A

PROJECT REPORT

ON

A STUDY ON IMPACT OF GST ON COMMON MAN WITH

RESPECT TO THANE REGION

A Project Submitted to

University of Mumbai for partial completion of the degree of

Bachelor in Commerce (Accounting and Finance)

Under the Faculty of Commerce

By

SHIVANI MOHAN CHAVAN

Under the Guidance of

PROF. DR. SHRADDHA M. BHOME

ROLL NO:- 15

SATISH PRADHAN DNYANSADHANA COLLEGE, THANE OFF

EASTERN EXPRESS HIGHWAY, DNYANASADHANA MARG,
THANE-400604
ACADEMIC YEAR: 2018 -19

1
CERTIFICATE

This is to certify that ASHWINI AMBRE of B.COM

(ACCOUNTING AND FINANCE ) Semester III, Batch (2018-
2019) has successfully completed the project on “A

COMPARATIVE STUDY OF PERFORMANCE OF SBI AND ICICI

MUTUAL FUND” under the guidance of Mrs. SHRADDHA

BHOME

Date:-
Place:-THANE

Director

2
 Project Guide / Internal Examiner External Examine

DECLARATION

I, ASHWINI AMBRE the student of MMS Semester III, Batch

(2018-19) hereby declare that I have completed the project on

successfully. A COMPARATIVE STUDY OF

PERFORMANCE OF SBI AND ICICI MUTUAL

FUND” The information submitted is true and original to the best of

my knowledge.

Date:-

Place:-THANE

Yours faithfully,

ASHWINI AMBRE
3
ACKNOWLEDGEMENT

I take this apportunity to express my gratitude and extend my thanks to all

those who helped and guided me to make this endeavor successful.
I express my sincere thanks to Director Sir for giving us the facilities and
resources in bringing project successfully.
I would also like to thank our project guide (Mrs. SHRADDHA BHOME) who
helped me in the completion of project.
I cannot end this page without thanking my family and friends for their
support and encouragement while undertaking this project.

SIGNATURE AND NAME OF THE STUDEN

4
INDEX

SR.NO. CONTENS PG.NO

1 Title Page
2 Certificate
3 Declaration
4 Acknowledgement
5 Index

Chapter 1 Introduction
1.1 Introduction Of Mutual Fund
1.2 History
1.3 Why Selected Mutual Fund
1.4 Features Of Mutual Fund
1.5 Advantages & Disadvantages Of Mutual
Fund
1.6 Types Of Mutual Fund

Chapter 2 Reviews of litrauture

Chapter 3 Research Methodology

3.1
3.2
3.3

5
 LIST OF TABLES

Sr.no Contents Page no

1 1.1 Credit Deposit Ratio
2 1.2 Interest Expense To Total Expenses
3 1.3 Interest Income To Total Income
4 1.4 Other Income To Total Income
5 1.5 Net Profit Margin
6 1.6 Net Worth Ratio
7 1.7 Growth Of Profit
8 1.8 Growth In Total Income
9 1.9 Total Expenditure
10 1.10 Total Advance
11 1.11 Total Deposit

6
 CHAPTER 1

1.1 INTRODUCTION OF MUTUAL FUND

A mutual fund is nothing more than a collection of stocks and/or bonds. You can think of a
mutual fund as a company that brings together a group of peopleand invests their money in
stocks, bonds, and other securities. Each investorowns shares, which represent a portion of the
holdings of the fund. You can make money from a mutual fund in three ways:
1) Income is earned from dividends on stocks and interest on bonds. A fund
pays out nearly all of the income it receives over the year to fund owners in the
form of a distribution.
2) If the fund sells securities that have increased in price, the fund has a
capital gain. Most funds also pass on these gains to investors in a distribution.
3) If fund holdings increase in price but are not sold by the fund manager, the
fund's shares increase in price. You can then sell your mutual fund shares for a
profit.
Funds will also usually give you a choice either to receive a check for
distributions or to reinvest the earnings and get more shares.

The first introduction of a mutual fund in India occurred in 1963, when the Government of
India launched Unit Trust of India (UTI). Until 1987, UTI enjoyed a monopoly in the Indian
mutual fund market. Then a host of other government-controlled Indian financial companies
came up with their own funds. These included State Bank of India, Canara Bank, and Punjab
National Bank. This market was made open to private players in 1993, as a result of the
historic constitutional amendments brought forward by the then Congress-led government
under

7
the existing regime of Liberalization, Privatization and Globalization (LPG). The first private
sector fund to operate in India was Kothari Pioneer, which later merged with Franklin
Templeton.

CONCEPT OF MUTUAL FUND:

A mutual fund is a common pool of money into which investors place their contributions
that are to be invested in accordance with a stated objective. The ownership of the fund is thus
joint or “mutual”; the fund belongs to all investors. A single investor’s ownership of the fund
is in the same proportion as the amount of the contribution made by him or her bears to the
total amount of the fund.
Mutual Funds are trusts, which accept savings from investors and invest the same in
diversified financial instruments in terms of objectives set out in the trusts deed with the view
to reduce the risk and maximize the income and capital appreciation for distribution for
theembers.
A Mutual Fund is a corporation and the fund manager’s interest is to professionally manage
the funds provided by the investors and provide a return on them after deducting
reasonable management fees.

