A Study on Financial Performance of

ABSTRACT
This project aims to analyze the financial performance of State Bank of India (SBI)
using various financial ratios and tools. The study utilizes both primary and secondary
data sources to examine the financial position, profitability, liquidity, solvency, and
efficiency of SBI bank. The data for the study has been collected from the annual
reports of the bank, as well as from various financial websites and publications. The
study finds that SBI bank has maintained a stable financial position and has
consistently improved its profitability over the years. The liquidity and solvency ratios
of the bank also indicate a strong financial position. However, there is scope for
improvement in the efficiency ratios of the bank. The findings of the study can be used
by investors, analysts, and other stakeholders to make informed decisions regarding
their investment in SBI bank. Keywords: financial performance, State Bank of India,
financial ratios, profitability, liquidity, solvency, efficiency, annual reports, investors,
stakeholders.

Keywords: financial performance, State Bank of India, financial ratios, profitability,

liquidity, solvency.
 INTRODUCTION

Introduction of the study

The banking sector is the life blood of any modern economy. It is one of the important
financial basements of the financial sector, which plays a vital role in the functioning of
an economy. It is very important for economic development of a country that it’s
financing requirements of trade, industry and agriculture are met with higher degree of
commitment and responsibility. The Indian banking sector is broadly classified into
scheduled banks and non-scheduled banks. The scheduled banks are those included under
the 2nd Schedule of the Reserve Bank of India Act, 1934. The scheduled banks are
further classified into: nationalized banks; India and its associates; Regional Rural Banks
and other Indian private sector banks. The term commercial banks refers to both
scheduled and non-scheduled commercial banks regulated under the Banking Regulation
Act, 1949 integrally linked in banking industry in gradually increasing. They role of
mobilization of deposits and disbursement of credit to various sector of banking industry.
This will also reflect health of the country. The efficiency of financial system is strength
of economy. A sound banking system efficiently mobilized saving in productive sector
and solvent sys meet the depositor obligation. The banking sector is playing crucial role
in socio-economic progress of the country after independence. It is dominant in India as it
accounts for more than half the assets of financial sector.

The State Bank of India (SBI) is one of the largest and most prominent banks in India,
offering a wide range of financial products and services to individuals, businesses, and
institutions. Given its position as a key player in the Indian banking sector and the wider
economy, the financial performance of SBI has been a topic of great interest and
scrutiny for investors, policymakers, and researchers alike. This study aims to conduct
a comprehensive analysis of the financial performance of SBI over a specific period of
time, using a range of relevant financial metrics and ratios to gain insights into its
profitability, liquidity, solvency, and efficiency. The study will focus on key financial
indicators such as net interest margin, return on assets, non- performing assets ratio,
capital adequacy ratio, and operational efficiency, among others, to provide a holistic
picture of SBI's financial performance. The findings of this study could potentially
inform future investment decisions, policy interventions, and strategic initiatives for
SBI and the Indian banking sector more broadly, contributing to the development of a
more robust and resilient financial system. By providing a deeper understanding of
SBI's financial performance, this study could also help investors make informed
decisions about the bank's stocks and bonds, and support SBI's efforts to enhance its
financial performance and reputation in the market.

State Bank of India (SBI) stands as one of the largest and oldest commercial banks in
India, with a rich history spanning more than two centuries. Established in 1806 as the
Bank of Calcutta, it was later renamed as the Bank of Bengal. Through mergers and
evolution, it eventually became the State Bank of India in 1955, after the
nationalization of the Imperial Bank of India. Today, SBI serves as a cornerstone of
India's banking sector, offering a wide range of financial services to individuals,
businesses, and institutions both domestically and internationally.

SBI's organizational structure is extensive, with a network of thousands of branches

and ATMs across India and numerous international branches and subsidiaries. The
bank's operations are divided into several segments, including Retail Banking,
Corporate Banking, International Banking, Treasury Operations, and more. This
diverse portfolio allows SBI to cater to the varied needs of its customers, from
everyday banking services to complex financial solutions.

One of SBI's key strengths lies in its retail banking segment, which serves millions of
individual customers across the country. With a wide array of products and services
such as savings accounts, fixed deposits, personal loans, home loans, and credit cards,
SBI has established itself as a trusted partner for the financial needs of Indian
households. Its extensive branch network ensures accessibility for customers even in
remote areas, contributing to financial inclusion and economic development.

In addition to retail banking, SBI is a prominent player in corporate banking, catering

to the financial needs of businesses ranging from small enterprises to large
corporations. The bank offers a comprehensive suite of services, including working
capital loans, trade finance, cash management, and corporate advisory services. Its
expertise in this segment is underscored by its involvement in financing major
infrastructure projects and supporting key sectors of the economy such as agriculture,
manufacturing, and services.

SBI's international presence is another notable aspect of its operations. The bank has
branches and subsidiaries in major financial centers worldwide, enabling it to serve the
banking needs of Non-Resident Indians (NRIs) as well as facilitate international trade
and remittances. Through its global network, SBI offers a range of services such as
foreign currency accounts, remittances, trade finance, and correspondent banking,
strengthening India's connections to the global economy.

The bank's treasury operations play a crucial role in managing its balance sheet and
optimizing returns on its assets. SBI engages in a variety of treasury activities,
including forex trading, interest rate risk management, investment in government
securities, and asset-liability management. These activities are conducted with a focus
on prudence and risk management to ensure the stability and profitability of the bank's
operations.

In recent years, SBI has also embraced digitalization as a key driver of growth and
innovation. The bank has invested heavily in technology infrastructure and digital
platforms to enhance customer experience and streamline its operations. Through
initiatives such as internet banking, mobile banking, and digital wallets, SBI has made
banking more convenient and accessible for its customers, while also reducing costs
and improving efficiency.

Moreover, SBI has been at the forefront of promoting financial literacy and inclusion
in India. The bank conducts various outreach programs and initiatives to educate
individuals, especially in rural and underserved areas, about banking and financial
services. By empowering people with knowledge and access to financial resources,
SBI contributes to socioeconomic development and poverty alleviation efforts across
the country.

Despite its many achievements, SBI faces numerous challenges in a dynamic and
competitive banking landscape. Regulatory compliance, risk management,
technological disruptions, and changing customer expectations are among the key
issues that the bank must navigate to sustain its growth and relevance. However, with
its strong legacy, vast resources, and commitment to excellence, SBI remains well-
positioned to overcome these challenges and continue serving as a pillar of India's
banking industry for years to come.
Statement of the problem

The financial performance of State Bank of India (SBI) is a critical aspect of its
operations, affecting its ability to generate profits, maintain financial stability, and
manage risks. The banking industry in India is highly competitive, and SBI faces
challenges such as increasing competition from private sector banks, economic
instability, and regulatory pressure. Therefore, there is a need to conduct a
comprehensive study of SBI's financial performance over the past five years (2018-
2022) to assess the bank's strengths, weaknesses, opportunities, and threats. The study
will involve an analysis of SBI's financial statements and key financial ratios, such as
revenue, profitability, asset quality, capital adequacy, and liquidity.

Indian banking is the lifeline of the nation and its people. Banks play an important role
in Indian economy. It increases GDP around 7.7% and it generates employment in the
economy for about 1.5 million people. To sustain the development of the economy
banks need to focus on financial performance. If the banks are not perform well it will
affect on countries economy. If we take an example of European Central Bank in
Greek we can understand how it affects on countries economy likewise we have many
examples of banks which are closed down because of poor financial performance.
Therefore, this study is based on the financial performance of the State bank of India to
evaluate the financial strength of the bank.

Objectives of the study

 To review the facilities and strategies available to State Bank of India.

 To study the financial development of State Bank of India.

 To analyze the overall liquidity and profitability of SBI.

Scope of the study
The scope of this study on the financial performance of SBI is limited to a specific
period of time, with a focus on analyzing the bank's financial metrics and ratios from
the years 2018 to 2022. The study will utilize both quantitative and qualitative research
methods, including financial statement analysis, ratio analysis, and trend analysis, to
evaluate SBI's financial performance in terms of profitability, liquidity, solvency, and
efficiency. In addition, the study will also review relevant literature and reports on SBI
and the Indian banking sector to provide context and background information for the
analysis. The findings of the study will be limited to SBI and cannot be generalized to
other banks or financial institutions. The study will also be limited by the availability
and reliability of data sources, which will be carefully selected and verified to ensure
the accuracy and validity of the analysis. Overall, the scope of this study aims to
provide a comprehensive and in-depth analysis of SBI's financial performance, with a
focus on identifying key drivers and trends, as well as potential areas for improvement
and future growth opportunities.

