Académique Documents
Professionnel Documents
Culture Documents
ON
COMPARATIVE STUDY OF FINANCIAL PERFORMANCE OF STATE BANK OF
INDIA AND BANK OF BARODA
Submitted to:
Submitted by:
Institute mentor
Jayati Poddar
Director Sir
DECLARATION
I, Jayati Poddar studying in Dr. Gaur Hari Singhania Institute Of Management and Research do
hereby declare that this project relating to the study of ratio analysis and the title Comparative
Study Of Financial Performance Of State Bank Of India And Bank Of Baroda has been
prepared by me after undergoing the study as part of the PGDM program of GHS-IMR.
I, express a thanks to my Institute mentor- Prof. Prithvi Yadav Sir, Director of GHS-IMR for his
support in the project.
I, further declare that this project work is the outcome of my efforts and not a replica of any other
report/work submitted to any University/ Boards.
Name of Student:
Place:
Jayati Poddar
Kanpur
ACKNOWLEDGEMENT
Last but not the least I would like to thank my parent and friends for their support.
THANKYOU ALL
Jayati Poddar
PREFACE
In any organization, the two important financial statements are the Balance Sheet and Profit &
Loss Account of the business. Balance Sheet is a statement of financial position of an enterprise
at a particular point of time. Profit & Loss account shows the net profit or net loss of a company
for a specified period of time. When these statements of the last few year of any organization are
studied and analyzed, significant conclusions may be arrived regarding the changes in the
financial position, the important policies followed and trends in profit and loss etc. Analysis and
interpretation of financial statement has now become an important technique of credit appraisal.
The investors, financial experts, management executives and the bankers all analyze these
statements. Though the basic technique of appraisal remains the same in all the cases but the
approach and the emphasis in the analysis vary. A banker interprets the financial statement so as
to evaluate the financial soundness and stability, the liquidity position and the profitability or the
earning capacity of borrowing concern. Analysis of financial statements is necessary because it
helps in depicting the financial position on the basis of past and current records. Analysis of
financial statements helps in making the future decisions and strategies. Therefore it is very
necessary for every organization whether it is a financial or manufacturing, to make financial
statement and to analyze it.
Table of content
Chapter No.
1
2
3
4
5
6
7
Particulars
Acknowledgement
Preface
Introduction of banking
Company Profile
State bank of India
Bank of Baroda
Research methodology
Financial Analysis
Ratio analysis
Financial comparative
analysis
Findings, suggestions and conclusions
References
Page no.
3
4
6-18
19-61
83-85
86-96
97-104
105-112
113
INTRODUCTION OF BANKING
INTRODUCTION OF BANKING
DEFINITION OF BANK
Banking Means "Accepting Deposits for the purpose of lending or Investment of deposits of
money from the public, repayable on demand or otherwise and withdraw by cheque, draft or
otherwise."
- Banking Companies (Regulation) Act,1949
ORIGIN OF THE WORD BANK:The origin of the word bank is shrouded in mystery. According to one view point the Italian
business house carrying on crude from of banking were called banchi bancheri" According to
another viewpoint banking is derived from German word "Branck" which mean heap or mound.
In England, the issue of paper money by the government was referred to as a raising a bank.
ORIGIN OF BANKING :
Its origin in the simplest form can be traced to the origin of authentic history. After recognizing
the benefit of money as a medium of exchange, the importance of banking was developed as it
provides the safer place to store the money. This safe place ultimately evolved in to financial
institutions that accepts deposits and make loans i.e., modern commercial banks.
Without a sound and effective banking system in India it cannot have a healthy economy.The
banking system of India should not only be hassle free but it should be able to meet new
challenges posed by the technology and any other external and internal factors.
For the past three decades India's banking system has several outstanding achievements to its
credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or
cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of
the country. This is one of the main reasons of India's growth process.
New phase of Indian Banking System with the advent of Indian Financial & Banking
Sector Reforms after 1991.
Phase I
The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and
Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay
(1840) and Bank of Madras (1843) as independent units and called it Presidency Banks.
These three banks were amalgamated in 1920 and Imperial Bank of India was established which
started as private shareholders banks, mostly Europeans shareholders.
In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National
Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of
India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore
were set up. Reserve Bank of India came in 1935.
During the first phase the growth was very slow and banks also experienced periodic failures
between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the
functioning and activities of commercial banks, the Government of India came up with The
Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per
amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive
powers for the supervision of banking in India as the Central Banking Authority.
During those days public has lesser confidence in the banks. As an aftermath deposit
mobilization was slow. Abreast of it the savings bank facility provided by the Postal department
was comparatively safer. Moreover, funds were largely given to traders.
Phase II
Government took major steps in this Indian Banking Sector Reform after independence. In1955,
it nationalized Imperial Bank of India with extensive banking facilities on a large scale especially
in rural and semi-urban areas. It formed State Bank of India to act as the principal agent of RBI
and to handle banking transactions of the Union and State Governments all over the country.
Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th
July,1969, major process of nationalization was carried out. It was the effort of the then Prime
Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country was
nationalized.
Second phase of nationalization Indian Banking Sector Reform was carried out in 1980 with
seven more banks. This step brought 80% of the banking segment in India under Government
ownership.
The following are the steps taken by the Government of India to Regulate Banking
Institutions in the Country: 1949: Enactment of Banking Regulation Act.
1955: Nationalization of State Bank of India.
1959: Nationalization of SBI subsidiaries.
1961: Insurance cover extended to deposits.
1969: Nationalization of 14 major banks.
1971: Creation of credit guarantee corporation.
1975: Creation of regional rural banks.
1980: Nationalization of seven banks with deposits over 200 crore.
After the nationalization of banks, the branches of the public sector bank India rose to
approximately 800% in deposits and advances took a huge jump by 11,000%.
Banking in the sunshine of Government ownership gave the public implicit faith and immense
confidence about the sustainability of these institutions.
Phase III
This phase has introduced many more products and facilities in the banking sector in its reforms
measure. In 1991, under the chairmanship of M Narasimhama, a committee was set up by his
name which worked for the liberalization of banking practices. The country is flooded with
foreign banks and their ATM stations. Efforts are being put to give a satisfactory service to
customers. Phone banking and net banking is introduced. The entire system became more
convenient and swift. Time is given more importance than money. The financial system of India
has shown a great deal of resilience. It is sheltered from any crisis triggered by any external
macroeconomics shock as other East Asian Countries suffered. This is all due to a flexible
exchange rate regime, the foreign reserves are high, the capital account is not yet fully
convertible, and banks and their customers have limited foreign exchange exposure.
BANKS IN INDIA
In India the banks are being segregated in different groups. Each group has their own benefits
and limitations in operating in India. Each has their own dedicated target market. Few of them
only work in rural sector while others in both rural as well as urban. Many even are only catering
in cities. Some are of Indian origin and some are foreign players.
All these details and many more is discussed over here. The banks and its relation with the
customers, their mode of operation, the names of banks under different groups and other such
useful informations are talked about.
10
One more section has been taken note of is the upcoming foreign banks in India. The RBI has
shown certain interest to involve more of foreign banks than the existing one recently. This step
has paved a way for few more foreign banks to start business in India.
Private Sector
Banks
(26)
Nationalized
Bank
Other
Public
Sector
Banks
(IDBI)
SBI And Its
Associates
Foreign Banks In
India
(25)
(29)
Regional Rural
Banks
(95)
Old Private
Banks
New Private
Banks
11
Public sector banks are those banks which are owned by the Government. The Govt. runs these
Banks. In India 14 banks were nationalized in 1969 & in 1980 another 6 banks were also
nationalized. Therefore in 1980 the number of nationalized bank 20. At present there are total 26
Public Sector Banks in India (As on 26-09-2009). Of these 19 are nationalised banks, 6(STATE
BANK OF INDORE ALSO MERGED RECENTLY) belong to SBI & associates group and 1
bank (IDBI Bank) is classified as other public sector bank. Welfare is their primary objective.
Nationalized banks
Allahabad Bank
Andhra Bank
Bank Of Baroda
Bank Of India
Bank Of Maharastra
Canara Bank
Central Bank Of India
Corporation Bank
Dena Bank
Indian Bank
Indian Overseas Bank
Oriental Bank Of
Commerce
Punjab & Sind Bank
Punjab National Bank
Syndicate Bank
UCO Bank
Union Bank Of India
United Bank Of India
Vijaya Bank
Other
Public
Sector
Banks
IDBI
(Industrial
Developmen
t Bank Of
India)Ltd.
12
These banks are owned and run by the private sector. Various banks in the country such as ICICI
Bank, HDFC Bank etc. An individual has control over there banks in preparation to the share of
the banks held by him.
Private banking in India was practiced since the beginning of banking system in India. The first
private bank in India to be set up in Private Sector Banks in India was IndusInd Bank. It is one of
the fastest growing Bank Private Sector Banks in India. IDBI ranks the tenth largest development
bank in the world as Private Banks in India and has promoted world class institutions in India.
The first Private Bank in India to receive an in principle approval from the Reserve Bank of
India was Housing Development Finance Corporation Limited, to set up a bank in the private
sector banks in India as part of the RBI's liberalization of the Indian Banking Industry. It was
incorporated in August 1994 as HDFC Bank Limited with registered office in Mumbai and
commenced operations as Scheduled Commercial Bank in January 1995. ING Vysya, yet another
Private Bank of India was incorporated in the year 1930
Private sector banks have been subdivided into following 2 categories:Old Private Sector Banks
13
14
Bank International
Indonesia
Bank of America
Shinhan Bank
Socit Gnrale
Bank of Ceylon
Sonali Bank
Barclays Bank
BNP Paribas
Calyon Bank
ChinaTrust Commercial
Bank
Citibank
DBS Bank
Deutsche Bank
The Cooperative bank is an important constituent of the Indian Financial System, judging by the
role assigned to co operative, the expectations the co operative is supposed to fulfil, their
number, and the number of offices the cooperative bank operate. Though the co operative
movement originated in the West, but the importance of such banks have assumed in India is
rarely paralleled anywhere else in the world. The cooperative banks in India plays an important
role even today in rural financing. The businesses of cooperative bank in the urban areas also has
increased phenomenally in recent years due to the sharp increase in the number of primary cooperative banks.
Co operative Banks in India are registered under the Co-operative Societies Act. The cooperative
bank is also regulated by the RBI. They are governed by the Banking Regulations Act 1949 and
Banking Laws (Co-operative Societies) Act, 1965.
15
Rural banking in India started since the establishment of banking sector in India. Rural Banks
in those days mainly focussed upon the agro sector. Regional rural banks in India penetrated
every corner of the country and extended a helping hand in the growth process of the country.
SBI has 30 Regional Rural Banks in India known as RRBs. The rural banks of SBI is spread in
13 states extending from Kashmir to Karnataka and Himachal Pradesh to North East. The total
number of SBIs Regional Rural Banks in India branches is 2349 (16%). Till date in rural banking
in India, there are 14,475 rural banks in the country of which 2126 (91%) are located in remote
rural areas.
Apart from SBI, there are other few banks which functions for the development of the rural areas
in India.
Few of them are as follows.
Haryana State Cooperative Apex Bank Limited
The Haryana State Cooperative Apex Bank Ltd. commonly called as HARCOBANK plays a
vital role in rural banking in the economy of Haryana State and has been providing aids and
financing farmers, rural artisans, agricultural labourers, entrepreneurs, etc. in the state and giving
service to its depositors.
