s

DECLARATION
I do hereby declare that all the work presented in the Internship report entitled “A
COMPARITIVE STUDY ON THE FINANCIAL PERFORMANCE OF BANKING SECTOR (
WITH SPECIAL REFERENCE TO ICICI BANK AND BANK OF BARODA )’’ is carried out and
being submitted at the school of management for the award of MASTER OF
COMMERCE , is an authentic record of Sakshi singh . It hasn’t been
submitted at any other place for any other academic purpose

SAKSHI SINGH
ROLL NO. :
SEMESTER - 3RD

4
 ACKNOWLEDGEMENT
I feel deeply indebted towards Branch Manager; ICICI BANK Limited who has
guided me in this project. It would have not have been possible to make such an
extensive report without the help, guidance and input from them.
I would firstly like to express my gratitude toward Dr Arun Kumar for having
shown much of flexibility and guiding in such a way that I really learning the subject
all the time. He helped me in deciding the project topic. He showed a lot of openness
in his approach and I would like to thank him for his support in a way that has lead to
proper & effective learning.
Last but not least I am great full to all my family members & my friends for being my
side always. Without their help and motivation it wouldn’t have been possible to
complete my project.

SAKSHI SINGH
ROLL NO. :
SEMESTER - 3RD

4
 ABSTRACT
Banks play a critical and important role in the growth of an economy. A sound banking
system
mobilizes the community's small savings and makes them available for investment in
profitable
businesses. Banks mobilize deposits by providing enticing interest rates, converting
savings into
productive capital; otherwise, the money would have sat idle. Banks are vital sources of
credit
and financing for industry and commerce. Farmers are supported by commercial banks in
obtaining credit for agricultural production. Banks also play an important role in
improving
people's living standards by providing them with consumer loans. But the sound financial
condition of the banks is needed for all of this. A financially stable bank is an economic
advantage, while a financially fragile bank is an economic liability. In this report, the
financial
performance of ICICI Bank and Bank of Baroda was compared. In their respective
divisions,
both banks are the biggest. For comparative financial analysis, the Profitability Ratio,
Liquidity
Ratio, Solvency Ratio, and Return on Equity have also been used. In comparison to Bank
of
Baroda, ICICI Bank was found to be superior on the above listed fronts.

4
1.1 Rationale of the study
The aim of this study is to compare the efficiency of Bank of Baroda and ICICI banks of the
Indian banking sector. The studies on the efficiencies of the banks are very important for policy
makers, industry leaders and many others who are reliant on the banking sector. The
performance of the banks has been an issue of major interest for various stakeholders such as
regulators, customers, investors and general public. The performance analysis of the banks is
useful to the policy-makers to identify the success or failures of bank and to adopt good
strategies for the success of the bank.
1.2 Introduction to the Bank Industry
Banking Industry plays a very important role in economical functioning of the economy of the
country. The basic function of a bank is to collect monetary savings and lending them to
individual and other borrowers. Generally bank means an institution that provides banking
services. But with the passage of time, function of bank has been increasing and diversifying. A
modern bank performs variety of functions such as Mobilisation of Savings, Transfer of Money,
Safe Custody of Valuables and Securities, Facility of Payment by Cheques, loan Facility,
Miscellaneous Services to Customers, Helping Trade Industries, Helping Government and
Financing foreign Trade. So now, banks are not merely the traders of money only but they are
also creating credit.
In the past many years, Indian industry has achieved some sensible milestone and outstanding
achievements to its credit. Indian banking has unfold even to the remote space of the country that
shows the in depth reach of it and for comprehensive Indian growth story. Banks are main
participants of the financial system in India. There are several popular modalities of banking. It
may differ from country to country. Commercial banking is one of them. Banking and financial
institution are also transmission channels of monetary policy, it is important for effective
monetary management to ensure that their financial health is sound and overall financial sector is
stable. The banking system which constitutes the core of the financial sector plays a critical
role in transmitting monetary policy impulses to the entire economic system.
2An efficient banking structure can promote greater amount of investment which can

further help to achieve faster growth rate of economy. Worldwide expertise confirms that
countries with well developed and market directed free banking industry grow quicker and a lot
of systematically. An efficient banking system is recognized as basic requirements for the
economic development of any economy. Bank mobilizes the saving of community into
4
productive channel.
1.2.1 Baking Structure in India
Financial need vary from customer to customer. There are different types of banks customers
such as Traders, Industrialists, Exporters, agriculturist, artisan’s etc. Again financial
requirements may be short term and long term, may be in the country or outside the country.
Banking institutions have to meet various types of requirements of the customer. These are very
wide and varied in the one hand and very complex in nature and order.
Therefore, it is necessary to create such type of financial institutions which can meet their needs.
Hence, various types of banking institutions have been created to meet specific requirements
The Reserve Bank of India (RBI) is liable for all form of policy formulation and implementation
in the banking industry in India. The main purpose of establishing Reserve Bank of India (RBI)
is to flow into the currency in the economy apart from computation of currency reserves. It’s
having very important purpose as to management the subject of bank notes and their custody of
treasure with a vision to shield monetary consistency in India and typically act as functions to the
system of the country.
The Indian banking system can be divided into three broad categories and they are
Commercial Banks and Co-operative Banks. Commercial banks can be divided into Regional
Rural Banks, Foreign Banks, Private Sector Banks and Public Sector Banks. At present,
there are 27 Public Sector Banks that operate in India and other 19 nationalized banks. Under
Private Sector Banks, there are 30 Private Banks and out of which, 22 are old Private
Banks and 8 are new Private Banks. At present there are 196 Regional Rural Banks that
operates in India. Under Co-operative Banks, there are 52 Urban Co-operative banks and
16 State Co-operative banks in Indi

