This paper analyzes the impact of CRAMEL model on commercial banks financial
performance working in Pakistan. Firm financial performance used as dependent
variable e.g. ROA, ROE and TQ whereas Capital Adequacy, Resource Allocation, Asset Quality,
Management Efficiency, Earning Profitability and Liquidity were used as independent
variables. Panel data was analyzed through ordinary least square, fixed effect and random effect
models. Secondary data of twenty listed commercial banks on Pakistan stock exchange are used
from the period of 2008 to 2017. Result of fixed effect model provided significant positive
relationship among CA, RA and ROA, ROE, whereas EP and LIQ have substantial negative
association with ROA and ROE. There is insignificant relation of AQ and EP with ROA and
ROE. Furthermore, EP has substantial positive association with Tobin's Q whereas RA, ME and
LIQ has substantial negative relation with Tobin's Q. Lastly CA and AQ have insignificant
impact on Tobin's Q.
1-Syed Masood Shah MS Management Science, Abdul Wali Khan University Mardan, KP, Pakistan.2-Muhammad Faizan Malik Assistant Professor, Abdul Wali Khan University Mardan, KP, Pakistan. 3-Sikandar Shah MS Management Science, Abdul Wali Khan University Mardan, KP, Pakistan.
Return on Assets, Return on Equity, Capital Adequacy, Resource Allocation, Asset Quality, Management Efficiency, Earning Profitability, Liquidity, Pakistan Stock Exchange