Impact of Corporate Social Responsibility on Financial Performance of the Banks: Case of Banking Sector in Pakistan

Abstract

The project aims to check the impact of CSR on a firms financial performance. Some researchers find a positive impact of CSR on firms’ financial performance. Some researchers find a negative effect of CSR on firms’ financial performance, and some researchers find no relationship between CSR and the financial performance of firms. The data used in this study is secondary data as it has been collected from published sources. The sample consists of six banks. Regression analysis was used to compute results. The present study proved the negative impact of CSR on ROA and ROE through statistical analysis. When spent more on CSR, then ROA and ROE are decreased. Results show a positive impact between CSR and the financial performance of Pakistani banks. The impact of CSR on financial performance tells about the social performance of banks of Pakistan. CSR has a positive impact on ROA. The value of R-square is 0.001073, and the value of the coefficient is 2.27, which means that the change in ROA is 2.27. The value of p is 0.8, which means that the model is insignificant. This study suggests that the organization should increase the opportunity for the betterment of society and development in business and eventually lead to the business’s strong profitability and financial performance.