INDUSTRY PROFILE INTRODUCTION TO THE INDIAN BANKING INDUSTRY BANKING IN HISTORICAL PERSPECTIVE The origin of banking in India can

be traced back to almost the Vedic period. The transformation from pure money lending to proper banking appears to have taken place before the times of Manu. Manu, a great Hindu jurist, has devoted a section of his work explaining the deposits and advances and he even laid down certain rules on rates of interest. Through out Mauryan period and later on desi bankers played some role in the economy of the country. However, it was during the Moghul period that indigenous bankers started playing a vital role in lending money and financing of the foreign trade and commerce. BANKING DURING BRITISH PERIOD BEFORE INDEPENDENCE: • • • The first joint stock bank, namely The General Bank of India was established in 1786. Later on Bank of Hindustan and Bengal Bank also came into existence. Bank of Hindustan carried on the business till 1906. East India Company established the following three banks, namely The Bank of Bengal in 1809, The Bank of Bombay in 1840, and Bank of Madras in 1843. They were collectively called Presidency Banks and were well functioning independent units. The three banks established by the East India Company were amalgamated in 1920 and a new bank called Imperial Bank of India was established. A number of private banks had been established by the businessmen from mid of the 19th century onwards. In the surchanged atmosphere of Swadeshi movement, a number of banks with Indian management, namely, Punjab National Bank Ltd., Bank of India Ltd., Canara Bank Ltd, Indian Bank Ltd. etc. were established. The Reserve Bank of India was established as the Central bank of the country in 1935 under an act called Reserve bank of India Act. Later on with the passage of the Banking Regulation Act passed in 1949, RBI was brought under government control. Under this Act, RBI was conferred with supervision and control of the banks and licensing powers and the authority to conduct inspections was also given to it. AFTER INDEPENDENCE : • • • • In 1955, the Imperial Bank of India was nationalised and was given the name "State Bank of India". It was established under State Bank of India Act, 1955. In 1960, RBI was empowered to force the compulsory merger of the weak banks with the strong ones. This led to reduction in the number of banks from 566 in 1951 to about 89 in 1969. On July 19, 1969, 14 major banks were nationalised. In 1980, another six banks were nationalized, and thus raising the number of nationalized banks to 20.

• •

On the suggestions of Narsimham Committee, the Banking Regulation Act was amended in 1993 and thus the gates for the new private sector banks were opened.

PRESENT STRUCTURE OF INDIAN BANKING SYSTEM Banks in India can be categorized into non-scheduled banks and scheduled banks. Scheduled banks constitute of commercial banks and co-operative banks. There are about 67,000 branches of Scheduled banks spread across India. During the first phase of financial reforms, there was a nationalization of 14 major banks in 1969. This crucial step led to a shift from Class banking to Mass banking. Since then, the growth of the banking industry in India has been a continuous process. The Public Sector Banks (PSBs), which are the foundation of the Indian Banking system account for more than 78 per cent of the total banking industry assets. Unfortunately, they are burdened with excessive Non-Performing Assets (NPAs), massive manpower and lack of modern technology. On the other hand, the Private Sector Banks in India are witnessing immense progress. They are leaders in Internet Banking mobile banking, phone banking, ATMs etc. STRUCTURE OF THE INDIAN BANKING INDUSTRY  Public sector (Government owned) banks account for 75% of the assets; however. Indian private banks and foreign banks are growing rapidly and gaining a larger share.  Standard Charted Bank, Citibank and HSBC are the three largest foreign banks in India with more than 65% of the total assets of foreign banks.

Reserve Bank of India
The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank Of India Act, 1934. The Central Office of the Reserve Bank was initially established in Calcutta but was permanently moved to Mumbai in 1937. The Central Office is where the Governor sits and where policies are formulated. Though originally privately owned, since nationalisation in 1949, the Reserve Bank is fully owned by the Government of India. Preamble

The Preamble of the Reserve Bank of India describes the basic functions of the Reserve Bank as: "...to regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage."

Organisation & Functions
Reserve Bank of India (RBI) is the Central Bank and all Banks in India are required to follow the guidelines issued by RBI.

Financial Supervision The Reserve Bank of India performs this function under the guidance of the Board for Financial Supervision (BFS). The Board was constituted in November 1994 as a committee of the Central Board of Directors of the Reserve Bank of India. Objective Primary objective of BFS is to undertake consolidated supervision of the financial sector comprising commercial banks, financial institutions and non-banking finance companies.

Constitution The Board is constituted by co-opting four Directors from the Central Board as members for a term of two years and is chaired by the Governor. The Deputy Governors of the Reserve Bank are ex-officio members. One Deputy Governor, usually, the Deputy Governor in charge of banking regulation and supervision, is nominated as the ViceChairman of the Board. BFS meetings The Board is required to meet normally once every month. It considers inspection reports and other supervisory issues placed before it by the supervisory departments. BFS through the Audit Sub-Committee also aims at upgrading the quality of the statutory audit and internal audit functions in banks and financial institutions. The audit sub-committee includes Deputy Governor as the chairman and two Directors of the Central Board as members. The BFS oversees the functioning of Department of Banking Supervision (DBS), Department of Non-Banking Supervision (DNBS) and Financial Institutions Division (FID) and gives directions on the regulatory and supervisory issues. Functions Some of the initiatives taken by BFS include: i. restructuring of the system of bank inspections ii. introduction of off-site surveillance, iii. strengthening of the role of statutory auditors and iv. strengthening of the internal defences of supervised institutions. The Audit Sub-committee of BFS has reviewed the current system of concurrent audit, norms of empanelment and appointment of statutory auditors, the quality and coverage of statutory audit reports, and the important issue of greater transparency and disclosure in the published accounts of supervised institutions. Current Focus • supervision of financial institutions • consolidated accounting • legal issues in bank frauds • divergence in assessments of non-performing assets and • supervisory rating model for banks.

Main Functions Monetary Authority: • Formulates, implements and monitors the monetary policy. • Objective: maintaining price stability and ensuring adequate flow of credit to productive sectors. Regulator and supervisor of the financial system: • Prescribes broad parameters of banking operations within which the country's banking and financial system functions.

• Objective: to give the public adequate quantity of supplies of currency notes and coins and in good quality. and. Manager of Foreign Exchange • Manages the Foreign Exchange Management Act. HDFC Bank: HDFC Bank was incorporated in August 1994.725 branches and 4. currently has an nationwide network of 1. Bank of India. Related Functions • Banker to the Government: performs merchant banking function for the central and the state governments. Developmental role • Performs a wide range of promotional functions to support national objectives. ICICI Bank. also acts as their banker. Issuer of currency: • Issues and exchanges or destroys currency and coins not fit for circulation. 1999. State Bank of India with respect to income generated. or we can say that in 2010 the income of the bank is 5times as compared to 2006. Interpretation: From the above diagram it can be interpreted that HDFC Bank is continuously growing well from the last five years. AXIS Bank. GROWTH OF BANKING INDUSTRY Growth of HDFC Bank. protect depositors' interest and provide cost-effective banking services to the public.• Objective: maintain public confidence in the system. • Banker to banks: maintains banking accounts of all scheduled banks.393 ATM’s in 780 Indian towns and cities. • Objective: to facilitate external trade and payment and promote orderly development and maintenance of foreign exchange market in India. Punjab National Bank. .

AXIS Bank Axis Bank was the first of the new private banks to have begun operations in 1994. The international business accounts for around 17.00 billion (US$ 81 billion) at March 31. The Bank has a network of 2.035 branches and about 5.25 billion (US$ 896 million) for the year ended March 31.634. 40. i. after the Government of India allowed new private banks to be established. 2010. 1894. Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC) and other four PSU insurance companies. Interpretation: From the above diagram it can be interpreted that PNB Bank is continuously growing well from the last five years. The Bank was promoted jointly by the Administrator of the specified undertaking of the Unit Trust of India (UTI . PUNJAB NATIONAL BANK The bank was incorporated under Act VI of the 1882 Indian Companies Act on 19 May. 3. National . Interpretation: From the above diagram it can be interpreted that BOI is continuously growing well from the last five years. BANK OF INDIA: Bank of India was founded on 7th September.I). The Bank has 3101 branches in India spread over all states/ union territories including 141 specialised branches.e. The Bank was under private ownership and control till July 1969 when it was nationalised along with 13 other banks.ICICI Bank ICICI Bank is India's second-largest bank with total assets of Rs.82% of Bank's total business. Interpretation: From the above diagram it can be interpreted that SBI Bank is continuously growing well from the last five years. 2010 and profit after tax Rs. 1906 by a group of eminent businessmen from Mumbai. or we can say that in 2010 the income of the bank is twice as compared to 2006. STATE BANK OF INDIA: The origin of the State Bank of India goes back to the first decade of the nineteenth century with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806.518 ATMs in India and presence in 18 countries Interpretation: From the above diagram it can be interpreted that ICICI Bank have grown well till 2009 but the income of bank decreases from mar-2009 to mar-2010.

vehicle loans. the latest trend in banking sector in India is the focus on retail loans.Insurance Company Ltd.50% 6. The New India Assurance Company Ltd. However. Public Sector Banks are also taking the installation of ATMs . CURRENT RATES AND RATIOS: Bank rate Repo rate Reverse repo rate CRR SLR Base rate Saving bank rate Deposit rate 6. The Oriental Insurance Company Ltd. UTI.000 marks in installing ATMs in India is ICICI. The retail loans to individuals like personal loan. Bank was looked as a lender to the business houses. HDFC and IDBI counts more than 50% of the total ATMs in India. ICICI.75% 4.. Technology in Banks: ATM’s: Automated Teller Machine: The first bank to introduce the ATM concept in India was the Hongkong and Shanghai Banking Corporation (HSBC).00%-7. A middle class person hardly ever ventured to take a loan from Bank for his personal needs.0% 25.0% 7.50% Source: rbi LATEST TREND IN BANKING SECTOR (A) Implementation of Basel II : • Credit Risk : Rating of the loan portfolio Market Risk Operational risk • • (B) Retail Banking : The main focus area of the bankers in India had always been the corporate sector.00% 3.. Private Sector Banks have taken the lead.50%-8. and United India Insurance Company Ltd.The first bank to cross 1. It was in the year 1987. housing loan were discouraged.5% 6.0% 5. We have in recent months have witnessed the unprecedented competition among the banks to have a large pie in housing loan segment.

