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Statistical Review on the Nationalized Banks in India


Dr. Mohammad Miyan

,Associate Professor, Shia P. G. College, University of Lucknow


.Sitapur Road, Lucknow, India-226020

Abstract
The nationalized banks are a serious a part of total industry in India therefore there's a requirement to
gauges the growth of those banks. The growth of the banks depends on the profitableness and
productivity factors performance. The current paper is to research the profitableness issue and
performance of nationalized banks in India for the period of last five financial years i.e., from
financial year 2011-12 to 2015-16. The analysis has taken the various parameters for decisive the
performance like as operative profit as a proportion to operating funds, operative financial gain, come
on assets, returns on investment, varied expenses and ratios. Its to conclude that the profitableness
and productivity performance of the nationalized banks isn't consistent throughout the study period of
five years and additionally not statistically significant. Further, the management of the bank isn't a lot
of economical in changing their efforts in terms of expenditure into advantages to earn profit and
increase the growth and productivity. The bank ought to efforts to extend the profit and productivity
growth by removing the negative factors and many additionally curtails operative expenses so as to
boost the performance and growth of the bank.
Keywords: Growth, NPA, Nationalized banks, Performance, Profit, Productivity.
1. Introduction
The nationalized banks are the banks those were non-inheritable by the govt. from non-public firm or
person or by an ordinance. The most distinction between Nationalized Bank and Public Sector Bank is
that Nationalized Banks were non inheritable by the govt. below an Act or Ordinance whereas Public
Sector Banks are banks during which majority of shares or half is control by the govt. (Chandra,
1992), (Amandeep, 1993), (Zacharias, 1996), (Bhatia & Verma, 1999), (Ojha, 1997), (Thomas, 1997).
So, the most factors are that PSU Banks don't seem to be Nationalized Banks. The highest 10
nationalized banks in Asian nation with relevance capitalization as reportable (Dylan, 2016) are as
follows:
Bank of Baroda (Market Capitalization: Rs 29,123 Crore): The Bank of Baroda (BOB) is an
Indian state closely-held banking and money services company. The Bank of Baroda stands
within the initial position among nationalized banks. The history of BOB dates back to the
year 1908, when it was founded by a group of businessmen and in the year 1969, the bank
was nationalized. At present, the BOB has more than 5,000 branches and over 8,000 ATMs
across the country that provides quality and prompts services to the customers. (Luther,
1976), (Das, 1999), (Athma, 2000). The BOB has more than 100 branches in over 20
countries across the world. The services offered by BOB include Credit Cards, Wealth
Management, Loans and Debit Cards (Dylan, 2016).The BOB also offers internet banking
service under the name of Baroda Connect.
Punjab National Bank (Market Capitalization: Rs 18,084 Crore): The Punjab National Bank
(PNB) is next on this list and stand at 2nd in the list of top 10 best nationalized banks in India.
The PNB was started in the year 1894 and presently a leading nationalized bank with more
than 6,000 branches and over 7,000 ATMs in the country. The PNB is known for the good
services, some other services offered by the bank are Personal Banking and Agricultural
Banking etc. (Dylan, 2016)

