IMPACTOFNON-PERFORMINGASSETSONPROFITABILITYOFSBI

Abstract

This paper analyzes the effect of Non
Performing Assets (NPAs) on bank
profitability in the State Bank of India (SBI),
India's largest government-owned bank.
Spanning 2016–2025, it compares trends in
NPAs, sectoral spread, and macroeconomic
factors like exchange rate volatility. Important
profitability
metrics—Return on Assets
(ROA), Return on Deposits (ROD), Net
Interest Margin (NIM), Return on Investment
(ROI), Loan Loss Provisions (LLP), Capital
Adequacy Ratio (CAR), and Loan-to-Deposit
Ratio (LTDR)—are analyzed via t-test,
regression, and correlation. The results
indicate a negative correlation between NPAs
and profitability, demonstrating how stressed
assets depress profits and curtail lending
capability. The study also highlights SBI’s
strategies like credit monitoring, digital tools.