Analysis of Financial Performance of Selected Commercial Banks in India

Abstract

The present study attempts to evaluate the financial performance of selected Indian commercial banks for the period from 2012/13 to 2016/17. The study comprises 16 commercial banks, 11 representing public sector and 5 from private sector, and the financial performance of these banks are analysed using the financial ratios. The study shows that the financial performance of private sector banks is relatively better than the public sector banks throughout the study period. Besides, the study examines the impact of liquidity, solvency and efficiency on the profitability of the selected Indian commercial banks by employing the panel data estimations, viz. the Fixed Effect and Random Effect models. The empirical results from the panel data estimations revealed that the liquidity ratio and solvency ratio, and the turnover ratio and solvency ratio are found to have positive and significant impact on the profitability of selected public sector and private sector banks, respectively, bearing testimony to the fact that profitability is a function of those ratios.