1189|Int. J. of Multidisciplinary and Current research, Vol.3 (Nov/Dec 2015) International Journal of Multidisciplinary and Current Research Research Article ISSN: 2321-3124 Available at: http://ijmcr.com IŵpaĐt of PrivatizatioŶ oŶ Firŵ’s PerforŵaŶĐe: A Case of ďaŶkiŶg SeĐtor of PakistaŶ Sana Siddiqui and Samreen Lodhi Jinnah University for Women, Pakistan Accepted 15 Nov 2015, Available online 21 Nov 2015, Vol.3 (Nov/Dec 2015 issue) Abstract A mode of modifying assets and processes to the private sector from the public sector is identified as Privatization. Privatization is a valuable process to enhance the performance of firms. Many researchers have conducted the study to evaluate the impact of pƌiǀatizatioŶ oŶ fiƌŵ’s peƌfoƌŵaŶĐe ďy usiŶg diffeƌeŶt teĐhŶiƋues. Pƌioƌ ƌeseaƌĐhes shoǁ positiǀe aŶd Ŷegatiǀe iŵpaĐts of pƌiǀatizatioŶ oŶ fiƌŵ’s peƌfoƌŵaŶĐe. This ƌeseaƌĐh has ďeeŶ ĐoŶduĐted iŶ oƌdeƌ to fiŶd the iŶflueŶĐe of pƌiǀatizatioŶ oŶ ďaŶk’s peƌformance in Pakistan. The research shows that privatization has constructive impacts on the performance of banks in Pakistan. A relative study was conducted in order to find the profitability, leverage and earnings per share, of privatized banks (MCB and ALB) and public sector banks (NBP and FWB) to evaluate the difference in performance of both. The data has been collected during the period of 2009-2014. Financial ratios has been calculated to evaluate the performance and represented by graph. Software SPSS (statistical package for social science) is being used for finding descriptive statistics and graphical analysis. The result shows that Privatized banks are more profitable than public sector banks over the span of six years. Research also reveals that privatized banks has upright outlook for future than public sector banks. Keywords: PƌiǀatizatioŶ, ďaŶk’s peƌfoƌŵaŶĐe, pƌofitaďility, leǀeƌage, eaƌŶiŶgs peƌ shaƌe, Musliŵ CoŵŵeƌĐial ďaŶk (MCB), Allied bank (ALB), National bank of Pakistan (NBP), First Women bank (FWB), Pakistan. 1. Introduction As privatization can be termed as universal phenomenon, many markets in early ϭ99Ϭ’s ǁhiĐh iŶĐludes EasterŶ Europe and Russia have turned their economies from public proprietorship to market centered system. As the corporate world is becoming active gradually, a need has been recognize for the significance of the privatization and the effect of liberalization on the business sphere. A method of altering assets and processes to the private sector from the public sector is identified as Privatization. It is also a significant element that enables markets to operate appropriately. This forceful atmosphere in the business division has given rise to the rivalry and proficiency between the organizations. The higher the measure of completion between the businesses, the more the organizations tend to be competent. Privatization advances to economic development, growth in output, efficiency in exploitation of resources and increase in production and employment. In Pakistan, during the rule period of Prime Minister Nawaz Sharif in ϭ99Ϭ’s, deǀelopŵeŶts ǁere ŵade to traŶsfer the ownership of nationalized businesses to private sectors. In order to reduce managerial expenditure of the government privatization of firms were prepared. This study is conducted to critically analyze the positiǀe aŶd Ŷegatiǀe iŵpaĐts of priǀatizatioŶ oŶ firŵ’s performance running in Pakistan. The performance of the firm will be measured through its profitability, level of leverage and earnings per share. As transfer of public businesses to private ownership is one of a study that extents curiosity for researchers, stakeholders and government. Numeral studies have been completed on this topic. But this study has its own significance because it covers competition in terms of profitability, leverage and earnings per share of firm. 1.1 Problem Statement The primary objective of the study is to determine the incentives achieve by firm after privatization in terms of profitability, leverage and earnings per share. 1.2 Significance of the Study Privatization helps economies and businesses to prosper and become efficient up to some extent. In recent years it has been an area of interest of many researches. Different variables have different effects on privatization of firm. This research will help in finding the impacts of privatization on profitability, leverage and earnings per share of the firm. 1.3 Objectives of the Study In Pakistan the privatization is prepared to acquire better financial position and productivity. The main objectives of