MAJOR RESEARCH PROJECT

On
“COMPARATIVE ANALYSIS OF SBI AND HDFC BY
USING CAMEL FRAMEWORK”

Submitted to
Devi Ahilya University, Indore
For partial fulfilment of the requirement for the Degree of
Master of Business Administration (Full-Time)
Batch 2021-23

Guided by- Submitted by –

Dr. Neha Shrivastava Saurabh singh
Assistant Professor IPS ACADEMY IBMR MBA 3 rd Sem IPS ACADEMY

IBMR, IPS ACADEMY

Rajendra Nagar, A.B. Road, Indore-452012 (MP)

1
 PREFACE

The bookish knowledge of any program, which we get from the educational institutions,
is not enough to be used in our day to day life. The more practical knowledge we have the
more beneficial it is for our learning.

To make the students aware of the working of the business world every student of
MASTER OF BUSINESS ADMINISTRATION (3rd Sem) has to undergo a major
research project where he/she experiences many aspects of business under the supervision
of Professional managers.

I strongly believe that the knowledge gained from this experience is more than the
knowledge gained from the theories in the book.

PLACE : INDORE
STUDENT NAME
SAURABH SINGH
MBA (MM) 3 rd Sem

2
 CERTIFICATE

This is to certify that Mr.Saurabh Singh student of Institute of Business

Management and Research, IPS Academy, Indore of MBA(MM) program has
prepared Major Research
Project report on topic “Comparative Analysis of SBI and HDFC by using
Camel Framework” under my guidance.

Internal Examiner (Guide) External Examiner

Director
IBMR, IPS Academy

3
 STUDENT DECLARATION

I Saurabh Singh Student of Institute of business management and research, IPS Academy,
Indore of MBA(MM) program has prepared Major research project report on topic
Comparative Analysis of SBI and HDFC By using camel framework.

The Research as per my knowledge is original and genuine and not published in any
research Journal previously.

Saurabh Singh
MBA(FT) 3 rd Sem

ACKNOWLEDGMENT

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I often wondered why the project reports always began with acknowledgment Now, when
I have undertaken a project myself I realize that project report involves not just the
researcher but so many people that help in making the research possible Therefore, I take
pleasure in beginning the most beautiful part of the report.

I fall short of words to express my gratitude to my guide Dr.Neha Shrivastava who

despite their busy schedule were able to find some time to guide me through trouble and
solve my problems to the best of abilities. Without their unfailing guidance
encouragement and patience this project would not have been possible. It has been a
learning experience under her/him.
I am thankful to my faculty guide Dr. Neha Shrivastava who gave me detailed
instructions during my MRP.

5
 TABLE CONTENT

S NO.. INDEX PAGE NO

1. INTRODUCTION 9-11
2. REVIEW OF LITERATURE 13-14
3. RATIONALE OF STUDY 15
4. OBJECTIVE OF STUDY 15
5, RESEARCH METHODOLOGY 16-17
6. RESEARCH ANALYSIS AND 18-43
INTERPRETATION OF
RESULTS

7. HYPOTHESIS OF THE STUDY 18-43

8. FINDINGS 44
9. CONCLUSIONS 45
10. REFRENCES 46
11. BIBLIOGRAPHY 47

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PROFILE OF HDFC

7
PROFILE OF SBI

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INTRODUCTION
Indian Banking industry is the backbone of the economy and it plays a vital role in
strengthening the financial system of the country. Indian Banking Sector is divided into
many categories like Public Sector Banks, Private Sector Banks, Foreign Banks in India
and Co-operative and Regional Rural Banks. The financial sector plays a major role in
the allocation and mobilization of funds . Banking Institutes plays a key role in the
economic development by providing funds to each and every sector. To study the
changes over the years in the financial data is rendered easy by the use of ratios.
Interbank comparison can also be made by use of ratio analysis of the financial data. A
sound liquidity leads to better profitability and it turn reduces the profitability of default
risk in the future. Risk and return are very important aspect to be considered while
making any decision regarding bank’s finance. The origin of SBI bank in 19th century
with the establishment of bank of Calcutta in 2 June 1806. An act was passed by the
Parliament in 1955 and on1st July 1955 the State bank of India was constituted. State
bank of India popularly known as SBI is one of leading bank of public sector in India.
Now the SBI is largest public bank in India .HDFC bank Limited was the first to receive
an approval from the RBI to set up a bank in the Private sector as part of liberalization of
the Indian Banking Industry. In January 1995 the banks commenced operation as a
scheduled commercial bank. Profitability ratios show that HDFC Bank Limited is more
profitable in comparison to SBI ratio analysis has been a tool for evaluating and assessing
the profitability of the various banks. There are various important parameter to do a
comparative analysis of HDFC Bank & SBI to analyse its performance, efficiency etc.
one such parameter is non performing assets (NPA). A non performing asset (NPA)
refers to a classification for loans or advances that are in default or in arrears. A loan is in
arrears when principal or interest payments are late or missed. A loan is in default when
the lender considers the loan agreement to be broken and the debtor is unable to meet his
obligations study is an attempt to compare the non- performing assets of SBI and HDFC
Bank using the secondary data analysis and to comment on their individual performances.
Another comparative aspect is profitability. The financial sector plays a major role in the
allocation and mobilization of funds. Banking Institutes plays a key role in the economic
development by providing funds to each and every sector. To study the changes over the
years in the financial data is rendered easy by the use of ratios. Interbank comparison can
also be made by use of ratio analysis of the financial data. A sound liquidity leads to
better profitability and it turn reduces the profitability of default risk in the future. In the
1980s, CAMEL rating system was first introduced by U. supervisory authorities as a
system of rating for on-site examination of banking institutions. This rating ensures a
bank’s healthy conditions by reviewing different aspects of a bank based on variety of
information sources such as financial statement, funding sources, macro-economic data,
budget and cash flow. In fact, CAMEL is an acronym for five components of bank safety
and soundness: -