Tele Banking: Telephone banking is a service provided by a financial institution.Free Balance Holding Demat .seriously for Indian market. permitting them to operate selected banking services over theirmobile phones using SMS messaging. With mobile banking facilities. which allows its customers to perform transactions over the telephone. credit union or building society. at anytime and in any condition or anyhow. They are either setting up their own ATM centres or entering into tie-ups with other banks.Last two Transactions Bill Payment Online Banking: Online banking (or Internet banking) allows customers to conduct financial transactions on a secure website operated by their retail or virtual bank. Under this scheme. .The scope of offered services may include facilities to conduct bank and stock market transactions. • • • • • • • • Balance enquiry Last three transactions Cheque payment status Cheque book request Statement request Demat . The Indian banks have also come up with a 'Swadhan' scheme. In past two years.and financial services with the help of mobile telecommunication devices. mobile banking users have increased three times if we compare the use of either debit card or credit card. the following operations can be conducted through advanced mobile phones which can is further viewed on channels such as the Internet via the Channel Manager. Using compact HTML and WAP technologies. • • • • Bill payments Fund transfers Check balances Any many more which is also available in SMS Banking SMS Banking: This is a technology-enabled service offering from banks to its customers. The system is either through SMS or through WAP. Mobile Banking is the hottest area of development in the banking sector and is expected to replace the credit/debit card system in future. The Corporation Bank has the second largest network of ATMs amongst the Public Sector Banks in India.With the use of this technology the following operations can be easily performed by the user by just sending an sms. It is extremely easy and inexpensive to implement. to administer accounts and to access customised information. It reduces the cost of operation for bankers in comparison to the use of ATMs. the banks can use each other's ATM Mobile Banking: Mobile Banking refers to provision and availment of banking. one can bank from anywhere.

However.FINANCIAL ANALYSIS OF BANKS To conduct the financial analysis financial statements are needed. a company's annual report is almost always accompanied by "Notes to the financial statement". What is Analysis of Financial Statements : Analysis of financial statements is a study of relationships among the various financial factors in a business. Moreover. the results arrived on the basis of analysis of such statements has its own limitations. Through analysis an attempt is made to determine the meaning and significance of financial statement data so that the forecast can be made in respect of future earnings. profitability etc. (b) To know the solvency of the entity : Analysis of the financial statements discloses whether the business is in a position to pay its short-term and long term liabilities in time. . Financial Statements : There are four basic financial statements that provide information needed by financial analysts to evaluate a company. These are :-: • The Balance Sheet • The Income Statement / Profit and Loss Account • The Funds Flow statement • The Cash Flows Statement Moreover. ADVANTAGES OF FINANCIAL ANALYSIS : (a) To know the earning capacity of the entity : Financial analysis helps in ascertaining whether sufficient profits are being earned on the capital invested in the business or not. From financial statements data is collected to calculate the ratios. it also helps us to know whether the profit is increasing or decreasing.

iii) Cross Sectional-cum-time series analysis. internal finance system etc. efficiency of management and more which may have a vital bearing on the firm's profitability are ignored. . namely:i) Cross Sectional Analysis or Inter firm comparison. LIMITATIONS OF FINANCIAL ANALYSIS :(1) Limitations of financial statements:-Financial statements have their own limitations and thus the analysis done on the basis of such statements will also suffer from inadequacies. credit worthiness etc Thus. the financial statements record only those events that can be expressed in terms of money. Cross Sectional-cum-Time Series Analysis: This is the most effective approach of financial statement analysis and compares the financial characteristics of two or more enterprises for a defined accounting period. For example. Qualitative aspect like cordial management-labour relations. liquidity.(c) To know the financial strength : It also discloses the total position of the business regarding its goodwill. Under this technqiue. profitability etc (e) Capability to pay interest and dividend: The analysis also helps to assess whether the entity will have sufficient profits to pay the interest in time and whether it has the capacity to pay the dividend in future at a higher ratio. (2) Affected by window dressing: Most of the firm resort to window dressing and try to cover their weak points so that they do not face problems with their bankers and shareholders etc. ii) Time series Analysis or Intra comparison. It is common practice by firms to overvalue their closing stock and hence the result obtained based on such analysis are misleading. (3) Different accounting policies: Firms adopting different accounting policies may not have the result which may be comparable. the method of valuing closing stock of two firms may differ and thus the comparison of such results will be wrong. solvency. Cross Sectional Analysis : Under this technique of analysis. Moreover. Time Series Analysis : This reflects the movement of various financial characteristics over a period. the financial characteristics of a firm are compared over a number of years so as to know the directions in which the firm is moving. financial statements of one firm are compared with financial statements of one or more other similar firms for profitability. under this technqiue we prepares the comparative financial characteristics of an enterprise with other comparable enterprises. Techniques of Financial Statement Analysis: These are broadly classified into three categories. (d) Comparative study with other firms : The comparative study of the profitability of various firms engaged in the same industry can be done to study the position of the firm in respect of sales.

and coverage. the RBI established the Board of Financial Supervision (BFS). liquidity and interest rate risks). currency. quality. In addition to the normal on-site inspections. The BFS has also established a sub-committee to routinely examine auditing practices. Padmanabhan to review the banking supervision system. wich focus on supervisory concerns such as capital adequacy. CAMELS evaluates banks on the following six parameters :(a) Capital Adequacy (b) Asset Quality (c) Management (d) Earning (e) Liquidity CAPITAL ADEQUACY . RBI had set up a working group under the chairmanship of Shri S. Reserve Bank of India also conducts offsite surveillance which particularly focuses on the risk profile of the supervised entity. It recommended that the banks should be rated on a five point scale (A to E) based on th elines of international CAMELS rating model. Its mandate is to strengthen supervision of the financial system by integrating oversight of the activities of financial services firms. The supervisory jurisdiction of the BFS was slowly extended to the entire financial system barring the capital market institutions and the insurance sector.CAMEL MODEL In 1994. 12 returns (called DSB returns) are called from the financial institutions. In 1995. The Committee certain recommendations and based on such suggetions a rating system for domestic and foreign banks based on the international CAMELS model combining financial management and systems and control elements was introduced for the inspection cycle commencing from July 1998. The entire supervisory mechanism was realigned to suit the changing needs of a strong and stable financial system. It was introduced with the aim to supplement the on-site inspections. earnings and risk exposures (viz. The Off-site Monitoring and Surveillance System (OSMOS) was introduced in 1995 as an additional tool for supervision of commercial banks. asset quality. large credits and concentrations. connected lending. which operates as a unit of the RBI. Under off-site system.

ASSET QUALITY Asset quality has direct impact on the financial performance of BANKs. The value of loan assets would depend on the realizable value of the collateral while investment assets would depend on the market value.Bank managers are concerned with the quality of their loans since that provides earnings for the bank.Capital Adequacy is a measure of an FI's (such as banks) financial strength. build up adequate reserves and enhance shareholders' value. Asset quality is related to the left-hand side of the bank balance sheet. MANAGEMENT QUALITY The performance of the other four CAMEL components will depend on the vision. An FI should have adequate capital to support its risk assets in accordance with the risk-weighted capital ratio framework. RETURN ON EQUITY . Under the Basel II framework. and (iv) likely unintended scope for regulatory arbitrage. in particular its ability to cushion operational and abnormal losses. It tells the user how effective a business has been putting its assets to work. professionalism. and competence of the BANK’s management. in addition to maintaining capital for credit and market risks. (ii) diversity in exercise of national discretions and their likely impact. ASSESSING EARNING PERFORMANCE The quality and trend of earnings of an institution depend largely on how well the management manages the assets and liabilities of the institution. An FI must earn reasonable profit to support asset growth. RETURN ON ASSETS Return on Assets (ROA) is an indicator informing the user about how profitable a company is relative to its total assets. In other words. It has become recognized that capital adequacy more appropriately relates to asset structure than to the volume of liabilities. ability. and the public at large. TOTAL CAR BASEL I (%)& TOTAL CAR BASEL II (%) The Basel II framework is highly complex on account of the several factors such as: (i) variety of available options. loan assets and investments. creditors. investors. As sound management is crucial for the success of any institution. especially in a cross border situation. management quality is generally accorded greater weighting in the assessment of the overall CAMEL composite rating. (iii) lack of clarity on regulatory approach to various implementation issues. The quality of assets particularly. integrity. Good earnings performance would inspire the confidence of depositors. that is how much profit (before interest and income tax) a business earned on the total capital used to make that profit. banks are required to maintain capital for operational risk also. would depend largely on the risk management system of the institution. capability. the ROA is a test of capital utilization.

operational weaknesses that could impair future viability and managerial critical financial weaknesses and there is high possibililty of failure in the near future. an FI must strike a balance between liquidity and profitability. LIQUIDITY RATIO Liquidity ratio measure the ability of a firm to meet its current obligations. and also that it does not have excess liquidity. it is necessary to strike a proper balance between high liquidity and lack of liquidity. serious or immoderate finance. A firm should ensure that it does not suffer from lack of liquidity. operational or compliance weaknesses that give cause for supervisory concern. There needs to be an effective asset and liability management system to minimize maturity mismatches between assets and liabilities and to optimize returns. Rating Symbol A B C D E Rating symbol indicates Bank is sound in every respect Bank is fundamentally sound but with moderate weaknesses financial. or even in legal tangles resulting in closure of the company. As liquidity has inverse relationship with profitability.ROE indicates how well the firm has used the resources of owners. This ratio reflects the extent to which this objective has been accomplished. The failure of a company to meet its obligations due to lack of sufficient liquidity. idle assets earn nothing. The firm’s funds will be unnecessarily tied up in current assets. loss of creditor’s confidence. The main objective of any business is earning a satisfactory return. . Therefore. An FI must always be liquid to meet depositors' and creditors' demand to maintain public confidence. will result in poor credit worthiness. A very high degree of liquidity is also bad.

INTERPRETATION HDFC BANK CAPITAL ADEQUACY TOTAL CAR BASEL I (%)&TOTAL CAR BASEL II (%) Interpretation :-This ratio basically determine the how well banks can cope up with the risks or we can say that to the shocks to their balance sheets.5% from 2006-2010. ASSET QUALITY NET NPAs (FUNDED) TO NET ADVANCES (%) INTERPRETATION :.This ratio indicates to what extent a bank is competent in managing it. which is a good indicator. ability to plan and react to changing circumstances.This ratio represents the assets which are not performing good. and we can see that HDFC having trend of NPAs less than 0. MANAGEMENT QUALITY COST PER UNIT OF MONEY LENT (%) INTERPRETATION :. It is a measure of how much capital is used to support the banks' risk assets. technical competence. It is a indicator that HDFC is a performing well. In addition performance evaluation includes compliance with set norms. So this ratio determines the capacity of a bank in terms of meeting with the liability and other risks such as credit risk. leadership and administrative ability. So capital provides cushion for potential losses. operational risk. As this cost is decreasing year by year. .

mutual funds.INTERMEDIATION COST.EARNING RATIO ROA (%) & ROE (%) INTERPRETATION :.Credit to deposit ratio represents to how much extent a bank is using its deposits (investments of people with the bank). And HDFC having a stable trend in both the ratios which is a indicator that it does not face much fluctuations. Because they have to deposit upto 25% with RBI to meet emergencies. is the cost involved in the placement of money with a financial intermediary. LIQUIDITY RATIO CREDIT/DEPOSITS (%) INTERPRETATION :. The person or institution empowered as the intermediary to make investment decisions for others. Examples: banks. And the above diagram depicts that this cost is decreasing from the last three years. This rate is increasing . insurance companies. Which is again a good indicator. savings and loan institutions. Earning spread ratio shows a steady trend but interest spread ratio has increased in 2008 after that it keeps on decreasing. INTEREST SPREAD RATIO (%) & EARNING SPREAD RATIO (%) INTERPRETATION :-This ratio represents the interest and earning distributed by the banks. brokerage firms. and credit unions. Upto 75% is best.This ratio represents return on assets and equity employed by the banks. in finance. INTERMEDIATION COST RATIO (%) INTERPRETATION :.