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Central Bank of India (Market capitalization: Rs 10,530 Crore): The Central Bank of India
(CBI), a government-owned Mumbai based bank, is one of the oldest and largest commercial
banks in India and came into existence in the year 1911 (Shirai, 2002), (Uppal, 2009). The
CBI is presently widely across the country with more than 4,300 branches in over 25 states in
India (Dylan, 2016). The Loans, Credit Card, NRI Banking, Deposits and Debit Card are
some of the services offered by the bank.
Canara Bank (Market Capitalization: Rs 9,768 Crore): The Canara Bank (CB) is other
nationalized bank with headquarter in Bangalore, Karnataka. It was also the oldest bank in the
country as it was established in 1906 at Manglore. The GOI nationalized the bank in 1969 and
is another nationalized bank, which is known for the quality products and services and
incorporated in the year 1906 (Patnaik & Patnaik, 2005), (Ram, 2010). The Loans, Personal
Banking, Insurance and Internet Banking are some of the services offered by Canara Bank.
The CB is growing swiftly and at present owns more than 5,500 branches and over 7,000
ATMs in the country (Dylan, 2016). The CB is known for the quality services have been
awarded with various awards like SKOCH Renaissance Award-2014 and MSME Banking
Excellence Awards-2014.
Union Bank of India (Market Capitalization: Rs 7,816 Crore): The Union Bank of India (UBI)
is one of the largest nationalized banks of India. It is listed on the magazine Forbes 2000, and
has assets of USD 13.45 billion. All the banks branches have been networked with its 6909
ATMs as reported on 30th Sep-2015. The UBI is the next nationalized bank that was
incorporated in 1919 and also wins the Express Uptime Champion Award 2014. It has
headquartered in Mumbai; UBI has more than 4,000 branches and a customer base of over 49
Million (Dylan, 2016). The UBI is suitable for its services and products and some of the
services offered by the bank are Mobile Banking, Various types of Loans, and Internet
Banking etc.
Bank of India (Market Capitalization: Rs 7,636 Crore): The Bank of India (BOI) is
commercial bank with headquarters in Mumbai, Maharashtra, India. Founded in 1906, it has
been government-owned since nationalization in 1969 (Jhamb & Jhamb, 2013). The BOI is
another leading bank in India, which was founded in the year 1906. The bank provides all the
services including Internet Banking, Deposits, Debit card and Credit Card etc. With more than
4,800 branches, BOI has a strong presence in the country (Dylan, 2016). The BOI has more
than 50 branches present in the 20 other countries also.
Syndicate Bank (Market Capitalization: Rs 4,637 Crore): The Syndicate Bank (SB) is one of
the oldest and major nationalized banks of India. It was founded by Upendra Pai, T. M. A.
Pai, and V. Kudva in 1925. At the time of its establishment, the name of the bank was the
Canara Industrial and Banking Syndicate Limited (Guruswamy, 2012). The SB is ranked 7th
in the list of top 10 best nationalized banks in India (Zackarias, 1996), (Thomas, 1997),
(Dylan, 2016). The SB was nationalized in the year 1969 as the other banks.
Indian Overseas Bank (Market Capitalization: Rs 4,594 Crore): The India Overseas Bank
(IOB) has more than 3,300 branches and gets eighth place in the list of top 10 nationalized
banks in India. Also, the bank has 8 overseas branches in Hong Kong, South Korea,
Singapore, Bangkok and Sri Lanka (Dylan, 2016). The IOB is a big nationalized bank at
Chennai, with around 3700 branch offices, 3 extension counters and eight overseas branches
as reported on 30 September 2014.
Indian Bank (Market Capitalization: Rs 4,461 Crore): The Indian Bank (IB) was an Indian
financial services company established in 1907 and headquartered in Chennai, India. It has
20464 employees, 2416 branches in India and is one of the big PSU banks of India. The
Indian Bank is a nationalized bank founded in the year 1907 (Badola & Verma, 2006) and
owns more than 2,500 branches in India. The Wealth Management, Internet Banking,
Educational Loan and Mobile Banking are some of the services offered by the bank. The IB

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in the financial year 2014-2015 has performed well and generated a total income of more than
Rs 17,000 Crore (Dylan, 2016). The net profit generated by Indian Bank was more than Rs
1,000 Crore.
Corporation Bank (Market Capitalization: Rs 4,079 Crore): The Corporation Bank is a PSU
banking company with headquartered in Mangalore. The bank has pan-India presence with
8,000 functional units comprising 2200 branches, more than 1800 ATMs and 3,000 branchless
banking units as on 30 January 2015. Established in 1906, (Chandan & Rajput, 2002) the
Corporation Bank has more than 3,000 branches and over 3,200 ATMs in the country,
established in 1906 (Dylan, 2016). The bank was nationalized in 1980 and presently a leading
nationalized bank in the country.
2. Statement of the Problem
The profitability is main performance parameter in the growth of the banking sector that reflects the
productive utilization of all resources in the company. The banks are now facing some new challenges
such as frequent changes in technology required for current banking, increasing competition, rigorous
prudential norms, raising customer beliefs, panic level of non-performing assets, asset-liability
management, increasing pressure on profitability, raising net expenditure, liquidity and credit risk
management, shrinking size of spread and so on. The present study attempts to analyze the overall
growth performance i.e., profitability of nationalized banks in India.
3. Research Methodology
The growth performance of a bank can be measured by various indicators. Among these, the
profitability is the most important and reliable indicator as it gives a broad indication of the capability
of a bank to increase its growth.
3.1 Objectivity of the study
i) To identify the financial performance of nationalized banks with respect to CRAMEL and factors
determining the profitability.
ii) To present the findings and offer suitable suggestions to improve the growth of the nationalized
banks.
3.2 Hypotheses of the Study
H 01: There are no significant differences across the various components of income and expenditure.
H 02: There is no significant difference between the trend of income and expenditure.
H 03: The profitability performance of the nationalized banks is not significant during the study period.
3.3 Period of Study
The analysis covered a period of five financial years from 2010-11 to 2015-16. The financial year
starts from 1st day of April of a year and ends on 31st day of March of next year.
3.5 Research Design
The descriptive research design is used for the analysis and it is basically a fact finding approach. Its
aim is to explain the behavior and characteristics of an individual or group characteristics and to find
out the frequency with the same things occurs.
3.6 Sampling Design
The ten nationalized banks are selected according to their market capital from the list of Scheduled
Commercial Banks group. The total population of the nationalized banks in India as on 31 st March
2012 is 20. There is analysis the banks with long financial periods of five years at a stretch without
any lapse of years or break of business operation.
3.7 Data Collection

