IMPACT OF MACROECONOMIC FACTORS ON THE STRATEGIC AND BUSINESS MODEL OF COMMERCIAL BANKS IN PAKISTAN

The current case study shows that how different banks have managed the effect of macroeconomic factors on their performance. It analyzes how Pakistani commercial banks have maintained their competitive edge by adjusting the tactics to ensure success in a turbulent economy. For this five banks on total assets basis have been chosen and the impact of macroeconomic factors on their performance has been studied. Among them four banks which are National Bank of Pakistan (NBP), Habib Bank of Pakistan (HBL), United Bank Limited (UBL) and Allied Bank Limited (ABL) are studied briefly and a detail study of MCB bank has been made. The performances of these five banks remained very consistent with economy even in the times of economic recession their performance remained remarkable. Strategy is creating a fit among a company’s activities (Porter, 1996). MCB bank’s success is due to its well thought out, clearly communicated strategy that exists at all business levels in their organization. Its success is also deep rooted in the fact that the tactics to achieve strategy have evolved over the years and have not been left stagnant. They have been constantly calibrated to assure survival and success in the turbulent economy of Pakistan. MCB Bank has consciously made certain choices over the years, bounded by the economic conditions, which lead to consequences which depict the reasons for its success. It has continued to make progress in operations and achieve required financial results. The research shows empirical evidences that by adopting such tactical moves small emerging banks can prosper in their way and face turbulent economy.