roshan jha final

7/27/2019 Roshan Jha Final

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SUMMER TRAINING PROJECT REPORT

ON

COMPARATIVE STUDY OF FINANCIAL PRODUCT AND REPORT

OF

TOP THREE BANKS OF INDIA

Submitted by: Roshan Jha Under guidance of :

BBA (CAM ) 2011-2014 MR. SUMIT DEBNATH(Asst.Professor)

03321001911 MR. KESHAV GUPTA(Asst.Professor)

IDEAL INSTITUTE OF MANAGEMENT AND TECHNOLOGY

(16x Karkardooma Institutional Area,Delhi-110092)

(G.G.S.I.P UNIVERSITY)


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CERTIFICATE

This is certify that Roshan Jha student of Ideal Institute of Management and Technology, Delhi

has completed his work report on the topic of COMPARATIVE STUDY OF FINANCIAL

PRODUCT AND REPORT OF TOP THREE BANKS and has submitted the work report.

He has worked under our guidance and direction. The said report is based on bona fide

information.

Project guide name Prof. Sumit Debnath


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DECLARATION

I hereby declare that project titled COMPARATIVE STUDY OF FINANCIAL Product is an

original piece of research work carried out by me under the guidance and supervision of Prof.Sumit Debnath . The information has been collected from genuine and authentic sources. The

work has been submitted.

Place Name

Date Signature


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ACKNOWLEDGEMENT

Perseverance inspiration and motivation have always played a key role in success of any

venture.I hereby express my deep sense of gratitude to all the personalities involved directly and

indirectly in my project work.

I would thanks to God for their blessing and my parents also for their valuable suggestion and

support in my project report.

I would also like to thank our friends and those who have helped us during this project directly or

indirectly.

Last but not the least; I would like to express my sincere gratitude to all the faculty memberswho have taught me in my entire BBA(Cam) curriculum and our Director Mr. Anil Parkash

Sharma who has always been a source of guidance, inspiration and motivation. However, I

accept the sole responsibility for any possible errors of omission and would be extremely grateful

to the readers of this project report if they bring such mistakes to my notice.

Roshan Jha


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INDEX


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Sr.No

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

Subjects

Introduction

Bank Profile

i. SBIii. ICICIiii. PNB

Products & Services

Balance Sheet

Ratio Analysis

Objectives

Importance

Advantages, Limitations

Conclusion

Bibliography

Page

7 - 11

12 - 1617202125

2643

4449

5075

7678

7980

8184

8587

88 - 89


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INTRODUCTION


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INRTODUCTION

After preparation of the financial statements, one may be interested in knowing the position

of an enterprise from different points of view. This can be done by analyzing the financial

statement with the help of different tools of analysis such as ratio analysis, funds flow analysis,

cash flow analysis, comparative statement analysis, etc.

Here I have done financial analysis by ratios. In this process, a meaningful relationship is

established between two or more accounting figures for comparison.

Financial ratios are widely used for modeling purposes both by practitioners and

researchers. The firm involves many interested parties, like the owners, management, personnel,

customers, suppliers, competitors, regulatory agencies, and academics, each having their views

in applying financial statement analysis in their evaluations. Practitioners use financial ratios, for

instance, to forecast the future success of companies, while the researchers' main interest has

been to develop models exploiting these ratios.

Many distinct areas of research involving financial ratios can be discerned. Historically one can

observe several major themes in the financial analysis literature. There is overlapping in the

observable themes, and they do not necessarily coincide with what theoretically might be the

best founded areas.

Financial statements are those statements which provide information about profitability and

financial position of a business. It includes two statements, i.e., profit & loss a/c or income

statement and balance sheet or position statement.


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The income statement presents the summary of the income earned and the expenses incurred

during a financial year. Position statement presents the financial position of the business at the

end of the year.

Before understanding the meaning of analysis of financial statements, it is necessary to

understand the meaning of analysis and financial statements.

Analysis means establishing a meaningful relationship between various items of the two

financial statements with each other in such a way that a conclusion is drawn. By financial

statements, we mean two statements- (1) profit & loss a/c (2) balance sheet. These are prepared

at the end of a given period of time. They are indicators of profitability and financial soundness

of the business concern.

Thus, analysis of financial statements means establishing meaningful relationship between

various items of the two financial statements, i.e., income statement and position statement

Parties interested in analysis of financial statements

Analysis of financial statement has become very significant due to widespread interest of various

parties in the financial result of a business unit. The various persons interested in the analysis of

financial statements are:-

Short- term creditors

They are interested in knowing whether the amounts owing to them will be paid as and when fall

due for payment or not.


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Longterm creditors

They are interested in knowing whether the principal amount and interest thereon will be paid on

time or not.

Shareholders

They are interested in profitability, return and capital appreciation.

Management

The management is interested in the financial position and performance of the enterprise as a

whole and of its various divisions.

Trade unions

They are interested in financial statements for negotiating the wages or salaries or bonus

agreement with management.

Taxation authorities

These authorities are interested in financial statements for determining the tax liability.


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Researchers

They are interested in the financial statements in undertaking research in business affairs and

practices.

Employees

They are interested as it enables them to justify their demands for bonus and increase in

remuneration.

You have seen that different parties are interested in the results reported in the financial

statements. These results are reported by analyzing financial statements through the use of ratio

analysis.


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BANK PROFILE


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STATE BANK OF INDIA

State Bank of India (SBI) (LSE: SBID) is the largest bank in India. It is also, measured by the

number of branch offices and employees, the second largest bank in the world. The bank traces

its ancestry back through the Imperial Bank of India to the founding in 1806 of the Bank of

Calcutta, making it the oldest commercial bank in the Indian Subcontinent. The Government of

India nationalized the Imperial Bank of India in 1955, with the Reserve Bank of India taking a

60% stake, and renamed it the State Bank of India. In 2008, the Government took over the stake

held by the Reserve Bank of India.

SBI provides a range of banking products through its vast network in India and overseas,

including products aimed at NRIs. With an asset base of $360 billion and its reach, it is a

regional banking behemoth. SBI has laid emphasis on reducing the huge manpower through

Golden handshake schemes and computerizing its operations.


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The State Bank Group, with over 21500 branches, has the largest branch network in India. It has

a market share among Indian commercial banks of about 20% in deposits and advances.

Regional office of the State Bank of India (SBI), India's largest bank, in Mumbai. The

government of India is the largest shareholder in SBI.

The bank has 52 branches, agencies or offices in 32 countries. It has branches of the parent in

Colombo, Dhakka, Frankfurt, Hong Kong, Johannesburg, London and environs, Los Angeles,

Male in the Maldives, Muscat, New York, Osaka, Sydney, and Tokyo. It has offshore banking

units in the Bahamas, Bahrain, and Singapore, and representative offices in Bhutan and Cape

Town.


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SBI operates several foreign subsidiaries or affiliates. In 1990 it established an offshore bank,

State Bank of India (Mauritius). It has two subsidiaries in North America, State Bank of India

(California), and State Bank of India (Canada). In 1982, the bank established its California

subsidiary, which now has seven branches.

The Canadian subsidiary was also established in 1982 and also has seven branches, four in the

greater Toronto area, and three in British Columbia. In Nigeria, it operates as INMB Bank.

This bank was established in 1981 as the Indo-Nigerian Merchant Bank and received permission

in 2002 to commence retail banking. It now has five branches in Nigeria. In Nepal SBI owns

50% of Nepal SBI Bank, which has branches throughout the country. In Moscow SBI owns 60%

of Commercial Bank of India, with Canara Bank owning the rest. In Indonesia it owns 76% of

PT Bank Indo Monex. State Bank of India already has a branch in Shanghai and plans to open

one up in Tianjin.


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BOARD OF DIRECTORS

1.Pratip Chaudhuri, Chairman

2.Diwakar Gupta

3.Dileep C Choksi

4.D Sundaram

5.J B Mohapatra

6.D K Mittal

7.Rajiv Kumar

8.S Visvanathan

9.Hemant G Contractor

10. A Krishna Kumar

11. S Venkatachalam

12. Parthasarathy Iyengar

13. Deepak Ishwarbhai Amin

14. Subir Vithal Gokarn

15. S K Mukherjee


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INDUSTRIAL CREDIT & INVESTMENT CORPORATION OF INDIA (ICICI)

ICICI was formed in 1955 at the initiative of the World Bank, the government of India and

Indian industry representatives. The principal objective was to create a development financial

institution for providing medium-term and long-term project financing to Indian businesses.

