1010pm - 8.epra Journals 13130

SJIF Impact Factor (2023): 8.574| ISI I.F. Value: 1.241| Journal DOI: 10.
36713/epra2016 ISSN: 2455-7838(Online)

EPRA International Journal of Research and Development (IJRD)
Volume: 8 | Issue: 5 | May 2023 - Peer Reviewed Journal
A STUDY ON FINANCIAL PERFORMANCE OF

INDIAN BANK LTD
Mr. P. Kanagaraj1, Mr. I. Harsha Vardhan2

1
Assistant Professor, Department of Commerce with Professional Accounting,
Dr. N.G.P. Arts and Science College, Coimbatore.
2
Student of III B.Com. (PA), Department of Commerce with Professional Accounting,
Dr. N.G.P. Arts and Science College, Coimbatore.
ABSTRACT
This study examines the financial performance of Indian Bank, one of the leading public sector banks in India. Using financial
statements for the period from 2017 to 2022, key financial ratios such as profitability, solvency and asset quality are analyzed to assess
the bank's financial health. This study finds that Indian Bank's profitability has improved over the period, driven by a higher net
interest margin and lower operating expenses. However, solvency ratios have declined, indicating potential areas for improvement.
The study provides insights for investors, regulators, and policymakers on the financial health of Indian Bank and highlights areas
that require attention for sustainable growth.
INTRODUCTION
Financial statement analysis is the process of analysing a bank’s financial statements for decision-making purposes. The
financial statements of a company are valuable to both external stakeholders and internal constituents for different reasons. External
stakeholders rely on them to assess the overall health of an organization and determine its financial performance and business value.
Meanwhile, internal constituents use these statements as a monitoring tool for managing finances. These statements contain
significant financial data covering all aspects of a business's activities, allowing them to be evaluated based on past, present, and
future performance. This analysis helps to determine the creditworthiness of the bank.
STATEMENT OF THE PROBLEM

Banking facilities are growing day by day and many private sector banks were introduced. So, the research conducted on
these private banks are increasing. Though there are many research conducted on public sectors like SBI, they don’t concentrate on
other public sector banks. Proper maintenance of financial statements is crucial for ensuring the stability of a bank's financial
performance. By conducting ratio analysis, the financial data can be summarized, and qualitative assessments can be made about
the Indian bank's financial position and performance.
OBJECTIVES OF THE STUDY

• To identify the profitability position of the Indian Bank.
• To analyse the solvency position of the Indian Bank.
• To analyse the asset quality of Indian Bank.
RESEARCH METHODOLOGY
Nature of Data Secondary data
Source of Data Financial Statement
Period of Study 2017-18 to 2021-22
Tools Ratio Analysis
2023 EPRA IJRD | Journal DOI: https://doi.org/10.36713/epra2016 | https://eprajournals.com/ |53 |

SJIF Impact Factor (2023): 8.574| ISI I.F. Value: 1.241| Journal DOI: 10.36713/epra2016 ISSN: 2455-7838(Online)
REVIEW OF LITERATURE
➢ S. Manicka Vasuki (2022), analysed the financial performance of Bank of Baroda. She aimed to examine the financial
performance of Bank of Baroda and provide useful recommendations to optimize its financial performance. Her study used
secondary data collected from Bank of Baroda’s website, Reserve Bank of India and other related sources for the period of
5 years from 2017 – 18 to 2021 – 22. She concluded that the bank’s financial performance can be maximized by increasing
the Net profit margin, Earnings per share, Return on Asset employed and Interest income.
➢ Shikhil Munjal and Dr. Krishna Lal Grover (2022), analysed the financial performance of ICICI. The main objective
was to find out the efficiency of ICICI bank through CAMEL Analysis. The researchers used 5 years (2015 - 2016 to 2020
- 2021) of ICICI bank’s secondary data. The researchers found that the productivity of bank is in downward trend. The
capital adequacy ratio parameter was average, asset quality parameter was moderate, management efficiency parameter
was in increasing tread, earning quality parameter was in growing trend and liquidity parameter was on the top position.
ANALYSIS AND INTERPRETATION

Return On Non
Net Profit Proprietary Debt to Loans to
Year Net Worth Performing
Ratio Ratio Equity Ratio Assets Ratio
Ratio Assets Ratio
2017-18 5.14 6.43 6.26 14.80 7.82 7.37
2018-19 1.09 1.42 5.80 15.99 4.32 7.11
2019-20 2.84 3.70 6.16 15.04 3.34 6.87
2020-21 6.39 8.89 5.23 17.91 3.96 9.85
2022-22 6.79 8.48 5.57 16.75 2.55 8.47
FINDINGS, SUGGESTIONS AND CONCLUSION

