NN PDF

Chapter-6
232 Evaluating Financial Performance of select Public and Private sector Banks
Using CAMELS and EAGLES Models
Chapter-6 Evaluating financial performance of
sample Banks using EAGLES Model
This part main objective is to analyse and compare the financial performance of Selected
public and private sector Banks. As it has been discussed earlier this research is based on
the six broad parameters of financial management such as Earnings, Asset Quality,
Growth, Liquidity, Equity and strategy that are essential for financial viability of any
bank. These parameters are nomenclature as EAGLES. The performance of these banks
has been discussed in the following sections based on the above mentioned parameters.
6.1Earning Appraisal:
Sustainable high level of earning enables a bank to boost its capital and improve
economic performance. Here is negative relationship between profitability and
probability of failure for any business organisation. As banking is a profit making
organisation the level of conducting the performance appraisal. For the purpose of such
evaluation following ratios have been discussed for each of the nationalized commercial
banks.
6.1.1 Return on Assets:

It has already interpreted in the CAMELS Model under Earnings component
6.1.2 Return on Net worth: Return on Net worth (RONW)

It has already interpreted in the CAMELS Model under Earnings component
6.1.3 Income to overhead Ratio:

The income-to-overhead ratio is also reflective Bank’s efficiency. Income to overhead
ratio is operating expenses divided by total income less interest expenses. Higher ratio
being indicative of more efficiently managed bank. Income-to-overhead ratio = total
income/ total overhead.
Table 87: Income to overheads ratio (IOR) in public and private sector banks
Public Sector Banks Private Sector Banks
Bank SBI BOB PNB BOI canara Kotak HDFC ICICI Yes Axis
2005-06 1.11 1.11 1.13 1.09 1.15 1.36 1.55 1.32 1.24 1.16
2006-07 1.11 1.11 1.13 1.13 1.12 0.49 1.46 1.25 1.14 1.13
2007-08 1.13 1.12 1.17 1.16 1.10 0.45 1.44 1.25 1.14 1.14
2008-09 1.14 1.14 1.17 1.18 1.12 1.10 1.36 1.32 1.14 1.15
2009-10 1.12 1.18 1.20 1.09 1.16 1.32 1.46 1.41 1.19 1.19
2010-11 1.08 1.21 1.17 1.11 1.19 1.17 1.19 1.11 1.18 1.21
2011-12 1.10 1.18 1.14 1.09 1.11 1.17 1.18 1.14 1.16 1.16
2012-13 1.10 1.13 1.12 1.08 1.08 1.16 1.19 1.16 1.16 1.18
2013-14 1.07 1.12 1.08 1.07 1.06 1.17 1.21 1.17 1.16 1.20
2014-15 1.07 1.08 1.06 1.04 1.06 1.17 1.22 1.17 1.17 1.20
Mean 1.10 1.14 1.14 1.10 1.12 1.05 1.32 1.23 1.17 1.17
CV -0.05 0.00 -0.06 -0.08 -0.07 0.33 -0.34 -0.16 -0.01 0.05
Growth -0.59 0.01 -0.79 -0.93 -0.85 4.02 -4.08 -1.98 -0.16 0.65
Rank 8 5 5 8 7 10 1 2 3 3
Globally, the income-to-overhead ratio ranges between 0.46 to 0.65 percent30. Income-
to-overhead ratio of the world’s largest bank varied markedly from a low of 0.48 percent
to a high of 1.16 percent. Income-to-overhead ratio being indicative bench mark, average
income-to-overhead ratio most of the commercial banks is comparable with global bench
30
Source: Globally financially stability Report(GFSR April 2014)
mark using the period of study. However most of the banks are above 0.48 in the above
analysis where as in the Kotak Mahindra bank in the year of 2007-08 is (0.44) but
remaining all the banks are above here for the analysis average of all the banks has been
taken Kotak Mahindra bank is in the bottom position with (1.05) i.e. it is most
inefficiently managing bank there is only minute differences between the banks SBI and
BOI is in eighth position. Top most positions are occupied by private sector banks where
as public sector banks are inefficient in managing their expenditure.
On the basis of Income to overhead ratio found, HDFC Bank (1.32 percent) has occupied
top position with its average value followed by ICICI bank (1.23 percent) and Axis Bank
(1.17 Percent) among all public and private sector banks. HDFC bank (1.32 percent) has
least average in IOR among all banks under study. This bank is taking high risk as their
IOR found lowest. Out of public sector banks Bank of Baroda (1.14 percent) has highest
IOR and Bank of India (1.10 percent) has lowest IOR. Whereas, out of private sector
banks HDFC bank (1.32 percent) has highest IOR and Kotak bank (1.05 percent) has
lowest IOR. The IOR of public sector banks lies "between" 1.14 percent to 1.10 percent
while private sector banks have range "between" 1.32 percent to 1.05 percent.
It is further observed that the highest growth rate of IOR found at Kotak Bank (4.02
percent), while HDFC Bank (-4.08 percent) is indicating negative growth rate in IOR
among all banks. In the distribution, the ranks pertaining to IOR of the banks based on
the growth rate shows first two ranks possessed by public sector banks i.e. Kotak and
Axis followed by BOB and Yes banks with 3th & 4th ranks.
The coefficient of variation revealed hardly the variation is exists with respect to the
above mentioned indictor. It shows that only one bank in public sector, i.e. Bank of
Baroda is indicate positive CV in IOR, whereas in private sector two banks are indicate
positive CV in IOR. Most of the private sector banks IOR is better than the public sector
banks.
Figure 27:: : Income to overhead Ratio of Public and Private Sector Banks
Income to overheads ratio (IOR) in public and private sector banks (2005
(2005-06
06 to 2014
2014-15)
1.32
1.23
1.14 1.14 1.17 1.17
1.1 1.1 1.12
1.05
SBI BOB PNB BOI canara kotak HDFC ICICI Yes Axis
Hypothesis Testing:
Null Hypothesis (Ho):--
There would be no significant difference among Income-to-overhead

Income overhead ratio of selected
public and private sector banks.
Alternate Hypothesis (H1):
There would be significant difference among Income-to-overhead

Income overhead ratio of selected
Table 88: The performance of public and private sector banks in Income to
overheads ratio
Std. Std. 95% Confidence