Until the late 1980s, ICICI primarily focused its activities on project finance, providing long-

term funds to a variety of industrial projects.

With the liberalization of the financial sector in India in the 1990s, ICICI transformed its

business from a development financial institution offering only project finance to a diversified

financial services provider that, along with its

Subsidiaries and other group companies offered a wide variety of products and services. As

Indias economy became more market-oriented and integrated with the world economy, ICICI


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capitalized on the new opportunities to provide a wider range of financial products and services

to a broader spectrum of clients.

ICICI Bank was incorporated in 1994 as a part of the ICICI group. ICICI Banks initial equity

capital was contributed 75.0% by ICICI and 25.0% by SCICI

Limited, a diversified finance and shipping finance lender of which ICICI owned 19.9% at

December 1996. Pursuant to the merger of SCICI into ICICI,

ICICI Bank became a wholly-owned subsidiary of ICICI. ICICIs holding in ICICI Bank

reduced due to additional capital rising by ICICI Bank and sale of shares by ICICI, pursuant to

the requirement stipulated by the Reserve Bank of India that ICICI dilute its ownership of ICICI

Bank. Effective March 10, 2001, ICICI Bank acquired Bank of Madura, an old private sector

bank, in an all-stock merger.

The issue of universal banking, which in the Indian context means the conversion of long-term

lending institutions such as ICICI into commercial banks, had been discussed at length over the

past several years. Conversion into a bank offered,

ICICI the ability to accept low-cost demand deposits and offer a wider range of products and

services, and greater opportunities for earning non-fund based income in the form of banking

fees and commissions. ICICI Bank also considered various strategic alternatives in the context of

the emerging competitive scenario in the Indian banking industry.

ICICI Bank identified a large capital base and size and scale of operations as key success factorsin the Indian banking industry. In view of the benefits of transformation into a bank and the

Reserve Bank of Indis pronouncements on universal banking, ICICI and ICICI Bank decided to

merge.


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At the time of the merger, both ICICI Bank and ICICI were publicly listed in India and on the

New York Stock Exchange. The amalgamation was approved by each of the boards of directors

of ICICI, ICICI Personal Financial Services, ICICI Capital Services and ICICI Bank at their

respective board meetings held on October 25, 2001.

The amalgamation was approved by ICICI Banks and ICICIs shareholders at their

extraordinary general meetings held on January 25, 2002 and

January 30, 2002, respectively. The amalgamation was sanctioned by the High Court of Gujarat

at Ahmedabad on March 7, 2002 and by the High Court of Judicature at Bombay on April 11,

2002. The amalgamation became effective on May 3, 2002. The date of the amalgamation for

accounting purposes under Indian GAAP was March 30, 2002.

The Sangli Bank Limited, an unlisted private sector bank merged with ICICI Bank with effect

from April 19, 2007. On the date of acquisition, Sangli Bank had over 190 branches and

extension counters, total assets of Rs. 17.6billion (US$ 440 million), total deposits of Rs. 13.2

billion (US$ 330 million), total loans of Rs. 2.0 billion (US$ 50million).

The Bank has a network of 2,772 branches and 9,363 ATM's in India, and has a presence in 19

countries, including India.[2]
http://en.wikipedia.org/wiki/ICICI_Bank#cite_note-1http://en.wikipedia.org/wiki/ICICI_Bank#cite_note-1http://en.wikipedia.org/wiki/ICICI_Bank#cite_note-1http://en.wikipedia.org/wiki/ICICI_Bank#cite_note-1


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BOARD OF DIRECTORS

1. Mr. K. V. Kamath, Chairman

2. Mr. Sridar Iyengar

3. Dr. Swati Piramal

4. Mr. Homi R. Khusrokhan

5. Mr. Arvind Kumar

6. Mr. M.S. Ramachandran

7. Dr. Tushaar Shah

8. Mr. V.Sridar

9. Ms. Chanda Kochhar,Managing Director & CEO

10. Mr. N. S. Kannan,Executive Director & CFO

11.Mr. K. Ramkumar,Executive Director

12.Mr. Rajiv Sabharwal,Executive Director
http://www.icicibank.com/aboutus/board-of-directors-kv-kamath.htmlhttp://www.icicibank.com/aboutus/board-of-directors-sridar-iyengar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-sridar-iyengar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-swati-piramal.htmlhttp://www.icicibank.com/aboutus/board-of-directors-swati-piramal.htmlhttp://www.icicibank.com/aboutus/board-of-directors-homi-khusrokhan.htmlhttp://www.icicibank.com/aboutus/board-of-directors-homi-khusrokhan.htmlhttp://www.icicibank.com/aboutus/board-of-directors-arvind-kumar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-arvind-kumar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-ms-ramachandran.htmlhttp://www.icicibank.com/aboutus/board-of-directors-ms-ramachandran.htmlhttp://www.icicibank.com/aboutus/board-of-directors-tushaar-shah.htmlhttp://www.icicibank.com/aboutus/board-of-directors-tushaar-shah.htmlhttp://www.icicibank.com/aboutus/board-of-directors-ns-kannan.htmlhttp://www.icicibank.com/aboutus/board-of-directors-k-ramkumar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-k-ramkumar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-k-ramkumar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-rajiv-sabharwal.htmlhttp://www.icicibank.com/aboutus/board-of-directors-rajiv-sabharwal.htmlhttp://www.icicibank.com/aboutus/board-of-directors-rajiv-sabharwal.htmlhttp://www.icicibank.com/aboutus/board-of-directors-rajiv-sabharwal.htmlhttp://www.icicibank.com/aboutus/board-of-directors-k-ramkumar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-ns-kannan.htmlhttp://www.icicibank.com/aboutus/board-of-directors-tushaar-shah.htmlhttp://www.icicibank.com/aboutus/board-of-directors-ms-ramachandran.htmlhttp://www.icicibank.com/aboutus/board-of-directors-arvind-kumar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-homi-khusrokhan.htmlhttp://www.icicibank.com/aboutus/board-of-directors-swati-piramal.htmlhttp://www.icicibank.com/aboutus/board-of-directors-sridar-iyengar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-kv-kamath.html


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PUNJAB NATIONAL BANK (PNB)

Punjab National Bank (PNB) was registered on May 19, 1894 under the Indian Companies Act

with its office in Anarkali Bazaar Lahore. The Bank, founded by Dyal Singh Majithia and Lala

Harkishen Lal, is the second largest government-owned commercial bank in India with about

4,500 branches across 764 cities. It serves over 37 million customers.

The bank has been ranked 248th biggest bank in the world by Bankers Almanac, London. Total

Business of the bank for financial year 2007 is estimated to be approximately US$60 billion. It

has a banking subsidiary in the UK, as well as branches in Hong Kong and Kabul, and

representative offices in Almaty, Shanghai, and Dubai.

We are a leading public sector commercial bank in India, offering banking products and services

to corporate and commercial, retail and agricultural customers. Our banking operations for

corporate and commercial customers include a range of products and services for large

corporations, as well as small and middle market businesses and government entities.

It offers a wide range of retail credit products including housing loans, personal loans and

automobile loans. We cater to the financing needs of the agricultural sector and have created

innovative financing products for farmers. We also provide significant financing to other priority

sectors including small scale industries. Through our treasury operations, we manage our balance

sheet, including the maintenance of required regulatory reserves, and seek to maximize profits

from our trading portfolio by taking advantage of market opportunities.


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Our revenue, which is referred to herein and in our financial statements as our income, consists

of interest income and other income. Interest income consists of interest on advances (including

the discount on bills discounted) and income on investments. Income on investments consists of

interest and dividends from securities and our other investments and interest from interbank loan

and cash deposits we keep with the RBI.

Securities portfolio consists primarily of Government of India and state government securities.

We meet our statutory liquidity reserve ratio requirements through investments in these and other

approved securities. We also hold debentures and bonds issued by public sector undertakings and

other corporations, commercial paper, equity shares and mutual fund units.

