A

PROJECT REPORT
ON
COMPARATIVE STUDY OF FINANCIAL PERFORMANCE OF STATE
BANK OF INDIA AND BANK OF BARODA

Submitted in the partial fulfillment of the requirement for

the award of the Degree of Masters of Business
Administration
Maharshi Dayanand University, Rohtak

Session: 2015-2016

Submitted to: Submitted

by:
Mr. jaideep sharma Priyanka
Arora
Faculty member of MBA MBA 4th Sem
(NGF Eng. & Tech.) Roll no.:-MBA 031

1
(April 2016)

(NGF college of Engineering & Technology, Palwal)

DECLARATION

I Priyanka Arora University Registration No 1176790004 of the NGF of Engineering &

Technology , Palwal Hereby declare that this project relating to the study of ratio
analysis and the title “comparative Study Of Financial Performance Of State Bank Of
India And Bank Of Baroda” as part of course requirement

I further declare that the information presented in this project is true and original to the
best of my knowledge.

Faculty Guide (Candidate

sign)

HOD

(HEAD OF DEPARTMENT)

2
Countersigned

Director/Principal of the Institute

PREFACE

There is a vast difference between theory and practical applicability of management

concepts, principles and theories in any industry. This practical training program in the
course is designed with an objective of bridging the gap between the theory and practical
applicability of management concepts and theories studied during the MBA program and
their applicability in an industry.

I am very fortunate to have an opportunity to undergo my comparison report the Bank of SBI
and Bank Of Baroda

This Comparative Analysis has been indeed a great learning experience which has provided
a lot of exposure regarding corporate functional environment in an industry. It has been a
great pleasure for me to do my project work in such an esteemed organization.

3
PRIYANKA ARORA

Acknowledgement

The success and final outcome of this required a lot of guidance and assistance from
many people and I am extremely fortunate to have got this all along the completion of
my project work. Whatever I have done is only due to such guidance and assistance and
I would not forget to thank them.

I heartily thank to Mrs. Manpreet Kaur (HOD of MBA deptt.) for her unlisted
encouragement and more over for their timely support and guidance till the completion
of project work. And also thank to my Mentor Mr.jaideep sir (Faculty of MBA deptt.) for
her guidance and suggestions during this project work.

I am thankful to and fortunate enough to get constant encouragement, support and

4
guidance from all Teaching Staff of MBA department which helped me in successfully
completing project work, also, I would like to extend my sincere regards to all the
non-teaching staff of MBA department for their timely support.

(PRIYANKA ARORA)

Table of content

Chapter No. Particular Page no.

1 Introduction of banking 6-15

2 Company Profile 16-54

State bank of India

5
Bank of Baroda

3 Research methodology 55-57

4 Financial comparative analysis 58-64

5 Findings, suggestions and conclusions 65-73

6 Bibliography 74-75

6
CHAPTER-1
INTRODUCTION OF BANKING

Introduction of Bank:
7
DEFINITION OF BANK

Banking Means "Accepting Deposits for the purpose of lending or Investment of

deposits of money from the public, repayable on demand or otherwise and withdraw
by cheque, draft or otherwise."

- Banking Companies (Regulation) Act,1949

ORIGIN OF THE WORD “BANK”:-

The origin of the word bank is shrouded in mystery. According to one view point the
Italian business house carrying on crude from of banking were called banchi bancheri"
According to another viewpoint banking is derived from German word "Branck" which
mean heap or mound. In England, the issue of paper money by the government was
referred to as a raising a bank.

ORIGIN OF BANKING :

Its origin in the simplest form can be traced to the origin of authentic history. After
recognizing the benefit of money as a medium of exchange, the importance of banking
was developed as it provides the safer place to store the money. This safe place
ultimately evolved in to financial institutions that accepts deposits and make loans i.e.,
modern commercial banks.

Banking system in India

Without a sound and effective banking system in India it cannot have a healthy
economy.The banking system of India should not only be hassle free but it should be
able to meet new challenges posed by the technology and any other external and
internal factors.

For the past three decades India's banking system has several outstanding

8
achievements to its credit. The most striking is its extensive reach. It is no longer
confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system
has reached even to the remote corners of the country. This is one of the main reasons
of India's growth process.

v HISTORY OF BANKING IN INDIA

Banking in India has its origin as early or Vedic period. It is believed that the transitions
from many lending to banking must have occurred even before Manu, the great Hindu
furriest, who has devoted a section of his work to deposit and advances and laid down
rules relating to the rate of interest. During the mogul period, the indigenous banker
played a very important role in lending money and financing foreign trade and
commerce.

During the days of the East India Company it was the turn of agency house to carry on
the banking business. The General Bank of India was the first joint stock bank to be
established in the year 1786. The other which followed was the Bank of Hindustan and
Bengal Bank. The Bank of Hindustan is reported to have continued till 1906. While other
two failed in the meantime. In the first half of the 19th century the East India Company
established there banks, The bank of Bengal in 1809, the Bank of Bombay in 1840 and
the Bank of Bombay in1843. These three banks also known as the Presidency banks
were the independent units and functioned well. These three banks were amalgamated
in 1920 and new bank, the Imperial Bank of India was established on 27th January,
1921.

With the passing of the State Bank of India Act in 1955 the undertaking of the Imperial
Bank of India was taken over by the newly constituted SBI. The Reserve Bank of India
(RBI) which is the Central bank was established in April, 1935 by passing Reserve bank
of India act 1935. The Central office of RBI is in Mumbai and it controls all the other
banks in the country.

In the wake of Swadeshi Movement, number of banks with the Indian management were
established in the country namely, Punjab National Bank Ltd., Bank of India Ltd., Bank of
Baroda Ltd., Canara Bank. Ltd. on 19th July 1969, 14 major banks of the country were
nationalized and on 15th April 1980, 6 more commercial private sector banks were taken
over by the government.

9
The first bank in India, though conservative, was established in 1786. From 1786 till
today,the journey of Indian Banking System can be segregated into three distinct
phases. They areas mentioned below:

v Early phase from 1786 to 1969 of Indian Banks

v Nationalization of Indian Banks and up to 1991 prior to Indian banking sector

Reforms.

v New phase of Indian Banking System with the advent of Indian Financial &
Banking Sector Reforms after 1991.

BANKS IN INDIA

In India the banks are being segregated in different groups. Each group has their own
benefits and limitations in operating in India. Each has their own dedicated target
market. Few of them only work in rural sector while others in both rural as well as urban.
Many even are only catering in cities. Some are of Indian origin and some are foreign
players.

All these details and many more is discussed over here. The banks and its relation with
the customers, their mode of operation, the names of banks under different groups and
other such useful information’s are talked about.

One more section has been taken note of is the upcoming foreign banks in India. The
RBI has shown certain interest to involve more of foreign banks than the existing one
recently. This step has paved a way for few more foreign banks to start business in
India.

