Abstract

This research study is based on nationalization and de-nationalization of banking industry of Pakistan. An effort
has been made to analyze and evaluate the performance and efficiency of banking sector using Credit Leona’s
Securities Asia stress test. It covers the period of pre and post nationalization of state owned and commercial
banks of Pakistan. Through the utilization of adjusted and unadjusted stress test, it has been analyzed that some
banks are mediocre, under stress or sound in regard to the capital strength, assets quality, efficiency and liquidity.
This is a pioneering attempt to apply stress test on banks operating in Pakistan and prescribes a procedure to
gauge solvency of individual banks.

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