Our interest expense consists of our interest on deposits as well as borrowings. Our interest

Income and expense are affected by fluctuations in interest rates as well as the volume of

activity. Our interest expense is also affected by the extent to which we fund our activities with

low interest or non-interest deposits, and the extent to which we rely on borrowings.

Non-interest expense consists principally of operating expenses such as expenses for wages and

employee benefits, rent paid on premises, insurance, postage and telecommunications expenses,

printing and stationery, depreciation on fixed assets, other administrative and other expenses.

Provisioning for non-performing assets, depreciation on investments and income tax is included

in provisions and contingencies

Use a variety of indicators to measure our performance. These indicators are presented in tabular

form in the section titled Selected Statistical Information on page []. Our net interest income

represents our total interest income (on advances and investments) net of total interest expense

(on deposits and borrowings).


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Net interest margin represents the ratio of net interest income to the monthly average of total

interest earning assets. Our spread represents the difference between the yield on the monthly

average of interest earning assets and the cost of the monthly average of interest bearing

liabilities.

Bank calculate average yield on the monthly average of advances and average yield on the

monthly average of investments, as well as the average cost of the monthly average of deposits

and average cost of the monthly average of borrowings.

Cost of funds is the weighted average of the average cost of the monthly average of interest

bearing liabilities. For purposes of these averages and ratios only, the interest cost of the

unsecured subordinated bonds that we issue for Tier 2 capital adequacy purposes (Tier 2

bonds) is included in our cost of interest bearing liabilities.

In our financial statements, these bonds are accounted for as other liabilities and provisions

and their interest cost is accounted for under other interest expenses.

Since 1969, when we became a public sector bank, we have managed to continue to grow our

business while maintaining a strong balance sheet. As of September 30, 2004, our total deposits

represented 85.9% of our total liabilities. On average, interest free demand deposits and low

interest savings deposits represented 43.8% of these deposits in the first six months of fiscal

2005.


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These low-cost deposits led to an average cost of funds excluding equity for the first six months

of fiscal 2005 of 4.7%. As of September 30, 2004, our gross and net non-performing assets

constituted 7.65% and 0.30% of our gross and net advances, respectively. In fiscal 2004 our total

income was Rs. 96.5 billion and our net profit was Rs. 11.1 billion before adjustment and Rs.

10.6billion after adjustment as part of the restatement of our financial statements for this Issue.

In the first six months of fiscal 2005 our total income was Rs. 51.9 billion and our net profit was

Rs. 7.4billion. Between fiscal 2002 and 2004, our total income grew at a compound annual rate

of12.5%, our unadjusted and adjusted net profit grew at a compound annual rate of 40.4%

and37.4%, respectively, and our total deposits and total advances grew at a compound annual

growth rate of 17.1% and 17.2%, respectively.

We intend to maintain our position as a cost efficient and customer friendly institution that

provides comprehensive financial and related services. We seek to achieve this by continuing to

adopt technology which will integrate our extensive branch network. We intend to grow by cross

selling various financial products and services to our customers and by expanding geographically

in India and internationally. We are committed to excellence in serving the public and also

maintaining high standards of corporate responsibility. In line with our philosophy of aiding

Indis development we have opened branches in many rural areas.


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BOARD OF DIRECTORS

1.K R Kamath

2.Usha Ananthasubramanian

3.B B Chaudhry

4.Mohinder Paul Singh

5.M N Gopinath

6.Sunil Gupta

7.N S Viswanathan

8.Rakesh Sethi

9.Anurag Jain

10. Mushtaq A Antulay

11. Pradeep Kumar

12. D K Singla

13. Sadhu Ram Bansal


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PRODUCTS

&

SERVICES


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1. SBI BANKING

Personal Banking

Agricultural & Rural Banking

NRI Services

International Banking

Corporate Banking

Services

Govt. Business

SME


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Personal Banking Agricultural NRI Services

Deposit Schemes Micro Credit Type of Accounts

Personal Finance Regional Rural Bank Corporate Banking

Corp Salary Package Agriculture Banking Corporate AccountsInternational Trade Mid Corporate Group

Merchant Banking

Project Finance

Correspondent Banking

Products and Services

Internet Banking

Mobile Banking

ATM Services

Demat Services

Public Provident Fund

Govt. SME Business

Govt. Accounts


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PERSONALBANKING

SBI Term Deposits

SBI Loan For PensionersSBI Recurring Deposits

SBI Loan Against Mortgage Of Property

SBI Housing Loan

SBI Loan Against Shares & Debentures

SBI Car Loan

SBI Rent Plus Scheme

SBI Educational Loan

SBI Medi-Plus Scheme

SBI Personal Loan

AGRICULTURE

State Bank of India caters to the needs of agriculturists and landless agricultural laborers througha network of 6600 rural and semi-urban branches. There are 972 specialized branches which

have been set up in different parts of the country exclusively for the development of agriculture

through credit deployment.

These branches include 427 Agricultural Development Branches (ADBs) and 547 branches with

Development Banking Department (DBDs) which cater to agriculturists and 2 Agricultural

Business Branches at Chennai and Hyderabad catering to the needs of hi tech commercial

agricultural projects.


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Our branches have covered a whole gamut of agricultural activities like crop production ,

horticulture , plantation crops, farm mechanization, land development and reclamation, digging

of wells, tube wells and irrigation projects, forestry, construction of cold storages and go downs,

processing of agro-products, finance to agro-input dealers, allied activities like dairy , fisheries,

poultry, sheep-goat, piggery and rearing of silk worms.

The branch also has farmer's meet in villages to explain to farmers about various schemes

offered by the bank. To give special focus to agriculture lending Bank has set up agro business

unit. Bank has also agro specialists in various disciplines to handle projects/ guide farmers in

their agriculture ventures. Advances are given for very small activity covering poorest of the

poor to hi-tech activities involving large fund outlays.

We are the leaders in agro finance in the country with a portfolio of Rs. 18,000 cars in agri

advances to around 50 lac farmers.

NRI SERVICES

World Class Services from a Bank you can Trust Indians everywhere should become enlightened

International citizens. Wherever you are, whichever country you live, enrich that nation, not only

in financial terms, but also with your sweat knowledge and dignity since that is the tradition of

the country from where you came. At the same time, remember we have a common umbilical

connectivity to our motherland, India.


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INTERNATIONAL BANKING

International banking services of State Bank of India are delivered for the benefit of its Indian

customers, non-resident Indians, foreign entities and banks through a network of 84

offices/branches in 32 countries as on 31 March 2008, spread over all time zones. The network is

augmented by a cluster of Overseas and NRI branches within India and correspondent links with

over 522 banks, the world over. Bank's Joint

Ventures and Subsidiaries abroad further underline the Bank's international presence. The

services include corporate lending, loan syndications, merchant banking, handling Letters of

Credit and Guarantees, short-term financing, collection of clean and documentary credits and

remittances.

The Bank has carved a niche for itself in the Euro land with branches located in Antwerp, Paris

and Frankfurt. Indian banks and corporates are able to avail single-window Euro services from

the Bank's Frankfurt branch.

CORPOTRATE BANKING

SBI is a one shop providing financial products / services of a wide range for large, medium and

small customers both domestic and international.

Working Capital Financing

-Fund based facilities to Corporate,

Partnership firms, Proprietary concerns

Term Loans to support capital expenditures for setting up new ventures as also for expansion,

renovation etc.


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Deferred Payment Guarantees to support purchase of capital equipment.

Corporate Loans For a variety of business related purposes to corporate.

Export Credit To Corporate / Non Corporate Strategic Business Units

(i) Corporate Accounts Group (CAG)

(ii) (ii)Project Finance (iii) Lease Finance

An exclusive unit providing ones shopping to Corporate

A dedicated set up specialized in financing of infrastructure and other large projects

Exclusive set up for handling large ticket leases.

Pricing

SBI's Prime Lending Rates (PLR) is among the lowest

Presently Bank has two PLR's

SBAR for loans payable on demand and up to one year

SBMTLRfor loans payable beyond one year.


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SERVICES

Listed on the left are Services, SBI offers to its customers.

