Performance analysis of Bank of Maharashtra and ICICI Bank

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Indian Banking Industry Banking in India

The Indian banking industry is an integral and very important part of the countrys economy. One can say, it is the life & blood of the nation and its people. The sector has helped peoples dream come true, and has translated the hopes and aspirations of millions of people into reality. It all started in the 18th century when the Indian banking industry laid its foundation, and has since then followed an evolutionary path towards growth. The importance of private and foreign players has been recognized in the recent times by the industry in a competitive scenario and has led towards greater liberalization. The ability of Indian banks to win market shares profitably is dependent on stock returns because they have mobilized around 80% of funding through deposits. In recent times, the Indian banking industry has been changing rapidly; high growth and development can be seen in this sector. The total assets of Indian banks were put up as Rs.82,99,220 crore during FY2012 and also the revenues of Indian banks grew almost four-fold from USD 11.8 billion to USD 46.9 billion over the decade spanning 2001-10. Even the PAT has rose nearly nine-fold from USD 1.4 billion to USD 12 billion over 2001-10. This growth has been driven primarily by two factors, first, the arrival of Foreign Direct Investment (FDI) of up to 74% with certain restrictions and second, the conservative policies of the RBI, which have shielded Indian Banks from recession and global economic turmoil. The BANKEX, an index tracking the performance of important banking sector stocks has grown at a CAGR of approximately 20% over 2003-12. For banks, the current and saving accounts (CASA) are their lifeline for profitable growth, but during Financial Year (FY) 2012 high interest rate chocked them of such deposits, slowing expansion to a five-year low of 7%. Because of the slowdown of the general economy, credit

growth of the Scheduled Commercial Banks (SCBs) also slowed down to 18.10% in FY2012, which was 22.90% in FY2011. In FY 2012 the growth of total deposits of the SCBs stood at 14.92% as against 18.31% in FY 2011 and also the net interest margin (NIM) of SCBs was 2.90% on average in FY 2012. The private banks, in the present competitive scenario are targeting faster growing retail loans, and also improving the growth rate in fee income by increasing transaction fees, the Public sector banks are targeting to push for higher recoveries and upgrades Non Performing Loans (NPL) and also improve their deposit mix by reducing the share of bulk deposits.

About the Maharashtra Bank:

Bank of Maharashtra is an Indian bank based in the city of Pune. The bank was established in the year 1935 with an initial authorized capital worth Rs. 10.00 Lacs, although it became operational in the early phase of the next year. The bank got nationalized by the Government of India in the year 1969. With a total number of 1421 branches located all over India as of April 2009, the bank claims to have the largest number of branches within the state of Maharashtra, among all the Public Sector banks. Commonly known as a common man's bank, Bank of Maharashtra adopts a philosophy of "Technology with personal touch", and follows its motto stating "One Family, One Bank, Bank of Maharashtra". Facilities All the branches of Bank of Maharashtra have been fully computerized, with Depository services and Demat facilities being offered at 131 branches as of April 2009. The bank aims at increasing its ATM network from 345 to 500 soon, apart from planning to install Biometric ATMs at some selected branches. Apart from it, introduction of Phone Banking, Internet Banking and Mobile Banking is also on the cards. Other Highlights Apart from providing regular banking services to the customers, Bank of Maharashtra has established two Joint Ventures to fulfill its other commitments towards the general public and society. These Joint Ventures are M-SETI and Mahabank Info Centre. Mahabank Self-Employment Training Institute (MSETI) is an effort initiated by Mahabank Agricultural Research & Rural Development Fund (MARDEF), a trust run by Bank of Maharashtra receiving help from National Bank for Rural Development (NABARD). The institute runs various self-employments oriented training courses for the rural unemployed youth from the districts of Pune, Kolhapur, Satara, Sangli, Nasik, Ahmednagar, Jalgaon, Dhule and Nandurbar. Mahabank Info Centre is a yet another initiative by Bank of Maharashtra aimed at providing various retail baking related information to the customers, and enabling smoother operations for them. Products / Services Bank of Maharashtra Credit Cards Bank of Maharashtra Auto Loans Bank of Maharashtra Personal Loans Bank of Maharashtra Fixed Deposits

Bank of Maharashtra Saving Accounts Bank of Maharashtra Educational Loans

Risk management frame work Banks are faced with a variety of risks while conducting day to day banking operations. Bank has its Risk Management Frame work in accordance with the RBI Guidelines and benchmarks itself against the industry best practices. This enables the Bank to identify measure, monitor and manage risk efficiently. The Board of Directors of the Bank reviews all Risk Management Policies and Strategies and establishes control systems in line with the Banks aggregate Risk Appetite. Credit Risk Management.

The Bank has constituted Credit Risk Management Committee (CRMC) which reviews the policies, procedures and systems relating to credit administration and monitoring, at periodic intervals. The Bank has put in place comprehensive Lending Policy, Loan Review Policy and Credit Risk Management Policy for credit risk management. The policies prescribe various guidelines, procedures, standards and prudential / exposure norms. To evaluate the risk perception in a lending proposition, the Bank has put in place an in-house developed Credit Risk Rating Framework (CRRF) for rating of existing as well as entry level borrowers in various asset classes, as desired under Basel II. In house developed rating model is also in use to rate Non-SLR Investments. The Bank utilizes industry risk rating from reputed credit rating agency and incorporates the industry risk score in the Credit Risk Rating Models. These models are periodically validated by independent experts to ensure the efficacy and relevance. The Bank has prescribed threshold ratings for entry level exposures with a view to building up credit portfolio within the risk appetite and achieves the profit plan. With a view to separating the Credit Risk '' Management function from credit sanctioning, Credit Approval Grids are set up at various levels and at Treasury & International Banking Division (TIBD), Mumbai, which assess the risk perception through a committee approach. The Bank has undertaken migration analysis of credit risk rating of borrowers over a time horizon and probability of default has been estimated in line with Basel II requirements. To achieve risk-retum trade off, risk based pricing framework has been implemented and reviewed periodically. The Bank undertakes following studies periodically to assess Credit Risk: o o o Compliance to Prudential Norms as per Lending Policy Credit Portfolio Review Assessment of Credit Concentration Risk Quick Mortality of Loans and Advances