10
BANKING STRUCTURE IN INDIA

SCHEDULED BANKS IN INDIA

Scheduled Commercial Banks

Public Sector Banks Private Sector Foreign Banks In Regional Rural

Banks India Banks

(26) (25) (29) (95)

v Nationalized v Old Private

Bank Banks
v Other Public v New Private
Sector Banks Banks
(IDBI)
v SBI And Its
Associates

(2) Scheduled Cooperative Banks

Scheduled Urban Cooperative Banks Scheduled State Cooperative Banks

Public Sector Banks

Public sector banks are those banks which are owned by the Government. The Govt.
runs these Banks. In India 14 banks were nationalized in 1969 & in 1980 another 6
banks were also nationalized. Therefore in 1980 the number of nationalized bank 20. At
present there are total 26 Public Sector Banks in India (As on 26-09-2009). Of these 19
are nationalised banks, 6(STATE BANK OF INDORE ALSO MERGED RECENTLY) belong
to SBI & associates group and 1 bank (IDBI Bank) is classified as other public sector
bank. Welfare is their primary objective.

11
Nationalized banks Other SBI & its Associates
Public
Sector
∙ Allahabad Bank Banks ∙ State Bank of India
∙ Andhra Bank
∙ Bank Of Baroda
∙ Bank Of India ∙ State Bank of Hyderabad
IDBI
∙ Bank Of Maharastra
(Industrial
∙ Canara Bank
Developme ∙ State Bank of Mysore
∙ Central Bank Of India
∙ Corporation Bank nt Bank Of
∙ Dena Bank India)Ltd. ∙ State Bank of Patiala
∙ Indian Bank
∙ Indian Overseas Bank
∙ Oriental Bank Of ∙ State Bank of Travancore
Commerce
∙ Punjab & Sind Bank
∙ Punjab National Bank ∙ State Bank of Bikaner And
∙ Syndicate Bank Jaipur
∙ UCO Bank
∙ Union Bank Of India
∙ United Bank Of India
∙ Vijaya Bank

(State Bank of Saurastra merged with

SBI in the year 2008 and State Bank
of Indore In 2010)

Private Sector Banks

These banks are owned and run by the private sector. Various banks in the country such
as ICICI Bank, HDFC Bank etc. An individual has control over there banks in preparation
to the share of the banks held by him.

Private banking in India was practiced since the beginning of banking system in India.
The first private bank in India to be set up in Private Sector Banks in India was IndusInd
Bank. It is one of the fastest growing Bank Private Sector Banks in India. IDBI ranks the
tenth largest development bank in the world as Private Banks in India and has promoted
world class institutions in India. The first Private Bank in India to receive an in principle

12
approval from the Reserve Bank of India was Housing Development Finance
Corporation Limited, to set up a bank in the private sector banks in India as part of the
RBI's liberalization of the Indian Banking Industry. It was incorporated in August 1994 as
HDFC Bank Limited with registered office in Mumbai and commenced operations as
Scheduled Commercial Bank in January 1995. ING Vysya, yet another Private Bank of
India was incorporated in the year 1930

Private sector banks have been subdivided into following 2 categories:-

Old Private Sector Banks New Private Sector Banks

∙ Bank of Rajasthan Ltd.

∙ Catholic Syrian Bank Ltd. ∙ Bank of Punjab Ltd. (since
∙ City Union Bank Ltd. merged with Centurian Bank)
∙ Dhanalakshmi Bank Ltd. ∙ Centurian Bank of Punjab (since
∙ Federal Bank Ltd. merged with HDFC Bank)
∙ ING Vysya Bank Ltd. ∙ Development Credit Bank Ltd.
∙ Jammu and Kashmir Bank Ltd. ∙ HDFC Bank Ltd.
∙ Karnataka Bank Ltd. ∙ ICICI Bank Ltd.
∙ Karur Vysya Bank Ltd. ∙ IndusInd Bank Ltd.
∙ Lakshmi Vilas Bank Ltd. ∙ Kotak Mahindra Bank Ltd.
∙ Nainital Bank Ltd. ∙ Axis Bank (earlier UTI Bank)
∙ Ratnakar Bank Ltd. ∙ Yes Bank Ltd.
∙ SBI Commercial and
International Bank Ltd.
∙ South Indian Bank Ltd.
∙ Tamilnad Mercantile Bank Ltd.
∙ United Western Bank Ltd.

Foreign Banks In India

13
v ABN AMRO Bank N.V. v HSBC (Hongkong &
v Abu Dhabi Commercial Shanghai Banking
Bank Ltd Corporation)

v American Express Bank v JPMorgan Chase Bank

v Antwerp Diamond Bank v Krung Thai Bank

v Arab Bangladesh Bank v Mashreq Bank

v Bank International v Mizuho Corporate Bank

Indonesia v Oman International Bank
v Bank of America v Shinhan Bank
v Bank of Bahrain & Kuwait v Société Générale
v Bank of Ceylon v Sonali Bank
v Bank of Nova Scotia v Standard Chartered Bank
v Bank of Tokyo Mitsubishi v State Bank of Mauritius
UFJ
v Barclays Bank
v BNP Paribas
v Calyon Bank
v ChinaTrust Commercial
Bank
v Citibank
v DBS Bank
v Deutsche Bank

Cooperative banks in India

The Cooperative bank is an important constituent of the Indian Financial System,

judging by the role assigned to co operative, the expectations the co operative is
supposed to fulfil, their number, and the number of offices the cooperative bank
operate. Though the co operative movement originated in the West, but the importance

14
of such banks have assumed in India is rarely paralleled anywhere else in the world. The
cooperative banks in India plays an important role even today in rural financing. The
businesses of cooperative bank in the urban areas also has increased phenomenally in
recent years due to the sharp increase in the number of primary co-operative banks.
Co operative Banks in India are registered under the Co-operative Societies Act. The
cooperative bank is also regulated by the RBI. They are governed by the Banking
Regulations Act 1949 and Banking Laws (Co-operative Societies) Act, 1965.

Rural banks in India

Rural banking in India started since the establishment of banking sector in India. Rural
Banks in those days mainly focussed upon the agro sector. Regional rural banks in India
penetrated every corner of the country and extended a helping hand in the growth
process of the country.

SBI has 30 Regional Rural Banks in India known as RRBs. The rural banks of SBI is
spread in 13 states extending from Kashmir to Karnataka and Himachal Pradesh to
North East. The total number of SBIs Regional Rural Banks in India branches is 2349
(16%). Till date in rural banking in India, there are 14,475 rural banks in the country of
which 2126 (91%) are located in remote rural areas.

Apart from SBI, there are other few banks which functions for the development of the
rural areas in India.

Few of them are as follows.

Haryana State Cooperative Apex Bank Limited

The Haryana State Cooperative Apex Bank Ltd. commonly called as HARCOBANK plays
a vital role in rural banking in the economy of Haryana State and has been providing aids
and financing farmers, rural artisans, agricultural labourers, entrepreneurs, etc. in the
state and giving service to its depositors.

NABARD

15
National Bank for Agriculture and Rural Development (NABARD) is a development bank
in the sector of Regional Rural Banks in India. It provides and regulates credit and gives
service for the promotion and development of rural sectors mainly agriculture, small
scale industries, cottage and village industries, handicrafts. It also finance rural crafts
and other allied rural economic activities to promote integrated rural development. It
helps in securing rural prosperity and its connected matters.

