Comparative Profitability Analysis of Indian Private and Public Sector Banks

Abstract

The success or failure of banks depends upon many factors, and one of the factors is the profitability of the bank. This paper aims to study the comparative analysis of the profitability of 10 banks, having a combination of private and public banks having 5 banks from each sector. The period under study is for the financial year starting from 2019 to 2024, covering 5 financial years. The major indicators of the study are Net Profit Margin, returns on Assets, Returns on Equity, and Net Interest Margin. The analysis uses ratio analysis and secondary data from the online and offline annual reports of the banks. The findings revealed that there is a consistent trend of higher profitability in private sector banks driven by better asset utilization, risk management, and operational efficiency. The paper also attempts to discuss the key challenges faced by the public sector banks and provide strategic recommendations for improvement.