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We will also know the Working & Performance of the banks &
Analyse how tentavies with a view

C (Capital adequacy)
A (Assets)
M (Management capability)
E (Earnings)
L (Liquidity)
S (Sensitivity)

CAPITAL ADEQACY
It evaluates an institution’s compliance with the regulations as per the minimum capital
reserve amount. Ratings are established by assessing the financial institution’s capital
position for the current year as well as for the previous years.
A ratio of the bank’s capital to Risk Weighted Assets is used to determine the bank’s
capital adequacy.
ASSETS
Banks earn through providing loans. These loans are the banks’ assets and the examiner
assesses the risks involved in such investments to assure that the banks’ asset quality and
investment decisions are not compromised upon.
Assets of the bank include assets that are current and fixed, investments, loans, real
estates, and the off-balance sheet transactions.
MANAGEMENT
The management capability gauges the ability of a bank to manage the team in order to
identify and react to the financial stress it may face.
It is the most forward-looking parameter of condition and a pivotal determinant whether a
credit union possesses the ability to correctly manage the financial stress.

EARNINGS
The continued sustainability of a bank depends on its ability to earn an adequate return on
its assets that enables it to fund expansion, remain competitive, and increase its capital.
When earnings are rated, the CAMELS examiner not only reviews the bank’s past and
present performance but also considers its future. The future performance of the banks
must be of equal or greater value even in various economic conditions.

10
LIQUIDITY
It is the fifth indicator and evaluates the extent to which a bank can meet its short-term
financial obligations by converting the assets into cash. This category of the CAMELS
system examines the liquidity risk and the interest rate risk.
The ratio of cash maintained by the banks and the balance with the RBI to total assets
determines the liquidity of the bank.

SENSITIVITY
The “S” in CAMELS is the financial institution’s “Sensitivity” to market risks. It is
considered to be a complex and evolving measurement area.
It covers how a particular risk exposure can affect the banks. In this one, the examiners
evaluate an institution’s sensitivity to market risks by monitoring their management of
credit concentrations.

REVIEW OF LITERATURE
Gupta(2014) analyzed the performance of public sector banks in India with the
help of CAMEL MODEL for the period of five years from 2009 to 2013 . For the
purpose of the study the financial data of 26 public sector banks was taken . for
determining wheather there is any significant difference between the means of
CAMEL ratios ANNOVA had been applied. The study concluded that Andhra
bank performed the best (secured the highest position i.e. First on majority of the
CAMEL parameters followed by bank of Baroda while United Bank performed
the worst and secured the least position i.e. 26th

11
 Kumar and Sharma (2014) analyzed the banking sector on the basis of the
CAMEL Model (Capital Adequacy, Asset Quality, Management, Earnings
and Liquidity). Eight banks (HDFC, ICICI, SBI, Kotak Mahindra Bank,
AXIS, BOB, BOI, PNB) with the highest market capitalization have been
taken for a period of 6 years from 2007-08 to 2012-13. The study
concluded that Kotak Mahindra Bank is on the top position in terms of
Capital Adequacy. SBI has the highest Non – Performing Assets followed
by ICICI bank. Earnings quality of Punjab National Bank and State Bank
of India are in top. Kotak Mahindra Bank and ICICI are most efficient in
managing the liquidity.

Karri, Meghani and Mishra (2015) studied the financial performance and
position of Bank of Baroda and Punjab National Bank for a period of
five years from 2010-2014. The results of t-test suggest that there is no
significant difference in the financial performance of Bank of Baroda and
Punjab National Bank during the period of study.

Sodhi, Simran and Waraich (2016) conducted fundamental analysis of three

public and two private sector banks in India. The objective was to analyze the
profitability position of the selected banks with respect to various financial
economic and industrial parameters that influence the risk return of securities.
They examined and compared the various aspects of performance of selected
public and private sector banks in India for five years starting from 2010-11 to
2014-15. The results of the study showed that the private sector banks have
performed better than public sector banks in terms of growth and profitability.
Gajera (2016) analyzed the financial performance of banks on the basis of
selected financial performance parameters which are divided into seven heads
such as Capital Adequacy ratios, Debt Coverage parameters, Balance Sheet
parameters, Management Efficiency parameters, Profitability parameters,
Employee ’s Efficiency parameters and Non-Performing Assets parameters.
For analysis CAMEL Model has been used. Four public 29 parameters 10
parameters showed significant financial difference at all level of data
analysis. Among 10 parameters private sector bank proved superiority over
public sector bank 4 parameters while public sector banks prove superiority over
private sector banks in remaining 6 parameters.

Susmitha & Mouneswari (2017) examined the financial performance of Syndicate Bank
by applying the CAMEL Model .They analyzed the performance of the bank for a period
of five year from 2013-2017. The results suggested that the performance of Syndicate
bank on t he parameters of Capital Adequacy, Asset Quality, Management Efficiency

12
and Earnings is satisfactory. But the performance on the parameter of Liquidity is not
satisfactory.
Subalakshmi , Grahlakshmi and Manikandan (2018) examined the asset liability
portfolio of SBI and also analyzed the various aspects like deposit mobilization,
investment position, earnings, profitability and efficiency, loans and advances and
non-performing assets by applying the technique of ratio analysis. The study
covered the period from 2009-2016.The findings suggested that there has been
sufficient improvement in the performance of the bank in terms of credit deposit ratio,
Deposits to Total Assets ratio, Return on Equity, Profit Margin.
Chaudhuri (2018) conducted a comparative study on the performance of SBI and
ICICI for a period of five years from 2011-12 to 2015-16 using the CAMEL
model. The results concluded that both the banks are complying the required
standards and are profitable. However, the performance of ICICI is better than SBI
on the parameter of earnings and management efficiency..

RATIONALE OF STUDY
The present study is undertaken to make a comparative analysis on financial performance
of selected private sector bank (HDFC) and public sector bank (SBI) in India using the
CAMEL analysis model. Through the study an attempt was made to assess the financial
position of the banks operating in India.