NABARD
National Bank for Agriculture and Rural Development (NABARD) is a development bank in the
sector of Regional Rural Banks in India. It provides and regulates credit and gives service for the
promotion and development of rural sectors mainly agriculture, small scale industries, cottage
and village industries, handicrafts. It also finance rural crafts and other allied rural economic
activities to promote integrated rural development. It helps in securing rural prosperity and its
connected matters.
Sindhanur Urban Souharda Co-operative Bank
Sindhanur Urban Souharda Co-operative Bank, popularly known as SUCO BANK is the first of
its kind in rural banks of India. The impressive story of its inception is interesting and inspiring
for all the youth of this country.
16
Canara Bank
The first Indian Bank to have been started solely with Indian capital.
Punjab
Bank
National
The first among the Private Sector Banks in Kerala to become Scheduled South Indian Bank
Bank in 1946 under the RBI act.
Indias oldest,largest and the most successful commercial bank offering the State Bank of India
widest possible rang of domestic,international and NRI products and
17
Indias second largest Private Sector Bank and is now the largest scheduled The Federal Bank
commercial bank in India.
Limited
The first Indian Bank to open a branch outside India in London in 1946 and Bank of India,
the first to open a branch in continental Europe at Paris in 1974
founded in 1906 in
Mumbai.
The oldest Public Sector Bank in India having branches all over India and Allahabad Bank
serving the customers for the last 132 years.
The first Indian Commercial Bank which was wholly owned and managed by Central
Indians.
India
Bank
of
The countrys middle class accounts for over 320 million People. In correlation with the growth
of the economy, rising income levels, increased standard of living, and affordability of banking
products are promising factors for continued expansion.
The Indian banking Industry is in the middle of an IT revolution, Focusing on the expansion of
retail and rural banking. Players are becoming increasingly customer -centric in their approach,
which has resulted in innovative methods of offering new banking products and services. Banks
are now realizing the importance of being a big playerand are beginning to focus their attention
on mergers and acquisitions to take advantage of economies of scale and/or comply with Basel II
regulation.Indian banking industry assets are expected to reach US$1 trillion by 2010 and are
poised to receive a greater infusion of foreign capital, says Prathima Rajan, analyst in Celent's
banking group and author of the report. The banking industry should focus on having a small
number of large players that can compete globally rather than having a large number of
fragmented players.
19
1955
Pratip Chaudhuri
Hemant G Contractor
B M Chatrath & Co/ Kalyaniwala & Mistry
State Bank Bhavan 8th Floor,
Madame Cama Road Nariman Point,
Mumbai, 400021, Maharashtra
91-22-22883888/22022678
Fax
E-mail
Website
Face Value (Rs)
BSE Code
BSE Group
NSE Code
Bloomberg
Reuters
ISIN Demat
Market Lot
91-22-22855348
gm.snb@sbi.co.in
http://www.sbi.co.in
10
500112
A
SBIN
SBIN IN
SBI.BO
INE062A01012
1
Ahmedabad,Chennai,Delhi,Kolkata,London,Mumbai,
Listing
NSE
Financial Year End
03
Book Closure Month
May
AGM Month
Jun
Datamatics Financial Services, PlotNo-A-16-17 PartB, Cross
Lane MIDC, Marol Andheri (East), Mumbai - 400 093.
Registrar's Name & Address
91-22-28213383/90/66
91-22-28369408
It is the largest Indian banking and financial services company (by turnover and total assets) with
its headquarters in Mumbai, India. It is state-owned. The bank traces its ancestry to British India,
through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it
the oldest commercial bank in the Indian Subcontinent. Bank of Madras merged into the other
two presidency banks, Bank of Calcutta and Bank of Bombay to form Imperial Bank of India,
which in turn became State Bank of India. The government of India nationalized the Imperial
Bank of India in 1955, with the Reserve Bank of India taking a 60% stake, and renamed it the
State Bank of India. In 2008, the government took over the stake held by the Reserve Bank of
India.
SBI provides a range of banking products through its vast network of branches in India and
overseas, including products aimed at non-resident Indians (NRIs). The State Bank Group, with
over 16,000 branches, has the largest banking branch network in India. SBI has 14 Local Head
Offices and 57 Zonal Offices that are located at important cities throughout the country. It also
has around 130 branches overseas.
With an asset base of $352 billion and $285 billion in deposits, SBI is a regional banking
behemoth and is one of the largest financial institutions in the world. It has a market share among
Indian commercial banks of about 20% in deposits and loans. T The State Bank of India is the
29th most reputed company in the world according to Forbes. Also SBI is the only bank featured
21
in the coveted "top 10 brands of India" list in an annual survey conducted by Brand Finance and
The Economic Times in 2010. The State Bank of India is the largest of the Big Four banks of
India, along with ICICI Bank, Punjab National Bank and HDFC Bankits main competitors.
History of state bank of India:
State Bank of India is the largest state-owned banking and financial services company in India.
The Bank provides banking services to the customer. In addition to the banking services, the
Bank through their subsidiaries, provides a range of financial services, which include life
insurance, merchant banking, mutual funds, credit card, factoring, security trading, pension fund
management and primary dealership in the money market.
The Bank operates in four business segments, namely Treasury, Corporate/ Wholesale Banking,
Retail Banking and Other Banking Business. The Treasury segment includes the investment
portfolio and trading in foreign exchange contracts and derivative contracts. The Corporate/
Wholesale Banking segment comprises the lending activities of Corporate Accounts Group, Mid
Corporate Accounts Group and Stressed Assets Management Group. The Retail Banking
segment consists of branches in National Banking Group, which primarily includes personal
banking activities, including lending activities to corporate customers having banking relations
with branches in the National Banking Group.
SBI provides a range of banking products through their vast network of branches in India and
overseas, including products aimed at NRIs. The State Bank Group, with over 16,000 branches,
has the largest banking branch network in India. The State bank of India is the 10th most reputed
company in the world according to Forbes. The bank has 156 overseas offices spread over 32
countries. They have branches of the parent in Colombo, Dhaka, Frankfurt, Hong Kong,
Johannesburg, London and environs, Los Angeles, Male in the Maldives, Muscat, New York,
Osaka, Sydney, and Tokyo. They have offshore banking units in the Bahamas, Bahrain, and
Singapore, and representative offices in Bhutan and Cape Town.
State Bank of India was incorporated in the year 1955. The Bank traces their ancestry to British
India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta,
making them the oldest commercial bank in the Indian Sub-continent. The Government of India
nationalized the Imperial Bank of India in the year 1955, with the Reserve Bank of India taking a
60% stake, and name was changed to State Bank of India.
In the year 2001, the SBI Life Insurance Company was started by the Bank. They are the only
Bank that have been permitted 74% stake in the insurance business. The Bank's insurance
subsidiary 'SBI Life Insurance Company' is a joint venture with Cardif S.A in which Cardif holds
26% of the stake.
During the year 2005-06, the bank introduced 'SBI e-tax' an online tax payments facility for
direct and indirect tax payment. They also launched the centralized pension processing. The
Bank made a partnership with Tata Consultancy Services for setup C-Edg Technologies and
consulting services to the banking, financial services and insurance industry. The bank was noted
as 'The most preferred bank' in a survey by TV 18 in association with AC Nielsen-ORG Marg.
22
Also, the Bank was voted as 'The most preferred housing loan provider' in AWAAZ consumer
awards for the year 2006.
In the customer loyalty survey 2006-07 conducted by 'Business World', the Bank was ranked
number one in all parameters of customer satisfaction, service orientation, customer care/ call
center, customer loyalty and home loans. SBI Funds was judged 'Mutual fund of the year' by
CNBC/TV-18/CRISL. The Bank introduced new products and services such as web-based
remittance, instant fund transfer, online-trading and comprehensive cash management.
During the year 2007-08, the Bank launched 965 branches all over the country. They
inaugurated a new state-of-the art Dealing Room with online connectivity to all active forex
intensive Branches at Corporate Centre in Mumbai. They launched a new product, Construction
Equipment Loan to cater to construction Companies. Also, they introduced new products such as
SBI Reverse Mortgage Loan and SBI Home Plus in the areas of Home Loans.
During the year, the RBI transferred their entire shareholding in the Bank representing 59.73%
of the issued capital of the Bank to the Government of India. The Bank acquired 92.03% of
equity of Global Trade Finance Ltd. Consequently, GTFL became a subsidiary of the Bank. They
signed an MoU with the Indian railways for installing ATMs at 682 railway stations. In March
2008, the Bank opened their 10,000th branch and became only the second bank in the world to
have more than 10,000 branches after China's ICBC. During the year 2008-09, the company
launched Import factoring, a new product in association with SBI Factors & Commercial
Services Ltd. They increased the number of branches for retail sale of gold coins from 250 to
518. Also, they re-launched Gold Deposit Scheme at 50 branches to mobilize gold from domestic
market for deployment as metal loans to jewellers.
During the year, the Bank opened their 11,111th Branch at Sonapur (Kamrup District) in Assam.
They introduced three new products viz., SBI Special Home Loan, SBI Happy Home Loan and
SBI Lifestyle in response to the stimulus package announced by the Government of India. Also,
they entered into an exclusive arrangement with TATA Motors for handling the booking process
of TATA 'Nano' cars. During the year, the Bank launched on their web-site an on-line application
form for registering Auto Loan enquiries and expeditiously monitoring and converting these
leads into Auto Loans. Also, they launched 'e-invest' for the ASBA (applications supported by
blocked accounts) to aid investors for their equity subscriptions, IPO and Rights applications.
During the year, the Bank set up a custodial services company namely SBI Custodial Services
Pvt. Ltd., in joint venture with Societe Generale, France. They signed letter of intent for setting
up of joint venture company for undertaking General Insurance Business. Also, they divested
10% equity stake in its wholly owned subsidiary SBI Pension Fund Pvt. Ltd at cost in favour of
its subsidiaries. In October 2008, the Bank signed an MoU with State General Reserve Fund
(SGRF) of Oman, for a general purpose private equity fund.
During the year, State Bank of Saurashtra (SBS), a wholly owned subsidiary of the Bank,
amalgamated with the Bank with effect from August 13, 2008. They signed a joint venture
agreement with Insurance Australia Group for undertaking General Insurance business. Also,
they signed a joint venture agreement with Macquarie Capital Group, Australia and IFC,
23
Washington for setting up an Infrastructure fund of USD 3 billion for investing in various
infrastructure projects in India.
During the year 2009-10, the Bank opened 1,049 branches, out of which branches were opened
in metro and urban areas with a view to increase the Bank's reach and be more accessible to
customers. In July 2009, SBI introduced 'SBI Loan to Affluent Pensioners' enabling the
government pensioners to avail personal loans upto Rs 3 lakh.
During the year, the Bank designed a special package, the Defence Salary Package, for
personnel of the three Armed Forces i.e. the Army, Navy and Air Force who maintain their
Salary accounts with them. As of March 2010, the Bank had 12,496 branches and 21,485 Group
ATMs. In June 2009, the company increased their shareholding in Nepal SBI Bank Ltd to
55.02% and thus Nepal SBI Bank Ltd became a subsidiary of the Bank with effect from June 14,
2009.
In May
2010, the Bank selected consortium of Elavon Incorporation, USA and Visa International, USA
as their joint venture (JV) partner for Merchant Acquiring Business. They set up a wholly owned
subsidiary, namely SBI Payment Services Pvt Ltd for conducting Merchant Acquiring Business.