. INTEREST EXPENDED / INTEREST EARNED (%) INTERPRETATION :This ratio represents the expenses over the earnings. The above diagram shows that it is having less than 50% expenses except 2009. which means they are borrowing some funds from outside. It means earnings are more than the expenses. INTEREST INCOME / TOTAL FUNDS (%) INTEREST EXPENDED / TOTAL FUNDS (%) NIM (%) INTERPRETATION :This ratio represents the income and expenses over total funds. As digram depicts that income is more than the expenses.year after year. But in 2010 this rate is beyond 75%. And NIM is difference between expenses and income. which means HDFC is performing well. Which is again represents that HDFC is a good performing bank.

operational risk. ability to plan and react to changing circumstances.ICICI BANK CAPITAL ADEQUACY TOTAL CAR BASEL 1 (%)&TOTAL CAR BASEL II (%) INTERPRETATION :-This ratio basically determine the how well banks can cope up with the risks or we can say that to the shocks to their balance sheets. MANAGEMENT QUALITY COST PER UNIT OF MONEY LENT (%) INTERPRETATION :. So this ratio determines the capacity of a bank in terms of meeting with the liability and other risks such as credit risk. technical competence. As this cost is decreasing after 2008. EARNING RATIO . which is a good indicator. ASSET QUALITY NET NPAs (FUNDED) TO NET ADVANCES (%) INTERPRETATION :. It is a measure of how much capital is used to support the banks' risk assets.This ratio represents the assets which are not performing good. and we can see that ICICI BANK having trend of NPAs less than 2% from 2006-2010. So capital provides cushion for potential losses.This ratio indicates to what extent a bank is competent in managing it. In addition performance evaluation includes compliance with set norms. leadership and administrative ability.

is the cost involved in the placement of money with a financial intermediary. Earning spread ratio and interest spread ratio shows an increasing trend. INTEREST SPREAD RATIO (%) &EARNING SPREAD RATIO (%) INTERPRETATION :. And the above diagram depicts that this cost is increasing year by year.INTERMEDIATION COST. savings and loan institutions. LIQUIDITY RATIO CREDIT/DEPOSITS (%) INTERPRETATION :.Credit to deposit ratio represents to how much extent a bank is using its deposits (investments of people with the bank). Because they have to deposit upto 25% with RBI to meet emergencies. mutual funds. And ICICI BANK is facing fluctuations in both the ratios. Which is again a not a good indicator. This rate is increasing .This ratio represents return on assets and equity employed by the banks. Upto 75% is best. The person or institution empowered as the intermediary to make investment decisions for others. Examples: banks.ROA (%) & ROE (%) INTERPRETATION :. brokerage firms. INTERMEDIATION COST RATIO (%) INTERPRETATION :. insurance companies.This ratio represents the interest and earning distributed by the banks. and credit unions. in finance.

which means they are borrowing some funds from outside. which means ICICI BANK is performing well. But this rate is beyond 75%. As digram depicts that income is more than the expenses.year after year. INTEREST INCOME / TOTAL FUNDS (%) INTEREST EXPENDED / TOTAL FUNDS (%) NIM (%) INTERPRETATION :This ratio represents the income and expenses over total funds. And NIM is difference between expenses and income.This ratio represents the expenses over the earnings. The above diagram shows that it is having more than 50% expenses in all the years. Which represents that ICICI BANKis a good performing bank. INTEREST EXPENDED / INTEREST EARNED (%) INTERPRETATION :. It means expenses are more than the earnings. .

5% from 2008-2010. EARNING RATIO . So this ratio determines the capacity of a bank in terms of meeting with the liability and other risks such as credit risk. technical competence. ASSET QUALITY NET NPAs (FUNDED) TO NET ADVANCES (%) INTERPRETATION :.This ratio represents the assets which are not performing good. In addition performance evaluation includes compliance with set norms.This ratio basically determine the how well banks can cope up with the risks or we can say that to the shocks to their balance sheets. It is a indicator that AXIS BANK is a performing well. So capital provides cushion for potential losses.AXIS BANK CAPITAL ADEQUACY TOTAL CAR BASEL 1 (%)&TOTAL CAR BASEL II (%) INTERPRETATION :. which is a good indicator. It is a measure of how much capital is used to support the banks' risk assets. leadership and administrative ability. operational risk. As this cost is decreasing after 2008. ability to plan and react to changing circumstances. and we can see that AXIS BANK having trend of NPAs less than 0. MANAGEMENT QUALITY COST PER UNIT OF MONEY LENT (%) INTERPRETATION :This ratio indicates to what extent a bank is competent in managing it.

INTEREST EXPENDED / INTEREST EARNED (%) .ROA (%)&ROE (%) INTERPRETATION :. Which is not a good indicator. This rate is increasing year after year. LIQUIDITY RATIO CREDIT/DEPOSITS (%) INTERPRETATION :. The person or institution empowered as the intermediary to make investment decisions for others. both are fluctuating from 20062010 INTERMEDIATION COST RATIO (%) INTERPRETATION :. And the above diagram depicts that this cost is increasing year after year. Earning spread ratio and interest spread ratio. and in 2010 it reach upto approx 74%. brokerage firms. INTEREST SPREAD RATIO (%) &EARNING SPREAD RATIO (%) INTERPRETATION :. and credit unions. savings and loan institutions. And AXIS BANK having a increasing trend in ROA which means its improving year after year and face fluctuations in ROE. Upto 75% is best.INTERMEDIATION COST. which means AXIS BANK is improving its performance year by year.This ratio represents return on assets and equity employed by the banks. which means AXIS BANK is performing well. insurance companies. Examples: banks. mutual funds. is the cost involved in the placement of money with a financial intermediary. Because they have to deposit upto 25% with RBI to meet emergencies. in finance.This ratio represents the interest and earning distributed by the banks.Credit to deposit ratio represents to how much extent a bank is using its deposits (investments of people with the bank).

The above diagram shows that it is having more than 50% expenses except 2009. Which is again represents that AXIS BANK is a good performing bank. It means expenses are more than the earnings.INTERPRETATION :. INTEREST INCOME / TOTAL FUNDS (%) INTEREST EXPENDED / TOTAL FUNDS (%) NIM (%) INTERPRETATION :. As digram depicts that income is more than the expenses. . And NIM is difference between expenses and income.This ratio represents the income and expenses over total funds.This ratio represents the expenses over the earnings.

leadership and administrative ability. . operational risk. In addition performance evaluation includes compliance with set norms. It is a measure of how much capital is used to support the banks' risk assets.This ratio basically determine the how well banks can cope up with the risks or we can say that to the shocks to their balance sheets.This ratio represents return on assets and equity employed by the banks. And BOI face fluctuations in both the ratios. So this ratio determines the capacity of a bank in terms of meeting with the liability and other risks such as credit risk. ability to plan and react to changing circumstances. So capital provides cushion for potential losses. and we can see that BOI face fluctuations of NPAs from 2006-2010. technical competence.BOI CAPITAL ADEQUACY TOTAL CAR BASEL 1 (%)&TOTAL CAR BASEL II (%) INTERPRETATION :. EARNING RATIO ROA (%)&ROE (%) INTERPRETATION :.This ratio indicates to what extent a bank is competent in managing it. which is a good indicator. As this cost is decreasing year by year. MANAGEMENT QUALITY COST PER UNIT OF MONEY LENT (%) INTERPRETATION :.This ratio represents the assets which are not performing good. ASSET QUALITY NET NPAs (FUNDED) TO NET ADVANCES(%) INTERPRETATION :.

INTEREST EXPENDED / INTEREST EARNED (%) .INTEREST SPREAD RATIO (%)&EARNING SPREAD RATIO (%) INTERPRETATION :. which means BOI is performing well.Credit to deposit ratio represents to how much extent a bank is using its deposits (investments of people with the bank). INTERMEDIATION COST RATIO (%) INTERPRETATION :. and credit unions. Earning spread ratio decreasing year by year and interest spread ratio is decreasing till 2008 after that it has increased and again decrease which means it face fluctuations. This rate is increasing year after year. And the above diagram depicts that this cost is decreasing year by year. mutual funds. savings and loan institutions. Because they have to deposit upto 25% with RBI to meet emergencies. Examples: banks. brokerage firms. LIQUIDITY RATIO CREDIT/DEPOSITS (%) INTERPRETATION :. is the cost involved in the placement of money with a financial intermediary. which means they are borrowing some funds from outside. Upto 75% is best.This ratio represents the interest and earning distributed by the banks.INTERMEDIATION COST. insurance companies. in finance. But in 2008 AND 2009 this rate is beyond 75%. The person or institution empowered as the intermediary to make investment decisions for others. Which is again a good indicator.

This ratio represents the expenses over the earnings.INTERPRETATION :.This ratio represents the income and expenses over total funds. Which is again represents that BOI is a good performing bank. PNB CAPITAL ADEQUACY TOTAL CAR BASEL 1 (%)&TOTAL CAR BASEL II (%) . INTEREST INCOME / TOTAL FUNDS (%) INTEREST EXPENDED / TOTAL FUNDS (%) NIM (%) INTERPRETATION :. The above diagram shows that it is having more than 50% . It means expenses are more than the earnings. As digram depicts that income is more than the expenses. And NIM is difference between expenses and income. which is not a good indicator.