N Mean Minimum Maximum
Deviation Error Interval for Mean
Bank
Lower Upper Lower Upper Lower Upper Lower Upper
Bound Bound Bound Bound Bound Bound Bound Bound
SBI 10 1.10 0.02 0.01 1.09 1.12 1.07 1.14
BOB 10 1.14 0.04 0.01 1.11 1.17 1.08 1.21
PNB 10 1.14 0.04 0.01 1.10 1.17 1.06 1.20
BOI 10 1.10 0.04 0.01 1.07 1.14 1.04 1.18
CANARA 10 1.12 0.04 0.01 1.09 1.15 1.06 1.19
KOTAK 10 1.05 0.32 0.10 0.83 1.28 0.45 1.36
HDFC 10 1.32 0.14 0.04 1.22 1.43 1.18 1.55
ICICI 10 1.23 0.10 0.03 1.16 1.30 1.11 1.41
YES 10 1.17 0.03 0.01 1.15 1.19 1.14 1.24
AXIS 10 1.17 0.03 0.01 1.15 1.19 1.13 1.21
Total 100 1.15 0.13 0.01 1.13 1.18 0.45 1.55
According to the above table the average performance of HDFC bank (1.32) found
highest value in income to overheads ratio against the Kotak bank which is found lowest
with an average of 1.05. On the other hand among the five selected public sector banks
the highest average performance in income to overhead ratio among public sector banks
observed by Bank of Baroda (1.14) and lowest performance observed by State bank of
India (1.10). Whereas, highest average performance among private sector banks observed
by the HDFC bank (1.32) and lowest performance observed by the Kotak Bank (0.05).
Table 89: Level of significance between and within groups of public and private
sector banks in income to overheads ratio
Sum of Mean
ANOVA Df f Sig.
Squares Square
Between Groups 0.53 9.00 0.06
Within Groups 1.27 90.00 0.01 4.15** 0.00
Total 1.79 99.00
**Significant @ 1% level; *Significant @ 5% level.
From the above table the level of difference between and within groups of different
public and private sector banks in income to overheads ratio found significant at
1percent. Whereas in sum of squares between the groups is 0.53 and within the groups is
1.27 and the f-value is 4.15. This indicates that there is significant difference between and
within the groups of public and private sector banks in income to overheads ratio.
Table 90: Mean difference between public and private sector banks in income to
overheads ratio
Mean No of observe Std. Dev.

Df t-value p- value
Public Private Public Private Public Private
1.12 1.19 98 50 50 0.04 0.18 2.72** 0.01
An analysis of the given data found the mean difference between public and private
banks in income to overhead ratio. It shows that average performance of income to
overhead ratio of private sector banks (1.19) found significant higher than the public
sector banks (1.12) and the respective standard deviations are 0.18 and 0.04. With this
distribution of data is calculated t-value is 2.72 found 1 percent significant. This infers
that there is a significant difference between public and private sector banks in
performance of income to overhead ratio where private sector banks mean value is higher
than public sector banks mean value.
6.2 Asset quality:

“Good Quality Assets” are the assets that have the capacity to generate maximum value
with minimum risk characteristic. The issue of maintaining good quality asses continues
to be the biggest challenge before Indian Banking sector. One of the major constraints of
the competitive efficiency of banks is the tendency to accumulate poor quality assets. A
good quality Asset is indicative of efficient credit administration i.e. standard credit
appraisal; effective follow up and efficiency recover of loans. Nothing is true indicator of
the quality of assets than the incidence of the quantum of NPAs in relation to total
portfolio. High level of NPAs demonstrates poor asset quality of banks and this has
serious implication not only for current earnings of banks but also their future income.
Significant amount of funds are locked in loan due to their non-recovery on time and this
further aggravates the problem for banks due to provisioning requirements for NPAs
classification. Bank with adequate credit risk management practices are expected to have
lower NPAs. Various Asset Quality Ratios have been used to analyses the quality of
assets in Banks are discussed in the following pages:
6.2.1 Gross NPAs

It has already interpreted in the CAMELS Model under Assets Quality
6.2.2 Net NPAs Ratio:

It has already interpreted in the CAMELS Model under Assets Quality
6.2.3 Provision Coverage Ratio (PCR)

Provision coverage Ratio (PCR) helps the banks to meet financial obligations. In broader
sense, the higher the coverage ratio, the better the ability of the bank to meet its future
obligations. The key relationship in analyzing asset quality of the bank is between the
cumulative provision balances of the banks on a particular date to cross gross NPAs. It is
a measure that indicates the extent to which the bank has provided against the troubled
part of its loan portfolio. A high ratio suggests that additional provisions to be made by
the bank in the coming years would be relatively low (if gross non-performing assets do
not rise at a faster clip).
Provision coverage ratio31 = cumulative provisions/ gross NPAs
Table 91: Provision coverage ratio (PCR) in public and private sector banks
2005-06 49.04 62.22 93.30 60.89 29.85 43.40 52.50 53.05 78.40 57.63
2006-07 45.31 62.37 78.60 69.91 27.50 57.00 59.05 65.03 76.00 45.60
2007-08 42.17 69.69 77.30 75.57 29.40 55.00 67.09 52.03 72.00 49.80
2008-09 38.41 75.63 89.50 56.13 30.50 45.40 68.43 59.06 73.69 63.55
2009-10 44.36 74.90 69.50 65.51 30.50 58.34 78.42 59.48 78.42 72.83
2010-11 51.25 85.00 73.21 72.81 72.99 70.14 82.51 76.00 88.63 80.90
2011-12 60.13 80.05 62.73 60.74 67.60 70.14 82.38 80.40 79.18 80.91
2012-13 57.11 68.24 58.83 63.77 57.39 68.21 79.91 76.80 92.59 79.15
2013-14 62.86 65.00 59.07 52.40 60.11 55.50 72.57 68.60 85.10 78.10
2014-15 69.13 65.00 58.21 52.15 57.29 56.80 73.93 59.00 72.01 77.73
Mean 51.98 70.81 72.03 62.99 46.31 57.99 71.68 64.95 79.60 68.62
CV 22.52 2.98 -31.07 -11.96 38.45 13.11 19.88 14.15 6.79 30.77
Growth 272.98 36.08 -376.65 -144.91 466.04 158.89 240.94 171.47 82.32 372.91
Rank 9 4 2 7 10 8 3 6 1 5
31
http://www.thehindubusinessline.com/portfolio/beyond-stocks/key-ratios-related-to-banks-balance-
sheets/article6386137.ece
On the basis of Provision coverage ratio found on an average, Yes Bank (79.60 percent)
occupied top position with its average value followed by Punjab National Bank (72.03
percent) and HDFC Bank (71.68 Percent) among all public and private sector banks.
Canara Bank (46.31 percent) has least average in PCR among all banks under study. This
bank is taking high risk as their PCR found lowest. Out of public sector banks Punjab
National Bank (73.56 percent) has highest PCR and Canara Bank (46.31 percent) has
lowest PCR. Whereas, out of private sector banks Yes bank (79.60 percent) has highest
PCR and Kotak bank (57.99 percent) has lowest PCR. The PCR of private sector banks
have range "between"79.60 percent to 57.99 percent while public sector banks lies
"between"73.56 percent to 46.31 percent.
It is further observed that the highest growth rate of PCR found at Canara Bank (466.04
percent), while Punjab National Bank (-376.65) and Bank of India (-144.91) are
indicating negative growth rate in PCR among all banks. In the distribution, the ranks
pertaining to PCR of the banks based on the growth rate shows 1st rank possessed by
public sector bank i.e. Canara and 2nd rank possessed by private sector bank i.e. Axis
followed by SBI and HDFC with 3rd & 4th ranks.
above mentioned indictor. It shows that two banks in public sector, i.e. Punjab National
Bank and Bank of India are indicating negative CV in PCR, whereas all banks in private
sector, i.e. Kotak, HDFC, ICICI, Axis and Yes Banks are indicating positive CV in PCR.
Most of the private sector banks PCR is better than the public sector banks.
Figure 28:: Provision coverage ratio of Public and Private Sector Banks
Ban
Provision coverage ratio (PCR) in public and private sector banks (2005-06
06 to 2014
2014-15)
79.6
70.81 72.03 71.68

