Comparative Analysis of

Financial Performance of Public

and Private Sectors Bank

Presented By : Pradeep Patil

Aug 2019
Objective

 To Analyze the performance and growth ratio of State Bank Of India

(SBI).
 To understand the profitability and efficiency positions of the banks.
 To know the strength and weakness of State Bank Of India.
 To make comparison between the ratios during different periods.
 State Bank Of India

 The State Bank of India (SBI) is an Indian multinational, public sector banking
and financial services bank. It is a headquartered in Mumbai, Maharashtra. SBI is
ranked 216th on the Fortune Globa 500 list of the world’s biggest corporations as
of 2018. It is the largest bank in India with a 23% market share in assets, besides
a share of one-fourth of the total loan and deposits market.
 Founded of SBI
2 June 1806, Bank of Calcutta
15 April 1840, Bank of Bombay
1 July 1843, Bank of Madras
27 January 1921, Imperial Bank of India
1 July 1995, State Bank of India

 Revenue : US$40 billion (2019)

 Operating Income : US$8.0 billion
 Net Income : US$120 million
 Total Assets : US$530 billion
Research Methodology
 Sampling
The sample required for the study has been selected through random sampling method
from the available list public and private sector banks. Broadly the sample of public
and private sector banks includes balance sheet of banks.
The study has taken following banks :-
1. State Bank of India (SBI)
2. Bank Of Maharashtra
3. RBL Bank
4. Bandhan Bank

 Period of study
The period of the internship study is 2 months i.e. 2 May 2019 to 30 June 2019. 5 years data
has been taken for the analysis of Public and Private sector banks.
 Data collection

The project is based on secondary data. The data was collected through annual report
of 4 sector banks. Detailed analysis of data is made by plotting different graphs and
tables which can be easily understandable. They by observing these graphs
researcher have made our conclusions and recommendations.
Data Analysis and Interpretation

 RETURN ON EQUITY RATIO :

Return on Equity = Net Profit / Average Equity

RETURN ON EQUITY (Amt in RS %)

Bank of
ROE SBI Bank Maharashtra RBL Bank Bandhan Bank

2019 6.700 8.120 11.060 9.210

2018 11.820 9.690 10.590 13.000

2017 13.620 15.190 14.030 14.590

2016 15.630 18.520 18.750 19.110

2015 21.030 22.130 28.260 21.420

 Return On Equity
30 28.26

25 22.13 21.42
21.03
20 18.52 19.11
18.75
15.19 14.59 15.63
15 13 13.62 14.03
11.06 11.82
10.59
9.69
10 9.21
8.12
6.7
5

0
2019 2018 2017 2016 2015
SBI Bank Bank of Maharashtra
RBL Bank Bandhan Bank

 Interpretation: It may be seen that the SBI rank is 3th highest being first RBL Bank in
2015. The average equity growth of SBI was higher i.e. 48.76% whereas the average
equity growth the RBL was 50.58% for a period of 2015 to 2019. During 2019, state bank
of India net profit is highly decline i.e.1708 cr. whereas the cb net profit 3394 cr. In 2019
average equity of SBI was 17,784 whereas RBL Bank was 19,345 which is higher than
SBI. The yield on investment of SBI was 8.45% whereas Bandhan Bank was 8.08 the bank
is manage their assets properly. Comparison of all pair banks the result was shown that last
5 years the ROE was cautiously decreased because of the changes in Indian market
economy. The SBI net profits are decrease because of the changes in the operating
expenses and the NPA and Provisions of loans. , so the SBI should increase their average
equity as well as net profit.
 COST INCOME RATIO :

Cost Income Ratio = Operating Expenses / (Total Income – Interest Expended)

COST INCOME RATIO (Amt in %)

Bank of

CIR SBI Bank Maharashtra RBL Bank Bandhan Bank

2019 51.92 46.74 51.10 43.62

2018 44.30 45.06 47.22 43.44

2017 41.68 42.81 46.60 39.78

2016 42.46 39.74 40.02 37.54

2015 48.48 41.27 41.98 39.87

 Cost Income Ratio
60

51.92 51.1
50 47.22 48.48
46.74 46.6
45.06
44.3
43.62 43.44 42.81 42.46
41.68 41.98
41.27
39.78 40.02
39.74 39.87
40 37.54

