Analysis Of Financial Position And Performance Of Public .

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NSOU-OPEN JOURNALISSN: 2581-5415Vol.2 No.1 (Jan. 2019)A multidisciplinary Online Journal of Netaji Subhas Open University, INDIAAnalysis of Financial Position and Performance of Public and PrivateSector Banks in India: A Comparative Study on SBI and HDFC BankJyotirmoy KoleyAssistant Professor (W.B.E.S.)P.G. Department of Commerce, Hooghly Mohsin CollegeE-mail: jyotirmoykoley@yahoo.co.inAbstractIndian banking sector is an important component of Indian financial system. It has a strong impact on theeconomic development and growth of the nation. The present study is made to measure the financial position,performance and efficiency of the largest public sector bank (SBI) and private sector bank (HDFC). Theobjective of the study is to identify financial position and performance of the selected banks and to examinewhether any significant difference exists in their performance. The study is based on secondary data which hasbeen collected from annual reports of the selected banks covering a period of five years from 2013-14 to 201718. The CAMEL model has been used to assess the financial strength of the selected banks. T-test has beenused on the important parameters like capital adequacy, asset quality, management efficiency, earnings abilityand liquidity to draw the conclusion the study.Key Words: Indian Banking Sector, Financial Performance and CAMEL Model.IntroductionThe improvement financial system is the key to theeconomic development of a nation. The Bankingsector is one of the vital components of thefinancial system. The sector provides financialservices not only to the industry but also to theagriculture and household sectors. It also playsimportant role in formation of capital in theeconomy. India Banking sector has a greatcontribution in the economic growth of the nation.Reserve Bank of India (RBI) is the apex body of theIndian Banking sector. It ensures the stability inthe monetary system of the country. Sinceindependence, RBI has initiated several measuresto improve more access to financial servicesthrough financial education, awareness andtechnological up gradations in an affordablemanner. The performance of the banking sector issupposed to be a crucial economic active of Indianeconomy. So, the reforms in banking sector areintended to make the banks more efficient.However, the Banking sector is facing alarmingchallenges like rising in competition, level of NonPerforming Assets and weakening asset quality.These may have a negative impact on theeconomy of the nation.This study deals with the analysis of the financialposition and performance of public sector bank(SBI) and private sector bank (HDFC) in India.The article has been divided into eight sections.Section II covers literature review. Research gaphas been mentioned in section III. Section IV and Vcontain objective and materials & methods of thestudy. Financial performance of SBI and HFDC bankhas been highlighted in the section VI. Analysis anddiscussion is made in section VII. Finally, sectionVIII concludes the study along with findings.Literature ReviewSeveral studies have been conducted by manyacademicians and researchers in this related areaof performance analysis of public sector andprivate sector banks in India. Some of theseliteratures are shown below:Goel and Rekhi (2013) attempted to measure therelative performance of Indian public sector andprivate sector banks. They concluded that theefficiency and profitability are interrelated and theperformances of private sector banks are betterthan public sector banks in India.Karri, H.K. et al. (2015) analyzed the performanceof banks from the important parameters likecapital adequacy, asset quality, management

