Fundamental Analysis of Public and Private Banks in India

A comprehensive project
On
FUNDAMENTAL ANALYSIS OF PUBLIC & PRIVATE

BANKS
AKBARI SEEMA
Enrollment no.: 157700592002
FALDU RIDDHI
Enrollment no.: 157700592036
Guided by
(PROF.) NISHANT FOFARIA
MBA SEM IV
Year 2015-2017
Submitted to:
JAYSUKHLAL VADHAR INSTITUTE OF MANAGEMENT

STUDIES (JVIMS)
Jamnagar
Affiliated to:
GUJARAT TECHNOLOGICAL UNIVERSITY (GTU)

DECLARATION
We, AKBARI SEEMA and, FALDU RIDDHI hereby declare that the report
for Comprehensive Project entitled Fundamental analysis of public &
private banks is a result of our own work and our indebtedness to other work
publications, references, if any, have been duly acknowledged.
Name of Student: Akbari Seema

Enrolment Number: 157700592002
Signature: _______________________
Name of Student: Faldu Riddhi

Enrolment Number: 157700592036
Signature: _______________________
ACKNOWLEDGEMENT
It is our pleasure to present the project report on Fundamental analysis of public

& private banks. There are so many people involved in this project, without their
support this project was not possible for us. We are thankful to all those people who
helped us in carrying out this work. We are really thankful to our Guide Prof.
Nishant Fofaria, and our director Dr. Ajay Shah & all other faculty members,
who helped us and guide us in preparing this project report. We have tried our level
best to present the available information in the best possible manner.
PREFACE
A Practical knowledge in a students life is very important. It helps a student to

know the real life situation and problem of life. Same is the case with the corporate
world. Theoretical knowledge is very much needed but practical knowledge is
equally important. The research study has helped us to understand the practical
aspects of companies. Being a student of JVIMS it was a very valuable and
memorable experience to undertake such research study. This wonderful experience
has given us a new light to what we had studied.
TABLE OF CONTENT
SR. NO. PARTICULAR PG. NO
BANKS DETAIL
fundamental analysis
REVIEW OF LITERATURE
Ratio analysis
Research Methodology
LIST OF TABLES
SR. NO. PARTICULAR PG. NO.
1. State Bank Of India
2. Bank Of Baroda
3. Punjab National Bank
4. Bank of India
5. IDBI Bank
6. HDFC Bank
7. ICICI Bank
8. Axis Bank
9. Kotak Mahindra Bank
10. YES BANK
11. Major Players In The Banking Sector
12. Capital adequacy ratio
13. Debt to equity ratio
14. Total Equity to Loan Portfolio
15. Total Investment to Total Assets
16. Gross NPA To Total Loan
17. Profit per Employee
18. Total Advances to Total Deposits
19. Other Income To Total Income Ratio
20. Dividend Payout Ratio

21. Liquid Assets to Total Assets
22. SAMPLE DESIGN

CHARTS
SR. NO. PARTICULAR PG. NO.

1. Structure Of Indian Banking System
2. Capital adequacy ratio
3. Debt to equity ratio
4. Total Equity to Loan Portfolio
6. Gross NPA To Total Loan
7. Profit per Employee
8. Total Advances to Total Deposits
9. Other Income To Total Income Ratio
10. Dividend Payout Ratio
11. Liquid Assets to Total Assets
12.
13.
14.
15.
16.
17.
18.
19.
20.
EXECUTIVE SUMMARY
Banking system occupies an important place in nation's economy. A banking institution is
indispensable in a modern society. It plays a essential role in the economic development of a
country. Thus, economic development of a country depends upon success of banking industry and
success of banking Industry is determined to a large extent by now well then needs of its customers
have been understood and satisfied. The Indian banking industry has come a long way from being
a sleepy business institution to a highly proactive and dynamic entity. The liberalization and
economic reforms have largely brought about this transformation. The entry of private banks has
revamped the services and product portfolio of nationalized banks. With efficiency being the major
focus, the private banks are leveraging on their strengths. To compete with the private banks, the
public sector banks are now going in for major image changes and customer friendly schemes.
Increasing competition and technology driven products are some of the trends which the banking
industry is currently experiencing. The technology oriented banking has become one of the latest
success mantra in market especially to win over the customers. Due to entry of private banks which
are known for technical and financial innovation their professional management has gained a
remarkable position in banking sector. The dissertation entitled Impact of Privatization on Public
Sector Banks is focused to study:
Changes made in Public Sector Banks in terms of arrival of new products and services.
Customers preference towards Public & Private Sector Banks i.e. which sector they prefer.
Introduction of banking industry
The Reserve Bank of India (RBI), as the central bank of the country, closely monitors
developments in the whole financial sector.
Scheduled Commercial Banks (SCBs) dominate the banking sector. As at end-March2002, there were 296
(change the font)
Commercial banks operating in India. This included 27 Public Sector Banks (PSBs), 31 Private, 42 Foreign and 196
Regional Rural Banks. Also, there were 67scheduled co-operative banks consisting of 51 scheduled urban co-
operative banks and 16scheduled state co-operative banks. Scheduled commercial banks touched, on the deposit
front, a growth of 14% as against 18%registered in the previous year. And on advances, the growth was 14.5%
against 17.3% of the earlier year.
https://www.scribd.com/doc/92977426/Introduction-of-Banking-Industry
STRUCTURE OF INDIAN BANKING SYSTEM

RBI
Scheduled Non Scheduled

Banks Banks
COMMERCIAL Co-operative
BANK Banks
URBAN CO- STATE CO-

PUBLIIC PRIVATE REGIONAL
Foreign Banks OPERATIVE OPERATIVE
SECTOR BANK SECTOR BANK RURAL BANK
BANK BANK
Chart-1: Structure of Indian Banking System
https://www.google.co.in/search?q=banking+sector+in+india+-chart
BANKS DETAIL
A. Public Sector Banks :-

1. STATE BANK OF INDIA:-
Table 1: State Bank of India
FOUNDED 1 July 1955, State Bank of India
Industry Banking, financial services
Headquarters Mumbai, Maharashtra, India
Area served Worldwide
Key people Arundhati Bhattacharya (Chairperson)
Website www.sbi.co.in
https://en.wikipedia.org/wiki/State_Bank_of_India
2. Bank of Baroda:-
FOUNDED 20 July 1908
Headquarters Vadodara, India
Key people P. S. Jayakumar(CEO & MD) Ravi Venkatesan

(Chairman)Bharat Dangar (Director)
Website www.bankofbaroda.com
Table 2: Bank of Baroda
https://en.wikipedia.org/wiki/Bank_of_Baroda
3. Punjab National Bank:-
Table 3: Punjab National Bank
FOUNDED 19 May 1894

Headquarters New Delhi
Founder Lala Lajpat Rai
Usha Ananthasubramanian (MD & CEO)

Key people
www.pnbindia.in
Website
https://en.wikipedia.org/wiki/Punjab_National_Bank
4. Bank of India :-
FOUNDED 7 September 1906
Industry financial services
Shri Melwyn Rego (MD & CEO)

Key people
www.bankofindia.co.in
Website
Table 4: Bank of India
https://en.wikipedia.org/wiki/Bank_of_India
5. IDBI Bank:-
Table 5: IDBI Bank
FOUNDED July 1964
Headquarters Mumbai, India
Mr. Kishor Kharat (MD & CEO)

Key people
www.idbi.com
Website
https://en.wikipedia.org/wiki/IDBI_Bank
B. Private Sector Banks:-
1. HDFC Bank:-
Table 6: HDFC Bank

https://en.wikipedia.org/wiki/HDFC_Bank
FOUNDED 1994
Industry Financial services
Headquarters Mumbai India
Area served India
Website www.hdfcbank.com
6. ICICI Bank:-
Table 7: ICICI Bank
FOUNDED 1994
Industry Banking, Financial services
Key people Mr. M. K. Sharma (Chairman)

Mrs. Chanda Kochhar (MD & CEO)
Website www.icicibank.com
https://en.wikipedia.org/wiki/ICICI_Bank
3. Axis Bank:-
FOUNDED 1993
Headquarters Ahmedabad ,India
Key people Shikha Sharma (MD & CEO) Sanjiv Misra (Chairman)
Website www.axisbank.com
Table 8: Axis Bank

https://www.axisbank.com/
4.Kotak Mahindra Bank:-
FOUNDED
1985
Headquarters MumbaiIndia
Uday Kotak (Founder & Executive Vice Chairman & MD

Key people
http://www.kotak.com/
Website
Table 9: Kotak Mahindra Bank
FOUNDED 2004

Headquarters MumbaiIndia
Key people Rana Kapoor and Ashok Kapur
Website www.yesbank.in
https://en.wikipedia.org/wiki/Kotak_Mahindra_Bank
5. YES BANK:-
Table 10: YES BANK
https://en.wikipedia.org/wiki/Yes_Bank
MAJOR PLAYERS IN THE BANKING SECTOR
PRIVET BANKS PUBLIC BANKS
State Bank Of India ICICI Bank
Andhra Bank Federal Bank
Bank Of India HDFC Bank
Canara Bank Karnataka Bank
Central Bank Of India Induslnd Bank

Indian Bank Yes Bank
Dena Bank Axis Bank
Union Bank Of India IDFC Bank
Punjab National Bank City Union Bank
Table 11: Major Players In The Banking Sector
HTTPS://EN.WIKIPEDIA.ORG/WIKI/LIST_OF_BANKS_IN_INDIA
Government policy on banking industry:
Federal and State agencies to govern their operations, service offerings, and the manner in which they
grow and expand their facilities to better serve the public. A banker works within the financial system to
provide loans, accept deposits, and provide other services to their customers. They must do so within a
climate of extensive Banks operating in most of the countries must contend with heavy regulations, rules
enforced by regulation, designed primarily to protect the public interests. The main reasons why the banks
are heavily regulated are as follows:
To protect the safety of the publics savings.

