A Comparative Study on Financial Performance of

SBI and HDFC Bank

Research Project Submitted in Partial Fulfillment of the Requirements for the Degree of

BCOM Honours

By

Chitra Advani

To the

DEPARTMENT OF COMMERCE

BHOPAL SCHOOL OF SOCIAL SCIENCES

April, 2021

Submitted by Guided by

Chitra Advani Dr. Swapna Pillai

( Associate Professor)
 CERTIFICATE

It is certified that the work contained in the project report titled A Comparative Study on
Financial Performance of SBI and HDFC Bank by ‘Chitra Advani’ , has been carried out
under my supervision and that this work has not been submitted elsewhere for a degree*

Signature of Supervisor: …………….

Name: Dr Swapna Pillai, Associate Professor

Department: Commerce

Bhopal School of Social Sciences

April, 2021
 DECLARATION

I hereby declare that this project report entitled A Comparative Study on Financial
Performance of SBI and HDFC was carried out by me for the degree of BCOM Honours under
the guidance and supervision of Dr. Swapna Pillai Associate Professor of Department of
Commerce, BSSS College. The interpretations put forth are based on my reading and
understanding of the original texts and they are not published anywhere in any form. The other
books, articles and websites, which I have made use of are acknowledged at the respective place
in the text. This research report is not submitted for any other degree or diploma in any other
University.

Place: Bhopal

Name of the Student: Chitra Advani

Class & Section: B.com Honours 3rd year A

Date: 30 April 2021

 ACKNOWLEDGEMENT

I would like to thank our Principal Dr. Fr. John P.J. and Vice Principal Dr Sr Sonia Kurien for
their immense support and blessings. I thank our HOD Dr Amit Kumar Nag for his support. I
would like to express my special thanks of gratitude to my research guide Dr. Swapna Pillai,
Associate Professor of Department of Commerce for her valuable suggestions and guidance and
for giving me the golden opportunity to do this wonderful research project on the topic: A
Comparative Study on Financial Performance of SBI and HDFC Without her help it would
have been difficult for me to have reached this state of completion of my project report. Also, I
would like to thank my parents and friends who helped me a lot in the preparation of this project.

I wish to acknowledge the help of all those who have provided me information, guidance and
other help during my research period.
 Table of Contents

S. no. Topics Page no.

01 Execute Summary 7

02 Chapter I : Introduction to the Topic 8

03 Chapter II : Review of Literature 17

04 Chapter III : Research Methodology 27

05 Chapter IV : Data Representation & Analysis 31

06 Chapter V : Results & Discussion 48

07 References 53

08 Annexure 55
 List of Tables

Table no. Table Topic Page no.

Table no. 1 Gross NPA Ratios 33

Table no. 2 Net NPA Ratios 34

Table no. 3 Fixed Assets Turnover Ratios 36

Table no. 4 Debt to Equity Ratios 37

Table no. 5 Operating Profit Ratios 39

Table no. 6 Gross Profit Ratios 41

Table no. 7 Net Profit Ratios 42

Table no. 8 Current Ratios 43

List of Graphs

Graph no. Graph Topic Page no.

Graph no. 1 Gross NPA Ratios 33
Graph no. 2 Net NPA Ratios 34
Graph no. 3 Fixed Assets Turnover Ratios 36
Graph no. 4 Debt to Equity Ratios 38
Graph no. 5 Operating Profit Ratios 39
Graph no. 6 Gross Profit Ratios 41
Graph no. 7 Net Profit Ratios 42
Graph no. 8 Current Ratios 44

Executives Summary

Following some significant changes in monetary policy, India's banking sector has come
under scrutiny. The cost of funds for banks has increased significantly as the Reserve Bank of
India (RBI) raised interest rates to help the falling Indian currency, the Rupee. This may show up
as a rise in non-performing assets (NPAs) and a drop in profitability. Internal and external factors
have an effect on bank profitability. The aim of this paper is to compare and evaluate the
financial performance of India's largest public and private sector banks and also to understand
their trends of NPAs through secondary data analysis. Both banks' earnings were guided by
bank-specific metrics and risk factors. Leverage financial ratios of SBI were found at higher
default risk than HDFC. Productivity measures were the key drivers of profits at India's largest
private sector bank HDFC but not at SBI. Asset usage efficiency measures were almost same of
both the banks. NPA ratios were much higher at India's largest public sector bank SBI. The
single most important determinant of SBI proved to be the liquidity ratios. Two sample T test
assuming equal variances was also conducted to check if there was significant difference
between the NPA ratio of SBI and HDFC bank over the last 3 years.
 Chapter I

Introduction of the Topic

1.1 Rationale of the Study

1.2 Introduction to the Banking Sector
1.3 Introduction to the SBI and HDFC Bank
1.4 Justification of the Topic
 Chapter 1: Introduction of the Topic

1.1 Rationale of the Study

A thorough examination of a bank's financial statements will reveal important factors to consider
before making an investment decision. Investors should be aware of the market cycle and interest
rates, as these can have a direct effect on a bank's financial results.

Reasons to choose Ratio Analysis for SBI and HDFC

 It provides clear understanding about the Profitability, Liquidity and Long term
Solvency of the firm.
 Ratio Analysis is an efficient way to evaluate the company’s performance and
compare it with other similar companies to measure financial stability.
 It is useful to analyze firm’s performance across the period of time.
 It is time and cost effective.
 A comprehensive method to compare the NPA ratios of both the firms.

Reasons to choose SBI and HDFC bank

 In the current scenario in June, 2020 if we think about the two largest of banks of India
one from the private segment and other from the public sector segment, there is no doubt
about it being HDFC Bank from the Private sector and SBI from the Public sector
looking at their balance sheet, reach and customer base.
  The study will assist in contrasting the public and private sectors in addition to SBI and
HDFC.

1.2 Introduction to Banking Sector

India is not only the world's largest independent democracy, but it is also a rapidly growing
economic powerhouse. No country can have a stable economy without a sound and efficient
banking system. Banks play a critical role in a country's economic growth. They collect people's
unused savings and make them eligible for investment. They're in the process of granting loans
and purchasing investment securities, new demand deposits are also established. Accepting and
discounting bills of exchange allows for trade both within and outside the country. Banks also
help to improve capital mobility. India's banking system has a long list of notable
accomplishments over the last three decades. It is no longer limited to the cities, but has spread
to even the most remote parts of the world. This is one of the factors behind India's development.
The banking industry is now one of India's most important service industries. The availability of
high-quality services is critical to the economy's success. Banks' attention has turned away from
customer acquisition to customer retention. The introduction of Information Technology into the
banking sector has changed the way people work. The banking sector's policy has undergone
radical transformations, various customer-oriented products, such as internet banking, are
available. Customer’s workload has been reduced mainly because of ATM providers,
telebanking, and electronic payments. The internet's convenience Banking allows a customer to
access and manage his bank account without having to go to the bank. 'The Customer's options
have been revolutionized by the availability of ATMs and credit/debit cards.

