Discriminant Analysis Of Bank Profitability: A Study In Indian Context

Journal Name: 
Journal of Banking, Information Technology & Management
Volume: 
Vol. 14 - No. 2
Authors: 
Author Name Designation Organization
Anirban Sarkar
Sudip Mukherjee
Abstract: 

Discriminant analysis has been widely applied to numerous issues in the financial theory and practice. Determinants of bank profitability have been theoretically and empirically explored. Taking into consideration the methodological features of the available literature, it has been found to the best of our knowledge, that the Discriminant analysis has not yet been applied in descriptions of Bank Profitability in the Indian context. Discriminant Analysis has been employed in this paper in order to identify and explain the key features of bank profitability levels. Bank profitability is set up in the form of a categorical variable: profit or loss recorded. Predictor variables are selected from various groups of financial indicators and financial ratios usually included in the empirical work on determinants of bank profitability. The data from the RBI is analyzed using the SPSS and concluding observations made.