Professional Documents
Culture Documents
Abstract
The erosion in the profitability was arrested to some extent by robust performance in
the Non-interest income. The Non-interest income increased from 22,576 crore in FY15 to 28,158
crore in FY16 i.e., 24.73% growth. The down fall in the profitability did not adversely impact Net
Interest Rate Margin (NIM) of the Bank. The Bank continued to maintain good NIM of 3.27%. The
Bank was suitably maintaining the margin because of 96 bps improvements in the CASA ratio to
43.84%.The figures are drawn with the help of the table-1. The graph-1 shows that the yearly profit of
the SBI decreases and shows the negative trend. The analysis of various ratios with respect to
different financial years is shown in figure-2. The figure-2 show that the net profit per branch, return
on assets percent and operating profit per branch decreases whereas the expenses per branch
increases. The net margin also shows the negative trend. The Karl Pearsons correlation coefficient of
the variable x and y is calculated with the help of table-2, where x = net NPA% and y = net profit
margin. The value of correlation coefficient is r = -0.85. Hence these two variables are negatively
correlated.
Keywords: NPA, Profitability, SBI.
1. Introduction
The All India Rural Credit Survey Committee proposed the takeover of Imperial
Bank of India and integrating with it, the former state-owned or state-associate banks. So, an Act was
passed in the Indian Parliament in May 1955. As the result, the State Bank of India (SBI) was
established on 1 July 1955. This resulted in making the State Bank of India much powerful because as
much as a quarter of the resources of the Indian banking system were directly controlled by the State.
Later on, the State Bank of India Act was passed in 1959. The Act enabled the State Bank of India to
make the eight former State associated banks as its subsidiaries.
Now India is rapidly advancing towards becoming a first world nation, and today, it is
focusing on the new opportunities such as Smart Cities, Digital India, and Bharat Net etc. As the
result, Indians are increasingly using the social media, internet, and their smart phones to do their
banking. They are demanding an end to end experience and a lot of consistency when doing the
banking via their iPad, smart phones / mobile, or even a computer. Similarly, corporate, SMEs and
public institutions are leveraging the Internet to do their business more economically and efficiently.
New disruptive businesses are altogether redefining how people go about doing routine chores. Not
to be left behind, millions from rural India have become more financially literate and are using the
normal routine banking system to have a more direct relationship with their social benefits and
money. With the Indian economy that is growing more rapidly, India is certainly on towards the Go!
As the biggest bank in India, they are integral to millions of personal lives and thousands of
commercial entities. As the digital economy flourishes, SBI has grown the technology and channel
platforms proportionately, and in more cases, ahead of the curve.
The world economy has passed via a difficult year. The growth in the advanced
economies has stagnated, while that in the emerging and developing world has decelerated, that leads
29 | P a g e
https://www.ijopaar.org/
30 | P a g e
https://www.ijopaar.org/
31 | P a g e
https://www.ijopaar.org/
*Rs. in Crores
FY-2011-12
FY-2012-13
FY-2013-14
FY-2014-15
FY-2015-16
Interest Earned
(a) Int. /Disc. on Adv/Bills
81,077.70
90,537.10
102,484.10
112,343.91
115,666.01
23,949.14
27,200.63
31,941.87
37,087.77
42,303.98
(d) Others
1,144.14
1,374.23
1,515.52
2,460.27
5,094.25
Other Income
14,351.45
16,034.84
18,552.92
22,575.89
28,158.36
Interest Expended
63,230.37
75,325.80
87,068.63
97,381.82
106,803.49
Employees Cost
16,974.04
18,380.90
22,504.28
23,537.07
25,113.83
Other Expenses
9,094.95
10,903.52
13,221.57
15,140.57
16,668.54
Depreciation
0.00
0.00
0.00
0.00
0.00
31,573.54
31,081.72
32,109.24
38,913.50
43,257.81
0.00
11,130.83
15,935.35
19,599.54
29,483.75
Exceptional Items
13,090.23
0.00
0.00
0.00
0.00
18,483.31
19,950.89
16,173.89
19,313.96
13,774.06
Tax
6,776.02
5,845.91
5,282.72
6,212.39
3,823.41
11,707.29
14,104.98
10,891.17
13,101.57
9,950.65
11,707.29
14,104.98
10,891.17
13,101.57
9,950.65
671.04
684.03
746.57
746.57
776.28
83,280.16
98,199.65
117,535.68
127,691.65
143,498.16
350.00
415.00
300.00
350.00
0.00
a) % of Share by Govt.