This ratio basically determine the how well banks can cope up with the risks or we can say that to the shocks to their balance sheets.This ratio represents the assets which are not performing good. MANAGEMENT QUALITY COST PER UNIT OF MONEY LENT (%) INTERPRETATION :.This ratio represents return on assets and equity employed by the banks. It is a indicator that PNB is a performing well. So capital provides cushion for potential losses. As this cost is decreasing year by year. EARNING RATIO ROA (%)&ROE (%) INTERPRETATION :. ability to plan and react to changing circumstances. technical competence. which is a good indicator. So this ratio determines the capacity of a bank in terms of meeting with the liability and other risks such as credit risk. leadership and administrative ability.This ratio indicates to what extent a bank is competent in managing it. INTEREST SPREAD RATIO (%)&EARNING SPREAD RATIO (%) . operational risk. And BOI having a increasing trend in both the ratios. and we can see that PNB having trend of NPAs approx less than 1% and keeps on fluctuating from 2006-2010. It is a measure of how much capital is used to support the banks' risk assets. which is a good indicator. In addition performance evaluation includes compliance with set norms.INTERPRETATION :. ASSET QUALITY NET NPAs (FUNDED) TO NET ADVANCES (%) INTERPRETATION :.

which means PNB is performing well. which means they are borrowing some funds from outside. insurance companies. And the above diagram depicts that this cost is decreasing year by year. and credit unions.This ratio represents the interest and earning distributed by the banks. Examples: banks. Upto 75% is best. INTEREST EXPENDED / INTEREST EARNED (%) INTERPRETATION :. which is not a good indicator. Earning spread ratio shows and interest spread ratio are fluctuating year after year. savings and loan institutions. The person or institution empowered as the intermediary to make investment decisions for others.INTERPRETATION :.Credit to deposit ratio represents to how much extent a bank is using its deposits (investments of people with the bank). is the cost involved in the placement of money with a financial intermediary. But in 2010 this rate is beyond 75%. . This rate is increasing year after year. brokerage firms.INTERMEDIATION COST.This ratio represents the expenses over the earnings. Which is again a good indicator. The above diagram shows that it is having more than 50% expenses except 2009. It means expenses are more than the earnings. LIQUIDITY RATIO CREDIT/DEPOSITS (%) INTERPRETATION :. Because they have to deposit upto 25% with RBI to meet emergencies. in finance. INTERMEDIATION COST RATIO (%) INTERPRETATION :. mutual funds.

operational risk. Which represents that PNB is a good performing bank.This ratio basically determine the how well banks can cope up with the risks or we can say that to the shocks to their balance sheets. It is a measure of how much capital is used to support the banks' risk assets.This ratio represents the income and expenses over total funds. So this ratio determines the capacity of a bank in terms of meeting with the liability and other risks such as credit risk. . So capital provides cushion for potential losses.INTEREST INCOME / TOTAL FUNDS (%) INTEREST EXPENDED / TOTAL FUNDS (%) NIM (%) INTERPRETATION :. And NIM is difference between expenses and income. As digram depicts that income is more than the expenses. SBI CAPITAL ADEQUACY TOTAL CAR BASEL 1 (%)&TOTAL CAR BASEL II (%) INTERPRETATION :.

leadership and administrative ability. EARNING RATIO ROA (%)&ROE (%) INTERPRETATION :. It is a indicator that SBI is a performing well. Earning spread ratio face fluctuations but interest spread ratio keeps on decreasing year after year. MANAGEMENT QUALITY COST PER UNIT OF MONEY LENT (%) INTERPRETATION :. and we can see that NPAs decreasing year by year. INTEREST SPREAD RATIO (%)&EARNING SPREAD RATIO (%) INTERPRETATION :.This ratio represents the interest and earning distributed by the banks.This ratio indicates to what extent a bank is competent in managing it.This ratio represents the assets which are not performing good. which is a good indicator.This ratio represents return on assets and equity employed by the banks. In addition performance evaluation includes compliance with set norms. As this cost is decreasing year by year. technical competence. And SBI face fluctuations in both the ratios. ability to plan and react to changing circumstances. INTERMEDIATION COST RATIO (%) .ASSET QUALITY NET NPAs (FUNDED) TO NET ADVANCES (%) INTERPRETATION :.

INTERPRETATION :. which means SBI is performing well. in finance. INTEREST EXPENDED / INTEREST EARNED (%) INTERPRETATION :. And NIM is difference between expenses and income. Because they have to deposit upto 25% with RBI to meet emergencies. Upto 75% is best.This ratio represents the income and expenses over total funds. This rate is increasing year after year. and credit unions. brokerage firms. which is not a good indicator. Examples: banks. And the above diagram depicts that this cost is decreasing till 2008 after that it starts increasing. It means expenses are more than the earnings. which means they are borrowing some funds from outside. As digram depicts that income is .This ratio represents the expenses over the earnings.INTERMEDIATION COST. LIQUIDITY RATIO CREDIT/DEPOSITS (%) INTERPRETATION :.Credit to deposit ratio represents to how much extent a bank is using its deposits (investments of people with the bank). 2008 and in 2010 this rate is beyond 75%. savings and loan institutions. The above diagram shows that it is having more than 50% expenses except 2009. But in 2007. mutual funds. INTEREST INCOME / TOTAL FUNDS (%) INTEREST EXPENDED / TOTAL FUNDS (%) NIM (%) INTERPRETATION :. The person or institution empowered as the intermediary to make investment decisions for others. insurance companies. is the cost involved in the placement of money with a financial intermediary.

To acquire practical exposure of financial analysis of an enterprise. industries and the economy as a whole before taking the investment decision and hence. Which is again represents that SBI is a good performing bank. To gain knowledge of evaluating intrinsic value of a firm. To get familiarity of scheming comparative efficiency of different firms. To analyze the profitability position of sample banks. HYPOTHESIS . Some of the objectives of conducting the study are as follows: ➢ ➢ ➢ ➢ ➢ To take investment decision cautiously after studying risks involved in the same. the present study attempts to analyze the position of the sample companies. RESEARCH & COMPARATIVE ANALYSIS NEED AND OBJECTIVE OF THE STUDY AN investor who would like to be rational and scientific in his investment activity has to evaluate a lot of information about past performance and the expected future performance of the companies.more than the expenses.

Bank of India (BOI). BOI. BOI. H10: The interest income/total funds position of HDFC. PNB and SBI does not differ significantly. They are HDFC Bank. Punjab National Bank (PNB) and State Bank of India (SBI). interest income/total funds. credit/deposit. Return On Equity (ROE). BOI. ICICI. A finite sample size of six banks listed on National Stock Exchange (NSE) has been selected for the purpose of the study. PNB and SBI does not differ significantly. PNB and SBI does not differ significantly. While interpreting the results. AXIS Bank. AXIS. H9: The interest expended/interest earned position of HDFC. AXIS. ICICI. BOI. BOI. BOI. . ICICI. AXIS. PNB and SBI does not differ significantly. AXIS. Management Quality. ICICI. ICICI. H5: The interest spread position of HDFC. PNB and SBI does not differ significantly. AXIS. interest spread. PNB and SBI does not differ significantly. PNB and SBI does not differ significantly. AXIS. The data of the sample companies (for the period of 5 years from 2006-2010) has been collected from the balance sheet and profit and loss account given in the software ACE equity. H8: The credit/deposit position of HDFC. The following hypothesis have been taken to put up on test: H1: The capital adequacy position of HDFC. interest expenses/total funds and nim. PNB and SBI does not differ significantly. ICICI. ICICI. ICICI. ICICI. PNB and SBI does not differ significantly. AXIS. BOI. and some information has been collected from the websites of the banks. BOI.The study tests whether the selected variables of sample companies vary significantly during the study period. The variables used in the analysis of the data are Capital Adequacy. H6: The earning spread position of HDFC. This specific hypothesis is tested at appropriate time while analyzing and interpreting the result. H7: The intermediation cost position of HDFC. BOI. AXIS. H4: The return on equity (ROE) position of HDFC. H11: The interest expenses/total funds position of HDFC. Asset Quality. intermediation cost. ICICI. ICICI. AXIS. BOI. H12: The (NIM) of HDFC. BOI. ICICI. PNB and SBI does not differ significantly. METHODOLOGY :The present study adopts an analytical and descriptive research design. Return On Assets (ROA). ICICI Bank. AXIS. earning spread. H3: The return on asset (ROA) position of HDFC. AXIS. the statistical tool of one-way Analysis of Variance (ANOVA) has been used. interest expended/interest earned. BOI. H2: The asset quality position of HDFC. AXIS. PNB and SBI does not differ significantly. PNB and SBI does not differ significantly.

552 SBI 8.SAMPLE DESIGN : Sampling Technique : The study is done with special reference to public and private sector banks. Apart from this. . interest income/total funds.  Sample Size : Three Indian Public sector banks and three Indian Private sector banks are chosen as sample size for the study on account of having the highest market capitalization. Return On Assets (ROA). The reason being that the data or the financial statements are readily available for them. public sector banks are bound to disclose all their facts and figure publicly. interest expenses/total funds and nim. As this ratio measure of how much capital is used to support the banks' risk assets. On an average ICICI BANK has generated highest among all and SBI having lowest among all. TOOLS USED FOR ANALYSIS :  Ratio Analysis: Ratios have been calculated for the past five years for the purpose of analysis.org and the websites of all the banks. interest spread. interest expended/interest earned. Analysis of Variance(ANOVA): The statistical tool that is used for testing hypothesis is one-way Analysis of Variance (ANOVA). Thus.7 INTERPRETATION : The above diagram depicts that among the private sector banks HDFC was highest for the first two years and after that ICICI is highest among the all private sector banks PNB having highest among the all public sector banks. Asset Quality.004 AXIS 13. operational risk. credit/deposit. Ratios being designed are named as: Capital Adequacy.   CAPITAL ADEQUACY Average HDFC 13.224 PNB 12. DATA COLLECTION : Financial statements are the raw data collected from Ace equity and from various websites such as www. earning spread. Return On Equity (ROE). Management Quality. intermediation cost. The election of sample companies is made on the basis of market capitalization. the technique of ‘Convenience Sampling’ is being adopted for the study. The analysis reveals that ICICI is the most efficient bank in terms of meeting with the liability and other risks such as credit risk.82 BOI 12.926 ICICI 15.rbi.

62 5 24 29 7. PNB and SBI does not differ significantly.456 ICICI 1. As this ratio measure of the assets which are not performing good. Ha: Capital Adequacy of HDFC. The analysis reveals that HDFC is the most efficient bank in terms of managing the assets. and having lowest ratio of non-performing assets. PNB and SBI does differ significantly. PNB and SBI differ significantly.738 INTERPRETATION : The above diagram depicts that among the private sector banks HDFC is performing well and PNB performing well among the all public sector banks.760417 6. ICICI. The details shown below: Ho: Asset Quality of HDFC. PNB and SBI does not differ significantly. AXIS. PNB and SBI does differ significantly.62 5 24 29 121.46.31426 3. On an average SBI BANK has generated highest among all and HDFC having lowest among all. AXIS.72 1.89401 . BOI.526397 0. AXIS. BOI. Ha: Asset Quality of HDFC.9 PNB .The capital adequacy of sample companies is compared and tested using the following hypothesis.465842 Inference: Since the calculated value of F is 6. AXIS. ICICI. DF SS MS F-ratio Source of Variation Between Groups Within Groups Total Table Value: 2. ICICI. it is concluded that the capital adequacy position of HDFC. ICICI.584 BOI . BOI. the null hypothesis is rejected and the alternative hypothesis is accepted. The details shown below: Ho: Capital Adequacy of HDFC. BOI. The asset quality of sample companies is compared and tested using the following hypothesis. Hence.478 SBI 1.5 AXIS .5713 90. AXIS.631987 3. ICICI. BOI. ASSET QUALITY Average HDFC . DF SS MS F-ratio Source of Variation Between Groups Within Groups Total Table Value: 2.25 211.62.08 10.82 24.128333 11.which is greater than the table value of 2.