4
4
Definition of Public Sector Bank Public Sector Banks (PSBs)
are banks where a majority stake (i.e. more than 50%) is held by a government. The shares of these banks are listed
on stock exchanges. There are a total of 21

PSBs in India

Emergence of Public Sector Banks The Central Government entered the banking business with the nationalization of
the Imperial Bank Of India in 1955. A 60% stake was taken by the Reserve Bank of India and the new bank was
named as the State Bank of India. The seven other state banks became the subsidiaries of the new bank when
nationalised on 19 July 196021 The next major nationalistion of banks took place in 1969 when the government of
India, under prime minister Indira Gandhi, nationalised an additional 14 major banks. The total deposits in the banks
nationalised in 1969 amounted to 50 crores. This move increased the presence of nationalised banks in India, with
84% of the total branches coming under government

control. (3] The next round of nationalisation took place in April 1980. The government nationalised six banks. The
total deposits of these banks amounted to around 200 crores. This move led to a further increase in the number of
branches in the market, increasing to 91% of the total

branch network of the country. The objectives behind nationalisation where: To break the ownership and control of
banks by a few business families, To prevent the concentration of wealth and economic power, To mobilize savings
from masses from all parts of the country,

To cater to the needs of the priority sectors.....

4
List of PSU Banks
Allahabad Bank

Bank of Baroda

Bank of India

Canara Bank

Central Bank of India

Corporation Bank

Dena Bank

IDBI Bank

Indian Bank

Indian Overseas Bank

Oriental Bank of Commerce Punjab National Bank

Punjab & Sind Bank

Syndicate Bank

UCO Bank

Union Bank of India

United Bank of India

Vijaya Bank

State Bank of India

4
List of Private sector Bank
The private-sector banks in India represent part of the Indian banking sector that is made up of both
private and public sector banks. The "private-sector banks" are banks where greater
parts of stake or equity are held by the private shareholders and not by government. Banking in India has
been dominated by public sector banks since the 1969 when all major banks were nationalised by the
Indian government. However since liberalisation in

government banking policy in 1990s, old and new private sector banks have re-emerged. They have grown
faster and bigger over the two decades since liberalisation using the latest technology, providing
contemporary innovations and monetary tools and techniques The private sector banks are split into two
groups by financial regulators in India, old and new. The old private sector banks existed prior to the
nationalisation in 1969 and kept their independence because they were either too small or specialist to be
included in nationalisation. The new private sector banks are those that have gained their banking license
since the liberalisation in the 1990s.
List of Private Banks in Cachar District

Axis Bank
Federal Bank
HDFC Bank
ICICI Bank
IndusInd Bank

Yes Bank

4
 Introduction to ICICI Bank and Bank of Baroda
1.3.1 ICICI Bank

The Industrial Credit and Investment Corporation of India (ICICI) is a wholly owned subsidiary
of the Industrial Credit and Investment Corporation of India, which was established in Vadodara
in 1994.The parent company was founded in 1955 as a joint venture between the World Bank,
India's public-sector banks, and public-sector insurance companies with the aim of providing
project financing to Indian industry. ICICI's shareholding in ICICI Bank was reduced to 46%
through a public offering of shares in India in fiscal 1998, an equity offering in the form of
ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura
Limited in an all-stock amalgamation in fiscal 2001, and secondary market sales by ICICI
to institutional investors in fiscal 2001 and fiscal 2002. (icici bank)
The company's headquarters are in Vadodara, Gujarat, and its registered office is in Jharkhand.
Via a number of distribution channels and specialist subsidiaries in the fields of investment
banking, venture capital, and asset management, it provides a broad range of banking products
and financial services to corporate and retail customers. The bank has 5275 branches and 15589
ATMs across the country. ICCI Bank has a presence in 17 countries other than India. ICICI Bank
is one of India's Big Four banks.
ICICI Bank is India's largest private sector bank with total consolidated assets of Rs. 11,99,942
billion (US$ 170.0 billion ) at March 31, 2020 and Revenue of Rs. 91,086 billion (US$ 13
billion) for the year ended March 31, 2020. (icicigroupcompanies about us)

4
History
In 1994, the Industrial Credit and Investment Corporation of India (ICICI), an Indian financial
institution, founded ICICI Bank as a wholly owned subsidiary in Vadodara. In 1955, the World
Bank, India's public-sector banks, and public-sector insurance firms formed a joint venture to
provide project finance to Indian industry. Before changing its name to ICICI Bank, the bank
was known as the Industrial Credit and Investment Corporation of India Bank. Later, the holding
firm and the bank combined.
In 1998, ICICI Bank began offering Internet Banking services.
Via a public offering of shares in India in 1998 and an equity offering in the form of American
depositary receipts on the New York Stock Exchange in 2000, ICICI's shareholding in ICICI
Bank was reduced to 46%. In 2001, ICICI Bank purchased the Bank of Madura Limited in an
all-stock transaction and sold additional shares to institutional investors between 2001 and 2002.
ICICI Bank became a diversified financial services company in the 1990s, transitioning from a
growth financial entity focused solely on project financing to a diversified financial services
group providing a broad range of products and services both directly and through a number of
subsidiaries and affiliates. ICICI became the first Indian firm, as well as the first bank or
financial institution from outside of Japan, to be listed on the New York Stock Exchange
(NYSE) in 1999.
In a reverse merger in 2002, ICICI, ICICI Bank, and ICICI subsidiaries ICICI Personal Financial
Services Limited and ICICI Capital Services Limited combined.
Following the 2008 financial crisis, clients flocked to ICICI Bank ATMs and branches in some
locations, citing news about the bank's financial turmoil. To put an end to the rumors, the
Reserve Bank of India released a statement on ICICI Bank's financial capability.
ICICI Bank Ltd.'s board of directors authorized an Rs 1,000 crores investment in Yes Bank Ltd.
in March 2020. As a result of this investment, ICICI Bank Limited now owns more than 5% of
the stock in Yes Bank. (icici bank)

