Hypotheses Testing
The present study is primarily concerned with the comparative study of financial performance of two
major banks representing public and private sector of India i.e. Punjab National Bank and HDFC Bank.
The secondary data considered for the study consists of selected variables collected for the ten years
period from 2006-07 to 2015-16. The analysis and interpretation is based on the following hypotheses:
H
01
: There is no significant impact of efficiency ratios on Return on Equity of PNB.

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International Academic Journal of Business Management,
Vol. 5, No. 1, pp. 26-47.
41
H
02
: There is no significant impact of efficiency ratios on Return on Assets of PNB.
Table
–
7 Descriptive Statistics of PNB
Mean
Std. Deviation
N
CRDR
75.09
2.98
10
CPDR
7.42
0.48
10
ROE
16.98
5.94
10
ROA
1.05
0.34
10
Source: Annual Reports of PNB from 2011-12 to 2015-16
The above table shows the statistical description of credit deposit ratio, capital deposit ratio, return on
equity and return on assets of PNB from 2006-07 to 2015-16. The Return on equity and return on assets
of PNB was 16.98 and 1.05 per cent respectively. The mean value of credit deposit ratio and capital
deposit ratio was 75.09 per cent and 7.42 per cent during the study period. The standard deviation of
CRDR and CPDR was 2.98 and 0.48 respectively while standard deviation of ROE and ROA was 5.94
and 0.34 for the study period.
Table
–
8 Model Summary
Model
R
R Square
Adjusted R Square
Std. Error of the
Estimate
1
.441
a
.195
-.035
6.04441
1
.328
a
.108
-.147
.36361
Source: Annual Reports of PNB from 2011-12 to 2015-16
a. Predictors: (Constant), CPDR, CRDR
Table 8 shows the correlation (r) between the efficiency ratios and ROE and ROA of PNB. The
coefficient of determination (R
2
) is at 0.195 and 0.108 respectively which implies that 19.5 and 10.8 per
cent of variance is explained by the relationship between these variables. Above table also examines the
relationship between efficiency ratios and ROE and ROA that gives the coefficient of correlation at 0.441
and 0.328 which indicate a positive moderate degree of correlation.
Table
–
9 Coefficients
Model
Unstandardized Coefficients
Standardized
Coefficients
T
Sig.
B
Std. Error
Beta
1
(Constant)
40.680
52.940
.768
.467
CRDR
.249
.716
.125
.348
.738
CPDR
-5.718
4.402
-.467
-1.299
.235
2
(Constant)
2.126
3.185
.667
.526
CRDR
.010
.043
.084
.223
.830
CPDR
-.243
.265
-.346
-.916
.390
Source: Annual Reports of PNB from 2011-12 to 2015-16
a. Dependent Variable: ROE, ROA.

International Academic Journal of Business Management,
Vol. 5, No. 1, pp. 26-47.
42
Table 9 presents the regression analysis of efficiency ratios on profitability of Punjab National Bank from
2006-07 to 2015-16. In case of ROE, it is observed that the value of beta coefficient is .125 which
signifies that for every unit change in ROE, there is a 0.125 unit’s change in CRDR. On the other hand,
the intercept is 0.249 which shows that if the value of ROE is zero then the value of CRDR would be
affected by 0.249 units. It point towards that there is other factor that affects ROE of PNB. The significant
value is 0.738 which is more than the critical value i.e. 0.05. It leads to the acceptance of the null
hypothesis that there is a significant impact of CRDR on Return on Equity of PNB from 2006-07 to 2015-
16. Hence the null hypothesis that there is no significant impact of credit deposit ratio on return on equity

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- Fall '16