Unions and Management Key Participants in the Labor Relations.docx

Unions and Management: Key Participants in the Labor
Relations Process
Outline
1. Goals and Strategies: Management and Unions (see Exhibit
4.1)
2. Company goals; The Company wants:
3. To survive and remain competitive
4. To grow and prosper
● To achieve a favorable return on its investment
1. To effectively use human resources
2. To attract, retain, and motivate employees
3. To protect management's rights to make decisions and retain
flexibility
● To obtain commitment from the union that there will be no
strike for the duration of the
agreement
1. Union goals; The Union wants:
2. The Company to survive and remain competitive as well as
for the union to survive and
remain secure
3. The Company to grow and prosper as well as the union
● The Company to achieve a favorable return on its investment
and return "fair" wages to
employees
1. The Company to effectively use human resources within the

rules and policies of the
agreement, and to achieve job security and employment
opportunities for members
2. The Company to attract, retain, and motivate employees
within the rules and policies of
the agreement
3. To protect union and employee rights that were negotiated
and included in the labor
agreement
● To obtain commitment from the company that there will be no
lockout for the duration of
the agreement
1. Company strategic planning
2. Determined by its managerial philosophy, ethics, economic
condition, force, competition,
time in the life of the company, and management capabilities
3. Union or nonunion
● Company strategies (Exhibit 4.2)
1. Nonunion companies' strategies
2. External forces affecting union-management relations:
competition from abroad,
deregulation, and competition from nonunion companies
3. Choice of remaining non-union by using union suppression,
union avoidance, and union
substitution strategies without using unfair labor practices
(Exhibit 4.3)
● Use of positive human resource management and double
breasting
1. Unionized Companies’ Strategies

2. Involvement of union and management
3. Employee representation; grievances
● Rules and policies become company policy
1. Businesslike, codified strategy
2. Accommodation and labor-management cooperation
3. Union contributions to company planning
● Employee empowerment
● Mixed strategy
1. Union strategic planning
1. A mission statement (Exhibit 4.4)
2. Analysis of external environment: demographics, politics,
image, industry trends
● Internal analysis: governance, openness, professionalism
1. Organizational objectives: long-term and short-term
2. Strategy development: survival and growth
3. See Exhibits 4.5 and 4.6 for differences in CWA and CTW
strategic plans
1. Company Organization for Labor Relations Activities
1. In larger corporations, labor relations is usually highly
centralized and policy
decisions are made at corporate level (Exhibit 4.7)
2. In smaller companies decisions are made at plant level
● Organization for labor relations are at the plant level (Exhibit
4.8)
● Union Governance and Structure
1. Power, authority, and legitimacy flow upward (Exhibit 4.9)

2. Union governance comparable to unit of state or federal
government
● Wide diversity of multi-level organizational relationships,
functions of officers, and
degrees of control
1. The local union
1. Branch of national union
2. Main point of contact for the individual employee
● Operates under national union’s constitution
1. Organizational chart Exhibit 4.10
1. Differences between craft and industrial unions
1. Craft union members organized by craft or skill
2. Industrial union members organized on an industry basis
2. Upward trend toward general unions
1. Differing Scope of the Labor Agreement
3. Short labor agreements
4. Several employers
● Local agreements
1. Differing skills
1. Types of skills
2. Training
1. Differing Job Characteristics
3. Short work assignments
4. Union hiring hall. Serves as placement office
● Pre-hire agreements
1. Differing Leadership Roles

1. Business agent; could accumulate power
2. Shop stewards represent business agents
● International union representative; enforces national
constitution
1. Government and Operation of the Local Union
1. Participation in Meetings
2. Attendance varies when union is confronted with important
business
3. Rises when meeting location is convenient
● Personal invitation
1. Use of electronic information services
2. Union leaders, departmental representatives, union stewards
always attend
3. Provide perks for attending meetings
● Meeting attendance required to run for office
● Average two hours. Reports from treasurer, project leaders,
and committee chairpersons
1. Business of local generally accomplished
1. Functions of the meeting
2. Union’s most important governmental activity
3. Opportunity for members to communicate with leaders
● Important decisions are made
1. The National or International Union
1. Occupies the "kingpin" position of influence (Exhibit 4.11)
2. The constitution of the union guides its government
2. The constitution restricts the power of the national union,
encourage union activity in

collective bargaining and political action, and contain
provisions to protect individual
rights of members
1. The Convention—supreme governing body of unions; final
court for union
decisions; nomination of officers; reporting; agenda for policy
formulation.
1. Use of delegate system; Delegates dependent on number of
members
2. Committee work, debates, and voting, similar to Congress
● Subjects covered include internal government matters,
collective bargaining problems,
and resolutions for or against policies
1. Leadership and democracy—officers and executive board
direct affairs of union
between conventions and Landrum-Griffin Act provisions
promote democracy
2. Profile of labor leaders—most come from working-class
families; fathers were
hourly employees; they have an average of 14.1 years of
education
3. Administration: departments and staff serve interests of
members; Presidents
paid well; members, stewards, and local officials not
compensated
4. Professional staff members—appointed or politically elected,
international union
representative, staff representative, business agent, or
organizer; other group

performs more technical duties, includes professionals
1. Unions today use more modern human resource policies and
practices
2. In-house training provided
● Unions’ own staff stops from advancing
1. Services to and Control of Locals
1. Negotiation of master labor agreements, support of strike
activities, arbitration, advice
and counsel on internal administration
2. National union assists locals in collective bargaining,
grievance administration, strike
activities, and internal financials; in addition, it provides
counseling and consultation for
internal financial administration, such as bookkeeping, dues
collection, and purchases.
● National union could replace local leaders with a trustee
1. Dues, Fees, and Distribution of Funds
1. Dues check off system
2. Portion of monthly dues for each member goes to national
union
● Dues go to general fund, strike fund, convention fund, union
publications, educational
activities, and retirement fund
1. Mergers of National Unions
Mergers occur through amalgamation (two unions joining
together), or absorption (larger union

absorbing a smaller union)
1. Overlooked behavioral dimensions
2. Members tend to evaluate mergers in practical terms
● Five unions with over 5 million members have dominated
merging activity
1. Intermediate organizational units
1. Regional or district offices—located closer to membership so
as to better
serve local unions
2. Trade conferences—grouping of unions who have common
industry interests
● Conference boards—organized within international unions to
prepare for negotiations
with a particular company
1. Joint councils—groups of local unions in a specific location
that have common goals,
problems, etc.
1. Independent unions
1. 41 independent unions at national level and 1,500 at the local
level.
2. Employee associations
2. Support new associations which provide a wide range of
services to members
3. Services include diploma equivalency classes, English
classes, toll-free hotline, courses
on sexual harassment, etc.
1. Managerial and professional organizations

4. Managers, supervisors, and professional employees join
organizations for their mutual
aid and insurance
5. Use union-like tactics, such as collective action, skill
certification, and political activities
● Organizations do not engage in collective bargaining
1. The American Federation of Labor-Congress of Industrial
Organizations (AFL-CIO)
2. 56 national and international unions, 60,000 local unions, and
about 12.7 million
members
3. Administer about 150,000 labor agreements, over 99 percent
negotiated without strikes
● Principle of autonomy—each affiliate conducts its own affairs
1. Governing body is the Executive Council, composed of the
president,
secretary-treasurer, and 55 vice-presidents
2. Executive council meets at least three times a year to handle
operational duties
3. President has authority to supervise affairs of the federation
and direct its staff
1. Organizational structure (Exhibit 4.12)
1. Convention, the supreme governing body, meets every two
years
2. Executive Council—composed of president, executive vice-
president,

secretary treasurer, and 55 vice-presidents
● Standing committees on various subjects to assist member
unions
1. General Board acts on matters referred to it by Executive
Council
2. 51 state federations bodies advance interests at state levels
3. Many local central bodies advance interests at local levels
● Financial activities—financed through member dues ($0.75
per month per capita tax is
used for operational expenses)
● Internet access to 17 million members, retirees, and associate
members, as well as
low-cost computers; Union Privilege Benefit Programs (Exhibit
4.13)
1. Associate membership program
2. Partnerships with worker centers
3. Local department councils; Union Cities program
1. Other activities of the AFL-CIO
1. Educational and informational; Website; blogs; courses in
union leadership development;
speakers for educational institutions; educational films
2. Working America program
● Lobby and political records publishing; get-out-the-vote
campaigns
1. Political activities through COPE (Committee on Political
Education)
1. Use of information technology by unions
2. Internal communications between union officers, staff, and
members, particularly when
they are geographically dispersed
3. External communications, such as to inform the public about

union issues potentially
affecting the public, workers, and unions
● Facilitation of bargaining activities
1. Contract administration, such as communicating grievances
and tracking decisions of
arbitrators
2. Union organizing, such as making contact with potential
union members and providing a
means for interested employees to communicate with the union
3. Political action, such as informing potential voters about
union views and those held by
organized labor’s friends and adversaries
● Importance of technology to modernize unionism
● Concerns over use of Internet and email
● Union corruption and the Landrum-Griffin Act
1. Abuses of power exposed by McClellan hearings of late
1950s
2. Phasing out of court supervision of Teamsters activities in
2015
● Level of corruption in unions is negligible
1. AFL-CIO established Ethical Practices Committee
2. In 1959 Congress passed Landrum-Griffin Act to promote
union democracy, leadership
accountability, and financial integrity; contains provisions
governing union operations and
government