FINDINGS
1. The net profit ratio of the company increased from 5.14 in financial year 2017-18 to 6.79 in financial year 2021-22,
indicating an improvement in the company's profitability.
2. The return on net worth ratio of the company increased from 6.43 in financial year 2017-18 to 8.48 in financial year 2021-
22, indicating an improvement in the company's ability to generate profits from its shareholders' investment.
3. The proprietary ratio of the company decreased from 6.26 in financial year 2017-18 to 5.57 in financial year 2021-22,
indicating a decrease in the company's reliance on shareholder funds to finance its operations.
4. The loan to assets ratio of the company decreased from 7.82 in financial year 2017-18 to 2.55 in financial year 2021-22,
indicating a decrease in the company's reliance on borrowing to finance its assets.
5. The loan to assets ratio of the company decreased from 7.82 in financial year 2017-18 to 2.55 in financial year 2021-22,
indicating a decrease in the company's reliance on borrowing to finance its assets.
6. The non-performing assets ratio of the company decreased from 7.37 in financial year 2017-18 to 8.47 in financial year
2021-22, indicating an improvement in the company's ability to recover its loans.
SUGGESTIONS
1. Address the increase in debt to equity ratio: The increase in this ratio indicates that the bank is relying more on debt
financing than equity financing. While debt financing can be beneficial in the short-term, it can also increase financial
risk in the long-term. The bank could explore options to raise equity capital, such as through public offerings or strategic
partnerships, to reduce its reliance on debt. Additionally, the bank could focus on improving its profitability to generate
more internal capital to support its growth.
2. Manage the loan to assets ratio carefully: While the decrease in this ratio indicates a decrease in reliance on borrowing,
the bank should still be cautious about its lending practices to avoid increasing its credit risk. The bank could focus on
diversifying its lending portfolio and increasing its fee-based income to reduce its reliance on interest income.
3. Continue to reduce Non Performing Assets (NPAs): The decrease in NPAs is a positive sign for the bank. However, the
bank could further improve its asset quality by continuing to focus on recovery of bad loans and strengthening its credit
appraisal and risk management processes.
CONCLUSION
In conclusion, Indian Bank has demonstrated an improvement in its financial performance over the years, as evidenced by
the positive trend in its liquidity, profitability, and asset quality ratios. Therefore, Indian Bank appears to be on a positive trajectory,

SJIF Impact Factor (2023): 8.574| ISI I.F. Value: 1.241| Journal DOI: 10.36713/epra2016 ISSN: 2455-7838(Online)
and it should continue to focus on managing its debt levels while improving its asset quality to maintain its growth and profitability
in the long run.
REFERENCE
1. S. Manicka Vasuki, “A Study on Financial Performance Analysis of Bank of Baroda”, International Journal of Scientific Development
and Research (IJSDR), Volume: 7, Issue: 3, 2022, p.p. no.: 55 – 58.
2. Shikhil Munjal and Dr. Krishna Lal Grover, “Financial Performance Analysis: A Study of ICICI Bank”, International Research Journal
of Modernization in Engineering Technology and Science – Peer Reviewed Journal, ISSN no.: 2582-5208, Volume: 4, Issue: 3, 2022, p.p.
no.: 779 – 786.
BOOKS
1. Dr. S. N. Maheshwari, Management Accounting and Financial Control – Sultan Chand & Sons
2. M. Y. Khan & P. K. Jain, Management Accounting – McGraw Hill Education
WEBSITE
1. www.moneycontrol.com
2. www.indianbank.in

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SJIF Impact Factor (2023): 8.574| ISI I.F. Value: 1.241| Journal DOI: 10.

36713/epra2016 ISSN: 2455-7838(Online)

A STUDY ON FINANCIAL PERFORMANCE OF

Mr. P. Kanagaraj1, Mr. I. Harsha Vardhan2

STATEMENT OF THE PROBLEM

OBJECTIVES OF THE STUDY

2023 EPRA IJRD | Journal DOI: https://doi.org/10.36713/epra2016 | https://eprajournals.com/ |53 |

ANALYSIS AND INTERPRETATION

FINDINGS, SUGGESTIONS AND CONCLUSION

2023 EPRA IJRD | Journal DOI: https://doi.org/10.36713/epra2016 | https://eprajournals.com/ |54 |

2023 EPRA IJRD | Journal DOI: https://doi.org/10.36713/epra2016 | https://eprajournals.com/ |55 |

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