Determinants of Profitability of Private Sector Bank Old and New in India Davis C. J.*, Mathew Jain** *Research Scholar, Department of Management Studies, Christ University, Bangalore Christ University, Bangalore, India **Professor, Department of Management Studies, Christ University, Bangalore Christ University, Bangalore, India Online published on 12 May, 2017. Abstract Banking sector in India has under gone major transformation after the Liberalization, Privatization and Globalization polices of Government of India, in early nineties. These reforms have rationalized the banking system, by way of opening of new generation commercial banks, entry of foreign banks, prudential norms for quality of asset, deregulation of interest rates. The present study analyses profitability determinants of private sector banks in India as a whole, including new and old groups. Private sector new and old bank group profitability performance has been analyzed for evaluating respective peer group performance. The study focuses on selected eight private sector (4 new and 4old) banks in India for the period of fifteen years, from year 2000–01 to 2014–15. Study used the correlation and regression analysis to find out significance of relationship of bank specific variables with profitability measure ROA. The Global banking profitability measure ROA is considered as dependent variable and bank specific five variables were taken as independent variables. Correlation and regression analysis were made to examine the degree of relationship of determinants with profitability indicator ROA. The study concluded that new private sector banks have strong determinants of profitability namely net interest margin, non interest income and lower intermediation cost. The study proved that selected determinants were having significant influence on profitability of bank group. Top Keywords Profitability, Return on asset, Private sector bank, New generation bank, Old generation bank, Multiple regression model. Top |