A Comparative Study – Financial Performance of State Bank Of

India and ICICI Bank Of India.

Alisa Tigga, Manjit Kumar, Farhat Anjum, Aditya Raj.
Amity University , Jharkhand.

Abstract
The banking system is vital to a country's economic process. With an outsized network of branches and a
various vary of economic services, India's banking industry is giant. The aim of this analysis is to check
the monetary results of India's 2 largest non-public and 2 public banks. State Bank of India (SBI) and
ICICI Bank are the two largest banks in India in public and private sector. Performance and efficiency of
commercial banks are the key elements of countries financial system. This comparative study of SBI and
ICICI Bank demonstrates that there are significant differences on the performance of SBI and ICICI Bank
in terms of Deposits, Advances, Investments, Net profit, and Total assets. Based on the study, it can be
said that SBI have an extensive operation than ICICI Bank.

Keywords- SBI, ICIC, financial performance, public banks, private banks,

1. Introduction

A perfect banking method can be identified as primary needs of the economic improvement of any
economy. Banks organize the savings of their peoples in an efficient connection. The banking method in
India is characterized by a huge channel of banking departments, providing different types of financial
requirements to the peoples.

The state bank of India is also recognized as SBI is one of the major banks in India. The state bank group
with above 16000 departments which gives a large variety of banking items with the help of its large
channels of departments in India and abroad also, involving items focusing at Indians who don’t lives in
India. The headquarters of State Bank of India is situated in Mumbai. There is total 14 local head offices
and total 57 Zonal offices of State Bank of India which is situated in important cities all over India. State
Bank of India has also approximately 130 departments outside India. It has a market share among Indian
commercial banks of about 20% in deposits and loans. The source of the State Bank of India rest in the
first decade of 19th century, when the Bank of Calcutta was one of the three presidency banks, the other
being the bank of Bombay (incorporated on 15 April 1840) and the Bank of Madras (incorporated on 1
July 1843). The State Bank of India is the bank with large number of branches in India with around 9000
departments situated in India and 54 internationals branches and offices. The bank also has parent
companies and partnership abroad India involving Europe, the United States, Canada, Mauritius, Nigeria,
Nepal, and Nepal.

Second largest bank in India is the ICICI bank and major banks of private sector in India. Its headquarters
is in Mumbai India. ICICI Bank limited is the leading banking, and it is also a financial service
organization in India. This bank is the second largest bank in India and the biggest private sector bank in
India by the value of money traded in the stock market. They are commonly engaging in serving a
different variety of banking and financial services involving commercial banking, retail banking, project,
and corporate finance, working capital finance, insurance, venture capital and private capital and private
equity, investment banking, broking and treasury products and services. ICICI Bank’s equity share are
listed in India on Bombay Stock Exchange (BSE) and the national stock exchange (NSE) and its
American Depository Receipts (ADRs) and are also listed on the New York stock exchange (NYSE).

1.1. State Bank of India (SBI)

SBI is that the oldest bank of Republic of India and India’s largest commercial bank,
that may be a government, owned bank was established in 1806. The bank provides a
wide array of banking product through their effective network not solely in Republic
of India however additionally overseas. The bank has concerning eighteen,266
branches, together with four,724 branches of its 5 Associate Banks, and is
additionally responsible for fifth part of the loans of Republic of India. it's concerning
8500 ATMs across the state.

1.2. ICIC Bank

This is the second largest non-public sector bank in Asian nation having 2,552
branches and seven,440 ATMs unfold across the country. It is among the highest
industrial banks of Asian nation providing a large range of banking services through
varied delivery channels. Besides giving high-end banking facilities like net banking,
Tele Banking, and Mobile Banking, ICICI additionally plays a important role within
the domains of investment banking, venture capital and plus management, and life
 and non-life insurance. The bank spreads its wings in eighteen countries across the
planet including Britain, Canada, Russia, and others.

2. Literature Review

Singh, B. A. and Tandon, P. (2012) Affirmed that banking Sector plays a vital role in economic
development of a country. The banking industry of Bharat is featured by a large network of bank
branches, serving several types of financial services of the folks. The banking company of Bharat,
popularly called SBI is one amongst the leading bank of public sector in Bharat. ICICI Bank is second
largest and leading bank of personal sector in Bharat. the current study is conducted to check the money
performance of SBI and ICICI Bank on the idea of ratios like credit deposit, net profit margin etc. the
amount of study taken is from the year 2007-08 to 2011-12. The study found that SBI is acting well and
financially sound than ICICI Bank however in context of deposits and expenditure ICICI bank has higher
managing efficiency than SBI.