DEFINITION:
“A mutual fund is an investment that pools your money with the money of an unlimited
number of other investors. In return, you and the other investors each own shares of the fund.
The fund's assets are invested according to an investment objective into the fund's portfolio of
investments. Aggressive growth funds seek long-term capital growth by investing primarily in
stocks of fast-growing smaller companies or market segments. Aggressive growth funds are
also called capital appreciation funds”.

1.2 Why selected mutual fund ?

The risk return trade-off indicates that if investor is willing to take higher risk then
correspondingly he can expect higher returns and vise versa if he pertains to lower risk

8
instruments, which would be satisfied by lower returns. For example, if an investors opt for
bank FD, which provide moderate return with minimal risk.But as he moves ahead to invest in
capital protected funds and the profit-bonds that give out more return which is slightly higher
as compared to the bank deposits but the risk involved also increases in the same proportion.
Thus investors choose mutual funds as their primary means of investing, as Mutual funds
provide professional management, diversification, convenience and liquidity. That doesn’t
mean
mutual fund investments risk free.
This is because the money that is pooled in are not invested only in debts funds which are
less riskier but are also invested in the stock markets which involves a higher risk but can
expect higher returns. Hedge fund involves a very high risk since it is mostly traded in the
derivatives market which is considered very volatil

1.3 ADVANTAGES OF MUTUAL FUNDS:

If mutual funds are emerging as the favorite investment vehicle, it is because of the many
advantages they have over other forms and the avenues of investing, particularly for the
investor
who has limited resources available in terms of capital and the ability to carry out detailed
research and market monitoring. The following are the major advantages offered by mutual
funds to all investors:
1. Portfolio Diversification:
Each investor in the fund is a part owner of all the fund’s assets, thus enabling him to
hold a diversified investment portfolio even with a small amount of investment that would
otherwise require big capital.
2. Professional Management:
Even if an investor has a big amount of capital available to him, he benefits from the
professional management skills brought in by the fund in the management of the investor’s
portfolio. The investment management skills, along with the needed research into available
investment options, ensure a much better return than what an investor can manage on his own.
Few investors have the skill and resources of their own to succeed in today’s fast moving,
global
and sophisticated markets.

9
3. Reduction/Diversification Of Risk:
When an investor invests directly, all the risk of potential loss is his own, whether he
places a deposit with a company or a bank, or he buys a share or debenture on his own or in
any
other from. While investing in the pool of funds with investors, the potential losses are also
shared with other investors. The risk reduction is one of the most important benefits of
a
collective investment vehicle like the mutual fund.
13
4. Reduction Of Transaction Costs:
What is true of risk as also true of the transaction costs. The investor bears all the costs of
investing such as brokerage or custody of securities. When going through a fund, he has the
benefit of economies of scale; the funds pay lesser costs because of larger volumes, a benefit
passed on to its investors.
5. Liquidity:
Often, investors hold shares or bonds they cannot directly, easily and quickly sell. When
they invest in the units of a fund, they can generally cash their investments any time, by selling
their units to the fund if open-ended, or selling them in the market if the fund is close-end.
Liquidity of investment is clearly a big benefit.
6. Convenience And Flexibility:
Mutual fund management companies offer many investor services that a direct market
investor cannot get. Investors can easily transfer their holding from one scheme to the other;
get
updated market information and so on.
7. Tax Benefits:
Any income distributed after March 31, 2002 will be subject to tax in the assessment of
all Unit holders. However, as a measure of concession to Unit holders of open-ended
equityoriented

funds, income distributions for the year ending March 31, 2003, will be taxed at a
concessional rate of 10.5%.
In case of Individuals and Hindu Undivided Families a deduction upto Rs. 9,000 from the
Total Income will be admissible in respect of income from investments specified in Section
80L,
10
including income from Units of the Mutual Fund. Units of the schemes are not subject
to
Wealth-Tax and Gift-Tax.
8. Choice of Schemes:
Mutual Funds offer a family of schemes to suit your varying needs over a lifetime.
14
9. Well Regulated:
All Mutual Funds are registered with SEBI and they function within the provisions of

9. Well Regulated:
All Mutual Funds are registered with SEBI and they function within the provisions of strict
regulations designed to protect the interests of investors. The operations of Mutual Funds are
regularly monitored by SEBI.
10. Transparency:
You get regular information on the value of your investment in addition to disclosure on the
specific investments made by your scheme, the proportion invested in each class of assets
and the fund manager's investment strategy and outlook.

1.4 DISADVANTAGES OF INVESTING THROUGH MUTUAL

FUNDS:
1. No Control Over Costs:
An investor in a mutual fund has no control of the overall costs of investing. The investor
pays investment management fees as long as he remains with the fund, albeit in return for the
professional management and research. Fees are payable even if the value of his investments
is
declining. A mutual fund investor also pays fund distribution costs, which he would not incur
in
direct investing. However, this shortcoming only means that there is a cost to obtain the mutual
fund services.
2. No Tailor-Made Portfolio:
Investors who invest on their own can build their own portfolios of shares and bonds and
other securities. Investing through fund means he delegates this decision to the fund managers.

