An Analysis of the Profitability of Public Sector Banks in India

Sebak Kumar Jana; Atanu Mitra; Partha Sarathi Sengupta

doi:10.55524/ijirem.2026.13.3.10

Abstract

This study takes 12 nationalised public sector banks in India as its sample, draws on data for 2022- 2024, provided by the Indian Banks' Association (IBA), and adopts a fixed-effects panel data model to explore the determinants of these banks’ profitability. Taking return on assets (ROA) as the dependent variable, the study incorporates seven explanatory variables including the loan-to-deposit ratio to conduct empirical analysis. It finds that the asset-weighted interest spread has a positive impact on profitability, while the investment-to-deposit ratio and operating expenses produce a significant negative impact. The study proposes that the sustainability of banks’ profitability can be enhanced through efficient interest spread management, prudent investment allocation, and cost control.

Keywords

Public Sector Banks, Bank Profitability, Return on Assets (ROA), Panel Data Regression Model

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Cites this article as

S. K. Jana, A. Mitra, P. S. Sengupta, "An Analysis of the Profitability of Public Sector Banks in India", International Journal of Innovative Research in Engineering and Management (IJIREM), Vol-13, Issue-3, Page No-74-77, 2026. Available from: https://doi.org/10.55524/ijirem.2026.13.3.10