3. The 1984 Comprehensive Crime Control Act, backed by AFL-
CIO, closed loopholes in
laws against labor malfeasance; contains the Labor
Racketeering Amendments
● Union security
1. Union security clause
1. Union security provisions
2. Closed shop: employee must first become a union member to
obtain a job; made
unlawful by LMRA in 1947
3. Union shop; non-union employee can be hired but must
become member within
certain period to remain employed (See exhibit 4.14)
2. Communications Workers v. Beck (487 U.S. 735 [1988]),
held that a union shop clause
only requires a bargaining unit member to become a financial
core union member; full
union member is subject to imposition of union conditions
3. Beck rights; annual notification, accounting of funds,
implementation procedures
● Bush Executive Order 132301 requires federal contractors to
post notices informing
workers of their Beck rights
1. Obama Executive Order 13496 requiring federal contractors
to post a notice informing
employees of their rights under federal labor laws – see Exhibit

4.15
1. Agency Shop; does not require employee to join the union but
requires the
employee to pay the union a sum equivalent to union
membership dues
2. Contingency union shop; union security provision will
automatically convert to a
union shop provision if a state’s right-to-work laws are
eliminated
3. Union hiring hall; employers hire employees referred by the
union if the union can
supply a sufficient number of qualified applicants
4. Preferential treatment clause; current employees who are
union members will be
given preference over nonemployees when a new facility is
opened
5. Dues checkoff; makes collection of union dues more
convenient for union and
union members
6. Right-to-Work laws: Controversy and Effects
2. Under Section 14 b of the LMRA, a state may initiate
legislation prohibiting union
membership as a condition of employment (Exhibit 4.16)
3. 25 states have right-to-work (RTW) laws (Exhibit 4.17)
● Republican party influences places emphasis on passing RTW
laws
1. National Right to Work Committee
2. Wage disparity in favor of non RTW laws states

1. Arguments for Right to Work Laws
3. Required union membership conflicts with employees’ free
choice and the requirement to
join a union and/or pay union is undemocratic
4. Requiring union membership violates the employees’
constitutional rights of free speech
and association if dues are used to support member activities
● Required union membership concedes too much power to
union officials
1. Arguments for abolishing Right-to-Work Laws
2. Elimination of “free riders”
3. Union exists by majority vote of the bargaining unit
● Union security clause keeps the employers from weakening
employees support for the
union because all employees will be paying dues
1. Recent U.S. Supreme Court Decision
2. June 2014, U.S. Supreme Court ruled that an agency fee
provision in collective
bargaining violated employees’ free speech under the first
amendment of the U.S.
Constitution
CHAPTER 5
Why and How Unions Are Organized

Outline
1. Why Unions Are Formed
1. Work and job conditions
2. Alienation Theory: Employees seek collective action to
relieve their feelings of alienation
caused by division of labor and mechanized manufacturing
under capitalist ownership
3. Scarcity Consciousness Theory (Selig Perlman): employees
unionize to protect jobs in a
job-scarce labor market through work rules, apprenticeship
programs, seniority layoff
programs, and legislation to protect employees' job rights
● Wheeler Model of Union Formation: A two-stage process that
involves (1) worker’s
readiness to take some form of aggressive action and (2) that
worker coming together
with other workers to take some form of collective action
1. Employees' background and needs
1. Previous membership
2. Parental attitudes and family experiences
● Needs for affiliation, status, and belonging
1. Race—positively associated with pro-union attitudes
1. Influences on Employees’ Votes for and against Unions
(Exhibit 5.1)
2. Employee confidence that union will improve their personal
situations
3. Employee must be convinced of "union instrumentality"
Factors include: social

pressure, job satisfaction/dissatisfaction, and attitudes and
beliefs about
unions
1. Union challenge of organizing the diverse work force
4. Attraction of minorities, contingent, skilled, and part-time
employees
5. Part-time employees
1. Organizing professional employees
6. Compatibility of unionism with professionalism
7. Pro: collective bargaining can achieve and maintain
professional values
● Con: unionization is a rejection of key professional values
1. Activities of the Union in Organizing Employees
1. Initial interests in unionization—employees dissatisfied with
some work-related
situation
2. Employees begin process of unionization
3. Roles of union organizers
4. Changing workforce
5. Training of union organizers; AFL-CIO Organizing Institute
(Exhibit 5.2)
6. Union organizers identify problems and show employees how
the union can
assist in solving problems (see Exhibit 5.3)
7. Rank and file intensive strategy yields higher win rates (see
Exhibit 5.4)

● Activities of the Company in Union Organizing
○ Must convince employees it deserves their support, or at least
a second chance
○ Employer enters campaign with three distinct advantages
○ Favorable position during pre-election campaign
● Use and effectiveness of employer tactics and practices:
hiring lawyers, rumors, delays
1. Second chance strategy
2. Use of consultants and attorneys
● Surface bargaining
1. Illegal discharge is used by some employers when financial
gains of keeping union out
are greater than legal costs of law violation and reinstatement
2. Worker misclassification; employee vs independent
contractor
3. Employee rights under the NLRA
1. Unintended Consequences of Anti-Union Behavior
4. Employees’ fear of reprisals
5. Stress effects to employees
1. Methods of Organizing Unions (Exhibit 5.5)
1. Voluntary recognition; Card Check Procedure; neutrality
agreement (Exhibit 5.6)
2. NLRB directives (Gissel case)
1. NLRB Secret ballot elections (Exhibit 5.7 and 5.8)
1. Pre–NLRB-Election Union Campaigns
2. Filing a Petition for the Election
3. Election Investigation and Hearing; directed elections
4. Appropriate Bargaining Unit; community of interests
5. Evaluation for appropriate bargaining unit

1. After the election
1. Unions fail to secure first contract 25 to 30 percent of the
time
2. Employers refuse or fail to bargain 13 percent of the time
● Increase in unfair labor practice charges
1. Duties of the Exclusive Bargaining Agent and Employer
2. After election loss by union (Exhibit 5.9)
3. Mandatory Secret Ballot Elections vs Employee Free Choice
Act (EFCA)
1. Secret Ballot Protection Act
2. Employee Free Choice Act
● Card check procedure (Exhibit 5.10)
1. Conduct of the representation election campaign (Exhibit
5.10)
1. Campaign Doctrines and NLRB Policies
1. Conduct doctrine: isolated incidents must be considered in
light of entire
campaign
2. Analysis of data and conclusions
2. Captive audience–24-hour rule: speeches cannot be presented
to employees
during working hours within 24 hours of election
3. Polling or Questioning Employees
4. Distribution of union literature and Solicitation by
Employees on Company

Property
1. Banned in work areas at all times
2. May not be disruptive to business (limited to nonworking
time and areas), nor
may literature include confidential company data
1. Showing films during Election Campaigns
2. Showing of films does not alone constitute an unfair labor
practice
3. Use of E-Mail, Internet, and Social Media
4. NLRB upheld employer policy banning use of company e-
mail system to support union
organizing
5. New Union Strategies
6. Instituting cyberspace organization with the Internet
1. Union salts
2. Corporate campaigns
● Strategic Organization Fund (Exhibit 5.11)
1. Decertification Procedures
2. Fair treatment of employees by employers
3. Poor job by unions (especially smaller unions) of providing
services to members
● Inability of unions to negotiate an effective first contract after
winning bargaining rights
1. Striking employees having skills that can be readily replaced
so that when a strike
occurs, the employer hires replacements
2. Good Faith Doubt; Objective evidence (Exhibit 5.12)
3. Raid elections

Q1 2017
www.bmiresearch.com
INDIA
COMMERCIAL BANKING REPORT
INCLUDES 5-YEAR FORECASTS TO 2020
Published by:BMI Research
India Commercial Banking Report Q1 2017
INCLUDES 5-YEAR FORECASTS TO 2020
Part of BMI’s Industry Report & Forecasts Series
Published by: BMI Research
Copy deadline: October 2016
ISSN: 1747-8596
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CONTENTS

BMI Industry View
...............................................................................................
................ 7
Table: Commercial Banking Sector Indicators . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Table: Commercial Banking Sector Key Ratios, September 2016
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Table: Annual Growth Rate Projections 2015-2020 (%) . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Table: Ranking Out Of 75 Countries Reviewed In 2016 . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Table: Commercial Banking Sector Indicators, 2013-2020 . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SWOT
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..................................... 9
Commercial Banking
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................................... 9
Political
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Economic
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................................................ 13
Operational Risk
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...................................... 15
Industry Forecast
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............... 17
Industry Trend Analysis
...............................................................................................
............................. 17
Commercial Banking Risk/Reward Index
....................................................................... 21
Asia Commercial Banking Risk/Reward Index
...............................................................................................
21
Table: Asia Commercial Banking Risk/Reward Index . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Market Overview
...............................................................................................
................ 23
Asia Commercial Banking Outlook
...............................................................................................
.............. 23
Table: Banks' Bond Portfolios, 2015 . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23
Table: Comparison of Loan/Deposit & Loan/Asset & Loan/GDP

ratios, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Table: Comparison of Total Assets & Client Loans & Client
Deposits (USDbn) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Table: Comparison of USD Per Capita Deposits, 2016 . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Economic Analysis
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.................................... 27
Competitive Landscape
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..... 31
Market Structure
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...................................... 31
Protagonists
...............................................................................................
........................................... 31
Table: Protagonists In India's Commercial Banking Sector . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Definition Of The Commercial Banking Universe
......................................................................................... 31
List Of Banks
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.......................................... 32
Table: Public Sector Banks . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. 32
Table: Foreign Banks In India . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. 33
Company Profile
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................. 35
Bank of Baroda
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........................................ 35
Table: Stock Market Indicators . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. 37
Table: Balance Sheet (INRmn) . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 37
Table: Balance Sheet (USDmn) . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. 37
Table: Key Ratios (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 38

HDFC Bank
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© Business Monitor International Ltd Page 4
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. 41
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 41
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. 42
Table: Key Ratios (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 42
ICICI Bank
...............................................................................................
.............................................. 43
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. 45
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 45
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. 46
Table: Key Ratios (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 46
Punjab National Bank
............................................................................................ ...
............................... 47
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. 49
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 49
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. 49
Table: Key Ratios (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 50
State Bank of India
...............................................................................................
.................................... 51
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. 53
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 53
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. 54
Table: Key Ratios (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 54
Regional Overview
...............................................................................................
............. 55
Global Industry Overview
...............................................................................................
... 62
Global Commercial Banking Outlook
........................................................................................... ....

