Chapter 5:

Data Analysis and

Interpretation
5.1 Analysis of Variance (ANOVA)
5.2 Hypothesis
5.3 Testing of Hypotheses
 Chapter 5
DATA ANALYSIS AND INTERPRETATION

Empirical Findings
In this chapter, an attempt has been made to test the significance
difference of various aspects of Non-Performing Assets between selected
public sector and private sector banks. The study is done by taken a period of
ten years from 2005-06 to 2014-15. Testing of Hypotheses has been done by
using Analysis of Variance (ANOVA) test.

5.1 Analysis of Variance (ANOVA)

Professor R.A. Fisher was the first man to use the term ‘Variance’[1]
and, in fact, it was he who developed a very elaborate theory concerning
ANOVA, explaining its usefulness in practical field. Later on Professor
Snedecor and many others contributed to the development of this technique.
ANOVA is essentially a procedure for testing the difference among different
groups of data for homogeneity. “The essence of ANOVA is that the total
amount of variation in a set of data is broken down into two types, that
amount which can be attributed to chance and that amount which can be
attributed to specific causes.”[2] There may be variation between samples and
also within sample items. ANOVA consists in splitting the variance for
analytical purposes. Hence, it is a method of analysing the variance to which a
response is subject into its various components corresponding to various
sources of variation.

Thus, through ANOVA technique one can, in general, investigate any

number of factors which are hypothesized or said to influence the dependent

[1]
Variance is an important statistical measure and is described as the mean of the squares
of deviations taken from the mean of the given series of data. It is frequently used
measure of variation. Its squareroot is known as standard deviation.
[2]
Donald L. Harnett and James L. Murphy, Introductory Statistical Analysis, p.376.
Data A nalysis and Interpretation 182

variable. One may as well investigate the differences amongst various

categories within each of these factors which may have a large number of
possible values. If we take only one factor and investigate the differences
amongst its various categories having numerous possible values, we are said
to use one-way ANOVA and in case we investigate two factors at the same
time, then we use two-way ANOVA. In a two or more way ANOVA, the
interaction (i.e., inter-relation between two independent variables/factors), if
any, between two independent variables affecting a dependent variable can as
well be studied for better decisions.

In short, we have to make two estimates of population variance viz.,

one based on between samples variance and the other based on within
samples variance. Then the said two estimates of population variance are
compared with F-test, wherein we work out.

Estimate of population variance based on between samples variance

F=
Estimate of population variance based on within samples variance

This value of F is to be compared to the F-limit for given degrees of

freedom. If the F value we work out is equal or exceeds the F-limit value
(given in table of critical values of F-Distribution, at 5 percent), we may say
that there are significant differences between sample means.

5.2 Hypothesis
Ordinarily, when one talks about hypothesis, one simply means a mere
assumption or some supposition to be proved or disproved. But for a
researcher hypothesis is a formal question that he intends to resolve. Thus a
hypothesis may be defined as a proposition or a set of proposition set forth as
an explanation for the occurrence of some specified group of phenomena
either asserted merely as a provisional conjecture to guide some investigation
or accepted as highly probable in the light of established facts. Quite often a
research hypothesis is a predictive statement, capable of being tested by scientific
methods, that relates an independent variable to some dependent variable.
Data A nalysis and Interpretation 183

Hypothesis should be capable of being objectively verified and tested.

A hypothesis “is testable if other deductions can be made from it which, in
turn, can be confirmed or disproved by observation.”[3]

5.3 Testing of Hypotheses

5.3.1 Analysis 1
H01 : There is no significant difference in Gross NPAs to Gross Advances
ratio of Public Sector & Private Sector Banks.

As discussed earlier, four leading Indian banks, two banks from public
sector and two banks from the private sector have been selected for this study
and the period is ten years from 2005-06 to 2014-15.

Table 5.1
Gross NPA to Gross Advances ratio
(In percentage)

YEARS SBI (X1) PNB (X2) HDFC (X3) ICICI (X4)

2005-06 3.61 4.10 1.44 1.51
2006-07 2.9 3.5 1.39 2.1
2007-08 3.0 2.7 1.42 3.3
2008-09 2.98 1.60 1.98 4.32
2009-10 3.05 1.71 1.44 6.52
2010-11 3.28 1.79 1.05 4.47
2011-12 4.44 2.93 1.02 3.62
2012-13 4.75 4.27 0.97 3.22
2013-14 4.95 5.25 0.98 3.03
2014-15 4.25 6.55 0.93 3.78
Sources:
(i) Annual Reports and Balance Sheets of SBI, PNB, HDFC and ICICI Various Issues.
(ii) The ratio that are not available, are calculated.

