Retail banking also known as consumer banking is the provision of services such as credit cards, auto financing, consumer durable loans, and other personal loans by a bank to individual consumers rather than to corporations, companies, or other banks. The main purpose of the research is to analyze the impact of credit risk of retail banking products on the profitability of the commercial banks of Pakistan. Return on Asset (ROA) and Return on Equity (ROE) are used as dependent variables (DV) to measure the profitability of commercial banks while infection ratios of Credit Cards (CC), Auto Loans (AL), Personal Loans (PL), and Consumer Durables (CD) are used as Independent Variables to measure credit risk. Liquidity Ratio (LR) and Capital Adequacy Ratio (CAR) are used as control variables. Simple Regression analysis is performed on time series data of all 30 commercial banks working in Pakistan, from the year 2004-2020 using SPSS. Overall results of this study show there is negative impact of credit risk of retail banking products on the profitability of commercial banks. This study is helpful for policy maker in understanding the contribution of retail banking products to the overall credit risk of commercial banks and they will be able to manage their credit risk more effectively by devising various policies regarding the credit risk related to retail banking products. It will help the management of commercial banks to review their retail banking portfolio and improve their policies to increase the profitability of commercial banks.

Keywords: Credit Risk, Profitability, Credit Card (CC), Auto Loan (AL), Personal Loan (PL), Consumer Durables (CD).