Financial analysis of The Surat Mercantile Co-op. Bank Ltd.”

7/28/2019 Financial analysis of The Surat Mercantile Co-op. Bank Ltd.

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SHRIMAD RAJCHANDRA INSTITUTE

OF MANAGEMENT

& COMPUTER APPLICATION

Financial analysis of The SuratMercantile Co-op. Bank Ltd.

S.Y.MBA (SEM. IV)

2012-13

ID No. Enrolment No. Name of Students

11 MBA 069 201104100710068 Ankit Gorasiya

11 MBA 102 201104100710100 Ankur Meruliya

SUBMITTED TO:

Mr. Sanjay Joshi(Assistant Professor)

SUBMITTED BY:

Group F3


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Literature Review Researcher: Martinihkand Klaus Schaeck(2009)

Title:Astudy of How Well Do Aggregate Bank Ratios Identify Banking Problems? Conclusion: The paper provides an empirical analysis of aggregate banking system ratios during

systemic banking crises. They utilize parametric and nonparametric tests to assess thepower of these ratios to discriminate between sound and unsound banking systems. Theyalso estimate a duration model to investigate whether the ratios help determine the timingof a banking crisis. Despite some weaknesses in the available data, their findings offerinitial evidence that some indicators are precursors for the likelihood and timing ofsystemic banking problems.

Researcher: Mabwe Kumbirai and Robert Webb(2009) Title: A study of financial Ratio Analysis of Commercial Bank Performance in South

Africa

Conclusion: In this paper investigates the performance of South Africas commercial banking sector for

the period 2005- 2009. Financial ratios are employed to measure the profitability, liquidityand credit quality performance of five large South African based commercial banks. Thestudy found that overall bank performance increased considerably in the first two years ofthe analysis. A significant change in trend is noticed at the onset of the global financial

crisis in 2007, reaching its peak during 2008-2009. This resulted in falling profitability,low liquidity and deteriorating credit quality in the South African Banking sector.


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Company Profile:

The Surat Mercantile Co-Op. Bank Ltd. Is established byMr. Shambhubhai V. Patel.

This is registered by low of corporate sector with theregister number UBD GUJ.1562 dated on 14-04-1965and certified with the license in Reserve Bank of India.

In The Surat Mercantile Co-Op. Bank Ltd., there aretotal 13 branch including head office. There are about109 employees in which 7 employees are at the top levelmanagement and 31 employees in the officers categoriesand others are the clerk and peon.


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Research MethodologyProblem define:

Financial Analysis of The Surat Mercantile Co Op Bank Ltd

Objectives:

-To analyze financial performance of The Surat Mercantile Co Op Bank Ltd. -To get basis for financial planning, analysis and decision making through financial

information.

-To study financial strength and weakness.

Research Design:

Descriptive Research Design

Sources of data collection:

Secondary data

Time duration:

2008 to 2012

Data analysis:

-Ratio Analysis -Branch comparison with ANOVA test


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Data Analysis & Interpretation

HIGH LIGHT (Rs. in Crore)

2008-09 2009-10 2010-11 2011-12

SHARE CAPITAL 6.86 7.41 7.69 7.42

DEPOSISTS 154.77 171.97 184 190.33

WORKING

CAPITAL 210.54 232.44 241.52 249.51

INVESTMENTS 102.60 119.59 125.55 130.26

LOAN

ADVANCES 95.95 94.26 99.18 101.44

NET PROFIT 2.70 1.95 1.62 2.55

All over analysis of SUMCO

0.00

50.00

100.00

150.00

200.00

250.00

2008-09 2009-10 2010-11 2011-12

SHARE CAPITAL DEPOSISTS WORKING CAPITAL INVESTMENTS LOAN ADVANCES


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300.00 310.00

248.00 251.57270.19

195.43162.00

255.00

0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

Profit

Profit of SUMCO (Rs. in Lacs)


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0.00

500.00

1000.00

1500.00

2000.00

2500.00

3000.00

3500.00

4000.00

4500.00

5000.00

2007-08 2008-09 2009-10 2010-11 2011-12

LAL DARVAJA

KATARGAM

KHATODARA

BHAGAL

RAMPURA

KADODARA

BHATHENA

AMROLI

KAPODRA

BHATAR

ANAND MAHAL

PANDESARA

BAMROLI

DEPOSITS (Rs. in Lacs)

