India’s bank Return on Assets (RoA) & Return on Equity (RoE) — how profitable are banks?
Quick answerReturn on Assets (RoA) is a bank’s net profit as a share of its total assets, and
Return on Equity (RoE) is profit as a share of shareholders’ capital — together the cleanest read on bank profitability. Indian banks now earn an RoA of about
1.3-1.4% and an RoE of about
14-15%, the
strongest in over a decade after years of bad-loan clean-up. The average hides a wide split:
public-sector banks ~1% RoA versus
private banks ~1.7%. Profitability climbed as provisioning fell and
margins widened through the rate cycle. Figures are official, rounded, approximate and revised periodically.
The chart shows Return on Assets (%) for the banking system and for the public- and private-sector bank groups. The table below adds system Return on Equity and carries the same figures so the page is readable without JavaScript — for accessibility and AI answer engines.
Return on Assets & Return on Equity by fiscal year and bank group (%)
| Fiscal year | System RoA | System RoE | Public RoA | Private RoA | Note |
| FY21 | ~0.7% | ~10.0% | ~0.3% | ~1.2% | Sector returns recovering after the NPA clean-up |
| FY22 | ~0.9% | ~11.5% | ~0.5% | ~1.3% | Lower provisions lift profits as asset quality improves |
| FY23 | ~1.1% | ~12.5% | ~0.8% | ~1.5% | Wider margins and falling slippages push RoA above 1% |
| FY24 | ~1.3% | ~14.0% | ~1.0% | ~1.7% | Sector RoA at its highest in over a decade |
| FY25 | ~1.4% | ~14.5% | ~1.1% | ~1.7% | Profitability holds near cycle highs |
Metric: RoA = net profit / average total assets; RoE = net profit / average net worth, at the scheduled-commercial-bank system level with an illustrative public- vs private-sector split. All figures are rounded and approximate; recent years are provisional and revised, and individual banks vary widely. For exact latest figures see the sources linked below.
What it means for bankers
RoA and RoE are the bottom-line scorecards of a bank. RoA strips out leverage and shows how well a bank turns its deposit-funded asset base into profit, while RoE shows the return delivered on the capital that absorbs losses and meets the capital-adequacy requirement. The transformation of the last few years is striking: a sector that earned almost nothing at the peak of the bad-loan cycle now posts an RoA above 1.3% and an RoE near 14%, its best in over a decade. The drivers are a sustained fall in non-performing assets and provisioning, recoveries, fresh capital and the wider net interest margins earned as repo hikes repriced loans faster than deposits. The structural gap remains: private banks earn an RoA close to 1.7% against roughly 1% for public-sector banks, which is why private lenders compound capital and grow faster at similar scale. For a banker, a rising RoA is what lets a bank fund growth from retained earnings rather than repeatedly returning to shareholders for capital.
India bank RoA & RoE FAQ
What are Return on Assets (RoA) and Return on Equity (RoE)?
RoA is a bank's net profit as a percentage of average total assets -- how much profit it earns per rupee of assets. RoE is net profit as a percentage of average net worth -- the return on owners' capital. RoA is the cleaner read on operating profitability because leverage does not flatter it, while RoE is what shareholders watch. An RoA of 1.3% with an RoE of 14% means 1.3 paise of profit per rupee of assets and 14 paise per rupee of equity.
What is the RoA and RoE of Indian banks?
At the system level Indian scheduled commercial banks earn an RoA of roughly 1.3-1.4% and an RoE of about 14-15% -- the strongest profitability in over a decade. The averages hide a wide gap: public-sector banks earn an RoA of ~1% while private banks earn ~1.7%, helped by wider margins and lower credit costs. Figures are rounded and approximate.
Why has Indian banks' RoA improved so much?
Through the 2010s a large stock of bad loans -- heaviest at public-sector banks -- forced big provisions and crushed profits, with sector RoA near zero in the worst years. A sustained NPA clean-up, recoveries under the insolvency code, fresh capital and stronger net interest margins through the rate cycle then lifted profitability sharply. System RoA rose past 1% in FY23 and to ~1.3% by FY24, its highest in over a decade, with RoE near 14%.
How are RoA and RoE calculated here?
RoA as net profit divided by average total assets and RoE as net profit divided by average net worth, at the system level with an illustrative public/private split, by fiscal year, compiled from RBI's Report on Trend & Progress / Financial Stability Report and bank disclosures. Figures are rounded and approximate; exact ratios depend on the averaging method and the period, so treat these as direction and rough magnitude, not a precise single-bank figure.
Methodology & sources: see how BankPulse dashboards are sourced, verified & updated · machine-readable RoA/RoE JSON feed.
Source: RBI — Report on Trend & Progress of Banking in India and Financial Stability Report, plus bank financial disclosures,
rbi.org.in. RoA is net profit / average total assets and RoE is net profit / average net worth; figures are rounded and approximate and recent years are provisional and revised. We never reproduce source text verbatim. Reviewed by
Vikram Jain. Last updated 19 Jun 2026, 05:39 IST.