30

20

10

0
2019 2018 2017 2016 2015

SBI Bank Bank of Maharashtra RBL Bank Bandhan Bank

 Interpretation: The State Bank of India registered 4th highest increase being
Bandhan Bank has first. The operating expense of Bandhan Bank in 2016 was
4629 cr. And in 2019 was 7674cr where as the operating expenses of SBI in 2015
was 5068cr. And in 2019 was 8088cr respectively. During 2019 the SBI had
increase payments to and provisions for employees i.e. 24.92% and advertisement
and publicity i.e. 28.68 compare to the Bandhan Bank, whose 3.27% and 3.60%
respectively. The net income of SBI also decreases because of the NPA and
provision of bank.
 RETURN ON ASSETS RATIO :

Return on Assets = Profit after Tax / Average Total Assets

RETURN ON ASSET (Amt in RS %)

ROA SBI Bank Bank Of Maharashtra RBL Bank Bandhan Bank

2019 0.276 0.507 0.493 0.475

2018 0.476 0.607 0.496 0.689

2017 0.607 0.991 0.697 0.819

2016 0.696 1.066 0.877 1.119

2015 0.709 1.172 1.198 1.184

mean 0.553 0.869 0.752 0.857

 Return on Assets
1.4
1.171.21.18
1.2 1.12
1.07
0.99
1 0.88 0.87 0.86
0.82
0.8 0.71 0.75
0.69 0.7 0.7
0.61 0.61
0.6 0.510.490.48 0.48 0.55
0.5
0.4 0.28

0.2

0
2019 2018 2017 2016 2015 mean
SBI Bank Bank Of Maharashtra RBL Bank Bandhan Bank

 Interpretation: As shown in table ROA is highest average in case of Bank of

Maharashtra(0.86) followed by Bandhan Bank (0.85), RBL (0.75) and SBI (0.55)
respectively and variation is more in the central SBI and Bandhan Bank.
It may be seen that SBI has registered 4th rank and Bank of Maharashtra being the first.
The SBI assets growth was 15.23% whereas the Bank of Maharashtra 11.89% which
shows that the SBI cost of investment and Yield on advances increase. In SBI assets are
groan but the earning assets are much less because of the NPAs and provision therefore
the ROA growth down. The SBI improve their assets management so they can take over
the Bank of Maharashtra. The SBI should look for the other interest income so they can
improve their asset quality and earnings. These returns are come in overall profitability on
the banks. It is concluded that, the fluctuation in ratio has showed adverse effect to the
bank.
Finding
In the area of Net Interest Income, Bandhan Bank was in the topmost position
and State Bank Of India in 2nd position for the study. The average equity growth
of SBI was higher 48.76% whereas the average equity growth the Bandhan Bank
was 50.58% for a period of 2015 to 2019
Suggestion

It is suggested that banks should try to retain the talented workforce with contributes
most to the profitability goals of the banks to remain competitive in this kind of
environment. The management should further try to control the over the expenses
and disbursement cost in order to increase the profits. The banks should focus on the
risk management while expanding its business internationally. The banks should
offer the products to the customers according to their taste. The banks should create a
friendly customer environment to satisfy their customers and to retain them. Banks
should have an ability to repeat and sustain such efforts in future, which would be
critical in maintaining their profitability.
Limitations

1. The data collected is basically confined to secondary sources, with very little
amount of primary data associated with the project.
2. There is a constraint with regard to time allocated for the research study.
3. The availability of information in the form of annual reports & price fluctuations
of the bank is a big constraint to the study.
4. In this study the Ratio Analysis is used to measure performance of different
banks.
5. The study has been restricted to only a four sector banks.
 Learning
 In the summer project we study about the banking schedules, analysis of P&L
account and Balance Sheet as well as ratio analysis is how helpful to getting
the result of annual performance as well as profitability efficiency of banks.
 l earnt some of my most important lessons so far on human behavior through
my interactions with SBI by observing my team members. These takeaways
would never become a part of my project report or my final presentation but
they did become a part of an important chapter of my life.