Bank Performance

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Asia Pacific Journal of Marketing & Management Review

Vol.1 No. 3, November 2012, ISSN 2319-2836
A STUDY OF FINANCIAL PERFORMANCE OF REPUTED PUBLIC

BANK IN INDIA DURING 2006 TO 2010
M. GANGU NAIDU*
*Research Scholar,
K L University.
ABSTRACT
This paper attempts to analyze the financial performance of Andhra bank in India. Andhra bank
form major part of total banking system in India and Andhra Pradesh so there is a need to
evaluate the performance of this bank. The study is based upon secondary data covering the
period from 2006-2010. For analyzing the performance Compound Annual Growth rate and
Coefficient of Variation of, total expenditure, total assets, total liabilities, interest earned to total
fund, interest expended to total assets, spread as percentage of total fund, Interest earned, non
interest expenditure, net profit to total funds percentage, and profit before provisions to total
assets percentage , and spread are calculated. It is concluded the CAGR of various variables have
shown in Andhra bank. Andhra bank has shown CAGR in case of interest earned, expenditure,
Burdon, total liability, total assets, and Interest expended/total funds.
KEYWORDS: Andhra Bank, Compound Annual Growth rate, Coefficient of Variation,
Financial analysis, Ratio Analysis.
________________________________________________________________________
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The banking system is an integral part of any economy. It is one of the many institutions that
impinges on the economy and affect its performance. Economists have expressed a variety of
opinions on the effectiveness of the banking systems in promoting or facilitating economic
development. As an economic institution, the bank is expected to be more directly and more
positively related to the performance of the economy than most non-economic institutions.
Banks are considered to be the mart of the world, the nerve centre of economies and finance of a
nation and the barometer of its economic perspective. They are not merely dealers in money but
are in fact dealers in development. The role of banks in accelerating the economic development
of a country like India has been increasingly recognized following the nationalization of fourteen
major commercial banks in July 1969 and six more banks in April 1980. With nationalization,
the concept of banking has undergone significant changes. Banks are no longer viewed as mere
lending institutions. They are to serve the society in a much bigger way with a socio-economic
Development oriented outlook. They are specially called up onto use their resources to attain
social upliftment and speedier economic development.
www.indianresearchjournals.com
INTRODUCTION
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REVIEW OF LITERATURE
Luther (1976) chaired the committee appointed by Reserve Bank of India to study the
productivity, efficiency and profitability of commercial banks. The committee analyzed the
various issues related to the planning, budgeting and marketing in commercial banks.
Varghese (1983) analyzed the profits and profitability of commercial banks in India from 1970 to
1979, by using the operating profits operating margins, growth yield on assets and the spread
relation ratios.
Amandeep (1991) attempted to estimate profit and profitability of Indian Nationalized banks and
to study the impact of priority sector lending, credit policies, geographical expansion, industrial
sickness, competition, deposit composition, establishment expenses, ancillary income, spread
and burden on bank profitability. For this purpose, trend analysis, ratio analysis and regression
analysis were used.
Swamy (2001) studied the comparative performance of different bank groups since 1995-96 to
1999-2000. An attempt was made by researcher to identify factors which could have led to
changes in the position of individual banks in terms of their share in the overall banking industry.
He analyzed the share of rural branches , average branch size, trends in banks profitability, share
of public sector assets, share of wages in expenditure, provision and contingencies, net non
performance assets in net advances, spread, has been calculated.
Yogesh Puri (2012) examined the study of financial performance of nationalized banks, the data
taken was for five years (1998-2002) and it was analyzed by using difference of means test. The
banking sector in India includes domestic banks (privately owned, partially privatized banks,
fully PSBs) as well as foreign banks, and objective of this study is to study the impact of
nationalizes banks in Indian economy.
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Roma Mitra, Shankar Ravi (2008), A stable and efficient banking sector is an essential
precondition to increase the economic level of a country. This paper tries to model and evaluate
the efficiency of 50 Indian banks. The Inefficiency can be analyzed and quantified for every
evaluated unit. The aim of this paper is to estimate and compare efficiency of the banking sector
in India. The analysis is supposed to verify or reject the hypothesis whether the banking sector
fulfils its intermediation function sufficiently to compete with the global players. The results are
insightful to the financial policy planner as it identifies priority areas for different banks, which
can improve the performance. This paper evaluates the performance of Banking Sectors in India.
Petya Koeva (July 2003), His study on The Performance of Indian Banks, During Financial
Liberalization states that new empirical evidence on the impact of financial liberalization on the
performance of Indian commercial banks. The analysis focuses on examining the behaviour and
determinants of bank intermediation costs and profitability during the liberalization period. The
empirical results suggest that ownership type has a significant effect on some performance
indicators and that the observed increase in competition during financial liberalization has been
associated with lower intermediation costs and profitability of the Indian banks.
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Most of the studies were concerned of commercial banks as a whole and we recovering
very limited number of years. PSBs maintained its dominance in the banking system. Keeping
into consideration the research gaps an endeavour is made in the present study to examine the
performance of PSBs by calculating various ratios and their Compound Annual Growth Rates
(CAGRs) and Coefficient of Variation (CV).
