Fundamental analysis of banking sector

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FUNDAMENTAL ANALYSIS OF BANKING SECTOR

Presented by:-Himanshu ShrimaliB2F-13

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INTRODUCTION The efficient, dynamic and effective banking

sector plays a very important role in accelerating the rate of economic growth in any economy.

The Government of India introduced economic and financial sector reforms in 1991 and banking sector reforms were part and parcel of financial sector reforms.

These were initiated in 1991 to make Indian banking sector more efficient, strong and

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Purpose The main purpose of the banking sector

analysis is to examine a risk and return characteristics of public sector banks and private sector banks .

The main aim is to know which bank sector is worthwhile to invest.

And which sector is more beneficial for economic purpose.

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Research objective To study the concept and techniques of

fundamental analysis. To evaluate 3 public sector banks and 3

private sector banks. To do the Comparative study of private sector

and public sector Banks. To study the growth trends in banking sector.

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Methodology Seconder source data collection by:- Equitymaster.com Moneycontrol.com Birla sun life.com Official websites of banks. Financial accounting

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Major players in industry Public sector banks – SBI, PNB, Bank of

Baroda, Bank of India etc. Private sector banks- HDFC, ICICI Bank,

AXIS Bank, Yes Bank etc. Foreign Banks – Standard Chartered

Bank, HSBC, City Bank etc. Regional Rural Banks – Andhra Pradesh

gramin bank , Uttranchal Gramin Bank etc.

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Ratios Net Interest Margin Capital Adequacy Ratio Net Interest Income Non Performing Assets CASA Loans

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AXIS Bank2013 2014 2015

Net int. margin

2.9% 3.2% 3.2%

Net int. income

96886 120330 143862

Capital adequacy ratio

17.0% 16.1% 15.1%

NPA 0.4% 0.4% 0.4%

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Net Interest Margin

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Net Interest Income

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Capital Adequacy Ratio

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NPA

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ICICI Bank2013 2014 2015

Net int. margin

2.6% 2.8% 2.9%

Net int. income

165992 197686 226459

Capital adequacy ratio

18.7% 17.7% 17.0%

NPA 0.8% 1.0% 1.6%

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Net Interest Margin

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Net Interest Income

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Capital Adequacy Ratio

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NPA

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HDFC Bank2013 2014 2015

Net int. margin

4.2% 4.0% 4.0%

Net int. income

161656 191096 233780

Capital adequacy ratio

16.8% 16.1% 16.8%

NPA 0.2% 0.3% 0.3%

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Net Interest Margin

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Net Interest Income

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Capital Adequacy Ratio

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NPA

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State Bank of India2013 2014 2015

Net int. margin

3.0% 2.9% 2.9%

Net int. income

611582 675834 747957

Capital adequacy ratio

12.9% 13.0% 12.8%

NPA 2.1% 2.6% 2.1%

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Net Interest Margin

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Net Interest Income

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Capital Adequacy Ratio

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NPA

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Bank of Baroda2013 2014 2015

Net int. margin

2.2% 1.9% 2.0%

Net int. income

119556 128585 143684

Capital adequacy ratio

13.3% 12.3% 12.6%

NPA 1.3% 1.5% 1.9%

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Net Interest Margin

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Net Interest Income

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Capital Adequacy Ratio

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NPA

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Punjab National Bank2013 2014 2015

Net int. margin

3.2% 3.0% 2.8%

Net int. income

152757 167378 173668

Capital adequacy ratio

13.2% 12.7% 13.6%

NPA 2.4% 2.9% 4.1%

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Net Interest Margin

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Net Interest Income

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Capital Adequacy Ratio

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NPA

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Comparisons 2015

Axis Bank

ICICI Bank

HDFC Bank

SBI BOB PNB

NIM 3.2% 2.9% 4.0% 2.9% 2.0% 2.8%

NII 143862 226459 233780 747957 143684 173668

CAR 15.1% 17.0% 16.8% 12.8% 12.6% 13.6%

NPA 0.4% 1.6% 0.3% 2.1% 1.9% 4.1%

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Conclusions Sector is increasing with total asset size

of 81trillion(USD 1.34 trillion). Interest rates are high and investors

confidence low resulting in shrinking investment and GDP growth.

The gross NPA of banks(PUB+PVT)increased over the last one year from 3.3% to 3.9% as on march 2014

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Refrences Equitymaster.com

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Thank You