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INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS
banking sector has shown good performance by attracting a large number of customers
due to the provision of quality services (Arby, 2003). Banks have realized the importance
of service quality for successful survival in today's global and highly competitive
environment (Wang et al. 2003). Similarly, it is reported that two principle paths could
improve the financial performance of banks i.e. by improving operational efficiency or
improvement in customer services (Duncan & Elliott, 2004). However, it is found that
performance evaluation provides sufficient information to take better and informed
business decisions. Better decisions results more profitability and improved performance
for the institution and its shareholders (Crider, 2007). On the basis of existing literature it
is hypothesized that there is positive relationship between service quality and bank
performance.
H1: There is a significant positive relationship between service quality and performance
of the conventional banks in Pakistan.
3. Methodology
This study investigates how service affects the performance of conventional banks in
Pakistan. The data was collected from 864 respondents of 72 branches of National Bank
of Pakistan, Bank Alfalah Ltd., Habib Bank of Pakistan, Muslim Commercial Bank,
United Bank and Askari Bank operating in Pakistan. The data was collected through
simple random sampling to gather the responses from the 12 most populous cities of
Pakistan from four provinces and capital territory. Service quality is measured by a
modified version of SERVQUAL developed by Parasuraman et al. (1991). While bank
performance was recorded by a modified version of an eight-item research instrument
developed by Quinn & Rohrbaugh, (1983). The responses were recorded regarding
service quality and bank performance by considering different aspects. Data was
collected by self administrative questionnaire through personal contact approach. Every
respondent was asked to rank a number of aspects regarding service quality and
performance of conventional banks in Pakistan.
4. Results and Discussion
The study examines the influence of service quality on performance of conventional
banks in Pakistan by collecting responses from a sample of 864 respondents of 72
branches of selected banks. Data was analyzed by SPSS 15.0 version by application of
Pearson‘s correlation and regression model. The relationship between service quality and
bank performance is assessed by Pearson‘ correlation while the magnitude of the
relationship was assessed by regression analysis. The results show that male customers
are greater than female customers that were using products/services of selected banks
working in Pakistan. It supported the literature as bank customers could be differentiated
due to social, cultural, and religious factors. It is evident that male customers perform
more banking activities than female customers (Obbe, 1980; Woldie & Adersua, 2004).
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COPY RIGHT © 2011 Institute of Interdisciplinary Business Research 152
JANUARY 2011
VOL 2, NO 9