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Out of the twenty nationalized banks, the ten top capitalized banks are taken. The information
collected for the study is purely based on secondary in nature. The data for the study has been
collected from the banks which were functioning in India for the financial period from 2011-12 to
2015-16. The required information are taken from the volumes of published reports by the RBI
bulletins, statistical data of RBI, reports on progress and trends of banking in India, various report on
currency and finance, books relating to banks, magazines, journals and online web based reports.
3.8 Tools Applied
The data collected were moderated for the study. The major tools applied for the analysis of the data
are ratios, coefficient of variation, coefficient of correlation and determination, CAGR, percentages,
trend line calculations and t-test of significance.
4. Literature Review
A lot of studies and researches that analyzed the productivity, efficiency and profitability of
commercial banks in the reforms era exhibited that nationalized banks have shown some improvement
during the last two decades, however the inter group comparisons display that the nationalized banks
are far beyond their private and foreign counterparts. There is representation reviews of some
researchers relating to the topic are as follows.
Zacharias Thomas (Zacharias, 1996) has studied to review and analyze the growth performance of the
Syndicate Bank and other nationalized banks in India by using an Economic Managerial- Efficiency
Evaluation Model (EMEE Model) developed by researcher. Das Abhiman (Das, 1999) evaluates the
inter-bank performance of the public sector banks during the reform period. He has made the use of
sequential decomposition model for the profitability analysis. Athma Prashanta (Athma, 2000) has
made an attempt to evaluate the performance of public sector commercial banks with the special
emphasis on the State Bank of Hyderabad. The period of the study for evaluation of performance is
from 1980-81 to 1993-94. He has analyzed the different factors including trends in the deposits,
various components of profits, and trends in asset structure of the SBH etc. Sayuri, Shirai (Shirai,
2002) analyzed the impact of reforms by examining various changes in the growth performance of the
banking industry. He has found that the performance of public sector banks improved in the second
half of the 1990s. The profitability (measured by the return on assets) of the nationalized banks
turned positive in 1997-2000 and that of SBI group have steadily improved their cost efficiency over
the reform period. DSouza has provided an overview of performance of public sector, foreign and
private sector banks during the period from 1991 to 2000 (Sarala, 2002). The efficiency of banking
system was measured in terms of employees ratio and working funds ratio. Though the employees
ratio has raised in the PSU banks, the turnover per employee in the private and foreign banks was
about double as compared to the nationalized banks during this period. However the analysis
disclosed that the profitability of the PSU banks in late nineties improved relatively to that of the
foreign and private banks. Chaudhuri Saumitra (Saumitra, 2002) in her paper has observed that the
profitability growth of PSU banks is continuously declining. The PSU banks are facing triple faced
problems. Their market share and profitability growth, both are declining. B. S. Badola and Richa
Verma (Badola & Verma, 2006) have studied the variables non-interest income, operating expenses,
provision and contingencies and spread have a significant relationship with net profit. Among them
two variables provision and contingencies and operating expenses are found having negative
relationship.
In 2007, Mckinsey & Company (Shirai, 2013) have reported a clear divide between the new private
sector and foreign banks i.e., attackers and the public and old private sector banks i.e., incumbents.
The report reveals that between 2000 and 2007 attackers have increased assets from 12% to 26%,
profits from 21% to 32 % and market capitalization from 37% to 49%. Saumitra N. Bhaduri and K. R.
Shanmugam (Saumitra, 2013) have analyzed the ownership issue for the Indian banking industry
during the post reform period i.e., 1992 to 2007. The results indicate that both domestic and foreign
private banks are superior and better to their PSUs in relation to some growth indicators i.e.,
Operating Profit Ratio, Return on Asset, Operating Cost Ratio and Staff Expense Ratio. The one

