Abstract This study presents a comparative empirical assessment of financial performance, profitability, operational efficiency, and asset quality among selected Public Sector Banks (PSBs) and Private Sector Banks (PVBs) operating in Tamil Nadu over an eleven-year period, from FY 2014–15 to FY 2024–25, comprising 132 bank-year observations. Guided by the CAMEL framework, the study examines key financial performance indicators, including Return on Assets (ROA), Net Interest Margin (NIM), Gross Non-Performing Assets (GNPA), Cost-to-Income Ratio (CIR), and Credit-to-Deposit Ratio (CDR). The results of independent-samples t-tests indicate that Private Sector Banks record significantly higher mean ROA (1.43% versus 0.91%, p < 0.001) and NIM (3.23% versus 2.44%, p < 0.001), suggesting stronger asset-based profitability and net interest income performance. In contrast, Public Sector Banks exhibit a significantly lower regional CDR (74.45% versus 82.78%, p < 0.001) and a higher CIR (51.98% versus 43.68%, p < 0.001), indicating differences in regional credit deployment and operating cost structures between the two ownership groups. Furthermore, pooled regression analysis identifies GNPA as a statistically significant negative predictor of bank profitability (β = −0.1525, p < 0.001), highlighting the importance of asset quality and credit risk management in explaining variations in bank profitability. Overall, the findings reveal significant ownership-related differences in banking performance and underscore the importance of strengthening credit appraisal mechanisms, improving operational efficiency, enhancing asset quality, and sustaining regional credit delivery in Tamil Nadu's banking sector.

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