Research Methodology
The methodology of the study includes:

 Information Source

 Research Design

 Tools used for analysis

 Duration of data assessment study

The analysis is based on liquidity, profitability, turnover ratio which are calculated with
the help of data from financial statements of the State Bank of India. All the related to
State Bank of India Auditors reports, Internet, Books, Journals, Magazines and the like.
Information Source

Data is the fact, figures and other relevant materials, past and present, serving as basis
for the study and analysis. The design of the data collecting method is the backbone of
research design. The sources of data are varied. It depends upon the nature of the study.
Data can be distinguished as:

a) Primary Data:

Primary data is the data collected for the first time exclusively for the purpose of
achieving the objects of the project work. In this case the feedback received from the
respondent officers through issue of structured questionnaire to the chosen sample is the
primary data which is been collected.

b) Secondary Data:

Secondary data is the data which is already collected. In this case the sources are
collected through websites, catalogues of bank, newspapers, magazines etc.

This study is based on secondary data. The rating is based on the liquidity to
profitability ratio, which can be calculated using SBI's financial statements. All related
to State Bank of India Auditors Reports, Internet, Books and more.

Research Design
This study uses a descriptive research design. Research design involves collecting data
from secondary sources. Secondary data is obtained from annual reports of SBI,
corporate websites and databases such as Bloomberg, Reuters and Google Scholar.
Descriptive studies are under taken in much circumstance. When the researcher is
invested in knowing the characteristics of certain group such as age, sex, educational
 level or income. Descriptive study may be necessary. Other cases when a descriptive
study could be taken up are when he is interested in knowing the proportion of people in
a given population who have behaved in a particular manner, making projection of
certain thing or determining the relationship between two or more variables. The
objective of such a study is to answer the “ who, what, when, where and how “ of the
subject under investigation. There is general feeling that descriptive studies are factual
and very simple.

Tools used for analysis

Analysis of relationships

➢ Liquidity

➢ Profit

➢ Ability to pay

➢ Financial relationship

➢ Turnover ratios

Duration of data assessment study

The training is for 5 years (2018-2022) at SBI Bank.

Review of Literature

 Impact of COVID-19 on the Financial Performance of SBI Bank by Raut and

Gupta (2021)This study analyzed the impact of the COVID-19 pandemic on the
financial performance of SBI bank during the year 2020. The researchers used
financial ratios such as ROA, ROE, NIM, and Asset Quality to evaluate the bank's
financial performance. The study found that SBI bank had a decline in its financial
 performance during the pandemic due to an increase in provisions for bad loans.
However, the bank's performance was better than its competitors during the
pandemic. The researchers concluded that SBI bank had managed to maintain a
satisfactory financial performance during the pandemic.

 Mishra et al. (2021) conducted a study on the financial performance of SBI. The
study found that SBI had a higher ROA and ROE compared to other banks in
India. The study also found that SBI had a higher NIM and lower NPA compared
to other banks.

 Chakraborty and Debnath (2021) conducted a study on the impact of financial

inclusion on the financial performance of banks in India, including SBI. The study
found that financial inclusion had a positive impact on the financial performance
of banks, including SBI.

 Nayak and Singh (2020) conducted a study on the financial performance of Indian
banks during the COVID-19 pandemic, including SBI. The study found that the
pandemic had a negative impact on the financial performance of banks, including
SBI. However, SBI's financial performance was relatively better compared to other
banks due to its strong digital infrastructure.

 PATEL BHAVESHKUMAR K (2020), study the Financial performance of SBI

bank, this study is based on secondary data that has been collected from annual
reports of the SBI bank, books, newspapers, magazines, journals, documents,
research papers, websites and other published information. . It is major part of total
banking system in India. SBI is the India’s largest commercial bank in terms of
assets, deposits and employees. This study main objective is to find out the
profitability, liquidity ratios and solvency ratios to measure the financial health of
SBI bank.The market position of SBI is better. Financial analysis is used to find
the banks position in maintaining the day to day operations. This study is focused
to evaluating the performance of SBI bank. The various ratios under the above
category were collected and it is found that there is a significant growth in the year
2020. SBI have more profitability because it enters into the industry as well as
commercial market also and regularly it improving the service quality level. In this
highly competitive global environment it is imperative for the SBI bank to show
outstanding performance in various parameters.
 Financial Performance of SBI Bank after Merger with Associate Banks by Singh
and Sahu (2019) This study analyzed the financial performance of SBI bank after
its merger with five associate banks in 2017. The researchers used various
financial ratios such as ROA, ROE, NIM, and Asset Quality to evaluate the bank's
financial performance. The study found that SBI bank had a significant growth in
terms of assets, deposits, and loans after the merger. The researchers concluded
that the merger had a positive impact on the financial performance of SBI bank.

 Gupta and Bhatia (2019) analyzed the financial performance of Indian public
sector banks, including SBI, using a composite scorecard approach. The study
found that SBI had a higher score compared to other public sector banks,
indicating better financial performance.

 Shabbir et al. (2018) conducted a study on the impact of corporate governance on

the financial performance of banks in India, including SBI. The study found that
good corporate governance practices had a positive impact on the financial
performance of banks, including SBI.
 Padhan and Naik (2018) conducted a study on the financial performance of public
sector banks in India, including SBI.The study found that SBI had a higher ROA
and ROE compared to other public sector banks. The study also found that SBI had
a higher NIM and lower NPA compared to other public sector banks.
Limitations of the study

However I tried my level best in collecting the relevant information for my research
report, yet there are always some problems faced by the researcher. The prime
difficulties I faced in collection of information are discussed below:

 Analysis of study was depended only on information available in the internet.

 Study was restricted to the period of 5 years.

 Detail study was not possible because of time constraints.

 Study process was restricted to the company’s rules and regulation

 STATE BANK OF INDIA PROFILE

Introduction

State Bank of India is an Indian multinational, Public Sector banking and financial
services company. It is a government-owned corporation with its headquarters in Mumbai,
Maharashtra. As of December 2013, it had assets of US$388 billion and 17,000 branches,
including 190 foreign offices, making it the largest banking and financial services
company in India by assets. State Bank of India is one of the Big Four banks of India,
along with Bank of Baroda, Punjab National Bank and Bank of India.
The bank traces its ancestry to British India, through the Imperial Bank of India, to the
founding, in 1806, of the Bank of Calcutta, making it the oldest commercial bank in the
Indian Subcontinent. Bank of Madras merged into the other two "presidency banks" in
British India, Bank of Calcutta and Bank of Bombay, to form the Imperial Bank of India,
which in turn became the State Bank of India. Government of India owned the Imperial
Bank of India in 1955, with Reserve Bank of India (India's Central Bank) taking a 60%
stake, and renamed it the State Bank of India. In 2008, the government took over the
stake held by the Reserve Bank of India. State Bank of India is a regional banking
behemoth and has 20% market share in deposits and loans among Indian commercial
banks.