11
The very-high-net-worth individuals or large corporate investors may find this to be a
constraint
in achieving their objectives. However, most mutual fund managers help investors overcome
this
constraint by offering families of funds- a large number of different schemes- within their own
management company. An investor can choose from different investment plans and constructs
a
portfolio to his choice.
15
3. Managing A Portfolio Of Funds:
Availability of a large number of funds can actually mean too much choice for the
investor. He may again need advice on how to select a fund to achieve his objectives, quite
similar to the situation when he has individual shares or bonds to select.
4. The Wisdom Of Professional Management:
That's right, this is not an advantage. The average mutual fund manager is no better at
picking stocks than the average nonprofessional, but charges fees.
5. No Control:
Unlike picking your own individual stocks, a mutual fund puts you in the passenger seat
of somebody else's car
6. Dilution:
Mutual funds generally have such small holdings of so many different stocks that
insanely great performance by a fund's top holdings still doesn't make much of a difference in
a
mutual fund's total performance.
7. Buried Costs:
Many mutual funds specialize in burying their costs and in hiring salesmen who do not
make those costs clear to their clients.

12
 CHAPTER 3

REVIEW OF LITERATURE

( A) RESEARCH PAPER

1 ) Lensen's Alpha (2012)

Jensen's Alpha is also a reward to risk measure. However, it uses a different concept
of risk. This measure's framework is taken from the capital asset pricing model (CAPM). In
this model, among the assumptions, it is taken that every investor holds a diversified portfolio.
This allows investors to diversify away some of their investment risk, leaving them exposed
only to 'systematic' or non-diversifiable market-related risk. Jensen's Alpha uses onlsystematic
risk for scaling a portfolio's return. Alpha measures the deviation of a portfolio's return from
its equilibrium level, defined as the deviation of return from the risk, adjusted expectation for
that portfolio's return. For ranking purposes, the higher the alpha, the better is the performance.
The fund beats the market, on a systematic risk adjusted basis, if Jensen's Alpha is greater than
zero, and vice versa.

2) The Sharpe Index (2009)

The Sharpe ratio is a risk-adjusted measure developed by the Nobel Laureate William Sharpe.
Markowitz (2009), the founder of Modern Portfolio Theory (MPT), suggested that investors
choose optimum portfolios on the basis of their expected return and risk characteristics. As
noted above, the overall risk of a portfolio is measured by the standard deviation of its returns.
Sharpe used this concept to build a "reward to variability" ratio which has become known as
the Sharpe Index. The metric is calculated using standard deviation and excess return (i.e.
return above a risk free investment) to determine reward per unit of risk. The higher the Sharpe
ratio, the better is the fund's historical risk-adjusted performance. In

13
theory, any portfolio with a Sharpe index greater than one is performing better than the market
benchmark.

3) Lensen's Alpha (2012)

Jensen's Alpha is also a reward to risk measure. However, it uses a different concept
of risk. This measure's framework is taken from the capital asset pricing model (CAPM). In
this model, among the assumptions, it is taken that every investor holds a diversified portfolio.
This allows investors to diversify away some of their investment risk, leaving them exposed
only to 'systematic' or non-diversifiable market-related risk. Jensen's Alpha uses onlsystematic
risk for scaling a portfolio's return. Alpha measures the deviation of a portfolio's return from
its equilibrium level, defined as the deviation of return from the risk, adjusted expectation for
that portfolio's return. For ranking purposes, the higher the alpha, the better is the performance.
The fund beats the market, on a systematic risk adjusted basis, if Jensen's Alpha is greater than
zero, and vice versa.

3) Treynor Index (2012)

A third performance measure is the Treynor index. This is calculated in the same manner as
the Sharpe index, using excess returns on the fund, but the excess return on the fund is scaled
by the beta of the fund, as opposed to the funds' standard deviation of returns.

4) Gupta (1981)
It had laid the foundation of performance evaluation with his study on performance
of Indian equities. This pioneering study in the Indian context has been a major contribution in
the field and is regarded as the benchmark on the rate of return on equities for the specified
time. He laid the basis of rate of return concept in performance evaluation.

5 )Immediately thereafter, Jain (1982)

evaluated performance of Unit Trust of India (UTI) during 1964-65 to 1979-80,
including the profitability aspects of UnitScheme 1964, Unit Scheme 1971 and Unit Scheme
1976. He concluded that its real rate of return have been low indicating overall poor
performance of UTI schemes. There has been no significant increase in the profitability over
the years. His work is

14
considered as the first notable work on performance evaluation of mutual funds in India. In
1986, UTI floated the first diversified equity fund in India, namely, Master share under the
banner of its subsidiary, UTI (Mutual Fund) subsidiary, 1986. Thereafter considerable interest
has been shown by the analysts, academicians and researchers to examine the financial
performance of equity mutual funds in India from the perspective of investors and the fund
managers.

6 )Barua and Verma (1991)

evaluated the performance of 'MasterShare', India's first 7-year close-end equity
mutual fund of UTI. They employed the Capital Asset Pricing Model (CAPM) and computed
the risk adjusted performance by employing Sharpe, Treynor, and Jensen ratios. The bench
mark selected was the 'Economic Times Ordinary Share Price Index. The study concludes that,
'Master Share' has performed better in systematic risk, not in terms of total risk.
7 ) Saba Asish and Rama Murthy Y Sree (1993-94)
identified that return, liquidity, safety and capital appreciation played a predominant role in
the preference of the schemes by investors.

