PROJECT REPORT

ON
“FINANCIAL ANALYSIS”
OF

ICICI
Bank

Submitted by: Submitted

to:
Yogesh Goyal Dr.Ritesh Srivastva
Purti Tiwari
Akhil Shrivastav
Nancy Bhandari
Shams Shabat
Bhibu Parsad
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.

Banking system in India:-

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.
INTRODUCTION OF ICICI BANK:-
ICICI Bank is India's second-largest
bank with total assets of Rs. 3,634.00 billion (US$ 81
billion) at March 31, 2010 and profit after tax Rs. 40.25
billion (US$ 896 million) for the year ended March 31,
2010. The Bank has a network of 2,016 branches and about
5,219 ATMs in India and presence in 18 countries. ICICI
Bank 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 in the areas of investment banking, life and
non-life insurance, venture capital and asset management.
The Bank currently has subsidiaries in the United
Kingdom, Russia and Canada, branches in United States,
Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and
Dubai International Finance Centre and representative
offices in United Arab Emirates, China, South Africa,
Bangladesh, Thailand, Malaysia and Indonesia. Our UK
subsidiary has established branches in Belgium and
Germany. There are more than 35000 employees working
& head office is in Mumbai.

ICICI Bank's equity shares are listed in India on

Bombay Stock Exchange and the National Stock Exchange
of India Limited and its American Depositary Receipts
(ADRs) are listed on the New York Stock Exchange
(NYSE).ICICI Bank is one of the Big Four Banks of India with
State Bank of India, Axis Bank and HDFC Bank.
HISTORY:-

In 1955, The Industrial Credit and

Investment Corporation of India Limited (ICICI) was
incorporated at the initiative of World Bank, the
Government of India and representatives of Indian industry,
with the objective of creating a development financial
institution for providing medium-term and long-term
project financing to Indian businesses. In 1994, ICICI
established Banking Corporation as a banking subsidiary.
Formerly known as Industrial Credit and Investment
Corporation of India, ICICI Banking Corporation was later
renamed as 'ICICI Bank Limited'.
Mr.A.Ramaswami Mudaliar elected as the first Chairman
of ICICI Limited.
ICICI Bank Board appoints Mr K. V. Kamath as non-
executive Chairman and Ms Chanda Kochhar as Managing
Director & CEO effective May 1, 2009.

ICICI Bank
 Type Public (BSE: 532174, NYSE: IBN)
Banking
Industry
Financial services
Founded 1955
Headquarters Mumbai, Maharashtra, India
K.V. Kamath
(Chairman)

Chanda Kochhar
Key people
(MD & CEO)

N. S. Kannan
( CFO)
Investment Banking
Commercial Banking
Retail Banking
Products Private Banking
Asset Management
Mortgages
Credit Cards
▲ 59,599.77 crore (US$ 12.93 billion)
Revenue
(2009)[1]

▲ 6,578.64 crore (US$ 1.43 billion)

Operating income
(2010)[1]

▲ 4,843.41 crore (US$ 1.05 billion)

Profit
(2010)[1]

Total assets ▲ US$ 100.10 billion (2010)[2]

Employees 35,000+ (2009)
Website ICICIBank.com

Products & Services:-

Personal Banking:
 • Deposits
• Loans
• Cards
• Investments
• Insurance
• Demat Services
• Wealth Management
NRI Banking:
• Money Transfer
• Bank Accounts
• Investments
• Property Solutions
• Insurance
• Loans
Business Banking:

• Corporate Net Banking

• Cash Management
• Trade Services
• FX Online
• SME Services
• Online Taxes
• Custodial Services

PRODUCT:
ICICI Bank offers wide variety of
Deposit Products to suit your requirements. Coupled
 with convenience of networked branches/ ATMs and
facility of E-channels like Internet and Mobile
Banking, ICICI Bank brings banking at your doorstep.
Select any of its deposit products and provide your
details online and their representative will contact you
for Account Opening.
SAVING ACCOUNTS:
ICICI Bank offers customers a power packed
Savings Account with a host of convenient
features and banking channels to transact
through. So now customers can bank at their
convenience, without the stress of waiting in
queues.
“LIFE PLUS” Senior citizens savings
account:
LIFE PLUS, a special savings account
for senior citizens from ICICI Bank is
packed with a host of benefits, designed
keeping your unique financial
requirements in mind.