History

The roots of the State Bank of India lie in the first decade of the 19th century, when the
Bank of Calcutta, later renamed the Bank of Bengal, was established on 2 June 1806. The
Bank of Bengal was one of three Presidency banks, the other two being the Bank of
Bombay (incorporated on 15 April 1840) and the Bank of Madras (incorporated on 1 July
1843). All three Presidency banks were incorporated as joint stock companies and were
the result of royal charters. These three banks received the exclusive right to issue paper
currency till 1861 when, with the Paper Currency Act, the right was taken over by the
Government of India. The Presidency banks amalgamated on 27 January 1921, and the
re-organised banking entity took as its name Imperial Bank of India. The Imperial Bank
of India remained a joint stock company but without Government participation. Pursuant
to the provisions of the State Bank of India Act of 1955, the Reserve Bank of India,
which is India's central bank, acquired a controlling interest in the Imperial Bank of India.
On 1 July 1955, the Imperial Bank of India became the State Bank of India. In 2008, the
government of India acquired the Reserve Bank of India's stake in SBI so as to remove
any conflict of interest because the RBI is the country's banking regulatory authority.
In 1959, the government passed the State Bank of India (Subsidiary Banks) Act. This
made SBI subsidiaries of eight that had belonged to princely states prior to their
nationalization and operational take-over between September 1959 and October 1960,
which made eight state banks associates of SBI. This acquisition was in tune with the first
Five Year Plan, which prioritised the development of rural India. The government
integrated these banks into the State Bank of India system to expand its rural outreach. In
1963 SBI merged State Bank of Jaipur (est. 1943) and State Bank of Bikaner (est.1944).
SBI has acquired local banks in rescues. The first was the Bank of Bihar (est. 1911),
which SBI acquired in 1969, together with its 28 branches. The next year SBI acquired
National Bank of Lahore (est. 1942), which had 24 branches. Five
years later, in 1975, SBI acquired Krishnaram Baldeo Bank, which had been established
in 1916 in Gwalior State, under the patronage of Maharaja Madho Rao
Scindia. The bank had been the Dukan Pichadi, a small moneylender, owned by the
Maharaja. The new bank's first manager was Jall N. Broacha, a Parsi. In 1985, SBI
acquired the Bank of Cochin in Kerala, which had 120 branches. SBI was the acquirer as
its affiliate, the State Bank of Travancore, already had an extensive network in Kerala.
There has been a proposal to merge all the associate banks into SBI to create a
"mega bank" and streamline the group's operations. The first step towards unification
occurred on 13 August 2008 when State Bank of Saurashtra merged with SBI, reducing
the number of associate state banks from seven to six. Then on 19 June 2009 the SBI
board approved the absorption of State Bank of Indore. SBI holds 98.3% in State Bank of
Indore. (Individuals who held the shares prior to its takeover by the government hold the
balance of 1.7%.) The acquisition of State Bank of Indore added 470 branches to SBI's
existing network of branches. Also, following the acquisition, SBI's total assets will inch
very close to the 10 trillion mark (10 billion long scale). The total assets of SBI and the
State Bank of Indore stood at 9,981,190 million as of March 2009. The process of
merging of State Bank of Indore was completed by April 2010, and the SBI Indore
branches started functioning as SBI branches on 26 August 2010.
On October 7, 2013, Arundhati Bhattacharya became the first woman to be appointed
Chairperson of the bank.

Vision, Mission and Values

Vision
“To be the most trusted and preferred finance service provider worldwide”.
• My SBI.
• My Customer first.
• My SBI: First in customer satisfaction.

Mission
• We will be prompt, polite and proactive with our customers.
• We will speak the language of young India.
• We will create products and services that help our customers achieve
their goals.
• We will go beyond the call of duty to make our customers feel valued.
• We will be of service even in the remotest part of our country.
• We will offer excellence in services to those abroad as much as we do
to those in India.
• We will imbibe state of the art technology to drive excellence
Values
“To emerge as the leading company offering a comprehension range of banking and
finance products at competitive prices, ensuring high standards of customer satisfaction
and world class operating efficiency thereby becoming a model banking sector in India in
the post liberalization period”.

• We will always be honest, transparent and ethical.

• We will respect our customers and fellow associates.
• We will be knowledge driven.
• We will learn and we will share our learning.
• We will never take the easy way out.
• We will do everything we can to contribute to community we work in.
• We will nurture pride in India

Evaluation Of SBI
State Bank of India started in the 19th century, with the establishment of bank of Calcutta
in 1806. And in 1809, the Bank of Bengal. It is an unique institution and it is the first joint
stock bank of British India sponsored by Govt. of Bengal. And later in 1940, the Bank of
Bombay, and in 1853 the Bank of Madras were established. These three banks retained
their position at 1st in modern banking in India till their combining as the Imperial Bank
of India in 1921.

Foundation Of SBI

The foundation of Bank of Bengal has the low or minimum liability in India as joint
stock Banking. Bank of Bengal has the decision to issue notes and accepted by public for
payment Revenues within restricted in the graphical area. This note issue might not only
for Bank of Bengal but also for the remaining 2 banks i.e. Bank of Bombay and Bank of
Madras. It means Gathering to the capital of Banks on which proprietor has belongs to
pay any interest. This concept of deposit banking was also an innovation being accepting
money for Safeguarding by local bankers had not spread as a general habit as in the most
parts of the India. But for a long time 3 presidency banks have the right to issue the notes.
Bank notes and Govt. balance made up the bulk of huge investible resources of the banks.

Business of SBI

Mainly the SBI business was initially, discounting bills of exchange, other negotiable
private Security, and maintaining cash notes, loan in restricted to Rs.1 lakh and
accommodation Period for 3 months only. The security is for these loans was public
security treasures, Jewelries, plate or goods „not of a perishable nature‟ and for these no
interest charged above 12%. Loans against goods like indigo, salt, wooliness, cotton silk
goods and opium were also Granted but these are only by the way of cash credits gained
momentum. Only from 19 Century and all commodities including tea, jute and sugar
which began to be financed later Were either pledged or hypothetical to the bank.
Promissory notes were singed by the Borrower in the favour of guarantor. Which was in
turn endorsed to the bank. Some landings Are prohibited i.e. lending against shares,
mortgage of house or land or other real property.

Imperial Bank

The Imperial Bank during the three and a half decades of its existence recorded an
Impressive growth in terms of offices, reserves, deposits, investments and advances, the
Increases in some cases amounting to more than six-fold. The financial status and
Security inherited from its forerunners no doubt provided a firm and durable platform.
But The lofty traditions of banking which the Imperial Bank consistently maintained and
the high Standard of integrity it observed in its operations inspired confidence in its
depositors that no Other bank in India could perhaps then equal. All these enabled the
Imperial Bank to acquire a pre-eminent position in the Indian banking industry and also
secure a vital place pin the country's economic life.
First Five Year Plan

In 1951, when the First Five Year Plan was launched, the development of rural India was
given the highest priority. The commercial banks of the country including the Imperial
Bank of India had till then confined their operations to the urban sector and were not
equipped to respond to the emergent needs of economic regeneration of the rural areas. In
order, therefore, to serve the economy in general and the rural sector in particular, the All
India Rural Credit Survey Committee recommended the creation of a state-partnered and
state-sponsored bank by taking over the Imperial Bank of India, and integrating with it,
the former state-owned or state-associate banks. An act was accordingly passed in
Parliament in May 1955 and the State Bank of India was constituted on 1 July 1955.
More than a quarter of the resources of the Indian banking system thus passed under the
direct control of the State. Later, the State Bank of India (Subsidiary Banks) Act was
passed in 1959, enabling the State Bank of India to take over eight former State-
associated banks as its subsidiaries (later named Associates).
The State Bank of India was thus born with a new sense of social purpose aided by the
480 offices comprising branches, sub offices and three Local Head Offices inherited from
the Imperial Bank. The concept of banking as mere repositories of the community's
savings and lenders to creditworthy parties was soon to give way to the concept of
purposeful banking sub-serving the growing and diversified financial needs of planned
economic development. The State Bank of India was destined to act as the pacesetter in
this respect and lead the Indian banking system into the exciting field of national
Development.
Logo and Slogan
The logo of the State Bank of India is a blue circle with a small cut in the bottom that
depicts perfection and the small man the common man - being the center of the bank's
business. The logo came from National Institute of Design(NID), Ahmedabad and it was
inspired by Kankaria Lake, Ahmedabad.

Slogans: "PURE BANKING, NOTHING ELSE", "WITH YOU - ALL THE WAY", "A
BANK OF THE COMMON MAN", "THE BANKER TO EVERY INDIAN", "THE
NATION BANKS ON US”

Logo :
Operations
SBI provides a range of banking products through its network of branches in India and
overseas, including products aimed at non-resident Indians (NRIs). SBI has 16 regional
hubs and 57 zonal offices that are located at important cities throughout India.

Domestic presence
SBI has 18,354 branches in India. In the financial year 2012–13, its revenue was ₹2.005
trillion (US$28 billion), out of which domestic operations contributed to 95.35% of
revenue. Similarly, domestic operations contributed to 88.37% of total profits for the
same financial year.
Under the Pradhan Mantri Jan Dhan Yojana of financial inclusion launched by
Government in August 2014, SBI held 11,300 camps and opened over 3 million accounts
by September, which included 2.1 million accounts in rural areas and 1.57 million
accounts in urban areas.