NO. BRANCH 2007-08 2008-09 2009-10 2010-11 2011-12

1 LAL DARVAJA 1877.29 1776.34 1802.67 1750.80 1839.26

2 KATARGAM 2716.48 2680.91 2888.55 3306.45 3582.12

3 KHATODARA 2213.45 2072.85 1945.67 2045.46 1981.14

4 BHAGAL 4883.02 4171.74 4058.93 3960.75 3842.785 RAMPURA 289.10 332.90 418.27 395.91 395.86

6 KADODARA 486.23 476.43 639.68 846.24 737.07

7 BHATHENA 634.19 863.19 1036.53 972.38 1120.68

8 AMROLI 703.82 844.02 853.65 923.73 961.44

9 KAPODRA 559.25 473.56 703.56 910.00 1202.83

10 BHATAR 723.08 683.01 683.01 883.31 1013.83

11 ANAND MAHAL 1193.83 1102.32 1583.68 1827.92 1693.48

12 PANDESARA 0.00 0.00 307.59 375.36 367.14

13 BAMROLI 0.00 0.00 111.70 201.77 295.08

TOTAL 16279.74 15477.27 17033.49 18400.08 19032.71

All particular branches Deposits of SUMCO (Rs. in Lacs)


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0.00

500.00

1000.00

1500.00

2000.00

2500.00

3000.00

2007-08 2008-09 2009-10 2010-11 2011-12

LAL DARVAJA

KATARGAM

KHATODARA

BHAGAL

RAMPURA

KADODARA

BHATHENA

AMROLI

KAPODRA

BHATAR

ANAND MAHAL

PANDESARA

BAMROLI

All particular branches Lending of SUMCO (Rs. in Lacs)NO. BRANCH 2007-08 2008-09 2009-10 2010-11 2011-12

1 LAL DARVAJA 1718.83 1637.60 1635.01 1357.97 1382.67

2 KATARGAM 1345.18 1187.02 1217.17 1370.80 1579.04

3 KHATODARA 643.92 516.02 621.05 833.14 919.73

4 BHAGAL 1195.79 1105.21 904.56 904.40 815.25

5 RAMPURA 414.56 472.19 281.45 208.66 164.66

6 KADODARA 819.08 714.14 759.76 776.76 636.57

7 BHATHENA 266.29 218.63 599.20 814.31 879.24

8 AMROLI 357.55 599.29 452.44 214.31 273.11

9 KAPODRA 1996.43 2084.86 2146.50 2578.33 2652.08

10 BHATAR 461.54 517.04 316.75 374.48 318.50

11 ANAND MAHAL 559.91 543.48 300.40 252.64 235.56

12 PANDESARA 0.00 0.00 62.40 188.57 208.44

13 BAMROLI 0.00 0.00 29.27 44.29 79.22

TOTAL 9779.08 9595.48 9325.96 9918.66 10144.07


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PROFIT (Rs. in Lacs)

NO. BRANCH 2007-08 2008-09 2009-10 2010-11 2011-12

1 LAL DARVAJA 15.78 4.38 -71.51 -179.90 -109.88

2 KATARGAM 62.59 71.71 52.89 79.67 108.25

3 KHATODARA 33.35 12.16 36.14 50.64 52.09

4 BHAGAL 8.90 20.16 18.21 -11.36 -23.895 RAMPURA 22.74 6.26 3.95 1.04 -1.86

6 KADODARA 27.29 39.39 29.24 39.48 41.21

7 BHATHENA 5.19 0.83 41.51 46.38 36.25

8 AMROLI 0.04 11.80 10.43 6.81 -0.40

9 KAPODRA 38.87 67.29 78.47 111.07 127.88

10 BHATAR 21.75 16.57 9.86 18.61 16.22

11 ANAND MAHAL 14.99 19.63 4.28 3.68 5.50

12 PANDESARA 0.00 0.00 -7.07 6.77 7.20

13 BAMROLI 0.00 0.00 -10.97 -10.90 -3.57TOTAL 251.49 270.18 195.43 161.99 255.00


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-200.00

-150.00

-100.00

-50.00

0.00

50.00

100.00

150.00

2007-08 2008-09 2009-10 2010-11 2011-12

All particular branches Profit of SUMCO(Rs. in Lacs)

LAL DARVAJA

KATARGAM

KHATODARA

BHAGAL

RAMPURA

KADODARA

BHATHENA

AMROLI

KAPODRABHATAR

ANAND MAHAL

PANDESARA

BAMROLI


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Ratio 2008-09 2009-10 2010-11 2011-12

Current Ratio 2.03 8.91 9.61 9.33

Profit Margin Ratio 11.9 9.01 7.43 10.79

Credit Deposit62 54.81 53.9 53.3

Owner Funds to assets22.04 14.84 20.57 20.06

Other income Ratio5.57 3.27 4.07 3.5

Interest Expenses Ratio49.87 50.23 50.11 46.36

Profit on Loan & Advance

2.81 2.07 1.63 2.51

Ratio Analysis :-


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Ratio Analysis :-

2.032282

8.9085839.609528

9.332254

0

2

4

6

8

10

12

2008-09 2009-10 2010-11 2011-12

Ratio

Current Ratio

Profitability Ratio1.220298

0.5659250.637063

0.965992

0

0.2

0.4

0.6

0.8

1

1.2

1.4

2008-09 2009-10 2010-11 2011-12

Ratio

Credit Deposit Ratio62

54.8153.9

53.3

48

50

52

54

56

58

60

62

64

2008-09 2009-10 2010-11 2011-12

Ratio

Profit on Loan & Advance Ratio2.81

2.07

1.63

2.51

0

0.5

1

1.5

2

2.5

3

2008-09 2009-10 2010-11 2011-12

Ratio


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Ratio Analysis :-Owner Funds to assets Ratio