Young Stars Account:

 Young Stars is a banking service for
children, aged 1day -18 years,
brought to you by ICICI Bank to
help the parents meet the present and
future aspirations that they hold for their child.
Advantage woman savings account:
The ICICI Bank Advantage Woman
Account enables today’s independent
women to enjoy hassle-free banking
services. Besides the core ICICI Bank
advantage, the Advantage Woman Savings Account is
packed with special benefits for our women customers.
Current Accounts:
Every business requires efficient banking facilities to
support its business activities. A Current Account is one
that is required by Businessman, Joint stock
companies, Institutions, Public authorities, public
corporations etc.

• Allows running account supporting unlimited

withdrawals and deposits.
• Is meant for convenience and not to save money.

Fixed deposits:
 Fixed deposits are options which help
you grow your money thus creating
wealth in a safer and secure way.
ICICI provides a Fixed Deposit
that allows customers to deposit
their money for just as long as you wish.

Recurring Deposits:
ICICI Bank Recurring Deposits are an ideal way to invest
small amounts of money every month and end up with a
large kitty on maturity.

LOANS:-
HOME LOAN:
ICICI Home Finance will not only
finance the balance amount of outstanding
loan but also your prepayment charges to
the old housing finance company.

PERSONAL LOANS:
ICICI Bank Personal Loans are easy to get
and absolutely hassle free. With minimum
documentation you can now secure a loan
for an amount up to Rs.15 lakh.

CAR LOAN:
 The NO. 1 financier for car loans in the
country. Network of more than 1500
channel partners in over 780 locations.
Tie-ups with all leading automobile
manufacturers to ensure the best deals.

FARM EQUIPMENT LOANS:

• ICICI is the preferred financier for

almost all leading tractor
manufacturers in the country.
• ICICI finances farm equipments in
over 381 locations spread across the
country.
CREDIT CARDS:

ICICI Bank Credit Cards give you the

facility of cash, convenience and a range
of benefits, anywhere in the world. These
benefits range from life time free cards,
Insurance benefits, global emergency assistance service,
discounts, utility payments, travel discounts and much
more.

DEBIT CARDS:
 The ICICI Bank Debit Card is a
revolutionary form of cash that allows
customers to access their bank account
around the clock, around the world. The
ICICI Bank Debit Card can be used for shopping at more
than 100,000 merchants in India and 13 million merchants
worldwide.

INVESTMENTS:-
ICICI Bank
cares about all
needs. Along
with Deposit products and Loan offerings, ICICI Bank
assists people to manage their finances by providing
various investment options ranging from ICICI Bank
Tax Saving Bonds to Equity Investments through Initial
Public Offers and Investment in Pure Gold. ICICI Bank
facilitates following investment products:

• ICICI Bank Tax Saving Bonds

• Government of India Bonds
• Investment in Mutual Funds
• Initial Public Offers by Corporate
• Investment in "Pure Gold"
• Foreign Exchange Services
• Senior Citizens Savings Scheme, 2004
Customers can invest in above products through any of
ICICI bank branches. For select products ICICI Bank also
provides the ease of investing through electronic channels
like ATMs and Internet (ICICIdirect.com)
All ICICI Bank Bonds have been rated "AAA" by CARE
and "LAAA" by ICRA indicating the highest degree of
safety for your money.
Investment in ICICI Bank Bonds are eligible for tax rebate
under Sec 88 to the full extent possible.

Meaning Of Financial Statements:-

Financial statements refer to such statements which
contains financial information about an enterprise. They
report profitability and the financial position of the business
at the end of accounting period. The team financial
statement includes at least two statements which the
accountant prepares at the end of an accounting period. The
two statements are: -
• The Balance Sheet
• Profit And Loss Account

Meaning Of Financial Analysis:-

The term financial analysis is also known as ‘analysis and
interpretation of financial statements’ refers to the
process of determining financial strength and weakness of
the firm by establishing strategic relationship between the
items of the Balance Sheet, Profit and Loss account and
other operative data.
Features of Financial Analysis:

o To present a complex data contained in the financial

statement in simple and understandable form.

o To classify the items contained in the financial

statement in convenient and rational groups.

