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require an integrated credit risk management to mitigate WKH GDWD DQDO\VLV DQG LQ VHFWLRQ ¿QDO FRQFOXVLRQ DQG
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and mitigation of sources of the risk; ensuring the capital
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years because of increased competition, technological
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have been reported by these studies(Boahene, Dasah,
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in current uncertain environment and such risksare the
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of credit risk management for the ultimate objective of
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risk management for the performance of banks, this study
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effective credit risk management through understanding
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as guidelines for the regulators to set the benchmarks PDQDJHPHQWSUDFWLFHVLQ,VODPLFEDQNV7KH\IRXQGWKDW
for capital adequacy ratios and for developing credit EDQN VL]H KDV VLJQL¿FDQW UHODWLRQVKLS ZLWK FUHGLW DQG
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introduction, contribution and objectives of the study; EDQNVDQGLQVLJQL¿FDQWLQIRUHLJQEDQNV'RPHVWLFEDQNV
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Credit Risk, Capital Adequacy and Bank’s Performance: An Empirical Evidence from Pakistan 29
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collected from the annual reports of the selected banking 52$it ȕȕ%'&itȕ&/$itȕ&5itȕ'5itȕ5/$itt
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Performance of the banks is measured by return on assets
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Table 1: Description of Variables WKHEDQNVVHOHFWHGLQWKHVWXG\7KHPHDQRIEDGGHEWFRVW
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Variables Measurement Symbols
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Independent Variables DQGPD[LPXP&$5LVDQGUHVSHFWLYHO\
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