OBJECTIVE OF THE STUDY-

• To study the opinion and awareness of financial services offered by SBI and
HDFC bank.
• To ascertain the level of satisfaction of customers in utilizing the services offered
by SBI and HDFC bank.

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 • To study the problems faced by the customers in utilizing the financial services of
the bank.
• To know about Camel approach.
• To know about importance of Camel approach in performance analysis of both
banks.

RESEARCH METHODOLOGY
The study requires the data to be collected from two different sources i.e. the primary
source and the secondary source. The study is descriptive in nature and therefore to
pursue the objective of the study descriptive research design will be applied.
Methodology is the systematic method/process dealing with identifying problem,
collecting facts or data, analyzing these data and reaching at certain conclusion either in
the form of solution towards concerned generalization for some theoretical formulation .
Research methodology is about customer satisfaction towards the services provided by
SBI .

RESEARCH DESIGN

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SAMPLE DESIGN
Sampling Unit: The sampling unit is customers who is having account in SBI and HDFC
Banks.
Sample Size: The samples have been collected by making use of questionnaire method
from 150 respondents of each 75 respondents from SBI and HDFC customers.
TOOLS USED:
Simple percentage method
Ranking Analysis

LIMITATIONS OF THE STUDY

• The study is limited to a particular area.

• Only selected Banks have been considered for the study.

• The number of respondents from whom the information has been collected is very less.
• Since the study is based on the monitoring transaction of the customers, most of them
will be reluctant to provide such confidential information.
The results are approximated, as no accurate data is available
In the present research study, following banks are selected for sample. These are-
PUBLIC SECTOR BANK (SBI)
PRIVATE SECTOR BANK (HDFC)

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C- TOOLS FOR COLLECTION

SECONDARY DATA- secondary data was used for the study. The data required for the
study was gathered from the annual reports of the respective banks available on their
official website and/or by using prowess IQ software.
The study is mainly based on secondary data. The data required for the study has been
collected from an extensive survey of literature in the form of articles, journals, books
and government reports, Annual bank reports and from internet for the performance
analysis of SBI and HDFC Ltd bank

D- ANALYSIS AND INTERPRETATION

To examine the performance of select public and private banks, CAMELS approach was
applied. The study was carried out in following steps.

STEP1: Data collection As stated above data for the ratios was extracted from the annual
reports and/or by using prowess IQ software and ratio tables was prepared in excel .
STEP2: Exsistence of significant difference was analysed using suitable statistical test
based upon the normality of data.

16
RESEARCH ANALYSIS
1: CAPITAL ADEQUACY
TABLE1: Capital Adequacy Ratio
YEAR HDFC SBI
2013-2014 16.10 12.44
2014-2015 16.80 12.00
2015-2016 15.50 13.12
2016-2017 14.60 13.11
2017-2018 14.80 12.60
2018-2019 17.10 12.72
2019-2020 18.50 13.06
2020-2021 18.8 13.74
2021-2022 18.9 13.83
AVERAGES 15.6 12.95
RANK 1 2

INTERPRETATION
Capital Adequacy reveals the overall financial condition of the bank and also how
effectively the bank can manage its need for additional capital requirements. It
demonstrates that the capital adequacy ratio of both the banks under study are highly
satisfactory and well above the standard set by RBI for Indian banks. The highest capital
adequacy ratio of SBI in the year 2021-2022 is 13.83%. The lowest capital adequacy ratio
of SBI was 12% in the year 2014-2015 and that of HDFC of 2021-2022 is 18.9%. So
from table it is clear that the mean capital adequacy ratio of HDFC bank is higher than
that of SBI.

Hypothesis Testing.
H0 :There is no significant difference in capital adequacy ratio among HDFC and SBI
H1: There is a significant difference in capital adequacy ratio among HDFC and SBI.

ANOVA

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 Source of P-
Variation SS df MS F F crit
Between
value
7.67E-
Groups 66.04836 1 66.04836 41.91643 06 4.493998
Within
Groups 25.21144 16 1.575715

Total 91.2598 17

From the above table, the p-value is 7.67, as P value is higher than 0.05, so the null
hypothesis is accepted .It means there is no significant difference in capital adequacy
ratio among HDFC and SBI.
.

TABLE 2: Debt Equity Ratio

YEAR HDFC SBI
2013-2014 935.58 1333.71
2014-2015 799.89 1387.39
2015-2016 824.75 1354.99
2016-2017 802.2 1254.71
2017-2018 857.87 1400.31
2018-2019 734.1 1500.32
2019-2020 795.11 1532.83
2020-2021 854.78 1534.86
2021-2022 856.80 1538.96
AVERAGES 829.00 1426.45
RANKS 1 2

INTERPRETATION
The Debt Equity ratio signifies the proportion of borrowed capital to owned capital. The
average debt equity ratio of HDFC stands at 829.00 Which is relatively lower when
compared to SBI which has a debt equity ratio of 1426.45. Thus from this it can be said
that HDFC bank provides its depositors and creditors with higher protection as against
SBI.

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HYPOTHESIS TESTING
H0 :There is no significant difference in Debt equity ratio among HDFC and SBI
H1: There is a significant difference in Debt equity ratio among HDFC and SBI

ANOVA
Source of Pvalu
Variation SS df MS F e F crit
Between 6.58E-
Groups 1606229 1 1606229 229.5351 11 4.493998
Within
Groups 111964 16 6997.751

Total 1718193 17

From the above table From the above table, the p-value is 6.58, as P value is higher than
0.05, so the null hypothesis is accepted .It means there is no significant difference in Debt
equity ratio among HDFC and SBI.