[3]
C. William Emory, Business Research Methods, p. 33.
Data A nalysis and Interpretation 184

Table 5.2
Mean, S.D. and C.V. Calculated on the basis of Table 5.1

Banks Mean Standard Coefficient of

Deviation Variation
SBI 3.72 0.80 21.51
PNB 3.44 1.63 47.45
HDFC 1.26 0.33 26.4
ICICI 3.59 1.37 38.33
Sources:- calculated on the basis of table 5.1

It is clear from table 5.1 that there has been fluctuating trend in NPAs
over the period in all selected banks. Gross NPAs to Gross Advances ratio of
SBI increased from 3.61 percent at the end of the year 2006 to 4.25 percent at
the end of March 2015. In case of PNB, this ratio increased from 4.10 percent
at the end of the year 2006 to 6.55 percent at the end of March 2015. And in
HDFC Gross NPAs to Gross Advances ratio decreased from 1.44 percent at
the end of the year 2006 to 0.93 percent at the end of March 2015. Similarly,
in ICICI, this ratio increased from 1.51 percent at the end of the year 2006 to
3.78 percent at the end of March 2015. In performance term, HDFC has
shown the significant result in handling their non-performing assets.

Table 5.2 shows that bank wise Mean, Standard deviation and
coefficient of variation of GNPAs to Gross Advances ratio of selected banks.
SBI and ICICI has highest mean value while HDFC has lowest value in
comparison to other. Standard Deviation of Gross NPAs to Gross Advances
Ratio is 1.63 of PNB with highest coefficient of variation with 47.45 percent.
It means this ratio is highly variable in PNB than other selected banks. HDFC
has less Standard Deviation and coefficient of variation than ICICI.

For testing the hypothesis that “there is no significant difference in

Gross NPAs to Gross Advances ratio of Public Sector & Private Sector
Data A nalysis and Interpretation 185

Banks”, we will apply ANOVA test. For this, we have to calculate the mean
of all the samples. Here all selected public and private banks are our samples.
Then mean of the sample means will be calculated. After that, Sum of Squares
SS between and SS within will be calculate for making ANOVA table.

Mean of each bank =

3.61 + 2.9 + 3.0 + 2.98 + 3.05 + 3.28
Mean of SBI (X1) = + 4.44 + 4.75 + 4.95 + 4.25
10

= 3.72
4.10 + 3.5 + 2.7 +1.60 +1.71 +1.79
Mean of PNB (X2) = +2.93 +4.27 +5.25 +6.55
10

= 3.44
1.44 + 1.39 +1.42 +1.98 + 1.44 + 1.05
Mean of HDFC (X3) = + 1.02 + 0.97 +0.98 +0.93
10
= 1.26
1.51 + 2.1 + 3.3 + 4.32 + 6.52
Mean of ICICI (X4) = + 4.47 + 3.62 + 3.22 + 3.03 +3.78
10

= 3.59

3.72 + 3.44 +1.26 +3.59

Mean of the sample mean =
4

Mean of the sample mean = 3

SS between =
= 10 (3.72 - 3)2 + 10 (3.44 - 3)2 + 10 (1.26 - 3)2 + 10 (3.59 - 3)2
= 10 (0.72)2 + 10 (0.44)2 + 10 (-1.74)2 + 10 (0.59)2
= 10 (0.52) + 10 (0.19) + 10 (3.03) + 10(0.35)
= 5.2 + 1.9 + 30.3 +3.5
= 40.9
Data A nalysis and Interpretation 186

2 2 2 2
SS within = ∑(X1i – 1) + ∑(X2i – 2) + ∑(X3i – 3) + ∑(X4i – 4)