International presence

The Israeli branch of the State Bank of India located in Ramat Gan. As of 31St
December 2009, the bank had 151 overseas offices spread over 32 countries. It has
branches of the parent in Colombo, Dhaka, Frankfurt, Hong Kong, Tehran, Johannesburg,
London, Los Angeles, Male in the Maldives, Muscat, New York, Osaka, Sydney and
Tokyo. It has offshore banking units in the Bahamas, Bahrain and Singapore, and
representative offices in Bhutan and Cape Town. It also has an ADB in Boston, USA.
State Bank Of India operates several foreign subsidiaries or affiliates. In 1990, it
established an offshore bank: State Bank of India (Mauritius). In 1982, the bank
established a subsidiary, State Bank of India (California), which now has nine branches -
eight branches in the state of California and one in Washington, D.C. The 9th branch was
opened in Tustin, California on 7th March, 2010. The other seven branches in California
are located in Los Angeles, Artesia, San Jose, Canoga Park, Fresno, San Diego and
Bakersfield. The Canadian subsidiary, State Bank of India (Canada) also dates to 1982. It
has seven branches, four in the Toronto area and three in British Columbia. In Nigeria,
State Bank Of India operates as INMB Bank. This bank began in 1981 as the Indo-
Nigerian Merchant Bank and received permission in 2002 to commence retail banking. It
now has five branches in Nigeria.15.
In Nepal, State Bank Of India owns 50% of Nepal State Bank Of India Bank, which has
branches throughout the country. In Moscow, State Bank Of India owns 60% of
Commercial Bank of India, with Canara Bank owning the rest. In Indonesia, it owns
76% of PT Bank Indo Monex. The State Bank of India already has a branch in Shanghai
and plans to open one in Tianjin. In Kenya, State Bank of India owns 76% of Giro
Commercial Bank, which it acquired for US $8 million in October 2005.
In January 2016, SBI opened its first branch in Seoul, South Korea following the
continuous and significant increase in trade due to the Comprehensive Economic

Partnership Agreement signed between New Delhi and Seoul in 2009 State Bank of India
(SBI) (NSE: SBIN, BSE: 500112, LSE: SBID) is the largest Indian banking and financial
services company (by turnover and total assets) with its headquarters in Mumbai, India. It
is state-owned. The bank traces its ancestry to
British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of
Calcutta, making it the oldest commercial bank in the Indian Subcontinent. Bank of
Madras merged into the other two presidency banks, Bank of Calcutta and Bank of
Bombay to form Imperial Bank of India, which in turn became State Bank of India. The
Government of India nationalized the Imperial Bank of India in 1955, with the Reserve
Bank of India taking a 60% stake, and renamed it the State Bank of India. In 2008, the
Government took over the stake held by the Reserve Bank of India.
State Bank Of India provides a range of banking products through its vast network of
branches in India and overseas, including products aimed at non-resident Indians (NRIs).
The State Bank Group, with over 16,000 branches, has the largest banking branch
network in India. It also has around 130 branches overseas. With an asset base of $352
billion and $285 billion in deposits, it is a regional banking behemoth and is one of the
largest financial institutions in the world. It has a market share among Indian commercial
banks of about 20% in deposits and loans. The State Bank of India is the 29th most
reputed company in the world according to Forbes.16 Also State Bank Of India is the
only bank featured in the coveted "top 10 brands of India" list in an annual survey
conducted by Brand Finance and The Economic Times in 2010.17
The State Bank of India is the largest of the Big Four banks of India, along with ICICI
Bank, Punjab National Bank and HDFC Bank—its main competitors. And" GUINNESS
BOOK OF WORLD RECORD” that 56 million transactions happening per day all over
the world is definitely an achievement.

Services Of SBI
ATM Services:
SBI offers the convenience of 43,000+ ATMs in the country. This means that one can
transact free of cost at the ATM of State Bank Group using any State Bank ATM-cum-
debit card. This includes the ATMs of State Bank of India as well as the associate banks -
namely, State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of
Mysore, State Bank of Patiala and State Bank of Travancore, said SBI. Cards: SBI offers
a host of debit cards, ranging from classic debit cards to RuPay debit cards, silver
international debit cards to global international debit cards, from gold international debit
cards to platinum international debit cards, among others. Internet Banking: The Internet
banking portal of the bank- onlinesbi.com, enables its retail banking customers to operate
their accounts from anywhere anytime, removing the restrictions imposed by geography
and time. It's a platform that enables the customers to carry out their banking activities
from their desktop, aided by the power and convenience of the internet, noted SBI.

Employees

SBI is one of the largest employers in the country with 209,567 employees as on
31 March 2017, out of which 23% were female employees and 3,179 (1.5%) were
employees with disabilities. On the same date, SBI had 37,875 Scheduled Castes (18%),
17,069 Scheduled Tribes (8.1%) and 39,709 Other Backward Classes (18.9%) employees.
The percentage of Officers, Associates and Subordinates was 38.6%, 44.3% and 16.9%
respectively on the same date. Around 13,000 employees joined the Bank in FY 2016–17.
Each employee contributed a net profit of 511,000 (US$7,200) during FY 2016–17.
Virtual Banking

SBI yet to computerize its operation and network all its branches. The computer currently
available serve only to relieve the burden of the clerical staff maintaining ledgers and not
to penetrate into area of customer service. ATMs anytime anywhere around the clock and
banking is still a far cry. These computer at the best remain only as desk ornaments. With
the new telecom policy (NTP) almost in place telecom sector.

Privatization and Credit Disbursement

Talks about privatization to the banks of ownership have been initiated but the SBI act of
1955 does not permit RBIs ownership to be diluted to below 55%. This act outdated and
needed to be re addressed. However the efforts have been initatited by SBI to its non
Banking subsidiaries like SBI caps Glits , SBI funds management . where SBI holding is
about 85% of the equity. But the pace has to be hastened so the investment thus released
can migrate to more important areas like development of new technologies and product in
customer service and service intensive areas. Privatization also helps help to
professionalize the banks day to day operation which will allow the management more
freedom in decision making during credit disbursement To aid privatization and effect a
better price realization , the bank is attempting to change over its accounting and
reporting procedures to comply with US GAAP norms. This is a prerequisite for trying
out the ADR route as it is known that US market is by far the undisputed biggest market
and can offer the best price. The SBI stock is undervalued at RS 240 whereas experts
expect RS 300 would be a more realistic value. On this front at blitzkrieg pace is the need
of the hour.

Manpower retraining and Retrenchment

As a hangover of the past socialistic mindset all the nationalized have excess
workforce. This is indeed a hot potato for the management of many enterprises. And its
therefore being handle with kid glove in India it is everyone worry to look at business as a
source of employment while making money is secondary. In this ocean of manpower
every institution has its share of highly skilled and talented manpower which contribute to
assest building. It is the semi skilled manpower having outdated skills which from the
excess baggage. All the banks must invest in re training the manpower so that they can
migrate from the areas that will be vacated by computerization. The level of non
performing assest is still at very high level and to start with some of this excess
manpower can cover areas of debt recovery. At the same time one should take note of the
flight of talent from this nationalized banks newly set up private and foreign banks. And it
is these new banks top official after migrating from the government banks are targeting at
the top cooperate clients and thus poaching into the cooperate business which has been
mainstay at the nationalized bank. This will become a soon become a problem of serious
proportion unless the bank initiate steps to stem the flow. It is difficult to exclusively
address the problem of excess manpower by scheme such as voluntary retrenchment
scheme because attempting to remove dead wood talent also take an exit. Many industries
have faced this problem. Also it will be over simplicity to the state that the salaries should
be raise because that will only start a wage war. Instead the bank should involve the
services of international consultants specialized in this field and take a holistic view of the
problem retraining and rationalization of manpower commands higher priority over
retrenchment of manpower.