In August 2010, State Bank of Indore was amalgamated with the Bank as per the scheme of
amalgamation approved by the Central Board.
During the year 2010-11, the Bank introduced 2 new products, namely 'Pushpa Ullas' and
'Arthias Plus' on pilot basis. They made substantial progress in establishing itself as a leading PE
fund player of the country. Also, they also signed a Joint Venture agreement with State General
Reserve Fund (SGRF) of Sultanate of Oman, a sovereign entity, to set up a general purpose
private equity fund with an initial corpus of USD 100 mn, expandable further to USD 1.5 bn.
During the year, the Bank opened 576 new branches besides merger of 470 branches of
erstwhile State Bank of Indore. Also, they opened 14 foreign offices during the year, taking the
total to 156. In July 1, 2010, the Bank launched their 'Green Channel Counter' at select branches
across the country.
In General Insurance business, the Bank launched limited operations in April 2010 for the
Corporate and Mid Corporate customers based at Mumbai, and it was expanded to six other
major locations in July 2010. In the Retail segment, the Bank launched their Long Term Home
Insurance business at Mumbai in October 2010, which was gradually extended to cover 56
RACPCs and RASMECCs. General Insurance SME business was launched on a pilot basis in
Mumbai and Chennai in February 2011. During the first quarter of the financial year 2011-12,
the Government of India issued the 'Acquisition of State Bank of India Commercial &
International Bank Ltd. vide notification dated July 29, 2011. Consequent to the said notification,
the undertaking of State Bank of India Commercial & International stands transferred to and vest
in State Bank of India with effect from July 29, 2011.
24
1988 During the year bank initiated UPTECH an Industrial Technology Group
to direct and guide programmes aimed at facilitating technology
upgradation.
Also a scheme to develop enterpreneurship among woman under the name
Stree Shakti was launched. Several concessions in respect of margin
and and rate of interest have been built into the package. Three
pilot programmes were launched at Chennai, Calcutta, and Hyderabad.
On 20th September, the bank inaugurated `SBINET,' an integrated
communication project aimed at improving customer service,
operational efficiency and administrative convenience. The network has been
designed to handle voice, fax data and manages through the trunk
routes and exchanges in important centres.
The bank sponsored 30 RRB's covering 66 divisions in the country.
branches were opened raising the branch network to 2,306.
1989 SBICAP, in their capacity as Trustee and Manager of Mutual Fund,
launched two scheme viz., Mangnum Monthly Income Scheme 1989 and
Magnum Tax Service Scheme 1990.
During the same period SBI in association with Morgan Stanley Asset
Management Inc. of USA, launched the India Magnum Fund.
1990 New products launched during the year included a Regular Income
Scheme, offering an assured return in excess of 12% and the first Pure
Growth Scheme aimed at capital appreciation. A Second offshore fund of US
$ 12 million called Asian Convertible and Indian Fund was launched in
association with Asian Development Bank, Manila.
During Kharif 1990, the bank introduced an agricultural credit card,
known as SBI Green Card to give greater liquidity and flexibility to
farmers in procuring agricultural inputs. The scheme was introduced
on a pilot basis in 125 intensive centre branches.
As at on 31st March, SBIMF had over 3,40,000 Indian investors and
about Rs 475 crores by way of investible domestic funds.
50,00,000 No. of shares issued at a prem. of Rs 160 per share.
1991 During February the bank set up a new subsidiary called the SBI
Factors and Commercial Serviced Pvt. Ltd. for rendering factoring services
to the industrial and commercial units in Western India.
1992 The bank sponsored 30 RRBs with a network of 3189 offices covering
102 backward and under banked districts of the country. A sum of Rs
15.25 crores was contributed towards the share capital of the RRBs.
During the period bank intoduced `Stockinvest' scheme. Also
introduced a `Gyan Jyoti' that replaced earlier education loan schemes and
offers substantial augmented assistance to students pursuing higher
studies.
27
SBI is also forming a subsidiary - SBI Gold and Precious Metals Pvt.
Ltd. with 50 per cent equity participation.
Mr. Vepa Kamesam, Deputy Managing Director, has been appointed as
Managing Director with effect from 1st June.
SBI board cleared the setting up of a separate subsidiary forinformation technology.
KC Raut has recently taken charge as general manager at State Bank
ofIndia, Chennai.
The Bank has become the first public sector bank to offer fixed-ratehome loans.
The State Bank of India has tied up with State Bank of Mysore tolaunch
co-branded credit cards as part its strategy to collaborate withassociate banks to expand its cardholder base.
Central Depository Services (India) Ltd has signed an agreement with
State Bank of India as its Depository participant.
State Bank of India and the Exim Bank of the US have signedamemorandum
of understanding, involving 0 million, to support the small and
medium-sized ndian companies to purchase US goods and services.
Mr. Suresh Kumar Mehra, Workmen Directors, ceased to be a member of
theCentral Board of the bank effect from October 1, due to his
retirementat the close of the business on September 30.
The Bank has launched an international credit cards for doctors, the frist of its kind in the country, offering
facilities including specialdiscounts on medical equipment and personal
loans from GE countrywide.
The State Bank of India has introduced a new scheme to boostexports.
The CRISIL has assigned a triple-A (AAA) rating to the State Bank of
India's Rs 3,000 crore bonds programme.
The Bank have decided to close down its fully-owned foreignsubsidiary
- SBI European Bank Ltd., in London.
Mr. S. Mukerji, Managing Director, of the bank retired from the bankon 30th of November.
State Bank of India Mutual Fund has launched the Magnum Gilt Fund,dedicated to
investing in government securities.
2001 The Bank has signed an MoU with Cardif S.A. for the bank's lifeinsurance business.
The Bank has introduced Voluntary Retirement Scheme for eligible
employees, open from the 15th January 2001 to the 31st January 2001.
The Bank has incorporated a subsidiary `SBI Life Insurance CompanyLtd.,' for doing life insurance
business. The Bank will install 10 more Automated Teller Machines in the
north-eastern region in addition to the one already commissioned at Guwahati.
State Bank of India launched three more ATMs i n Bangalore.
Mr Y Radhakrishnan has been promoted to the post of managingdirector
of State Bank of India. SBI Cards has set up a special insurance cell in Ahmedabad for
facilitating the claims of SBI cardholders affected by the tragic earthquake in Gujarat.
SBI has assigned the Delhi-based HCL Com Net to provide it ATMteller
inter-connectivity which could involve investments running into
several hundred crores.
SBI chief general manager Madhav M Mehta, who is currently theoperational head in
Gujarat, has been transferred to its corporate office in Mumbai as chief general manager
(CGM).
31
July 3- Announces the launch of the SBI International card and theSBI
Global Card for global travelers in India. SBI International cards and
SBI Gold Cards would be accepted at over 20 million Visa outletsworldwide and one lakh
outlets in India. State Bank of India has embarked upon an ambitious Rs 800-crore
technology upgradation programme. The bank has appointed KPMG, aconsultant in
computer technology, to provide inter connectivitynetworking to the computerised branches
and also to the ATMs acrossthecountry enabling its customers to transact any kind of
business from anywhere.
State Bank of India was presented the award for JD Power AsiaPacifics2001 India Sales Satisfaction Index
(SSI) and Consumer FinancingSatisfaction (CFS)
State Bank of India has added three more ATMs to its network. ThenewATMs were
installed at SBI's Andheri (west),Goregaon (east),and Borivili (east) branches on September
22. State Bank Of India (SBI) has informed BSE that Shri K.J.Udeshi, ED,RBI has been
nominated on the Central Board of the Bank as nomineeofRBI in place of Dr.Y.V.Reddy,
w.e.f. September 22, 2001 under Sec.19(f)of SBI Act.
State Bank of India has slashed the interest rate on home loans by 0.5per cent to 12 per cent, effective from
September 15.
IN A significant move, the State Bank of India has decided todistance itself from its
subsidiaries - SBI Capital Markets, SBI Gilts, SBIAMCand State Bank of Credit and
Commerce International. They will havethe autonomy, independent chairmen and external executives at theseni
management level at market-related salaries. At present, the
SBI chairman is the ex-officio chairperson of all the subsidiaries,including the associate
banks.
The new scheme will be aimed only at the award staff, a categorythatwas included with
officers in the January 2001 voluntary retirementscheme.
SBI Cards on July 3, announced the launch of the SBI Internationalcardand the SBI Global
Card for global travelers in India.
- VRS implemented in which around 21,000 employees, includingofficers, were permitted
to retire
- The Bank has crossed another milestone by making a successfulforay
into insurance. SBI is the only Bank to have been permitted a 74%
stake
in the insurance business. The Bank's insurance subsidiary, SBI Life
Insurance Company, a joint venture with the Bank holding 74% and
Cardif S.A., the Joint venture partner, the balance 26%, was incorporated to
undertake life insurance and pension business. Cardif S.A. is a
wholly-owned subsidiary of BNP-Paribas, which is the largest bank in
France and one of the top ten banks in the world. Cardif S.A. is the
largest bancassurance company in France.
- The bank's efforts to establish a world -class credit information
bureau in India culminated in the successful setting up of the
Credit
Information Bureau (India) Ltd., a joint venture of the Bank with
HDFC
Ltd., Dun and Bradstreet Information Services India Pvt. Ltd. and
32
-State Bank of India has informed BSE that Shri Janki Ballabh,
Chairman has relinquished office of Chairman at the close of business
hours on his attaining superannuation on October 31, 2002.
-State Bank of India has informed that Smt Vineeta Rai, Secretary
(Banking & Insurance), Ministry of Finance and Company Affairs,
Department of Economic Affairs (Banking Division), New Delhi has been
nominated as Director of the Board with effect from October 30, 2002.
-State Bank of India has informed that the Central Government, after
consultation with the Reserve Bank of India, appointed Shri A K
Purwar, Deputy Managing Director, State Bank as Chairman, State Bank
of India from the date of his taking charge of the post and upto May
31, 2003 i.e. date of his superannuation or until further orders
whichever is earlier. Shri A K Purwar assumed the charge of Chairman,
State Bank of India, on November 13, 2002.
2003
- State Bank of India (SBI) and Maruti Udyog Ltd have announced a
joint initiative aimed at making car finance affordable to middle and
lower middle class customers. Customers will now have transparent car
finance involving no hidden charges and pre-closure penalties, and
also get the dealers' margins, Mr S.K. Bhattacharya, Chief General
Manager, SBI, told newspersons. It will help both the bank and Maruti
to aggressively tap the Andhra Pradesh market, he said. SBI offers
finance facility even for lifetime tax, insurance and accessories of
the vehicle.
- State Bank of India has informed that the Bank has appointed Shri
Ananta Chandra Kalita, Head Assistant, State Bank of India as a
Director on the Central Board of the Bank amongst the employees of
the Bank, who are workmen for a period of 3 years commencing from
July 15, 2003 or until he ceases to be a workmen employee of the Bank
or until further orders, whichever is earlier provided that he shall
not hold the office continously for a period exceeding six year.