= { (3.61-3.72)2 + (2.9-3.72)2 + (3-3.72)2 + (2.98-3.72)2 + (3.05-3.72)2 +

(3.28-3.72)2 + (4.44-3.72)2 + (4.75-3.72)2 + (4.95-3.72)2 + (4.25-3.72)2 } +
{ (4.10-3.44)2 + (3.5-4.44)2 + (2.7-3.44)2 + (1.6-3.44)2 + (1.71-3.44)2 +
(1.79-3.44)2 + (2.93-3.44)2 + (4.27-3.44)2 + (5.25-4.44)2 + (6.55-3.44)2 } +
{ (1.44-1.26)2 + (1.39-1.26)2 + (1.42-1.26)2 + (1.98-1.26)2 + (1.44-1.26)2 +
(1.05-1.26)2 + (1.02-1.26)2 + (0.97-1.26)2 + (0.98-1.26)2 + (0.93-1.26)2 } +
{ (1.51-3.59)2 + (2.1-3.59)2 + (3.3-3.59)2 + (4.32-3.59)2 + (6.52-3.59)2 +
(4.47-3.59)2 + (3.62-3.59)2 + (3.22-3.59)2 + (3.03-3.59)2 + (3.78-3.59)2 }

={0.01 + 0.67 + 0.52 + 0.55 + 0.45 + 0.19 + 0.52 + 1.06 + 1.51 + 0.28 } +
{0.44 + 0.004 + 0.55 + 3.39 +2.99 + 2.72 + 0.26 + 0.69 + 3.28 + 9.67 } +
{0.03 + 0.02 + 0.03 + 0.52 + 0.03 + 0.04 + 0.06 + 0.08 + 0.08 + 0.11} + {4.33
+ 2.22 + 0.08 + 0.53 + 8.58 + 0.77 + 0.001 + 0.14 +0.31 + 0.04}

= 5.76 + 23.99 + 1 + 17
= 47.75

SS for total variance = SS between + SS within

= 40.90 + 47.75
=88.65

Now, we can prepare ANOVA table for testing our hypothesis:-

Table 5.3
ANOVA 1
Source of Sum of Square Degree of Mean Square
Variation (SS) Freedeom (d.f.) (MS)
Between 40.90 (4 – 1) = 3 13.63
Within 47.75 (40 – 4 ) = 36 1.33
Total 88.65 39
F- Ratio 13.63 ÷ 1.33 = 10.25
F- limit 2.84 at 5% level of significance
(from the F-table)
Source: calculated on the basis of Table 5.1
Data A nalysis and Interpretation 187

The above table 5.3 shows that the calculate value of F is 10.25 which
is more than the table value 2.84 at 5% level with d.f. being v1 = 3 and v2 =
36. This analysis rejects the null-hypothesis of no difference in Gross NPAs
to Gross Advances ratio between public sector and private sector banks. So it
can be concluded that there is significant difference in Gross NPAs to Gross
Advances ratio between public sector and private sector banks.

So, the Null-hypothesis Rejected.

5.3.2 Analysis 2
H02: There is no significant difference in Net NPAs to Net Advances ratio
of Public Sector & Private Sector Banks.

Here also, four leading Indian banks, two banks from public sector and
two banks from the private sector have been selected for this study and the
period is ten years from 2005-06 to 2014-15.

Table 5.4
Net NPA to Net Advances ratio
(In percentage)
YEARS SBI (X1) PNB (X2) HDFC (X3) ICICI (X4)
2005-06 1.88 0.35 0.44 0.72
2006-07 1.56 0.76 0.43 1.02
2007-08 1.78 0.64 0.47 1.55
2008-09 1.79 0.17 0.63 2.09
2009-10 1.72 0.53 0.31 2.12
2010-11 1.63 0.85 0.19 1.11
2011-12 1.82 1.52 0.18 0.73
2012-13 2.10 2.35 0.20 0.77
2013-14 2.57 2.85 0.28 0.97
2014-15 2.12 4.06 0.26 1.61
Sources:-
(i) Annual Reports and Balance Sheets of SBI, PNB, HDFC and ICICI Various Issues.
(ii) The ratio that are not available, are calculated.
Data A nalysis and Interpretation 188

It is clear from table 5.4 that there has been fluctuating trend in NPAs
over the period in all selected banks. Net NPAs to Net Advances ratio of SBI
increased from 1.88 percent at the end of the year 2006 to 2.12 percent at the
end of March 2015. In case of PNB, this ratio increased from 0.35 percent at
the end of the year 2006 to 4.06 percent at the end of March 2015. And in
HDFC Net NPAs to Net Advances ratio decreased from 0.44 percent at the
end of the year 2006 to 0.26 percent at the end of March 2015. Similarly, in
ICICI, this ratio increased from 0.72 percent at the end of the year 2006 to
1.61 percent at the end of March 2015. In performance term, HDFC has
shown the significant result in handling their non-performing assets.

