A Study on Financial Performance of

ICICI and IDBI

Abstract: Finance is defined as the management of money and initiative of the World Bank, the Government of India and
includes activities like investing, borrowing, lending, budgeting, representatives of Indian industry. The principal objective was
saving, and forecasting. The main objectives of this paper used to to create a development financial institution for providing
analysis the financial performance of two year respective banks
are Industrial Credit and Investment Corporation of India
medium-term and long-term project financing to Indian
(ICICI) and Industrial Development Bank of India (IDBI). We business. In the 1990s, ICICI transformed its business from a
draw conclusion on the basis of financial tools like ratio analysis, development financial institution offering only project finance
comparative and common size. to a diversified financial services group offering a wide variety
of products and services, both directly and through a number
Keywords: Financial statement, Ratio analysis, financial of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI
performance.
become the first Indian company and the first bank or
financial institution from non-Japan Asia to be listed on the
1. Introduction
NYSE.

A financial statement is a formal record of the financial B. IDBI bank

activities, and position of a business, person, or other entity. It IDBI Bank Ltd is one of India's largest commercial Banks.
is presented in a structured manner and in a form easy to The Bank is a Universal Bank with their operations driven by
understand. In the preparation of final accounts of a firm, the a cutting edge core Banking IT platform. They offer
financial statements display the net results for the given year. personalized banking and financial solutions to their clients in
They play a vital role in allowing a user of a financial the retail and corporate banking arena through their large
statement, to understand the results of a firm for a given year. network of Branches and ATMs spread across length and
breadth of India. IDBI Bank had a network of 1916 branches
A. Definition
and 3276 ATMs as on 31 March 2018. The bank also set up an
Financial statements are written records that convey the overseas branch at Dubai. The Bank operates in four segments
business activities and the financial performance of a namely Wholesale Banking Retail Banking Treasury Services
company. Financial statements are often audited by and Other Banking Operations. They have six wholly-owned
government agencies, accountants, firms, etc. to ensure subsidiaries namely IDBI Home finance Ltd IDBI Gilts Ltd
accuracy and for tax, financing, or investing purposes. IDBI Intech Ltd IDBI Capital Market Services Ltd IDBI Asset
Financial statements include: Management Ltd and IDBI MF Trustee Company Ltd.
 Balance sheet
 Income statement 3. Nature of financial statement
 Cash flow statement.
The financial statement supply financial position (i.e.
revenues and expenses we get from income statement and
2. History of bank balance sheet presents the assets and liabilities position at a
A. ICICI bank particular date). Thus the nature of financial statement can be
ICICI Bank was originally promoted in 1994 by ICICI summarized in the following forms:
Limited, an Indian financial institution, and was its wholly-  Recorded facts
owned subsidiary. ICICI's shareholding in ICICI Bank was  Convention
reduced to 46% through a public offering of shares in India in  Postulates
fiscal 1998, an equity offering in the form of ADRs listed on  Legal implication and
the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of  Personal judgment
Madura Limited in an all-stock amalgamation in fiscal 2001,
and secondary market sales by ICICI to institutional investors
in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at
the
 4. Review of literature 6. Objective of the study
Ihsan Isik et. al. (2003) analysed the Financial deregulation
 To examine the trends and growth of the Industrial Credit
and total factor productivity change of Turkish commercial
and Investment Corporation of India and Industrial
banks. It found that all forms of Turkish banks, although in
Development Bank of India.
different magnitudes, have recorded significant productivity
 To analysis financial performance of using Industrial
gains driven mostly by efficiency increases rather than
Credit and Investment Corporation of India and Industrial
technical progress. Efficiency increases, however, were mostly
Development Bank of India ratios, comparative balance
owing to improved resource management practices rather than
sheet and common size statement.
improved scales. It also indicated that private banks began to
 To offer suggestion based on the finding of this study.
close their performance gap with public banks in the new
environment. A. Sources of data collection
Milind Sathye (2003) measured the productive efficiency of The study was based on secondary data
banks in a developing country, that is, India. The measurement
of efficiency was done using data envelopment analysis. Two 7. Research methodology
models have been constructed to show efficiency scores vary
The common methods of financial statement analysis
with change in inputs and outputs. The efficiency scores, for
include ratio, comparative and common size. Historical
three groups of banks, that is, publicly owned, privately owned
information combined with a series of assumption and
and foreign owned, are measured. It shown that the mean
adjustment to the financial information may be used to project
efficiency score of Indian banks compares well with the world
future performance.
mean efficiency score and the efficiency of private sector
commercial banks as a group is, paradoxically lower than that A. Ratios
of public sector banks and foreign banks in India. The existing Ratio is a form of financial statement analysis that is used to
policy of reducing non - performing assets and rationalization obtain a quick indication of a firm’s financial performance in
of staff and branches may be continued to obtain efficiency several key areas. Financial ratio is relationship determined
gains and make the Indian banks internationally competitive form a company’s financial information and used for
which is a declared objective of the Government of India. comparison.
Prashanta Kumar Banerjee (2003) evaluated the operational
and financial performance of Indian Factoring Companies. B. The ratio used for the study are
Factoring is a global industry with a vast turnover. It offers • Reserve to total liability ratio
various advantages like consistent cash flow, lower • Borrowing to total liability ratio
administration costs, reduced credit risks and more time for • Advance to total asset ratio
core activities. Both the domestic and international factoring
are getting popularity at an impressive rate in all parts of the Table 1
Reserve to total liability ratio
world. The factoring services made an entry in India in the YEAR ICICI IDBI
year 1991. Since then, a good number of factoring companies 2017-18 11.57 3.79
namely SBI Factors and Commercial Services Ltd., Canbank 2018-19 10.82 7.38
Factors Ltd., Wipro Finance Ltd., Integrated Finance 𝑅𝑒𝑠𝑒𝑟𝑣𝑒
Company Ltd, and Foremost Factors Ltd. have been offering 𝑅𝑒𝑠𝑒𝑟𝑣𝑒 𝑡𝑜 𝑡𝑜𝑡𝑎𝑙 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑦 = × 100
𝑇𝑜𝑡𝑎𝑙 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑦
factoring services in India. It confirmed that operational and
financial performance of the factors in India has been
improving through time.

