Banks In Pakistan Research Articles

The Mediating Impact of Organizational Culture on the Association between Performance Management and Employee Retention in Private Commercial Banks of Pakistan

The purpose of this research was to develop the association between performance management & employee retention, organizational culture as mediators among private commercial banks of Larkana and Sukkur, Sindh Pakistan. The data collection was through a structured questionnaire which was distributed by hand and HR process among 300 employees in private commercial banks. A total of 350 questionnaires were distributed and returned out of 300 were completely filled that were used to perform regression analysis which recommended a positive relationship between performance management & employee retention. The findings indicated that the identified organizational culture did play a mediating role on performance management & employee retention of banking employees. As suggested by our finding organizational culture infers proper effect on performance management and employee retention of employees.

Nexus of renewable energy, green financing, and sustainable development goals: an empirical investigation.

Achieving the sustainable development goals (SDG) agenda, proposed by the United Nations by 2030, has become the main concern around the globe. The continuing ecological crises and energy sustainability issues can only be dealt with using sustainable solutions such as green finance. Green finance has become a pioneer in economic green transformation resulting in the collective development of both the economy and the environment. Therefore, this study aims to examine the influence of green finance on the achievement of the five major sustainable development goals in the context of the economy of Pakistan. The renewable energy scheme proposed by the State Bank of Pakistan in 2016 serves as a basis for this study. We innovate our research by studying the impact of green finance on five SDGs simultaneously. The association between the variables is checked using random effect modeling. The findings reveal that green finance supports SDG 3, 12, and 13 while having little effect on SDG 1 and SDG 2. Moreover, green finance is a suitable reform for the sustainable development of the economy and the environment. The study has robust policy implications for Pakistan.

Determinants of the firm value of listed banks in Pakistan: A panel data approach

The aim of this study is to examine the determinants of firm value for listed banks in Pakistan. This study is based on secondary data extracted from the annual reports of listed banks in Pakistan with quarterly data comprising 512 sample observations from 2015 to 2021. Panel data estimation techniques were employed for the analysis. The findings of the study revealed that all determinants influence firm value except liquid assets to total assets (LATA). The stock price of listed banks in Pakistan is continuously falling, which causes the stock's value to change from being overpriced to being undervalued. Nonperforming loans (NPLs) and the cost-to-income ratio (CIR) reduce firm value, while increases in the net interest margin (NIM) and capital adequacy ratio (CAR) enhance firm value. Further, NPLs and the CIR have a negative relationship with firm value. However, CAR, LATA, and NIM have positive associations with the firm value. The study concluded that the average capital adequacy ratio of listed banks in Pakistan is 10.5%, which is higher than the minimum requirement set by the regulator. This indicates that CAR helps to increase firm value in listed banks in Pakistan. The study will be useful to policymakers, regulators, and the banking sector in evaluating the major determinants that affect firm value.

The Impact of COVID-19 Pandemic on Islamic and Conventional Banks’ Profitability

The banking sector has a significant impact on a nation’s financial stability and economic development. As one of the fundamental components of the financial sector, banks offer services that are essential for the expansion of the markets. The stability of the financial system is significantly impacted by the efficiency of the banking sector. COVID-19 has had a tremendous effect on the economy. This pandemic cannot be disregarded, considering how widespread it has been and how many people it has affected globally. Both society and the global economy have undergone profound change. Hence, it is critical to ascertain how severely the outbreak has impacted the banking system. To assess the potential impact of pandemic, the current study examined conventional and Islamic banking. This study also investigates how COVID-19’s moderating effect influences the banking system. Financial statements from 10 conventional banks and 5 Islamic banks in Pakistan are the sources of this study’s sample data. COVID-19 is a moderator in this study. The empirical estimations by means of the fixed-effects approach suggests that the moderator has a large impact on bank profitability. In addition, COVID-19 appears to have a stronger influence on the Islamic banking system.

Relationship between financial risks and firm value: A moderating role of capital adequacy

The study of firm value and financial risks became more important after the global financial crisis of 2007–2008, as the required risk was mismanaged, resulting in a deterioration in firm value. It is important to study the relationship between financial risks and firm value. This study aims to examine the moderating effect of capital adequacy on the relationship between financial risks and the firm value of listed banks in Pakistan. This study is based on half-yearly secondary data of 560 sample observations from 2009 to 2021. Multiple regression and panel data estimation techniques were employed for the analysis. The study used firm value as a dependent variable, proxied by Tobin’s Q, along with five independent variables and one moderating variable. The results of this study indicate that a higher capital adequacy ratio (CAR) increases firm value and has a moderating effect on financial risks and firm value. Nonperforming loans, net interest margin, and cost income ratio are found to have a significant negative relationship with firm value. The study concludes that the stock prices of listed banks in Pakistan are declining persistently, which causes the stock’s worth to shift from being inflated to being undervalued.

