HDFC Bank

Presented By: Group 4

Financial Analysis of HDFC

Financial Analysis of HDFC Bank Group 4

Contents Introduction ........................................................................................3 Financial Sector of India An Overview ..........................................5 HDFC Bank ........................................................................................8 Financial Analysis ........................... Error! Bookmark not defined. Financial Statement analysis of HDFC Bank ..................................13 Comparative Statement Analysis .....................................................13 Ratio Analysis of HDFC Bank .........................................................21 Common Size Analysis of HDFC Bank ..........................................36 Trend Analysis of HDFC Bank ........................................................40 Managers Perspective47

Financial Analysis of HDFC Bank Group 4

Introduction
Financial statement analysis is very helpful in spanning banks internal operations and its relations with the outside world. Therefore, the financial information must be organized into an understandable, coherent and sufficiently limited set of data. Data from the financial statement analysis can be used to quickly calculate and examine financial ratios. An attempt has been made here to analyse the financial statements of HDFC Bank.

The investors rely on the financial statement to judge the performanceof the bank and ensure that these statements are correct, complete, consistent and comparable. The accuracy of the financial statement can be identified from the report of the auditors. The financial statement analysis can be used by investors for deciding about their investments. The financial institutions also use these statements while granting loans to the banks. The debenture holders, creditors, employees and government can also use the financial statements for different purposes. The bank itself and outside providers of capital creditors and investors all undertake financial statement analysis. The type of analysis varies according to the specific interests of the party involved. Creditors are primary interested in the liquidity of a bank. Their claims are short term, and the ability of the bank to pay these claims quickly is best judged by an analysis of the banks liquidity. The claims of bond holders, on the other hand, are long term. Accordingly, bond holders are more interested in the cash flows ability of the bank to service debt over a long period of time.
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Financial Analysis of HDFC Bank Group 4

Inflation Rate

Inflation rate in double-digit and resulted in hike in policy rates by 150 bps, which put the liquidity situation under high stress. Although, further rate hike is not imminent, but inflation would drive the monetary policy further and interest rate expected to remain high.

Headline inflation is always considered as a major vexation for the Indias central bank. Since, inflation was reading in a double-digit figure, it was a challenge for the Reserve Bank of India to fix the inflation problem under the condition of fragile global economic recovery without denting the recovery process. In response to that, RBI revised its policy rates by over 100 bps and now it does seem that the policy action is working but the money supply is still at 20.34 per cent. Both trend lines are now acting inversely, and inflation is falling down to 8 per cent. According to VMW Research, inflation is projected at 7.48 per cent for the month of Nov, 2010. It is also evident that in the past three months, schedule commercial banks and non-banking
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Financial Analysis of HDFC Bank Group 4

financial companies have started borrowing from the RBIs window of Liquidity Adjustment Facility (LAF) at the rate of 6.25 per cent. Since, banks are now left with the limited amount of liquidity; theyre again focusing on deposits from customers. Several banks have revised their deposit rates between 50 bps and 150 bps to attract funds, however, going forward, banks will see a narrow interest rate spread, resulted in lower earnings. Discomfort levels of inflation and money supply will keep interest rates higher for the next few months. Moreover, to reduce the impact of tight liquidity, RBI has already started the Open Market Operation (OMO) to infuse liquidity by way of purchasing government bonds in exchange of money.

Financial Sector of India An Overview

Financial Sector of India is intrinsically strong, operationally sundry and exhibits competence and flexibility besides being sensitive to Indias economic aims of developing a market oriented, industrious and viable economy. An established financial sector assists greater standards of endowments and endorses expansion in the economy with its intensity and exposure. The fiscal sector in India entails banks, financial organization, markets and services.