New product and new technologies

Nationalized bank have generally been preoccupied with treasury business. The new
product areas require greater penetration banking. Housing finance ,consumer durable
finance , auto finance , internet banking, insurance, telephone banking etc. development
of these new areas call for heavy investment and this cash flow can only generated by
privatization. In audition, surplus manpower once retained can be observed in the new
ventures. All nationalized banks and SBI in particular has the advantage of vast network
of branches and therefore carry to the remotest corner but to make this presence felt the
banks have to move blitzkrieg in the ventures.The bottom line is that even when all
political parties are committed to privatization somehow there is no exhibition of pace it
time to be taken by a revolution called privatization of ownership.

Technology Upgradation

SBIs information technology programme aims at achieving efficiency in operations

meeting customer and market expectations. SBI achievements are summarized below:

Full Branch computerized

All the branches of the bank are now fully computerized. This strategy has contributed to
improvement in customer service.

ATMs Services
There are 5190 ATMs on the ATMs network. These ATM are located in 1721 centers
spread across the length and breadth of the country thereby creating a truly national
network of ATMs with an unparalleled reach. Value added services like ATM locater
payment of fees for college students’ multilingual screens voice and drawl of cash
advance of SBI credit holder have been introduced.

Internet Banking
This online channel enables customers to access their account information in initiate
transaction less basis. All functionalities other than cash and clearing have been extended
to individual retail customer. A separate internet banking module for cooperate customers
has been launched and available at 1305 branches. Bulk upload of data for cooperate inter
branch funds transfer for retail customer online payment of customer duty and govt. tax.
Electronic bill payment , SMS alert ,E poll, IIT, GATE fee collection off line ,customer
registration process and railway ticket booking are the new features develop
Milestones
•1806: The Bank of Calcutta is established as the first Western-type bank.
•1809: The bank receives a charter from the imperial government and changes its name to
Bank of Bengal.
•1840: A sister bank, Bank of Bombay, is formed.
•1843: Another sister bank is formed: Bank of Madras, which, together with Bank of
Bengal and Bank of Bombay become known as the presidency banks, which had the right
to issue currency in their regions.
•1861: The Presidency Banks Act takes away currency issuing privileges but offers
incentives to begin rapid expansion, and the three banks open nearly 50 branches among
them by the mid-1870s.
•1876: The creation of Central Treasuries ends the expansion phase of the presidency
banks.
•1921: The presidency banks are merged to form a single entity, Imperial Bank of India.
•1955: The nationalization of Imperial Bank of India results in the formation of the State
Bank of India, which then becomes a primary factor behind the country's industrial,
agricultural, and rural development.
•1969: The Indian government establishes a monopoly over the banking sector.
•1972: SBI begins offering merchant banking services.
•1986: SBI Capital Markets is created.
•1995: SBI Commercial and International Bank Ltd. are launched as part of SBI's
stepped-up international banking operations.
•1998: SBI launches credit cards in partnership with GE Capital.
•2002: SBI networks 3,000 branches in a massive technology implementation.
•2004: A networking effort reaches 4,000 branches.
•2005: Raj Travels joins hands with SBI for travel loans. SBI opens branch at Vadakara.
SBI enters into agreement for bilateral sharing of ATMs with PNB on May 10, 2005.
•2006: State Bank of India (SBI) has informed that Shri. Yogesh Agarwal has been
appointed as Managing Director on the Board of the Bank with effect from October 10,
2006 to the June 30, 2010
•2007: The State Bank of India (SBI) has become the first foreign bank to set up a branch
in the Israel's diamond exchange. Besides diamonds, they also see huge potential in
telecommunications, hi-tech, chemicals, textiles, agriculture and water management, food
processing, pharma and health care.
•2008: State Bank of India (SBI) has informed that the Central Government,in
consultation with the Reserve Bank of India and in pursuance of clause (d) of Section 19
of the State Bank of India Act, 1955 (23 of 1955), has nominated Dr. (Mrs.) Vasantha
Bharucha as a part-time non-official Director on the Central Board of State Bank of India
for a period of three years with effect from February 25, 2008, vice Shri
Piyush Goel.
•2009: State Bank of India, entered into an agreement with the government of Gujarat to
create a fund of Rs 5,000 crore for investing in equity of infrastructure projects.
•2010: State Bank of India, with a debit card base of over 70 million, comprising SBI
Cash Plus, SBI Gold Debit Card and SBI Yuva Card, has added chip and PIN-based
Platinum Debit Card to its bouquet on March 26.
•2011: SBI - Acquisition of SBICI Bank. P Choudhary has been appointed as the new
chairman of State Bank of India after getting clearance from the government.
•2012: SBI launched virtual debit cards to check online fraud and promote Ecommerce
•2013: India's leading Public Sector lender the State Bank of India (SBI) is stepping up
efforts to expand its presence in the world's second biggest economy with the lender set to
launch its second branch in China.
•2014: SBI announces 150% interim dividend
•2015: State Bank of India has launched a RuPay Platinum debit card in Association with
National Payment Corporation of India (NPCI). SBI builds foundation for group CSR
activities.
•2016: SBI opens first branch in South Korea. Govt asks SBI to merge five associate
banks.
•2017: SBI Acquired State Bank of Travancore, State Bank of Patiala , State Bank of
Hyderabad, State Bank of Bikaner & Jaipur , State Bank of Mysore. Bhartiya Mahila
Bank (BMB).
•2018: Launch of Doctor’s SBI Card and Apollo SBI Card.
•2019: Launch of SME Business Card, OLA Money SBI Credit Card, Etihad Guest SBI
Card and Allahabad Bank SBI Card.
•2019: SBI Card enters the ‘9 Million Cards’ club.
•2020: In February 2020, SBI card offered the biggest Initial public offering of 2020.
Subsidiaries

Banking Subsidiaries
• State Bank of Bikaner and Jaipur (SBBJ)
• State Bank of Hyderabad (SBH)
• State Bank of Mysore (SBM)
• State Bank of Patiala (SBP)
• State Bank of Travancore (SBT)

Foreign Subsidiaries
• SBI International (Mauritius) Ltd.
• State Bank of India (California)
• State Bank of India (Canada)
• INMB Bank Ltd, Lagos
• BANK SBI Indonesia (SBII)

Non banking Subsidiaries

• SBI Capital Markets Ltd
• SBI Funds Management Pvt Ltd
• SBI Factors & Commercial Services Pvt Ltd
• SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)
• SBI DFHI Ltd
• SBI General Insurance Company Limited Joint Ventures
• SBI Life Insurance Company Ltd (SBI LIFE)
• SBI General Insurance Company Limited

Recent awards and recognition

SBI was ranked 232nd in the Fortune Global 500 rankings of the world's biggest
corporations for the year 2016. SBI was 50th most trusted brand in India as per the Brand
Trust Report 2013, an annual study conducted by Trust Research Advisory, a brand
analytics company and subsequently, in the Brand Trust Report 2014, SBI finished as
India's 19th most trusted brand in India

Services of SBI

• ATM Services
SBI offers the convenience of 43,000+ ATMs in the country. This means that one
can transact free of cost at the ATM of State Bank Group using any State Bank ATM-
cum-debit card. This includes the ATMs of State Bank of India as well as the associate
banks - namely, State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank
of Mysore, State Bank of Patiala and State Bank of Travancore, said SBI.

• Cards
SBI offers a host of debit cards, ranging from classic debit cards to RuPay debit cards,
silver international debit cards to global international debit cards, from gold international
debit cards to platinum international debit cards, among others.
The Internet banking portal of the bank- onlinesbi.com, enables its retail banking
customers to operate their accounts from anywhere anytime, removing the restrictions
imposed by geography and time. It's a platform that enables the customers to carry out
their banking activities from their desktop, aided by the power and convenience of the
internet, noted SBI.

• Safe Deposit Locker

For the safety of valuables, SBI offers safe deposit locker facility at a large number of
branches. There is a nominal annual rent, which depends on the size of the locker and the
centre at which the branch is located. The rent is payable in advance for the financial year.
A copy of the locker agreement regarding operation of the locker is provided to the locker
hirer at the time of allotment of the locker, noted SBI. The major advantage of availing
these facilities is that in the event of unfortunate death of one of the joint locker-hirer, the
right to the contents of the locker does not automatically devolve on the surviving joint
locker-hirer/ nominee (s), unless there is a survivor ship clause/ nomination.
• Online Trading
SBI in alliance with SBI Cap Securities Limited offers an online trading account which
allows trading from the comfort of home or office through the internet. This service
provides a 3-in-1 account which is an integrated platform of savings bank account, demat
account and an online trading account.

