Impact of Bank Specific Variables on Financial Performance of Private Sector Banks in India

Authors

  • Hetal K. Solanki Research Scholar, S.D. School of Commerce, Gujarat University, Ahmedabad-380009, Gujarat, India
  • Dr. Jigar Aggarwal Associate Professor, J.G College of Commerce, Gujarat University, Ahmedabad-380009, Gujarat, India

DOI:

https://doi.org/10.31305/rrijm.2022.v07.i01.010

Keywords:

Banking sector, variables, financial performance, profitability, multiple regression analysis

Abstract

The major goal of this research is to study the effect of bank-specific variables on private-sector banks’ financial performance. In this study, multiple regression analysis was employed. Return on assets (ROA) and return on equity (ROE) were used as profitability measures in this study to assess the profitability of private sector banks. Both the ROA and the ROE are dependent variables. The independent variables employed in the study to analyze and explain the impact of bank specific variables on the financial performance of private sector banks include liquidity risk, credit risk, capital adequacy, expense management, solvency, growth rate, and efficiency. Secondary data was collected for time period of 12 years (2008-09 to 2019-20) from the financial statements of selected banks. The results of the study suggest that when ROA is taken to represent the profitability of private sector banks; liquidity risk and expense management have adverse effect on the financial performance of selected private sector banks. However, solvency has positive effect on the financial performance of the selected private sector banks in India. When ROE is taken to represent the profitability of private sector banks; liquidity risk and expense management have negative impact on financial performance of selected private sector banks. Whereas, capital adequacy and solvency have positive impact on the financial performance of selected private sector banks in India.

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Published

20-01-2022

How to Cite

Solanki, H. ., & Aggarwal, J. . (2022). Impact of Bank Specific Variables on Financial Performance of Private Sector Banks in India. RESEARCH REVIEW International Journal of Multidisciplinary, 7(1), 70–81. https://doi.org/10.31305/rrijm.2022.v07.i01.010