Sbi vs Icici

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CHAPTER 6 COMPARISON BETWEEN ICICI

BANK AND SBI.

Contents

6.1 SBI v/s ICICI

6.2 Analysis & Interpretation of Services

6.3 Analysis of Performance of ICICI Bank & SBI

6.4 Major Findings

6.5 Testing of Hypothesis



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CHAPTER 6 COMPARISON BETWEEN ICICI

BANK AND SBI.

6.1 SBI v/s ICICI

SBI stands for State Bank of India. It is a public sector institution (government

owned), with a huge customer base all over India. It has seven associate banks

operating under its SBI name. It has over thirteen thousand branches across India and

in some selected international countries and a 56,000 ATM network across India. The

Standard Bank of India „inherited‟ the Bank of Calcutta, which was founded in 1806,

and has been in existence for over two hundred years.

On the other hand, the ICICI is a private sector bank ( privately owned), with a

relatively smaller clientele base. It is one of the major banks in India (precisely the

second largest), but much smaller than the SBI. It has 950 branches, with 3,500

branches across India. The bank has deposits of Rs 1.65 lakh crore compared to SBI‟s

Rs 3.8 lakh crore (accumulated in a period of twelve years), racking up a net worth of

Rs 22,000 against Rs 27,000 for the State Bank of India. This represents Rs 9 crore

business generated by each ICICI employee per year, compared to Rs 3 crore worth of

business per employee of the ICICI.

While the State Bank pays 4.7 percent on deposits, and earns less on advances,

the ICICI pays 0.7 less (4 percent), while earning more on advances, and thus earns

0.4 percent more on assets than the SBI. This is no surprise, as there‟s seemingly

limitless access to funds from the government for the state owned SBI.

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On money transfers from overseas accounts, with the SBI, once a transfer

transaction is completed, you will be able to know the exchange rate used, and there

are no restrictions on the amounts you can transfer a day. However, the ICICI transfer

is somewhat different. After completion of a money transfer transaction, the exchangerate can only be known after five days, and there is a daily limit of $5000 that can be

transferred a day.

Although the SBI has generally performed well in the past, in recent years, the

ICICI has seen very good performance, almost edging out the SBI in every aspect,

especially financially. The financial years between 2001-2002 and 2005, and 2006,

saw very strong gains for the ICICI bank. Its deposits grew by 200 percent, five times

more than the SBI‟s, and while SBI‟s revenue grew by 30 percent and the ICICI

bank‟s revenue grew by seven times that percentage. This trend means that ICICI‟s

growth will eventually overtake SBI‟s in the future, in terms of deposits.

The SBI is a government owned bank (public sector), while ICICI is a

privately owned bank (private sector).

The SBI is much older (more than 200 years old) and more established than the

ICICI, which is less than 25 years old.

The SBI does not limit daily international transfer amounts, while the ICICI

limits daily transfers to $5000 a day.

The SBI bank pays a higher percentage on deposits than the ICICI bank.

6.2 ANALYSIS AND INTERPRETATION OF SERVICES

Case 1 –

Sale of Gold during Akshya Tritiya (2012)

SBI

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ICICI

We can see here that SBI advertises sale of mutual fund units in their Gold

Fund scheme during the festival of Akshaya Tritiya. Investors who have knowledge

about the market will know very well that gold as a commodity yields an average 20%

YoY and has since never saw a negative rate of return. SBI also had a scheme that

offered 1% discount on all denominations of Gold coins except those above 100gms

during their campaign. The drawback of advertising like this is, many do not know the

benefits of investing in paper ‟ gold. Which means, gold mutual funds or gold

exchange traded funds; this form of investment has superior advantages than investing

in gold as a physical commodity. ICICI however had decorated all its branches during

the festival and even offered a larger discount, 8% on gold coins being purchasedonline. Many Indians today still choose gold as a physical commodity and it is

possible that ICICI had better sales than SBI in comparison to gold coins.

SBI could simply mention the rate of return on its gold mutual funds or offer the

advantages of paper ‟ gold over physical gold in its advertisements during Akshaya

Tritiya. The advantages of investing in paper gold are not even mentioned on their mutual funds website by means of a flash advertisement.

Case 2 – Branch Service Delivery

The below floor design matches the SBI Branch located in V.V. Puram in

Bangalore



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Here is a table that represents the services the below counters offer:

Demand Drafts

Operations Manager (Queries)

Deposits / Withdrawals

Deposits / Withdrawals

Pass Book Entries

Queries

Clearing

May I Help You

SBI has very limited space for the number of customers who transact daily.

This crosses more than 500 daily just for deposits and withdrawals. Only two counters

manage this which is highly inadequate; thus leading to crowding and frustrationamong customers at the VV Puram branch.

SBI could reduce the time spent by customers for waiting by simply adding

additional counters or better yet in order to save cost, they could have the existing

counters perform multiple services rather than only one.

