A Study on Bank Profitability Using Financial Ratios

Abstract

This study delves into the analysis of bank profitability through financial ratios in a leading private-sector bank in Puducherry. Banks' profitability is crucial to their performance, impacting stakeholders ranging from shareholders to regulators. Financial ratios provide a comprehensive framework for evaluating various facets of a bank's profitability, encompassing efficiency, asset quality, liquidity, and leverage. By employing a mix of profitability ratios, including Return on Assets (ROA), Return on Equity (ROE), Net Interest Margin (NIM), and Efficiency Ratio, among others, this research seeks to unveil the underlying dynamics influencing bank profitability. By synthesizing diverse perspectives, Trabelsi provided valuable insights into the complex interplay of these elements and their implications for banks' financial performance. This review contributes to a deeper understanding of bank profitability dynamics, offering significant implications for policymakers, researchers, and industry practitioners striving to enhance economic stability and performance in the banking sector.