Journal Press India^®

Author Details ( * ) denotes Corresponding author

Financial strength and wealth maximisation are the two main aspects, important for growth and development of an organisation which is highly applicable to the financial sectors. Banks are the major part of financial sector which play a vital role in contributing to the economic growth of the country. The study is an effort to find the relationship between the financial strength and shareholder value creation of select private sector banks in India. Secondary data have been collected for a period of ten years from 2005-06 to 2014-15 through Capitaline Plus Database, annual reports and RBI reports. Bankometer Model and various economic measures have been applied to analyse the financial soundness and shareholder value of the select banks.

Keywords

Banks; Private sector; Soundness; Value creation

1. Bacidore, J. M., Boquist, J., & Thakor, A. V. (1997). The search for the best financial performance measure. Financial Analysts Journal, 53 (1),11–20.
2. Hajiabbasi, M. Kaviani, M., Largani, N. S., Largani, M. S. & Montazeri, H. (2012). Comparison of information content value creation measures (EVA, REVA, MVA, SVA, CSV and CVA) and accounting measures (ROA, ROE, EPS, CFO) in predicting the Shareholder Return (SR): Evidence from Iran Stock Exchange. ARPN Journal of Science and Technology, 2(5), 517-521.
3. Hanif, A., Tariq, M., Tahir, A. & Wajeeh-ul-Momeneen. (2012). Comparative performance study of conventional and Islamic banking in Pakistan. International Research Journal of Finance & Economics, 8(3), 8-17.
4. Makkar, A.& Singh, S. (2012). Evaluating the financial soundness of Indian commercial banks: An application of Bankometer. National Conference on Emerging Challenges for Sustainable Business, Conference Proceedings, ISBN-978-93-81583-46-3, 118-132
5. Shah, A.& Sengupta, S. (2015). A study on financial performance and valuation metrics: Application of EVA, MVA, CVA and TSR techniques. Twelfth AIMS International Conference on Management. Conference Proceedings, ISBN: 978-81-924713-8-9, pp. 538-546.
6. Shar, A. H., Shah, M. A. & Jamali, H. (2010). Performance evaluation of banking sector in Pakistan: An application of Bankometer. International Journal of Business and Management, 5(9), 81-86.
7. Vashisht, A.K. & Gupta, M. (2012). Economic value added as a performance measurement tool in Banks. The Indian Journal of Commerce, 65(1), 53-61.