TABLE:3 Total advances to total assets

YEAR HDFC SBI
2013-2014 61.63 67.5
2014-2015 61.89 63.4
2015-2016 65.6 64.8
2016-2017 64.2 58.06
2017-2018 61.88 56.01
2018-2019 65.84 59.38
2019-2020 64.93 58.85
2020-2021 64.84 54.01
2021-2022 66.17 54.81
AVERAGES 64.10 52.4
RANKS 1 2

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INTERPRETATION
The average total advances to total assets ratio of HDFC bank stands at 64.10%. which is
higher than that of SBI which stands at 52.4%.The highest Total advances to Total assets
of SBI in the year 2013-2014 is 67.5%. The lowest Total advances to Total assets of
SBI was 54.01 in the year 2020-2021 and that of HDFC of 2013-2014 is 61.63%. So
from table it is clear that the Total advances to Total assets of HDFC bank is higher than
that of SBI This implies that HDFC Bank is more aggressive in the lending activities as
compared to SBI , which may lead to higher profitability for HDFC Bank compared to
SBI.

HYPOTHESIS TESTING
H0 :There is no significant difference in Total advance to total assets among HDFC and
SBI
H1: There is a significant difference in Total advance to total assets among HDFC and
SBI

ANOVA
Source of
Variation SS df MS F P-value F crit
Between Groups 89.60142 1 89.60142 7.144719 0.016669 4.493998
Within Groups 200.6549 16 12.54093

Total 290.2563 17

From the above table From the above table, the p-value is 0.016, as P value is less than
0.05, so the alternate hypothesis is accepted .It means there is a significant difference in
total advance to total assets among HDFC and SBI.

TABLE 4 GOVERNMENT SECURITIES INVESTMENT

YEAR HDFC SBI
2013-2014 78.25 78.25
2014-2015 72.32 77.45
2015-2016 76.7 77.2
2016-2017 75.73 76.25
2017-2018 77.95 80.95
2018-2019 82.85 79.99

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2019-2020 82.66 78.35
2020-2021 83.70 79.36
2021-2022 85.72 81.38
AVERAGES 79.54 78.79
RANKS 2 1

INTERPRETATION
This ratio indicates thew risk involved in banks investments. The government securities
are assumed to be risk free. Therefore, a higher ratio indicates lesser risk involved in
banks investment. The investments of SBI are relatively more secure than HDFC bank as
the average government securities investment ratio of SBI stands at 78.79 as compared
to HDFC bank whose average government securities investment ratio stands at 79.54.

HYPOTHESIS TESTING
H0 :There is no significant difference in Government securities investment among HDFC
and SBI
H1: There is a significant difference in Government securities investment among HDFC
and SBI

ANOVA
Source of
Variation SS df MS F P-value F crit
Between Groups 2.493889 1 2.493889 0.22231 0.643651 4.493998
Within Groups 179.4893 16 11.21808

Total 181.9832 17

From the above table From the above table, the p-value is 0.64, as P value is higher than
0.05, so the null hypothesis is accepted .It means there is no significant difference in
Government securities investment among HDFC and SBI.

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ASSET QUALITY RATIO TABLE 5 NET NPA TO TOTAL ASSETS
YEAR HDFC SBI
2013-2014 0.17 1.73
2014-2015 0.15 1.35
2015-2016 0.19 3.09
2016-2017 0.21 2.00
2017-2018 0.24 3.21
2018-2019 0.26 1.79
2019-2020 0.23 1.31
2020-2021 0.26 0.81
2021-2022 0.21 0.56
AVERAGES 0.21 1.76
RANKS 1 2

INTERPRETATION
This ratio measures the quality of assets. The lower the ratio , the better the quality of
advances. The average NET NPAs to total assets ratio of HDFC Bank stands at about
0.21%, while that of SBI stands at about 1.76%. This shows that the quality of advances
of HDFC Bank is far better than that of SBI.

HYPOTHESIS TESTING
H0 :There is no significant difference in Net NPA to total assets among HDFC and SBI
H1: There is a significant difference in Net NPA to total assets among HDFC and SBI

ANOVA
Source of
Variation SS df MS F P-value F crit
Between Groups 10.78027 1 10.78027 25.91533 0.000109 4.493998
Within Groups 6.655689 16 0.415981

Total 17.43596 17
From the above table From the above table, the p-value is 0.000109, as P value is less
than 0.05, so the alternate hypothesis is accepted .It means there is a significant difference
in Net NPA to total assets among HDFC and SBI

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TABLE 6: Net NPAs TO NET ADVANCES
YEAR HDFC SBI
2013-2014 0.27 2.57
2014-2015 0.25 2.12
2015-2016 0.28 3.81
2016-2017 0.33 3.71
2017-2018 0.4 5.73
2018-2019 0.39 3.01
2019-2020 0.36 2.23
2020-2021 0.40 1.50
2021-2022 0.32 1.02
AVERAGES 0.33 2.85
RANKS 1 2

INTERPRETATION
It is used to measure of overall quality of banks loan book. The average NET NPAs to
Net Advances of HDFC bank stands at 0.33% while that of SBI stands at about 2.85%.
This points out that HDFC bank has better quality loans in its loan book as compared to
SBI.

HYPOTHESIS TESTING
H0 :There is no significant difference in Net NPAs to net advance among HDFC and SBI
H1: There is a significant difference in Net NPAs to net advance among HDFC and SBI

ANOVA
Source of
Variation SS df MS F P-value F crit
6.88E-
Between Groups 28.62722 1 28.62722 28.31781 05 4.493998
Within Groups 16.17482 16 1.010926

Total 44.80204 17

From the above table From the above table, the p-value is 6.88, as P value is higher than
0.05, so the null hypothesis is accepted .It means there is no significant difference in NET
NPAs to NET advance among HDFC and SBI

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TABLE 7: TOTAL INVESTMENTS TO TOTAL ASSETS
YEAR HDFC SBI
2013-2014 24.6 22.22
2014-2015 28.19 24.17
2015-2016 23.1 21.1
2016-2017 24.83 28.31
2017-2018 22.76 30.71
2018-2019 23.55 26.27
2019-2020 25.6 26.5
2020-2021 25.40 29.80
2021-2022 22.02 29.70
AVERAGES 24.45 26.53
RANKS 1 2
INTERPRETATION
This ratio is an important tool for measuring the percentage of total assets locked
up in investments, which conventionally does not form the part of the core income
of the bank. The average Total Investment to Total Assets Ratio of HDFC bank
stands at about 24.45% which is slightly lower as compared to SBI whose average
Total Investment to Total Assets ratio stands at 26.53% .It can be said that HDFC
bank is better placed in terms of total investment to total assets ratio when
compared to SBI.

