July 2014 Edition of BEACON, A Monthly Newsletter by SIMCON.
Inside this issue:
INDUSTRY ANALYSIS :Banking Industry
COMPANY ANALYSIS : ICICI Bank
Concept of the Month
Quiz
Did You Know?
• Stable loan growth. The banking industry kept up its loan growth pace of 10.9%
yoy in Mar 09. This was partly driven by a 20-30% jump in loans classified as
“others”, which are loans extended to government agencies and non-bank
financial institutions. Business loan growth decelerated from 10% in Feb 09 to
9.5% in Mar 09 while the growth pace for consumer loans was sustained at 8.8%.
• Lethargic leading loan indicators. Leading loan indicators remained subdued in
Mar 09 – loan applications rose by only 4.8% yoy while loan approvals dipped by
0.7% yoy. The business loan segment was the culprit, with applications and
approvals dwindling 11-13% yoy and offsetting the 13-22% increase in the
indicators for consumer loans.
• Still expecting loan momentum to lose steam. We continue to expect a sharp
fall-off in industry loan growth from 12.8% in 2008 to 2-3% in 2009 given (1) the
sluggish leading loan indicators, (2) slower economic growth, and (3) the downshift
in car sales.
• Sliding lending rates. In response to the OPR cut on 24 Feb 09, banks reduced
their fixed deposit (FD) rates a few days later but BLRs for most banks were
lowered later by about 40bp in early Mar. As a result, FD rates were stable at 2.02-
2.52% but the average lending rate shrank by 105bp yoy and 33bp mom to an alltime
low of 5.16%.
• Ample liquidity. As loan growth of 10.9% outpaced the deposit growth of 8%,
banks’ loan-to-deposit rate tightened to 73.7% as at end-Mar 09 from 70.8% a
year ago. The system still has plenty of excess liquidity estimated to be about
RM219bn in mid-Apr 09 vs. RM216.8bn as at end-Mar 09.
• NPL ratio still improving, for now. Banks’ 3-month net NPL ratio declined by
73bp yoy to 2.2% in Mar 09 but was stable mom. Gross NPL ratio also fell by
154bp yoy and 21bp mom to 4.6%. The reserve coverage improved from 76.5% a
year ago to 86.4%, aided by a 16.9% yoy drop in gross NPLs against a 6.1%
decline in total provisioning.
• Maintain NEUTRAL. We remain NEUTRAL on Malaysian banks as the stillhealthy
banking numbers suggest that banks could perform better than we and the
market expect despite the downbeat economic outlook. Although banks’ net
earnings are estimated to pull back 6.5% this year, we anticipate a 17.4% rebound
in 2010. Over the longer term, many banks will also reap the benefits from their
ongoing revamps and regional expansion. Public Bank remains our top pick for the
sector.
A pioneering initiative in Financial Inclusion of the Poorest of the Poor by the State of Andhra Pradesh for Electronic Benefit Transfer for Payment of MGNREGA Wages and Social Security Pensions in the State.
Banking industry of india analysis - PDFdeniver003
Let’s have an analysis of Indian Banking industries. This PDF Contains various banking overview, and a dig at the segmentation of the Indian banking industry, as well as classification, NBFCs, Digitalization of banking, and role of RBI.
Obtaining New Banking Licenses in India: Challenges and OpportunitiesCognizant
Banks applying for new banking licenses in India will be challenged by the Reserve Bank of India's (RBI) stringent new guidelines, which emphasize financial inclusion, rural banking, technology innovation and financial credibility. At the same time, these issues can open opportunities for consulting firms and service providers.
July 2014 Edition of BEACON, A Monthly Newsletter by SIMCON.
Inside this issue:
INDUSTRY ANALYSIS :Banking Industry
COMPANY ANALYSIS : ICICI Bank
Concept of the Month
Quiz
Did You Know?
• Stable loan growth. The banking industry kept up its loan growth pace of 10.9%
yoy in Mar 09. This was partly driven by a 20-30% jump in loans classified as
“others”, which are loans extended to government agencies and non-bank
financial institutions. Business loan growth decelerated from 10% in Feb 09 to
9.5% in Mar 09 while the growth pace for consumer loans was sustained at 8.8%.
• Lethargic leading loan indicators. Leading loan indicators remained subdued in
Mar 09 – loan applications rose by only 4.8% yoy while loan approvals dipped by
0.7% yoy. The business loan segment was the culprit, with applications and
approvals dwindling 11-13% yoy and offsetting the 13-22% increase in the
indicators for consumer loans.
• Still expecting loan momentum to lose steam. We continue to expect a sharp
fall-off in industry loan growth from 12.8% in 2008 to 2-3% in 2009 given (1) the
sluggish leading loan indicators, (2) slower economic growth, and (3) the downshift
in car sales.
• Sliding lending rates. In response to the OPR cut on 24 Feb 09, banks reduced
their fixed deposit (FD) rates a few days later but BLRs for most banks were
lowered later by about 40bp in early Mar. As a result, FD rates were stable at 2.02-
2.52% but the average lending rate shrank by 105bp yoy and 33bp mom to an alltime
low of 5.16%.
