ICICI BANK

Presented by: Nikita Wanwari & Binita Anchan

CONTENTS

WHAT IS BANKING? BANKING SYSTEM IN INDIA ICICI BUSINESS OBJECTIVES BALANCE SHEET TREND ANALYSIS RATIO ANALYSIS CURRENT RATIO LIQUIDITY RATIO EARNINGS PER SHARE DIVIDEND PER SHARE NET PROFIT RATIO DEBT-EQUITY RATIO CREDIT DEPOSIT RATIO CONCLUSION SUGGESTIONS BIBLIOGRAPHY

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

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.

ICICI BANK
ICICI Bank (BSE: ICICI) (formerly Industrial Credit and Investment Corporation of India) is India's largest private sector bank by market capitalization and second largest overall in terms of assets. ICICI Bank is also the largest issuer of credit cards in India. ICICI Bank has got its equity shares listed on the stock exchanges at Kolkata and Vadodara, Mumbai and the National Stock Exchange of India Limited, and its ADRs on the New York Stock Exchange (NYSE). The Bank is expanding in overseas markets and has the largest international balance sheet among Indian banks. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and specialized subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. (These data are dynamic.) ICICI Bank is also the largest issuer of credit cards in India.

Type

Private BSE & NSE:ICICI, NYSE: IBN Banking Insurance Capital Markets and allied industries 1955 (as Industrial Credit and Investment Corporation of ) ICICI Bank Ltd., , Bandra Kurla, Mumbai, India K.V. Kamath,Chairman Chanda Kochhar, Managing Director & CEO Sandeep Bakhshi, Deputy Managing Director N.S. Kannan, Executive Director & CFO K. Ramkumar, Executive Director Sonjoy Chatterjee, Executive Director Loans, Credit Cards, Savings, Investment vehicles, Insurance etc. USD 15.06 billion USD 120.61 billion (at March 31, 2009.) www.icicibank.com

Industry

Founded Headquarters

Key people

Products Revenue Total assets Website

BUSINESS OBJECTIVE
Vision To be the leading provider of financial services in India and a major global bank.

Mission We will leverage our people, technology, speed and financial capital to: be the banker of first choice for our customers by delivering high quality, worldclass service. Expand the frontiers of our business globally. Play a proactive role in the full realization of Indias potential. Maintain a healthy financial profile and diversify our earnings across businesses and geographies. Maintain high standards of governance and ethics. Contribute positively to the various countries and markets in which we operate. Create value for our stakeholders.

Comparative Balance Sheet Of ICICI Bank From 2005-2006 To 2008-2009

PARTICULARS 2005-2006
Absolute change % of change

2006-2007
Absolute change % of change

2007-2008
Absolute change % of change

2008-2009
Absolute change % of change

CAPITAL AND LIABILITIES:

Capital 153.08 9502.96 65264.39 4977.41 3831.71 14 80 65 15 18 9.51 2097.76 65427.02 12734.12 13000.76 0.8 10 40 33 51.5 213.34 21943.61 13920.86 14392.4 4666.75 17 94 6 28 12 0.61 3062.2 (26083.23) 1675.26 851.04 .04 7 (11) 2.5 2

Reserves and surplus Deposits Borrowings Other Liabilities and Provisions

TOTAL CAPITAL AND LIABILITIES

83729.55

50

93269.17

37

55136.96

16

(20494.12)

(5.1)

ASSETS:
Investments Advances Fixed assets Capital Work In Progress
21060.04 54757.96 (57.32) 51.64 42 60 (1.4) 54 19710.45 49702.49 (57.3) 41.72 27.5 34 (1.4) 28.2 20196.5 29750.48 185.47 (189.66) 22 15 5 -100 (8396.03) (7305.23 (307.27) 0.00 (7.5) (3.25) (7.5) 0.00

Current assets
TOTAL ASSETS:

7917.23
83729.55

37
50

23871.8
93269.16

81
37

5194.17
55136.96

10
16

(4485.58)
(20494.11)

(8)
(5.1)

