PARIPEX - INDIAN JOURNAL OF RESEARCH Volume-8 | Issue-1 | January-2019 | PRINT ISSN - 2250-1991

ORIGINAL RESEARCH PAPER Commerce

A STUDY ON FINANCIAL PERFORMANCE OF STATE KEY WORDS: Financial

performance, Comparative study,
BANK OF INDIA Recovery trend

Ph.D Scholar, School of Commerce. PSG College of Arts and Science, Tamilnadu,
S. Sowbarnika India.
Associate Professor, School of Commerce, PSG college of Arts and Science,
Dr. M. Jayanthi* Coimbatore, Tamilnadu, India *Corresponding Author
The study was undertaken to examine the financial performance of SBI which plays a crucial role in growth of banking. SBI being
India's largest bank with the rich experience gained over generation that address complex financial requirements, brings
ABSTRACT

considerable expertise in engineering financial packages. The global presence as also the well spread domestic branch network of
SBI ensures that the delivery of every project financial needs are totally taken care of. The present study is undertaken to highlight
the comparative study on the financial performance of SBI bank from 2010-2011 to 2014-2015. The study is mainly approached
from the point of view of SBI bank's report. It does not consider other's view. The study focuses only on the financial performance
of SBI bank & not its other associates-SBBJ, SBH, SBM, SBP and SBT. The study reveals that it has increased its revenue by the
implementation of innovative schemes to the public. Overall, SBI shows a recovery trend over the last five years.

INTRODUCTION achieved high level of efficiency in its operations, with Oriental

A bank is a financial institution that creates credit by lending Bank of Commerce at the top.
money to a borrower, thereby creating a corresponding deposit on
the bank's balance sheet. Lending activities can be performed SINHA et al. (2009) in their paper entitled “Bank Ownership and
either directly or indirectly through capital markets. Due to their Deposit Mobilization: A Non-Parametric Approach” compare the
importance in the financial system and influence on national performance of 40 Indian commercial banks using window
economies, banks are highly regulated in most countries. Most analysis, considering deposit mobilizations as the output indicator.
nations have institutionalized a system known as fractional reserve The results obtained from the study indicate that mean technical
banking under which banks hold liquid assets equal to only a efficiency of the in-samples banks exhibited a declining trend for
portion of their current liabilities. In addition to other regulations the period. The decline in mean technical efficiency was due to a
intended to ensure liquidity, banks are generally subject to greater divergence in performance compared to the frontier.
minimum capital requirements based on an international set of Among the samples banks, the private sector banks performed
capital standards, known as the Basel accounts. better than the public sector banks.

