Determinants of banks profitability:

Banking sector plays a vital role in the development of economy in every country. Profitability of commercial banks is basis for diversification, product innovation and efficiency of the commercial banks. The objective of the study is to identify which factors have impact on Banks profitability. The necessary data is collected from secondary source and studied on bank profitability and summarized that internal and external determinants effect on banks profitability. In internal factors liquidity, credit risk, and capital strength included on other hand in external factors or determinants GDP growth rate, inflation and interest rate included. Result concluded that internal factors have large proportion on profitability of bank; however external factors have also an impact on the performance. We use sample of 23 Pakistani Banks listed in KSE for the Period of 2011 to 2017 with 161 observations. In our study we take comparison between 3 models i.e. Pooled Effect model, Fixed Effect Model and Random Effect Model and also take three dependent variables.