INTERPRETATION

The capital of bank increased by 14% in 2005-06,0.8% in 2006-07,17% in 200708,and .04 % in 2008-09.This shows that there is fluctuation in the rate of increase in the capital. In 2005-06 and 2007-08 the rate of increase in capital is more than that of 2006-07 and 2008-09. There is a huge fluctuation in the rate of increase in reserves and surplus also. This shows that bank is effectively utilizing its reserves and surplus. In 2005-06 deposits increase by 65%,in 2006-07 it increased by 40%,and an increase of 6% in 2007-08.in 2008-09 deposits fall by 11%.this shows that the bank has repaid its deposits in this year. The borrowings are also showing a fluctuating rate of increase. in 2008-08 the borrowings have increased at a very low rate. this shows that bank has repaid a large amount of borrowings in this year and thereby reducing the dependence on outside debt. The investments are also increasing but with lower rates compared to the preceding years. Similarly advances rose by 60% in 2005-06,an increase of 34% in 2006-07,15% increase in 2007-08 and finally decreased by 3.25% in 2008-09. There has been a consistent decline in the fixed assets over years. in 2005-06 and 2006-07 it decreased by 1.4 % ,increased by 5% in 2007-08 and again decreasing by 7.5% in 2008-09.this is mainly due to increase in the rate of depreciation in the subsequent years. A huge fluctuation is revealed from current assets. it increased by 37% in 200506,rate of increase rose to 80% in 2006-07 and then the it increased at a much lower rate i.e at 10%.this shows that the bank is effectively utilizing its working capital. There is a fall in current assets in 2008-09 by 8 %.this is mainly due to the repayment

2005 CAPITAL AND LIABILITIES: Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Net Worth 1086.75 736.75 0.02 350.00 11813.20 0.00 12899.97

2006

2007

2008

2009

1239.83 889.83 0.00 350.00 21316.16 0.00 22555.99

1249.34 899.34 0.00 350.00 23413.92 0.00 24663.26

1462.68 1112.68 0.00 350.00 45357.53 0.00 46820.21

1463.29 1113.29 0.00 350.00 48419.73 0.00 49883.02

Deposits
Borrowings Total Debt Other Liabilities And Provisions Total Liabilities

99818.78
33544.50 146263.25 21396.17 167659.42

165083.17
38521.91 226161.17 25227.88 251388.95

230510.19
51256.03 306429.48 38228.64 344658.12

244431.05
65648.43 356899.69 42895.39 399795.08

218347.82
67323.69 335554.53 43746.43 379300.96

ASSETS:
Cash And Balances With RBI Balances With Banks, Money At Call Advances Investments Gross Block Accumulated Depreciation Net Fixed Assets Capital Work In Progress Other Assets Total Assets 6344.90 8934.37 18706.88 29377.53 17536.33

6585.07

8105.85

18414.45

8663.60

12430.23

91405.15 50487.35 5525.65 1487.61 4038.04 96.30 8702.59 167659.40

146163.11 71547.39 5968.57 1987.85 3980.72 147.94 12509.57 251388.95

195865.60 91257.84 6298.56 2375.14 3923.42 189.66 16300.26 344658.11

225616.08 111454.34 7036.00 2927.11 4108.89 0.00 20574.63 399795.07

218310.85 103058.31 7443.71 3642.09 3801.62 0.00 24163.62 379300.96

2005 INCOME: Interest Earned Other Income Total Income EXPENDITURE: Interest Expended Operating Expenses Total Expenses Operating Profit Other Provision And Contigencies Provision For Tax Net Profit Extraordinary Items Profit B/F 6570.89 3299.15 9870.04 2956 428.80 9409.90 3416.14 12826.04