Diversity of Shari’ah supervisory board and the performance of Islamic banks: evidence from an emerging economy of Pakistan

PurposeGiven the relative importance of the Shari’ah supervisory boards (SSBs) in Islamic banks’ (IBs’) performance, this study aims to examine the impact of SSB diversity on IBs’ performance from the stakeholders’ perspective in the context of Pakistan.Design/methodology/approachRandom-effects model and generalized method of moment are used to investigate the impact of SSB diversity on IBs’ performance across a panel data of 22 Islamic banks in Pakistan from 2005 to 2020 inclusive.FindingsThe findings of this study show that SSB size, SSB relevant educational background diversity, bank’s size and bank’s stability have a positive impact on IBs’ performance. In contrast, SSB age, nationality and cross-membership diversities have a negative impact on IBs’ performance. Moreover, SSB gender, tenure and general educational diversities have no significant impact on IBs’ performance.Research limitations/implicationsSSB diversity and IBs practices are different across different jurisdictions. This study is conducted on IBs in Pakistan because of data constraints; thus, the results of this study may not be generalizable to other countries' IBs.Practical implicationsIn structuring the SSBs’ framework, the regulatory authorities and policymakers should consider mandating an ideal SSB size and hiring relevant qualified members with low cross-membership to improve IBs' performance. Thus, the structure potentially attracts Muslim stakeholders, enhances their satisfaction and improves IBs' performance.Social implicationsHaving diversified members in the SSB, IBs equally benefit both individual and group stakeholders in society. Diversity in SSB members enhances IBs' performance and the social welfare of various stakeholders in society.Originality/valueTo the best of the authors' knowledge, this is the first empirical research that examines comprehensively the impact of SSB structural and demographic diversities on IBs' performance in the context of Pakistan. This paper contributes to the unique Shari’ah governance structure in the context of Pakistan. Additionally, this study may serve to assist IBs’ stakeholders in better comprehending the SSB practices of IBs in Pakistan.

Shariah Compliance: An Empirical Study on the Perceptions of Islamic Financial Institutions in Pakistan

This paper examines the importance of Shariah Compliance for Islamic Financial Institutions (IFI) in Pakistan along with the process followed to ensure it. Islamic Banking was initiated in Pakistan in early 2000s and by now a proper network exists with a market share of 13.6 % of Assets and 14.7% of deposits with a network of 21 Islamic Banking institutions, out of which 5 are full-fledged Islamic Banks and 16 conventional banks have standalone Islamic windows. This study contributes as being first of its nature to study the Shariah compliance in the context of Pakistan. For the study, mainly primary data was used. Interviews of Shariah Compliance Heads and Shariah Advisors were conducted. The results indicate that a Shariah Compliance acts as a vital element for Islamic banking in Pakistan and influences the operations carried out by them. Moreover, a proper Shariah Governance System is also implemented and followed by the Islamic Financial Institutions. In addition to this, Shariah Advisors also play a pivotal role in the whole procedure and are responsible for Shariah Compliance in the IFIs.

Risk committee characteristics and risk disclosure in banks: evidence from an emerging economy

PurposeThis study aims to investigate the impact of risk committee characteristics on the risk disclosure of banking institutions in an emerging economy, Pakistan.Design/methodology/approachThe data are collected through a manual content analysis of 21 banks regulated by the State Bank of Pakistan over the period 2011–2020. The study utilizes the generalized least square (GLS) regression model as the method of analysis.FindingsThe study finds that risk committee size is positively associated with risk disclosure, which is in line with agency theory. However, risk committee independence and risk committee gender diversity are negatively associated with risk disclosure. This contradicts the theoretical perspective and is explained by the weak regulatory framework of Pakistan.Research limitations/implicationsThis study was carried out in a single research setting, which limits the generalizability of its findings to other developed and emerging economies.Practical implicationsThe results provide valuable insights for regulators by identifying the attributes that require regulatory focus to strengthen risk committees and enhance risk disclosure practices within the banking sector of Pakistan. The findings highlight the effectiveness of the risk committee size, call for fully independent risk committees and encourage greater representation of women in these committees.Originality/valueThis study contributes to the corporate governance literature by empirically examining the risk committee characteristics and their impact on the risk disclosure of banks in an emerging economy. Moreover, this study contributes to theory by utilizing upper echelon theory in addition to agency theory as the motivation for the study.

