Abstract

The current research study analyzed the effect of capital structure and productivity performance of banking sectors. The study used the regression and co-relation analysis to test the impact of capital structure on productivity performance. The study divided the banking sector into two broad categories such as, Conventional Banks and Islamic Banks over the sample period. For the said purpose an economic model was developed for conventional and Islamic banks. This model is based on Net Profit Margin (NPM) i.e. dependent variable and explanatory variables such as Debt to Assets (DTA), Debt to Equity (DTE), Total Capitalization Ratio (TCR) and Coverage Ratio (CR). The results showed that Conventional Banks, DTA and DTE were statistical significant for dependent variable NPM. While in case of Islamic Banks, DTE and CR were statistically significant with positive signs and were contributing reasonably well in the profitability

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