Decoding the Balance Sheets: Key Determinants of Financial Success in Indian Banking
DOI:
https://doi.org/10.69968/ijisem.2026v5i444-57Keywords:
Indian Banking, Financial Performance, Profitability, Asset Quality, Operational EfficiencyAbstract
The Indian banking sector plays a central role in financial intermediation, economic development and financial stability, making the assessment of banking performance an important area of research. This review, titled “Decoding the Balance Sheets: Key Determinants of Financial Success in Indian Banking,” examines the major factors influencing financial success through balance-sheet characteristics, profitability indicators and macroeconomic conditions. It focuses on Return on Assets (ROA), Return on Equity (ROE) and Net Interest Margin (NIM), along with asset quality, credit risk, capital adequacy, operational efficiency, cost management, revenue generation and financial leverage. The review also considers GDP growth, inflation, interest rates, exchange rates and major economic shocks. The literature indicates that asset quality, asset utilisation, operational efficiency and risk management are closely associated with profitability, while macroeconomic conditions influence banking outcomes. Differences across public and private banks further highlight the importance of bank-specific characteristics and an integrated approach to evaluating financial success.
References
[1] Advani, C., & Pillai, D. S. (2021). A Comparative Study on Financial Performance of SBI and HDFC Bank. https://doi.org/10.47392/irjash.2021.163
[2] Almaqtari, F. A., Al-Homaidi, E. A., Tabash, M. I., & Farhan, N. H. (2019). The Determinants of Profitability of Indian Commercial Banks: A Panel Data Approach. International Journal of Finance & Economics, 24(1), 168–185. https://doi.org/https://doi.org/10.1002/ijfe.1655
[3] Bajaj, R., & Anshu. (2020). A Study on Factors Affecting Financial Performance of Indian Banking Sector. Journal of Business Management and Information Systems, 7, 9–16. https://doi.org/10.48001/jbmis.2021.0702002
[4] Bandekar, D. B. N., & Mayenkar, K. K. (2025). Determinants of Profitability of Indian Commercial Banks: An Analytical Study. In Emerging Issues in Banking, Insurance, Micro Finance and Financial Inclusion (pp. 8–19). https://doi.org/10.17010/ijf/2019/v13i1/141016
[5] Chaplot, D., & Sen, H. (2025). Assessing The Profitability and Efficiency in the Indian Banking Sector: A Review of Recent Trends. Internation Education Scientific Research Journal, 11(9), 13–16.
[6] Cobbinah, B. B., Yang, W., Sarpong, F. A., & Nyantakyi, G. (2024). From Risk to Reward: Unveiling the Multidimensional Impact of Financial Risks on the Performance of Ghanaian Banks. Heliyon, 10(23), e40777. https://doi.org/10.1016/j.heliyon.2024.e40777
[7] G. Kiruthika, M., & Muthumar, D. S. (2024). Financial Performance Analysis Of Indian Banking Sector: A Comparative Study Of Public And Private Banks In The Post-Digital Era (2019-2024). Educational Administration: Theory and Practice, 30(11), 12–22. https://doi.org/10.53555/kuey.v30i11.10399
[8] Jain, R. K., Metri, B., & Rao, K. P. V. (2019). Determinants of Profitability of Indian Commercial Banks. Indian Journal of Finance. https://doi.org/10.1051/e3sconf/202338102013
[9] Jeet, V., & Aspal, P. K. (2020). The Determinant of Financial Performance of Indian Public Sector Banks- A Panel Data Approach. International Journal of Financial Research, 11(5), 285–295. https://doi.org/10.5430/ijfr.v11n5p285
[10] Joseph, A., Geetha, E., & Kishore, L. (2025). Impact of Macroeconomic Factors on Bank Stock Returns: Empirical Evidence From India. Investment Management and Financial Innovations, 22(1), 416–428. https://doi.org/10.21511/imfi.22(1).2025.31
[11] Kartiko, E., Suryaputra, V., Hamdah, D. F. L., & Amirrudin, M. S. (2025). Determinants of Financial Reporting Quality in the Banking Sector. International Journal of Research and Innovation in Social Science, IX(VIII). https://doi.org/10.47772/IJRISS
[12] Kaur, M., & Kaur, M. (2024). Determinants of Banking Stability in India. The Bottom Line, 38(1), 49–70. https://doi.org/10.1108/BL-04-2023-0120
[13] Khairullah, M. A. H., & Rosita, D. S. (2022). Financial Performance of Banks in India: A Study of Selected Private Sector Banks by Using Camel Model. Journal of Emerging Technologies and Innovative Research, 9(3), 45–52. https://doi.org/10.47631/jareas.v1i1.18
[14] Kheni, A. H., & Dr. Namrata Khatri. (2021). A Study on Financial Performance of Top Five Private Banks in India.