Fiscal transactions in an organized industry are executed by a number of financial organizations which are commercial in nature and offer monetary services to the society. Further classification includes banking and non-banking enterprises, often recognized as activities that are client specific. The chief controller of the finance in India is the Reserve Bank of India (RBI) and is regarded as the supreme organization
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Financial Analysis of HDFC Bank Group 4

in the fiscal structure. Other significant fiscal organizations are business banks, domestic rural banks, cooperative banks and development banks. Non-banking fiscal organizations entail credit and charter firms and other organizations like Unit Trust of India, Provident Funds, Life Insurance Corporation, Mutual funds, GIC, etc.
Indian Banking Sector

After a difficult FY09 Indian banks managed to grow their balance sheets in FY10 albeit at a lower average rate than that projected by the RBI. The monetary stimuli (reduction in repo rate, cash reserve ratio (CRR) and statutory liquidity ratio (SLR) offered to the banks by the RBI early in the fiscal made it easier to sustain margins But what really helped was the accretion of low cost deposits (CASA). Indian banks grew their advances and deposits by 16.9% YoY and 17.2% YoY respectively in FY10. The growth was mainly driven by a expansion in low cost deposits and growth in agricultural and large corporate credit.

Financial Analysis of HDFC Bank Group 4

With lesser avenues of credit disbursal, banks had to park most of the liquidity available with them with the RBI. In the retail portfolio, while home loans grew by 11% YoY, personal loans enjoyed a much smaller growth of 6% YoY due to bank's reluctance towards uncollateralized credit. Credit card outstanding in fact dropped by 27% YoY. Indian banks, however, enjoyed higher levels of money supply, credit and deposits as a percentage of GDP in FY10 as compared to that in FY09 showing improved maturity in the financial sector.

Despite poor pricing power lower cost of funds helped Indian banks grow their net interest margins in FY10. While few like ICICI Bank chose to reduce their balance sheet size, most entities chose to reasonably grow their franchise as well as assets. Public sector banks outdid their private sector counterparts in terms of growth and franchise expansion in the last fiscal. Improved capital adequacy also helped banks to

Financial Analysis of HDFC Bank Group 4

comfortably comply with Basel II. The higher efficiency levels were the hallmarks of better performance of Indian banks last year. Most banks had to restructure some loans in their portfolio during FY10 which deferred their interest income. Further the PSU banks had also to provide for the loss of interest on the agri-loans waived by the government.

HDFC Bank
In August, 1994 the Housing Development FinanceCorporation Limited (HDFC) was incorporated in the name ofHDFC Bank Limited. The Reserve Bank of India has approved in principle to set up private banks. HDFC was one of the firstorganizations to receive in principle approval from RBI. The HDFC Bank has its registered office in Mumbai. In January 1995, theoperations of HDFC Bank as a commercial bank has commenced.In India and in international markets HDFC has an impeccabletrack record. HDFC has maintained a healthy growth and aconsistency in its operations and remained as a leader in market ofmortgages. The portfolio of HDFCs outstanding loan has a milliondwelling units. HDFC has a large corporate client base for housingrelated credit facilities. HDFC was ideally positioned to promote abank in the Indian market with its experience and strong reputationin market of finance.HDFC Bank has 1,725 branches in India. Objective:
HDFC Bank is a young and dynamic bank, with a youthfuland enthusiastic team determined to accomplish the vision ofbecoming a world-class Indian bank.
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Financial Analysis of HDFC Bank Group 4

Banks business philosophy is based on four core values- Customer Focus, Operational Excellence, ProductLeadership and People. Bank believes that the ultimateidentity and success of bank will reside in the exceptionalquality of our people and their extraordinary efforts. For thisreason, bank is committed to hiring, developing, motivatingand retaining the best people in the industry.

Mission: The Banks mission is to be a World Class Indian Bank,benchmarking bank against international standards and bestpractices in terms of product offerings, technology, service levels,risk management and audit & compliance. The objective is to buildsound customer franchises across distinct businesses so as to bea preferred provider of banking services for target retail and wholesale customer segments, and to achieve a healthy growth inprofitability, consistent with the Banks risk appetite. Bank iscommitted to do this while ensuring the highest levels of ethicalstandards, professional integrity, corporate governance andregulatory compliance.HDFC Bank has been recognized as 'Best Bank in India' inthe magazine rankings as well as surveys year on year. HDFC Bank is the most preferred employer in banking industry in India.Bank business strategy emphasizes the following:

Increase banks market share in Indias expanding bankingand financial services industry by following a disciplinedgrowth strategy focusing on quality and not on quantity anddelivering high quality customer service.

