Impact of Bank Efficiency on the Profitability of the Banks in India: An Empirical Analysis Using Panel Data Approach

Dsouza, Suzan; Rabbani, Mustafa Raza; Hawaldar, Iqbal Thonse; Jain, Ajay K.

doi:10.3390/ijfs10040093

Cited by 19 publications

(15 citation statements)

References 28 publications

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“…Our findings are in line with Bawa et al (2019). Similarly, Dsouza et al (2022) found that CI has a negative effect on the ROE of banks in India. However, the findings of this study regarding the insignificance of CAR in affecting ROA and ROE are somewhat different from previous studies, which have found that CAR is a significant indicator of credit risk that affects the financial performance of banks.…”

Section: Conclusion Limitations and Future Scopesupporting

confidence: 90%

Credit Risk and financial performance banks: a panel data analysis

Kumar¹,

Meena²

2022

IJABF

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The NIFTY50 index is the premier benchmark for the Indian stock market, comprising 50 companies from 13 diverse sectors. As five of the country's largest commercial banks are part of this index, their performance indicates the overall market performance. This study aimed to investigate the correlation between credit risk and the financial performance of these NIFTY50-indexed banks. Utilizing secondary data collected from the banks' annual reports over the past decade (2012-2021), the study employed panel data regression analysis to examine the relationship between return on equity and return on asset as measures of financial performance and capital adequacy ratio, net non-performing assets (NNPAs), and cost to income (CI) as measures of credit risk. The results revealed a significant relationship between credit risk and financial performance, with the capital adequacy ratio having no significant impact. The study recommends that NIFTY50-indexed commercial banks implement strategies to lower their CI and NNPAs to improve their financial performance.

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Section: Conclusion Limitations and Future Scopesupporting

confidence: 90%

Credit Risk and financial performance banks: a panel data analysis

Kumar¹,

Meena²

2022

IJABF

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“…European banks were discussed by Kozak and Wierzbowska (2022). Asian banks were analyzed by Nguyen and Le (2022) and Dsouza et al (2022). Vietnamese banks were evaluated by Pham et al (2022), and sub-Saharan African banks were assessed by Taylor et al (2022).…”

Section: Literature Reviewmentioning

confidence: 99%

“…Numerous mathematical and statistical techniques were used to draw this conclusion. Not only the aforementioned authors performed profitability indicator analyses, but in their analysis of Indian banks, Dsouza et al (2022) employed additional methods, including panel regression, one-dimensional analysis, and descriptive statistics. In the US, however, Chue and Xu (2022) used the model of Hou, Xue, and Zhang, which solved aggregate profitability and investment in assets and showed high predictive power.…”

Section: Literature Reviewmentioning

confidence: 99%

Does the Size of the Business Still Matter, or Is Profitability under New Management, by Order of the COVID-19?

Blazek

Ďurana

Michulek

et al. 2023

JRFM

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Businesses should come up with a strategy, plans, and goals so that their total assets can make a profit during the transformation process. Utilizing various features of a property can generate this income. This comparison provides evidence of profitability. During the global economic downturn, a number of businesses encountered issues that caused their payment situations and profitability to deteriorate. The goal of this article is to ascertain whether particular profitability indicators also revealed the pandemic-related global crisis, particularly in the Visegrad Group countries. This analysis was conducted based on categories of business size. Specifically, 8671 enterprises were analyzed. The evaluation of indicators revealed whether there was a significant change in a negative direction, a significant change in a positive direction, or no significant change. It was possible to make a clear diagram of the companies that took part in the study and to figure out the median values in order to compare the results of the chosen profitability indicators. Correspondence analysis was conducted so that conclusions could be more accurate. According to the findings of this study, indicators of ROA, ROE, and ROS did not change significantly across enterprise size categories in the years preceding, during, and after the pandemic. Since the government regulations of the V4 countries had a significant impact on these businesses, the change was most obvious in the case of small businesses within the ROS indicator. The added value of the article is derived from its analysis of selected profitability indicators in the largest group of Central European nations and its relevance.

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“…But, credit risk, cost of fund, nonperforming assets and consumer price index have significantly negative influence to the profitability while bank size and ratio of priority loan to total loans do not have any impact towards profitability. Dsouza et al (2022) found that cost to income ratio has a significant negative impact to the return on assets and net interest margin in Indian banks from the analysis of data 2001 to 2020. The staff expenses to total expenses ratio has a significant positive impact on return on assets but it has positive insignificant impact to the net interest margin.…”

Section: Review Of Literaturementioning

confidence: 99%

Operating Efficiency, Macroeconomic Variables, and Profitability: Evidence from Nepalese Commercial Banks

Poudel

2023

Journal of Nepalese Business Studies

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This research examines the impact of operating leverage and macroeconomic variables on profitability of Nepalese commercial bank. To measure operating efficiency, and profitability of bank, the researcher uses descriptive cum causal research design with quantitative data from secondary sources. This study employs ordinary least square model using 120 observations of 20 commercial banks as entire population from the period of 2016/17 to 2021/22. This study reveals that the positive influence of operating income ratio, assets utilization ratio, overhead efficiency ratio and interest revenue ratio to the return on assets, return on equity and earning per share of banks. However, the provision for loan losses ratio has negative significant influence to the return on assets, return on equity and earning per share of Nepalese commercial banks. The growth rate of gross domestic product has positive influence to the earning per share of banks but there is insignificant relationship with return on assets and return on equity. Careful selection of lending areas, expanding the size and scope of the operation activities stand out as key avenues for increasing operating efficiency and profitability. The banks might adopt the strategy of diversifying lending portfolio, introduce non-interest income generation program along with increases the size and operation of the activities. The study lacks consideration of debt capital ratio, dividend ratio, interest spread rate, national consumption, government rules and regulation, managerial structure which also influence the profitability and operating efficiency of banks. Future research aims to use structural equation modeling with addressing uncover variables.

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Impact of Bank Efficiency on the Profitability of the Banks in India: An Empirical Analysis Using Panel Data Approach

Cited by 19 publications

References 28 publications

Credit Risk and financial performance banks: a panel data analysis

Credit Risk and financial performance banks: a panel data analysis

Does the Size of the Business Still Matter, or Is Profitability under New Management, by Order of the COVID-19?

Operating Efficiency, Macroeconomic Variables, and Profitability: Evidence from Nepalese Commercial Banks

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