Analyzing The Performance Of Private And Public Sector Banks In India

Abstract

This study presents a comprehensive analysis of the performance differentials between public sector banks (State Bank of India, Punjab National Bank, Bank of Baroda, Indian Overseas Bank, and Union Bank of India) and private sector banks (HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, and Yes Bank) in India over a ten-year period from 2014-2015 to 2023-2024. The research examines operational efficiency through employee-level and branch-level performance metrics, including Interest Income/Employee, Net Profit/Employee, and Business/Employee ratios. Utilizing secondary data and quantitative analysis tools, the study calculates descriptive statistics, Compound Annual Growth Rate (CAGR), and Average Annual Growth Rate (AAGR) to evaluate growth trends and comparative performance. Findings reveal that public sector banks, particularly State Bank of India, demonstrated robust performance with the highest CAGR across multiple metrics (9.60% for Interest Income/Employee, 15.65% for Net Profit/Employee, and 10.65% for Business/Employee), while private sector performance varied considerably with Yes Bank showing negative growth in some parameters. The significant variations between CAGR and AAGR values across banks highlight the year-to-year volatility in the banking sector's operational performance, suggesting the need for comprehensive evaluation approaches when assessing banking efficiency in the post-liberalization era.