Financial Analysis of HDFC Bank Group 4

Leverage technology platform and open scalable systems todeliver more products to more customers and to controloperating costs.

Maintain current high standards for asset quality throughdisciplined credit risk management. Develop innovative products and services that attract targeted customers and address inefficiencies in the Indianfinancial sector.

Continue to develop products and services that reduce costof funds. Focus on high earnings growth with low volatility.
Capital Structure:

At present, HDFC Bank boasts of an authorized capital of Rs.550 crore (Rs5.5 billion), of this the paid-up amount is Rs 424.6 crore (Rs.4.2 billion). In terms of equity share, the HDFC Group holds 19.4%. Foreign Institutional Investors (FIIs) have around 28% of the equity and about 17.6% is held by the ADS Depository (in respect of the bank's American Depository Shares (ADS) Issue). The bank has about 570,000 shareholders. Its shares find a listing on the Stock Exchange, Mumbai and National Stock Exchange, while its American Depository Shares are listed on the New York Stock Exchange (NYSE), under the symbol 'HDB'.
Capital Adequacy Ratio:

Banks total Capital Adequacy Ratio (CAR) calculated in line with the Basel II framework stood at 17.4%, well above the regulatory minimum of 9.0%. Of this, Tier I CAR was 13.3%.
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Financial Analysis of HDFC Bank Group 4

Financial Analysis

Financial Analysis: Financial analysis is a study of relationship among the various financial factors in a business. The process of financial statement analysis can be described in various ways depending on the objective to be obtained. Financial analysis can be used as a preliminary screening tool in the selection of the stock in theprimary and secondary market. It can be used as a forecasting tool of future financial condition and result. It may be used as a process of evolution and diagnosiss of managerial, operating or other problem area. Financial analysis is an integral part of the interpretation of result disclosed by financial statements. It supplies to decision makers, crucial financial information and points out the problem areas, which can be investigated. Financial analysis reduce reliance on institution guesses and thus narrows the areas of uncertainty that is present in all decision making process.

Tools of Financial Analysis: Common Size Statement:

The statement is prepared to bring out the ratio of each asset or liability to the total of balance sheet and the ratio of each item of expense or revenue to interest earned. These common size statements are often called common measurement or component percentage statement, since each statement is reduced to the total of 100 and each individual component of the statement is represented as a percentage of the total of 100, which invariably serves as the base.
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Financial Analysis of HDFC Bank Group 4

Comparative Financial Statement:

Comparative financial statements are statement of financial position of a business so designed as to facilitate comparison of different accounting variables from drawing useful inferences.
Preparation of Comparative Financial Statement

These statements are prepared by placing the various items in rows and years in the columns. This is done to facilitate easy identification of their significant differences. Columns may be drawn to accommodate absolute changes as well as percentage changes side by side. In order to calculate the percentage change, the absolute change in the various account figures are divided by their respective base year figures and multiplied by 100.

Comparative Income Statement:

A comparative income statement shows the absolute figures for two or more periods, and the absolute change from one period to another since the figure are shown side by side the user can quickly understand the operation.

Comparative Balance Sheet:

Balance sheet as on two or more different dates is used to compare the assets, liabilities and net worth of the bank. Comparative balance sheet is useful to study the trends in the financial position of a bank.

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Financial Analysis of HDFC Bank Group 4

Ratio Analysis:

Ratio analysis is the method or process by which the relationship or item or group of item in the financial statement are computed determine and presented to determine a particular aspect of organization or company. Ratio analysis is an attempt to drive quantities measure or guide concerning the financial health and profitability of a business enterprise. Ratio analysis can be used both in trends and static analysis. There are several ratios at the disposal of an analysis but the group of the ratio would prefer depends on the purpose and the objective of analysis.

Types of Financial Ratios: 1. Liquidity Ratios: 2. Profitability Ratios: 3. Solvency Ratios: 4. Capital Market Ratio

Financial Statement analysis of HDFC Bank Comparative Statement Analysis

Here we analyse the comparative financial statements of HDFC Bank as at 31st March 2008, 2009, 2010. Analysis with respect to its competitors namely ICICI Bank, Axis Bank and the public sector giant State Bank of India all of which fall among the top banks in India is also done.