To control the supply of money and credit in order to achieve a nations broad economic
goal.
To ensure equal opportunity and fairness in the publics access to credit and other vital
financial services.
To promote public confidence in the financial system, so that savings are made speedily
and efficiently.
To avoid concentrations of financial power in the hands of a few individuals and
institutions.
Provide the Government with credit, tax revenues and other services.
To help sectors of the economy that they have special credit needs for eg. Housing, small
business and agricultural loans etc.
http://shodhganga.inflibnet.ac.in/bitstream/10603/2031/10/10_chapter%201.pdf
SWOT Analysis
Banking is as old as Vulnerable to risk
Human race. High NPAs
Hedge from risk Structural
Connecting People weaknesses
Expansion
Recession
Changing Socio-
Stability of the
cultural&demographic
system
factors
Competition
Rise in private sector
banking.
http://www.marketing91.com/swot-analysis-of-banking-industry/
Problems of the industry

When in an economy interest rate will raise, it directly affect the decision of loan holders as well
as it leads investing decisions to make a change in the structure of investment, that will affect the
share prices of banking industry.
The amount invested by FII in banking industry will affected due to the fluctuation in exchange
rate as a result there will be changes in share prices of banking sector and exchange rate can be
used as an indicator for investment decision making in banking sector stocks.
When inflation raise, it will reduce the purchasing power of general people as a result it affect the
investors decision to make an investment in banking industry. Thus, this is the problems and we
conduct a research to know fundamental analysis of banking sector.
Factors promoting growth of Banking Sector
Emergence of Universal Banking System:
Services provided by banks have expanded rapidly in the last decade. In addition to the
traditional savings and loans, banks started providing a wide gamut of financial services like
insurance, investment, asset management, etc which increased their in the economy.
Through partnerships and acquisitions, banks are trying to integrate financial services,
wallets, payments, shopping services etc., there by adding depth to their financial services.
Economic growth:
Over 9 percent GDP growth in the pre global financial crisis period (2009-10) and over 7
percent in the last two years largely facilitated the growth of this sector.
Globalization:
As India is moving towards closer integration with the world economy, Indias
merchandise trade, service exports and remittances are growing at a faster pace. In order to serve
these new needs banks have evolved and redeemed themselves in India and abroad.
Policy initiatives:
The Banking Laws (Amendment) Act, 2012 at the monetary front, and large scale infusion
of funds into the public sector banks by the government in recent years fuelled the growth of this
sector.
For the government, the banking sector is at the core of governance. Initiatives like Jan
Dhan Yojana and Direct Benefit Transfer are case in point.
Usage of technology:
Information and communication technologies including the mobile phones and internet
connectivity are the prime reason for expanding the reach of banking sector to the youth and rural
habitations.
http://www.jagranjosh.com/current-affairs/issues-and-challenges-facing-indian-banking-
sector-1456572882-1
Introduction to fundamental analysis:

Fundamental analysis an attempt is made to analyze various fundamental or basic factors that
affect the riskreturn of the securities. Fundamental analysis helps to analyze the strength of basics
of indian banking sector. It provides the information on the long term stability of banking sector
and future growth prospects in banking sector. Fundamental analysis can help the various
interested parties by providing relevant information to them, which can help them to take informed
decision. Investors can find out the past performance of the banking sector, recent changes and
their impact on this sector, and future prospects of higher return and stability in this sector. Banks
can find out the opportunities available in the market, perception of customers, weaknesses and
ways to improve in future, it focuses on the emergence of indian banking sector, its reform over
the period, its connection with the world economic conditions, banking sector analysis,
environmental analysis and the analysis of performance of the top public sector banks. The
performance of public sector banks is also compared with the private sector banks to understand
the perception of customers and to measure the competitiveness of public sector banks. It can help
to understand the shortcomings of public sector banks and find out the ways to improve
performance.
http://www.irjcjournals.org/ijmssr/june2013/4.pdf
REVIEW OF LITERATURE
1.performance analysis of public sector &private sector banks in india
Gurpreet Kaur
2015
A better performance in terms of Efficiency and profitability of banking sector is must for a
flourishing economy to ensure the growth and development by facing intense competition,
meeting greater customer demands and changing banking reforms. The Fundamental Analysis,
which aims at developing an insight into the economic performance of the business, is of
paramount importance from the view point of investment decisions. The present study attempts
to analyze and measure the relative performance of the major banks in India. ; PNB, SBI,
Canara Bank, UCO Bank, ICICI , Axis Bank, HDFC Bank and Yes Bank. The main objective
of this article is to make an evaluation of the financial performance of Indian Banks .The
financial performance of a bank is measured by a number of key indicators with reference to
Deposits, Advances, Total Income, Investment and Net Profit etc. Recommendations and
suggestions have been given for improving the performance of Banks in India.
http://www.ijbm.co.in/downloads/vol2-issue1/59.pdf
2.Performance of Private Sector Banks with the Public Sector Banks in India
Garima Chaudhary
2014
Recently the Indian economy has witnessed the emergence of many banks in the private sector.
There are several reasons behind the increasing number of commercialization of banks. The
growth of such banks is not possible unless they witness some success in the context of customer
satisfaction or may it be the net assets held by these banks, efficiency of their management or the
networks of each bank both in private as well as the public sector bank.
http://www.ermt.net/docs/papers/Volume_3/2_February2014/V3N2-114.pdf
3. Performance of indian public sector banks and private sector banks

Kajal Chaudhary and Monika Sharma
2011
The economic reforms in India started in early nineties, but their outcome is visible now. Major
changes took place in the functioning of Banks in India only after liberalization, globalisation
and privatisation. It has become very mandatory to study and to make a comparative analysis
of services of Public sector Banks and Private Sector banks. Increased competition, new
information technologies and thereby declining processing costs, the erosion of product and
geographic boundaries, and less restrictive governmental regulations have all played a major
role for Public Sector Banks in India to forcefully compete with Private and Foreign Banks.
this paper an attempt to analyze how efficiently Public and Private sector banks have been
managing NPA. We have used statistical tools for projection of trend.
http://www.ijimt.org/papers/140-M582.pdf
4.fundamental analysis of selected public and private sector banks in india
Amanjot Kaur Sodhi Simran Waraich
2016
Fundamental analysis studies the various financial, economic and industrial parameters that
influence the risk-return of securities and helps in investment decision making. Banking
companies have a strong shareholding foothold in the Indian economy and the stock markets.
Fundamental analysis can help the shareholders by providing relevant information in terms of
profitability and growth which can, in turn, help them to take informed investment decisions. With
the help of fundamental analysis, investors can track the past performance, recent changes and
future prospects of the banking sector. This research paper analyses the fundamentals of selected
banking companies using independent financial parameters.
http://www.nmims.edu/NMIMSmanagementreview/pdf/jan-feb-2016/fundamental-
analysis-of-selected-public-and-private-sector-banks-in-india.pdf
5. Fundamental analysis of public sector banks

