This ratio is used to indicate the exposure by non performing loans to owners

This ratio is used to indicate the exposure by non

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were working in Pakistan during the period of 2006-2009. This ratio is used to indicate the exposure by non- performing loans to owners. Here, public banks have high ratio than private banks which means public banks are efficient than private banks. Table 16: Ranks of Public and Private Banks based on Bank Size and Financial Ratios Financial Ratios Public Banks Private Banks Bank size 2 1 Efficiency / Profitability Ratios: 1. Spread ratio 2 1 2. Net Interest Margin Ratio 2 1 3. Return on Owners’ Equity 1 2 4. Return on Total Assets 1 2 5. Non-Interest Expenses to Total Income 2 1 Liquidity Ratios: 1. Cash & Cash Equivalents to Total Assets 1 2 2. Investment to Total Assets 1 2 3. Advances to Total Assets 2 1 4. Total Liabilities to Total Assets 2 1 Capital / Leverage Ratios: 1. Capital Ratio 2 1 2. Break up value per share 1 2 3. Deposits to Equity Ratio 1 2 Asset Quality Ratios: 1. NPLs to Gross Advances 1 2 2. NPLs to Equity Ratio 1 2 5. Conclusions On the basis of results and analysis, public and private banks has different ranking based on bank size and each financial ratio categories such as efficiency / profitability ratios, capital / leverage ratio, liquidity ratios, and asset quality ratios. a. Based on bank size, private banks are at first, and public banks are second. b. Based on efficiency / profitability ratios, public banks are at first on the base of return on total assets (ROA) and return on owners’ equity (ROE ). Whereas, private banks are at first on the base of spread ratio, non-interest expenses to total income ratio and net interest margin ratio. c. Based on liquidity ratios, public banks are at first on the base of cash & cash equivalents to total assets ratio of bank and investments to total assets ratio. Whereas private banks are at first on the base of advances to total assets ratio and debt to assets ratio. d. Based on capital / leverage ratios, public banks are at first on the base of break up value per share and deposits to equity ratio. Whereas private banks are at first on the base of capital ratio.
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International Journal of Business and Social Science Vol. 2 No. 11 [Special Issue - June 2011] 64 e. Based on asset quality ratios, public banks are at first and private banks are second. References 1. Aburime, U. T. (2009). Impact of Political Affiliation on Bank Profitability in Nigeria. African Journal of Accounting, Economics, Finance, and Banking Research , 4 (4), 61-75. 2. Ahmad, H. K., Raza, A., Amjad, W., & Akram, M. ( 2011). Financial Performance of Non Banking Finance Companies in Pakistan. Interdisciplinary Journal of Contemporary Research in Business , 2 (12), 732-744. 3. Alam, H. M., Raza, A., & Akram, M. (2011). Financial Performance of Leasing Sector. The Case of Pakistan. Interdisciplinary Journal of Contemporary Research in Business , 2 (12), 339-345. 4. Athanasoglou, P. P., Brissimis, S. N., & Delis, M. D. (2008).Bank-specific, industry-specific and macroeconomic determinants of bank profitability. International Financial Markets Institutions & Money, 18 (2008), 121-136.
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