RESEARCH METHODOLOGY
The study is based upon secondary data covering the period from 2006-2010.The study is related
to Andhra bank. The proposed study will aim at examining the performance of Andhra bank in
India. The data on the variables selected like total expenditure, total assets, total liabilities,
interest earned to total fund, interest expended to total assets, spread as percentage of total fund,
Interest earned, non interest expenditure, net profit to total funds percentage, and profit before
provisions to total assets percentage for analysis from RBI website www.rbi.org.in and website
of Indian Banker Association and Andhra bank website. We have computed Return on Assets,
and Interest Expended to Total Assets, Interest Earned to Total Assets, Spread Ratio and profit
before provisions to total assets percentage. These computed ratios were further analyzed by
computing compound annual growth rates (CAGRs) and coefficient of Variation (CV).
OBJECTIVE OF STUDY
The present study has the following major objectives:
1. To evaluate the financial performance of Andhra bank in India, through the spread
burden, and the profitability ratios.
2. To appraise the profitability of this bank through overall profitability indices.
3. To enlighten on the establishment of public sector banks.
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The performance effectiveness of the nationalized banking industry that controls more than 90
percent of the banking business in India is an issue of serious concern to the Government of
India, the national and international monetary authorities such as the Reserve Bank of India, the
World Bank, the International Monetary Fund and so on: it is a seriously debating topic among
academicians and public at large. Andhra bank is playing main role in India and Andhra Pradesh
and the study of the performance effectiveness of this bank from 2006 to 2010. Andhra Bank
(BSE: 532418) is a medium-sized public sector bank (PSB), with a network of 1,712 branches,
15 extension counters, 38 satellite offices and 1056 automated teller machines (ATMs) as on
March 31, 2012. Andhra Bank was founded by the eminent freedom fighter, Dr. Bhogaraju
Pattabhi Sitaramayya. The Government of India owns 51.55% of its share capital and is going to
increase it to 58% by infusing 1100 crore. The state owned Life Insurance Corporation of India
holds 10% of the shares. The bank has done a total business of Rs. 1, 90,535 crore as on
31.03.2012. Though a number of studies are available on banking industry, there is dearth of a
comprehensive academic study on the performance effectiveness and managerial efficiency of
the Andhra bank. A review of the available literature on banking reveals that no exclusive study
SIGNIFICANCE OF THE STUDY
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on the performance effectiveness of bank has so far been attempted in India. In this context the
present study may fill the gap to a certain extent.
PUBLIC SECTOR BANKS EVOLUTION
Public sector banks are the ones in which the government has a major holding. They are
divided into two groups i.e. Nationalized Banks and State Bank of India and its associates.
Among them, there are 19 nationalized banks and 8 State Bank of India associates. Public Sector
Banks dominate 75% of deposits and 71% of advances in the banking industry. Public Sector
Banks dominate commercial banking in India. These can be further classified into:
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The Public sector in the Indian banking got widened with two rounds of nationalization-first in
July 1969 of 14 major private sector banks each with deposits of Rs. 50 crore or more, and
thereafter in April 1980, 6 more banks with deposits of not less than Rs. 2 Crore each. It resulted
in the creation of public sector banking with a market share of 76.87 per cent in deposits and
72.92 per cent of assets in the banking industry at the end of March 2003. With the merger of
'New Bank of India' with 'Punjab National Bank' in 1993, the number of nationalized banks
became 19 and the number of public sector banks 27. The number of branches of public sector
banks, which was 6,669 in June 1969, increased to 41874 by Mach 1990 and again to 46,752 by
March 30, 2003. The public sector banks thus came to occupy a predominant position in the
Indian banking scene. It is however, important to note that there has been a steady decline in the
share of PSB's in the total assets of SCB's during the latter - half of 1990s. While their share was
84.5 per cent at the end of March 1996, it declined to 81.7 per cent in 1998 and further to 81 per
cent in 1999. The share of the banking sector held by the public banks continued to grow through
the 1980s, and by 1991 the public sector banks accounted for 90% of the banking sector. A year
later, in March, 1992, the combined total of branches held by public sector banks was 60,646
across India, and deposits accounted for Rs. 1,10,000 crore. The majority of these banks were
profitable, with only one out of the 27 public sector banks reporting a loss, with nationalised
banks reporting a combined loss of Rs. 1160 crores. However, the early 2000s saw a reversal of
this trend, such that in 2002-03 a profit of Rs. 7780 crores by the public sector banks: a trend that
continued throughout the decade, with a Rs. 16856 crore profits in 2008-2009.
Public sector in the banking industry emerged with the nationalization of Imperial Bank
of India (1921) and creating the State Bank of India (1955) as a part of integrated scheme of rural
credit proposed by the All India Rural Credit Survey Committee (1951). The Bank is unique in
several respects and it enjoys a position of pre-eminence as the agent of RBI wherever RBI has
no branches. It is the single largest bank in the country with large international presence, with a
network of 48 overseas offices spread over 28 countries covering all the time zones. One of the
objectives of establishing the SBI was to provide extensive banking facilities in rural areas by
opening as a first step 400 branches within a period of 5 years from July 1, 1955. In 1959, eight
banking companies functioning in formerly princely states were acquired by the SBI, which later
came to be known as Associate Banks. Later, two of the subsidiary banks', viz., the State Bank of
Bikaner and Jaipur were merged to form the State Bank of Bikaner and Jaipur, thus form eight
banks in the SBI group then making banks in the state bank group.
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1) State Bank of India