DeepikaDhingra
6 June 2013
The study represents the brief idea about Indian banking sector and fundamental analysis of public
sector banks. In fundamental analysis an attempt is made to analyze various fundamental or basic
factors that affect the risk-return of the securities. The analysis of economy, industry and company
fundamental is the main ingredient of the fundamental approach. The analyst should take into
account the entire three constituent that form different but special steps in making various
decisions. Fundamental analysis helps to analyze the strength of basics of Indian banking sector.
It provides the information on the long term stability of banking sector and future growth prospects
in banking sector. Fundamental analysis can help the various interested parties by providing
relevant information to them, which can help them to take informed decision. Investors can find
out the past performance of the banking sector, recent changes and their impact on this sector, and
future prospects of higher return and stability in this sector. Banks can find out the opportunities
available in the market, perception of customers, weaknesses and ways to improve in future, It
focuses on the emergence of Indian banking sector, its reform over the period, its connection with
the world economic conditions, banking sector analysis, environmental analysis and the analysis
of performance of the top public sector banks. Economic analysis covers the recent changes in the
world economy and its impact on Indian banking sector. It includes macro-economic analysis and
micro economic analysis (fiscal and monetary policy changes).
Banking sector analysis involves the stage of banking sector life cycle, banking sector
performance. Environmental analysis includes attitude of government towards public banks,
competitors and technology progress and SWOT analysis of public sector banks Performance of
the top public sector banks is analyses on the basis of ratio analysis, nonperforming assets, profits
and capital adequacy ratio etc. The performance of public sector banks is also compared with the
private sector banks to understand the perception of customers and to measure the competitiveness
of public sector banks. It can help to understand the shortcomings of public sector banks and find
out the ways to improve performance.
6.financial performance analysis of selected public sector banks: a camel
model approach
Jaspreet Kaur , Manpreet Kaur and Dr. Simranjit Singh
2015
Banking industry is one of the crucial and important industry of Indian economy. There are many banking
companies working in India. Banking Industry is growing at a faster pace and thus the competition too. Due
to passage of time there has been a constant change in the performance of banks, which leads to change in
ranking and position of the banks every year. It may be very difficult to compare the performance and ranks
and this study will helps to find out which bank is better among leading banks and where the investors and
customers should invest money into. There are many aspects to measure the performance of banks like
WACC, Regression Analysis and CAMEL Model is one important of them and thus it is being used in
study to measure and compare the financial performance of leading five public sector banks, on the basis
of total assets and consolidated basis, in India for 5 years from 2009-2014. The banks include Bank of
Baroda, State Bank of India, Punjab National bank, Bank of India, and Canara Bank. The data is collected
from annual reports of these banks and various ratios have been calculated measuring the aspects of
CAMEL which includes capital adequacy, asset quality, management efficiency, earning quality and
liquidity. After calculating these ratios, it is found that Bank of Baroda is leading in all the aspects of
CAMEL followed by Punjab National Bank in Capital Adequacy, Management efficiency and Earning
capacity and Bank of India in Asset Quality.
http://www.serialsjournals.com/serialjournalmanager/pdf/1457762462.pdf
7. A study on fundamental analysis of banking sector (with special reference
to public sector banks)
Dr. M. Parveen
Ms. S. Sameera
2016
The study consist of fundamental analysis so it focuses on the overall state of the economy, and considers
factors including interest rates, production, earnings, employment, GDP, housing, manufacturing and
management. When analyzing a stock, futures contract, or currency using fundamental analysis there are
two basic approaches one can use: bottom up analysis and top down analysis. So the researcher gives the
problem as A study on fundamental analysis of banking sector with special reference to public sector banks.
The main objective is to study the fundamental analysis of three banks which Punjab National Bank (PNB),
Bank of Baroda (BOB) and State Bank of India (SBI). To evaluates the price to earnings, price to growth,
and dividend ratios, and finally the comparative study between the selected public banks. The researcher
used the secondary data from the annual report of selected banks. The data are analyzed and its findings,
suggestions and it also concluded that the all the three banks which is Punjab National Bank (PNB), Bank
of Baroda (BOB) and State Bank of India (SBI) are financial sound and good in their performance.
http://www.iaeme.com/MasterAdmin/UploadFolder/IJM_07_02_093/IJM_07_02_093.pdf
8. A Comparative Financial Performance Analysis of Selected Public Sector
Banks in India
Nikhil Kumar and Narendra Kumar
2016
Bank play important role in the Economic Development of all the Nations of the World. Banking is the life
blood of Modern Commerce. Financial Performance analysis of Selected Public Sector Bank (State Bank
of India, Punjab National Bank, Bank of Baroda and Bank of India) during the Periods of five Financial
year (2011 to 2015). State Bank of India is the largest bank in India. Punjab National Bank is second largest
bank in India. Bank of Baroda is International Bank and Bank of India fast growing bank. This study based
on entirely on secondary data and tools used to Ratio analysis selected public sector banks. This study found
that SBI, PNB and BOB financially sound other than BOI.
http://www.krishisanskriti.org/vol_image/08Jun201610063412%20%20%20%20%20%20
%20%20%20%20NIKHIL%20KUMAR%20%20%20%20%20220-224.pdf
9.Comparative study of public and private sector banks in India :
Ashish Gupta, VS Sundram
2015
Public sector banks and private sector banks is dominant player which have important role in growth of
Indian economy. The Present research paper aimed to examine and compare the financial performance of
selected public and private sector banks in India during 2009-10 to 2013-14. Data of public sector banks
(Bank of Baroda, Punjab National Bank, Central bank of India) and private sector banks (ICICI bank,
HDFC bank, Axis bank) for 5 years, has been collected from their official sites and annual report. This
study is primarily based on secondary data and financial ratios are used. Some selected variables like Assets,
Net profit, Interest expand, interest income, deposits are taken to known the financial positions of selected
banks. The study found that overall performances of private sector banks are better than public sector banks.
http://www.allresearchjournal.com/archives/2015/vol1issue12/PartM/1-11-174.pdf
10. A comparative study on the performance of public and private sector
banks in india
Pradip Kumar Pradhan
2015
The economic development of a country mostly depends upon the efficient banking system. Indian banking
system has undergone significant transformation following financial sector reforms. The co-existence of
both public and private sector banks drives the banking sector to more competitive position. Indian banking
system is adopting best banking practices, new technology and customer friendly atmosphere with a vision
to strengthen their performance. This study strives to examine the comparative performance of banking
sector in relation to private and public sector banks. The researcher has analysed several performance
indicators of the banks to compare their performance. The study is based on the secondary data retrieved
from Report on Trend and Progress of Banking in India .The study analysis the loan asset quality and price
earnings ratio of banks to evaluate their performance. The scope of the study is limited to the analysis of
NPAs and price earnings ratio (P/E ratio) of the public sector banks and private sector banks for the period
six (6) years i.e. from 2007-08 to2012-13. It examines the trend of NPAs and price earnings ratios in both
public sector and private sector banks .The data has been analyzed by statistical tools such as percentages,
average, standard deviation and correlation. The study observed that the private sector banks have achieved
a better performance compared to the public sector banks and the public sector banks needs to improve
their performance especially in management of non-performing assets.
http://www.journalijmri.com/sites/default/files/issue-files/0032_0.pdf
Ratio analysis
Meaning OF RATIO ANALYSIS:
Quantitative analysis of information contained in a companys financial statements. Ratio

analysis is based on line items in financial statements like the balance sheet, income statement
and cash flow statement; the ratios of one item or a combination of items - to another item
or combination are then calculated.
Ratio analysis is used to evaluate relationships among financial statement items. The ratios are
used to identify trends over time for one company or to compare two or more companies at
one point in time. Financial statement ratio analysis focuses on three key aspects of a business:
liquidity, profitability, and solvency.
Ratios are also compared across different companies in the same sector to see how they stack
up, and to get an idea of comparative valuations. Ratio analysis is a cornerstone of fundamental
analysis.
Definition of ratio analysis:
Ratio-analysis means the process of computing, determining and presenting the relationship
of related items and groups of items of the financial statements. They provide in a summarized
and concise form of fairly good idea about the financial position of a unit. They are important
tools for financial analysis.
ADVANTAGE OF RATIO ANALYSIS
1. Helpful in analysis of Financial Statements.
2. Helpful in Forecasting.
3. Estimate about the trend of the business.

4. Fixation of ideal Standards.
5. Effective Control.
6.Study of Financial Soundness.
LIMITATIONS OF RATIO ANALYSIS
1. Comparison not possible if different firms adopt different accounting policies.
2. Ratio analysis becomes less effective due to price level changes.
3. Limited use of a single data.
4. Lack of proper standards.
5. False accounting data gives false ratio.
6. Ratios alone are not adequate for proper conclusions.
7. Effect of personal ability and bias of the analyst.

CAPITAL ADEQUACY:-
1. Capital adequacy ratio:-
Capital Adequacy has emerged as one of the major indicators of the financial health of the
banking entity. It is measured as a ratio of banks own capital to its risk weighted assets. Well
adherence to capital adequacy regime does play a vital role in minimizing the cascading effects
of banking and financial sector crisis. The higher the capital adequacy ratio, the stronger is
considered bank, as it ensures higher safety against bankruptcy.
Capital Adequacy Ratio (CAR) = Tier I Capital & Tier II Capital
Risk Weighted Assets
Tier I capital includes equity capital and free reserves
Tire II capital comprises of subordinated debt of 5-7 years tenure.
Risk-weighted assets can be loans, investment in stock markets, guarantees, etc.
As per the reserve bank of India norms, the bank in India should have a CRA of 8%.
The higher the CRA, the stronger the bank is.
Table 12: Capital adequacy ratio