8 ) Radha (1995)
offers certain guidelines to the investors in selecting found that investors have certain primary
objectives and gave importance to them while making investment plans. Capital appreciation
was considered as the most important objective. It was also observed that investors 'investment
objectives differed depending on their occupation and income.

9) Shankar (1996)
points out that the Indian investors view Mutual Funds as commodity products and AMCs, to
capture the market, should follow the consumer product distribution model.
10 ) Srinivasan (1997)
,Delicited opinion on investors' choices over the investment avenues and found that
the majority of investors favoured fixed deposits in banks, followed by post office schemes,
insurance schemes, bonds issued by government organizations and equity shares. Mutual fund
schemes were the least preferred. The survey also elicited information on the important factors
that influence an investor to prefer one investment to another. Guaranteed return coupled with
capital appreciation was the main expectation of most investors.
15
11 ) Somasundaram (1998)
found that investors consider safety of investment followed by regular return and
capital appreciation as important objectives while making an investment decision. Private
sector employees gave more importance to returns, while government employees looked for
tax benefits while choosing an investment option.

12) Sundar (1998)

conducted a survey to get an insight into the mutual fund operations of private
institutions with special reference to Kothari Pioneer. The survey revealed that the awareness
about MF concept was poor during that time in small cities like Vishakapatnam. Agents playa
vital role in spreading the Mutual Fund culture; opened schemes were much preferred. Age and
income are the two important determinants in the selection of the fund/scheme; brand image
and return are the prime considerations while investing in any Mutual Fund.

13 ) Khorana and Servaes (1999)

in their study reported that the decision to introduce a new type of fund is affected by a
number of variables, including investor demand for the fund's attributes.

14) Chakarabarti and Rungta (2000)

stressed the importance of brand effect in determining the competitive position of the
AMCs. Their study reveals that the brand image factor, though not easily captured by
computable performance measures, influences the investor's perception and hence his
fund/scheme selection.

15) Shanmugham (2000)

conducted a survey of 201 individual investors to study the information sourcing by
investors, their perceptions of various investment strategy dimensions and the factors
motivating share investment decisions, and reports that among the various factors,
psychological and sociological factors dominate the economic factors in share investment
decisions.

16
17
 CHAPTER 3

RESEARCH METHODOLOGY

2.1 INTRODUCTION TO THE TOPIC:

Research Design
Descriptive Research Design is used for the study and it is essentially a fact-fi nding
approach. It aims to explain the characteristics of an individual or group characteristics
and to determine the frequency with the same things occurs.

Sample Design
Deliberate sampling technique is used for the study. This sampling method involves
purposive or deliberate selection of particular units of the world for constituting a
sample that represents the population

Data Collection
The data were collected through annual report from sources that are secondary in nature
such as internet, magazines, websites, books, and journals

2.2 OBJECTIVES TO THE STUDY

 To study the financial performance of SBI and ICICI Bank.

 To study compare the financial performance of SBI and ICICI Bank.

18
  To compare the financial performance of State Bank of India and ICICI Bank.

 To know and compare the profitability position of State Bank of India and ICICI
Bank.

 To know and compare the managerial effIciency of State Bank of India and
ICICI Bank.

 To offer findings and suggestions to enhance the fInancial performance of State

Bank of India and ICICI Bank.

2.3 HYPOTHESIS OF STUDY

1. H01: There is no signifi cant difference between performance of SBI and ICICI
Bank in terms of Deposits.

2. H02: There is no signifi cant difference between performance of SBI and ICICI
Bank in terms of Advances.

2.4. SIGNIFICANCE OF STUDY

 This study will pave the way to the academic as well as general public about the
overall efficiency at which the largest commercial banks are serving.

 This study will also help to understand the financial performance of both public
sector and private sector.

 This study will throw light on the different aspects where the State Bank of India
and ICICI Bank excel and how the banks will provide an opportunity in
balancing its activities to achieve the best performance.

19
 2.5 LIMITATION TO STUDY

Due to constraints of time and resources, the study is likely to suffer from certain limitations.
Some of these are mentioned here under so that the findings of the study may be understood in
a proper perspective. The limitations of the study are:

 The study is based on the secondary data and the limitation of using secondary data may
affect the results.

 The secondary data was taken from the annual reports of the SBI and ICICI Bank.

It may be possible that the data shown in the annual reports may be window dressed
which does not show the actual position of the banks. Financial analysis is mainly done to
compare the growth, profitability and financial soundness of the respective banks by
diagnosing the information contained in the financial statements. Financial analysis is done to
identify the financial strengths and weaknesses of the two banks by properly establishing
relationship between the items of Balance Sheet and Profit & Loss Account. It helps in better
understanding of banks financial position, growth and performance by analyzing the financial
statements with various tools and evaluating the relationship between various elements of
financial statements.