2) Nationalized banks
3) Regional Rural Banks
FINANCIAL PERFORMANCE OF ANDHRA BANK
Andhra Bank was founded by Dr. Bhogaraju Pattabhi Sitaramayya in 1923 in
Machilipatnam, Andhra Pradesh. The founder Dr. Bhogaraju Pattabhi Sitaramayya was an
eminent freedom fighter and a multifaceted genius. The Bank was registered on November 20,
1923 and commenced business on 28 November 1923 with a paid up capital of Rs 1.00 lakh and
an authorised capital of Rs 10.00 lakhs. In 1956, linguistic division of States was promulgated
and Hyderabad was made the capital of Andhra Pradesh. The registered office of the Bank was
subsequently shifted to Andhra Bank Buildings, Sultan Bazar, Hyderabad, and Andhra Pradesh.
In the second phase of nationalization of commercial banks commenced in April 1980, the bank
became a wholly owned Government bank. In 1964, the bank merged with Bharat Lakshmi Bank
and further consolidated its position in Andhra Pradesh. Andhra Bank opened a representative
office in Dubai in May, 2006 and another at Jersey City, New Jersey (USA), in June 2009. A
foothold in New Jersey is strategic for the bank as the state has a large number of Indians from
Andhra Pradesh. In 2010 Malaysia awarded a commercial banking license to a locally
incorporated bank to be jointly owned by Bank of Baroda, Indian Overseas Bank and Andhra
Bank. The new bank, India BIA Bank (Malaysia), will have its headquarters in Kuala Lumpur,
which has a large population of Indians. Andhra Bank will hold a 25% stake in the joint-venture.
Bank of Baroda will own 40% and IOB the remaining 35%. Andhra Bank received the MSME
National Award for the year 2009-10 for Andhra Bank's outstanding performance in PMEGP
Scheme in National Awards Presentation function, Andhra Bank has won the Banking
Excellence Award for the Best Public Sector Bank, instituted by the State Forum of Bankers
Clubs Kerala on 13.11.2010; it received the "BEST BANK" award - for the Quality of Assets
awarded by BUSINESS TODAY on 08.12.2010 at Mumbai.
ANALYSIS AND INTERPRETATION THROUGH RATIOS

