Volume : 3, Issue : 3, March - 2014

Profitability Analysis of Selected Nationalised Banks in India

Dr. Hemal Pandya, Mrs. Chetana Parmar

Abstract :

 Banking in India originated in the last decades of the 18th century. After the nationalization of banks, the major concern was the productivity and profitability of public sector banks. It was believed that the new direction given to the banks since their nationalization in 1969, and the slacking productivity, has led to declining trends in the profits and profitability. This study is conducted to know the profitability of selected Nationalised Indian banks. In order to access and evaluate the profitability of selected nationalized banks of India, financial ratios of the different banks have been studied and correlation analysis and multiple regression techniques are used. The study shows the explanatory power of some variables such as NII, C/D ratio, Business per employee, Profit per employee are significantly high and Interest spread, OE, P&C are found with low explanatory power. To strengthen the position further, the public sector banks must strive to greatly enhance efficiency through a control over increasing non-interest income, and maximizing business per employee and per anch, etc.