Journal of Management (JOM)

Volume 6, Issue 1, January – February 2019, pp. 162–169, Article ID: JOM_06_01_017
Available online at http://www.iaeme.com/JOM/issues.asp?JType=JOM&VType=6&IType=1
ISSN Print: 2347-3940 and ISSN Online: 2347-3959

A RELATIVE COMPARISON OF FINANCIAL

PERFORMANCE OF STATE BANK OF INDIA
AND AXIS BANK
Premchand Kaila
Research Scholar, Department of Management Studies, Jawaharlal Nehru Technological
University Anantapur, Anantapuramu, India

Dr. E. Lokanadha Reddy

Professor, Department of Management Studies, Sri Venkateswara College of Engineering and
Technology, R.V.S.Nagar, Chittoor, Andhra Pradesh, India

Dr. T. Narayana Reddy

Associate Professor, Department of Management Studies, Jawaharlal Nehru Technological
University Anantapur, Anantapuramu, India

ABSTRACT
State Bank of India (SBI) and AXIS Bank are the two leading banks in India.one
being a public sector and later one is private sector bank. Financial Performance and
the efficient functioning of commercial banks are the major measuring attributes of a
country’s financial system. For the comparison of bank’s position the study has
applied Solvency ratios, Profitability ratios, and Management efficiency ratios on SBI
and AXIS Bank. The study has identified that the banks have been maintaining their
prescribed parameters and operating profitably.
Further the study notices a difference in the efficiencies and performances of the
Banks with regards to Investments, Net profit, Advances, Deposits, and Total assets.
The study, tries to prove that SBI has a better performance AXIS Bank.
Key words: Efficiency ratios, Financial system, Performance, Profitability Ratios,
Solvency Ratios
Cite this Article: Premchand Kaila, Dr. E. Lokanadha Reddy, Dr. T. Narayana
Reddy, A Relative Comparison of Financial Performance of State Bank of India and
Axis Bank, Journal of Management, 6(1), 2019, pp. 162–169.
http://www.iaeme.com/JOM/issues.asp?JType=JOM&VType=6&IType=1

1. INTRODUCTION
The industry of Banking has a prominent role in developing the nation’s economy. The sector
of banking emerged in the 18th century, in India. The General Bank of India was the first bank
that was established in 1786. The second bank was Bank of Hindustan which started its
operations in 1790. SBI started its operations from 19th Century, The Bank of Calcutta started
on 2nd June 1806, which was then popularly known as The Bank of Bengal commenced on

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 Premchand Kaila, Dr. E. Lokanadha Reddy, Dr. T. Narayana Reddy

2nd January 1809. The banks from 1906 to 1911 drew their inspiration from Swadeshi
movement. The Indian Government (GOI) introduced The Banking Companies Act, 1949
with some amalgamation of rules that later gave way to Banking Regulation Act 1949[7]..

1.1. Statement of the problem

The financial execution of SBI and AXIS banks are the major elements of the country’s
financial progress. The basic objective of Banking industry is to upgrade the performance and
profitability. Moreover, today managers of bank are striving to develop their performance
based on financial views which evaluate overall performance of organization and presenting
an effective feedback. The performances of bank have two be measured through two aspects,
financial and human. The financial performance and their efficiency of banks act as a
parameter that assists customers, mangers, regulators and supervisors in decision making. For
the analysis of data, the following ratios are considered viz., Profitability ratio, Solvency ratio,
and Management efficiency ratios of SBI and AXIS Bank[8].

1.2. Objectives
 To compare the financial performance of SBI and Axis Bank.
 To compare the profitability position and managerial efficiency of SBI and Axis Bank.