BANKS/YEAR 2016 2015 2014 2013 2012 average
State Bank of India 1.0816 1.0643 1.0545 1.0532 1.0634 1.0634
Bank of Baroda 0.0757 0.0707 0.0684 0.0696 0.0722 0.0713
Punjab National Bank 0.0672 0.0735 0.0728 0.0745 0.0668 0.0710
Bank of India 0.0643 0.0586 0.0591 0.0606 0.0568 0.0599
IDBI Bank 0.0880 0.0738 0.0784 0.0720 0.0737 0.0772
HDFC Bank 0.1156 0.1166 0.1240 0.1026 0.1031 0.1124
ICICI Bank 0.1506 0.1401 0.1419 0.1445 0.1462 0.1447
Axis Bank 0.1154 0.1081 0.1013 0.1112 0.1066 0.1085
Kotak Mahindra Bank 0.1410 0.1460 0.1560 0.1220 0.1310 0.1392
Yes Bank 0.0938 0.0956 0.0934 0.0740 0.0730 0.0860
1.2000
1.0000
0.8000
0.6000
0.4000
0.2000
0.0000
2016 2015 2014 2013 2012 average
State Bank of India Bank of Baroda Punjab National Bank Bank of India
IDBI Bank HDFC Bank ICICI Bank Axis Bank
Kotak Mahindra Bank Yes Bank
Chart-2: Capital adequacy ratio
From the above information of ten banks for five years on the basis of their average we can say
that the higher the Capital Adequacy Ratio is GOOD for the performance of the bank. Here, the
highest Capital Adequacy Ratio is of stat bank of India that is 1.06, the second highest is of ICICI
bank that is 0.144, The lowest Capital Adequacy Ratio is of Bank of India that is 0.059.
In the year 2012 State Bank of India has the highest Capital Adequacy and the lowest is of Bank
of India, whereas in the year 2013 the highest Capital Adequacy is of stat bank of India and the
lowest is of bank of India. In the year 2014 the highest Capital Adequacy is of State Bank of India
and the lowest is of the Bank of India. In the year 2015 the highest Capital Adequacy is of State
Bank of India and lowest is of bank of India. In the year 2016 the highest Capital Adequacy is of
State Bank of India and the lowest is of Bank of India
2.Debt to equity ratio (D/E):-
Debt to Equity Ratio is another important parameter, which indicates the degree of leverage of the
bank or how much of the business is financed through debt and how much through equity. Higher
ratio indicates less protection for the creditors and depositors. However, sometimes, aggressive
banks can raise huge amounts through debt to meet the increased business requirements. Here,
shareholders net worth includes equity capital and reserves and surplus.
Debt to Equity Ratio (D/E) = Total Borrowings and Deposits
Shareholders Net Worth
Table 13: Debt to equity ratio
TOTAL DEBT TO OWENWERS FUND

BANKS/ YEAR 2016 2015 2014 2013 2012 Average
Bank of Baroda 14.2799 15.5 15.8089 14.82 14.007 14.88316
Bank of India 15.874 16.91 15.94 15.96 15.18077 15.97295
IDBI 15.16 14.1991 13.4963 15.043 15.02124 14.58393
HDFC Bank 8.24795 7.9989 9.355779 9.09 8.24433 8.587392
ICICI Bank 6.86 6.63 6.64 6.565898 6.55043 6.649266
Axis Bank 8.599 9 8.666 8.9576 11.1438 9.27328
Yes Bank 10.3998 10.05107 13.4105 15.13 13.5371 12.50569
Chart Title
18
16
14
12
10
8
6
4
2
0
2016 2015 2014 2013 2012 Average
IDBI HDFC Bank ICICI Bank Axis Bank
Chart-3: Debt to equity ratio
that the higher the Debt Equity Ratio the POOR the performance of the bank. Here the highest
Debt Equity Ratio is of Bank of India that is 15.97295, the second highest is of the Punjab National
Bank that is 15.17352and the third highest is of Bank of Baroda 14.88316. The lowest Debt Equity
Ratio is of the Kotak Mahindra Bank that is 6.64678, second lowest is of the ICICI Bank that is
6.649266 and the third lowest is of HDFC Bank is 8.587392.
In the year 2012 the highest Debt Equity Ratio is of Punjab National Bank while the lowest is of
the ICICI Bank, whereas in the year 2013 the highest Debt Equity Ratio is of Bank of India and
the lowest is of Kotak Mahindra Bank. In the year 2014 the highest Debt Equity Ratio is of Bank of
India and the lowest is of ICICI Bank. In the year 2015 the highest Debt Equity Ratio is of the
Bank of India and the lowest is of Kotak Mahindra Bank. And in the year 2016 the highest Debt
Equity Ratio is of Punjab National Bank and the lowest is of Kotak Mahindra Bank.
3. Total Equity to Loan Portfolio:-
According to Grier (2007), poor asset quality is the major cause of most bank failures. A most
important asset category is the loan portfolio; the greatest risk facing the bank is the risk of loan
losses derived from the delinquent loans.
Total equity to loan portfolio= Total Equity
Total loan
Table 14: Total Equity to Loan Portfolio

Bank of Baroda 0.0011 0.0010 0.0011 0.0013 0.0014 0.0012
Bank of India 0.0055 0.0016 0.0016 0.0020 0.0022 0.0026
IDBI Bank 0.0095 0.0077 0.0081 0.0068 0.0071 0.0078
HDFC Bank 0.0011 0.0014 0.0014 0.0016 0.0020 0.0015
ICICI Bank 0.0027 0.0030 0.0034 0.0040 0.0045 0.0035
Axis Bank 0.0014 0.0017 0.0017 0.0020 0.0024 0.0018
Yes Bank 0.0086 0.0090 0.0083 0.0088 0.0081 0.0086
0.0120
0.0100
0.0080
0.0060
0.0040
0.0020
0.0000
2016 2015 2014 2013 2012 average
Chart-4: Total Equity to Loan Portfolio
that the higher the Total Equity to Loan Portfolio Ratio the GOOD the performance of the bank.
Here the highest Total Equity to Loan Portfolio Ratio is of two banks Yes bank that is 0.008,
whereas the second highest is of the kotak Mahindra bank of India that is 0.007. The lowest Total
Equity to Loan Portfolio Ratio is of State Bank of India that is 0.0006
In the year 2012 the highest Total Equity to Loan Portfolio is of kotak Mahindra bank, whereas
the lowest is of State Bank of India. In the year 2013 the highest Total Equity to Loan Portfolio is
of Yes bank and the lowest is of the State Bank of India. In the year 2014 the highest Total Equity
to Loan Portfolio is of Yes Bank and the lowest is of the State Bank of India. While in the year
2015 the highest Total Equity to Loan Portfolio is of Yes bank and the lowest is of the State Bank
of India. Whereas in the year 2016 the highest Total Equity to Loan Portfolio is of IDBI and the
lowest is of the State Bank of India.
(1) CAPITAL ADEQUACY RATIO
Null Hypothesis (Ho):- There is no significant difference among Capital Adequacy

Ratio of selected public and private sector banks.
Alternative Hypothesis (Ha):- There is significant difference among Capital

Adequacy Ratio of selected public and private sector banks.
(2) DEBT EQUITY RATIO
Null Hypothesis (Ho):- There is no significant difference among Debt Equity Ratio of
selected public and private sector banks.
Alternative Hypothesis (Ha):- There is significant difference among Debt Equity

(3) Total Equity to Loan Portfolio
Null Hypothesis (Ho):- There is no significant difference among Total Equity to Loan
Portfolio of selected public and private sector banks.
Alternative Hypothesis (Ha):- There is significant difference among Total Equity to Loan
Portfolio of selected public and private sector banks
Anova: Single Factor
SUMMARY
Groups Count Sum Average Variance
Column 1 10 1.9336 0.19336 0.094303
Column 2 10 117.9902 11.79902 13.33373
Column 3 10 0.0363 0.00363 9.81E-06
ANOVA
Source of Variation SS df MS F P-value F crit

2.61E-
Between Groups 912.8623 2 456.4312 101.9727 13 3.354131
Within Groups 120.8524 27 4.476014
Total 1033.715 29
As the calculated value 101.9727 is more than tabulated value, null hypo is rejected.
ASSET QUALITY
Total investments to total assets indicate the extent of deployment of assets in investment as against
advances. The ratio is applied as a tool to measure the percentage of total assets locked up in
investments. The ratio is calculated by dividing total investments by total assets of the bank
. = 0
Table 15: Total Investment to Total Assets
Total Investment to Total Assets

Bank of Baroda 18.596 17.6594 18.0947 22.7999 19.0882 19.24763
Bank of India 19.9275 19.85 20.55598 21.448 23.36 21.0283
IDBI 26.444 33.9755 31.5424 30.61 28.6499 30.24436
HDFC Bank 23.12 28.1895 24.6035 27.88 28.84882 26.52836
ICICI Bank 22.2579 28.87658 29.7695 31.92 33.6875 29.3023
Axis Bank 23.2186 28.6498 29.62817 33.3971 32.62711 29.50415
Yes Bank 29.55189 34.22567 37.636 43.36453 37.70068 36.49575
Chart Title
45
40
35
30
25
20
15
10
5
0
2016 2015 2014 2013 2012 Average
Chart-5 Total Investment to Total Assets
that the higher the Total Investment to Total Assets the POOR the performance of the bank. Here
the highest Total Investment to Total Assets is of Yes Bank that is 36.49575, the second highest is
of the Kotak Mahindra Bank that is 30.3587 and the third highest is of IDBI 30.24436. The lowest
Total Investment to Total Assets is of the Bank of Baroda that is 19.24763, second lowest is of the
Bank of India that is 21.0283 and the third lowest is of State Bank of India is 22.67359.
In the year 2012 the highest Total Investment to Total Assets is of Yes Bank while the lowest is
of the Bank of Baroda, whereas in the year 2013 the highest Total Investment to Total Assets is of
Yes Bank and the lowest is of Bank of India. In the year 2014 the highest Total Investment to Total
Assets is of Yes Bank and the lowest is of Bank of Baroda. In the year 2015 the highest Debt
Equity Ratio is of the Yes Bank and the lowest is of Bank of Baroda. And in the year 2016 the
highest Total Investment to Total Assets is of Yes Bank and the lowest is of Bank of Baroda.
2. Gross NPA to Total Loan:-
Bank nonperforming loans to total loans are the value of nonperforming loans divided by the total
value of the loan portfolio (including nonperforming loans before the deduction of specific loan-
loss provisions). The loan amount recorded as nonperforming should be the value of the loan as
recorded on the balance sheet, not just the amount that is overdue.
Gross NPA to Total Loan = Gross NPA
Total Loan
Table 16: Gross NPA to Total Loan

