Impact of Customer Trust on Financial Performance of Banks: An Empirical Study

Abstract In the contemporary banking environment, customer trust has emerged as a critical intangible asset influencing financial performance and long-term sustainability of banks. With increasing competition, digitalisation, and exposure to financial risks, banks are no longer evaluated solely on traditional financial indicators but also on relational factors such as trust, transparency, service reliability, and ethical conduct. This study examines the impact of customer trust on the financial performance of banks in India. Using primary data collected from 100 bank customers and secondary data from annual reports, the research analyses how trust affects profitability, customer retention, and revenue growth. Statistical tools such as percentage analysis, correlation, and regression analysis are employed. The findings reveal a significant positive relationship between customer trust and financial performance, suggesting that trust-driven banking strategies enhance profitability and stability. The study concludes with managerial and policy implications for strengthening trust-based banking practices. Keywords: Customer Trust, Financial Performance, Banking Sector, Profitability, Customer Retention