CHAPTER-1

INTRODUCTION:
Financial performance is the process of measuring how effectively a company utilizes its assets from
primary mode of business to raise incomes. The study used 5 years of stock price and bank nifty for in
HDFC’s secondary data and main objective is to find out the performance ratios of the bank that can be
helpful in finding the growth aspects of the bank. The various tools like Return on assets ratio, Interest
coverage ratio, and other performance ratios were used for the study. The suggestions reveal bank is
generating sufficient income and they are making better profits but efficiency of the bank in generating
profits is limited. Finally, Bank is performing well in terms of income and it is satisfactory.

Financial performance analysis is the process of identifying the financial strengths and weaknesses of the
firm by properly establishing the relationship between the items of balance sheet and profit and loss
account. It also helps in short-term and long-term forecasting and growth can be identified with the
help of various financial tools in financial performance analysis. Bank plays a crucial role in the
development of Indian economy. A sound and an efficient banking system in developing countries provide
the necessary financial inputs to the economy. It also measures organizations whole financial health over a
particular period of time. Financial performance of the organization deals with the financial strength and
weaknesses of bank accurately establishing a relationship between the balance sheet and income statement.

INDUSTRY PROFILE:

Banking comes under tertiary industries these are concerned with providing support services to primary and
secondary industries as well as activities relating to trade. This study around 5 years for performance of HDFC
Bank evaluation

BANKING INDUSTRY:

The Indian banking system consists of 12 public sector banks, 22 private sector banks, 44 foreign banks, 43
regional rural banks, 1,484 urban cooperative banks and 96,000 rural cooperative banks in addition to
cooperative credit institutions. As of September 2021, the total number of ATMs in India reached 213,145 out of
which 47.5% are in rural and semi-urban areas.

According to the RBI, bank credit stood at Rs. 116.8 lakh crore (US$ 1.56 trillion) on 31st December 2021.

As of February 2022, credit to non-food industries stood at Rs. 114.10 trillion (US$ 1.53 trillion).

In FY18-FY21, bank assets across sectors increased. Total assets across the banking sector (including public and
private sector banks) increased to US$ 2.48 trillion in FY21.
In FY21, total assets in the public and private banking sectors were US$ 1,602.65 billion and US$ 878.56 billion,
respectively. RBI has decided to set up Public Credit Registry (PCR), an extensive database of credit
information, accessible to all stakeholders. The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017
Bill has been passed and is expected to strengthen the banking sector. Total equity funding of microfinance
sector grew 42% y-o-y to Rs. 14,206 crore (US$ 2.03 billion) in 2018-19.

As of February 21, 2022, the number of bank accounts—opened under the government’s flagship financial
inclusion drive ‘Pradhan Mantri Jan Dhan Yojana (PMJDY)’—reached 44.63 crore and deposits in the Jan Dhan
bank accounts totaled Rs. 1.58 trillion (US$ 21.25 billion).

Rising income is expected to enhance the need for banking services in rural areas, and therefore, drive the growth
of the sector.

India is the world's largest market for Android-based mobile lending apps, accounting for ~82% of all online
lenders worldwide. India currently has 887 active lending apps.

The digital payments revolution will trigger massive changes in the way credit is disbursed in India. Debit cards
have radically replaced credit cards as the preferred payment mode in India after demonetization. In January
2022, Unified Payments Interface (UPI) recorded 4.62 billion transactions worth Rs. 8.32 trillion (US$ 111.8
billion).

FINANCE INDUSTRY:

The financial services industry manages money for individuals and corporations. It comprises such organizations
as commercial and investment banks, insurance companies, hedge funds, credit-card companies, consumer
finance firms, accounting agencies, and brokerage firms.

India’s PE/VC investment were at US$ 77 billion in 2021, which was 62% higher than 2020. In 2021, Prosus
acquired Indian payments gaint Bill Desk for US$ 4.7 billion. In September 2021, eight Indian banks announced
that they are rolling out—or about to roll out—a system called ‘Account Aggregator’ to enable consumers to
consolidate all their financial data in one place. In September 2021, Piramal Group concluded a payment of Rs.
34,250 crore (US$ 4.7 billion) to acquire Dewan Housing Finance Corporation (DHFL). Digital payment
platforms for rural India:

In July, Dvara Kshetriya Gramin Financial Services Pvt Ltd., an NBFC operating in remote rural areas of India,
acquired ‘TransactNow’ digital platform, an early phase tech start-up that provides digital financial services to
India's unbanked and underserved population.
In August 2021, Neokred, an open banking stack that delivers curated versions of issuance in the payment
ecosystem, teamed with Virenxia, a provider of integrated and sustainable solutions for rural transformation and
development, to launch the ‘The Kisan Card,' a special payment card for Indian farmers. In May 2021, the
Reserve Bank of India (RBI) granted authorisation to Eroute Technologies to operate as a prepaid payment
instruments (PPI) company. In February 2021, the Reserve Bank of India (RBI) cleared the Rs. 34,250 crore
(US$ 4.7 billion) acquisition of Dewan Housing Finance Corporation (DHFL) by the Piramal Group. In January
2021, Sundaram Asset Management Company announced the acquisition of Principal Asset Management for Rs.
338.53 crore (US$ 46.78 million). In January 2021, the National Stock Exchange (NSE) launched derivatives on
the Nifty Financial Service Index. This service index is likely to provide institutions and retail investors more
flexibility to manage their finances. In September 2021, Unified Payments Interface (UPI) recorded 3.65 billion
transactions worth Rs. 6.5 trillion (US$ 86.63 billion). The number of transactions through immediate payment
service (IMPS) reached 384.88 million (by volume) and amounted to Rs. 3.18 trillion (US$ 43.19 billion) in
September 2021. In August 2021, Unified Payments Interface (UPI) recorded 3.55 billion transactions worth Rs.
6.39 lakh crore (US$ 86.00 billion). The number of transactions through immediate payment service (IMPS)
reached 377.94 million (by volume) and amounted to Rs. 3.18 trillion (US$ 42.85 billion) in August 2021.

HISTORY OF HDFC BANK

HDFC Bank Limited (Housing Development Finance Corporation) was incorporated in August 1994 with its
registered office in Mumbai, India. HDFC Bank commenced operations as a scheduled commercial bank in
January 1995. HDFC was amongst the first to receive an ‘in principle’ approval from the Reserve Bank of India
(RBI) to set up a bank in the private sector. The bank at present has an enviable network of over 4,805 branches
spread over cities across India. All branches are linked on an online real time basis. Customers in over 500
locations are also servicing through telephone banking. The bank also has a network of about over 12,860
networked ATMs 2,657 across cities and towns. HDFC Bank provides a number of products and services
including wholesale banking and retail banking, treasury, auto loans, two wheeler loans, personal loans, loans
against property, consumer durable loans, life style loan, credit cards and the various digital products.

COMPANY PROFILE.

Provide clients a ‘total financial services’ broking experience through tailored / efficient structuring, industry
knowledge and access to trusted industry partners.
 Always act on our client’s behalf to facilitate the greatest benefit to them and liaise with financial institutions to
provide a financial package that will suit our client’s needs both now and in the future.

Increase our client’s wealth by providing efficient financial structuring whilst sourcing the most appropriate
financial package for their individual and/or business needs.

Finance all has been set up purely to service the needs of its clients. It provides a total financial experience
tailored to professionals, self-employed and SME’s (small / medium business enterprise). As a finance
brokerage, experience is not limited to any one area of the finance industry. Areas of expertise include: banking n
finance, oil n gas, retailing, insurance, telecom, metals and mining, cement, power, logistics, healthcare these all
financial HDFC BANK performance for all company sectors.

 Residential home and investment Loans

 Equipment Finance Loans
 Business & Commercial loans
 Self-Managed Super Fund (SMSF) loans
 Debtor / Cash Flow facilities
 Business management consulting

Structuring finance facilities correctly to suit a client’s immediate and long term goals is seen as the greatest
benefit that Finance All can provide. Effective structuring provides:

 Specific market comparisons for rates and fees.

 Identify and stop any unnecessary fees and charges through inefficiencies of existing structure.
 Ensures the financial structure has a strong platform for future growth.

Banking , finance, oil ,gas, retailing, insurance, telecom, metals and mining, cement, power, logistics, healthcare
for last 5 years, above the details covered all HDFC BANK Financial sectors for all company which one we
mansion.

PROMOTORS:
 Occasional promoters. These promoters take interest in floating some companies.
 Entrepreneur promoters.
 Financial promoters.
 Discovery of a business idea.
 Detailed investigation.
 Assembling the factors of production.
 Entering into preliminary contracts.
 Naming a company.

Financial performance is the process of measuring how effectively a company utilizes its assets from primary
mode of business to raise incomes it also measures organizations whole financial health over a particular period
of time. Financial performance of the organization deals with the financial strength and weaknesses of bank
accurately establishing a relationship between the balance sheet and income statement. This process used to
clearly understand the growth of long-term and short-term of bank. There are several ways to analyze data the
researcher used ratio analysis in this research. This analysis also helpful determines the credit worthiness of the
bank to evaluate the market position among the competitors.