- SBI group's total profit identified at Rs 3,354 cr in '02
- Mr. D C Gupta nominated as Director on the Board of SBI
- SBI introduces IT upgradation plan with KPMG help
- SBI Cards and Payment Services Private Ltd, the credit card
subsidiary of the State Bank of India, introduces two new schemes
recently- SBI Advantage Card to the bank's fixed deposit customers
and SBI International Card for its home loan borrowers
34
35
36
- State Bank of India along with ANZ Investment Bank have consummated
5 year syndicate loan facility of 0 million to Indian
Petrochemicals Corporation (IPCL)
- Opens cheque clearing cente at Kolkata
- Inks pact with Mahindra & Mahindra (M&M) for co-branded tractor
scheme SBI-Mahindra Tractor Plus
- Joins hands with Tractors and Farm Equipment Ltd (TAFE) for tractor
loans
- Launches insurance scheme in Kerala
- Unveils new retail bank loan product Credit Khazana, which targets
the bank's housing loan account holders
- Unveils online ticket reservation system 'e-Rail'
- Reserve Bank of India nominates Dr Rakesh Mohan, Deputy Governor,
RBI, on the Central Board of the bank
- Appoints Mr C. Narasimhan as the Chief General Manager of the SBI's Kerala Circle
-Unveils Credit Khazana, retail bank loan product, to target the bank's housing loan account holders
- MRO-TEK Ltd has secured State Bank of India's order of Rs 15-crore
to provide networking solutions of 2Mbps and 64 Kbps high-end leased
line modems for SBI to connect more than 800 branches across the country.
-SBI joins hands with LIC to dentify long-term investment proposals
for LIC
-Tied with bajaj Auto to finance its two wheelers.
-SBI granted Rs 125-cr loan to Nethaji Apparel park to set up units
and buy machinery for the first batch of 54 garment plants in the
65-acre special apparel park.
-The bank has tied up with TVS motor company to finance two wheeler
loans
-Tied up with apollo hospital enterprise to finance for the hospital
treatement.
-The company launched mobile pre-paid cards recharge facility at its
37
ATM's
-Tied up with ICICI Bank and HDFC for sharing ATM networks
2003-Bank has entered into MOU with both ICICI Bank and HDFC Bank for
sharing Bank's ATM Network with them on bilateral terms.
-The Central Government after consultation with the Reserve Bank of
India, appointed Shri Chandan Bhattacharya, Deputy Managing Director
State Bank Of India as Managing Director State Bank Of India for the
period from December 17, 2003 to January 31, 2005.
-The State Bank of India has announced a special package to BSNL
employees by allowing concessional interest rates for different types
of loans to be availed by the BSNL staff.
2004
-Former KCCI President nominated to SBI Bangalore Local Board
-State Bank Of India has informed that Reserve Bank of India has
nominated Shri A V Sardesai, Executive Director, Reserve Bank of
India on the Central Board of State Bank of India vice Dr. Rakesh
Mohan.
-SBI sets up ATM counter in Ernakulam
-Bahrain Monetary Agency (BMA) grants in-principle licence to Statte
Bank of India (SBI)
-SBI sets up India's first drive-in ATM in Hyderabad
-State Bank of India has entered into an alliance with HDFC Bank for
sharing ATM networks to be operationalised from February 3, this
year.
2004
-SBI unveils new branch in Manjeri
-Bank awarded special prize for lending to self help group run by
women
-SBI unveils floating ATM
-State Bank of India appointed six new Deputy Managing Directors on
38
February 11, 2004. The new DMDs are: Mr T.S. Bhattacharya, CGM,
Product Development and Marketing, Mr M.M.Lateef, Managing Director,
SBI Gilts, Mr Yogesh Agarwal, CGM, Chandigarh, Mr Krishnamurthy, CGM,
Madras LHO and Mr R.Ramanathan, CGM, Technology and Mr Vijay Anand,
CGM, Corporate Account group. These top level appointments follow the
appointment of the new Managing Director for the bank, Mr Chandan
Bhattacharya, in December.
-GAIL ties up SBI for e-banking system
-SBI join hands with Visa for travel card
-SBI enters into ATM sharing agreements with UTI Bank & HDFC Bank
-Signs a Memorandum of Understanding (MoU) under which the bank will
provide term loans to farmers for purchasing capital inputs from Jain
Irrigation Systems Ltd (JISL)
-Join hands with Siemens for financing the medical equipments sold by
Siemens
-Joins hands with VST Tillers to launch SBI-VST Shakti, a new loan
scheme for farm mechanisation programme
-Unveils Vishwa Yatra foreign travel card, a prepaid card which
offers the traveller a convenient and secure way to carry cash
-Ties up with Same Deutz-Fahr India for tractor financing
-In ally with Sikkim govt to beef up SMEs
-The government has chosen State Bank of India (SBI) for channelising
government credit to other countries which runs into billions of
dollar
-SBI opens MICR cheque processing center
-Signs MoU with HMT Ltd. for financing their tractors
-State Bank of India deploys Flexcube as core banking solution at
Frankfurt
-Mr Ashok K. Kini appointed as new Managing Director of State Bank of
India with effect from April 1, 2004 to December 31, 2005
-SBI unveils Foreign Travel card in Orissa
39
clause (d) of Section 19 of the State Bank of India Act, 1955 (23 of
1955), has nominated Dr. Rajiv Kumar as part-time non-official
director on the Central Board of Directors of State Bank of India for
a period of three years with effect from September 08, 2008 or until
further orders, whichever is earlier.
- State Bank of India (SBI) has signed a Joint Venture Agreement with
Insurance Australia Group to form a Joint Venture Company which will
be engaged in General Insurance business in India.
- State Bank of India has rolled out a micro insurance scheme
'Grameen Shakti', for its Self Help Group (SHG) members. The product
was launched on Nov 26 at the Tamil Nadu Agricultural University. The
bank is hopeful to cover at least five lakh SHG members by December
31.
-The company has issued rights in the ratio of 1:5 at a premium of
Rs.1580/- Per Share.
2009
- State Bank of India yesterday slashed its benchmark lending rate by
half a percentage point to 11.75 per cent. The Benchmark Prime Lending
Rate (BPLR) was revised down by 50 basis points with effect from June
29, SBI informed the Bombay Stock Exchange. This move would benefit
home, car and corporate loan customers
- State Bank of India on June 30 launched two new home loan products
called as SBI Easy Home Loan and SBI Advantage Home Loan, with zero
processing fees for both waived off till September 30. While SBI Easy
Home is for loans amount up to Rs 30-lakh while the SBI Advantage Home
is for loans above Rs 30-lakh, a press release issued here said.
- State Bank of India, entered into an agreement with the government
of Gujarat to create a fund of Rs 5,000 crore for investing in equity
of infrastructure projects.
2010
- State Bank of India, with a debit card base of over 70 million,
comprising SBI Cash Plus, SBI Gold Debit Card and SBI Yuva Card, has
added chip and PIN-based Platinum Debit Card to its bouquet on March 26.
- Mr Arun Kumar Agarwal has taken over charge as General Manager at
State Bank of India, Kerala Circle. Until now, he has been General
Manager at the Lucknow Circle of the bank. Mr Agarwal is Certified
Associate of Indian Institute of Bankers and joined State Bank of
43
44
2007
2008
2009
2010
2011
526.30
526.30
0.00
0.00
30772.26
0.00
31298.56
435521.09
39703.34
475224.43
60042.26
566565.25
631.47
631.47
0.00
0.00
48401.09
0.00
49032.66
537403.94
51727.41
589131.35
83362.30
721526.31
634.88
634.88
0.00
0.00
57312.82
0.00
57947.70
742073.13
53713.68
795786.81
110697.57
964432.08
634.88
634.88
0.00
0.00
65314.32
0.00
65949.20
804116.23
103011.60
907127.83
80336.70
1053413.7
3
635.00
635.00
0.00
0.00
64351.04
0.00
64986.04
933932.81
119568.96
1053501.77
105248.39
1223736.20
2007
2008
2009
2010
2011
ASSETS
Cash and balances with RBI
Balance with banks, money at call
Advances
Investments
Gross block
Accumulated depreciation
Fixed Assets
Capital work in progress
Other assets
Total assets
Contingent liabilities
Bills for collection
Book value
EPS
29,076.43
51534.62
55546.17
61290.87
94395.50
22892.27
15931.72
48857.63
34892.98
28478.65
337336.49
149148.88
13189.28
8757.33
4431.95
332.23
43777.85
416768.20
189501.27
11831.63
7713.90
4117.73
295.18
35112.76
542503.20
275953.96
10403.03
6828.65
3574.41
263.44
37733.27
756719.45
295600.57
13189.28
8757.33
4431.95
332.23
43777.85
566565.25
721526.31
964432.08
585294.50
205092.29
1023.40
86.29
429917.37
166449.04
1038.76
106.56
614603.47
152964.06
912.73
143.67
631914.15
285790.07
11831.63
7713.90
4117.73
295.18
35112.76
1053413.7
4
429917.37
166449.04
1038.76
144.37
1223736.20
585294.50
205092.29
1023.40
116.07
2008
2009
2010
2011
Income:
Interest earned
Other income
39491.03
7446.76
48950.31
9398.43
63788.43
12691.35
70993.92
14968.15
81394.36
14935.09
Total income
46937.79
58348.74
76479.78
85962.07
96329.45
23436.82
13251.78
42396.48
5707.88
4541.31
0.00
0.34
4541.65
0.00
736.82
125.22
31929.08
14609.55
51619.62
5080.99
6729.12
0.00
0.34
6729.46
0.00
1357.66
165.87
42915.29
18123.66
67358.55
6319.60
9121.23
0.00
0.34
9121.57
0.00
1841.15
248.03
47322.48
24941.01
76796.02
4532.53
9166.05
0.00
0.34
9166.39
0.00
1904.65
236.76
48867.96
31430.88
88959.12
8660.28
7370.37
0.00
0.34
7370.69
0.00
1905.00
246.52
86.29
140.00
594.69
106.56
215.00
776.48
143.67
290.00
912.73
144.37
300.00
1038.76
116.07
300.00
1023.40
3682.15
-2.88
862.04
0.34
5205.69
-0.10
1523.53
0.34
6725.15
306.90
2089.18
0.34
6495.14
529.50
2141.41
0.34
2488.96
2729.87
2151.52
0.34
Expenditure:
Interest expended
Operating expenses
Total expenses
Other provision and contingencies
Net profit
Extraordinary items
Profit B/F
Total
Preference dividend
Equity dividend
Corporate dividend tax
Per share data:
EPS
Equity dividend (%)
Book value
Appropriations
Transfer to statutory reserve
Transfer to other reserve
Proposed dividend/ transfer to govt.
Balance C/F to balance sheet
45
Total
4514.65
6729.46
9121.57
9166.39
7370.69
201003
(12)
200903
(12)
200803
(12)
200703
(12)
97218.96 85962.07
76482.74
58437.42
44671.37
88954.44 76796.02
67361.51
51708.3
40130.06
INCOME :
Total
II. Expenditure
Total
46
0
976.82
8264.52
-10.23
8274.75
0
-1407.75
9166.05
-5.83
9171.88
142
-1055.1
9121.23
-1.71
9122.94
105
-219.43
6729.12
7
6722.12
504
CRAR%
20110
3
20100
3
20090
3
20110
3
7.77
4.21
11.98
20100
3
9.45
3.94
13.39
20090
3
9.38
4.87
14.25
CRAR(%)
Year End
CRAR - Tier I (%)
CRAR - Tier II (%)
Total CRAR (%)
year
47
Total
CRAR
(%)
2009
14.25
2010
13.39
2011
11.98
8857
88.5
-19.83
4541.31
4.52
4536.79
14.5
14.25
14
13.39
13.5
13
12.5
11.98
12
11.5
11
10.5
RATIO ANALYSIS:
CURRENT RATIO:
An indication of a company's ability to meet short-term debt obligations; the
higher the ratio, the more liquid the company is. Current ratio is equal to current assets
divided by current liabilities. If the current assets of a company are more than twice the
current liabilities, then that company is generally considered to have good short-term
financial strength. If current liabilities exceed current assets, then the company may have
problems meeting its short-term obligations.