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Financial Analysis of HDFC Bank Group 4

Comparative Balance Sheet of HDFC Ltd as at 31st March 2008, 2009 and 2010 (in Rs Cr.)

Capital & Liabilities

Mar'08

Inc/Dec

Mar'09

Inc/Dec

Mar'10

Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Net Worth Deposits Borrowings Total Debt

354.43

70.95

20.02

425.38

32.36

7.61

457.74

354.43

70.95

20.02

425.38

32.36

7.61

457.74

400.92

400.92

-400.92

-100

11,142.80

3083.63

27.67

14,226.43

6838.32

48.07

21,064.75

11,497.23

3555.5

30.9 41.7 -40.03 38.24

15,052.73 1,42,811.58 2,685.84 1,45,497.42

6469.76 24592.86 10229.85 34822.71

42.98 17.22 380.88 23.93

21,522.49 1,67,404.44 12,915.69 1,80,320.13

1,00,768.60 42042.98 4,478.86 -1793.02

1,05,247.46 40249.96

Other Liabilities & Provisions

16,431.91

6288.71

38.27

22,720.62

-2104.68

-9.26

20,615.94

Total Liabilities

1,33,176.60 50094.17

37.61

1,83,270.77

39187.79

21.38

2,22,458.56

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Financial Analysis of HDFC Bank Group 4

Assets Cash & Balances with RBI Balance with Banks, Money at Call Advances 63,426.90 35,456.15 55.9 98,883.05 26,947.54 27.25 1,25,830.59 2,225.16 1,754.25 78.84 3,979.41 10,479.70 263.35 14,459.11 12,553.18 974.03 7.76 13,527.21 1,956.07 14.46 15,483.28 Mar'08 Inc/Dec % Mar'09 Inc/Dec % Mar10

Investments

49,393.54

9,424.01

19.08

58,817.55

-209.93

-0.35

58,607.62

Gross Block Accumulated Depreciation Net Block Capital Work In Progress Other Assets

2,386.99

1,569.64

65.76

3,956.63

751.34

18.99

4,707.97

1,211.86

1,038.04

85.66

2,249.90

335.26

14.9

2,585.16

1,175.13

531.6

45.24

1,706.73

416.08

24.37

2,122.81

4,402.69

1,954.14

44.39

6,356.83

-401.68

-6.32

5,955.15

Total Assets

1,33,176.60

50,094.18

37.61 1,83,270.78 39,187.78

21.38 2,22,458.56

Contingent Liabilities Bills for collection Book Value (Rs)

5,82,835.94

1,86,241.63

-31.95 3,96,594.31 69,641.93

17.56 4,66,236.24

17,092.85

846.77

4.95

17,939.62

3,000.51

16.73

20,940.13

324.38

20.06

6.18

344.44

125.75

36.51

470.19

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Financial Analysis of HDFC Bank Group 4

Comparative Income Statement of HDFC Ltd for the periods 31st March 2008, 2009 and 2010 (in Rs. Cr)
Income Interest Earned Other Income Total Income Expenditure Interest expended Employee Cost Selling and Admin Expenses Depreciation Miscellaneous Expenses Preoperative Exp. Capitalized Operating Expenses Provisions & Contingencies Net Profit Total Expenses Extraordinary Items Profit brought forward Total Preference Dividend Equity Dividend Corporate Dividend Tax 4,887.12 1,301.35 974.79 271.72 3,295.22 82.34 71.99 192.5 32.46 -2.97 8,911.10 2,238.20 2,851.26 359.91 3,197.49 -12.62 2.28 19.1 9.58 -0.89 7,786.30 2,289.18 3,395.83 394.39 3,169.12 Mar '08 10,115.00 2,205.38 12,320.38 % 61.47 57.37 60.73 Mar '09 16,332.26 3,470.63 19,802.89 % -0.98 9.8 0.91 Mar '10 16,172.90 3,810.62 19,983.52

0 3,935.28 1,907.80 1,590.18 10,730.20 -0.06 1,932.03 3,522.15 0 301.27 51.2 41.2 41.19 85.26 -28.91 41.18 63.63 883.33 33.26 36.82

