To explore the relationship between assets and liabilities, we could merely

compute the correlation between each set of assets and each set of liabilities.
Unfortunately, all of these correlations assess the same hypothesis - that
assets influence liabilities. Hence, a Bonferroni adjustment needs to be
applied. That is, we should divide the level of significance by the number of
correlations. This Bonferroni adjustment, of course, reduces the power of
each correlation and thus can obscure the findings. Canonical correlation
provides a means to explore all of the correlations concurrently andthus
obviates the need to incorporate a Bonferroni adjustment. The technique
reduces the relationship into a few significant relationships.The essence of
canonical correlation Measures the strength of relationship between two sets
of variables (Assets (6) & Liabilities (4) in this case) by establishing linear
combination of variables in one
set and a linear combinations of variables in other set. It produces an output
that shows the strength of relationship between two variates as well as
individual variables accounting for variance in other set
.
A = A1 * (Liquid Assets) + A2 * (SLR Securities)+ A3 * (Investments) + A4 *
(Term Loans) +
A5 *
(Short Term Loans) + A6 * (Fixed Assets)
B = B1 * (Net Worth) + B2* (Borrowings) + B3 *(Short Term Deposits) + B4 *
(Long Term
Deposits)
To begin with, A and B (called canonicalvariates) are unknown. The technique
tries to
compute the values of Ai and Bi such that the covariance between A & B is
maximum.

Public Private Foreign

R square
Canonical loadings
Assets
Liquid assets
Cash and balances with
RBI
Investments
Term loans
Short term loans
Fixed Assets

Liabilities
Net worth
Borrowings
Short term deposits
Term deposits
Redundancy
Assets
Liabilities
Public Private Foreign

(In crores)
Assets
Liquid assets 3,95,074 1,14,539 39,656
SLR Securities 10,13,386 2,41,506 1,17,496
Investments 12,05,783 3,54,117 1,59,286
Term loans 14,85,984 4,46,313 76,031
Short term loans 12,15,317 1,86,181 87229
Fixed Assets 34,466 10,239 4859

Liabilities
Net worth 2,41,002 11,9984 69139
Borrowings 3,13,814 1,48,803 62,146
Short term deposits 1255795 320809 104329
Term deposits 24,36,006 5,01,992 1,33,524

2)
SBM Canara Vijaya Syndicate ING
R square
Canonical
loadings
Assets
Liquid assets
Cash and
balances
with RBI
Investments
Term loans
Short term
loans
Fixed Assets

Liabilities
Net worth
Borrowings
Short term
deposits
Term
deposits
Redundancy
Assets
Liabilities

Data(in thousands)
SBM Canara Vijaya Syndicate Ing

Assets
Liquid 29794750 196532100 55492547 127338529 30270444
assets
SLR 107086903 631301744 179018082 283553670 81939328
Securities
Investments 11494,40,83 69676,95,22 211074464 33010,92,88 104,729,191
Term loans 19177,98,86 83113,48,18 220566032 68322,06,64 124,194,542
Short term 103,578,715 862211488 193805894 220842931 60877353
loans
Fixed Assets 732,99,09 3216,91,78 4931614 701,43,34 4,959,331

Liabilities
Net worth 26652888 146717834 34751508 562704496 30270444
Borrowings 2274,00,96 8440,55,73 1938,56,15 12172,68,76 36,713,880
Short term 122765926 49875,42,14 152446624 365507221 84270281
deposits
Term 26603,41,06 166390,14,4 466870831 804729776 174382726
deposits 3