Journal of Poverty, Investment and Development www.iiste.org ISSN 2422-846X An International Peer-reviewed Journal Vol.13, 2015 1 A Comparison of Financial Performance of Banking Industry in Pakistan Ashfaq Habib Research Associate in University of Poonch Rawalakot Azad Kashmir Abstract The basic idea of this study is to evaluate the financial performance of banking industry in Pakistan from 2009 to 2013. The reason for choosing this period is to evaluate the finance performance of banking industry after the end of military regime in Pakistan and revolutionary change in banking. For this purpose entire banking industry is divided into four sectors, public commercial banks, private commercial banks, specialized banks and foreign banks. The average growth and return on total assets, total fixed assets, total operational assets and total shareholders’ equity were used to assess the performance of each banking sector which indicates that how banks used their assets and equity to increase their performance. The study guide that banks having more total assets , total fixed assets, total operational assets and total equity have better financial performance or not, It does not mean that banking sector having large fixed asset, operational assets and large equity have better financial performance than others. Keywords: Assets, Equity, Returns, Growth, Performance, Assessment INTRODUCION In Pakistan banking companies are registered and operate under the banking companies’ ordinance 1962. The State Bank of Pakistan has overall responsibility to monitor the entire banking system in Pakistan to perform the role of central bank in Pakistan. All the banks are legally bound to follow the instructions and guidelines issue by the state bank of Pakistan. Banks in Pakistan have implemented the minatory policy introduce by the SBP to control the inflation and deflation in the country. The SBP also implemented a policy for the developments and promotions of banking industry in the country. These policies have included denationalization and privatization of banks, interest rate deregulation, and development of a system of self-disciplined bank management. State Bank of Pakistan categorized all the banks on the base of registration, ownership, function and nationality. Currently the SBP specified the banks in four sectors, Public Commercial Banks, Private Commercial Banks, Specialized Banks and Foreign Banks which include both specialized and commercial banks. Central Bank deals issues relates to all the banks. Banking industries contribute in the economy development of a country by providing a major source of financial intermediation and their checkable deposit liabilities represent the bulk of the nation’s money stock. Banks basically perform the function of borrowing and lending on a define markup to make the return. Banking industry in Pakistan grow rapidly in the last decade and number of foreign banks also carried business in Pakistan in different sectors to earn the profit. Local banks expand their business and foreign banks also enter in market to avail the opportunity of the under developing financial market. Specialized banks expand their operations to provide the finance for the development and progress in some growing sectors. This development in banking sectors opens the doors of competition in financial market and resource mobilization. All the banks in Pakistan increase their services and now offer the variety of product to the customers such as Cash Credit, Bank Overdraft facility, ATM Card facility, Running finance facility, fixed deposit facility, Profit and loss saving account facility, funds transferring facility, Car loans facility and housing finance agricultural loan facility, industrial development loan etc. It is important to evaluate the overall performance and monitor their financial position for depositors, owners, potential investors, managers and, of course, regulators. Researchers used number of criteria and model to evaluate the performance of banks such as profitability, liquidity, assets quality, return on equity, debt stability, attribute towards risk and management strategies. The development of banking industry in Pakistan and entrance of public, private and foreign banks in local market not only increase the total number but also make it more important to evaluate the performance of banks on the basis of ownership, operation and nationality. In this paper efficiency of bank is measure on the basis of assets management and equity investment returns by using the financial ratios. The research try to determine that banks have higher total assets, large fixed assets and large equity earn higher return and large growth or not. For this purpose overall banks are divided in four categories on the define line of State Bank of Pakistan. This division includes Private commercial Banks, Public Commercial banks, Specialized Banks and Foreign Banks. STUDY OBJECTIVES The basis objective of this study is to evaluate the performance of entire banking industry by employing the