Definition of a Bank
A bank is a financial institution and a financial intermediary that accepts deposits and channels
those deposits into lending activities, either directly by loans or indirectly through capital
markets. (technofunc.com, 2013)

Types of Banks:
Banks are classified as Public or Private depending on their ownership.

PUBLIC SECTOR BANKS-

Public Sector Banks (PSBs) are a major form of bank in India, in which the Indian government
or state governments own a majority stake (i.e. more than 50%). The shares of these banks are
traded on stock exchanges. Public sector banks in India include State Bank of India, Bank of
Baroda, Bank of Maharashtra, Bank of India and others. (types of banks, 2020)

PRIVATE SECTOR BANKS-

Private sector banks are those in which majority of the stake is owned by the bank's shareholders
rather than the government. Private sector banks in India include RBL Bank, HDFC Bank, ICICI
Bank, Yes Bank, and others. (Private sector Banks)

Indian Banking Sector-

The Reserve Bank of India (RBI) claims that India's banking sector is adequately capitalised and
controlled. The country's financial and economic standards are far superior to those of any other
country on the planet. According to credit, industry, and liquidity risk studies, Indian banks are
generally resilient and have fared well during the global downturn.
Innovative banking models such as transfers and small finance banks have recently been
introduced in the Indian banking industry. The RBI's new initiatives may go a long way toward
assisting the domestic banking industry's restructuring.

Market Size

The Indian banking system consists of 12 public sector banks, 22 private sector banks, 46 foreign
banks, 56 regional rural banks, 1485 urban cooperative banks and 96,000 rural cooperative banks
in addition to cooperative credit institutions. As of September 2020, the total number of ATMs in
India increased to 210,049 and is further expected to increase to 407,000 by 2021. (banking
sector in india, 2021)

NON PERFORMING ASSESTS of a Bank

Definition: A non performing asset (NPA) is a loan or advance for which the principal or interest
payment remained overdue for a period of 90 days. (definition of NPAs)

Types of NPAs-
Standard Assets: This is a type of performing asset that generates a steady stream of income and
repayments as they become due. These assets have a normal risk profile and are not NPAs in the
traditional sense. As a result, standard properties do not need any special requirements.

Sub-Standard Assets- These include loans and advances that have been classified as non-
performing assets for more than a year.

Doubtful Assets- these are assets that have been deemed non-performing for a duration of more
than 12 months.

Loss Assets- these are the assets that the lending institutions are unable to recover. (What is
NPA and Types of NPA, 2020)
Road Ahead
Increased infrastructure investment, faster project delivery, and the continuation of reforms are
expected to give the banking sector a boost. All of these factors point to a strong future for
India's banking sector, as rapidly expanding companies will turn to banks for credit.

In addition, technological advancements have pushed mobile and internet banking to the
forefront. The banking industry is putting a greater focus on delivering better services to
customers and improving their technology infrastructure in order to boost the overall customer
experience and offer banks a competitive advantage.

1.3 Introduction to the SBI and HDFC bank

 HDFC Bank

About HDFC

The Housing Development Finance Corporation Limited (HDFC) Bank is an Indian banking and
financial services company, headquartered in Mumbai, Maharashtra. HDFC Bank is India’s
largest private sector bank by assets and by market capitalization as of April 2021. It is the third
largest company by market capitalization on the Indian stock exchanges.

The HDFC Bank Preferred program for high net worth individuals-
The HDFC Bank Plus and The Investment Advisory Services program have been designed
keeping in mind needs of customers who seek distinct financial solutions, information and advice
on various investment avenues. The Bank also has a wide array of retail loan products including
Auto Loans, Loans against marketable securities,
History
HDFC Bank, a subsidiary of the Housing Development Finance Corporation, was established in
1994 and is headquartered in Mumbai, Maharashtra, India. Manmohan Singh, the Union Finance
Minister, inaugurated the company's first corporate office and a full-service branch at Sandoz
House in Worli.

Market Reach
The Bank's distribution network had 5,500 branches in 2,764 cities as of 30 June 2019. In fiscal
year 2017, the bank also constructed 430,000 point-of-sale terminals and issued 23,570,000 debit
cards and 12 million credit cards. As of March 21, 2020, it had 1,16,971 permanent staff.

Products and Services Offered-

Wholesale banking, retail banking, treasury, auto loans, two-wheeler loans, personal loans, loans
against land, consumer durable loan, lifestyle loan, and credit cards are among the products and
services offered by HDFC Bank. Payzapp and SmartBUY are two other digital products
available. (HDFC Bank)

 SBI Bank

About SBI

STATE BANK OF INDIA is a regulatory body for public sector banking and financial services
in India, based in Mumbai, Maharashtra. SBI is world's 43rd largest bank and the only Indian
bank on the Fortune Global 500 list of the world's largest companies for 2020, ranking 221st.
[eight] It is India's largest public sector bank, with a 23 percent asset market share and a 25
percent share of the overall loan and deposit market.

History
The Imperial Bank of India was established when the Bank of Calcutta and the Bank of Bombay
merged to create the Imperial Bank of India, which later became the State Bank of India in 1955.
In 1955, the Indian government took control of the Imperial Bank of India, with the Reserve
Bank of India (India's central bank) owning a 60% stake and renaming the bank State Bank of
India. (State Bank of India)

Market Reach
SBI is one of the largest employers in the country with 209,567 employees as on 31 March
2017, out of which 23% were female employees and 3,179 (1.5%) were employees with
disabilities. On the same date, SBI had 37,875 Scheduled Castes (18%), 17,069 Scheduled Tribes
(8.1%) and 39,709 Other Backward Classes (18.9%) employees.
National
In India, SBI has over 24000 branches. Its revenue in the financial year 2012–13 was 2.005
trillion (US$28 billion), with domestic operations accounting for 95.35 percent of revenue. In the
same financial year, domestic activities accounted for 88.37 percent of overall earnings.
SBI organized 11,300 camps and opened over 3 million accounts by September under the
Pradhan Mantri Jan Dhan Yojana, which was launched by the government in August 2014 and
included 2.1 million accounts in rural areas and 1.57 million accounts in urban areas.
International
As of 2014-15, the bank had 191 overseas offices in 36 countries making it the Indian bank with
the highest presence in international markets. (State Bank of India)

Products and Services Offered

SBI offers a plethora of products and services such as savings account, credit cards, fixed
deposits, personal loan, home loan, business loan, debit card, loan against property, car loan,
gold loan, mudra loan and more. (State Bank of India, 2020)
1.4 Justification of the Topic

Ratio analysis is an effective way to evaluate the financial results of the company to
gauge performance. It provides clear understanding about the Profitability, Liquidity
and Long term Solvency of the firm. It will also aid in the comparison of both the
banks as well as the subsequent changes in liquidity, profitability and NPA position
over the last years. Ratio analysis is the finest method to compare the firm’s
performance across the period of time. Hence the researcher has chosen the ratio
analysis for comparing the SBI (largest public sector bank) and HDFC Bank. (largest
private sector bank)
Chapter II

Review of Literature

2.1 International Reviews

2.2 National Reviews

Chapter II: Review of Literature
2.1 International Reviews
Here are several factors that impact the profitability of banks (Sufian & Habibullah, 2010);
(Dietrich & Wanzenried, 2011). These factors can be broadly classified as either internal
determinants that originate within the firm such as bank size, capital, risk management, expenses
management, and diversification (Molyneux & Thornton, 1992); (BODLA & VERMA, 2006)

or

external determinants that are outside the firm like market concentration, industry size and
ownership, inflation, interest rates, money supply and Gross Domestic Product (GDP)
(Athanasoglou, Brissimis, & Delis, 2008); (Chirwa, 2003).