HYPOTHESIS TESTING
H0 :There is no significant difference in Total investment to total assets among HDFC
and SBI
H1: There is a significant difference in Total investment to total assets among HDFC and
SBI

ANOVA
Source of
Variation SS df MS F P-value F crit
Between Groups 19.48961 1 19.48961 2.538232 0.13068 4.493998

24
 Within Groups 122.8547 16 7.678418

Total 142.3443 17
From the above table From the above table, the p-value is 0.13068, as P value is
higher than 0.05, so the null hypothesis is accepted .It means there is no significant
difference in Total investment to total assets among HDFC and SBI

TABLE8 : PERCENTAGE CHANGE IN NPA

YEAR HDFC SBI
2013-2014 -35 22.38
2014-2015 7.4 17.51
2015-2016 10.71 -79.72
2016-2017 17.86 2.62
2017-2018 -21.21 -54.45
2018-2019 2.5 47.39
2019-2020 7.69 26
2020-2021 11.11 32.73
2021-2022 20 32
AVERAGES 2.34 5.16
RANKS 1 2
INTERPRETATION
It measures the movement in net NPA in relation to previous year . The lower the
percentage change the better the quality of assets . The average percentage
decrease in the Net NPAs of SBI was about 2.61%, which is higher than that of
HDFC Bank whose percentage decrease in Net NPAs is 1.44%. Thus it can be
concluded that SBI stands at a better position than HDFC Bank in terms of
percentage change in NPAs.

HYPOTHESIS TESTING
H0 :There is no significant difference in Percentage change in NPA among HDFC and
SBI
H1: There is a significant difference in Percentage change in NPA among HDFC and SBI

ANOVA
Source of
SS df MS F P-value F crit

25
 Variation
Between Groups 35.84222 1 35.84222 0.032557 0.859076 4.493998
Within Groups 17614.48 16 1100.905

Total 17650.33 17
From the above table From the above table, the p-value is 0.859076, as P value is
higher than 0.05, so the null hypothesis is accepted .It means there is no significant
difference in Percentage change in NPA among HDFC and SBI

MANAGEMENT EFFICIENCY RATIOS TABLE9: TOTAL

ADVANCES TO TOTAL DEPOSITS
YEAR HDFC SBI
2013-2014 82.5 86.76
2014-2015 81.08 82.44
2015-2016 85.02 84.6
2016-2017 86.16 76.83
2017-2018 83.46 71.49
2018-2019 88.76 75.08
2019-2020 86.6 71.73
2020-2021 87.78 66.53
2021-2022 84.85 67.47
AVERAGES 85.13 75.88
RANKS 1 2

INTERPRETATION
This ratio measures the efficiency of management in converting the deposits available
with the bank into advances. Both HDFC bank and SBI are in the range of 75-85% but as
HDFC bank has a higher Total Advances to total deposits ratio of 84.8% as compared to
SBI who has a total advances to total deposits ratio of 75.88%, it HDFC bank is relatively
more efficient in converting the deposits into high interest earning advances or loans.

26
HYPOTHESIS TESTING
H0 :There is no significant difference in Total advance to total deposits among HDFC
and SBI
H1: There is a significant difference in Total advance to total deposits among HDFC and
SBI

ANOVA
Source of
Variation SS df MS F P-value F crit
Between Groups 385.3088 1 385.3088 12.75715 0.002547 4.493998
Within Groups 483.2539 16 30.20337

Total 868.5627 17

From the above table From the above table, the p-value is 0.002547, as P value is
less than 0.05, so the alternate hypothesis is accepted .It means there is a
significant difference in Total advance to total deposits among HDFC and SBI

TABLE 10: PROFIT PER EMPLOYEE

YEAR HDFC SBI
2013-2014 0.12 0.05
2014-2015 0.13 0.06
2015-2016 0.14 0.05
2016-2017 0.17 0.05
2017-2018 0.2 -0.02
2018-2019 0.22 0
2019-2020 0.22 0.06
2020-2021 0.24 0.09
2021-2022 0.26 0.13
AVERAGES 0.18 0.05
RANKS 2 1

27
 INTERPRETATION
The ratio measures the efficiency of the employee at the branch level. The average
profit per employee ratio of HDFC Bank stands at appx.0.18 Which is
significantly higher than that of SBI which stands at appx.0.05.Thus, it can be
concluded that HDFC Bank is more efficient as compared to SBI . Considering the
fact that SBI has more employees than HDFC bank, still the profit per employee
of HDFC bank is far more than SBI.

HYPOTHESIS TESTING
H0 :There is no significant difference in Profit per employee among HDFC and SBI
H1: There is a significant difference in Profit per employee among HDFC and SBI

ANOVA
Source of Pvalu
Variation SS df MS F e F crit
Between 1.56E-
Groups 0.08405 1 0.08405 37.10362 05 4.493998
Within
Groups 0.036244 16 0.002265

Total 0.120294 17

From the above table From the above table, the p-value is 1.56, as P value is higher than
0.05, so the null hypothesis is accepted .It means there is no significant difference in
Profit per employee among HDFC and SBI

TABLE:11 BUSINESS PER EMPLOYEE

YEAR HDFC SBI

28
 2013-2014 9.83 10.64
2014-2015 10.7 12.34
2015-2016 11.55 14.11
2016-2017 14.21 16.24
2017-2018 16.4 16.7
2018-2019 16.87 19.81
2019-2020 17.49 22.32
2020-2021 17.52 23.05
2021-2022 17.58 24.08
AVERAGES 14.68 17.69
RANKS 1 2
INTERPRETATION
This ratio measures the efficiency of all employees of the bank in generating
business for the bank . Business implies total advances and total deposits. SBI has
a higher business per employee ratio which stands at 17.69 as compared to HDFC
bank whose business per employee ratio stands at 14.68. Thus, it can be concluded
that employees of SBI are more efficient in generating business for the bank as
compared to that of HDFC bank.