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indicator for that the private banks are less efficient than their counterpart is Net Interest Margin. The
study highlights that foreign banks were better among the private banks, while the State bank group
shows much better performance among the PSU banks. The results also show a combination in the
growth performances across the different financial owned groups over that period. Toni, U. A., (Toni,
2008), has identified the significant company level determinants of the bank profitability. By using a
panel data set comprising 91 observations of the 33 banks over the 2000-2004 periods, regression
results specify that the size of credit portfolio capital size and extent of ownership concentration are
significant company level determinants of the bank profitability in Nigeria (Toni, 2008).
In 2008, Kumar and Sreeramulu (Adhikari et al., 2014) in their study have compared the productivity
ratios and the employee's cost of banks in India from 1997 to 2008, and found that the performance of
the new private sector and foreign banks has been superior to public and old private sector banks.
Manoj, P. K. (Manoj, 2010) has identified the operational efficiency of KOPBs, and determinants of
profitability using an econometric methodology. Ram Mohan T. T. (Ram, 2010) has highlighted the
proposition given by President of America Mr. Obama that higher capital requirements are not
sufficient but the caps on the bank sizes are also required. He hold the view that the banks size should
be fixed in relation to economies in which they operate that 5-10% of GDP. Deger Alpher and Adem
Anbarb (Alpher, 2011) have analyzed the ratios of loans and assets and loans under follow-up/ loans
are found negative and significant impacts on ROA. That shows that the credit portfolio volume and
weak asset quality have given the negative impact for the return on the asset. M. G. Naidu (Naidu,
2012) has founded that the ratios like earned interest, total expenditure, net profit to whole funds have
recorded a downfall, which leads to decrease in the profitability factor whereas the decrease in the
ratios interest expenditure, leads to increase in the Burdon ratios. Nafees A. Khan and Ms. Fozia
(Khan & Fozia, 2012) have focuses on the improvement of technology that allows electronic
transactions to take place faster and offers unparallel convenience via various delivery channels. The
technology enhances choices, creates new markets, and improves efficiency and productivity. The
proper use of technology has a valuable effect on development and growth of banking (Pandi, 2014).
In 2013, K. S. Rao (Sarala, 2013) analyses the data on the factors of productivity ratios i.e., business
per employee, net income per employee, profit per employee, business per branch, profit Per Branch,
reveals that the private and foreign banking sector have outperformed over the PSU banks. However,
the gap between the private sector and PSU banks registered declining trends on all the five indicating
factors during the period 2005-2011. S. Jhamb and H. V. Jhamb (Jhamb & Jhamb, 2013) have argued
that the NPAs are not the only factor in decreasing the profitability of the banks as the NNPAs to Net
Advances ratio has been continuously on the decline. This further confirms the influence of some
other external factors in the banks profitability. There is also a need to look into the management
aspect of the banks. The management has to maintain a good relationship with the customers and
investors to raise the profitability of the banks. K. Adhikari et al. (Adhikari et al., 2014) have analysed
the profitability performance calculated by the various parameters fluctuated throughout the study
period and the performance observed by the return on the investment ratio is more consistent as its
coefficient of variation is least (9.85 %). T. D. Pandi and P. Vellingiri (Pandi, 2014) have applied the
different ratios and found significant of debt to equity, fixed assets to total assets, fixed assets to net
worth, other assets to total assets and other liabilities to total assets. In the terms of the profitability
factor, the major banks have registered above the benchmark on ROA i.e., more than one per cent,
equity paid up to net worth, deposits to total assets and return on capital employed.
5. Analysis
Keys:
NNPA = Net NPA%;
OIPWF = Operating Income as the % of Working Funds;
NPM = Net Profit Margin;
RRNW = Reported Return on Net Worth;

