A Review of Impact of Interest Rate Spread on Profitability

Abstract

The purpose of this study is to explain the relationship between interest rate spread and profitability. Interest rate spread is actually the difference between deposit rate and lending rate of bank. Interest rate spread is an important factor in profitability of banks. It means increase or decrease in interest rate will affect profitability. Many other factors also contribute in the profitability of banks. The growth of any organization depends on its profitability. When the profitability of any organization increases the value of shareholders also increase.

Keywords: Interest rate spread, Profitability, Bank