Profitability

T. R. Bishnoi () and Sofia Devi
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T. R. Bishnoi: The Maharaja Sayajirao University of Baroda
Sofia Devi: The Maharaja Sayajirao University of Baroda

Chapter Chapter 6 in Banking Reforms in India, 2017, pp 165-185 from Palgrave Macmillan

Abstract: Abstract Since 1991, public sector banks began to emphasize profitabilityProfitability objective in order to strengthen their net worth and financial health as necessitated under financial reformsFinancial reforms , and therefore, the analysis is in terms of three profitability ratios—return on assetsProfitability Return on Assets (ROA), return on equityProfitability Return on Equity (ROE) and profit marginProfitability Profit Margin (PM) for the period from 1991–1992 to 2014–2015. Positive trend in growth rates of these indicators suggested the favourable impact of banking reforms over the period. ROA of the public sector banks improved by 0.06% points, ROA annually by 1.05% points and PM by 0.69% points per year. Among determinants of banks’ profitability, significant factors were credit quality and management of funds.

Keywords: Profitability ratio; Return on assetsprofitability return on assets; Return on equityprofitability return on equity; Profit marginprofitability profit margin; Quality of creditquality of credit; Credit risk (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-3-319-55663-5_6

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DOI: 10.1007/978-3-319-55663-5_6

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