VISION:
Financial Institution Saving Low Income Individuals and Borrowers below TZS 40M.

MISSION
To generate a better a better world that would be safer, more peaceful and more creative than the world we know
today.
QUALITY POLICES
All HDFC BANK tool very sold and ensure very decent investment and quality for all products based on interest
and popularities. In this HDFC BANK products awareness for following fields to get more information regarding
HDFC BANK products. Main activity followed every day to check our competitors update and their information
and checking customer blogs and reviews. If we do this definitely to
Improve HDFC BANK products quality products.

PRODUCT/SERVICES:
In HDFC BANK store so many products is available for all type of customers and every HDFC BANK store
they Have good service and helping to all customers to choice suitable products and service will doing in for last
5 years performance evaluation

AREA OF OPERATION:

Global HDFC BANK financial sector is looking to open 35 new Bank branach in the coming one year to
increase its HDFC BANK in the country. the brand that currently has 355 area across 120 cities .Banking
lifestyle brand HDFC BANK schemes will count India among its top five markets with three years even as some
international peers struggle with their domestic operations here.in 2022, India was the eighth largest market for
HDFC BANK and the expects India to be the top five by 2018-2022
The major operating cities of HDFC BANK banking are:
 Bangalore
 Delhi
 Pune
 Kolkata
 Mumbai
 Chennai
 Hyderabad
 Mangalore
 Agra
 Allahabad
 Indore
 Punjab
 Surat
 Luck now.

COMPETITORS INFORMATION:

 ICICI
 SBI
 YES
 PRIVATE PERSONAL BANK
 AXIS

INFRASTRUCTURES FACILITIES:
HDFC BANK all bank store for the most part comprises of 1floor. The Back office is arranged at the ground

floor. On the off chance that clients visits stores they can have all offices of stopping, lift offices and clients

effortlessly discover items in the stores.

• Two wheeler s and four wheeler s offices at underground floor.

• Two trial spaces for clients.

• Lift offices.

• Fire leave offices in each floor.

• Scanner in the passage and exit of the store.

• Drinking water.

• Lunch space for staff.

• Air Conditioner.

• Music.

SWOT ANALYSIS:

STRENGTH

It has gone into organization with acclaimed organizations like Banking Telecom.

It has a good HDFC BANK name throughout worldwide.

HDFC BANK brand is extremely creative and has an exceptionally rich R&D group.

HDFC BANK is built up more than 90 nations and utilizes around 11787 representatives will over the world.

WEAKNESS

HDFC BANK has intense rivalry and constrained piece of the pie contrasted with GAS and OIL

High brand changing means hard to have steadfast client base.

Missing insurance segmentation.

OPPORTINITUES

More promoting and marking to tap more up to date clients

 Technology up gradation for new products.

Acquisition and sponsorships.

THREATS

Economic situation.

Governmental approaches and control can influence business task.

FUTURE GROWTH AND PROSPECTS

The percentage increase in performance indicators was subdued as compared to a pre-COVID-19 year; even so, the
yearon- year increase in key metrics shows a healthy and continued growth. The Bank’s growth metrics like its Balance
sheet size which crossed `17 Lakh Crore – a 14.1% increase, was driven by similar increase in Advances (14.0%) and
Deposits (16.3%). Our efficiency in managing capital can be seen from a 27.0% increase in our low-cost CASA deposits
– the highest in previous three years. Our profitability in disruptive times, is an outcome of the operational efficiencies
built into our system. We continue to deliver a double-digit growth in earnings, with an increase of 18.5% in net profit,
while keeping a check on our operational costs, resulting in a lower cost to income ratio of 36.3%. The Bank’s business
resilience is an important indicator of our credit risk evaluation and management. Our key strength continues to be
maintaining one of the lowest levels of Gross Non-Performing Assets (NPAs) in the Banking industry with provision
coverage ratio of 69.8%.

Type of HDFC BANKs investing in India are as below:

 Hedge Funds
 Foreign Mutual Funds

 Sovereign Wealth Funds

 Pension Funds

 Trusts

 Asset Management Companies

 Endowments, University Funds, etc.

The total market capitalization (M-cap) of all companies listed on the Bombay Stock Exchange (BSE) rose to a
record level of Rs. 264.41 trillion (US$ 3.53 trillion) in 2021-22 (till February 1st), from Rs. 204.31 trillion (US$
2.76 trillion) in 2020-21.

This study has been carried out to evaluate the financial performance of HDFCBank.HDFC was amongst the first
to receive an ‘in principle’ approval from the Reserve Bank of India (RBI) to set up a bank in the private sector.
The bank at present has an enviable network of over 4,805 branches spread over cities across India. All branches
are linked on an online real time basis. Customers in over 500 locations are also servicing through telephone
banking. The bank also has a network of about over 12,860 networked ATMs 2,657 across cities and towns.
HDFC Bank provides a number of products and services including wholesale banking and retail banking,
treasury, auto loans, two wheeler loans, personal loans, loans against property, consumer durable loans, life style
loan, credit cards and the various digital products. The financial performance of above mentioned bank has been
evaluated for the past five year’s i.e.2018, 2019, 2020, 2021 and 2022. The data analyzed by ratio analysis such
as current ratio, cash position ratio, fixed assets ratio, debt-equity ratio and proprietary ratio and give
interpretation to each ratio. To conclude this article the financial soundness of the bank is satisfactory during the
study period.

FINANACIAL STATEMENTS:
 CHAPTER-2

THEORETICAL BACKGROUND OF THE STUDY:

Capital market is a mechanism through which funds can be borrowed and lent for long period of time and stock
price is determined though free interaction of market forces such as demand and supply. Since share price is
market determined, often it does not reflect the true intrinsic value. There are different conceptual frameworks,
tools and techniques to analyze the performance of capital market instruments which includes Markowitz model,
Sharpe Single Index Model, Capital Asset Pricing Model, Technical analysis, Fundamental analysis, Efficient
Market Hypothesis and different valuation approaches. All the models are based on some critical assumptions as
well as on strong analytical foundations. It has been experienced that often these established empirical models
are unable to forecast the movement of stock prices. Almost in all the cases, models are formed on the basis of
simplistic assumption that investors are rational in nature where in reality; market is driven by emotion,
sentiment, greed and fear of the investors. Thus the assumption of rationality of investors does not hold in real
life. Hence company’s capital market performance should be used as an integral part to analyze the perception of
investors about the company instead of using the same to judge the fundamental strength of the company.

Banking sector is chosen as it is highly regulated sector in India. HDFC bank has largest market capitalization
among the banking players which is immediately followed by State bank of India (SBI) and ICICI bank. Since
SBI is largest PSU bank in India, ICICI bank and HDFC banks are considered for comparative analysis in order
to create a level playing field.

Most financial statement analyses focus on firms belonging to industries that either contribute significantly to
economic figures or posit in a highly competitive business environment. The objective of this paper is an analysis
done to see the extent to which a company has implemented using rules financial performance is good and right.
This study investigates performance of commercial banking sector for the period of April- 2018 to March -2022.
Financial statements of Axis bank, ICICI bank, Federal bank and HDFC bank for the indicated periods were
obtained from database such as CMIE, Prowess, money control and yahoo finance. Necessary information
derived from these financial statements were summarized and used to compute the financial ratios for the four-
year period. Financial ratios are tools used to measure the profitability, liquidity and solvency performance of
four major Indian commercial banks. This research is to analyze the financial statements of these banks using
liquidity ratios, activity ratios, leverage ratios, profitability ratios, and market value ratios. For liquidity, the
following ratios were used: current ratio, quick or acid-test ratio. For activity, Inventory turnover ratio, debtor
turnover ratio and working capital turnover ratios were used. For leverage, the following ratios were used i.e.
debt ratio, equity ratio, and interest coverage ratio. For profitability, profit margin, net profit margin, return on
assets, return on shareholder’s equity, and earnings per share were used. For market value, price earnings ratio
and earning per share ratios were used.

