EFFECT OF LIQUIDITY MANAGEMENT ON BANK’S PROFITABILITY - A STUDY ON PRIVATE COMMERCIAL BANKS IN PAKISTAN

In the corporate finance literature liquidity and profitability is the main issue. Every firm tries to maximize its profits. If the firm pays too much attention on profitability, it may overlook the liquidity. In this way, the study is conducted to know the impact and relationship between liquidity and profitability. The study covered 5 listed Banks of Pakistan over a period of past 10 years from Jan 2008 to Dec 2017. Regression, Correlation analysis and descriptive statistics were used in the analysis and results shows the liquidity and Return on assets has significant relationship, but the liquidity and Return on Equity shows insignificant relationship among the listed banks of Pakistan. Banks are suggested to work on their strategies, to enhance the usage of assets and improve yields on shareholders