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LINKING NONPERFORMING LOANS WITH ORGANIZATIONAL PERFORMANCE EVIDENCE FROM BANKING SECTOR OF PAKISTAN

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04 Pages : 35-44

http://dx.doi.org/10.31703/ger.2019(IV-IV).04      10.31703/ger.2019(IV-IV).04      Published : Dec 2019

Linking Non-Performing Loans with Organizational Performance: Evidence from Banking Sector of Pakistan

Abstract

    The contemporary study explored the impacts of nonperforming loans on banks profitability. In order to find the effects of non-performing loans on bank profitability, the study included controlled variables as deposit to total assets, liability to total assets and size of the bank. The study population comprises of Pakistani commercial banks. The study sample is made up of 10 years of data from 2006 to 2015. By testing the hypotheses, diverse econometric tests corresponding correlation, ordinary least square regression and autoregressive model were applied. The study originated a negative and significant association of non-performing loans on bank profitability. Deposit to total assets have positive, however insignificant association with bank profitability (return on asset, return on equity). Liability to total assets has negative significant relation with bank profitability. In the same way, the study also established a positive and significant relationship of the size of the bank and banks profitability. The study also found that NPLs is negatively associated with share prices.

    Non-Performing Loans, Deposit to Total Assets, Liability to Total Assets, Bank Size, Bank Profitability

    (1) Amna Sana
    PhD Scholar, Department of Management Sciences, Qurtuba University D.I. Khan, KP, Pakistan.
    (2) Mohammad Fayaz
    Lecturer, IBMS, The University of Agriculture, Peshawar, KP, Pakistan.
    (3) Rahman Ullah
    PhD Scholar, Department of Management Sciences, Qurtuba University Peshawar, KP, Pakistan.
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Cite this article

APA

    APA : Sana, A., Fayaz, M., & Ullah, R. (2019). Linking Non-Performing Loans with Organizational Performance: Evidence from Banking Sector of Pakistan. Global Economics Review, IV(IV), 35-44. https://doi.org/10.31703/ger.2019(IV-IV).04

CHICAGO

    CHICAGO : Sana, Amna, Mohammad Fayaz, and Rahman Ullah. 2019. "Linking Non-Performing Loans with Organizational Performance: Evidence from Banking Sector of Pakistan." Global Economics Review, IV (IV): 35-44 doi: 10.31703/ger.2019(IV-IV).04

HARVARD

    HARVARD : SANA, A., FAYAZ, M. & ULLAH, R. 2019. Linking Non-Performing Loans with Organizational Performance: Evidence from Banking Sector of Pakistan. Global Economics Review, IV, 35-44.

MHRA

    MHRA : Sana, Amna, Mohammad Fayaz, and Rahman Ullah. 2019. "Linking Non-Performing Loans with Organizational Performance: Evidence from Banking Sector of Pakistan." Global Economics Review, IV: 35-44

MLA

    MLA : Sana, Amna, Mohammad Fayaz, and Rahman Ullah. "Linking Non-Performing Loans with Organizational Performance: Evidence from Banking Sector of Pakistan." Global Economics Review, IV.IV (2019): 35-44 Print.

OXFORD

    OXFORD : Sana, Amna, Fayaz, Mohammad, and Ullah, Rahman (2019), "Linking Non-Performing Loans with Organizational Performance: Evidence from Banking Sector of Pakistan", Global Economics Review, IV (IV), 35-44

TURABIAN

    TURABIAN : Sana, Amna, Mohammad Fayaz, and Rahman Ullah. "Linking Non-Performing Loans with Organizational Performance: Evidence from Banking Sector of Pakistan." Global Economics Review IV, no. IV (2019): 35-44. https://doi.org/10.31703/ger.2019(IV-IV).04