Analytical Study of the influence of Relative Advantage and Compatibility on Customers’ Adoption of Islamic Banking in Pakistan

Although Pakistani Islamic banks offered consumers of Islamic banking and the country at large desirable opportunities, customer adoption remained low in Pakistan. Rogers' (2003) Diffusion of Innovation Theory was used in this study to examine the effects of relative advantage and compatibility on customer adoption of Islamic banking goods and services in Pakistan. The study looked at how adoption is directly impacted by relative advantage and compatibility. Relative advantage and compatibility were found to have a considerable impact on adoption, supporting hypotheses H1 and H2.

Factors Affecting the Financial Performance of Islamic Banks in Pakistan

This research aims to evaluate the internal factors influencing the performance of Islamic banks in Pakistan. There are currently five Islamic banks in operation, and data from all five have been used to analyze their performance from 2008 to 2021. The data was collected from the State Bank of Pakistan. To examine financial performance, this study used return on assets (ROA) and returns on equity (ROE) as proxies, and considered both internal attributes (such as liquidity, bank size, asset quality, capital adequacy ratio, operational efficiency, and assets management) and external factors (such as macroeconomic indicators like GDP growth and inflation rate). Ordinary least squares (OLS) estimation is employed to examine the relationship among variables. The estimation findings suggest that all of the internal factors have a strong association with banks' performance. Bank size and asset quality were found to have a positive and significant association with ROA, while asset quality and assets management were associated positively with ROE. Additionally, during the Covid-19 pandemic period, banks' size and liquidity were found to adversely affect ROA of Islamic banks, while operational efficiency had a positive impact.

Determinants of bank's efficiency in an emerging economy: A data envelopment analysis approach.

This study aims to assess the influence of internal and external factors on the Efficiency of banks in Pakistan using the Data Envelopment Analysis Approach (DEA). Bank's Efficiency is measured through DEA Model using input and output variables. The input variable includes the number of employees, number of branches, administration expenses, non-interest expenses, and loan loss provisions. In contrast, the output variable consists of net interest income, net commissions, and total other income. This study considers the internal determinants of the bank's Efficiency as corporate governance, enterprise risk management, ownership structure (state, foreign, and domestic ultimate owned banks), return on equity, financial leverage, and the size of the bank. The external determinants of the bank's Efficiency include banking structure and macroeconomic conditions. The study has used data from seventeen commercial banks over the period of 2011 to 2020. The study used the Data Envelopment Analysis Approach (DEA) and Logit and Probit Regression Model to evaluate research hypotheses. The Logit model results show that corporate governance, ultimate global ownership, and return on equity have a statistically significant and positive impact on the bank's Efficiency. Enterprise risk management and financial leverage adversely affect the bank's Efficiency. Better corporate governance can help banks to control the risk and cost of capital and enhancement the effectiveness of capital. Similarly, better risk management of banks can lead to better operational and strategic decisions in the competitive banking environment.

Contribution the Effect of Corporate Governance on Firm Performance in Pakistan

The study investigates the effect of corporate governance on firm performance in commercial banking sector of Pakistan. we have reviewed the previous studies from 1980-2021. In these researches Pakistani banks' financial performance is improved by board size, long-term CEOs, audit committee size, audit committee independence, foreign ownership, institutional possession, annual preferred meeting, and dividend coverage. In order to safeguard shareholders and improve the overall financial performance of the business, the banks have advocated for the adoption of sound corporate governance exercise. Most importantly, by enforcing appropriate endorsements for noncompliance and ensuring compliance with appropriate corporate governance, the regulatory authority ought to encourage the growth of the commercial banks of Pakistan. Beyond the rights and responsibilities of various stakeholders in the management of a company, the study aims to strengthen company governance in other areas, such as the relationship between a company and its finance vendors, compliance with societal demands for felony, ethical, and environmental standards, and others. The study's most significant contribution to knowledge is in this regard. The study compresence the interpretations that have frame corporate governance in relation to the company's overall performance has been significantly enhanced by this contribution.

