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Comparison of Financial Performance of Commercial Banks: A Case Study in The Context of India (2009-2013)

The document analyzes the financial performance of commercial banks in India from 2009-2013 using various financial ratios. It finds that while the return on assets and net interest margin did not significantly differ between public and private sector banks, the return on equity was higher for private banks, indicating different levels of financial performance. Overall, the study finds that Indian banks were performing comparably to foreign banks despite economic challenges. However, continued reforms are still needed in the banking sector to further accelerate the Indian economy.

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33 views

Comparison of Financial Performance of Commercial Banks: A Case Study in The Context of India (2009-2013)

The document analyzes the financial performance of commercial banks in India from 2009-2013 using various financial ratios. It finds that while the return on assets and net interest margin did not significantly differ between public and private sector banks, the return on equity was higher for private banks, indicating different levels of financial performance. Overall, the study finds that Indian banks were performing comparably to foreign banks despite economic challenges. However, continued reforms are still needed in the banking sector to further accelerate the Indian economy.

Uploaded by

13128_anu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Comparison of Financial Performance of Commercial Banks: A Case Study in the Context

of India (2009-2013)

Summary:
The history of Indian banking dates as early as 1786. Started with the establishment of General
Bank of India, Indian economy now hosts multiple of these kinds of institutions. At present,
Indian banking sector is categorized into public sector banks, private sector banks (old and new
private sector banks), foreign banks, regional rural banks, co-operative sector banks and
development banks. The sound financial health of these banks is not only important to depositors
but also equally important to the shareholders, employees and the entire economy of the country.
Realizing this, progressive efforts have been continually made to evaluate the financial position,
management and performance of different banks. Similarly, this study was undertaken with the
objective to evaluate the financial performance and achievement of Indian commercial banks
based on different financial ratios.
The study which was extended over the period of five years from 2009-2013, relied on
quantitative research technique to arrive at the conclusion. Information for the study was
extracted from various published sources and analysis of variance (ANOVA) was used to test the
hypothesis set by the researcher. Furthermore, the profitability of different banking groups was
evaluated and appraised through different ratios like Return on Assets (ROA), Return on Equity
(ROE) and Net Interest Margin (NIM). The result of the study indicated that there was no
significant difference in profitability position among different banking groups with respect to
ROA and NIM. Both ROA and NIM ratios had decreased during 2010 due to the slump in
domestic economy and shown increasing trend thereafter. However, significant mean difference
was found among different banking groups in terms of ROE which implies that different level of
financial performance was exhibited by different banks. The private sector banks have incurred
higher ROE than public sector banks at the end of the study period.
In nut shell, all these financial ratios indicate that Indian banking sector is performing at par with
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its foreign counterparts, despite the global financial crisis and slump in domestic economy.
Never-the-less various reforms and improvement is still required in the banking sector to
accelerate the Indian economy.
Anu Shah (13128)|

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