o o

Country Risk Management Aggregate exposure on other banks and Stress test Report

Findings of these studies are placed before the Credit Risk Management Committee (CRMC), Risk Management Committee (RMC) and the Board on periodical basis. Market Risk Management: Bank has its separate Market Risk Management Committee which reviews MRM Policy on regular basis and reports modifications, if any, to the Risk Management Committee & the Board for approval. The Bank's MRM Policy aims to set out the broad processes i.e. by which the Bank will identify risks in the areas of Interest Rate Risk, Forex Risk, Equity Price Risk and Options Risk. Reporting framework has been prescribed for internal reporting, Regulatory reporting and Pillar III disclosures. Interest Rate Risk Management: Bank uses the following tools to manage interest rate risk: o o Traditional Gap Analysis (TGA) which is undertaken through the preparation of Interest Rate Sensitive Gap Reports on a monthly basis. Earning at Risk is based on Calculation of impact on Nil due to 1% change in interest rates. It also takes into account Basis Risk. Embedded Option Risk, Yield Cure Risk, Net Interest Position Risk, Price Risk and Reinvestment Risk. o Duration Gap Analysis (DGA) which focuses on the bank's exposure to interest rate risk in banking book (IRRBB) in terms of sensitivity of Market Value of its Equity (MVE) to interest rate movements. o Considering the interest rate risk in the portfolio, the Bank has set upper limits of Modified Duration for AFS HFT category and also the upper limit for total investment portfolio. o Value at Risk (VaR) for treasury positions is calculated for 1 Day,10 Days and 30 Days for 99% Confidence Level. The Bank has constituted Asset Liability Management Committee (ALCO) which meets at regular intervals to review the interest rate scenarios, liquidity positions in the banking book etc. The ALCO manages and supervises Liquidity Risk through review of rates of interest on deposits / advances. ALCO also monitors adherence to various risk limits and determines the business strategy in light of prevailing interest rate scenario and liquidity position in the market with a view to optimizing profit and overall balance sheet management while managing interest rate risk. The ALM Policy, which is reviewed annually and approved by the Board, prescribes the parameters for management of Liquidity Risk, Interest Rate Risk, Basel III Compliance and lays down Strategies for

Asset Liability Pricing, Profit Planning and Growth Projections, Funding and Capital Planning and Regulatory Reporting Framework. Investment Risk is managed through the prescriptions made in the Investment Management Policy & Investment Risk Management Policy. Management of Foreign Exchange Risk, prudential limits for open foreign exchange position, aggregate gap position, Daylight limit, Overnight limit, Net open overnight position, Stop loss limit, Limit for undertaking swaps/investment/ borrowing overseas, interbank exposure limits etc. have been put in place. These limits are monitored regularly. The ''Liquidity Risk'' is measured and managed through ''Gap analysis'' for maturity mismatches by reviewing structural liquidity position on daily basis and short term dynamic liquidity on fortnightly basis. Bank is conducting behavioral studies in GAP analysis. Stress testing is undertaken periodically. Operational Risk Management: Operational risk is the risk of loss resulting from inadequate or failed internal processes, people or systems or from external events. Bank's primary aim is the early identification, recording, assessment, monitoring, prevention and mitigation of operational risks, as well as timely and meaningful management reporting. The Operational Risk Management Committee (ORMC) meets regularly to review the matters related to operational risk. The Bank has put in place policy on Business Continuity Planning. A policy on outsourcing is also formulated which facilitates use of expertise available in the market with adequate safeguards against risk associated with outsourcing. Under the Risk based supervision, Risk Profile Template covering five business risks and two control risks are prepared on quarterly basis and submitted to RBI. Rating of the branches is being done under Risk-based Internal Audit (RBIA) and the position is reviewed every quarter. Implementation of Basel II: The Bank is Basel II compliant in terms of the New Capital Adequacy Framework (Basel II) guidelines issued by RBI. Bank has adopted Standardized Approach for Credit Risk, Standardized Measurement Approach for Market Risk and Basic Indicator Approach for Operational Risk as per RBI guidelines for capital adequacy computation. External credit ratings from approved rating agencies are used for risk weighting of corporate exposures as required under Basel II. Bank has also put in place a Policy on Disclosure, Policy on Utilization of Credit Risk Mitigation Techniques & Collateral Management and Policy on Stress Testing approved by the Board. The Bank has evolved Board approved internal Capital Adequacy Assessment Process (ICAAP) which covers identification and measurement of risks other than Pillar 1 risks (i.e. Credit Risk, Market Risk & Operational Risk), to meet the requirements of Pillar 2 of Basel II norms. The Bank has adhered to disclosure norms as stipulated in the guidelines of RBI to meet Pillar 3 requirements of Basel II. The year-end disclosures as on March 31, 2013 are part of the Annual Report and also displayed on the Bank''s website. In-house software - Credit Information and Monitoring System (CIMS) is used for computation of Capital Adequacy under Basel II framework, in line with RBI Master Circular on

implementation of New Capital Adequacy Framework dated 02.07.2012. CIMS is used for generating credit risk statements for Standardised Approach under Basel II, statement of un-availed portion of credit facilities and capital adequacy report in Extensible Business Reporting Language (XBRL) format. For implementation of the advanced approaches under the Basel II framework and industry best practices in risk management, the Bank has appointed consultants for Credit, Market and Operational Risk. The Bank will enhance its Risk and Capital Management capabilities by migrating to the Advanced Approaches of the Basel II framework. Advanced approaches include Foundation and Advanced Internal Ratings Based Approach (''FIRBA'' & ''AIRBA'') for Credit Risk, Standardized and Advanced Measurement Approach (''TSA'' & ''AMA'') for Operational Risk and Internal Models Approach (''IMA'') for Market Risk. Improvement in awareness of Basel II norms amongst the employees is ensured through training. Knowledge and skill levels of risk management team at Head Office are constantly upgraded through exposure to external trainings, workshops and seminars. Implementation of Basel iii: RBI has issued Guidelines on Implementation of Basel III Capital

Regulations in India on 2nd May, 2012. These Guidelines will become effective from April 1, 2013 in a phased manner. Basel III guidelines of RBI have also introduced (i) a minimum Leverage Ratio of 4.5 per cent as an additional standard of riskiness of a Bank''s balance sheet, (ii) Liquidity standards by way of two liquidity ratios namely Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR). During the parallel run between January, 2013 and January, 2017, banks will strive to maintain a minimum Leverage Ratio of 4.5 per cent. The regulatory leverage ratio requirements would be prescribed by RBI after a parallel becomes effective from Jan. 1, 2018. Bank is having adequate MIS for implementation of the Basel III guidelines issued by RBI and reporting/ disclosures will be done as per periodicity prescribed. Internal Control Systems Inspection & Concurrent Audit: The Inspection and Audit system & various measures of internal control are adopted by the Bank to ensure identification /assessment and mitigations of operational risks. Internal Audit of branches:Inspection of more than 63 per cent of total branches was conducted so as to cover more than 62 per cent of the business of the bank while complying with the Jilani Committee recommendations. Complying with the RBI Guidelines, the Bank has also started Risk Based Internal Audit of the branches w.e.f. 01.01.2013 on standalone basis as against the conventional internal inspection and RBIA being done on parallel basis earlier. During the year, the Bank has implemented some strategic decisions so as to strengthen the internal control system such as, o o On the spot rectification of atleast 51 per cent irregularities during the course inspection itself in the branches. Implementation of Document mechanization system.

Initiating the process of Web Based application system so as to improve Branch Inspection, Concurrent Audit system and Off-site surveillance.