........... 62
Regional Outlooks
...............................................................................................
................................... 64
Demographic Forecast
...............................................................................................
...... 69
Table: Population Headline Indicators (India 1990-2025) . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Table: Key Population Ratios (India 1990-2025) . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Table: Urban/Rural Population & Life Expectancy (India 1990-
2025) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Table: Population By Age Group (India 1990-2025) . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Table: Population By Age Group % (India 1990-2025) . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Methodology
...............................................................................................
....................... 74
Industry Forecast Methodology
...............................................................................................
................. 74

Sector-Specific Methodology
...............................................................................................
..................... 75
Risk/Reward Index Methodology
...............................................................................................
................ 76
Table: Commercial Banking Risk/Reward Index Indicators . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Table: Weighting Of Indicators . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. 78
BMI Industry View
Table: Commercial Banking Sector Indicators
Date
Total
assets
Client
loans
Bond

portfolio Other
Liabilities
and capital Capital
Client
deposits Other
September
2015, INRbn 100,135.1 66,858.9 26,418.9 6,857.4 100,135.1
8,976.1 86,139.1 5,019.9
September
2016, INRbn 108,717.5 73,099.7 28,393.9 7,223.8 108,717.5 na
na na
% change y-
o-y 8.6% 9.3% 7.5% 5.3% 8.6% na na na
September
2015, USDbn 1,526.7 1,019.3 402.8 104.5 1,526.7 136.9 1313.3
104.5
September
2016, USDbn 1,632.1 1,097.4 426.3 108.4 1,632.1 na na 108.4
% change y-
o-y 6.9% 7.7% 5.8% 3.7% 6.9% na na 3.7%
Source: BMI; Central banks; Regulators
Table: Commercial Banking Sector Key Ratios, September 2016
Loan/deposit ratio Loan/asset ratio Loan/GDP ratio GDP Per
Capita, USD Deposits per capita, USD

- 67.24% 54.56% 1,535.9 na
- Rising Falling na na
Table: Annual Growth Rate Projections 2015-2020 (%)
Assets Loans Deposits
Annual Growth Rate 19 19 20
CAGR 17 17 20
Ranking 9 10 4
Table: Ranking Out Of 75 Countries Reviewed In 2016
Loan/deposit ratio Loan/asset ratio Loan/GDP ratio
66 9 46
Local currency asset growth Local currency loan growth Local
currency deposit growth
15 17 4

Table: Commercial Banking Sector Indicators, 2013-2020
2013 2014 2015e 2016f 2017f 2018f 2019f 2020f
Total assets, INRbn 84,904.6 93,298.8 104,019.1 117,541.6
138,699.1 163,664.9 193,124.6 229,818.3
Total assets, USDbn 1,373.9 1,479.9 1,572.4 1,703.5 1,981.4
2,321.8 2,726.1 3,227.9
Client loans, INRbn 57,413.4 63,185.2 69,882.5 78,967.2
91,602.0 108,090.3 127,546.6 152,205.6
Client loans, USDbn 929.0 1,002.2 1,056.4 1,144.5 1,308.6
1,533.4 1,800.4 2,137.8
Client deposits, INRbn 72,234.9 80,119.5 88,871.5 106,645.8
127,974.9 153,569.9 184,283.9 221,140.7
Client deposits, USDbn 1,168.8 1,270.9 1,343.4 1,545.6 1,828.2
2,178.6 2,601.3 3,106.0
e/f = estimate/forecast. Source: BMI; Central banks; Regulators
SWOT
Commercial Banking
India Commercial Banking SWOT

Strengths ■ In macroeconomic terms, India is set to be a global
growth outperformer in the
coming years.
■ India's high consumer savings rate and the efficacy of the
regulation undertaken by
the Reserve Bank of India have provided stability.
■ Although loans have been growing rapidly, there are few
signs of the excesses that
have taken place over the last few years versus that of China.
■ The lack of linkages between Indian banks and the global
financial system means that
they are comparatively immune to volatility in global markets.
Weaknesses ■ A legacy of the protection of the commercial
banking sector, which remains
dominated by the State Bank of India, is that efficiency levels
and product offerings
are a long way from best practice globally.
■ The banking system is particularly held back by low levels of
per capita GDP.
■ The logistics involved in running a bank can be daunting due
to the prevalence of
paper-based payment systems (e.g., instruments such as

cheques).
Opportunities ■ India is still under-banked. Per-capita deposits
are low. People with savings often
hold their wealth outside the formal banking system.
■ India's banking industry is progressively being opened up to
competition from foreign
banks.
■ The Reserve Bank of India is looking to enact major reforms
to the sector, after
several years of policy stagnation.
■ Opportunities exist for mutual funds, insurance companies
and organisations offering
related products.
India Commercial Banking SWOT - Continued
■ The government's progressive sale of public banks to private
sector participants
could help improve the management and efficiency of these
institutions.

Threats ■ The development of particular products - such as
mortgages - is hampered by
inefficiencies in the housing market (e.g., a cumbersome legal
system and bizarre
planning regulations) that need to be removed through the
process of reform.
■ It remains to be seen how effective pension and insurance
reforms will be in boosting
financial intermediation.
■ State-directed lending requirements and other debt waivers
reduce the profitability
and resilience of the sector, with asset quality deteriorating over
the past few years.
Political
Political SWOT Analysis
Strengths ■ India is the world's largest democracy. A secular
constitution, framed in 1950,
officially guarantees justice, liberty and equality while aiming
to promote fraternity

among the citizenry. More than 1,600 political parties registered
for the April-May
2014 general elections, competing for the preference of India's
814mn eligible voters.
■ Despite its multitude of problems, India has generally
managed to avoid hard
authoritarian rule or military coups, which have happened in
many other developing
countries, including India's neighbours Bangladesh, Myanmar,
and Pakistan.
Weaknesses ■ Large coalition governments complicate
policymaking at the centre as coalition
partners and outside parties pursue their own agendas. The
competence of state
government varies enormously across India's 35 states and
union territories.
■ India's tense relationship with Pakistan still weighs on
regional stability. The two
countries have gone to war three times since they were
'partitioned' on independence
from British rule in 1947.
■ Issues such as the ineffectiveness of the executive and
judiciary in controlling

underhand practices, the apparent arbitrary allocation of
government licences, and
the uneasy influence of special interest groups remain key
investor concerns.
Opportunities ■ India has in recent years edged closer to the US
in foreign policy. Both the US and
India are democracies and face threats from militant Islamists;
this, combined with the
presence of a 2mn-strong affluent Indian diaspora in the US, is
bringing the two
countries closer together.
■ Thawing relations with Pakistan has made it easier for the
parties to defuse potentially
explosive situations, such as the Mumbai attacks in November
2008, which
Islamabad acknowledges were planned and launched from its
territory.
Threats ■ India's growing regional rivalry with China, if
unchecked, could lead to a more hostile
regional outlook.

Political SWOT Analysis - Continued
■ India has experienced a series of serious terrorist attacks over
the past few years,
perpetrated by radical Islamist and rural Maoist groups. The
surge in Naxalite attacks
has also raised the spectre of further violence.
Economic
Economic SWOT Analysis
Strengths ■ India has a very large domestic market, and rising
domestic demand is a major driver
of economic growth.
■ A vast supply of inexpensive but skilled labour has turned
India into the back office of
the world. Around half of the population is younger than 25.
Weaknesses ■ Despite rapid economic growth, India remains a
very poor country. According to
BMI's estimates, India's GDP per capita was roughly USD1,621

in 2014, a quarter of
the size of China's.
■ Agriculture remains inefficient, and poor monsoon rains can
slash rural incomes and
consumption. Two-thirds of the population depend on farming
for their livelihood.
■ India runs chronic trade and fiscal deficits, both of which are
likely to persist. The
government spends a significant part of its revenue on interest
payments, subsidies,
salaries, and pensions. This limits the amount of money
available for infrastructural
improvements.
Opportunities ■ India's emerging middle class will continue to
drive demand for new goods and
services. A wealthier society, combined with tax reforms, would
serve to boost
revenue receipts, relieving fiscal pressure.
■ The government has implemented some tax reforms. A
uniform goods and services
tax to be implemented in the near future should help boost
compliance, thereby
raising government revenue.

■ With Chinese labour costs rising aggressively, India may well
enjoy a manufacturing
boom in the coming years as multinational look to take
advantage of a young,
competitive workforce and major transport network
improvements.
Threats ■ India's dependency on oil imports is problematic.
This undermines the trade balance
and makes India vulnerable to energy price-driven inflation and
oil price spikes during
periods of political instability abroad.
Economic SWOT Analysis - Continued
■ India is at risk of severe environmental problems. Many of its
cities' air and rivers are
heavily polluted, raising questions about the sustainability of
the economy's rapid
growth.

Operational Risk
SWOT Analysis
Strengths ■ Low minimum wage rates and high productivity
reduce operating costs for
businesses.
■ India has one of the largest and best funded armed services in
the world, offering a
major deterrence against potential adversaries.
■ A high presence of international banks facilitates the flow of
funds into the country
without the risk of losing money in transfer fees.
■ The cost of electricity has fallen marginally in the past
decade.
Weaknesses ■ Major disparities exist in terms of access to
education depending on socio-economic
status.
■ India's cyber capacities are underdeveloped, constricting the
ability to cope with the
emerging cyber threat.