2006

2007

2008

2009

13784.49 4983.14 18767.63

22994.29 5929.17 28923.46

30788.34 8810.77 39599.11

31092.55 7603.72 38696.27

9597.45 4479.51 14076.96 4690.67 1594.07

16358.50 6690.56 23049.06 5874.40 2226.36

23484.24 8154.18 31638.42 7960.69 2904.59

22725.93 7045.11 29771.04 8925.23 3808.26

522 2005.20 0.00 53.09

556.53 2540.07 0.00 188.22

537.82 3110.22 0.00 293.44

898.37 4157.73 0.00 998.27

1358.84 3758.13 (0.58) 2436.32

Total

2058.29

2728.29

3403.66

5156.00

6193.87

Total
Preference Dividend Equity Dividend Corporate Dividend Tax

2058.29
0.00 632.96 90.10

2728.29
0.00 759.33 106.50

3403.66
0.00 901.17 153.10

5156.00
0.00 1227.70 149.67

6193.87
0.00 1224.58 151.21

Pershare Data
Eps(Rs.) Equity Dividend(%) Book Value(Rs) Appropriations Transfer To 547.00 Statutory Reserve Transfer To Other Reserve Proposed Dividend/Transfer To Govt Balance C/F To Balance Sheet Total 600.01 723.06 248.69 1320.34 865.83 1351.12 0.00 1054.27 1342.31 0.01 1377.37 2008.42 0.01 1375.79 27.22 85.00 170.35 28.55 85.00 249.55 34.59 100.00 270.37 37.37 110.00 417.64 33.78 110.00 445.17

188.22 2058.29

293.44 2728.30

998.27 3403.66

2436.32 5156.01

2809.65 6193.87

FINDINGS

Profit before tax for the year ended March 31, 2009 (FY2009) was Rs. 5,117 crore (US$ 1,009 million), compared to Rs. 5,056 crore (US$ 997 million) for the year ended March 31, 2008 (FY2008). Profit after tax for FY2009 was Rs. 3,758 crore (US$ 741 million) compared to Rs. 4,158 crore (US$ 820 million) for FY2008 due to the higher effective tax rate on account of lower proportion of income taxable as dividends and capital gains. Net interest income increased 15% from Rs. 7,304 crore (US$ 1,440 million) for FY2008 to Rs. 8,367 crore (US$ 1,650 million) for FY2009. While the advances declined marginally year-on-year, the net interest income increased due to improvement in net interest margin from 2.2% in FY2008 to 2.4% in FY2009. Operating expenses (including direct marketing agency expenses) decreased 14% to Rs. 6,835 crore (US$ 1,348 million) in FY2009 from Rs. 7,972 crore (US$ 1,572 million) in FY2008. The cost/average asset ratio for FY2009 was 1.8% compared to 2.2% for FY2008. The branch network of the Bank has increased from 755 branches at March 31, 2007 to 1,438 branches at April 24, 2009. The Bank is also in the process of opening 580 new branches which would expand the branch network to about 2,000 branches, giving the Bank a wide

TREND ANALYSIS
Particula 2005 rs Deposits 100 Advances 100 Net profit 100 2006 165 160 127 2007 231 214 155 2008 245 247 207 2009 219 239 187 There is a continuous increase in the deposits till the year ending 2008 followed by a downfall in the year ending 2009 due to repayment of deposits in this year. Similarly advances also shows as increasing trend till the year ending 2008 followed by a slight downfall in the year ending 2009. There has been a substantial increase in net profit till the year year ending 2008.In four years it has been more than double. The overall performance of the bank is satisfactory.

Trend graph of ICICI Bank

300 250
percentage(%)

200 150 100 50 0 2005 2006 2007 Years 2008 2009

DEPOSITS ADVANCES NET PROFIT

CURRENT RATIO
CURRENT RATIO = CURRENT ASSETS / CURRENT LIABILITY
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.
Year 2005 Current Assets
(Rs. In crores)

Current Liabilities
(Rs. In crores)

Current Ratio 1.01

21632.56

21396.16

2006
2007 2008 2009

29549.79
53421.59 58615.76 54130.18

25227.88
38228.64 42895.38 43746.43

1.17
1.39 1.36 1.23
Ratio

Current Ratio of ICICI Bank for the period of 2005-2009

1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2005 2006 2007 Years 2008 2009 Current Ratio 1.17 1.01 1.39 1.36 1.23

here the current ratio is less than 2 and more than 1 which shows that the bank have current assets just equal to the current liabilities which is not satisfactory as the safety margin is very less or zero. Therefore the bank should keep more current assets so that it can maintain a satisfactory safety margin.