Acquisitions
• ICICI Ltd., a diversified financial company headquartered in Mumbai, was established in
1996.
• 1997: ITC Classic Finance, a non-bank financial company that engaged in employs, buys,
and leasing operations, was established in 1986. ITC Classic had eight offices, 26 stores,
and 700 brokers at the time of its purchase.
4
• SCICI was founded in 1997. (Shipping Credit and Investment Corporation of India)
• Finance Anagram (ENAGRAM) in 1998. Anagram had developed a network of around
50 branches in Gujarat, Rajasthan, and Maharashtra, specializing in car and truck retail
financing. It had a record of 250,000 depositors.
• Grindlays Bank opens branches in Darjeeling and Shimla in 2002.

• Investitsionno-Kreditny Bank (IKB), a Russian bank, was established in 2005.

• Sangli Bank was established in 2007. Sangli Bank was a private, unlisted bank
established in 1916 and owned by the Bahte family to the tune of 30%. It had 198
branches and its headquarters were in Sangli, Maharashtra. There were 158 in
Maharashtra and 31 in Karnataka, with additional locations in Gujarat, Andhra Pradesh,
Tamil Nadu, Goa, and Delhi. Its divisions were divided reasonably equally between
urban and rural or semi-urban areas.
• In 2010, the ICICI Bank purchased the Bank of Rajasthan (BOR) for 30 billion rupees
(US$420 million). The promoters of BOR were chastised by RBI for not selling their
shares in the venture. Since then, BOR has merged with ICICI Bank. (icici bank)

Subsidiaries of ICICI BANK:

• ICICI Lombard
• ICICI Prudential Life Insurance Company Ltd

• ICICI Securities Limited

• ICICI Prudential Asset Management Company Limited

• ICICI Venture
• ICICI Foundation

4
2 Bank of Baroda

4
 Bank of Baroda (BOB) is a banking and financial services firm owned by the Indian government.
With 131 million clients, a total company of US$218 billion, and a global footprint of 100
overseas offices, it is India's third largest government-owned bank. It is ranked 1145 on the
Forbes Global 2000 list as of 2019. BOB has total assets in excess of Rs. 3,583 billion, a network
of over 3,409 branches and offices, and about 1,657 ATMs It offers a wide range of banking
products and financial services to corporate and retail customers through a variety of delivery
channels and through its specialized subsidiaries and affiliates in the areas of investment
banking, credit cards and asset management. Its total business was Rs. 5,452 billion as of June
30. (bank of baroda)
On September 17, 2018, the Indian government announced the merger of Bank of Baroda,
Vijaya Bank, and Dena Bank to form India's third largest lender. With a combined market of
Rs14.82 trillion (short scale), the merger is the country's first three-way acquisition of banks,
making it the country's third largest bank after State Bank of India (SBI) and ICICI Bank.
The bank was created on July 20, 1908, in the Princely State of Baroda, Gujarat, by Maharaja
Sayajirao Gaekwad III, Maharaja of Baroda. On July 19, 1969, the government of India
nationalised the bank, along with 13 other large Indian commercial banks. The bank was listed as
a profit-making public sector undertaking (PSU). (about us - bank of baroda )
8History

1908s
Maharaja Sayajirao Gaekwad III established the Bank of Baroda (BoB) in 1908, along with other
industry heavyweights including Sampatrao Gaekwad, Ralph Whitenack, Vithaldas Thakersey,
Tulsidas Kilachand, and NM Chokshi. BoB opened its first branch in Ahmedabad two years
back. Domestically, the bank flourished until after WWII. Then, in 1953, it crossed the Indian
Ocean to support Indian populations in Kenya and Uganda, opening branches in Mombasa and
Kampala, respectively. The next year, it opened a second branch in Nairobi, Kenya, and in 1956,
it opened a branch in Dar-es-Salaam, Tanzania. Then, in 1957, BoB made a major international
change by opening a branch in London. London was the most prominent international banking
centre and the nucleus of the British Commonwealth. BoB acquired Hind Bank (Calcutta;
established 1943) in 1958, making it the bank's first domestic acquisition.
1960s
New Citizen Bank of India was purchased by BoB in 1961. It was able to expand its branch
network in Maharashtra as a result of this merger. In addition, BoB has a branch in Fiji. It
4
opened a branch in Mauritius the next year.
Surat Banking Corporation in Surat, Gujarat, was purchased by BoB in 1963. BoB bought two
banks the next year: Umbergaon People's Bank in southern Gujarat and Tamil Nadu Central
Bank in Tamil Nadu.
BoB established a branch in Guyana in 1965. Due to the Indo-Pakistani War of 1965, BoB lost
its branch in Narayanganj (East Pakistan) in the same year. It is unknown when BoB formed the
branch. Bob’s three branches in Tanzania (Dar es Salaam, Mwanga, and Moshi) were
nationalised by the Tanzanian government in 1967, and their activities were passed to the
Tanzanian government-owned National Banking Corporation.
The Indian government nationalised 14 major banks, including BoB, in 1969. BoB formed a 51
percent subsidiary in Uganda, with the government holding the remaining 49 percent.
91970s