Bank of Baroda 0.1038 0.0973 0.1049 0.1199 0.1308 0.1113
Bank of India 0.1350 0.1254 0.1324 0.1661 0.1403 0.1398
IDBI Bank 0.1152 0.0609 0.0504 0.0329 0.0252 0.0569
HDFC Bank 0.0095 0.0094 0.0097 0.0099 0.0097 0.0096
ICICI Bank 0.0602 0.0390 0.0310 0.0331 0.0373 0.0401
Axis Bank 0.0180 0.0146 0.0127 0.0137 0.0122 0.0142
Yes Bank 0.0153 0.0067 0.0061 0.0043 0.0039 0.0072
0.1800
0.1600
0.1400
0.1200
0.1000
0.0800
0.0600
0.0400
0.0200
0.0000
2016 2015 2014 2013 2012 average
Chart-6 Gross NPA to Total Loan
that the higher the Gross NPA to Total Loan Ratio the POOR the performance of the bank. Here
the highest Gross NPA to Total Loan Ratio is of Bank of India that is 0.13, whereas the second
highest is of the Bank of Baroda that is 0.11 and The lowest Net NPA to Total Loan Ratio is of
Yes bank and Yes Bank that is 0.007
In the year 2012 the highest Gross NPA to Total loan is of Bank of India, whereas the lowest is of
Yes bank. In the year 2013 the highest Gross NPA to Total loan is of Bank of India and the lowest
is of the Yes Bank. In the year 2014 the highest Gross NPA to Total loan is of Bank of India and
the lowest is of Yes Bank. While in the year 2015 the highest Gross NPA to Total loan is of Bank
of India and the lowest is of Yes Bank. Whereas in the year 2016 the highest Gross NPA to Total
loan is of Punjab National Bank and the lowest is of HDFC Bank.
3. Net NPA to Total Loan:-
Net NPA to Total Loan = Net NPA
Total Loan

Bank of Baroda 0.0463 0.0438 0.0507 0.0574 0.0733 0.0543

Bank of India 0.0666 0.0659 0.0721 0.0932 0.0768 0.0749
IDBI Bank 0.0678 0.0288 0.0248 0.0158 0.0161 0.0307
HDFC Bank 0.0028 0.0025 0.0025 0.0027 0.0020 0.0025
ICICI Bank 0.0298 0.0161 0.0097 0.0077 0.0073 0.0141
Axis Bank 0.0074 0.0047 0.0045 0.0045 0.0038 0.0049
Yes Bank 0.0058 0.0038 0.0019 0.0006 0.0005 0.0025
0.1000
0.0800
0.0600
0.0400
0.0200
0.0000
2016 2015 2014 2013 2012 average
State Bank of India Bank of Baroda Punjab National Bank

Bank of India IDBI Bank HDFC Bank
ICICI Bank Axis Bank Kotak Mahindra Bank
Yes Bank
that the higher the Net NPA to Total Loan Ratio the POOR the performance of the bank. Here the
highest Net NPA to Total Loan Ratio is of Bank of India that is 0.07, whereas the second highest
is of the Bank of Baroda that is 0.05and The lowest Net NPA to Total Loan Ratio is of Yes bank
and HDFC Bank that is 0.002
In the year 2012 the highest Net NPA to Total loan is of Bank of India, whereas the lowest is of
Yes bank. In the year 2013 the highest Net NPA to Total loan is of Bank of India and the lowest
is of the Yes Bank. In the year 2014 the highest Net NPA to Total loan is of Bank of India and the
lowest is of Yes Bank. While in the year 2015 the highest Net NPA to Total loan is of Bank of
India and the lowest is of Yes Bank. Whereas in the year 2016 the highest Net NPA to Total loan
is of Punjab National Bank and the lowest is of HDFC Bank.
ASSET QUALITY
Null Hypothesis (Ho):- There is no significant difference among Total Investment to Total Assets
of selected public and private sector banks.
Alternative Hypothesis (Ha):- There is significant difference among Total Investment to Total Assets
Gross NPA to Total Loan:-
Null Hypothesis (Ho):- There is no significant difference among Gross NPA to Total Loan
Of selected public and private sector banks.
Alternative Hypothesis (Ha):- There is significant difference among Gross NPA to Total Loan
Net NPA to Total Loan:-
Null Hypothesis (Ho):- There is no significant difference among Net NPA to Total Loan
Alternative Hypothesis (Ha):- There is significant difference among Net NPA to Total Loan

SUMMARY
Column 1 10 271.12871 27.112871 26.63269593
Column 2 10 0.515 0.0515 0.001991958
Column 3 10 0.2618 0.02618 0.000616848
` ANOVA

Between Groups 4886.690903 2 2443.345451 275.2000184 1.10528E-18 3.354130829
Within Groups 239.7177426 27 8.878434912
Total 5126.408645 29
MANAGEMENT EFFICIENCY QUALITY:-
1. Profit per Employee (PPE)
Profit per Employee reveals the surplus earned per employee. It is arrived at by dividing the Net
Profit earned by the bank by the total number of employees. The higher the ratio, the higher is
the efficiency of the management. Both indicators- BPE and PPE measure the banks efficiency
with respect to human assets.
Profit per Employee = Net profit Earned by the Bank
Total number of Employees
Table 17: Profit per Employee

Bank of Baroda 0.1071 0.0687 0.0688 0.0987 0.1009 0.0888
Bank of India 0.1260 0.0377 0.1473 0.0652 0.0603 0.0873
IDBI Bank 0.2086 0.0528 0.0682 0.1217 0.1316 0.1165
HDFC Bank 0.1404 0.1339 0.1339 0.1244 0.0974 0.1260
ICICI Bank 0.1348 0.1685 0.1358 0.1341 0.1109 0.1368
Axis Bank 0.1640 0.1627 0.1670 0.1538 0.1367 0.1568
Yes Bank 0.1693 0.1867 0.2251 0.1838 0.1691 0.1868
0.2500
0.2000
0.1500
0.1000
0.0500
0.0000
2016 2015 2014 2013 2012 average
Chart-7: Profit per Employee
that the higher the Profit per Employee Ratio the GOOD is the performance of the bank. Here the
highest Profit per Employee Ratio is of Yes Bank that is 0.18, whereas the second highest is of
Axis Bank that is 0.15 and the lowest Profit per Employee Ratio is of Stat Bank of India that is
0.05.
In the year 2012 the highest Profit per Employee is of Yes Bank, whereas the lowest is of Stat
Bank of India. In the year 2013 the highest Profit per Employee is of Yes Bank and the lowest is
of Stat Bank of India. In the year 2014 the highest Profit per Employee is of Yes Bank and the
lowest is of Punjab National Bank. While in the year 2015 the highest Profit per Employee is of
Yes Bank and the lowest is of Bank of India. Whereas in the year 2016 the highest Profit per
Employee is of IDBI Bank and the lowest is of Stat Bank of India.
2.Total Advances to Total Deposits
The ratio, Total Advances to Total Deposits, measures the efficiency of the banks management
in covering the deposits available with the bank into high earning advances. The higher the ratio,
the better is the bank. Total Advances include receivables. Total Deposits include demand
deposits, saving deposits, term deposits, and deposits of other banks.
Total Advances to Total Deposits = Total Advances x 100
Total Deposits
Table 18: Total Advances to Total Deposits