DOMESTIC TREASURY

SBI VISHWA YATRA FOREIGN TRAVEL CARD

BROKING SERVICES

REVISED SERVICE CHARGES

ATM SERVICES

INTERNET BANKING

E-PAY

E-RAIL

RBIEFT

SAFE DEPOSIT LOCKER

GIFT CHEQUES

GOVERNMENT BUSINESS

State Bank of India's linkage with Government business is widespread. No wonder that out of

9315 branches in India, about 7000 branches are conducting Government Business. The large

network of our branches provides easy access to the common man to deposit the following

Government dues and pension payments.


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SME (small scale industries)

State Bank of India has been playing a vital role in the development of small scale industries

since 1956.The Bank has financed over 8 lakhs SSI units in the country. It has 55 specialized SSI

branches, 99 branches in industrial estates and more than 400 branches with SIB divisions.

The Bank finances for Small Business activities which are of special significance to a large

number of people as many of these activities can be started with relatively lower investment and

with no special skills on the part of the entrepreneurs.


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2. ICICI BANKING

Safety, Flexibility, Liquidity, Returns!

ICICI Bank offers a wide Variety of Deposit Products to suit your banking requirements.

Simplified Documentation, Quick Processing.

Exclusive, Economical Investment Plans

World Class Service and Acceptance!!!A truly world class service as ICICI Bank cards have both national and international acceptance.


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Secure, Reliable ,Convenient!!!

Convenience has always been synonymous with ICICI Bank and keeping in

line we offer the facility of buying Insurance policies online.

Banking at your fingertips!!!

Why be inline when you can be online for paying your utility bills, mobile bills, prepaid mobile

recharge, Shopping, Credit card, insurance premium and lots more.

INTERNATIONAL BANKING

In 2001, we identified international banking as a key opportunity, aiming to cater to the cross-

border needs of clients and leveraging our domestic banking strengths to offer products

internationally. We have made significant progress in the international business since we set up

our first overseas branch in Singapore in 2003.

ICICI Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in

Singapore, Bahrain, Hong Kong, Sri Lanka, Dubai International Finance Centre, Qatar Financial

Centre and the United States and representative offices in the United Arab Emirates, China,

South Africa, Bangladesh, Thailand, Malaysia and Indonesia.

The Banks wholly owned subsidiary ICICI Bank UK PLC has nine branches in the United


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Kingdom and a branch each in Belgium and Germany. ICICI Bank Canada has eight branches

including three in Toronto. ICICI Bank Eurasia LLC has six branches including three branches

in Moscow and one in St. Petersburg.

Our international strategy is focused on building a retail deposit franchise, diverse wholesale

funding sources and strong syndication capabilities to support our corporate and investment

banking business; achieving the status of a non-resident Indian (NRI) community bank in key

markets; and expanding private banking operations for India-centric asset classes. During fiscal

2008, we focused on deepening our presence in existing overseas locations and expanding our

operations in key markets. In line with our strategy to establish a presence in large markets with

significant savings pools, we entered into Germany through a branch established by ICICI Bank

UK PLC. We have been able to successfully leverage our technology advantage to create a

growing international deposit base. 30% year-on-year increase in standalone profit after tax to `

1,956 crore (US$ 370 million) for the quarter ended September 30, 2012 (Q2-2013) from ` 1,503

crore (US$ 284 million) for the quarter ended September 30, 2011 (Q2-2012).

We have established a strong franchise among NRIs by offering a comprehensive product suite,

technology enabled access, a wide distribution network in India and alliances with local banks in

various markets. Currently, we have over 500,000 NRI customers. We have undertaken

significant brand-building initiatives in international markets and have emerged as a well-

recognized financial services brand for NRIs.

We continue to maintain a market share of 25% in inward remittances to India. During fiscal


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2012, we launched innovative products like instant money transfer and enhanced our focus on

customer relationship management and process automation. Additionally, we also undertook the

development of low cost remittance products in non-India geographies with correspondent tie-

ups for disbursements in over 100 such geographies.

Through our international private banking services, we offer various products to mass affluent

and high net worth clients based on their financial needs and risk appetite. The offerings range

from simple deposits and loans to more sophisticated structured products, private equity and

products giving exposure to the real estate sector in India.

CORPORATE BANKING

Our corporate banking strategy is based on providing comprehensive and customized financial

solutions to our corporate customers. We offer a complete range of corporate banking products

including rupee and foreign currency debt, working capital credit, structured financing,

syndication and transaction banking products and services.

Our corporate and investment banking franchise is built around a core relationship team that has

strong relationships with almost all of the countrys corporate houses. The relationship team is

product agnostic and is responsible for managing banking relationships with clients. We have

also put in place product specific teams with a view to focus on specific areas of expertise in

designing financial solutions for clients.

Through our relationship teams working in tandem with product solution teams, we have

deepened our client relationships across our product portfolio or resulting in significant growth

in income and wallet share among all our top corporate clients, as compared to the previous year.


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We have created an integrated Global Investment Banking Group, which is responsible for

working with the relationship team in India and our international subsidiaries and branches, for

origination, structuring and execution of investment banking mandates on a global basis. We

have also restructured our delivery team for transaction banking products by creating dedicated

sales teams for trade services and transaction banking products. This has been done with the

intent to increase our market share from transaction banking products, which will translate into

recurring fee income for the Bank. We have also focused on increasing market share in trade

finance by leveraging and further strengthening correspondent banking relationships

SME BANKING

During fiscal year 2008, our small customer base enterprises increased by 26% to about 1.1

million accounts. We have introduced our service offerings in over 400 new branches, increasing

our coverage to over 1,000 branches. During the year, we have focused on product specialization

including investment banking for SMEs.

We have continued to focus on shaping the small and medium enterprises sphere in India

through initiatives such as the Emerging India Awards, the SME CEO Knowledge Series - a

platform to mentor and assist SME entrepreneurs, and the SME Dialogue - a weekly feature in

a leading financial newspaper sharing SME best practices and success stories. During the year,

we have launched several new products and services like the SME toolkit an online business

and advisory resource for SMEs.


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RURAL BANKING AND AGRI-BUSINESS

We believe the rural economy has high growth potential and offers large credit growth

opportunities. Towards this end, our suite of products and services is targeted to address the

needs of both the farm and non-farm sectors. Our retail product suite encompasses loans for crop

production, purchase of farm equipment; commodity based finance as well as various savings,

investment and insurance products.

Bank also offer micro-finance and jewel loans. We have also focused on enhancing credit to

farmers by leveraging on corporate partnerships. For example, we have partnered with various

dairies to provide financing to farmers for purchase of milk cattle. We also provide credit and

banking services to SMEs active in the agricultural value chain. To enhance our service quality

and product delivery capabilities we have developed a large network of rural branches which is

further augmented by non-branch channels.

Rural banking in India is still at a nascent stage and the deployment of technology channels and

modern banking methods for rural lending continues to be an evolving process. In line with our

learning from our rural banking operations, we undertook a comprehensive review of and

realigned our channel architecture, credit underwriting processes and account management

systems.

We have put in place a robust risk management structure to Mitigate and manage credit,

operational and fraud risks. Through this, we aim to create a strong foundation for scaling up of

our rural business.


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3.PNB BANKING

Term loans

Cash credit and other working capital facilities

Bill discounting

Export credits

Other credit and financing products

SERVICES TO NON-RESIDENT INDIANS

We provide personal financial services for NRIs. We have established a branch in Kabul and

Representative offices in other cities overseas in order to facilitate services being provided to

NRIs. We offer foreign currency accounts to NRIs under our Foreign Currency Non-Resident

Scheme and rupee accounts for NRIs under our Non-Resident External and Non-Resident

Ordinary Schemes. We have introduced our

Global Foreign Currency Scheme and Global Rupee Deposit Scheme, which offer benefits and

concessions to NRIs and their relatives provided a minimum balance of Rs. 250,000 or

US$5,000 is maintained in the account. We also offer various products for facilitating

remittances from NRIs to India.

We recently entered into an arrangement to facilitate money transfers through Western Union,

which is a global leader in money transfer services. We have also entered into an agreement with


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Times Online Money Ltd., a Times of India group company, with a view to establishing an

internet based international remittance service. In addition, we also provide housing loans to

NRIs.