Operating results data:-

The following table sets forth, for the periods indicated, the
operating results data.
Rs. in billion, except percentages
Fiscal 2009 Fiscal 2010 %change
Interest income Rs. 310.93 Rs. 257.07 (17.3)
Interest expense 227.26 175.93 (22.6)
Net interest income 83.67 81.14 (3.0)
Non-interest income 76.03 74.78 (1.6)
- Fee income1 65.24 56.50 (13.4)
- Treasury income 4.43 11.81 166.6
- Lease income 2.33 1.57 (32.6)
- Others 4.03 4.90 21.6
Operating income 159.70 155.92 (2.4)
Operating expenses 63.06 55.93 (11.3)
DMA expense2 5.29 1.25 (76.4)
Lease depreciation 2.10 1.42 (32.4)
Operating profit 89.25 97.32 9.0
Provisions, net of write 38.08 43.87 15.2
Backs
Profit before tax 51.17 53.45 4.5
Tax, net of deferred tax 13.59 13.20 2.9
Profit after tax Rs. 37.58 Rs. 40.25 7.1
Interpretation:-
The net profit increased by 7.1% in 2009-10.this may
be due to decline in operating expenses, DMA
expenses and lease deprecation. Decrease tax liability
in the year 2009-10.
Financial Condition:-
The following table sets forth, for the periods indicated, the
summarised balance sheet.
Rs. in billion, except
percentages
March 31,2009 March 31,2010 % change
Assets:
Cash, balances with RBI and other banks and Statutory Liquidity
Ratio (SLR) investments Rs. 933.53 Rs. 1,072.77 14.9
– Cash and balances
with RBI and banks 299.66 388.73 29.7
– SLR investments 633.87 684.04 7.9
Advances 2,183.11 1,812.06 (17.0)
Debentures, bonds and
other investments 396.71 524.89 32.3
Fixed assets (including leased assets) 38.02 32.13 (15.5)
Other assets 241.64 192.15 (20.5)
Total Assets Rs. 3,793.01 Rs. 3,634.00 (4.2)
Liabilities:
Equity capital and reserves Rs. 495.33 Rs. 516.18 4.2
– Equity capital 11.13 11.15 0.2
– Reserves 484.20 505.03 4.3
Deposits 2,183.48 2,020.17 (7.5)
– Savings deposits 410.36 532.18 29.7
– Current deposits 216.32 309.98 43.3
– Term deposits 1,556.80 1,178.01 (24.3)
Preference capital 3.50 3.50 —
Borrowings 673.24 609.47 9.5
– Domestic 138.56 140.21 1.2
– Overseas 534.68 469.26 12.2
Subordinated debt 2254.82 329.67 29.4
– Domestic 237.66 314.47 32.3
– Overseas 17.16 15.20 (11.4)
Other liabilities 182.64 155.01 (15.1)
Total liabilities Rs. 3,793.01 Rs. 3,634.00 (4.2)
SCHEDULE:-

Balance Sheet
At march 31,2010 (Rs. in ‘000s)
Schedule At
At
31.03.2010
31.03.2009
CAPITAL AND LIABILITIES
Capital 1 11,148,892 11,132,898
Reserves and surplus 2 505,034,767 484,197,292
Deposits 3 2,020,165,972 2,183,478,249
Borrowings 4 942,635,686 931,554,542
Other liabilities and provisions 5 155,011,834 182,646,642
TOTAL CAPITAL AND LIABILITIES 3,633,997,151 3,793,009,623
ASSETS
Cash and balances with
Reserve Bank of India 6 275,142,920 175,363,342
Balances with banks and money
at call and short notice 7 113,594,020 124,302,296
Investments 8 1,208,928,005 1,030,583,080
Advances 9 1,812,055,971 2,183,108,492
Fixed assets 10 32,126,899 38,016,209
Other assets 11 192,149,336 241,636,204
TOTAL ASSETS 3,633,997,151 3,793,009,623
Contingent liabilities 12 7,270,840,587 8,346,830,027
Bills for collection 64,749,539 60,004,383