2.6 RESEARCH METHODOLOGY

Data Collection

Secondary data:
The data were collected through annual report from sources that are secondary
in nature such as internet, magazines, websites, books, and journal

20
21
3.2 REVIEW OF BOOKS

 Sadhak H., Mutual Fund-Investment and Marketing Practices in India, New Delhi: Sage
Publication, 2010, p.107

 Femando, Deepthi, Klapper, Leora F., Sulla, Victor and Vittas, Dimitri, "The Global
Growth of Mutual Funds" ,World Bank Policy Research Working Paper No. 3055, May
2010, pp.27-30 http://ssrn.com/abstract Sadhak H., op.cit, pp.

 68-117 .Ajith Kumar Singh, "Mutual Fund Regulations -The Journey So Far", August,
2011, pp. 38-41. Fernando, Deepthi, Klapper, et al., op.cit, pp. 9-10 Khorana, Ajay,
Servaes, Henri and Tufano, Peter, "Explaining the Size of the Mutual Fund Industry
Around the World", Darden School of Business No.03-04, January 2004,
http://ssrn.com/abstract=573503

 Huhmann, B. A., "Does Mutual Fund Advertising Provide Necessary Investment

Information?" International Journal of Bank Marketing, 23 (4), pp.296-316
.
 Agrawal, Deepak, "Measuring Performance of Indian Mutual Funds," Prabhandan
Taniknigui, 1(1), September, 2012, p.ll, ssrn.com/abstract=1311761.

 Nazir, Mian Sajid ., Nawaz, Muhammad Musarat, "The Determinants of Mutual Fund
Growth in Pakistan," International Research Journal of Finance and Economics, ISSN
1450-2887 Issue 54 , 2010, pp. 75-83 , http://eurojournals.com/finance.

22
 Friend et. al, "A Study of Mutual Funds" U.S. Securities and Exchange
Commission,USA, (2012). Treynor Jack L, "How to Rate Management of Investment
Funds", Harvard

 Business Review, Vol. 43(1), 2011, pp. 63-75. Sharpe William, E., "Mutual Fund
Performance," 39, 1966,pp.119-138. Treynor and Mazuy., "Can Mutual Funds
Outguess The Markets", Harvard Business Review, Vol. 44,2008, pp.131-136.

 Jensen Michael C., "The Performance of Mutual Funds In the Period 1945-1964",
Journal of Finance, 23, 2011, pp. 389-416. Smith, Keith, V., Tito, Dennis, A., "Risk-
return Measures of Post-Portfolio Performance", Journal of Financial and Quantitative
Analysis. 4, 2012, pp.

23
 CHAPTER 3

DATA ANALYSIS AND INTERPRETATION

1. CREDIT DEPOSIT RATIO:-

Credit-Deposit Ratio is the proportion of loan-assets created by a bank from the deposits
received. Credits are the loans and advances granted by the bank. In other words it is the amount
lent by the bank to a person or an organization which is recovered later on. Interest is charged
from the borrower. Deposit is the amount accepted by bank from the savers and interest is paid
to them.

TABLE 1.1 - CREDIT DEPOSIT RATIO

(IN PERCENT)

YEAR SBI ICICI

2007-08 77.57 84.99

2008-09 74.97 91.44

2009-10 73.56 90.04

2009-10 76.32 87.81

24
 2011-12 78.50 92.30

MEAN 76.184 89.302

CGR 1.19 8.51

Source: Annual Reports of SBI and ICICI from 2007-08 to 2011-12

FIG. NO. 1.1:- CREDIT DEPOSIT RATIO

Table 1.1 depicts that over the course of five financial periods of study the mean of Credit
Deposit Ratio in ICICI was higher (89.302%) than in SBI (76.184%). But the Compound
Growth
Rate in SBI lowers 1.19% than in ICICI (8.51%). In case of SBI the credit deposit ratio was
highest in 2011-12 and lowest in 2009-10. But in case of ICICI credit deposit ratio was highest
in
2011-12 and lowest in 2007-08. This shows that ICICI Bank has created more loan assets from

25
its deposits as compared to SBI.

2. INTEREST EXPENSES TO TOTAL EXPENSES:-

Interest Expenses to Total Expenses reveals the expenses incurred on interest in
proportion to total expenses. Banks accepts deposits from savers and pay interest on these
accounts. This payment of interest is known as interest expenses. Total expenses include the
amount spent in the form of staff expenses, interest expenses, overhead expenses and other
operating expenses etc.

TABLE 1.2:- INTEREST EXPENSES TO TOTAL EXPENSES

(IN PERCENT

YEAR SBI ICICI

2007-08 61.85 66.135

2008-09 63.27 64.10

2009-10 61.62 60.71

2010-2011 54.93 60.70

2011-2012 57.90 65.19

MEAN 59.9 63.36

CGR -6.38 -1.46

26
 Source: Annual Reports of SBI and ICICI from 2007-08 to 2011-12

FIG.NO.1.2:- INTEREST EXPENSES TO TOTAL EXPENSES

The table 1.2 shows that the ratio of interest expenses to total expenses in SBI was highly
volatile it increased from 61.85 per cent to 63.27 per cent during the period 2007-08 to 2008-
09.
Afterwards it was decreased till 2010-11 and then again increased to 57.90 per cent. The ratio
of
interest expenses to total expenses in ICICI was also decreased from 66.135 per cent to 64.10
per
cent during the period 2007-08 to 2008-09. It remain stable from 2009-10 to 2010-2011 but
Further it was increased to 65.19 per cent in 2011-12 . It has been found that the share of interest
expenses in total expenses was higher in case of SBI as compared to ICICI, which shows that
people preferred to invest their savings in SBI than ICICI.

