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

Abstract

The idea of Corporate Social Responsibility (CSR) was acknowledge worldwide in 90s. First time the concept of CSR was developed in 1950 and that time it is familiar such as social responsibility. In 1953, Howard Bowen reported first dissemination about CSR and it's planed in the format of book in market. Between strong firms CSR is main part of each organizations corporate strategy. The concept of CSR is new in Pakistan so its awareness is not clear. The aim of project is that to check the impact of CSR on firm's financial performance. The research question of study is that is there any relationship between dependent variable (financial performance) and independent variable CSR? In literature review many researcher find out the relationship between CSR and firms financial performance. Some researcher find positive impact of CSR on firms financial performance, some researcher find negative effect of CSR on financial performance of firms and as well as some researcher find no relationship between CSR and financial performance of firms. Present study proved that negative impact of CSR on ROA and ROE through statistical analysis. When spent more on CSR then ROA and ROE is decrease. Results shows positive impact between CSR and financial performance of Pakistani banks. The impact of CSR on financial performance tells about social performance of banks of Pakistan.