0 7,290.66 1,356.20 2,244.94 17,557.96 -0.59 2,574.63 4,818.98 0 425.38 72.29 29.13 26.2 5.66 13.93 31.35 -2.98 57.63 34.22 32.88

0 7,703.41 1,545.11 2,948.70 17,034.82 -0.93 3,455.57 6,403.34 0 549.29 91.23

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Financial Analysis of HDFC Bank Group 4 Per share data (annualized) Earnings Per Share (Rs.) Equity Dividend (%) Book Value (Rs.) Appropriations Transfer to Statutory Reserves Transfer to Other Reserves Proposed Dividend/Transfer to Govt. Balance c/f to Balance Sheet Total 2,574.61 3,522.15 34.22 36.82 3,455.57 4,818.99 31.17 32.88 4,532.79 6,403.33 352.47 41.19 497.67 28.7 640.52 436.05 47.06 641.25 45.83 935.15 44.87 85 324.38 17.61 17.65 6.18 52.77 100 344.44 22.08 20 36.51 64.42 120 470.19

159.02

41.18

224.5

31.35

294.87

Interpretation of Comparative Statements

Comparative Balance Sheet:

The total assets and liabilities have increased by 21.38% compared to 20082009 to reach Rs. 2,22,458.56 crore but this rise is less when compared to the previous periods rise of 37.6%. The increase in total assets can be attributed mainly by the rise in Advances and Balances with Banks and Money at Call and Short notice. This could be an indication of the healthy position the bank is in. Cash and Balance with RBI has also increased over the period by 14.46% further contributing to the rise in total assets. Investments have reduced by 0.36% over the period.
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Financial Analysis of HDFC Bank Group 4

According to the schedules to the accounts, there has been addition of fixed assets, mainly to premises including land worth Rs.2,735,762,000 further adding to rise in value of fixed assets. This increase in assets is met by a 7.61% rise in Capital, increase in deposits by 17.22% and a large increase in borrowingswhich shows the company has raised money through borrowings.This is an indication of the bank planning for expansion to cover more areas and increase its operations. But the large part of this expansion is funded by deposits and borrowings which may not be good sign as far as the bank and its shareholders are concerned. There is a 14.46% increase in cash balances with the RBI which could be explained by the various policies adopted by the central bank, 263.35% increase in balance with banks and money at call and short notice, 27.25% in advances and 24.38% in fixed assets. Contingent liabilities have increased by 17.56% and Bills for collection by 16.73%. Book value has increased by 36.5% to 470.19. Capital has increased by 7.61%. It consists of 55,00,00,000 Equity Shares of Rs. 10/- each of Authorised Capital and 45,77,43,272 Equity Shares of Rs. 10/- each of Issued, Subscribed and Paid-up Capital. Reserves have increased by 48.06% compared to the previous period where there was only 27.67% rise. This rise can be attributed to the rise in profits. The deposits have grown by 17.22% which is a good indication of the banks healthy position and the confidence it enjoys with the public.

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Financial Analysis of HDFC Bank Group 4

Comparative Income Statement:

We notice that the interest earned has decreased by 0.98% over the period ending March 2010 whereas there was in increase by 61.47% over the previous period. This change is not favourable to the bank as far as shareholders and the management are concerned. But the interest expense has also gone down by -12.62% whereas there was a rise by 82.34% over the previous period. The decrease in interest expense is mainly due to the reduction in interest on deposits and interest on RBI/Inter-Bank Borrowings. The decrease in interest earned has gone down mainly due to decreases in Interest / discount on advances / bill, income from investments, Interest on balance with RBI and other inter-bank funds. From the balance sheet we have noticed that investments had gone down.There is decrease in investments from 32.09% to 26.35%, which shows that bank has sold some of its investments Since there has been a much greater descent in interest expense, the profit had increased over the period. There has been a decrease in the rate of depreciation from 32.46% to 9.58%. Employee cost and Selling and Administrative expenses has increased down by 2.28% and 19.10% respective whereas in the previous year it was 71.99% an 192.50% respectively. Net profit for the period was Rs.2948.70 crore which represents an increase by 31.35% compared to a rise of 41.18% over the previous period. The decrease in interest income could have contributed to the decline in the rate. Profit brought forward from the previous year was Rs.3,455.57 crore. Equity dividend rose by 29.13% to 549.29 crore compared to 41.20% over the previous period and corporate dividend tax rose by 26.2% to Rs. 91.23 crore. Equity dividend percentage rose by 20% to 120% from the previous 100%. The book value has increased by 36.51% to 470.19 which is good news for the
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Financial Analysis of HDFC Bank Group 4