5. Statement of problem
1. Personal financial statement. To learn more about finances,
cash flows, and financial statements, see the following
resources. Balance Sheet Income Statement Template Cash
Flow Statement Three Financial Statements.
2. The research problem formulated has is to make a
“comparative study on financial performance of ICICI and
IDBI bank.
3. The idea has been developed only after review of literature Chart-1: Reserve to total liability ratio
and discussion with experts.
Interpretation:
The above table shows that reserve to total liability ratio of
ICICI are 11.57% in 2017-18 and 10.82% in 2018-19.
Likewise, it is 3.79% in 2017-18 and 7.38% in 2018-19 for 𝐴𝑑𝑣𝑎𝑛𝑐𝑒𝑠
IDBI. 𝐴𝑑𝑣𝑎𝑛𝑐𝑒𝑑 𝑡𝑜 𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡 𝑟𝑎𝑡𝑖𝑜 = × 100
𝑇𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡
Inference: Interpretation:
The ratio of reserve to total liability was decreasing for The above table shows that reserve to total liability ratio of
ICICI bank. But it increasing for IDBI. ICICI are 58.48% in 2017-18 and 61.02% in 2018-19.
Likewise, it is 49.74% in 2017-18 and 46.81% in 2018-19 for
Table 2
Borrowing to total liability ratio IDBI.
YEAR ICICI IDBI
2017-18 20.87 18.30 Inference:
2018-19 17.20 14.44 ICICI bank shows increasing trend in advance to total asset
ratio, but for IDBI the ratio is decreasing.
𝐵𝑜𝑟𝑟𝑜𝑤𝑖𝑛𝑔
𝐵𝑜𝑟𝑟𝑜𝑤𝑖𝑛𝑔 𝑡𝑜 𝑡𝑜𝑡𝑎𝑙 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑦 𝑟𝑎𝑡𝑖𝑜 = × 100
𝑇𝑜𝑡𝑎𝑙 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑦
Interpretation:
The above table shows that reserve to total liability ratio of
ICICI are 20.87% in 2017-18 and 17.20% in 2018-19.
Likewise, it is 18.30% in 2017-18 and 14.44% in 2018-19 for
IDBI.
Inference:
Both the bank shows a decreasing trend in borrowing to
total liability.
Chart-3: Advance to total asset ratio

