1.

Title :- TO STUDY THE FINANCIAL PERFORMANCE OF HDFC BANK, SBI BANK &
CITIBANK

2. Background Of The Study :-

In an economy Banks, Insurance organizations, Development banks and other financial

organizations plays a very important role in mobilization and distribution of funds. The growth of
the economy is based on systematic functioning of these financial intermediaries. Bank is the major
component in the economy, which offers different variety of services to the needs of customers.
Traditional Banks play a limited role of mobilization and utilization of funds in an economy.
Whereas the scope of modern banks are not limited to primary banking operations and extended to
fund and fee based services. Performance evaluation of the banking sector is an effective measure
and indicator to check the reliability of economic activities of an economy.

The study focuses on the comparative evaluation of the selected banks public sector (HDFC
Bank), private sector (SBI Bank) and foreign sector (Citibank). The purpose of the study is to
examine the profitability aspects of the three banks and also to evaluate the financial performance
of the banks using financial statement analysis. The study will also focus on the strengths and
weakness of the banks and do the swot analysis of the banks. The study will also find out the
different measures taken by the bank for its growth and profitability. For this purpose secondary
data have been taken for the period of 2018-19.

In the banking industry, financial statements are of great interest to the general public because
the banks directly or indirectly interact with people.

This public interest has caused banks to accept social as well as economic, financial and legal
responsibilities and has created a consequence, a growing need for the communication of
information to account for the results which are of considerable interest to wide range of individuals
and organizations.

So, it becomes very imperative for reliable information to be circulated to interested parties
which can enable them to acquire an essential knowledge of the way is which banks are performing
in relation to the public interest.
 3. Significance Of The Study: -

Since the era of economic reforms, banking sector has been witnessing numerous changes.
The new public sector banks, private sector banks and foreign banks have also introduced number
of new innovative products. These banks are also offerings their services through new age
distribution channels like ATM, internet banking, phone banking, etc. All these factors have
affected the performance of both the public sector banks and private sector banks. A large no of
studies have already been conducted in banking sector but these studies have covered period prior
to 2019. So the present study is an attempt to analyses and compares the profitability of HDFC, SBI
and Citibank during the period 2018-19.

The present study has been undertaken to measure and evaluate the profitability of three
banks. The sample of study takes into account three banks one from private sector, one from public
sector and one from foreign sector bank.

Profitability is the management concept with the objective of assessment bank’s results from
efficiency point of view both for entirely activity and for differently management compounds. From
the conceptual point of view, profitability represents the modality to achieve two major goals of
banks activity, respectively the maximization of profits in minimization risk conditions. The
profitability analysis is achieved on a set of indicator to measure the banks performance. The
indicator results arise from the accounting dates which illustrates the reference period in the most
synthetic expression of balance sheet and profit and loss account.

Today Banking sector reforms aims at, introduction of new indirect monetary policy,
strengthening prudential regulation, opening the financial sector to foreign financial institutions and
promotion of the capital market. Therefore the need to identify the determinants of growth
performance of banks in the India as well as other countries has gained importance. Researchers
have tried to analyze bank performance based on external and internal variables in various
countries. External variables include rate of economic growth, industry-wide developments,
inflation, money supply, economies of scale and scope, dynamics of bank competition, global
presence of financial conglomerates, disintermediation in banking activities and other
macroeconomic factors; while bank specific internal variables mean an increase in the business over
a period of time in the areas of Reserve and Surplus growth (RES), Advance growth (ADV),
Investment growth (INV), Interest Earned growth (IE), Operating Expenses growth (OE), Equity
Dividend growth (ED), Net profit growth (NP) and EPS growth (EPS) of the current year in
comparison to previous year.
 4. Literature Review :-

i. [Rakesh Kumar, June 2017] – In his paper titled ‘Performance of Banking Sector in India’
concludes that profitability of public sector banks has started improving but despite this the
foreign and private sector banks take a big share of cake. He further says that public sector
banks need to improve their performance to meet the requirement of new an open
competitive environment.
ii. [Alfred Szydelko, October 2016] – In his paper titled ‘The Role of Financial Statement in
Performance Management’ focuses that particular elements of financial statement are very
useful in assessing achievements in selected areas of performance management. However,
Polish financial statements legally formalised by the accounting act provide limited
capabilities of using them in performance management.
iii. [Amedu Mercy, August 2012] – In his paper titled ‘Role of Financial Statement In
Investment Decision Making’ his concludes that financial statements plays a vital role in
investment decision making and suggest the companies to try as much as possible to posit
financial statements that reflects true and fair view of what is the propose to represent as a
way of appreciating their companies the more.
iv. [B. Divya Priya, December 2012] – In her study she found that private sector banks are
more innovative in adopting latest technology when compared to public sector banks. And
her study indicates that growth performance is very pleasing in case of private sector banks
than public sector banks in India during the period of study.

5. Problem Statement :-

Performance and efficiency of commercial banks are the key elements of efficiency and
efficacy of national financial system. The broad objective of the banking sector reforms in India has
been to increase efficiency and profitability of the banks. Prior to banking reforms, the industry was
a near monopoly dominated by public sector banks. However, the banking reforms created an
opportunity to increase number of private and foreign banks in the market. Operational efficiency is
an indicator, which will help not only the public but to the management, regulators, and supervisors
to understand and judge the relative efficiency of the players competing in the banking sector.
Financial analysis is done to evaluate the performance and liquidity of the banks by properly
analyzing the items of Balance Sheet. It helps in better understanding of banks financial position,
liquidity and performance by analyzing the financial statements with various tools and evaluating
the relationship between various elements of financial statements.
 Therefore, this study attempts to do the comparative study to measure the profitability of
HDFC, SBI, and Citibank in order to compare their efficiency and solvency position.

6. Objectives :-
i. To study the annual statements of the banks
ii. To evaluate the financial performance of the banks using financial statement analysis
method
iii. To do comparative analysis of the financial of HDFC Bank, SBI Bank and Citibank
iv. To do SWOT analysis of three banks
v. To study the innovative products, services and practices followed by the banks for
sustainable growth

7. Hypothesis :-
Since the objective of this study is to compare the performance of the private, public and
foreign banks the study makes the following hypothesis:
H0: There is difference between the performance of private, public and foreign banks.
H1: There is no difference between the performance of private, public and foreign banks.

8. Scope of the project :-

The present study has been undertaken to measure and evaluate the performance of three
banks. The study covers 2018-19 year for comparison of the banks. The sample of the study takes
into account 3 banks i.e. from private, public and foreign bank. This study will be limited to a
geographical area up to India.

9. Research Methodology :-
i. Research Type :- Analytical research type
ii. Population :- Private, Public & Foreign banks
iii. Data Collection: - The study was based on secondary data drawn from the annual reports of
the respective banks.