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| Article Name : | | | A STUDY ON PATTERN OF ROE OF SELECTED INDIAN PRIVATE BANKS | | Author Name : | | | G. Madan Mohan , Anushree Baruah | | Publisher : | | | Ashok Yakkaldevi | | Article Series No. : | | | ISRJ-361 | | Article URL : | |  | Author Profile | | Abstract : | | | Return on Equity (ROE) portrays the profitability of an institution. ROE compares the profit after tax with equity of the company. Better ROE reveals better utilisation of resources, resulting in better returns for owners. ROE is important for banks as they need high returns to meet their operational and administrative expenses and honour their obligations towards deposit-holders in the form of payment of interest and principal. This descriptive research intends to trace the pattern of ROE of 13 selected private banks of India using Du Pont Analysis and tries to identify the impact exerted by Margin on Sales, Asset Turnover and Leverage on ROE. This research is based on five year figures of these 13 private banks relating to the period of 2008-09 to 2012-13. Results suggest that Asset Turnover exerts the maximum impact on ROE followed by Margin on Sales, and Leverage exerts the least impact. Furthermore, the study has revealed that banks with high margin on sales and modest leverage are associated with banks with high ROE. | | Keywords : | | - leverage
- asset turnover
- return on equity
- margin on sales
- panel data
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