8. Comparative balance sheet

A comparative balance sheet presents side-by-side
information about an entity's assets, liabilities, and
shareholders' equity as of multiple points in time. For
example, a comparative balance sheet could present the
balance sheet as of the end of each year for the past three
years. Another variation is to present the balance sheet as of
the end of each month for the past 12 months on a rolling
Chart-2: Borrowing to total liability ratio
basis. In both cases, the intent is to provide the reader with a
Table 3 series of snapshots of a company's financial position over
Advance to total asset ratio time, which is useful for developing trend line analysis.
YEAR ICICI IDBI
2017-18 58.48 49.74
2018-19 61.02 46.81
Table 4
Comparative balance sheet of ICICI for the year 2017-18
PARTICULARS 2017 2018 AMOUNT INCREASE /DECREASE PERCENTAGE INCREASE/
DECREASE
ASSET
Cash and balance with RBI 31702.41 33102.38 1399.97 4.42
Balance with banks and money at call 44010.66 51067.00 7056.34 16.03
Advance 464232.08 512395.29 48163.21 25.69
Investment 161506.55 202994.18 41487.63 10.37
Fixed asset 4763.07 4900.32 137.25 2.88
Other asset 62534.55 71726.80 9192.25 14.70
Total asset 768749.32 876185.97 107436.65 13.98
LIABILITIES
Share capital 1165.11 1285.81 120.7 10.36
Reserve 95737.57 100864.37 5126.8 5.36
Deposits 490039.06 560975.21 70936.15 14.48
Borrowing 147556.15 182858.62 35302.47 23.92
Other liabilities 34245.16 30196.40 -4048.76 -11.82
Total liabilities 768749.31 876185.98 107436.67 13.98
 Table 5
Comparative balance sheet of ICICI of India for the year 2018-19
PARTICULARS 2018 2019 INCREASE(+) OR DECREASE(-)
AMOUNT PERCENTAGE%
ASSET
Cash and balance with RBI 33102.38 37858.01 4755.63 14.36
Balance with banks and money at call 51067.00 42438.27 -8628.73 -16.90
Advance 512395.29 586646.58 4738.5 2.33
Investment 202994.18 207732.68 14251.29 14.49
Fixed asset 4900.32 4886.72 -13.4 -0.27
Other asset 71726.80 81852.17 10125.37 14.12
Total asset 876185.97 961414.63 85228.73 9.73
LIABILITIES
Share capital 1285.81 1289.46 3.65 0.28
Reserve 100864.37 10402.40 3165.03 3.14
Deposits 560975.21 652919.40 91944.46 16.39
Borrowing 182858.62 165319.97 -17538.65 -9.59
Other liabilities 30196.40 37851.46 7655.06 25.35
Total liabilities 876185.98 961414.64 85228.66 9.73

Table 6
Comparative balance sheet of IDBI for the year 2017-18
PARTICULARS 2017 2018 INCREASE(+) OR DECREASE(-)
AMOUNT PERCENTAGE%
ASSETS
Cash and balance with RBI 13346.92 13163.69 -183.23 -1.37
Balance With banks money at call 19337.16 20522.40 1185.24 6.13
Investment 190825.93 171739..95 -19085.98 -10.00
Advance 92934.41 91606.06 -1328.35 -1.43
Fixed assets 1391.19 1215.22 -175.97 -12.65
Other assets 37974.70 46510.56 8535.86 22.48
TOTAL ASSETS 356350.17 345259.77 -11090.4 -3.11
LIABILITIES
Capital 2058.82 3083.86 1025.04 49.79
Reserve & surplus 15087.09 13701.98 -1385.11 -9.18
Deposits 268538.10 247931.61 -20606.49 -7.67
Borrowings 56363.98 63185.53 6821.55 12.10
Other liabilities and provision 14302.18 17986.77 3684.59 25.76
TOTAL LIABILITIES 356350.17 345259.75 -11090.42 -3.11