BoB bought Bank of India's Uganda operations in 1972. BoB opened branches in Dubai and Abu
Dhabi two years later.
BoB gained the majority shareholding and management control of Bareilly Company Bank
(founded 1954) and Nainital Bank (founded 1922) in Uttar Pradesh and Uttarakhand,
respectively, in 1975. Nainital Bank has also spread into the states of Uttarakhand, Uttar Pradesh,
Haryana, Rajasthan, and Delhi. At the moment, BoB owns 99 percent of Nainital Bank.
1980s
BoB established a branch in Bahrain in 1980, as well as a representative office in Sydney,
Australia. IUB International Finance, a licensed deposit taker, was founded in Hong Kong by
BoB, Union Bank of India, and Indian Bank. Each of the three banks received the same amount.
BoB would eventually buy out its partners (in 1999).
In 1985, a second consortium or joint-venture bank was formed. Indo-Zambia Bank was founded
in Lusaka by BoB (20%), Bank of India (20%), Central Bank of India (20%), and ZIMCO
(Zambian government; 40%). BoB also founded an Offshore Banking Unit (OBU) in Bahrain in
the same year (Gulf).Back in India, BoB purchased Traders Bank in 1988, which had 34
branches in Delhi.
1990s
BoB established an OBU in Mauritius in 1992, but closed its Sydney representative office. The
next year, BoB acquired Union Bank of India and Punjab & Sind Bank's London branches
(P&S). P&S had a branch before 1970, and Union Bank had one after 1980. Following the banks'
4
role in the Sethia scam in 1987 and resulting damages, the Reserve Bank of India ordered their
takeover.
Then, in 1992, BoB formed a local subsidiary to manage its activities in Kenya. The next year,
BoB's OBU in Bahrain was locked.
In December 1996, BoB Bank launched an initial public offering (IPO) on the stock exchange
(IPO). The government of India remains the bank's largest shareholder, with a 66 percent stake
10BoB opened a branch in Durban in 1997. The next year, BoB bought out its Hong Kong-based

partners in IUB International Finance. This was reportedly in reaction to legislative reforms
brought about by Hong Kong's return to the People's Republic of China. Bank of Baroda (Hong
Kong), a restricted license bank, was formed from the now wholly owned subsidiary. Punjab
Cooperative Bank was also rescued by BoB. For broking, BoB founded BOB Capital Markets, a
wholly–owned subsidiary.
In another bailout, BoB merged with Bareilly Corporation Bank in 1999. Bareilly had 64
branches at the time, including four in Delhi. Bank of Baroda Guyana, a subsidiary of BoB, was
founded in Guyana. BoB opened a branch in Mauritius and closed one in London's Harrow.
2000s
BoB founded Bank of Baroda in the year 2000. (Botswana). The bank operates three branches in
Gaborone and Francistown. BoB's Hong Kong subsidiary was changed to a Restricted License
Bank from a deposit-taking business in 2002.
At the Reserve Bank of India's appeal, BoB purchased Benares State Bank (BSB) in 2002.
On the Uganda Securities Exchange, Bank of Baroda (Uganda) was named (USE). BoB released
an OBU in Mumbai the next year.
The collapsed south Gujarat Local Area Bank was purchased by BoB in 2004. BoB has formed a
subsidiary in Dar-es-Salaam to return to Tanzania. In addition, BoB founded representative
offices in Kuala Lumpur, Malaysia, and Guangzhou, China.
In 2005, BoB developed a Global Data Centre (DC) in Mumbai to support its centralised banking
solution (CBS) and other applications through the bank's 1,900 branches in India and 20 other
countries. In Thailand, BoB built a representative office.
BoB launched an Offshore Banking Unit (OBU) in Singapore in 2006.
BoB's overall market surpassed 2.09 trillion (short scale) in 2007, its affiliates surpassed 2000,
and its worldwide user base surpassed 29 million people. With effect from April 1, 2007, the
Bank of Baroda branch in Hong Kong received a Full Fledged Banking license, and the business
4
1112