2. REVIEW OF LITERATURE
Sathya Swaroop Debasish(2006) analyzed efficiency performance in Indian banking sector.
This study measure the relative efficiency of banks segmented on the basis of bank size,
ownership structure and new economy/old economy banks. The current study does not
include a few of the important banking efficiency parameters like non-performing asset,
capital adequacy figures, customer satisfaction index and other service quality variables.
Fadzlan Sufian, Muzafar Shah Habibullah(2009) measures macroeconomic attributes of
bank profitability of Chinese banking industry in the post-reform period of 2000–2005. This
study results focuses on the relationship in bank profitability and its explanatory variables.
Fadzlan Sufian and Mohamad Akbar Noor Mohamad Noor (2012) the study determines
the Bank Performance in a Developing Economy and focuses on relationship between bank
profitability and Explanatory variables. The study identified that impact of Indian bank’s
profitability on the development of economy is negative.
Jaynal Ud-din Ahmed(2015) the study focused on evaluating the performance of Regional
Rural Banks. The study analyzes the development on every sector and deployment of credit of
RRBs over the years. This study found that RRBs are not in a position to deploy credit for
socio-economic development unlike Indian Commercial Banks.
Poonam Singh and Kanhaiya Singh(2015) analyzed the Parameters to determine the
efficiency of Indian Public Sector Banks. The study observed efficiency of rural variable
among all the operational performance variables.
Hannes Koster and Matthias Pelster(2017) conducted a study. The study focused on
financial penalties and its impact on profitability and stock performances of bank.The study
focuses on profits of banks deposits and loans.

2.1. Hypothesis Testing

H01: There is no noticeable difference in the performances of SBI and AXIS Bank regarding
Deposits.

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 A Relative Comparison of Financial Performance of State Bank of India and Axis Bank

H02: There is no remarkable difference in the performances of SBI and AXIS Bank with
respect to Advances.
H03: There is no remarkable difference in performance of SBI and AXIS Bank in terms of
Investments.
H04: There is no significant difference between performance of SBI and AXIS Bank in terms
of Net Profit.
H05: There is no significant difference between performance of SBI and AXIS Bank in terms
of Total Assets.

3. RESEARCH METHODOLOGY
Research Design
This study adopted descriptive Research to find the facts.
Sampling Design
Judgmental sampling technique was used in this study. This technique involved a judgmental
selection based on the purpose of the sample
Selection of the Sample Units
Banking sector is one of the fast growing financial institution. Using this Judgmental sample
technique State Bank of India and Axis Bank were selected as a sample units for this study.
These sample units are selected based on their better performance in banking sector.
Data collection
To analyze the performance of both SBI and AXIS Bank the data was collected through
annual report from sources of secondary data such as Internet, Magazines, Websites, Books,
and Journals
Period of Study
This study covers a period of five years, i.e,, from 2013-14 to 2017-18
Tools Applied
The major tools applied for the analysis of the data are Percentages, Ratios, and T-Test.

4. DATA ANALYSIS
4.1. Net Profit Ratio
Table 1 illustrates that the period of study, Net profit ratio of both SBI and AXIS Banks are
fluctuated. The highest Net Profit Ratio of SBI was 8.59% in 2014-15 and for AXIS bank it
was 20.74% in 2014-15. However, the lowest Net Profit Ratio of SBI was -2.97% in 2017-18
and 0.60% for AXIS bank in 2017-18.
Table 1: Net Profit Ratio
SBI ( Rs in crores) AXIS ( Rs in crores)
Year Net Profit
Net Profit Net sales Net Profit Ratio Net Profit Net sales
Ratio
2013 - 2014 10,891.17 136350.8 7.9876099 6,217.67 30641.16 20.29188843
2014 - 2015 13,101.57 152397.07 8.596995992 7,357.82 35478.6 20.73875519
2015 - 2016 9,950.65 163685.31 6.079134407 8,223.66 40988.04 20.06356
2016 - 2017 10,484.10 175518.24 5.973225347 3,679.28 44542.16 8.260219082
2017 - 2018 -6547.45 220499.32 -2.969374237 275.68 45,780.31 0.602180282
Source: http://www.moneycontrol.com

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 Premchand Kaila, Dr. E. Lokanadha Reddy, Dr. T. Narayana Reddy

4.2. Operating Profit Ratio

Table 2 illustrates that the period of study, Operating ratio of both SBI and AXIS Banks are
fluctuated. The highest Operating Profit Ratio of SBI was 11.45% in 2014-15 and for AXIS
bank it was 17.50% in 2015-16. However, the lowest Operating Profit Ratio of SBI was
8.08% in 2017-18 and 11.34% for AXIS bank in 2017-18.