68.62
62.99 64.95
57.99
51.98
46.31
Hypothesis Testing:
There would be no significant difference among Provision coverage ratio of selected

There would be significant difference among Provision coverage ratio of selected public
and private sector banks
Table 92: The performance of public and private sector banks in
provision coverage ratio

Dev. Error Interval for Mean
BANK
SBI 10 51.98 9.99 3.16 44.83 59.12 38.41 69.13
BOB 10 70.81 7.80 2.47 65.23 76.39 62.22 85.00
PNB 10 72.03 12.72 4.02 62.93 81.12 58.21 93.30
BOI 10 62.99 8.14 2.57 57.17 68.81 52.15 75.57
CANARA 10 46.31 18.29 5.78 33.23 59.39 27.50 72.99
KOTAK 10 57.99 9.36 2.96 51.30 64.69 43.40 70.14
HDFC 10 71.68 10.05 3.18 64.49 78.87 52.50 82.51
ICICI 10 64.95 10.13 3.20 57.70 72.19 52.03 80.40
YES 10 79.60 7.05 2.23 74.56 84.64 72.00 92.59
AXIS 10 68.62 13.47 4.26 58.98 78.26 45.60 80.91
Total 100 64.70 14.38 1.44 61.84 67.55 27.50 93.30
According to the above table the average performance of Yes bank (79.60) found highest
value in provision coverage ratio against the Canara bank which is found lowest with an
average of 46.31. On the other hand among the five selected public sector banks the
highest average performance in provision coverage ratio among public sector banks
observed by Punjab National Bank (72.03) and lowest performance observed by Canara
Bank (46.31). Whereas, highest average performance among private sector banks
observed by the Yes bank (79.60) and lowest performance observed by the Kotak Bank
(57.99).
sector banks in provision coverage ratio
Sum of Mean
ANOVA Df f Sig.
Squares Square
Between
Groups 9250.61 9.00 1027.85
8.25** 0.00
Within Groups 11208.00 90.00 124.53
Total 20458.61 99.00
public and private sector banks in provision coverage ratio found significant at 1percent.
Whereas in sum of squares between the groups is 9250.61 and within the groups is
11208.00 and the f-value is 8.25. This indicates that there is a significant difference
between and within the groups of public and private sector banks in provision coverage
ratio.
Table 94: Mean difference between public and private sector banks in provision
coverage ratio

Df t-value p- value
60.82 68.57 98 50 50 15.45 12.18 2.78** 0.01
The table shows that an analysis of the given data found the mean difference between
public and private banks in provision coverage ratio. It shows that the average
performance of provision coverage ratio of private sector banks (68.57) found significant
higher than the public sector banks (60.82) and the respective standard deviations are
12.18 and 15.45. With this distribution of data is calculated t-value is 2.78 found 1
percent significant. This infers that there is a significant difference between public and
private sector banks in performance of provision coverage ratio where private sector
banks mean value is higher than public sector banks mean value.
6.3 Growth
A higher growth of loans and deposits are the maximum essential signs of how a banks
wants to function itself in the market. An excessive growth in loan without a
corresponding growth in deposits signifies an aim to increase interest margin. A higher
deposit without a corresponding increase in loans means that the bank suffers from low
interest margins.
6.3.1 Loans
Loans are the effective rate of return on the Bank’s investment in loans. Higher Loans
growth indicates higher earning capacity of the bank. Loans growth has been declined
steadily for all selected banks over the period of study due to increase in the proportion of
disbursement of loan over the period of study in absolute terms.
Table 95: Loans ratio in public and private sector banks
Bank SBI BOB PNB BOI Canara Kotak HDFC ICICI YES AXIS
2005-06 16.22 3.20 3.81 3.05 4.33 0.10 0.35 1.12 0.02 0.16
2006-07 18.11 3.79 4.88 3.32 4.70 0.16 0.47 1.51 0.05 0.26
2007-08 22.80 49.58 7.59 4.39 5.88 0.20 0.63 1.76 0.07 0.41
2008-09 27.16 62.80 8.14 6.06 6.78 0.20 0.99 1.70 0.09 0.58
2009-10 31.40 76.14 9.99 7.24 8.31 0.25 1.26 1.38 0.17 0.75
2010-11 36.52 10.12 1.21 8.18 10.13 0.34 1.60 1.69 0.27 1.04
2011-12 41.63 12.69 1.43 9.96 11.76 0.44 1.95 2.02 0.28 1.19
2012-13 49.15 14.14 1.43 11.53 1.30 0.55 2.40 2.39 0.34 1.37
2013-14 60.92 16.53 1.46 11.70 1.74 0.58 3.03 2.75 0.40 1.58
2014-15 66.58 17.44 1.54 13.82 1.88 0.72 3.65 3.07 0.57 1.95
Mean 37.05 26.64 4.15 7.93 5.68 0.35 1.63 1.94 0.23 0.93
CV 46.66 -8.80 -5.20 10.19 -2.44 0.55 2.99 1.54 0.47 1.62
Growth 565.60 -106.72 -63.05 123.57 -29.59 6.72 36.19 18.62 5.69 19.60
Rank 1 2 5 3 4 9 7 6 10 8
Given the above table shows the information of loans ratio in banking sectors found on
an average, State Bank of India (37.05 percent) occupied top position with its average
value followed by Bank of Baroda (26.64 percent) and Bank of India (7.93 Percent)
among all public and private sector banks. Yes Bank (0.23 percent) has least average in
loans ratio among all banks under study. This bank is taking high risk as their loans ratio
found lowest. Out of public sector banks State bank of India (37.05 percent) has highest
loans ratio and Punjab national Bank (4.15 percent) has lowest loans ratio. Whereas, out
of private sector banks ICICI bank (1.94 percent) has highest loans ratio and Yes bank
(0.23 percent) has lowest loans ratio. The loans ratios of private sector banks
ba have range
"between"1.94 percent to 0.23 percent while public sector banks lies "between"37.05
percent to 26.64 percent.
It is further observed that the highest growth rate of loans ratio found at State Bank of
India (565.60 percent), while Bank of Bar
Baroda (-106.72)
106.72) and Punjab National Bank (-
(
63.05) are indicating negative growth rate in loans ratio among all banks. In the
distribution, the ranks pertaining to loans ratio of the banks based on the growth rate
shows first two ranks possessed by public sec
sector
tor banks i.e. SBI and BOI followed by
HDFC and Axis with 3rd & 4th ranks.
above mentioned indictor. It shows that two banks in public sector, i.e. Bank of India and
Punjab
unjab National Bank are indicating negative CV in loans, whereas all banks in private
sector, i.e. Kotak, HDFC, ICICI, Axis and Yes Banks are indicating positive CV in loans.
Most of the private sector banks loans ratios are better than the public sector banks.
b
Figure 29:
29: : Loans Ratio in Public and Private Sector Banks
Loans ratio in public and private sector banks (2005-06 to 2014-15)