Sindhanur Urban Souharda Co-operative Bank

Sindhanur Urban Souharda Co-operative Bank, popularly known as SUCO BANK is the
first of its kind in rural banks of India. The impressive story of its inception is interesting
and inspiring for all the youth of this country.

United Bank of India

United Bank of India (UBI) also plays an important role in regional rural banks. It has
expanded its branch network in a big way to actively participate in the developmental of
the rural and semi-urban areas in conformity with the objectives of nationalisation.

Syndicate Bank

Syndicate Bank was firmly rooted in rural India as rural banking and have a clear vision
of future India by understanding the grassroot realities. Its progress has been abreast of
the phase of progressive banking in India especially in rural banks.

Fact Files of Banks in India

The first Bank in India to be given an ISO certification. Canara Bank

16
The first Bank in Northern India to get ISO 9002 certification Punjab and Sind
Bank
for their selected branches.

The first Indian Bank to have been started solely with Indian capital. Punjab National
Bank

India’s oldest,largest and the most successful commercial bank State Bank of
offering the widest possible rang of domestic,international and NRI India
products and services,through its vast network in India and overseas.

India’s second largest Private Sector Bank and is now the largest The Federal Bank
scheduled commercial bank in India. Limited

Bank which started as Private Shareholders Banks,mostly European Imperial Bank of

shareholders. India

The first Indian Bank to open a branch outside India in London in 1946 Bank of India,

17
and the first to open a branch in continental Europe at Paris in 1974 founded in 1906
in Mumbai.

The oldest Public Sector Bank in India having branches all over India Allahabad Bank
and serving the customers for the last 132 years.

The first Indian Commercial Bank which was wholly owned and Central Bank of
managed by Indians. India

CHAPTER-2
COMPANY PROFILE
18
19
STATE BANK OF INDIA

STATE BANK OF INDIA

State Bank of India

Industry :Banks - Public Sector

Incorporation Year 1955

Chairman Arundhati Bhattacharya
Managing Director Shri B. Sriram
Company Secretary -
Auditor B M Chatrath & Co/ Kalyaniwala & Mistry
State Bank Bhavan 8th Floor,
Registered Office Madame Cama Road Nariman Point,
Mumbai, 400021, Maharashtra
Telephone 91-22-22883888/22022678

20
Fax 91-22-22855348
E-mail [email protected]
Website http://www.sbi.co.in
Face Value (Rs) 10
BSE Code 500112
BSE Group A
NSE Code SBIN
Bloomberg SBIN IN
Reuters SBI.BO
ISIN Demat INE062A01012
Market Lot 1
Ahmedabad,Chennai,Delhi,Kolkata,London,Mumbai,
Listing
NSE
Financial Year End 03
Book Closure Month May
AGM Month June
Datamatics Financial Services, PlotNo-A-16-17 PartB,
Cross Lane MIDC, Marol Andheri (East), Mumbai - 400
Registrar's Name &
093.
Address
91-22-28213383/90/66
91-22-28369408

It is the largest Indian banking and financial services company (by turnover and total
assets) with its headquarters in Mumbai, India. It is state-owned. The bank traces its
ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of
the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent.
Bank of Madras merged into the other two presidency banks, Bank of Calcutta and Bank
of Bombay to form Imperial Bank of India, which in turn became State Bank of India. The
government of India nationalized the Imperial Bank of India in 1955, with the Reserve
Bank of India taking a 60% stake, and renamed it the State Bank of India. In 2008, the
government took over the stake held by the Reserve Bank of India.

21
SBI provides a range of banking products through its vast network of branches in India
and overseas, including products aimed at non-resident Indians (NRIs). The State Bank
Group, with over 16,000 branches, has the largest banking branch network in India. 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 overseas.

With an asset base of $352 billion and $285 billion in deposits, SBI is a regional banking
behemoth and is one of the largest financial institutions in the world. It has a market
share among Indian commercial banks of about 20% in deposits and loans. T The State
Bank of India is the 29th most reputed company in the world according to Forbes. Also
SBI is the only bank featured in the coveted "top 10 brands of India" list in an annual
survey conducted by Brand Finance and The Economic Times in 2010. The State Bank
of India is the largest of the Big Four banks of India, along with ICICI Bank, Punjab
National Bank and HDFC Bank—its main competitors.

22
BALANCE SHEET FOR THE YEAR ENDING ON MARCH 2011-2015

2011 2012 2013 2014 2015

CAPITAL AND LIABILITIES
Total share capital 526.30 631.47 634.88 634.88 635.00
Equity share capital 526.30 631.47 634.88 634.88 635.00
Share application money 0.00 0.00 0.00 0.00 0.00
Preference share capital 0.00 0.00 0.00 0.00 0.00
Reserves 30772.26 48401.09 57312.82 65314.32 64351.04
Revaluation reserves 0.00 0.00 0.00 0.00 0.00
Net worth 31298.56 49032.66 57947.70 65949.20 64986.04
Deposits 435521.09 537403.94 742073.13 804116.23 933932.81
Borrowings 39703.34 51727.41 53713.68 103011.60 119568.96
Total debt 475224.43 589131.35 795786.81 907127.83 1053501.7
7
Other liabilities and provisions 60042.26 83362.30 110697.57 80336.70 105248.39
Total liabilities 566565.25 721526.31 964432.08 1053413.7 1223736.2
3 0

2011 2012 2013 2014 2015

ASSETS
Cash and balances with RBI 29,076.43 51534.62 55546.17 61290.87 94395.50
Balance with banks, money at call
22892.27 15931.72 48857.63 34892.98 28478.65
Advances 337336.49 416768.20 542503.20 631914.15 756719.45
Investments 149148.88 189501.27 275953.96 285790.07 295600.57
Gross block 13189.28 11831.63 10403.03 11831.63 13189.28
Accumulated depreciation 8757.33 7713.90 6828.65 7713.90 8757.33
Fixed Assets 4431.95 4117.73 3574.41 4117.73 4431.95
Capital work in progress 332.23 295.18 263.44 295.18 332.23
Other assets 43777.85 35112.76 37733.27 35112.76 43777.85
Total assets 1053413.7 1223736.2
566565.25 721526.31 964432.08
4 0
Contingent liabilities 585294.50 429917.37 614603.47 429917.37 585294.50
Bills for collection 205092.29 166449.04 152964.06 166449.04 205092.29
Book value 1023.40 1038.76 912.73 1038.76 1023.40
EPS 86.29 106.56 143.67 144.37 116.07

∙ Net block= gross block – depreciation Net block = fixed assets

23
PROFIT AND LOSS ACCOUNT OF STATE BANK OF INDIA

FOR THE ENDING ON MARCH 2011-2015

2011 2012 2013 2014 2015

Income:
Interest earned 39491.03 48950.31 63788.43 70993.9 81394.36
2
Other income 7446.76 9398.43 12691.35 14968.1 14935.09
5