Table 2: Operating Profit Ratio

SBI ( Rs in crores) AXIS ( Rs in crores)
Year Operating Operating Profit Operating Operating Profit
Net sales Net sales
Profit Ratio Profit Ratio
2013 – 2014 14890.26 136350.8 10.92055199 4414.79 30641.16 14.40803808
2014 – 2015 17454.1 152397.07 11.45304172 5426.06 35478.6 15.29389548
2015 – 2016 16799.75 163685.31 10.26344392 7176.06 40988.04 17.50769249
2016 – 2017 17680.28 175518.24 10.0731867 6402.01 44542.16 14.37292219
2017 – 2018 17829.74 220499.32 8.086074823 5195.49 45,780.31 11.3487436
Source: http://www.moneycontrol.com

4.3. Return on Shareholder’s Investment or Net Worth Ratio

Table 3 illustrates that the period of study, Net Worth Ratio of both SBI and AXIS Banks are
fluctuated. The highest Net Worth Ratio of SBI was 10.20% in 2014-15 and for AXIS bank it
was 16.46% in 2014-15. However, the lowest Net Worth Ratio of SBI was -2.98% in 2017-18
and 0.43% for AXIS bank in 2017-18. The table says that the Net Worth Ratio of SBI is went
to negative values the return of shareholders investment went on losses.
Table 3: Return on Shareholder’s Investment or Net Worth Ratio
SBI ( Rs in crores) AXIS ( Rs in crores)
Return on
Year Share Holders Return on net Share
Net Profit Net Profit net worth
Fund worth Ratio Holders Fund
Ratio
2013 - 2014 10,891.17 1,18,282.25 9.20778055 6,217.67 38,220.49 16.26789714
2014 - 2015 13,101.57 1,28,438.23 10.2006778 7,357.82 44,676.52 16.46909831
2015 - 2016 9,950.65 1,44,274.44 6.8970291 8,223.66 53,164.91 15.46821014
2016 - 2017 10,484.10 1,88,286.06 5.5681765 3,679.28 55,762.54 6.598121248
2017 - 2018 -6547.45 2,19,128.56 -2.9879491 275.68 63,445.26 0.434516306
Source: http://www.moneycontrol.com

4.4. Earnings per Share [EPS]

Table 4 illustrates that the period of study, EPS of both SBI and AXIS Banks are fluctuated.
The highest EPS of SBI was 17.54% in 2014-15 and for AXIS bank it was 17.25% in 2015-
16. However, the lowest EPS of SBI was -7.33% in 2017-18 and 0.53% for AXIS bank in
2017-18. The table says that the EPS of SBI is gone to negative value.

Table 4: Earnings Per Share [EPS]

SBI ( Rs in crores) AXIS ( Rs in crores)
No. of
Year Earnings per No. of Equity Earnings per
Net Profit Equity Net Profit
shares Shares shares
Shares
2013 - 2014 10,891.17 746.57 14.58827705 6,217.67 469.84 13.23359016
2014 - 2015 13,101.57 746.57 17.54901751 7,357.82 474.1 15.51955284
2015 - 2016 9,950.65 776.28 12.81837739 8,223.66 476.57 17.25593302
2016 - 2017 10,484.10 797.35 13.14868 3,679.28 479.01 7.681008747
2017 - 2018 -6547.45 892.46 -7.336407234 275.68 513.31 0.537063373
Source: http://www.moneycontrol.com

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 A Relative Comparison of Financial Performance of State Bank of India and Axis Bank

4.5. Total Assets Turnover Ratio

Table 7.5 illustrates that the period of study, Total Assets Turnover Ratio of both SBI and
AXIS Banks are fluctuated. The highest Total Assets Turnover Ratio of SBI was 7.60% in
2013-14 and for AXIS bank it was 7.99% in 2013-14. However, the lowest Total Assets
Turnover Ratio of SBI was 6.42% in 2017-18 and 6.62% for AXIS bank in 2017-18.

