Contact Us

For Marketing, Sales and Subscriptions Inquiries
Rockefeller Center, 45 Rockefeller Plaza
20th Flr Unit #5, New York, NY 10111
United States

Conference List

The Economics and Finance Letters

March 2019, Volume 6, 1, pp 40-56

Determinants of Banks Profitability & Liquidity and the Role of BASEL III in Islamic & Conventional Banking Sector of Pakistan: A Case Study of NBP

Sitara Bibi


Fatima Mazhar

Sitara Bibi 1 Fatima Mazhar 1 ,

  1. Department of Management Sciences, Govt Sadiq College Women University Bahawalpur, Pakistan. 1

on Google Scholar
on PubMed

Pages: 40-56

DOI: 10.18488/journal.29.2019.61.40.56

Share :

Article History:

Received: 11 December, 2018
Revised: 22 January, 2019
Accepted: 28 February, 2019
Published: 06 May, 2019


This study aimed to examine and compare the performance of Islamic and Conventional banking sector of Pakistan in terms of the impact of BASEL III reforms on the profitability and liquidity of Islamic and conventional banks of Pakistan. For this purpose, National bank of Pakistan has been taken as a unit of analysis and eight year’s financial data has been collected from the official website of NBP. BASEL III standard’s ratios including CAR, CER and LCR have been used as an independent variable while the bank’s profitability and liquidity have been taken as a dependent variable. Descriptive statistics have been performed first to examine and compare the performance of both Islamic and conventional banking sector before and after the induction of BASEL III. After that T-Test has been performed to investigate the differences between the impact of BASEL III on the profitability and liquidity of Islamic and conventional banking sector. The regression analysis has been performed to examine whether BASEL III has a strong relationship with Islamic or conventional banking sector. The results found that BASEL III has a significant positive relationship with the profitability and liquidity of the Islamic sector. Islamic banks are higher in terms of the impact of BASEL III on profitability and liquidity. They are more profitable, more liquid and highly capitalized with BASEL III standards. While Conventional banking sector needs to redesign their policies and make them more compliant with BASEL III to generate more profit and be more liquid as Islamic banks are.
Contribution/ Originality
This study is one of the very few studies which have investigated the impact of BASEL III on the profitability and liquidity of Islamic and Conventional banking sector through comparative analysis. The results reveal that Islamic banks are more profitable, more liquid, more compliant and highly capitalized with BASEL III standards.


Islamic banks, Conventional banks, Profitability, Liquidity, BASEL accord, Comparative analysis, Pakistan.




Google Scholor ideas Microsoft Academic Search bing Google Scholor


This study received no specific financial support.

Competing Interests:

The authors declare that they have no competing interests.


Both authors contributed equally to the conception and design of the study.