Ratios are used to evaluate the performance of your business and identify potential
problems. Each ratio informs you about factors such as the earning power, solvency, efficiency,
and debt load of your business. They are used to measure the relationship between two or more
components of the financial statements and have greater meaning when the results are compared
to industry standards for businesses of similar size and activity.
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The study is based on the secondary data obtain from the various sources, viz, the IBA bulletins
(annual issue), statistical table related to Andhra bank annual report of financial performance,
banks in India performance highlights of public sector banks , and the RBI reports on trends and
progress of banking in India.
DATA COLLECTION
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Ratios are effective performance indicators when results for the current period are compared to
the past performance over several periods. For example, by examining the inventory turnover
over more than one fiscal year, you can compare the rate at which inventory turns over to the
year before. You can also determine whether or not sales of inventories are still growing and at
what rate. This is referred to as horizontal or trend analysis, as data is compared for multiple
consecutive periods to determine if the business's performance is following a predictable course.
A dramatic upward or downward trend can signify areas requiring attention, permitting you to
forecast future results. Following and reacting to these trends is your first line of strategic
defence.
The performance of the business should also be compared to that of competitors or other
businesses of comparable size and activity. If your business experiences a downturn in its Net
Profit Margin by 6% but the competitors experience an average downturn of 21%, this indicates
that your business is performing better than the industry as a whole. Nonetheless, it is still
necessary to analyze the underlying data to establish the cause of the downturn in the Net Profit
Margin and to take effective measures.
When you compare ratios with those of other companies, it is important to ensure you are using
the same equation in your calculation.
Financial ratios are one of the many tools used in financial analysis. A ratio may vary in
importance depending on the business type, the industry category it belongs to, or its location.
For example, regional differences such as labour or shipping costs can affect the result of a ratio.
Sound financial analysis always requires scrutinizing the data used with the ratios and examining
the circumstances that generated the results
PROFITABILITY RATIOS: for calculating the profitability ratios following points are taken
into consideration, (i) Operating profits as percentage of total assets, (ii) Net profits as percent of
total assets.
PERFORMANCE INDICES: for analyzing the performance of nationalized banks eights
profitability ratios are calculated.
Index =
Average ratio for the bank concern

---------------------------------------------------Average ratio for the aggregate of all banks
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BURDEN RATIOS: Burden ratios are calculated as difference of non interest expenditure and
non interest income. Following points are taken into consideration during calculation of burden
ratios. (i) Non interest expenditure, (ii) Noninterest income (iii) Difference between a. and b. as
burden.
SPREAD TO TOTAL ASSETS RATIO: Spread is the difference between interest earned and
Interest paid. The higher the difference the better it will be for the bank. Thus spread ratio
Measures the proportion of spread to total assets of a bank. Following factors are considered to
calculate spread. (i) Interest earn as percent of total assets, (ii) Interest expenditure as percent of
total assets. (iii) Spread as percent of total assets.
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CALCULATING GROWTH RATES: It's common to calculate period growth rates for
historical figures. For calculating growth from a single start time and a single end time it's
sufficient. In other words, if we have a value for revenue in Year 1 and a revenue figure for Year
10 and we aren't concerned about the years between we would set up the spreadsheet shown
below, given that the formula is:
CAGR: =((End Value/Start Value)^(1/(Periods - 1)) -1
Year 1
110.06
Year 10
260.83
=((B3/B2)^(1/9))-1
==>
10.06%
COEFFICIENT OF VARIATION
In probability theory and statistics, the coefficient of variation (CV) is a normalized measure of
dispersion of a probability distribution. It is also known as unitized risk or the variation
coefficient. The absolute value of the CV is sometimes known as relative standard deviation
(RSD), which is expressed as a %. CV should not be used interchangeably with RSD (i.e. one
term should be used consistently)
The coefficient of variation (CV) is defined as the ratio of the standard deviation
:
to the mean
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Which is the inverse of the signal-to-noise ratio? It shows the extent of variability in relation to
mean of the population.
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The coefficient of variation should be computed only for data measured on a ratio scale, which are measurements that can only take
non-negative values. The coefficient of variation may not have any meaning for data on an interval scale. For example, most
temperature scales are interval scales (e.g. Celsius, Fahrenheit etc.), they can take both positive and negative values. The Kelvin scale
has an absolute null value, and no negative values can naturally occur. Hence, the Kelvin scale is a ratio scale. While the standard
deviation (SD) can be derived on both the Kelvin and the Celsius scale (with both leading to the same SDs), the CV is only relevant as
a measure of relative variability for the Kelvin scale. Often, laboratory values that are measured based on chromatographic methods
are log-normally distributed. In this case, the CV would be constant over a large range of measurements, while SDs would vary
depending on typical values that are being measured.
On the basis of these studies following tables, graphs and conclusion were drawn.
FINANCIAL ANALYSIS AND DISCUSSION
The study seeks to assess the relative performance of the Andhra bank in various years, with respect to the above mentioned
indicators. The relevant information is shown in bellow tables.
INTEREST EARNED BY ANDHRA BANK DURING THE PERIOD (2006-2010)
YEAR
2006
ANDHRABANK 2,675.12
CAGR
2007
2008
2009
2010
3,315.33
4,209.56
5,374.62
6,372.87
24.23614
MEAN
4389.5
S.D
1343.84
C.V
0.306149
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BANK
TABLE: 1
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INTEREST EARNED
2010
6372.87
2009
5374.62
2008
4209.56
2007
3315.33
2006
2675.12
FIGURE: 01
INTERPRETATION: INTEREST EARN: The above table shows the interest earn by the various public sector banks, and
calculated all years of Mean and CAGR. If we observe above table and diagram interest earning is increasing when compare from
2006 to 2010
BANK
YEAR
2006
ANDHRABANK 1,506.15
2007
2008
2009
2010
1,897.79
2,870.00
3,747.71
4,178.13
CAGR
MEAN
29.05607
2839.956
S.D
1027.847
C.V
0.361923
90
TABLE: 02
EXPENDITURE BY ANDHRA BANK DURING THE PERIOD (2006-2010)
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EXPENDITURE
2010
4178.13
2009
3747.71
2008
2870
2007
1897.79
2006
1506.15
FIGURE: 02
INTERPRETATION: EXPENDITURE: The above table shows the Expenditure by Andhra bank the various years. Above table
shows expenditure in different years when we study the above table in 2006 Andhra bank expenditure is Rs. 1506.15 and 2010
expenditure is 4178.13, we can understand through that data it is growing very fast.
ANDHRA
YEAR
2006
2007
2008
2009
2010
1,168.97
1,417.54
1,339.56
1,626.91
2,194.74
BANK
TABLE: 03
CAGR
MEAN
S.D
C.V
17.05634
1549.544
354.5753
0.228826
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BANK
SPREAD SHARE IN PUBLIC SECTOR MARKET BY ANDHRA BANK DURING THE PERIOD (2006-2010)
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SPREAD SHARE IN PUBLIC SECTOR MARKET