[15] Kumar Aspal, P., Dhawan, S., & Nazneen, A. (2019). Significance of Bank Specific and Macroeconomic Determinants on Performance of Indian Private Sector Banks. International Journal of Economics and Financial Issues, 9(2), 168–174. http:www.econjournals.com
[16] Kumari, P., Singh, R., Singh, S., Mishra, S., & Wadhwa, J. (2025). An Analysis of Hindustan Aeronautics Limited (HA) Becoming the 14th Maharatna Company in India. International Journal of Innovations In Science Engineering And Management, 4(1). https://doi.org/10.69968/ijisem.2025v4i1285-295
[17] Misra, B. S., & Sahoo, B. K. (2026). What Drives the Profitability of Indian Banks: Level or Growth Efficiency? International Review of Economics and Finance, 106. https://doi.org/10.1016/j.iref.2026.104978
[18] Moganapriya, M. B., Pradeep, S. A. M., & Sudhanraj, A. (2024). Financial Efficiency Analysis of Indian Bank with Reference to Pondicherry City. International Journal of Scientific Research and Engineering Development, 7(6), 260–266.
[19] Neha, Dubey, P. K., Chaudhary, K., & Raj, D. (2025). Study of the Banking Sector in India: An Overview on Indian Banking Performance With Reference to Market Capitalization. International Journal of Advances in Engineering and Management, 7(12), 323–331. https://doi.org/10.35629/5252-0712323331
[20] Parghi, V. K., & Zala, D. (2025). Determinants Of Financial Performance In Indian Financial Services Companies: An Empirical Study. International Journal of Management, Economics and Commerce, 2(2), 91–100. https://doi.org/10.62737/2gfdq489
[21] Rajan, M., & Geetha, D. (2025). Profitability Indicators as Predictors of Market Capitalisation in ICICI Bank, Axis Bank, And Kotak Mahindra Bank. International Journal of Scientific Research in Engineering and Management, 09, 1–9. https://doi.org/10.55041/IJSREM55258
[22] Rajesh, G., Natarajan, S. P., Neelima, S., & Rao4, B. S. (2024). Financial Performance Analysis of Private Sector Banks in India: An Eagle Model Approach. Educational Administration Theory and Practice, 30(5), 14005–14018. https://doi.org/10.53555/kuey.v30i5.6191
[23] Raut, T. B., Rana, M. P. H., Menezes, A. J., Shaikh, I. W., & Dcruz, M. M. (2026). Comparative Profitability Analysis of Indian Private and Public Sector Banks. Journal of Informatics Education and Research, 6(1), 2025–2033.
[24] Ravichandiran, D. G., Surya, M., & Jeeva, M. M. (2026). Financial Performance and Balance Sheet Analysis of a Banking Institution: A Comparative Study. International Journal of Research Nexus, 01(01), 42–45.
[25] S, T., & Srinivasan K. (2022). A Study on Financial Performance Analysis of Selected Public and Private Sector Banks. International Journal of Creative Research Thoughts, 10(4), 720–726.
[26] Sar, A., & Panigrahi, K. (2025). The Dynamics of Financial Performance and Market Performance in the Context of Indian Banking Industry. F1000Research, 1–19.
[27] Sathavara, M. J. A., & Christian, D. S. R. (2021). Financial Performance Analysis of Private Sector Banks in India: An EAGLE Model Approach. International Journal of Commerce and Management Studies, 6(3), 14005–14018. https://doi.org/10.53555/kuey.v30i5.6191
[28] Shweta Goel, & Ahluwalia, D. A. (2017). A Study on Performance and Progress of Indian Banking Sector. Journal of Advances and Scholarly Researches in Allied Education, 13(2). https://consensus.app/papers/study-financial-performance-analysis-indian-banking-vohra/ae010b4b46e95ed5a5dd9cd2f321c1ac/?utm_source=chatgpt
[29] Singh, B., Singh, L. B., Athira, C. A., & Patel, M. R. (2026). Profitability Determinants of Indian Scheduled Commercial Banks: A Classification-Based Analysis. LBS Journal of Management & Research, 1–29. https://doi.org/10.1108/lbsjmr-06-2024-0056
[30] Suresh, K., & Pradhan, S. K. (2023). Evaluation of Financial Performance of Banking Sector in India – A Camel Approach. Journal of Law and Sustainable Development, 11(4), 1–25. https://doi.org/10.55908/sdgs.v11i4.894
[31] Thanigaivalen, P., & Vidya, M. (2020). A Study on Financial Performance Analysis of Selected Private Sector Banks in India. Journal of Management and Science, 15(1), 45–52. https://doi.org/10.47631/jareas.v1i1.18
[32] Vaghasiya, K. D., & Mishra, P. (2026). The Financial Performance of Indian Banks In Both The Public And Private Sectors. International Journal of Drug Delivery Technology, 16(34s), 946–952. https://doi.org/10.25258/ijddt.16.34s.118
[33] Xu, F., Kasperskaya, Y., & Sagarra, M. (2025). The Impact of FinTech on Bank Performance: A Systematic Literature Review. Digital Business, 5(2), 100131. https://doi.org/10.1016/j.digbus.2025.100131
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Parinita Batra
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Re-users must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use. This license allows for redistribution, commercial and non-commercial, as long as the original work is properly credited.
How to Cite
7