Table 5.5
Mean, S.D. and C.V. Calculated on the basis of Table 5.4

Banks Mean Standard Coefficient of

Deviation Variation
SBI 1.90 0.30 15.63
PNB 1.41 1.28 90.94
HDFC 0.34 0.15 43.72
ICICI 1.27 0.54 42.45
Sources:- calculated on the basis of table 5.4

Table 5.5 shows that bank wise Mean, Standard deviation and
coefficient of variation of NNPAs to Net Advances ratio of selected banks.
SBI and PNB has highest mean value while HDFC has lowest value in
comparison to other. Standard Deviation of Net NPAs to Net Advances Ratio
is 1.28 of PNB with highest coefficient of variation with 90.94 percent. It
means this ratio is highly variable in PNB than other selected banks. HDFC
has less Standard Deviation and more coefficient of variation than ICICI.

For testing the hypothesis that “there is no significant difference in Net

NPAs to Net Advances ratio of Public Sector & Private Sector Banks”, we
Data A nalysis and Interpretation 189

will again apply ANOVA test. For this, we have to calculate the mean of all
the samples. Here all selected public and private banks are our samples. Then
mean of the sample means will be calculated. After that, Sum of Squares SS
between and SS within will be calculate for making ANOVA table.

Mean of each bank =

1.88 + 1.56 + 1.78 + 1.79 + 1.72
Mean of SBI (X1) = + 1.63 + 1.82 + 2.1 + 2.57 +2.12
10

= 1.90
0.35 + 0.76 + 0.64 + 0.17 + 0.53 + 0.85 + 1.52 +
2.35 +2.85 +4.06
Mean of PNB (X2) =
10

= 1.41
0.44 + 0.43 + 0.47 + 0.63 + 0.31 + 0.19
+ 0.18 + 0.20 +0.28+0.26
Mean of HDFC (X3) =
10

= 0.34
0.72 + 1.02 + 1.55 + 2.09 + 2.12 + 1.11
+ 0.73 + 0.77 + 0.97 +1.61
Mean of ICICI (X4) =
10

= 1.27

1.90 + 1.41 + 0.34 + 1.27

Mean of the sample mean =
4
Mean of the sample mean = 1.23

SS between =
= 10 (1.90 - 1.23)2 + 10 (1.41 - 1.23)2 + 10 (0.34 – 1.23)2 + 10 (1.27 – 1.23)2
= 10 (0.67)2 + 10 (0.18)2 + 10 (-0.89)2 + 10 (0.04)2
= 10 (0.45) + 10 (0.03) + 10 (0.79) + 10(0.002)
= 4.5 + 0.3 + 7.9 + 0.02
= 12.72
Data A nalysis and Interpretation 190

2 2 2 2
SS within = ∑(X1i – 1) + ∑(X2i – 2) + ∑(X3i – 3) + ∑(X4i – 4)

= { (1.88-1.90)2 + (1.56-1.90)2 + (1.78-1.90)2 + (1.79-1.90)2 + (1.72-1.90)2 +

(1.63-1.90)2 + (1.82-1.90)2 + (2.10-1.90)2 + (2.57-1.90)2 + (2.12-1.90)2 } +
{ (0.35-1.41)2 + (0.76-1.41)2 + (0.64-1.41)2 + (0.17-1.41)2 + (0.53-1.41)2 +
(0.85-1.41)2 + (1.52-1.41)2 + (2.35-1.41)2 + (2.85-1.41)2 + (4.06-1.41)2 } +
{ (0.44-0.34)2 + (0.43-0.34)2 + (0.47-0.34)2 + (0.63-0.34)2 + (0.31-0.34)2 +
(0.19-0.34)2 + (0.18-0.34)2 + (0.20-0.34)2 + (0.28-0.34)2 + (0.26-0.34)2 } +
{ (0.72-1.27)2 + (1.02-1.27)2 + (1.55-1.27)2 + (2.09-1.27)2 + (2.12-1.27)2 +
(1.11-1.27)2 + (0.73-1.27)2 + (0.77-1.27)2 + (0.97-1.27)2 + (1.61-1.27)2 }