The effect of main internal factors on profitability has been studied in a number of studies.
(Smirlock & Brown, 1986) investigated the profitability of demand deposits as a feature of total
deposits. Demand deposits seemed to have a substantial positive relationship with earnings,
according to their results. Loan loss provision and net charge offs had a major negative impact
on large bank profitability, according to Miller and Noulas (1997).
These findings revealed that asset and liability composition had an effect on net charge-offs. As a
result, commercial banks' asset liability portfolio decisions are likely to have an effect on their
profitability through net charge-offs. As a result, banks with higher wages and benefits will need
higher net interest margins to stay profitable. (S M Miller , A G Noulas, 1997)
(Ganesan, 2001) looked at the profitability of India's public sector banks and discovered that
interest costs, interest income, other income, deposits per branch, credit to total assets, and the
proportion of priority sector advances were all important determinants of profitability. (El-
Bannay, 2004) looked into it.
Whether or not investment in information technology infrastructure has an effect on bank
profitability in the United Kingdom. The findings revealed that
a bank's profitability is influenced by the number of automated teller machines it has built.
(BODLA & VERMA, 2006) attempted to define the core determinants of profitability of public
sector banks in India, and their findings revealed that non-interest income, operating expenses,
provision, and capital are all important factors. Net profits are inextricably linked to
contingencies and spread.

(Naceur, S, & Goaied, 2001)found that banks with relatively high capital and overhead
expenses have higher net-interest margins and profitability levels in a study of Tunisian banks
from 1980 to 2000. They also discovered that the size of a bank has a negative impact on
profitability, moreover the stock exchange. Bank profitability increased as a result of the
expansion. Furthermore, private banks were discovered to be comparatively more profitable.
They are more successful than their government-owned counterparts.
(SUFIAN, 2009) looked at the factors that influenced Malaysian domestic and foreign
commercial bank profitability from 2000 to 2004. Malaysian banks with higher credit risk and
loan concentration have lower profitability rate, according to research. Banks with a higher
capitalization ratio, on the other hand, have a higher risk of failure.
High running costs and a high proportion of income from non-interest sources were found to be
comparatively more beneficial.

The effect of macroeconomic variables such as concentration, expansion, and inflation on bank
profitability is covered by external determinants of bank profitability (Rajan & Zingales, 1998);
(Athanasoglou, Brissimis, & Delis, 2008); (Chirwa, 2003) looked into the relationship between
market structure and consumer behavior and profitability of Malawi's commercial banks using
time series data from 1970 to 1994. The investigation demonstrates a long-term connection
between bank performance and concentration.

(SUFIAN, 2009) discovered that economic growth has a negative effect on Malaysian bank
profitability. Inflation rates that were higher had a positive effect on the profitability of these
banks. (Molyneux & Thornton, 1992) studied a survey of eighteen European countries.
and discovered that the return on equity and the level of interest rates have a significant positive
relationship on each nation, the concentration of banks, and the ownership of the government.
2.2 National Reviews

Avani Ojha and Hemchandra Jha- has conducted studies on the effect of NPAs on the operations

of the SBI and PNB using various research methods and analyzed the hypothesis based on the

entire study that NPAs play a significant role. Non-performing assets have a significant effect on

bank profitability because they are closely linked to efficiency. The profitability and asset

liability management of Indian banks. NPAs are the product of advances not being recovered or

not being recovered within a certain time frame for a given type of lending. They suggest that

banks analyze NPAs on a regular basis, by intent, borrower, country, and so on. Before

sanctioning, there should be methods and proper inspections of the creditors. (Ojha & Jha,
2018)

Dr. Ganesan and R. Santhanakrishnan has conducted a report on NPAs at the State Bank of
India from 2002-03 to 2011-12 with the aim of deploying capital, analyzing gross NPAs,

investigating the effects of NPAs, and recommending steps to monitor NPAs. They calculated

the averages and standard deviations to test the hypothesis, and the results were based on the

desired outcomes. They put the hypothesis to the test by estimating averages and standard

deviations, and then comparing the results to the desired outcomes. They discovered that the

banking industry has changed dramatically since the first phase of economic liberalization, and

that credit management has become increasingly important as a result. NPAs has increased with

economic growth and aggressive lending practices. (Santhankrishnan & Ganesan, 2013)

Manisha Raj, Aashita Jain, Shruti Bansal, and Tanya Verma conducted a report on non-

performing assets (NPAs) and conducted a “A comparative study of SBI and ICICI Bank from

2014-17.” They primarily conducted a report on nonperforming assets (NPAs) to examine the

pattern of NPAs at State Bank of India and ICICI Bank over a four-year period from 2014 to

2017. They also compared overall advances, net benefit, gross NPAs, and net NP from table to

table. They looked for a linear relationship between net profit and net NPAs in both banks during

the research. After conducting research, they came to the conclusion that managing

non-performing assets (NPAs) is a difficult challenge for any bank in the banking industry. After

analyzing the data for the given years, it appears that the biggest problem for both banks in terms

of liquidity is that NPAs have increased while profitability has decreased. Despite the fact that

SBI has a higher NPA ratio than ICICI Bank.

Since SBI is a public sector bank, it is more vulnerable to losing money if it extends loans to the

general public. In the case of ICICI Bank, their investigation discovered that no significant
benefit or loss has been reported, but that NPAs are periodically settled against the bank’s

profitability. In the event that SBI’s condition worsens as a result of rising NPAs. (RAJ, Jain,
Bansal, & Verma, 2018)

Swathi.M.S. and Sridhar.K. conducted a study of non-performing assets from 2007 to 2013 and

analyzed the methods for resolving NPAs for public sector banks, private sector banks, and other

types of banks. To conclude the analysis, they mostly relied on secondary data released by banks

at the end of each quarter and year, as well as the RBI annual reports. They have taken the net

and gross Non-Performing Assets to assess and find the facts and figures in the analysis using

data derived from secondary sources. They investigated the causes and factors that influence

NPAs. Willful defaults by customers of various banks is the key cause, according to the central

light. Other factors they discovered during the study included lenient lending norms, industrial

crises, fund diversification, higher debt and borrowing costs, and a sudden stock market

downturn. Lok Adalat, enactment of the SARFAESI Act, Asset Reconstruction Company,

corporate debt restructuring, and other solutions are also suggested by them to solve the

problems. (Swathi.M.S & Sridhar., 2019)

The first mention of bankers is that of the ‘Shroffs,’ ‘Seths,’ ‘Sahukars,’ ‘Mahajans,’

and ‘Chettis,’ who were doing similar work in the past. In her article on the history of banking,

Srivastava (2001) mentions the presence of these early forms of bankers.