State Bank of India is founded in 1806. Bank of Calcutta was the SINGLA HK (2008), in his paper 'Financial Performance of Banks in
first bank established in India and over a period of time evolved India', in ICFAI Journal of Bank Management No7. Has examined
into SBI. SBI represents a sterling legacy of over 200 years. It is the that how financial management plays a crucial role in growth of
oldest commercial Bank in the Indian subcontinent, strengthening banking. It is concerned with examining the profitability position
the nation's trillion-dollar economy and serving the aspirations of of the selected sixteen banks of banker index for a period of six
its vast population. The Bank is India's largest commercial bank in years (2001-06). The study reveals that the profitability position
terms of assets, deposits, profits, branches, number of customers was reasonable during the period of study when compared with
and employees , enjoying the continuing faith of millions of the previous years. Strong capital and balance sheet place, banks
customers across the social spectrum. in better position to deal with and absorb the economic constant
over a period of time.
Statement of the Problem
State Bank of India is an Indian Multinational Public sector Banking Research Methodology
and Financial Services Company. It is a Government owned Research Design: The Research work is analytical in nature as it is
corporation having 13000 branches including 190 Foreign offices based on secondary data.
making it the largest Banking and Financial services company in
India by assets. Since its inception in 1955, the Project finance SBU Data Collected: This study is based on secondary data. This data
has built up a strong reputation for its in-depth understanding was collected from the annual report of State Bank of India. In
about the project and also its ability to provide financial solutions. addition to the records of the bank, data was collected from
State Bank of India is chosen for this purpose and hence the banking bulletin, websites, newspaper and magazine.
financial position plays and essential role in growth and diversified
requirement for the different levels of project. Period of Study: The study will cover the period of 5 financial
years from 2010-2011 to 2014-2015.
Literature review
VERMA et al. (2011) in his paper entitled 'performance of Tools used for the study: Data will be collected from diverse
scheduled commercial banks in India: an application of DEA' source that is put through analysis using the following tools:
analyze the efficiency of 88 schedule commercial banks with the Ÿ Comparative Balance Sheet.
data set ranging from the year 1998-99 to 2007-08. The results
indicate that the public sector and foreign banks needed to take Objective of the study
steps to reduce the expenses and improve the output at the given 1 To analyze the comparative growth of the State bank of India.
input level because they had failed to acquire full efficiency score in
six and five years respectively, out of the ten years under study. Data Analysis
Comparative Balance sheet of Financial Year 2010-2011
SHOBANA(2010) in her paper entitled 'operational efficiency of (AMOUNT IN CRORES)
public sector banks in India-a Non-Parametric Model' focuses on PARTICULARS 2010 2011 Change in Change In
the operational efficiency of public sector banks in India using a amount Percentage
non-parametric model, which measures the efficiency as a ratio of CURRENT ASSET
output index to an index of input used. The findings reveal that, Cash and Balance 61,290.87 94.395.50 33104.63 54.01
out of 27 public sector banks in India, only nine banks had with RBI
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PARIPEX - INDIAN JOURNAL OF RESEARCH Volume-8 | Issue-1 | January-2019 | PRINT ISSN - 2250-1991
Balance with 34.892.98 28,478.65 -6414.33 -18.38 CAPITAL AND
Banks Money at LIABILITIES
call Equity share 635.00 671.04 36.04 5.68
Advances 631,914.15 756.719.45 124805.30 19.75 capital
Investment 285,790.07 295,600.57 9810.50 3.43 Reserves 64,351.04 83,280.16 18929.12 29.42
GROSS BLOCK 11,831.63 4,431.96 -7399.67 -62.54 NET WORTH 64,986.04 83,951.20 18965.16 29.18
Revaluation - - 0.00 0.00 Deposits 933,932.81 1,043,647.36 109714.55 11.75
reserves
Accumulated 7,713.90 - -7713.90 -100.00
Borrowings 119,568.96 127,005.57 7436.61 6.22
Depreciation TOTAL DEBT 1,053,501.77 1,170,652.93 117151.16 11.12
Net block 4,117.73 4,431.96 314.23 7.63 Other 105,248.39 80,915.09 -24333.30 -23.12
Capital work in 295.18 332.23 37.05 12.55 liabilities and
Progress provisions