Related Article

( 1 ) Determinants of Share Price Movement in Nigeria -The Management Perspective
( 2 ) Determinants of Tax Revenue in Ethiopia (Johansen Co-Integration Approach)
( 3 ) Determinants of Import Demand Functions of Pakistan: An ARDL Bound Testing Approach
( 4 ) Determinants of Rural Residential Solid Waste Collection Services in Lagos State
( 5 ) Determinants of Public Sector Corruption in Nigeria
( 6 ) Determinants of Banks Profitability & Liquidity and the Role of BASEL III in Islamic & Conventional Banking Sector of Pakistan: A Case Study of NBP
( 7 ) Estimating the Economic Determinants of Technical Efficiency of Bioenergy in EU-28: An Application of Tobit Analysis
( 8 ) Determinants of Corporate Tax Avoidance Strategies among Multinational Corporations in Malaysia
( 9 ) Determinants of Exchange Rate in Nigeria: A Comparison of the Official and Parallel Market Rates
( 10 ) Determinants of Financial Performance and its Impact on the Growth of Islamic Bank Assets on Indonesia
( 11 ) Analysis of Credit Ratings Determinants: Evidences in Brazilian and American States
( 12 ) Determinants of Profitability and its Implications on Corporate Values (Studies at Ceramic, Porcelain and Glass Sub Sector Listed in Indonesia Stock Exchange, 2009 - 2018)
( 13 ) Determinants of Firm Profitability: Evidences from Bangladeshi Manufacturing Industry
( 14 ) Determinants of Technical Efficiency of Hospitals in Kenya: 2012-2016
( 15 ) Socioeconomic Determinants of Drug Abuse in the United States
( 16 ) The Total Factor Productivity of Libyan Banks, 2004 – 2010
( 17 ) The Effects of Changes in Accounting Standards on Value Relevance of Financial Statement Information of Malaysia and Nigeria Banks
( 18 ) The Mediating Effect of Market Orientation on the Relationship between Entrepreneurial Orientation Dimensions and Organizational Performance: A Study on Banks in Libya
( 19 ) Measuring the Quality of Islamic Banks Services and Its Impact on Customers Satisfaction A Survey Study on the Islamic Banks Customers in Lattakia-Syria
( 20 ) Measuring Efficiency in Banks: A Brief Survey on Non – Parametric Technique (Data Envelopment Analysis)
( 21 ) Appointment of Directors and Performance of Deposit Money Banks in Sub Saharan Africa: Do We Need More Executive or Non-Executive Directors?
( 22 ) The Effect of Personal Factors on the Customer Rating of the Quality of Services of the Islamic Banks Operating in the Syrian Coast
( 23 ) Relevance of Stakeholders Theory, Organizational Identity Theory and Social Exchange Theory to Corporate Social Responsibility and Employees Performance in the Commercial Banks in Nigeria
( 24 ) Financial Tables Reports Gaps in Jordanian Islamic Banks
( 25 ) Effects of Corporate Social Responsibility on Banks Financial Performance in Nigeria: A Study of United Bank of Africa
( 26 ) Electronic Banking Innovations and Selected Banks Performance in Nigeria
( 27 ) The Effect of Internal and External Factors of Companies on Profitability and its Implications on Stock Price Index of State-Owned Banks
( 28 ) Sectoral Credit Allocation of Deposit Money Banks and Poverty Reduction in Nigeria
( 30 ) Analysis of Effect of Profitability, Capital, Risk Financing, the Sharia Supervisory Board and Capabilities Zakat in Islamic Perspective with Circular Approach Causastion on Islamic Banks in Indonesia
( 31 ) Analyzing the Financial Soundness of Kuwaiti Banks Using CAMELS Framework
( 32 ) Financial Inclusion and Poverty Alleviation: The Contribution of Commercial Banks in West Africa
( 33 ) Interest Rate Ceilings and Financial Exclusion in Kenya: Evidence from Commercial Banks’ Sectoral Credit Distribution
( 34 ) Change Management and Firm Performance of Selected Deposit Money Banks in Owerri, Imo State, Nigeria
( 35 ) Factors Influencing Profitability of Commercial Banks in Tanzania: A Case Study of CRDB Bank Plc
( 36 ) On the OCC Announcement Allowing US Banks to Use Stablecoins and the Immediate Impact on Cryptocurrency Valuations
( 37 ) The Relationship Between Market Share and Profitability of Ghanaian Banks
( 38 ) The Effect of Selected Financial Ratios on Profitability: An Empirical Analysis of Listed Firms of Cement Sector in Saudi Arabia
( 39 ) Market Share and Profitability Relationship: A Study of the Banking Sector in Nigeria
( 40 ) The Profitability of Momentum Strategies: Empirical Evidence from Damascus Securities Exchange (DSE)
( 42 ) Profitability of Commercial Bank on Interest Rate Deregulation
( 43 ) Factors that Influence Profitability of General Insurance Issuers in Indonesia
( 45 ) Profitability Behavior of Plastic Industries in Indonesia
( 47 ) Does Capital Structure Affect the Profitability of Listed Family and Non-Family Firms? Evidence from Bangladesh