Willingness towards eye donation: A public health necessity in Pakistan

Introduction: According to the WHO, a person is said to be blind when he/she has visual acuity of less than 3/60, and/or a corresponding visual field of less than 10°; for a smaller diameter, in the better eye with the best possible correction. At present, approximately 39 million individuals are bilaterally blind, and another 285 million with severe visual impairment.
 Objective: To assess the willingness and knowledge of the people regarding eye donation and to evaluate factors associated with eye donation.
 Methodology: This cross-sectional study was carried out in the outdoor patient department (OPD) of two governments and two private tertiary healthcare hospitals in Rawalpindi and Islamabad. A total of 360 individuals who visited OPD of the tertiary health care hospitals were included. Data were obtained by using an interview-based questionnaire after taking informed consent. Inferential analysis was done by applying the Chi-Square test and binary logistic regression.
 Results: Out of 360 respondents, the majority were males 201. 276 were willing to donate their eyes. Willingness showed a statistically significant association with occupation. 175 had good knowledge regarding eye donation. Male respondents had 3 times more knowledge regarding eye donation as compared to females. Respondents having an age higher than 30 years had 2 times high knowledge as compared to individuals having an age less than 30 years. 
 Conclusion: The majority of the people showed willingness but had little knowledge regarding eye donation procedures and eye banks in Pakistan.

CSR and Consumer Loyalty: Moderating Role of Consumer Characteristics: A comparative study of the banking Industry

This study analyses corporate social responsibility (CSR) with consumer loyalty in the banking industry. Specifically, our study empirically demonstrates the mediating role of Consumer Trust with Consumer demographics as a moderator. Through the quantitative analysis of an online survey,five hypotheseswere tested. These hypotheses were approved after the attestation of a structural equation model. Our findings revealed that CSR positively impacts consumer loyalty with the mediating role of consumer trust,whileconsumer demographics have multi-group moderation. Our study determines how consumers are more loyal to Pakistan's banking industry and how the trust level has increased due to CSR. Meanwhile,this research provides a better view of how CSR positively impacts consumer loyalty, and their trust level increases the level of commitment when consumers are facilitated with CSR activities. This study will help financial institutions raise their customers due to working on CSR. So the banking sector can expand its customer base level due by focusing on and implementing CSR

The Impact of Corporate Social Responsibility on Financial Performance: Evidence from the Listed Banks in Pakistan

Corporate social responsibility (CSR) has recently gained substantial attention from researchers across the world. Banks play a crucial role in the prosperity, development, and sustainability of society along with the growth of businesses. The study objective is to assess the impact of CSR initiatives on the financial performance with moderating variable of bank size in the context of Pakistan. The survey questionnaire was used to collect the primary data from respondents. In total 500 survey questionnaires were distributed and 441 fully completed questionnaires were returned, indicating a response rate of 88.2%. A total of eight hypotheses were developed and empirically tested using structural equation model (SEM). The descriptive statistics and direct path coefficients show that all four dimensions of CSR have substantial positive bearings on the financial performance of banks with discretion dimension being more effective. The results of moderating path coefficient show that size of a firm further stimulates and magnifies the impact of legal, ethical, and discretionary aspects of CSR on financial performance except the economic dimension is which has an insignificant impact. Keywords: Corporate Social Responsibility, Financial Performance, Banking Sector

Do you want to retain your relevant knowledge? The role of contextual factors in the banking sector

PurposeRetaining critical knowledge is relevant for all organizations, knowledge-intensive ones in particular. Failure to do so can, in the worst case, lead to an organization being unable to act. Acknowledging the role of context in this regard, the purpose of this paper is to examine knowledge retention (KR) in the banking sector of a developing country. A particular focus is placed on exploring various contextual factors that influence the retention of critical knowledge taking into consideration the setting.Design/methodology/approachFollowing a qualitative research design, semi-structured interviews were conducted with senior managers from private and public banks in Pakistan. Thematic analysis was used to analyze the data.FindingsThe findings suggest that the existence of a collectivist society, gender differences, few job opportunities, power distance and the late IT Boom are vital factors to be considered regarding KR in the setting studied. The findings are summarized in a conceptual framework that highlights critical factors of KR to be studied in a broader context and which are viewed as relevant for informing future research in this underdeveloped area of knowledge management (KM).Research limitations/implicationsThe data were collected from a small number of individuals working in different banks in only one country. Future studies should consider research designs across multiple organizations involving more people representing different roles, functions and age groups.Originality/valueExisting KM research has emphasized the role of context while research on KR is underdeveloped in this regard. By exploring different contextual factors this study advances current understanding in the KM domain.

