The Impact of Advertising on the Profitability of Public &Private Sector Commercial Banks

The purpose of this study is to investigate the impact of advertising on the profitability of commercial banks over the period of 2008- 2012, in the presence of control variables: Credit risk, Operating Efficiency, total advances to total deposits, total loans to total assets and Size(total assets) ratio. Bank’s profitability is measured in terms of return on equity (ROE) .The data has been obtained from the publications of State Bank of Pakistan (SBP) and commercial banks. The regression results confirm the positive and significant effects of advertising expenditure on ROE for private sector banks than public sector banks. Keywords: ROE, ROA, Advertising, Credit Risk, Operating Efficiency, Bank Deposits & Advances JEL- Classification: G-2