Financial Statement Analysis of ICICI Bank Ltd.

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  • 1. FSA Presentation on ICICI Bank Ltd. Submitted to Dr. Manaswee Kumar samal Presented By Amit Kumar Bishnu Panda5/30/2012 Praxis Business School 1
  • 2.  ICICI Bank is a Second largest bank in India by assets & third largest by market capitalization. Bank has presence in 19 countries with a network of 2575 branches & 8000 ATM. Products- Corporate banking, Finance & Insurance, Investment Banking, Mortgage loan, Private banking & Wealth Management5/30/2012 Praxis Business School 2
  • 3. Revenue-USD 13.82 billion Profit-USD 1.66 billion Total assets-USD 119.69 billion Total Equity-USD 12.21billion Employee-80,0005/30/2012 Praxis Business School 3
  • 4. Source of Information 1.Directors’ report 2.Management Discussion & Analysis 3. Schedule & notes of FS 4.Auditor’s Report5/30/2012 Praxis Business School 4
  • 5. Techniques used for FSA 1.Horizontal Analysis 2.Trend Analysis 3.Ratio Analysis5/30/2012 Praxis Business School 5
  • 6. Directors’ Report ICICI Bank Annual Report FY2011.pdf Page 95/30/2012 Praxis Business School 6
  • 7. Nifty Tracker Movement of shares in stock market ICICI_FINANCE2.xlsx5/30/2012 Praxis Business School 7
  • 8. Horizontal Analysis It is comparative information for the current year as well as previous year. icici bank FSA.xlsx5/30/2012 Praxis Business School 8
  • 9. Trend Analysis It is a calculation of percentage changes in Financial statement items for a number of successive years. icici bank FSA.xlsx5/30/2012 Praxis Business School 9
  • 10. Ratio AnalysisIt is establishment of relevant financialrelationship between components of financialstatements. Financial ratios are the significantindicator of a company financial health.5/30/2012 Praxis Business School 10
  • 11. Analysis 1.Dupont chart- icicibank2010_dupont.xlsx5/30/2012 Praxis Business School 11
  • 12. Profitability Ratio It measures the degree of operating success of the company. Profit Margin Ratio Asset Turnover Ratio Earning per share Ratio5/30/2012 Praxis Business School 12
  • 13. Profit Margin Ratio Net Profit Revenue It measures the amount of net profit earned by each rupee of revenue. Year ICICI BANK AXIS BANK 2011 ICICI Bank Axis Bank 8.66% 7.29% 2010 6.46% 7.14%5/30/2012 Praxis Business School 13
  • 14. Asset Turnover Ratio Revenue Average Total Asset It measures firm’s efficiency in utilizing its assets Year ICICI BANK AXIS BANK 2011 0.15 0.21 2010 0.16 0.165/30/2012 Praxis Business School 14
  • 15. Earning Per Share NPAT+Peference Dividend No. of Equity Shares EPS is useful in comparing companies’ performance Year ICICI BANK AXIS BANK 2011 44.72 81.35 2010 34.94 66.165/30/2012 Praxis Business School 15
  • 16. Solvency Ratio 1.It indicates the business is affected by the extent of the debt used to finance the asset of the company. 2.The presence of heavy debt in a companies capital structure is thought to reduce the companies solvency because debt is more risky than Equity Debt-to-Equity Ratio Interest Coverage Ratio Credit-to Deposit Ratio NPA Ratio CASA Ratio5/30/2012 Praxis Business School 16
  • 17. Debt-to-Equity Ratio Secured + Unsecured Loan Shareholder’s Equity It measures the relationship of capital provided by creditors to the amount provided by the shareholder’s Year ICICI BANK AXIS BANK 2011 6.37 11.83 2010 6.04 10.295/30/2012 Praxis Business School 17
  • 18. Interest Coverage Ratio PBIT Interest Expenses It measures the protection available to creditors for payment of interest charges by the company Year ICICI BANK AXIS BANK 2011 1.39 1.59 2010 1.30 1.575/30/2012 Praxis Business School 18
  • 19. Credit -to-Deposit Ratio Total Advances Total Deposit It Indicates how much of the Advances lent by bank is done through deposit. Higher the ratio, the higher the loan-assets credited from deposit Year ICICI Bank Axis Bank 2011 95.90% 75.28% 2010 89.69% 73.85%5/30/2012 Praxis Business School 19
  • 20. Non Performing Assets Ratio Net NPA Net Customer Assets It used as a measure of the overall quality of the bank’s loan book. An NPA are those assets for which interest is overdue for more than 90 days. Higher ratio reflects rising bad quality of loans Year ICICI Bank Axis Bank 2011 0.94% 0.26% 2010 1.86% 0.36%5/30/2012 Praxis Business School 20
  • 21. CASA Ratio Current & Saving a/c deposits Total Deposits The CASA ratio shows how much deposit a bank has in the form of current and saving account deposits in the total deposit. A higher CASA ratio means higher portion of the deposits of the bank has come from current and savings deposit, which is generally a cheaper source of fund. Higher the CASA ratio better the net interest margin, which means better operating efficiency of the bank. Year ICICI Bank Axis Bank 2011 45% 41% 2010 41% 46%5/30/2012 Praxis Business School 21
  • 22. Capital Adequacy Ratio Tier one capital + Tier two capital Risk Weighted Assets This ratio is used to protect depositors and promote the stability and efficiency of financial system around the world. Year ICICI BANK AXIS BANK 2011 13.11% 17.42% 2010 29.72% 36.5%5/30/2012 Praxis Business School 22
  • 23. Capital Market Ratio It relate the market price of a company’s share to the company earning & dividends Price Earning Ratio5/30/2012 Praxis Business School 23
  • 24. Price Earning Ratio Market price per Equity share Earning per Share It is a indicator of firm’s growth prospect. High price earning ratio indicates the stock market confidence in company’s future earning growth Year ICICI BANK AXIS BANK 2011 19.78 16.09 2010 23.47 15.265/30/2012 Praxis Business School 24
  • 25. Key Ratios at a glance Ratios ICICI AXIS ICICI AXIS BANK(2011) BANK(2011) BANK(2010) BANK(2010) ROE 6.4% 5.1% 2.7% 2.1% PE Ratio 19.78 16.09 23.47 15.26 CASA Ratio 45% 41% 41% 46% NPA Ratio 0.94% 0.26% 1.86% 0.36% Capital 13.11% 17.42% 29.72% 36.5% Adequacy ratio5/30/2012 Praxis Business School 25
  • 26. Conclusions Based on the financial assessment of key indicators of banks.. ICICI Bank Ltd is leading ahead of Axis Bank.5/30/2012 Praxis Business School 26
  • 27. Balance sheet ICICI Bank Annual Report FY2011.pdf Page-805/30/2012 Praxis Business School 27
  • 28. Profit & Loss account ICICI Bank Annual Report FY2011.pdf Page 815/30/2012 Praxis Business School 28
  • 29. Cash flow statement ICICI Bank Annual Report FY2011.pdf Page 825/30/2012 Praxis Business School 29
  • 30. Thank you!!! ICICI bank Ltd.5/30/2012 Praxis Business School 30