( 49 ) Testing the Validity of Gibrats Law in the Context of Profitability and Leverage
( 50 ) The Effect of Capital Structure Decisions on Profitability of Quoted Consumer Goods in Nigeria
( 52 ) Factors Affecting Profitability of General Insurance Companies in Indonesia
( 55 ) The Lead-Lag Relationships between Construction Investment and GDP: Granger Causality Tests and Impulse Responses Using Japanese Data
( 57 ) The Colonialists & Indigenous Exchange Currency: Tracing the Genesis of Socioeconomic Woes in Postcolonial Nigeria
( 58 ) Export- Led Growth Hypothesis for Ghana: A TVAR & TVECM Analysis
( 59 ) A Study on Financial Performance of Transport & Warehouses Firms Listed on the Hanoi Stock Exchange
( 60 ) Money Supply & Growth Nexus: Evidence from Nigeria
( 61 ) Analysis of Synergies in Indian Corporate M&A Deals: A Logit Regression Approach
( 62 ) The Impact of the Global Financial Crisis on the Debt, Liquidity, Growth, and Volume of Companies in Palestine Stock Exchange
( 64 ) Making Poverty A History in Africa: The Role of the G8
( 65 ) Relationships Between Leadership Roles and Project Team Effectiveness as Perceived by Project Managers in Malaysia
( 66 ) Driving Role of Institutional Investors in the Indian Stock Market in Short and Long-Run – An Empirical Study
( 67 ) The Role of Information and Communication Technology in Rural Socio-Economic Development in Africa
( 68 ) Social Security; A Public Policy for Good Governance in Nigeria: The Role of Nigerian Legislature
( 69 ) The Role of Bank Loans in Monetary Policy Transmission in Malaysia
( 70 ) Nigerian Politics, Economic Development, and the Role of Human Rights Organisations on Elections
( 71 ) Role of Foreign Investment and External Debt in Determination of Exchange Rate
( 72 ) Moderating Effects of Project Management Experience, Project Team Size, Project Duration and Project Value Size on the Relationship between Project Manager’s Leadership Roles and Project Team Effectiveness in Malaysia
( 73 ) The Role of Strategic Planning on the Management of Organizational Change
( 74 ) The Role of Social Entrepreneurship in Pakistan and its Impact on Economy
( 75 ) Industrialization and Economic Growth in Sub-Saharan Africa: The Role of Human Capital in Structural Transformation
( 76 ) The Roles of Labour Union in Nigeria Industrial Harmony and Development
( 77 ) Foreign Direct Investment in Zimbabwe: The Role of Uncertainty, Exports, Cost of Capital, Corruption and Market Size
( 79 ) Rethinking Port Role as Transport Corridor under Symbiosis Theory-Case Study of China-Europe Trade Transportation
( 80 ) The Role of Social Security Program for Enhancing Seniors Longevity
( 81 ) Trade Union Performance and Industrial Relations Climate in the Nigerian Petroleum Sector
( 82 ) Ethical Context of Organization and Turnover Intention of Women Employees: The Mediating Role of Perceived Organizational Support
( 83 ) The Role of Women in Rural Development in Enugu State, Nigeria
( 84 ) International Business Expansion: The Roles of Affiliation and Ownership
( 85 ) Role of Talent Development on Talent Engagement and Self-Efficacy: A Structural Model
( 86 ) The Role of Social Capital and Social Innovation in Economic Growth
( 87 ) Effects of Green Human Resource Management on Employee Green Behavior: Moderating Role of Employee Environmental Knowledge
( 88 ) Facing the Challenges of Covid-19 in the Egyptian Banking Sector: The Role of Bricoleurs in Achieving Organizational Innovations via Learning through Improvisation
( 91 ) A Model of Strategic Thinking: Islamic and Iranian Perspective
( 95 ) Does Gold Price Lead or Lags Islamic Stock Market and Strategy Commodity Price? A Study from Malaysia
( 96 ) Incorporating Islamic Ethic Elements into Marketing Mix Paradigm
( 108 ) Attributes Influencing Strategic Alignment in the Service Sector: An Indonesian Banking Sector Case Study
( 110 ) What Drives Banking Stability? Empirical Evidence from ECOWAS Countries
( 112 ) Depositors Confidence and Mergers and Acquisitions: The Nigerian Banking Sector Experience
( 114 ) Consumers’ Behavioural Intention to Adopt Mobile Banking in Rural Sub-Saharan Africa Using an Extension of Technology Acceptance Model: Lessons from Zimbabwe
( 115 ) Financial Risks in Turkish Banking Industry: A Panel Data Analaysis on Istanbul Stock Exchange
( 117 ) NGO Programming and Policy Advocacy in the Land Sector in Zimbabwe
( 118 ) Government Borrowing Behaviour: Implications for Private Sector Growth in Nigeria
( 119 ) Consideration the Effects of Water Sector Investment on Economic Growth in Iran
( 120 ) Influence Internship Learning Effect in Business Service Sector: Using Internship Self-Efficacy as the Mediator Variable
