Impact of Corporate Social Responsibility on Financial Performance of Islamic Banks: A Case from Pakistan

Abstract

The present study seeks to investigate the impact of corporate social responsibility on the financial performance of the Islamic banks located in Pakistan. For this purpose, the study uses CSR as the independent variable and financial performance as the dependent variable. The data was gathered from the financial statements of the Islamic banks over a period from 2012 to 2019. The proxies for FP as the proxies of the dependent variable were ROA, ROEand NPM.This study employs the Probitregression model and found a positive impact of CSR on the FP of the Islamic banks.The study concludes that CSR activities lead to an increase in the financial performance of the Islamic banks in Pakistan.