efficiency, earning ability and liquidity with thehelp of CAMEL model.deposits and expenditure HDFC has bettermanaging efficiency.Nagarkar (2015) examined the performance ofmajor five public, private and foreign sector bankswith the help of principle component analysistechnique. He found that commercial banks mostlydepend on deposits for providing credit. So,Commercial banks need to check their creditappraisal process to reduce the non-performingassets and regain the faith of depositors as key tobanks’ success.Research GapFrom the above literature review, it appears thatover the years, various attempts have been madeby the researchers and academicians to evaluatethe financial position and performance of publicsector banks and private sector banks fromdifferent aspects of CAMEL model. But there is noseminal work made on the analysis of the financialposition of SBI and HDFC from public sector banksand private sector banks respectively in India. So,the present study has tried to highlight thisuntouched area.Mistry and Savani (2015) classified Indian privatesector banks on the basis of their financialcharacteristics and analyzed their financialperformance. They found that return on assetsand interest income have a negative correlationwith operational efficiency whereas, positivecorrelation with asset utilization and asset size.They also revealed that operational efficiency,asset management and bank size have an impacton the financial performance of the Indian privatesector banks.Sodhi and Waraich (2016) made a fundamentalanalysis with the help of key financial ratios toidentify the value of stocks of the selected banksand their investment opportunities. They foundthat private and foreign banks are trying toimprove their performance due to increasingcompletion in the banking sector.Majumder and Rahman (2016) measured thefinancial performance of the fifteen selected banksin Bangladesh and identified the significantdifference in their performances for the period2009-2013. The suggested that the lower rankingbanks should take necessary steps to improvetheir weaknesses.Balaji and Kumar (2016) examined and comparedthe overall financial performance of selectedpublic and private sector banks in India during theperiod 2011-12 to 2015-16 with help of mean andT-Test . They concluded that public sector banksmust redefine their strategies by considering theirstrengths, weakness and operating market.Taqi and Mustafa (2018) analyzed the growth andperformance of Punjab National Bank and HDFCbank for the period 2006-07 to 2015-16. Theymade quantitative analysis and found that PNB ismore financially sound that HDFC but in context ofObjective of the StudyThe objective of the study is to analyze andcompare the financial position and performance ofpublic sector bank (SBI) and private sector bank(HDFC) in India.For the purpose of this study, SBIfrom public sector banks and HDFC bank fromprivate sector banks have been selected as theyhave the largest market capitalization at present.DatabaseThe present study is analytical in nature. It ispurely based on the secondary data. The data havebeen collected from various research articles,journals, annual reports of SBI and HDFC and webbased resources.MethodologyThe CAMEL model is followed to measure therelative financial position and performance of thebanks. RBI adopted the model in 1996 by therecommendations of Padmanabham Committee(1995). Apart from CAMEL model, statistical toolslike Mean and t-test have been used to assess theperformance of banks from each of the importantparameters like capital adequacy, asset quality,management efficiency, earning ability andliquidity to draw the logical conclusions.Study PeriodThe study covers a period of five years from 201314 to 2017-18.HypothesisHo: There is no significant difference inthe financial position and performance of SBI andHDFC bank in IndiaH1: There is significant difference in thefinancial position and performance of SBI andHDFC bank in India

