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Financial Performance analysis of Public Banks using Ratio Analysis
Subject area: Management and Commerce · Area of research: Ratio Analysis
Abstract
This study evaluates the financial performance of selected Indian public sector banks using financial ratio analysis over a five-year period. The analysis focuses on profitability, asset quality, capital adequacy, net interest margin and leverage to assess the changing financial position of SBI, PNB and Canara Bank. The findings indicate an overall improvement in profitability, with increases in Net Profit Margin (NPM), Return on Assets (ROA) and Return on Equity (ROE), while Gross NPA and Net NPA ratios declined consistently, with all three banks reducing Net NPA below 1% by FY25. SBI maintained the highest FY25 Net Interest Margin and Net Profit Margin and the lowest Gross NPA ratio, PNB recorded a significant turnaround with the lowest Net NPA ratio, and Canara Bank achieved the highest ROA and ROE. Capital adequacy remained sound, although NIM softened during FY25, indicating some pressure on funding spreads. The study concludes that ratio analysis provides a useful multidimensional framework for assessing bank performance and recommends continued focus on asset quality, capital strength, credit monitoring, operational efficiency, digital risk management and sustainable non-interest income.
Keywords
public sector banks, financial performance, ratio analysis, profitability, net profit margin, return on assets, return on equity, net interest margin, non-performing assets, capital adequacy, leverage, asset quality, sbi, pnb, canara bank.
How to cite this paper
@article{1722444,
author = {Ajas Ahmed, Dr. Pavan Kumar S S},
title = {Financial Performance analysis of Public Banks using Ratio Analysis},
journal = {Iconic Research And Engineering Journals},
year = {2026},
volume = {10},
number = {2},
pages = {1787-1796},
issn = {2456-8880},
url = {https://www.irejournals.com/formatedpaper/1722444.pdf},
abstract = {This study evaluates the financial performance of selected Indian public sector banks using financial ratio analysis over a five-year period. The analysis focuses on profitability, asset quality, capital adequacy, net interest margin and leverage to assess the changing financial position of SBI, PNB and Canara Bank. The findings indicate an overall improvement in profitability, with increases in Net Profit Margin (NPM), Return on Assets (ROA) and Return on Equity (ROE), while Gross NPA and Net NPA ratios declined consistently, with all three banks reducing Net NPA below 1% by FY25. SBI maintained the highest FY25 Net Interest Margin and Net Profit Margin and the lowest Gross NPA ratio, PNB recorded a significant turnaround with the lowest Net NPA ratio, and Canara Bank achieved the highest ROA and ROE. Capital adequacy remained sound, although NIM softened during FY25, indicating some pressure on funding spreads. The study concludes that ratio analysis provides a useful multidimensional framework for assessing bank performance and recommends continued focus on asset quality, capital strength, credit monitoring, operational efficiency, digital risk management and sustainable non-interest income.},
keywords = {public sector banks, financial performance, ratio analysis, profitability, net profit margin, return on assets, return on equity, net interest margin, non-performing assets, capital adequacy, leverage, asset quality, sbi, pnb, canara bank.},
month = {August},
}