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Abstract The banking sector mirrors the larger economy its linkages to all sectors make it a proxy for what is
happening in the economy as a whole. Efficient functioning of banking sector is required for the growth of overall
economy. Banking plays a silent, yet crucial role in our day-to-day lives. The banks work as financial intermediaries,
pooling savings and channelizing them into investment, helps in economic development of a country. The banking
system of India is featured by a large network of bank branches, serving much kind of financial needs of the people.
ICICI Bank has a network of 3350 branches and 10486 ATMs in India, and has a presence in 19 countries. ICICI
bank is one of the Big Four banks of India, along with State Bank of India, Punjab National Bank and Canara Bank.
The State Bank of India, popularly known as SBI is one of the leading banks in India. The State Bank Group, with
over 16,000 branches provides a wide range of banking products through its vast network of branches in India and
overseas, including products aimed at Non-Resident Indians (NRIs). Headquarter of SBI is at Mumbai. SBI has 14
Local Head Offices and 57 Zonal Offices that are located at important cities throughout the country. In the present
study, an attempt has been made to evaluate and compare the financial performance of SBI and ICICI Bank by
comparing various ratios like Return on Equity, Cash Deposit Ratio and Credit Deposit Ratio. The data is taken from
financial reports of both the banks for last five years ranging from 2008-09 to 2013-13. The results depicts that ICICI
bank is performing better than SBI bank as it is able to generate more loans from its deposits to the customers.
KeywordsICICI Bank, SBI Bank, Financial Performance
I. INTRODUCTION
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Pooja Sharma al. International Journal of Research Aspects of Engineering and Management
ISSN: 2348-6627, Vol. 1, Issue 1, FEB 2014, pp. 20-24
through its vast network of branches in India and overseas,
including products aimed at Non-Resident Indians (NRIs).
Headquarter of SBI is at Mumbai. SBI has 14 Local Head
Offices and 57 Zonal Offices that are located at important
cities throughout the country. It also has around 130
branches out of the country. The State Bank of India was
constituted on 1st July 1955, pursuant to the State Bank of
India Act, 1955 (the "SBI Act") for the purpose of creating a
state-partnered and state-sponsored bank integrating the
former Imperial Bank of India. In 1959, the State Bank of
India (Subsidiary Banks) Act was passed, enabling the Bank
to take over eight former state associated banks as its
subsidiaries.
Year
SBI
ICICI
2008-09
74.97
95.93
2009-10
75.96
95.04
2010-11
79.9
92.97
2011-12
82.14
97.71
2012-13
85.17
99.25
Fig 1.1
Table 1.1 depicts that over the course of five financial
periods of study the Credit Deposit Ration in ICICI was
higher (99.25%) than in SBI (85.17%) in 2012-13. In both
SBI and ICICI the credit deposit ratio was highest in 201213. This shows that ICICI bank has created more loan assets
from its deposits as compared to SBI.
OPERATING FUNDS TO TOTAL FUNDS: A measure
of what it costs an investment company to operate funds. An
expense ratio is determined through an annual calculation,
where funds operating expenses are divided by the average
dollar value of its assets under management. Marketing
expenses are taken out of funds assets and lower the return
to a funds investors.
Table 1.2
(In %)
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Pooja Sharma al. International Journal of Research Aspects of Engineering and Management
ISSN: 2348-6627, Vol. 1, Issue 1, FEB 2014, pp. 20-24
Year
SBI
ICICI
2008-09
1.86
1.94
2009-10
2.01
1.58
2010-11
2.02
1.72
2011-12
2.03
1.75
2012-13
2.02
1.76
Fig 1.3
The table reveals that the ratio of net profits to total funds of
ICICI was varied from 0.96 per cent to 1.62 percent. It
increased to1.62 percent from 0.96 percent in 2008-09. But
the net profit in case of SBI has decreased to 0.73 percent in
2010-11 from 1.08 percent in 2008-09; it further increases to
0.97 percent in 2012-13. However, the net profit margin was
higher in ICICI (1.62%) as compared to SBI (0.97%) during
the period of study. Thus, the ICICI has shown
comparatively lower operational expenses than SBI.