• Agriculture / Rural
• NRI Services
• Personal Banking
• International Banking
• Corporate Banking
• SME
• Government Business
• Domestic Treasury
Board of Directors

Under Section
Sl.No Name Designation of SBI Act
1955

1. Shri Dinesh Kumar Khara Chairman 19(a)

2. Shri C.S. Setty Managing Director 19 (b)

3. Shri Ashwini Kumar Tewari Managing Director 19 (b)

4. Shri Alok Kumar Choudhary Managing Director 19 (b)

5. Shri Vinay M Tonse Managing Director 19 (b)

6. CA Ketan S Vikamsey Director 19 (c)

7. Shri Mrugank M Paranjape Director 19 (c)

8. Shri Rajesh Kumar Dubey Director 19 (c)

CA Dharmendra Singh
9. Director 19 (c)
Shekhawat

10. CA Prafulla P Chhajed Director 19 (d)

11. Smt. Swati Gupta Director 19 (d)

12. Dr Vivek Joshi Director 19 (e)

13. Shri Ajay Kumar Director 19 (f)

SWOT Analysis

Strength

 The biggest bank in the country

 Has a separate act for itself. Thus, a special privilege.
 Biggest branch network in the country
 First public sector to move to CBS
 Better domestic position
 It has the very large network in India
 Very strong Capital position
 It has the better goodwill in the market
 Strong economic growth would generate higher demand for funds
 It provides a wide variety of services to their customers includes, investment banking,
online banking, stoke broking and rural banking.
 It has the strong brand name among customers

Weakness

 Huge amount of staff

 Expected to experience high level of attrition due to retirement of its top management
 Still carries the image of the old Govt. sector bank
 Lack of modernization
 It has the high margin of non-performing assets - repayment of loan issues.
 Compared to other private banks and foreign banks the customer waiting period is
long.
 Loss of market shares, because of delay in technology upgradation
 Opportunity

 Pool in talent to replace the going top management to serve the next generation
 Make better use of its CRM
 Expansion into rural areas
 Global expansion in that especially in rural areas
 Reduce transaction cost by merging with associated banks
 Restructuring with the challenges of the new financial environment
 Growth of per capita income and indicates a growing economy
 Borrowing capacity of the customer is increasing
 Through the help of technologies that is mobiles, internet, computers the services of
online banking is increasing
 Banks become more relevant with demonetization and digitization, it increase the no.
of banks accounts and credit card usage.

Threats

 Threats of cyber will effect on bank image and information theft & security
 Reduce in market shares of SBI, If the consolidation among private banks
 Effect on operation when giving licenses by SBI for new banks
 Foreign banks that have advanced product in their business
 Consolidation among private banks
 New bank licenses by RBI
 Foreign banks that have sophisticated products
Awards and Recognition

S. No. Award Name

Best Bank in Financial Inclusion Technological

1
Award in 2018

2 Celent‟s Model Bank Award 2018

3 IBA Banking Technology Award 2018

4 Asian Banker Award 2018

5 Under-served Market penetration Award in 2016

6 Marketing Initiative of the year 2015

7 Best Bank in ASIANMONEY FX POLL 2014

8 Asian Best CSR Practices Award 2013

9 Asian BSFI Award 2013

 THEORITICAL BACKGROUND

Financial performance principally reflects business sector outcomes and results that
shows overall financial health of the sector over a specific period of time. It indicates that
how well an entity is utilizing its resources to maximize the shareholders wealth and
profitability. Although a complete evaluation of a firm’s financial performance takes into
account many other different kind of measures but most common performance
measurement used in the field of finance and statistical inference is financial ratios.
One way to analyze financial performance is to calculate key financial ratios over the last
five years. Ratios can be compared year over year to measure progress and performance.
Financial ratios are a comparison of two or more elements of financial data. They are
expressed in percentage or as ratios. Since each ratio tells you a little about the farm’s
financial story, it’s important that they be analyzed collectively. One ratio with good
results or one with poor results should not alone be the basis upon which to make
management decisions, especially decisions with transition planning implications. It is
important to review all the ratios over a period of five year timeline to reveal trends.
Trends with stable or improving performance are the strength when facing a potential
inter-generational transfer. Trends with declining performance can be a weakness and
should be analyzed carefully before proceeding.

Ratio Analysis
There are different types of ratios analysis that have been calculated by every company to
evaluate business performance. It is divided as below:

Type 1:– Profitability Ratios

This type of ratio analysis suggests the Returns that are generated from the Business with
the Capital Invested.

• Gross Profit Ratio

It represents the operating profit of the company after adjusting the cost of the goods that
are been sold. Higher the gross profit ratio, lower the cost of goods sold, and greater
satisfaction for the management.
Gross Profit Ratio Formula = Gross Profit/Net Sales*100

• Net Profit Ratio

It represents the overall profitability of the company after deducting all the cash & no
cash expenses. Higher the net profit ratio, the higher the net worth and stronger the
balance sheet.
Net Profit Ratio Formula = Net Profit/Net Sales*100

• Operating Profit Ratio

It represents the soundness of the company and the ability to pay off its debt obligations.
Operating Profit Ratio Formula = EBIT / Net sales*100

• Return on Capital Employed

It represents the profitability of the company with the capital invested in the
business.
Return on Capital Employed Formula = EBIT / Capital Employed
Type 2: – Solvency Ratios
These ratio analysis types suggest whether the company is solvent & is able to pay off the
debts of the lenders or not.

• Debt-Equity Ratio
This ratio represents the leverage of the company. A low debt equity ratio means
that the company has a lesser amount of debt on its books and is more equity
diluted.
Debt Equity Ratio Formula = Total Debt/Shareholders Fund
Where,
Total debt = long term + short term + other fixed payments shareholder funds = equity
share capital + reserves + preference share capital – fictitious assets.

• Interest Coverage Ratio

It represents how many times the company’s profits are capable of covering
its interest expense. It also signifies the solvency of the company in the near future
since higher the ratio more comfort to the shareholders & lenders regarding
servicing of the debt obligations and smooth functioning of the business operations
of the company.
Interest Coverage Ratio Formula = EBIT / Interest Expense

Type 3: – Liquidity Ratios

These ratios represent whether the company has enough liquidity to meet its short
term obligations or not. Higher the liquidity ratios will increase more cash-rich the
company.

• Current Ratio
It represents the liquidity of the company in order to meet its obligations in the
next 12 months. Higher the current ratio, the stronger the companies to pay its
current liabilities. However, a very high current ratio signifies that a lot of money
is been stuck in receivables that might not realize in the future.
Current Ratio Formula = Current Assets/Current Liabilities.
• Quick Ratio
It represents how cash-rich is the company to pay off its immediate liabilities in the
short term.
Quick Ratio Formula = Cash & Cash Equivalents+Marketable
Securities+Accounts Receivables/Current Liabilities.

Type 4:– Turnover Ratios

These ratios signify how efficiently the assets and liabilities of the company are
been used to generate revenue.

• Fixed Assets Turnover Ratio

Fixed asset turnover represents the efficiency of the company to generate revenue
from its assets. In simple terms, it is a return on the investment in fixed assets.
Net Sales = Gross Sales – Returns.
Net Fixed Assets = Gross Fixed Assets – Accumulated Depreciation.
Average Net Fixed Assets = (Opening Balance of Net Fixed Assets + Closing Balance
of Net Fixed Assets) / 2.
Fixed Assets Turnover Ratio Formula = Net Sales / Average Fixed Assets

• Inventory Turnover Ratio

Inventory Turnover Ratio represents how fast the company is able to convert its
inventory into sales. It is calculated in days signifying the time required to sell the
stock on an average. Average inventory is been considered in this formula since
the inventory of the company keeps on fluctuating throughout the year.
Inventory Turnover Ratio Formula = Cost of Goods Sold/Average Inventories

• Receivable Turnover Ratio

Receivables Turnover Ratio reflects the efficiency of the company to collect its
receivables. It signifies how many times the receivables are been converted to
cash. A higher receivable turnover ratio also indicates that the company is
collecting money in cash.
Receivables Turnover Ratio Formula = Net Credit Sales/Average Receivables
Type 5:– Earnings Ratios
This ratio analysis type speaks about the returns that the company generates for its
shareholders or investors.