RETAIL BANKING

In retail banking, our principal competitors are the large public sector banks, as well as existing

and new private sector banks and foreign banks in the case of retail loan products. The other

public sector banks have large deposit bases and large branch networks, including the State Bank

of India which has 13,593 branches. Private sector and foreign banks compete principally by

offering a wider range of products as well as greater technological sophistication in some cases

Foreign banks, while having a small market penetration overall, has a significant presence

among non-resident Indians and also competes for non-branch based products such as auto loans

and credit cards.

In particular, we face significant competition primarily from private sector banks and to a lesser

degree from other public sector banks, in the housing, auto and personal loan segments. In

mutual fund sales and other investment related products, our principal competitors are brokers,

foreign banks and new private sector banks.

SERVICES FOR AGRICULTURE CUSTOMERS

Agriculture contributes 22% to Indias GDP and supports approximately two-thirds of Indias

population. In fiscal 2004, we surpassed the stated national goal that banks should provide at

least18% of their net bank credit (which is gross credit minus Foreign Currency Non-Resident

Bank deposits) to this segment, for which we received an award from Indias Finance Minister.


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Our average credit growth rate in this segment has been 32.2% over the last four years. As of the

last reporting Friday of September 2004, agricultural loans constituted 18.8% of our net bank

credit.

SMALL SCALE INDUSTRIES

We provide financing to small scale industries or SSIs. SSIs are defined as manufacturing,

processing and servicing businesses with up to Rs. 50 million invested in plant and machinery

for certain industries such as hosiery, hand tools, drugs and pharmaceuticals and stationery items

and up to Rs. 10 million invested in plant and machinery for other small scale industries.

SSIs are also considered a priority sector for directed lending purposes. See the section titled

Business-Directed Lending below. As of the last reporting Friday in September 2004, SSI

loans constituted 11.3% of our net bank credit

. As of the last reporting Friday in September, 2004 we had an outstanding loan portfolio of Rs.

57.3 billion in this segment compared to Rs. 48.5 billion as of the last reporting Friday in

September 2003, representing growth of approximately 18.1%.We have also received awards

and recognition from the Government of India relating to our efforts in financing SSI businesses.


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BALANCE SHEETOF

STATE BANK OFINDIA


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Balance Sheet of State Bank ofIndia

------------------- in Rs. Cr. -------------------

Mar '12 Mar '11

12 mths 12 mths

Capital and Liabilities:

Total Share Capital 671.04 635.00

Equity Share Capital 671.04 635.00

Share Application Money 0.00 0.00

Preference Share Capital 0.00 0.00

Reserves 83,280.16 64,351.04

Revaluation Reserves 0.00 0.00

Net Worth 83,951.20 64,986.04

Deposits 1,043,647.36 933,932.81Borrowings 127,005.57 119,568.96

Total Debt 1,170,652.93 1,053,501.77

Other Liabilities & Provisions 80,915.09 105,248.39

Total Liabilities 1,335,519.22 1,223,736.20

Mar '12 Mar '11

12 mths 12 mths

Assets

Cash & Balances with RBI 54,075.94 94,395.50

Balance with Banks, Money at Call 43,087.23 28,478.65

Advances 867,578.89 756,719.45

Investments 312,197.61 295,600.57

Gross Block 14,792.33 13,189.28

Accumulated Depreciation 9,658.46 8,757.33

Net Block 5,133.87 4,431.95

Capital Work In Progress 332.68 332.23

Other Assets 53,113.02 43,777.85

Total Assets 1,335,519.24 1,223,736.20

Contingent Liabilities 698,064.74 585,294.50

Bills for collection 201,500.44 205,092.29

Book Value (Rs) 1,251.05 1,023.40


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BALANCE SHEETOF

ICICI BANK


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Balance Sheet of ICICI Bank ------------------- in Rs. Cr. -------------------

Mar '12 Mar '11

12 mths 12 mths


Total Share Capital 1,152.77 1,151.82

Equity Share Capital 1,152.77 1,151.82



Reserves 59,250.09 53,938.82

Revaluation Reserves 0.00 0.00

Net Worth 60,405.25 55,090.93

Deposits 255,499.96 225,602.11

Borrowings 140,164.91 109,554.28

Total Debt 395,664.87 335,156.39


Total Liabilities 473,647.10 406,233.67

Mar '12 Mar '11

12 mths 12 mths

Assets



Advances 253,727.66 216,365.90

Investments 159,560.04 134,685.96

Gross Block 9,424.39 9,107.47


Net Block 4,614.69 4,744.26


Other Assets 19,515.39 16,347.47

Total Assets 473,647.09 406,233.67



Book Value (Rs) 524.01 478.31


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BALANCE SHEETOF

PUNJAB NATIONAL BANK


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Balance Sheet of PunjabNational Bank

------------------- in Rs. Cr. -------------------

Mar '12 Mar '11

12 mths 12 mths


Total Share Capital 339.18 316.81

Equity Share Capital 339.18 316.81



Reserves 26,028.37 19,720.99

Revaluation Reserves 1,449.53 1,470.76

Net Worth 27,817.08 21,508.56

Deposits 379,588.48 312,898.73Borrowings 37,264.27 31,589.69

Total Debt 416,852.75 344,488.42


Total Liabilities 458,194.01 378,325.25

Mar '12 Mar '11

12 mths 12 mths

Assets



Advances 293,774.76 242,106.67

Investments 122,629.47 95,162.35

Gross Block 5,265.08 4,981.60


Net Block 3,168.86 3,105.59


Other Assets 9,792.88 8,259.42

Total Assets 458,194.01 378,325.25



Book Value (Rs) 777.39 632.48


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RATIO ANALYSIS


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RATIO ANALYSIS OF STATE BANK OF INDIA

Ratios

Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09Mar ' 08

Per share ratios

Adjusted EPS (Rs) 174.80 130.44 144.54 143.71 106.39

Adjusted cash EPS (Rs) 189.81 146.04 159.23 155.74 117.16

Reported EPS (Rs) 174.46 130.15 144.37 143.67 106.56

Reported cash EPS (Rs) 189.47 145.75 159.06 155.69 117.33

Dividend per share 35.00 30.00 30.00 29.00 21.50

Operating profit per share (Rs) 289.44 255.39 229.63 230.04 173.61

Book value (excl rev res) per share (Rs)1,251.051,023.401,038.76912.73 776.48

Book value (incl rev res) per share (Rs.)1,251.051,023.401,038.76912.73 776.48

Net operating income per share (Rs) 1,776.471,504.341,353.151,179.45899.83

Free reserves per share (Rs) 645.05 468.29 412.36 373.99 356.61

Profitability ratiosOperating margin (%) 16.29 16.97 16.96 19.50 19.29

Gross profit margin (%) 15.44 15.93 15.88 18.48 18.09

Net profit margin (%) 9.73 8.55 10.54 12.03 11.65

Adjusted cash margin (%) 10.59 9.60 11.62 13.04 12.81

Adjusted return on net worth (%) 13.97 12.74 13.91 15.74 13.70

Reported return on net worth (%) 13.94 12.71 13.89 15.74 13.72

Return on long term funds (%) 96.84 96.72 95.02 100.35 86.83

Leverage ratiosLong term debt / Equity - - - - -

Total debt/equity 12.43 14.37 12.19 12.81 10.96

Owners fund as % of total source 7.44 6.50 7.57 7.24 8.36

Fixed assets turnover ratio 0.10 7.24 7.26 7.20 6.32


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Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09Mar ' 08

Liquidity ratios

Current ratio 0.65 0.41 0.43 0.34 0.53

Current ratio (inc. st loans) 0.04 0.04 0.03 0.04 0.07

Quick ratio 12.05 8.50 9.07 5.74 6.15

Inventory turnover ratio - - - - -

Payout ratios

Dividend payout ratio (net profit) 22.59 26.03 23.36 22.90 22.64

Dividend payout ratio (cash profit) 20.80 23.24 21.20 21.13 20.56

Earning retention ratio 77.45 74.03 76.67 77.11 77.33

Cash earnings retention ratio 79.24 76.80 78.82 78.88 79.41

Coverage ratios

Adjusted cash flow time total debt 81.94 100.71 79.54 75.05 72.64

Financial charges coverage ratio 0.32 0.35 0.33 1.36 0.37

Fin. charges cov.ratio (post tax) 1.20 1.19 1.21 1.23 1.23

Component ratios

Material cost component (% earnings) - - - - -

Selling cost Component 0.17 0.26 0.26 0.33 0.30

Exports as percent of total sales - - - - -

Import comp. in raw mat. consumed - - - - -

Long term assets / total Assets 0.85 0.87 0.89 0.88 0.81

Bonus component in equity capital (%) - - - - -


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RATIO ANALYSIS OF ICICI BANK

