Performance Analysis of Select Private Sector Banks in India (original) (raw)
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ijmsrr, 2017
The banking sector is in leading position in developing countries economy building through promotion of capital formation, encouraging innovations in the product line and market, monetization and facilitating monetary policy. Performance evaluation of banking sector is the best indicator to check the soundness of an economy. Indian banking system has undergone for many changes in recent years due to the reforms taken by the Govt. and RBI. In this present study an attempt was made to evaluate the performance of ICICI bank and HDFC bank to know the financial soundness of the bank through CAMEL approach. This approach is mainly considered for the purpose of studying the performance of different tools like capital adequacy, asset quality, management efficiency, earnings capacity and liquidity position. The factors taken are predominantly affecting the performance of the bank.
EVALUATING PERFORMANCE OF COMMERCIAL BANKS IN PAKISTAN: “AN APPLICATION OF CAMEL MODEL”
Banking sector plays a vital role in the economic growth. Sound financial well-being of a bank is the assurance not only to its investors, but is equally important for the owners, personnel and the whole economy as well. As a result efforts have been made from time to time, to gauge the money related position of every bank and oversee it proficiently and viably. In this paper, an effort has been made to assess the financial execution of the ten commercial banks working in Pakistan and the data has been taken for seven years i.e. 2007-2013. Moreover, data were also assembled from articles, papers, the World Wide Web (Internet), Specialized International Journals, and relevant previous studies. In the present study an endeavor was made to evaluate the execution & financial accuracy of commercial banks using CAMEL approach. CAMEL is the supervisory and administrative framework implemented by State Bank of Pakistan. It consists of five critical indicators to assess the soundness and execution of the bank. These segments are Capital adequacy, Asset quality, Management, Earning and Liquidity. The Capital adequacy, Asset quality, Management efficiency, Earning and Liquidity are taken as independent variables (financial measures) with a view to study their impact on the firm‘s performance. Earnings per share (EPS) is used as a dependent variable. Measurable apparatuses like descriptive statistics, Correlation and regression analysis were used to gauge the execution of the banks. The results show that total deposit to to equity, non-performing loans to gross advances, non performing loans to equity, Admin Exp to Interest Income Ratio, Gross Advances to Total Deposits Ratio were significantly but negative correlated with a bank’s performance. The Return on Assets and Return on Equity were significantly and positively correlated with a bank’s performance. The interest income to total assets ratio is statistically insignificant with bank’s performance, whereas the regression result show that INT is statistically significant with bank’s performance. The cash ratio is also showing insignificant correlated bank’s performance, whereas the regression result shows that the cash ratio is statistically significant with a bank’s performance. Key words: Capital Adequacy, Asset Quality, Management Efficiency, earnings & Profitability, Liquidity, bank’s performance (earning per share)
Financial Assessment of Public and Private Banks in India
International Journal of Social Sciences and Management, 2015
The banking sector is the backbone of the economy and plays an important financial intermediary role, their health is very critical to the health of the general economy at large. In order to ensure a healthy, solid and stable banking sector, the banks must be analyzed and evaluated in a way that will allow the smooth correction and removal of the potential vulnerabilities. The present study is done with the objective to analyze the financial performance of the commercial banks in India. CAMEL Approach is applied to evaluate the financial performance of SBI and ICICI bank. Based on the set of indicators as defined by CAMEL framework the financial performance is being evaluated with the help of various ratios. Comparison of financial performance was done by applying Independent sample t- test. The study concluded that ICICI bank is more efficient in terms of capital adequacy and can resists risk more effectively that SBI. The financial statements of SBI & ICICI bank from the period of...
IAEME PUBLICATION, 2020
In today's scenario, the banking sector is one of the fastest growing sectors and many funds are invested in Banks. Also today's banking system is becoming more complex. So, we thought of evaluating the performance of the banks. There are so many models of evaluating the performance of the banks, CAMEL Rating has been considered as one of the widely used tools for judging capital adequacy, asset quality, management capacity, earnings ability, and liquidity of the financial institutions including commercial banks by the principal regulators all around the world. This paper examines the comparative performance of leading public sector, private sector and foreign banks. Data have been collected though annual reports of the consecutive nine years i.e. 2008-09 to 2016-17 of all the banks. The calculated ratios for all the banks interpreted by CAMEL Model parameters. The study concluded that Foreign Banks perform well as compare to Public sector and Private sector banks in terms of Capital Adequacy, Management Efficiency and in Liquidity Management. In term of Assets Quality Private sector banks preform well as compare to Public sector banks and Foreign Banks with lowest average of 1.0973. In terms of Earning Quality Public sector banks perform well as compare to Private sector banks and Foreign banks with higher average of 19.2344. The Overall all financial performance based on CAMEL parameters Foreign banks topped and obtained overall first rank by having average of 14.0047 followed by Public sector banks (11.756) and Private sector Banks (11.2778). On the whole, it is observed that Foreign Banks outperformed public sector and private sector banks with regard to CAMEL framework as a method of measuring and managing performance of the bank under financial measure.