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EXP. = EXPENDITURE;
IE = Interest Expended;
EC = Employees Cost;
OE = Other Expenses;
GR = Growth Rate.
Table 1 Data representations of ratios and factors of various banks with average data of nationalized
banks for FY-2011-12 to FY-2015-16
S. No. Profitability FY-2011- FY-2012- FY-2013- FY-2014- FY-2015-
Name of Ratios 12 13 14 15 16
Bank
1. NNPA 0.54 1.28 1.52 1.89 5.06
Bank of OIPWF 10.32 10.72 9.80 10.03 11.48
Baroda NPM 16.87 12.73 11.66 7.91 -12.24
RRNW 18.22 14.01 12.61 8.53 -13.42
IE 19356.71 23881.39 26974.36 29776.32 31321.43
EC 2985.58 3449.65 4139.73 4261.35 4978.02
OE 2123.39 2422.46 2935.14 3412.78 3945.11
2. NNPA 1.52 2.35 2.85 4.06 8.61
Punjab OIPWF 12.39 13.56 12.37 12.17 11.50
National NPM 13.40 11.33 7.73 6.61 8.38-
Bank RRNW 18.52 15.19 9.69 8.12 11.20-
IE 23013.59 27036.82 27077.28 29759.79 32112.57
EC 4723.48 5674.72 6510.45 7336.91 6425.95
OE 2279.27 2490.34 2827.78 3154.64 3546.50
3. NNPA 3.09 2.90 3.75 3.61 7.36
Central Bank OIPWF 12.98 12.71 13.77 14.01 14.38
of India NPM 2.78 4.64 5.16- 2.29 5.47-
RRNW 4.52 7.30 10.24- 3.87 9.85-
IE 13980.86 16123.08 17933.16 19161.71 18822.27
EC 2506.24 2891.55 3537.01 3824.94 4465.67
OE 1242.75 1340.78 1641.92 1757.24 1895.80
4. NNPA 1.46 2.18 1.98 2.65 6.42
Canara Bank OIPWF 13.26 14.07 13.13 13.25 13.55
NPM 10.64 8.42 6.16 6.17 6.38-
RRNW 15.91 12.57 10.10 10.21 10.75-
IE 23161.31 26198.94 30603.17 34086.37 34258.77
EC 2973.08 3253.56 3672.38 4274.25 4445.88
OE 1700.66 1888.43 2408.63 2989.30 3046.05
5. NNPA 1.70 1.61 2.33 2.71 5.25
Union Bank OIPWF 11.82 12.07 12.81 12.54 12.04
of India NPM 8.49 8.58 5.77 5.55 4.19
RRNW 13.67 13.69 9.97 9.68 6.65
IE 14235.39 17581.86 21470.07 23640.06 23885.70
EC 2479.26 2755.01 3307.77 3785.52 3619.89
OE 1508.26 1757.16 2174.99 2357.91 2602.93
6. NNPA 1.47 2.06 2.00 3.36 7.79
Bank of India OIPWF 11.44 11.02 10.22 10.80 11.63
NPM 9.40 8.61 7.19 3.93 14.56-

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RRNW 13.57 11.49 9.12 5.43 19.63-