The Bank is prepared to implement Seth Committee Recommendations so as to strengthen the Internal Audit System. During the year, the Bank also organized conference of all Inspecting Officials and Heads of Inspection Cells so as to update them on policies, procedures, business environment, opportunities and challenges for banks, emerging areas of risks and their role in alerting the Top Management of existing and impending risks at branches and offices. i) Surprise inspection: Surprise inspection of 91 branches, focusing mainly on high risk areas was also carried out in pursuance of Ghosh Committee recommendations. ii) Concurrent Audit: The Bank also ensured concurrent audit of its branches and departments which covered business of 51 per cent of aggregate deposit and 74.29 per cent of total advances in addition to business covered in RBIA. iii) Income & Expenditure Audit: Income & Expenditure Audit for the period from October 2011 to September 2012 was carried out at 995 branches to identify and recoverincome leakage, if any. Half yearly expenses audit of all the Zonal offices was carried out during the year. iv) Management audit: For assessing their effectiveness of Zonal Offices and different departments in the Head Office in terms of supervision and control, Management Audit of 17 Zonal offices and 14 departments at Head Office was carried out during the year. RBI Inspection under Section 35 of the Banking Regulation Act: The Bank was also subject to RBI inspection under Sec.35 of the Banking Regulation Act. Besides that two branches were also inspected during the year.

Disclosure on compliance to capital adequacy & other regulatory prescriptions

The Bank is subjected to the Capital Adequacy guidelines stipulated by RBI. Adequate capital is maintained by the Bank as a cushion for covering the risk of loss in value of exposure, businesses etc. so as to protect the depositors, general creditors and stakeholders against such losses. The Bank has evolved and put in place a Board approved Internal Capital Adequacy Assessment Process (ICAAP) framework. Assessment and review of Banks capital requirements are carried out at periodical intervals. The guidelines for implementation of the New Capital Adequacy Framework issued by RBI stipulates higher of the following amounts as minimum capital required to be maintained by the Bank. (a) Minimum capital as per Basel II norms for Credit, Market and Operational Risk.

(b) 80% of Minimum capital as per Basel I norms for Credit and Market risks.

The minimum capital required to be maintained by the Bank as on March 31, 2013 is 80% of the capital requirement under Basel I norms i.e. Rs. 5611.26 Crore or capital requirement as per Basel II norms i.e. Rs.6474.56 Crore, whichever is higher. However, the actual capital (Tier 1 and Tier 2) maintained by the Bank as on March 31, 2013 is Rs. 9059.14 Crore, which is above the prudential floor limit. The Capital ratios of the bank and subsidiaries are: Bank of Maharashtra CRAR % CRAR Tier I Capital (%) CRAR Tier II Capital (%) Consolidated Group CRAR % CRAR Tier I Capital (%) CRAR Tier II Capital (%) 12.59 7.57 5.02 12.59 7.57 5.02

CAPITAL STRUCTURE The Capital Structure of the Bank comprises Equity, Preference shares, Reserves & Surplus and Innovative Perpetual Bonds. The Bank has raised equity capital of Rs. 406.00 crore (including share premium) through allotment of equity share capital to Government of India on preferential basis during the year as under: Particulars Date Allotment Government of 30.03.2013 India of No. of Shares Equity issued 7,18,83,852 capital 71.88 share Share premium 334.12 406.00 Total

Interest rates: Above 1 year and less than 3 year 9.10% Base rate 10.25%

Financial analysis based on financial statements

Profitability Analysis
Profitability Ratio Spread Burden Net Profit ROE% ROA% 13-Mar 3033.35 1236.71 7.21 12.21 87.82 12-Mar 2517.09 874.57 5.52 9.97 70.13 11-Mar 1968.39 324.17 5.42 10.23 70.23 10-Mar 1296.25 223.3 8.16 18.28 66.39 9-Mar 1256.53 293.51 7.88 18.16 58.47

On the Basis of Spread Spread refers to the difference in borrowing and lending rates of financial institutions (such as banks) in nominal terms. The Spread of the bank has been continuously increasing which shows that company is able to increase its profits. Thus we conclude that bank has source of financing to meets its obligation. On the Basis of Burden Burden refers to excess of non interest expenses over non interest income. Higher the Burden in the bank lower will be the profitability of the bank burden amount in the bank of Maharashtra has been increasing continuously thus its lowering down the profitability of the bank. Bank needs to decrease its non interest expenses and should try to increase its non-interest income. By doing this bank would be able to increase its profit. On the basis of Net Profit From the below graph we clearly conclude that net profit the bank has increasing from the previous year. As compared to 2012 the net profit of the bank has increased to approx 30%, is clearly shows that bank is able to meet its entire obligation. On The basis of ROE Return on equity measures the rate of return on the ownership interest of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity. We could clearly see that how the ROE has increases from year 2011 earlier there was a downfall in the ROE of the

Company but now the bank is able to regain its efficiency or we could say that the bank is able to fulfill the interest of existing shareholders or owners. On the Basis of ROA The return on assets percentage shows how profitable a company's assets are in generating revenue. From the below graph we could clearly find out that the bank efficient asset, as the ROA of the bank has been increasing continuously, From the year 2009, Thus bank is able to manage its assets very well. Overall Profitability Ratio From analyzing the profitability Ratio we conclude the following things:
Bank is efficiently managing its Interest Expenses and Incomes thus insuring that bank has sufficient source of funds in order to meet its obligation. ROA of the bank is also increasing continuously from the year 2009, thus we could that company is managing its asset efficiently. The net profit of the bank has been increased from its previous year, but the net profit has decreased in the year 2011, this happen because of significant increase in burden means non-interest expense of the bank has increased a lot in this as compared to non-interest income. Similarly ROE of the bank has increased as compared to its previous year, but there is downfall in the ROE of the bank in the year 2011.

Balance Sheet Analysis

Ratios Capital Adequacy Ratio Credit Deposit Ratio Investment Deposit Ratio Debt-Equity Ratio Current Ratio Quick Ratio 13-Mar 12.59 32.81 31.8 16.34 0.8 0.249 12-Mar 12.43 71.8 31.67 20.51 0.03 0.2152 11-Mar 13.35 67 33.67 22.94 0.03 0.2082 10-Mar 12.78 64.56 34.36 26.33 0.03 0.2275 9-Mar 12.05 67.63 32.62 25.31 0.03 0.978