={0.0004 + 0.12 + 0.01 + 0.01 + 0.03 + 0.07 + 0.006 + 0.04 + 0.45 + 0.05 } +
{1.12 + 0.42 +0.59 + 1.54 + 0.77 + 0.31 + 0.01 + 0.88 + 2.07 + 7.02 } +
{0.01 + 0.008 + 0.02 + 0.08 + 0.001 + 0.02 + 0.03 + 0.02 + 0.004 + 0.006} +
{0.30 + 0.06 + 0.08 + 0.67 + 0.72 + 0.03 + 0.29 + 0.25 + 0.09 +0.12}
= 0.79 + 14.73 + 0.20 + 2.61
= 18.33

SS for total variance = SS between + SS within

= 12.72 + 18.33
=31.05
Now, we can prepare ANOVA table for testing our hypothesis:-

Table 5.6
ANOVA 2
Source of Sum of Square Degree of Mean Square
Variation (SS) Freedeom (d.f.) (MS)
Between 12.72 (4 – 1) = 3 4.24
Within 18.33 (40 – 4 ) = 36 0.51
Total 31.05 39
F- Ratio 4.24 ÷ 0.51 = 8.31
F- limit 2.84 at 5% level of significance
(from the F-table)
Source: calculated on the basis of Table 5.4
Data A nalysis and Interpretation 191

The above table 5.6 shows that the calculate value of F is 8.31 which
is more than the table value 2.84 at 5% level with d.f. being v1 = 3 and v2 =
36. This analysis rejects the null-hypothesis of no difference in Net NPAs to
Net Advances ratio between public sector and private sector banks. So it can
be concluded that there is significant difference in Net NPAs to Net Advances
ratio between public sector and private sector banks.

So, the Null-hypothesis Rejected.

5.3.3 Analysis 3
H03: There is no significant difference in Gross NPAs to Total Assets ratio
of Public Sector & Private Sector Banks.
Here also, four leading Indian banks, two banks from public sector and
two banks from the private sector have been selected for this study and the
period is ten years from 2005-06 to 2014-15.

Table 5.7
Gross NPA to Total Assets ratio
(In percentage)

YEARS SBI (X1) PNB (X2) HDFC (X3) ICICI (X4)

2005-06 1.95 2.16 0.69 0.88
2006-07 1.76 2.09 0.72 1.20
2007-08 1.78 1.68 0.68 1.90
2008-09 1.62 1.12 0.89 2.54
2009-10 1.85 1.08 0.81 2.60
2010-11 2.06 1.16 0.61 2.41
2011-12 2.97 1.91 0.59 1.94
2012-13 3.27 2.82 0.58 1.79
2013-14 3.44 3.43 0.61 1.77
2014-15 2.77 4.27 0.58 2.34
Sources:-
(i) Annual Reports and Balance Sheets of SBI, PNB, HDFC and ICICI Various Issues.
(ii) The ratio that are not available, are calculated.
Data A nalysis and Interpretation 192

Table 5.8
Mean, S.D. and C.V. Calculated on the basis of Table 5.7

Banks Mean Standard Coefficient of

Deviation Variation
SBI 2.35 0.69 29.43
PNB 2.17 1.06 48.64
HDFC 0.68 0.11 15.63
ICICI 1.94 0.57 29.31
Sources:- Calculated on the basis of table 5.7

It is clear from table 5.7 that there has been fluctuating trend in NPAs
over the period in all selected banks. Gross NPAs to Total Assets ratio of SBI
increased from 1.95 percent at the end of the year 2006 to 2.77 percent at the
end of March 2015. In case of PNB, this ratio increased from 2.16 percent at
the end of the year 2006 to 4.27 percent at the end of March 2015. And in
HDFC Gross NPAs to Total Assets ratio decreased from 0.69 percent at the
end of the year 2006 to 0.58 percent at the end of March 2015. Similarly, in
ICICI, this ratio increased from 0.88 percent at the end of the year 2006 to
2.34 percent at the end of March 2015. In performance term, HDFC has
shown the significant result in handling their non-performing assets.

Table 5.8 shows that bank wise Mean, Standard deviation and
coefficient of variation of GNPAs to Total Assets ratio of selected banks. SBI
and PNB has highest mean value while HDFC has lowest value in comparison
to other. Standard Deviation of Gross NPAs to Total Assets Ratio is 1.06 of
PNB with highest coefficient of variation with 48.64 percent. It means this
ratio is highly variable in PNB than other selected banks. HDFC has less
Standard Deviation and coefficient of variation than ICICI.