Fig 1.2
The table 1.2 reveals that the ratio of operating funds to total
funds of ICICI was varied from 1.94 per cent to 1.76percent.
It was at 1.58 percent in 2009-10, lowest among five years
again it increased to1.72 percent in 2010-11. But the
operating funds ratio in case of SBI has increased over the
five years. It was at its lowest in 2008-09(1.86%), after that
it has shown almost increment in operating funds.
NET PROFIT TO TOTAL FUNDS: A ratio that measures
a companys ability to generate profits from its funds. The
ratio is considered an indicator of how effectively a company
is using its assets to generate earnings before contractual
obligations must be paid.
Table 1.3
SBI
ICICI
2008-09
8.37
10.14
2009-10
7.56
10.72
2010-11
8.96
11.32
2011-12
7.51
8.6
2012-13
5.34
7.21
(In %)
Year
SBI
ICICI
2008-09
1.08
0.96
2009-10
0.91
1.08
2010-11
0.73
1.34
2011-12
0.91
1.44
2012-13
0.97
1.62
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Pooja Sharma al. International Journal of Research Aspects of Engineering and Management
ISSN: 2348-6627, Vol. 1, Issue 1, FEB 2014, pp. 20-24
Fig 1.5
The table 1.5 depicts that return on equity in SBI bank has
decreased to 12.62% in year 2010-11 from 17.05% in 200809 while in ICICI bank ROE has continuously increased in
last five years ranges from 7.83% to 13.1%. In SBI bank
ROE shows a growth sign in the years 2011-13 but its
slower in comparison to ICICI banks ROE. Hence it depicts
that ICICI bank has been successful in generating returns on
the shareholders capital more than SBI bank.
VI. FINDINGS AND CONCLUSIONS
Fig 1.4
The table 1.4 depicts that the Cash Deposit Ratio in ICICI
and SBI was highest in 2010-11. In both SBI & ICICI the
cash deposit ratio has decreased in period 2011-13. It is an
indicator to customers whether they will be able to get back
their cash whenever required or not.
RETURN ON EQUITY: The ability of the firm's
management to realize an adequate return on the capital
invested by the owners of the firm. Tendency is to look
increasingly to this ratio as a final criterion of profitability.
Table 1.5
Year
SBI
(In %)
ICICI
2008-09
17.05
7.83
2009-10
14.8
7.96
2010-11
12.62
9.65
2011-12
15.72
11.2
2012-13
15.43
13.1
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Pooja Sharma al. International Journal of Research Aspects of Engineering and Management
ISSN: 2348-6627, Vol. 1, Issue 1, FEB 2014, pp. 20-24
REFERENCES:[1]. Development Research Group Study, No. 22,
Department of Economic Analysis and Policy,
Reserve Bank of India, Mumbai September 20,
2000.
[2]. Financial year report of ICICI Bank 2008-09 to
2012-13.
[3]. Financial year report of SBI 2008-09 to 2012-13.
[4]. Gaylord A Freeman, The Problem of Adequate
bank Capital, quoted by Howard D. Crosse in his
book on Management Policies for Commercial
Banks, pp. 158.
[5]. http://www.capitaline.com/user/framepage.asp?id=
1 (Sept, 2013)
[6]. http://www.moneycontrol.com/stocks/company_inf
o/print_main.php (Sept, 2013)
[7]. ICICI Bank bulletin publication 2013
[8]. Maheshwari&Maheshwari, Banking Law and
Practices, Himalaya Publishing Pvt Ltd, Allahabad,
pp.152.
[9]. RBI statistical table relating to banks 2012-13
[10].
SBI bulletin publication 2013.
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