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Empirical Examination for Operational and Credit Risk Perspective – A Case of Commercial Banks of Pakistan

Author

Listed:
  • Mehmood, Mian Saqib
  • Sheraz, Iram
  • Mehmood, Asif
  • G. Mujtaba, Bahaudin

Abstract

The objective of this study is to evaluate the factors that influence credit and operational risk in commercial banks. Financial data was collected from 11 commercial banks of Pakistan listed in Karachi Stock Exchange (KSE) over the period of 2009-2014. Different statistical tools and techniques are applied to find the cause and effect relationship for the underconsideration issue.The banking sector have faced the rivalry with other financial institutions to grab the attention of the customers and having a considerable competition with other banks. The result has shown that operational risk had significant but negative relation with NPL and operating efficiency but positive and highly significant relationship with bank size. Credit risk had significant and positive regression values with gearing ratio. NPL, operating efficiency and bank size had negative and insignificant relation with credit risk. There was no relationship between gearing ratio and operational risk. However the bottomline of this research suggests that banks play an important role in providing the finance for many of the businesses. Moreover these institutions need more managerial grip and vigilant attitude towards the risk management.

Suggested Citation

  • Mehmood, Mian Saqib & Sheraz, Iram & Mehmood, Asif & G. Mujtaba, Bahaudin, 2017. "Empirical Examination for Operational and Credit Risk Perspective – A Case of Commercial Banks of Pakistan," MPRA Paper 80491, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:80491
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    References listed on IDEAS

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    Cited by:

    1. azahar, intan nur asyiqin, 2019. "An Analysis Of Performance In E-Commerce Industry," MPRA Paper 97210, University Library of Munich, Germany.

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    More about this item

    Keywords

    Operational Risk; Credit Risk; KSE; Commercial Banks; Pakistan;
    All these keywords.

    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G0 - Financial Economics - - General
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration

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