2010
2194.74
2009
1626.61
2008
1339.56
2007
1417.54
2006
1168.97
Formatted: Centered
BURDON BY THE ANDHRA BANK DURING THE PERIOD (2006-2010)

TABLE: 04
BANK
YEAR
2006
683.47
CAGR
2007
2008
2009
2010
MEAN
S.D
C.V
92
INTERPRETATION: Spread: The below table shows the spread share in public sector market in India by Andhra bank. Here we can
understand Andhra bank has spread share in public sector market, in 2006 it market share is 1168.97 and 2010 market share is 2194.94
when we compare with all public sector banks in india.
FIGURE: 03
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879.64
ANDHRABANK
763.99
973.86
1,148.89
13.86487
889.97
162.9092
0.18305
BURDON IN INTEREST RATE

2010
2009
2008
2007
2006
1148.89
973.86
763.99
879.64
683.47
FIGURE: 04
INTERPRETATION: BURDON: the above table shows the BURDON by Andhra bank in the various years.
3. Above table is showing maximum consistency in term of Burdon in 2008.

NON INTEREST EXPENDITURE BY ANDHRA BANK DURING THE PERIOD (2006-2010)
TABLE: 05
BANK
YEAR
2006
CAGR
2007
2008
2009
2010
MEAN
S.D
C.V
93
2. GROWTH RATE of Andhra bank is higher when we compare from 2006 to 2010.
1. Andhra Bank is having highest interest earn share in 2010 when we compare with public sector market followed by above
table.
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ANDHRABANK
1,147.85
1,466.02
1,409.25
1,756.09
2,154.85
17.05312
1586.812
343.5488
0.216503
NON INTEREST EXPENDITURE