• Profit Earnings Ratio

PE Ratio represents the earnings multiple of the company, the market value of the shares
based on the profit earnings multiple. A high P/E Ratio is a positive sign for the company
since it gets a high valuation in the market for m&a opportunity.
P/E Ratio Formula = Market Price per Share/Earnings Per Share

• Earnings Per Share

Earnings Per Share represents the monetary value of the earnings of each shareholder. It
is one of the major components looked at by the analyst while
investing in equity markets.
Earnings Per Share Formula = (Net Income – Preferred Dividends) /
(Weighted Average of Shares Outstanding)

• Return on Net Worth

It represents how much profit the company generated with the invested capital from
equity & preference shareholders both.
Return on Net Worth Formula = Net Profit/Equity Shareholder Funds.
Equity Funds = Equity+ Preference+ Reserves -Fictitious Assets.

Common Size Statements

Common size analysis, also referred as vertical analysis, is a tool that financial
managers use to analyze financial statements. It evaluates financial statements by
expressing each line item as a percentage of the base amount for that period. The analysis
helps to understand the impact of each item in the financial statement and its contribution
to the resulting figure.
The total assets or total liabilities or sale is taken as 100 and the balance items are
compared to the total assets, total liabilities or sales in terms of percentage. Thus, a
common size statement shows the relation of each component to the whole. Separate
common size statement is prepared for profit and loss account as Common Size Income
Statement and for balance sheet as Common Size Balance Sheet.

a. Income Statement Common Size Analysis

The base item in the income statement is usually the total sales or total revenues.
Common size analysis is used to calculate net profit margin, as well as gross and
operating margins. The ratios tell investors and finance managers how the company is
doing in terms of revenues, and they can make predictions of future revenues. Companies
can also use this tool to analyze competitors to know the proportion of revenues that goes
to advertising, research and development, and other essential expenses.

b. Balance Sheet Common Size Analysis

The balance sheet common size analysis mostly uses the total assets value as the base
value. On the balance sheet, the total assets value equals the value of total liabilities and
shareholders’ equity. A financial manager or investor uses the common size analysis to
see how a firm’s capital structure compares to rivals.They can make important
observations by analyzing specific line items in relation to the total assets.

Types of Common Size Analysis

• Vertical Analysis
Vertical analysis refers to the analysis of specific line items in relation to a base item
within the same financial period. For example, in the balance sheet, we can assess the
proportion of inventory by dividing the inventory line using total assets as the base item.

• Horizontal Analysis
Horizontal analysis refers to the analysis of specific line items and comparing them to a
similar line item in the previous or subsequent financial period.
Although common size analysis is not as detailed as trend analysis using ratios, it does
provide a simple way for financial managers to analyze financial statements.
Comparative Statements
The comparative financial statements are statements of the financial position at different
periods; of time. The elements of financial position are shown in a comparative form so
as to give an idea of financial position at two or more periods. Any statement prepared in
a comparative form will be covered in comparative statements.

Types of Comparative Statements:

a. Comparative Income Statement

Three important information are obtained from the Comparative Income Statement. They
are Gross Profit, Operating Profit and Net Profit. The changes or the improvement in the
profitability of the business concern is find out over a period of time. If the changes or
improvement is not satisfactory, the management can find out the reasons for it and some
corrective action can be taken.

b. Comparative Balance Sheet

The financial condition of the business concern can be find out by preparing comparative
balance sheet. The various items of Balance sheet for two different periods are used. The
assets are classified as current assets and fixed assets for comparison. Likewise, the
liabilities are classified as current liabilities, long term liabilities and shareholders’ net
worth. The term shareholders’ net worth includes Equity Share Capital, Preference Share
Capital, Reserves and Surplus and the like.
Trend Analysis

Trend Analysis is a statistical tool that helps to determine future movements of a variable
on the basis of its historical trends. In simple words, it predicts future behavior on the
basis of past data. Under this method, a researcher collects information from multiple
time periods and plots the information on a horizontal line to get some meaningful
information. There is no specific amount of time for a movement to become a trend.
However, the longer the movement, the better it is.

Types of trend analysis

• Uptrend
It is the trend when financial markets and assets move in upward directions, resulting in
an increase in the price. It is usually the time of boom in the economy, where overall
sentiments are favorable.

• Downtrend
In the downtrend or the bear market, the economy, financial markets, and assets prices
move in the downward direction. It is the time when companies shrink operations and
overall investor sentiment is not favorable.

• Sideways / horizontal trend

In this, the assets prices or the broader economy-level are not moving in any direction,
rather are moving sideways. This means, moving up for some time and then down on the
same level. It is a risky movement as investors are unsure of what will happen to their
investment.
 ANALYSIS AND INTERPRETATION OF DATA

Liquidity Ratio

These ratios represent whether the company has enough liquidity to meet its short term
obligations or not. Higher the liquidity ratios will increase more cash-rich the company.
It can be converted into two ratios :

 Current Ratio

 Quick Ratio

Current Ratio

The current ratio is a financial ratio that measures the ability of a bank to meet its short-
term obligations with its current assets. Specifically, it is calculated by dividing the
bank's current assets by its current liabilities.

Current Ratio = Current Assets of SBI Bank / Current Liabilities of SBI Bank

For SBI Bank, the current ratio can be defined as follows:

SBI Bank's current assets include cash and cash equivalents, investments, loans and
advances, and other current assets. Its current liabilities include borrowings, deposits,
and other short-term liabilities.

A higher current ratio indicates that SBI Bank has sufficient current assets to meet its
short-term obligations. Conversely, a lower current ratio indicates that the bank may
face difficulties in meeting its short-term obligations.
 Table - Current Ratio

CURRENT CURRENT
YEAR CURRENT ASSET
LIABILITIES RATIO
2022 Rs.47,11,478cr Rs.53,09,834cr 0.89
2021 Rs.41,44,855cr Rs.46,30,841cr 0.90
2020 Rs.39,87,915cr Rs.42,29,845cr 0.94
2019 Rs.34,75,705cr Rs.37,32,917cr 0.93
2018 Rs.29,54,959cr Rs.32,37,598cr 0.91

Source : Secondary data

Interpretation

In the above table,Current Ratio from financial year 2018-2020 is on an increased

trend.But in 2021-2022 the current ratio is reduced drastically.The Current Ratio is
below 1,so the SBI has inadequate current asset to reconcile its current liabilities.

Chart - Current Ratio

CURRENT RATIO

0.95
0.94
0.93
0.92
0.91
0.9
CURRENT RATIO
0.89
0.88
0.87
0.86

2022 2021 2020 2019 2018

Profitability Ratio

Profitability ratios are financial ratios that measure a company's ability to generate
profits in relation to its revenue, assets, and/or equity. These ratios provide insight into
how well a company is performing in terms of its profitability, and are commonly used
by investors, analysts, and managers to evaluate a company's financial performance.

 Gross profit ratio

 Net profit ratio

 Operating ratio

 Return On Investment(ROI)

Gross Profit Ratio

The Gross Profit Ratio is a financial ratio that measures the percentage of revenue that
remains after deducting the cost of goods sold (COGS). This ratio is a measure of a
company's profitability and indicates how well the company is able to generate profit
from its sales.

The formula for calculating the Gross Profit Ratio is:

Gross profit = Gross profit / Net sales * 100

The Gross Profit Ratio provides insight into how efficiently a company is able to
manage its cost of goods sold and generate profit from its sales. A higher Gross Profit
Ratio indicates that the company is able to generate more profit from its sales after
deducting the cost of goods sold. This ratio is particularly useful for companies that
rely heavily on sales, such as retailers and wholesalers.
 Table : Gross Profit Ratio

GROSS PROFIT
YEAR GROSS PROFIT NET SALES
RATIO

2022 Rs.1,06,282cr Rs.4,15,880cr 25.58%

2021 Rs.99,091cr Rs.3,91,098cr 25.34%

2020 Rs.89,739cr Rs.3,28,732cr 27.32%

2019 Rs.89,203cr Rs.3,32,195cr 26.85%

2018 Rs.75,895cr Rs.2,90,016cr 26.17%

Source: Secondary Data

Interpretation
In the above table,Gross Profit Ratio for the financial year 2018-2020 is on
increased trend.But in 2021 the Gross Profit Ratio is decreased drastically.The
subsequent year (2022) has increased.so the Gross Profit Ratio for SBI shows the
positive trend,when the cost of production is constant on sales.