investors.Transfers to statutory and other reserves rose by 45.83 and 31,83% respectively. Proposed Dividend rose by 28.7% to 640.52 which indicates the healthy position of the bank.
Comparative Balance Sheet of HDFC Bank with respect to ICICI as of 31st March 2010.
HDFC Bank Mar. 2010 Total share capital Equity share capital Share Application money Preference share capital Reserves Revaluation reserves Net worth Deposits Borrowings Total debt Other liablities and Provisions Total liabilities Cash & balances with RBI Balances with banks Money at call Advances Investments Gross block Accumulated depreciation Net block Capital work in progress Other assets 222458.6 21.38 3,63,399.72 -4.19 457.74 457.74 0 0 21064.8 0 21522.5 167404.5 12915.7 180320.1 20615.94 % 14.46 263.38 27.251 -0.256 14.901 24.2787 0 -6.3188 21.382 21.382 17.56 Mar.2010 1,114.89 1,114.89 0 0 50,503.48 0 51,618.37 2,02,016.60 94,263.57 2,96,280.17 15,501.18 3.48 -7.48 40.02 3.71 -64.57 -100 4.3 % -23.81 0.14 ICICI

15483.28

23.35

27,514.29

56.9

1459.11 125830.6 58607.62 4707.97

27.25 18.989 24.39 -6.31

11,359.40 1,81,205.60 1,20,892.80 7,114.12

-8.61 -17 17.31 -4.43

2585.16 2122.81 0 5955.15

21.383 17.599 16.7 36.5

3,901.43 3,212.69 0 19,214.93

7.12 -15.49

-20.48

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Financial Analysis of HDFC Bank Group 4

Total assets 222458.6 21.39 3,63,399.71 -4.19

Here we, observe that share capital has increased by a greater extent for HDFC bank than ICICI but still ICICI is shown to be having a much larger share capital than HDFC. Reserves rose about 14.9% as of March 2010 when compared to ICICI where it is only 4.3%. ICICI has a much larger amount in investment where they seek to increase their wealth but the growth is larger for HDFC bank for the period. Advances grew at 19% for HDFC bank whereas in the case of ICICI bank, there is decrease by 17%. HDFC is a smaller bank than ICICI but when comparing profitability, efficiency etc it is not behind ICICI in any manner. ICICI bank gets funds by borrowings and the rate of increase is more than that of HDFC. Total assets rose by 21.39% for HDFC bank whereas it went down by 4.19% for ICICI bank.

Ratio Analysis of HDFC Bank

Here a ratio analysis of HDFC Bank for three periods with respect to its competitors namely ICICI Bank, Axis Bank and the public sector giant State Bank of India is performed (FY ending March of that year). Profitability Ratios
1. Profit Margin Profit Margin = (Profit After Tax / Net Revenue) * 100 HDFC Bank: Year Profit Margin ICICI Bank:
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2008 12.82

2009 11.35

2010 14.76

Financial Analysis of HDFC Bank Group 4

Year Profit Margin Axis Bank Year Profit Margin

2008 10.51

2009 9.74

2010 12.17

2008 12.22

2009 13.31

2010 16.10

State Bank of India Year 2008 Profit Margin 11.65

2009 12.03

2010 10.54

2. Return on Assets Return on Assets = (Profit After Tax / Average Total Assets) * 100 HDFC Bank: Year Return on Assets ICICI Bank: Year Return on Assets