‘Indian Banking History’ is a book about the history of Indian banking. She goes on to say that
these small businesses were run by indigenous bankers. Their activities ranged from small
money lenders to Shroffs with massive conglomerates Corporations they ran are much bigger
and more specialized company than they did before even greater than an ordinary bank.
(Shrivastava, 2001)

Tiwari (1959) investigated the growth and development of the Indian banking system. He claims

that Allahabad Bank (founded in 1865) was the first bank owned entirely by Indians, followed by

Punjab National Bank (1894). A large number of other banks like Bank of India, Central Bank of

India, and other Indian banks were founded between 1906 and 1913. Bank of Baroda, Canara

Bank, Indian Bank, and Bank of Mysore are some of the most well-known banks in India.
(Tiwari, 1959)

The performance of public sector banks has declined dramatically since nationalization, with

more than half of them having a negative net worth. Recognizing that a sound banking system is

essential for any country’s growth, the ‘Banking Sector Reforms’ were introduced by the

government at the time. The first move was to set up a committee to implement the banking

reforms.

The Narasimham Committee was established in 1989 to implement these reforms. In 1991, the

Committee issued its first report, which included recommendations such as lowering the

Statutory Liquidity Ratio (SLR) to 25% over a five-year period and gradually lowering the SLR.

CRR (Cash Reserve Ratio) of 3-5 percent. It also suggested that guided credit be phased out.

Programs and a re-definition of the priority field are in the works. The prohibition on

estabilishing new private banks. Branch licensing was also abolished, according to the
Narasimham Committee Report.

In 1991, The committee’s second report, released in 1998, recommended that the two

organizations be merged. Banks in the public sector that are strong and those that are poor are

being closed. The committee also promoted a healthy rivalry between public and private sector

banks by recommending the Golden Handshake Scheme. (Arora, 2017)

Following the Narasimham Committee’s recommendations, the profitability and growth of

Indian banks improved significantly. Deposits as a percentage of GDP increased from 48.6% in
1990 to 60.4 percent in 2010. In 2002, the credit rating rose from 29.5

percent to 39 percent. (Radha, 2003)

According to Malayadri and Sirisha (2011), in their paper titled “A Comparative Study of Non-

Performing Assets in Indian Banking Industry,” there has been a rise in advances and a decrease

in the NPA ratio in both public and private sector banks, resulting in improved financial

performance. Quality of the asset They also came to the conclusion that the banks’ NPA

management had improved as a result of the study. The regulatory authorities implemented

prudential standards and measures. (Malayadri, Sirisha, & Pacha, 2011)

In their paper titled “NPAs Reduction Strategies for Commercial Banks in India,” Prasad and

Veena (2011) reported that NPAs have a negative effect on the ROA because they do not

produce any net interest income. As a result, bank profits are reduced, and recycling of waste is
limited. (Bhavani, G.V., Veena, & D, 2011)
The NPAs study comparing public and private sector banks was conducted by Kajal Chaudhari
and Monika Sharma in June 2011. To detect any diversion of funds, effective and regular follow-
up of the end usage of the funds sanctioned is needed. This procedure can be repeated every
quarter to ensure that any accounts that become NPA are properly accounted for. (Chaudhari &
Sharma, 2011)

PROF. SIRAJ. K. K & SIRAJ. K. K (DR). NPA, according to P. SUDARSANAN PILLAI

(February 2014), is a virus that has infected the banking sector. It has an effect on liquidity and
profitability, as well as posing a challenge to asset quality and bank survival. The study
concluded that nonperforming assets (NPAs) continue to be a major danger, and the incremental
aspect explained by NPA additions raises serious doubts about the efficiency of Indian banks'
credit risk management. (PILLAI & K.K, 2012)

Chetan Dudhe (August 2017) discovered a connection between gross nonperforming assets and
net profit. Every country has a problem with nonperforming loans, and financial institutions
should devise new strategies to boost loan recovery. Non-performing assets (NPAs) are
impacting financial institutions' financial and psychological results. (Dudhe, 2017)
 Chapter III

Research Methodology

3.1 Objectives of the study

3.2 Research Hypothesis

3.3 Scope of the Study

3.4 Research Design

3.5 Limitations of the study

 Chapter III: Research Methodology

3.1 Objectives of the Study

 To compare and evaluate the financial performance of SBI and HDFC Bank.
 To understand and compare the trends of NPA of both the banks over the last three years.
 To ascertain yearly fluctuations in terms of profitability, liquidity and efficiency of SBI and
HDFC Bank.

3.2 Research Hypothesis

Ho1 = there is no significant relationship between the gross NPA ratio of SBI and
HDFC over the last three years.

Ho2 = there is no significant relationship between the net NPA ratio of SBI and
HDFC over the last three years.

3.3 Scope of the Study

In the present study, an attempt has been made to measure, evaluate and compare the financial
performance of SBI and HDFC. The study is based on secondary data that has been collected
through annual reports of the respected banks, websites, journals, documents and other published
information. The study covers the period of 3 years i.e. is from year 2017-18, 2018-19 and 2019-
20. Ratio analysis was applied to analyze and compare the trends in financial performance. Mean
and t test have also been deployed to analyze the trends in banking profitability.

3.4 Research Design

 DURATION OF STUDY- The period of this study will cover last 3 years of the
financial data- 2017-18, 2018-19, 2019-20.

 DATA COLLECTION PROCEDURE- Secondary Data will be used in this study

to compare the financial statements of both the banks over the last three years.

 DATA COLLECTION METHODS- Data has been collected through Ratio Analysis.
  STATISTICAL TOOLS AND TESTS USED- The statistical tool used in the study is
Mean and inferential statistic T-test has been conducted to know the significant
relation between the NPA Ratios of both the banks.

3.5 Limitations of the Study

 The study is confined only to the selected and restricted indicators and the study is
confined only for a period of three years.
 As the analysis is entirely based on secondary data, it has its drawbacks, firms can
cheat and window dress their financial statements.
 Ratio analysis metrics do not necessarily represent future performance of the
company.
 Chapter IV

Data Representation & Interpretation

4.1 Data Representation & Analysis

4.2 Hypothesis Testing

 Chapter IV: Data Representation and Interpretation

4.1 Data Representation and Interpretation

Ratio analysis of SBI and HDFC bank from its annual reports for the year 2017-18, 2018-19 and
2019-20 is presented below-:

I NON PERFORMING ASSETS RATIOS-

NON-PERFORMING ASSETS (NPA) are assets for which interest is overdue for more than 90
days. It includes-

 Gross non performing asset ratio

Gross non-performing assets- Gross non-performing assets refer to the total amount of the debts
that an organization has failed to collect or the people owing the organization has failed to honor
their contractual obligations of paying both the principal and interest amount.

Gross non-performing loans are the sum of all the loans that have been defaulted by the
individuals who have acquired loans from the financial institution. This means that all loans
defaulted are added together to form gross non-performing assets.

