Impact of Privatization of Banks on Profitability of Banking Sector in Pakistan

Abstract

This study has been done to investigate the impact of privatization of banks on their profitability. For this purpose researchers selected the three banks for their analysis which are Allied Bank Limited (ABL), Habib Bank Limited (HBL), & Muslim Commercial Bank (MCB). Researchers have selected the ROE, ROA, Capital (Investment), Size (Total Assets), & Deposits as their Research Variables. In order to analyze the impact of Privatization on banks profitability researchers selected the dual Methodology in which they first analyze the profitability ratios of selected banks after and before the Privatization takes place, and secondly employed a t-test model to drive desired results. The results suggested that there is a significant positive impact of Privatization of particular banks on their profitability and overall profitability of banking sector of Pakistan. 

Keywords: Pre-Privatization, Post-Privatization, ROA, ROE, Deposits, Capital