Exploring the impact of macroeconomic and internal factors on the profitability of Islamic banks of Pakistan


  • Dr. Fahad Bahauddin Zakariya University Multan
  • Haris Ali Islamic Banking and Finance, Bahauddin Zakaryia University Multan
  • Miqdad Hani Islamic Banking and Finance, Bahauddin Zakaryia University Multan


Profitability of Islamic Banks, Return on assets, Return on equity, Non-performing load, Gross domestic production.


In this research we are attempting to investigate the effect of how the bank-specific profitability factors influence Islamic bank results. This research uses samples from 2015 to 2019 consisting of Pakistan's Islamic deposits. From both statistical multivariate regression models it is apparent that the relationship between gearing ratio and capital adequacy ratio has a favorable relationship and is statistically significant at the level of 5 percent, while asset management is statistically significant in Model I and Insignificant in Model II in both versions, with a positive relation. Bank size recorded negative and insignificant relationships in both models, which can be caused by the fact that most Islamic banks have been suffering losses in the last few years. In comparison, capital adequacy has found a major partnership in both models, as prudential controls are tightened by Pakistan's state bank. This analysis provides information for academics and practitioner’s alike. The financial and economic literature on the viability of Islamic banks should be strengthened.