Ratio Analysis
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 said that the relationship between two figures, expressed in arithmetical terms is called a ratio.

Quick Total Quick LIQUID RATIO Ratio =Total CurrentAssets Liabilities

Quick Assets = Total Current Assets Inventory Liquid ratio is also known as Quick or
Liquid Ratio of ICICI Bank for the period of 2005-2009 1.2 1 0.8 0.67
Ratio

Acid Test Ratio. Liquid assets refer to

assets which are quickly convertible into cash. Current Assets other stock and prepaid expenses are considered as

0.97 0.88 0.68 Liquid Ratio

0.6 0.6 0.4 0.2

quick assets.

YEAR TOTAL QUICK ASSET S

2005 2006 2007 2008 12929.97 17040.22 37121.33 38041.13

TOTAL CURREN T LIABILITI ES

21396.16 25227.88 38228.64 42895.38

LIQUID RATIO

0 2005 2006 2007 Years 2008 2009

0.60 0.67 0.97 0.88

Though it is not equal to the ideal liquid ratio of 1:1 but it is still under control. Thus it can be concluded that the liquidity position of the bank is quite satisfactory.

EARNING PER SHARE

Earning Per Equity Share = Net Profit after Tax Preference Dividend No. of Equity shares

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 companys capacity to pay dividend to its equity shareholders.

The earnings per share for the period under study shows a promising increase. it suggests that bank has better profitability position and in future it can be a better or attractive channel of investment for shareholders.

Year

2005 2006 2007 2008 2009

Net Income Available For Shareholders (Rs. In crores) 2005.2 2540.07 3110.22 4157.73 3758.13

No. Of Equity Shares (Rs. In crores) 73.6716 88.9823 89.9266 111.2687 111.325

EPS

27.22 28.55 34.59 37.37 33.78

Earnings Per Share Ratio of ICICI Bank for the period of 2005-2009
40 35 30 25 27.22 28.55 34.59 37.37 33.78

Ratio

20 15 10 5 0 2005 2006 2007 Years 2008 2009

Earnings Per Share

DIVIDEND PER SHARE

Dividend Per Share = Dividend Paid To Equity Shareholders No. Of Equity Shares

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.

Since the dividend per share has shown a promising increase for the period under study. It shows that the bank is following a sound dividend policy and is capable of distributing higher dividends. In this way the investors will feel investing in capital of the bank a much beneficial option and will be reluctant to withdraw capital for a long time.

Year

2005 2006 2007 2008 2009

Debt (Rs. In crores) 154759.45 228832.96 319994.86 352974.87 329417.94

Equity (Rs. In crores) 12899.97 22555.99 24663.26 46820.21 49883.02

Debt Equity Ratio 11.99 10.14 12.97 7.53 6.6

Dividend Per Share Ratio of ICICI Bank for the period of 2005-2009
11.03 10.02 8.59 8.53 Dividend Per Share Ratio 11

12 10 8
Ratio

6 4 2 0 2005 2006 2007 Years 2008 2009

NET PROFIT RATIO:

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 Net Profit Ratio of ICICI Bank for the period of 2005-2009 of Year business. Net Profit Sales Net Profit
(Rs. In crores) (Rs. In crores)

Ratio(%)

2005 2006 2007 2008 2009

2005.2 2540.07 3110.22 4157.73 3758.13

9409.9 13784.49 22994.29 30788.34 31092.55

Ratio (in %) 21.3 18.42 13.52 13.5 12.08

25 21.3 20 18.42

15

13.52

13.5 12.08 Net Profit Ratio

Although both the sales and net profit have increased during the above period but the Net Profit Ratio of the bank is declining continuously. This is because of the reason that net profits have not increased in the same proportion as of that as sales.