To improve order among customers at the branch, they have installed a tokenmachine that dispenses small slips of paper that show when the customer gets his turn



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to complete the transaction. These dispense tokens only for deposits or withdrawals. It

would be more convenient if they had a smart token machine that dispenses tokens for

those wanting demand drafts, opening fixed or recurring deposits, NRI accounts or

more importantly those seeking loans; which happen to be a major revenue source for the bank. There are very little advertisements displayed at the branch regarding the

variety of services offered by the bank. SBI could do so much more, by putting up

advertisements on the variety of accounts it offers for businesses, corporate and

individuals. They have a 32 inch television that displays some of the services it offers

but the television is placed at an angle which is not visible for the customers seated in

the branch. The seating arrangements are for 15 but only 4 can view the television

screen.

There is one excellent move by SBI to reduce time spent by customers in

writing the deposit slips. The SBI Green Channel Counters, where the customer can

simply swipe his debit card and deposit the required cash at the counter. The cashier

would provide an acknowledgement slip thereafter. This is a boon to customers as

they need not scavenge for a deposit slip, write the details and verify them in the

crowded branch and instead get a token and wait.

The poor marketing of this initiative is clearly seen when you visit the branch.

The benefits of the green channel counters are displayed on small pamphlets on the

counter glass walls and the advantages of this are printed in small font text.

It is also seen when you Google SBI Green Channel‟ the results do not

display any information from the company website. In other words, SBI does not even

mention this excellent move on its website.

The floor design below is that of the ICICI Bank Branch in Jayanagar 7th Block



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Operations Manager (Complaints)

New Accounts

NRI / Forex

Deposits

Deposits

DepositsMay I Help You

Fixed Deposits and Others

Loans

DEMAT, Mutual Funds

It is seen that the bank branch is much larger and has more counters to cater to

the needs of the customer. ICICI branch employees take up multi tasking during timeswhen there are more customers to cater to. From 3 counters that accept deposits, they

increase it to 4 or sometimes 5 to ensure waiting times of the customers are reduced.

The token system is very well organized, with separate tokens disbursed for

non customers, customers and Gold Customers. The last set mentioned being

customers who avail privilege banking services. There are also tokens disbursed for

each service, which means if a customer wants to enquire mutual funds or DEMATservices, then all that needs to be done would be to select the customer type and then



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press the button which has the label for the service needed. To make it even more

easier, the token machine prioritizes deposit values as well. If you are a customer

wanting to deposit more than Rs.50, 000/- there is a separate option for the same. This

is not present in SBI, a customer who wants to deposit upwards of Rs.50,000/- wouldnot get any priority than someone else who has to deposit say Rs.500/-

Case 3-ATM Services

SBI ICICI

Cash Withdrawal Cash Withdrawal

Mobile Recharge Mobile Recharge

Fund Transfers Pay Utility Bills (All)

Mini Statement Pay ICICI credit card bills

Balance Enquiry Pay ICICI Prudential Insurance premium

Donate to temple trusts Request cheque book

Donate to relief funds Fund Transfers

Pay Utility Bills (MTNL and Bescom only) Mini Statement

Pay SBI Credit Card Bills Balance Enquiry

Pay SBI Life Insurance premium

Pay fees of certain colleges

SBI ATMs do have more services than what ICICI ATMs offer. But there is a

small glitch in their service delivery and marketing. SBI offers the basic services

(highlighted purple) in all the ATMs. However, the rest are available only in a select

few. The data for which is unavailable.

Only on their website in a link that shows up when you type “ATM” in the search bar.

Poor advertising of its ATM functionality has resulted in lack of awareness among

consumers regarding the services available. In fact, the SBI website also does not

advise any details on what services their ATMs offer.



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The irony is, SBI keeps advertising on the number of ATMs and cash

withdrawals made by consumers over the years in these ATMs. This advertising is

irrelevant. As a customer of SBI, it makes no difference on the number of ATMs

added over the years since the data is irrelevant. ICICI however offers all the servicesin all of its ATMs. And the advertising of its services has been clearly seen on all its

branches. There is even a flash demo on the bank ‟ s website that provides details on

the services available at its ATMs. Their current marketing campaign, suggests “Our

ATM is almost a bank branch” indicating customers the improvised convenience

offered to them.

Case 4 – Website User Interface

SBI



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ICICI

Some of the basic principles of running e-commerce would be to have a

website that is user friendly and provides adequate info without having to do much of

searching.

We can see here on the SBI website that the text of the links is not boldly

displayed and hence does not stand out. The home page focuses on 3 areas of banking,

personal, agriculture and NRI. These are 3 source of low volume of revenue.