Financial PerformanceFinancial Performance of SBI and HDFC bank hasbeen shown below with the help of followingtables by using various parameters like totalincome, net interest income, operating profit andnet profit over the last five years from the year2013-14 to 2017-18.Table-1: Total income of SBI and HDFC Bankduring the year 2013-14 to 2017-18Rs. in CrorePartic 201 201 201 201 201 Meaulars3-14 4-15 5-16 6-17 7-18 nSBI154 174 191 210 265 1995904 973 843 979 100 60HDFC490 574 709 816 954 709155667302621.6Source: Annual Reports of SBI and HDFC of variousyearsFrom the above table it has been observed thatthe total income of both SBI and HDFC has beenincreasing over the years but the increasing rate ofHDFC bank is higher than SBI. But the mean oftotal income of SBI is higher than HDFC.Table-2: Net interest income of SBI and HDFCBank during the year 2013-14 to 2017-18Rs. in CroreParticu 201 201 201 201 201 Mealars34567n1415161718SBI492 550 571 618 748 596482159560541.2HDFC184 223 275 331 400 283483969139950.8Source: Annual Reports of SBI and HDFC of variousyearsFrom the above table is seen that net interestincome of both SBI and HDFC has been increasingover the years and mean of net interest income ofSBI is higher than HDFC.Table- 3: Operating profit of SBI and HDFC Bankduring the year 2013-14 to 2017-18Rs. in CroreParticu 201 201 201 201 201 Mealars34567n1415161718SBI321 395 432 508 595 450509375848112.6HDFC143 174 213 257 326 222960046432257Source: Annual Reports of SBI and HDFC of variousyearsFrom the above table is observed that operatingprofit has a hiking trend for both SBI and HDFCover the years and mean of operating profit of SBIis higher than HDFC.Table-4:Net profit of SBI and HDFC Bank duringthe year 2013-14 to 2017-18Rs. in CroreParticu 201 201 201 201 201 Mealars34567n1415161718SBI108 131 995 104 7576.9102184654 27HDFC847 102 122 145 174 12608169650875.4Source: Annual Reports of SBI and HDFC of variousyearsFrom the above table it is observed that net profitof SBI has a fluctuating trend i.e. both increasingand decreasing trend over the last five years from2013-14 to 2017-18 but SBI has incurred net loss inthe year 2017-18. On the other hand, HDFC has acontinuous increasing trend in its net profit overthe last five years. Mean of net profit of HDFC isalso higher than SBI.Analysis and DiscussionThe CAMEL model and its parameters are shownand discussed below on the basis of secondarydata to measure the financial performance of theselected banks.Table-5:CAMEL ModelShort Parameters ofRatio of MeasuringForm CAMELCAMEL ParametersCCapitalCapital Adequacy RatioAdequacyDebt Equity RatioAAsset QualityAsset Turnover RatioLoan RatioNet NPA to NetAdvance RatioMManagementCredit Deposit RatioEfficiencyNet Profit perEmployeeEEarning AbilityNet Profit RatioDividend per ShareEarnings per ShareReturn on Net worthReturn on AssetsInterest Spread RatioLLiquidityCurrent RatioLiquid Assets to TotalAssets RatioLiquid Assets to TotalDeposit Ratio

Capital AdequacyIt indicates whether the bank has enough capitalto absorb unexpected losses. It maintains thedepositors’ confidence and prevents the bankfrom bankruptcy. It indicates the overall financialcondition of banks and the ability of managementto meet the requirement of additional capital.The following ratios are considered in the presentstudy for the assessment of capital adequacy ofthe selected banks.Capital Adequacy Ratio (CAR):This ratio measures the ability of the bankregarding absorption of losses arising from the riskweighted assets. It is a measurement of Tire-1 andTire-II capital to the aggregate of risk weightedassets. CAR (Tire 1 Capital Tire 2 Capital) / RiskWeighted Assets:Table- 6: Group Statistics of CARGroup l40AdequaHDF15.55cy Ratio5.91396C20Source: Compiled by researcherSBIStd.ErrorMean.21231.40873Table- 7: Independent Samples Test on CARIndependent Samples TestLevene'sTest fort-test for Equality of MeansEquality ofVariancesCapitalAdequacy RatioEqualvariancesassumedEqualvariances notassumedStd.ErrorDifference95% ConfidenceInterval of theDifferenceLowerUpperFSig.tdfSig. 4.024471.77153Source: Compiled by researcherObservation: From the above table-7, it has been observed that the significant p value is 0.192 greater than0.05 than equal variance assumed is 0.001 less than 0.05 than Null hypothesis is Rejected.Debt-Equity Ratio:Bank’s financial leverage is measured by this ratio.It is the proportion of total external liabilities tonet worth. The ratio indicates how much portionof the bank’s business is financed by debt and howmuch portion is financed through equity. Higherratio signifies less protection for creditors anddepositors of the bank. DE Ratio Debt/Net worthTable- 8: Group Statistics on Debt-Equity RatioGroup StatisticsStd.BankStd.ErrorNMean Deviation MeanDebtSBI51.7452 .28220.12621Equity HDFC5.8700.17743.07935RatioSource: Compiled by researcher