10

0 2005 2006 2007 Years 2008 2009

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 profitabilityof 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.
The above table exhibit the return on capital employed ratio of the bank for last five years.This ratio measures the earning of the net assets of the business. The ratio was 6.22% in year 2005. After that it raised to the tune of 5.61%,6.52%,7.99% and 8.29% in year 2006, 2007, 2008 and year 2009 respectively. It lead to the conclusion bank rising but very little proportion of return on capital employed.
9 7.99 8 7 6 6.22 5.61 Return On Capital Employed 4 3 2 1 0 2005 2006 2007 Years 2008 2009 6.52

Year

Net Profit Before Interest And Tax

(Rs. In crores)

Capital Employed
(Rs. In crores)

Return On Capital Employed (in %)

2005 2006

9098.09 12694.05

146263.25 226161.17

6.22 5.61

2007
2008 2009

20006.54
28540.34 27842.9

306429.48
356899.69 335554.53

6.52
7.99 8.29

Return On Capital Employed of ICICI Bank for the period of 2005-2009

8.29

Ratio

PROPRIETORY RATIO:
Proprietory Ratio = Shareholders Fund Total Assets
It helps to determine the long-term solvency of a company.This ratio measures the protection available to the creditors.Higher the ratio,lesser is the likelihood of insolvency in future,as the management has to use lessor debts and vice versa.Thus,this ratio is of great importance to theAssets creditors. Years Shareholder's Funds Total Proprietory Proprietory Ratio of ICICI Bank for the period of
(Rs. In crores) 2005 2006 2007 2008 2009 12899.97 22555.99 24663.26 46820.21 49883.02 (Rs. In crores) 167659.4 251388.95 344658.11 399795.07 379300.96 Ratio 0.07 0.08 0.07 0.12 0.13

2005-2009
0.14 0.12 0.12 0.1 0.08
Ratio

0.13

0.08 0.06 0.04 0.02 0

0.07

0.07 Proprietory Ratio

It was 7% in 2005,After that was 8% in year 2006. Similarly it was once again reduced to 7 % in the year 2007. After 2007 it registered increase and was 12% and 13% in the year 2008 and 2009 respectively. Hence it leads to the conclusion owners have less than 13% stake in the total assets of the bank. It is not a good sign as far the long term solvency is concerned.

2005

2006

2007 Years

2008

2009

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 shareholders funds. The soundness of longterm financial policies of a firm can be determined with the help of Debt thisInratio. Equitycrores) Debt Equity Debt Equity ratio of ICICI Bank for the period of (Rs. crores) (Rs. In Ratio
2005-2009
2005 2006 2007 2008 2009 154759.45 228832.96 319994.86 352974.87 329417.94 12899.97 22555.99 24663.26 46820.21 49883.02 11.99 10.14 12.97
Ratio

Year

14 11.99 12 10.14 10 8 6 4 2 0 2005 2006

12.97

7.53 6.6

7.53 6.6 Debt Equity Ratio

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.

2007 Years

2008

2009

OPERATING PROFIT RATIO:

Operating Profit Ratio = Operating Profit X100 Net Sales
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 Year Operating Sales Operatin and provide reasonable return. (Rs. In Profit g Profit
(Rs. In crores) crores)

Ratio (in %)
31.41 34.02 25.54 25.85 28.7

Operating Profit Ratio of ICICI Bank for the period of 2005-2009

40 35 30 25.54 25 25.85 34.02 31.41 28.7

2005 2006 2007 2008 2009

2956 4690.67 5874.4 7960.69 8925.23

9409.9 13784.49 22994.29 30788.34 31092.55

In the year 2005 & 2006 the operating profit is 31.41% & 34.02% respectively. After that it has been consistently declined from the year 2007 till 2008 and again gaining momentum in 2009. This may be due to the reason that operating expenses have been increased more as compared to sales during the above period consequently reducing the operating profits.Therefore the bank should check on unnecessary operating expenses to correct this situation and to provide a sufficient return.

Ratio

20 15 10 5 0 2005 2006 2007 Years 2008 2009

Operating Profit Ratio

FIXED ASSETS TURNOVER RATIO: Turnover Ratio = Cost of goods sold or Sales Fixed Assets
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 vey high and Sales Net Fixed the profitability is significantly dependent on theYear utilization of these assets.
Fixed assets Turnover Ratio of ICICI Bank for the period of 2005-2009
2005
(Rs. In crores)

Fixed Assets
(Rs. In crores)

Assets Turnover Ratio 2.33 3.46 5.86 7.49

9409.9 13784.49 22994.29 30788.34

4038.04 3980.72 3923.42 4108.89

9 8 7 6 5 4 3 2 1 0

7.49 5.86 3.46 2.33

8.17

2006 2007 2008

31092.55 3801.62 8.17 Fixed assets Turnover 2009 Ratio Here the fixed assets employed in the business shows a
decreasing trend except in the year 2008 where fixed assets have again increased.This may be due to increase in rate of depreciation in subsequent years. Neverthless,the fixed assets turnover ratio has been consistently increasing.It 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.

