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Fundamental analysis of banking sector
- 1. FUNDAMENTAL ANALYSIS OF BANKING SECTOR Presented by:- HimanshuShrimali B2F-13 1
- 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. Purpose The mainpurpose 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. Research objective Tostudy 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. Methodology Seconder source datacollection by:- Equitymaster.com Moneycontrol.com Birla sun life.com Official websites of banks. Financial accounting 5
- 6. Major players inindustry 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. Ratios Net InterestMargin Capital Adequacy Ratio Net Interest Income Non Performing Assets CASA Loans 7
- 8. AXIS Bank 2013 20142015 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
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- 13. ICICI Bank 2013 20142015 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
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- 18. HDFC Bank 2013 20142015 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
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- 23. State Bank ofIndia 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
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- 28. Bank of Baroda 20132014 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
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- 33. Punjab National Bank 20132014 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
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- 38. Comparisons 2015 Axis Bank ICICI Bank HDFC Bank SBI BOBPNB 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. Conclusions Sector isincreasing 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
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