15)
37.05
26.64
7.93
5.68
4.15
1.63 1.94 0.93
0.35 0.23
Hypothesis Testing:
Null Hypothesis (Ho):-
There would be no significant difference among Loans ratio of selected public and
private sector banks.
There would be significant difference among Loans ratio of selected public and private
sector banks
Table 96: The performance of public and private sector banks in Loans ratio

BANK
SBI 10 37.05 17.43 5.51 24.58 49.52 16.22 66.58
BOB 10 26.64 26.17 8.28 7.92 45.37 3.20 76.14
PNB 10 4.15 3.33 1.05 1.76 6.53 1.21 9.99
BOI 10 7.93 3.76 1.19 5.23 10.62 3.05 13.82
CANARA 10 5.68 3.61 1.14 3.10 8.26 1.30 11.76
KOTAK 10 0.35 0.21 0.07 0.21 0.50 0.10 0.72
HDFC 10 1.63 1.12 0.35 0.83 2.43 0.35 3.65
ICICI 10 1.94 0.62 0.20 1.49 2.38 1.12 3.07
YES 10 0.23 0.18 0.06 0.10 0.35 0.02 0.57
AXIS 10 0.93 0.60 0.19 0.50 1.36 0.16 1.95
Total 100 8.65 15.50 1.55 5.58 11.73 0.02 76.14
The above table shows the average performance of State bank of India (37.05) found
highest value in loans ratio against the Yes bank which is found lowest with an average
of 0.23. On the other hand among the five selected public sector banks, the highest
average performance in loans ratio among public sector banks observed by State bank of
India (37.05) and lowest performance observed by Punjab National Bank (4.15).
Whereas, highest average performance among private sector banks observed by the ICICI
bank (1.94) and lowest performance observed by the Yes Bank (0.23).
sector banks in Loans ratio
Sum of Mean
ANOVA Df f Sig.
Squares Square
Between
Groups 14535.28 9.00 1615.03
15.69** 0.00
Within Groups 9264.59 90.00 102.94
Total 23799.87 99.00
public and private sector banks in loans ratio found significant at 1percent. Whereas in
sum of squares between the groups is 14535.28 and within the groups is 9264.59 and the
f-value is 15.69. This indicates that there is a significant difference between and within
the groups of public and private sector banks in loans ratio.
Table 98: Mean difference between public and private sector banks in loans ratio
Mean No of observe. Std. Dev.

Df t-value p- value
16.29 1.02 98 50 50 19.13 0.92 5.64** 0.00
When we look in to the table shows that an analysis of the given data found the mean
difference between public and private banks in loans ratio. It shows that the average
performance of loans ratio of public sector banks (16.29) found significant higher than
the private sector banks (1.02) and the respective standard deviations are 19.13 and 0.92.
With this distribution of data is calculated t-value is 5.64 found 1 percent significant. This
infers that there is a significant difference between public and private sector banks in
performance of loans ratio where public sector banks mean value is higher than private
sector banks mean value.
6.3.2 Deposits:
Deposit is the amount accepted by bank from the savers in the form of current deposits,
savings Deposits and fixed deposits and interest is paid to them
Table 99: Deposits ratio in public and private sector banks
Bank SBI BOB PNB BOI Canara Kotak HDFC ICICI YES AXIS
2005-06 16.22 3.20 3.81 3.05 4.33 0.10 0.35 1.12 0.02 0.16
2006-07 18.11 3.79 4.88 3.32 4.70 0.16 0.47 1.51 0.05 0.26
2007-08 22.80 49.58 7.59 4.39 5.88 0.20 0.63 1.76 0.07 0.41
2008-09 27.16 62.80 8.14 6.06 6.78 0.20 0.99 1.70 0.09 0.58
2009-10 31.40 76.14 9.99 7.24 8.31 0.25 1.26 1.38 0.17 0.75
2010-11 36.52 10.12 1.21 8.18 10.13 0.34 1.60 1.69 0.27 1.04
2011-12 41.63 12.69 1.43 9.96 11.76 0.44 1.95 2.02 0.28 1.19
2012-13 49.15 14.14 1.43 11.53 1.30 0.55 2.40 2.39 0.34 1.37
2013-14 60.92 16.53 1.46 11.70 1.74 0.58 3.03 2.75 0.40 1.58
2014-15 66.58 17.44 1.54 13.82 1.88 0.72 3.65 3.07 0.57 1.95
Mean 37.05 26.64 4.15 7.93 5.68 0.35 1.63 1.94 0.23 0.93
CV 46.66 -8.80 -5.20 10.19 -2.44 0.55 2.99 1.54 0.47 1.62
Growth 565.60 -106.72 -63.05 123.57 -29.59 6.72 36.19 18.62 5.69 19.60
Rank 1 2 5 3 4 9 7 6 10 8
The above table shows that the deposits ratio found on an average, State Bank of India
(9.05 percent) occupied top position with its average value followed by Bank of Baroda
(3.15), Punjab National Bank (2.92 percent) and Bank of India (2.79 Percent) among all
public and private sector banks. Kotak Bank (0.33 percent) has least average in deposit
ratio among all banks under study. This bank is taking high risk as their deposit ratio
found lowest. Out of public sector banks State Bank of India (9.05 percent) has highest
deposit ratio and Canara Bank (2.71 percent) has lowest deposit ratio. Whereas, out of
private sector banks ICICI bank (2.53 percent) has highest deposit ratio and Kotak bank
(0.33 percent) has lowest deposit ratio. The deposit ratios of private sector banks have
range "between"2.53 percent to 0.33 percent while public sector banks lies
"between"9.05 percent to 2.71 percent.
It is further observed that the highest growth rate of deposit ratio found at State bank of
India (132.39 percent), while no negative growth rate is indicating hear in deposit ratio
among all banks. In the distribution, the ranks pertaining to deposit ratio of the banks
based on the growth rate shows first four ranks possessed by public sector bank i.e. SBI,
BOB, BOI and PNB followed by HDFC and canara with 5th & 6th ranks.
above mentioned indictor. It shows that all banks in public and private sector banks are
indicating positive CV in deposit ratio. Most of the public sector banks deposit ratio is
better than the private sector banks.
Figure 30:
30: Deposits ratio in Public and Private Sector Banks
Deposits ratio in public and private sector banks (2005-06 to 2014-15)