CURRENT RATIO = CURRENT ASSETS / CURRENT LIABILITY
current ratio
year 2007-2011
year
2007
2008
48
Ratio
0.05
0.07
2009
2010
2011
0.04
0.04
0.04
LIQUID RATIO:
Liquid ratio is also known as Quick or Acid Test Ratio. Liquid assets refer to
assets which are quickly convertible into cash. Current Assets other stock and prepaid expenses
are considered as quick assets.
Ratio
6.52
6.15
2009
2010
2011
5.74
9.07
8.50
quick ratio
10
9
8
7
6
5
4
3
2
1
0
9.07
6.52
6.15
8.5
quick ratio
5.74
Year
Ratio
2007
86.29
50
2008
106.56
2009
143.67
2010
144.37
2011
116.07
Ratio
160
143.67
144.37
140
120
100
116.07
106.56
Ratio
86.29
80
60
40
20
0
1
dividen
51
d per
share
2007
2008
2009
2010
2011
year
14
21.5
29
30
30
35
29
30
25
30
21.5
20
15
30
10
5
0
This ratio indicates the Net margin on a sale of Rs.100. It is calculated as follows:
Net Profit Ratio = Net Profit X 100
Net Sales
This ratio helps in determining the efficiency with which affairs of the business are being
managed. An increase in the ratio over the previous period indicates improvement in the
operational efficiency of the business. The ratio is thus on effective measure to check the
profitability of business.
net
profit
52
ratio
2007
2008
2009
2010
2011
year
10.12
11.65
12.03
10.54
8.55
14
11.65
12
10
12.03
10.54
10.12
8.55
6
4
2
0
It measures the profitability of the business in view of the shareholders. It judges the earning
capacity of the company and the adequacy of return on proprietors funds. Shareholders and
potential investors are interested in this ratio. It is calculated as below:
Return On Net Worth = Net Profit After Interest And Tax x 100
Shareholders Funds
return on
shareholder'
53
s
2007
2008
2009
2010
2011
year
14.5
13.72
15.74
13.89
12.71
18
16
14
15.74
14.5
13.72
13.89
12.71
12
return on
shareholder's
10
8
6
4
2
0
54
2007
2008
2009
2010
2011
year
13.92
10.96
12.81
12.19
14.37
14.37
13.92
12.81
12.19
10.96
10
8
6
4
2
0
5.44
year
2008
2009
2010
2011
6.32
7.2
7.26
7.24
7.2
7
6
7.26
7.24
6.32
5.44
5
assets turnover ratio
4
3
2
1
0
CREDIT-DEPOSIT RATIO:
This ratio is very important to assess the credit performance of the bank. The ratio shows the
relationship between the amount of deposit generated by the bank as well as their deployment
towards disbursement of loan and advances. Higher credit deposit ratio shows overall good
efficiency and performance of any banking institution.
Credit Deposit Ratio
Credits
100
Deposits
deposit
ratio
year
2007
2008
2009
2010
2011
73.44
77.51
74.97
75.96
79.9
82
79.9
80
78
77.51
75.96
76
74.97
74 73.44
72
70
YEAR
57
2007
2008
2009
2010
2011
6.22
8.29
8.37
7.56
8.96
10
9
8.29
7.56
8
7
8.96
8.37
6.22
5
4
3
2
1
0
YEAR
58
2007
2008
2009
2010
2011
8.46
8.96
8.99
8.62
8.48
9.1
8.96
8.99
8.9
8.8
8.7
CAPITAL TURNOVER
RATIO
8.62
8.6
8.5
8.48
8.46
8.4
8.3
8.2
8.1
year
59
2007
2008
2009
2010
2011
0.08
0.09
0.09
0.09
0.08
0.09
0.09
0.09
0.09
0.09
0.09
0.09
total assets turnover
ratio
0.08
0.08
0.08
0.08
0.08
0.08
0.08
0.07
Year
60
2007
2008
2009
2010
2011
11.83
15.38
7.63
14.78
21.92
25
21.92
20
15.38
14.78
15
11.83
10
7.63
year
61
2007
2008
2009
2010
2011
1.67
2.06
1.17
2
2.7
2.7
2.5
2.06
2
1.67
1.5
1.17
1
0.5
0
year
62
2007
2008
2009
2010
2011
15.64
14.46
13.64
15.33
17.07
EV/EBIDTA
18
16
14
12
17.07
15.64
14.46
15.33
13.64
EV/EBIDTA
10
8
6
4
2
0
BANK OF BARODA
63
INTRODUCTION
Bank of Baroda (BoB) (BSE: 532134) (Hindi: ) is the third largest bank in India,
after the State Bank of India and the Punjab National Bank and ahead of ICICI Bank.[3] BoB is
ranked 763 in Forbes Global 2000 list. BoB has total assets in excess of Rs. 3.58 lakh crores, or
Rs. 3,583 billion, a network of over 3,409 branches and offices, and about 1,657 ATMs. It plans
to open 400 new branches in the coming year. It offers a wide range of banking products and
financial services to corporate and retail customers through a variety of delivery channels and
through its specialized subsidiaries and affiliates in the areas of investment banking, credit cards
and asset management. Its total business was Rs. 5,452 billion as of June 30.[4]
As of August 2010, the bank has 78 branches abroad and by the end of FY11 this number should
climb to 90. In 2010, BOB opened a branch in Auckland, New Zealand, and its tenth branch in
the United Kingdom. The bank also plans to open five branches in Africa. Besides branches,
BoB plans to open three outlets in the Persian Gulf region that will consist of ATMs with a
couple of people.
The Maharajah of Baroda, Sir Sayajirao Gaekwad III, founded the bank on 20 July 1908 in the
princely state of Baroda, in Gujarat. The bank, along with 13 other major commercial banks of
India, was nationalized on 19 July 1969, by the government of India.
BALANCE SHEET OF BANK OF BARODA
64
2007
365.53
2008
365.53
2009
365.53
2010
365.53
2011
392.81
365.53
0
0
8284.41
0
8649.94
124915.98
1142.56
126058.54
8437.70
143146.18
2007
365.53
0
0
10,678.40
0
11,043.93
152,034.13
3,927.05
155,961.18
12,594.41
179,599.52
2008
365.53
0
0
12,470.01
0
12,835.54
192,396.95
5,636.09
198,033.04
16,538.15
227,406.73
2009
365.53
0
0
14,740.86
0
15,106.39
241,044.26
13,350.09
254,394.35
8,815.97
278,316.71
2010
392.81
0
0
20,600.30
0
20,993.11
305,439.48
22,307.85
327,747.33
9,656.73
358,397.17
2011
Assets
Cash & Balances with RBI
Balance with Banks, Money at
Call
6413.52
9,369.72
10,596.34
13,539.97
19,868.18
11866.85
13490.77
21,927.09
30,065.89
Advances
Investments
Gross Block
83620.87
34943.63
2244.62
12,929.56
106,701.32
0
43,870.07
3,787.14
143985.90
52445.88
3954.13
175,035.29
61,182.38
4,266.60
228,676.36
71,260.63
4,548.16
1155.81
1088.81
0
5212.5
1,360.14
2427.00
0
4301.83
1644.41
2309.72
0
4578.12
1,981.84
2,284.76
0
4,347.22
2,248.44
2,299.72
0
6,226.40
143146.18
179599.5
227406.73
278,316.71
358,397.180
54999.86
12976.53
237.46
28.18
75364.33
15105.51
303.18
39.41
64745.82
22584.64
352.37
61.14
77,997.01
27,949.60
414.71
83.96
112,272.64
33,735.67
536.16
108.33
Accumulated Depreciation
Net Block
Capital Work In Progress
Other Assets
Total Assets
Contingent Liabilities
Bills for collection
Book Value (Rs)
EPS
IN RS.
CR.
2008
2009
2010
2011
16,698.
3
2,806.3
6
21,885.
9
2,809.1
9
Income:
Interest earned
Other income
65
9,212.6
4
1,381.7
9
11,813.
5
2,051.0
4
15,091.
6
2,757.6
6
Total income
Expenditure:
Interest expended
Operating expenses
Other provision and contingencies
10,594.
4
13,864.
5
17,849.
2
19,504.
7
24,695.
1
5,426.5
6
2,771.4
5
1,369.9
5
9,968.1
7
3,844.6
6
1,809.2
0
15,622.
0
10,758.
9
4,711.2
3
9,568.0
7,901.6
7
3,370.2
7
1,157.0
5
12,429.
0
976.28
16,446.
4
13,083.
7
5,669.8
8
1,699.8
8
20,453.
4
1,026.4
6
0
0
1,026.4
6
1,435.5
2
0
0
1,435.5
2
2,227.2
0
0
0
2,227.2
0
3,058.3
3
0
0
3,058.3
3
4,241.6
8
0
0
4,241.6
8
0
252.46
0
0
340.94
0
0
383.56
0
0
639.26
0
0
753.35
0
28.18
60
237.46
39.41
80
303.18
61.14
90
352.37
83.96
150
414.71
108.33
165
536.16
271.5
444.23
1,136.2
3
502.5
252.46
0
650.35
340.94
0
707.41
383.56
0
1,162.0
7
1,257.0
0
639.26
0
1,387.8
7
2,100.4
6
753.35
0
1,026.4
6
1,435.5
2
2,227.2
0
3,058.3
3
4,241.6
8
Total expenses
Net profit
Extraordinary items
Profit B/F
Total
Preference dividend
Equity dividend
Corporate dividend tax
Per share data:
EPS
Equity dividend (%)
Book value
Appropriations
Transfer to statutory reserve
Transfer to other reserve
Proposed dividend/ transfer to govt.