AXIS. the null hypothesis is rejected and the alternative hypothesis is accepted.62.509383 2. BOI.276 AXIS 5. AXIS.053828 1. Ha: Management Quality of HDFC. MANAGEMENT QUALITY: Average HDFC 5. PNB and SBI does differ significantly. ICICI. DF SS MS F-ratio Source of Variation Between Groups Within Groups Total Table Value: 2. ICICI. PNB and SBI differ significantly. leadership and administrative ability The management quality of sample companies is compared and tested using the following hypothesis. ICICI. ICICI.62. AXIS. it is concluded that the management quality position of HDFC.008 BOI 6.522 PNB 6. As this ratio measure to what extent a bank is competent in managing its assets.Inference: Since the calculated value of F is 11. Hence. PNB and SBI differ significantly. BOI. the null hypothesis is rejected and the alternative hypothesis is accepted. EARNING RATIO RETURN ON ASSETS . On an average BOI BANK has generated highest among all and ICICI having lowest among all. BOI. BOI.685751 Inference: Since the calculated value of F is 2. ability to plan and react to changing circumstances.2252 56. The analysis reveals that BOI is the most efficient bank in terms of compliance with set norms.68.49434 4. PNB and SBI does not differ significantly.128 SBI 6.89. Hence.which is greater than the table value of 2. technical competence.516 INTERPRETATION : The above diagram depicts that among the private sector banks HDFC is performing well and BOI and SBI performing well among the all public sector banks.which is greater than the table value of 2. The details shown below: Ho: Management Quality of HDFC.62 5 24 29 20. it is concluded that the asset quality position of HDFC. AXIS.26914 36.856 ICICI 4.

BOI.733387 0.633387 0. PNB and SBI does not differ significantly. AXIS. PNB and SBI does not differ significantly. PNB and SBI does differ significantly. The return on assets of sample companies is compared and tested using the following hypothesis. Hence. AXIS. On an average BOI BANK has generated highest among all and ICICI having lowest among all. The analysis reveals that HDFC is the most efficient bank in terms of generating returns on assets employed by it. DF SS MS F-ratio Source of Variation Between Groups Within Groups Total Table Value: 2.47. ICICI. The details shown below: Ho: Return on Asset of HDFC.962 Average INTERPRETATION : The above diagram depicts that among the private sector banks HDFC was highest PNB having highest among the all public sector banks.814874 0.082 AXIS 1. BOI. ICICI. AXIS. RETURN ON EQUITY Average HDFC 17.01 SBI 16.9 1.HDFC 1. it is concluded that the return on assets position of HDFC.684 ICICI 11. BOI.414 ICICI 1. On an average HDFC BANK has generated highest among all and SBI having lowest among all.which is less than the table value of 2.258 BOI 1 PNB 1. ICICI. As this ratio measure of return on assets employed by banks.62.551002 1.204 SBI 0.106 AXIS 19.62 5 24 29 0.478895 Inference: Since the calculated value of F is 1.51 PNB 21.06 BOI 21. the null hypothesis is accepted and the alternative hypothesis is rejected. As this .21 INTERPRETATION : The above diagram depicts that among the private sector banks AXIS was highest and BOI is highest among the all public sector banks. Ha: Return on Asset of HDFC.

16. ICICI. Hence. PNB and SBI does differ significantly. AXIS.31 704. PNB and SBI does differ significantly.9946 339.539532 0. AXIS. On an average HDFC BANK has generated highest and BOI has generated lowest among all. the null hypothesis is rejected and the alternative hypothesis is accepted. Ha: Interest Spread of HDFC. AXIS.which is greater than the table value of 2.13792 5. DF SS MS F-ratio Source of Variation Between Groups Within Groups Total Table Value: 2.ratio measure of return on equity employed by the banks. ICICI. PNB and SBI does not differ significantly. ICICI. The analysis reveals that HDFC is the most efficient bank in terms of distributing interest.846 ICICI 6. BOI. PNB and SBI does not differ significantly.644009 . DF SS MS F-ratio Source of Variation Between Groups Within Groups 5 24 47.324 SBI 6. The analysis reveals that BOI is the most efficient bank in terms of generating returns on equity employed by it. As this ratio is measure of earned interest distributed by the banks.74 9. Ha: Return on Equity of HDFC.032 PNB 7. The details shown below: Ho: Interest Spread of HDFC. it is concluded that the return on equity position of HDFC.99892 14. ICICI. The details shown below: Ho: Return on Equity of HDFC. BOI. INTEREST SPREAD Average HDFC 9.69766 23. The interest spread of sample companies is compared and tested using the following hypothesis.163343 Inference: Since the calculated value of F is 5. The return on equity of sample companies is compared and tested using the following hypothesis. BOI.734 INTERPRETATION : The above diagram depicts that among the private sector banks HDFC is highest and PNB having highest among the all public sector banks. ICICI. AXIS. BOI.282 AXIS 7.3 72. AXIS. PNB and SBI differ significantly. BOI.62.62 5 24 29 364.989167 9.604 BOI 6.

227047 60.Total Table Value: 2. On an average BOI BANK has generated highest among all and ICICI having lowest among all. AXIS.464 INTERPRETATION : The above diagram depicts that among the private sector banks AXIS has highest and BOI having highest among the all public sector banks.8 ICICI 6.62 5 24 29 1703.64. PNB and SBI differ significantly. BOI. ICICI. it is concluded that the earning spread position of HDFC.62 29 71. The details shown below: Ho: Earning Spread of HDFC. DF SS MS F-ratio Source of Variation Between Groups Within Groups Total Table Value: 2. PNB and SBI does differ significantly. ICICI.44912 1756.6288 2.9509 Inference: Since the calculated value of F is 152. Hence. Ha: Earning Spread of HDFC. AXIS.44 Inference: Since the calculated value of F is 9. ICICI. ICICI.57218 152.584 BOI 25. it is concluded that the interest spread position of HDFC. PNB and SBI does not differ significantly. The earning spread of sample companies is compared and tested using the following hypothesis. INTERMEDIATION COST .758 SBI 21.593 340. Hence. EARNING SPREAD HDFC 6.676 PNB 21.132 AXIS 14. the null hypothesis is rejected and the alternative hypothesis is accepted.which is greater than the table value of 2.62. The analysis reveals that BOI is the most efficient bank in terms of distributing earnings. BOI. AXIS. As this ratio measure of earnings distributed by the banks.which is greater than the table value of 2.144 53.62. AXIS. PNB and SBI differ significantly. BOI.9. the null hypothesis is rejected and the alternative hypothesis is accepted. BOI.

938 INTERPRETATION : The above diagram depicts that among the private sector banks ICICI is lowest and BOI having lowest among the all public sector banks. The details shown below: Ho: Intermediation Cost of HDFC.984 BOI 2. Hence. PNB and SBI differ significantly. PNB and SBI does not differ significantly. AXIS. The analysis reveals that SBI is perfoming well inspite ICICI is highest but it . ICICI. BOI.which is greater than the table value of 2.36 SBI 75. On an average BOI BANK has generated lowest among all and SBI having second lowest among all.95 AXIS 2.954 BOI 72. PNB and SBI does differ significantly.53323 0.62.098 AXIS 65.951049 Inference: Since the calculated value of F is 2.526 ICICI 2.906 PNB 70. BOI.497478 0.48739 4.54 PNB 2.225284 2.924 SBI 2.04584 6.108 INTERPRETATION : The above diagram depicts that among the private sector banks ICICI and SBI having highest among the all public sector banks. Ha: Intermediation Cost of HDFC. As this ratio measure of the cost involved in the placement of money with a financial intermediary. On an average SBI BANK has generated highest among all and AXIS having lowest among all. BOI. ICICI.62 5 24 29 2. ICICI. it is concluded that the intermediation cost position of HDFC. the null hypothesis is rejected and the alternative hypothesis is accepted. DF SS MS F-ratio Source of Variation Between Groups Within Groups Total Table Value: 2. LIQUIDITY RATIO CREDIT/DEPOSITS (% HDFC 67.Average HDFC 3.168577 0. The intermediation cost of sample companies is compared and tested using the following hypothesis.786 ICICI 91. As this ratio measure of to how much extent a bank is using its deposits (investments of people with the bank). AXIS. AXIS.95. The analysis reveals that BOI is the most efficient bank in terms of placing the money with a financial institution.

AXIS.02042 92.012 INTERPRETATION : The above diagram depicts that among the private sector banks HDFC and PNB having lowest among the all public sector banks. The details shown below: Ho: Credit/Deposit of HDFC.is more than 80% which means it has to borrow some funds from outside(upto 75% is best). BOI.2642 26.811 411. PNB and SBI does differ significantly. INTEREST EXPENDED / INTEREST EARNED (%) HDFC 48. On an average HDFC BANK has generated lowest among all and ICICI generated highest among all. The credit/deposit of sample companies is compared and tested using the following hypothesis. AXIS. The analysis reveals that HDFC is the most efficient bank in terms of generating less expenses to earnings which means earnings are more than the expenses. the null hypothesis is rejected and the alternative hypothesis is accepted. As this ratio measure of interest expenses occurred to interest earnings. BOI. BOI. AXIS. ICICI. it is concluded that the credit/deposit position of HDFC.80544 Inference: Since the calculated value of F is 15.62 5 24 29 2056.which is greater than the table value of 2. ICICI. PNB and SBI does differ significantly.56083 19.44176 15. DF SS MS F-ratio Source of Variation Between Groups Within Groups 5 24 1595. Ha: Credit/Deposit of HDFC.321 624.27071 .8.49 2680. PNB and SBI does not differ significantly. BOI.62. PNB and SBI does not differ significantly. The interest expended/interest earnred of sample companies is compared and tested using the following hypothesis.695 397.168 BOI 65 PNB 58. ICICI.139 16. ICICI.46 319. Hence. The details shown below: Ho: Interest Expended/Interest Earned of HDFC. AXIS. PNB and SBI differ significantly. BOI. DF SS MS F-ratio Source of Variation Between Groups Within Groups Total Table Value: 2. AXIS.392 ICICI 72.006 SBI 63. ICICI.36 AXIS 63. Ha: Interest Expended/Interest Earned of HDFC.

PNB and SBI does not differ significantly. ICICI.27. Ha: Interest Income/Total Funds of HDFC. PNB and SBI differ significantly.68 PNB 7.which is greater than the table value of 2. PNB and SBI does differ significantly. ICICI.414 BOI 6. AXIS.49 1. the null hypothesis is rejected and the alternative hypothesis is accepted.76 15 0. AXIS. BOI.which is less than the table value of 2. it is concluded that the interest expended/interest earned position of HDFC. it is concluded that the interest income/total funds position of HDFC. PNB and SBI does not differ significantly.32.62.321199 Inference: Since the calculated value of F is 1.Total Table Value: 2. BOI.152 SBI 6.72948 Inference: Since the calculated value of F is 19.62. the null hypothesis is accepted and the alternative hypothesis is rejected. Hence.236937 11.432 ICICI 6. The details shown below: Ho: Interest Income/Total Funds of HDFC. ICICI. The Interest Income/Total Funds of sample companies is compared and tested using the following hypothesis. INTEREST EXPENDED / TOTAL FUNDS (%) .79 INTERPRETATION : The above diagram depicts that among the private sector banks HDFC and PNB having highest among the all public sector banks.155 68. DF SS MS F-ratio Source of Variation Between Groups Within Groups Total Table Value: 2.62 5 24 29 3. BOI.966 AXIS 6. AXIS. INTEREST INCOME / TOTAL FUNDS (%) Average HDFC 7.647387 0.62 29 1993. AXIS. As this ratio measure of interest earnings occurred to total funds. Hence. BOI. ICICI. On an average HDFC BANK has generated highest among all and AXIS having lowest among all. The analysis reveals that HDFC is the most efficient bank in terms of generating interest income.