■ Corruption, weak government policies and poor law
enforcement increase legal risks
and operating costs of businesses present in India.
■ High lead times and lengthy administration costs drive up the
cost of doing business
in India and delay supply chains.
Opportunities ■ Investment in education will boost the mean
years of schooling in the medium term.
■ Border cooperation with neighbouring states could reduce
organised crime.
■ Increasing internet penetration rates create opportunity for
internet-focused
businesses.
■ The government is undertaking a number of projects to
increase the quality of India's
ports including the development of a transhipment hub.
Threats ■ Low rate of urbanisation means a highly dispersed
work force, posing a risk to
businesses.

SWOT Analysis - Continued
■ Inefficient bureaucratic processes and corruption facilitate
money laundering activities
and are difficult and time-consuming to root out.
■ India's tense relations with Pakistan reduce the likelihood that
the Kashmir crisis will
be resolved.
■ Poor contract enforceability has the potential to severely
damage small businesses in
need of cheap trials to stay solvent.
Industry Forecast
Industry Trend Analysis
BMI View: We maintain our view that Non Performing Assets
(NPAs) will continue to escalate in 2016 and
2017, especially among Public Sector Banks (PSBs). The large
NPA burden has already weighed on credit
growth and could further undermine financial stability. We

expect new NPAs to originate from steel and
power generation industries due to high leverage and weak
profitability in these sectors. That said, we
believe that RBI's commitment to resolving NPAs will bear fruit
over time.
Following an escalation in stressed assets in Q1FY2016/17
(quarter ending June), we maintain our view that
asset quality will continue to weaken in 2016 and 2017. Public
sector banks face the highest asset quality
risks, which could impede overall credit flows and undermine
financial stability. Increased Non Performing
Assets (NPAs) are especially likely to emerge from the steel
and power-generation sectors due to their
mounting losses and low interest coverage ratios. Over the
longer term, we believe that the Reserve Bank of
India (RBI) will make progress in resolving troubled assets in
the banking system, building on the
momentum of reforms such as bankruptcy law and its previous
efforts to encourage greater transparency in
recognising and declaring NPAs.

Growing NPA Burden In Public Banks
India - Gross NPAs, % Of Total Advances
Source: RBI, BMI
Notes: PSB-Public Sector Bank, PVB - Private Bank, FB -
Foreign Bank
NPAs Remain Concentrated In PSBs And Are Likely To Rise
Further
Non Performing Assets (NPAs) among Scheduled Commercial
Banks (SCBs) accelerated to 8.7% of total
assets in June from 7.8% in March, which was in line with our
expectations. Meanwhile, banks' total
stressed assets, which stood at 12.0% in June 2016, suggest that
future increases in NPAs are likely over the
coming quarters.
Asset quality risks remain concentrated primarily among Public
Sector Banks (PSBs), with NPAs and
stressed assets both exceeding the national aggregate, at 11.3%
and 15.4% respectively in June. Due to their
dominant presence in the banking system, rising NPAs among
PSBs are likely to impede credit flows to the
commercial sector. Banks with high levels of stressed assets are
more likely to adopt a cautious approach

and will be less willing to extend new loans. Indeed, credit
growth to the private sector has slowed, falling
from an average monthly rate of 12.2% y-o-y in 2014 to 9.2% y-
o-y in 2015. This in turn is likely to further
exacerbate NPA risks, as highly indebted firms may be unable
to meet their interest payment obligations
due to liquidity shortages. Interest coverage in India's corporate
sector has declined steadily from a high of
8.7% in June 2007 to just 3.2% in March 2015, and is likely to
remain low over the coming quarters.
Credit Growth Decelerates
India - Credit To The Private Sector, % chg y-o-y
Source: RBI, BMI
Specifically, we highlight that higher NPLs are likely to arise
from steel and power-generation industries
due to the fragile balance sheets and falling cash flows of firms
in these industries. In the steel sector, firms
continue to struggle with low prices and excess capacity,
despite the introduction of anti-dumping taxes. We

also expect a spike in NPAs from power generation firms due to
financial stresses arising from high
electricity distribution losses, theft and pricing failures. For
instance, the interest coverage of the Power
Grid Corporation of India, which supplies approximately half of
India's electricity, dipped to 3.3% in March
2016 compared to 3.6% the previous year, while the company's
debt-to-capital ratio remains high at 71.9%.
RBI Committed To Resolving NPA Burden
That said, we believe that the RBI will maintain a proactive
stance to tackle asset quality risks in the
banking system. Its reform measures will likely lead to
cumulative progress in addressing banks' NPA
burdens. The new RBI governor, Urjit Patel, has signalled his
priority to continue the work of his
predecessor, Raghuram Rajan, on banking sector reforms. While
Rajan initiated measures to encourage
greater NPA recognition and declaration, we expect Patel to
focus on recovering and resolving NPAs in
order to facilitate healthy credit flows and improve the central

bank's policy rate transmission.
We believe that the RBI will engage banks cooperatively when
planning reforms. This could enhance the
effectiveness of future reforms designed to resolve and recover
NPAs. For example, the RBI updated its
rules on allowing banks not to declare the sustainable
component of a restructured loan as a bad asset.
Under the Sustainable Structuring of Stressed Assets (S4A)
mechanism, which was introduced in June
2016, banks are allowed to restructure loans by separating them
into a sustainable and unsustainable
component, before converting the latter into equity instruments
in order to prevent bad debt from piling up.
Banks and rating agencies however have since provided
feedback that the scheme was of limited
applicability due to its strict pre-conditions, including the
minimum loan size of INR5bn. In response, the
RBI announced plans to relax the criteria in October. The RBI
is also conducting discussions with financial
sector professionals to evaluate further measures to resolve
NPAs, which could include creating a bad bank
to separate healthy and toxic assets from banks' balance sheets.

Commercial Banking Risk/Reward Index
Asia Commercial Banking Risk/Reward Index
Commercial Banking Risk/Reward Index Methodology
Since Q108, we have described numerically the banking
business environment for each of the countries
analysed by BMI. We do this through our Commercial Banking
Industry Risk/Reward Index (RRI), a
measure that ensures we capture the latest quantitative
information available. It also ensures consistency
across all countries. Like all of BMI's Industry Risk/Reward
Indices, its takes into account the Rewards on
offer within the banking sector in a given country, but also the
Risks to investors being able to realise those
opportunities. The overall index is weighted 70% towards
Rewards and 30% towards Risks.
Within the Rewards category, we look at factors that are
specific to the banking industry (accounting for
60% of the score within this category), and elements that relate
to that country in general (accounting for
40% of the weighting). These include, but are not limited to,
total assets, asset and loan growth, GDP and

taxation. Likewise on the Risks side, we look at industry-
specific Risks (weighted 40% of the Risks total)
and country-specific Risks (weighted 60%). These include, but
are not limited to, the regulatory framework
and environment, the competitive environment, financial risk,
legal risk and policy continuity.
In general three aspects need to be borne in mind when
interpreting the RRIs. The first is that the Industry
Rewards element is the most heavily weighted of the four
elements, accounting for 42% (60% of 70%) of
the overall Index. Second, if the Industry Rewards score is
significantly higher than the Country Rewards
score, within the Rewards category, it usually implies that the
banking sector is (very) large and/or
developed relative to the general wealth, stability and financial
infrastructure in the country. Conversely, if
the industry score is significantly lower, it usually means that
the banking sector is small and/or
underdeveloped relative to the general wealth, stability and
financial infrastructure in the country. Third,
within the Risks category, the industry-specific elements (ie,
how regulations affect the development of the
sector, how regulations affect competition within it, and
Moody's Investor Services' Ratings for local

currency deposits) can be markedly different from BMI's long-
term Country Risk Index for a given market.
Table: Asia Commercial Banking Risk/Reward Index
Limits of Potential Returns Risks to Potential Returns Overall
Market Structure Country Structure Market Risks Country
Risks Index Ranking
Bangladesh 56.7 47.5 43.3 48.0 50.9 54
China 93.3 60.0 63.3 70.0 76.2 13
Hong Kong 73.3 95.0 73.3 82.0 81.0 10
India 83.3 57.5 60.0 56.0 68.4 24
Indonesia 73.3 65.0 80.0 54.0 68.3 25
Japan 30.0 75.0 66.7 78.0 55.6 47
Malaysia 70.0 80.0 83.3 76.0 75.5 15
Pakistan 50.0 50.0 53.3 46.0 49.7 55
Philippines 56.7 62.5 60.0 62.0 59.7 38
Singapore 66.7 95.0 96.7 84.0 81.3 9

Sri Lanka 33.3 57.5 33.3 50.0 43.1 63
South Korea 80.0 85.0 83.3 78.0 81.4 8
Taiwan 76.7 72.5 86.7 72.0 75.9 14
Thailand 63.3 65.0 86.7 70.0 67.8 31
Vietnam 66.7 57.5 36.7 54.0 58.2 41
New Zealand 53.3 87.5 86.7 82.0 72.1 20
United States 93.3 85.0 100.0 82.0 89.8 2
Scores out of 100, with 100 the highest. Source: BMI
Market Overview
Asia Commercial Banking Outlook
Table: Banks' Bond Portfolios, 2015
Bond Portfolio, USDbn Bond as % total assets Year-on-year
growth %
Bangladesh 35.8 21.9 8.7
China* 1,873.0 8.7 17.5

Hong Kong* 379.2 19.8 8.1
India 405.5 25.8 10.6
Indonesia** 17.3 4.3 17.7
Japan 1,917.4 22.8 -7.9
Malaysia 64.0 11.9 -11.8
Pakistan 65.2 51.0 45.5
Philippines 50.3 21.7 8.6
Singapore 96.3 12.9 6.2
Sri Lanka*** 8.1 21.9 8.4
South Korea 565.2 23.0 9.8
Taiwan*** 202.9 15.1 3.1
Thailand 73.9 15.4 0.3
Vietnam* 20.4 10.9 64.4
New Zealand 8.3 2.5 -11.0
United States 667.9 4.3 3.2
Source: Central banks, regulators, BMI. * Only 2012 data
available. **Only 2011 data available. *** Only 2014 data
available