OTHER ASSETS 35112.76 43,777.85 8665.09 24.68 TOTAL 1,223,736.20 1,335,519.22 111783.02 9.13
Total Asset 1,072,959.27 1,223,736.21 150776.94 14.05 LIABILITIES
Contingent 429,917.37 790,389.59 360472.22 83.85 INTERPRETATION
Liabilities Ÿ The current assets (gross block) have increased by 15.84% and
Bills for Collection 166,449.04 - -166449.04 -100.00 the cash has increased by 51.30%. this inturn indicates that
Book Value 1,038.76 1,023.40 -15.36 -1.48 the net worth of the firm has gone up to 29.18%. this
CAPITAL AND indicates that the Book value of the firm has been affected and
LIABILITIES increased to 22.24%. This further confirms that the company
Equity share 634.88 635.00 0.12 0.02 has raised long-term finances resulting to improvement in the
capital liquidity position.
Reserves 65,314.32 64,351.04 -963.28 -1.47 Ÿ The fixed assets (net block) have increased by 15.84%
NET WORTH 65.949.20 64,986.04 -963.16 -1.46 relatively the other liabilities & provisions have decreased by
Deposits 804,116.23 933,932.81 129816.58 16.14 23.12% as the deposits have increased up to 11.75% and the
Borrowings 103.011.60 119,568.96 16557.36 16.07 equity share capital has also increased by 5.68%. This depicts
TOTAL DEBT 907,127.83 1,053,501.77 146373.94 16.14 that the policy of the bank is to purchase fixed assets from the
Other liabilities 80,336.70 105,248.39 24911.69 31.01 long term sources of finance..
and provisions Ÿ Reserves and surplus have increased up to 29.42% which
TOTAL LIABILITIES 1,053,413.73 1,223,736.20 170322.47 16.17 shows that the company has excess amount in R&S from the
profits accumulated.
INTERPRETATION
Ÿ The current assets (gross block) have decreased by 62.54% Comparative Balance sheet of Financial Year 2012-2013
and the cash has decreased by 18.38%. this inturn indicates (AMOUNT IN CRORES)
that the net worth of the firm has gone up to 1.46%. this Particulars 2012 2013 Change In Change In
indicates that the Book value of the firm has been affected and Amount Percentage
decreased to 1.48%. Current Asset
Ÿ The fixed assets (net block) have increased by 7.63% relatively Cash and 54,075.94 65,830.41 11754.47 21.74
the other liabilities & provisions have increased by 31.01% and Balance with
the equity share capital has also increased by 0.02%. This RBI
depicts that the policy of the bank is to purchase fixed assets Balance with 43,087.23 48,989.75 5902.52 13.70
from the long term sources of finance.. Banks Money
Ÿ Reserves and surplus have decreased up to 1.47% which at call
shows that the company has utilized R&S for payment of Advances 867,578.89 1,045,616.55 178037.66 20.52
dividends to the shareholders. Investment 312,197.61 350,927.27 38729.66 12.41
GROSS BLOCK 5,133.87 6,595.71 1461.84 28.47
Comparative Balance sheet of Financial Year 2011-2012 Revaluation - - 0.00 0.00
(AMOUNT IN CRORES) reserves
Accumulated - - 0.00 0.00
Particulars 2011 2012 Change in Change In Depreciation
amount Percentage
Net block 5,133.87 6,595.71 1461.84 28.47
Current Asset Capital work 332.68 409.31 76.63 23.03
Cash and 94,395.50 54,075.94 -40319.56 -42.71 in Progress
Balance with
Other Assets 53,113.02 47,892.03 -5220.99 -9.83
RBI
Total Asset 1,335,519.24 1,572,856.74 237337.50 17.77
Balance with 28,478.65 43,087.23 14,608.58 51.30
Banks Money Contingent 899,565.18 993,018.45 93453.27 10.39
at call Liabilities
Advances 756,719.45 867,578.89 110859.44 14.65 Book Value 1,251.05 1445.60 194.55 15.55
Investment 295,600.57 312,197.61 16597.04 5.61 CAPITAL AND
LIABILITIES
GROSS 4,431.96 5,133.87 701.91 15.84
BLOCK Equity share 671.04 684.03 12.99 1.94
capital
Revaluation - - 0.00 0.00
reserves Reserves 83,280.16 98,199.65 14919.49 17.91
Accumulated - - 0.00 0.00 NET WORTH 83,951.20 98,883.68 14932.48 17.79
Depreciation Deposits 1,043,647.36 1,202,739.57 159092.21 15.24
Net block 4,431.96 5,133.87 701.91 15.84 Borrowings 127,005.57 169,182.71 42177.14 33.21
Capital work 332.23 332.68 0.45 0.14 TOTAL DEBT 1,170,652.93 1,371,922.28 201269.35 17.19
in Progress Other liabilities 80,915.09 95,455.07 14539.98 17.97
OTHER 43,777.85 53,113.02 9335.17 21.32 and provisions
ASSETS Total 1,335,519.22 1,566,261.03 230741.81 17.28
Total Asset 1,223,736.21 1,335,519.24 111783.03 9.13 Liabilities
Contingent 790,389.59 899,565.18 109175.59 13.81 INTERPRETATION
Liabilities Ÿ The current assets (gross block) have increased by 28.47% and
Book Value 1,023.40 1,251.05 227.65 22.24 the cash has increased by 13.70%. this inturn indicates that
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PARIPEX - INDIAN JOURNAL OF RESEARCH Volume-8 | Issue-1 | January-2019 | PRINT ISSN - 2250-1991