On the basis of Capital Adequacy Ratio A measure of a bank's capital. It is expressed as a percentage of a bank's risk weighted credit exposures. This ratio is used to protect depositors and promote the stability and efficiency of financial systems of the

bank. The capital adequacy ratio of the bank of Maharashtra has been continuously increasing from year 2009 thus bank has enough capital to meet its credit exposure. On the basis of Credit Deposit Ratio A commonly used statistic for assessing a bank's liquidity by dividing the banks total loans by its total deposits. As per the RBI Guidelines the credit deposit ratio of the bank should be 60%. Currently Credit deposit ratio of the bank is 32.81% which has decreased from its previous year this means that banks is not earning as much as they could earn in short we could conclude that Bank of Maharashtra is following the conservative approach. On The Basis of Debt-Equity Ratio Debt-Equity measures of a company's financial leverage, indicates what proportion of equity and debt the company is using to finance its assets. In the year 2009 the debt equity ratio of the bank was quite high, but since then bank has significantly reduces its debt. A high Portion of debt means that bank is financing its funds from outside which is not a good source of financing, and high debt result in increase in interest expenses and even it increase risk of bankruptcy/Liquidity, thus reduction in debt-equity means bank financial structure is being continuously improving. On the basis of Current ratio A liquidity ratio that measures a company's ability to pay short-term obligations. The current ratio of the bank remains stable till 2012 after that it gradually increases to 0.8. But still current ratio of the bank is below ideal ratio. Thus liquidity position of the bank is quite week. Thus bank does not have cash/Short term funds to pay off its short term obligation. On the Basis of Quick Ratio The Acid-test or quick ratio or liquid ratio measures the ability of a company to use its near cash or quick assets to extinguish or retire its current liabilities immediately. The quick ratio is below the benchmark but it gradually increased as compared to past few years. Business parameters Growth in deposits- As far as 2010-11 is concerned there has been robust growth in CASA deposits, total deposits recorded growth of 3541 crore during the year to reach 66,845 crore, up by 5.59 per cent over the level of 63,304 crore as at the end of March 2010. Aggregate deposits recorded growth of 5.44 per cent over the same period. CASA deposits constituted 40.44 per cent of total deposits of the Bank. In 2011-12 CASA deposits have increased by 17.01% and have stood at 31,632 crore and share of CASA deposits in total bank deposits improved to 41.33%. In 2012-13 CASA deposits increased by 21.64% and has stood at 38,476 crore and constituting the 40.79% of the total bank deposits. It is seen that there has been a continuous growth in the deposits of the bank which shows that it has developed its trustworthy image in the minds of its customers.

Growth in advances- Gross advances have increased from 40,926 crore in 2010 to 47,487 crore in 2011 with growth rate of 16.03 per cent. Credit deposit ratio (CDR) in 2011 is 71.04 per cent as against 64.65 per cent as in 2010. As it has been continuously emphasising on qualitative credit growth and ensures compliance with regulatory requirements as well as the prudential exposure limits, the gross advances of the bank have increased from 40,487 crore in 2011 to 56,979 crore in 2012 with a growth of 19.99%. Credit deposit ratio is 74.75% in 2012 as against 71.04% in 2011. The bank takes several steps in for reduction in the proposal processing time at all levels and for improvement in the quality of credit. With this the gross advances of the bank have increased from 56,979 crore in 2012 to 76,397 crore in 2013 with the growth of 34.08%. Advances have been showing a continuous positive growth in its advances which shows that customers believe that the bank has good lending facility. Growth in investments- The Net investments of the bank has stood at 22,491.08 crore in 2011as against 21,323.85 crore in 2010, registering a growth of 5.47per cent. The Net Interest Income from investment increased by 17.13 percent to 1,520.29 crore from 1,297.90 crore during 2010. As far as 2011-12 is concerned the net investments of the bank has stood at 22,911.36 crore in 2011 as against 22,491 crore in 2012. The net interest income is increased by 12.38% to 1,708.57 crore to 1,520.29 crore during 2012. The net investment of the bank in 2013 has stood at 31,430.31 crore as against 26,031.36 crore in 2012. The net interest income from investment activity increased to 2,231.28 crore from 1,708.57 crore during the last year, a growth of 30.59 per cent. This shows that Bank of Maharashtra has been consistently earning good net interest income from its investments. Efficiency parameters Cost to income ratio- The lower the cost to income ratio, more profitable the bank is.The cost to income ratio of 2010-11, 2011-12 and 2012-13 have stood at 65.79%, 52.02% and 45.54%respectively. It is seen that the bank is efficiently running its business and controlling its costs in an efficient manner.

Operating profit to average working funds ratio- It measures the efficiency of the bank to utilize its funds. The ratio of the bank stands at 1.22, 1.98 and 2.08 in 2010-11, 2011-12 and 2012-13 respectively which shows that the bank is able to utilise its funds in a better manner and generating operating profit.

Business per employee- This tool measures the efficiency of all the employees of a bank in generating business for the bank. The ratio stands at 8.25, 9.67 and 12.56 (in crore) for 2010-11, 2011-12 and 2012-

13 which show that all the employees are working efficiently in generating huge business for the organization. Profit per employee- This ratio measures the efficiency of employees at the branch level. The higher the ratio, higher is the efficiency of the management. The ratio stands at 2.38, 3.12 and 5.59 (in lakhs) in 2010-11, 2011-12 and 2012-13 respectively which indicates that the employees are working efficiently in their respective branches, thus leading to the efficient management of the organization.

PRODUCTIVITY PARAMETERS

Average business per employee:- It is calculated as average month wise deposits plus advances by number of full-time employees 2013 2012 2011 12.56 9.67 8.25 Business/employee It is increasing each year which is a good indicator of profitability. Average profit per employee: it is the ratio of net profit to number of full-time employees. Year ended
Profit Per Emp. [Rs. in Lacs]

31.3.2013 5.59

31.3.2012 3.12

Average yield on advances :2013 2012 2011 11.50 11.44 9.69 Yield on advances(in %) The yield is increasing which is showing a good trend.

Average cost of deposit :2013 2012 2011 6.87 6.35 5.38 Cost of deposit(in %) The cost of deposit is increasing which is profitable to bank.

VULNERABILITY PARAMETERS Capital to Risk Adjusted Return ratio (CRAR)

CRAR

2013 12.59

2012 12.43

2011 13.35

The minimum Capital Adequacy Ratio prescribed by RBI is 9%.Capital Adequacy Ratio of Bank of Maharashtra is more than 9% over the years which is a good sign.

Gross NPA Ratio

NPA

2013 1.49

2012 1.71

2011 2.28

Gross NPA Ratio is reducing over the years means it is not vulnerable to earnings.

Net NPA Ratio

NPA

2013 .52

2012 .66

2011 .84

SWOT Analysis of Bank of Maharashtra

1. Public sector undertaking. Thus, has govt. backing 2. In this area for more than 75 years. Thus, expertise in this field. 3. Very high investments in SLR securities

Strength

4. High connectivity to common man in some parts of the country 5. Over 1500 branches in 23 states and 2 union territories 1.Risk averse 2.Low profitability 3.Increasing NPAs 1.Rural Areas 2.Increasing Non-SLR investments to increase profits 3.Making their credit cards profitable 1.Competitor 2.New bank licenses 3.Dis-investments by the government

Weakness

Opportunity

Threats

Recommendation and Suggestion

The business growth of bank of Maharashtra has been constantly positive but as the market is in downturn condition it should try to consolidate itself so that its growth may not go down. The liquidity position of the bank is quite weak as the liquidity ratio of the bank is below the benchmark, thus bank is required to improve its liquidity. They should improve their credit policy so as to protect themselves from defaulters. As the government of India has decided to infuse 14000 crore in public sector banks so bank of Maharashtra should make the best utilization of this opportunity. The up gradation of technology by bank of Maharashtra is quite slow they should adopt the latest technology on time in order to speed up their process and to satisfy their customers. Now the bank should try to increase their profitability and they should try to expand their business in the rural market.