Total income 46937.79 58348.74 76479.78 85962.0 96329.45

7

Expenditure:
Interest expended 23436.82 31929.08 42915.29 47322.4 48867.96
8
Operating expenses 13251.78 14609.55 18123.66 24941.0 31430.88
1
Total expenses 42396.48 51619.62 67358.55 76796.0 88959.12
2
Other provision and contingencies 5707.88 5080.99 6319.60 4532.53 8660.28
Net profit 4541.31 6729.12 9121.23 9166.05 7370.37
Extraordinary items 0.00 0.00 0.00 0.00 0.00
Profit B/F 0.34 0.34 0.34 0.34 0.34
Total 4541.65 6729.46 9121.57 9166.39 7370.69
Preference dividend 0.00 0.00 0.00 0.00 0.00
Equity dividend 736.82 1357.66 1841.15 1904.65 1905.00
Corporate dividend tax 125.22 165.87 248.03 236.76 246.52
Per share data:
EPS 86.29 106.56 143.67 144.37 116.07
Equity dividend (%) 140.00 215.00 290.00 300.00 300.00
Book value 594.69 776.48 912.73 1038.76 1023.40
Appropriations
Transfer to statutory reserve 3682.15 5205.69 6725.15 6495.14 2488.96

24
Transfer to other reserve -2.88 -0.10 306.90 529.50 2729.87
Proposed dividend/ transfer to govt. 862.04 1523.53 2089.18 2141.41 2151.52
Balance C/F to balance sheet 0.34 0.34 0.34 0.34 0.34
Total 4514.65 6729.46 9121.57 9166.39 7370.69

RATIO ANALYSIS:

CURRENT RATIO:

An indication of a company's ability to meet short-term debt obligations; the

higher the ratio, the more liquid the company is. Current ratio is equal to current assets

divided by current liabilities. If the current assets of a company are more than twice the

current liabilities, then that company is generally considered to have good short-term

financial strength. If current liabilities exceed current assets, then the company may
have problems meeting its short-term obligations.

CURRENT RATIO = CURRENT ASSETS / CURRENT LIABILITY

current ratio

year 2011-2015
Year Ratio
2011 0.05
2012 0.07
2013 0.04
2014 0.04
2015 0.04

25
0.08

0.06

0.04

0.02

0
2011 2012 2013 2014 2015

LIQUID RATIO:

Liquid ratio is also known as ‘Quick’ or ‘Acid Test ‘Ratio. Liquid assets refer to

assets which are quickly convertible into cash. Current Assets other stock and prepaid
expenses

are considered as quick assets.

Quick Ratio = Total Quick Assets

Total Current Liabilities

Quick Assets = Total Current Assets – Inventory

Year Ratio
2011 6.52
2012 6.15
2013 5.74
2014 9.07
2015 8.50

26
10
9
8
7
6
5
4
3
2
1
0
2011 2012 2013 2014 2015

EARNING PER SHARE:

In order to avoid confusion on account of the varied meanings of the term capital

employed, the overall profitability can also be judged by calculating earning per share
with the help of the following formula:

Earning Per Equity Share = Net Profit after Tax –Preference Dividend

No. of Equity shares

The earning per share of the company helps in determining the market price of the
equity shares of the company. A comparison of earning per share of the company with
another will also help in deciding whether the equity share capital is being effectively
used or not. It also helps in estimating the company’s capacity to pay dividend to its
equity shareholders.

Year Ratio

2011 86.29

27
2012 106.56

2013 143.67

2014 144.37

2015 116.07

160
140
120
100
80
60
40
20
0
2011 2012 2013 2014 2015

DIVIDEND PER SHARE :

It is expressed by dividing dividend paid to equity shareholders by no. of equity shares.

this shows the per share dividend given to equity shareholders. It is very helpful for
potential investors to know the dividend paying capacity of the company. It affects the
market value of the company.

Dividend Per Share = Dividend Paid To Equity Shareholders

No. Of Equity Shares

year dividend per share

28
2011 14
2012 21.5
2013 29
2014 30
2015 30

35
30
25
20
15
10
5
0
2011 2012 2013 2014 2015

NET PROFIT RATIO:

This ratio indicates the Net margin on a sale of Rs.100. It is calculated as follows:

Net Profit Ratio = Net Profit X 100

Net Sales

This ratio helps in determining the efficiency with which affairs of the business are
being managed. An increase in the ratio over the previous period indicates improvement
in the operational efficiency of the business. The ratio is thus on effective measure to
check the profitability of business.

year net profit ratio

29
2011 10.12
2012 11.65
2013 12.03
2014 10.54
2015 8.55

14
12
10
8
6
4
2
0
2011 2012 2013 2014 2015

RETURN ON NET WORTH:

It measures the profitability of the business in view of the shareholders. It judges the
earning capacity of the company and the adequacy of return on proprietor’s funds.
Shareholders and potential investors are interested in this ratio. It is calculated as
below:

30
Return On Net Worth = Net Profit After Interest And Tax x 100

Shareholder’s Funds

return on
year shareholder's
2011 14.5
2012 13.72
2013 15.74
2014 13.89
2015 12.71

16
14
12
10
8
6
4
2
0
2011 2012 2013 2014 2015

DEBT- EQUITY RATIO:

The Debt-Equity ratio is calculated to find out the long-term financial position of the
firm. This ratio indicates the relationship between long-term debts and shareholder’s
funds. The soundness of long-term financial policies of a firm can be determined with
the help of this ratio. It helps to assess the soundness of long-term financial policies of
a business. It also helps to determine the relative stakes of outsiders and shareholders.

31
Long-term creditors can assess the security of their funds in a business. It indicates to
what extent a firm depends upon lenders to meet its long-term financial requirements. A
low Debt-Equity ratio is considered better from the point of view of creditors.

Total Debt to
YEAR Owners Fund
2011 13.92
2012 10.96
2013 12.81
2014 12.19
2015 14.37

16
14
12
10
8
6
4
2
0
2011 2012 2013 2014 2015

FIXED ASSETS TURNOVER RATIO:

It is also called as Sales to Fixed Assets Ratio. It measures the efficient use of fixed
assets. This ratio is a measure of efficient use of fixed assets. it is calculated as:

Fixed Assets Turnover Ratio = Cost of goods sold or Sales

32
Net Fixed Assets

It measures the efficiency and profit earning capacity of the business. Higher the ratio,
greater is the intensive utilization of fixed assets and a lower ratio shows under
utilization of the fixed assets. This ratio has a special importance for manufacturing
concerns where investment in fixed assets, is very high and the profitability is
significantly dependent on the utilization of these assets.

assets turnover
Year ratio
2011 5.44
2012 6.32
2013 7.2
2014 7.26
2015 7.24

8
7
6
5
4
3
2
1
0
2011 2012 2013 2014 2015

CREDIT-DEPOSIT RATIO:

This ratio is very important to assess the credit performance of the bank. The ratio

33
shows the relationship between the amount of deposit generated by the bank as well
as their deployment towards disbursement of loan and advances. Higher credit deposit
ratio shows overall good efficiency and performance of any banking institution.