HYPOTHESIS TESTING
H0 :There is no significant difference in Business per employee among HDFC and SBI
H1: There is a significant difference in Business per employee among HDFC and SBI

ANOVA
Source of
Variation SS df MS F P-value F crit
Between Groups 40.92109 1 40.92109 2.414018 0.139809 4.493998
Within Groups 271.2231 16 16.95144

Total 312.1442 17
From the above table From the above table, the p-value is 0.139809, as P value is
higher than 0.05, so the null hypothesis is accepted .It means there is no significant
difference in business per employee among HDFC and SBI

29
 TABLE:12 RETURN N NET WORTH
YEAR HDFC SBI
2013-2014 20.9 10.49
2014-2015 20.36 11.17
2015-2016 17.97 7.74
2016-2017 18.04 7.25
2017-2018 18.22 -3.78
2018-2019 15.2 0.48
2019-2020 16.4 7.74
2020-2021 15.27 8.86
2021-2022 15.39 12.33
AVERAGES 17.52 6.29
RANKS 2 1
INTERPRETATION
It measures the profitability of the company. The average Return on net worth of
HDFC bank stands at about 17.52 which is significantly higher than that of SBI
which stands at about 6.29. .Thus this indicates that HDFC bank is more
efficient in generating higher returns on the shareholders equity than SBI.

HYPOTHESIS TESTING
H0 :There is no significant difference in Return N net worth among HDFC and SBI
H1: There is a significant difference in Return N net worth among HDFC and SBI

ANOVA
Source of
Variation SS df MS F F crit
P-value

30
 3.95E-
Between Groups 506.3623 1 506.3623 31.40901 05 4.493998 Within Groups
257.945 16 16.12156

Total 764.3072 17

From the above table From the above table, the p-value is 3.95, as P value is
higher than 0.05, so the null hypothesis is accepted .It means there is no significant
difference in Return N net worth among HDFC and SBI

EARNINGS TABLE13: OPERATING PROFIT TO AVERAGE

WORKING FUNDS RATIO
YEAR HDFC SBI
2013-2014 3.39 1.78
2014-2015 3.44 1.94
2015-2016 9.4 1.92
2016-2017 3.32 1.99
2017-2018 3.6 1.72
2018-2019 3.58 1.71
2019-2020 3.73 1.49
2020-2021 3.75 1.50
2021-2022 3.82 1.52
AVERAGES 4.22 1.73
RANKS 1 2

INTERPRETATION
The operating profit to average working funds ratio of HDFC Bank is about 4.22
higher than the operating profits to average working funds ratio of SBI, which
stands at 1.73. It can be concluded that HDFC bank is in better position than SBI
in terms of Operating profits to average working funds.

31
HYPOTHESIS TESTING
H0 :There is no significant difference in operating profit to average working funds ratio
among HDFC and SBI
H1: There is a significant difference in operating profit to average working funds ratio
among HDFC and SBI

ANOVA
Source of
Variation SS df MS F P-value F crit
Between Groups 28.02509 1 28.02509 14.62505 0.001494 4.493998
Within Groups 30.65982 16 1.916239

Total 58.68491 17
From the above table, the p-value is 0.001494, as P value is less than 0.05, so the
alternate hypothesis is accepted .It means there is a significant difference in
Operating profit to average fund ratio among HDFC and SBI

TABLE14: NET PROFIT TO AVERAGE ASSETS

YEAR HDFC SBI
2013-2014 2 0.65
2014-2015 2.02 0.68
2015-2016 1.92 0.46
2016-2017 1.88 0.41
2017-2018 1.93 -0.19
2018-2019 1.83 0.02
2019-2020 1.89 0.38
2020-2021 1.90 0.39
2021-2022 1.92 0.40
AVERAGES 1.92 0.22
RANKS 1 2

32
INTERPRETATION
The ratio measures return on assets employed or the efficiency in utilization of the assets.
The average of net profit to average assets ratio of the last 9 years of HDFC bank stands
at 1.92 which is nearly 5 times that of SBI .Thus it can be said that HDFC bank has
higher ability to earn profits on its average assets as compared to SBI.

HYPOTHESIS TESTING
H0: There is no significant difference in net profit ratio among HDFC and SBI.

H1: There is a significant difference in net profit ratio among HDFC and SBI.

ANOVA

Source of
Variation SS df MS F P-value F crit
1.87E-
Between Groups 10.14423 1 10.14423 261.6538 10 4.60011
Within Groups 0.542775 14 0.03877

Total 10.687 15
From this table, the P-value is 1.87, as the P-value is higher than 0.05, so
the null hypothesis is accepted. It means there is no significant
difference in net profit to average ratio among HDFC and SBI.

TABLE 15:PERCENTAGE CHANGE IN NET PROFIT

YEAR HDFC SBI
2013-2014 26.05 -22.79
2014-2015 20.49 20.3
2015-2016 20.36 -24.05
2016-2017 18.37 5.36

33
 2017-2018 20.2 -162.45
2018-2019 20.54 113.17
2019-2020 24.57 1580.74
2020-2021 25.59 1582.75
2021-2022 28.61 1584.78
AVERAGES 22.75 519.75
RANKS 2 1

INTERPRETATION
It shows the percentage change in net profit from last year. The average change in net
profit of HDFC Bank stands at 22.75 ,while that of SBI has seen a significant
improvement in 2019_2020 is 510.75 as compared to 2018-2019 on account of the
multiple factors including better asset quality, higher NIMs on account of better yields on
advances and lower cost of funds and recoveries on some of the large written off
accounts.