ICICI BANK
Industrial Credit and Investment Corporation of India (ICICI) Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its wholly owned subsidiary. ICICI was formed in 1955 at the initiative of the World Bank, the Government of India and representatives of Indian industry. The principal objective was to create a development financial institution for providing medium-term and long-term project financing to Indian businesses. In the 1990s, ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group offering a wide variety of products and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial institution from nonJapan Asia to be listed on the NYSE. ICICI Bank is India's largest private sector bank with total assets of Rs. 5,367.95 billion (US$ 99 billion) at March 31, 2013 and profit after tax Rs. 83.25 billion (US$ 1,533 million) for the year ended March 31, 2013. The Bank has a network of 3,100 branches and 10,481 ATMs in India, and has a presence in 19 countries, including India.

ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries in the areas of investment banking, life and non-life insurance, venture capital and asset management.

The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established branches in Belgium and Germany.

ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). ICICI Bank also provides various services under government banking wherein, it includes Agency function Power sector Municipal corporations Development Authority Social Welfare Department Food and Civil Supplies Forest Corporation Nagar Nigam Jal Nigam, etc. Its products under government banking are as follows: Online Auctioning/E-tendering Biometric Card-Payment Collection of State and Central taxes (both online and offline) E-governance- Collection of Direct General Foreign Trade (DGFT), online collection of fees and stamp duty and e-ticket for railways. Form selling through branches

ICICI Banks facts and figures 1. Size of the firm I. II. Turnover- Rs. 22,212 crore Profit- 29% growth in ICICI Banks profit after tax to 83.25 billion in fiscal 2013.

III.

Branches & ATMs- During fiscal 2013, they added 348 branches and 1,475 ATMs to their network, taking their branch and ATM count to 3,100 and 10,481 respectively at March 31, 2013

2. Structure of the firm:Key Players and market share ICICI Prudential Life Insurance Company Limited(ICICI Life)- market share 7.0% in fiscal 2013 ICICI Lombard General Insurance Company Limited (ICICI General)market share 9.5% in fiscal 2013 ICICI Securities Primary Dealership Limited ICICI Securities Limited ICICI Securities Holdings Inc. ICICI Securities Inc. ICICI Home Finance Company Limited ICICI Trusteeship Services Limited ICICI Investment Management Company Limited ICICI Venture Funds Management Company Limited ICICI International Limited ICICI Bank UK PLC ICICI Bank Eurasia Limited Liability Company ICICI Bank Canada ICICI Prudential Trust Limited ICICI Prudential Asset Management Company Limited ICICI Prudential Pension Funds Management Company Limited

3. Growth rate over the period 3-5 years- 20 to 25% 4. Key growth drivers- technology, investment, people, products and services 5. Segmental analysis

 Retail- Small and Medium enterprise and Agricultural, Rural Microfinance and Agricultural business, ATMs and Branches Wholesale- Corporate Banking, Commercial banking, Government Banking Service- Treasury, Compliance, Account opening team 6. Specific terminologies and key performance- Refer to Appendices section of the report. 7. Dynamics of the firm- The competition is happening because of price, product differentiation and services. 8. Critical success factors- Market share, Low cost and Depreciation, elite customer base 9. Regulations that affect the firm- Cash Reserve Ratio, Statutory Liquidity Ratio, Repo rate, Reverse Repo rate, rules & guidelines of RBI regarding financial inclusion 10. Analysis of costs and profitability I. Major costs a. Payments to and provisions for employees b. Rent, taxes and lighting c. Printing and stationery d. Advertisement and publicity e. Depreciation on Bank's property f. Depreciation (including lease equalisation) on leased assets g. Directors' fees, allowances and expenses h. Auditors' fees and expenses i. j. Law charges Postages, telegrams, telephones, etc.

k. Repairs and maintenance l. Insurance

m. Direct marketing agency expenses n. Other expenditure II. Margins & profitability- 17.19% (Net profit margin)

11. Analysis of top 3-5 competitors of the firm

Particulars

State Bank of India

Axis Bank

HDFC

Punjab National Bank

Assets & Liabilities Profit

Rs.1,566,261.04 crore Rs. 14,104.98 crore

Rs.340,560.66 crore Rs.5,179.43 Crore Rs. 704.13 Crore 5.39%

Rs.400,331.89 crore Rs.6,726.28 crore Rs. 468.95 crore 5.46%

Rs.478,877.03 crore Rs.4,747.67 crore Rs.7,236.50 crore 38.10%

Non-Performing Assets Cash Deposit Ratio

Rs. 21,956.48 crore 5.34%

ICICI Bank Group

BUSINESS PROFILE

Products & Services Personal Banking

Deposits Loans Cards Investments Insurance Demat Services Wealth Management

NRI Banking

Money Transfer Bank Accounts Investments Property Solutions Insurance Loans

Business Banking

Corporate Net Banking Cash Management Trade Services FXOnline SME Services Online Taxes Custodial Services

BALANCE SHEET OF ICICI BANK LTD.

2009 CAPITAL AND LIABILITIES: Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Net Worth Deposits Borrowings Total Debt Other Liabilities And Provisions Total Liabilities 2010 2011

(Rs. In crores)

2012

2013

1086.75 736.75 0.02

1239.83 889.83 0.00

1249.34 899.34 0.00

1462.68 1112.68 0.00

1463.29 1113.29 0.00

350.00 11813.20 0.00 12899.97 99818.78 33544.50 146263.25 21396.17 167659.42

350.00 21316.16 0.00 22555.99 165083.17 38521.91 226161.17 25227.88 251388.95

350.00 23413.92 0.00 24663.26 230510.19 51256.03 306429.48 38228.64 344658.12

350.00 45357.53 0.00 46820.21 244431.05 65648.43 356899.69 42895.39 399795.08

350.00 48419.73 0.00 49883.02 218347.82 67323.69 335554.53 43746.43 379300.96

ASSETS:
Cash And Balances With RBI Balances With Banks,Money At Call Advances Investments Gross Block Accumulated Depreciation Net Fixed Assets Capital Work In Progress Other Assets Total Assets 6344.90 8934.37 18706.88 29377.53 17536.33

6585.07

8105.85

18414.45

8663.60

12430.23

91405.15 50487.35 5525.65 1487.61 4038.04 96.30 8702.59 167659.40

146163.11 71547.39 5968.57 1987.85 3980.72 147.94 12509.57 251388.95

195865.60 91257.84 6298.56 2375.14 3923.42 189.66 16300.26 344658.11

225616.08 111454.34 7036.00 2927.11 4108.89 0.00 20574.63 399795.07

218310.85 103058.31 7443.71 3642.09 3801.62 0.00 24163.62 379300.96

Contingent liabilities Bills for collection Book value(Rs.) EPS No. of equity shares

97507.79 9803.67 170.35 27.22 736716094

119895.78 15025.21 249.55 28.55 889823901

177054.18 22717.23 270.37 34.59 899266672

371737.36 29377.55 417.64 37.37 1112687495

803991.92 36678.71 445.17 33.78 1113250642

PROFIT AND LOSS ACCOUNT OF ICICI BANK LTD.