Kumbirai, M. and Webb, R. (2010) investigates the performance of South Africa’s business banking
sector for the quantity 2005- 2009. cash ratios are utilized to measure the profit, liquidity, and credit
quality performance of five big South African primarily based business banks. The study found that
overall bank performance increased considerably among the initial two years of the analysis. A significant
modification in trend is detected at the onset of the global cash crisis in 2007, reaching its peak
throughout 2008-2009. This resulted in falling profit, low liquidity and deteriorating credit quality among
the South African Banking sector.

Mohi-ud-Din Sangmi; Nazir, T. (2010) specific that sound financial health of a bank is that the guarantee
not exclusively to its depositors but is equally necessary for the shareholders, employees and whole
economy, nevertheless. As a sequel to the current maxim, efforts square measure created from time to
time, to measure the cash position of each bank and manage it efficiently and effectively. throughout this
paper, a shot has been made to gauge the cash performance of the two major banks operative in northern
Republic of India .This analysis has been done by practice hoofed mammal Parameters, the foremost
recent model of financial analysis. Through this model, it's highlighted that the position of the banks
beneath study is sound and satisfactory up to currently as their capital adequacy, and quality,
Management capability and liquidity thinks about.

Mitra, R. and sitar player, R. (2008) aforementioned that a stable and efficient banking sector is a vital
precondition to increase the economic level of a rustic. This paper tries to model and judge the potency of
fifty Indian banks by using information enclosure Analysis (DEA). Drug Enforcement Agency is capable
of handling multiple inputs and outputs and also the sources of inefficiency may be analyzed and
quantified for each evaluated unit. The aim of this paper is to estimate and compare the potency of the
banking sector in India. The analysis is meant to verify or reject the hypothesis of whether the banking
sector fulfills its mediation function sufficiently to contend with the worldwide players. The results are
perceptive to the money policy planner because it identifies priority areas for various banks, which might
improve the performance. This paper evaluates the performance of Banking Sectors in India.

3. Objectives of the study

1. To compare the economic overall performance of State Bank of India and ICIC bank.
2. To recognize and compare the profitability of State Bank of India and ICIC Bank of
India.
3. To compare and evaluated the managerial effectivity of the State Bank of India and
ICIC.

4. Research Methodology

4.1Research Design

This research is descriptive and quantitative in nature which is collected through

google forms and online articles related to the study. is based on the combination.
Google forms were circulated with question with best of our teammates knowledge
and creativity to gather data.in this research paper we also used secondary data
because used in the comparative study of Private sector Banks and public sector
banks is largely secondary in nature.
 4.2 Sample Design

4.2.1 Data Collection Method

The secondary has been collected from Industry journals, News Articles ,Bank websites
and Research papers. This data used to analyze the balance sheet fig of the bank .

Google from collected data through various channels of social media platforms
namely
i. WhatsApp
ii. Facebook
iii. Instagram

5. Analysis and Interpretation of Data

5.1 Secondary Data

Table 1 demonstrates that for the study period, Net Profit Ratio of both SBI and ICICI
bank were fluctuating. The very best Net Profit Ratio of SBI used to be 11.93% in 2008-
09 and for ICICI financial institution it used to be 15.56% in 2010-11. Whereas the
lowest Net Profit Ratio of SBI used to be 7.65% in 2010-11 and 9.58% for ICICI bank
in 2008-09. The average Net Profit Ratio of SBI is 10.29% and ICICI bank is
11.64%,which implies that the Net Profit Ratio of ICICI financial institution is 1.35%,
which is greater than that of the SBI.

Table 1: Net Profit Ratio

Table 2 demonstrates that in the given learn about period, the Operating Profit Ratio of
both SBI and ICICI bank have been fluctuating. The very best Operating Profit Ratio of
SBI in the year 2008-09 was 19.10% and that of ICICI bank was 22.31% in 2010-11.
Whereas the lowest Operating Profit Ratio of both SBI and ICICI financial institution in
the 12 months 2006-07 was once 16.56% and 12.66% respectively. The average
Operating Profit Ratio of SBI is 17.65% and that of ICICI bank is 15.99%, which
implies that the Operating Profit Ratio of SBI is 1.66%, which is more than that of the
ICICI financial institution.