15)
9.05
3.15 2.92 2.79 2.71 2.53

2.1
1.71
0.33 0.39
Hypothesis Testing:
There would be no significant difference among deposits ratio of selected public and
private sector banks.
There would be significant difference among deposits ratio of selected public and
private sector banks
Table 100: The performance of public and private sector banks in deposits ratio

BANK
SBI 10 9.05 4.04 1.28 6.16 11.94 3.80 15.77
BOB 10 3.15 1.88 0.59 1.81 4.50 0.94 6.18
PNB 10 2.92 1.35 0.43 1.95 3.89 1.20 5.01
BOI 10 2.79 1.50 0.47 1.72 3.86 0.94 5.32
CANARA 10 2.71 1.23 0.39 1.82 3.59 1.17 4.74
KOTAK 10 0.33 0.23 0.07 0.16 0.49 0.07 0.75
HDFC 10 2.10 1.31 0.41 1.17 3.04 0.56 4.51
ICICI 10 2.53 0.60 0.19 2.10 2.96 1.65 3.62
YES 10 0.39 0.31 0.10 0.18 0.61 0.03 0.91
AXIS 10 1.71 0.97 0.31 1.02 2.41 0.40 3.22
Total 100 2.77 2.82 0.28 2.21 3.33 0.03 15.77
According to the above table the average performance of State bank of India (9.05) found
highest value in deposit ratio against the Kotak bank which is found lowest with an
average of 0.33. On the other hand among the five selected public sector banks the
highest average performance in deposit ratio among public sector banks observed by
State Bank of India (9.05) and lowest performance observed by Canara Bank (2.71).
Whereas, highest average performance among private sector banks observed by the ICICI
bank (2.53) and lowest performance observed by the Kotak Bank (0.33).
Table 101: : Level of significance between and within groups of public and private
sector banks in Deposits ratio
Sum of Mean
ANOVA df f Sig.
Squares Square
Within Groups 257.33 90.00 2.86 20.54** 0.00
Total 785.93 99.00
public and private sector banks in deposit ratio found significant at 1percent. Whereas in
sum of squares between the groups is 528.60 and within the groups is 257.33 and the f-
value is 20.54. This indicates that there is a significant difference between and within the
groups of public and private sector banks in deposit ratio.
Table 102: Mean difference between public and private sector

banks in deposits ratio

Df t-value p- value
4.13 1.41 98 50 50 3.30 1.18 5.47** 0.00
When we look in to the table shows that an analysis of the given data found the mean
difference between public and private banks in deposit ratio. It shows that the average
performance of deposit ratio of public sector banks (4.13) found significant higher than
the private sector banks (1.41) and the respective standard deviations are 3.30 and 1.18.
performance of deposit ratio where public sector banks mean value is higher than private
sector banks mean value.
6.4 Liquidity Analysis:

Liquidity Management is one of the essential functions of treasury department of banks
to meet different demands of funds. A bank must maintain highly liquid assets in
sufficient amount to meet deposit with drawls as well as legitimate loan request.
Various objectives of liquidity are as follows:
Table 103: Objectives of Liquidity
I Deposit Liquidity To honor depositors for funds
II Protective Liquidity To protect the bank against scale of credit worthy assets in
adverse market scenario in case of emergency need of
funds
III Portfolio liquidity Maintenance of additional funds to meet additional
demand for loan. Tracking the assets and liabilities
maturity profile for making cash inflow and cash outflows
IV Regulatory Liquidity To accomplish 25% SLR requirements as per RBI’s guideline
Liquidity ratio provides the primary means of judging bank’s Liquidity position. In
Banking there is no universally recognized liquidity ratio as liabilities are not Predictable.
In case of non-financial firms, liabilities have fixed maturities while large portion of
bank’s liabilities are repayable on demand. The ratios that could be used to analyse the
liquidity position of banks are as follows:
6.4.1 Loans-to-deposit Ratio
It has already interpreted in the CAMELS Model under Management Component
6.4.2 Investment-to-Deposit
It has already interpreted in the CAMELS Model under Liquidity Component
6.5 Equity
Equity level and capital adequacy have profound impact upon the bank. Not only is there
an international guideline (Basel I and II) that stipulates a bank must have a minimum
capital equivalent to 8% of risk adjusted asset, even RBI has mentioned a comfort zone of
10-12% of total CAR for banks in India.
6.5.1 Capital Adequacy Ratio

It has already interpreted in the CAMELS Model under Capital Adequacy Component
6.6 Strategy
This defines the management’s bandwidth of actions as regards to growth of income and
balance sheet. Strategy is broken down into 2 ratios viz., interest and non interest. Interest
income on interest cost helps in understanding the bank’s ability to re-price its assets in
line with liabilities and passing through the hikes in interest cost to its customers. Non-
interest income on Non-interest cost signifies how much a bank incurs to earn the non-
interest income. The ratio ideally should be higher than 1.The effective management of a
bank strategy is indicated by the strategic Response Quotient (SRQ). It assesses
management’s ability to lend, to garner deposits, obtain fee based income and to manage
the operating cost. As to what an appropriate balance of the three core banking activities
will depend on the bank’s strategy. The SRQ is obtained by dividing the interest margin
by net operating cost (operating cost less fee income). The higher the figure the better
combined with excellent risk controls.
6.6.1 Interest Income/Interest Cost

