Profitability in Punjab National Bank and Andhra Bank in the changing banking environment

Profitability is considered a very important test for measuring efficiency of the Bank as it is a means to measure the ability of the bank to earn profits. Bank has to take care of profitability while granting advances along with the other two aspects i.e. funds remain fairly liquid, safe and give a reasonable return. The purpose of the analysis of profit and profitability is to increase the absolute value of profits and profitability of the bank based on the effective management of revenue and expenditure Profit is the main reason for the continued existence of every commercial organization and profitability depicts the relationship of the absolute amount of profit with various other factors. This paper attempts to analyze the profitability in nationalized banks in the changing banking environment a study of select banks during the period 2004-05 to 2013-2014. Key Performance Indicators such as spread, burden, net profit, and average and growth rate is taken for the present study. The study is diagnostic and exploratory in nature and makes use of secondary data. The study finds and concludes that the profitability of Punjab National bank is improved over the period of study than the Andhra bank.