Banks play an important role in building the economy as well changes the lives of many individuals. In India
banking sector reforms are lifeline of economic activity for both rural and urban areas. So, any changes in stock
price of banks will be definitely affect the investment pattern of investor and also affects the economy. Indian
banking industry, the backbone of the country’s economy has always played a positive and key role in prevention
of economic disaster in the country. Risk is a concept that denotes a potential negative impact to an asset or some
characteristic of value that may arise from some present process or future event. It has achieved enormous
appreciation for its strength, particularly in the wake of some of the worldwide economic disasters. Government
of India initiated diverse structural reforms in line with global banking industry such as implementation of Basel
norms, listing in stock exchanges, automation of operational activities, consolidation of selected public sector
banks , as a part of financial inclusion Pradhan Mantri Jan Dhan Yojana (PMJDY), National Investment and
Infrastructure (NIIF), allowing to operate small and payments banks and others. It will not be an overemphasis to
say that Banking Stocks are the lifeline of the Stock Market. There are 9 Banking Stocks in bench mark NIFTY
50 which contributes 18.56% weightage to NIFTY 50 index. Moreover, according to experts, the revival of
Indian Economy is not possible without the participation of banking sector. As mentioned, that most of the
analysts are extremely bullish on private sector banking stocks because competition among banks is one of the
key reasons which will put pressure on the bottom line of the banking stocks. NPA’s is another key concern.
NPA is a serious threat to the performance of banking stocks. Base Rate Calculation is another one which has
seriously impact on the NIM (Net Interest Margin) of banks. Social Banking Accounts are the account having
zero Balance will be another major burden on banks’ balance sheet. It will in turn put pressure on the
performance of banking stocks. It’s a big challenge to make accounts opened under the scheme Pradhan Mantri
Jan Dhan Yojana . Consolidation in Banking Sector is another initiative by then finance Minister Chidambaram,
to merge non performing small banks or similar size banks with other banks may be significantly strained the
balance sheets of big banks. A strong regulator ensures the growth of the sector, Currently, banking industry is
facing the heat of excessive regulatory intervention. In the current scenario, survival of new banks looks bleak
due to capital requirement. The new banks may not succeed but will impact existing banks. Recent technology
driven adoptions like Electronic Payment Services, Real Time Cross Settlement (RTGS), Electronic Funds
Transfer (EFT) Electronic Clearing Service (ECS), Point of Sale Terminal, Tele Banking, Electronic Data
Interchange (EDI) are influence on paradigm shift of their operations. India is one of the emerging economies,
which has witnessed significant developments in the stock markets during the liberalization period and policies
initiated by the government. The current study highlights risk and return of banking stocks which are listed in
NSE Nifty between 2 periods which includes period1, the UPA government (2010 to 2014) and period2, the
NDA government (2015 to 2019). It also examines the pattern of return and risk of banking stocks between two
periods and relates different policy decisions. The study used different statistical techniques like Return, Average
return, Standard deviation, Variance and Beta for analysis with the following objectives

INDEX VALUE

The formula for calculating the value of a price return index is as follow:

Where:

VPRI = the value of the price return index

ni = the number of units of constituent security held in the index portfolio

N = the number of constituent securities in the index

Pi = the unit price of constituent security

Di = the value of the divisor

While the formula for calculating the value of an index may seem somewhat complicated at first glance, it is
similar to calculating the value of any other normal portfolio of securities as it involves adding up the values of
constituent securities. Index value calculation has just one additional step of dividing the sum of constituent
securities’ values by a divisor, which is usually chosen at the inception of the index to set a convenient beginning
value and then adjusted to offset index value changes unrelated to changes in the prices of constituent securities.

INDEX VALUE

An index is made up of two constituent securities, Stock A and Stock B. What beginning divisor must be used to
achieve a beginning value of 1,000?

Let’s first calculate the sum of the values of both constituent securities.

Stock A value = 50 × 10 = 500

Stock B value = 30 × 100 = 3,000

Stock A value + Stock B value = 3,500

PRICE RETURN AND TOTAL RETURN:

The divisor must be set such that this figure is adjusted down to 1,000.

The study used different statistical techniques like

1. Return: The formula for the total stock return is the appreciation in the price plus any dividends paid, divided
by the original price of the stock. The income sources from a stock are dividends and its increase in value
2. Average return: The average return tells an investor what the returns for a stock have been in the past or what
the returns of a portfolio of companies are. Average return = Σ R/n

3. VARIANCE: Variance is the expectation of the squared deviation of a random variable from its mean.
Variance = Σ(x-X) 2/N

4. STANDARD DEVIATION: Standard deviation is a number used to tell how measurements for a group are
spread out from the average (mean), or expected value. SD = √variance 5. Beta (β): It measures the market risk
or systematic risk. Beta is commonly computed by the under given formula. β= (Cov (Ra, Rm))/(Var (Rm))
Where, Ra is the return of a stock and Rm is benchmark index return. Sample size Top twelve banks in National
Stock Exchange (bank nifty) are selected to analysis the risk and return analysis: Axis bank IDFC bank ICICI
bank Bank of Baroda IndusInd bank Union bank Federal bank Kotak Mahindra bank SBI bank HDFC bank
Punjab national bank YES bank

LITERATURE SURVEY:

Nagalekshmi V S, Vineetha S Das (2018), found that the positive impact of merger Kotak Mahindra Bank Ltd
with ING-Vysya Bank. It also found that momentous increment in various budgetary like operating profit, net
profit, earnings per share, interest earned, return on assets, equity share capital, income on investment etc.,

K. Dinesh Kumar and G. Venugopal (2018) revealed that ICICI Bank good performance of balance sheet
ratios and Debt coverage ratios and next position of HDFC Bank. SBI andKotak Mahindra Bank performance is
good in profitability ratios.

Murad Mohammad Galif Al-Kaseasbah and Abdel KarimSalimIssaAlbkour (2018) in their paper entitled,
financial performance of Indian Banking sector: A Case Study of SBI and ICICI Bank. To examine the financial
performance of SBIandICICI Bank. During the study, it was found that the SBI recorded fluctuating trend on the
other hand ICICI failed to manage the increasing trend.

Vinoth Kumar and BhawnaMalhothra (2017), attempted has been made evaluate the performance &financial
soundness of selected private sector banks in India for the period 2007-2017 CAMEL approach has been used.
This study concluded that the Axis Bank is ranked first under the CAMEL analysis followed by ICICI Bank.
Kotak Mahindra Bank occupied the third position. The fourth position occupied by HDFC Bank and the last
position is occupied by Induslndbank amongst all the selected banks.

SuruchiSatsangiPrem Das Saini (2017) analyzed financial performance of Kotak Mahindra Bank merger with
ING Vysya Bank. The findings of the study showed the high growth rate which is observed in the financial
performance of the Kotak Mahindra Bank after the mergers and acquisitions.

PriyankaJha (2017) analyzed financial performance of Public Sector Banks (Punjab National Bank) and Private
Sector Banks (ICICI) in India. The researcher concludes her research PNB has lower operational efficiency
comparatively than ICICI Bank. In case of dividend pay- out ratio, debt-equity ratio and interest expended to
interest earned, ICICI Bank has performed sounder as compare to PNB.

Jaiswal and Jain (2016) entitled a comparative study of financial performance SBI and ICICI Bank in India.
This study examines the financial performance of Indian Banks with the help of CAMEL Model. This study
compare the financial performance of SBI and ICICI from 2018-19 to 2020-21.

Gupta (2014) entitled an empirical study of financial performance of ICICI bank a comparative analysis focused
on operational control profitability and solvency etc., this research paper aimed to analysis and compare the
financial performance of ICICI bank and offer suggestions for the improvement of efficiency in the bank. This
study suggested that NPAs of the ICICI Bank is more than 1percent. Therefore ICICI should control NPAs.

Tirkeyi and Salem (2013) analyzed a comparative study financial statement of ICICI and HDFC through ratio
analysis examined the financial position with the use of different ratios. It was found that financial position of
ICICI is much better than HDFC.

Vola, et al. (2009), in their paper on, “Performance Measurement under Balanced Scorecard: The case study of a
Co-operative Credit Bank in Piedmont”, concluded that a control system is needed based on comprehensive
framework that translates company’s strategy into a coherent set of performance measures for the bank. An
empirical analysis through exploratory case study methodhas been conducted.

Tekar et al. (2011), in their article on, “Measuring Commercial Bank’s Performance in Turkey: A Proposed
Model”, conducted an empirical research in Turkey to evaluate the financial performance of 13 commercial
banks and ranked them for each year using a performance indexing approach from 2003-2010. Data has been
collected from the web pages of Turkish Banks Association. The study concluded that non- financial
performance measures have become more important in recent years for measuring overall performance of any
firm and the inclusion of measures like higher customer satisfaction, effective management and leadership and
using advanced technology in banking operations makes valuable contribution to the measurement of overall
performance of banks rather than limiting the measures by financials only.

Amiri et al. (2012), in their paper on “An Analytical Network Process Approach for Evaluating Banking
Performance Based on Balanced Scorecard”, proposed an analytical network process approach for banking
performance evaluation based on Balanced Scorecard. They concluded that this model can be a useful and
effective assessment tool. It was found that more emphasis on financial factors and customer satisfaction must be
given to improve banks performance. It was recommended to explore more cases and to conduct more empirical
studies to further validate the usefulness of the proposed evaluation model.

Dave and Dave (2012) in their research paper on, “Applying Balanced Scorecard in Indian Banking Sector: An
empirical study of the State Bank of India” concluded that being a part of the service sector, long-term strategic
planning in a bank needs to concentrate on a comprehensive performance evaluation system. BSC emerges to be
an efficient and all inclusive tool and encompassing various aspects of Banks performance. It is helpful in
understanding the complementarities among various performance indicators for a bank and makes a strategy
designing ad implementation process more efficient. Implementing BSC technique becomes complicated due to
the difficulties in measurement of the intangible assets, existence of interrelations among these indicators,
differences in the significance assigned to various indicators within the organization and trouble in setting the
linkages between the employee’s performance and the reward mechanism. For the study, a balanced scorecard
was constructed and performance of bank over twelve years from 1997 to 2008 was evaluated using 29
indicators of the banks.

