Determinants Of South Asian Public Sector Bank’s Profitability: A Panel Data Analysis

The profitability of banks serves as a significant measure of their overall success. The metric denotes the profitability achieved by a banking company via the efficient utilisation of its available resources for the production and provision of services. This study assesses the factors that contribute to the profitability of banks from 7 South Asian countries. The dataset of 12 banks was used, including the time frame spanning from 2014-15 to 2023-24. The present research examined the predictive value of ROA, ROE, Assets Quality (AQ), and Non-Profit Loans (NPLs) in assessing profitability. The data is analysed using multiple regression approaches using the E-Views program. The findings revealed that the use of ROE and decreasing NPLs in combination provide the most accurate forecast of profitability for banks in South Asian countries. The research suggests that it would be beneficial for banks to enhance their equity levels to achieve an appropriate ROA and align their decreasing NPLs. This strategic approach is essential for banks to maintain competitiveness and generate better profits for banks in South Asia.