Balance C/F to balance sheet
Total
2007
2008
2009
2010
2011
year
0.04
0.03
0.02
0.02
0.02
Current Ratio
0.05
0.04
0.04
0.04
0.03
0.03
Current Ratio
0.03
0.02
0.02
0.02
0.01
0.01
0
QUICK RATIO:
Quick
Ratio
year
67
2007
2008
2009
2010
2011
11.29
9.56
9.62
21.88
26.38
0.02
0.02
Quick Ratio
30
26.38
25
21.88
Quick Ratio
20
15
11.29
10
9.56
5
0
Earning
s Per
Share
year
68
2007
2008
2009
2010
2011
28.18
39.41
61.14
83.96
108.33
9.62
108.33
100
83.96
Earnings Per Share
80
61.14
60
40
39.41
28.18
20
0
Total Debt to
Owners Fund
year
2007
2008
2009
2010
2011
14.44
13.77
14.99
15.96
14.55
15.96
16
15.5
14.99
15
14.5
14
13.5
13
12.5
69
14.55
14.44
13.77
Cash Deposit
Ratio
2007
2008
2009
2010
2011
year
4.46
5.7
5.8
5.57
6.11
6
5
5.8
6.11
5.57
4.46
4
3
2
1
0
Credit
Deposit Ratio
year
70
2007
2008
2009
2010
2011
65.67
68.72
72.78
73.6
73.87
72.78
73.6
73.87
72
70
68.72
68
66
65.67
64
62
60
Asset
Turnover
Ratio
year
71
2007
2008
2009
2010
2011
4.25
3.47
4.2
4.48
5.25
5.25
4.25
4.2
4.48
Asset Turnover Ratio
3.47
3
2
1
0
Total Assets
Turnover Ratios
2007
2008
2009
2010
2011
Year
0.07
0.08
0.08
0.08
0.08
0.08
0.08
0.08
0.07
0.07
0.07
0.07
0.06
72
0.08
0.08
Total Assets Turnover
Ratios
0.08
0.07
0.08
0.07
Total Income /
Capital
Employed(%)
2007
2008
2009
2010
2011
year
7.83
8.57
8.51
7.86
7.75
8.6
8.51
8.4
8.2
8
7.86
7.83
7.8
7.75
7.6
7.4
7.2
Net Profit /
Total Funds
year
73
2007
2008
2009
2010
2011
0.8
0.89
1.09
1.21
1.33
1.4
1.21
1.2
1.09
1
0.8
0.8
0.89
0.6
0.4
0.2
0
Dividend Per
Share
2007
2008
2009
2010
2011
Year
6
8
9
15
16.5
16.5
15
16
14
12
10
8
6
4
2
0
74
8
6
YEAR
2007
2008
2009
2010
2011
7.93
7.49
3.95
7.87
9.15
10
9
8
9.15
7.93
7.87
7.49
7
6
5
4
PRICE- EARNING
3.95
3
2
1
0
YEAR
2008
2009
2010
2011
0.94
0.67
1.55
1.8
1.8
1.8
1.55
1.6
1.4
PRICE-BOOK VALUE
1.2
1 0.91
0.94
0.8
0.67
0.6
0.4
0.2
0
ENTERPRISE TO EBIDTA:
EV/EBIDT
A
2007
15.9
YEA
R
76
2008
2009
2010
2011
13.93
14.01
15.93
16.64
17
16.64
16.5
15.93
16 15.9
15.5
EV/EBIDTA
15
14.5
13.93
14
14.01
13.5
13
12.5
TREND ANALYSIS
Trend Analysis is the practice of collecting information and attempting to spot a pattern, or
trend, in the information. In some fields of study, the term "trend analysis" has more formallydefined meaning.
Although trend analysis is often used to predict future events, it could be used to estimate
uncertain events in the past, such as how many ancient kings probably ruled between two dates,
based on data such as the average years which other known kings reigned.
TREND ANALYSIS OF STATE BANK OF
INDIA
BASE YEAR 2006-2007
percentage (%)
figures
200
7
2008
deposits
advance
s
net
profit
77
200
9
201
0
2011
100
123
170
185
214
100
124
161
187
224
100
148
201
202
162
250
200
150
deposits
advances
100
net profit
50
0
2007
2008
2009
2010
2011
INTERPRETATION:
There is a increase in net profits till 2010 but there is a fall in 2011
Bank of Baroda
Base year 2006-2007
In percentage(%) figures
2007
78
2008
2009
2010
2011
deposits
advance
s
net
profit
100
100
122
128
154
172
193
209
245
273
100
140
217
298
413
450
400
350
300
250
deposits
200
advances
net profit
150
100
50
0
2007
2008
2009
2010
2011
INTERPRETATION:
Deposits:The trend shows that the deposits are increasing from 2007-2011
Advances:The trend of advances shows that it is increasing in those four years 2008-2011
Net profit:The trend of net profit shows the increase from 2008-2011
BETA ANALYSIS
A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the
market as a whole. Beta is used in the capital asset pricing model (CAPM), a model that
79
calculates the expected return of an asset based on its beta and expected market returns..
Also known as "beta coefficient".
MONTH
SENSEX
10-Sep
20,069.12
10-Oct
20,032.34
10-Nov
19,521.25
10-Dec
20,509.09
11-Jan
18,327.76
11-Feb
17,823.40
11-Mar
19,445.22
11-Apr
19,135.96
11-May
18,503.28
11-Jun
18,845.87
11-Jul
18,197.20
11-Aug
16,676.75
11-Sep
16,933.83
AVERAGE
RETURN
80
SBI
3,233.
20
3,151.
20
2,994.
10
2,811.
05
2,641.
05
2,632.
00
2,767.
90
2,805.
60
2,297.
80
2,405.
95
2,342.
00
1,974.
50
1,945.
55
RETURN RETUR
OF
N OF
SENSEX SBI
5
6
7
returnreturn
averag
of SBIe of
Averag
return varianc e of
of
e of
return
sensex sensex of SBI
8
covarian
ce of
sensex
and SBI
0.00
-0.03
0.01
0.0001
0.01
0.0001
-0.03
-0.05
-0.01
0.0002
-0.01
0.05
-0.06
0.06
0.0040
-0.11
-0.06
-0.09
0.0088
-0.03
0.00
-0.01
0.0002
0.09
0.05
0.10
0.0108
-0.02
0.01
0.00
0.0000
-0.03
-0.18
-0.02
0.0004
0.02
0.05
0.03
0.0010
-0.03
-0.03
-0.02
0.0005
0.09 0.002686
0.01 0.000268
-0.08
-0.16
-0.07
0.0050
-0.12 0.008358
0.02
-0.01
0.03
0.0008
0.02 0.000683
-0.01
-0.04
0.0026
0.00200
0.00014
-0.02 0.001407
-0.02 0.002018
0.04 0.000525
0.09 0.009392
0.05 0.000167
-0.14
0.00289
COVARIANC
E
0.001995
59
VARIANCE
0.002642
95
BETA
0.755062
MONT
H
10-Sep
SENSEX
20,069.12
RETUR
N OF
BANK RETUR BANK
OF
N OF
OF
BAROD SENSE BAROD
A
X
A
872.8
10-Oct
20,032.34
1,011.00
-0.0018
0.1583
10-Nov
19,521.25
937.75
-0.0255
-0.0725
10-Dec
20,509.09
896.5
0.0506
-0.0440
11-Jan
18,327.76
869.15
-0.1064
-0.0305
11-Feb
17,823.40
870.85
-0.0275
0.0020
11-Mar
19,445.22
963.15
0.0910
0.1060
11-Apr
19,135.96
912.15
-0.0159
-0.0530
11May
11-Jun
81
18,503.28
18,845.87
863.4
871.9
-0.0331
0.0185
-0.0534
0.0098
5
return
avera
ge of
return
on
sense
x
0.010
9
0.012
8
0.063
3
0.093
6
0.014
8
0.103
7
0.003
2
0.020
3
0.031
variance
of
sensex
return
avera
ge of
return
on
BOB
covarian
ce of
sensex
and
BOB
0.00011
9
0.00016
4
0.00401
0.00876
8
0.00021
9
0.01075
7
1.01E05
0.00041
4
0.00097
0.165
0
0.072
5
0.044
0
0.030
5
0.002
0
0.106
0
0.053
0
0.053
4
0.009
0.0018
0.0009
-0.003
0.0029
-3E-05
0.011
0.0002
0.0011
0.0003
11-Jul
18,197.20
878.3
-0.0344
0.0073
11-Aug
16,676.75
736.6
-0.0836
-0.1613
11-Sep
16,933.83
774.8
0.0154
0.0519
AVERAGE
RETURN
-0.0127
-0.0066
COVARIAN
CE
0.00234
VARIANCE
0.00264
3
BETA
0.88438
5
2
0.021
7
0.070
8
0.028
1
0.00047
1
0.007
3
0.161
3
0.051
9
0.00501
8
0.00079
2
0.00264
3
-0.00016
0.0114
0.0015
0.0023
RATIO ANALYSIS
A tool used by individuals to conduct a quantitative analysis of information in a company's
financial statements. Ratios are calculated from current year numbers and are then compared to
previous years, other companies, the industry, or even the economy to judge the performance of
the company. Ratio analysis is predominately used by proponents of fundamental analysis.
There are many ratios that can be calculated from the financial statements pertaining to a
company's performance, activity, financing and liquidity. Some common ratios include the priceearnings ratio, debt-equity ratio, earnings per share, asset turnover and working capital.
SUSTAINABLE EARNINGS OF BANK OF BARODA
IN RS. CR.
201103 (12)
INCOME :
82
201003 (12)
200903
(12)
Total
24695.1
19504.7
17876.11
13892.18
10438.12
Total
20453.42
16446.37
15648.91
12456.66
9411.66
0
0
4241.68
-0.12
0
0
3058.33
56.12
0
0
2227.2
62.29
11
-3.12
1435.52
0.22
7.5
-3.11
1026.46
8.01
4241.8
3002.21
2164.91
1435.3
1018.45
II. Expenditure
2164.91
3002.21
4241.8
Sum = 9408.92
Average = 3136.30
Standard deviation
1044.466
Rounding off
1044
20110
3
20100
3
20090
3
20110
3
9.99
4.53
14.52
20100
3
9.2
5.16
14.36
20090
3
8.49
5.56
14.05
CRAR(%)
Year End
CRAR - Tier I (%)
CRAR - Tier II (%)
Total CRAR (%)
83
year
Total
CRAR
(%)
2009
14.05
2010
14.36
2011
14.52
14.6
14.52
14.5
14.4
14.36
14.3
14.2
14.1
14
13.9
13.8
84
14.05
RESEARCH METHODOLOGY
85
RESEARCH TOPIC
OBJECTIVE OF THE STUDY:1. To know the strength and weakness of State Bank Of India and Bank Of Baroda through
Ratio analysis.
2. To evaluate the performance of the companies.
3. To understand the liquidity, profitability and efficiency positions of the companies.
4. To make comparison between the ratios during different periods.
INTRODUCTION
Financial Management is the specific area of finance dealing with the financial decision
corporations make, and the tools and analysis used to make the decisions. The discipline as a
whole may be divided between long-term and short-term decisions and techniques. Both share
the same goal of enhancing firm value by ensuring that return on capital exceeds cost of capital,
without taking excessive financial risks.
Capital investment decisions comprise the long-term choices about which projects receive
investment, whether to finance that investment with equity or debt, and when or whether to pay
dividends to shareholders.
Short-term corporate finance decisions are called working capital management and deal with
balance of current assets and current liabilities by managing cash, inventories, and short-term
borrowings and lending (e.g., the credit terms extended to customers). Corporate finance is
closely related to managerial finance, which is slightly broader in scope, describing the financial
techniques available to all forms of business enterprise, corporate or not.
RESEARCH METHODOLOGY
86
The conclusive research is being used to study the comparison of the companies.
Data collection:
Secondary data is being taken
Websites
Outcomes of the study:
1. With this analysis we come to know about the strength and weakness of State Bank Of
India and Bank Of Baroda through Ratio analysis.
2. To evaluate the performance of the companies.
3. To understand the liquidity, profitability and efficiency positions of the companies.
4. To make comparison between the ratios during different periods.
Limitation of the study:
The study is done in Kanpur
Study is constrained to only the comparison of State Bank Of India and Bank Of Baroda.
TOOLS USED:
Comparative analysis
Ratio analysis
Trend analysis
Beta valuation
Sustainable earnings
Basel-II CRAR % capital requirement
Cash Flow Statement Analysis
STATISTICAL TOOL:
CAPITALINE
SPSS
87
FINANCIAL ANALYSIS
88
Ratios are relative figures reflecting the relation between variables. They enable analyst to draw
conclusions regarding financial operations. They use of ratios as a tool of financial analysis
involves the
comparison with related facts.