the net worth of the firm has gone up to 17.79%. this Cash and 84,955.66 115,883.84 30928.18 36.41
indicates that the Book value of the firm has been affected and Balance with
increased to 15.55%. This further confirms that the company RBI
has raised long-term finances resulting to improvement in the Balance with 47,593.97 58,977.46 11383.49 23.92
liquidity position. Banks Money
Ÿ The fixed assets (net block) have increased by 28.47% at call
relatively the other liabilities & provisions have increased by Advances 1,209,828.72 1,300,026.39 90197.67 7.46
17.97% as the deposits have increased up to 15.24% and the Investment 398,308.19 495,027.40 96719.21 24.28
equity share capital has also increased by 1.94%. This depicts Gross Block 8,002.16 9,329.16 1327.00 16.58
that the policy of the bank is to purchase fixed assets from the
long term sources of finance.. Revaluation - - 0.00 0.00
Ÿ Reserves and surplus have increased up to 17.91% which reserves
shows that the company has excess amount in R&S from the Accumulated - - 0.00 0.00
profits accumulated. Depreciation
Net block 8,002.16 9,329.16 1327.00 16.58
Comparative Balance sheet of Financial Year 2013-2014 Capital work - - - -
(AMOUNT IN CRORES) in Progress
Particulars 2013 2014 Change In Change In Other Assets 43,545.90 68,835.55 25289.65 58.08
Amount Percentage Total Asset 1,792,234.60 2,048,079.80 255845.20 14.28
Current Asset Contingent 1,091,358.37 1,093,422.51 2064.14 0.19
Cash and 65,830.41 84,955.66 19125.25 29.05 Liabilities
Balance with Book Value 1,584.34 172.04 -1412.30 -89.14
RBI CAPITAL AND
Balance with 48.989.75 47,593.97 -1395.78 -2.85 LIABILITIES
Banks Money Equity share 746.57 746.57 0.00 0.00
at call capital
Advances 1,045,616.55 1,209,828.72 164212.17 15.70 Reserves 117,535.68 127,691.65 10155.97 8.64
Investment 350,927.27 398,308.19 47380.92 13.50 NET WORTH 118,282.25 128,438.22 10155.97 8.59
Gross Block 6,595.71 8,002.16 1406.45 21.32 Deposits 1,394,408.51 1,576,793.24 182384.73 13.08
Revaluation - - 0.00 0.00 Borrowings 183,130.88 205,150.29 22019.41 12.02
reserves
TOTAL DEBT 1,577,539.39 1,781,943.53 204404.14 12.96
Accumulated - - 0.00 0.00
Depreciation Other 96,412.96 137,698.05 41285.09 42.82
liabilities and
Net block 6,595.71 8,002.16 1406.45 21.32 provisions
Capital work 409.31 - -409.31 -100.00 TOTAL 1,792,234.60 2,048,079.80 255845.20 14.28
in Progress LIABILITIES
OTHER ASSETS 47,892.03 43,545.90 -4346.13 -9.07
INTERPRETATION
Total Asset 1,572,856.74 1,792,234.60 219377.86 13.95 Ÿ The current assets (gross block) have increased by 16.58%
Contingent 993,018.45 1,091,358.37 98339.92 9.90 and the cash has increased by 23.92%. this inturn indicates
Liabilities that the net worth of the firm has gone up to 8.59%. this
Book Value 1,445.60 1,584.34 138.74 9.60 indicates that the Book value of the firm has been decreased to
CAPITAL AND 89.14%.
LIABILITIES Ÿ The fixed assets (net block) have increased by 16.58%
Equity share 684.03 746.57 62.54 9.14 relatively the deposits have increased by 13.08% and the
capital equity share capital is stable. This depicts that the policy of the
Reserves 98,199.65 117,535.68 19336.03 19.69 bank is to purchase fixed assets from the long term sources of
NET WORTH 98,883.68 118,282.25 19398.57 19.62 finance..
Ÿ Reserves and surplus have increased up to 8.64% which shows
Deposits 1,202,739.57 1,394,408.51 191668.94 15.94
that the company has excess amount in R&S from the profits
Borrowings 169,182.71 183,130.88 13948.17 8.24 accumulated.
TOTAL DEBT 1,371,922.28 1,577,539.39 205617.11 14.99
Other liabilities 95,455.07 96,412.96 957.89 1.00 FINDINGS
and provisions The comparative balance sheet of SBI bank for these 5years shows
TOTAL 1,566,261.03 1,792,234.60 225973.57 14.43 that the bank has increased its equity capital which in turn is used
LIABILITIES for the diversifying the investment. SBI has used its Reserves and
INTERPRETATION Surplus efficiently in paying higher returns to its shareholders.
Ÿ The current assets (gross block) have increased by 21.32%
and the cash has decreased by 2.85%. this inturn indicates SUGGESTION
that the net worth of the firm has gone up to 19.62%. this Ÿ SBI should also increase its sales by implementing new policies
indicates that the Book value of the firm has been affected and in the rural sector and attracting customers in the urban sector
increased to 9.60%. so that the net profit of the bank increases respectively.
Ÿ The fixed assets (net block) have increased by 21.32% Ÿ SBI being India's largest lender has to focus on its performance
relatively the other liabilities & provisions have increased by to give specific outcomes.
1% and the equity share capital has also increased by 9.14%. Ÿ SBI has to increase its capital in crores to increase sales which in
This depicts that the policy of the bank is to purchase fixed
turn increases the financial strength.
assets from the long term sources of finance..
Ÿ Reserves and surplus have increased up to 19.69% which
shows that the company has utilized R&S for the payment of CONCLUSION
dividends to the shareholders. From the financial analysis it is inferred that SBI has a good financial
strength. SBI being ranked the top public sector bank with efficient
Comparative Balance sheet of Financial Year 2014-2015 performance, the financial reports stand important to
(AMOUNT IN CRORES) Government, investors, customers and competitors to analyse the
performance of the bank. Investors will also prefer to invest in SBI
Particulars 2014 2015 Change In Change In
owing to regular payments of dividends. SBI has also increased its
Amount Percentage
revenue by the implementation of innovative schemes to the
Current asset public. Overall, SBI shows a recovery trend over these 5 years.
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PARIPEX - INDIAN JOURNAL OF RESEARCH Volume-8 | Issue-1 | January-2019 | PRINT ISSN - 2250-1991

REFERENCES
BOOKS
1. ‘MANAGEMENT ACCOUNTING’ Shashi K.Gupta, R.K Sharma and Neeti Gupta
2. ANNUAL REPORT of SBI from financial year 2010-2011 to 2014-2015.
3. BANKING SERVICE CHRONICLE- monthly magazine
WEBSITE
4. www.sbi.com
5. www.wikipedia.com
6. www.investopedia.com
7. www.capitaline.com
8. www.moneycontrol.com

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