IE 20167.23 22884.92 27079.57 32086.25 30071.85
EC 3053.42 3130.51 3991.15 4985.82 5357.24
OE 1887.24 2201.03 2708.32 3102.77 3984.30
7. NNPA 0.96 0.76 1.56 1.90 4.48
Syndicate OIPWF 12.35 11.60 10.70 10.66 11.52
Bank NPM 8.60 11.70 9.19 7.04 7.08-
RRNW 16.34 20.95 15.70 12.54 15.32-
IE 10183.32 11666.63 13080.51 16094.87 17213.08
EC 1891.50 2179.21 2228.62 2229.44 2715.64
OE 922.62 999.62 1073.13 1393.15 1568.60
8. NNPA 1.35 2.50 3.20 5.68 11.89
India OIPWF 12.71 12.89 12.89 13.93 14.61
Overseas NPM 5.87 2.74 2.65 1.89- 12.31-
Bank RRNW 0.00 0.00 4.19 3.26- 21.85-
IE 12880.91 15424.78 17106.92 18554.38 18134.60
EC 2082.98 2248.35 2362.61 2649.54 3390.40
OE 1080.09 1159.49 1386.30 1550.67 1635.10
9. NNPA 1.33 2.26 2.26 2.50 4.20
Indian Bank OIPWF 13.54 13.15 12.47 12.59 12.58
NPM 14.28 11.38 7.60 6.34 4.37
RRNW 18.47 14.79 9.81 8.00 5.27
IE 7813.32 9368.37 10888.79 11391.65 11797.60
EC 1483.96 1973.89 1926.79 1742.59 2006.40
OE 703.04 776.97 904.71 1068.34 1189.11
10. NNPA 0.87 1.19 2.32 3.08 6.53
Corporation OIPWF 12.95 12.91 13.10 13.48 13.83
Bank NPM 11.56 9.35 3.12 2.98 2.60-
RRNW 18.19 14.99 5.56 5.57 4.73-
IE 9870.89 11908.23 14174.88 15486.10 15171.78
EC 913.23 990.31 1190.24 1182.22 1373.18
OE 870.33 1006.47 1201.77 1343.13 1506.42
Average NPM (x); 10.189 8.948 5.591 4.693 6.046-
Ratios GR: 0.00 -12.18 -37.52 -16.06 -228.83
of all NNPA (y); 1.429 1.909 2.377 3.144 6.759
Nationalized :GR 0.00 +33.58 +24.52 +32.27 +114.98
Banks RRNW (z); 13.741 12.498 7.651 6.869 9.483-
GR: 0.00 9.05- 38.78- 10.22- 238.06-
OIPWF (w); 12.376 12.47 12.126 12.347 12.712
GR: 0.00 +0.76 -2.75 1.82- 2.95+
IE (a); 15466.353 18207.502 20638.871 9361.325 22478.965
GR: 0.00 +17.72 +13.14 -54.64 +140.12
EC (b); 2509.273 2854.676 3286.675 3627.258 3877.827
GR: 0.00 13.76+ 15.13+ 10.36+ 6.9+
OE (c); 1431.765 1722.234 1926.269 2212.993 2491.992
GR: 0.00 20.28+ 11.84+ 11.88+ 12.6+

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4500
4000
f(x) = - 20.08x^2 + 471.43x + 2037.69
3500 R = 1 Employees Cost
3000 Polynomial
(Employees Cost)
2500
f(x) = 4.27x^2 + 235.51x + 1203.56
2000 R = 1 Other Expenses

1500 Polynomial
(Other Expenses)
1000
500
0
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5

Figure 1 (FY based variations of Employees Cost and Other expenses with parabolic trend lines)

20

Net Profit
Margin
15 Ratio
f(x) = - 1.87x^2 + 6x + 8.8
R = 0.93 Polynomi
10
f(x) = - 1.18x^2 + 3.41x + 7.42 al (Net
R = 0.94 Profit
Margin
5 f(x) = 0.47x^2 - 1.63x + 2.84 Ratio)
R = 0.95

Net NPA%
0
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5
Polynomi
al (Net
-5 NPA%)

RR (z)
-10

Polynomi
-15 al (RR (z))

Year 2011-2016

Figure 2 (FY based variations of NPMR, NNPA and RRNW with parabolic trend lines)

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50

0 27.09x^2 + 105.72x
f(x) = - 25.31x^2 114.82x - 97.65
105.68
0.5 1 f(x)
R = =0.81
0.89x^2
0.82
1.5 - 5.01x
2 + 5.06
2.5 3 3.5 4 4.5 5 5.5
R = 0.61
-50

-100

GR of NPM
-150
Polynomial
(GR of NPM)
-200 GR of RNNW
Polynomial
-250 (GR of RNNW)
GR of w%
-300 Polynomial
(GR of w%)
FY-2011 to 2016

Figure 3 (FY based Growth Rate% of NMP, RNNW and OIPWF with parabolic trend lines)
200
Growth of NPA%

150 Polynomial
(Growth of NPA
%)

100 f(x) Growth of a


f(x) == 20.78x^2
8.22x^2 - -26.45x
103.87x + 106.34
+ 30.01
R == 0.82
R 0.51 Polynomial
(Growth of a)
50
Growth of b

f(x) = - 2.9x^2 + 18.43x - 14.18 Polynomial


0 (Growth of b)
0.5 1 R = 0.87
1.5 2 2.5 3 3.5 4 4.5 5 5.5
Growth of c
-50 Polynomial
(Growth of c)