Assuming a start up wishes to bank with SBI, and opens their home page, the

company executive would have very little info when he visits the corporate accounts

page. The reason being, SBI merely offers soft benefits of using their service citing

leaders in market, competitive pricing etc. It does not mention details of services such

as asset management. It only mentions that it would be managed by SBI Capital. To

know more about SBI capital one must visit their website. The page also provides

details which form traditional services and nothing new. These include term loans,leasing and export/import credit; just to name a few. It is also seen that SBI does not



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showcase any advertisement about its services. The only flash advertisement running

so far is:

The advertisement follows mentioning a vast set of services offered by the

bank. It is unfortunate that the flash advertisement has no hyperlink if a customer was

interested to know what the vast set of services offered by the bank is. Brand re-

enforcement of SBI is not needed. Since the bank is generations old. Their brand

value is familiar to the masses.

ICICI boldly advertises its services on the website giving customers and

potential customers vast details of their banking services. Emphasis on Wealth

Banking‟ is an excellent move since there are more than 1 million newly rich Indians

in this country who form their potential customer base. ICICI even offers student

accounts as well which is gaining popularity among many today. In case of corporate

accounts which are a major revenue source, there are vast details of what ICICI offers

to those taking up their services. Here is a screenshot of the details:



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6.3 ANALYSIS OF PERFORMANCE OF ICICI BANK AND SBI

25.5% increase in standalone profit after tax from Rs. 51.51 bn in FY2011 (April

2010-March 2011) to Rs. 64.65 bn in FY2012 (April 2011-March 2012)

Net interest income increased by 19.0% year-on year; full year NIM improved by

9 basis points to 2.73%

Fee income increased by 4.5%

30.8% reduction in provisions to Rs. 15.83 bn25.4% increase in consolidated profit after tax from Rs. 60.93 bn in FY2011 to Rs.

76.43 bn in FY2012, despite additional third party motor pool losses for ICICI

General

31.0% increase in standalone profit after tax from Rs. 14.52 bn in Q4-2011

(January-March 2011) to Rs.19.02 bn in Q4-2012 (January-March 2012)

Net interest income increased by 23.7% year-on year; net interest margin at 3.01%

compared to 2.74% in Q4-2011



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35.8% year-on-year increase in non-interest income driven by increased dividends

from subsidiaries

Increase in provisions on account of restructuring of exposures in Q4-2012

Advances increased by 17.3% year-on-year to Rs.2,537.28 billion at March 31,

2012

CASA ratio at 43.5% at March 31, 2012; average CASA ratio at 39.0% in Q4-

2012

Net NPA ratio decreased to 0.62% at March 31, 2012 from 0.70% at December

31, 2011 (March 31, 2011: 0.94%)

(Table 6.1,6.2,6.3,6.4,6.5)



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During fiscal 2012, ICICI Bank focused on profitable growth by leveraging its

rebalanced funding mix and strong capital position to grow our loan portfolio and

improving the credit quality of our loan portfolio.

Profit after tax increased by 25.5% from Rs. 51.51 billion in fiscal 2011 to Rs.

64.65 billion in fiscal 2012. The increase in profit after tax was mainly due to a 19.0%

increase in net interest income, 12.8% increase in non-interest income and 30.8%

decrease in provisions and contingencies (excluding provisions for tax). Net interest

income increased by 19.0% from Rs. 90.17 billion in fiscal 2011 to Rs. 107.34 billion

in fiscal 2012, reflecting an increase of 9 basis points in net interest margin and an

increase of 15.0% in average interest earning assets.

Non-interest income increased by 12.8% from Rs. 66.48 billion in fiscal 2011to Rs. 75.02 billion in fiscal 2012. The increase in non-interest income was primarily



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due to an increase in dividend income from subsidiaries from Rs. 4.11 billion in fiscal

2011 to Rs. 7.36 billion in fiscal 2012 and a decrease in loss from treasury-related

activities from Rs. 2.15 billion in fiscal 2011 to Rs. 0.13 billion in fiscal 2012.

Loss from treasury-related activities for fiscal 2012 primarily includes

realized/MTM provision on security receipts, offset, in part, by reversal of MTM

loss/realized gain on investments in government of India securities and other fixed

income positions and gain on equity/preference investments. Fee income increased by

4.5% from Rs. 64.19 billion in fiscal 2011 to Rs. 67.07 billion in fiscal 2012.

Non-interest expenses increased by 18.6% from Rs. 66.17 billion in fiscal 2011

to Rs. 78.50 billion in fiscal 2012 primarily due to an increase in employee expensesand other administrative expenses. Provisions and contingencies (excluding

provisions for tax) decreased by 30.8% from Rs. 22.87 billion in fiscal 2011 to Rs.

15.83 billion in fiscal 2012. The decrease in provisions and contingencies (excluding

provisions for tax) was primarily due to a reduction in provisions for retail non-

performing loans, as accretion to retail non-performing loans declined sharply from

fiscal 2011.