Formula-

Gross NPA Ratio= (A1 + A2 + A3 ……………………. + An)/Gross Advances

( A1 stands for loans given to person number one, A2 for loans given to person number two
etc)
YEAR SBI HDFC
2017-18 10.91 1.30
2018-19 7.53 1.36
2019-20 6.15 1.26
Average 8.19 1.30
(Table 1 shows the % of Gross NPA of SBI and HDFC for last three years)

12

10

6 SBI
HDFC
4

0
2017-18 2018-19 2019-20

(Graph 1 shows the % of Gross NPAs of SBI and HDFC for last three years)

Interpretation: The gross NPA ratio of SBI stood at 10.91 in 2017-18 while that of HDFC was
1.30 in the same year. In 2018-19 the ratio of SBI dropped down to 7.53 and that of HDFC
increased to 1.36. In the year 2019-20 the ratio of SBI further dropped down to 6.15 while that of
HDFC was 1.26.

So the average Gross NPA ratio of SBI stood at 8.19 while that of HDFC was much lesser at
1.30, which clearly shows that SBI’s asset quality is in very poor shape.
  NET NON PERFORMING ASSESTS RATIO

Net non-performing assets are the amount that is realized after provision amount has been
deducted from the gross non-performing assets. It is the actual loss that the organization incurs
after loan defaults.

Formula-

Net NPA Ratio = (Total Gross NPA) – (Provision for Unpaid Debts)/Gross Advances

YEAR SBI HDFC

2017-18 5.73 0.40
2018-19 3.01 0.39
2019-20 2.23 0.36
Average 3.65 0.38
(Table 2 shows the % of Net NPA of SBI and HDFC for last three years)

4
SBI
3
HDFC
2

0
2017-18 2018-19 2019-20

(Table 2 shows the % of Net NPA of SBI and HDFC for last three years)
Interpretation: In the year 2017-18, the Net NPA ratio of SBI stood at 5.73 while that of HDFC
was much lesser i.e. 0.40. In year 2018-19, the ratio of SBI further dropped to 3.01 and that of
HDFC was at 0.39. In 2019-20, the ratio again dropped to 2.23 and 0.36 respectively, which
shows the Net NPAs gradually started decreasing.

The average gross NPA ratio of SBI was at 3.65 and that of HDFC was at 0.38. Therefore it
shows that HDFC has better overall financial health and it is better than SBI in managing their
net NPAs.

II Efficiency Ratios

Efficiency ratios measure a company’s ability to use its assets and manage its liabilities
effectively in the current period or in the short-term. These ratios measure how efficiently a
company uses its assets to generate revenues and its ability to manage those assets.

The efficiency ratio of a bank can be used to determine how efficient a bank is. This reveals the
financial health of the institution.

 Fixed Asset Turnover Ratio

Fixed-asset turnover ratio is a type of efficiency ratio that measures sales to the value of fixed
assets. It indicates how well the business is using its fixed assets to generate sales. Generally, a
high fixed assets turnover ratio indicates better utilization of fixed assets and a low ratio means
inefficient or under-utilization of fixed assets.

Fixed Asset Turnover Ratio = Net Sales / Average Fixed Assets

YEAR SBI HDFC

2017-18 0.08 0.08
2018-19 0.07 0.08
2019-20 0.07 0.08
Average 0.07 0.08
(Table 3 showing Fixed Asset Turnover Ratio of SBI and HDFC for the last three years)

0.082

0.08

0.078

0.076

0.074
SBI
0.072
HDFC
0.07

0.068

0.066

0.064
2017-18 2018-19 2019-20

(Graph 3 showing Fixed Asset Turnover Ratio of SBI and HDFC for the last three years)
Interpretation: The fixed asset turnover ratio of both SBI and HDFC stood at 0.08 in the year
2017-18, in 2018-19, the ratio of SBI was at 0.07 while that of HDFC remained same at 0.08. In
2019-20, the ratio again remained same as 0.07 and 0.08 respectively.

The average Fixed Assets Turnover ratio of SBI was 0.07 and that of HDFC was 0.08 which
shows that both the banks are inefficiently using their fixed assets.

III Leverage Financial Ratios

Leverage ratios measure the amount of capital that comes from debt. In other words, leverage
financial ratios are used to evaluate a company’s debt level.

 Debt to Equity Ratio

The debt to equity ratio is a type of leverage ratio that calculates the weight of total debt and
financial liabilities against shareholders’ equity. The ideal debt to equity ratio is 2:1 (because the
cost of debt is lower than the cost of equity.)

Debt to equity ratio = Total liabilities / Shareholder’s equity

YEAR SBI HDFC

2017-18 15.79 8.58
2018-19 16.89 6.97
2019-20 17.08 7.56
Average 16.59 7.70
(Table 4 showing Debt to Equity Ratio of SBI and HDFC for the last three years)
 18
16
14
12
10
8 Sum of SBI

6 Sum of HDFC

4
2
0
2017-18
2018-19
2019-20

(Graph 4 showing Debt to Equity Ratio of SBI and HDFC for the last three years)

Interpretation: In the year 2017-18, the debt to equity ratio of SBI is very high at 15.79 and that
of HDFC is 8.58. In 2018-19, the DER of SBI increased to 16.89 while that of HDFC decreased
to 6.97. Lastly in 2019-20, the ratio further increased to 17.08 and 7.56 respectively.

The average debt to equity of SBI stood at 16.59 and that of HDFC stood at 7.70. It suggests that
SBI is at higher default risk than HDFC and both of the banks are financing a significant amount
of their potential growth through borrowing.
IV Profitability Ratios

Profitability ratios measure a company’s ability to generate income relative to revenue, balance
sheet assets, operating costs, and equity. Common profitability financial ratios include the
following:

 Operating Profit Ratio

Operating profit ratio is a profitability or performance ratio that compares the operating income
of a company to its net sales to determine operating efficiency.

Operating Profit Ratio = Operating income / Net sales

YEAR SBI HDFC

2017-18 8.14 22.33
2018-19 8.95 15.87
2019-20 -6.65 12.66
Average 3.48 16.95
(Table 5 showing Operating Profit Ratio of SBI and HDFC for the last three year

25

20

15

10 SBI

5 HDFC

0
2017-18 2018-19 2019-20
-5

-10
 (Graph 5 showing Operating Profit Ratio of SBI and HDFC for the last three years)

Interpretation: In 2017-18, the operating profit ratio of SBI is 8.14 and that of HDFC is much
higher at 22.33. In the year 2018-19, the ratio of SBI stood at 8.95 and that of HDFC at 15.87. In
2019-20, SBI had a negative operating profit ratio which shows its overhead costs are too high
and they can only survive as long as their cash reserves will allow. If they begin to run out of
cash in hand, they may have to sell assets in order to cover their expenses and remain in
operation.

The average operating profit ratio of SBI student 3.48 and that of HDFC stood at 16.95 which
suggest that SBI has low operating profit margin while HDFC has very high operating profit
margin.

