Vol: 2, Issue: 1 2012

Page: 10-21

An Analysis on the Profitability, Risk and Growth Indicators of Public and Private Sector Banks

Mayank Malviya

Received Date: 2012-11-12

Accepted Date: 2011-12-12

Published Date: 2012-01-11

This paper consolidates the summarized financial statements of the main banks operating in India during the financial year 2010-11, the public and private sector. The profitability, risk and growth prospects of the two types of institutions are analyzed through Return on Equity decomposition and the use of other financial ratios. Various differences between public and private institutions have emerged. In particular, public sector institutions realized higher profitability and cost control; they were more capitalized in absolute terms and relied relatively less on income earned through interest. While Private sector institutions generated comparatively more revenue; they were more capitalized in relative terms and were relatively more provisioned against loan losses and held a higher proportion of liquid assets.

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