Performance Evaluation of Commercial Banks in India: A Camel Model
The main objective of the present study is to examine the performance of selected commercial banks. to this the researcher used CAMEL model. The study is based on secondary data, the required secondary data have been collected from banks annual reports, CMIE data base, articles etc. for the purpose of evaluating the data the statistical tools like, Mean, Rank, F test have been employed. Finally the study reveals that, private sectors banks have more efficient than the public sectors banks, this may result from the policy of RBI and government.
Comparative Analysis of Top Private Sector Banks in India based on CAMEL Parameters
MUDRA : Journal of Finance and Accounting
The CAMEL rating is a well-established technique to compare the performance of banks and financial institutions. The Compound Annual Growth Rate (CAGR) is a very useful growth measure. We compare the top five private sector banks in India, ranking them via the CAMEL rating based on the CAGR of CAMEL parameters. Of the banks chosen for the study, IndusInd bank ranked first in capital adequacy, asset quality and earnings quality. HDFC bank ranked first in management efficiency and Axis bank ranked first in liquidity. The bank with the best overall CAMEL rank proved to be IndusInd bank. By providing a basis of comparison for different banks, the CAMEL rating can yield valuable insight to several stake holders of banks such as top management, investors and regulators.
Scholedge International Journal of Management & Development, 2020
The CAMEL approach is a useful tool to examine the safety and soundness of banking sectors in India. In the present study, the performance of Punjab National Bank using the CAMEL approach has been studied. This paper observes the globally accepted parameters of the CAMEL rating model and their consistency over the study period of 2014-15 to 2018-19. The main objective of this paper is to highlight the overview of PNB and to study the shareholder's capital adequacy, asset quality, earnings quality, liquidity ratios and management efficiency ratios performance in PNB. The particular study is based on secondary data where different ratios pertained. It is interpreted that the expediency position is falling during the study period wherein it improves asset quality and capital adequacy however earning standards couldn't match banks' efficiency to induce increased turnover.
Analyzing Performance of Indian Public Sector Banks using CAMEL Approach
Each country's banking system plays a crucial role in its economic development. Without a sound banking system, no economy can exist. In the current banking environment, due to the increasing complexity of the banking system financial performance evaluation is becoming increasingly important. Thus, the financial health of banks has been regularly evaluated. The present study focuses on the performance appraisal of five public sector banks i.e., SBI, Bank of Baroda, Canara Bank, PNB and Union Bank. Regression Analysis, WACC, and CAMEL Model are some of the tools used to measure bank's performance via., CAMEL parameters this evaluation has been done. This is a well-established method of comparing the performance of financial institutions as well as banks. This way of evaluating banks' performance is widely recognized. This model evaluates a bank's performance based on several factors, including capital sufficiency, asset quality, management, earnings, and liquidity. To determine capital adequacy in the current research, we took into account: Capital Adequacy Ratio and Government Securities to Total Investments Ratio. To measure asset quality we considered: Total Investment to Total Assets and Net NPA Ratio. To measure Management efficiency we considered: Business per employee and Profit per employee. To measure earnings quality we considered: EPS (Earnings per share); Operating Profit to Average Working Funds and Dividend payout ratio. To measure liquidity we considered: Investment to total deposits and Government securities to total deposits. The study has considered a period of six years i.e., from 2017 to 2022. The primary objective of the present study is to focus on the performance appraisal of five Indian banks all the banks are public sector banks viz., SBI, Bank of Baroda, Canara Bank, PNB and Union Bank. Apart from that, this study also gives a ranking with the help of the overall performance of banks. This study has used secondary data sourced from annual reports of Banks and also taken help from few websites. Various financial ratios and averages have been used to analyze the information collected.
Banking sector is one of the fastest growing sectors in India. Today’s banking sector becoming more complex. The objective of this study is to analyze the Financial Position and Performance of the Bank of Baroda and Punjab National Bank in India based on their financial characteristics. This study attempts to measure the relative performance of Indian banks. For this study, we have used public sector banks. We know that in the service sector, it is difficult to quantify the output because it is intangible. We have chosen the CAMEL model and t-test which measures the performance of bank from each of the important parameter like capital adequacy, asset quality, management efficiency, earning quality, liquidity and Sensitivity.