Abstract
The study tends to examine the financial performance of Pakistani banks by using financial ratios, inflation and
corporate governance. To examine the impact of ratios, inflation and corporate governance on performance of
banks, data of seventeen years from 2000 to 2016 of financial sector of Pakistan is used. The major sources of data
used in this study are World Bank, IMF and Pakistan Statistics Bureau. However major data is collected from the
financial reports issued by State Bank of Pakistan i.e. FSA and BSA. The study tend to used descriptive summary
and correlation matrix for diagnostic testing. However linear regression method also applied to examine the cause
and effects relationship. Regression result analyze that CG have significant relationship with profitability. Inflation
rate also has significant relationship with profitability of firms. Financial ratios i.e. cost income ratio, loan loss
reserve ratio and total loan ratio have significant relationship with profitability of firms. There are some limitations
in this study as there are factors other than inflation rate and corporate governance that affect performance of
banks which are not included in this study. This study provide a clear thoughtful to the policy makers, researchers
and corporations. They can build their assurance and can make more rational decisions towards policy formulation
after understanding the financial performance of banks accurately. They will also be able to understand the role of
inflation rate and CG in measuring the performance of banks.
Zafar Iqbal, Hafiz Abdul Rashid, Aftab Hussain Tabassam. (2021) Analyzing the Financial Performance of Pakistani Banks By using Inflation, financial ratios and Corporate Governance, Journal of the Research Society of Pakistan, Volume-58, Issue-1.
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