2010
2154.85
2009
1756.09
2008
1409.25
2007
1466.02
2006
1147.85
PROFIT BEFORE PROVISION/ TOTAL ASSETS BY ANDHRA BANK DURING THE PERIOD (2006-2010)
TABLE: 06
BANK
YEAR
2006
CAGR
2007
2008
2009
2010
MEAN
S.D
C.V
94
INTERPRETATION: NON INTEREST EXPENDITURE: The above table shows the non interest expenditure by the various
public sector banks. In public sector banks if we observe Andhra bank non interest expenditure from 2006 to 2010, is decreased in
2008 but it is increased slowly Andhra Bank is having highest Non interest expenditure share in public sector market in 2010
FIGURE: 05
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1.9
ANDHRABANK
2.3
2.1
2.3
17.05312
1586.812
343.5488
0.216503
PROFIT BEFORE PROVISION/ TOTAL ASSETS

PROFIT BEFORE PROVISION/ TOTAL ASSETS
2.5
2
2.3
1.9
2.3
2.1
1.5
1
0.5
0
2008
2009
2010
FIGURE: 06
INTERPRETATION: PROFIT BEFORE PROVISIONS / TOTAL ASSETS (%): the above table shows the Profit before
Provisions / Total Assets (%) by the Andhra bank. Andhra bank is having highest Profit before Provisions / Total Assets (%) share in
public sector market in 2007 and 2010.
NET PROFIT/TOTAL ASSETS ANDHRA BANK DURING THE PERIOD (2006-2010)
TABLE: 07
BANK
YEAR
2006
CAGR
2007
2008
2009
2010
MEAN
S.D
C.V
2007
95
2006
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1.3
ANDHRABANK
1.2
1.1
1.3
1.18
0.116619
0.09883
NET PROFIT/TOTAL ASSETS

NET PROFIT/TOTAL ASSETS
1.4
1.2
1.3
1.3
1.2
1.1
0.8
0.6
0.4
0.2
0
2008
2009
2010
FIGURE: 07
INTERPRETATION: Net Profit / Total funds (%): The above table shows the Net Profit / Total funds (%) by the various public
sector banks. Andhra Bank is having highest Net Profit / Total funds (%) share in 2007 and 2010.
OTHER INCOME / TOTAL INCOME (%) BY ANDHRA BANK DURING THE PERIOD (2006-2010)
TABLE: 08
BANK
YEAR
2006
CAGR
2007
2008
2009
2010
MEAN
S.D
C.V
2007
96
2006
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ANDHRABANK
14.8
15
13.3
12.7
13.6
-2.09175
13.88
0.884081
0.063695
OTHER INCOME / TOTAL INCOME %

2007, 15
2006, 14.8
2008, 13.3
2010, 13.6
2009, 12.7
2007
2008
2009
2010
FIGURE: 08
INTERPRETATION: other income / total income (%): the above table shows the Other Income / Total Income (%) by Andhra
banks. Andhra bank was showing maximum consistency in term of other income / total income (%), When we study above table from
2006 to 2010.
TOTAL ASSETS BY ANDHRA BANK DURING THE PERIOD (2006-2010)
TABLE: 09
BANK
YEAR
2006
CAGR
2007
2008
2009
2010
MEAN
S.D
C.V
2006
97
15.5
15
14.5
14
13.5
13
12.5
12
11.5
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ANDHRA 40,673.27
47,557.90
56,624.34
68,529.21
90,430.81
22.11017
60763.11
17524.8
0.288412
BANK
TOTAL ASSETS
2010
90430.81
2009
68529.21
2008
56624.34
2007
47557.9
2006
INTERPRETATION: Total assets: the above table shows the Total assets by the various public sector banks. If we see above table,
Andhra bank total assets are increasing, in 2006 bank total assets value is Rs. 40673.27 and 2010 total assets value is 90430.81
TOTAL LIABILITIES BY THE ANDHRA BANK DURING THE PERIOD (2006-2010)
TABLE: 10
BANK
YEAR
2006
CAGR
2007
2008
2009
2010
MEAN
S.D
C.V
98
FIGURE: 09
40673.27
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ANDHRA 40,673.27
47,557.90
56,624.34
68,529.21
90,430.81
22.11017
60763.11
17524.8
0.288412
BANK
TOTAL LIABILITIES
2010
90430.81
2009
68529.21
2008
56624.34
2007
47557.9
2006
FIGURE: 10
INTERPRETATION: Total liabilities: the above table shows the Total liabilities by the various public sector banks. If we observe
above table Andhra bank liabilities share in public sector bank is increasing when we compare from 2006 to 2010
SPREAD AS PERCENT OF TOTAL FUND BY ANDHRA BANK DURING THE PERIOD (2006-2010)
TABLE: 11
YEAR
2006
CAGR
2007
2008
2009
MEAN
S.D
C.V
2010
99
BANK
40673.27
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ANDHRA
3.2
3.8
2.6
2.6
2.7
-4.15853
2.98
0.466476
0.156536
BANK
SPREAD AS PERCENTAGE OF TOTAL FUND

