Factors Effecting Return on Equity of Commercial Banks: An Empirical Evidence of Pakistani Banking Sector

This study determined the profitability of commercial banks in Pakistan through Leverage ratio, liquidity and net profit margin, author have selected this topic to determine the listed commercial bank’s profitability in Pakistan and have collected 19 listed commercial bank’s data from 2015–2021 from financial websites of banks, State bank of Pakistan and Pakistan Stock Exchange. Independent variables of this research were leverage ratio, liquidity and net profit margin and the dependent variable of this research is 6 years’ data have been collected of these said variables. E-Views was applied to analyze the data. Output suggested that there is a positive association of leverage ratio, liquidity and net profit margin with return on equity. This study shows observational prove almost the bond among liquidity and productivity of recorded ordinary banks of Pakistan Stock Exchange over the period of 2015 to 2021. In our study, individual bank characteristics (inside variables as it were) are considered as determinants of bank productivity in Pakistan. It is proposed that future research must tend to a longer period of time with having a broader determination of capital structure and profitability measures can reveal a few modern issues. This study can be amplified by including more banks or by conducting a think about on worldwide level with consideration of all banks around the world.