of its Restricted License Banking subsidiary was taken over by the Bank of Baroda branch in
Hong Kong.
BoB established branches in Guangzhou, China and Kenton, Harrow, United Kingdom in 2008.
India First Life Insurance Corporation, a joint venture between BoB, Andhra Bank, and Legal &
General (UK), was founded.
The Bank of Baroda (New Zealand) was founded in 2009. As of 2017, BoB (New Zealand) has
three locations: two in Auckland and one in Wellington.
2010s
In 2010, the Malaysian government issued a commercial banking license to a locally
incorporated bank operated by Bank of Baroda, Indian Overseas Bank, and Andhra Bank.
In 2011, BoB founded an Electronic Banking Service Unit (EBSU) in Sharjah's Hamriya Free
Zone (UAE). It has extended its activities in Uganda, Kenya (2), and Guyana by opening four
new branches. In preparation for the launch of its consortium bank in Malaysia, BoB closed its
representative office there. The upgrade of BoB's representative office in Australia to a branch
gained 'In Principle' clearance. Bob has purchased Memon Cooperative Bank, a Mumbai-based
bank with 225 employees and 15 branches in Maharashtra and three in Gujarat. Thanks to its
uncertain financial situation, it had to cease activities in May 2009
The Government of India proposed the merger of Dena Bank and Vijaya Bank with the Bank of
Baroda on September 17, 2018, subject to approval by the boards of the three banks. On
January 2, 2019, the Union Cabinet and the boards of the banks approved the merger. Dena Bank
and Vijaya Bank shareholders issued 110 and 402 equity shares of the Bank of Baroda with a
face value of 2 for every 1,000 shares owned, respectively, under the terms of the merger. The
merger took place on April 1, 2019. After merging with State Bank of India and HDFC Bank,
the Bank of Baroda is now India's third largest bank. (bank of baroda)13
Subsidiaries of BANK OF BARODA
• BOB Capital Markets (BOBCAPS)

• The Nainital Bank Ltd.

• BOB Financial Solutions Limited

• Baroda Asset Management India Limited

• India Infradebt Limited

4
• Baroda Global Shared Services Ltd
Shareholding

Shareholders(as on 31- march-2023 ) Shareholding

Government of india 71.60%
Mutual Funds 10.01%
Insurance Companies 3.56%
Foreign Holding 4.89
Indian Public 7.99%
Bodies Corprate 0.65%
Others 1.30%

1.4 Justification of the Topic

A COMPARITIVE STUDY ON THE FINANCIAL PERFORMANCE OF ICICI BANK AND
BANK OF BARODA, this comparison will help us to know about the financial performance of
the banks. Performance and efficiency of commercial banks are the key elements of
efficiency and efficacy of countries financial system. It will provide internal and external
stakeholder with the opportunity to make informed decision regarding investment .The analysis

will provide an unbiased view of banks financial health which is helpful for making decisions.

4
4
INTERNATIONAL REVIEW
A literature review is an integral part of any research project. It works like a magnifying glass,
allowing you to see problems in a wide and clear field of view. The researcher might use a
literature review to fill in the gaps of their study. A review of the literature will also help a
researcher decide what type of research technique to use to solve a problem and, in the past, what
impact previous studies have on current studies.
2.1.1 (Webb & Kumbirai, 2010)attempted to look at commercial financial ratio analysis in South
Africa. Financial ratios were used to assess the profitability, liquidity, and credit quality of five
major South African commercial banks. They believe that the bank's overall performance has
improved significantly in the first two years of the analysis. At the start of the global financial
crisis in 2007, a noticeable shift in trend was found, peaking in 2008-2009. In the South African
banking industry, this resulted in declining earnings, low liquidity, and worsening credit quality.
2.1.2 (Gilbert & Charles, 2014)to measure and compare the financial performance of agricultural
development banks in Ghana. The study devised the PELARI (Profitability, Efficiency,
Liquidity, Asset Quality, Risk Measures, and Investor Analyses) model for analysis, which is
analogous to the CAMELS rating. Risk was also measured using troubled signals models such as
the Altman z-score for non-manufacturing companies and the risk index. They discovered that
bank liquidity is rapidly dwindling in this research.
2.1.3 (Manzler, 2004)The authors did a study on Financial Information, which discusses how to
determine criteria against which a company's financial ratios can be compared, and it deals with
measures of liquidity, solvency, and fund flows. One of the approaches used to evaluate the
financial situation and achievement is the financial ratio. It's a crucial tool for making an
investment decision based on a company's financial report analysis, as it evaluates all aspects of
the company's financial condition using the financial statement's value.
2.1.4 (Choi, 2014)Following the implementation of the Basel III standards, liquidity-defining
ratios such as Liquidity Coverage Ratio and Net Stable Funding Ratio were heavily debated, and
a new liquidity ratio, the Liquidity Stress Ratio (LSR), was used to analyze cross-sectional data
4
among a smaller number of banking holding companies in the United States. According to the
15results, stress ratios expose early warning signs of a liquidity crisis. The results also revealed that

LSR and Return on Assets (ROA) have no relationship.

2.1.5 (A.Samad, 2007)describes the operation of international and local banks in the process of
Bangladesh's industrialization and economic growth in his paper "Comparative Analysis of
Domestic and Foreign Bank Operations in Bangladesh." When comparing the financial ratios of
international and domestic banks, it becomes clear that there are substantial operational
differences.
2.1.6 (Richard, 2002)compared the productivity effectiveness and performance of US
commercial banks between 1984 and 1998. It explained the CAMELS rating system, which bank
examiners and regulators use, and discovered that banks with high efficiency scores also have
high CAMELS ratings. It discovered and urges the use of DEA to assist analysts and
policymakers in better understanding institutions, regulators and examiners in developing
monitoring techniques, and banks in benchmarking their procedures.
2.1.7 (Rasoul, 2002) examined the production performance and cost structure of a sample of
Singaporean commercial banks using a parametric approach in the framework of a trans log cost
function and a non-parametric approach in the framework of linear programming. The findings
of the parametric approach indicated that these banks' average cost curves are U-shaped, and that
small and medium-sized banks benefit from economies of scale. It demonstrated that all banks,
regardless of size, can benefit from economies of scale. The non-parametric findings showed that
if all Singaporean banks were equally effective, they could have cut costs by 43%. Allocate and
technological inefficiencies appear to be equally responsible for this cost inefficiency.
2.1.8 (Chien, 2004)the performance measurement of Taiwan's commercial banks was examined
by ChienTa Ho et al. It evaluated the performance of 41 publicly traded banking firms in Taiwan
using a novel two-stage data envelopment analysis model that distinguishes productivity and
effectiveness. It was discovered that just because a business is more efficient doesn't mean it's
more successful. These two indicators did not seem to have any relationship.