Higher Interest Income/Interest cost ratio signifies that interest income has grown more
than proportionate to increase in interest cost. The bank has been able to either control its
cost of deposits or has been able to grow its loan book faster to garner higher interest
income or has been able to increase its yield on advances faster than increase in its cost of
deposits i.e. lower maturity of assets compared to liabilities.
Table 104: Interest income/interest cost (II/IC) in public and private sector banks
2005-06 1.75 1.83 1.94 1.59 1.69 2.04 2.31 1.43 1.81 1.59
2006-07 1.68 1.69 1.91 1.59 1.54 1.93 2.16 1.40 1.41 1.52
2007-08 1.49 1.49 1.63 1.52 1.33 1.93 2.06 1.31 1.34 1.58
2008-09 1.46 1.51 1.57 1.50 1.38 1.98 1.83 1.36 1.34 1.51
2009-10 1.50 1.55 1.65 1.47 1.43 2.32 2.07 1.46 1.49 1.75
2010-11 1.66 1.67 1.77 1.56 1.50 2.00 2.12 1.53 1.44 1.76
2011-12 1.64 1.53 1.58 1.41 1.33 1.68 1.82 1.47 1.34 1.57
2012-13 1.57 1.47 1.54 1.39 1.30 1.66 1.82 1.52 1.36 1.55
2013-14 1.55 1.44 1.59 1.39 1.29 1.73 1.81 1.59 1.37 1.63
2014-15 1.56 1.44 1.55 1.35 1.28 1.76 1.85 1.63 1.43 1.66
Mean 1.59 1.56 1.67 1.48 1.41 1.90 1.99 1.47 1.43 1.61
CV -0.08 -0.26 -0.30 -0.22 -0.28 -0.32 -0.39 0.23 -0.18 0.07
Growth -0.92 -3.14 -3.67 -2.66 -3.44 -3.93 -4.71 2.78 -2.21 0.87
Rank 5 6 3 7 10 2 1 8 9 4
On the basis of Interest cost found, HDFC Bank (1.99 percent) has occupied top position
with its average value followed by Kotak Bank (1.90 percent) and Punjab National Bank
(1.67 Percent) among all public and private sector banks. HDFC Bank (1.99 percent) has
least average in IC among all banks under study. This bank is taking high risk as their IC
found lowest. Out of public sector banks Punjab national bank (1.67 percent) has highest
IC and Canara bank (1.41 percent) has lowest IC. Whereas, out of private sector banks
HDFC bank (1.99 percent) has highest IC and Yes bank (1.43 percent) has lowest IC. The
IC of private sector banks have range "between"1.99 percent to 1.43 percent while public
sector banks lies "between"1.67 percent to 1.41 percent.
It is further observed that the positive growth rate of IC found at ICICI Bank (2.78
percent), Axis Bank (0.87 percent) otherwise all banks are indicating negative growth
rate in IC. HDFC Bank (-4.71
( percent), Kotak Bank (-3.93
3.93 percent), Punjab National
Bank (-3.67)
3.67) are indicating highest negative growth rate in IC among all ban
banks. In the
distribution, the ranks pertaining to IC of the banks based on the growth rate shows first
two ranks possessed by private sector banks i.e. ICICI and Axis followed by SBI and Yes
banks with 3rd & 4th ranks.
above mentioned indictor. It shows that all banks in public sector, i.e. Bank of India,
Canara, SBI, PNB, BOB banks are indicating negative CV in IC, where as two banks in
private sector, i.e. ICICI, and A
Axis
xis Banks are indicating positive CV in IC. Most of the
private sector banks IC is better than the public sector banks.
Figure 31:: Interest Income/ Interest Cost ratio of Public and Private Sector Banks
Interest income/interest cost (II/IC) in public and private sector banks (2005-06
06 to 2014
2014-15)
1.99
1.9
1.67
1.59 1.56 1.61
1.48 1.47 1.43
1.41
Hypothesis Testing:
There would be no significant difference among interest income/ interest cost of selected
There would be significant difference among interest income/ interest cost of selected
public and private sector banks
Table 105: The performance of public and private sector banks in Interest
income/interest cost

Bank
SBI 10 1.59 0.09 0.03 1.52 1.65 1.46 1.75
BOB 10 1.56 0.13 0.04 1.47 1.65 1.44 1.83
PNB 10 1.67 0.15 0.05 1.57 1.78 1.54 1.94
BOI 10 1.48 0.09 0.03 1.41 1.54 1.35 1.59
CANARA 10 1.41 0.13 0.04 1.31 1.50 1.28 1.69
KOTAK 10 1.90 0.20 0.06 1.76 2.05 1.66 2.32
HDFC 10 1.99 0.18 0.06 1.86 2.11 1.81 2.31
ICICI 10 1.47 0.10 0.03 1.40 1.54 1.31 1.63
YES 10 1.43 0.14 0.04 1.33 1.53 1.34 1.81
AXIS 10 1.61 0.09 0.03 1.55 1.67 1.51 1.76
Total 100 1.61 0.23 0.02 1.57 1.66 1.28 2.32
According to the above table the average performance of HDFC bank (1.99) found
highest value in interest income/interest cost against the Canara bank which is found
lowest with an average of 1.41. On the other hand among the five selected public sector
banks the highest average performance in interest income/interest cost among public
sector banks observed by Punjab National Bank (1.67) and lowest performance observed
by Canara bank (1.41). Whereas, highest average performance among private sector
banks observed by the HDFC bank (1.99) and lowest performance observed by the Yes
Bank (1.43).
sector banks in Interest income/interest cost
Sum of Mean
ANOVA Df f Sig.
Squares Square
Within Groups 1.66 90.00 0.02 20.67** 0.00
Total 5.09 99.00
public and private sector banks in interest income/interest cost found significant at
1.66 and the f-value is 20.67. This indicates that there is significant difference between
and within the groups of public and private sector banks in interest income/interest cost.
Table 107: Mean difference between public and private sector banks in Interest
income/interest cost

Df t-value p- value
1.54 1.68 98 50 50 0.15 0.27 3.22** 0.00
Above table of the given data analysis found the mean difference between public and
private banks in interest income/interest cost. It shows that the average performance of
interest income/interest cost of private sector banks (1.68) found significant higher than
the public sector banks (1.54) and the respective standard deviations are 0.27 and 0.15.
performance of interest income/interest cost where private sector banks mean value is
higher than public sector banks mean value.
6.6.2 Non Interest Income/ Non Interest cost