Michael and Tobi (2014), in their research paper on, “Performance Measurement in the United Kingdom (UK)
retail banking industry”, found that the Balanced Scorecard, performance dashboards and use of financial
measures are HDFC Bank.

Bangaru Pushpalatha (2020), ‘analysed the financial statements of State Bank of India. The objectives
are examine the portfolio of assets and liabilities in SBI. Researcher limited the study to years starting
from 2011 to 2017. Researcher used T’ test to determine the relative importance of each variable. The study
reported SBI have healthier managing and financial efficiency. It also reported people prefer SBI for advance
loan schemes.’

Nandhini Thakur (2020), ‘The study is conducted on financial statement analysis of HDFC Bank with
the time period of 2019-20 to 2021-22. Tools used in this study was ratio analysis, cash and fund flow
analysis trend analysis. The objective is to measure the efficiency of various properties of bank. Researchers
find that bank’s financial performance was strong and suggested to providing more housing loans to the
development of the citizen of India.’

Rajendran P (2019), ‘analyzed the performance of HDFC Bank. Researcher explained about HDFC Bank’s
history. Current ratio, cash position ratio, Debt equity ratio and proprietary ratio was good. The study finds that
part of working capital of the bank was financed by long term funds. Researcher concluded with result as HDFC
Bank was the largest private sector bank in India and its financial performance was strong during the period of
study.’

Dr. Srinivas K. and Saroja L. (2013) conducted a study to compare the financial performance of HDFC Bank
and ICICI Bank. From the study it is clear that there is no significance difference between the ICICI and HDFC
bank’s financial performance but we conclude that the ICICI bank performance is slightly less compared with
HDFC.

Biswas Mahua (2014) studied the financial performance of Andhra Bank & Bank of Maharashtra. Andhra Bank
dominated in Management Efficiency and Earning Quality. However on Assets Quality & Liquidity Bank of
Maharashtra dominated over Andhra Bank. Both the banks were on par with respect to the Cash Adequacy Ratio.
Overall both the banks were found to be performing on par with each other.

Rostami Malihe (2015) studied the performance of Iranian Bank. Q-Tobin’s ratio is put as performance
indicator and concluded that bank can focus on risk and some important ratios and try to manage and control
some possible crisis.
CHAPTER-3
STATEMENT OF THE PROBLEM:

Banking Facilities are increasing day by day and the studies and researches conducted on these private
banks are limited. Before privatization, only public sector banks are there in the country, after
privatization, private sector banks started to emerge and some banks are failed due to lack of research
among their problems and no change of trends and also on bad loans. Even then many banks are
successfully running in the country. Financial Performance of the bank will be stable, only when banks are
maintaining proper Financial Statements. The HDFC Bank offers lot of customer benefits that helps the Bank
to attract customers faster. This particular study explains all about financial performance analysis of HDFC Bank
with the reference of last five years financial statements and also explains about the findings about
expansion of bank, deposits, loan lending and credit expansion for the business and other people.
NEED FOR THE STUDY:

Financial performance analysis is the process of identifying the financial strengths and weaknesses of the firm
by properly establishing the relationship between the items of balance sheet and profit and loss account. It
also helps in short-term and long-term forecasting and growth can be identified with the help of various
financial tools in financial performance analysis. Bank plays a crucial role in the development of Indian
economy. A sound and an efficient banking system in developing countries provide the necessary financial
inputs to the economy. It also measures organizations whole financial health over a particular period of time.
Financial performance of the organization deals with the financial strength and weaknesses of bank accurately
establishing a relationship between the balance sheet and income statement.
OBJECTIVE OF THE STUDY:

 To measure HDFC Bank financial results.

 To analyses the financial & Performance analysis of the bank by using different ratios.
 To analysis about stock price and bank nifty under HDFC Ltd.
 To study and analyses the financial performance of HDFC Ltd for the period of five years from 2018
to 2022.
 To study the growth aspects of HDFC Bank for 5 years.
 To offer suggestions that are based on the findings of the study.

SCOPE OF THE STUDY:

The study covers a time period of five year from 2018 to 2022.

RESEARCH METHODOLOGY
Sources of data
1. Primary data

2. Secondary data

Secondary data:
The secondary data can be collected through
 The internet sources

 Annual report of the company

 Material provided by the company

 Fund houses

 Fact sheets, Brochures etc.

The secondary data is obtained from the various HDFC BANK fund scheme and investor’s magazines and
websites. Monthly fact sheets of HDFC BANK fund companies are important sources of secondary data; the data
obtained is analyzed using mathematical models
The secondary data obtained from various schemes such as
 Fact sheets of HDFC BANK fund companies

 Business line

 Moneycontrol.com

 Mutualfundindia.com

 Indiainfoline.com

 Finance magazines

Source of Data: Secondary data

Period of study: 2018 To 2022
Framework of analysis: Financial Statements
Tools and Techniques: Ratio analysis

HYPOTHESIS OF THE STUDY:-

H0- There is no significant difference in the overall performance of HDFC Bank during the last 5 Years based
on BSC.
H1- There is a significant difference in the overall performance of HDFC Bank during the last 5 Years based on
BSC.

LIMITATIONS OF THE STUDY:

• The study is restricted to HDFC bank only.

• The study is based on secondary data only.
• Period taken for the study is limited.
• Tools and techniques used for analyzing data are limited.
• Due to non-availability of data on few measures may affect the results.
CHAPTER SCHEME:

CHAPTER CONTENTS
CHAPTER-1 Introduction, industry profile, organization
profile, promoters, vision, mission, quality
polices, service profile territory task,
framework offices, contenders
information,SWOT examination, future
development and prospects and money related
proclamation
CHAPTER-2 Conceptual background: Theoretical
background of the study and Literature
Survey
CHAPTER-3 Statement of the problem, need of the
study,objective,scope of the study, Research
methodology, Hypothesis and Chapter
Scheme
CHAPTER-4 Analysis and interpretation: Data collected
From the relevant source table and graphs.
CHAPTER-5 Finding, Suggestion/Recommendations and
Conclusion.
Bibliography and Annexure Figures,Graphs,Photograph etc.
CHAPTER-4
 ANALYSIS OF THE RESULTS

1. RATIO ANALYSIS

Table-1 Financial Performance of Private Sector Banks with Reference to HDFC Bank
and Selected Private Banks
Banks Net Return Return Interest Credit Liquid
Cash Total
Profit on Net on spread deposit assets to
Deposit Assets
Margin worth Assets Ratio demand
Ratio Turnover
deposit
ratio
ratio
HDFC 20.65 13.294 1.5 7.304 106.818 6.678 6.878 111.136
ICICI 19.93 18.006 1.858 8.092 83.808 6.51 9.26 38.698
AXIS 19.99 16.59 1.68 7.206 82.552 5.942 8.3 50.976
Kotak Mahindra 20.438 13.116 2.092 8.788 130.434 5.37 10.36 62.674
Source: Annual Reports Of ICICI, HDFC, AXIS AND KOTAK MAHINDRA Banks

Graph- 1 Financial Performance of Private Sector Banks with Reference toICICI

Bankand Selected Private Banks
FINANCIAL PERFORMANCE OF PRIVATE SECTOR BANKS WITH REFERENCE
TO ICICI BANK AND SELECTED PRIVATE BANKS.
130.434

140
111.136
106.818

120
83.808
82.552

100

80
50.976
38.698

60
 20

0
Net ProfitReturn onReturn on Interest CreditCash deposit Total Assets Liquid assets
MarginNet worthAssets spread deposit Ratioratio turnover to demand
ratio deposit ratio

ICICIHDFCAXISKotak Mahindra

18.006
19.93
19.99
20.65

13.294

16.59

8.092
7.304

7.206

6.878
6.678

5.942

9.26
6.51
1.858

8.3
1.68
1.5

Interpretation: In the table we can find that the average net profit margin of ICICI bank is

more than the other private banks, followed by Kotak Mahindra Bank, Axis and HDFC bank

respectively. The average return on net worth of HDFC bank is the highest compare to other

banks followed by Axis Bank, ICICI Bank and Kotak Mahindra Bank respectively. From
 The table. It’s clear that Kotak Mahindra bank has highest average return on assets compared

to other banks, followed by HDFC bank, Axis Bank and ICICI bank respectively. It

indicates the weak position of the ICICI bank in return on total assets. It is clear that Kotak

Mahindra Bank has got highest average interest spread compared to other banks, followed by

HDFC Bank, ICICI Bank and Axis Bank respectively. It indicates the weakness of ICICI

bank in total interest income and expenses to average working fund.