61.58
62.31
58.60
58.60
60.18
12.05
0.00
0.00
0.00
0.00
13.86
12.92
12.96
12.79
0.00
Basic EPS
184.31
210.06
156.76
17.55
12.98
Diluted EPS
184.31
210.06
156.76
17.55
12.98
Basic EPS
184.31
210.06
156.76
17.55
12.98
Diluted EPS
184.31
210.06
156.76
17.55
12.98
i) Gross NPA
39,676.46
51,189.39
61,605.35
56,725.34
98,172.80
ANALYTICAL RATIOS
NPA Ratios :
ii) Net NPA
15,818.85
21,956.48
31,096.07
27,590.58
55,807.02
i) % of Gross NPA
4.44
4.75
4.95
4.25
6.50
1.82
2.10
2.57
2.12
3.81
Return on Assets %
0.88
0.91
0.65
0.76
0.46
No Of Shares (Lakhs)
2,577.92
2,577.93
3,091.13
30,911.33
0.00
38.42
37.69
41.40
41.40
0.00
0.00
0.00
0.00
0.00
0.00
7.28
7.20
7.19
7.49
7.29
5.40
5.49
5.51
5.46
5.46
PROFITABLITY RATIOS
10.99
11.78
7.98
8.59
6.07
13.94
14.26
9.20
10.20
6.89
13.94
14.26
9.20
10.20
6.89
7.46
7.98
8.49
9.22
9.75
1.28
1.08
0.93
1.06
1.00
0.82
0.94
0.68
0.79
0.59
1.19
1.23
1.40
1.42
1.50
0.57
0.65
0.74
0.85
0.89
4.43
5.02
5.42
5.89
6.36
8.90
11.28
11.40
12.42
13.36
73.14
80.17
86.83
95.42
103.12
32 | P a g e
https://www.ijopaar.org/
2012-13
2013-14
2014-15
2015-16
Polynomial ()
1.2
1
0.8
0.6
0.4
0.2
0
FY-2011-12
FY-2015-16
4
2
0
FY-2011-12
33 | P a g e
FY-2012-13
FY2013-14
FY-2014-15
FY-2015-16
https://www.ijopaar.org/
r=
( x i x ) ( y i y )
( x ix )2 ( y i y )2
^
y i=a^ + b^ xi
e i= y i ^
yi
xi
yi
( x ix ) ( y i y ) ( x ix )2
( y i y )
( x ix )
( y i y )
^
yi
ei
ei2
1.82
10.99
-0.664
1.908
0.440896
3.640464
-1.266912
12.1933
-1.2033
1.4479308
2.10
11.78
-0.384
2.698
0.147456
7.279204
-1.036032
10.8815
0.8985
0.8073022
2.57
7.98
0.086
-1.102
0.007396
1.214404
-0.094772
8.67955
-0.6995
0.4893702
2.12
8.59
-0.364
-0.492
0.132496
0.242064
0.179088
10.7878
-2.1978
4.8303248
3.81
6.07
1.326
-3.012
1.758276
9.072144
-3.993912
2.87015
3.19985
10.239040
Table-2
We have the following values
x =2.484, y =9.082
( x i x ) ( y i y ) =6.21254
( x i x )2=2.48652
( y i y )2=21.44828
r=
6.21254
=0.85070108 0.85
7.302847197
^ (
b=
xi x ) ( y i y ) 6.21254
=
=4.685173454 4.685
1.326
( xi x )
a^ = y b^ x a^ =20.71997086 20.72
The standard error for regression coefficient b is given as:
S res =
( y i y )2
Se ( b )=
n2
S res
( x x )
i
2.4368
=1.545339819 1.545
1.57687
t=
b
4.685
=
=3.03236246 3.03
se ( b ) 1.545
34 | P a g e
https://www.ijopaar.org/
35 | P a g e
https://www.ijopaar.org/
36 | P a g e
https://www.ijopaar.org/