FACTORS AFFECTING BANK'S

PERFORMANCE
BY
SWETA SWARNIM SINGH
09DF008
 INTRODUCTION

Banking sector in India is one of the growing

sectors with great dynamics. There are various
factors which affects the share price of banking
companies. This study is all about how various
(internal and external) factors affects the share
prices of the banks. Various internal factors like
bank’s fundamentals, profitability, NPA, income,
expenses and external factor like CRR, Repo rate,
Reverse repo rate and country’s GDP are considered
which affect the share prices of Banks and so their
capital market performance.
 OBJECTIVE OF THE STUDY

The objective of the study is to identify,

understand and analyze the impact of various
factors that affect the capital market
performance of banks.
The main focus will be on understanding,
analyzing and providing a valid explanation
both theoretically and technically, that how
various factors affect the share prices of banks.
To analyze the performance of these banks by
using these parameters.
 LITERATURE REVIEW
Banking performance is the mirror reflection of an
economy. So long as banks do their primary function of
banking by lending to the constituents of economy, they
stand a chance of nudging ahead. (Rohit Rao,2000).
Ozanian, Michel K. and Bradford, Stacey, L. (1996)
focused on the stock performance of top banks in the
United states as of July 8, 1996. Total asset value of
bank takeovers. Trend towards increasing the percentage
of non-interest income versus interest income; list of top
performing banks in the United states; measures used in
ranking the banks, in 1996, world of banking dealt with
ranks of 20n biggest banks in Russia in respect of share
of gross assets and net assets ratio.
CONTINUED…
Thomas, Tony (1995) highlighted the results of
KPMG’s 1995 ratings of Australian bank’s strength and
efficiency, overall ranking of banks; Ratio of write-offs
to loans, Capital adequacy ratio, Return on net assets,
Levels of derivatives , interest margins and spreads.
The impact of reforms on banking sector varies from
changing their constitution, cost of operations,
reporting norms and ultimately their profitability. The
predominance analysis of banks was undertaken. The
reforms associate themselves with vision, vigour and
vitality and a mission to strengthen the Indian economy
(AV. Aruna Kumari, 2002).
RESEARCH METHODOLOGY
Sample size:
Sample of 10 commercial banks are being taken.
Which includes public sector and private sector
banks.
 Sample description:
A Sampling unit is the basic unit containing the
data from 2007-08 to 2009-10 .
Variable summary
Earning of the company
Market capitalization
Price earning ratio
CONTINUE….
C/D ratio
CRR
Repo and reverse repo
GDP
Tools And Techniques
MS Excel and SPSS
Multiple regression analysis
Data collection
The data relating to these variables are collected
from the annual report of the banks, different
websites
(www.nseindia.com,www.icicidirect.com), RBI
THANK YOU