Total assets increased by 16.6% from Rs. 4,062.34 billion at March 31, 2011

to Rs. 4,736.47 billion at March 31, 2012. Total deposits increased by 13.3% from

Rs. 2,256.02 billion at March 31, 2011 to Rs. 2,555.00 billion at March 31, 2012.

Savings account deposits increased by 13.7% from Rs. 668.69 billion at March 31,

2011 to Rs. 760.46 billion at March 31, 2012. Current and savings account (CASA)

deposits ratio was 43.5% at March 31, 2012 compared to 45.1% at March 31, 2011.

Term deposits increased by 16.6% from Rs. 1,239.55 billion at March 31, 2011 to Rs.

1,444.81 billion at March 31, 2012. Total advances increased by 17.3% from Rs.

2,163.66 billion at March 31, 2011 to Rs. 2,537.28 billion at March 31, 2012

primarily due to an increase in domestic and overseas corporate loans and an increase

in the retail loan book. Net non-performing assets decreased by 22.9% from Rs. 24.58

billion at March 31, 2011 to Rs. 18.94 billion at March 31, 2012 and the net non-

performing asset ratio decreased from 0.94% at March 31, 2011 to 0.62% at March

31, 2012.



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ICICI Bank continued to expand our branch network in India. Our branch

network in India increased from 2,529 branches and extension counters at March 31,

2011 to 2,752 branches and extension counters at March 31, 2012. We also increased

our ATM network from 6,104 ATMs at March 31, 2011 to 9,006 ATMs at March 31,

2012.

The total capital adequacy ratio of ICICI Bank on a standalone basis at March

31, 2012 in accordance with RBI guidelines on Basel II was 18.5% with a Tier I

capital adequacy ratio of 12.7% compared to a total capital adequacy ratio of 19.5%

and Tier I capital adequacy ratio of 13.2% at March 31, 2011.

Net Profit increased from Rs.8,265 crores in FY11 to Rs.11,707 crores in FY12

(41.66% YOY growth)

Operating Profit increased from Rs.25,336 crores in FY11 to Rs.31,574 crores in

FY12 (24.62%YOY growth).

Capital Adequacy Ratio of the Bank increased from 11.98% (Tier I: 7.77%) in

Mar 11 to 13.86% (Tier I: 9.79%) in Mar 2012 (188 bps YOY growth).

Net Interest Income increased from Rs.32,526 crores in FY11 to Rs.43,291

crores in FY12 (33.10%YOY growth).



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Net Interest Margin (Whole Bank) increased from 3.32% in FY11 to 3.85% in

FY12 (53 bps YOY growth). Domestic NIM increased from 3.63% in FY11 to

4.17% in FY12.

Dividend of Rs.35 per share (350%) proposed for the year ended 31st March 12.

Interest Income on Advances increased from Rs.59,976 crores in FY11 to

Rs.81,078 crores in FY12 (35.18%YOY growth).

Interest Income on Resources Operations increased from Rs.20,062 crores in

FY11 to Rs.24,300 crores in FY12 (21.12%YOY growth).

Interest paid on deposits increased from Rs.43,235 crores in FY11 to Rs.55,644

crores in FY12 (28.70%YOY growth).

Non Interest Income decreased from Rs.15,825 crores in FY11 to Rs.14,351

crores in FY12 (9.31%YOY decline).(Table 6.6,6.7,6.8,6.9,6.10,6.11)



153



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Profit

The Operating Profit of the Bank for 2011-12 stood at Rs.31,573.54 crores as

compared to Rs.25,335.57 crores in 2010-11 registering a growth of 24.62%. The

Bank has posted a Net Profit of Rs.11,707.29 crores for 2011-12 as compared to

Rs.8,264.52 crores in 2010-11 registering a growth of 41.66%. While Net Interest

Income recorded a growth of 33.10%, the Other Income declined by 9.31%, Operating

Expenses increased by 13.27% attributable to higher staff cost and other expenses.

Dividend

The Bank has declared dividend @ Rs.35.00 per share (350%) as against @

Rs.30.00 per share (300%) in the previous year.

Net Interest Income

The Net Interest Income of the Bank registered a growth of 33.10% from

Rs.32,526.41 crores in 2010-11 to Rs.43,291.08 crores in 2011-12. This was due to

higher growth in the advances and investment portfolios. The gross interest income

from global operations correspondingly rose from Rs.81,394.36 crores to

Rs.1,06,521.45 crores during the year registering a growth of 30.87%.

Interest income on advances in India registered an increase from Rs.56,960.97

crores in 2010-11 to Rs.77,309.15 crores in 2011-12 due to higher volumes. The

average yield on advances in India increased from 9.56% in 2010-11 to 11.05% in

2011-12. Interest income on advances at foreign offices has also grown by 24.99%.

