Antecedents of Sustainable Financial Performance: Evidence from the Banking Sector of Pakistan

Abstract

This research aims to investigate the determinants of the sustainable financial performance of banks listed on the Pakistan Stock Exchange. The data for the present research is collected from 30 banks over the period of 2012-2022. The panel cross-linear regression was employed to analyse the data by employing Stata. Various bank-specific factors were found to be positive and statistically significant antecedents of banks’ financial performance. However, bank size, business model and financial structure have negative and insignificant impacts on the bank’s financial performance. In a similar vein, macro-economic factors have a significant negative and insignificant positive impact on banks’ financial performance. Concerning social factors, only hospital funding has an adverse effect on financial performance. Last but not least, environmental financing is negatively and insignificantly linked with banks’ financial performance. Accordingly, this research concludes that managers and policymakers of commercial banks must keep their social and environmental investments in check to attain sustainable financial performance.