TOTAL ADVANCES TO TOTAL DEPOSITS
Bank of Baroda 63.41933 63.73 63.859 63.4616 68.2697 64.54792
Bank of India 64.2924 69.04 70.5628 68.0721 70.10628 68.41472
IDBI 81.248 80.1955 83.43 86.43426 85.7856 83.41867
HDFC Bank 85.02 81.077 82.48 80.91918 79.21156 81.74155
ICICI Bank 103.2836 107.1798 102.0454 99.192 99.30634 102.2014
Axis Bank 94.6381 87.173 81.89 77.97 77.1269 83.7596
Yes Bank 87.9 82.86165 74.985 63.46 68.2697 75.49527
Chart Title
120
100
80
60
40
20
0
2016 2015 2014 2013 2012 Average
Chart-8: Total Advances to Total Deposits
that the higher the Total Advance to Total Deposit Ratio the GOOD is the performance of the
bank. Here the highest Total Advance to Total Deposit Ratio is of ICICI Bank that is 102.2014,
whereas the second highest is of Kotak Mahindra Bank that is 92.025 8and the third highest is
State Bank of India that is 84.7701. The lowest Total Advance to Total Deposit Ratio is of Bank
of Baroda that is 64.54792, the second lowest is of Bank of India that is 68.41472 and the third
lowest is of Yes Bank that is 75.49527.
In the year 2012 the highest Total Advance to Total Deposit is of Kotak Mahindra Bank, whereas
the lowest is of Bank of Baroda &Yes Bank. In the year 2013 the highest Total Advance to Total
Deposit is of ICICI Bank and the lowest is of Yes Bank. In the year 2014 the Highest Total
Advance to Total Deposit is of ICICI Bank and the lowest is of Bank of Baroda. While in the year
2015 the highest Total Advance to Total Deposit is of ICICI Bank and the lowest is of Bank of
Baroda. Whereas in the year 2016 the highest Total Advance to Total Deposit is of ICICI Bank
and the lowest is of Bank of Baroda.
MANAGEMENT EFFICIENCY QUALITY:
Null Hypothesis (Ho):-
There would be no significant difference among Profit per Employee Ratio of selected
public and private sector banks.
Alternative Hypothesis (Ha):-
There would be significant difference among Profit per Employee Ratio of selected
Public and private sector banks.
2. ADVANCES TO TOTAL DEPOSIT RATIO
There is no significant difference among Total Advances to Total Deposits Ratio of
Selected public and private sector banks.
There is significant difference among Total Advances to Total Deposits Ratio of
Selected public and private sector banks.

SUMMARY
Column 1 10 1.1064 0.11064 0.001757452
Column 2 10 813.18641 81.318641 119.4627716
ANOVA
Source of
Variation SS Df MS F P-value F crit
Between Groups 32973.69713 1 32973.69713 552.0248964 5.87E-15 4.413873
Within Groups 1075.180761 18 59.73226452
Total 34048.87789 19
EARNINGS QUALITY:-
1. Other income to total income ratio:-
Non Interest / Total Income ratio measures the proportion of bank's total income that have been
generated by non-interest related activities. It is calculated as (Total Income - Interest Income) /
Total Income. The interpretation of this ratio is subject to some controversy. Some analysts view
a high number as well, since it shows that the bank is not dependent on its lending activities to
generate a profit. However others take the opposite view and view a high number as indicating
that the bank is dependent on unstable revenues that are not predictable for its profitability
Other Income to Total Income = Other income
Total income
Table 19: Other Income To Total Income Ratio
Other income to total income

Bank of Baroda 10.18 9.29 10.28 9.35 10.34 9.888
Bank of India 8.0365 8.88 10.16976 10.5565 10.44333 9.617217
IDBI 10.84 12.46 10.071 11.38287 8.28888 10.60855
HDFC Bank 15.14899 15.655 16.1443 16.347 16.11953 15.88296
ICICI Bank 22.51 19.87 19.09656 17.2355 18.27917 19.39825
Axis Bank 19.609 19.072 19.46 19.42 19.7711 19.46642
Yes Bank 16.69 15.027 14.71068 13.16452 11.96 14.31044
Chart Title
25
20
15
10
0
2016 2015 2014 2013 2012 Average
State Bank of India Bank of Baroda Punjab National Bank Bank of India IDBI
HDFC Bank ICICI Bank Axis Bank Kotak Mahindra Bank Yes Bank
Chart-9: Other Income To Total Income Ratio
that the higher the Other Income to Total Income Ratio the POOR is the performance of the bank.
Here the highest Other Income to Total Income Ratio is of Axis Bank that is 19.46642, whereas the
second highest is of ICICI Bank that is 19.39825 and the third highest is HDFC Bank that is
15.88296. The lowest Other Income to Total Income is of Bank of India that is 9.617217, the second
lowest is of Bank of Baroda that is 9.888 and the third lowest is of Punjab National Bank that is
10.60101.
In the year 2012 the highest Other Income to Total Income is of Axis Bank whereas the lowest is
of IDBI. In the year 2013 the highest Other Income to Total Income is of Axis Bank and the lowest
is of Punjab National Bank. In the year 2014 the highest Other Income to Total Income is of Axis
Bank and the lowest is of Punjab National Bank. While in the year 2015 the highest Other Income
to Total Income is of ICICI Bank and the lowest is of Bank of India. Whereas in the year 2016 the
highest Other Income to Total Income is of ICICI Bank and the lowest is of Bank of India.
2. Dividend Payout Ratio:-
A reduction in dividends paid is looked poorly upon by investors, and the stock price usually
depreciates as investors seek other dividend-paying stocks. The payout ratio provides an idea of
how well earnings support the dividend payments. More mature companies tend to have a higher
payout ratio. A stable dividend payout ratio indicates a solid dividend policy by the company's
board of directors.
Dividend Payout Ratio = divided per share
Earnings per share
Table20: Dividend Payout Ratio

Bank of Baroda 0.0000 8.8627 1.6748 1.0673 1.0148 2.5239
Bank of India 0.0000 1.8818 1.1757 2.0925 1.4292 1.3158
IDBI Bank 0.0000 1.4679 1.2500 2.3810 1.7007 1.3599
HDFC Bank 9.8425 9.5992 9.5238 9.7416 9.7587 9.6931
ICICI Bank 14.9254 12.9400 2.7062 2.7701 2.9407 7.2564
Axis Bank 7.2275 7.4194 7.3765 1.5088 1.5041 5.0072
Yes Bank 1.6496 1.8367 1.8824 1.7777 1.7809 1.7854
25.0000
20.0000
15.0000
10.0000
5.0000
0.0000
2016 2015 2014 2013 2012 average

Yes Bank
Chart-10: Dividend Payout Ratio
that the higher the Dividend payout Ratio the GOOD is the performance of the bank. Here the
highest Dividend payout Ratio is of HDFC Bank that is 9.69, whereas the second highest is of Stat
Bank of India that is 9.25 and the lowest Dividend payout Ratio is of Kotak Mahindra Bank that
is 1.24.
In the year 2012 the highest Dividend payout Ratio is of HDFC Bank whereas the lowest is of
Bank of Baroda. In the year 2013 the highest Dividend payout Ratio is of HDFC Bank and the
lowest is of Bank of Baroda. In the year 2014 the highest Dividend payout Ratio is of HDFC Bank
and the lowest is of Punjab National Bank. While in the year 2015 the highest Dividend payout
Ratio is of Stat Bank of India and the lowest is of Kotak Mahindra Bank. Whereas in the year 2016
the highest Dividend payout Ratio is of Stat Bank of India and the lowest is of Bank of Baroda.

SUMMARY
Column 1 10 1.1064 0.11064 0.001757452
Column 2 10 813.18641 81.318641 119.4627716
ANOVA
Source of
Variation SS df MS F P-value F crit
Between Groups 32973.69713 1 32973.69713 552.0248964 5.87E-15 4.413873
Within Groups 1075.180761 18 59.73226452
Total 34048.87789 19
LIQUIDITY:-
1. Liquid Assets to Total Assets:-
The ratio is arrived at by dividing the liquid assets by total assets. Ideally, the ratio should be
higher. Liquid Assets include cash in hand, balance with RBI, Balance with other banks (Both in
India and Abroad) and money at call and short notice.
Liquid Assets to Total Assets = Liquid Assets x 100
Total Assets
Table21: Liquid Assets to Total Assets

Liquid Assets to Total Assets
Bank of Baroda 39.26 39.07735 38.49 38.839 33.8084 37.89495
Bank of India 36.55 32.51 31.609 33.879 32.71 33.4516
IDBI 4.428893 4.079919 5.111879 5.553367 6.21999 5.07881
HDFC Bank 5.49 6.152 8.052 6.814388 6.19625 6.540928
ICICI Bank 8.307083 6.547392 6.983972 7.71571 7.649009 7.440633
Axis Bank 6.342 7.8147 7.3683 6.00036 4.878345 6.480741
Yes Bank 4.9729 5.549773 5.4044 4.1025 4.869958 4.979906
Chart Title
40
35
30
25
20
15
10
5
0
2016 2015 2014 2013 2012 Average
Chart-11: Liquid Assets to Total Assets