2.1.9 (Jamal, 2011)conducted empirical research on the financial performance of Islamic and
conventional banks. The study's aim was to compare the financial performance of Islamic banks
and conventional banks in Kenya and see if there was a substantial discrepancy between the two
16banking categories' financial performance. Secondary data, primarily from audited annual reports
4
of banks, was used to achieve the goals. The research was conducted between 2010 and
2011.The information gathered was evaluated using the CAMEL model for analyzing bank
financial performance. In terms of capital adequacy, asset quality, profits, and liquidity position,
traditional banks outperformed Islamic banks, according to the research. However, in terms of
asset quality, management quality, earnings, and liquidity position, there was no substantial
distinction between the two banking categories except for capital adequacy.

2.1.10 (Ihsan, 2003)financial deregulation and total factor efficiency change in Turkish
commercial banks were studied by Ihsan Isik .It discovered that all types of Turkish banks have
experienced major productivity gains, albeit of varying magnitudes, driven primarily by
efficiency gains rather than technological progress. However, rather than improved scales,
efficiency gains were largely due to better resource management practices. It also implied that, in
the new climate, private banks started to close the performance gap with public banks.

2.2 National Review

2.2.1 (Goel & Rakhi, 2013)examined the performance of three main public sector banks (SBI,
PNB, and BOB) and three private sector banks (ICICI, HDFC, and AXIS). They used coefficient
correlation approaches to analyze the data ratios. Furthermore, his research for SBI shows that
the company's overall profitability is low because its NIM is low, and it needs to be increased.
PNB has a very high return on equity when compared to other banks and they have a strong
relationship with deposits. Because BOB bank does not have a strong deposit relationship, its
CDR is low, and its NIM needs to be increased. For ICICI bank, it has a strong relationship with
CAR, and bank deposits are very high, while NIM is low, and needs to be boosted in order to
increase profitability.

2.2.2 (Sharma, 2014) tries a comparison of Syndicate Bank and Canara Bank's financial
performance. He concluded that a financial statement is vital because it aids in the depiction of
financial position based on historical and current data. Financial statement analysis aids in the
formulation of future decisions and plans. Financial performance analysis is also a widely used
credit assessment method. This assertion is scrutinised by investors, financial analysts,
management directors, and bankers. His paper begins a comparison of Syndicate Bank and
Canara Bank's financial performance.
4
2.2.3 (Bhanwar & Pawan, 2016)explores a comparative analysis study on financial
performance.PNB and HDFC Bank are two of the most well-known banks in the country. He
claims that reviewing and analyzing the data given in the company's annual reports and financial
bulletins would evaluate the company's financial performance. His studies were descriptive and
analytical in nature. His research compares and evaluates the financial performance of PNB and
HDFC Bank. According to the report, PNB is having difficulty generating revenue, and its
nonperforming assets (NPAs) are rising. According to the research, HDFC Bank has a better
financial performance than PNB.

2.2.4 (J.J.Nagarkar, 2015)used principle component analysis to examine the financial

performance of fifteen banks, five from each of the public, private, and international sectors. The
information was gathered from 2003 to 2013, and it was split into two periods: 2003-08 and
2009-13. Because big national banks were able to resist business cycles better than regional
18banks, the credit growth rate was unaffected by the drop in deposits, according to the study. The

research supported the government's goal of merging smaller banks to form larger national
Banks.

2.2.5 (V.S.Pai, 2006)reveals in his paper “Trends in the Indian Banking Industry: Analyses of
Inter-regional Trends in Deposits and Credits” that bank performance in terms of deposits and
credits has been largely similar at two points in time. It was also discovered that private planned
commercial banks outperformed public commercial banks. This would put the public sector
banks' dominant position in jeopardy. The areas investigated also revealed that their growth rates
on these parameters were comparable at both time points.

2.2.6 (B.S.Bodla & R.Verma, 2006) investigated the "Performance of SBI and ICICI Bank via
Camel Model for the Period 2004-05." In terms of earning quality, the ratio of operating profit to
average working capital, Net Profit to Average Assets, and so on, they discovered that ICICI
Bank outperformed SBI. The same should be said for asset quality, earnings quality, and
managerial quality. Both banks' liquidity positions are sounds and do not vary significantly.

4
2.2.7 (Prabakkar, 2007)reports that the interest income over expenditure increased to Rs. 13, 108
crores in 2005-06 from Rs. 10,006 crores in 2004-05 in his paper “The Earning Performance of
Private Sector Banks during 2005-2006.” The proportion that increased was 31. Simultaneously,
the operating expense to operating profit ratio went to Rs.817 crores in 2005-06, down from
Rs.992 crores in 2004-05. During the year, the profitability ratios of all 28 private sector banks
showed a positive trend. ICICI Bank was the private sector bank with the highest profit margin.