NATURE OF RATIO ANALYSIS
Ratio analysis is a technique of analysis and interpretation of financial statements. It is the
process of establishing and interpreting various ratios for helping in making certain decisions. It
is only a means of
understanding of financial strengths and weaknesses of a firm. There are a number of ratios
which can be calculated from the information given in the financial statements, but the analyst
has to select the appropriate data and calculate only a few appropriate ratios. The following are
the four steps
involved in the ratio analysis.
Selection of relevant data from the financial statements depending upon the objective of the
analysis.
Calculation of appropriate ratios from the above data.
Comparison of the calculated ratios with the ratios of the same firm in the past, or the ratios
developed from projected financial statements or the ratios of some other firms or the
comparison with ratios of the
industry to which the firm belongs.
INTERPRETATION OF THE RATIOS
The interpretation of ratios is an important factor. The inherent limitations of ratio analysis
should be kept in mind while interpreting them.
The impact of factors such as price level changes, change in accounting policies, window
dressing etc., should also be kept in mind when attempting to interpret ratios.
IMPORTANCE OF RATIO ANALYSIS
Aid to measure general efficiency
Aid to measure financial solvency
Aid in forecasting and planning
Facilitate decision making
Aid in corrective action
Aid in intra-firm comparison
Act as a good communication
Evaluation of efficiency
Effective tool
LIMITATIONS OF RATIO ANALYSIS
Differences in definitions
Limitations of accounting records
Lack of proper standards
No allowances for price level changes
Changes in accounting procedures
Quantitative factors are ignored
Limited use of single ratio
Background is over looked
90
Limited use
Personal bias
IN THE VIEW OF FUNCTIONAL CLASSIFICATION THE RATIOS
ARE
1. Liquidity ratio
2. Leverage ratio
3. Activity ratio
4. Profitability ratio
1. LIQUIDITY RATIOS
Liquidity refers to the ability of a concern to meet its current obligations as & when there
becomes due. The short term obligations of a firm can be met only when there are sufficient
liquid assets. The short term obligations are met by realizing amounts from current, floating (or)
circulating assets The current assets should either be calculated liquid (or) near liquidity. They
should be convertible into cash for paying obligations of short term nature. The sufficiency (or)
insufficiency of current assets should
be assessed by comparing them with short-term current liabilities. If current assets can pay off
current liabilities, then liquidity position will be satisfactory.
To measure the liquidity of a firm the following ratios can be
calculated
Current ratio
Quick (or) Acid-test (or) Liquid ratio
Absolute liquid ratio (or) Cash position ratio
(a) CURRENT RATIO:
Current ratio may be defined as the relationship between current assets and current liabilities.
This ratio also known as Working capital ratio is a measure of general liquidity and is most
widely used to
make the analysis of a short-term financial position (or) liquidity of a firm.
Outstanding expenses
Cash at bank
Bills receivable
Inventories
Work-in-progress
Marketable securities
Short-term investments
Sundry debtors
Prepaid expenses
Bank overdraft
Bill payable
Short term advances
Sundry creditors
Dividend payable
Income-tax payable
91
Current liabilities
Outstanding or accrued expenses
Bank overdraft
Bills payable
Short term advances
Sundry creditors
Dividend payable
Income tax payable
Current liabilities
Cash in hand
Cash in bank
Interest on fixed deposits
92
2. LEVERAGE RATIOS
The leverage or solvency ratio refers to the ability of a concern
to meet its long term obligations. Accordingly, long term solvency ratios
indicate firms ability to meet the fixed interest and costs and repayment
schedules associated with its long term borrowings.
The following ratio serves the purpose of determining the
solvency of the concern.
Proprietory ratio
(a) PROPRIETORY RATIO
A variant to the debt-equity ratio is the proprietary ratio which
is also known as equity ratio. This ratio establishes relationship between
share holders funds to total assets of the firm.
Proprietory ratio = Shareholders funds/ Total assets
Shareholder fund
Total Assets
Share capital
Reserve& surplus
Fixed assets
Current assets
Cash in hand
Cash at bank
Bills receivable
Inventories
Marketable securities
Short term investment
Sundry debtors
Prepaid expenses
3. ACTIVITY RATIOS
Funds are invested in various assets in business to make sales
and earn profits. The efficiency with which assets are managed directly
effect the volume of sales. Activity ratios measure the efficiency (or)
effectiveness with which a firm manages its resources (or) assets. These
ratios are also called Turn over ratios because they indicate the speed with which assets are
converted or turned over into sales.
Working capital turnover ratio
Fixed assets turnover ratio
Capital turnover ratio
Current assets to fixed assets ratio
(a) WORKING CAPITAL TURNOVER RATIO
Working capital of a concern is directly related to sales.
Working capital= current assets current liabilities
It indicates the velocity of the utilization of net working capital.
This indicates the no. of times the working capital is turned over in the
course of a year. A higher ratio indicates efficient utilization of working
93
Current liabilities
Cash in hand
Cash at bank
Bank overdraft
Bills receivable
Bills payable
Prepaid expenses
Sundry creditors
Inventories
Dividend payable
Work in progress
Marketable securities
Sundry debtors
(b) FIXED ASSETS TURNOVER RATIO
It is also known as sales to fixed assets ratio. This ratio measures the efficiency and profit
earning capacity of the firm. Higher the
ratio, greater is the intensive utilization of fixed assets. Lower ratio means
under-utilization of fixed assets.
Fixed assets turnover ratio = Cost of Sales/ Net fixed assets
Cost of Sales = Income from Services
Net Fixed Assets = Fixed Assets - Depreciation
(c) CAPITAL TURNOVER RATIOS
Sometimes the efficiency and effectiveness of the operations
are judged by comparing the cost of sales or sales with amount of capital
invested in the business and not with assets held in the business, though in
both cases the same result is expected. Capital invested in the business may be classified as longterm and short-term capital or as fixed capital and working capital or Owned Capital and Loaned
Capital. All Capital
Turnovers are calculated to study the uses of various types of capital.
Capital turnover ratio= cost of goods sold/capital employed
Capital employed = capital+ reserves& surplus
94
Fixed assets
Cash in hand
Plant
Cash at bank
Machinery
Bills receivables
Land
Building
Inventories
Vehicles
Sundry debtors
Work in progress
Marketable securities
4. PROFITABILITY RATIOS
The primary objectives of business undertaking are to earn profits. Because profit is the engine,
that drives the business enterprise.
Net profit ratio
Return on total assets
Reserves and surplus to capital ratio
Earnings per share
Operating profit ratio
Price earning ratio
Return on investments
(a) NET PROFIT RATIO
Net profit ratio establishes a relationship between net profit (after tax) and sales and indicates the
efficiency of the management in manufacturing, selling administrative and other activities of the
firm.
Net profit after tax = net profit-( depreciation+ interest+ income tax)
95
96
Earning per share = net profit after tax/ no. of equity shares
The Earnings per share is a good measure of profitability when
compared with EPS of similar other components (or) companies, it gives a
view of the comparative earnings of a firm.
(e) OPERATING PROFIT RATIO
Operating ratio establishes the relationship between cost of goods sold and other operating
expenses on the one hand and the sales on
the other.
Operating ratio = operating cost / net sales
However 75 to 85% may be considered to be a good ratio in case of a manufacturing under
taking.
Operating profit ratio is calculated by dividing operating profit
by sales.
Operating profit = net sales operating cost
Market price per share = capital + reserves& surplus / no. of equity shares
Earning per share = earnings before interest and tax / no. of equity shares
(g) RETURN ON INVESTMENTS
Return on share holders investment, popularly known as Return on investments (or) return on
share holders or proprietors funds is
97
the relationship between net profit (after interest and tax) and the
proprietors funds.
Return on shareholders investment = net profit after interest and tax / shareholders fund
The ratio is generally calculated as percentages by multiplying
the above with 100.
98
99
Capital &
Liabilities
Capital
Reserve&
surplus
deposits
borrowings
Other
liabilities and
provisions
TOTAL
CAPITAL
AND
LIABILITIE
S
Assets:
Investments
Advances
Fixed assets
Capital Work
In Progress
Current assets
TOTAL
ASSETS:
20072008
Absolute
change
20082009
%
Absolute
change change
%
Absolute
change change
20102011
%
Absolute
change change
105.17
17628.83
19.98
57.28
3.41
8910.91
0.0054
18.41
0.00
8001.5
0.00
13.96
0.12
(963.28)
0.018
(1.47)
101882.8
5
12024.07
23320.04
23.39
204669.1
9
1986.27
27335.27
38.08
62043.1
8.36
16.14
3.83
32.79
49297.92
(30360.30
)
91.77
(27.42
)
129816.5
8
16557.36
24911.69
154961.0
6
27.35
242905.7
7
33.66
88981.65
9.226
170322.4
7
16.16
2007-08
Absolute
change
2008-09
%
Absolute
change change
2009-10
%
Absolute
change change
2010-11
%
Absolute
change change
40352.39
79431.71
(314.22)
86452.69
125735
(543.32)
45.62
30.16
(0.13)
9836.11
89410.95
543.32
3.56
16.48
0.15
9810.5
124805.3
314.22
3.43
19.75
0.076
(37.05)
27.055
23.54
(0.070
)
(0.11)
(31.74)
31.74
0.1204
37.05
0.1255
(8665.09)
(0.19)
2620.51
(0.107
)
0.074
(2620.51)
8665.09
0.24
33.66
88981.65
(0.069
)
9.226
170322.4
7
16.16
30.28
38.83
154961.0 27.35
6
Interpretation :
242905.7
7
2009-2010
The capital of bank increased by 19.98%in 07-08, 0.0054% in 08-09, 0.018% in 10-11.
100
%
chang
e
16.07
31.009
%
chang
e
INCOME:
operating income
EXPENDITURE
:
interest expended
operating
expenses
total expenses
provision and
contingencies
net profit of the
year
extraordinary
items
profit brought
forward
total profit/(loss):
101
2007-08
absolute
change
%
change
2008-09
absolute
change
%
change
2009-10
absolute
change
2010-11
% change
absolute change
%
change
11410.95
0.24
18131.04
0.31
9482.29
0.12
10367.38
0.12
8492.26
0.36
10986.21
3514.11
0.18
4407.19
0.10
1545.48
0.032
1357.77
9223.14
0.10
0.24
6817.35
0.37
6489.87
0.26
0.21
15738.93
0.30
9437.47
0.14
12163.1
0.15
-626.89
-0.10
1238.61
0.24
-1787.07
0.14
12163.1
0.15
2187.81
0.48
2392.11
0.35
44.82
0.004914
-1795.68
-0.19
0
2187.81
0
0.48
0
2392.11
0
0.35
0
44.82
0
0.004914
0
-1795.68
0
-0.19
INTERPRETATION:
Net Profit Of The Year: it shows a fluctuating trend i.e., increased by 48% in2007-08,35% in
2008-09,0.49% in 2009-10 and decline by 19% in 2010-11due to increased tax liability.
Interest Expended: it increases from 36% in 2007-08,18% in 2008-09, 10% in 2009-10 and
3.20% in 2010-11.
BALANCE SHEET OF BANK OF BARODA FOR THE YEAR ENDING ON MARCH
2007-2011
IN RS CR.