Table: Comparison of Loan/Deposit & Loan/Asset & Loan/GDP
ratios, 2016
Loan/Deposit
ratio % Rank Trend
Loan/Asset
ratio % Rank Trend
Loan/GDP
ratio % Rank Trend
Bangladesh 90.7 37 Falling 53.6 42 Falling 46.3 52 Rising
China 80.5 49 Falling 52.8 45 Falling 153.9 7 Rising
Hong Kong 65.5 67 Falling 38.5 65 Falling 304.3 1 Falling
India 74.0 63 Falling 67.2 10 Falling 57.3 47 Rising
Indonesia 92.8 34 Falling 66.2 12 Falling 36.3 59 Rising
Japan 70.4 64 Falling 46.8 54 Falling 94.1 24 Falling
Malaysia 82.1 45 Falling 61.5 22 Falling 121.6 14 Falling
Pakistan 59.4 71 Falling 40.4 63 Falling 21.9 68 Rising
Philippines 75.3 59 Falling 57.1 46 Falling 46.0 53 Rising

Singapore 103.9 20 Rising 56.7 34 Falling 147.7 9 Falling
Sri Lanka 78.9 52 Falling 57.2 33 Falling 31.6 63 Rising
South Korea 81.0 47 Falling 68.1 11 Falling 126.4 12 Rising
Taiwan 80.9 48 Falling 62.6 27 Falling 168.7 4 Rising
Thailand 95.4 29 Falling 68.3 8 Falling 87.9 27 Rising
Vietnam 88.1 40 Falling 76.5 2 Falling 112.1 15 Rising
New Zealand 212.1 1 Falling 90.5 1 Falling 175.7 2 Rising
United States 107.1 14 Rising 76.5 3 Falling 66.3 35 Rising
Source: Central banks, regulators, BMI
Table: Comparison of Total Assets & Client Loans & Client
Deposits (USDbn)
2016 2015
Total Assets Client Loans Client Deposits Total Assets Client
Loans Client Deposits
Bangladesh 184.7 99.1 109.2 163.2 87.6 98.8
China 33,095.0 17,466.6 21,687.4 30,669.1 16,186.3 21,028.1

Hong Kong 2,517.8 969.6 1,480.3 2,474.9 972.2 1,387.0
India 1,703.5 1,144.5 1,545.6 1,572.4 1,056.4 1,343.4
Indonesia 509.5 337.2 363.4 444.8 294.3 320.1
Japan 9,924.3 4,647.5 6,598.7 8,404.8 3,943.8 5,656.1
Malaysia 606.0 372.6 453.9 536.7 330.0 383.9
Pakistan 145.9 58.9 99.4 128.0 51.6 86.7
Philippines 241.3 137.7 182.8 232.3 121.9 176.8
Singapore 747.8 424.1 408.0 746.3 423.2 395.2
Sri Lanka 44.2 25.3 32.0 40.0 22.9 29.5
South Korea 2,468.7 1,681.1 2,076.5 2,452.8 1,638.9 2,039.6
Taiwan 1,425.2 891.7 1,102.6 1,347.0 818.4 1,042.1
Thailand 513.0 350.6 367.4 480.7 328.5 340.9
Vietnam 285.5 218.4 247.8 261.8 200.3 229.3
New Zealand 327.6 296.6 139.9 327.9 287.0 140.0
United States 16,182.3 12,384.2 11,558.4 15,559.9 11,683.2
11,008.0

Table: Comparison of USD Per Capita Deposits, 2016
GDP Per Capita
Client Deposits,
per capita
Rich 20% Client Deposits,
per capita
Poor 80% Client
Deposits, per capita
Bangladesh 80 51 15 670
China 7 191 12 15,689
Hong Kong 8 465 9 201,499
India 69 77 14 1,165
Indonesia 13,600 39 12 1,395
Japan 102 134 2 52,236
Malaysia 4 148 8 14,761
Pakistan 105 37 15 516
Philippines 49 61 14 1,788
Singapore 1 142 3 71,624

Sri Lanka 155 40 16 1,539
South Korea 1,220 156 6 41,115
Taiwan 32 209 5 47,130
Thailand 35 92 10 5,391
Vietnam 23,300 127 18 2,624
New Zealand 1 83 1 30,638
United States 1 62 6 35,661
Economic Analysis
BMI View: The Indian economy expanded by 7.6% in real terms
in FY2015/16 (April-March) from 7.2% in
the previous year, and we maintain our view that the South
Asian economy will be the fastest growing major
economy over the coming years. Nevertheless, we also retain
our FY2016/17 real GDP growth forecast of
7.2%, and highlight that the economy is still facing ongoing
challenges from weak private investment and

external headwinds.
India's real GDP growth accelerated to 7.9% y-o-y in
Q4FY2015/16 (quarter ending March 2016) from
7.2% y-o-y in the previous quarter, bringing growth for the
whole of FY2015/16 (April-March) to 7.6%,
which was above both our forecast (7.3%) and Bloomberg
consensus forecasts (7.5%). We continue to
believe that India will be Asia's fastest growing major economy,
and we maintain our FY2016/17 real GDP
growth forecast of 7.2%. However, we reiterate that the Indian
economy will continue to face ongoing
challenges from weak private investment in the infrastructure
sector and external headwinds, which will
prevent the economy from meeting consensus expectations of
7.7% expansion in FY2016/17.
Strong Growth From Industrial And Services Sectors
India - Percentage Points (pp) Contribution To Real GDP
Growth By Sectors
Source: MOSPI

Manufacturing And Services Sectors To Continue
Outperforming
We hold a constructive outlook on the Indian manufacturing
sector owing to supportive policies and
structural factors including India's large, cheap labour force,
and we believe that the sector will continue to
grow at a robust rate over the coming quarters. Indeed, the
Indian statistics office reported that the
manufacturing sector expanded by 9.3% y-o-y in Q4FY2015/16
(versus 11.5% y-o-y in the previous
quarter), and it contributing 1.7 percentage points (pp) to the
Q4FY2015/16 headline GDP growth figure.
We believe that India's manufacturing sector will continue to
benefit from the government's 'Make In India'
campaign amid the improvements in the power and mining
sector, despite slowing reforms to simplify the
country's complex labour laws (see ''Make In India' To Spur
Manufacturing Sector, But Targets Too
Ambitious', May 31).
Meanwhile, growth in India's services sector (which accounts
for approximately 45% of GDP) came in at a
strong rate of 8.7% y-o-y in Q4FY2015/16, despite a slight
slowdown from 9.1% y-o-y in Q3FY2015/16.
We believe that the services sector, particularly the transport

and logistics category, will continue to
perform well over the coming months as domestic trade activity
will continue to grow. The category will be
boosted by the delivery of agricultural produce to various areas
of the country and inputs for the
manufacturing sector through freight.
Investment Environment And External Sector Outlook Still
Weak
Despite the strong headline GDP figure, we continue to
highlight that the Indian economy is still facing
significant challenges. One of the key sectors that is facing
difficult times is the agricultural sector, despite
an improvement in real growth to 2.3% y-o-y in Q4FY2015/16
(versus a contraction of 1.0% y-o-y in
Q3FY2015/16). According to the India Meteorological
Department, the 2016 summer monsoon rainfall will
likely exceed the 50-year average by 6.0%. Although the
outlook for production in the upcoming
FY2016/17 season is more positive owing to the return of more
normal rains in 2016 after two straight years
of below-par monsoon rainfall, growth is still likely to remain
relatively subdued amid ongoing structural
inefficiencies such as poor irrigation. Moreover, should rainfall
disappoint again this year, agricultural

production in domestic grains, oilseeds crop as well as sugar
would likely be subdued.
In addition, gross capital formation growth continues to trend
lower, having fallen into negative territory of
-2.4% y-o-y in Q4FY2015/16, and this highlights India's weak
private investment environment. We believe
that this slow pace of investment growth is unlikely to improve
significantly over the coming quarters as
structural issues will hinder investment in the infrastructure
sector. Although the Modi administration
remains committed to attracting private investment into the
infrastructure sector through its focus of
enhancing Public-Private partnerships (PPPs) in its FY2016/17
Union and Railway Budget, the sector is still
hindered by red tape and recurring project delays. A third of
approximately 1,000 construction and
infrastructure projects valued at USD210bn are still delayed,
and while this actually presents progress
compared with 42% last year, it still shows the pervasiveness of
bottlenecks. The main reasons for this

include the fact that the balance sheets of infrastructure
companies are still stressed, while there are delays
in land acquisition and gaining environmental clearance,
coupled with contractual issues, which result in
time and cost overruns. Lastly, the Indian banking sector is still
stressed, which will also impede the
efficient allocation of credit to the corporate sector, and prevent
a significant pick-up in investment.
Furthermore, there are still no signs of a significant
improvement in India's external sector, as net exports
contributed negatively to the headline GDP growth number for
the fourth consecutive quarter, subtracting
-0.1pp in Q4FY2015/16. Despite being the Asian economy that
is least exposed to the slowing Chinese
economy, the Indian economy has significant trade exposures to
the US and Europe, with the two regions
accounting approximately 36% of overall exports. The US
economy is showing signs of weakness amid
falling corporate profitability. Meanwhile, the EU economy is
still fragile due to the ongoing political
uncertainties in the region. Therefore, given the uncertainties in
the global economy, we do not expect
Indian exports to recover strongly over the coming quarters.