Non interest income on non interest cost as a ratio signifies management’s ability to earn
the non-interest income with matching cost. This ratio ideally should be higher than 1,
which signifies that bank has been able to garner more noninterest income at a controlled
cost of earning that income. None of the banks have shown this ratio higher than 1,
largely due to slowing other income and spike up in operating costs leading to higher cost
to income ratios.
Table 108: Non-interest income/non-interest cost (NII/NIC) in public and private
sector banks
2005-06 0.61 0.43 0.45 0.44 0.46 0.59 0.59 0.95 1.06 0.77
2006-07 0.61 0.49 0.34 0.49 0.50 0.41 0.41 0.78 1.02 0.71
2007-08 0.73 0.60 0.51 0.63 0.62 0.31 0.31 0.81 1.01 0.71
2008-09 0.73 0.71 0.58 0.82 0.61 0.11 0.11 0.75 0.91 0.80
2009-10 0.63 0.59 0.61 0.48 0.61 0.29 0.29 0.71 0.97 0.77
2010-11 0.73 0.60 0.56 0.52 0.63 0.50 0.50 1.00 0.91 0.96
2011-12 0.63 0.66 0.60 0.67 0.62 0.53 0.53 0.95 0.91 0.90
2012-13 0.61 0.61 0.51 0.70 0.61 0.52 0.52 0.92 0.94 0.94
2013-14 0.59 0.62 0.49 0.64 0.64 0.55 0.55 1.01 0.98 0.93
2014-15 0.66 0.57 0.56 0.52 0.62 0.62 0.62 1.05 0.89 0.90
Mean 0.65 0.59 0.52 0.59 0.59 0.44 0.44 0.89 0.96 0.84
CV -0.02 0.10 0.10 0.09 0.12 0.19 0.19 0.20 -0.11 0.22
Growth -0.30 1.26 1.24 1.04 1.47 2.28 2.28 2.39 -1.35 2.64
Rank 4 5 8 6 7 9 9 2 1 3
On the basis of Non-Interest cost found, , Yes Bank (0.96 percent) has occupied top
position with its average value followed by ICICI Bank (0.89 percent) and Axis Bank
(0.84Percent) among all public and private sector banks. Yes Bank (0.96percent) has
least average NIC among all banks under study. This bank is taking high risk as their NIC
found lowest. Out of public sector banks State bank of India (0.65percent) has highest
NIC and Punjab National Bank (0.52 percent) has lowest NIC. Whereas, out of private
sector banks Yes bank (0.96 percent) has highest NIC and Kotak bank (0.44 percent) and
HDFC Bank (0.44) have lowest NIC. The NIC of private sector banks have range
"between"0.96 percent to 0.44 percent while public sector banks lies "between"0.65
percent to 0.52 percent.
It is further observed that the highest growth rate of NIC found at Axis Bank (2.64
percent), while Yes Bank (-1.35percent)
( 1.35percent) and State bank of India (-0.30)
( are indicating
negative growth rate in NIC among all banks. In the distribution, the ranks pertaining to
NIC of the banks based on the growth rate shows first four ranks possessed by private
sector banks
anks i.e. Axis, ICICI, kotak and HDFC followed by Canara and BOB banks with
5th & 6th ranks.
above mentioned indictor. It shows thatone bank in public sector, i.e. State
S Bank of India,
is indicating negative CV in NIC, whereasone bank in private sector, i.e. Yes Banks is
indicating negative CV in NIC. Most of the private sector banks NIC is better than the
public sector banks.
nterest Income/ Non-Interest

Figure 32: Non-Interest Non Interest Cost ratio of Public and Private Sector Banks
Non-interest
interest income/non-interest
income/non interest cost (NII/NIC) in public and private sector banks (2005
(2005-06 to
2014-15)
0.96
0.89
0.84
0.65
0.59 0.59 0.59
0.52
0.44 0.44
Hypothesis Testing:
There would be no significant difference among non-Interest Income/ non-Interest cost

of selected public and private sector banks.
There would be significant difference among non-Interest Income/ non-Interest cost of

selected public and private sector banks
Table 109: The performance of public and private sector banks in Non-interest
income/non-interest cost

Bank
SBI 10 0.65 0.06 0.02 0.61 0.69 0.59 0.73
BOB 10 0.59 0.08 0.03 0.53 0.64 0.43 0.71
PNB 10 0.52 0.08 0.03 0.46 0.58 0.34 0.61
BOI 10 0.59 0.12 0.04 0.51 0.68 0.44 0.82
CANARA 10 0.59 0.06 0.02 0.55 0.64 0.46 0.64
KOTAK 10 0.44 0.16 0.05 0.33 0.56 0.11 0.62
HDFC 10 0.44 0.16 0.05 0.33 0.56 0.11 0.62
ICICI 10 0.89 0.12 0.04 0.81 0.98 0.71 1.05
YES 10 0.96 0.06 0.02 0.92 1.00 0.89 1.06
AXIS 10 0.84 0.10 0.03 0.77 0.91 0.71 0.96
Total 100 0.65 0.20 0.02 0.61 0.69 0.11 1.06
According to the above table the average performance of Yes bank (0.96) found highest
value in non-interest income/non-interest cost against the kotak bank which is found
lowest with an average of 0.44. On the other hand among the five selected public sector
banks the highest average performance in non-interest income/non-interest cost among
public sector banks observed by State bank of India (0.65) and lowest performance
observed by Punjab National Bank (0.52). Whereas, highest average performance among
private sector banks observed by the Yes bank (0.96) and lowest performance observed
by the Kotak Bank (0.44).
sector banks in Non-interest income/non-interest cost
Sum of Mean
ANOVA Df f Sig.
Squares Square
Within Groups 1.02 90.00 0.01 29.76** 0.00
Total 4.06 99.00
public and private sector banks in non-interest income/non-interest found significant at
1.02 and the f-value is 29.76. This indicates that there is significant difference between
and within the groups of public and private sector banks in non-interest income/non-
interest.
Table 111: Mean difference between public and private sector banks in Non-interest
income/non-interest cost