27
 3. INTEREST INCOME TO TOTAL INCOME:-
Interest Income to Total Income shows the proportionate contribution of interest income
in total income. Banks lend money in the form of loans and advances to the borrowers and
Receive interest on it. This receipt of interest is called interest income. Total income includes
interest income, non-interest income and operating income.

TABLE 1.3:-INTEREST INCOME TO TOTAL INCOME IN SBI AND ICICI

(IN PER CENT)

YEAR SBI ICICI

2007-08 83.89 77.61

2008-09 79.29 8.40

2009-10 77.90 82.58

2010-11 78.51 84.49

2011-12 80.92 88.12

MEAN 78.84 84.49

CGR 4.26 5.04

28
The table 1.3 represents that the ratio of interest income to total income in SBI and ICICI both
is
quite stable and volatile over the years. The growth rate of SBI is 5.04 while that of ICICI is
4.26. Thus, the proportion of interest income to total income in SBI was higher than that of
ICICI, which shows that people preferred SBI to take loans and advances.

4. OTHER INCOME TO TOTAL INCOME:-

29
Other income to total income reveals the proportionate share of other income in total
income. Other income includes non-interest income and operating income. Total income
includes interest income, non-interest income and operating income.

FIG.NO.1.4 OTHER INCOME TO TOTAL INCOME IN SBI AND ICICI

(IN PERCENT)

YEAR SBI ICICI

2007-08 16.10 22.38

2008-09 16 20.70

2009-10 17 22.09

2010-11 16 21.48

2011-12 11 19.07

MEAN 15.22 21.44

CGR -31.6 -14.7

30
Source: Annual Reports of SBI and ICICI Bank from 2007-08 to 2011-12

The table 1.4 shows that the ratio of other income to total income was decreased from 16.10
per
cent in 2007-08 to 11.00 per cent in 2011-12 in case of SBI. However, the share of other income
in total income of ICICI was also decreased from 22.38 per cent in 2007-08 to 19.07 per cent
2011-12. The table shows that the ratio of other income to total income was relatively higher
in
ICICI (21.44%) as compared to SBI (15.22%) during the period of study.

31
 5. NET PROFIT MARGIN:-
Net Profit Margin reveals the financial results of the business activity and efficiency of
management in operations. The table 5.8 shows the net profit margin in SBI and ICICI during
the
Period 2005-06 to 2009-10

TABLE-1.5:-NET PROFIT MARGIN IN SBI AND ICICI

(IN PERCENT)

YEAR SBI ICICI

2007-08 12.64 11.81

2008-09 13.11 11.45

2009-10 10.54 13.64

2010-11 8.55 17.52

2011-12 9.73 17.45

MEAN 10.91 14.37

CGR 23.02 47.7

32
)

Source: Annual Reports of SBI and ICICI from 2007-08 to 2011-12

FIG. NO.1.5 NET PROFIT MARGIN IN SBI AND ICICI

The table 1.5 reveals that the ratio of net profits to total income of ICICI was varied from 11.81
per cent to 17.45 percent whereas in case of SBI it is not stable. It increased to 13.11 percent
from 12.64 percent in 2008-09 then further decreased to 10.54 percent in 2009-10 and 8.55
percent in 2010-11 and finally increased to 9.73 percent in 2011-12 during the period of 5 years
of study. However, the net profit margin was higher in ICICI (14.37%) as compared to SBI
(10.91%) during the period of study. But it was continuously decreased from 2007-08 to 2011-
12
in ICICI. Thus, the ICICI has shown comparatively lower operational efficiency than SBI.

6. NET WORTH RATIO:-

33
Net worth Ratio is used for measuring the overall efficiency of a firm. This ratio establishes
the
relationship between net profit and the proprietor‟s funds

TABLE 1.6 NET WORTH RATIO

(IN PERCENT)

YEAR SBI ICICI

2007-08 13.70 8.94

2008-09 15.74 7.58

2009-10 13.91 7.79

2010-11 12.84 9.35

2011-12 14.36 10.70

MEAN 14.11 8.87

CGR 4.87 19.68

34
Source: Annual Reports of SBI and ICICI from 2007-08 to 2011-12

FIG.NO.1.6 NET WORTH RATIO

It is clear from the table 1.6 that the net worth ratio of SBI was increased from 13.70 per cent
to
14.36 per cent during 2007-08 to 2011-12, and decreased in 2009-10 and 2010-2011. Whereas
the ratio was increased from 8.94 per cent to 10.70 per cent in ICICI. The table showed that
the
net worth ratio was higher in SBI (14.11%) as compared to ICICI (8.87%) during the period of
study, which revealed that SBI has utilized its resources more efficiently as compared to ICICI.

35
 7. GROWTH OF PROFIT:-
Net profit Ratio is used for measuring the profitability of the firm. It is calculated by dividing
net
profit by net sales multiplied by 100. It establishes the relationship between the net profit and
sales.