( 121 ) The Impact of Dividend Policy on Shareholders’ Wealth before and After Financial Melt down: Evidence from FMCG Sector in India
( 122 ) The Biodiesel Market in Brazil and the Prospects for the Sector
( 124 ) Workplace Bullying: Modelling Construct Validity in an Australian Public Sector Workforce
( 126 ) Exploration of Suitability of Situational Leadership in the Oil and Gas Sector
( 128 ) Auditing Procedures and Process in the Public Sector
( 129 ) Internationalization of State Multilatinas: A Multi-Case Study in The Oil Sector
( 130 ) Public Sector Size and GDP Growth Nexus: Panel Data Estimation
( 131 ) Leading Indicators and Financial Crisis: A Multi-Sectoral Approach Using Signal Extraction
( 133 ) Does Agricultural Sector Contribute to the Economic Growth in Case of Republic of Benin?
( 135 ) The Impact of Organisational Culture on Public Sector Performance: A Case Study of Local Authorities in Zimbabwe
( 137 ) Impact of Exchange Rate Fluctuation on Selected Economic Sectors of the Nigerian Economy
( 139 ) Value for Money (VFM) Audit and Public Sector Performance in Afikpo North Local Government Area of Ebonyi State, Nigeria
( 141 ) Nexus between Non-Oil Sectoral Contribution and Economic Growth in Nigeria 1981-2018
( 142 ) Factors Affecting the Individual Stock Price Index (IHSI) Industrial Manufacturing Sector in Indonesia, Automotive Sub Sectors, and Components in Indonesia Stock Exchange (IDX)
( 145 ) The Promise and Reality of Public Sector Reform – A Case Study of the Implementation of Trinidad and Tobagos Health Sector Reform
( 146 ) Employee Creative Behaviour: A Predictive Study of Perceived Relational Injustice and Workplace Ostracism among Public Sector Workers
( 147 ) Is Foreign Direct Investment the Way Forward for Manufacturing Sector Renaissance in Nigeria?
( 151 ) Kashmir Peasant Economy under Dogra’s: A Case Study of Agrarian Produce and Livestock 1885-1925 A.D
( 152 ) Promoting Entrepreneurship through Open and Distance Education in Zimbabwe. A Case Study of the Zimbabwe Open University Students at Masvingo Regional Campus
( 153 ) Taylor Rule in The Context of Inflation Targeting: The Case of Tunisia
( 154 ) Geographical Starting Points the Analysis of Current Rural Problems in Montenegro: Case Study of Rural Local Community Kralje
( 155 ) Reminiscing Stock Splits Announcement: A Malaysian Case
( 156 ) Testing the Random Walk: The Case of Hong Kong Stock Exchange
( 157 ) Foreign Direct Investment (FDI) and Employment: A Case of Province of Punjab, Pakistan
( 158 ) The Association Between Corporate Risk Disclosure and Firm Performance in Emerging Country – The Case of Egypt
( 159 ) Local Governance and Service Delivery in Zimbabwean Local Authorities: The Case of Harare and Masvingo Urban Municipalities
( 160 ) Promoting Local Acceptability of International Oil Companies (IOCS) Through Corporate Social Responsibility (CSR): The Case of Tullow Oil in Ghana
( 161 ) Challenges and Survival Strategies for Women in Small Scale Catering Business: A Case Study of Siyaso Magaba, Mbare
( 163 ) Micro-Credits and Poverty Reduction in Dar-Es-Salaam, Tanzania: A Case Study of Dar-Es-Salaam Commercial Bank
( 164 ) An Empirical Test on Effect of Intra-Product Trade on Regional Income Distribution: The Case of Liaoning, China
( 165 ) Effects of Advertising on Consumer Behavior in Low Density Houses: The Case of Marlborough, Zimbabwe
( 166 ) An Assessment of the Impact of Information Communication Technology (ICT) On the Administration of Public Records: A Case Study of the Bolgatanga Municipal Assembly in the Upper East Region of Ghana-West Africa
( 167 ) Investigating the Demand of Small Hotel and Restaurant Businesses for Bank Financing: The Case of Turkey
( 168 ) A Review on EU Transportation Projects within the Case of Turkey for European Union Regional Development Policy
( 169 ) Confirming the Mediation Effect of A Structural Model By Using Bootstrap Approach: A Case Study of Malaysian 8th Grade Students’ Mathematics Achievement
( 170 ) Forecasting-Based Carry Trade Using Pegged Currency: A Case of Omani Rial
( 171 ) A Theoretical Analysis Upon the Environmental Health and Justice Issue: A Case Study for a Comparison Between G20s Unitary and Federal Members
( 172 ) A Factor Analysis Approach Towards a Study of the Factors Affecting Students’ Choice of Higher Education Institution: A Case Study of a Private Institution (Twintech International University College of Technology)
( 173 ) Effects of Environmental Satisfaction on Family Displacement Case Study: Gohar Dasht Region, Karaj City
( 174 ) Rice Farmer and Capital Formation: A Case Study of Rice Farmer's Credit Cooperative in Itoikin, Ikosi-Ejirin LCDA, Lagos State
( 175 ) Investment Climate Rating Evaluation: The Case of Ukrainian Economy