Credit Risk Management Practices and Banks’ Performance in Pakistan

IF 2.3 Q3 BUSINESS
Umer Qazi, A. Ahmad, Mirwais Khan, Riffat Aisha
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Abstract

The main objective of this study is to investigate whether the credit risk management of Pakistan's commercial banks listed on the Pakistan Stock Exchange is linked to financial performance. For this purpose, the researchers have attempted to analyze the data trends of five major banks of Pakistan as a proxy representation of the entire banking sector of Pakistan. Five (5) years of panel data collected from the State Bank of Pakistan Annual publication and annual reports of respective banks was used to conduct the research. The study found that underperforming Credit Risk Management (CRM) loans and Capital Adjustment Ratios (CDRs) have an impact on the financial achievement of Pakistani commercial banks as measured by return on equity (ROE) and return on assets. For panel data analysis, inferential statistics (regression models) were used in this study. After analyzing the data, the researcher found that CRM has a significant impact on the financial performance of Commercial Banks of Pakistan. Furthermore, the researcher encourages the Pakistani banks to grow their profitability in terms of better CRM. Pakistan's banking sector must develop suitable CRM strategies and policies through a sound credit appraisal before lending to consumers and banks; an appropriate CRM mechanism must be developed, and the credit awards system must be thoroughly reviewed, properly informed and used to repay loans. Pakistani Banks would develop and implement strategies to improve their performance & competitiveness as well as limit their lending risk exposure.
巴基斯坦信贷风险管理实践与银行绩效
本研究的主要目的是调查在巴基斯坦证券交易所上市的巴基斯坦商业银行的信用风险管理是否与财务绩效有关。为此,研究人员试图分析巴基斯坦五大银行的数据趋势,作为巴基斯坦整个银行业的代理代表。从巴基斯坦国家银行的年度出版物和各自银行的年度报告中收集的五(5)年面板数据用于进行研究。研究发现,信用风险管理(CRM)贷款和资本调整比率(cdr)表现不佳对巴基斯坦商业银行的财务业绩(以股本回报率(ROE)和资产回报率衡量)有影响。对于面板数据分析,本研究采用推论统计(回归模型)。通过对数据的分析,研究者发现客户关系管理对巴基斯坦商业银行的财务绩效有显著的影响。此外,研究人员鼓励巴基斯坦银行在更好的客户关系管理方面提高盈利能力。巴基斯坦银行业必须在向消费者和银行放贷之前,通过健全的信用评估,制定合适的客户关系管理战略和政策;必须建立适当的客户关系管理机制,必须彻底审查信用奖励制度,适当告知并用于偿还贷款。巴基斯坦银行将制定和实施战略,以提高其业绩和竞争力,并限制其贷款风险敞口。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
CiteScore
4.70
自引率
5.60%
发文量
20
审稿时长
48 weeks
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