Title : Financial Dynamics of Listed Banks in Pakistan: Exploring the Interplay between Cost-Income Ratio, Capital Adequacy, and Performance Metrics

Vol 7 No 1 (2024): Volume 07 Issue 01 January 2024

Article Date Published : 31 January 2024 | Page No.: 831-841 | Google Scholar | Crossref doi for this article

Abstract :

This study delves into the relationship between the Cost-Income Ratio, Capital Adequacy, and the performance of listed banks in Pakistan. Drawing data from 2014 to 2022 annual reports, the Generalized Method of Moments (GMM) in STATA version 18 is employed for analysis. The findings disclose a negative connection between capital adequacy and performance, particularly return on assets (ROA) and return on equity (ROE). While the correlation lacks statistical significance for ROA, it becomes significant in the context of ROE. Additionally, a statistically significant negative correlation is identified between the cost-income ratio and both ROA and ROE. Total equity debt displays a negative relationship, achieving significance concerning ROA. Bank size demonstrates a significant negative correlation with both ROA and ROE. GDP exhibits a positive link, significant only with ROE. These findings contribute valuable insights into the dynamics of financial indicators influencing bank performance in the Pakistani context.

Keywords :

Capital adequacy, Efficiency, GMM, Performance, profitability

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How to Cite :

Financial Dynamics of Listed Banks in Pakistan: Exploring the Interplay between Cost-Income Ratio, Capital Adequacy, and Performance Metrics. Muhammad Iatzaz Ul Hassan, Mengyun WU, Charles Mawuena Gates , 7(1), 831-841. Retrieved from https://ijcsrr.org/single-view/?id=14878&pid=14318

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