Income from resources deployed in treasury operations in India increased by

22.05% mainly due to higher average resources deployed and increase in average

yield. The average yield, which was 7.02% in 2010-11, has increased to 7.51% in



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2011-12. Total interest expenses of global operations increased from Rs.48,867.96

crores in 2010-11 to Rs.63,230.37 crores in 2011-12. Interest expenses on deposits in

India during 2011-12 recorded an increase of 29.19% compared to the previous year,

whereas the average level of deposits in India grew by 14.31%. The average cost of deposits has consequently increased from 5.26% in 2010-11 to 5.95% in 2011-12.

Non-Interest Income

Non-interest income stood at Rs.14,351.45 crores in 2011-12 as against

Rs.15,824.59 crores in 2010-11 registering a decline of 9.31%. During the year, the

Bank received an income of Rs.767.35 crores (Rs.827.73 crores in the previous year)

by way of dividends from Associate Banks / subsidiaries and joint ventures in India

and abroad.

Operating Expenses

There was an increase of 11.59% in the Staff Cost from Rs.15,211.62 crores in2010-11 to 16,974.04 crores in 2011-12. Other Operating Expenses have also

registered an increase of 16.54% mainly due to increase in expenses on rent, taxes and

lighting, postage, telegrams & telephones, insurance and miscellaneous expenditure.

Operating Expenses, comprising both staff cost and other operating expenses, have

registered an increase of 13.27% over the previous year.

Assets

The total assets of the Bank increased by 9.13% from Rs.12,23,736.20 crores

at the end of March 2011 to Rs.13,35,519.23 crores as at the end of March 2012.

During the period, the loan portfolio increased by 14.65% from Rs.7,56,719.45 crores

to Rs.8,67,578.89 crores. Investments increased by 5.61% from Rs.2, 95,600.57 crores

to Rs.3,12,197.61 crores as at the end of March 2012. A major portion of the



156

investment was in the domestic market in government securities and investment in

Subsidiaries & Associates.

Liabilities

The Bank‟s aggregate liabilities (excluding capital and reserves) rose by 8.01%

from 11,58,750.16 crores on 31st March 2011 to Rs. 12,51,568.03 crores on 31st

March 2012. The increase in liabilities was mainly contributed by increase in deposits

and borrowings. The Global deposits stood at Rs.10, 43,647.36 crores as on 31st

March 2012 against Rs.9,33,932.81 crores as on 31st March 2011, representing an

increase of 11.75 % over the level on 31st March 2011.



157

Table 6.12



158



159

Table 6.13

6.4 MAJOR FINDINGS

Analysis based on Questionnaire for SBI, the cost of funds could go up partly

because of the increase in the saving bank rate (by5-15 bps) and partly because

of higher incremental costs. A temporary slack in credit growth (as is typically

seen in the first half of financial year) and adjustment in the lending rate (to

incorporate the higher rate on saving deposits, etc.) may lead to a dip in the

NIM, which could however recover subsequently, depending on the credit off-

take.

The credit profiles of borrowers could weaken in 2012-13 because of a tight

liquidity situation, higher interest rates, and moderation in GDP growth rate. The

vulnerability of banks because of their increasing exposure to State power utilities

is likely to increase, unless tariffs are revised upwards. However, these may not

reflect in the Gross NPA percentage as there may be some regulatory respite.

An increase in the proportion of infrastructure loans and deregulation of saving

rates could worsen the asset-liability management (ALM) profile and increase the

interest rate sensitivity of banks.



160

Indian banks continue to enjoy a comfortable capitalization as compared with

existing RBI norms with their Tier I capital close to 9%. Thus, apart from SBI,

none of the PSBs may need significant Tier I capital in the short term. However,

some of the fast-growing small private sector banks may need Tier I capital over short to medium term.

Figure 6.1. Innovative Banking Services

1. On being asked about the innovative nature of banking services, 83.2 % of the

customers of ICICI bank said that the banking schemes offered by ICICI bank

are very much innovative.

2. The SBI customer were asked about the innovative nature of SBI services,

around 77.5 % customers out of 100 said that the schemes are very much

innovative.

416.00

84

Banks

ICICI

SBI



161

Figure 6.2. Innovative Banking Services

3. As far as the comparisons of innovative scheme of both the banks are

concerned; it is found that ICICI bank offers more innovative schemes than

SBI.

4. About the dynamic nature of banking services offered by ICICI bank only

51.5% of the customers out of 100 said that the services are very much

dynamic in nature whereas 33.3% SBI customers fell that the services provided

by SBI are dynamic. In comparison with SBI about dynamic services, ICICI

bank stands first.

257.5

242.5

Banks

ICICI

SBI



162

Figure 6.3 Dynamic Services

5. In terms of competitiveness of banking schemes ICICI bank has only 56.4%

customer saying its services are very much competitive.

6. SBI customers are negative about the competitiveness of banking schemes of

SBI. Around 37.3% customers feel that the services are very much competitive

whereas majority of customers i.e. 50% have the opinion that the schemes

offered by SBI are very less competitive.

