Title: An Analysis of Determinants of Profitability in Public and Private Sector Banks in India
Abstract: An analysis was carried out to empirically evaluate the determinants of profitability in the public and private sector commercial banks in India. A combination of statistical tools such as the correlation analysis, multiple regression analysis and factor analysis were used to estimate the contribution of select bank specific variables towards profitability which was measured by using Return on Assets (RoA). The study revealed that the cost of borrowing and NPA has a significant negative correlation with profitability for public sector banks. Return on investments, return on advances and operating profit had a significant positive correlation with profitability for both public and private sector banks. The multiple regression analysis highlighted that the return on investments and return on advances has a significant influence on the profitability of private sector banks. The factor analysis has also shown that the NPA has a strong negative influence on the profitability for both public and private sector banks.
Publication Year: 2011
Publication Date: 2011-09-30
Language: en
Type: article
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Cited By Count: 3
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