 Gross Profit Ratio

The gross profit ratio compares the gross profit of a company to its net sales

to show how much profit a company makes after paying its cost of goods sold.
Gross Profit Ratio = Gross profit / Net sales

YEAR SBI HDFC

2017-18 6.81 21.20
2018-19 7.62 14.72
2019-20 -7.93 11.62
Average 2.16 15.84
(Table 6 showing Gross Profit Ratio of SBI and HDFC for the last three years)

25

20

15
SBI
10
HDFC
5

0
2017-18 2018-19 2019-20
-5

-10

(Graph 6 showing Gross Profit Ratio of SBI and HDFC for the last three years)

Interpretation: In 2017-18, the gross profit ratio of SBI stood at 6.81 while that of HDFC stood at
21.20. In 2018-19, ratio of SBI increased to 7.62 while that of HDFC decreased to 14.72. In
2019-20 SBI had a negative gross profit ratio of -7.93 which shows that the sales are not enough
to cover the costs incurred to manufacture the goods or provide the services.
The average gross profit ratio of SBI stood at 2.16 while that of HDFC was much higher at 15.84
and it suggests that HDFC is successfully producing profits over and above cost.
  Net Profit Ratio
Also known as Net Profit Margin ratio, it establishes a relationship between net profit earned and
net revenue generated from operations (net sales). Net profit ratio is a profitability ratio which is
expressed as a percentage hence it is multiplied by 100.

NP ratio helps to determine the overall efficiency of the business’ operations, furthermore, it is
an indicator of how well a company’s trading activities are performing.

Net Profit Ratio = (Net profit ÷ Net sales) x 100

YEAR SBI HDFC

2017-18 -2.96 21.79
2018-19 0.35 21.29
2019-20 5.63 22.86
Average 1 22
(Table 7 showing Net Profit Ratio of SBI and HDFC for the last three years)

25

20

15

SBI
10
HDFC

0
2017-18 2018-19 2019-20
-5

(Graph 7 showing Net Profit Ratio of SBI and HDFC for the last three years)
Interpretation: The net profit ratio of SBI stood at -2.96 at while that of HDFC stood at 21.79 in
2018-19 the ratio of SBI was at 0.35 while that of HDFC was at 21.29. In 2019-20 the net profit
ratio of SBI increased to 5.63 while that of HDFC increase to 22.86.

The average net profit ratio of SBI stood at 1 while that of HDFC stood at 22 which show that
SBI is making less money than it is spending and HDFC's overall efficiency is quite good.

Liquidity Ratios-

Liquidity ratios are financial ratios that measure a company’s ability to repay both short- and
long-term obligations. Common liquidity ratios include the following:

 Current Ratio

The current ratio is a liquidity ratio that measures a company’s ability to pay off short-term
obligations or those due within one year. This ratio measures the financial strength of the
company. Generally 2:1 is treated as the ideal current ratio.

Current Ratio = Current Assets / Current Liabilities

YEAR SBI HDFC

2017-18 1.36 0.89
2018-19 1.83 0.89
2019-20 1.78 0.80
Average 1.66 0.86
(Table 8 showing Current Ratio of SBI and HDFC for the last three years)
 2
1.8
1.6
1.4
1.2
1 SBI

0.8 HDFC

0.6
0.4
0.2
0
2017-18 2018-19 2019-20

(Graph 8 showing Current Ratios of SBI and HDFC for the last three years)

Interpretation: In 2017-18 the current ratio of SBI stood as 1.36 and that of HDFC stood at 0.89.
In 2019-20, the ratio of SBI was 1.83 and that of HDFC was 0.89. In 2019-20, the ratio stood at
1.78 and 0.80 respectively.

The average of current assets ratio of SBI was 1.66 and that of HDFC was at 0.86 which shows
that SBI is more capable in paying its short term obligations.

4.2 Hypothesis Testing

T-test at significance level of 0.05 was used to analyze the financial performance of SBI and
HDFC bank.

Ho1 = there is no significant relationship between the gross NPA ratio of SBI and HDFC over
the last three years.
 SBI HDFC
Mean 3.656667 0.383333
Variance 3.376133 0.000433
Observations 3 3
Pooled Variance 1.688283
Hypothesized Mean 0
Difference
df 4
t Stat 3.085412
P(T<=t) one-tail 0.018369
t Critical one-tail 2.131847
P(T<=t) two-tail 0.036738
t Critical two-tail 2.776445

RESULT: A two sample t test assuming equal variances was conducted to check if there was
significant difference between the gross NPA ratio of SBI and HDFC bank over the last three
years.

There was statistically significant difference between the average gross NPA ratios of SBI and
HDFC bank. Since p<0.05(p=0.03), H01 is rejected and therefore we it is proved that there is
significant relationship between the gross NPA ratio of SBI and HDFC bank over the last
three years.
Ho2 = there is no significant relationship between the net NPA ratio of SBI and HDFC over the
last three years.

SBI HDFC
Mean 8.196667 1.306667
Variance 5.997733 0.002533
Observations 3 3
Pooled Variance 3.000133
Hypothesized Mean 0
Difference
df 4
t Stat 4.871857
P(T<=t) one-tail 0.004104
t Critical one-tail 2.131847
P(T<=t) two-tail 0.008209
t Critical two-tail 2.776445
RESULT: A two sample t test assuming equal variances was conducted to check if there was
significant difference between the net NPA ratio of SBI and HDFC bank over the last three
years.

There was statistically significant difference between the average net NPA ratios of SBI and
HDFC bank. Since p<0.05(p=0.008), H02 is rejected and therefore we it is proved that there is
significant relationship between the net NPA ratio of SBI and HDFC bank over the last
three years.
 Chapter V

Results & Discussions

5.1 Major Findings

5.2 Discussions & Suggestions

5.3 Conclusions
5.1 Major Findings

1. NPA Ratios- From graph 1 and graph 2 it is clear that over the last three years,
NPAs of SBI are far more than that of HDFC which clearly shows that asset quality
and overall financial health of SBI is in poor shape.
 Among the last three years 2017-18 has been proved to the worst year for SBI with
highest NPA ratios and HDFC had highest gross and net NPA ratios in 2018-19 and
2017-18 respectively.

2. Efficiency Ratios
Fixed Assets Turnover ratio-From table and graph no. 3 it is found that the average fixed asset
turnover ratios of SBI and HDFC were almost same during the last 3 years which shows that
both the banks were inefficiently using their fixed assets.

3. Leverage Ratios
 Debt to equity ratio- It is used to evaluate a company's debt level which is not
satisfactory of both the banks. The average debt equity of SBI stood at 16.59 and that of
HDFC stood at 7.70 which shows that SBI is at higher default risk than HDFC.
Among the last three years it is observed that SBI had highest debt in 2019-20 whereas
HDFC had the highest in 2017-18.

4. Profitability Ratios
 Operating Profit ratio- Further in graph 5 it is clear that the operating profit ratio of
SBI is very less while that of HDFC is completely satisfactory which shows that the
company is making enough money from its ongoing operations to pay for its variable
costs as well as its fixed costs.
Gross Profit ratio- Graph 6 shows that gross profit ratio of SBI is again very less than that of
HDFC over the last three years. SBI had a negative gross profit ratio of -7.93 in the year 2019-20
issues that the sales and not enough to cover the cost incurred in manufacturing activities. But in
the same year HDFC's GP ratio was highest which shows the company has more cash to pay for
indirect and other costs such as interest raph 7 show that the net profit ratio of SBI is less than
that of HDFC over the last 3 years which shows that HDFC's overall efficiency is better.