TABLE 1.6 GROWTH OF PROFIT IN SBI AND ICICI

(IN CRORES)

YEAR PROFIT %CHANGE PROFIT %CHANGE

2007-08 6729 - 4157.73 -

2008-09 9121 35.5% 3758.13 -9.61

2009-10 9161 49% 4024.98 7.10

2010-11 8265 -9.8% 5151.38 27.9

2011-12 11707 42% 6465.26 25.50

MEAN 8996.6 - 4711.49 -

CGR 5.26 - 4.36 -

Source: Annual Reports of SBI and ICICI from 2007-08 to2011-12

FIG.NO.1.6 GROWTH OF PROFIT IN SBI AND ICICI

36
The table 1.8 highlights that the mean value of net profit was higher in SBI (Rs. 8996.6 crores)
as compared to that in ICICI (Rs. 4711.9 crores) during the period of study. Further the growth
rate of Net Profits was also higher in SBI (73.97%) than that in ICICI (55.49%) during the
study
period. The table also shows that the annual growth rate of profit in SBI was highest in the year
2009-10 and was negative (-9.8%) in the year 2010-11. In ICICI, the annual growth rate of
profit
was highest in the year 2010-11(27.9%) and was negative in the year 2008-09 (-9.61%).

8. TOTAL INCOME:-

37
The total income indicates the rupee value of the income earned during a period. The higher
value of total income represents the efficiency and good performance.

TABLE 1.8 GROWTH IN TOTAL INCOME OF SBI AND ICICI

(IN CRORES)

YEAR INCOM E %CHANGE INCOME %

CHANGE
2007-08 58,348.74 - 39,667.19 -
2008-09 76,479.78 31% 39,210.31 -1.15%
2009-10 85,962.07 12.3% 33,999.36 -15.8%
2010-11 96,329.45 12.06% 33,082.96 0.25%
2011-12 120,872 25.4% 41,450.75 25.2%
MEAN 87,598.58 37282.114
CGR 107.15 4.49

Source: Annual Reports of SBI and ICICI from 2007-08 to 2011-12

FIG.NO.1.8 GROWTH IN TOTAL INCOME OF SBI AND ICICI

38
The table 1.9 highlights that the mean value of total income was higher in SBI (Rs. 87,598.58
crores) as compared to that in ICICI (Rs. 37282.114 crores) during the period of study.
However
the rate of growth regarding total income was higher in SBI (107.15 %) than in ICICI (4.49 %)
during the period of study.

9. TOTAL EXPENDITURE:

The total expenditure reveals the proportionate share of total expenditure spent on the

39
development of staff, interest expended and other overheads. The higher value of total

TABLE 1.9:- TOTAL EXPENDITURE OF SBI AND ICICI

(IN CRORES)
YEAR EXPENDITURE % EXPENDITURE %
CHANGE CHANGE
2007-08 51,619.622 - 35,509.47 -

2008-09 67,358.55 30.4% 35,452.17 0.16%

2009-10 76,796.02 14.01% 28,974.37 -18.2%

2010-11 88,959.12 15.83% 27,931.58 -3.59%

2011-12 109,186.99 22.73% 34,985.50 25.25%

MEAN 78,784.06 - 32570.61 -

CGR 111.52 - -1.47 -

Source: Annual Reports of SBI and ICICI from 2007-08 to 2011-12

FIG.NO.1.9 TOTAL EXPENDITURE OF SBI AND ICICI

40
The table 1.10 discloses that the mean value of total expenditure was higher in SBI (Rs.
78,784.06 crores) as compared to that in ICICI (Rs. 32570.61 crore) during the period of study.
But the rate of growth regarding expenditure in ICICI was (-1.47 %) than that in SBI (111.52%)
during the same period. It is clear that ICICI is successful in decreasing their total expenditure
as
compared to SBI. The table also highlights that the annual growth rate of expenditure in SBI
was
highest (30.04) in the year 2008-09 and was lowest (14.01) in the year 2009-10. In ICICI, the
annual growth rate of expenditure was negative in the year 2009-10 and 2010-11 i.e. (-18.20)
and
(-3.59) respectively. Hence it is clear that ICICI is more efficient as compared to SBI in terms
of
managing expenditure.

10. ADVANCES:-

41
Advances are the credit facility granted by the bank. In other words it is the amount borrowed
by
a person from the Bank. It is also known as „Credit‟ granted where the money is disbursed and
recovery of which is made later on.

TABLE 1.9- TOTAL ADVANCES OF SBI AND ICICI

(IN CRORES)

YEAR ADVANCES % ADVANCES %

CHANGE CHANGE
2007-08 416,768.20 - 225,616.08 -

2008-09 542,503.20 30.16% 218,310.85 -3.25%

2009-10 631,914.15 16.48% 181,205.60 -16%

2010-11 756,719.45 19.75% 216,365.90 19.40%

2011-12 867,578.89 14.6% 253,727.66 17.26%

MEAN 646,578.89 - 224,645 -

CGR 108.16 - 12.45 -

Source: Annual Reports of SBI and ICICI from 2007-08 to 2011-12

FIG.NO.1.10- TOTAL ADVANCES OF SBI AND ICICI

42
Table 1.9 presents that the mean of Advances of SBI was higher (646,578.89) as compared to
mean of Advances of ICICI (224,645). Rate of growth was also higher in SBI (108.16 %) than
in
ICICI (12.45%). Table also shows the per cent Change in Advances over the period of 5 years.
In case of SBI Advances were continuously increased (with a decreasing trend) over the period
of study. However Advances in ICICI were decreased till 2009-10 but these were increased in
the subsequent years.