Table 7
Comparative balance sheet of IDBI for the year 2018-19
PARTICULARS 2018 2019 INCREASE(+) OR DECREASE(-)
AMOUNT PERCENTAGE%
ASSETS
Cash and balance with RBI 13163.69 12730.47 -433.22 -3.29
Balance with banks money at call 20522.40 8503.23 -12019.17 -58.57
Investment 171739..95 146790.44 -24949.51 -14.53
Advance 91606.06 93072.63 1466.57 1.60
Fixed assets 1215.22 1035.68 -179.54 -14.77
Other assets 46510.56 50956.74 4446.18 9.60
TOTAL ASSETS 345259.77 313556.80 -31702.97 -9.18
LIABILITIES
Capital 3083.86 7736.29 4652.43 150.86
Reserve& surplus 13701.98 23147.71 9445.73 68.94
Deposits 247931.61 227371.72 -20559.89 -8.29
Borrowings 63185.53 45287.72 -17897.81 -28.33
Other liabilities and provision 17986.77 10013.35 -7973.42 -44.33
TOTAL LIABILITIES 345259.75 313556.79 31702.96 100

A. Common size
A common size income statement is an income statement in
which each line item is expressed as a percentage of the value
of revenue or sales. It is used for vertical analysis, in which
each line item in a financial statement is represented as a
percentage of a base figure within the statement.
 Table 8 Table 11
Common size balance sheet of ICICI for the year 2018 Common size balance sheet of IDBI for the year 2019
PARTICULAR 2018 PERCENTAGE PARTICULARS 2019 PECENTAGE
ASSET ASSET
Cash and balance with RBI 33102.38 3.78 Cash and balance with RBI 12730.47 4.06
Balance with banks and money at call 51067.00 5.83 Balance with banks and money at call 8503.23 2.71
Advance 512395.29 58.48 Investment 146790.44 29.68
Investment 202994.18 23.17 Advance 93072.63 46.81
Fixed asset 4900.32 0.56
Fixed asset 1035.68 0.49
Other asset 71726.80 8.19
Other asset 50956.74 16.25
Total asset 876185.97 100
Total asset 313556.80 100
LIABILITIES LIABILITIES
Share capital 1285.81 0.15 Share capital 7736.29 2.47
Reserve 100864.37 11.51
Reserve 23147.71 7.38
Deposits 560975.21 64.02
Deposits 227371.72 72.51
Borrowing 182858.62 20.87
Borrowing 45287.72 14.44
Other liabilities 30196.40 3.45
Other liabilities 10013.35 3.20
Total liabilities 876185.98 100
Total liabilities 313556.79 100
Table 9
Common size balance sheet of ICICI for the year 2019 9. Conclusion
Financial analysis is the process of evaluating businesses,
PARTICULARS 2019 PECENTAGE project, budgets, and financial related transaction. The study is
ASSET
made to attempt to evaluate the financial performance of
Cash and balance with RBI 37858.01 3.94
Balance with banks and money at call 42438.27 4.41
ICICI bank and IDBI bank the researcher has used ratio,
Advance 586646.58 61.01 comparative and common size balance sheet for the study. The
Investment 207732.68 21.61 researcher concluded that IDBI is in a better position a
Fixed asset 4886.72 0.51 comparison reserve to total liability ratio and borrowing to
Other asset 81852.17 8.52 total liability ratio.
Total asset 961414.63 100
LIABILITIES
Share capital 1289.46 0.13
References
Reserve 104029.40 10.82 [1] www.moneycontrol.com
Deposits 652919.40 67.91 [2] https://sg.inflibnet.ac.in
[3] www.wikipedia.com
Borrowing 165319.97 17.20
Other liabilities 37851.46 3.94
Total liabilities 961414.64 100

Table 10
Common size balance sheet of IDBI for the year 2018
PARTICULAR 2018 PERCENTAGE
ASSET
Cash and balance with RBI 13163.69 3.81
Balance with banks and money at call 20522.40 5.94
Investment 171739..95 26.53
Advance 91606.06 49.80
Fixed asset 1215.22 0.45
Other asset 46510.56 13.47
Total asset 3445259.77 100
LIABILITIES
Share capital 3083.86 0.89
Reserve 13701.98 3.79
Deposits 247931.61 71.81
Borrowing 63185.53 18.30
Other liabilities 17986.77 5.21
Total liabilities 345259.75 100