Comparative Analysis of Selected CAMEL-Based Financial Ratios of SBI and HDFC Bank: Evidence from the Indian Banking

Abstract

This study compares selected CAMEL-based financial ratios of the State Bank of India (SBI) and HDFC Bank for 2013–2024. Rather than applying the full CAMEL framework, the study focuses on five key financial indicators related to investment and credit performance: government securities investment, total investment to total assets, advances to deposits, spread, and approved securities to total assets. The study gathered secondary data from Reserve Bank of India (RBI) publications and individual banks' annual reports. The study used Compound Annual Growth Rate (CAGR), time-series regression, and independent-samples t-tests to compare the two banks' financial performance and examine long-term changes. The results show that the two institutions' financial strategies differ significantly. Over the study period, HDFC Bank showed statistically significant positive trends in the Advances-to-Deposits Ratio and Spread Ratio, indicating stronger loan growth and improved earnings efficiency. By contrast, SBI consistently maintained higher ratios of Government Securities Investment and Approved Securities to Total Assets, suggesting a more cautious investment strategy focused on portfolio stability and liquidity. The comparison shows that SBI maintained a more risk-conscious investing profile, whereas HDFC Bank pursued a growth-oriented approach. Beyond providing useful evidence for banking professionals, financial analysts, researchers, and policymakers assessing financial performance using specific CAMEL-based indicators, these findings advance knowledge of investment and credit management practices in Indian public and private sector banks.