Table- 9: Independent Samples Test on Debt-Equity RatioIndependent Samples TestLevene's Test forEquality oft-test for Equality of EqualvariancesnotassumedMeanDifferenceStd. ErrorDifference95% ConfidenceInterval of theDifferenceLowerUpperFSig.tdfSig. 975.8716.735.001.87520.14908.519861.23054Source: Compiled by researcherObservation: From the above table-9, it is seenthat the significant p value is 0.471 greater than0.05 than equal variance assumed is 0.001 lessthan 0.05 than Null hypothesis is Rejected.Asset Turnover RatioIt determines the efficiency of the bank in assetutilization. It is measured by dividing sales withtotal assets.Asset QualityIt indicates the types of advance made by the bankto generate interest income. The bank providescredit at a lower rate to the highly ratedcompanies compare to lower rated doubtfulcompanies. It determines the nature of debtors ofbank. This ratio helps the bank to decide thefinancial risk and potential losses attached withtheir various assets. The following ratios areconsidered in this study to assess the asset qualityof the selected banks.Table- 10: Group Statistics on Asset TurnoverRatioGroup StatisticsStd.Std.BankN MeanErrorDeviationMeanAssetSBI58.1184 .50527.22596TurnoverHDFC 59.6282 .43096.19273RatioSource: Compiled by researcherTable- 11: Independent Samples Test on Asset Turnover RatioIndependent Samples TestLevene's Test forEquality Equalvariancesnotassumedt-test for Equality of MeansMeanDifferenceStd. ErrorDifference95% ConfidenceInterval of theDifferenceLowerUpperFSig.tdfSig. ource: Compiled by researcher

Observation: From the above, it is seen that thesignificant p value is 0.745 greater than 0.05 thanequal variance assumed is 0.001 less than 0.05than Null hypothesis is Rejected.Table- 12: Group Statistics on Loan RatioGroup 1.75116Loan RatioThe ratio measures the financial position of banks511.2340 1.54089Loan SBIand its ability to meet outstanding loans. It isRatio HDFC 58.65941.67965calculated by dividing amount of loans with totalSource: Compiled by researcherassets.Table- 13: Independent Samples Test on Loan RatioIndependent Samples TestLevene's Test forEquality oft-test for Equality of MeansVariances95% ConfidenceSig. (2- MeanStd. Error Interval of theFSig.tdftailed) Difference Difference DifferenceLowerUpperEqualvariances .003.9592.5268.0352.574601.01937.22393 62.574601.01937.22090 4.92830notassumedSource: Compiled by researcherObservation: From the above, it is seen that thesignificant p value is 0.959 greater than 0.05 thanequal variance assumed is 0.036 less than 0.05then Null hypothesis is Rejected.Table- 14: Group Statistics on Net NPA to NetAdvance RatioGroup StatisticsStd.Std.BankNMeanErrorDeviationMeanNet NPA SBI53.5880 1.40033.62625to NetAdvance HDFC 5.3060.06025.02694RatioSource: Compiled by researcherNet NPA to Net Advance RatioThe ratio measures the proportion of bad loans ofthe bank out of total advances given. Higher ratiosignifies the bank’s inability to recover the loanand that leads to huge capital losses. So, lowerratio is expected to be positive for bank. It iscalculated by dividing total NPA with totaladvances.Table- 15: Independent Samples Test on Net NPA to Net Advance RatioIndependent Samples TestLevene's Testfor Equality of t-test for Equality of MeansVariancesNet NPAto NetAdvance RatioEqual variancesassumedEqual variancesnot assumedMeanDifferenceStd. ErrorDifference95% ConfidenceInterval of theDifferenceLowerUpperFSig.tdfSig. ce: Compiled by researcher