For testing the hypothesis that “there is no significant difference in

Gross NPAs to Total Assets ratio of Public Sector & Private Sector Banks”,
Data A nalysis and Interpretation 193

we will again apply ANOVA test. For this, we have to calculate the mean of
all the samples. Here all selected public and private banks are our samples.
Then mean of the sample means will be calculated. After that, Sum of Squares
SS between and SS within will be calculate for making ANOVA table.

Mean of each bank =

1.95 + 1.76 + 1.78 + 1.62 + 1.85 + 2.06
+ 2.97 + 3.27 + 3.44 + 2.77
Mean of SBI (X1) =
10

= 2.35
2.16 + 2.09 + 1.68 + 1.12 + 1.08 + 1.16
+ 1.91 + 2.82 + 3.43 + 4.27
Mean of PNB (X2) =
10

= 2.17
0.69 + 0.72 + 0.68 + 0.89 + 0.81 + 0.61 + 0.59 +
0.58 + 0.61 +0.58
Mean of HDFC (X3) =
10

= 0.68
0.88 + 1.20 + 1.90 + 2.54 + 2.60 + 2.41
+ 1.94 + 1.79 + 1.77 + 2.34
Mean of ICICI (X4) =
10

= 1.94

2.35 +2.17 + 0.68 + 1.94

Mean of the sample mean =
4
Mean of the sample mean = 1.79

SS between =
= 10 (2.35 – 1.79)2 + 10 (2.17 - 1.79)2 + 10 (0.68 – 1.79)2 + 10 (1.94 – 1.79)2
= 10 (0.56)2 + 10 (0.38)2 + 10 (-1.11)2 + 10 (0.15)2
= 10 (0.314) + 10 (0.144) + 10 (1.232) + 10(0.023)
= 3.14 + 1.44 + 12.32 + 0.23
= 17.13
Data A nalysis and Interpretation 194

2 2 2 2
SS within = ∑(X1i – 1) + ∑(X2i – 2) + ∑(X3i – 3) + ∑(X4i – 4)

= { (1.95-2.35)2 + (1.76-2.35)2 + (1.78-2.35)2 + (1.62-2.35)2 + (1.85-2.35)2 +

(2.06-2.35)2 + (2.97-2.35)2 + (3.27-2.35)2 + (3.44-2.35)2 + (2.77-2.35)2 } +
{ (2.16-2.17)2 + (2.09-2.17)2 + (1.68-2.17)2 + (1.12-2.17)2 + (1.08-2.17)2 +
(1.16-2.17)2 + (1.91-2.17)2 + (2.82-2.17)2 + (3.43-2.17)2 + (4.27-2.17)2 } +
{ (0.69-0.68)2 + (0.72-0.68)2 + (0.68-0.68)2 + (0.89-0.68)2 + (0.81-0.68)2 +
(0.61-0.68)2 + (0.59-0.68)2 + (0.58-0.68)2 + (0.61-0.68)2 + (0.58-0.68)2 } +
{ (0.88-1.94)2 + (1.20-1.94)2 + (1.90-1.94)2 + (2.54-1.94)2 + (2.60-1.94)2 +
(2.41-1.94)2 + (1.94-1.94)2 + (1.79-1.94)2 + (1.77-1.94)2 + (2.34-1.94)2 }

={0.16 + 0.35 + 0.33 + 0.53 + 0.25 + 0.08 + 0.38 + 1.04 + 1.19 +0.18} +
{0.0001 + 0.006 + 0.24 + 1.10 + 1.19 + 1.02 + 0.07 + 0.42 + 1.59 +4.41 } +
{0.0001 + 0.002 + 0 + 0.04 + 0.02 + 0.005 + 0.008 + 0.01 +0.005 + 0.01} +
{1.12 + 0.55 + 0.002 + 0.36 + 0.44 + 0.22 + 0 + 0.02 + 0.03 + 0.30}