Ratio

2005

2006

2007 Years

2008

2009

RETURN ON NET WORTH:

Return On Net Worth = Net Profit After Interest And Tax x 100

Shareholders Funds

Year

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.
Net Profit After Interest And Tax
(Rs. In crores)

Sharehold er's Fund

(Rs. In crores)

Return On Net Worth (in %)

Return On Net Worth Ratio of ICICI Bank for the period of 2005-2009
15.54 12.61 11.26 8.88 7.53 Return On Net Worth

Ratio

2005 2006 2007 2008 2009

2005.2 2540.07 3110.22 4157.73 3758.13

12899.97 22555.99 24663.26 46820.21 49883.02

15.54 11.26 12.61 8.88 7.53

18 16 14 12 10 8 6 4 2 0 2005 2006 2007 Years 2008 2009

The net profit after interest and tax have increased slowly till the year 2008 followed by a downfall due to high interest payments, operating expenses and taxation liability. Consequently the net worth ratio has declined considerably and has reduced to more than half in the year 2009 than it was in 2005.

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 has well as their deployment towards disbursement of loan and advances. Higher credit deposit ratio shows overall good efficiency and performance of any banking institution.

Year

Advances (Rs. In crores)

Deposits (Rs. In crores)

Credit Deposit Ratio (in%)

2005 2006 2007 2008 2009

91405.15 146163.11 195865.6 225616.08 218310.85

99818.78 165083.17 230510.19 244431.05 218347.82

91 88 84 92 99

High trends of credit deposit ratio reveals that bank has performed satisfactorily as regard to granting loans and advances to generate income. It suggests that credit performance is good and the bank is doing its business good by fulfilling its major objective as regards to granting loans and accepting deposits.

Credit Deposit ratio of ICICI bank for the period of 2005-2009

1.05 1 0.95
Ratio

0.99 0.92 0.88 0.84 Credit Deposit ratio

0.91 0.9 0.85 0.8 0.75 2005 2006 2007 Years

2008

2009

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 owners equity. Banks 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.

Suggestions

Although the short term liquidity position is quite satisfactory as per revealed by liquid ratio but the current ratio is below the ideal ratio of 2:1.So the bank should make efforts to increase its current assets to maintain a safety margin and to maintain a better liquidity position. The profitability of the bank for the period under study is not satisfactory. Profits are increasing but not with same pace as of the expenditure due to higher reliance on debt capital in the form of borrowings and loans for financing capital structure. So in order to improve profitability, the bank should reduce its dependence on external equities for meeting capital requirements. Consequently, the interest expenses will decline and profits will increase which is good for the bank. Similarly non productive expenses should be curtailed to improve profitability. Higher trend of credit deposit ratio reveals that the bank has performed satisfactorily as regard to granting loans and advances to generate income. It suggests that the credit performance of bank is good and it is performing its business well by fulfilling the major objective of granting credit and accepting deposit. So in order to have more creditability in the market the bank should maintain its credit deposit ratio. Though the bank has been successful in increasing its deposits but to further improve upon such situation it can introduce some new and attractive schemes for public. Such schemes can be in the form of higher rate of interest and shorter maturity period for FDs etc. Bank should try to finance more and more projects. Financing will help it to earn higher amount of profits. The bank is having a greater reliance on debt capital. The increasing reliance on external equities may prove hazardous in the long run. So in order to remedy this

BIBLIOGRAPHY

Www.Icicibank.Com Www.Moneycontrol.Com WWW.Money.Rediff.Com Www.Wikipedia.Org Www.Google.Com Www.Scribd.Com