 Net Profit Ratio- Graph 8 shows that current ratio of SBI is better than that of HDFC
which shows that SBI is more capable in paying it's short term obligations.

Among the last 3 years 2018-19 has proved to be the best year for both the banks with highest
current ratio of SBI at 1.83 and that of HDFC stood at 0.89.

5. Lastly a two sample t test assuming equal variances was conducted to check if there
was significant difference between the NPA ratios of SBI and HDFC bank over the
last 3 years.
 In the test the null hypothesis was rejected and therefore it was proved that there was
significant difference between the NPA ratios of SBI and HDFC.
 5.2 Discussions and Suggestions

 As we see, the debt equity ratio of SBI is higher than HDFC so it should try to restructure
its debt and NPAs. The borrowings should be reduced to the level that it is not more than
4-5 times of equity. It will decrease their NPAs. Also this will result in better financial
health of the companies.

 Banks should limit its huge lending to trusted companies or individuals so that recovery
becomes comparatively faster and easier which would consequently result in less NPAs.

 We can increase the gross profit ratio of SBI by generating more revenue by managing
the costs of company efficiently. Working on the products and services of the bank and
making different changes in little time will increase the revenue.

 Reducing extra operating expenses and direct overhead expenses will increase the profit
margin of the Banks.

 The current ratio of HDFC Bank can be improved by-

1. Delaying any capital purchases that would require any cash payments.

2. Looking to see if any term loans can be re-amortized.

3. Selling any capital assets that are not generating a return to the business (use
cash to reduce current debt).
 5.3 Conclusion

After the above study on the comparative analysis of SBI and HDFC it was discovered that
both the banks are managing their ratios to the best of their abilities within the specified
parameters. However, when we compare the two banks, it appears that HDFC Bank has an edge
over SBI, reason being HDFC Bank have lower NPAs than the SBI. HDFC Bank having average
Gross NPAs less than 1.5% while SBI having the GNPAs near about 8.1% as per the annual
report of both banks over the last three years.
HDFC Bank has managed their NPA and profitability ratios in a very efficient manner and are
playing an important role as a profitable commercial bank, while SBI is controlling its ratios
particularly the current assets ratio but is not as competitive in terms of net profit and Non
Performing Assets (NPAs).
SBI needs to be more focused on managing the net profits and NPAs part to be a commercially
successful bank.
During, the comparative study of SBI v/s HDFC Bank it is found that HDFC Banks has never
gone above 2% in net NPAs during the study period while SBI has never gone below 6% during
the study period.
This is an eye-opening comparison that demonstrates SBI's need to concentrate on acquiring
high-quality assets, otherwise they will be compromising customers' hard-earned money in the
future.

In order to study the trends of NPA, t-Test has been used, the results of which have been shown
in the relevant tables. The comparative analysis of the profitability of the two banks clearly
reveals that there is no significant relation between the NPA ratios of both the Banks
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 Annexure

 Balance sheet of State Bank of India [SBI]

 PROFIT & LOSS A/C
 Balance sheet of HDFC BANK
 PROFIT& LOSS A/C

Balance sheet of State Bank of India [SBI]

 MAR 20 MAR 19 MAR 18
BALANCE SHEET OF
STATE BANK OF
INDIA (in Rs. Cr.)

12 mths 12 mths 12 mths

EQUITIES AND
LIABILITIES

SHAREHOLDER'S
FUNDS

Equity Share Capital 892.46 892.46 892.46

TOTAL SHARE 892.46 892.46 892.46

CAPITAL

Revaluation Reserve 23,762.67 24,653.94 24,847.99

Reserves and Surplus 207,352.30 195,367.42 193,388.12

Total Reserves and 231,114.97 220,021.36 218,236.10

Surplus

TOTAL 232,007.43 220,913.82 219,128.56

SHAREHOLDERS
FUNDS

Deposits 3,241,620.73 2,911,386.01 2,706,343.29

Borrowings 314,655.65 403,017.12 362,142.07

Other Liabilities and 163,110.10 145,597.30 167,138.08

Provisions

TOTAL CAPITAL 3,951,393.92 3,680,914.25 3,454,752.00

AND LIABILITIES

ASSETS

Cash and Balances with 166,735.78 176,932.42 150,397.18

Reserve Bank of India

Balances with Banks 84,361.23 45,557.69 41,501.46

Money at Call and Short
Notice

Investments 1,046,954.52 967,021.95 1,060,986.72

Advances 2,325,289.56 2,185,876.92 1,934,880.19

Fixed Assets 38,439.28 39,197.57 39,992.25

Other Assets 289,613.55 266,327.70 226,994.20

TOTAL ASSETS 3,951,393.92 3,680,914.25 3,454,752.00

OTHER
ADDITIONAL
INFORMATION

Number of Branches 22,141.00 22,010.00 22,414.00

Number of Employees 249,448.00 257,252.00 264,041.00

Capital Adequacy Ratios 13.00 13.00 13.00

(%)

KEY
PERFORMANCE
INDICATORS

Tier 1 (%) 11.00 11.00 10.00

Tier 2 (%) 2.00 2.00 2.00

ASSETS QUALITY

Gross NPA 149,091.85 172,753.60 223,427.46

Gross NPA (%) 6.00 8.00 11.00

Net NPA 51,871.30 658,947.40 110,854.70

Net NPA (%) 2.23 3.00 6.00

Net NPA To Advances 2.00 3.00 6.00

(%)

CONTINGENT
LIABILITIES,
COMMITMENTS

Bills for Collection 55,758.16 70,022.54 74,027.90

Contingent Liabilities 1,214,994.61 1,116,081.46 1,162,020.69

PROFIT& LOSS A/C

PROFIT & LOSS ACCOUNT OF STATE MAR 20 MAR 19 MAR 18

BANK OF INDIA (in Rs. Cr.)