2008 1.20

2009 1.20

2010 1.3

2008 1.12

2009 0.98

2010 1.13

Axis Bank Year Return on Assets

2008 1.24

2009 1.44

2010 1.67

State Bank of India Year 2008 Return on Assets 0.93

2009 1.04

2010 0.91

3. Asset Turnover Assets Turnover = (Net Revenue / Average Operating Assets) * 100 HDFC Bank: Year Assets Turnover

2008 5.18

2009 5.0

2010 4.24

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Financial Analysis of HDFC Bank Group 4

ICICI Bank: Year Assets Turnover

2008 5.61

2009 5.14

2010 4.60

Axis Bank Year Assets Turnover

2008 6.32

2009 7.78

2010 7.31

State Bank of India Year 2008 Assets Turnover 6.32 4. Return on Equity

2009 7.20

2010 7.26

Return on Equity = (Profit After Tax / Average Shareholders Equity) * 100 HDFC Bank: Year Return on Equity ICICI Bank: Year Return on Equity

2008 13.83

2009 15.32

2010 13.7

2008 8.94

2009 7.58

2010 7.79

Axis Bank Year Return on Equity

2008 12.21

2009 17.77

2010 15.67

State Bank of India Year 2008 Return on Equity 13.72 5. Earnings Per Share

2009 15.74

2010 13.89

Earnings Per Share (EPS) = (Profit After Tax / Weighted Average No. of Equity Shares) * 100 HDFC Bank: Year EPS

2008 44.87

2009 52.77
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2010 64.42

Financial Analysis of HDFC Bank Group 4

ICICI Bank: Year EPS

2008
37.37

2009
33.76

2010 36.10

Axis Bank Year EPS

2008 29.94

2009 50.57

2010 62.06

State Bank of India Year 2008 106.56 EPS Interpretation of Profitability Ratios

2009
143.67

2010
144.37

The Profit Margin has increased by over 30% to 14.76 as of March 2010 over

the period where as there was a slight fall as of March 2009 over the period. The net profit had gone up by 31% for the period 2009-10 although for the period 2008-09, the rise in profits was 41%. Though there was a fall by 0.98% in interest income, other income rose by 9.8% over the period due to increase in fees and commissions earned and income from foreign exchange and derivatives offset in part by lower bond gains than those in the previous financial year as per the annual report of the bank. Total income rose by 0.91% over the period. Total expenses had gone down by 2.98%, thus explaining the rise in profit margin. Although total income had increased by 60.73% for the period ending March 2009, there was a higher increase in total expenses by 63.63%. Hence total expenses rose at a higher percentage than total income thus causing a reduction in profit with respect to income thus causing a fall in Profit margin during the period. The rise in profit margin over the period 2009-10 shows the good health the bank is in. Investors have reason to feel satisfied as an increase in profit cause increase
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Financial Analysis of HDFC Bank Group 4

in wealth. Increase in capital value signals a healthy position for the management too. The profitability is in good shape and hence potential investors can take a favourable decision as the profit margin shows the bank in good health. Operating efficiency could have increased over the period and it shows effective cost control. This outcome is favourable to the management. Creditors too can take comfort in the fact that the situation is favourable to them also as there rise in profits and there is less risk of returns. Comparing with the competitors (here Axis Bank, ICICI Bank and SBI are taken), only Axis Bank shows a larger profit margin due to its consistently good performance. Other banks show a fall in profit margin in the period 2008-09, Axis Bank show an increase in profit margin. Hence HDFC Bank should take measures to prevent investors to consider the opportunity cost with respect to Axis Bank and arriving at a conclusion that Axis Bank was a better choice.
There is a slight increase in Return On Assetsratio to 1.3 from 1.2 over the

period ending March 2010. There has been an increase in profits over the period though assets have also increased over the period. An increase in ROA indicates higher efficiency and here the costs have shown to be effectively controlled. From the three other banks, only Axis Bank is shown to have a higher ROA due to its consistently better performance when compared to other banks including HDFC.
There was a fall in Assets Turnoverratio to 4.24 from 5.00 during the period.