Kotak Mahindra Bank has the average highest Credit deposit ratio compared to other banks,

followed by ICICI bank, HDFC Bank and Axis Bank respectively. Though ICICI bank is

second in line for Credit deposit ratio, it still shows that ICICI bank is able to generate more

loans for the deposit received as compared to HDFC and AXIS banks. ICICI Bank has

highest Cash deposit ratio compared to other banks, followed by HDFC Bank, Axis Bank and

Kotak Mahindra Bank respectively. It indicates that ICICI Bank has more deposit compared

to other banks. Kotak Mahindra Bank has highest total assets turnover ratio compared to

other banks, followed by HDFC bank, Axis Bank and ICICI Bank respectively. It shows that

ICICI bank is less efficient in generating revenue from their assets. The ICICI Bank has

highest Liquid assets demand deposit ratio compared to Kotak Mahindra Bank, Axis Bank

and HDFC Bank respectively. It shows that ICICI bank has the highest ability to meet

immediately and short-term deposit by cash or online banking or ATM. But in another side

the high percentage will reflect that the bank did not mobilize the cash effectively in short-

term investment.

2. ANALYSIS OF VARIANCES

Table-2 Analysis of mean Standard deviation, Coefficient of Variance of Net profit margin

PARTICULARS HDFC ICICI AXIS KOTAK MAHINDRA

MEAN 20.65 19.93 19.99 20.438
SD 2.147 1.022 0.752 2.210
CV 0.104 0.051 0.038 0.108

Source: Annual reports of ICICI,HDFC,AXISAND KOTAK MAHINDRA banks

 Chart Title

KOTAK MAHINDRA

AXIS

ICICI

HDFC

0 5 10 15 20 25

CV SD MEAN
Interpretation-From the table, it has been evident that ICICI has the highest mean valueof net profit

margin (20.65) compare to other banks. Kotak Mahindra bank has the highest standard deviation of net

profit margin (2.210) as well as co efficient of variance (0.108) compared with other banks, followed

by ICICI Bank, HDFC Bank and Axis Bank respectively. ICICI Bank has highest Mean value (20.65)

with moderate standard deviation (2.147) and co-efficient of variance (0.104) on Net Profit Margin.

Table -3 Analysis of mean, standard deviation, coefficient of variance of Return on net

worth
PARTICULARS HDFC ICICI AXIS KOTAK MAHINDRA
MEAN 13.294 18.006 16.59 13.116
SD 1.446 1.218 1.198 1.638
CV 10.877 6.764 7.221 12.488
Source: Annual reports of ICICI, HDFC, AXISAND KOTAK MAHINDRA banks

Chart Title

KOTAK MAHINDRA

AXIS

ICICI

HDFC

0 2 4 6 8 10 12 14 16 18 20

CV SD MEAN

Interpretation- As per the table it has been found that Axis Bank has highest Mean value of

returns on net worth compare to other banks. The Standard Deviation and Coefficient

variance of Kotak Mahindra Bank Return on Net worth is higher than other banks. ICICI

Bank has moderate Mean Value (13.294) which is lesser than HDFC and AXIS Banks,

moderate Standard deviation (1.446) and co-efficient variance (10.877) lesser than Kotak

Mahindra bank followed by AXIS and HDFC Bank respectively on Return on Net worth.
 Table-4 Analysis of Mean,Standard deviation, co-efficient of variance of Return on
assets
PARTICULARS HDFC ICICI AXIS KOTAK MAHINDRA
MEAN 1.5 1.858 1.68 2.092
CD 0.173 0.095 0.06 0.197
CV 11.556 5.083 3.572 9.424
Source: Annual reports of ICICI, HDFC, AXISAND KOTAK MAHINDRA banks

Chart Title

KOTAK MAHINDRA

AXIS

ICICI

HDFC

0 2 4 6 8 10 12 14

CV CD MEAN

Interpretation From the table, it has been evident that the return on assets of Axis Bank has

highest mean value (2.092) of Return on assets compare to the other banks. The Standard

deviation of Kotak Mahindra bank (0.197) of Return on assets is highest compare to ICICI

bank, followed by HDFC and Axis Banks.ICICI Bank has the lowest mean value (1.5),
Moderate standard deviation (0.173) and highest coefficient variance (11.556) compared to

other banks on Return on assets.

Table 5: Analysis of Mean, Standard Deviation, Coefficient of Variance of Interests

Spread
PARTICULARS HDFC ICICI AXIS KOTAK MAHINDRA
Mean 7.304 8.092 7.206 8.788
SD 0.322 0.528 0.650 0.643
CV 4.413 6.525 9.016 7.317
Source: Annual reports of ICICI, HDFC, AXISAND KOTAK MAHINDRA banks

Chart Title

KOTAK MAHINDRA

AXIS

ICICI

HDFC

0 1 2 3 4 5 6 7 8 9 10

CV SD Mean

Interpretation-From the table, it has been evident that The Kotak Mahindra Bank has the

highest interest spread (8.788) compare to other banks The Axis Bank has highest standard

deviation (0.650) and co efficient of variance (9.016) of interests spread compare to other

banks, followed by Kotak Mahindra Bank, HDFC Bank and ICICI Bank respectively. The

ICICI Bank has moderate Mean value (7.304) with lowest standard deviation (0.322) and Co

efficient Variance (4.413) compare to other banks on Interests spread.

Table 6: Analysis of Mean, standard deviation, coefficient of variance Credit deposit

ratio
PARTICULARS HDFC ICICI AXIS KOTAK MAHINDRA
MEAN 106.818 83.808 82.552 130.434
SD 4.288 3.233 6.606 13.951
CV 4.014 3.858 8.002 10.696
Source: Annual reports of ICICI, HDFC, AXIS AND KOTAK MAHINDRA banks
 Chart Title

KOTAK MAHINDRA

AXIS

ICICI

HDFC

0 20 40 60 80 100 120 140

CV SD MEAN
Interpretation As per Table, it has been found that Kotak Mahindra Bank has highest Mean

value (130.434), Standard deviation (13.951) and Co-efficient of variance (10.696) of Credit

deposit compare to other banks. ICICI Bank has the moderate mean value (106.818),

Standard deviation (4.288) and Co efficient of variance (4.014) compare to other banks on

credit deposit

Table 7: Analysis of Mean, standard deviation, coefficient of variance of cash to deposit

PARTICULARS HDFC ICICI AXIS KOTAK MAHINDRA

MEAN 6.678 6.51 5.942 5.37
SD 0.638 1.338 0.316 0.658
CV 9.559 20.547 5.309 12.251

Chart Title

KOTAK MAHINDRA

AXIS

ICICI

HDFC

0 5 10 15 20 25

CV SD MEAN
 Source: Annual reports of ICICI, HDFC, AXIS, AND KOTAK MAHINDRA banks
Interpretation- As per Table it has been found that ICICI bank has the highest mean value

(6.678) of cash to deposit compared to other banks. The standard deviation of the Kotak

Mahindra bank (0.658) is the highest compared to others and has the highest coefficient of

variance (12.251) of cash to deposit. ICICI Bank has highest mean value (6.678), Moderate

Standard deviation (0.638) and lower co efficient of variance (9.559) on cash deposit

Table -8 Analysis of mean, standard deviation, coefficient of variance of Total assets

turnover ratio
PARTICULARS HDFC ICICI AXIS KOTAK MAHINDRA
MEAN 6.87 9.26 8.3 10.36
CD 0.14 0.2 0.22 0.43
CV 2.038 2.160 2.650 4.151
Source: Annual reports of ICICI, HDFC, AXISAND KOTAK MAHINDRA banks

Chart Title

KOTAK MAHINDRA

AXIS

ICICI

HDFC

0 2 4 6 8 10 12

CV CD MEAN
Interpretation As per the table it has been found that Kotak Mahindra bank has the highest

mean value (20.36), highest standard deviation and Co efficient of variance (4.151) of total

assets ratio. ICICI bank has the lowest mean value (6.87), standard deviation of Asset turnover

ratio of the ICICI bank (0.14) with the coefficient of variance (2.037846) when compared to

banks.
 Table-9 Analysis of mean, standard deviation, coefficient of variance of liquid assets to
demand deposit
PARTICULARS HDFC ICICI AXIS KOTAK MAHINDRA
MEAN 111.136 51.77 50.976 62.674
CD 12.9 8.251 12.189 11.98
CV 11.60 15.93 23.91 19.11
Source: Annual reports of ICICI, HDFC, AXIS AND KOTAK MAHINDRA banks

Chart Title

KOTAK MAHINDRA

AXIS

ICICI

HDFC

0 20 40 60 80 100 120

CV CD MEAN

Interpretation From the above table it is clear that ICICI Bank (111.136) has the highest mean

value, Standard deviation (1.290) and co efficient of variance (1.160) of liquid assets to demand

deposit compare to the other banks. it is clear that the position of ICICI Bank is better in

compassion with HDFC, AXIS, KOTAK bank because high liquid assets indicate better

position to meet the immediate and short-term deposits.

CURRENT RATIO

Current ratio establishes relationship between current assets and current liabilities. Current assets
mean any asset is converted in to cash within a year or 12 months. Current liabilities are those
liabilities are settled or repay within a year.

Current Ratio = Current Assets/ Current Liabilities.

The standard norm or rule of thumb for current ratio is 2:1. It means that let the total amount of
current liabilities. When a bank’s current ratio is 2 or more it means that its liquidity position is
good.