22.04

14.84

20.5720.06

0

5

10

15

20

25

2008-09 2009-10 2010-11 2011-12

Ratio

Profit Margin Ratio11.9

9.01

7.43

10.79

0

2

4

6

8

10

12

14

2008-09 2009-10 2010-11 2011-12

Ratio

Other income Ratio5.57

3.274.07

3.5

0

1

2

3

4

5

6

2008-09 2009-10 2010-11 2011-12

Ratio

Interest Expenses Ratio

49.8750.23 50.11

46.36

44

45

46

47

48

49

50

51

2008-09 2009-10 2010-11 2011-12

Ratio


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Profit on Loan & Advance Ratio

Ratio Analysis :-

2.81

2.07

1.63

2.51

0

0.5

1

1.5

2

2.5

3

2008-09 2009-10 2010-11 2011-12

Ratio


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Anova: Single Factor

SUMMARY

Groups Count Sum Average Variance

laldarvaja 5 -341.13 -68.226 6636.39

katargam 5 375.11 75.022 445.2633

khatodara 5 184.38 36.876 261.1921

bhagal 5 12.02 2.404 372.0313

rampura 5 32.13 6.426 92.49288

kadodara 5 176.61 35.322 42.50247

bhathena 5 130.16 26.032 456.8867

amroli 5 28.68 5.736 32.51353

kapodra 5 423.58 84.716 1250.549

bhatar 5 83.01 16.602 19.03387

anandmahal 5 48.08 9.616 52.45263

pandesara 5 6.9 1.38 34.53395

bamroli 5 -25.44 -5.088 30.61427

ANOVA

Source of Variation SS df MS F P-value F crit

Between Groups 86317.4 12 7193.117 9.614037 0.0000000 1.943617

Within Groups 38905.83 52 748.189

Total 125223.2 64


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CONCLUSION

Branch comparisons in profit related Kapodra branch continuesincreasing profit 38.87 lacs in 2007-08 and its last year which ishighest profit making branch to other with 127.88 lacs.

Main branch of bank Lal Darvaja which last three year continuesloss in market and other three branch Bamroli, Amroli and Bhagal

not making profit which is affecting whole branch through data. In particular branch deposits of SUMCO in Kapodra branchperformance increasing compare with all other branch. In LalDarvaja branch highly deposited money but it is not able to makingprofit.

In providing loan to customer in Kapodra branch is last five yearperformance well so that its profit increasing. In current ratio in last three year very high compare 2:1 so bank not

using efficient way that current assets in bank so this ratio is notgood.


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Net working capital ratio last two year respectively 0.94 and 0.95 sobank working capital cycle is good for pay short term liquidity.Positive working capital indicates that bank has the ability topayments of short terms liabilities

Profit of bank also decreasing continually because of the

government policy in Embroidery business Textile sector tough loanposition and also not providing subsidies to customer.

Credit deposit ration according RBI rules its maintain 60-70% butlast four year continues down so bank increasing their loan &advantages.

In other income ratio also decreasing because of bank not providinglocker facility in some branch.

CONCLUSION


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RECOMMENDATION

Bank should increase funds through short term sources for shortterm requirement of funds, which comparatively economical ascompare to long term funds.

In competitive market The Surat Mercantile Co-op. Bank Ltd.should give more facilities to its customers like locker, SMS system,e-payment and ATM facilities so it can attract more & morecustomer.

They should expand its branches at new industrial area like Sachin,Hazira, Vesu, Kamrej so it will benefited for bank.

Bank should effective way use of current assets so they have tolending money its customer so earn more money.

Banks hade office continually making loss so they should cut downin expense.

Bank Increasing loan facility to its customer through credit policy.


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BIBLIOGRAPHY

Ahmed, M., B. (2009). Measuring the Performance of Islamic Banks by Adapting ConventionalRatios German University in Cairo Faculty of Management Technology Working Paper No. 16 pp1-26.

Beck, T., A. Demirg-Kunt, and R. Levine, 2005, Bank Concentration, Competition and Crises:First Results,Journal of Banking and Finance, forthcoming.

Annual Report of The Surat Mercantile Coop Bank Ltd. 2011-12

2010-11

2009-10

2008-09

2007-08

Pandya, K., Bulsari, S. and Sinha (2009), SPSS In Simple Steps, TechDream Press. PP 101-110

Gupta, A.(2006) Financial Accounting for Management: An Analytical Perspective , PearsonEducation, 1/e, pp 606-651

Documents

Financial analysis of The Surat Mercantile Co-op. Bank Ltd.”