Trading Above Resistance
India - Nifty Index
Source: Bloomberg
Potential To Rally Further Amid Positive Sentiment
With respect to Indian equities, the Nifty Index could rally
further towards the 9,000 level, despite its still
lofty valuations owing to positive investor sentiment. Looking
at the technical picture, the Nifty Index has
already broken near-term resistance at around the 8,000 level.
Competitive Landscape
Market Structure
Protagonists
Table: Protagonists In India's Commercial Banking Sector

Central bank: Reserve Bank of India (RBI)
www.rbi.org.in
The RBI was established in 1935 in accordance with the
Reserve Bank of India Act 1934. Its principle functions are to
'regulate the issue of bank notes and keeping of reserves with a
view to securing monetary stability in India and generally
to operate the currency and credit system of the country to its
advantage. The RBI was nationalised in 1949, and has
remained government owned ever since. Through the Board of
Financial Supervision, a committee of the central board of
directors of the RBI, the central bank is the supervisor and
regulator of the commercial banking sector and other financial
institutions and banking finance companies. The RBI's functions
include: formulation and implementation of monetary
policy; management of foreign exchange; issuing of notes and
coins; being a banker to government; being a banker to
banks; and 'a wide range of promotional functions to support
national objectives' in relation to development.
Principal banking regulator: Reserve Bank of India (RBI)
www.rbi.org.in
Among its other roles, the RBI regulates the commercial
banking sector.
Banking trade association: Indian Banks' Association (IBA)
www.iba.org.in
The interests of India's commercial banking sector are
represented by the IBA, established in 1946. It has 139 ordinary
and more than 98 associate members. Its membership includes
public sector banks, private sector banks, foreign banks

with offices in India, and urban cooperative banks.
Definition Of The Commercial Banking Universe
We define the universe of Indian banks as including 91
organisations, which are variously identified by the
Indian Banks' Association as public sector banks (27), private
sector banks (23) and foreign banks in India
(41). Public sector banks include 20 nationalised banks, the
State Bank of India (SBI), the five associates
of SBI and the Industrial Development Bank of India (IDBI).
List Of Banks
Table: Public Sector Banks
Nationalised Banks
Allahabad Bank
Andhra Bank
Bank of Baroda
Bank of India
Bank of Maharashtra

Bhartiya Mahila Bank
Canara Bank
Central Bank of India
Corporation Bank
Dena Bank
Indian Bank
Indian Overseas Bank
Oriental Bank of Commerce
Punjab & Sind Bank
Syndicate Bank
UCO Bank
Union Bank of India
United Bank of India
Vijaya Bank
State Bank of India (SBI)
IDBI Bank

Associates of SBI
State Bank of Bikaner & Jaipur
State Bank of Hyderabad
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore
Source: IBA, BMI
Table: Foreign Banks In India
AB Bank Ltd
Abu Dhabi Commercial Bank
American Express Banking Corporation
Australia & New Zealand Banking Group
Bank of America
Bank of Bahrain and Kuwait
Barclays Bank

BNP Paribas
Citibank
Commonwealth Bank of Australia
Credit Agricole CIB
Credit Suisse AG
DBS Bank
Deutsche Bank
Doha Bank
FirstRand Bank
HSBC Bank Oman S.A.O.G
ICBC
Industrial Bank of Korea
JPMorgan Chase Bank
Japan Bank for International Cooperation
JSC VTB Bank
KBC Bank N.V.
KEB Hana Bank
Krung Thai Bank

Mashreq Bank
Mizuho Corporate Bank
National Australia Bank
National Bank of Abu Dhabi
Rabobank International
Sberbank
SBM Bank (Mauritius)
Foreign Banks In India - Continued
Shinan Bank
Societe Generale
Sonali Bank
Standard Chartered Bank
Sumitomo Mitsui Banking Corporation
Bank of Nova Scotia
Bank of Tokyo-Mitsubishi UFJ

HSBC Ltd
Royal Bank of Scotland
The Toronto Dominion Bank
UBS
United Overseas Bank
Westpac Banking Corporation
Woori Bank
Source: IBA, BMI (as of October 2016)
Company Profile
Bank of Baroda
SWOT Analysis
Strengths ■ Large state-backed bank.
■ Well capitalised balance-sheet and robust business model.
■ Strong overseas footprint.
Weaknesses ■ Branch network could be far stronger to garner
faster growth from expanding

economy.
■ Both deposits and lending activity declined during FY16.
■ Saw a net profit in FY15 turn into a net loss in FY16.
Opportunities ■ International and domestic expansion plans.
Threats ■ Uncertain regional economic climate could hamper
international expansion and
growth at home.
■ GNPA increased significantly in FY16.
■ Bank caught up in money laundering scandal.
Company Overview Mumbai-based Bank of Baroda was
established in 1908 and is now normally ranked
behind State Bank of India and Punjab National Bank amid the
biggest state-owned
banks in India. At the end of 2014, the government owned a
56.3% stake in the bank,
with the remaining shares publicly listed.
The bank had a total of 5,479 branches globally as of October
2016, including 5,372 in
India and 107 overseas outlets.. The lender also has 13 zonal
controlling offices and 56
regional controlling offices. The bank has subsidiaries in
Botswana, Kenya, Uganda,

New Zealand, Tanzania, Trinidad & Tobago, Guyana, and
Ghana. The bank also has
representative offices in Thailand, and branches in 15 other
countries, including the US,
UK, and China.
The bank signed a partnership agreement with the Khalifa
Industrial Zone Abu Dhabi
(Kizad) in the UAE in July 2011 to supply its tenants with retail
banking facilities and
financial services. The deal is part of Kizad's 'one-stop-shop'
approach to providing for
its businesses and Baroda will help the zone in trying to attract
more overseas
investment.
In 2015 Bank of Baroda has been caught up in an alleged
INR60bn foreign exchange
scam. As a result, the Reserve Bank of India (RBI) is likely to
make it mandatory for all
lenders to report smaller transactions from a single account.

Corporate
Highlights
During FY16 to the end of March 2016, Bank of Baroda
consolidated its operations and
focused on sustainable performance by taking steps to re-
balance its portfolio towards
reducing the cost of its liabilities and improving yield on assets.
Thus the total deposits
of the bank were at INR5,740,380mn as of the end of FY16 as
compared to
INR6,175,600mn last year. Advances were at INR3,837,700mn
as of the same date, but
down from INR4,280,650 in FY15. The bank remained cautious
in lending to the large
corporate and SME segment.
In FY16, international business contributed 31.3% of global
business.
Gross Non-Performing Assets (GNPA) of the bank increased
from INR162,610mn as of
the end of FY15 to INR405,210mn in FY16. The bank's
Provision Coverage Ratio (PCR)
was at 60.09% in FY16 as against 52.70% in Q316.
Bank of Baroda posted a lower operating profit of INR88,160mn

for FY16, down from
INR99,150mn in FY15 on account of increased slippages
leading to lower net interest
income of INR127,400mn compared with INR131,870mn in
FY15. The bank posted a
net loss of INR53,960mn in the year ending March 2016,
dropping from a net profit of
INR33,980mn in FY15.
Despite weak financials, the Capital Adequacy Ratio of the bank
as per Basel III
continues to be healthy at 13.17% as of March 2016, with the
Tier 1 capital ratio at
10.79% and the Common Equity Tier 1 (CET-1) at 10.29%.
Meanwhile, the consolidated
group capital adequacy ratio stood at 13.63% as at the end of
March 2016.
In 2014 Moody's affirmed its 'Baa3' long-term credit rating for
Bank of Baroda, though
warned that India's public-sector banks have a negative outlook
due to weakening
profits and deteriorating asset quality. In September 2014 Fitch
affirmed the bank's IDR
at 'BBB-'.

Table: Stock Market Indicators
2009 2010 2011 2012 2013 2014 2015 08-Mar-2016
Market Capitalisation INR 187,215 326,638 260,515 339,255
271,942 465,443 360,947 373,159
Market Capitalisation USD 4,024 7,307 4,906 6,192 4,396 7,362
5,450 5,614
Share Price INR 102.79 179.34 133.07 173.29 129.11 216.78
156.65 161.95
Share Price USD 2.21 4.01 2.51 3.16 2.09 3.43 2.37 2.44
Share Price USD, % change (eop) 92.0 81.6 -37.5 26.2 -34.0
64.3 -31.0 na
Change, year-to-date na na na na na na na na
Shares Outstanding (mn) 1,821 1,821 1,958 2,056 2,106 2,147
2,211 na
Source: Bank of Baroda, Bloomberg
Table: Balance Sheet (INRmn)
2008 2009 2010 2011 2012 2013 2014 2015
Total Assets 1,834,790 2,315,767 2,842,768 3,662,138

4,574,120 5,593,883 6,761,141 7,339,774
Loans & Mortgages 1,064,926 1,455,595 1,777,119 2,320,851
2,920,771 3,336,252 4,037,154 4,354,155
Total Deposits 1,414,093 1,966,084 2,459,511 3,116,032
3,926,159 4,826,389 5,799,971 6,299,813
Total Shareholders' Equity 113,948 133,711 157,740 218,453
286,075 333,918 380,052 422,044
Earnings per share (INR) 8.50 13.09 17.46 24.33 26.80 23.34
23.65 18.22
Table: Balance Sheet (USDmn)
2008 2009 2010 2011 2012 2013 2014 2015
Total Assets 45,744 45,644 63,243 82,134 89,785 102,668
112,890 117,797
Loans & Mortgages 26,550 28,690 39,535 52,052 57,332 61,232
67,408 69,880
Total Deposits 35,255 38,752 54,717 69,886 77,067 88,582
96,841 101,106
Total Shareholders' Equity 2,841 2,635 3,509 4,899 5,615 6,129
6,346 6,773
Earnings per share (USD) 0.21 0.29 0.37 0.53 0.56 0.43 0.39
0.30

