Determinants of Profitability in Indian Banks in the Changing Scenario
<p>Banking Sector in India plays a crucial role in the development of the country. Being a major constituent of the economy, banks have their own promises and challenges. While banks have the onus of providing funds to the growing economy, they face a daunting task of maintaining profitability...
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| Format: | Article |
| Language: | English |
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EconJournals
2018-05-01
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| Series: | International Journal of Economics and Financial Issues |
| Online Access: | https://www.econjournals.com/index.php/ijefi/article/view/4732 |
| _version_ | 1797917970972803072 |
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| author | Biraj Kumar Mohanty Raveesh Krishnankutty |
| author_facet | Biraj Kumar Mohanty Raveesh Krishnankutty |
| author_sort | Biraj Kumar Mohanty |
| collection | DOAJ |
| description | <p>Banking Sector in India plays a crucial role in the development of the country. Being a major constituent of the economy, banks have their own promises and challenges. While banks have the onus of providing funds to the growing economy, they face a daunting task of maintaining profitability in a competitive environment. This study aims at identifying the performance variables responsible in driving the Return on Asset (ROA) of the banks. We have analyzed bank specific, industry specific and economy specific elements guiding the profitability of 46 Indian banks over a period of 17 Years (1999-2015) through panel Generalized Method of movements (GMM) estimation. It was found out that Return on Asset (ROA) has a significant positive association with last year ROA, solvency ratio, capital adequacy ratio whereas two and three year lag ROA, size, GDP growth, Loan to Deposit Ratio, expense ratio and productivity have significant negative effect.</p><p><strong>Keywords: </strong>Profitability of Banks, Panel GMM estimation,</p><p><strong>JEL Classifications: </strong>E50, C23, C33<strong></strong></p> |
| first_indexed | 2024-04-10T13:21:51Z |
| format | Article |
| id | doaj.art-e23ae1d2e3d849cf93f6a8c96519020c |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-04-10T13:21:51Z |
| publishDate | 2018-05-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-e23ae1d2e3d849cf93f6a8c96519020c2023-02-15T16:12:01ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382018-05-01832352403301Determinants of Profitability in Indian Banks in the Changing ScenarioBiraj Kumar Mohanty0Raveesh Krishnankutty1Alliance UniversityICFAI Business School Hyderabd<p>Banking Sector in India plays a crucial role in the development of the country. Being a major constituent of the economy, banks have their own promises and challenges. While banks have the onus of providing funds to the growing economy, they face a daunting task of maintaining profitability in a competitive environment. This study aims at identifying the performance variables responsible in driving the Return on Asset (ROA) of the banks. We have analyzed bank specific, industry specific and economy specific elements guiding the profitability of 46 Indian banks over a period of 17 Years (1999-2015) through panel Generalized Method of movements (GMM) estimation. It was found out that Return on Asset (ROA) has a significant positive association with last year ROA, solvency ratio, capital adequacy ratio whereas two and three year lag ROA, size, GDP growth, Loan to Deposit Ratio, expense ratio and productivity have significant negative effect.</p><p><strong>Keywords: </strong>Profitability of Banks, Panel GMM estimation,</p><p><strong>JEL Classifications: </strong>E50, C23, C33<strong></strong></p>https://www.econjournals.com/index.php/ijefi/article/view/4732 |
| spellingShingle | Biraj Kumar Mohanty Raveesh Krishnankutty Determinants of Profitability in Indian Banks in the Changing Scenario International Journal of Economics and Financial Issues |
| title | Determinants of Profitability in Indian Banks in the Changing Scenario |
| title_full | Determinants of Profitability in Indian Banks in the Changing Scenario |
| title_fullStr | Determinants of Profitability in Indian Banks in the Changing Scenario |
| title_full_unstemmed | Determinants of Profitability in Indian Banks in the Changing Scenario |
| title_short | Determinants of Profitability in Indian Banks in the Changing Scenario |
| title_sort | determinants of profitability in indian banks in the changing scenario |
| url | https://www.econjournals.com/index.php/ijefi/article/view/4732 |
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