BOI.52 . Hence. ICICI.Average HDFC 3.624363 0.52187 0. Ha: Interest Expended/Total Funds of HDFC.62. PNB and SBI does differ significantly. PNB and SBI does not differ significantly.963593 Inference: Since the calculated value of F is . it is concluded that the interest expended/total funds position of HDFC.62 5 24 29 5.06692 14.which is less than the table value of 2.274 INTERPRETATION : The above diagram depicts that among the private sector banks HDFC and PNB having lowest among the all public sector banks.36 BOI 2. ICICI. NET INTEREST MARGIN % Average HDFC 3.984 SBI 2. The analysis reveals that HDFC is the most efficient bank in controlling expenses.96. the null hypothesis is accepted and the alternative hypothesis is rejected. AXIS. As this ratio measure of interest expenses occurred to total funds.346 PNB 4.454947 9.916 AXIS 2. BOI. The details shown below: Ho: Interest Expended/Total Funds of HDFC. BOI. DF SS MS F-ratio Source of Variation Between Groups Within Groups Total Table Value: 2.054 AXIS 4. PNB and SBI does not differ significantly.626 ICICI 5. The interest expended/total funds of sample companies is compared and tested using the following hypothesis.166 SBI 4.054 BOI 4.332 PNB 2. AXIS. On an average HDFC BANK has generated lowest among all and ICICI having highest among all. ICICI. AXIS.601632 0.802 ICICI 1.

The study reveals that among the six banks HDFC is the most efficient bank . return on assets. the null hypothesis is rejected and the alternative hypothesis is accepted. ICICI.62 5 24 29 10. ICICI Bank.06. SBI.179508 0. BOI.62. ICICI. Thus. PNB and SBI does not differ significantly. the present study has been conducted to examine the economic sustainability of the six major banks in Indian banking sector: HDFC Bank.06011 Inference: Since the calculated value of F is 29.075 29. On an average HDFC BANK has generated highest among all and ICICI having lowest among all. DF SS MS F-ratio Source of Variation Between Groups Within Groups Total Table Value: 2. The analysis reveals that HDFC is the most efficient bank in terms of generating earnings. AXIS.89754 1. interest spread ratio and the most important ratio (net interest margin) are the ratios in which HDFC bank perform well. ICICI. AXIS.INTERPRETATION : The above diagram depicts that among the private sector banks HDFC is highest SBI having highest among the all public sector banks. after that BOI is the second efficient bank because it performed well in four ratios that is intermediation cost ratio. it is concluded that the net interest margin position of HDFC. because the research shows that among the thirteen ratios in seven ratios HDFC perform well among which the asset quality ratio. earning spread ratio return on equity and management quality. PNB and SBI does differ significantly. Hence. AXIS Bank. AXIS.8 12. BOI. BOI. PNB and SBI differ significantly. PNB. The details shown below: Ho: Net Interest Margin (NIM) of HDFC.which is greater than the table value of 2. Ha: Net Interest Margin (NIM) of HDFC. BOI. The net interest margin of sample companies is compared and tested using the following hypothesis. As this ratio measure of difference between expenses and income or we can say that the earnings. after these two banks ICICI performing well in capital adequacy ratio which is another .7 2. Conclusion The fundamental analysis which aims at developing an insight into the economic performance of the business is of paramount importance from the view point of investment decisions.

interest income/total funds and return on assets. The research also reveals that in all the ratios banks differ significantly from each other which reveals that the functioning of one bank is differ from the other bank.most important ratio and SBI perform well in credit/deposit ratio the another most important ratio . . But these banks does not differ from each other in all these ratios that is interest expended/total funds. Which reflects that under these aspects banks are more or less same.

21 3.00 2006 2007 3.Interest income / Total funds (%) 9.00 5.39 3.This ratio represents the income and expenses over total funds.00 1.00 3.39 2. As digram depicts that income is more than the expenses. Which represents that PNB is a good performing bank.00 2.71 3.00 6.60 7.78 2.00 8. And NIM is difference between expenses and income.21 6.00 0. SBI .87 2008 2009 2010 INTERPRETATION :.83 7.85 4.92 Interest Expended / Total funds (%) 7.17 NIM(%) 7.00 6.98 4.36 2.24 4.00 4.

00 4.This ratio basically determine the how well banks can cope up with the risks or we can say that to the shocks to their balance sheets.00 13. operational risk.64 9.53 16.00 6.14 8.76 1.39 8.80 1.78 1. So capital provides cushion for potential losses. It is a indicator that SBI is a performing well.00 12.56 1.25 12.40 1.01 9.00 8.00 10. ¢ et NPAs (f e ) to Net A va ces (%) £ ¢¡ ££   .87 1.CAPITAL ADEQUACY TOTAL CAR BASEL 1 (%)&TOTAL CAR BASEL II (%) Tier-1 ratio (Basel I) (%) Total CAR (Basel II) (%) 14. and we can see that NPAs decreasing year by year.00 1.46 2006 2007 2008 2009 2010 INTERPRETATION :. ASSET QUALITY NET NPAs (FUNDED) TO NET ADVANCES (%) 2.60 1.This ratio represents the assets which are not performing good.00 0.72 2006 2007 2008 2009 2010 INTERPRETATION :.00 14. It is a measure of how much capital is used to support the banks' risk assets. So this ratio determines the capacity of a bank in terms of meeting with the liability and other risks such as credit risk.36 8.00 2.

05 14.47 INTERPRETATION :.00 2.This ratio indicates to what extent a bank is competent in managing it. leadership and administrative ability.86 1.MANAGEMENT QUALITY COST PER UNIT OF MONEY LENT (%) cost per unit money lent (%) 8.04 1.00 4.52 8 6 4 2 0 2006 2007 2008 2009 2010 5.00 14.92 0.52 5.00 0.41 16.80 0. ability to plan and react to changing circumstances.08 0.00 6.00 8.76 6.91 2006 2007 2008 2009 2010 . In addition performance evaluation includes compliance with set norms.00 15.04 18.00 16. technical competence. which is a good indicator. EARNING RATIO ROA (%)&ROE (%) ROA(%) 17.31 10 6.75 ROE(%) 17. As this cost is decreasing year by year.00 12.00 10.

INTERMEDIATION COST RATIO (%) intermediation cost ratio 3. And SBI face fluctuations in both the ratios.78 2.This ratio represents the interest and earning distributed by the banks.43 19.77 10.83 24.5 1 0. Earning spread ratio face fluctuations but interest spread ratio keeps on decreasing year after year.52 .00 5.37 5.37 6. INTEREST SPREAD RATIO (%)&EARNING SPREAD RATIO (%) Interest Spread (%) 30.INTERPRETATION :.64 earning spread ratio INTERPRETATION :.00 15.61 2.72 22.5 0 2006 2007 2008 2009 2010 3.00 0.07 20.46 21.03 2.00 2006 2007 2008 2009 2010 6.00 19.75 4 3.This ratio represents return on assets and equity employed by the banks.5 3 2.5 2 1.00 25.00 8.33 6.

And the above diagram depicts that this cost is decreasing till 2008 after that it starts increasing. INTEREST EXPENDED / INTEREST EARNED (%) . and credit unions. Examples: banks.Credit to deposit ratio represents to how much extent a bank is using its deposits (investments of people with the bank).84 2006 2007 2008 2009 2010 INTERPRETATION :. LIQUIDITY RATIO CREDIT/DEPOSITS (%) Credit/Deposits(%) 80. brokerage firms. But in 2007.00 68.00 64.00 72.00 78. This rate is increasing year after year. which means SBI is performing well. Because they have to deposit upto 25% with RBI to meet emergencies.58 77. is the cost involved in the placement of money with a financial intermediary.00 66. The person or institution empowered as the intermediary to make investment decisions for others. insurance companies.46 77.INTERPRETATION :.00 78.00 76. Upto 75% is best.11 68.55 73. savings and loan institutions. 2008 and in 2010 this rate is beyond 75%. in finance.INTERMEDIATION COST. which means they are borrowing some funds from outside.00 62.00 70.00 74. mutual funds.

74 Interest Expended / Total funds (%) NIM(%) INTERPRETATION :.61 6.57 6. And NIM is difference between expenses and income.17 2.00 59.57 60.00 4. INTEREST INCOME / TOTAL FUNDS (%) INTEREST EXPENDED / TOTAL FUNDS (%) NIM (%) Interest income / Total funds (%) 8.66 2.00 3.49 7.00 7. which is not a good indicator. It means expenses are more than the earnings.28 66.00 2006 2007 2008 2009 2010 3.23 65. The above diagram shows that it is having more than 50% expenses except 2009.00 2.00 5.00 6.25 4.16 2.00 55.43 3.This ratio represents the income and expenses over total funds.00 0.00 50.00 2006 2007 2008 56.92 4.08 4.66 2009 2010 INTERPRETATION :.32 67. As digram depicts that income is .78 6.25 6.This ratio represents the expenses over the earnings.Interest Expended / Interest earned(%) 70.00 65.00 1.45 4.36 2.

Which is again represents that SBI is a good performing bank. To get familiarity of scheming comparative efficiency of different firms. To gain knowledge of evaluating intrinsic value of a firm.more than the expenses. RESEARCH & COMPARATIVE ANALYSIS NEED AND OBJECTIVE OF THE STUDY AN investor who would like to be rational and scientific in his investment activity has to evaluate a lot of information about past performance and the expected future performance of the companies. To analyze the profitability position of sample banks. the present study attempts to analyze the position of the sample companies. Some of the objectives of conducting the study are as follows:      To take investment decision cautiously after studying risks involved in the same. industries and the economy as a whole before taking the investment decision and hence. HYPOTHESIS . To acquire practical exposure of financial analysis of an enterprise.

BOI. AXIS. earning spread. interest income/total funds. BOI. H9: The interest expended/interest earned position of HDFC. METHODOLOGY :The present study adopts an analytical and descriptive research design. H6: The earning spread position of HDFC. The following hypothesis have been taken to put up on test: H1: The capital adequacy position of HDFC. AXIS. Asset Quality. They are HDFC Bank. ICICI. . PNB and SBI does not differ significantly. ICICI. The variables used in the analysis of the data are Capital Adequacy. PNB and SBI does not differ significantly. ICICI. H2: The asset quality position of HDFC. PNB and SBI does not differ significantly. H5: The interest spread position of HDFC. interest expended/interest earned. AXIS. PNB and SBI does not differ significantly. Punjab National Bank (PNB) and State Bank of India (SBI). BOI. Return On Assets (ROA). AXIS. ICICI. BOI. AXIS. ICICI. Return On Equity (ROE). BOI. AXIS. ICICI. ICICI Bank. PNB and SBI does not differ significantly. AXIS. PNB and SBI does not differ significantly. H8: The credit/deposit position of HDFC. BOI. interest spread.The study tests whether the selected variables of sample companies vary significantly during the study period. AXIS. PNB and SBI does not differ significantly. Management Quality. PNB and SBI does not differ significantly. BOI. H7: The intermediation cost position of HDFC. intermediation cost. ICICI. PNB and SBI does not differ significantly. AXIS. AXIS. PNB and SBI does not differ significantly. AXIS. This specific hypothesis is tested at appropriate time while analyzing and interpreting the result. ICICI. H4: The return on equity (ROE) position of HDFC. A finite sample size of six banks listed on National Stock Exchange (NSE) has been selected for the purpose of the study. and some information has been collected from the websites of the banks. AXIS. The data of the sample companies (for the period of 5 years from 2006-2010) has been collected from the balance sheet and profit and loss account given in the software ACE equity. BOI. H3: The return on asset (ROA) position of HDFC. BOI. H11: The interest expenses/total funds position of HDFC. H10: The interest income/total funds position of HDFC. AXIS Bank. ICICI. BOI. Bank of India (BOI). ICICI. H12: The (NIM) of HDFC. ICICI. PNB and SBI does not differ significantly. BOI. BOI. PNB and SBI does not differ significantly. credit/deposit. ICICI. interest expenses/total funds and nim.