Df t-value p- value
0.59 0.72 98 50 50 0.09 0.26 3.28** 0.00
When look into the table of the given data analysis is found the mean difference between
public and private banks in non-interest income/interest cost. It shows that the average
performance of non-interest income/interest cost of private sector banks (0.72) found
significant higher than the public sector banks (0.59) and the respective standard
deviations are 0.26 and 0.09. With this distribution of data is calculated t-value is 3.28
found 1 percent significant. This infers that there is a significant difference between
public and private sector banks in performance of non-interest income/interest cost where
private sector banks mean value is higher than public sector banks mean value.
Table 112: EAGLES Ranking of select Public and private sector Banks
EAGLES
SBI BOB PNB BOI Canara Kotak HDFC ICICI Yes Axis
Earnings 9 6 4 9 6 8 1 5 1 3
Asset 10 4 5 7 9 5 2 7 1 3
Growth 1 2 5 3 4 9 7 6 10 8
Liquidity 3 10 6 8 8 1 3 2 5 7
Equity 9 6 7 10 8 1 4 2 3 5
Strategy 9 6 7 10 8 1 4 2 3 5
average 6.833333 5.666667 5.666667 7.833333 7.166667 4.166667 3.5 4 3.833333 5.166667
rank 8 6 6 10 9 4 1 3 2 5
In the above model Ranking has been done based on mean values. In this particular
model private sector Banks are performing efficiently than Public sector Banks. Among
select Banks HDFC Bank is in top position and next position is followed by Yes Bank
and other Private sector Banks. Except in growth component in remaining components
Private sector Banks has played a prominent role so Private sector Banks occupied a
prominent positions compared to Public sector Banks.
Table 113: A comparative Analysis of CAMELS and EAGLES Ratings
CAMELS EAGLES
SBI BOB PNB BOI canara Kotak HDFC ICICI Yes Axis SBI BOB PNB BOI canara Kotak HDFC ICICI Yes Axis
C 3.70 3.75 3.79 3.71 3.69 3.92 3.67 3.78 4.51 3.58 E 9 6 4 9 6 8 1 5 1 3
A 3.60 3.09 3.35 3.33 3.27 5.21 3.24 4.30 3.07 3.14 A 10 4 5 7 9 5 2 7 1 3
M 21.65 26.2 22.96 24.68 24.06 19.28 19.43 28.67 34.65 32.62 G 1 2 5 3 4 9 7 6 10 8
E 0.84 0.88 0.99 0.86 0.93 0.96 1.11 0.80 1.08 1.06 L 3 10 6 8 8 1 3 2 5 7
L 3.75 2.88 3.85 3.15 3.65 6.83 4.20 5.93 4.27 4.11 E 9 6 7 10 8 1 4 2 3 5
S -6.36 -0.95 -0.02 -0.75 -0.61 -0.44 10.16 -2.61 -6.16 -0.30 S 9 6 7 10 8 1 4 2 3 5
Avg. 27.19 35.88 34.95 35.00 35.05 35.77 41.84 40.88 -568.45 44.23 Avg. 6.83 5.66 5.66 7.83 7.16 4.16 3.5 4 3.83 5.16
Rank 9 4 8 7 6 5 2 3 10 1 Rank 8 6 6 10 9 4 1 3 2 5
In the above models ranking has been done for select Public and Private sector Banks.
CAMELS Ranking has been done based on the weight age of each component where as
EAGLES Ranking has been based on their mean values. In CAMELS Model Axis Bank
is on top position and bottom Position by Yes Bank . Bank of Baroda is on fourth
Position among select Public and Private sector Banks. But in EAGLES Model top
prominent positions are occupied by Private sector Banks and next Positions are followed
by Public sector Banks in this model Bank of India is on bottom position among Public
and Private sector Banks. There is a lot of impact on BPE which resulted that top 3
positions are occupied by Private sector Banks and next respective Positions are followed
by Public sector Banks. Private sector Banks are efficient in Managing the expenditure
only Kotak Mahindra Bank which is inefficient and it stands at bottom position among
select Banks for the respective ratio. Private sector Banks are having more Profitability if
we closely consider Return on Assets. Both Public and Private sector Banks are getting
high Interest Income/Interest cost so ranking Pattern Has been changed. In sensitivity
analysis the scenario totally changed Private sector Banks are having more risk compared
to Public sector Banks so the ranking distribution has been changed top 3 positions are
occupied by Private sector Banks and 4th position by Bank of Baroda which is a public
sector Banks its ranking totally different to EAGLES Model. In EAGLES Model
particularly top 5 positions are occupied by Private sector Banks and next positions are
followed by Public sector Banks. By considering all the ratios we can find that there is a
significant difference between select Public and Private sector Banks for each and among
components of models.

NN PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

NN PDF

Uploaded by

Copyright:

Available Formats

Chapter-6

6.1.1 Return on Assets:

6.1.2 Return on Net worth: Return on Net worth (RONW)

6.1.3 Income to overhead Ratio:

Public Sector Banks Private Sector Banks

Null Hypothesis (Ho):--

There would be no significant difference among Income-to-overhead

Alternate Hypothesis (H1):

There would be significant difference among Income-to-overhead

Std. Std. 95% Confidence

SBI 10 1.10 0.02 0.01 1.09 1.12 1.07 1.14

BOB 10 1.14 0.04 0.01 1.11 1.17 1.08 1.21

PNB 10 1.14 0.04 0.01 1.10 1.17 1.06 1.20

BOI 10 1.10 0.04 0.01 1.07 1.14 1.04 1.18

CANARA 10 1.12 0.04 0.01 1.09 1.15 1.06 1.19

KOTAK 10 1.05 0.32 0.10 0.83 1.28 0.45 1.36

HDFC 10 1.32 0.14 0.04 1.22 1.43 1.18 1.55

ICICI 10 1.23 0.10 0.03 1.16 1.30 1.11 1.41

YES 10 1.17 0.03 0.01 1.15 1.19 1.14 1.24

AXIS 10 1.17 0.03 0.01 1.15 1.19 1.13 1.21

Total 100 1.15 0.13 0.01 1.13 1.18 0.45 1.55

Between Groups 0.53 9.00 0.06

Within Groups 1.27 90.00 0.01 4.15** 0.00

Total 1.79 99.00

**Significant @ 1% level; *Significant @ 5% level.

Mean No of observe Std. Dev.

1.12 1.19 98 50 50 0.04 0.18 2.72** 0.01

**Significant @ 1% level; *Significant @ 5% level.

6.2 Asset quality:

6.2.1 Gross NPAs

6.2.2 Net NPAs Ratio:

6.2.3 Provision Coverage Ratio (PCR)

Provision coverage ratio31 = cumulative provisions/ gross NPAs

Public Sector Banks Private Sector Banks

70.81 72.03 71.68

Null Hypothesis (Ho):--

There would be no significant difference among Provision coverage ratio of selected

Alternate Hypothesis (H1):

Std. Std. 95% Confidence

SBI 10 51.98 9.99 3.16 44.83 59.12 38.41 69.13

BOB 10 70.81 7.80 2.47 65.23 76.39 62.22 85.00

PNB 10 72.03 12.72 4.02 62.93 81.12 58.21 93.30

BOI 10 62.99 8.14 2.57 57.17 68.81 52.15 75.57

CANARA 10 46.31 18.29 5.78 33.23 59.39 27.50 72.99

KOTAK 10 57.99 9.36 2.96 51.30 64.69 43.40 70.14

HDFC 10 71.68 10.05 3.18 64.49 78.87 52.50 82.51

ICICI 10 64.95 10.13 3.20 57.70 72.19 52.03 80.40

YES 10 79.60 7.05 2.23 74.56 84.64 72.00 92.59

AXIS 10 68.62 13.47 4.26 58.98 78.26 45.60 80.91

Total 100 64.70 14.38 1.44 61.84 67.55 27.50 93.30

Total 20458.61 99.00

**Significant @ 1% level; *Significant @ 5% level.

Mean No of observe Std. Dev.

60.82 68.57 98 50 50 15.45 12.18 2.78** 0.01

**Significant @ 1% level; *Significant @ 5% level.

Public Sector Banks Private Sector Banks

Loans ratio in public and private sector banks (2005-06 to 2014-15)

Null Hypothesis (Ho):-

Alternate Hypothesis (H1):

Std. Std. 95% Confidence

SBI 10 37.05 17.43 5.51 24.58 49.52 16.22 66.58

BOB 10 26.64 26.17 8.28 7.92 45.37 3.20 76.14

PNB 10 4.15 3.33 1.05 1.76 6.53 1.21 9.99