Comparative Analysis of SBI and PNB Banks Using Compound Annual Growth Rate

Shipra Gupta, Vijay Kumar, Vishal Sagar, Kapil Ahalawat

2023

Abstract

Banking is the backbone of economies, and therefore banking performance is a critical issue. Banks are not only vital for a monetary system to enhance the flow of money, but they are also directly responsible for credit allocation, interest rate determination, and the overall creation of money in a monetary system. With 86,311 operational bank branches and 1,37,113 ATMs in the country till March 2021, India has a large banking sector. This sector is highly regulated, and the regulator is the Reserve Bank of India (RBI) which mandates the formulation and disclosure of various ratios that are used to assess the health of a bank. In this often-requested analysis, we evaluate and compare the financial performance of the most important bank of India — State Bank of India (SBI); to that of the less prominent Punjab National Bank (PNB). The analysis includes the comparison of the growth trends of SBI and PNB over nine years that ended with the year for which the numbers could be found for both banks. Because the only method available for the comparison of growths of all such numbers is the Compound Annual Growth Rate (CAGR) method, we compared their CAGR over the said period which was for the revenue, net income, total assets, and total liabilities. This evaluation is carried out using the most recent five years of the annual reports of SBI and PNB, i.e., 2019-2023. Different ratios like basic EPS, ROA, net interest margin, operating profit margin, and ROCE for SBI and PNB over the mentioned period are provided in the results. The results of this analysis lead the viewer into the financial health and performance trajectory of SBI and PNB. The findings are discussed further in the Discussion section, where the close or distant growth patterns of SBI and PNB are carefully discussed. The contribution of factors like market dynamics, general economic conditions, and regulatory changes are analysed by the authors next. Finally, the results can be drawn and the vital insight that these results lay bare regarding the financial performance of SBI and PNB are duly highlighted. Quantitative methods like the CAGR in this case must be more extensively adopted to understand the financial performance of banks which will also be useful to investors, policymakers, and other stakeholders.

Paper Citation

in Harvard Style

Gupta S., Kumar V., Sagar V. and Ahalawat K. (2023). Comparative Analysis of SBI and PNB Banks Using Compound Annual Growth Rate. In Proceedings of the 2nd Pamir Transboundary Conference for Sustainable Societies - Volume 1: PAMIR-2; ISBN 978-989-758-723-8, SciTePress, pages 519-523. DOI: 10.5220/0012874500003882

in Bibtex Style

@conference{pamir-223,
author={Shipra Gupta and Vijay Kumar and Vishal Sagar and Kapil Ahalawat},
title={Comparative Analysis of SBI and PNB Banks Using Compound Annual Growth Rate},
booktitle={Proceedings of the 2nd Pamir Transboundary Conference for Sustainable Societies - Volume 1: PAMIR-2},
year={2023},
pages={519-523},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0012874500003882},
isbn={978-989-758-723-8},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 2nd Pamir Transboundary Conference for Sustainable Societies - Volume 1: PAMIR-2
TI - Comparative Analysis of SBI and PNB Banks Using Compound Annual Growth Rate
SN - 978-989-758-723-8
AU - Gupta S.
AU - Kumar V.
AU - Sagar V.
AU - Ahalawat K.
PY - 2023
SP - 519
EP - 523
DO - 10.5220/0012874500003882
PB - SciTePress