Author(s): Vanlalzawna C*, Sharma L. S
The development of the banking sector serves as an excellent indicator of the overall economic progress. Understanding the financial performance of banks enables investors, borrowers, and other stakeholders to predict and compare bank efficiency. This study, which is both descriptive and analytical, aims to evaluate and compare the financial performance of six selected commercial banks in India from 2018-19 to 2023-24. The selected banks include State Bank of India (SBI), Punjab National Bank (PNB), and Canara Bank from the public sector, and ICICI Bank, HDFC Bank, and Axis Bank from the private sector. The data for this study were primarily sourced from the annual reports published by these banks. Ratio analysis was used to examine the financial ratios of the selected banks, and a one-way ANOVA was employed to determine any significant differences between the financial ratios of public and private sector banks. Additionally, the study investigates the impact of liquidity, solvency, and efficiency on the profitability of the selected Indian commercial banks using panel data estimations, specifically the Fixed Effect and Random Effect models. The empirical results from the panel data estimations indicated that profitability, liquidity, and efficiency ratios have no significant impact on the market value ratios of the selected public sector banks. However, a significant impact was found on the market value ratios of the selected private sector banks, highlighting that market value ratios are influenced by these financial ratios.