ZENITH International Journal of Business Economics & Management Research__________ ISSN 2249- 8826

ZIJBEMR, Vol.5 (8), AUGUST (2015), pp. 86-109

Online available at zenithresearch.org.in

DETERMINANTS OF PROFITABILITY: A STUDY OF SELECTED

PUBLIC SECTOR AND PRIVATE SECTOR BANKS IN INDIA
MS. CHETANA R. MARVADI
ASSISTANT PROFESSOR
S. D. SCHOOL OF COMMERCE
GUJARAT UNIVERSITY
AHMEDABAD-38009.

ABSTRACT
The banking sector is considered to be an important source of financing for most businesses. In a
developing economy, the role of banks is more formative and purposeful than in the developed
one. The strength of economy of any country basically depends on the strength and efficiency of
financial system, which, in turn, depends upon a sound banking system. The main objective of
the study to know the determinants of profitability of selected Indian banks. In order to access
and evaluate the profitability of selected banks in India, the relationship between financial ratios
of the different banks have been studied using statistical techniques such as Correlation Analysis,
Factor Analysis and Multiple Regression technique. The study shows that the major determinants
of profitability of the selected banks differ for each bank and have been identified separately for
each bank. Also the most commonly influencing factors affecting profitability of the banks have
been identified using Factor Analysis. The result shows that Overall Business productivity is
having significant effect in Public Sector Banks whereas Profitability is having significant effect
in Private Sector Banks.
KEY WORDS: Profitability, Correlation, Multiple Regression, Factor Analysis.

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ZENITH International Journal of Business Economics & Management Research__________ ISSN 2249- 8826
ZIJBEMR, Vol.5 (8), AUGUST (2015), pp. 86-109
Online available at zenithresearch.org.in

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