Credits
Credit Deposit Ratio = ´ 100
Deposits

Credit means disbursement of advances

Deposit mean sum of fixed deposit,

Saving deposit and current deposit.

year credit deposit ratio

2011 73.44
2012 77.51
2013 74.97
2014 75.96
2015 79.9

81
80
79
78
77
76
75
74
73
2011 2012 2013 2014 2015

CASH DEPOSIT RATIO :

34
cash deposit
year ratio
2011 6.22
2012 8.29
2013 8.37
2014 7.56
2015 8.96

10
9
8
7
6
5
4
3
2
1
0
2011 2012 2013 2014 2015

35
CAPITAL TURNOVER RATIO :

Income / capital employed

CAPITAL TURNOVER
year RATIO
2011 8.46
2012 8.96
2013 8.99
2014 8.62
2015 8.48

9.1
9
8.9
8.8
8.7
8.6
8.5
8.4
2011 2012 2013 2014 2015

36
Total assets turnover ratio:

total assets turnover

year ratio
2011 0.08
2012 0.09
2013 0.09
2014 0.09
2015 0.08

0.092
0.09
0.088
0.086
0.084
0.082
0.08
0.078
2011 2012 2013 2014 2015

37
PRICE- EARNING RATIO:

Price earning ratio = market price per share/ earning per share

Price
Earning
YEAR (P/E)
2011 11.83
2012 15.38
2013 7.63
2014 14.78
2015 21.92

25

20

15

10

0
2011 2012 2013 2014 2015

38
Price to Book Value:

Market Value of Security/ book value of shares

Price to
Book Value
year ( P/BV)
2011 1.67
2012 2.06
2013 1.17
2014 2
2015 2.7

39
3

2.5

1.5

0.5

0
2011 2012 2013 2014 2015

Enterprise Value / EBIDTA

year EV/EBIDTA
2011 15.64
2012 14.46
2013 13.64
2014 15.33
2015 17.07

40
18
16
14
12
10
8
6
4
2
0
2011 2012 2013 2014 2015

41
BANK OF BARODA

INTRODUCTION

42
Bank of Baroda (BoB) (BSE: 532134) (Hindi: बक ऑफ़ बड़ौदा) is the third largest bank in
India, after the State Bank of India and the Punjab National Bank and ahead of ICICI
Bank.[3] BoB is ranked 763 in Forbes Global 2000 list. BoB has total assets in excess of
Rs. 3.58 lakh crores, or Rs. 3,583 billion, a network of over 3,409 branches and offices,
and about 1,657 ATMs. It plans to open 400 new branches in the coming year. It offers a
wide range of banking products and financial services to corporate and retail customers
through a variety of delivery channels and through its specialized subsidiaries and
affiliates in the areas of investment banking, credit cards and asset management. Its
total business was Rs. 5,452 billion as of June 30.[4]

As of August 2010, the bank has 78 branches abroad and by the end of FY11 this
number should climb to 90. In 2010, BOB opened a branch in Auckland, New Zealand,
and its tenth branch in the United Kingdom. The bank also plans to open five branches
in Africa. Besides branches, BoB plans to open three outlets in the Persian Gulf region
that will consist of ATMs with a couple of people.

The Maharajah of Baroda, Sir Sayajirao Gaekwad III, founded the bank on 20 July 1908
in the princely state of Baroda, in Gujarat. The bank, along with 13 other major
commercial banks of India, was nationalized on 19 July 1969, by the government of
India.

43
BALANCE SHEET OF BANK OF BARODA

2011 2012 2013 2014 2015

Total Share Capital 365.53 365.53 365.53 365.53 392.81
Equity Share Capital 365.53 365.53 365.53 365.53 392.81
Share Application Money 0 0 0 0 0
Preference Share Capital 0 0 0 0 0
Reserves 8284.41 10,678.40 12,470.01 14,740.86 20,600.30
Revaluation Reserves 0 0 0 0 0
Net Worth 8649.94 11,043.93 12,835.54 15,106.39 20,993.11
Deposits 124915.98 152,034.13 192,396.95 241,044.26 305,439.48
Borrowings 1142.56 3,927.05 5,636.09 13,350.09 22,307.85
Total Debt 126058.54 155,961.18 198,033.04 254,394.35 327,747.33
Other Liabilities & Provisions 8437.70 12,594.41 16,538.15 8,815.97 9,656.73
Total Liabilities 143146.18 179,599.52 227,406.73 278,316.71 358,397.17
2011 2012 2013 2014 2015
Assets

Cash & Balances with RBI 6413.52 9,369.72 10,596.34 13,539.97 19,868.18
Balance with Banks, Money at
Call 11866.85 12,929.56 13490.77 21,927.09 30,065.89
106,701.32
Advances 83620.87 0 143985.90 175,035.29 228,676.36
Investments 34943.63 43,870.07 52445.88 61,182.38 71,260.63
Gross Block 2244.62 3,787.14 3954.13 4,266.60 4,548.16

Accumulated Depreciation 1155.81 1,360.14 1644.41 1,981.84 2,248.44

Net Block 1088.81 2427.00 2309.72 2,284.76 2,299.72
Capital Work In Progress 0 0 0 0 0
Other Assets 5212.5 4301.83 4578.12 4,347.22 6,226.40

Total Assets 227406.73

143146.18 179599.5 278,316.71 358,397.180

Contingent Liabilities 54999.86 75364.33 64745.82 77,997.01 112,272.64

Bills for collection 12976.53 15105.51 22584.64 27,949.60 33,735.67
Book Value (Rs) 237.46 303.18 352.37 414.71 536.16

44
EPS 28.18 39.41 61.14 83.96 108.33

PROFIT AND LOSS OF BANK OF BARODA

PROFIT & LOSS OF BANK OF

BARODA
IN RS.
CR.
2011 2012 2013 2014 2015
Income:
9,212.6 11,813. 15,091. 16,698. 21,885.
Interest earned 4 5 6 3 9
Other income 1,381.7 2,051.0 2,757.6 2,806.3 2,809.1
9 4 6 6 9
Total income 10,594. 13,864. 17,849. 19,504. 24,695.
4 5 2 7 1
Expenditure:
Interest expended 5,426.5 7,901.6 9,968.1 10,758. 13,083.
6 7 7 9 7
Operating expenses 2,771.4 3,370.2 3,844.6 4,711.2 5,669.8
5 7 6 3 8
Other provision and contingencies 1,369.9 1,157.0 1,809.2 1,699.8
5 5 0 976.28 8
Total expenses 12,429. 15,622. 16,446. 20,453.
9,568.0 0 0 4 4

Net profit 1,026.4 1,435.5 2,227.2 3,058.3 4,241.6

6 2 0 3 8
Extraordinary items 0 0 0 0 0
Profit B/F 0 0 0 0 0
1,026.4 1,435.5 2,227.2 3,058.3 4,241.6
Total 6 2 0 3 8