Observation: it is observed that the significant pvalue is 0.038 lower than 0.05 than equal varianceassumed is 0.006 less than 0.05 then nullhypothesis is rejected.Credit Deposit RatioThis ratio shows the proportion of lending out ofits total deposit mobilization. It indicates theability of the bank to convert its deposits into highearning advances. It is calculated by dividing totaladvances with total customer deposits.Management EfficiencyThe growth and survival of bank is ensured by themanagement efficiency. It evaluates themanagement quality to assign premium to betterquality and discount to the poor qualitymanagement. This parameter analyses theefficiency of the management in generatingbusiness and maximizing profits. The followingratios are considered in the present study toassess the management efficiency of the selectedbanks.Table- 16: Group Statistics on Credit Deposit RatioGroup tSBI5.8040.06195.02770DepositHDFC 5.8366.02011.00899RatioSource: Compiled by researcherTable- 17: Independent Samples Test on Credit Deposit RatioIndependent Samples TestLevene's Test forEquality oft-test for Equality of medEqualvariancesnotassumedFSig.tdfSig. (2tailed)MeanDifferenceStd. ErrorDifference95% ConfidenceInterval of theDifferenceLower -1.1194.834.316-.03260.02913.10825.04305Source: Compiled by researcherObservation: it is observed that the significant pvalue is 0.027 lower than 0.05 than equal varianceassumed is 0.316 greater than 0.05 then nullhypothesis is accepted.Table- 18:Group Statistics on Net Profit PerEmployeeGroup StatisticsStd.Std.BankNMeanErrorDeviationNet Profit per EmployeeMeanIt reveals the productivity and efficiency of humanNet Profit SBI5.0364 .03415.01527resources of bank. It is arrived at by dividing netPerHDFC 5.1460 .03847.01720profit with total number of employees.EmployeeSource: Compiled by researcherTable- 19: Independent Samples Test on Net Profit per EmployeeIndependent Samples TestLevene'sTest forEquality ofVariancest-test for Equality of MeansFtSig.dfSig.(2tailed)MeanDifferenceStd. ErrorDifference95% ConfidenceInterval of theDifference

Net .05642Source: Compiled by researcherObservation: it is seen that the significant p valueis 0.736 greater than 0.05 than equal varianceassumed is 0.001 less than 0.05 then nullhypothesis is rejected.Earning AbilityIt reflects the profitability of a bank. It alsoexplains the sustainability and growth of earning infuture. Higher earnings indicate the healthyperformance of a bank. Generation of adequateearnings is the key to exits in long run for a bank.The following ratios are considered in the presentstudy for the assessment of earning ability of theselected banks.decreasingratioshowsinefficiencyinmanagement and excessive operational expenses.It is calculated by dividing net profit with totalincome.Table- 20: Group Statistics on Net Profit RatioGroup I54.98662.975801.33082Profit17.7064 .42391.18958Ratio HDFC 5Source: Compiled by researcherNet Profit RatioIt shows the operational efficiency of a business.Increasing ratio indicates better performance andTable- 21: Independent Samples Test on Net Profit RatioIndependent Samples TestLevene's Testfor Equality oft-test for Equality of qualvariancesnotassumedMeanDifferenceStd. ErrorDifference95% ConfidenceInterval of theDifferenceLowerUpperFSig.tdfSig. .04424Source: Compiled by researcherObservation: it is seen that the significant p valueis 0.096 greater than 0.05 than equal varianceTable- 22: Group Statistics on Dividend per Shareassumed is 0.001 less than 0.05 then nullGroup Statisticshypothesis is rejected.Std.Std.MeaBankNDeviati ErrornDividend per ShareonMeanIt indicates the dividend earned by each7.740 12.5125.595shareholder in hand. Higher the ratio higher is theSBI5Divide03168operational efficiency of the business. It isnd perHDF9.670 2.43041.086calculated by dividing dividend in equity shareShare5C0392capital with number of equity shares.Source: Compiled by researcher