For The Year Ended Mar2005,Mar2006,Mar2007,Mar2008,Mar2009 (Rs. In Crores)

2009 INCOME: Interest Earned Other Income Total Income EXPENDITURE: Interest Expended Operating Expenses Total Expenses Operating Profit Other Provision And Contigencies Provision For Tax Net Profit Extraordinary Items Profit B/F Total Preference Dividend Equity Dividend Corporate Dividend Tax Pershare Data Eps(Rs.) Equity Dividend(%) Book Value(Rs) 9409.90 3416.14 12826.04 6570.89 3299.15 9870.04 2956 428.80 522 2005.20 0.00 53.09 2058.29 0.00 632.96 90.10

2010 13784.49 4983.14 18767.63 9597.45 4479.51 14076.96 4690.67 1594.07 556.53 2540.07 0.00 188.22 2728.29 0.00 759.33 106.50

2011 22994.29 5929.17 28923.46 16358.50 6690.56 23049.06 5874.40 2226.36 537.82 3110.22 0.00 293.44 3403.66 0.00 901.17 153.10

2012 30788.34 8810.77 39599.11 23484.24 8154.18 31638.42 7960.69 2904.59 898.37 4157.73 0.00 998.27 5156.00 0.00 1227.70 149.67

2013 31092.55 7603.72 38696.27 22725.93 7045.11 29771.04 8925.23 3808.26 1358.84 3758.13 (0.58) 2436.32 6193.87 0.00 1224.58 151.21

27.22 85.00 170.35

28.55 85.00 249.55

34.59 100.00 270.37

37.37 110.00 417.64

33.78 110.00 445.17

Appropriations Transfer To Statutory Reserve Transfer To Other Reserve Proposed Dividend/Transfer To Govt Balance C/F To Balance Sheet Total

547.00 600.01 723.06

248.69 1320.34 865.83

1351.12 0.00 1054.27

1342.31 0.01 1377.37

2008.42 0.01 1375.79

188.22 2058.29

293.44 2728.30

998.27 3403.66

2436.32 5156.01

2809.65 6193.87

FINANCIAL STATEMENT ANALYSIS

Comparative Balance Sheet Of ICICI Bank From 2005-2006 To 2008-2009
PARTICULARS 2009-2010
Absolute change % of change

2010-2011
Absolute change % of change

2011-2012
Absolute change % of change

(Rs. in crores) 2012-2013

Absolute change % of chang e

CAPITAL AND LIABILITIES:

Capital

Reserves and surplus Deposits Borrowings Other Liabilities and Provisions

153.08 9502.96 65264.39 4977.41 3831.71

14 80 65 15 18

9.51 2097.76 65427.02 12734.12 13000.76

0.8 10 40 33 51.5

213.34 21943.61 13920.86 14392.4 4666.75

17 94 6 28 12

0.61 3062.2 (26083.23) 1675.26 851.04

.04 7 (11) 2.5 2

TOTAL CAPITAL AND LIABILITIES

83729.55

50

93269.17

37

55136.96

16

(20494.12)

(5.1)

ASSETS:
Investments Advances Fixed assets Capital Work In Progress
21060.04 54757.96 (57.32) 51.64 42 60 (1.4) 54 19710.45 49702.49 (57.3) 41.72 27.5 34 (1.4) 28.2 20196.5 29750.48 185.47 (189.66) 22 15 5 -100 (8396.03) (7305.23 (307.27) 0.00 (7.5) (3.25) (7.5) 0.00

Current assets TOTAL ASSETS:

7917.23 83729.55

37 50

23871.8 93269.16

81 37

5194.17 55136.96

10 16

(4485.58) (20494.11)

(8) (5.1)

Interpretation
The capital of bank increased by 14% in 2009-10,0.8% in 2010-11,17% in 2011-12,and .04 % in 2012-13.This shows that there is fluctuation in the rate of increase in the capital. In 2009-10 and 2011-12 the rate of increase in capital is more than that of 2010-11 and 2012-13 There is a huge fluctuation in the rate of increase in reserves and surplus also. This shows that bank is effectively utilizing its reserves and surplus. In 2009-10 deposits increase by 65%,in 2010-11 it increased by 40%,and an increase of 6% in 2011-12.in 2012-13 deposits fall by 11%.this shows that the bank has repayed its deposits in this year. The borrowings are also showing a fluctuating rate of increase.in 2012-13 the borrowings have increased at a very low rate.this shows that bank has repaid a large amount of borrowings in this year and thereby reducing the dependence on outside debt. The investments are also increasing but with lower rates compared to the preceding years. Similarly advances rose by 60% in 2009-10,an increase of 34% in 2010-11,15% increase in 2010-11 and finally decresed by 3.25% in 2012-13. Thre has been a consistent decline in the fixed assets over years.in 2009-10 and 2010-11 it decreased by 1.4 % ,increased by 5% in 2011-12 and again decreasing by 7.5% in 2012-13.this is mainly due to increase in the rate of depreciation in the subsequent years. A huge fluctuation is revealed from current assets. it increased by 37% in 2009-10,rate of increase rose to 80% in 2010-11 and then the it increased at a much lower rate i.e at 10%.this shows that the bank is effectively ustilising its working capital.there is a fall in current assets in 2012-13 by 8 %.this is mainly due to the repayment of deposits in the years 2012-13.

1. Comparative Income Statement Of ICICI Bank From 2009-2010 To 2012-2013

PARTICULARS 2009-2010
Absolute change % of change

2010-11
Absolute change % of change

2011-12
Absolute change % of change

(Rs. in crores) 2012-13

Absolute change % of change

INCOME:

Operating income
EXPENDITURE:

5941

46.3

10156

54.1

10676

37

(902.84)

(2.3)

Interest expended Operating expenses Total expenses Operating profit

Provision and contigencies

3026.56 1180.36 4206.92 1734.67

46 36 43 59

6761.05 2211.05 8972.1 1183.73

70.4 49.3 64 25.2

7125.74 1463.62 8589.36 2086.29

43.5 22 37.2 35.5

(758.31) (1109.07 (1867.38) 964.54

(3) (14) (5.9) 12.1

1199.8

126.1

613.58

28.5

1038.78

37.5

1364.14

36

Net profit for the year Extraordinary items Profit brought forward
TOTAL PROFIT/(LOSS):

534.87 0.00 135.13 670

27 0.00 254.5 32.55

570.15 0.00 105.22 675.37

22.4 0.00 56 25

1047.51 0.00 704.83 1752.34

34 0.00 21 51.4

(399.6) (0.58) 1438.05 1037.87

(10) 0.00 144 20

Interpretation: The net profit shows a fluctuating trend i.e it increased by 27% in 2000-10,22.4% increase in 2010-11,and increased by 34% in 2011-12 and finally if falls by 10% in201213.this may be due to decline in operating income and inresed tax liability in the year 2012-13. The interest expenses from the period 2009 to 2012 showed an increasing trend but decresed in 2012-13 due to repayment of borrowings.