2.2.8 (Milind, 2003)investigated the productive efficiency of banks in a developed country,

namely India. The data envelopment analysis method was used to assess effectiveness. Two
models were created to demonstrate how efficiency scores change as inputs and outputs change.
The efficiency scores of three types of banks are measured: publicly owned, privately owned,
and foreign owned. It was discovered that Indian banks' mean efficiency score compares
favorably to the global average, and that the productivity of private sector commercial banks as a
group is, paradoxically, lower than that of public sector banks and foreign banks in India. The
current policy of lowering non-performing assets and rationalizing personnel and branches may

4
be maintained in order to achieve productivity gains and make Indian banks more globally
competitive, which is a stated goal of the Indian government.

2.2.9 (Bhutani & Goel, 2013) tried to measure the relative performance of Indian banks in their
paper "A Comparative Study on the Performance of Selected Public Sector and Private Sector
Banks in India." They used both public and private sector banks for this research. Because it is
impossible to calculate intangible output in the service sector, various proxy indicators have been
used to measure bank productivity. The financial industry has been segmented based on the size
of bank assets. Overall, the research reinforces the conclusion that new banks are more effective
than old banks, and that public sector banks are less profitable than private banks.

2.2.10 (Gurpreet, 2015) tried to analyse and measure the performance of major Indian banks
such as PNB, SBI, Canara Bank, UCO Bank, ICICI Bank, Axis Bank, HDFC Bank, and YES
Bank in her paper "Performance Analysis: A Study of Public Sector and Private Sector Banks in
India." The primary goal of this research is to assess the financial performance of Indian banks.
Banks' financial performance has been measured using key indicators such as deposits, advances,
total revenue, investment, net profit, and so on. Recommendations and recommendations have
been made in order to increase the performance of Indian banks.
be maintained in order to achieve productivity gains and make Indian banks more globally
competitive, which is a stated goal of the Indian government.

4
CHAPTER-III
RESEARCH
METHODOLOGY

4
VVV 3.1 Objective of the Study
• To compare and study financial performance of ICICI Bank and Bank of Baroda.

• To analyse the liquidity, solvency and profitability position of the banks.

• To offer finding and suggestions to enhance the financial performance of banks
3.2 Research Hypothesis
To test the financial performance and effectiveness of the Bank of Baroda and ICICI Bank, the
following theory is formulated using the above goals.
H0: There is no significant difference between the financial performance of ICICI and Bank of
Baroda in terms of deposit, Advance, Investment, Total asset and Net profit.
H1: There is a significant difference between the financial performance of ICICI and Bank of
Baroda in terms of deposit, Advance, Investment, Total asset and Net profit.
3.3 Scope of the Study
Financial fund management is a critical function in every business to ensure that funds are used
efficiently to maximize profits. Financial fund management has an impact on investment policy
decisions made by managers.
• This research would inform academics and the general public about the overall efficiency
with which the biggest commercial banks serve their customers.
• This research would also assist in comprehending the financial situation the results of
both banks.
• This research will shed light on the various areas in which the Bank of Baroda and the
ICICI Bank excel, as well as how the two banks compare to one another. It will aid us in
comprehending the banks' strengths and weaknesses.
3.4 Research Design
The study employs a descriptive research design, which is simply a fact-gathering strategy. Its
goal is to describe an individual's or a group's qualities and ascertain the frequency with which
the same things occur.
22 3.4.1 Data Collection

The study is based on secondary data gathered from annual reports of the respective banks,
books, newspapers, magazines, journals, documents, survey reports, research papers, websites,
and other publicly available sources. As a result, the data for the study was gathered from ICICI
and Bank of Baroda's annual reports and other published material.

4
3.4.2 Study Period
This research spans a five-year period, from 2015-16 to 2019-20.
3.4.3 Method of Data Analysis
For the study, the data gathered from secondary sources has been analyzed by financial ratios
and shown by the means of tabulation and graphical representation. Data processing and analysis
had been done by both manually and by using computer. Ratio analysis is primarily used to
compare bank financial performance. The following ratios were used:
• Liquidity Ratios

• Solvency Ratios
• Profitability Ratios
3.5 Limitation of the Study
The study has certain constraints, which are listed below so that the study's findings can be
properly understood. There have been some limitations in this study.
• The study relies solely on secondary data, which was gathered from publicly available
annual reports and bank websites. This data, which may be shown in reports, may be
merely window dressing and does not reflect the Bank's true position.
• The research is limited to the last five fiscal years.
• This research may not be comprehensive enough to cover all of the ratios that should be
considered when assessing a bank's financial soundness.

4
 CHAPTER-IV
DATA REPRESENTATION
& ANALYSIS

4
4.1 Data representation and Interpretation
PROFITABILITY RATIOS

1. Net Profit Ratio-This ratio establishes the relationship in terms of percentage between
net profit and net sales.
Net profit ratio= Net profit / Net sales *100
Table – 1

years Bank of baroda Ratio ICICI Bank Ratio

Net profit – Net sales Net profi – Net sales

2019 -5395.54 44061.28 -12.24 9726.29 52739.43 18.44
2020 1383.14 42199.93 3.27 9801.09 54156.28 18.09
2021 -2431.81 43648.54 -5.57 6777.42 54965.89 12.33
2022 433.52 49770.61 0.87 3363.30 63401.19 5.30
2023 546.19 75983.65 0.71 7930.81 74798.32 10.60
AVERAGE -2.59 AVERAGE 12.95
Figure – 1