Table: Key Ratios (%)
2008 2009 2010 2011 2012 2013 2014 2015
Return on Assets 0.9 1.1 1.2 1.4 1.3 0.9 0.8 0.6
Return on Equities 15.3 19.3 21.9 23.7 20.9 15.5 14.1 9.8
Loan Deposit Ratio 75.3 74.0 72.3 74.5 74.4 69.1 69.6 69.1
Loan Asset Ratio 58.0 62.9 62.5 63.4 63.9 59.6 59.7 59.3
Equity Asset Ratio 6.2 5.8 5.5 5.9 6.2 5.9 5.6 5.7
Total Risk Based Capital Ratio na 14.1 14.4 14.5 14.7 13.3 12.3
13.1
Tier 1 Capital Ratio na 8.5 9.2 10.0 10.8 10.1 9.3 9.9
HDFC Bank

SWOT Analysis
Strengths ■ High-performing and highly rated bank.
■ Large and expanding branch network across India.
■ Strong capital ratios.
■ Expanding branch and ATM network.
■ Net profit up 20.4% in FY16.
Weaknesses ■ Exposure to unsecured consumer finance has had
an adverse affect during a financial
crisis.
Opportunities ■ The acquisition and associated extra business,
including retail customer acquisition.
■ Net revenue up 22.1% in FY16.
■ HDFC is becoming a market leader in fast-growing online and
mobile banking
sectors.
■ Both loans and deposits increased during FY16.
Threats ■ Although still strong, the bank's CAR declined during
FY16.
Company Overview Mumbai-headquartered HDFC Bank was
incorporated in August 1994, and had a
nationwide network of 4,541 Branches and 12,013 ATM's across

2,587 Indian towns
and cities as of June 2016. The bank was established in 1994
after the RBI allowed
private entrants into the banking sector and it is now one of the
country's largest banks
in terms of market capitalisation. HDFC Bank had over 28mn
customers as of March
2014.
HDFC Bank offers a wide range of commercial and
transactional banking services and
treasury products to wholesale and retail customers. The bank
has received many
awards in recent years, including the 'Best Domestic Bank in
India' for the last three
years in Asiamoney magazine.
The bank is 22.5% owned by HDFC Group. The remaining
shares in the bank are
publicly listed on the Bombay Stock Exchange and The National
Stock Exchange of
India. The Bank's American Depository Shares (ADS) are listed
on the New York Stock

Exchange (NYSE) and the Bank's Global Depository Receipts
(GDRs) are listed on
Luxembourg Stock Exchange.
In December 2013, the Reserve Bank of India (RBI) restricted
any further foreign
investment in HDFC after the bank crossed the threshold for
49% foreign ownership.
The bank filed an application with the Foreign Investment
Promotion Board (FIPB) to
increase its foreign shareholding limit to 74%, and this was
eventually approved in
December 2014.
In Q314, HDFC became the leading private-sector bank for
mobile transactions; to
further boost its standing in this fast-growing sector, the bank
launched a new mobile
banking platform in December 2014 and a 'digital wallet' in
January 2015.
In February 2015, HDFC Bank launched a share offer in India
and the US to raise up to
INR100bn (USD1.6bn) to meet the Basel III global banking
industry rules. HDFC, which

reportedly filed with the US watchdog to sell 22mn American
Depositary Shares, also
plans to sell shares to investors in India to raise up to INR20bn
(USD324mn). The lender
secured the Indian government's approval in the week ended
January 31 2015 to raise
up to USD1.6bn by selling shares. However, the government
granted approval on
condition that its foreign ownership must not be more than 74%.
HDFC lacks
immediate capital requirement, but the new finances raised via
share sale are expected
to help boost its growth.
Corporate
Highlights
For the year ended March 2016, HDFC Bank earned total
income of INR709,732mn. Net
revenues (net interest income plus other income) for FY16 were
INR383,432mn, up by
22.1% over INR313,920mn for the year ended March 2015. The
bank's net profit for
FY16 was INR122,962mn, up by 20.4%, over the year ended
FY15. Meanwhile, the

consolidated net profit of the bank increased by 19.8% to
INR128,013mn for the year
ended March 2016.
HDFC's total balance sheet size as of March 2016 was
INR7,088,460mn as against
INR5,905,030mn a year earlier. Total deposits in FY16 came to
INR5,464,240mn, an
increase of 21.2% y-o-y. Advances as of March 2016 were
INR4,645,94omn, an
increase of 27.1% over FY15. Both segments of the Bank's loan
portfolio grew faster
than system loan growth. As per regulatory [Basel 2] segment
classification, the
domestic retail loans and wholesale loans grew by 29.7% and
27.2% respectively (as
per internal business classification grew by 28.4% and 28.5%
respectively).
The bank's total Capital Adequacy Ratio (CAR) as per Basel III
guidelines, was at 15.5%
as at March 2016 (16.8% as at March 2015) as against a
regulatory requirement of 9%.
Tier-I CAR was at 13.2% as at March 2016 compared to 13.7%
as at March 2015.
Gross non-performing assets (NPAs), meanwhile, were at 0.94%

of gross advances by
the end of FY16, as against 0.93% in FY15. Net non-performing
assets were at 0.3% of
net advances as on March 2016. Total restructured loans were at
0.1% of gross
advances as of the same date, flat from FY15.
During 2014, Moody's held HDFC Bank's credit rating at 'Baa2',
with a stable outlook.
S&P also affirmed its BBB- long-term credit rating for HDFC
Bank, though assigned a
negative outlook in September 2014 due to a similar revision
for India's sovereign
rating.
Company Data ■ Website: www.hdfcbank.com
■ Status: Private Sector Bank
2009 2010 2011 2012 2013 2014 2015 08-Mar-2016
Market
Capitalisation INR 730,327 1,088,174 999,027 1,606,969

1,594,440 2,300,405 2,732,522 3,251,642
Market
Capitalisation
USD
15,697 24,341 18,812 29,330 25,777 36,384 41,256 48,916
Share Price INR 340.45 469.27 426.85 678.60 665.85 951.60
1,082.15 1,284.35
Share Price USD 7.32 10.50 8.04 12.39 10.76 15.05 16.34 19.32
Share Price USD,
% change (eop) 78.4 43.5 -23.4 54.1 -13.1 39.8 8.6 na
Change, year-to-
date na na na na na na na na
Shares
Outstanding (mn) 2,127 2,289 2,326 2,347 2,379 2,399 2,506 na
Source: The HDFC Bank Ltd, Bloomberg
2008 2009 2010 2011 2012 2013 2014 2015
Total Assets 1,331,931 1,834,028 2,229,475 2,779,629
3,410,550 4,077,230 5,036,200 6,070,965
Loans & Mortgages 634,181 986,607 1,255,398 1,608,028
1,984,661 2,471,534 3,145,542 3,817,934
Total Deposits 982,671 1,402,550 1,648,599 2,058,420
2,442,434 2,936,254 3,643,210 4,468,111

303,944 368,641 443,184 633,157
36.58 44.10
2008 2009 2010 2011 2012 2013 2014 2015
Total Assets 33,207 36,149 49,599 62,341 66,946 74,832 84,089
97,433
Loans & Mortgages 15,811 19,446 27,929 36,065 38,957 45,362
52,521 61,274
Total Deposits 24,499 27,645 36,676 46,166 47,943 53,891
60,830 71,709
7,400 10,162
0.72

2008 2009 2010 2011 2012 2013 2014 2015
Return on Assets 1.4 1.4 1.5 1.6 1.7 1.8 1.9 1.9
Loan Asset Ratio 47.6 53.8 56.3 57.9 58.2 61.1 62.9 63.3
Total Risk Based Capital Ratio 13.6 15.1 17.5 16.5 16.7 16.9
16.0 16.8
Tier 1 Capital Ratio 10.3 10.2 13.3 12.3 11.7 11.0 11.7 13.7
ICICI Bank
SWOT Analysis
Strengths ■ Dominant private sector bank.
■ Well-capitalised and a high capital adequacy ratio.
■ Highly rated by international agencies.

■ Expanding branch network.
■ Consolidated assets increased in FY16.
Weaknesses ■ The bank has faced losses due to its exposure to
consumer lending.
■ The bank has been forced to sell its subsidiary in Russia and
trim back other
international operations.
Opportunities ■ Increased business with customers in rural
areas (low-value, high-volume
transactions).
■ Expects to increase its infrastructure lending in the short-
term.
■ Advances increased by 12% in FY16.
Threats ■ The gradual entry of foreign banks operating more
fully.
■ New licenses for private banks would pose a threat to existing
players.
■ Decline in profit after tax in FY16.
Company Overview ICICI Bank is India's largest private sector
bank with total assets of INR7,206.95bn at
the end of March 2016 and profit after tax of INR97.26bn as of
the same date. ICICI

Bank, which was founded in 1994 by ICICI Ltd after the
government allowed new
private banks to be established, currently has a network of
4,450 Branches and 14,295
ATM's across India. It has been listed on the Bombay Stock
Exchange since 1998 and
the New York Stock Exchange since 2000.
The bank has subsidiaries in the UK, Russia, and Canada, plus
branches in the US,
Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai. It
also has representative
offices in the UAE, China, South Africa, Bangladesh, Thailand,
Malaysia and Indonesia.
The UK subsidiary has branches in Belgium and Germany.
In 2012, ICICI bank started opening electronic branches - 24/7
one-stop shops for all
banking transactions - and now has over 100 across the country.
In January 2015, to
mark the 60th anniversary since ICICI Ltd was founded, the

bank launched a new
'digital village' project in Gujarat, bringing technological
solutions to banking and
everyday life in rural India.
In December 2014, the bank announced that it would sell its
Russian subsidiary, ICICI
Bank Eurasia, to Sovcombank. The transaction is currently
pending regulatory approval.
The bank also increased the repatriation of capital at its UK and
Canadian subsidiaries
as it looks to the domestic market for future growth.
Corporate
Highlights
Consolidated profit before collective contingency and related
reserve made by ICICI
Bank, and tax, was IRS179,040mn for FY16 compared to
IRS183,390mn for FY15.
Consolidated profit after tax was IRS101,800mn in FY16
compared to IRS122,470mn in
FY15.
The y-o-y growth in domestic advances was 16% in FY16. The
bank continued to see
robust growth in its retail business resulting in a y-o-y growth

of 23% in the retail
portfolio. The retail portfolio constituted about 47% of the loan
portfolio of the bank.
Total advances increased by 12% y-o-y to IRS4,352,640mn as at
March 2016 from
IRS3,875,220mn at March 2015.
In FY16, savings account deposits increased by IRS193,700mn
and current account
deposits increased by IRS93,500mn. The Bank's CASA ratio
was 45.8% at the end of
March 2016 compared to 45.2% at December 31, 2015 and
45.5% in March 2015.
Consolidated profit before collective contingency and related
reserve made by ICICI
Bank, and tax, was IRS179,040mn for FY16 compared to
IRS183,390mn for FY15.
Consolidated profit after tax was IRS101,800mn in FY16
compared to IRS122,470mn in
FY15.
Consolidated assets grew by 11% from IRS8,260,790mn at the
end of March 2015 to
IRS9,187,560mn as of March 2016.
The Bank's capital adequacy at the end of March 2016 as per