• Ample liquidity. As loan growth of 10.9% outpaced the deposit growth of 8%,
banks’ loan-to-deposit rate tightened to 73.7% as at end-Mar 09 from 70.8% a
year ago. The system still has plenty of excess liquidity estimated to be about
RM219bn in mid-Apr 09 vs. RM216.8bn as at end-Mar 09.
• NPL ratio still improving, for now. Banks’ 3-month net NPL ratio declined by
73bp yoy to 2.2% in Mar 09 but was stable mom. Gross NPL ratio also fell by
154bp yoy and 21bp mom to 4.6%. The reserve coverage improved from 76.5% a
year ago to 86.4%, aided by a 16.9% yoy drop in gross NPLs against a 6.1%
decline in total provisioning.
• Maintain NEUTRAL. We remain NEUTRAL on Malaysian banks as the stillhealthy
banking numbers suggest that banks could perform better than we and the
market expect despite the downbeat economic outlook. Although banks’ net
earnings are estimated to pull back 6.5% this year, we anticipate a 17.4% rebound
in 2010. Over the longer term, many banks will also reap the benefits from their
ongoing revamps and regional expansion. Public Bank remains our top pick for the
sector.
A pioneering initiative in Financial Inclusion of the Poorest of the Poor by the State of Andhra Pradesh for Electronic Benefit Transfer for Payment of MGNREGA Wages and Social Security Pensions in the State.
Banking industry of india analysis - PDFdeniver003
Let’s have an analysis of Indian Banking industries. This PDF Contains various banking overview, and a dig at the segmentation of the Indian banking industry, as well as classification, NBFCs, Digitalization of banking, and role of RBI.
Obtaining New Banking Licenses in India: Challenges and OpportunitiesCognizant
Banks applying for new banking licenses in India will be challenged by the Reserve Bank of India's (RBI) stringent new guidelines, which emphasize financial inclusion, rural banking, technology innovation and financial credibility. At the same time, these issues can open opportunities for consulting firms and service providers.
Understanding the Finance Industry in Rural India by RC&M India Experiential Rural Marketing Firm in India.
• Understanding the Finance Industry in Rural India
• Finance Presence in Rural India
• Rural Finance Penetration in India
• Finance Presence Geographic Segmentations
• Rural Finance Growth & Potential
• Rural Finance Potential
• Rural Finance Growth
• Rural Customer Finance Preferences
• Finance Preference in a Rural Household
• Rural Finance Preference Breakup
• Rural Finance Agency wise & Region wise Penetration
• Initiative in Rural Finance
Finance presence in Rural areas of India today; is in the following forms:
Nationalized Banks
Private Banks
Credit Societies
Co-operative Banks
Informal loans (Money Lenders)
• Understanding the Finance Industry in Rural India
• Finance Presence in Rural India
• Rural Finance Penetration in India
• Finance Presence Geographic Segmentations
• Rural Finance Growth & Potential
• Rural Finance Potential
• Rural Finance Growth
• Rural Customer Finance Preferences
• Finance Preference in a Rural Household
• Rural Finance Preference Breakup
• Rural Finance Agency wise & Region wise Penetration
• Initiative in Rural Finance
The Indian Banking industry, which is governed by the Banking Regulation Act of India, 1949 can be broadly classified into two major categories, non-scheduled banks and scheduled banks. Scheduled banks comprise commercial banks and the co-operative banks. In terms of ownership, commercial banks can be further grouped into nationalized banks, the State Bank of India and its group banks, regional rural banks and private sector banks (the old/ new domestic and foreign). These banks have over 84,000 branches spread across the country
Microfinance and International Migration: Strengthening Financial Inclusion i...Matt Rolland
Final presentation of my Fulbright-García Robles grant to Zacatecas, Mexico. With support from the Universidad Autónoma de Zacatecas, Estudios del Desarrollo, this project investigated financial inclusion, microfinance, migration, and development issues during 2010-2011. Presented the 13 of May, 2011. The results will be published in a forthcoming book, "Perspectives on Development in Zacatecas".
Attaching a Concept Note on a Payments-related Entrepreneurial Idea I had 4 years ago when I was in India. Although a lot has since changed, some trends forecast in the concept note have actually become reality - especially the emergence of Co-operative Banks as a crucial channel for reaching underbanked & unbanked population in the rural areas. Thus, the material may still be somewhat pertinent today. Opening it up for any entrepreneur or Entity interested in the Payments area, especially in India- with possible applications in other Emerging economies as well. Enjoy and feel free to re-use
4. About Financial Sector
• Financial Sector is the backbone of the economy
and it is indeed critical to nurture the growth of
this important sector in order to ensure sustained
growth rate. When the Indian economy was
liberalized in the year 1991, a road map was also
set forth for financial sector reforms.
• 2nd largest component after trade, hotels,
transport and communication all combined
together in GDP.