Interpretation:-
• The capital of bank increased by 0.14% in 2009-10.
• In 2009-10 deposits decrease by 8.5% this shows that
the bank has repaid its deposits in this year.
• Increase in borrowings shows the dependence on
outside debt.
 • The investments are also increasing.
Profit and Loss Account
for the year ended March 31, 2010 (Rs. in
‘000s)
schedule Year ended Year ended
31.03.20
10 31.03.2009
I. INCOME
Interest earned 13 257,069,331 310,925,484
Other income 14 74,776,500 76,037,271
TOTAL INCOME 331,845,831 386,962,755
II. EXPENDITURE
Interest expended 15 175,925,704
227,259,343
Operating expenses 16 58,598,327 70,451,137
Provisions and contingencies 17 57,071,971 51,670,943
TOTAL EXPENDITURE 291,596,002 349,381,423
III. PROFIT/LOSS
Net profit for the year 40,249,829 37,581,332
Profit brought forward 28,096,510 24,363,159
TOTAL PROFIT/(LOSS) 68,346,339 61,944,491
IV. APPROPRIATIONS/TRANSFERS
Transfer to Statutory Reserve 10,070,000 9,400,000
Transfer to Reserve Fund 2,170 4,221
Transfer to Capital Reserve 4,440,000 8,180,000
Transfer to Investment Reserve Account 1,160,000 —
Transfer to General Reserve 10,369 —
Transfer to Special Reserve 3,000,000 2,500,000
Dividend (including corporate dividend tax)
for the previous year paid during the year 929 5,811
Proposed equity share dividend 13,378,604 12,245,771
Proposed preference share dividend 35 35
Corporate dividend tax 1,640,425 1,512,143
Balance carried over to balance sheet 34,643,807 28,096,510
TOTAL 68,346,339 61,944,491
Significant accounting policies and notes to accounts 18 & 19
Earnings per share (Refer note 19.4)
Basic (Rs) 36.14 33.76
Diluted (Rs.) 35.99 33.70
Face value per share (Rs.) 10.00 10.00

CASH-FLOW STATEMENT:-
A cash – flow statement is a statement showing inflows
(receipts) and outflows (payments) of cash during a
particular period. In other words, it is a summary of sources
and applications of each during a particular span of time.

Cash Flow Statement

for the year ended March 31, 2010 (Rs. in ‘000s)
PARTICULARS Year Ended Year Ended
31.03.2010 31.03.2009
Cash flow from operating activities
Net profit before taxes 53,453,218 51,169,693
Adjustments for:
Depreciation and amortization 7,550,323 8,576,435
Net (appreciation)/depreciation on investment 6,242,755 13,371,083
Provision in respect of non-performing assets (including prudential
provision on standard assets) 43,621,629 37,500,259
Provision for contingencies & others 273,494 (395,005)
Income from subsidiaries, joint ventures and
Consolidated entities (3,933,959) (3,636,999)
(Profit)/loss on sale of fixed assets (1,345,173) (175,113)
105,862,287 106,410,353
Adjustments for:
(Increase)/decrease in investments (243,844,179) 26,560,241
(Increase)/decrease in advances 327,300,630 34,618,121
Increase/(decrease) in borrowings (17,220,942) 32,785,480
Increase/(decrease) in deposits (163,312,277) (260,832,253)
(Increase)/decrease in other assets 54,586,538 (33,283,816)
Increase/(decrease) in other liabilities (28,694,588)
(32,683,319)
 (71,184,818)
(232,835,546)
Refund/(payment)of direct tax
(15,985,360) (15,459,704)
Net cash generated from
operating activities (A)
18,692,109 (141,884,897)