Ratios

Mar ' 12Mar ' 11Mar ' 10Mar ' 09Mar ' 08

Per share ratios

Adjusted EPS (Rs) 56.10 44.37 34.90 33.60 36.78


Reported EPS (Rs) 56.09 44.73 36.10 33.76 37.37




Book value (excl rev res) per share (Rs)524.01 478.31 463.01 444.94 417.64

Book value (incl rev res) per share (Rs.)524.01 478.31 463.01 444.94 417.64

Net operating income per share (Rs) 346.19 281.04 293.74 343.59 354.71


Profitability ratios

Operating margin (%) 21.99 22.80 16.95 14.13 14.45

Gross profit margin (%) 20.68 21.06 15.06 12.36 12.99






Leverage ratios

Long term debt / Equity - - - 0.01 0.01

Total debt/equity 4.23 4.10 3.91 4.42 5.27

Owners fund as % of total source 19.12 19.62 20.35 18.46 15.95


Liquidity ratios

Current ratio 1.97 1.73 1.94 0.78 0.72


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Quick ratio 16.71 15.86 14.70 5.94 6.42


Payout ratios





Coverage ratios


Financial charges coverage ratio 0.39 0.43 0.33 0.25 1.25Fin. charges cov.ratio (post tax) 1.31 1.34 1.26 1.20 1.20

Component ratios








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RATIO ANALYSIS OF PUNJAB NATIONAL BANK

Ratios


Per share ratios

Adjusted EPS (Rs) 143.88 139.84 123.78 97.97 64.94


Reported EPS (Rs) 144.00 139.94 123.86 98.03 64.98




Book value (excl rev res) per share (Rs)777.39 632.48 514.77 416.74 341.98

Book value (incl rev res) per share (Rs.)820.13 678.91 562.09 464.75 390.68

Net operating income per share (Rs) 1,170.81940.76 777.82 694.81 505.09


Profitability ratios

Operating margin (%) 19.09 21.85 24.63 21.80 21.74

Gross profit margin (%)

18.36

20.99

23.72

20.93

20.67






Leverage ratios

Long term debt / Equity - - - - -

Total debt/equity 14.40 15.62 15.36 15.96 15.44Owners fund as % of total source 6.49 6.01 6.11 5.89 6.08


Liquidity ratios

Current ratio 0.72 0.66 0.61 0.27 0.29


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Quick ratio 23.81 22.24 20.47 9.75 9.40


Payout ratios





Coverage ratios


Financial charges coverage ratio 0.35 0.47 1.50 0.43 0.42Fin. charges cov.ratio (post tax) 1.22 1.31 1.32 1.27 1.25

Component ratios








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RATIO ANALYSIS

PROFITABILITY RATIO

A class of financial metrics that are used to assess a business's ability to generate earnings as

compared to its expenses and other relevant costs incurred during a specific period of time. For

most of these ratios, having a higher value relative to a competitor's ratio or the same ratio from a

previous period is indicative that the company is doing well.

Some examples of profitability ratios are profit margin, return on assets and return on equity. It is

important to note that a little bit of background knowledge is necessary in order to make relevant

comparisons when analyzing these ratios.

For instances, some industries experience seasonality in their operations. The retail industry, for

example, typically experiences higher revenues and earnings for the Christmas season.

Therefore, it would not be too useful to compare a retailer's fourth-quarter profit margin with its

first-quarter profit margin. On the other hand, comparing a retailer's fourth-quarter profit margin

with the profit margin from the same period a year before would be far more informative.


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OPERATING MARGIN

A ratio used to measure a company's pricing strategy and operating efficiency. Operating margin

is a measurement of what proportion of a company's revenue is left over after paying for variablecosts of production such as wages, raw materials, etc. A healthy operating margin is required for

a company to be able to pay for its fixed costs, such as interest on debt. It Is Also known as

"operating profit margin."

Calculated as:

Operating margin gives analysts an idea of how much a company makes (before interest and

taxes) on each dollar of sales. When looking at operating margin to determine the quality of a

company, it is best to look at the change in operating margin over time and to compare the

company's yearly or quarterly figures to those of its competitors.

If a company's margin is increasing, it is earning more per dollar of sales. The higher the margin,

the better. For example, if a company has an operating margin of 12%, this means that it makes$0.12 (before interest and taxes) for every dollar of sales. Often, nonrecurring cash flows, such

as cash paid out in a lawsuit settlement, are excluded from the operating margin calculation

because they don't represent a company's true operating performance.


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OPERATING MARGIN

INTERPRETATION

It shows that operating efficiency of ICICI is better than PNB and SBI. While operating efficiency of

SBI is lower than ICICI and PNB. So rank of operating efficiency of banks can be given as ICICI,

PNB and SBI as on March 2012.

As on March 2011 ICICI was leading the operating efficiency by having Operating Margin of 22.8%

As on March 2010 PNB was leading the operating efficiency by having Operating Margin of 24.63%

GROSS PROFIT MARGIN

A financial metric used to assess a firm's financial health by revealing the proportion of money

left over from revenues after accounting for the cost of goods sold. Gross profit margin serves as

the source for paying additional expenses and future savings. It is also known as "gross margin".

0

5

10

15

20

25

30

SBI ICICI PNB

2012

2011

2010


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Calculated as:

For example, suppose that ABC Corp. earned $20 million in revenue from producing widgets

and incurred $10 million in COGS-related expense. ABC's gross profit margin would be 50%.

This means that for every dollar that ABC earns on widgets, it really has only $0.50 at the end of

the day.

This metric can be used to compare a company with its competitors. More efficient companies

will usually see higher profit margins.

GROSS PROFIT MARGIN

0

5

10

15

20

25

SBI ICICI PNB

2012

2011

2010


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INTERPRETATION

This ratio shows financial position of company. Here, financial position of ICICI is better than SBI and

PNB as on March 2012. So ICICI is at first rank by its financial position than SBI and PNB.

As on March 2011 ICICI was leading the financial position by having Gross Profit of 21.06%.

As on March 2010 PNB was leading the financial position by having Gross Profit of 23.72%.

NET PROFIT MARGIN

For a business to survive in the long term it must generate profit. Therefore the net profit marginratio is one of the key performance indicators for your business. The net profit margin ratio

indicates profit levels of a business after all costs have been taken into account. It is worth

analyzing the ratio over time. A variation in the ratio from year to year may be due to abnormal

conditions or expenses. Variations may also indicate cost blowouts which need to be addressed.

A decline in the ratio over time may indicate a margin squeeze suggesting that productivity

improvements may need to be initiated. In some cases, the costs of such improvements may lead

to a further drop in the ratio or even losses before increased profitability is achieved

The calculation used to obtain the ratio is:

Net Profit Margin = Net Profit x 100

Sales


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NET PROFIT MARGIN

INTERPRETATION

This ratio is key performance indicators for business. Key performance means the profit level of

company; from above graph we can say that performance of ICICI is better than SBI and PNB as on

March 2012. So profit level of ICICI is at first rank than SBI and PNB.

As on March 2011 ICICI was leading in Net Profit Margin by 15.91%.

As on March 2010 PNB was leading in Net Profit Margin by 15.64%.

RETURN ON NETWORTH

Return on Net worth (RONW) is used in finance as a measure of a companys profitability. It

reveals how much profit a company generates with the money that the equity shareholders have

invested. Therefore, it is also called Return on Equity (ROE)

0

2

4

6

8

10

12

14

16

18

SBI ICICI PNB

2012

2011

2010


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It is expressed as:-

Net Income

RONW = ------------------------------------------- X 100

Shareholders Equity

RETURN ON NET WORTH

INTERPRETATION

This ratio is useful for comparing the profitability of a company to that of other firms in the same

industry. Here, profitability of PNB is more than SBI and ICICI as on all three consecutive years

(March 2010, 2011 and 2012). So we can say that PNB is at first rank by its profitability than SBI

and ICICI.