4
Table 1 demonstrates that Net profit ratio of bank of Baroda and icici bank were highly
fluctuating. The highest Net profit ratio of bank of Baroda was 3.27% in 2020 and that of ICICI
bank was 18.44% in2019 where as the lowest Net profit ratio of bank of Baroda was -12.24% in
2019and in ICICI bank was 5.30% in 2022
The average Net profit ratio of BOB is -2.59% and ICICI bank is 12.95%which implies that
ICICI bank has better net profit ratio than Bob

2. Operation profit Ratio – The difference between net profit ratio and net operating profit
ratio is that net operating profit is calculated without considering non-operating expenses
and non-operating incomes. If we deduct this ratio from 100, the result will be operating
ratio. Higher operating profit ratio enables the organization to recoup non-operating
expenses out of operating profits and provide reasonable return.
Operating Profit Ratio = Operating Profit / Net Sales *100
Table - 2

years Bank of Baroda Ratio ICICI Bank Ratio

Operating. - Net sales Operating - Net sales

profit profit

2019 1039406 44061.28 23.59 559565.4 52739.43 10.61

2020 537205.1 42199.93 12.73 969939 54156.28 17.91
2021 908762.6 43648.54 20.82 1064140 54965.89 19.36
2022 585800.1 49770.61 11.77 1114593 63401.19 17.58
2023 976389.9 75983.65 12.85 843725 74798.32 11.28
AVERAGE 16.352 AVERAGE 15.348
Figure – 2

4
4
Table 2 demonstrates that Operating profit ratio of bank of Baroda and icici bank were
fluctuating. The highest Operating profit ratio of bank of Baroda was 23.59% in 2019 and that of
ICICI bank was 19.36% in 2018 where as the lowest Operating profit ratio of bank of Baroda
was -11.77% in 2022 and in ICICI bank was 10.61% in 2022.
The average Operating profit ratio of BOB is 16.35% and ICICI bank is 15.34%which implies
that Bank of Baroda has better net Operating ratio than ICICI bank

3. Return on Net Worth –This ratio determines the earning capacity related to owners’
capital or investments. It measures the profitability of the business in view of the
shareholders. It judges the earning capacity of the company and the adequacy of return on
proprietor’s funds. Shareholders and potential investors are interested in this ratio
Return on Net Worth = Net Profit after Interest and Tax / Shareholder’s Funds* 100
Table – 3

years Bank of Baroda Ratio ICICI BANK Ratio

Net profit. - Shareholder`s Net profit - Shareholder`s
fund fund
2019 -5395.54 40198.99 -13.42 9726.29 89735.58 11.19
2020 1383.14 40303.25 3.43 9801.09 99951.07 10.11
2021 -2431.81 43394.77 -5.60 6777.42 105158.94 6.63
2022 433.52 45941.10 0.94 3363.30 108268.04 3.19
2023 546.19 71856.22 0.76 7930.81 116504.41 6.99
AVERAGE -2.78 AVERAGE 7.62
Figure – 3

4
Table 3 demonstrates that Return on net worth of bank of Baroda and icici bank. The highest
Return on net worth of bank of Baroda was 3.43 in 2020 and that of ICICI bank were11.19 in
2016 where as the lowest Return on net worth of bank of Baroda was -13.42 in 2016 and in
ICICI bank was 3.19 in 2022.
The average Return on net worth of BOB is -2.78and ICICI bank is 7.62 which imply that ICICI
ban has better net worth than bank of Baroda

4. Return on Assets (ROA) - The return on assets (ROA) is a profitability ratio that
indicates how much profit a corporation can gain on its assets. In other words, return on
assets (ROA) is a statistic that calculates how good a company's management is at
extracting income from its economic capital or balance sheet assets. The higher the
figure, the more effective a company's management is at managing its balance sheet to
produce income. ROA is expressed as a metric, and the higher the number, the more
efficient a company's management is at managing its balance sheet to generate profits.
Return on Asset = Net Profit after Interest and Tax / Total asset* 100
Table - 4
years Bank of Baroda Ratio ICICI Bank Ratio

Net profit - Total Assets Net profit. - Total Assets

2019 -5395.54 671,376.48 -0.8 9726.29 720685.1 1.34

2020 1383.81 694,875.42 0.19 9801.09 771791.45 1.26
2021 -2431.81 719,999.77 -0.33 6777.42 879189.16 0.77
2022 433.52 780,987.40 0.05 3363.30 964569.15 0.34
2023 546.19 1,157,915.52 0.04 7930.81 1098365.2 0.72
AVERAGE -0.17 AVERAGE 0.886
Figure – 4

4
4
Table 4 demonstrates that return on assets ratio of bank of Baroda and icici bank. The highest
return on assets ratio of bank of Baroda was 0.19 in 2020 and that of ICICI bank was 1.34 in
2019 where as the lowest return on assets ratio of bank of Baroda was -0.33 in 2021 and in ICICI
bank was 0.34 in 2022.
The average return on assets ratio of BOB is -0.17 ICICI bank is 0.886.

5. Earnings per share (EPS) - Earnings per share (EPS) is calculated as a company's profit
divided by the outstanding shares of its common stock. The resulting number serves as an
indicator of a company's profitability. It is common for a company to report EPS that is
adjusted for extraordinary items and potential share dilution. The higher a company's
EPS, the more profitable it is considered to be.
Table – 5