Cash flow from investing activities

Investments in subsidiaries and/or joint ventures
(including application money) (1,113,156)
(42,016,414)
Income from subsidiaries,
joint ventures and consolidated entities 3,933,959
3,636,999
Purchase of fixed assets (5,101,617)
(10,568,742)
Proceeds from sale of fixed assets 3,164,763
667,236
(Purchase)/sale of held to securities 60,623,375
86,859,726
Net cash generated from
investing activities (B)
61,507,324 38,578,805
Cash flow from financing activities
Proceeds from issue of share capital (including ESOPs) net of
issue
expenses 610,429
452,464
Net proceeds/(repayment) of bonds 26,946,780
29,492,463
Dividend and dividend tax paid (13,731,041)
(13,691,338)
Net cash generated
from financing activities (C) 13,826,168
16,253,589
Effect of exchange fluctuation on
translation reserve (D)
(4,954,299) 6,306,853
Net increase/(decrease) in cash and
cash equivalents (A)+(B)+(C)+(D)
89,071,302 (80,745,650)
Cash and cash equivalents at
April 1
299,665,638 380,411,288
Cash and cash equivalents at
March 31
388,736,940 299,665,638

Ratio Analysis:-

Meaning :
Absolute figures expressed in financial statements by
themselves are meaningfulness. These figures often do not
convey much meaning unless expressed in relation to other
figures. Thus, it can be say that the relationship between
two figures, expressed in arithmetical terms is called a ratio

TYPES OF RATIOS:
• Proportion or Pure Ratio or Simple ratio.
• Rate or so many Times.
• Percentage
• Fraction.
Classification of Ratio:

Liquidity Ratios Long-term Activity Ratios Profitability

Solvency and Ratios
Leverage Ratios
-Current Ratio Financial Inventory In Relation to
-Liquid Ratio Operating Turnover Ratio. Sales.
(Acid) Test or Composite Debtors Gross Profit
Quick Ratio. -Debt. Equity Turnover Ratio Ratio.
-Absolute liquid Ratio Fixed Assets Operating Ratio.
or -Debt to Total Turnover Ratio Operating Profit
-Cash Ratio. Capital Ratio Total Asset Ratio.
-Debtors -Interest Turnover Ratio Net Profit Ratio.
Turnover Ratio Coverage Ratio Working Capital Expenses Ratio
-Creditors -Capital Gearing Turnover Ratio. In relation to
Turnover Ratio Payables investments
Ratio Turnover Ratio Return on
-Inventory Capital Investments.
Turnover ratio Employed Return on capital.
Turnover Ratio Return on Equity
Capital.
Return on total
Resources
Earning per share.
Price Earning
Ratio.

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 liabilities=saving deposit+ current deposit+
other liabilities
YEAR CURRENT ASSET CURRENT LIABILITY CURRENT RATIO
(Rs. In ‘000s) (Rs. In ‘000s)
2009 541301842 809326642 0.67
2010 580886276 997171834 0.58

Interpretation:

An ideal current ratio is 2. The ratio of 2 is considered as a

safe margin of solvency due to the fact that if current assets
are reduced to half (i.e.) 1 instead of 2, then also the
creditors will be able to get their payments in full. But here
the current ratio is less than 2 which shows that the bank
have current assets less than current liabilities which is not
satisfactory as the safety margin is very less.

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 than stock and
prepaid expenses are considered as quick assets.
Quick Ratio = Total Quick Assets
Total Current Liabilities
Quick Assets = Total Current Assets – Inventory
YEAR QUICK ASSET CURRENT LIABILITY QUICK RATIO
(Rs. In ‘000s) (Rs. In ‘000s)
2009 299665638 809326642 0.37
2010 388736940 997171834 0.39

Interpretation:

A quick ratio of 1:1 is considered favorable because for

every rupee of current liability, there is at least one rupee of
liquid assets. A higher value of ratio is considered
favorable. Here this ratio is less than 1 in 2009 & 2010.
This means the bank has not managed its funds properly in
this particular period.

EARNING PER SHARE:

The earning per share of the company helps in determining

the market price of the equity shares of the company. A
comparison of earning per share of the company with
another will also help in deciding whether the equity share
capital is being effectively used or not. It also helps in
estimating the company’s capacity to pay dividend to its
equity shareholders.
Earning Per Equity Share = Net Profit after Tax – Prefrence Dividend
 No. of Equity shares

YEAR NET INCOME AVAILABLE NO. OF EQUITY EPS

FOR SHAREHOLDER SHARE
(Rs. In ‘000s) (Rs. In ‘000s)
2009 37581332 1113289 33.75
2010 40249829 1114889 36.10

Interpretation:

Earning Per Share is the most commonly used data which

reflects the performance and prospects of the company. It
affects the market price of shares.
Here the Earning Per Share shows a persistent increase in
2010 because of increase in profits.