HYPOTHESIS TESTING
H0:There is no significant difference in percentage change in net profit among HDFC
and SBI.

H1: There is a significant difference in percentage change in net profit among HDFC and
SBI.

ANOVA
Source of
Variation SS df MS F P-value F crit
Between Groups 1111555 1 1111555 3.470306 0.080943 4.493998
Within Groups 5124875 16 320304.7

Total 6236431 17

34
From the above table, the P-value is 0.080943, as the P-value is higher than 0.05, so the
null hypothesis is accepted. It means there is no significant difference in percentage
change in net profit ratio among HDFC and SBI.

LIQUID RATIOS TABLE18: LIQUID ASSETS TO TOTAL ASSETS

YEAR HDFC SBI
2013-2014 8.05 7.4
2014-2015 6.15 8.54
2015-2016 5.49 7.41
2016-2017 5.67 6.35
2017-2018 11.55 5.55
2018-2019 6.54 6.04
2019-2020 5.66 6.35
2020-2021 5.68 7.56
2021-2022 5.70 7.91
AVERAGES 6.72 7.01
RANKS 2 1

INTERPRETATION
The Liquid assets to total assets ratio of HDFC bank stands at 6.72 which is higher
when compared to SBI who liquid assets to total assets stands at 7.01 indicating
that HDFC bank has a better liquidity position when compared to SBI. This
implies that HDFC bank stands ahead of SBI in terms of liquid assets to total
assets ratio.

HYPOTHESIS TESTING
H0: There is no significant difference in liquid assets to total assets ratio among
HDFC and SBI.

H1: There is a significant difference in liquid assets to total assets ratio among
HDFC and SBI.

35
 ANOVA
Source of
Variation SS df MS F P-value F crit
Between Groups 0.381356 1 0.381356 0.156352 0.697759 4.493998
Within Groups 39.02524 16 2.439078

Total 39.4066 17
From this table, the P-value is 0.697759, as the P-value is 0.697759 is higher than
0.05, so the null hypothesis is accepted. It means there is no significant difference
in liquid assets to total assets among HDFC and SBI.

TABLE 19: GOVERNMENT SECURITIES TO TOTAL ASSETS

YEAR HDFC SBI
2013-2014 19.25 17.39
2014-2015 20.39 18.72
2015-2016 17.73 16.4
2016-2017 18.8 21.58
2017-2018 17.74 25.21
2018-2019 19.51 21.01
2019-2020 21.16 20.76
2020-2021 22.18 21.78
2021-2022 23.20 22.80
AVERAGES 19.99 20.62
RANKS 2 1

INTERPRETATION
This ratio measures the proportion of risk free liquid assets invested in government
securities as a percentage of total assets. The average government securities to
Total assets ratio of HDFC bank stands at 19.99 which is lower when compared to
SBI whose government securities to total assets ratio stands at 20.62. This clearly
points out that SBI is at a better position as compared to SBI in terms of
government securities to total assets ratio.

36
HYPOTHESIS TESTING
H0: There is no significant difference in government securities to total assets ratio
among HDFC and SBI.

H1: There is a significant difference in in government securities to total assets

ratio among HDFC and SBI.

ANOVA
Source of
Variation SS df MS F P-value F crit
Between Groups 1.798672 1 1.798672 0.322982 0.577711 4.493998
Within Groups 89.10318 16 5.568949

Total 90.90185 17
From this table, the P-value is 0.577711 as the P-value is higher than 0.05, so the
null hypothesis is accepted. It means there is no significant difference in in
government securities to total assets among HDFC and SBI.

TABLE 20: LIQUID ASSETS TO DEMAND DEPOSITS

YEAR HDFC SBI
2013-2014 64.38 117.06
2014-2015 49.39 140.36
2015-2016 44.01 119.78
2016-2017 42.35 112.83
2017-2018 103.04 100.91
2018-2019 57.09 108.07

37
 2019-2020 49.71 110.45
2020-2021 45.60 113.50
2021-2022 40.06 115.16
AVERAGES 55.07 115.34
RANKS 1 2
This ratio measures the ability of a bank to meet the demand from demand
deposits in a particular year. The average Liquid assets to demand deposits ratio of
HDFC bank stands at 55.07 which is lower when compared to SBI whose liquid
assets to demand deposits ratio stands at 115.34 ,which indicates that SBI is better
placed as compared to HDFC bank in terms of liquid assets to demand deposits
ratio.

HYPOTHESIS TESTING
H0: There is no significant difference in liquid assets to demand deposit ratio
among HDFC and SBI.

H1: There is a significant difference in liquid assets to demand deposit ratio

among HDFC and SBI.

ANOVA
Source of
Variation SS df MS F P-value F crit
4.78E-
Between Groups 16349.74 1 16349.74 65.47505 07 4.493998
Within Groups 3995.352 16 249.7095

Total 20345.1 17
From this table, the P-value is 4.78 as the P-value is higher than 0.05, so the null
hypothesis is accepted. It means there is no significant difference in liquid assets
to demand deposit among HDFC and SBI.

TABLE22: LIQUID ASSETS TO TOTAL DEPOSITS

YEAR HDFC SBI

38
 2013-2014 11.85 9.5
2014-2015 8.06 11.09
2015-2016 7.12 9.68
2016-2017 7.61 10.9
2017-2018 15.58 7.09
2018-2019 8.81 7.64
2019-2020 7.55 7.75
2020-2021 9.31
2021-2022 9.73
AVERAGES 9.18
RANKS
The ratio measures the liquidity available to the deposits of a bank. The liquid
Assets to total deposits ratio Of HDFC Bank stands at which is slightly higher
as compared to SBI who is higher the liquid Assets to total Deposits ratio stands at
, representing that the depositors of HDFC bank is better placed as compared to
SBI in terms of higher the liquid assets to total deposits ratio.

HYPOTHESIS TESTING
H0: There is no significant difference in liquid assets to total
deposit ratio among HDFC and SBI.