Preference dividend 0 0 0 0 0
Equity dividend 252.46 340.94 383.56 639.26 753.35
Corporate dividend tax 0 0 0 0 0
Per share data:
EPS 28.18 39.41 61.14 83.96 108.33
Equity dividend (%) 60 80 90 150 165
Book value 237.46 303.18 352.37 414.71 536.16

45
Appropriations
Transfer to statutory reserve 1,136.2 1,162.0 1,387.8
271.5 444.23 3 7 7
Transfer to other reserve 1,257.0 2,100.4
502.5 650.35 707.41 0 6
Proposed dividend/ transfer to govt. 252.46 340.94 383.56 639.26 753.35
Balance C/F to balance sheet 0 0 0 0 0

Total 1,026.4 1,435.5 2,227.2 3,058.3 4,241.6

6 2 0 3 8

RATIO ANALYSIS OF BANK OF BARODA:

Current ratio: CURRENT ASSETS/ CURRENT LIABILITIES

Current
Year Ratio
2011 0.04
2012 0.03
2013 0.02
2014 0.02
2015 0.02

46
0.045
0.04
0.035
0.03
0.025
0.02
0.015
0.01
0.005
0
2011 2012 2013 2014 2015

QUICK RATIO:

year Quick Ratio

2011 11.29
2012 9.56
2013 9.62
2014 21.88
2015 26.38

47
30

25

20

15

10

0
2011 2012 2013 2014 2015

EARNING PER SHARE

Earnings Per
YEAR Share
2011 28.18
2012 39.41
2013 61.14
2014 83.96

48
2015 108.33

120

100

80

60

40

20

0
2011 2012 2013 2014 2015

TOTAL DEBT TO OWNER FUND

Total Debt to
YEAR Owners Fund
2011 14.44
2012 13.77
2013 14.99

49
2014 15.96
2015 14.55

16.5

16

15.5

15

14.5

14

13.5
2011 2012 2013 2014 2015

CASH DEPOSIT RATIO

YEAR Cash Deposit Ratio

2011 4.46

50
2012 5.7
2013 5.8
2014 5.57
2015 6.11

7
6
5
4
3
2
1
0
2011 2012 2013 2014 2015

CREDIT DEPOSIT RATIO

Credit Deposit
YEAR Ratio
51
2011 65.67
2012 68.72
2013 72.78
2014 73.6
2015 73.87

75
74
73
72
71
70
69
68
67
66
65
2011 2012 2013 2014 2015

ASSEST TURNOVER RATIO

52
Asset Turnover
YEAR Ratio
2011 4.25
2012 3.47
2013 4.2
2014 4.48
2015 5.25

0
2011 2012 2013 2014 2015

53
TOTAL ASSESTS TURNOVER RATIO

Total Assets
YEAR Turnover Ratios
2011 0.07
2012 0.08
2013 0.08
2014 0.08
2015 0.08

0.082
0.08
0.078
0.076
0.074
0.072
0.07
0.068
2011 2012 2013 2014 2015

54
CAPITAL EMPLOYED

Total Income /
Capital
YEAR Employed(%)
2011 7.83
2012 8.57
2013 8.51
2014 7.86
2015 7.75

8.7
8.6
8.5
8.4
8.3
8.2
8.1
8
7.9
7.8
7.7
2011 2012 2013 2014 2015

55
TOTAL FUND:

Net Profit /
YEAR Total Funds
2011 0.8
2012 0.89
2013 1.09
2014 1.21
2015 1.33

1.4
1.2
1
0.8
0.6
0.4
0.2
0
2011 2012 2013 2014 2015

56
DIVIDEND PER SHARE:

Dividend Per
YEAR Share
2011 6
2012 8
2013 9
2014 15
2015 16.5

18
16
14
12
10
8
6
4
2
0
2011 2012 2013 2014 2015

57
PRICE- EARNING RATIO:

Price earnings ratio = market price per share/ earnings per share

YEAR PRICE- EARNING

2011 7.93
2012 7.49
2013 3.95
2014 7.87
2015 9.15

10
9
8
7
6
5
4
3
2
1
0
2011 2012 2013 2014 2015

58
PRICE- BOOK VALUE

Market Value of Security/ book value of shares

PRICE-BOOK
YEAR VALUE
2011 0.91
2012 0.94
2013 0.67
2014 1.55
2015 1.8

2
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
2011 2012 2013 2014 2015

59
ENTERPRISE TO EBIDTA:

YEAR EV/EBIDTA
2011 15.9
2012 13.93
2013 14.01
2014 15.93
2015 16.64

17
16.5
16
15.5
15
14.5
14
13.5
2011 2012 2013 2014 2015

60
CHAPTER-3
RESEARCH METHODOLOGY

61
RESEARCH TOPIC

“THE COMPARATIVE STUDY OF FINANCIAL PERFORMANCE OF STATE BANK OF INDIA

AND BANK OF BARODA.”

OBJECTIVE OF THE STUDY:-

1. To know the strength and weakness of State Bank Of India and Bank Of Baroda
through Ratio analysis.

2. To evaluate the performance of the companies.

3. To understand the liquidity, profitability and efficiency positions of the

62
companies.

4. To make comparison between the ratios during different periods.

INTRODUCTION

Financial Management is the specific area of finance dealing with the financial decision
corporations make, and the tools and analysis used to make the decisions. The
discipline as a whole may be divided between long-term and short-term decisions and
techniques. Both share the same goal of enhancing firm value by ensuring that return
on capital exceeds cost of capital, without taking excessive financial risks.

Capital investment decisions comprise the long-term choices about which projects
receive investment, whether to finance that investment with equity or debt, and when or
whether to pay dividends to shareholders.
Short-term corporate finance decisions are called working capital management and
deal with balance of current assets and current liabilities by managing cash, inventories,
and short-term borrowings and lending (e.g., the credit terms extended to customers).
Corporate finance is closely related to managerial finance, which is slightly broader in
scope, describing the financial techniques available to all forms of business enterprise,
corporate or not.

RESEARCH METHODOLOGY

The conclusive research is being used to study the comparison of the companies.

Ø Data collection:

Secondary data is being taken

Websites

Outcomes of the study:

1. With this analysis we come to know about the strength and weakness of State

63
Bank Of India and Bank Of Baroda through Ratio analysis.

2. To evaluate the performance of the companies.

3. To understand the liquidity, profitability and efficiency positions of the

companies.

4. To make comparison between the ratios during different periods.

Limitation of the study:

Study is constrained to only the comparison of State Bank Of India and Bank Of Baroda.

TOOLS USED:

Comparative analysis

Ratio analysis

Trend analysis

Beta valuation

Sustainable earnings

Basel-II CRAR % capital requirement

Cash Flow Statement Analysis

64
CHAPTER-4
FINANCIAL COMPARATIVE ANALYSIS

65
BETA VALUATION :

state bank of
India bank of Baroda
beta 0.8 0.9

beta
0.92

0.78
beta
da
...
nk

ro
ba

ba
e

of
at

nk
st

ba

The graph shows the compare beta of SBI and BOB which is 0.8 and 0.9 which means
that both are comparatively good. There betas are<1 which means it is goodfor the
investors to invest in the bank as it is less risky in nature.