DIVIDEND PER SHARE :-

It is expressed by dividing dividend paid to equity
shareholders by no. of equity shares. This shows the per
share dividend given to equity shareholders. It is very
helpful for potential investors to know the dividend paying
capacity of the company. It affects the market value of the
company.

Dividend Per Share = Dividend Paid To Equity Shareholders

 No. Of Equity Shares

YEAR DIVIDEND PAID TO NO. OF EQUITY DPS

SHAREHOLDER SHARE
(Rs. In ‘000s) (Rs. In ‘000s)
2009 12245800 1113289 11.00
2010 13378600 1114889 12.00

Interpretation:-

Here the Dividend Per Share is increasing in 2010 year.

The dividend per share ratio of the bank is quite
satisfactory which shows the bank has a good dividend
paying capacity.

NET PROFIT RATIO:-

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.

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

YEAR NET PROFIT SALES NET PROFIT RATIO

(Rs. In ‘000s) (Rs. In ‘000s) (in %)
2009 37581332 310925484 12.08
2010 40249829 257069331 15.65

Interpretation:

In 2010 the sales declined and net profit increased so the

Net Profit Ratio of the bank is more than previous year
2009. It is good sign for bank to grow up in banking sector.

OPERATING PROFIT RATIO:-

The difference between net profit ratio and net operating

profit ratio is that net operating profit is calculated without
considering non-operating expenses and non-operating
incomes. If we deduct this ratio from 100,the result will be
operating ratio. Higher operating profit ratio enable the
organization to recoup non-operating expenses out of
operating profits and provide reasonable return.

Operating Profit Ratio = Operating Profit X100

Net Sales
YEAR OPERATING PROFIT SALES OPERATING PROFIT
RATIO
(Rs. In ‘000s) (Rs. In ‘000s) (in %)
2009 89251332 310925484 28.70
2010 97329829 257069331 37.86

Interpretation:

In the year 2009 & 2010 the operating profit ratio is

28.70% & 37.86% respectively. It shows that operating
profit ratio of 2010 is more than year 2009. So operating
expenses have been decreased in 2010 more as compared to
previous year.

RETURN ON NET WORTH:-

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 proprietor’s funds.
Shareholders and potential investors are interested in this
ratio.
RETURN ON NET WORTH= NET PROFIT X 100
SHAREHOLDER’S FUND
YEAR NET PROFIT SHAREHOLDER’S FUND RETURN ON NET WORTH
(Rs. In ‘000s) (Rs. In ‘000s) (in %)
2009 37581332 495332457 7.58
2010 40249829 516189331 7.79
Interpretation:
The net profit after interest and tax have increased in 2010
followed by 2009 because of less operating expenses and
taxation liability. Consequently the net worth ratio has
increased in 2010.

RETURN ON CAPITAL EMPLOYED:-

It establishes relationship between profit before interest and
tax and capital employed. It indicates the percentage of
return on the total capital employed in the business. This
ratio is also known as Return On Investment. It measures
the overall efficiency and profitability of the business in
relation to investment made in business. It also shows how
efficiently the resources are used in the business.
Comparison of one unit with that of the other or
performance in one year with that of the same unit is
possible.
It is calculated as below:
ROI= NET PROFIT BEFORE INTEREST AND TAX X 100
 CAPITAL EMPLOYED
YEAR NET PROFIT BEFORE INT.& TAX CAPITAL EMPLOYED
ROI
(Rs. In ‘000s) (Rs. In ‘000s) (in %)
2009 51171332 335725484 15.24
2010 53459829 330569331 16.17

Interpretation:
The above table exhibit the return on capital employed ratio
of the bank for last two years.. The ratio was 15.24% in
year 2009. After that it raised to the tune of 16.17% in year
2010. It lead to the conclusion bank rising but very little
proportion of return on capital employed.