Table- 23: Independent Samples Test on Dividend per ShareIndependent Samples TestLevene's Testfor Equality oft-test for Equality of dEqualvariancesnotassumedMeanDifferenceStd. ErrorDifference95% ConfidenceInterval of theDifferenceLowerUpperFSig.tdfSig. 6854Source: Compiled by researcherObservation: it is seen that the significant p valueis 0.075 greater than 0.05 than equal varianceassumed is 0.751 greater than 0.05 then nullhypothesis is accepted.Earnings per ShareIt indicates return earned by each shareholder.This ratio measures the market worth of theshares of a business. Higher ratio shows betterprospects of the bank. It is calculated by dividingearning available to equity shareholders withnumbers of equity shares.Table- 24 :Group Statistics on Earnings per ShareGroup StatisticsStd.Std.BankNMean Deviati ErroronMean38.61 66.775 29.8625Earnin SBI002178gs perHDF50.28 12.655 5.6598Share5C00700Source: Compiled by researcherTable- 25: Independent Samples Test on Earnings per ShareIndependent Samples TestLevene's Testfor Equality ualvariancesnotassumedt-test for Equality of MeansMeanDifferenceStd. ErrorDifference95% ConfidenceInterval of 44.287.719-11.6700030.3943993.8763770.53637Source: Compiled by researcherObservation: it is seen that the significant p valueis 0.077 greater than 0.05 than equal varianceassumed is 0.719 greater than 0.05 then nullhypothesis is accepted.Return on Net worthThis ratio shows the relation between net profitand capital employed of the business. Itdetermines operational efficiency and overallprofitability of the business. Maximization ofreturn of net worth is the prime objective any

business. The result of ratio indicates the extent ofthe achievement of that objective. It is calculatedby dividing net profit with net worth.Table- 26: Group Statistics on Return on Net worthGroup StatisticsStd.Std.BankN MeanErrorDeviationMeanReturn SBI5 6.37404.008151.79250on NetHDFC 5 17.1212 1.35134.60434worthSource: Compiled by researcherTable- 27: Independent Samples Test on Return on Net worthIndependent Samples TestLevene's Testfor Equalityt-test for Equality of Meansof VariancesReturnon medMeanDifferenceStd. ErrorDifference95% ConfidenceInterval of .898.003-10.747201.8916315.640495.85391Source: Compiled by researcherconversion of assets into earnings. It is calculatedObservation: it is observed that the significant pby dividing net profit with total assets.value is 0.129 greater than 0.05 than equalvariance assumed is 0.003 less than 0.05 then nullTable- 28:Group Statistics on Return on Assethypothesis is rejected.Group StatisticsStd.Std.Return on AssetBankNMeanErrorDeviationIt signifies the operational efficiency in assetMeanutilization by the management and profitability onReturn SBI5.4020.35096.15695the assets of the business. It is a general measureonHDFC 51.9500 .05831.02608of managerial performance to assess theAssetSource: Compiled by researcherTable- 29: Independent Samples Test on Return on AssetIndependent Samples TestLevene's Test forEquality oft-test for Equality of ig.tdfSig. (2tailed)3.325.106-9.7308.000MeanDifferenceStd. ErrorDifference95% ConfidenceInterval of 1

9101.980781.11522Source: Compiled by researcherObservation: it is observed that the significant pTable- 30: Group Statistics on Interest Spreadvalue is 0.106 greater than 0.05 than equalRatiovariance assumed is 0.000 less than 0.05 then nullGroup Statisticshypothesis is rejected.Std.Std.BankNMeanErrorDeviationInterest Spread RatioMeanSpread is the difference between the interestInterest SBI52.4598 .25147.11246incomes and interest expended. Higher ratioSpreadHDFC 53.8096 .05489.02455indicates better earning ability of the business. ItRatiois determined as a percentage of total assets.Source: Compiled by researcherTable- 31: Independent Samples Test on Interest Spread RatioIndependent Samples TestLevene's Test forEquality oft-test for Equality of umedEqualvariancesnotassumedFSig.tdfSig. (2tailed)MeanDifferenceStd. ErrorDifference95% ConfidenceInterval of 5111.658741.04086Source: Compiled by researcherObservation: it is observed that the significant pvalue is 0.009 less than 0.05 than equal varianceassumed is 0.000 less than 0.05 then nullhypothesis is rejected.LiquidityThe liquidity measures the bank’s ability to meetthe short term financial obligations. Adequateliquidity position can be achieved when thebusiness can obtain sufficient liquid fund either byconverting its assets into cash or increasingliability. Higher ratio indicates that the business iswealthier. The following ratios are considered toassess the liquidity of the selected banks.Current RatioIt measures the sufficiency of current assets to payoff the current liabilities. It helps the bank todetermine its working capital requirement. Theratio is calculated by dividing current assets withcurrent liabilities.Table- 32: Group Statistics on Current RatioGroup .0426.28010.12527CurrentRatioHDFC 52.0932 .80919.36188Source: Compiled by researcher

