Comparative Analysis of Commercial Bank’s Income in India

Abstract

Purpose: Due to technological developments in information and communication, competition among Commercial Banks has increased. Hence, the variety and density of businesses & requirements of financial services are enforcing banks to start providing additional banking services to customers that can strengthen income generation. Sources of Commercial Bank’s income are classified in two groups namely: Net Interest Income and Non-Interest Income. This study aims to inspect the contribution of Net-Interest and Non-Interest incomes in total income of selected Indian commercial banks.
Methodology: Comparative analysis and trend analysis on both the types of incomes are performed.On selected commercial banks & their relevant data for five years (2013-2017) are collected form the annual reports of respective banks.
Findings: Percentage of net-interest income has reduced whereas percentage of non-interest income has shown growth during the period of study. it is observed that percentage of non-interest income is less than net-interest income in total income but all together there are minimal expenditure incurred to earn non-interest income, which makes it more lucrative. Trend analysis displays that there is an upward increasing movement in case of non-interest income and downward decreasing movement in case of net-interest income.
Value: Commercial banks’ net-interest incomes are extremely depending on movement of interest- rate & economic cycles whereas non-interest income offers diversification & better stability for commercial bank’s revenues. Therefore, the study tries to explain that mingling net-interest with non-interest income will decrease the instability of incomes of Commercial Banks in India.