= 4.49 + 10.05 + 0.1001 + 3.042

= 17.68

SS for total variance = SS between + SS within

= 17.13 + 17.68
=34.81

Now, we can prepare ANOVA table for testing our hypothesis:-

Table 5.9
ANOVA 3
Source of Sum of Square Degree of Mean Square
Variation (SS) Freedeom (d.f.) (MS)
Between 17.13 (4 – 1) = 3 5.71
Within 17.68 (40 – 4 ) = 36 0.49
Total 34.81 39
F- Ratio 5.71 ÷ 0.49 = 11.65
F- limit 2.84 at 5% level of significance
(from the F-table)
Source: Calculated on the basis of Table 5.7
Data A nalysis and Interpretation 195

The above table 5.9 shows that the calculate value of F is 11.65 which
is more than the table value 2.84 at 5% level with d.f. being v1 = 3 and v2 =
36. This analysis rejects the null-hypothesis of no difference in Gross NPAs
to Total Assets ratio between public sector and private sector banks. So it can
be concluded that there is significant difference in Gross NPAs to Total
Assets ratio between public sector and private sector banks.

So, the Null-hypothesis Rejected.

5.3.4 Analysis 4
H04: There is no significant difference in Net NPAs to Total Assets ratio of
Public Sector & Private Sector Banks.
Here also, four leading Indian banks, two banks from public sector and
two banks from the private sector have been selected for this study and the
period is ten years from 2005-06 to 2014-15.

Table 5.10
Net NPA to Total Assets ratio
(In percentage)

YEARS SBI (X1) PNB (X2) HDFC (X3) ICICI (X4)

2005-06 0.99 0.14 0.21 0.42
2006-07 0.93 0.45 0.22 0.58
2007-08 1.03 0.38 0.22 0.87
2008-09 0.99 0.11 0.34 1.20
2009-10 1.03 0.33 0.18 1.06
2010-11 1.01 0.54 0.11 0.59
2011-12 1.18 0.98 0.10 0.38
2012-13 1.4 1.52 0.11 0.42
2013-14 1.73 1.81 0.17 0.55
2014-15 1.35 2.56 0.15 0.97
Sources:-
(i) Annual Reports and Balance Sheets of SBI, PNB, HDFC and ICICI Various Issues.
(ii) The ratio that are not available, are calculated.
Data A nalysis and Interpretation 196

Table 5.11
Mean, S.D. and C.V. Calculated on the basis of Table 5.10

Banks Mean Standard Coefficient of

Deviation Variation
SBI 1.16 0.26 21.92
PNB 0.88 0.82 93.34
HDFC 0.18 0.07 39.88
ICICI 0.70 39.88 42.07
Sources:- Calculated on the basis of table 5.10

It is clear from table 5.10 that there has been fluctuating trend in NPAs
over the period in all selected banks. Net NPAs to Total Assets ratio of SBI
increased from 0.99 percent at the end of the year 2006 to 1.35 percent at the
end of March 2015. In case of PNB, this ratio increased from 0.14 percent at
the end of the year 2006 to 2.56 percent at the end of March 2015. And in
HDFC Net NPAs to Total Assets ratio decreased from 0.21 percent at the end
of the year 2006 to 0.15 percent at the end of March 2015. Similarly, in
ICICI, this ratio increased from 0.42 percent at the end of the year 2006 to
0.97 percent at the end of March 2015. In performance term, HDFC has
shown the significant result in handling their non-performing assets.

Table 5.11 shows that bank wise Mean, Standard deviation and
coefficient of variation of NNPAs to Total Assets ratio of selected banks. SBI
and PNB has highest mean value while HDFC has lowest value in comparison
to other. Standard Deviation of Net NPAs to Total Assets Ratio is 0.82 of
PNB with highest coefficient of variation with 93.34 percent. It means this
ratio is highly variable in PNB than other selected banks. HDFC has less
Standard Deviation and coefficient of variation than ICICI.

For testing the hypothesis that “there is no significant difference in Net

NPAs Total Assets ratio of Public Sector & Private Sector Banks”, we will
Data A nalysis and Interpretation 197

again apply ANOVA test. For this, we have to calculate the mean of all the
samples. Here all selected public and private banks are our samples. Then
mean of the sample means will be calculated. After that, Sum of Squares SS
between and SS within will be calculate for making ANOVA table.

