three, NBP is at position four, HBL is at position
five, BOP is at position six and MCB is at position seven. In the above table and Raza paper only NBP is a same position four in investment to
total assets ratio the other ratio are different.
In the above figure investment to total assets ratio are given for the period of six years (2007 to 2012) for each selected commerical bank of
pakistan. On the basis of average ratio BOK is a leading bank, ABL is at position two, UBL is at position three, NBP is at position four, HBL is
at position five, BOP is at position six and MCB is at position seven. In the above figure and Raza paper only NBP is a same position four in
investment to total assets ratio the other ratio are different.
Table 13. Pakistani Commerical Banks Based on Fananical Perfomances
Banks/variable
MCB
ABL
HBL
UBL
NBP
BOP
BOK
ROA
ROE
Average to deposits
Return on deposits
Average investment
Conclusion
As cleaerly mentioned that the main purpose of this research work is to examined the financial performance of banking sector in Pakistan. For
such finding we used the total average assets, total average equity, total operatng fixed assets, average advances to assets, average to deposits, average to total
investment and ratios means Return on assets, Return on equity, Return on operating fixed asstes, Return on advances to assets ratio, Return on deposits ratio,
Investment to total assets ratio as proxies. This is concluded that on the basis of average total assets, total equity, total operating fixed assets, advances, deposits
and average total investment NBP is leading bank, HBL is second follower, MCB, UBL, ABL, BOP and BOK are their respective follower. On the basis of these
research and their finding it is concluded that the bank getting first position frequently are considered top performer like NBP is the top performer.
12
References
[1]
[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10]
[11]
[12]
[13]
Minh, H. (2002): Factors influencing the performance of foreign- owned banks in New Zealand Journal of International Financial Markets, Institutions
and Money 341 357
Chirwa, E.W. (2003). Determinants of commercial banks in Malawi: a cointegration approach Applied Financial Economics, 13, 565-571
Tarawneh, M, (2006),A Comparison of Financial Performance in the Banking Sector: Some Evidence from Omani Commercial Banks, International
Research Journal of Finance and Economics, Issue.3.
Okpara (2010) MICROFINANCE BANKS AND POVERTY ALLEVIATION IN NIGERIA Journal of Sustainable Development in Africa (Volume
12, No.6)
Al-Tamimi, H (2010)Factors Influencing Performance of the UAE Islamic and Conventional National Banks, Global Journal of Business Research, vol.
4, no.2.
Salem R (2011) The Major Factors that Affect Banks Performance in Middle Eastern Countries Journal of Money, Investment and Banking ISSN 1450288X Issue 20
Ali, K., Akhtar, M.F., and Ahmed, H.Z. (2011). Bank-Specific and Macroeconomic indicators of Profitability Empirical Evidence from the
commercial Banks of Pakistan. International Journal of business and Social Science vol 2.no 6.
Abbas Faisal, Tahir M and Rahman (2012) A Comparison of Financial Performance in the Banking Sector: Some Evidence from Pakistani Commercial
Banks Journal of Business Administration and Education ISSN 2201-2958 Volume 1.
Raza Ali (2012) Financial Performance Assessment of Banks: A Case of Pakistani Public Sector Banks International Journal of Business and Social
Science Vol. 3 No. 14.
Kavitha.M and Dhanabhakyam (2012) Financial Performance of Selected Public Sector Banks in India International Journal of Multidisciplinary
Research Vol.2 Issue 1,
JI RUI (2012) Factors Influencing Commercial Bank Performance: A case study on commercial banks in china
Tabari1, Ahmadi and Ma'someh Emami (2013) The Effect of Liquidity Risk on the Performance of Commercial Banks International Research Journal
of Applied and Basic Sciences Vol, 4 (6): 1624-1631.
Madishetti and Rwechungura (2013) Determinants of Bank Profitability in a Developing Economy: Empirical Evidence from Tanzania Asian Journal of
Research in Banking and Finance Vol. 3, No. 11, pp. 46-65.