Figure 6.4. Competitive Schemes

282

218

Banks

ICICI

SBI

282

218

Banks

ICICI

SBI



163

7. The customers of ICICI bank are satisfied with the services offered by ICICI

bank. Since 83.2 % of the, customers responded „yes‟ to the question whether

they are satisfied with the services of ICICI bank.

Figure 6.5. Service Satisfaction

8.

SBI customers are also satisfied with the banking services offered by SBI. Thecustomers who are satisfied with ICICI bank services stand at 76.5%.

Figure 6.6. Banking Services

416

84

Banks

ICICI

SBI

382.5

117.5

Banks

SBI

ICICI



164

9. It was obvious that ICICI bank customers are more satisfied with 83.2% out of

total 100 respondents when compared with SBI bank in terms of satisfaction.

Figure 6.7 Customer Satisfaction

10. Private sector banks give more importance to customer satisfaction. For private

sector banks, not only the product and services are important, but also the way

they communicate about their new services, opening of new branches, changes

in interest rates etc. to their customers. It shows that 80.2 % out of total

respondents are satisfied with the communication from ICICI bank.

Figure 6.8 Product Satisfaction

416

84

Banks

ICICI

SBI

401

99

Banks

ICICI

SBI



165

11. SBI customers are more satisfied at 85.3 % about communication from SBI

about new services, changes in interest rates opening of new branches, etc.

Figure 6.9 Communication Satisfaction

12. When ICICI bank and SBI are compared on satisfaction with the

communication from banks it is found that SBI is more prompt and efficient in

communication with the customers.

13. It is found that 34.6 % customers of ICICI bank are always satisfied with the

way ICICI bank markets it banking services. And 61.4% of the ICICI bank

customers are sometimes satisfied with marketing of ICICI bank services.

14. it is found that 50% customers of SBI are sometimes satisfied with the SBI

markets its products, 47.1% customers of SBI are always satisfied with the

way bank markets its services.

15. ICICI bank has 11.9% customers who are not satisfied with the service of

ICICI bank. The study also attempts to find out the reasons for dissatisfaction

of services of ICICI bank, it is found that;

426.5

73.5

Banks

SBI

ICICI



166

8.9% customers are not satisfied because of services.

1.0% customers are not satisfied because of schemes offered by ICICI bank.

7.9% customers are not satisfied with the staff of ICICI bank.

7.0% customers of ICICI bank are not satisfied because of banking charges.

4.0% percent customers of ICICI bank are not satisfied because of the time

taken for transaction.

Figure 6.10 Staff and Scheme Satisfaction of ICICI Bank

16. SBI has 7.9% out of the total respondents who are not satisfied with the

services of SBI. The Study also attempts to find out the reasons for

dissatisfaction of services of SBI It is found that:

6.9% of the customers of SBI are not satisfied because of services.

3.9% customers of SBI are not satisfied with the schemes offered by SBI13.7% of the customers are not satisfied with the staff SBI

59.5 44.5

500

39.5

35

20

2301.5

Banks

ICICI

ICICI

ICICI

ICICIICICI

ICICI

SBI





168

28.7% of the total respondents said ICICI bank is very good in terms of

customer service.

30.7% of the total respondents said ICICI bank is good in terms of customer

service.

7.9% of the total respondents said ICICI bank is poor in terms of customer

service.

Figure 6.12 ICICI Customer Service

20. When customers of SBI asked to rate SBI on the basis of customer services the

customers of SBI have rated SBI as follows:

25.5% of the total respondents said SBI is excellent in terms of customer

services.

34.4% of the total respondents said SBI is very good in terms of customer

services.

37.3% of the total respondents said SBI is good in terms of customer services.

4.9% of the total respondents said SBI is poor in terms of customer services.

163.5

143.5

153.5

39.515

Banks

ICICI

ICICI

ICICI

ICICI

SBI



169

Figure 6.13 SBI Customer Service

21. When asked about the Redressal of complaints most of the marketing staff of

ICICI bank replied in negative terms. Around 32% said it is satisfactory, 26%

said it is poor. And 6% said the Redressal of complaints at ICICI bank is

excellent, 10% said it is very good and 26% said it is good.

Figure 6.14 Complaint Redressal

127.5

172

186.524.5

1489.5

Banks

SBI

SBI

SBI

SBI

ICICI

160

13030

50

130

20

Banks

ICICI

ICICI

ICICI

ICICI

ICICI

SBI



170

22. The question regarding customer complaints when asked to marketing staff of

SBI they replied in following way: reply to customer complaints at SBI is

excellent 12%, very good 6%, good 45% and 16% satisfactory around 21%

said it is poor.

Figure 6.15 Customer Complaint

23.

IT is found that the marketing problems faced by marketing staff of SBI isrelated to banking products 8%, marketing strategies 12%, service charges

55% banking staff 20% and other 5%.

