SEIZING OPPORTUNITY IN

ADVERSITY

TEAM NAME – SARVODAYA

TEAM MEMBERS
1. Mr. GOUTAM DASH
MBA(IB)
E-mail- litu.goutam@gmail.com
Mobile No. 09000250633

2. Ms. SHEELU
MBA(IB)
E-mail –sheelusharma8@gmail.com
Mobile No. 09959643382

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

GITAM UNIVERSITY, RUSHIKONDA

VISAKHAPATNAM (A.P) PIN - 530045

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INTRODUCTION

The Professionals’’ Bank of India Ltd. is a midsized bank in the country. The bank has
positioned itself from financial banking to customer care. The bank has done excellently
in Q2 and Q3 of FY09 and is now more concerned about the future quarters. This is
because they have built a world class human capital, acquired and institutionalized
relation capital. The bank is also planning to enter adjacent-synergistic business like
Insurance, Retail etc. The bank has re-balanced their portfolio with positioning and
capitalization but the main problem which arises is concerning the limited opportunity
due to competition.

As the major cause of concern in this globalised world is that companies are more
concentrating in RED-OCEAN STRATEGY but for the company like TPBoI ltd has to
concentrate more on BLUE –OCEAN STRATEGY to cater in to new segment of the
market.

THE ROADMAP OF ANALYSIS:-

Before going in to study the company as a whole there many methods to be followed we
in our analysis try to do EIC analysis and Benchmarking analysis to arrive in to some
logical conclusion. We also did comparative analysis with the major competitor of
TPBoI ltd. We also did ratio analysis to arrive at the current position of the bank .

ISSUES: - Changing the Mid and long-term strategy within the purview of three
major strategic alternatives.
BANKING INDUSTRY

The Indian banking system is financially stable and resilient to the shocks that may arise
due to higher non-performing assets (NPAs) and the global economic crisis. RBI, the
central bank of the country said that banks should link more branches to the National
Electronic Clearing Service (NECS). There are more than 80 banks in India including
public, private and foreign banks. Given the demographic shifts resulting from changes
in age profile and household income, consumers will increasingly demand enhanced
institutional capabilities and service levels from banks.

SWOT Analysis of Banking Sector

Strengths Weaknesses

1. Strong policy and regulation. 1. Poor technology infrastructure.

2. Bank lending has been a driver of 2. Weak corporate governance and
GDP growth and employment. restrictive labor laws.
3. Aggression towards development 3. Presence of more number of small
of existing standards by banks. banks.

Opportunities Threats

1. Opportunity in retail and wholesale 1. Rise in inflation because of which

banking. For this new skills need to interest rates increased.
be acquired such as marketing, 2. Increase in number of foreign banks
sales, credit and operations. which pose threat for private banks.
2. Reach in rural India 3. Inability to meet additional capital
3. To trade in commodity and requirements.
commodity derivatives.
SWOT Analysis of TPBoI

Strengths Weaknesses

1. Wholesale banking 1. Human capital

2. Relationship capital 2. Small segment bank
3. Positioning of product
4. Knowledge bankers to corporate
Opportunities Threats

1. Entering retail banking, microfinance 1. Competition from other banks

etc..

Yearly Report BANKEX Inflation GDP of Consumer

Rate the Price Index
country
2004-05 3,079.50 6.4 7.5 3.8
2005-06 4,641.85 4.4 9.5 4.4
2006-07 5,954.34 5.4 9.7 6.7
2007-08 9,122.20 4.7 9 6.2
2008-09 5,933.13 8.4 6.5 8.7
Comparison of BANKEX , inflation Rate , GDP of the Country and CPI

These are some of the major indicator on how the country is moving . As we know
BANKEX is the replica of the banking industry and GDP is the replica of the whole
countries growth they are directly proportional with each other. BANKEX and GDP of
the country are inversely related to Inflation Rate and CPI of the country. So as per the
 current situation of the country , as the CPI increasing day by day the company should
concentrate more on FINANCIAL INCLUSION of the SME sector.

BANKEX
BANKEX In both the graph it can be clearly
9,122.20 visible the relation between BANKEX,

5,954.34 5,933.13 GDP, CPI and Inflation. These graph

4,641.85
3,079.50 clearly indicate the behavior of the
industry, and the economy
2004-05 2005-06 2006-07 2007-08 2008-09

Relationship between Inflation rate , GDP and CPI

12
10
8
6
4
2
0
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5

Inflation Rate GDP of the country Consumer Price Index

COMPARATIVE STUDY WITH SELECTED COMPETITORS in TERMS of BUSINESS:-

Current Business / BANKS DHANLAXM FEDERA HDFC KOTAK

TPBoI ltd I BANK L BANK BANK BANK
CORPORATE BANKING          
PERSONAL BANKING          
NRI BANKING          
FINANCIAL BANKING          
MICRO-FINANCE    
TRANSACTION BANKING          
DEVELOPMENT &
KNOWLEDGE BANKING  
CASA/ WEALTH
MANAGEMENT          
LIFE-INSURANCE BUSINESS    

This is the comparative analysis of TPBoI with some of the market competitors. As you
can see from the table above that TPBoI is not in the micro-finance and Retail business
including Life Insurance business. So as the bank is expanding it can enter into micro-
finance segment. Microfinance in India through its two major channels – SBLP and
MFIs – served over 33 million Indians in 2008, up by 9 million over the previous
financial year. 4 out of 5 microfinance clients in India are women. The loan segment
between Rs. 5,000 and Rs 10,000 has been growing strongest. The outstanding micro-
credit portfolio of India Microfinance was about Rs. 22,000 crore, 75% are accounted for
by SBLP, 20% by large MFIs and 5% by medium and small MFIs. Urban Microfinance is
emerging as a strong growth driver. Also penetration of life insurance services in rural
India is <10%.