Table 1: Current Ratio

Year 2018-19 2017-18 2016-17 2015-16 2014-15
CR 6.74 7.97 4.64 5.52 6.24
Source: Annual Report.
Table 1 shows that the current ratio was 6.24 in the year 2014-15 it was increased to 5.52 and
4.64 in the years 2015-16 and 2016-17. In the year 2017-18 the ratio was increased 7.97 except
in the year 2018-19. It indicates that banks liquidity and its repayment of debts are sound during
the period of study.

CASH POSITION RATIO

This ratio is also called “Absolute Liquidity Ratio” or Super Quick Ratio. This is a variation of
quick ratio. This ratio is calculated when liquidity is highly restricted in terms of cash and cash
equivalents. This ratio measures liquidity in terms of cash and near cash items and short term
current liabilities. Cash position ratio is calculated with the help of the following formula.
 Cash Position ratio = Cash and Bank Balances + Marketable Securities / Current
Liabilities

An ideal cash position ratio is 0.75 : 1. This ratio is a more rigorous measure of a firms liquidity
position.

Table 2: Cash Position Ratio

Year 2018-19 2017-18 2016-17 2015-16 2014-15
CPR 1.47 2.68 0.86 1.05 1.11
Source: Annual Report.

Table 2 explains ability of bank to meet its financial obligations it gives better position of the
bank. Cash Position Ratio in the year 2014-15 is 1.11 which had decreased by 1.05 and 0.86 in
the year 2015-16 and 2016-17 respectively. But in the year 2017-18 it had increased to 2.68. In
the year 2018-19 it had decreased 1.47. During the study period the bank liquidity position is
good.
LONG-TERM SOLVENCY RATIOS

FIXED ASSETS RATIO

This ratio deals the relationship between fixed assets and long-term funds. The primary motto of
this ratio is to ascertain the proportion of long-term funds invested in fixed assets.

Fixed Assets Ratio = Fixed Assets/ Long-Term Funds

An ideal fixed assets ratio is 0.67. The ratio must not be more than 1, if the ratio is less than 1it
indicates that a portion of working capital had financed by long-term funds.
Table 3: Fixed Assets Ratio

Year 2018-19 2017-18 2016-17 2015-16 2014-15

FAR 7.39 6.95 7.07 6.61 6.22

Source: Annual Report.

\

Table 3 reveals that fixed assets and long-term funds of the bank. In the year 2014-15 fixed
assets ratio is 6.22 which has increased to 6.61 in the year 2015-16. During the year 2016-17 the
ratio was 7.07 and in the year 2017-18 it had decreased by 6.95. 2018-19 the ratio was increased
to 7.39.These ratios are compared with standard norm of fixed assets ratio, it is very high. Hence
a portion of working capital had financed by long-term funds during the study period.

DEBT-EQUITY RATIO

This ratio is otherwise called as “External-Internal Equity Ratio”. Mainly it is calculated to

assess the financial soundness of long-term policies and to determine the relative shares of
outsiders and shareholders. It determines relationship between the debt and equity.

Debt-Equity Ratio = Shareholders Funds / Total Long-Term Funds

A high debt-equity ratio shows the highest claims of creditors over assets of the firm than those
of shareholders. A high ratio reveals an unfavorable position of the company. A low debt-equity
ratio indicates lesser claim of creditors and a higher margin is safe for them. The standard norm
of this ratio 2:1 is satisfactory.
Table 4: Debt-Equity Ratio
Year 2018-19 2017-18 2016-17 2015-16 2014-15

DER 1.27 0.86 1.20 1.37 1.37

Source: Annual Report.

Table 4 explains debt-equity relationship. In the year 2014-15 the ratio was 1.37 and it was same
in the year 2015-16 followed by this it was decreased by 1.20 during the year 2016-17. In 2017-
18 it was decreased by 0.86 But it was increased in the year 2018-19 was 1.27. These ratios are
less than the standard norm of 2:1. Hence, the creditors are safe during the study period.
PROPRIETARY RATIO

This ratio is called as owners fund ratio or net worth ratio. This ratio points out relationship
between the stake holder’s funds and total tangible assets.
Proprietary Ratio = Shareholders funds/Total tangible assets

This ratio is very useful to determine the long-term solvency of the company. It is important to
the creditors who can ascertain the proportion of shareholders’ funds in the total assets employed
in the company. Standard norm of this ratio 0.5, below this standard norm the creditors may have
to loss heavily in the event of winding up of the company.
 Table 5: Proprietary Ratio
Year 2018-19 2017-18 2016-17 2015-16 2014-15
Proprietary 2.80 2.62 1.95 1.75 2.79
ratio
Source: Annual Report.

Table 5 clearly explains that long-term solvency of the company. In the year 2014-15 the ratio
was 2.79 which have decreased by 1.75 in the year 2015-16. But it was increased to 1.95
during the year 2016-17. Followed by this in the year 2017-18 and 2018-19 it was increased to
2.62 and
2.80 Respectively. These ratios are more than the standard norm of 0.5. It is clearly shows that
the creditors are highly safe during the study period.

Figure 3.1

Q.No.1:- service received from the customer service representative?

 60 55
50 50 50
50 45 45
42 40 40
40
30 30 30
30 25
20
20 15 15
10 3 5 3 2 5
0
ne
r ts nd ice er nc
e
n uc po v m ra
a ro
d s Ser sto a
sm re nt cu e
u fP & ce pp
o O n ed a
orte d ge lis
te Effi
v alu tiv
e
&
c le to st
&
as r ac
ly now ss Fa u att
d K gn
e yo &
ien n of al
illi on sio
n
W niti fes
g o
eco Pr
R

Very Satisfied Satisfied Neutral Dissatisfied Very Dissatisfied

Source :-
ary data

INTERPRETATION
From the data it can be concluded that the HDFC customers are more satisfied to the service provided by the
bank

Figure 3.2

Q.No.2:- Service received from Supervisors & Management?

 50 45 47 45
45 43 40
39 37 39
40 35
35 30 30 29
30 26 25 25 27 23
25 20
20 14 1413 13
15 10
10 6 4 5 5 5 4
5 2
0
r ts d e er e d
n ne
d uc pon r vic o m r anc ede
a o s Se st a ne
sm Pr re nt cu pe n
u f & e d p e
rte
o
ge
O en Effi
c e ea rw
h
co d list & v alu ctiv e
le ra
& to st as m
ly n ow
ess Fa o u att u sto
d K y c
ien gn of l& to
Fr li lin n o na le
tio i ab
W ni ss
g ofe v ail
co Pr A
Re

Very Satisfied Satisfied Neutral Dissatisfied Very Dissatisfied

Source:-
Primary data

INTERPRETATION
It is clear from the above chart that HDFC customers are satisfied but some percent is also dissatisfied with the
management because they said the staff should a friendly relation with any type of customer.

Figure 3.3

Q.No.3:- Do you agree that minimum account limit is not high and easy to maintain?
 10%
5%
35%

Strongly Agree
Agree
23% Somewhat Agree
Disagree
Strongly Disagree

27%

Source: Primary Data

INTERPRETATION
From the above data it can be concluded that most of the customers are satisfied with the account limit but some
percent of customers are dissatisfied with the account limit that means they said its difficult to maintain as AQB
charges are very high.

Figure 3.4

Q.No.4:- How satisfied were you with the following aspects of the branch facility?
 Availablity of in-
formation
Efficient, no wait brochures; Wery Pleasant & attractive
service; Wery Satis- Satisfied; 37 décor; Wery Satis-
fied; 34 fied; 35

Clean & well cared

facilities; Wery Sat - No long line ups at
isfied; 24 counter ; Wery Sat -
isfied; 22 automatic bank ma-
chines in convenient
locations; Wery Sat -
isfied; 15

Wery Satisfied Satisfied Neutral Dissatisfied Very Dissatisfied

Source: Primary Data

INTERPRETATION
From the above data given in a chart we can easily say that majority of the customers of the HDFC bank are
satisfied with the facility provided by the branh.they should maintain the same pace of service constantly to
attract more and more customers.

figure 3.5

Q. No.5:- Do you receive statements monthly?

 40%

YES
NO

60%

Source: Primary Data

INTERPRETATION
Most of the Customers of HDFC bank said that they are receiving monthly statement from the bank and the rest
of the customers said that they don’t need of the monthly statement.

Figure 3.6

Q.No:-6 In terms of your expectation regarding mailed statements?

 70

60
60
55

50
45
40 40
40
33
30
30 27
25 25

20
15

10
5

Very Satisfied Satisfied Neutral

Source: Primary Data

INTERPRETATION
From the above data it could be easily said that majority of the HDFC customers seeks the benefit of mail
service.

figure 3.7

Q.No.7:- Are you using other facilities provided by the bank, like internet banking, Phone banking etc.
 2%
5%

25%

YES
NO
Sometime
Need an Improvement

68%

Source: Primary Data

INTERPRETATION
From the above chart we can predict easily that HDFC customers are using other perks provided by the bank

figure 3.8

Q.No 8:- Have you applied for credit card?