Table 5: Total Assets Turnover Ratio

SBI ( Rs in crores) AXIS ( Rs in crores)
Total Assets Total Assets
Year
Net sales Total Assets Turnover Net sales Total Assets Turnover
Ratio Ratio
2013 - 2014 136350.8 1,792,234.60 7.607865622 30641.16 383,244.89 7.995190751
2014 - 2015 152397.07 2,048,079.80 7.440973247 35478.6 461,932.39 7.680474625
2015 - 2016 163685.31 2,259,063.05 7.245716759 40988.04 525,467.61 7.8002981
2016 - 2017 175518.24 2,674,380.65 6.56294907 44542.16 601,467.66 7.405578548
2017 - 2018 220499.32 3,429,904.01 6.428731514 45,780.31 691,329.57 6.622067388
Source: http://www.moneycontrol.com

4.6. Dividend Pay-Out Ratio

Table 6 illustrates that the period of study, Dividend Pay-Out Ratio of both SBI and AXIS
Banks are fluctuated. The highest Dividend Pay-Out Ratio of SBI was 2.05% in 2013-14 and
for AXIS bank it was 1.62% in 2012-13. However, the lowest Dividend Pay-Out Ratio of SBI
was 0% in 2017-18 and 0% for AXIS bank in 2017-18. Compare to SMI and AXIS the
Dividend Pay-Out Ratio of SBI is in negative.

Table 6: Dividend Pay-Out Ratio

SBI ( Rs in crores) AXIS ( Rs in crores)
Year Dividend Per Earnings per Dividend Dividend Per Earnings per Dividend
share shares pay-out ratio share shares pay-out ratio
2012 - 2013 41.5 20.62 2.012568965 18 11.07 1.626260032
2013 - 2014 30 14.59 2.056445726 20 13.23 1.511305682
2014 - 2015 3.5 17.55 0.199441365 4.6 15.52 0.296400292
2015 - 2016 2.6 12.82 0.202833785 5 17.26 0.289755413
2016 - 2017 2.6 13.15 0.19773848 5 7.68 0.650956165
2017 - 2018 -7.34 0 1.48 0
Source: http://www.moneycontrol.com

4.7. Debt-Equity Ratio

Table 7 illustrates that the period of study, Debt-Equity Ratio of both SBI and AXIS Banks
are fluctuated. The highest Debt-Equity Ratio of SBI was 16.34% in 2015-16 and for AXIS
bank it was 10.89% in 2017-18. However, the lowest Debt-Equity Ratio of SBI was 14.2% in
2016-17 and 9.88% for AXIS bank in 2015-16.

Table 7: Debt-Equity Ratio

SBI ( Rs in crores) AXIS ( Rs in crores)
Share Share
Year Total Debt Equity Total Debt Equity
Holders Holders
Liabilites Ratio Liabilites Ratio
Fund Fund
2013 - 2014 1,792,748.28 1,18,282.25 15.15 383244.89 38,220.49 10.02
2014 - 2015 2,048,079.80 1,28,438.23 15.94 461932.39 44,676.52 10.33
2015 - 2016 2,357,617.55 1,44,274.44 16.34 525,467.62 53,164.91 9.88
2016 - 2017 2,674,380.65 1,88,286.06 14.2 601467.67 55,762.54 10.78

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 Premchand Kaila, Dr. E. Lokanadha Reddy, Dr. T. Narayana Reddy

2017 - 2018 3,429,904.02 2,19,128.56 15.65 691,329.57 63,445.26 10.89

Source: http://www.moneycontrol.com

4.8. Interest Expended to Interest Earned Ratio

Table 8 illustrates that the period of study, Interest Expended to Interest Earned Ratio of both
SBI and AXIS Banks are fluctuated. The highest Interest Expended to Interest Earned Ratio
of SBI was 66.05% in 2017-18 and for AXIS bank it was 60.99% in 2013-14. However, the
least Interest Expended to Interest Earned Ratio of SBI was 63.86% in 2013-14 and 58.93%
for AXIS bank in 2015-16.