2. TREND ANALYSIS

Trend Percentage Of ICICI Bank From 2009-20 To 2012-2013

(base year 2004 -05) Percentage(%) figures

Particulars
Deposits Advances Net profit

2009
100 100 100

2010
165 160 127

2011
231 214 155

2012
245 247 207

2013
219 239 187

Interpretation: There is a continous increase in the deposits till the year ending 2012 followed by a downfall in the year ending 2013 due to repayment od deposits in this year. Similarly advances also shows as increasing trend till the year ending 2012 followed by a slight downfall in the year ending 2013. There has been a substantial increase in net profit till the year year ending 2012.In four years it has been more than double. The overall performance of the bank is satisfactory.

3.RATIO ANALYSIS CURRENT RATIO: An indication of a company's ability to meet short-term debt obligations; the higher the ratio, the more liquid the company is. Current ratio is equal to current assets divided by current liabilities. If the current assets of a company are more than twice the current liabilities, then that company is generally considered to have good short-term financial strength. If current liabilities exceed current assets, then the company may have problems meeting its short-term obligations. CURRENT RATIO = CURRENT ASSETS / CURRENT LIABILITY Year 2009 2010 2011 2012 2013 Current Assets
(Rs. In crores)

Current Liabilities
(Rs. In crores)

Current Ratio 1.01 1.17 1.39 1.36 1.23

21632.56 29549.79 53421.59 58615.76 54130.18

21396.16 25227.88 38228.64 42895.38 43746.43

 Interpretation: An ideal solvency ratio is 2. The ratio of 2 is considered as a safe margin of solvency due to the fact that if current assets are reduced to half (i.e.) 1 instead of 2, then also the creditors will be able to get their payments in full. But here the current ratio is less than 2 and more than 1 which shows that the bank have current assets just equal to the current liabilities which is not satisfactory as the safety margin is very less or zero. Therefore the bank should keep more current assets so that it can maintain a satisfactory safety margin.

LIQUID RATIO:
Liquid ratio is also known as Quick or Acid Test Ratio. Liquid assets refer to assets which are quickly convertible into cash. Current Assets other stock and prepaid expenses are considered as quick assets. Quick Ratio = Total Quick Assets Total Current Liabilities Quick Assets = Total Current Assets Inventory

2009 2010 2011 2012 2013

12929.97 17040.22 37121.33 38041.13 29966.56

21396.16 25227.88 38228.64 42895.38 43746.43

0.60 0.67 0.97 0.88 0.68

Interpretation:
A quick ratio of 1:1 is considered favourable because for every rupee of current liability,there is atleast one rupee of liquid assets. A higher value of ratio is considered favourable. Here this ratio is less than 1 in 2005,2006 & 2009 but in 2007 & 2008 it is close to 1 which is not satisfactory. This means the bank has not managed its funds properly in this particular period.Therefore bank should rationally utilise its funds to maintain an ideal liquid ratio.

EARNING PER SHARE:

In order to avoid confusion on account of the varied meanings of the term capital employed, the overall profitability can also be judged by calculating earning per share with the help of the following formula: Earning Per Equity Share = Net Profit after Tax Prefrence Dividend No. of Equity shares

The earning per share of the company helps in determining the market price of the equity shares of the company. A comparison of earning per share of the company with another will also help in deciding whether the equity share capital is being effectively used or not. It also helps in estimating the companys capacity to pay dividend to its equity shareholders. Year Net Income Available For Shareholders (Rs. In crores) 2005.2 2540.07 3110.22 4157.73 3758.13 No. Of Equity Shares (Rs. In crores) 73.6716 88.9823 89.9266 111.2687 111.325 EPS

2009 2010 2011 2012 2013

27.22 28.55 34.59 37.37 33.78

Interpretation: Earning Per Share is the most commonly used data which reflects the performance and prospects of the company.It affects the market price of shares. Here the Earning Per Share is shows a persistent increase till the year 2008 after that in the year 2009 Earning Per share is followed by a downfall due to decline in profits.

DIVIDEND PER SHARE :

It is expressed by dividing dividend paid to equity shareholders by no. of equity shares.this shows the per share dividend given to equity shareholders.It is very helpful for potential investors to know the dividend paying capacity of the company.It affects the market value of the company.

Dividend Per Share = Dividend Paid To Equity Shareholders No. Of Equity Shares

Year 2005 2006 2007 2008 2009

Dividend Paid
(Rs. In crores)

No. Of Equity Shares

(Rs. In crores)

DPS 8.59 8.53 10.02 11.03 11

632.96 759.33 901.17 1227.7 1224.58

73.6716 88.9823 89.9266 111.2687 111.325

Interpretation:
Here the Dividend Per Share is increasing year after year except a little decline in 2009.otherwise the dividend per share ratio of the bank is quite satisfactory which shows the bank has a good dividend paying capacity.

NET PROFIT RATIO:

This ratio indicates the Net margin on a sale of Rs.100. It is calculated as follows: Net Profit Ratio = Net Profit X 100 Net Sales This ratio helps in determining the efficiency with which affairs of the business are being managed. An increase in the ratio over the previous period indicates improvement in the operational efficiency of the business. The ratio is thus on effective measure to check the profitability of business. Year 2009 2010 2011 2012 2013 Net Profit (Rs. In crores) 2005.2 2540.07 3110.22 4157.73 3758.13 Sales (Rs. In crores) 9409.9 13784.49 22994.29 30788.34 31092.55 Net Profit Ratio (in %) 21.3 18.42 13.52 13.5 12.08

Interpretation:
Although both the sales and net profit have increased during the above period but the Net Profit Ratio of the bank is declining continuously. This is because of the reason that net profits have not increased in the same proportion as of the sales.

OPERATING PROFIT RATIO:

This ratio is calculated as follows: Operating Profit Ratio = Operating Profit X100 Net Sales

The difference between net profit ratio and net operating profit ratio is that net operating profit is calculated without considering non-operating expenses and non-operating incomes. If we deduct this ratio from 100,the result will be operating ratio. Higher operating profit ratio enable the organization to recoup non-operating expenses out of operating profits and provide reasonable return. Year 2009 2010 2011 2012 2013 Operating Profit (Rs. In crores) 2956 4690.67 5874.4 7960.69 8925.23 Sales (Rs. In crores) 9409.9 13784.49 22994.29 30788.34 31092.55 Operating Profit Ratio (in %) 31.41 34.02 25.54 25.85 28.7

 Interpretation:
In the year 2009 & 2010 the operating profit is 31.41% & 34.02% respectively. After that it has been consistently declined from the year 2011 till 2012 and again gaining momentum in 2013. This may be due to the reason that operating expenses have been increased more as compared to sales during the above period consequently reducing the operating profits.Therefore the bank should check on unnecessary operating expenses to correct this situation and to provide a sufficient return.