The Higher the Liquid Assets to Total Assets ratio the good the performance of the Bank. Here
the highest Liquid Assets to Total Assets on an average is of Bank of Baroda that is 37.89495 ,the
second highest Liquid Assets to Total Assets ratio is of Bank of India 33.4516 While the third
highest ratio is of Punjab National Bank is 7.795437. Whereas the lowest ratio is of Yes Bank is
4.979906 second lowest is of IDBI bank 5.07881 and the third lowest is of Kotak Mahindra Bank
that is 5.369272.
In the year 2012 the highest Liquid Assets to Total Assets ratio is of Bank of Baroda whereas the
lowest is of Kotak Mahindra Bank. In the year 2013 the highest Liquid Assets to Total Assets ratio
is of Bank of Baroda and the lowest is of Yes Bank. In the year 2014 the highest Liquid Assets to
Total Assets ratio is of Bank of Baroda and the lowest is of IDBI. While in the year 2015 the
highest Liquid Assets to Total Assets ratio is of Bank of Baroda and the lowest is of Yes Bank.
Whereas in the year 2016 the highest Liquid Assets to Total Assets ratio is of Bank of Baroda
Bank and the lowest is of IDBI.
2. Liquid Assets to Total Deposits:-
This ratio measures the liquidity available to the depositors of a bank. The higher the ratio, the
better is the liquidity position of the bank. Liquid Assets includes cash in hand, balance with RBI,
balance with other banks (both in India and aboard) and money at call and short notice. Total
Deposits include Demand deposits, Savings deposits, Term deposits, and Deposits of other
financial institutions.
Liquid Assets to Total Deposits = Liquid Assets x 100

Total Deposits

Bank of Baroda 20.98 19.806 20.4102 25.6167 21.620000 21.68658
Bank of India 23.16 22.52 22.96 24.7783 27.26248266 24.13615653
IDBI Bank 6.239857 5.59 7.133 7.8922 8.578759268 7.086763254
HDFC Bank 7.1224 8.0594 10.5 9.2085 8.486896066 8.675439213
ICICI Bank 14.2062 11.70049 12.512 14.15 14.1797713 13.34969275
Axis Bank 9.3096 11.1955 10.051 8.089 6.330594177 8.995138835
Yes Bank 7.356297 8.288568 7.94111 6.072325 7.294842844 7.39062845
Chart Title
30
25
20
15
10
5
0
2016 2015 2014 2013 2012 average

Yes Bank
The Higher the Liquid Assets to Total Deposits ratio the good the performance of the Bank. Here
the highest Liquid Assets to Total Deposits on an average is of Bank of India that is 24.13615653,the
second highest Liquid Assets to Total Assets ratio is of Bank of Baroda that is 21.68658While the
third highest ratio is of ICICI Bank is13.34969275. Whereas the lowest ratio is of IDBI Bank is
7.086763254 second lowest is of Yes Bank 7.39062845and the third lowest is of Kotak Mahindra
Bank that is 8.0803483.
In the year 2012 the highest Liquid Assets to Total Deposits ratio is of Bank of India whereas the
lowest is of Kotak Mahindra Bank. In the year 2013 the highest Liquid Assets to Total Deposits ratio
is of Bank of Baroda and the lowest is of Yes Bank. In the year 2014 the highest Liquid Assets to
Deposits Assets ratio is of Bank of Baroda and the lowest is of IDBI. While in the year 2015 the
highest Liquid Assets to Total Deposits ratio is of Bank of Baroda and the lowest is of IDBI Bank.
Whereas in the year 2016 the highest Liquid Assets to Total Deposits ratio is of Bank of India and
the lowest is of IDBI.
LIQUIDITY:-

There would be no significant difference among Liquidity Assets to Total Assets

There would be significant difference among Liquidity Assets to Total Assets Ratio of

There would be no significant difference among Liquidity Assets to Total Deposits
There would be significant difference among Liquidity Assets to Total Deposits Ratio of
SUMMARY
Column 1 10 122.622589 12.2622589 154.3731265
Column 2 10 119.0282323 11.90282323 37.02609434
ANOVA

Between Groups 0.645969996 1 0.645969996 0.006749975 0.935428 4.413873
Within Groups 1722.592987 18 95.69961039
Total 1723.238957 19
As the calculated value 0.006749975 is less than tabulated value, null hypo is rejected.
Research
Methodology
Research Methodology
Research methodology is a way to systematically solve the research problem. The reseach
methodology using for find bout the solution of the research problem is analytical research
methodology and some extend descriptive research methodology.
The term research consists of two words:
Research = Re + Search
Re means again and again and Search means to find out something.
http://www.slideshare.net/darunvd/fundamental-analysis-of-banking-industry
Research problem

There are many private & public sector bank listed in Indian Banking Industry & they
differed in terms of their financial performance.

Financial Performance of bank depends on many factors that can be studied with the
help of fundamental analysis.

So this project is an effort to study performance of selected private& public sector
bank with respect to following parameters.

Risk & Return

Growth

Profitability

Liquidity

Solvency
OBJECIVES:-
To evaluate the overall productivity and profitability of Public Sector Banks and Private
Sector Banks.
To evaluate the financial performance of Public Sector Banks and Private Sector Banks
under study.
To evaluate the profitability of Public Sector Banks and Private Sector Banks.
To suggest investors regarding fundamentally best company to invest.
To acquire practical exposure of financial analysis of an enterprise.
To gain knowledge of evaluation intrinsic value of firm.
To analysis the profitability position of the sample banks.
SAMPLE DESIGN
The research problem having been formulated in clear terms, the researcher will be required to
prepare a research design, i.e. he will have to state the conceptual structure within which research
would be conducted. The preparation of such a design facilitates research to be as efficient as
possible yielding maximal information. But how all these can be achieved depends mainly on the
research purpose. Research purposes may be grouped into four categories, viz.
EXPLORATORY
DESCRIPTIVE
HYPOTHESIS - TESTING
EXPLORATORY RESEARCH DESIGN:
In this type of research designs a specific problem is formulated for precise investigation or a
specific hypothesis is formulated from an operational observation. Such studies are, therefore,
known as formative studies also. Generally flexible research designs are popular for exploratory
studies because discovery of ideas and new insight, literature survey etc are generally associated
with such designs.
DESCRIPTIVE RESEARCH DESIGN:
Descriptive research studies are generally having cause effect relationships are described in such
studies. These rigid designs generally concentrate on the aspect like setting objectives, defining
and stating the problem under study, designating the method of data collection, including sampling
survey, analysis and interpretation of data.
HYPOTHESIS- TESTING RESEARCH DESIGN:
Hypothesis testing is also known as experimental research design. Experimental designs are
generally used in experimental studies where hypothesis is tested. Experimental design is now
used in almost all the areas of scientific studies.
HYPOTHESIS
The hypothesis is a tentative solution of a problem. The research activities are planned to
verify the hypothesis. It is very important for the researcher to understand the meaning of the
word hypothesis.
The word hypothesis consists of two words:
Hypo + thesis = Hypothesis
Hypo means composition of two or more variables which is to be verified.
Thesis means position of these variables in the specific frame of reference.
Thus, a hypothesis is a special proposition, formulated to be tested in a certain given situation as

a part of research which states what the researcher is looking for.
There are two types of hypothesis statements:

(2) CAPITAL ADEQUACY RATIO
Null Hypothesis (Ho):- There is no significant difference among Capital Adequacy

Alternative Hypothesis (Ha):- There is significant difference among Capital

Adequacy Ratio of selected public and private sector banks.
(2 )DEBT EQUITY RATIO
Null Hypothesis (Ho):- There is no significant difference among Debt Equity Ratio of
Alternative Hypothesis (Ha):- There is significant difference among Debt Equity

(3).Total Equity to Loan Portfolio

Null Hypothesis (Ho):- There is no significant difference among Total Equity to Loan
Alternative Hypothesis (Ha):- There is significant difference among Total Equity to Loan
SUMMARY
Column 1 10 1.9336 0.19336 0.094303
Column 2 10 117.9902 11.79902 13.33373
Column 3 10 0.0363 0.00363 9.81E-06
ANOVA

2.61E-
Between Groups 912.8623 2 456.4312 101.9727 13 3.354131
Within Groups 120.8524 27 4.476014
Total 1033.715 29
ASSET QUALITY
Null Hypothesis (Ho):- There is no significant difference among Total Investment to Total Assets
Alternative Hypothesis (Ha):- There is significant difference among Total Investment to Total Assets

Gross NPA to Total Loan:-
Null Hypothesis (Ho):- There is no significant difference among Gross NPA to Total Loan
Alternative Hypothesis (Ha):- There is significant difference among Gross NPA to Total Loan
Net NPA to Total Loan:-
Null Hypothesis (Ho):- There is no significant difference among Net NPA to Total Loan
Alternative Hypothesis (Ha):- There is significant difference among Net NPA to Total Loan
SUMMARY
Column 1 10 271.12871 27.112871 26.63269593
Column 2 10 0.515 0.0515 0.001991958
Column 3 10 0.2618 0.02618 0.000616848
` ANOVA

Between Groups 4886.690903 2 2443.345451 275.2000184 1.10528E-18 3.354130829
Within Groups 239.7177426 27 8.878434912
Total 5126.408645 29