12 mths 12 mths 12 mths

INCOME

Interest / Discount on Advances / Bills 179,748.84 161,640.23 141,363.17

Income from Investments 68,204.72 74,406.16 70,337.62

Interest on Balance with RBI and Other Inter- 2,920.41 1,179.07 2,250.00
Bank funds

Others 6,449.63 5,643.19 6,548.53

TOTAL INTEREST EARNED 257,323.59 242,868.65 220,499.32

Other Income 45,221.48 36,774.89 44,600.69

TOTAL INCOME 302,545.07 279,643.54 265,100.00

EXPENDITURE

Interest Expended 159,238.77 154,519.78 145,645.60

Payments to and Provisions for Employees 45,714.97 41,054.71 33,178.68

Depreciation 3,303.81 3,212.31 2,919.47

Operating Expenses (excludes Employee Cost 26,154.91 25,420.72 23,845.30

& Depreciation)

TOTAL OPERATING EXPENSES 75,173.69 69,687.74 59,943.45

Provision Towards Income Tax 2,803.14 491.13 673.54

Provision Towards Deferred Tax 7,510.99 954.12 -9,654.33

Other Provisions and Contingencies 43,330.37 53,828.55 75,039.20

TOTAL PROVISIONS AND 53,644.50 54,573.80 66,058.41

CONTINGENCIES

TOTAL EXPENDITURE 288,056.96 278,781.31 271,647.46

NET PROFIT / LOSS FOR THE YEAR 14,488.11 862.23 -6,547.45

NET PROFIT / LOSS AFTER EI & PRIOR 14,488.11 862.23 -6,547.45

YEAR ITEMS

Profit / Loss Brought Forward -15,226.06 -15,078.57 0.32

TOTAL PROFIT / LOSS AVAILABLE FOR -737.94 -14,216.34 -12,954.83

APPROPRIATIONS

APPROPRIATIONS

Transfer To / From Statutory Reserve 4,346.43 258.67 0.00

Transfer To / From Capital Reserve 3,985.84 379.21 3,288.88

Transfer To / From Revenue And Other 308.20 371.84 -1,165.14
Reserves

Dividend and Dividend Tax for The Previous 0.00 0.00 0.00
Year

Equity Share Dividend 0.00 0.00 0.00

Tax On Dividend 0.00 0.00 0.00

Balance Carried Over To Balance Sheet -10,498.30 -15,226.06 -15,078.57

TOTAL APPROPRIATIONS -737.94 -14,216.34 -12,954.83

OTHER INFORMATION

EARNINGS PER SHARE

Basic EPS (Rs.) 16.23 0.97 -7.67

Diluted EPS (Rs.) 16.23 0.97 -7.67

DIVIDEND PERCENTAGE

Equity Dividend Rate (%) 0.00 0.00 0.00

 BALANCE SHEET OF HDFC BANK

BALANCE SHEET OF HDFC MAR 20 MAR 19 MAR 18

BANK (in Rs. Cr.)

12 mths 12 mths 12 mths

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS

Equity Share Capital 548.33 544.66 519.02

TOTAL SHARE CAPITAL 548.33 544.66 519.02

Revaluation Reserve 0.00 0.00 0.00

Reserves and Surplus 170,437.70 148,661.69 105,775.98

Total Reserves and Surplus 170,437.70 148,661.69 105,775.98

TOTAL SHAREHOLDERS FUNDS 170,986.03 149,206.35 106,295.00

Deposits 1,147,502.29 923,140.93 788,770.64

Borrowings 144,628.54 117,085.12 123,104.97

Other Liabilities and Provisions 67,394.40 55,108.29 45,763.72

TOTAL CAPITAL AND LIABILITIES 1,530,511.26 1,244,540.69 1,063,934.32

ASSETS

Cash and Balances with Reserve Bank of 72,205.12 46,763.62 104,670.47

India

Balances with Banks Money at Call and 14,413.60 34,584.02 18,244.61

Short Notice

Investments 391,826.66 290,587.88 242,200.24

Advances 993,702.88 819,401.22 658,333.09

Fixed Assets 4,431.92 4,030.00 3,607.20

Other Assets 53,931.09 49,173.95 36,878.70

TOTAL ASSETS 1,530,511.26 1,244,540.69 1,063,934.32

OTHER ADDITIONAL
INFORMATION

Number of Branches 5,416.00 5,103.00 4,787.00

Number of Employees 116,971.00 98,061.00 88,253.00

Capital Adequacy Ratios (%) 19.00 17.00 15.00

KEY PERFORMANCE INDICATORS

Tier 1 (%) 17.00 16.00 13.00

Tier 2 (%) 1.00 1.00 2.00

ASSETS QUALITY

Gross NPA 12,649.97 11,224.16 8,606.97

Gross NPA (%) 1.00 1.00 1.00

Net NPA 3,542.36 3,214.52 2,601.02

Net NPA (%) 0.36 0.00 0.00

Net NPA To Advances (%) 0.00 0.00 0.00

CONTINGENT LIABILITIES,
COMMITMENTS

Bills for Collection 51,584.90 49,952.80 42,753.83

Contingent Liabilities 1,128,953.40 1,024,715.12 875,488.23

 Profit & loss A/C

PROFIT & LOSS ACCOUNT OF HDFC MAR 20 MAR 19 MAR 18

BANK (in Rs. Cr.)

12 mths 12 mths 12 mths

INCOME

Interest / Discount on Advances / Bills 91,787.88 77,544.19 62,661.79

Income from Investments 20,633.32 19,997.46 16,222.37

Interest on Balance with RBI and Other Inter- 1,828.93 635.70 523.88
Bank funds

Others 562.52 794.70 833.31

TOTAL INTEREST EARNED 114,812.65 98,972.05 80,241.36

Other Income 23,260.82 17,625.88 15,220.30

TOTAL INCOME 138,073.47 116,597.94 95,461.66

EXPENDITURE

Interest Expended 58,626.40 50,728.83 40,146.49

Payments to and Provisions for Employees 9,525.67 7,761.76 6,805.74

Depreciation 1,195.85 1,140.10 906.34

Operating Expenses (excludes Employee Cost & 19,976.01 17,217.51 14,978.30

Depreciation)

TOTAL OPERATING EXPENSES 30,697.53 26,119.37 22,690.38

Provision Towards Income Tax 9,833.15 12,129.61 10,107.25

Provision Towards Deferred Tax 516.69 -1,008.12 -896.68

Other Provisions and Contingencies 12,142.39 7,550.08 5,927.49

TOTAL PROVISIONS AND 22,492.23 18,671.57 15,138.06

CONTINGENCIES

TOTAL EXPENDITURE 111,816.15 95,519.77 77,974.93

NET PROFIT / LOSS FOR THE YEAR 26,257.32 21,078.17 17,486.73

NET PROFIT / LOSS AFTER EI & PRIOR 26,257.32 21,078.17 17,486.73

YEAR ITEMS

Profit / Loss Brought Forward 49,223.30 40,453.42 32,668.94

TOTAL PROFIT / LOSS AVAILABLE FOR 75,480.62 61,531.58 50,155.67

APPROPRIATIONS

APPROPRIATIONS

Transfer To / From Statutory Reserve 6,564.33 5,269.54 4,371.68

Transfer To / From Capital Reserve 1,123.85 105.34 235.52

Transfer To / From Revenue And Other 0.00 0.00 0.00

Reserves

Dividend and Dividend Tax for The Previous 0.00 0.00 3,390.58
Year

Equity Share Dividend 6,540.31 4,052.59 0.00

Tax On Dividend 0.00 0.00 0.00

Balance Carried Over To Balance Sheet 57,492.40 49,223.30 40,453.42

TOTAL APPROPRIATIONS 75,480.62 61,531.58 50,155.67

OTHER INFORMATION

EARNINGS PER SHARE

Basic EPS (Rs.) 48.01 78.65 67.76

Diluted EPS (Rs.) 47.66 77.87 66.84

DIVIDEND PERCENTAGE

Equity Dividend Rate (%) 250.00 750.00 650.00