66
SUSTAINABLE EARNINGS:

SBI BOB
SUSTAINABLE
EARNINGS 8857 3136

SUSTAINABLE
8857
EARNINGS
10000
3136
SUSTAINABLE EAR
0 NINGS
SBI BOB

CRAR% ANALYSIS :

SBI BOB
BASEL-II
CRAR% 11.98 14.52

67
BASEL-II CRAR%
16 14.52
11.98
12
8
BASEL-II CRAR%
4
0
SBI BOB

CASH FLOW STATEMENT ANALYSIS OF BANK OFBARODA:

2011 2012 2013 2014 2015

2207.1 3342.9 4238.0 5650.3
NET PROFIT BEFORE TAX 1654.26 6 4 6 2
NET CASH FROM OPERATING 2241.8 1125.4 11252. 11778.
ACTIVITIES 5153.94 2 7 45 81
NET CASH USED IN FROM INVESTING -235.1 -489.7
ACTIVITIES -307.65 3 -238.93 -335.01 6
NET CASH USED IN FROM FINANCING 2012.2 3177.9
ACTIVITIES -20.56 3 901.29 462.51 6
NET (DECREASE)/INCREASE IN CASH 4018.9 1787.8 11379. 14467.
AND CASH EQUIVALENT 4825.73 2 3 94 01
18280. 22299. 24087. 35467.
OPENING CASH 13454.64 37 29 12 06
22299. 24087. 35467. 49934.
CLOSING CASH 18280.37 29 12 06 07

CASH FLOW STATEMENT ANALYSIS OF STATE BANK OF INDIA:

2011 2012 2013 2014 2015

68
PARTICULARS
14180.6 14954.2
Net Profit Before Tax 7625.08 10438.9 4 13926.1 3
-1776.0 29479.7 -1804.9 34282.5
Net Cash From Operating Activities 7 -856.87 3 9 2
-284.56 -2798.0 -1651.9 -1761.5 -1245.5
Net Cash (used in)/from Investing activities 1 3 2 3
19371.1 -3359.6
Net Cash (used in)/from Financing Activities 9494.11 2 5097.38 7 2057.11
Net (decrease)/increase In Cash and Cash 15716.2 32925.1 -6926.1
Equivalents 7433.49 4 8 8 35094.1
51968.6 71478.6 87780.0
Opening Cash & Cash Equivalents 44535.2 9 2 103110 5
51968.6 67466.3 104403. 96183.8 122874.
Closing Cash & Cash Equivalents 9 4 8 4 2

TREND ANALYSIS

Trend Analysis is the practice of collecting information and attempting to spot a pattern, or
trend, in the information. In some fields of study, the term "trend analysis" has more
formally-defined meaning.

Although trend analysis is often used to predict future events, it could be used to
estimate uncertain events in the past, such as how many ancient kings probably ruled
between two dates, based on data such as the average years which other known kings
reigned.

TREND ANALYSIS OF STATE BANK OF INDIA

BASE YEAR 2011-2015

percentage
(%) figures
201 201
2011 2012 3 4 2015

deposit
s 100 123 170 185 214
advanc 100 124 161 187 224

69
es
net
profit 100 148 201 202 162

250
200
150
DEPOSITS
100 ADVANCE
50 NET PROFIT
0
2011 2012 2013 2014 2015

INTERPRETATION:

∙ There is a continuous increase in deposits

∙ There is a increase of advances

∙ There is a increase in net profits till 2014 but there is a fall in 2015

The overall performance of the bank is satisfactory.

TREND ANALYSIS OF BANK OF BARODA

Base year 2011-2015

In percentage(%) figures

2011 2012 2013 2014 2015

deposits 100 122 154 193 245
advances 100 128 172 209 273
net profit 100 140 217 298 413

70
450
400
350
300
250
DEPOSITS
200 ADVANCE
150 NET PROFIT
100
50
0
2011 2012 2013 2014 2015

INTERPRETATION:

Deposits:-

The trend shows that the deposits are increasing from 2011-2015

Advances:-

The trend of advances shows that it is increasing in those four years 2012-2015

Net profit:-

The trend of net profit shows the increase from 2012-2015

BETA VALUATION OF STATE BANK OF INDIA

return
-
avera return
ge of of SBI-
71 return varian Avera covarian
RETURN RETUR of ce of ge of ce of
OF N OF sense sense return sensex
MONTH SENSEX SBI SENSEX SBI x x of SBI and SBI
20,069.1 3,23
10-Sep 2 3.20
20,032.3 3,15 0.000
10-Oct 4 1.20 0.00 -0.03 0.01 1 0.01 0.0001
19,521.2 2,99 0.000
10-Nov 5 4.10 -0.03 -0.05 -0.01 2 -0.01 0.00014
20,509.0 2,81 0.004 -0.0014
10-Dec 9 1.05 0.05 -0.06 0.06 0 -0.02 07
18,327.7 2,64 0.008 0.00201
11-Jan 6 1.05 -0.11 -0.06 -0.09 8 -0.02 8
17,823.4 2,63 0.000 -0.0005
11-Feb 0 2.00 -0.03 0.00 -0.01 2 0.04 25
19,445.2 2,76 0.010 0.00939
11-Mar 2 7.90 0.09 0.05 0.10 8 0.09 2
19,135.9 2,80 0.000 -0.0001
11-Apr 6 5.60 -0.02 0.01 0.00 0 0.05 67
18,503.2 2,29 0.000
11-May 8 7.80 -0.03 -0.18 -0.02 4 -0.14 0.00289
18,845.8 2,40 0.001 0.00268
11-Jun 7 5.95 0.02 0.05 0.03 0 0.09 6
18,197.2 2,34 0.000 -0.0002
11-Jul 0 2.00 -0.03 -0.03 -0.02 5 0.01 68
16,676.7 1,97 0.005 0.00835
11-Aug 5 4.50 -0.08 -0.16 -0.07 0 -0.12 8
16,933.8 1,94 0.000 0.00068
11-Sep 3 5.55 0.02 -0.01 0.03 8 0.02 3
AVERAGE 0.002
RETURN -0.01 -0.04 6 0.00200
COVARIANC 0.001995
E 59
0.002642
VARIANCE 95

BETA 0.755062
BETA VALUATION OF BANK OF BARODA

RETUR return return

BANK RETUR N OF -avera -avera covarian
OF N OF BANK ge of varianc ge of ce of
MONT BAROD SENSE OF return e of return sensex
H SENSEX A X BAROD on sensex on and BOB

