Basically three factors - Yield on Assets, Cost of Funds and Asset quality.

Size matters because economies of scale in banking exists; however, the benefits diminish when a bank is approximately medium in size.

There has been many Futile attempts to look at bank efficiency by using the fictional production function approach. People should get away from fiction and use a decision model which can be externally validated. The bank's decision should be modeled as a multilateral bargaining game between the central bank on one side and the individual banks on the other side. Let us get out of the unrealistic assumption of perfect competition among banks. Stop weeping about credit rationing and accept the fact that no bank on this planet can lend infinite amount to customers. Instead of changing the data, we need to change the model.

Fees structure is also an important element for profitability. This can show innovation in coming up with novel products to the benefit of customers but being also highly rewarding to individual banks. Non-interest income appears to be much higher for most profitable banks than mere loans/investments-deposit portfolios.

could ever be that they are only thinking of how much money can upper management make WITHOUT delivering any value for the money they make. does it cross anybody's mind that there are thieves out there. Must you assume tha bankers are angels who are always working for us

why cant economist stay awake for long?

I second Anusha’s answer and emphasize the fact that bank’s behavior is best viewed as a simple decision problem which a bargaining game.

Factors affecting banks' profitability are quality of the asset / investment, interest spread, expense ratio, level of NPA, staff efficiency, cost -income ratio.

Maximum profit, minimum use of their capital, maximum use of depositors’ money, big big big moral hazard. Don't worry, no one is paying attention.