 42%

YES
NO
58%

Source: Primary Data

INTERPRETATION
From the above chart we can clearly say that majority of the HDFC Bank customers seeks the benift of credit
card and many more are likely to apply for that it is because of no surcharges and other benefits as compare with
the other bank’s credit card.

Figure 3.9

Q.No 9:- Service you received from the lending officer(s), how satisfied were you with following?
 60
50
50 45 44 42
41 40
40 34 35 36 35 33
30
30 25 25
20 20 20
20
7 10
10 3 5
0
r e d e er d
ne vic ee vic m de
an se
r r n
se r
st o
nee
u sm & you ent cu e n
o cts to ci e d h
te du Effi alu
w
our r o ond
& v er
C p t as m
& sp Re
s
Fa
s
ou us
to
dly ank & y c
ien
b n of to
Fr e of i ste o n b le
g l iti ila
o
w led s st o gn
A va
o e c
Kn gn Re
lil in
W

Very Satisfied Satisfied Neutral Dissatisfied Very Dissatisfied

Source: Primary Data

INTERPRETATION
Majority of the HDFC Bank customers are satisfied with the relation of the lending officer. According of the
satisfied customers they said that lending officer is always keen to listen the grievance and complaint of the
customers and try to solve it within a specified time.

Figure 3.10

Q.No.10 Do you feel the procedure to open an account with the bank was difficult?
 No, it was easy.
45%
Yes, to certain extent
55%

Source: Primary Data

INTERPRETATION
From the above data it is clearly seen that majority of the HDFC Bank customers are dissatisfied with the
procedure of opening of an account it is because it took a lot of time to open an account and the customers has to
wait more than a specified time
 HYPOTHESIS TESTING

3. ANALYSISOFANOVA H01 : There is no significant difference between Net profit margin

among selected private sector banks in India.

Table 10
Sources of S Degre Mean F Table
variation u es of Square (calculated value) value (at
m freedo 5% level
of m of
S significant
q )
u
ar
es
Between Groups 1.827 3 .609 0.219 0.881
Within Groups 44.400 16 2.775
Total 46.227 19
Interpretation- As per the table the calculated value of F (0.219) is less than the table value

(0.881). We accept Null Hypothesis and conclude that, there is no significant difference

between net profit margin amongICICI, HDFC, AXIS and KOTAK Mahindra private sector

banks in India.

H02: There is no significant difference between Return on net worth among different selected

private sector banks in India.

Table 11:

Sou Su Deg Mean F Table value (at 5% level

rce m rees Square (calculated value) of significant ).
s of of of
var Sq free
iati ua dom
on res
Between 88.855 3 29.618 15.395 .000
Groups
Within 30.781 16 1.924
Groups
Total 119.636 19
Interpretation: As per the table, the calculated value of F test (15.395) is more than the

tabulated value, hence reject null hypothesis and conclude that there is a significant

difference between Return on net worth among ICICI, HDFC, AXIS and KOTAK Mahindra

private sector banks in India.

H03: There is no significant difference between Return on assets among selected private
sector banks in India.
 Table 12:
Sources of Sum of Degrees ofMean F Table value (at 5%
variation Squares freedom Square (calculated value) level of significant ).
Between Groups .959 3 .320 15.701 .000
Within Groups .326 16 .020
Total 1.285 19
Interpretation: As per the table, the calculated value of F test (15.701) is more than the

tabulated value, hence reject null hypothesis and conclude that there is a significant

difference between Return on Return on assets among ICICI, HDFC, AXIS and KOTAK

Mahindra private sector banks in India.

H04: There is no significant difference between Interests spread among selected private

sector banks in India.

Table 13:
Sources of Sum of Degrees of Mean F Table value (at 5%
variation Squares freedom Square (calculated value) level of significant ).
Between Groups 8.256 3 2.752 9.034 0.001
Within Groups 4.874 16 .305
Total 13.130 19
Interpretation:As per the table, the calculated value of F test (9.034) is more than the

tabulated value, hence reject null hypothesis and conclude that there is a significant

difference between Interest spread among ICICI, HDFC, AXIS and KOTAK Mahindra

private sector banks in India.

H05: There is no significant difference between credit deposit ratio among selected private

sector banks in India.

Table 14:
Sources of Sum of Degrees ofMean F Table value (at 5%
variation Squares freedom Square (calculated value) level of significant ).
Between Groups 7680.327 3 2560.109 38.337 .000
Within Groups 1068.461 16 66.779
Total 8748.788 19
Interpretation- As per the table, the calculated value of F test (38.337) is more than the

tabulated value, hence reject null hypothesis and conclude that there is a significant

difference between credit deposit ratio among ICICI, HDFC, AXIS and KOTAK Mahindra

privatesector banks in India

H06: There is no significant difference between cash deposit ratio among selected private

sector banks in India.

Table 20:
Sources of Sum of Degrees ofMean F Table value (at 5%
variation Squares freedom Square (calculated value) level of significant ).
Between Groups 5.287 3 1.762 2.583 .089
Within Groups 10.917 16 .682
Total 16.205 19
Interpretation- As per the table, the calculated value of F test (2.583) is more than the

tabulated value (0.089), hence reject null hypothesis and conclude that there is a significant

difference between cash deposit ratio among ICICI, HDFC, AXIS and KOTAK Mahindra

private sector banks in India.

H07: There is no significant difference between Asset Turnover ratio among selected

private sector banks in India.

Table 21:
F
Sources of Sum of Degrees ofMean Table value (at 5% level
(calculated
variation Squares freedom Square of significant ).
value)
Between Groups 32.744 3 10.915 144.869 .000
Within Groups 1.205 16 .075
Total 33.950 19

Interpretation-As per the table, the calculated value of F test 144.869) is more than the

tabulated value (0.000), hence reject null hypothesis and conclude that there is a significant
 difference between Asset Turnover ratio among ICICI, HDFC, AXIS and KOTAK

Mahindra private sector banks in India.

H08: There is no significant difference between liquid assets to demand deposit among

different selected private sector banks in India

Table 22:
F
Sources of Sum of Degrees ofMean Table value (at 5%
(calculated
variation Squares freedom Square level of significant ).
value)
Between Groups 12184.216 3 4061.405 30.849 .000
Within Groups 2106.475 16 131.655
Total 14290.691 19
Interpretation-As per the table, the calculated value of F test (30.849) is more than the

tabulated value (0.000), hence reject null hypothesis and conclude that there is a significant

difference between liquid assets to demand deposit among ICICI, HDFC, AXIS and KOTAK

Mahindra private sector banks in India.

SUMMARY OF FINDINGS

1. Ratio Analysis

a. The average net profit margin of ICICI bank is more than the other private banks, followed

by Kotak Mahindra Bank, Axis and HDFC bank respectively.

b. The average return on net worth of HDFC bank is the highest compare to other banks

followed by Axis Bank, ICICI Bank and Kotak Mahindra Bank respectively.

c. The Kotak Mahindra bank has highest average return on assets compared to other banks,

followed by HDFC bank, Axis Bank and ICICI bank respectively. It indicates the weak

position of the ICICI bank in return on total assets.

d. The Kotak Mahindra Bank has got highest average interest spread compared to other banks,

followed by HDFC Bank, ICICI Bank and Axis Bank respectively. It indicates the weakness

of ICICI bank in total interest income and expenses to average working fund.

e. Kotak Mahindra Bank has the average highest Credit deposit ratio compared to other banks,

followed by ICICI bank, HDFC Bank and Axis Bank respectively. Though ICICI bank is
 second in line for Credit deposit ratio, it still shows that ICICI bank is able to generate more

loans for the deposit received as compared to HDFC and AXIS banks.

f. ICICI Bank has highest Cash deposit ratio compared to other banks, followed by HDFC

Bank, Axis Bank and Kotak Mahindra Bank respectively. It indicates that ICICI Bank has

more deposit compared to other banks.

g. Kotak Mahindra Bank has highest total assets turnover ratio compared to other banks,

followed by HDFC bank, Axis Bank and ICICI Bank respectively. It shows that ICICI bank

is less efficient in generating revenue from their assets.

h. The ICICI Bank has highest Liquid assets demand deposit ratio compared to Kotak Mahindra

Bank, Axis Bank and HDFC Bank respectively. It shows that ICICI bank has the highest

ability to meet immediately and short-term deposit by cash or online banking or ATM. But in

another side the high percentage will reflect that the bank did not mobilize the cash

effectively in short-term investment.

2. Analysis of Variances

a. The ICICI has the highest mean value of net profit margin (20.65) compare to other banks.

Kotak Mahindra bank has the highest standard deviation of net profit margin (2.210) as well

as co efficient of variance (0.108) compared with other banks, followed by ICICI Bank,

HDFC Bank and Axis Bank respectively. ICICI Bank has highest Mean value (20.65) with

moderate standard deviation (2.147) and co-efficient of variance (0.104) on Net Profit

Margin.

b. The Axis Bank has highest Mean value of returns on net worth compare to other banks. The

Standard Deviation and Coefficient variance of Kotak Mahindra Bank of Return on Net

worth is higher than other banks. ICICI Bank has moderate Mean Value (13.294) which is

lesser than HDFC and AXIS Banks, moderate Standard deviation (1.446) and co-efficient

variance (10.877) lesser than Kotak Mahindra bank followed by AXIS and HDFC Bank

respectively on Return on Net worth.

c. The return on assets of Axis Bank has highest mean value (2.092) of Return on assets

compare to the other banks. The Standard deviation of Kotak Mahindra bank (0.197) of

Return on assets is highest compare to ICICI bank, followed by HDFC and Axis Banks.

