Factors influencing the profitability of banks in India and China

ABSTRACT

The study investigates the factors influencing profitability of banks in India and China. Our results suggest that credit quality, bank size, and cost management are the key factors behind the profitability of banks in India and China. The loan to deposit ratio of the banks is also important. It has a positive impact on the profitability of banks in China but a negative impact on the profitability of banks in India.

KEYWORDS:

• Profitability
• capital adequacy ratio
• inflation
• non-performing loans
• bank-specific variables
• industry and macroeconomic variables

JEL CLASSIFICATION:

• G21
• G28

Disclosure statement

Authors have no conflict of interests to disclose.

Additional information

Funding

This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.