Impacts of Inflationary Trends on Banks’ Performance(Large Banks Segment) in Pakistan

Abstract

Inflation is an economic period in which prices raised interest rate increases and affects some businesses positively and some negatively. This paper examines the overall Inflationary trends that have great influence on the performance of the large banking segment of Pakistan. This study is directed to verify the impact of inflationary trends on the top rated banks in Pakistan and return on assets (ROA), return on equity (ROE) and net interest margin as key performance indicators of banking sectors are selected as variable. Researchers calculate the figures of these variables and then discuss these figures with bank representatives. The research sample consists of large banks in Bahawalpur district. Through discussion and calculated results, a strong positive relation has found among the variables, i.e. inflation over bank's performance. The limitation of the study is that data of limited years have been taken the due to the unavailability of data and time constraint as well as only banks of Bahawalpur district considered.