11. DEPOSITS:-
Deposit is the amount accepted by bank from the savers in the form of current deposits, savings
deposits and fixed deposits and interest is paid to them.

43
TABLE 1.11-TOTAL DEPOSITS OF SBI AND ICICI
(IN CRORES)

YEAR DEPOSITS % CHANGE DEPOSITS % CHANGE

2007-08 50 403.9 - 244,431.05 -

2008-09 742,073.13 38.08% 218,347.82 -10.6%

2009-10 804,116.23 8.36% 202,016.60 -7.40%

2010-11 933,932.81 16.14 225,602.11 11.6%

2011-12 1,04,647.36 11.7% 255,499.96 13.2%

MEAN 812,234 - 229,179 -

CGR 94.20 - 4.52 -

Source: Annual Reports of SBI and ICICI from 2007-08 to 2011-12

FIG. NO.1.11:- TOTAL DEPOSITS OF SBI AND ICICI

44
Table 1.11 presents that the mean of Deposits of SBI was higher (812,234) as compared to
mean
of deposits of ICICI (229,179%). However the rate of growth was higher in SBI (94.20%) than
that in ICICI (4.52%) during the period of study. Table also shows the per cent Change in
Deposits over the period of 5 years. In case of SBI Deposits were continuously fluctuating over
the period of study. However deposits in ICICI were decreased in 2008-09 and 2009-10 but
these
were increased in the year 2010-11 and 2011-12 with 11.6% and 13.2% respectively.

CHAPTER-5

45
SUGGESTION AND CONCLUSIONS:-

 The study found that the mean of Credit Deposit Ratio in ICICI was higher (89.302 %)
than in SBI (76.184%).
 This shows that ICICI Bank has created more loan assets from its deposits as compared
to SBI. The share of interest expenses in total expenses higher in ICICI (63.36 %) as
compare to SBI (59.99 %) and the proportion of interest income to total income was
higher in case of SBI(84.49 % ) as compared to ICICI (78.84%), which shows that
people prefer ICICI to invest their savings and SBI to take loans & advances.
 The ratio of other income to total income was relatively higher in ICICI (21.44 %) as
compared to SBI (15.22 %). The Net Profit Margin of ICICI is higher (14.37 %)
whereas in SBI it was (10.99 %), which shows that ICICI has shown comparatively
better operational efficiency than SBI. The growth rate of net profit is 73.97% in SBI
which is higher than ICICI which is 55.49% This shows that SBI performed well as
compared to ICICI. The mean value of total income was higher in SBI (87,598.58) as
compared to that in ICICI (37,282.114).
 Net worth ratio was also higher in SBI (14.11 %) than ICICI (8.87 %), which revealed
that SBI has utilized its resources more efficiently as compared to ICICI.
 The mean value of total expenditure was higher in SBI (Rs. 78,784.06 crores) as
compared to that in ICICI (Rs.32,570.61) and the combined growth rate of expenditure
was negative (-1.47%)
 in the case of ICICI whereas in SBI it is 111.52%. Deposits in SBI were continuously
increased.
 However deposits in ICICI were decreased (with a declining trend) till 2009-10 but
these were increased in the subsequent years.
 In case of SBI Advances were continuously increased (with decreasing trend) with the
combined growth rate of (108.16 %), However Advances in ICICI were decreased (with
a declining trend) till 2009-10 but these were increased thereafter with combined
growth rate of (12.45 %).
 It shows that ICICI has suffered with funds or avoid providing advances through 2007-
08 to 2009-10. Hence, on the basis of the above study or analysis banking customer has
more trust on the public sector banks as compared to private sector banks.

46
BIBLIOGRAPHY

 Maheshwari & Maheshwari, Banking Law and Practices, Himalaya Publishing Pvt Ltd,
Allahabad, pp.152.

47
 Pandey, I.M. Financial Management, Vikas Publishing. House Pvt. Ltd. 2002, pp. 633.

 Study material, Financial Management Unit 17, IGNOU, New Delhi. pp.6

 Trend and progress of banking, RBI, pp.22-23

 Gaylord A Freeman, “ The Problem of Adequate bank Capital”, quoted by Howard D. Crosse
in his book on Management Policies for Commercial Banks, pp. 158.

 Development Research Group Study, No. 22, Department of Economic Analysis and
Policy, Reserve Bank of India, Mumbai September 20, 2000.

 Financial year report of SBI 2007-08 to 2011-12.

 SBI bulletin publication 2012. Financial year report of ICICI Bank 2007-08 to 2011-12.
 ICICI Bank bulletin publication 2012
 RBI statistical table relating to banks 2011-12.
Information Memorandum
 SBI and ICICI Bank annual report 2007-12.

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