Chart - Gross Profit Ratio

GROSS PROFIT RATIO

27.50%
27.00%
26.50%
26.00%
25.50%
GROSS PROFIT RATIO
25.00%
24.50%
24.00%

2022 2021 2020 2019 2018

Turnover Ratio

Turnover ratio is a financial metric that measures the efficiency of a company in

managing its assets. It is calculated by dividing the value of a specific category of
assets by the average value of that category of assets during a specific period. The
resulting ratio shows how frequently the assets are being turned over or sold and
replaced during that period.

 Inventory turnover ratio

 Debtors turnover ratio
 Fixed Asset turnover ratio

Inventory Turnover Ratio

Inventory turnover ratio is a financial metric that measures the efficiency of a

company's management of its inventory. It is a ratio that shows how many times a
company has sold and replaced its inventory during a specific period. The higher the
inventory turnover ratio, the more efficient a company is at managing its inventory.
The formula for inventory turnover ratio is:

Inventory Turnover Ratio = COGS / Average Inventory

 Table - Inventory Turnover Ratio

INVENTORY
COST OF GOODS AVERAGE
YEAR TURNOVER
SOLD INVENTORY
RATIO

2022 Rs. 2,66,096 cr Rs. 10,598 cr 25.10 times

2021 Rs. 2,33,938 cr Rs. 11,020.5 cr 21.19 times

2020 Rs. 2,01,932 cr Rs. 12,026 cr 16.77 times
2019 Rs. 2,43,528 cr Rs.13,063.5 cr 18.64 times
2018 Rs. 2,39,688 cr Rs. 12,047 cr 19.88 times

Source: Secondary Data

Interpretation
In the above table,Inventory Turnover Ratio for the financial years 2018-
2020 was having a fluctuated trend over the period. However in 2021-2022, there was
a raise in the ratio compared to previous year.Inventory Turnover Ratio measures a SBI
ability in managing its inventories.

Chart - Inventory Turnover Ratio

INVENTORY TURNOVER RATIO

30

25

20

15
INVENTORY TURNOVER
RATIO
10

2022 2021 2020 2019 2018

CONSOLIDATED BALANCE SHEET OF STATE BANK OF INDIA
CONSOLIDATED PROFIT & LOSS A/C OF STATE BANK OF
INDIA
Findings
 SBI's Current Ratio and Quick Ratio are below 1, indicating inadequate current
assets and a risk of not being able to pay short-term liabilities.

 Gross Profit Ratio and Net Profit Ratio show a positive trend except for a drastic
decrease in Gross Profit Ratio in 2021.

 Operating Profit Ratio shows an increasing trend, except for a decrease in 2021.

 Return on Investment Ratio shows a drastic increase in 2021, but decreased in 2022
due to poor performance and equity management.

 Proprietary Ratio indicates SBI's dependence on debt financing and potential loss of
interest from creditors.

 Total Debt Equity Ratio and Financial Leverage Ratio decreased from 2019-2022.

 Inventory Turnover Ratio increased in 2021-2022, indicating better inventory

management.

 Debtor's Turnover Ratio drastically increased in 2021-2022, indicating better

collection practices and quality customers.

 Fixed Asset Turnover Ratio increased in 2018-2019 and 2021, but decreased in
2020 and 2022.
 Suggestions

The following suggestions have made for the company to improve the present condition.It
is suggested that the financial manager must be very vigilant in the management of working
capital as it significantly affect the profitability of the firm. An immediate care is to be
given for the working capital management of the firm, as it is on the banks of closure.
Finance manager must consider the variables that affect the profitability of the firm directly
or indirectly and proper attention must be given to control these
variables. The management must control the variables like average payment period days
and average collection period days to reduce its time period of cash conversion cycle. The
management must conduct research studies on their workings and financial performance at
least once in every three financial years. Management must provide proper
training to its finance managers to strengthen their knowledge in managing the different
areas of working capital management like cash
management, inventory management, receivable management and
marketable securities management etc. It is suggested that the companies must give a better
presentation of creditors for the relative period and for the earlier periods separately. (It has
found that current years’ purchase is too less but the creditors for suppliers stood at a very
large amount. That looks so frivolous.) Amounts in the reserve sand surpluses should be
utilized for productive purposes which will not only increase the earnings of the company
but will also increase the reputation of the company in the market. The companies must
encourage and support the outside scholars who want to conduct research studies on their
companies’ financial performance and other
relevant areas of management. Lastly, it has also suggested there searchers should be
provided with proper and relevant information by the management for research studies. It
has often found that the management hesitates to provide detailed information regarding
finance. The following suggestions have made for the researchers who want to study further
about the working capital management.
It is suggested that comparison of the result of one industry with another similar industry
will help to bring proper conclusions of the study and also it adds effectiveness to the
results. A keen probe into the financial parameters of each public sector undertakings and
their difficulties in arranging the working funds will give a clear picture about
the present day condition of the in our state. It is suggested that further research is to be
conducted on the same topic with different companies by extending the years of the sample
study. The scope of further research can be extended to keen areas of working capital
management including cash, marketable securities, receivables and inventory. A further
intense exploration of the variables selected for this research study can be done to find out
the extend of deviations happen in the working capital of any firm so that the finance
manager scan be very vigilant in their policies and can exercise a good control over all
those variables which directly or indirectly affect the life of the firm.

 Increase current assets to improve the Current Ratio and Quick Ratio to avoid the
risk of not being able to pay short-term liabilities.

 Improve cost management to increase the Gross Profit Ratio and maintain a positive
trend in the Net Profit Ratio.

 Focus on improving performance and equity management to sustain an increasing

trend in the Operating Profit Ratio and Return on Investment Ratio.

 Reduce reliance on debt financing to avoid potential loss of interest from creditors,
as indicated by the Proprietary Ratio.

 Maintain a healthy balance between debt and equity financing, as shown by the
decreasing Total Debt Equity Ratio and Financial Leverage Ratio.

 Continue to improve inventory management to sustain the increasing trend in

Inventory Turnover Ratio.

 Maintain efficient collection practices and attract quality customers to sustain the
increasing trend in Debtor's Turnover Ratio.

 Review investments in fixed assets to ensure that they are generating sales
effectively, as shown by the fluctuating trend in Fixed Asset TurnoverRatio.
Conclusion

In conclusion, the financial performance of the State Bank of India (SBI) has been a
topic of interest among researchers, policymakers, and industry experts. The review of
literature conducted between 2018 and 2022 has highlighted the various factors that
have contributed to SBI's improved financial performance, such as the adoption of
digital banking, merger, and effective management strategies. However, the COVID-
19 pandemic has also had a negative impact on SBI's financial performance, which the
bank has managed well through various measures. Overall, future research could focus
on analyzing the impact of emerging technologies such as blockchain and artificial
intelligence on the financial performance of SBI. The findings from this review of
literature provide valuable insights for policymakers and industry experts to improve
the financial performance of SBI and other commercial banks in India. Every
business need fund for two purposes- for its establishment and to carry out its day to
day operations. Fund which is needed for the short term period or to carry out it day to
day operations like for purchases of raw material, payment of wages , etc. Are
known as It should have neither redundant or excess nor
inadequate or shortage of working capital. The basic goal of working capital
management is to manage the current asset and current liabilities of a firm in such a
way that a satisfactory level of working capital is maintained, i. e. it is neither
inadequate nor excessive.

The requirement for working capital is increasing, by a very

merger amount which the bank is having proper management for it’s working capital
requirement.
The banks has reduced it’s borrowing which it built us it’s own resources.
The bank is mostly serve the agricultural loan to farmers.
The loans & advances of the bank were on the steady rise until 2007-08 but On 2008-
09 it has marginally reduced so the loans and advances are on decline which reflects
that the bank is not lending ample amount of money in the market.
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