6. Indian Insurance Sector
• The US$ 41-billion Indian life insurance industry is
considered the
• 5th largest life insurance market, and
• Growing at 32-34%
• The government is likely to reintroduce the Insurance Bill
which proposes to increase the FDI cap in private sector
insurance companies from 26 % to 49%.
• The health insurance market stood at around us $ 1.5
billion in 2008-09 and is expected to grow to us $ 9 billion
by 2016-17.
7. Future of Indian Insurance Market
Indian Insurance Sector ready to tap Rural India
• A large part of rural India is still untapped due to poor
distribution, large distances & high costs relative to returns
• Assocham stated that semi-urban areas would have a share of
US$ 35 Billion and urban areas would account for US$ 25 Billion
in the US$ 60 Billion industry.
• Life insurance market in semi-urban and rural territories is
expected to rise to US$ 20 Billion mark in the upcoming four
years from the existing value of less than US$ five Billion.
8. Structure of the Banking Industry
Reserve bank of
India
Non-banking
Financial financial
Banks
institutions Institutions
(NBFCs)
Scheduled Commercial
Co-operative Banks
banks
Rural Co-
Regional Urabsn Co-
Public Sector Private Sector Foreign Banks operative
Rural Banks opeartive
Banks (27) Banks (22) (31) Banks
(84) Banks (1,721)
(98,061)
9. Market size
Advances-Deposits of All SCBs Credit composition of Financial Sector
6000000 Entities
5000000
4000000 NBFM-Infra
Rs. Crore
6%
3000000
2000000 0%
Public Banks
1000000 65%
0 HFCs SCBs
2007 2008 2009 2010 2011 4% 85%
Deposits 2696937 3320062 4063201 4746920 5616432 Foreign Banks
Advances 1981236 2476936 2999924 3496720 4298704 4%
Private Banks
CD Ratio 73.5% 74.6% 73.8% 73.7% 76.5% NBFM-Retail
16%
5%
Domestic Credit as % of GDP
300.0%
India’s banking sector is dominated by
250.0% public sector banks, i.e. 65% of the Gross
200.0% credit suppliers.
150.0%
The Bank credit market in India is lower
100.0%
than the global benchmark on account of
50.0%
lower penetration in the rural areas and
0.0% tier-3 cities. Higher credit % reflects higher
2006 2007 2008 2009 2010 financial inclusion. This clearly reflects that
USA Thailand Malaysia China India lower PCI of rural areas has not attracted
banks to service them.
World average: 169.8%
10. Market size and Cost of Intermediation
Advances-Deposits trend in Public Banks Advances-Deposits trends in Pvt Banks
35.00% 500 140 35%
30.00% 120 30%
In 10,000 Crores
400
In 10,000 Crore
25.00% 100 25%
20.00% 300 80 20%
15.00% 200 60 15%
10.00% 40 10%
100
5.00% 20 5%
0.00% 0 0 0%
2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011
Advances Deposits Adv. growth% Dep growth% Deposits Advances
Deposit Growth % Advances Growth %
Spread of Bank Lending and Deposit Rates
6.00%
Cost of Intermediation still remains higher than
5.00% other countries due to small ticket
4.00% size, regulatory cost associated with SLR, CRR and
3.00%
PSA (Priority Sector Advances) on account of
2007
Hawkish monetary policy to contain recent
2.00% 2011
inflationary pressure.
1.00%
0.00%
India Malaysia Thailand Singapore China
11. Growth Drivers for Banking System
• Large number of micro, small and medium
enterprises (MSMEs) with significant growth
opportunities in their respective sectors.
• Large amount of money is remitted by NRI.
• Stringent regulatory framework like RBI
• Adoption of best practices from other countries
• Retail Banking
• Technological Development for Core Banking
13. Job Description
• Conduct market research and collect the data of the company in a respective area.
•
• Conduct cold calling and maintain the data of the same.
•
• Create a database of SME accounts and service them.
•
• Responsible for the sourcing of materials from the SME accounts.
•
• Adhere to day to day summing up of accounts and reporting the same to their reporting
Manager.
•
• Establishing and maintaining new and established client relationships.
• Responding to sales inquiries from new and existing customers.
• Maintaining the company’s contact database management with up-to-date
contact, accurate and activity details
• Preparing a variety of sales status reports (monthly/ weekly etc.) that include
activity, follow-up, closings, and adherence to targets
14. Desired Candidate personality
• Good interpersonal and communication skills
• Tenacious work attitude
• Self-motivated and flexible to work under negligible supervision
• Excellent problem solving skills
• Able to persuade and convince others and should have negotiation skills to deal with
different kinds of customers
• An enthusiastic, confident, problem – solving and flexible mindset is important
• Having an emotional and sympathetic approach to people and their problems is an
advantage in this profession
• Good computer application skills such as Microsoft Word, Excel, PowerPoint etc.
• High emotional stability
• Capable of agile cogitating to give quick and accurate response to questions
15. Compensation Plan- The compensation
plan will include a base salary of 2.25 lac p.a.
Location – Delhi/NCR