20072008
absolute
change
%
change
20082009
absolute
change
%
change
20092010
absolute
change
%
change
20102011
absolute
change
%
change
capital &
liabilities:
Capital
reserves&
surplus
Deposits
Borrowings
other
liabilities
TOTAL
LIABILITIE
S:
0
2393.99
27118.1
5
2784.49
4156.71
36453.3
4
2007-08
absolute
change
0
0.28897
5
0.21709
1
2.43706
2
0.49263
5
0
0.16777
9
0.26548
5
0.43519
7
0.31313
4
0.25465
8
%
change
47807.2
1
2008-09
absolute
change
0.26618
8
%
change
50909.9
8
2009-10
absolute
change
0.25545
3
0.27601
3
1.2
8575.81
37284.5
8
(117)
0.19548
2
0.34942
9
(0.05)
0
47807.2
3
0
0.26618
8
1791.61
40362.8
2
1709.04
3943.74
0.07463
1
0.39749
6
0.26715
1
0.67098
9
0.09536
8
0
0.18210
5
0.25284
9
1.36867
9
0.46693
27.28
0.22387
2
0.28773
1
%
change
80080.4
6
2010-11
absolute
change
8736.5
31049.3
9
(25)
0.16658
1
0.21564
2
(0.01)
10078.2
5
53641.0
7
15
0.16472
5
0.30645
9
0.01
0
50909.9
8
0
0.22387
2
0
80080.4
7
0
0.28773
1
2270.85
48647.3
1
7714
7722.18
5859.44
64395.2
2
8957.76
840.76
%
change
ASSETS
Investments
8926.44
23080.4
5
1338
Advances
fixed assets
capital work in
progress
0
0
36453.3 0.25465
Total assets
2
8
INTERPRETATION:
102
The capital of the bank shows no change till 2009-10 but it increases by 7.40% in 2010-11.
There is a huge fluctuation in the increase of reserves and surplus. It increases by 28% in 200708,16%in 2008-09,18% in 2009-10 and 39% in 2010-11.
The investments has increased with a low rate . 2007-08- 25%,2008-09 19%, 2009-10 16.6%,
2010-11-16.47%
There is a fluctuating in increase in advances 27% in 2007-08,34.9% in 2008-09, 21.5%in 200910, 30.64% in 2010-11.
There is decline of fixed assets in 2008-09 and 2009-10 with 5% and 1% respectively. The
reason may be the increase in the rate of depreciation in the subsequent years.
There has been an increase in borrowings. 243% in 2007-08, 43.5% in 2008-09, 136% in 200910,67% in 2010-11.
PROFIT AND LOSS OF BANK OF BARODA FOR THE YEAR ENDING ON MARCH
2007-11
absolute
change
2007-08
absolute change
absolute
change
2008-09
2009-10
absolute
change
2010-11
particulars
income:
total income
3,270.1
30.87%
3,984.7
28.74%
2,475.11
1,655.5
9.27%
5,190.4
26.61%
expenditure:
interest expended
45.61%
2,066.50
26.15%
791
7.93%
2,324.8
21.61%
operating expenses
other provisions and
contingencies
598.82
21.61%
474.39
14.08%
866.57
958.65
20.35%
-212.90
-15.54%
652.15
56.36%
-832.92
22.54%
46.04%
723.60
74.12%
total expenses
2,861.0
29.90%
3,193.0
25.69%
824.3
5.28%
4,007.1
24.36%
409.06
39.85%
791.68
55.15%
831.13
37.32%
1,183.35
38.69%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
409.06
39.85%
791.68
55.15%
831.13
37.32%
1,183.35
38.69%
INTERPRETATION:
The net profit of the year shows a fluctuating trend i.e., 39.85% in 2007-08,55.15% in200809,37.32% in 2009-10and 38.69% in 2010-11.
103
BETA VALUATION :
state bank of
India
beta
bank of Baroda
0.8
0.9
beta
0.9
0.88
0.86
0.84
0.82
0.8
0.78
0.76
0.74
beta
bank of baroda
The graph shows the compare beta of SBI and BOB which is 0.8 and 0.9 which means that
both are comparatively good. There betas are<1 which means it is goodfor the investors to
invest in the bank as it is less risky in nature.
SUSTAINABLE EARNINGS:
SBI
SUSTAINABLE
EARNINGS
104
8857
BOB
3136
SUSTAINABLE EARNINGS
10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
8857
SUSTAINABLE
EARNINGS
3136
SBI
BOB
CRAR% ANALYSIS :
SBI
BASEL-II
CRAR%
11.98
BOB
14.52
BASEL-II CRAR%
16
14
12
14.52
11.98
10
BASEL-II CRAR%
8
6
4
2
0
SBI
105
BOB
2007
NET PROFIT BEFORE TAX
NET CASH FROM OPERATING
ACTIVITIES
NET CASH USED IN FROM INVESTING
ACTIVITIES
NET CASH USED IN FROM FINANCING
ACTIVITIES
NET (DECREASE)/INCREASE IN CASH
AND CASH EQUIVALENT
1654.26
5153.94
-307.65
-20.56
4825.73
OPENING CASH
13454.64
CLOSING CASH
18280.37
2008
2207.1
6
2241.8
2
-235.13
2012.2
3
4018.9
2
18280.
37
22299.
29
2009
2010
1125.47
2011
5650.3
4238.06
2
11252.4 11778.8
5
1
-238.93
-335.01
901.29
462.51
11379.9
4
24087.1
2
35467.0
6
3342.94
1787.83
22299.2
9
24087.1
2
-489.76
3177.9
6
14467.
01
35467.
06
49934.
07
2007
2008
7625.08
10438.9
-1776.07
-284.56
9494.11
7433.49
44535.2
51968.6
9
-856.87
-2798.01
19371.1
2
15716.2
4
51968.6
9
67466.3
4
2009
2010
2011
PARTICULARS
Net Profit Before Tax
106
14180.6
4
29479.7
3
-1651.93
5097.38
32925.1
8
71478.6
2
104403.
8
-1804.99
-1761.52
14954.2
3
34282.5
2
-1245.53
-3359.67
2057.11
-6926.18
35094.1
87780.0
5
122874.
2
13926.1
103110
96183.8
4
107
Bank of Baroda
0.8
504
0.9
1044
8857
3136
14467.01
35094.1
4.
5.
6.
7.
11.98
(19%)
16
14.52
38.69%
28%
21.92
2.7
17.07
9.15
1.8
16.64
Particulars
1. Beta valuation
2. sustainable earnings ( standard
deviation)
Average sustainable earnings
Basel-II CRAR%
Profit & Loss statement analysis
Balance sheet statement analysis
Ratio analysis:
a. P/E ratio
b. P/BV
c. EV/EBIDTA
YEAR 2011
P/E
P/BV
EV/EBID
TA
108
SBI
BOB
21.92
9.15
2.7
1.8
17.07
16.64
25
21.92
20
17.0716.64
15
SBI
10
BOB
9.15
2.7
1.8
0
P/E
P/BV
EV/EBIDTA
INTERPRETATION:
P/E RATIO OF State bank of India is 21.92 which is more than the P/E ratio of its peerset bank
of Baroda 9.15 which means that it is overvalued and strongly sound in nature.
P/BV
The ratio of state bank of india is 2.7 and that of its peerset is 1.8 which means the bank is highly
overvalued in nature
EV/EBIDTA
The ratio of state bank of india is 17.07 and that of its peerset is 16.64 which means that the bank
is closely related to its peerset.
Both are fundamentally sound in nature.
109
90
80
SBI
BOB
79.9
73.87
8.96
6.11
79.9
73.87
70
60
50
40
CASH DEPOSIT
30
20
10
8.96
6.11
0
SBI
BOB
CREDIT-DEPOSIT RATIO:
This ratio assess the credit performance of the bank.
The graph shows that state bank of india and bank of baroda both are performing well as both
banks has overall good efficiency in nature.
SBI-79.9
BOB 73.87
State bank of India has overall good efficiency and performance of banking institutions.
CASH DEPOSIT RATIO:
This ratio assesses the cash performance of the bank.
The graph shows that state bank of India and bank of Baroda is performing well in nature.
110
STANDARD DEVIATION
AVERAGE
SUSTAINABL
E EARNINGS
SBI
BOB
504
1044
8857
3136
10000
8857
9000
8000
7000
6000
STANDARD DEVIATION
5000
AVERAGE
4000
3136
3000
2000
1000
504
1044
OUTCOME:
Since the average sustainable earnings is high and standard deviation of state bank of India is
low which means that the bank is fundamentally sound and it is performing good as compared to
bank of Baroda.
111
INDUSTR
Y
P/E
RATIO
6.43
SBI
BOB
21.92
9.15
P/E RATIO
25
21.92
20
15
10
P/E RATIO
9.15
6.43
5
0
INDUSTRY
SBI
BOB
INTERPRETATION:
Since the industry P/E ratio is 6.43 ,SBI 21.92,BOB 9.15.
It means that State bank of India P/E ratio is more than the industry/peerset company which
means it is overvalued and it is fundamentally sound in nature as compared to its industry/
peerset bank of Baroda.
112
SBI
BOB
26.03
17.76
26.03
25
20
17.76
15
10
5
0
SBI
BOB
INTERPRETATION:
SBI
BOB
26.03
17.76
SBI
BOB
116.07
1,023.4
0
108.33
30
16.5
536.16
21.92
9.15
2.7
1.8
It is indicated that EPS AND DPS ARE INCREASING OF STATE BANK OF INDIA AS
COMPARED TO BANK OF BARODA .
THE REASON MAY BE THAT THERE IS MORE USE OF DEBTTHAN DUE TO
IMPROVED OPERATIONS.
P/E RATIO AND P/BV RATIO BOTH ARE INCREASING . .
THE OVERALL EFFICIENCY OF THE COMPANY IS GOOD AND IT IS PERFORMANCE
IS BETTER IN THE BANKING INSTITUTION.
CONCLUSIONS:
1. State Bank Of India has overall better efficiency and has performed better in the banking
institution as compared to Bank Of Baroda.
2. EPS And DPS Of State Bank Of India is increasing due to increase in the use of debt
rather than the use of improved operations.
3. The P/E Ratio Of State Bank Of India is high as compared to its industry and Bank Of
Baroda which means that SBI is using its funds in a better manner and it is fundamentally
sound in nature.
4. Beta Of State Bank Of India And Bank Of Baroda is less than the market beta which
means that both banks are giving less returns but they are less risky and investors can
invest in these shares.
5. The Average Sustainable Earnings Of State Bank Of India is high and the standard
deviation is low so the bank has its earnings is sustain and more robust in nature as
compared to Bank of Baroda.
6. The Credit Deposit Of State Bank Of India And Bank Of Baroda is close but the ratio is
high which means that State Bank Of India has overall good efficiency and better
performance, i.e., the bank has high credit deposit ratio.
114
REFERENCES:
http://en.wikipedia.org/wiki/State_Bank_of_India
http://en.wikipedia.org/wiki/Bank_of_Baroda
http://www.moneycontrol.com/financials/state bank of India/balance-sheet/SBI
http://www.moneycontrol.com/financials/bankofbaroda/balance-sheet/BOB
http://www.moneycontrol.com/financials/bankofbaroda/profit&loss/BOB
http://www.moneycontrol.com/financials/bankofbaroda/profit&loss/SBI
www.google.com
www.capitaline.com
www.sbi.com
www.investopedia.com
115
116