RETURN ON NET WORTH:

It measures the profitability of the business in view of the shareholders. It judges the earning capacity of the company and the adequacy of return on proprietors funds.Shareholders and potential investors are interested in this ratio.It is calculated as below: Return On Net Worth = Net Profit After Interest And Tax x 100 Shareholders Funds

Year

2009 2010 2011 2012 2013

Net Profit After Interest And Tax (Rs. In crores) 2005.2 2540.07 3110.22 4157.73 3758.13

Shareholder's Fund (Rs. In crores) 12899.97 22555.99 24663.26 46820.21 49883.02

Return On Net Worth (in %) 15.54 11.26 12.61 8.88 7.53

Interpretation:

The net profit after interest and tax have increased slowly till the year 2012 followed by a downfall due to high interest payments,operating expenses and taxation liability.consequently the networth ratio has declined considerably and has reduced to more than half in the year 2013 than it was in 2009.

RETURN ON CAPITAL EMPLOYED:

It establishes relationship between profit before interest and tax and capital employed. It indicates the percentage of return on the total capital employed in the business.This ratio is also known as Return On Investment. It measures the overall efficiency and profitabilityof the business in relation to investment made in business. It also shows how efficiently the resources are used in the business.comparison of one unit with that of the other or performance in one year with that of the same unit is possible. It is calculated as below:

Year

2009 2010 2011 2012 2013

Net Profit Before Interest And Tax (Rs. In crores) 9098.09 12694.05 20006.54 28540.34 27842.9

Capital Employed (Rs. In crores) 146263.25 226161.17 306429.48 356899.69 335554.53

Return On Capital Employed (in %) 6.22 5.61 6.52 7.99 8.29

Interpretation:

The above table exhibit the return on capital employed ratio of the bank for last five years.This ratio measures the earning of the net assets of the business. The ratio was 6.22% in year 2005. After that it rised to the tune of 5.61%,6.52%,7.99% and 8.29% in year 2010, 2011, 2012 and year 2013 respectively. It lead to the conclusion bank rising but very little proportion of return on capital employed.

DEBT- EQUITY RATIO:

The Debt-Equity ratio is calculated to find out the long-term financial position of the firm.This ratio indicates the relationship between long-term debts and shareholders funds.The soundness of long-term financial policies of a firm can be determined with the help of this ratio. It helps to assess the soundness of long-term financial policies of a business.It also helps to determine the relative stakes of outsiders and shareholders.Long-term creditors can assess the security of their funds in a business.it indicates to what extent a firm depends upon lenders to meet its long-term financial requirements.A low Debt-Equity ratio is considered better from the point of view of creditors. Year 2009 2010 2011 2012 2013 Debt (Rs. In crores) 154759.45 228832.96 319994.86 352974.87 329417.94 Equity (Rs. In crores) 12899.97 22555.99 24663.26 46820.21 49883.02 Debt Equity Ratio 11.99 10.14 12.97 7.53 6.6

Interpretation:

The ratio shows the extent to which funds have been provided by long-term creditors as compared to the funds provided by the owners.Here the Debt-Equity ratio for the above period is always high.this shows that the bank is more relying on outside funds as compared to internal sources of capital,in its capital structure. From the long-term lenders point of view this ratio is not satisfactory.

PROPRIETORY RATIO:
It is also called shareholders equity to total equity ratio or net worth to total assets ratio or equity ratio.It compares the shareholders funds to total assets.It is calculated by dividing shareholders funds by total assets.

Proprietory Ratio = Shareholders Fund Total Assets

It helps to determine the long-term solvency of a company.This ratio measures the protection available to the creditors.Higher the ratio,lesser is the likelihood of insolvency in future,as the management has to use lessor debts and vice versa.Thus,this ratio is of great importance to the creditors. Years 2009 2010 2011 2012 2013 Shareholder's Funds (Rs. In crores) 12899.97 22555.99 24663.26 46820.21 49883.02 Total Assets (Rs. In crores) 167659.4 251388.95 344658.11 399795.07 379300.96 Proprietory Ratio 0.07 0.08 0.07 0.12 0.13

Interpretation:
Above table exhibits the proprietary ratio of the bank for last five years . It was 7% in 2009,After that was 8% in year 2010. Similarly it was once again reduced to 7 % in the year 2011. After 2011 it registered increase and was 12% and 13% in the year 2012 and 2013 respectively. Hence it leads to the conclusion owners have less than 13% stake in the total assets of the bank. It is not a good sign as far the long term solvency is concerned.

FIXED ASSETS TURNOVER RATIO:

It is also called as Sales to Fixed Assets Ratio.It measures the efficient use of fixed assets.This ratio is a measure of efficient use of fixed assets.it is calculated as: Fixed Assets Turnover Ratio = Cost of goods sold or Sales Net Fixed Assets It measures the efficiency and profit earning capacity of the business.Higher the ratio,greater is the intensive utilization of fixed assets and a lower ratio shows under utilization of the fixed assets.This ratio has a special importance for manufacturing concerns where investment in fixed assets,is vey high and the profitability is significantly dependent on the utilization of these assets. Year 2009 2010 2011 2012 2013 Sales (Rs. In crores) 9409.9 13784.49 22994.29 30788.34 31092.55 Net Fixed Assets (Rs. In crores) 4038.04 3980.72 3923.42 4108.89 3801.62 Fixed Assets Turnover Ratio 2.33 3.46 5.86 7.49 8.17

Interpretation:
Here the fixed assets employed in the business shows a decreasing trend except in the year 2012 where fixed assets have again increased.This may be due to increase in rate of depreciation in subsequent years. Neverthless,the fixed assets turnover ratio has been consistently increasing.It indicates that fixed assets have been effectively used in the business without much additional investment in the period of study and also the capital is not blocked in fixed assets.

CREDIT-DEPOSIT RATIO: This ratio is very important to assess the credit performance of the bank. The ratio shows the relationship between the amount of deposit generated by the bank has well as their deployment towards disbursement of loan and advances. Higher credit deposit ratio shows overall good efficiency and performance of any banking institution.

Credit Deposit Ratio

Credits 100 Deposits

Credit means disbursement of advances Deposit mean sum of fixed deposit, Saving deposit and current deposit.

Year 2009 2010 2011 2012 2013

Advances (Rs. In crores) 91405.15 146163.11 195865.6 225616.08 218310.85

Deposits (Rs. In crores) 99818.78 165083.17 230510.19 244431.05 218347.82

Credit Deposit Ratio (in%) 91 88 84 92 99

Interpretation: Above table exhibits credit deposit ratio of the bank during last 5 years. In the year 2005 ratio was 91% and it declined to 88% and 84%in the year 2010 and 2011 respectively. In the year 2012 and 2013 ratio was increased to 92% and 99% respectively. it leads to conclusion that credit performance of the bank is very good.