The numerator is equal to a fiscal years net income (after payment of preference share dividends

but before payment of equity share dividends).The denominator excludes preference shares and

0

5

10

15

20

25

30

SBI ICICI PNB

2012

2011

2010


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considers only the equity shareholding. So, RONW measures how much return the company

management can generate for its equity shareholders.

RONW is a measure for judging the returns that a shareholder gets on his investment as a

shareholder, equity represents your money and so it makes good sense to know how well

management is doing with it.

LEVERAGE RATIO

Any ratio used to calculate the financial leverage of a company to get an idea of the company's

methods of financing or to measure its ability to meet financial obligations. There are several

different ratios, but the main factors looked at include debt, equity, assets and interest expenses.

A ratio used to measure a company's mix of operating costs, giving an idea of how changes in

output will affect operating income.

Fixed and variable costs are the two types of operating costs; depending on the company and the

industry, the mix will differ.

The most well-known financial leverage ratio is the debt-to-equity ratio. For example, if a

company has $10M in debt and $20M in equity, it has a debt-to-equity ratio of 0.5

($10M/$20M). Companies with high fixed costs, after reaching the breakeven point, see a greater

increase in operating revenue when output is increased compared to companies with high

variable costs.

The reason for this is that the costs have already been incurred, so every sale after the breakeven

transfers to the operating income. On the other hand, a high variable cost company sees little

increase in operating income with additional output, because costs continue to be imputed into

the outputs. The degree of operating leverage is the ratio used to calculate this mix and its effects

on operating income.


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DEBT-EQUITY RATIO

A measure of a company's financial leverage is calculated by dividing its total liabilities by

stockholders equity.

Calculated as:

Debt Equity Ratio

Note: Sometimes only interest-bearing, long-term debt is used instead of total liabilities in the

calculation. It is also known as the Personal Debt/Equity Ratio, this ratio can be applied to

personal financial statements as well as companies'.

A high debt/equity ratio generally means that a company has been aggressive in financing its

growth with debt.

This can result in volatile earnings as a result of the additional interest expense. If a lot of debt is

used to finance increased operations (high debt to equity), the company could potentially

generate more earnings than it

would have without this outside financing. If this were to increase earnings by a greater amount

than the debt cost (interest), then the shareholders benefit as more earnings are being spread

among the same amount of shareholders.

However, the cost of this debt financing may outweigh the return that the company generates on

the debt through investment and business activities and become too much for the company to

handle. This can lead to bankruptcy, which would leave shareholders with nothing.

The debt/equity ratio also depends on the industry in which the company operates. For example,

capital-intensive industries such as auto manufacturing tend to have a debt/equity ratio above 2,

while personal computer companies have a debt/equity of under 0.5.


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DEBT EQUITY RATIO

INTERPRETATION

This ratio indicates what proportion of equity and debt the company is using to finance its assets.

From above diagram we can say that PNB has a high debt-equity ratio as on all three consecutive

years ( March 2010, 2011 and 2012) means it is aggressive in financing its growth with debt. Than

after SBI has a low debt-equity ratio as comparison with PNB and ICICI comes at third rank in debt-

equity ratio.

FIXED ASSETS TURNOVER RATIO

Measure of the productivity of a firm, it indicates the amount of sales generated by each dollar

spent on fixed assets, and the amount of fixed assets required to generate a specific level of

revenue. Changes in the ratio over time reflect whether or not the firm is becoming more

efficient in the use of its fixed assets. Formula: Sales revenue average fixed assets.

0

2

4

6

8

10

12

14

16

18

SBI ICICI PNB

2012

2011

2010


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FIXED ASSETS TURNOVER RATIO

INTERPRETATION

This ratio shows specific level of revenue by the amount of fixed assets. SBI has a high level of

revenue in comparison with ICICI and PNB on all three consecutive years (March 2010, 2011 and

2012). After SBI, PNB has a high level of revenue and then ICICI.

LIQUIDITY RATIO

A class of financial metrics that is used to determine a company's ability to pay off its short-

terms debts obligations. Generally higher the value of the ratio, the larger the margin of safety

that the company possesses to cover short-term debts.

Common liquidity ratios include the current ratio, the quick ratio and the operating cash flow

ratio. Different analysts consider different assets to be relevant in calculating liquidity.

0

1

2

3

4

5

6

7

8

SBI ICICI PNB

2012

2011

2010


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Some analysts will calculate only the sum of cash and equivalents divided by current liabilities

because they feel that they are the most liquid assets, and would be the most likely to be used to

cover short-term debts in an emergency.

A company's ability to turn short-term assets into cash to cover debts is of the utmost importance

when creditors are seeking payment. Bankruptcy analysts and mortgage originators frequently

use the liquidity ratios to determine whether a company will be able to continue as a going

concern.

CURRENT RATIO

This ratio is a rough indication of a firm's ability to service its current obligations. Generally, the

higher the current ratio, the greater the "cushion" between current obligations and your

Company's ability to pay them. The composition and quality of current assets is a critical factorin the analysis of your Company's liquidity. It is calculated as Total current assets divided by

total current liabilities.


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CURRENT RATIO

INTERPRETATION

Current ratio of ICICI is higher than SBI and PNB, means ICICI has a high ability to pay for its

liabilities, and then secondly comes PNB and ICICI has a low ability to pay for liabilities as on all

three consecutive years (March 2010, 2011 and 2012).

QUICK RATIO

It is also known as the "Acid Test" ratio; it is a refinement of the current ratio and is a more

conservative measure of liquidity. The ratio expresses the degree to which your current

Company's current liabilities are covered by the most liquid current assets. Generally, any value

of less than 1 to 1 implies a "dependency" on inventory or other current assets to liquidate short-

term debt.

0

0.5

1

1.5

2

2.5

SBI ICICI PNB

2012

2011

2010


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It is calculated as Cash plus trade receivables divided by total current liabilities.

QUICK RATIO

INTERPRETATION

PNB has a high quick ratio means it has enough current assets to cover its current liabilities on all

three consecutive years (March 2010,2011 and 2012), while SBI and ICICI have a low quick ratio in

comparison with PNB on all three consecutive years.

PAYOUT RATIOS

The amount of earnings paid out in dividends to shareholders. Investors can use the payout ratio

to determine what companies are doing with their earnings.

Calculated as:

0

5

10

15

20

25

30

SBI ICICI PNB

2012

2011

2010


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For example, a very low payout ratio indicates that a company is primarily focused on retaining

its earnings rather than paying out dividends. The payout ratio also indicates how well earnings

support the dividend payments: the lower the ratio, the more secure the dividend because smaller

dividends are easier to pay out than larger dividends.

DIVIDEND PAYOUT RATIO

Dividend payout ratio is the fraction of net income a firm pays to its stockholders in dividends:

The part of the earnings not paid to investors is left for investment to provide for future earnings

growth. Investors seeking high current income and limited capital growth prefer companies with

high Dividend payout ratio. However investors seeking capital growth may prefer lower payout

ratio because capital gains are taxed at a lower rate.

High growth firms in early life generally have low or zero payout ratios. As they mature, they

tend to return more of the earnings back to investors. Note that dividend payout ratio is a

reciprocate ratio to dividend cover, which is calculated as EPS/DPS.


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DIVIDEND PAYOUT RATIO

INTERPRETATION

ICICI has a high dividend pay-out ratio on all three consecutive years(March 2010,2011 and 2012),

so the Investors who are seeking high current income and limited capital growth should be invest in

ICICI bank. SBI and PNB have a low dividend pay-out ratio, so investors who are seeking capital

growth should be invest in SBI and PNB because capital gains are taxed at a lower rate.

EARNING RETENTION RATIO

The percent of earnings credited to retained earnings. In other words, the proportion of net

income that is not paid out as dividends.

