Impact of Privatization on Firm’s Performance: A Case of banking Sector of Pakistan

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 privatization on firm’s performance by using different techniques. Prior researches show positive and negative impacts of privatization on firm’s performance. This research has been conducted in order to find the influence of privatization on bank’s performance 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.