THE INFLUENCE OF BANK CAPITAL, LIQUIDITY RISK, AND CREDIT RISK ON THE FINANCIAL INSTITUTIONS PROFITABILITY: FINDINGS FROM NEWLY GROWING MARKET ON ISLAMIC V/S CONVENTIONAL BANKS

Abstract

The main focus of this study is to check the influence of bank capital, liquidity risk, and credit risk on profitability of financial institutions of both Islamic and conventional banking profitability. Purposive sampling technique has been applied for this study to collected data with 138 respondents who are working in finance department of both Islamic and conventional banking. In this study using explanatory research approach with using quantitative research of 138 respondents in Karachi, Pakistan. Afterwards, to check the relationship between different constructs PLS-SEM software has been used for statistical technique to analyze the current model. Finding of this study show the influence of bank capital, liquidity risk, and credit risk on profitability of financial institutions both banks. Credit risk is negatively effect on the bank profitability and the bank capital and Liquidity risk is positively impact on the profitability of both banking. The Study has been finding into four main areas such bank capital, liquidity risk and credit risk.