BENCHMARK RATIO ANALYSIS:-

Industry >> Analytical Ratios >> Aggregate Key Fin Ratios

Industry - Banks-Pvt Sector

Year Latest 2007 2006 2005 2004
No. Of Companies 130 5 81 95 91
KEY RATIOS
Credit-Deposit (%) 74.21 76.06 74.32 70.12 67.43
Investment / Deposit (%)
42.19 42.16 44.32 47.98 51.6
Cash / Deposit (%) 11.5 9.49 10.8 11.64 11.83
Interest Expended / Interest
Earned (%) 60.23 65.16 56.41 57.83 62.71
Other Income / Total Income
(%) 22.41 20.87 24.04 23.65 24.85
Operating Expenses / Total
Income (%) 28.42 25.38 30.62 29.32 24.42
Interest Income / Total Funds
(%) 7.57 5.55 7 6.72 7.65
Interest Expended / Total Funds
(%) 4.56 3.62 3.95 3.89 4.8
Net Interest Income / Total
Funds (%) 3.01 1.93 3.05 2.84 2.85
Non Interest Income / Total
Funds (%) 2.19 1.46 2.21 2.08 2.53
Operating Expenses / Total
Funds (%) 2.77 1.78 2.82 2.58 2.49
Profit before Provisions / Total
Funds (%) 1.1 0.8 1.24 1.1 1.55
The above table shows the benchmark industry average till 2009 December. When we
compare the industry average with TPBoI Ltd we found that it matches up to the
industry standard. Take for example Investment/ Deposit Ratio is 37.57% which is
almost matching the industry standard and also it has increased by 62.8% on Year on
Year basis. Other Income / Total Income (%) is 38% which way above 22.41% which
shows the consistency of the firm.

So, as per our analysis we thought that as company is in a growth stage of economy, it
should go for expansion and diversification in future which need a proper well trained
human capital with the in-depth knowledge about the culture as a whole.

HUMAN CAPITAL ANALYSIS:-

Bank Name Number of No.of Total Net Profit

Branches Employees Income(Rs Mn) (Rs Mn)
Indian Bank 1395 21302 38960 5045
Corporation Bank 794 10754 31979 4445
Andhra Bank 1213 13169 31324 4855
United Bank of India 1316 17319 28170 2045
State Bank of Patiala 753 11350 28086 3031
Vijaya Bank 924 11494 26808 1269
State Bank of Travancore 690 11642 26497 2587
Bank of Maharashtra 1287 14052 25267 508
Dena Bank 1039 10156 22191 730
ABN Amro Bank N.V. 23 3093 19886 2417
Federal Bank Limited, The 472 6366 16535 2252
IndusInd Bank Limited
137 2365 14144 368
ING Vysya Bank Limited
369 4892 14128 91
Kotak Mahindra Bank
Limited 78 3597 9370 1182
South Indian Bank Limited,
The 424 3709 8336 509
Karur Vysya Bank Limited,
The 243 2908 7940 1354
Lakshmi Vilas Bank
Limited, The 223 1873 3681 225
YES BANK Limited 9 627 2899 553
Dhanalakshmi Bank
Limited, The 178 1385 2369 95
(Data as on 2007)

(Source: - http://www.dnb.co.in/TopBanks/company_listing.asp?
PageNo=6&q=Total_Income )

The table above shows some of the competitors of TPBoI Ltd. The employee base of
TPBoI is 2700 and wants to increase it to 10,000 with 750+ branches by 2015. To
implement this, bank needs to have expansion strategy in all segments. As the
workforce will increase it will lead to more output and income generation. The bank is
delivering extra ordinary results after every quarter so by looking this, human capital
will be attracted. To motivate, groom and retain human capital, bank need to design a
training program which will be accompanied by varied skill sets required in the
banking industry. The bank should also increase the perks, incentives, awards in the
employment policy. There also can be job rotation and job enrichment depending on
skill set the person posses. Also there should be state based recruitment process so that
it can cover all language and ethnic group and in return bank will get benefit as the
employee will understand each customers need. This manpower will help in designing
the product as per the demand. As suggested by us the bank should come up with
Micro finance so in that case the bank should appoint sales and marketing team who
should understand the villagers more effectively.  

CONCLUSION:-
As per our Analysis we came to the conclusion that company should go for Building
World Class Human Capital and Allied businesses (A&C). From the above all analysis
we can clearly seen the below mention which shows company should go for BLUE
OCEAN STRATEGY.

1. Overall Growth in the Banking sector

2. Urbanisation in Tier II and Tier III cities.
3. Financial Inclusion concept
4. Growing concern for Corporate Social Responsibilities
5. Key ratios as indicators to go for Human capital employment and expansion
to new business sector.
6. Microfinance is major thrust area because of growing concern of regulatory
and government to uplift the unorganised sector and priority sector.

So because of above Reason Company should go for Choice A and C.

BIBLIOGRAPHY:-
1. CMIE Report
2. www.capitaline.com
3. www.rbi.org.in
4. http://www.dnb.co.in/TopBanks/company_listing.asp?
PageNo=6&q=Total_Income
5. Different bank website