Return On Assets (ROA).While interpreting the results. interest expended/interest earned. Thus. interest income/total funds. Return On Equity (ROE). interest spread. interest expenses/total funds and nim. Ratios being designed are named as:  Capital Adequacy. CAPITAL ADEQUACY . The election of sample companies is made on the basis of market capitalization. earning spread. Apart from this. DATA COLLECTION : Financial statements are the raw data collected from Ace equity and from various websites such as www. TOOLS USED FOR ANALYSIS :  Ratio Analysis: Ratios have been calculated for the past five years for the purpose of analysis. Asset Quality.org and the websites of all the banks.  Sample Size : Three Indian Public sector banks and three Indian Private sector banks are chosen as sample size for the study on account of having the highest market capitalization. SAMPLE DESIGN : Sampling Technique : The study is done with special reference to public and private sector banks. intermediation cost. Management Quality.rbi.  Analysis of Variance(ANOVA): The statistical tool that is used for testing hypothesis is one-way Analysis of Variance (ANOVA). the technique of µConvenience Sampling¶ is being adopted for the study. The reason being that the data or the financial statements are readily available for them. public sector banks are bound to disclose all their facts and figure publicly. credit/deposit. the statistical tool of one-way Analysis of Variance (ANOVA) has been used.

ICICI. DF SS MS F-ratio Source of Variation Between Groups Within Groups Total Table Value: 2.465842 Inference: Since the calculated value of F is 6.00 4.7 INTERPRETATION : The above diagram depicts that among the private sector banks HDFC was highest for the first two years and after that ICICI is highest among the all private sector banks PNB having highest among the all public sector banks. BOI.00 0.HDFC 20.00 14. ICICI. Ha: Capital Adequacy of HDFC. BOI.926 15. On an average ICICI BANK has generated highest among all and SBI having lowest among all. PNB and SBI does differ significantly. the null hypothesis is rejected and the alternative hypothesis is accepted. PNB and SBI differ significantly.00 8. PNB and SBI does not differ significantly.82 12. Hence.25 211.224 12.00 12. As this ratio measure of how much capital is used to support the banks' risk assets. AXIS. it is concluded that the capital adequacy position of HDFC.62 5 24 29 121.82 24.00 2. The details shown below: Ho: Capital Adequacy of HDFC.760417 6. ICICI.004 13.00 6. AXIS. AXIS.31426 3. operational risk.5713 90.552 8. .62. The capital adequacy of sample companies is compared and tested using the following hypothesis.00 10.46.00 2006 2007 ICICI AXIS BOI PNB SBI 2008 2009 2010 Average HDFC ICICI AXIS BOI PNB SBI 13. The analysis reveals that ICICI is the most efficient bank in terms of meeting with the liability and other risks such as credit risk.00 18.00 16.which is greater than the table value of 2. BOI.

BOI.526397 0.50 PNB 2.62. The details shown below: Ho: Asset Quality of HDFC. ICICI. ICICI.72 1.00 2005-06 2006-07 2007-08 2008-09 2009-10 Average HDFC . BOI.89.ASSET QUALITY ICICI AXIS BOI SBI HDFC 2.50 0.89401 Inference: Since the calculated value of F is 11.128333 11. DF SS MS F-ratio Source of Variation Between Groups Within Groups Total Table Value: 2.00 1.9 PNB .which is greater than the table value of 2.738 INTERPRETATION : The above diagram depicts that among the private sector banks HDFC is performing well and PNB performing well among the all public sector banks.62 5 24 29 7. AXIS. On an average SBI BANK has generated highest among all and HDFC having lowest among all. AXIS.456 ICICI 1. the null hypothesis is rejected and the alternative hypothesis is accepted.478 SBI 1. Ha: Asset Quality of HDFC. As this ratio measure of the assets which are not performing good.00 0. and having lowest ratio of non-performing assets. PNB and SBI does not differ significantly. The analysis reveals that HDFC is the most efficient bank in terms of managing the assets.08 10. PNB and SBI does differ significantly.631987 3. .584 BOI .50 1.5 AXIS . The asset quality of sample companies is compared and tested using the following hypothesis.

BOI. technical competence. leadership and administrative ability The management quality of sample companies is compared and tested using the following hypothesis. As this ratio measure to what extent a bank is competent in managing its assets. AXIS.128 SBI 6. ICICI. DF SS MS F-ratio Source of Variation Between Groups Within Groups Total Table Value: 2.509383 2. MANAGEMENT QUALITY: HDFC 9 8 7 6 5 4 3 2 1 0 2006 2007 2008 2009 2010 ICICI AXIS BOI PNB SBI Average HDFC 5.685751 .856 ICICI 4. The analysis reveals that BOI is the most efficient bank in terms of compliance with set norms. ICICI. AXIS. PNB and SBI does differ significantly. Ha: Management Quality of HDFC. PNB and SBI differ significantly.516 INTERPRETATION : The above diagram depicts that among the private sector banks HDFC is performing well and BOI and SBI performing well among the all public sector banks.49434 4.008 BOI 6. PNB and SBI does not differ significantly. ability to plan and react to changing circumstances. BOI. it is concluded that the asset quality position of HDFC.053828 1.Hence.276 AXIS 5. BOI.26914 36.2252 56. The details shown below: Ho: Management Quality of HDFC.522 PNB 6. ICICI. On an average BOI BANK has generated highest among all and ICICI having lowest among all. AXIS.62 5 24 29 20.

478895 .814874 0. PNB and SBI does differ significantly.258 BOI 1 PNB 1. BOI.633387 0. it is concluded that the management quality position of HDFC. ICICI.00 ICICI AXIS BOI PNB SBI 2006 2007 2008 2009 2010 Average HDFC 1.20 1.62. The analysis reveals that HDFC is the most efficient bank in terms of generating returns on assets employed by it.68.which is greater than the table value of 2.9 1.733387 0. Hence.414 ICICI 1.20 0. AXIS. BOI.082 AXIS 1. EARNING RATIO RETURN ON ASSETS HDFC 1.80 0.00 0. ICICI.60 1. the null hypothesis is rejected and the alternative hypothesis is accepted.551002 1. ICICI. On an average HDFC BANK has generated highest among all and SBI having lowest among all. PNB and SBI differ significantly. DF SS MS F-ratio Source of Variation Between Groups Within Groups Total 5 24 29 0. The return on assets of sample companies is compared and tested using the following hypothesis.40 0.204 SBI 0. AXIS.962 INTERPRETATION : The above diagram depicts that among the private sector banks HDFC was highest PNB having highest among the all public sector banks.Inference: Since the calculated value of F is 2. Ha: Return on Asset of HDFC. The details shown below: Ho: Return on Asset of HDFC. As this ratio measure of return on assets employed by banks. AXIS. PNB and SBI does not differ significantly. BOI.40 1.60 0.

00 5.00 0. BOI.00 15. ICICI. The analysis reveals that BOI is the most efficient bank in terms of generating returns on equity employed by it. AXIS.62 Inference: Since the calculated value of F is 1. Hence. PNB and SBI does not differ significantly.00 10.47. BOI. The details shown below: Ho: Return on Equity of HDFC. the null hypothesis is accepted and the alternative hypothesis is rejected.21 INTERPRETATION : The above diagram depicts that among the private sector banks AXIS was highest and BOI is highest among the all public sector banks. PNB and SBI does not differ significantly. AXIS.00 20.06 BOI 21.62.106 AXIS 19. PNB and SBI does differ significantly. AXIS.Table Value: 2. ICICI. RETURN ON EQUITY HDFC 30.00 ICICI AXIS BOI PNB SBI 2006 2007 2008 2009 2010 Average HDFC 17. it is concluded that the return on assets position of HDFC. On an average BOI BANK has generated highest among all and ICICI having lowest among all.51 PNB 21. ICICI.01 SBI 16.which is less than the table value of 2. Ha: Return on Equity of HDFC.00 25. DF SS MS F-ratio Source of . BOI.684 ICICI 11. As this ratio measure of return on equity employed by the banks. The return on equity of sample companies is compared and tested using the following hypothesis.

31 704.3 72. On an average HDFC BANK has generated highest and BOI has generated lowest among all. PNB and SBI differ significantly. Hence.00 10. INTEREST SPREAD HDFC 12.16. PNB and SBI does not differ significantly. BOI.Variation Between Groups Within Groups Total Table Value: 2. ICICI. The interest spread of sample companies is compared and tested using the following hypothesis. AXIS.846 2007 2008 2009 2010 ICICI 6.13792 5.324 SBI 6. As this ratio is measure of earned interest distributed by the banks. the null hypothesis is rejected and the alternative hypothesis is accepted. ICICI. BOI. The analysis reveals that HDFC is the most efficient bank in terms of distributing interest. it is concluded that the return on equity position of HDFC.032 PNB 7.00 6.9946 339.which is greater than the table value of 2.62. Ha: Interest Spread of HDFC. PNB and SBI does differ significantly.00 2. BOI.62 5 24 29 364. AXIS. AXIS.734 INTERPRETATION : The above diagram depicts that among the private sector banks HDFC is highest and PNB having highest among the all public sector banks.00 4. . The details shown below: Ho: Interest Spread of HDFC.163343 Inference: Since the calculated value of F is 5.00 8.282 AXIS 7.00 0.00 ICICI AXIS BOI PNB SBI 2006 Average HDFC 9.604 BOI 6.99892 14. ICICI.

AXIS.Source Variation Between Groups Within Groups Total Table Value: 2.74 71. The earning spread of sample companies is compared and tested using the following hypothesis.539532 0. ICICI. Hence.758 SBI 21. PNB and SBI differ significantly. it is concluded that the interest spread position of HDFC.69766 23.8 ICICI 6.644009 Inference: Since the calculated value of F is 9.44 MS 9. As this ratio measure of earnings distributed by the banks.62.584 BOI 25.464 INTERPRETATION : The above diagram depicts that among the private sector banks AXIS has highest and BOI having highest among the all public sector banks. . ICICI.676 PNB 21.which is greater than the table value of 2. BOI. the null hypothesis is rejected and the alternative hypothesis is accepted. The analysis reveals that BOI is the most efficient bank in terms of distributing earnings. PNB and SBI does not differ significantly. EARNING SPREAD HDFC 30 25 20 15 10 5 0 2006 2007 2008 2009 2010 ICICI AXIS BOI PNB SBI HDFC 6. BOI. AXIS. The details shown below: Ho: Earning Spread of HDFC.989167 F-ratio 9.62 of DF 5 24 29 SS 47.132 AXIS 14.64. On an average BOI BANK has generated highest among all and ICICI having lowest among all.

