A comparative analysis of financial performance of SBI and ICICI Bank
Banks play a vital and crucial role in the development of an economy. A sound banking system mobilizes small savings of the community and makes them available for investment in productive enterprises. Banks mobilise deposits by offering attractive rates of interest and thus convert savings into active capital, otherwise that amount would have remained idle. Banks are very important sources of finance and credit for industry and trade. The commercial bank helps the farmers in extending credit for agricultural development. Banks also play crucial role in raising the level of standard of living of people by providing them consumer loans. But for all this what is required is the sound financial position of the banks. A financially sound bank is an asset for the economy whereas a financially weak bank is a liability for the economy. In the present study, ICICI Bank from Private Sector and SBI from Public Sector have been taken for their financial comparison. Both banks are largest banks in their respective segments. Credit Deposit Ratio, Operating Expenses to Total Funds Ratio, Cash Deposit Ratio, Return on Equity and Net Profit to Total Funds Ratio have been used for the comparative financial analysis. It was found that ICICI Bank is superior on the above mentioned fronts as compared to SBI.