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Fundamental analysis of banking sector

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FUNDAMENTAL ANALYSIS OF BANKING SECTOR

Published in: Economy & Finance
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Fundamental analysis of banking sector

  1. 1. FUNDAMENTAL ANALYSIS OF BANKING SECTOR Presented by:- Himanshu Shrimali B2F-13 1
  2. 2. 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 2
  3. 3. 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. 3
  4. 4. 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. 4
  5. 5. Methodology Seconder source data collection by:-  Equitymaster.com  Moneycontrol.com  Birla sun life.com  Official websites of banks.  Financial accounting 5
  6. 6. 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. 6
  7. 7. Ratios  Net Interest Margin  Capital Adequacy Ratio  Net Interest Income  Non Performing Assets  CASA  Loans 7
  8. 8. AXIS Bank 2013 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% 8
  9. 9. Net Interest Margin 9
  10. 10. Net Interest Income 10
  11. 11. Capital Adequacy Ratio 11
  12. 12. NPA 12
  13. 13. ICICI Bank 2013 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% 13
  14. 14. Net Interest Margin 14
  15. 15. Net Interest Income 15
  16. 16. Capital Adequacy Ratio 16
  17. 17. NPA 17
  18. 18. HDFC Bank 2013 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% 18
  19. 19. Net Interest Margin 19
  20. 20. Net Interest Income 20
  21. 21. Capital Adequacy Ratio 21
  22. 22. NPA 22
  23. 23. State Bank of India 2013 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% 23
  24. 24. Net Interest Margin 24
  25. 25. Net Interest Income 25
  26. 26. Capital Adequacy Ratio 26
  27. 27. NPA 27
  28. 28. Bank of Baroda 2013 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% 28
  29. 29. Net Interest Margin 29
  30. 30. Net Interest Income 30
  31. 31. Capital Adequacy Ratio 31
  32. 32. NPA 32
  33. 33. Punjab National Bank 2013 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% 33
  34. 34. Net Interest Margin 34
  35. 35. Net Interest Income 35
  36. 36. Capital Adequacy Ratio 36
  37. 37. NPA 37
  38. 38. 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% 38
  39. 39. 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 39
  40. 40. Refrences  Equitymaster.com 40
  41. 41. Thank You 41

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