4
2007, 3.8
3.5
3
2006, 3.2
2008, 2.6
2.5
2009, 2.6
2010, 2.7
2
1.5
1
0.5
2007
2008
2009
2010
FIGURE: 11
INTERPRETATION: Spread as percent of total fund: the above table shows the spread as percent of total fund by the various public
sector banks. The conclusions drawn are as follows, Andhra bank funds are spread in public sector banks in India in 2007 percentage
is 3.8 and 2006 percentage is 3.2.
LIMITATIONS
There are some limitations were faced during the analysis period they are as follows:
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2006
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1. As growth rate are calculated on max and min value of the extreme years its value become zero if there are no change between
the values.
2. Different website contains different values of the same year hence reference is taken from single website.
calculated
approximate
values
hence
there
is
not
100%
reliability.
are
101
3. Ratios
IRJC
CONCLUSION
As per the analysis performed it has been found that the ratios like interest earn ,total expenditure
, net profit to total funds have recorded a downfall leading to decrease in the profitability while
decrease in the ratios interest expenditure leading to increase the Burdon ratios. Hence this leads
to increase in the profitability indices. The bank has to re-orient their strategies in the light of
their own strengths and the kind of market in which they are likely to operate on. In the
perspective of this domestic and international development, the banking sector has to chart out a
perfect path for the development in its own.
REFERENCES
1. Amandeep. 1991, Profit and Profitability of Indian Nationalized Banks, Ph.D. Thesis, Punjab
University, Chandigarh.
2. Janki, B. 2002.Unleashing employ productivity; A need for a paradigm shift.Indian Banking
association bulletin, XXIV (3): 7-9.
3. Justin.Paul&Padmalatha Suresh.2006. Management of Banking and Financial Services, New
Delhi, Pearson Education
4. Luther, J.C.1976. Report of JC Luther, Committee on Productivity, Efficiency & Profitability
in Commercial banks, Bombay 1976.
5. MilindSathya .2005. Privatization, Performance, and Efficiency: A study of Indian
Banks.Vikalpa,( 1):23-28.
6. Mukherjee, A, Nath, P & Pal, MN .2002. Performance Benchmarking and Strategic
Homogeneity of Indian Banks. International Journal of Bank Marketing,20 (3):122-139.
9. Swamy, B.N.A.2001, New Competition, Deregulation and Emerging Changes in Indian

Banking. Bank Quest The Journal of Indian Institute of Bankers, 729(3): 3-22.
101
8. Ramanathan Ramakrishnan.2007.Performance of Banks in Countries of the Gulf Cooperation

Council. International Journal of Productivity and Performance Management, 56(2): 137154.
7. Pal Ved& Malik N.S .2007.A Multivariate Analysis of the financial characteristics of
Commercial Banks in India.The Icfai Journal of Bank Management .VI (3).

Bank Performance

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IRJC

Asia Pacific Journal of Marketing & Management Review

A STUDY OF FINANCIAL PERFORMANCE OF REPUTED PUBLIC

SIGNIFICANCE OF THE STUDY

1) State Bank of India

ANALYSIS AND INTERPRETATION THROUGH RATIOS

Average ratio for the bank concern

EXPENDITURE BY ANDHRA BANK DURING THE PERIOD (2006-2010)

SPREAD SHARE IN PUBLIC SECTOR MARKET

BURDON BY THE ANDHRA BANK DURING THE PERIOD (2006-2010)

BURDON IN INTEREST RATE

3. Above table is showing maximum consistency in term of Burdon in 2008.

NON INTEREST EXPENDITURE

PROFIT BEFORE PROVISION/ TOTAL ASSETS

NET PROFIT/TOTAL ASSETS

OTHER INCOME / TOTAL INCOME %

SPREAD AS PERCENTAGE OF TOTAL FUND

9. Swamy, B.N.A.2001, New Competition, Deregulation and Emerging Changes in Indian

8. Ramanathan Ramakrishnan.2007.Performance of Banks in Countries of the Gulf Cooperation

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