H1: There is a significant difference in liquid assets to total

deposit ratio among HDFC and SBI.

ANOVA
Source of
Variation SS df MS F P-value F crit
Between Groups 0.412452 1 0.412452 0.077885 0.784264 4.60011
Within Groups 74.13904 14 5.295646

Total 74.55149 15

39
 From this table, the P-value is 0.784264, as the P-value is 0.697759 is higher than
0.05, so the null hypothesis is accepted. It means there is no significant difference in
liquid assets to total deposit among HDFC and SBI.

FINDINGS

The study provides the key findings according to the data analysis and arrives on
some conclusions based on the findings: The mean CRAR of HDFC Bank
(15.6%) is higher than that of SBI (12.95%) for the study period, which indicates
that HDFC has performed better than SBI in maintaining minimum capital to
mitigate credit risk, market risk and operational risk. The mean Net NPA to Net
Advances of HDFC Bank (0.33%) is lower than that of SBI (2.85%) for the study
period, which implies that HDFC Bank has lower proportion of net Non-
performing Assets (NPA) to the Net Advances than that of SBI. The mean Return
on Net Worth of HDFC Bank (17.52%) is higher than that of SBI (6.29%) for the
study period indicating a superior performance on part of HDFC Bank over its
counterpart for the period under study. The mean of Total advance to total assets
of HDFC Bank (64.10%) is higher than that of SBI (52.4%) for the study
period, which implies that HDFC Bank is more aggressive in lending

40
activities as compared to SBI. The mean Debt Equity Ratio of SBI
(1426.45) is higher than that for HDFC (829.00), which is a clear indicator
of the fact that SBI has maintained a generally higher level of Debt Equity
Ratio than that of HDFC for the entire study period. The mean Government
securities investment of SBI (78.79%) is lesser than that of HDFC Bank
(79.54%) for the study period, which implies that the risk involved in banks
investment. The government securities are assumed to be risk free. The
mean Net NPA to total assets of HDFC Bank (0.21%) is lesser than that of
SBI (1.76%) which implies that HDFC Bank provides a lesser return to
equity shareholders as compared to SBI. The mean Net NPAs to net
advances of HDFC (0.33) is lesser than that of SBI (2.85) and as it is used to
measure of overall quality of banks loan book.. The mean Total investments
to total assets of HDFC (24.45) is lesser than that of SBI (26.53) and ratio is
an important tool for measuring the percentage of total assets locked up in
investments, which conventionally does not form the part of the core income
of the bank.

Suggestion
The following suggestions have been suggested for the respective banks under
study: Both SBI and HDFC have a very low level of return on assets and as such
assets must be utilised in a more efficient manner for improving the return on
assets. SBI has a very high debt equity ratio as compared to HDFC and as such it
is suggested that SBI introduce an effective measure to control total debts. SBI has
a slightly lower credit deposit ratio than HDFC and as such SBI must take steps to
create a higher proportion of loan assets from total deposits received.

41
Conclusion
State Bank of India (SBI) and HDFC Bank are the two largest banks in India in
public and private sectors respectively. To compare the financial performance of
the banks, various ratios have been used to measure the banks’ profitability,
solvency position, and management efficiency. According to the analysis, both the
banks are maintaining the required standards and running profitably. From the
present study, HDFC has been a better performer in terms of profitability and
management efficiency as compared to SBI for the study period. This study will
help enhance further research on the subject by researchers and academicians.
Conclusion In the process of evaluation of performance of various banks, our
study concluded that, different banks have obtained different performances with
respect to CAMEL ratios. Our study also concluded the following: · The HDFC ,
SBI stood at top position in terms of capital adequacy. · In terms of asset quality,
the HDFC Bank was at top most position. · In context of management quality,
HDFC Bank positioned at first. · In terms of earnings quality, HDFC Bank, SBI
Bank obtained the top position. · The HDFC Bank was ranked top in liquidity
criterion. · The overall performance table shows that, HDFC Bank is ranked first
followed by HDFC Bank & SBI Bank. Most of these banks, including HDFC, , lie
in a similar rank region. However, these banks' assets etc. vary a great deal and
they cannot be judged solely based on the absolute values of the CAMEL ratios.
Looking at the trend, we can say that private banks are growing at a faster pace
than public sector banks.

42
 References
1. Annual Reports of HDFC from 2011-12 to 2015-16. 2. Annual Reports of SBI
from 2011-12 to 2015-15. 3. Kumar M.A., “Analysing Soundness in Indian
Banking: A Camel Approach”, Research Journal of Management Sciences,
ISSN: 2319–1171, 2012;1(3). 4. Chaudhary G. “Performance Comparison of
Private Sector Banks with the Public Sector Banks in India”, International
Journal of Emerging Research in Management & Technology, ISSN:
22789359, 2014;3(2). 5. Bodla BS, Verma R. Evaluating Performance of
Banks through CAMEL Model: A Case Study of SBI and HDFC, The ICFAI
Journal of Bank Management 2006;5(3):49-63. 6. Chaudhury S, Singh S.
Impact of Reforms on the Asset Quality in Indian Banking. International
Journal of
Multidisciplinary Science 2012;5(2):52-58.
2. 7. Gupta R. An Analysis of Indian Public Sector Banks using CAMEL Approach.
IOSR Journal of Business and Management 2014;16(1):94-102. 8.
Prasuna DG. Performance Snapshot 2003-04. Chartered Financial Analyst
2004;X(11):6-13. 9. Sarker A. CAMEL Rating System in the Context of
Islamic Banking: A Proposed ‘S’ for Shariah Framework. Journal of Islamic
Economics and Finance. 2005;1(1):78-84

43
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https://www.researchgate.net/publication/352102657_A_Comparative_Study_on_th
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https://www.academia.edu/44920463/PERFORMANCE_ANALYSIS_SBI_BANK_
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https://www.hdfc.com/digital-annual-report-2021-2022/

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