ICICI Bank has the lowest mean value (1.5), moderate standard deviation (0.173) and highest

coefficient variance (11.556) compared to other banks on Return on assets.

d. The Kotak Mahindra Bank has the highest interest spread (8.788) compare to other banks The

Axis Bank has highest standard deviation (0.650) and co efficient of variance (9.016) of

interests spread compare to other banks, followed by Kotak Mahindra Bank, HDFC Bank and

ICICI Bank respectively. The ICICI Bank has moderate Mean value (7.304) with lowest

standard deviation (0.322) and Co efficient Variance (4.413) compare to other banks on

Interests spread.

e. The Kotak Mahindra Bank has highest Mean value (130.434), Standard deviation (13.951)

and Co-efficient of variance (10.696) of Credit deposit compare to other banks. ICICI Bank

has the moderate mean value (106.818), Standard deviation (4.288) and Co efficient of

variance (4.014) compare to other banks on credit deposit

f. The ICICI bank has the highest mean value (6.678) of cash to deposit compared to other

banks. The standard deviation of the Kotak Mahindra bank (0.658) is the highest compared to

others and has the highest coefficient of variance (12.251) of cash to deposit. ICICI Bank has

highest mean value (6.678), Moderate Standard deviation (0.638) and lower co efficient of

variance (9.559) on cash deposit

g. The Kotak Mahindra bank has the highest mean value (20.36), highest standard deviation and

Co efficient of variance (4.151) of total assets ratio. ICICI bank has the lowest mean value

(6.87), standard deviation of Asset turnover ratio of the ICICI bank (0.14) with the coefficient

of variance (2.037846) when compared to other banks

h. The ICICI Bank (111.136) has the highest mean value, Standard deviation (1.290) and co

efficient of variance (1.160) of liquid assets to demand deposit compare to the other banks.

It is clear that the position of ICICI Bank is better in compassion with HDFC, AXIS, KOTAK bank
because high liquid assets indicate better position to meet the immediate and short-term deposits.
3. Hypothesis Testing

There is no significant difference between net profit margin among ICICI, HDFC, AXIS and

KOTAK Mahindra private sector banks in India, Since the calculated value of F is less than

the table value. We accept Null Hypothesis. The other hypothesis (H0 2 to H08)there is a

significant difference between Return on net worth, return on assets, Interests spread, credit

deposit ratio, cash deposit ratio, Asset turnover ratio and liquid assets to demand deposit

among ICICI, HDFC, AXIS and KOTAK Mahindra private sector banks in India, Since the

calculated values are higher than the table value. Hence, we reject the null hypothesis (H0 2 to

H08) and accept the alternate hypothesis. This clearly indicates that there are positive

differences in comparison of ICICI Bank and selected private banks.

SUGGESTIONS

1. ICICI Bank has to increase its net profit margin.

2. ICICI bank has to increase its return on equity percentage by buying back their stock,

increasing earning, or using more debt to fund operation.

3. ICICI bank should review the managerial performance to improve the efficiency of

management in the future and increase generating revenue from its assets because it has the

lowest return on assets and Asset turnover ratio

4. In credit and cash deposit ratio ICICI bank has good position. So, the bank has to continue in

the same policy and standard to successes.

5. It’s important for ICICI bank to mobilize the cash effectively in short-term investments

6. It’s important to conduct study in depth financial analysis adequacy capital of ICICI bank

with its peers.

7. In depth merger of ICICI bank with AXIS bank which has more potential in terms net worth

and return on assets. The combination of these two banks will become the greatest private

bank in India and shall be easy to expand in the world.

CONCLUSIONS

With various techniques applied in finding the financial performance of the ICICI Bank,

HDFC Bank, AXIS Bank and Kotak Mahindra Bank, we find that ICICI bank has got the

highest net profit margin, Cash deposit ratio and liquid assets demand ratio with the positive

differences in terms of the variances and ANOVA testing for Hypothesis. Overall ICICI bank

has got satisfactory financial position irrespective of having moderate and lowest ratios in

terms of return on net worth, return on assets, interest spread and assets turnover ratio. In

order to achieve best financial position in all factors, it must make efforts to increase its

current assets and maintain a safety margin which will provide better liquidity position.

Reduce the dependence on external equities for meeting capital requirements by focusing on

internal equities and other sources of internal financing. Introduce schemes for public that

provides higher rate of interest and shorter maturity period. In order to bring confidence and

build their image, banks need to provide finance to more projects. The banks should simplify

the procedure of advances for quick disbursement.

REFERENCES

1. Balasubramaniam, C. S. (2012). Non-performing assets and profitability of commercial banks

in India: assessment and emerging issues. National Monthly Refereed Journal of Research in

Commerce & Management, June, volume, (1), 41-52.

2. Biswal, B. P., & Gopalakrishna, R. (2014). CD Ratio and Bank Profitability: An Empirical

Study. International Journal of Financial Management, 4(2).

3. Chandani, A., Mehta, M., & Chandrasekaran, K. B. (2014). A Working Paper on the Impact

of Gender of Leader on the Financial Performance of the Bank: A Case of ICICI

Bank. Procedia Economics and Finance, 11, 459-471.

4. Chandran, D., & Francis, P. (2014). Inflation Versus Prime Lending Rates: An Empirical

Analysis. Indian Journal of Finance, 8(2), 5-14.

5. D.Padma and V.Arulmathi (2013)- Financial Performance of State Bank of India and Icici

Bank – A Comparative Study, International Journal on Customer Relations, (18-24)

6. Gupta, Shikha (2014). An empirical study of financial performance of ICICI bank-

acomparative analysis. IITM Journal of Business Studies (JBS,) 1(1).

7. Jaiswal, A., Jain, C. (2016). A Comparative Study of Financial Performance of SBI and

ICICI Banks in India. International Journal of Scientific Research in Computer Science and

Engineering,4(3),1-6.

8. Kumar, J., Selvan T. R. (2014). Capital Adequacy Determinants and Profitability of Selected

Indian Commercial Banks GJRA - global journal for research analysis,3(11), 57-58.

9. Malhotra, N. (2015). Standard Chartered Bank, ICICI and SBI-A Comparative Analysis in

Post Reforms Scenario. EXCEL International Journal of Multidisciplinary Management

Studies, 5(10), 15-20.

10. Malik, Sonika (2016) Study of Indian Banking Industry. IRACST – International Journal of

Commerce, Business and Management (IJCBM),5(4),103-109.

11. Nagarajan, G., Ali, A. A., & Sathyanarayana, N. (2013). Financial Performance Analysis of

State Bank of India And ICICI Bank in India: A Comparative Study. International Journal of

Management Research and Reviews, 3(10), 3649.

12. Pooja Sharma (2014). Financial Performance of ICICI Bank and SBI bank: A Comparative

Analysis. International Journal of Research Aspects of Engineering and Management ISSN:

2348-6627, Vol. 1, Issue 1,2014, pp. 20-24.

13. Prakash, P., & Sundararajan, S. (2016). An Analytical Research on Fundamental and

Technical Analysis of ICICI Bank Stocks in India. Asian Journal of Research in Social

Sciences and Humanities, 6(9), 895-907.

14. Prasad, K.V.N. And Ravinder, G. (2011). Performance Evaluation of Banks: A Comparative

Study on SBI, PNB, ICICI and HDFC. Advances in Management, 4(2), pp. 43-53.

15. Sharma, R., Goswami, A., & Kumar, P. (2014). Private sector Banks in India: An assessment

of Financial performance. Midas Touch Indian Journal of Multidisciplinary Research, 2(1-3).

16. Shukla, S. S., (2015). Analyzing Financial Strength of Public and Private Sector Banks: A

CAMEL Approach. Pacific Business Review International 7(8).

17. Singh, A. K. (2015). An Analysis of Profitability Position of Private Banks in

India. International Journal of Scientific and Research Publications, 5(5), 1-11.

18. Singh, A., & Tandon, P. (2012). A study of financial performance: A comparative analysis of

SBI and ICICI Bank. International Journal of Marketing, Financial Services & Management

Research, 1(11), 56-71.

19. Singh, J. P., & Seth, M. (2017). An Inclusive Study on Capital Adequacy performance of

Selected Public Sector and Private Sector Banks in India. International Journal of

Multifaceted and Multilingual Studies, 3(10).

20. Srinivasan, P., & Saminathan, Y. P. (2016). A Camel Model Analysis of Public, Private and

Foreign Sector Banks in India.,Pacific Business Review International,8(9).

THE FINANCIAL PERFORMANCE EVALUATION OF HDFC BANK
COMPARED TO INDEX RETURN

66