Efficiency and Profitability: A Case Study of Banking Sector in Sri Lanka

K Priya; T Velnampy

Authors

K Priya
T Velnampy

Keywords:

Organizational efficiency is still important to planning because it enables plans that are possible to achieve profitability Efficiency measure of ho

Abstract

Organizational efficiency is still important to planning because it enables plans that are possible to achieve profitability. Efficiency measure of how well or how productively resources are used to achieve a goal. Banking sector is important factor for economic development. The study is also aimed at finding the effect of changes in efficiency levels on profitability of banking in Sri Lanka. The study covered banking sector in Sri Lanka over a period of past 5 years from 2008 to 2012. Correlation and regression analysis were used in the analysis and findings suggest that there is a significant relationship exists between efficiency and profitability. However, the findings of this paper are based on a study conducted on the banking sector in Sri Lanka. Results of this study found that the Sales to Total Asset (SA/TA) is significantly correlated with Operating Profit Margin (OPM) and Return on Equity (ROE). At the same time SA/TA and Operating Expenses to Total Assets (OPE/TA) and Loan to Total Assets (LO/TA) are significantly correlated with Net profit Margin (NPM). Then indicated that LO/TA is significantly correlated with OPM and ROE 5 percent level of significance. At the same time OPE/TA also is significantly correlated with ROE at 5 percent level of significance. The other rest of variables are not correlated.

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Efficiency and Profitability: A Case Study of Banking Sector in Sri Lanka. (2013). Global Journal of Management and Business Research, 13(34), 51-58. https://journalofbusiness.org/index.php/GJMBR/article/view/

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Author Biography

K Priya

Prof. Dr. T. Velnampy is a distinguished academic and researcher affiliated with the University of Jaffna, Sri Lanka, where he serves as Professor and Dean of the Faculty of Management Studies & Commerce. With a prolific publication record of 67 works and over 823 citations, his research spans diverse areas including tourism forecasting, capital structure, profitability, customer relationship marketing, job satisfaction, library services, dividend policy, board characteristics, and human resources planning. His h-index of 13 and i10-index of 15 reflect his significant impact in the field of management and commerce. Prof. Velnampy is also known under the names N.Sivathaasan and T.Mangaleswaran, and his ORCID is 0000-0002-1371-5772.

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