Crowding in and crowding out in Pakistan: A Co-Integration Analysis of Public and Private Investment (1972-2015)

Investments in both public and private are essential to Pakistan's economy. Public investment iscrucial for any nation's economic development, but private investment serves as a catalyst for the creation of jobs and income. The primary purpose of this stud y is to empirically examine the “crowding-out and crowding-in” effects of state spending on private investment in Pakistan. The 43 most recent years (1972–2015) of data were gathered and examined. The main data sources used for data collection were the “State Bank of Pakistan”, "the Economic Survey of Pakistan," and "World Development Indicators”. The researchers considered all forms of investment, including private investment, "government interest spending," “current government spending”, and current government spending transfer. In the analysis section, the “Augmented Dickey-Fuller” test was employed to gauge the stationarity of the variables. All of the study's variables were found to be non-stationary using the analytical tools. The results of the "vector error correction model" (VECM), which was employed to examine both long-run and short-run causation, illustrate that government interest spending has a substantial and encouraging impact on private investments.

Macroeconomic Factor Affecting Non-Performing Loans (NPLs): Evidence from Commercial Bank in Pakistan Based ARDL Cointegration Approach

AbstractThe main objective of this study is to measure the NPLS in Pakistan’s commercial bank. The macroeconomic factor of Country GDP, corruption, unemployment, political instability and inflation it’s nettle the level of NPLS in commercial bank in Pakistan. The unemployment, increasing of interest rate, low economic growth and money laundering they elaborate the changing in NPLS. high inflation, unemployment ratio, huge cases of corruption, political instability are faced by the country.we are working time series data of Pakistan from 1972 to 2022 by using ARDL long and short run. We find that there is long run relationship exist between the variables, and co-integration also have positive and significant impact on NPLS.Finding The observation of this study shows that efficiency of managing the productivity had important effects on NPLS. The policy maker should be establishing the steps for creditors to ensure superb loan management and they will grant to the banks. If the better steps for loan will be establish then the bank will be stable and so their works efficiently. The Finding shows that GDP has positive/negative and significant impact on NPLS of commercial banking in Pakistan in long run/ short run. However, corruption has positive/negative and insignificant impact on NPLs in long run/ short run, we also find that inflation has negative and significant impact on NPLs in long run/short run, we also observed that interest rate has negative and significant impact on NPLs in long run/short run.

Credit Risk Management and Its Impact On the Performance of Commercial Banks in Pakistan: An Application of Penal Var Approach

Credit risk is nothing else but the default by the borrower. Credit risk management practices are adopted by the banks to mitigate this risk. It is crucial for every bank or financial institution to follow the effective risk management system to avoid or mitigate the credit risk. This paper is an attempt to investigate the effect of default or credit risk management on the financial performance of banks and how factors of CRM affect each other. VAR approach has been used to analyze the penal data. Sixteen private commercial banks have been taken into the consideration. Data has been collected from the year 2012 to 2021. Granger causality and impulse response have also been identified and analyzed. E view has been used for the purpose of analysis. Results of Granger causality reveal that almost all the variables are affecting or explaining each other. There is a bidirectional association ship between LTDR and ROE. In variance decomposition analysis, all the variables are mostly being affected by themselves or by their own shocks and shocked of other variables. Finally, short term relationship has been found or identified through VECM. This study is helpful for all the stakeholders of commercial banks. This study is also helpful for the students using penal var approach for understanding and analysis purpose. This study is also helpful for the decision makers to frame policy of credit risk management and see how effective risk management affects the financial health of commercial banks.

Impact of Leadership on Effective Succession Planning: Comparison of Public and Private Organizations

Leadership plays a substantial role in effective succession planning in public and private organizations. In comparison to private organizations, most public organizations have a bureaucratic structure. A study has been conducted to observe the impact of leadership on effective succession planning in public and private organizations. Study based on qualitative methodology. We can successfully observe the nature of both organizations by conducting an interview study. The study chose two private organizations, such as Standard Chartered Bank and Bank Alfalah. Two other public organizations are also taken into observation, namely the National Bank of Pakistan and the First Women's Bank of Pakistan. N=250 people from the aforementioned organizations were observed for the study. According to one study, hiccups integrate the nature of tenancy and political administration in people working in the public sector, as well as work force framework principles, the absence of assets, and the absence of core interests. A study found that proper implementation of strategies needs to be taken into consideration because most organizations fail to implant the proper program. Decision-making is also important because it’s necessary to take the right decision at the right time for effective succession planning.