Table- 33: Independent Samples Test on Current RatioIndependent Samples TestLevene's Test forEquality oft-test for Equality of MeansVariancesFSig.Equalvariances edSource: Compiled by researcherMeanDifferenceStd. ErrorDifference95% ConfidenceInterval of theDifferenceLowerUppertdfSig. 4.945.900-.05060.382951.03830.93710Observation: it is observed that the significant pvalue is 0.179 greater than 0.05 than equalvariance assumed is 0.9 greater than 0.05 then nullhypothesis is accepted.Liquid Assets to Total Assets RatioIt measures overall liquidity position of a business.It is calculated by dividing liquid assets with totalassets.Table- 34 :Group Statistics on Liquid Assets toTotal Assets RatioGroup StatisticsStd.Std.BankN MeanErrorDeviationMeanLiquid SBI5 6.7926 .83126.37175AssetstoTotalHDFC 5 7.3830 2.543491.13749AssetsRatioSource: Compiled by researcherTable- 35: Independent Samples Test on Liquid Assets to Total Assets RatioIndependent Samples TestLevene's Test forEquality oft-test for Equality of nceStd. ErrorDifference95% ConfidenceInterval of theDifferenceLowerUpperFSig.tdfSig. urce: Compiled by researcherObservation: it is observed that the significant pvalue is 0.075 greater than 0.05 than equalvariance assumed is 0.643 greater than 0.05 thennull hypothesis is accepted.

Liquid Assets to Total Deposit RatioIt indicates the ability of the bank to meet itsdeposit obligations with available liquid funds.Higher ratio signifies better ability of the bank. It iscalculated by dividing liquid assets with totaldeposit.Table- 36: Group Statistics on Liquid Assets toTotal Deposit RatioGroup dSBI58.8996 1.15317.51571AssettoTotalHDFC 59.8290 3.514691.57182DepositRatioSource: Compiled by researcherTable- 37: Independent Samples Test on Liquid Assets to Total Deposit RatioIndependent Samples TestLevene's Test forEquality oft-test for Equality of nceStd. ErrorDifference95% ConfidenceInterval of theDifferenceLowerUpperFSig.tdfSig. urce: Compiled by researcherObservation: it is observed that the significant pvalue is 0.073 greater than 0.05 than equalvariance assumed is 0.599 greater than 0.05 thennull hypothesis is accepted.Findings and ConclusionsFrom the above analysis the following outcomesare found on the financial performance of SBI andHDFC bank: The capital and capital adequacy ratio forboth the banks are more than Baselnorms for bank. So, they are satisfactoryfor both SBI and HDFC banks. SBI has higher debt equity ratio of thanHDFC. SBI is trying to taki

Source: Annual Reports of SBI and HDFC of various years From the above table is observed that operating profit has a hiking trend for both SBI and HDFC over the years and mean of operating profit of SBI is higher than HDFC. Table-4:Net profit of SBI and HDFC Bank during the year 2013-14 to 2017-18 Rs. in Crore Particu lars 201 3-14 201 4-15

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