0

5

10

15

20

25

30

35

40

SBI ICICI PNB

2012

2011

2010


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Calculated as:

EARNING RETENTION RATIO

INTERPRETATION

Earning retention ratio is the opposite of the dividend pay-out ratio. PNB have high Earning

Retention Ration on all three consecutive years(March 2010 , 2011 and 2012).

PNB have a high earning retention ratio, so the Investors who are seeking high current income and

limited capital growth should be invest in PNB. ICICI and SBI have low earning retention ratio, so

the investors who are seeking capital growth should be invest in ICICI BANK .

0

10

20

30

40

50

60

70

80

90

SBI ICICI PNB

20122011

2010


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PERSHARE RATIOS

EARNIG PER SHARE

The portion of a company's profit allocated to each outstanding share of common stock. Earnings

per share serve as an indicator of a company's profitability.

Calculated as:

When calculating, it is more accurate to use a weighted average number of shares outstanding

over the reporting term, because the number of shares outstanding can change over time.

However, data sources sometimes simplify the calculation by using the number of shares

outstanding at the end of the period

Diluted EPS expands on basic EPS by including the shares of convertibles or warrants

outstanding in the outstanding shares number.

Earnings per share are generally considered to be the single most important variable in

determining a share's price. It is also a major component used to calculate the price-to-earnings

valuation ratio.

For example, assume that a company has a net income of $25 million. If the company pays out

$1 million in preferred dividends and has 10 million shares for half of the year and 15 million

shares for the other half, the EPS would be $1.92 (24/12.5). First, the $1 million is deducted fromthe net income to get $24 million, and then a weighted average is taken to find the number of

shares outstanding (0.5 x 10M+ 0.5 x 15M = 12.5M). An important aspect of EPS that's often

ignored is the capital that is required to generate the earnings (net income) in the calculation.

Two companies could generate the same EPS number, but one could do so with less equity

(investment) - that company would be more efficient at using its capital to generate income and,


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all other things being equal, would be a "better" company. Investors also need to be aware of

earnings manipulation that will affect the quality of the earnings number. It is important not to

rely on any one financial measure, but to use it in conjunction with statement analysis and other

measures.

EARNING PER SHARE

INTERPRETATION

This ratio is an indicator of a company's profitability. From above graph we can say that SBI has

a high profitability than PNB and ICICI as on March 2012. So, PNB comes at second position

and ICICI comes at third position in profitability.

As on March 2011 PNB was leading the Earning Per Share by 139.94%.

As on March 2010 SBI was leading the Earning Per Share by 144.07%.

0

20

40

60

80

100

120

140

160

180

200

SBI ICICI PNB

2012

2011

2010


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OBJECTIVES


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OBJECTIVES

Analysis of financial statements is an attempt to assess the efficiency and performance of an

enterprise. For that there are some objectives which are described as under.

1. EARNING CAPACITY OR PROFITABILITY

The overall objective of a business is to earn a satisfactory return on the funds invested in it.

Financial analysis helps in ascertaining whether adequate profits are being earned on the capital

invested in the business or not. It also helps in knowing the capacity to pay the interest and

dividend.

2. COMPARATIVE POSITION IN RELATION TO OTHER FIRMS

The purpose of financial statements analysis is to help the management to make a comparative

study of the profitability of various firms engaged in similar business. Such comparison also

helps the management to study the position of their firm in respect of sales expenses,

profitability and using capital etc.

3. EFFICIENCY OF MANAGEMENT

The purpose of financial statement analysis is to know that the financial policies adopted by the

management are efficient or not. Analysis also helps the management in preparing budgets by

forecasting next years profit on the basis of past earnings. It also helps the management to find

out shortcomings of the business so that remedial measures can be taken to remove these

shortcomings.

4. FINANCIAL STRENGTH

The purpose of financial analysis is to assess the financial potential of business. Analysis alsohelps in taking decisions.

(a) Whether funds required for the purchase of new machinery and equipment are provided from

internal resources of business or not.

(b) How much funds have been raised from external sources.


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5.SOLVECNY OF THE FIRM

The different tools of analysis tells us whether the firm has sufficient funds to meet its short-term

and long-term liabilities or not.


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IMPORTANCE


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IMPORTANCE

Ratio analysis is an important technique of financial analysis. It is a means for judging the

financial health of a business enterprise. It determines and interprets the liquidity, solvency,

profitability, etc. of a business enterprise.

f

different ratios. Financial ratios simplify, summaries, and systemize the accounting figures

presented in financial statements.

ratio analysis, comparison of profitability and financial soundness can be

made between one industry and another. Similarly comparison of current year figures can also be

made with those of previous years with the help of ratio analysis and if some weak points are

located, remedial measures are taken to correct them.

If accounting ratios are calculated for a number of years, they will reveal the trend of costs,

sales, profits and other important facts. Such trends are useful for planning.

ards for judging

actual performance of a business. For example, if owners of a business aim at earning profit @

25% on the capital which is the prevailing rate of return in the industry then this rate of 25%

becomes the standard. The rate of profit of each year is compared with this standard and the

actual performance of the business can be judged easily.

position of business with liquidity viewpoint, solvency view point, profitability viewpoint, etc.

with the help of such a study, we can draw conclusion regarding the financial health of business

enterprise.


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ADVANTAGES&

LIMITATIONS


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ADVANTAGES

Ratio analysis is an important and age-old technique of financial analysis. The following aresome of the advantages of ratio analysis:

1. Simplifies financial statements: It simplifies the comprehension of financial statements. Ratios

tell the whole story of changes in the financial condition of the business.

2. Facilitates inter-firm comparison: It provides data for inter-firm comparison. Ratios highlight

the factors associated with successful and unsuccessful firm. They also reveal strong firms and

weak firms, overvalued and undervalued firms.

3. Helps in planning: It helps in planning and forecasting. Ratios can assist management, in its

basic functions of forecasting. Planning, co-ordination, control and communications.

4. Makes inter-firm comparison possible: Ratios analysis also makes possible comparison of the

performance of different divisions of the firm. The ratios are helpful in deciding about their

efficiency or otherwise in the past and likely performance in the future.

5. Help in investment decisions: It helps in investment decisions in the case of investors and

lending decisions in the case of bankers etc.


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LIMITATIONS

The ratios analysis is one of the most powerful tools of financial management. Though ratios are

simple to calculate and easy to understand, they suffer from serious limitations.

1. Limitations of financial statements: Ratios are based only on the information which has been

recorded in the financial statements. Financial statements themselves are subject to several

limitations. Thus ratios derived, there from, are also subject to those limitations.

For example, non-financial changes though important for the business are not relevant by the

financial statements. Financial statements are affected to a very great extent by accounting

conventions and concepts. Personal judgment plays a great part in determining the figures for

financial statements.

2. Comparative study required: Ratios are useful in judging the efficiency of the business only

when they are compared with past results of the business. However, such a comparison only

provide glimpse of the past performance and forecasts for future may not prove correct sinceseveral other factors like market conditions, management policies, etc. may affect the future

operations.

3. Problems of price level changes: A change in price level can affect the validity of ratios

calculated for different time periods. In such a case the ratio analysis may not clearly indicate the

trend in solvency and profitability of the company.

The financial statements, therefore, be adjusted keeping in view the price level changes if a

meaningful comparison is to be made through accounting ratios.


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4. Lack of adequate standard: No fixed standard can be laid down for ideal ratios. There are no

well accepted standards or rule of thumb for all ratios which can be accepted as norm. It renders

interpretation of the ratios difficult.

5. Limited use of single ratios: A single ratio, usually, does not convey much of a sense. To make

a better interpretation, a number of ratios have to be calculated which is likely to confuse the

analyst than help him in making any good decision.

6. Personal bias: Ratios are only means of financial analysis and not an end in itself. Ratios have

to interpret and different people may interpret the same ratio in different way.

7. Incomparable: Not only industries differ in their nature, but also the firms of the similar

business widely differ in their size and accounting procedures etc. It makes comparison of ratios

difficult and misleading.


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CONCLUSION


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CONCLUSION

Ratios make the related information comparable. A single figure by itself has no meaning,

but when expressed in terms of a related figure, it yields significant interferences. Thus, ratios

are relative figures reflecting the relationship between related variables. Their use as tools of

financial analysis involves their comparison as single ratios, like absolute figures, are no

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