Figure 6.16 Marketing Staff

60

30

225

80

105

20

Banks

SBI

SBI

SBI

SBI

SBI

ICICI

40

60

275

100

25 20

Banks

SBI

SBI

SBI

SBI

SBI

ICICI



171

24. In case of ICICI bank it is found that the marketing problems faced by

marketing staff is related to banking products 9% marketing strategies 10%

service charges 63% banking staff 10 and other 8%.

25. It is found that most of the time ICICI bank marketing staff faces problems in

convincing the customers because of reasons such as service charges, banking

staff, etc. at 79% where SBI staff faces problems at 51%.

26. The major question remains whether all these problems affect the marketing

staff in convincing the customer about other products. Only 2% of ICICI bank

marketing staff feels that they have problem in convincing the customers all

the times because of all these problems stated above, 9% have problems mostof the time. 79% have problems some times, and 10% never have problems

because of all these reason to convince the customers.

ICICI BANK

With 7.2% share of India's total non-food credit disbursements and 9% of the banking system's deposits in FY11, ICICI Bank is the second largest bank in the

country after SBI in terms of asset size. The bank has lost its share of the banking

sector's advances from 10.2% in FY07 to 6.8% in FY11. At the end of March 2011,

the bank had assets of over US$ 104 bn (Rs 4.7 trillion) and a franchise of over 5,700

ATMs and 1,800 branches spread across the country. Retail assets constituted 33% of

advances in FY11 as against 65% in FY07. The bank is focusing on loan origination

in the large corporate, SME and agriculture segments and on non-fund based productsand services. Besides the bank itself being the market leader across retail loan

portfolios, its subsidiaries ICICI Life Insurance, ICICI General Insurance and ICICI

AMC are leaders in their respective businesses.



172

SBI

SBI is India's largest bank in the country with an asset size of over 12 trillion.

Although the bank's loan book is largely skewed towards corporate (large, mid and

small) loans (51% of total advances in FY11), the retail side is also fast scatching up.

SBI has a network of almost 13,700 branches and over 20,000 ATMs across the

country.