72
sense
A x BOB
10-Sep 20,069.12 872.8
1,011.0 0.010 0.0001 0.165
10-Oct 20,032.34 0 -0.0018 0.1583 9 19 0 0.0018
-0.01 0.0001 -0.07
10-Nov 19,521.25 937.75 -0.0255 -0.0725 28 64 25 0.0009
0.063 0.0040 -0.04
10-Dec 20,509.09 896.5 0.0506 -0.0440 3 1 40 -0.003
-0.09 0.0087 -0.03
11-Jan 18,327.76 869.15 -0.1064 -0.0305 36 68 05 0.0029
-0.01 0.0002 0.002
11-Feb 17,823.40 870.85 -0.0275 0.0020 48 19 0 -3E-05
0.103 0.0107 0.106
11-Mar 19,445.22 963.15 0.0910 0.1060 7 57 0 0.011
-0.00 1.01E- -0.05
11-Apr 19,135.96 912.15 -0.0159 -0.0530 32 05 30 0.0002
11-Ma -0.02 0.0004 -0.05
y 18,503.28 863.4 -0.0331 -0.0534 03 14 34 0.0011
0.031 0.0009 0.009
11-Jun 18,845.87 871.9 0.0185 0.0098 2 76 8 0.0003
-0.02 0.0004 0.007 -0.0001
11-Jul 18,197.20 878.3 -0.0344 0.0073 17 71 3 6
-0.07 0.0050 -0.16
11-Aug 16,676.75 736.6 -0.0836 -0.1613 08 18 13 0.0114
0.028 0.0007 0.051
11-Sep 16,933.83 774.8 0.0154 0.0519 1 92 9 0.0015

AVERAGE 0.0026
RETURN -0.0127 -0.0066 43 0.0023

COVARIANC 0.0023
E 4

0.0026
VARIANCE 43

0.8843
BETA 85

73
CHAPTER-5
FINDINGS,SUGGESTION & CONCLUSION

74
State bank of India Bank of Baroda

Particulars

1. Beta valuation 0.8 0.9

2. sustainable earnings ( standard 504 1044

deviation)

Average sustainable earnings 8857 3136

3. Cash flow statement analysis: 14467.01 35094.1

4. Basel-II CRAR% 11.98 14.52

5. Profit & Loss statement analysis (19%) 38.69%

6. Balance sheet statement analysis 16 28%

7. Ratio analysis:

a. P/E ratio 21.92 9.15

b. P/BV 2.7 1.8

c. EV/EBIDTA 17.07 16.64

75
YEAR 2014

SBI BOB
P/E 21.92 9.15
P/BV 2.7 1.8
EV/EBIDTA 17.07 16.64

25 21.92
20 17.07
16.64
15
9.15 SBI
10
BOB
5 2.7 1.8

0
P/E P/BV EV/EBIDTA

INTERPRETATION:

P/E RATIO OF State bank of India is 21.92 which is more than the P/E ratio of its

76
peerset bank of Baroda 9.15 which means that it is overvalued and strongly sound in
nature.

P/BV

The ratio of state bank of india is 2.7 and that of its peerset is 1.8 which means the
bank is highly overvalued in nature

EV/EBIDTA

The ratio of state bank of india is 17.07 and that of its peerset is 16.64 which means
that the bank is closely related to its peerset.

Both are fundamentally sound in nature.

SBI BOB
credit deposit
ratio 79.9 73.87
CASH DEPOSIT 8.96 6.11

90 79.9
80 73.87
70
60
50
credit deposit ratio
40
30 CASH DEPOSIT
20 8.96 6.11
10
0
SBI BOB

77
CREDIT-DEPOSIT RATIO:

This ratio assess the credit performance of the bank.

The graph shows that state bank of india and bank of baroda both are performing well
as both banks has overall good efficiency in nature.

SBI-79.9

BOB – 73.87

State bank of India has overall good efficiency and performance of banking institutions.

CASH DEPOSIT RATIO:

This ratio assesses the cash performance of the bank.

The graph shows that state bank of India and bank of Baroda is performing well in
nature.

SUSTAINABLE
EARNINGS
SBI BOB
STANDARD DEVIATION 504 1044
AVERAGE 8857 3136

78
10000 8857
STANDARD DEVIA
3136 TION
504 1044
AVERAGE
0
SBI BOB

OUTCOME:

Since the average sustainable earnings is high and standard deviation of state bank of
India is low which means that the bank is fundamentally sound and it is performing
good as compared to bank of Baroda.

INDUSTRY SBI BOB

P/E
RATIO 6.43 21.92 9.15

79
P/E RATIO
25 21.92
20
15 9.15
10 6.43
5 P/E RATIO
0

B
I
RY

SB

BO
ST
DU
IN

INTERPRETATION:

Since the industry P/E ratio is 6.43 ,SBI 21.92,BOB 9.15.

It means that State bank of India P/E ratio is more than the industry/peerset company
which means it is overvalued and it is fundamentally sound in nature as compared to its
industry/ peerset bank of Baroda.

SBI BOB
dividend payout
ratio 26.03 17.76

80
dividend payout ratio
30 26.03
25
20 17.76
15 dividend payout rat
10 io
5
0
SBI BOB

INTERPRETATION:

SBI 26.03

BOB 17.76

There is increase in ratio in the year 2011 in both the banks .

SBI BOB

81
Earnings Per Share 116.07 108.33
1,023.4
Book Value 0 536.16

Dividend Per Share 30 16.5

Price Earning (P/E) 21.92 9.15
Price to Book Value (
P/BV) 2.7 1.8

Intrepretation :

It is indicated that EPS AND DPS ARE INCREASING OF STATE BANK OF INDIA AS
COMPARED TO BANK OF BARODA .

THE REASON MAY BE THAT THERE IS MORE USE OF DEBTTHAN DUE TO IMPROVED
OPERATIONS.

P/E RATIO AND P/BV RATIO BOTH ARE INCREASING . .

THE OVERALL EFFICIENCY OF THE COMPANY IS GOOD AND IT IS PERFORMANCE IS

BETTER IN THE BANKING INSTITUTION.

82
CONCLUSIONS:

1. State Bank Of India has overall better efficiency and has performed better in the
banking institution as compared to Bank Of Baroda.

2. EPS And DPS Of State Bank Of India is increasing due to increase in the use of
debt rather than the use of improved operations.

3. The P/E Ratio Of State Bank Of India is high as compared to its industry and
Bank Of Baroda which means that SBI is using its funds in a better manner and it
is fundamentally sound in nature.

4. Beta Of State Bank Of India And Bank Of Baroda is less than the market beta
which means that both banks are giving less returns but they are less risky and
investors can invest in these shares.

5. The Average Sustainable Earnings Of State Bank Of India is high and the
standard deviation is low so the bank has its earnings is sustain and more
robust in nature as compared to Bank of Baroda.

83
CHAPTER-6
BIBLIOGRAPHY

84
BIBLIOGRAPHY:

http://en.wikipedia.org/wiki/State_Bank_of_India

http://en.wikipedia.org/wiki/Bank_of_Baroda
http://www.moneycontrol.com/financials/state bank of India/balance-sheet/SBI

http://www.moneycontrol.com/financials/bankofbaroda/balance-sheet/BOB
http://www.moneycontrol.com/financials/bankofbaroda/profit&loss/BOB

http://www.moneycontrol.com/financials/bankofbaroda/profit&loss/SBI

www.google.com

www.capitaline.com

www.sbi.com

www.investopedia.coms

85