Profitability Analysis of Indian Public and Private Sector Banks: A Comparative Study

Presently banks in India are confronting with dual challenges of maintaining the profitability position on one hand and on the other to bring novelty and innovation in financial products after squeezing costs. As Financial Ratio analysis provides the true picture of financial condition of banks, thus the present study makes an attempt to evaluate the Spread, Burden and Profitability ratios of selected Public and Private Banks for the period 1999–2000 to 2015–2016 through Mean, Standard Deviation and Compound Annual Growth Rate. The study is based on secondary data in which Bank-wise and Sector-wise analysis has also been done. PNB and HDFC Bank have the highest spread among Public and Private Sector Banks, respectively. Burden is on higher side of Public Banks, whereas Private Banks have incentivized their non-interest incomes. Profitability in terms of Total Assets and Total Income is inflated for Private Sector Banks as per Sector-wise analysis. Public Sector Banks must align their profitability ratios with Private Sector Banks so as to survive and endure.