ARTICLE

IMPACT OF CRAMEL MODEL ON THE FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN PAKISTAN

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07 Pages : 67-77

http://dx.doi.org/10.31703/ger.2020(V-III).07      10.31703/ger.2020(V-III).07      Published : Sep 2020

Impact of Cramel Model on the Financial Performance of Commercial Banks in Pakistan

Abstract

    This paper analyzes the impact of CRAMEL model on commercial banks financial performance working in Pakistan. Firm financial performance used as dependent variable e.g. ROA, ROE and TQ whereas Capital Adequacy, Resource Allocation, Asset Quality, Management Efficiency, Earning Profitability and Liquidity were used as independent variables. Panel data was analyzed through ordinary least square, fixed effect and random effect models. Secondary data of twenty listed commercial banks on Pakistan stock exchange are used from the period of 2008 to 2017. Result of fixed effect model provided significant positive relationship among CA, RA and ROA, ROE, whereas EP and LIQ have substantial negative association with ROA and ROE. There is insignificant relation of AQ and EP with ROA and ROE. Furthermore, EP has substantial positive association with Tobin's Q whereas RA, ME and LIQ has substantial negative relation with Tobin's Q. Lastly CA and AQ have insignificant impact on Tobin's Q.

    Return on Assets, Return on Equity, Capital Adequacy, Resource Allocation, Asset Quality, Management Efficiency, Earning Profitability, Liquidity, Pakistan Stock Exchange

    (1) Syed Masood Shah
    MS Management Science, Abdul Wali Khan University Mardan, KP, Pakistan.
    (2) Muhammad Faizan Malik
    Assistant Professor, Abdul Wali Khan University Mardan, KP, Pakistan.
    (3) Sikandar Shah
    MS Management Science, Abdul Wali Khan University Mardan, KP, Pakistan.
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Cite this article

APA

    APA : Shah, S. M., Malik, M. F., & Shah, S. (2020). Impact of Cramel Model on the Financial Performance of Commercial Banks in Pakistan. Global Economics Review, V(III), 67-77. https://doi.org/10.31703/ger.2020(V-III).07

CHICAGO

    CHICAGO : Shah, Syed Masood, Muhammad Faizan Malik, and Sikandar Shah. 2020. "Impact of Cramel Model on the Financial Performance of Commercial Banks in Pakistan." Global Economics Review, V (III): 67-77 doi: 10.31703/ger.2020(V-III).07

HARVARD

    HARVARD : SHAH, S. M., MALIK, M. F. & SHAH, S. 2020. Impact of Cramel Model on the Financial Performance of Commercial Banks in Pakistan. Global Economics Review, V, 67-77.

MHRA

    MHRA : Shah, Syed Masood, Muhammad Faizan Malik, and Sikandar Shah. 2020. "Impact of Cramel Model on the Financial Performance of Commercial Banks in Pakistan." Global Economics Review, V: 67-77

MLA

    MLA : Shah, Syed Masood, Muhammad Faizan Malik, and Sikandar Shah. "Impact of Cramel Model on the Financial Performance of Commercial Banks in Pakistan." Global Economics Review, V.III (2020): 67-77 Print.

OXFORD

    OXFORD : Shah, Syed Masood, Malik, Muhammad Faizan, and Shah, Sikandar (2020), "Impact of Cramel Model on the Financial Performance of Commercial Banks in Pakistan", Global Economics Review, V (III), 67-77

TURABIAN

    TURABIAN : Shah, Syed Masood, Muhammad Faizan Malik, and Sikandar Shah. "Impact of Cramel Model on the Financial Performance of Commercial Banks in Pakistan." Global Economics Review V, no. III (2020): 67-77. https://doi.org/10.31703/ger.2020(V-III).07