SUMMARY
Column 1 10 1.1064 0.11064 0.001757452
Column 2 10 813.18641 81.318641 119.4627716
ANOVA
Source of
Variation SS df MS F P-value F crit
Between Groups 32973.69713 1 32973.69713 552.0248964 5.87E-15 4.413873
Within Groups 1075.180761 18 59.73226452
Total 34048.87789 19
As the calculated value 552.0248964 is morethan tabulated value, null hypo is rejected.
EARNINGS QUALITY:-
1.OTHER INCOME TO TOTAL INCOME RATIO
There would be no significant difference among Other Income to Total Income Ratio
There would be significant difference among Other Income to Total Income Ratio of
2.DIVIDEND PAY-OUT RATIO
There would be no significant difference among Dividend Pay-out Ratio of selected

There would be significant difference among Dividend Pay-out Ratio of selected
SUMMARY
Column 1 10 136.632077 13.6632077 13.61897073
Column 2 10 42.2866 4.22866 11.26155402
ANOVA

Between Groups 445.0534515 1 445.0534515 35.77524638 1.17E-05 4.413873
Within Groups 223.9247227 18 12.44026237
Total 668.9781743 19
As the calculated value 35.77524638is more than tabulated value, null hypo is rejected.
LIQUIDITY:-

There would be no significant difference among Liquidity Assets to Total Assets
There would be significant difference among Liquidity Assets to Total Assets Ratio of
There would be no significant difference among Liquidity Assets to Total Deposits
There would be significant difference among Liquidity Assets to Total Deposits Ratio of
SUMMARY
Column 1 10 122.622589 12.2622589 154.3731265
Column 2 10 119.0282323 11.90282323 37.02609434
ANOVA
Between Groups 0.645969996 1 0.645969996 0.006749975 0.935428 4.413873
Within Groups 1722.592987 18 95.69961039
Total 1723.238957 19
As the calculated value 0.006749975 is less than tabulated value, null hypo is rejected.
SAMPLE DESIGN
Table22: SAMPLE DESIGN
Types of research Explorative research design and
Descriptive research design
Sources of data Secondary data

Banks Balance Sheets
Profit & Loss statements
Statical tools Anova table
Sample units Private sector banks :5

Public sector banks :5
Limitations of the study
Following are the limitations of the study:-
The study is conducted only for the banking Sector and the sample taken for the study is
also small i.e. only 10 banks are taken so an accurate research cannot be done.
The study is limited to financial data for a period of 5 years from 2011-12 to 2015-16.
It is difficult to give a perfect decision to investor to invest or not as the market is
fluctuating.
This study is based on the analysis of secondary data. The result and conclusion of this
study might not be accurate due to reliability of the secondary data.
The bias on the part of the researcher may affect the findings of the study.
Conclusion
Indias banking industry has evolved over a long period of more than two centuries. The
banking sector is one of the most crucial sectors in any economy, and plays an instrumental
role in promoting economic growth. In India, the sector is even more important as the
expansion of banking services to rural areas may also play a significant role in reducing
poverty and ensuring sustainable income levels.
Indias banking industry is considered to be very stable with healthy balance sheets and low
exposure to risky assets. The global financial crisis did not affect the Indian banks
significantly. So this is one of the sectors that is going to show continued growth on the back
of growing Indian economy.
Form the detail study of the Fundamental Analysis it can be said that the Indian Economy has
been developing since last decade. The fundamental analysis which aims at developing an
insight into the economic performance of the business is of paramount importance from the
view point of investment decisions. Thus, the present study has been conducted to examine
the economic sustainability of the 10 major banks in the Indian banking sector.
By using ratio analysis to know the fundamentally strong banks i.e. AXIS, HDFC, SBI and
KOTAK MAHINDRA BANK are seem to be strong and profitable for investors to invest in
it.
Finally it has been concluded that as banking industry is playing major role in the growth of
Indian capital market, it is essential to identify whether the market of banking industry is
efficient or inefficient. For that purpose fundamental analysis has been used by applying one-
way ANOVA test. So from the analysis and testing of 10 selected public and private sector
banks it is concluded that Axis banks performing well and it is safest mode of investment for
investors.
BIBLIOGRAPHY
BIBLIOGRAPHY BOOK REFERRED (BIBLIOGRAPHY)
Donald R. Cooper & Pamela S. Schindler, Business Research Methods, Tata McGraw Hill
Publishing Co. Ltd., New Delhi, 2006.
C.R. KOTHARI, LATEST EDITION.
J.K. Sharma, Business Statistics, Addison Wesley, 2000.
Ken Black, Business Statistics for decision Making, Wiley Student Edition, 2006.
WEB SITES
www.investopedia.com
www.wikipidia.com
www.moneycontrol.com
www.rbi.org.in
SOURCES
http://shodhganga.inflibnet.ac.in/bitstream/10603/11205/13/13_summary.pdf
https://www.scribd.com/doc/92977426/Introduction-of-Banking-Industry
https://www.google.co.in/search?q=banking+sector+in+india+-chart
https://en.wikipedia.org/wiki/State_Bank_of_India
https://en.wikipedia.org/wiki/Bank_of_Baroda
https://en.wikipedia.org/wiki/Punjab_National_Bank
https://en.wikipedia.org/wiki/Bank_of_India
https://en.wikipedia.org/wiki/IDBI_Bank
https://en.wikipedia.org/wiki/HDFC_Bank
https://en.wikipedia.org/wiki/ICICI_Bank
https://www.axisbank.com/
https://en.wikipedia.org/wiki/Kotak_Mahindra_Bank
https://en.wikipedia.org/wiki/Yes_Bank
HTTPS://EN.WIKIPEDIA.ORG/WIKI/LIST_OF_BANKS_IN_INDIA
http://www.marketing91.com/swot-analysis-of-banking-industry/
http://www.jagranjosh.com/current-affairs/issues-and-challenges-facing-indian-banking-
sector-1456572882-1
http://www.ijbm.co.in/downloads/vol2-issue1/59.pdf
http://www.ermt.net/docs/papers/Volume_3/2_February2014/V3N2-114.pdf
http://www.ijimt.org/papers/140-M582.pdf
http://www.nmims.edu/NMIMSmanagementreview/pdf/jan-feb-2016/fundamental-
analysis-of-selected-public-and-private-sector-banks-in-india.pdf
http://www.serialsjournals.com/serialjournalmanager/pdf/1457762462.pdf
http://www.iaeme.com/MasterAdmin/UploadFolder/IJM_07_02_093/IJM_07_02_093.pdf
http://www.krishisanskriti.org/vol_image/08Jun201610063412%20%20%20%20%20%20
%20%20%20%20NIKHIL%20KUMAR%20%20%20%20%20220-224.pdf
http://www.allresearchjournal.com/archives/2015/vol1issue12/PartM/1-11-174.pdf
http://www.journalijmri.com/sites/default/files/issue-files/0032_0.pdf

Fundamental Analysis of Public and Private Banks in India

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A comprehensive project

FUNDAMENTAL ANALYSIS OF PUBLIC & PRIVATE

(PROF.) NISHANT FOFARIA

JAYSUKHLAL VADHAR INSTITUTE OF MANAGEMENT

GUJARAT TECHNOLOGICAL UNIVERSITY (GTU)

Name of Student: Akbari Seema

Name of Student: Faldu Riddhi

It is our pleasure to present the project report on Fundamental analysis of public

A Practical knowledge in a students life is very important. It helps a student to

3. Punjab National Bank

9. Kotak Mahindra Bank

10. YES BANK

11. Major Players In The Banking Sector

12. Capital adequacy ratio

13. Debt to equity ratio

14. Total Equity to Loan Portfolio

15. Total Investment to Total Assets

16. Gross NPA To Total Loan

17. Profit per Employee

18. Total Advances to Total Deposits

19. Other Income To Total Income Ratio

20. Dividend Payout Ratio

22. SAMPLE DESIGN

SR. NO. PARTICULAR PG. NO.

2. Capital adequacy ratio

3. Debt to equity ratio

4. Total Equity to Loan Portfolio

5. Total Investment to Total Assets

6. Gross NPA To Total Loan

7. Profit per Employee

8. Total Advances to Total Deposits

9. Other Income To Total Income Ratio

10. Dividend Payout Ratio

11. Liquid Assets to Total Assets

STRUCTURE OF INDIAN BANKING SYSTEM

Scheduled Non Scheduled

URBAN CO- STATE CO-

Chart-1: Structure of Indian Banking System

A. Public Sector Banks :-

Table 1: State Bank of India

FOUNDED 1 July 1955, State Bank of India

Industry Banking, financial services

Headquarters Mumbai, Maharashtra, India

Area served Worldwide

Key people Arundhati Bhattacharya (Chairperson)

FOUNDED 20 July 1908

Industry Banking, financial services

Headquarters Vadodara, India

Area served Worldwide

Key people P. S. Jayakumar(CEO & MD) Ravi Venkatesan

Table 2: Bank of Baroda

3. Punjab National Bank:-

Table 3: Punjab National Bank

FOUNDED 19 May 1894

Headquarters New Delhi

Founder Lala Lajpat Rai

Usha Ananthasubramanian (MD & CEO)

FOUNDED 7 September 1906

Industry financial services

Headquarters Mumbai, Maharashtra, India

Shri Melwyn Rego (MD & CEO)

Table 4: Bank of India

FOUNDED July 1964

Industry Banking, financial services