Reserve Bank of India's
guidelines on Basel III norms was 16.64% and Tier-1 capital
adequacy was 13.09%,
significantly higher than the regulatory requirements.
Rating's agency Moody's held its long-term credit score for
ICICI Bank at 'Baa2' during
2014, maintaining a stable outlook. Meanwhile, in September
2014 Fitch affirmed its
long-term IDR for ICICI Bank at 'BBB-', noting that the bank
had some of the strongest
financial metrics in the sector.
Company Data Website:
■ www.icicibank.com
Status:
■ Private Sector Bank
Media Contact:
■ Charudatta Deshpande
■ Tel: 91-22-2653-8208

■ Email: [email protected]
2009 2010 2011 2012 2013 2014 2015 08-Mar-2016
Market
Capitalisation INR 977,089 1,315,218 789,104 1,308,643
1,268,544 2,044,925 1,519,003 1,454,812
Market
Capitalisation
USD
21,000 29,420 14,859 23,885 20,508 32,344 22,934 21,885
Share Price INR 175.40 229.02 136.93 227.65 219.75 353.10
261.35 250.10
Share Price USD 3.77 5.12 2.58 4.15 3.55 5.58 3.95 3.76
Share Price USD,
% change (eop) 104.7 35.9 -49.7 61.1 -14.5 57.2 -29.3 na
Change, year-to-
date na na na na na na na na
Shares
Outstanding (mn) 5,566 5,574 5,759 5,764 5,768 5,775 5,797 na
Source: ICICI Bank Limited, Bloomberg
2008 2009 2010 2011 2012 2013 2014 2015
Total Assets 4,856,166 4,826,910 4,893,473 5,337,679

6,192,869 6,748,217 7,475,257 8,260,792
Loans & Mortgages 2,460,377 2,661,305 2,257,781 2,560,193
2,921,254 3,299,741 3,873,418 4,384,901
Total Deposits 2,639,126 2,618,558 2,415,723 2,591,060
2,819,505 3,147,705 3,595,127 3,859,552
627,042 704,682 784,406 872,104
19.13 21.17
2008 2009 2010 2011 2012 2013 2014 2015
Total Assets 121,071 95,140 108,865 119,712 121,560 123,855
124,813 132,578
Loans & Mortgages 61,341 52,455 50,229 57,420 57,341 60,562
64,674 70,374
Total Deposits 65,797 51,612 53,742 58,112 55,344 57,772
60,027 61,942
Total Shareholders' Equity 11,419 9,468 11,695 12,708 12,308

12,933 13,097 13,996
0.35
2008 2009 2010 2011 2012 2013 2014 2015
Return on Assets 0.8 0.7 1.0 1.2 1.3 1.5 1.6 1.6
Loan Deposit Ratio 94.7 101.6 93.5 98.8 103.6 104.8 107.7
113.6
Loan Asset Ratio 51.5 55.1 46.1 48.0 47.2 48.9 51.8 53.1
Total Risk Based Capital Ratio 13.5 14.7 19.2 19.9 19.6 19.7
18.3 17.2
Tier 1 Capital Ratio 10.7 10.3 12.9 12.7 12.8 12.9 13.1 12.9

SWOT Analysis
Strengths ■ Large market share.
■ Dominance in northern India and in rural retail banking.
■ Total business of the bank increased in FY16.
■ Strong capital base.
Weaknesses ■ Potential for political interference.
■ High concentration of foreign currency loans leaves bank
vulnerable to currency
swings.
■ Reputation damaged by the bribes-for-loans scandal.
Opportunities ■ Increased business with customers in rural
areas through banking correspondents
and technology (for the bank to benefit from low-value, high-
volume transactions).
■ Deposits and advances to the bank rose in FY16.
Threats ■ The gradual entry of foreign banks operating more
fully.
■ Rising NPL ratio has led to negative outlook on credit rating.
Company Overview Punjab National Bank (PNB), established in
1895, is India's second largest public sector

bank (the government owned a 58.9% stake as of October 2014)
and its largest
nationalised bank in terms of the number of branches, deposits,
advances, total
business and operating and net profit.
Based in New Delhi, PNB has a network 6,809 branches and
9,669 ATMs in India as of
June 2016. The bank has a presence in 10 countries with four
representative offices,
five overseas branches, three overseas subsidiaries (in London,
Bhutan, Kazakhstan),
and a joint-venture with Everest Bank in Nepal (in which PNB
owns a 20% stake). The
bank has an estimated 89mn customers worldwide.
PNB has a policy of inclusive growth in the Indo-Gangetic
region, which involves
'banking for the unbanked'. In addition to its large network of
nearly 2,500 rural
branches, it has launched a number of ATMs designed for
disabled customers. PNB is
also expanding its international network, and has been granted
permission from the

Reserve Bank of India to open new representative offices in
Myanmar and Bangladesh.
However, in June 2014 the bank announced that it would no
longer be seeking to set up
a subsidiary in Canada due to ongoing delays and regulatory
obstacles.
In 2011, PNB was caught up in a 'bribes-for-loans' scandal that
raised concerns over
corruption at state-run banks in India. The problems continued
in 2014 as within the
space of three weeks in April one branch manager was
sentenced to prison for the
same crime, while another senior manager was arrested on
similar charges.
Corporate
Highlights
PNB's total business of the bank stood at IRS9,653,770mn as of
the end of FY16, up by
9.5% y-o-y. Total deposits of the bank recorded a y-o-y growth
of 10.3% to reach
IRS5,530,510mn in FY16. Meanwhile, net advances increased to
IRS4,123,260mn

registering a y-o-y growth of 8.4% as of the end of March 2016.
Retail loans were at
IRS578,010mn as of the end of FY16, growing 19% on a y-o-y
basis over FY15.
The bank's operating profit for FY16 was at IRS122,160mn,
while net profit reached
IRS39,740mn as of the same date. Total income, meanwhile,
reached a level of
IRS543,010mn in FY16 and net interest income closed the year
ending March 2016 at
IRS153,120mn.
As of the end of March 16, the bank's gross NPA ratio stood at
12.90% and net NPA
ratio was at 8.61%. The restructured assets of the bank declined
to IRS201,440mn in
FY16 from IRS383,150mn a year earlier.
In December 2013, Moody's changed its rating outlook for PNB
from stable to negative
due to concerns over rising NPLs amid an environment of high
interest rates and rising
inflation. The bank's long-term foreign currency rating stands at
'Baa2'. In September
2014, Fitch affirmed PNB's long-term IDR at 'BBB-', with a

stable outlook.
Company Data ■ Website: www.pnbindia.in
■ Status: Public Sector Bank
2009 2010 2011 2012 2013 2014 2015 08-Mar-2016
Market Capitalisation INR 285,728 385,300 247,367 295,526
221,433 396,648 227,188 307,385
Market Capitalisation USD 6,141 8,619 4,658 5,394 3,580 6,274
3,430 4,624
Share Price INR 181.24 244.40 156.16 174.26 125.29 219.10
115.70 144.45
Share Price USD 3.90 5.47 2.94 3.18 2.03 3.47 1.75 2.17
Share Price USD, % change (eop) 80.0 40.3 -46.2 8.2 -36.3 71.1
-49.6 na
Change, year-to-date na na na na na na na na
Shares Outstanding (mn) 1,577 1,577 1,584 1,767 1,767 1,810
1,855 na
Source: Punjab National Bank, Bloomberg

2008 2009 2010 2011 2012 2013 2014 2015
Total Assets 2,037,159 2,535,912 3,035,694 3,862,838
4,704,454 4,966,478 5,748,205 6,360,112
Loans & Mortgages 1,209,461 1,584,534 1,911,109 2,477,466
3,013,465 3,202,891 3,660,732 4,046,141
Total Deposits 1,636,157 2,106,592 2,514,577 3,162,319
3,844,082 3,990,002 4,612,035 5,152,454
295,353 348,353 385,163 425,884
20.32 18.78
2008 2009 2010 2011 2012 2013 2014 2015
Total Assets 50,789 49,983 67,535 86,635 92,344 91,153 95,977
102,074
Loans & Mortgages 30,154 31,232 42,516 55,564 59,151 58,785
61,123 64,937
Total Deposits 40,792 41,521 55,942 70,924 75,456 73,231
77,007 82,692
6,431 6,835

0.31
2008 2009 2010 2011 2012 2013 2014 2015
Return on Assets 1.2 1.4 1.4 1.3 1.2 1.0 0.7 0.6
Loan Asset Ratio 59.4 62.5 63.0 64.1 64.1 64.5 63.7 63.6
Total Risk Based Capital Ratio na na na na 13.0 13.2 12.1 12.9
Tier 1 Capital Ratio na na na na 9.4 10.0 9.3 9.7

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