Table 8: Interest Expended to Interest Earned Ratio

SBI AXIS
Year Interest Expended / Interest Earned Interest Expended / Interest
Earned
2013 - 2014 63.86 60.99
2014 - 2015 63.9 59.91
2015 - 2016 65.12 58.93
2016 - 2017 64.76 59.38
2017 - 2018 66.05 59.33
Source: http://www.moneycontrol.com

5. RESULTS
Table 9
VARIABLES MEAN1 MEAN2 SD SE C. V
Deposits 1890603.774 365871.114 2.41 1.077817531 3.35
Advances 1495902.82 332528.632 1.86 0.831842576 2.59
Investments 656637.29 130113.382 1.14 0.509838998 1.58
Net Profit 7576.008 5150.822 1212.59 542.30322 1.60
Total Assets 2440732.422 532688.424 3.016 1.348837209 4.20
Source: http://www.moneycontrol.com
Table value = 2.236
Table 9 demonstrates the Performance of SBI and AXIS Bank in terms of Deposits,
Advances, Investments, Net Profit, and Total Assets by applying the t- test
The calculated value of Deposits 3.35 is greater than the table value 2.236. Therefore, H01
is rejected.
The calculated value of Advances 2.59 is greater than the table value 2.236. Therefore,
H02 is rejected.
The calculated value of Investments 1.58 is less than the table value 2.236. Therefore,
H03 is rejected.
The calculated value of Net Profit 1.58 is less than the table value 2.236. Therefore, H04
is rejected.
The calculated value of Total Assets 4.2 is greater than the table value 2.236. Therefore,
H05 is rejected.

6. DISCUSSION
The study provides key findings according to the data analysis and arrives on some
conclusions based on the findings.

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 A Relative Comparison of Financial Performance of State Bank of India and Axis Bank

 The average Net Profit Ratio of SBI is 5.13% and AXIS bank is 13.99%, which implies that
the Net Profit Ratio of AXIS bank is 8.85%, which is more than that of the SBI.
 The average Operating profit ratio of SBI is 10.15% and AXIS bank is 14.58% it means AXIS
bank Operating profit ratio is 4.42% more than SBI.
 The average Net Worth Ratio of SBI is 5.77% and AXIS bank is 11.04% it means AXIS bank
Net Worth Ratio is 5.27% more than SBI.
 The average EPS of SBI is 10.15% and AXIS bank is 10.84% it means AXIS bank EPS is
0.69% more than SBI.
 The average Total Assets Turnover Ratio of SBI is 7.05% and AXIS bank is 7.50% it means
AXIS bank Total Assets Turnover Ratio is 0.44% more than SBI.
 The average Dividend Pay-Out Ratio of SBI is 4.66% and AXIS bank is 4.34% it means SBI
bank Dividend Pay-Out Ratio is 0.44% more than AXIS.
 The average Debt-Equity Ratio of SBI is 15.45% and AXIS bank is 10.33% it means SBI
bank Debt-Equity Ratio is 5.07% more than AXIS.

7. SUGGESTIONS
 An Earnings per Share (EPS) of SBI Bank is very low when compared to AXIS. Where in
2017-18 the value gone to negative it implies profitability of SBI is not equal to AXIS Bank.
Therefore, the SBI Bank may take some measures to increase income over expenditure for
increasing Earning per Share.
 Debt-equity Ratio of SBI is higher when compared to AXIS Bank. As a result, SBI should
have a control on their debts. Axis Bank have to maintain the standards to manage their debts.

8. CONCLUSIONS
According to the analysis both SBI and AXIS banks are maintaining their standards and
requirements. Both the banks are running with profitability. But their performance indicate
the significant difference between both the banks of SBI and AXIS in terms of Deposits,
Advances, Investments, Net Profit, and Total Assets.

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[3] Fadzlan sufian, Md Akbar Noor Mohamad Noor (2012),” Determinants of Bank
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[4] Jaynal Ud-din Ahmed(2015),” Performance Evaluation of Regional Rural Banks:

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[5] PoonamSingh, Kanhaiya Singh (2015),” Efficiency Assessment Parameters

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 Premchand Kaila, Dr. E. Lokanadha Reddy, Dr. T. Narayana Reddy

[7] D.Padma and V.Arulmathi (2013) ,”Financial Performance Of State Bank Of India And
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