-100

Figure 4 (FY based Growth Rate% of various ratios with parabolic trend lines)
5.1 Calculation and Result Discussions
Key: Net Profit Margin = x, Net NPA% = y, Reported Return on Net Worth = z, Interest Expended= a,
Employees Cost= b, Other Expenses =c;
Net Profit Margin (x): CV (x) =1.2267, CAGR (x) = -4.05875, the growth rate of NPM shows
continuously downfall year by year, the two-tailed t-value is 0, the p-value is 1. The result
is not significant at p < 0.05.

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Net NPA% (y): CV (y) =0.60946, CAGR (y) =1.3325, the growth rate of NPA% is upwards
from Fy-2011-12 to Fy-2015-16 continuously, the two-tailed t-value is 0, the p-value is 1. The
result is not significant at p < 0.01.
Reported Return on Net Worth (z): CV (z) =1.3280, CAGR (z) = -5.806, its growth rate
decreases continuously from 2011 to 2015, the two-tailed t-value is 0, the p-value is 1. The
result is not significant at p < 0.05.
Operating Income as a % of Working Funds (w): CV (w) =0.01531, CAGR =0.084, the
growth rate does not show any positive trend it shows a zigzag movement, the two-tailed t-
value is 0.065261, the p-value is 0.951098. The result is not significant at p < 0.05.
Interest Expended (a): CV (a) =0.26615, CAGR (a) = 1753.153, its growth rate shows
positive trend except in 2015, the two-tailed t-value is 0.816525, the p-value is 0.460036. The
result is not significant at p < 0.05.
Employees Cost (b): CV (b) =0.15418, CAGR (b) = 342.1385, the growth rate of employees
cost moves continuously upwards, the two-tailed t-value is 0; the p-value is 1. The result is
not significant at p < 0.05.
Other Expenses (c): CV (c) =0.18894, CAGR(c) =265.05675, the growth rate of other
expenses also shows a positive trend, the two-tailed t-value is -6.891108, the p-value is
0.002325. The result is significant at p < 0.05.
The value of r(x, y) = -0.9928. This is a strong negative correlation that means a high x
variable scores go with low y variable scores and so on. The value of r 2, the coefficient of
determination, is 0.9857.
The value of r (x, z) = -0.9929. This is a strong negative correlation, which means that high x
variable scores go with low z variable scores (and vice versa). The value of r 2, the coefficient
of determination, is 0.9859.
The value of r (x, a) = -0.4475. Although technically a negative correlation, the relationship
between variables is only weak (the nearer the value is to zero, the weaker the relationship).
The value of r2, the coefficient of determination, is 0.2003.
The value of r (x, b) = -0.8725. This is a strong negative correlation, which means that high x
variable scores go with low b variable scores (and vice versa). The value of r 2, the coefficient
of determination, is 0.7613.
The value of r (x, c) = -0.9109. This is a strong negative correlation, which means that high x
variable scores go with low c variable scores (and vice versa). The value of r 2, the coefficient
of determination, is 0.8297.
6. Conclusion
The analysis by scheming the ratios, growth rates of varied ratios, we will say that Profit Margin, rate
of growth of NPM the troubles, Net NPA%, rate of growth of Reported Return on Net Worth the
troubles, reported come Operating Income as a % of Working Funds and rate of growth of RRNW the
troubles, show a unendingly downfall. The in operation financial gain as a percent of working funds
has no constant trend. The interest expended, employees cost and different Expenses moves
unendingly upward with positive growth. The NPAs have invariably created an enormous downside
for the banks in Asian country. Its simply not downside for the banks except for the Indian Economy
too. The money latched up in NPAs features a direct impact on profit of the bank because the Indian
banks are extremely addicted to financial gain from interest on funds loaner. Hence, it's to conclude
that the performance of nationalized banks isn't consistent throughout the study amount of 5 years and
additionally not statistically significant. These issues want immeasurable serious efforts by the govt.
otherwise can keep killing the expansion of banks that isn't sensible for the growing Indian Economy
in the least.

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