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  18 Pages Download PDF: Analyzing the Influence of Post-2018 Macroeconomic and Bank-Specific Indicators on Banking Sector Profitability: Evidence from Pakistan

  Analyzing the Influence of Post-2018 Macroeconomic and Bank-Specific Indicators on Banking Sector Profitability: Evidence from Pakistan

  Muhammad Iqbal, Muhammad Munir Ahmad, Naeem Raza, Muhammad Tayyeb Hafeez

  2025-06-27 https://doi.org/10.36923/jcmi.v6i1.643

  This study examines the impact of macroeconomic and bank-specific indicators on the profitability of Pakistan’s banking sector, focusing on the volatile post-2018 period. Using return on assets (ROA) as the performance metric, it analyzes data from 20 commercial banks between 2018 and 2023. Panel data regression, conducted via Gretl software, reveals that these internal factors—Capital Adequacy Ratio (CAR), Spread Ratio (SR), and Earnings per Share (EPS)—positively and significantly influence ROA, while Firm Size (SZ) has a significant negative effect. In contrast, macroeconomic indicators like Exchange Rate (EXR), GDP, and Policy Rate (POLR) show insignificant negative relationships, and Inflation (INF), Foreign Exchange Reserves (FXRV), and Cash Equivalents (CEQU) have insignificant positive effects. These findings highlight that bank-level factors play a more critical role than external economic conditions in determining profitability. The study recommends that bank managers focus on operational efficiency and

  pp. 119-136 Abstract views:216 Downloads:118