Table 2: Operating Profit Ratio

Table 3 indicates that for the learn about period, Return on Net Worth Ratio of each SBI
and ICICI bank had been fluctuating. The absolute best Return on Net well worth Ratio
of SBI used to be 15.74% in the year 2008-09, and for ICICI bank it used to be 12.61%
in 2006-07. Whereas the lowest Return on Net Worth Ratio of SBI in the 12 months
2010-11 was once 11.34% and for ICICI bank it was 7.53% in 2008-09.The average Net
Worth Ratio of SBI is 13.83% and that of ICICI bank is 9.23%, which implies that the
average Net Worth Ratio of SBI is 4.60% which is extra than that of the ICICI bank.

Table 3: Return on Shareholder’s Investment or Net Worth Ratio

 Table 4 illustrates that for the study period, Earnings per Share of both SBI and ICICI
bank have been fluctuating. The very best Earnings per Share of SBI was once 144.39 in
the year 2009-10 and that of ICICI financial institution was once 44.70 in 2010-11.
Whereas, the lowest Earnings per Share of SBI in the yr 2006-07 was 86.30 and that of
ICICI financial institution in the year 2008-09 was once 33.75. The common Earnings
per Share of SBI is 119.40 and ICICI bank is 37.29, which implies that the average
Earnings per Share of SBI is 82.11, which is greater than that of the ICICI bank.

Table 4: Earnings Per Share [EPS]

5.2 Primary Data

Through the data we’ve collected on who will people choose in various
conditions following are the results.

1.Taking out a loan

46% of our respondents have chosen SBI, as a bank they would choose if they
need loan. While ICICI scores 17.5% and other public and private bank scored
17.5% and 19% respectively. SBI has clearly stepped up in this front and the
interest rates might be the reason as SBI charges 9.60% while ICICI bank charges
10.25%.

2. Online Banking

ICICI is still behind SBI in this front also with a difference of 5.4%. What
services customers chooses plays important role in finance of the industry.
The majority of the respondents however chosen a third party showing
none of the banks is as good as others.

1. Investment
Depositing is the main feature of a bank however banks are required to
maintain LRR which is 0.1%. If a bank has higher deposits, they can lend
more and earn more so SBI with 51.6% takes the lead on ICICI having
only 16.7%.

5. Preference at different conditions

Again taking the lead SBI is at 42.1% while ICICI has only 19% customer
base while it comes to deposition of their money and deposition is the
major role in a bank therefore we can say SBI is doing much better than
ICICI financially.
 8. Choosing a bank

If you don’t have customer to begin with, you can not exactly run a
company. So in collecting customers SBI stops at 47.6% and ICICI at
19%.

6. Findings

 The common Net Profit Ratio of SBI is 10.29% and ICICI financial institution is
11.64%, which implies that the Net Profit Ratio of ICICI financial institution is
1.35%, which is greater than that of the SBI.
 The common Operating Profit Ratio of SBI is 17.65% and that of ICICI bank
is15.99%, which implies that the Operating Profit Ratio of SBI is 1.66%, which is
more than that of the ICICI bank.
  The average Net worth Ratio of SBI is 13.83% and that of ICICI bank is 9.23%,
which implies that the common Net Worth Ratio of SBI is 4.60% which is greater
than that of the ICICI bank.
 The common Earnings per Share of SBI is 119.40 and ICICI bank is 37.29, which
implies that the average Earnings per Share of SBI is 82.11, which is greater than that
of the ICICI bank.

6, Conclusion
The researchers focused at the financial performance of India's banking sector over
the last five years, from 2006 to2011. State Bank of India (SBI) and ICICI 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’ profit ability, solvency position, and management efficiency. According to the
analysis, each the banks are retaining the required requirements and going for walks
profitably. The assessment of the performance of SBI and ICICI Bank shows that are
significant distinction between overall performance of SBI and ICICI Bank in terms
of Deposits, Advances, Investments, Net Profit, and Total Assets. It is inferred that
SBI have an
extensive operation than ICICI Bank. This find out about will assist enhance further
lookup on the difficulty by researchers and academicians

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Websites
www.sbi.com
www.icicibank.com
www.google.com