DEBT- EQUITY RATIO:-

The Debt-Equity ratio is calculated to find out the long-
term financial position of the firm. This ratio indicates the
relationship between long-term debts and shareholder’s
funds. The soundness of long-term financial policies of a
firm can be determined with the help of this ratio.
It helps to assess the soundness of long-term financial
policies of a business. It also helps to determine the relative
stakes of outsiders and shareholders. Long-term creditors
can assess the security of their funds in a business. It
indicates to what extent a firm depends upon lenders to
meet its long-term financial requirements. A low Debt-
Equity ratio is considered better from the point of view of
creditors.
YEAR DEBT EQUITY DEBT-EQUITY
RATIO
(Rs. In ‘000s) (Rs. In ‘000s)
2009 3298581332 495335484 6.65
2010 3118249829 516189331 6.04

Interpretation:
The ratio shows the extent to which funds have been
provided by long-term creditors as compared to the funds
provided by the owners. Here the Debt-Equity ratio for the
above period is always high. This shows that the bank is
more relying on outside funds as compared to internal
sources of capital, in its capital structure. From the long-
term lenders point of view this ratio is not satisfactory.

PROPRIETORY RATIO:-
It is also called shareholders equity to total equity ratio or
net worth to total assets ratio or equity ratio. It compares
the shareholder’s funds to total assets. It is calculated by
dividing shareholder’s funds by total assets.
Proprietory Ratio = Shareholder’s Fund
Total Assets

YEAR SHAREHOLDER FUND ASEETS PROPRIETORY

RATIO
(Rs. In ‘000s) (Rs. In ‘000s)
2009 495331332 3793015484 0.13
2010 516189829 3634069331 0.14
Interpretation:

Above table exhibits the proprietary ratio of the bank for

last two years . It was 13% and 14 in the year 2009 and
2010 respectively. Hence it leads to the conclusion owners
have less than 14% stake in the total assets of the bank. It is
not a good sign as far the long term solvency is concerned.

FIXED ASSETS TURNOVER RATIO:-

It is also called as Sales to Fixed Assets Ratio. It measures
the efficient use of fixed assets. This ratio is a measure of
efficient use of fixed assets. It is calculated as:
Fixed Assets Turnover Ratio = Cost of goods sold or Sales
Net Fixed Assets
It measures the efficiency and profit earning capacity of
the business. Higher the ratio, greater is the intensive
utilization of fixed assets and a lower ratio shows under
utilization of the fixed assets. This ratio has a special
importance for manufacturing concerns where investment
in fixed assets, is very high and the profitability is
significantly dependent on the utilization of these assets.
YEAR SALES FIXED ASSET FIXED ASSET TURNOVER
RATIO
(Rs. In ‘000s) (Rs. In ‘000s)
2009 310925482 38022548 8.17
2010 257069331 32136931 8.00

Interpretation:
Here the fixed assets employed in the business shows a
decreasing in the year 2010.This may be due to decrease in
sales in year 2010. Fixed asset turnover ratio indicates that
fixed assets have been effectively used in the business
without much additional investment in the period of study
and also the capital is not blocked in fixed assets.

Conclusion

On the basis of various techniques applied for the financial

analysis of ICICI Bank we can arrive at a conclusion that
the financial position and overall performance of the bank
is satisfactory. Though the income of the bank has
increased over the period but not in the same pace as of
expenses. But the bank has succeeded in maintaining a
reasonable profitability position.
The bank has succeeded in increasing its share capital also
which has increased around 50% in the last 5 years.
Individuals are the major shareholders. The major
achievement of the bank has been a tremendous increase in
its deposits, which has always been its main objective.
Fixed and current deposits have also shown an increasing
trend.
Equity shareholders are also enjoying an increasing trend in
the return on their capital. Though current assets and
liabilities (current liquidity) of the bank is not so
satisfactory but bank has succeeded in maintaining a stable
solvency position over the years. As far as the ratio of
external and internal equity is concerned, it is clear that
bank has been using more amount of external equity in the
form of loans and borrowings than owner’s equity. Bank’s
investments are also showing an increasing trend. Due to
increase in advances, the interest received by the bank from
such advances is proving to be the major source of income
for the bank.