Table. 6.14 Equity Share Data

EQUITY

SHARE

DATA

ICICI BANK SBI ICICI

BANK/

31/3/2012 31/3/2012 SBI

High Rs 1,128 2,960 38.1%

Low Rs 652 1,576 41.4%

Sales per share Rs 329.6 2,193.6 15.0%

Earnings per share Rs 54.1 -13.4 -402.9%

Cash flow per share Rs 310.5 684.8 45.3%

Dividends per share Rs 16.50 35.00 47.1%

Dividend yield (eoy) % 1.9 1.5 120.1%



173

Book value per share Rs 531.6 1,583.1 33.6%

Shares outstanding (eoy) m 1,152.59 671.04 171.8%

Bonus/Rights/Conversions ESOS PI -

Price / Sales ratio x 2.7 1.0 261.1%

Avg P/E ratio x 16.4 -168.9 -9.7%

P/CF ratio (eoy) x 2.9 3.3 86.5%

Price / Book Value ratio x 1.7 1.4 116.8%

Dividend payout % 30.5 -260.6 -11.7%

Avg Mkt Cap Rs m 1,025,805 1,521,919 67.4%

No. of employees `000 58 215 27.0%

Total wages/salary Rs m 51,049 220,840 23.1%

Avg. sales/employee Rs Th 6,519.8 6,831.1 95.4%

Avg. wages/employee Rs Th 876.0 1,024.9 85.5%

Avg. net profit/employee Rs Th 1,311.5 712.0 184.2%



174

Table 6.15 Income data

INCOME DATA

Net Sales Rs m 379,949 1,471,974 25.8%

Other income Rs m 286,634 298,354 96.1%

Total revenues Rs m 666,583 1,770,328 37.7%

Gross profit Rs m 365,884 1,309,530 27.9%

Depreciation Rs m 295,520 468,560 63.1%

Interest Rs m 250,132 893,196 28.0%

Profit before tax Rs m 106,866 246,128 43.4%

Minority Interest Rs m -2,947 -6,302 46.8%

Prior Period Items Rs m 0 0 -

Extraordinary Inc (Exp) Rs m 0 0 -

Tax Rs m 27,490 86,395 31.8%

Profit after tax Rs m 76,429 153,431 49.8%

Gross profit margin % 96.3 89.0 108.2%

Effective tax rate % 25.7 35.1 73.3%



175

Net profit margin % 20.1 10.4 193.0%

Table 6.16Balance Sheet Data

BALANCE

SHEET DATA

Current assets Rs m 2,921,254 11,636,702 25.1%

Current liabilities Rs m 0 0 -

Net working cap to sales % 768.9 790.6 97.3%

Current ratio x 43.0 43.0 100.0%

Inventory Turnover Days 0 0 -

Debtors Turnover Days 0 0 -

Net fixed assets Rs m 54,320 74,080 73.3%

Share capital Rs m 11,528 6,710 171.8%

"Free" reserves Rs m 438,127 571,380 76.7%

Net worth Rs m 612,765 1,062,300 57.7%

Long term debt Rs m 1,612,966 1,579,914 102.1%



176

Total assets Rs m 6,041,914 18,299,562 33.0%

Interest coverage x 1.4 1.3 111.9%

Debt to equity ratio x 2.6 1.5 177.0%

Sales to assets ratio x 0.1 0.1 78.2%

Return on assets % 5.4 5.7 94.5%

Return on equity % 12.5 14.4 86.4%

Return on capital % 15.9 42.9 37.1%

Exports to sales % 0.0 0.0 -

Imports to sales % 0.0 0.0 -

Net fx Rs m 0 0 -

6.5 TESTING OF HYPOTHESIS

In the beginning of the study the researcher had set hypothesis based on the

survey data, charts, tables, diagrams and based on percentages, statically tool test of

significance (z-test) has been applied.



177

The hypothesis of the study:

“ICICI Bank and SBI are provides innovative, dynamic and competitive

services in terms of customer satisfaction in comparison to each other. However these

banks are facing problems while marketing their services.”

In the light of the above – cited objective, the researcher for the present study has set

the following hypotheses:

The sub hypothesis (HI) – The banking services offered by ICICI bank are

innovative, was put to statistical test by using z – test of significance. The services

provided by ICICI banks are very much invocative are tested against not so much

innovative by using the proportion of customer‟s responses who responded as the

service are innovative. It is found that the services provided by ICICI bank are

very much innovative (Z1=6.64) 1 percent level significance.

Therefore the hypothesis “services provided by ICICI bank are innovative” stands

accepted.

Likewise the sub – hypothesis (H2) – the banking services offered by SBI are

innovative, was put to statistical test by using z – test of significance.

The services provided by SBI are very much innovative is tested against not so

much innovative by using the proportion of customers responses who respond as

the services are innovative.; it is found that the services provided by SBI are very

much innovative. (Z2-5.5) 1%level of significance.

Therefore the hypothesis “services provided by SBI bank are innovative” stand s

accepted.

The sub – hypothesis, (H3)- innovative services provided by ICICI bank and SBIs

are homogenous put to statistical test by using z-test if significance.

The services provided by ICICI bank and SBI are homogeneous is tested against

services provided by ICICI bank is more innovative than SBI. (Z=1.02)

Therefore the hypothesis “Services provide ICICI bank and SBI are homogenous”

stands accepted.



178

The sub – hypotheses, (H4) – the banking service offered by ICICI bank are

Dynamic, was put to statistical test by using z – test of significance.

The services provided by ICICI banks are very dynamic are tested against not so

much dynamic by using the proportion of customer‟s responses who responded asthe services are dynamic. It is found that the services provided by ICICI bank are

not very much dynamic at (Z1=0.3) 1 % level of significance.

Therefore the hypothesis “the banking services provided by ICICI bank are

dynamic” is rejected.

Sub hypothesis, (H5) – “the services offered by SBI are competitive” was put to

statistical test by using the z – test of significance.

The services provided by SBI are very much competitive are tested against not so

much competitive by using the proportion of customers Reponses who responded

as the services are competitive. It is formed that the services provided by SBI are

not very much competitive at (Z2 = -2.54) 1 percent level of significance.

Therefore the hypothesis “the banking services provided by SBI are competitive”

is rejected.

The sub – hypotheses, namely (H6) – “the customers of ICICI bank are satisfied

with the services of ICICI Bank” was put to statistical test by u sing the z – test of

significance.

The customers of ICICI bank are satisfied with services provided by ICICI bank,

is tested by using the proportion of customer responses who said they are not

satisfied with the services. It is found that the customers of ICICI bank are

satisfied with the services provided by ICICI bank at (Z1=6.64) at 1 percent

significance level.

There for the hypothesis “the banking customers of ICICI bank are satisfied with

the services provided by ICICI bank” stands accepted.



The sub – hypothesis (H7) “the customers of SBI are satisfied with the services

provided by SBI” was put to statistical test by using (Z-test) of significance.

The customers of SBI are satisfied with services provided by SBI is tested by

using the proportion of customer responses who said they are not satisfied with the

services. It is found that the customers of SBI are satisfied.

Therefore the “the banking customers of SBI bank are satisfied with the services

provided by SBI stands accepted.

Sub hypothesis (H8) “Services offered by ICICI bank and SBI are same” was putto statistical test of significance (z-test) comparing the customer satisfaction of

ICICI bank (Z1=6.64) with SBI (Z2=5.3) it is found that both the banks provide

services to the satisfaction of customers (Z1=6.64, Z2=5.3) and there is no

significant difference between them in the same (Z=1.19). Therefore the

Hypothesis “services offered by SBI and ICICI banks are same.” Stands accepted.

Sbi vs Icici

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