PNB and SBI does differ significantly.95 AXIS 2. PNB and SBI differ significantly.Ha: Earning Spread of HDFC. INTERMEDIATION COST HDFC 4. Hence.227047 60.57218 152. AXIS.9. it is concluded that the earning spread position of HDFC. the null hypothesis is rejected and the alternative hypothesis is accepted.9509 Inference: Since the calculated value of F is 152.5 1 0. DF SS MS F-ratio Source of Variation Between Groups Within Groups Total Table Value: 2.62 5 24 29 1703.62.44912 1756.54 PNB 2.5 2 1.984 BOI 2. ICICI.6288 2. ICICI. BOI.526 ICICI 2. On an average BOI BANK has generated lowest among all and SBI having second lowest among all.938 INTERPRETATION : The above diagram depicts that among the private sector banks ICICI is lowest and BOI having lowest among the all public sector banks.924 SBI 2. As this ratio measure of the cost involved in the placement of money with a financial . AXIS. BOI.593 340.which is greater than the table value of 2.144 53.5 3 2.5 4 3.5 0 2006 2007 2008 2009 2010 ICICI AXIS BOI PNB SBI Average HDFC 3.

ICICI. PNB and SBI does differ significantly.which is greater than the table value of 2.497478 0. The analysis reveals that BOI is the most efficient bank in terms of placing the money with a financial institution. BOI. the null hypothesis is rejected and the alternative hypothesis is accepted.108 INTERPRETATION : The above diagram depicts that among the private sector banks ICICI and SBI having highest among the all public sector banks. BOI.00 60.00 70. PNB and SBI differ significantly. it is concluded that the intermediation cost position of HDFC.951049 Inference: Since the calculated value of F is 2.62 5 24 29 2.168577 0.00 80.954 BOI 72. AXIS. AXIS. On an average SBI .098 AXIS 65. AXIS.00 50. PNB and SBI does not differ significantly.04584 6.00 10.225284 2. The details shown below: Ho: Intermediation Cost of HDFC.00 30.00 40.00 ICICI AXIS BOI PNB SBI 2006 2007 2008 2009 2010 HDFC 67. ICICI.00 20. BOI. DF SS MS F-ratio Source of Variation Between Groups Within Groups Total Table Value: 2.00 90. LIQUIDITY RATIO CREDIT/DEPOSITS (% HDFC 100. Ha: Intermediation Cost of HDFC.53323 0.36 SBI 75. ICICI.906 PNB 70. The intermediation cost of sample companies is compared and tested using the following hypothesis.786 ICICI 91.00 0.48739 4.intermediary.62.95. Hence.

PNB and SBI differ significantly.012 INTERPRETATION : The above diagram depicts that among the private sector banks HDFC and PNB having lowest among the all public sector banks.006 SBI 63.62 5 24 29 2056. it is concluded that the credit/deposit position of HDFC. PNB and SBI does not differ significantly.44176 15. ICICI. The analysis reveals that SBI is perfoming well inspite ICICI is highest but it is more than 80% which means it has to borrow some funds from outside(upto 75% is best).00 2006 2007 2008 2009 2010 ICICI AXIS BOI PNB SBI HDFC 48.02042 92.BANK has generated highest among all and AXIS having lowest among all. ICICI. On an average HDFC BANK has generated lowest among all and ICICI generated highest among all.321 624.168 BOI 65 PNB 58.00 70.49 2680.00 40. BOI. As this .811 411.392 ICICI 72.00 30. As this ratio measure of to how much extent a bank is using its deposits (investments of people with the bank).00 10.80544 Inference: Since the calculated value of F is 15.00 50.8. DF SS MS F-ratio Source of Variation Between Groups Within Groups Total Table Value: 2. PNB and SBI does differ significantly. Hence.00 20. INTEREST EXPENDED / INTEREST EARNED (%) HDFC 80. BOI. Ha: Credit/Deposit of HDFC.00 0. AXIS.which is greater than the table value of 2. BOI. AXIS. ICICI.00 60.2642 26.62. the null hypothesis is rejected and the alternative hypothesis is accepted. The details shown below: Ho: Credit/Deposit of HDFC. AXIS.36 AXIS 63. The credit/deposit of sample companies is compared and tested using the following hypothesis.

414 BOI 6. Hence.27071 Inference: Since the calculated value of F is 19.00 4. BOI.72948 19.00 8. DF SS MS F-ratio Source of Variation Between Groups Within Groups Total Table Value: 2.00 2006 2007 2008 2009 2010 ICICI AXIS BOI PNB SBI Average HDFC 7.79 .00 6. BOI. INTEREST INCOME / TOTAL FUNDS (%) HDFC 9.152 SBI 6.62. The interest expended/interest earnred of sample companies is compared and tested using the following hypothesis.68 PNB 7.which is greater than the table value of 2. The details shown below: Ho: Interest Expended/Interest Earned of HDFC. PNB and SBI differ significantly. the null hypothesis is rejected and the alternative hypothesis is accepted. Ha: Interest Expended/Interest Earned of HDFC.00 7.00 2. it is concluded that the interest expended/interest earned position of HDFC.00 5.56083 68.432 ICICI 6.ratio measure of interest expenses occurred to interest earnings.27. ICICI. AXIS.139 16. The analysis reveals that HDFC is the most efficient bank in terms of generating less expenses to earnings which means earnings are more than the expenses.62 5 24 29 1595.00 0. BOI.695 397.00 3. ICICI. PNB and SBI does differ significantly.00 1.46 1993. PNB and SBI does not differ significantly.966 AXIS 6. ICICI. AXIS.155 319. AXIS.

00 1. INTEREST EXPENDED / TOTAL FUNDS (%) HDFC 6.62 5 24 29 3. ICICI.00 2006 2007 2008 2009 2010 ICICI AXIS BOI PNB SBI Average . PNB and SBI does not differ significantly.647387 0. DF SS MS F-ratio Source of Variation Between Groups Within Groups Total Table Value: 2.00 4.which is less than the table value of 2.236937 11. BOI. ICICI. AXIS. The details shown below: Ho: Interest Income/Total Funds of HDFC. it is concluded that the interest income/total funds position of HDFC. the null hypothesis is accepted and the alternative hypothesis is rejected.00 3. Ha: Interest Income/Total Funds of HDFC.76 15 0. BOI.32. On an average HDFC BANK has generated highest among all and AXIS having lowest among all. The analysis reveals that HDFC is the most efficient bank in terms of generating interest income. Hence. ICICI.00 2.62.00 5.00 0. As this ratio measure of interest earnings occurred to total funds.321199 Inference: Since the calculated value of F is 1. BOI.INTERPRETATION : The above diagram depicts that among the private sector banks HDFC and PNB having highest among the all public sector banks. PNB and SBI does differ significantly. The Interest Income/Total Funds of sample companies is compared and tested using the following hypothesis.49 1. PNB and SBI does not differ significantly. AXIS. AXIS.

AXIS. BOI. The details shown below: Ho: Interest Expended/Total Funds of HDFC. AXIS.624363 0. PNB and SBI does not differ significantly. The interest expended/total funds of sample companies is compared and tested using the following hypothesis. The analysis reveals that HDFC is the most efficient bank in controlling expenses. ICICI. NET INTEREST MARGIN % . it is concluded that the interest expended/total funds position of HDFC.06692 14.62 5 24 29 5. PNB and SBI does not differ significantly. As this ratio measure of interest expenses occurred to total funds. ICICI. PNB and SBI does differ significantly.346 PNB 4.52187 0. BOI. AXIS. ICICI.166 SBI 4.054 AXIS 4.62.601632 0. Hence.HDFC 3.274 INTERPRETATION : The above diagram depicts that among the private sector banks HDFC and PNB having lowest among the all public sector banks.054 BOI 4. BOI.963593 Inference: Since the calculated value of F is . On an average HDFC BANK has generated lowest among all and ICICI having highest among all.626 ICICI 5.454947 9. Ha: Interest Expended/Total Funds of HDFC.96. DF SS MS F-ratio Source of Variation Between Groups Within Groups Total Table Value: 2.which is less than the table value of 2. the null hypothesis is accepted and the alternative hypothesis is rejected.

00 2006 2007 ICICI AXIS BOI PNB SBI 2008 2009 2010 Average HDFC 3. BOI.36 BOI 2.00 0. DF SS MS F-ratio Source of Variation Between Groups Within Groups Total Table Value: 2.075 29.179508 0. As this ratio measure of difference between expenses and income or we can say that the earnings. The analysis reveals that HDFC is the most efficient bank in terms of generating earnings.62 5 24 29 10. the null hypothesis is rejected and the alternative hypothesis is accepted.89754 1.00 2.52 INTERPRETATION : The above diagram depicts that among the private sector banks HDFC is highest SBI having highest among the all public sector banks. AXIS.916 AXIS 2. . ICICI. AXIS. Ha: Net Interest Margin (NIM) of HDFC.50 1.06. PNB and SBI does not differ significantly.HDFC 4.50 2.8 12. The net interest margin of sample companies is compared and tested using the following hypothesis. BOI.50 3.50 0.332 PNB 2. PNB and SBI does differ significantly.62.984 SBI 2. Hence.802 ICICI 1. BOI.7 2. PNB and SBI differ significantly.which is greater than the table value of 2.50 4. On an average HDFC BANK has generated highest among all and ICICI having lowest among all. ICICI. AXIS.06011 Inference: Since the calculated value of F is 29.00 1. ICICI. The details shown below: Ho: Net Interest Margin (NIM) of HDFC.00 3. it is concluded that the net interest margin position of HDFC.

because the research shows that among the thirteen ratios in seven ratios HDFC perform well among which the asset quality ratio. AXIS Bank. PNB. after these two banks ICICI performing well in capital adequacy ratio which is another most important ratio and SBI perform well in credit/deposit ratio the another most important ratio . But these banks does not differ from each other in all these ratios that is interest expended/total funds.Conclusion The fundamental analysis which aims at developing an insight into the economic performance of the business is of paramount importance from the view point of investment decisions. BOI. after that BOI is the second efficient bank because it performed well in four ratios that is intermediation cost ratio. earning spread ratio return on equity and management quality. The research also reveals that in all the ratios banks differ significantly from each other which reveals that the functioning of one bank is differ from the other bank. . ICICI Bank. Thus. Which reflects that under these aspects banks are more or less same. interest income/total funds and return on assets. return on assets. The study reveals that among the six banks HDFC is the most efficient bank . the present study has been conducted to examine the economic sustainability of the six major banks in Indian banking sector: HDFC Bank. SBI. interest spread ratio and the most important ratio (net interest margin) are the ratios in which HDFC bank perform well.

Sign up to vote on this title
UsefulNot useful