Mean of each bank =

0.99 + 0.93 + 1.03 + 0.99 + 1.03 + 1.01
+ 1.18 + 1.4 + 1.73 + 1.35
Mean of SBI (X1) =
10

= 1.16
0.14 + 0.45 + 0.38 + 0.11 + 0.33 + 0.54
+ 0.98 + 1.52 + 1.81 + 2.56
Mean of PNB (X2) =
10

= 0.88
0.21 +0.22 +0.22 +0.34 + 0.18 + 0.11
+ 0.10 + 0.11 + 0.17 + 0.15
Mean of HDFC (X3) =
10

= 0.68
0.42 + 0.58 + 0.87 + 1.20 + 1.06 + 0.59
+ 0.38 + 0.42 + 0.55 + 0.97
Mean of ICICI (X4) =
10

= 0.70

1.16 + 0.88 + 0.18 + 0.70

Mean of the sample mean =
4

Mean of the sample mean = 0.73

SS between =
= 10 (1.16 – 0.73)2 + 10 (0.88 – 0.73)2 + 10 (0.18 – 0.73)2 + 10 (0.70 – 0.73)2
= 10 (0.43)2 + 10 (0.15)2 + 10 (-0.55)2 + 10 (-0.03)2
= 10 (0.185) + 10 (0.023) + 10 (0.303) + 10(0.001)
= 1.85 + 0.23 + 3.03 + 0.01
= 5.12
Data A nalysis and Interpretation 198

2 2 2 2
SS within = ∑(X1i – 1) + ∑(X2i – 2) + ∑(X3i – 3) + ∑(X4i – 4)

= { (0.99-1.16)2 + (0.93-1.16)2 + (1.03-1.16)2 + (0.99-1.16)2 + (1.03-1.16)2 +

(1.01-1.16)2 + (1.18-1.16)2 + (1.40-1.16)2 + (1.73-1.16)2 + (1.35-1.16)2 } +
{ (0.14-0.88)2 + (0.45-0.88)2 + (0.38-0.88)2 + (0.11-0.88)2 + (0.33-0.88)2 +
(0.54-0.88)2 + (0.98-0.88)2 + (1.52-0.88)2 + (1.81-0.88)2 + (2.56-0.88)2 } +
{ (0.21-0.18)2 + (0.22-0.18)2 + (0.22-0.18)2 + (0.34-0.18)2 + (0.18-0.18)2 +
(0.11-0.18)2 + (0.10-0.18)2 + (0.11-0.18)2 + (0.17-0.18)2 + (0.15-0.18)2 } +
{ (0.42-0.70)2 + (0.58-0.70)2 + (0.87-0.70)2 + (1.20-0.70)2 + (1.06-0.70)2 +
(0.59-0.70)2 + (0.38-0.70)2 + (0.42-0.70)2 + (0.55-0.70)2 + (0.97-0.70)2 }

={0.03 + 0.05 + 0.02 + 0.03 + 0.02 + 0.02 + 0.0004 + 0.06 + 0.32 + 0.04} +
{0.55 + 0.19 + 0.25 + 0.59 + 0.30 + 0.12 + 0.01 + 0.41 + 0.87 + 2.82 } +
{0.001 + 0.002 + 0.002 + 0.03 + 0 + 0.005 + 0.006 + 0.005 + 0.0001 + 0.001}
+ {0.08 + 0.014 + 0.03 + 0.25 + 0.13 + 0.01 + 0.10 + 0.08 + 0.02 + 0.07}
= 0.56 + 6.11 + 0.05 + 0.77
= 7.49

SS for total variance = SS between + SS within

= 5.12 + 7.49
=12.61

Now, we can prepare ANOVA table for testing our hypothesis:-

Table 5.12
ANOVA 4

Source of Sum of Degree of Mean Square

Variation Square (SS) Freedeom (d.f.) (MS)
Between 5.12 (4 – 1) = 3 1.71
Within 7.49 (40 – 4 ) = 36 0.21
Total 12.61 39
F- Ratio 1.71 ÷ 0.21 = 8.14
F- limit 2.84 at 5% level of significance
(from the F-table)
Source: calculated on the basis of Table 5.10
Data A nalysis and Interpretation 199

The above table 5.12 shows that the calculate value of F is 8.14 which
is more than the table value 2.84 at 5% level with d.f. being v1 = 3 and v2 =
36. This analysis rejects the null-hypothesis of no difference in Net NPAs to
Total Assets ratio between public sector and private sector banks. So it can be
concluded that there is significant difference in Net NPAs to Total Assets
ratio between public sector and private sector banks.

So, the Null-hypothesis Rejected.