We can see that there was a fall in this ratio over the previous period also. This could be due to the lesser rise in Net Revenue when compared to the rise in assets over the period. A fall in this ratio indicates lesser efficiency in utilising the assets to generate revenue. We see that the ratios for the other three banks too have fallen during the
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Financial Analysis of HDFC Bank Group 4

period, but they are still higher than that of HDFC bank indicating higher efficiency. The management has to consider this seriously and take steps to improve the operating efficiency of the bank.
There was a fall in Return on Equityratio over the period ending March

2010 to 13.7 from 15.32 though there was a rise in the previous period from 13.82. This indicates that the efficiency to generate profits from every unit of shareholders equity has gone down which should be of concern to the shareholders as well as the management. The opportunity cost has to be considered in the case of Return on Equity. We can see that this ratio has fallen for most other banks except ICICI Bank which shows a marginal increase. Axis Bank has a highest value of this ratio and there is very little difference between the ratios for SBI and HDFC. There is a chance that investors could prefer Axis Bank over HDFC.
There has been in increase in Earnings Per Share(EPS) over the period to

64.42 from 52.77. Thisshows strong foundation of the bank to achieve this growth rate by increasing the netincome. This is good news for the shareholders as well as the management because this results in maximization of wealth which is the objective of any firm. According to the Annual Report, post merger of the erstwhile Centurion Bank of Punjab with the bank, 26,200,220 warrants convertible into an equivalent number of equity shares were issued to HDFC Limited on a preferential basis at a rate of Rs. 1,530.13 each. On November 30, 2009 these said warrants were converted by HDFC Limited and consequently the bank issued them 26,200,220 equity shares. During the year under review, 61.59 lac shares were allotted to the employees of the bank pursuant to the exercise of options under the employee stock option scheme of the bank. These include the shares allotted under the employee stock option scheme of
26

Financial Analysis of HDFC Bank Group 4

the erstwhile Centurion Bank of Punjab. Correspondingly there was a large rise in net revenue and profit contributing to the higher EPS. Hence shareholders can find the situation more favourable.

Liquidity Ratios
1. Current Ratio Current Ratio = (Current Assets / Current Liabilities) HDFC Bank: Year Current Ratio

2008
0.26

2009
0.27

2010
0.28

ICICI Bank: Year Current Ratio

2008
0.72

2009
0.78

2010
1.94

Axis Bank Year Current Ratio

2008
0.36

2009
0.37

2010
0.63

State Bank of India Year 2008 0.53 Current Ratio 2. Quick Ratio

2009
0.34

2010
0.43

Quick Ratio = (Quick Assets / Current Liabilities) HDFC Bank: Year Quick Ratio

2008 4.89

2009 5.23
27

2010 7.14

Financial Analysis of HDFC Bank Group 4

ICICI Bank: Year Quick Ratio

2008 6.42

2009 5.94

2010 14.70

Axis Bank Year Quick Ratio

2008 9.23

2009 9.52

2010 19.19

State Bank of India Year 2008 Quick Ratio 6.15 Interpretation of Liquidity Ratios

2009 5.74

2010 9.07

The Current Ratiois mainly used to give an idea of the company's ability to

payback its short-term liabilities with its short-term assets. The higher the current ratio, themore capable the company is of paying its obligations. Hence creditors are most concerned about these liquidity ratios. A lesser current ratio leads to higher creditor concern. A ratio under 1 suggests that thecompany would be unable to pay off its obligations if they came due at that point. Due to a rise in current assets the ratio shows a rise, but is very low as current assets are only 28% of current assets. ICICI Bank is shown to have the highest Current Ratio and the ratio for all the other three banks are shown to have increased substantially when compared to HDFC bank.
The Quick Ratiois an indicator of a company's short-term liquidity. Itmeasures

a company's ability to meet its short-term obligations with its most liquidassets. The higher the quick ratio, the better the position of the company. Hence creditors are most concerned about the quick ratios. A lesser quick ratio leads to higher creditor concern. The quick ratiois more conservative than the current ratio. When short-term obligations need to be paid off immediately, there are situations in which the current ratio would
28

Financial Analysis of HDFC Bank Group 4

overestimate a company's short-term financial strength. The quick ratio has been 7.14 in the year 09-10 which indicates the banks robustness and financial soundness in paying off its short term obligations. The figures indicate that there is excess liquidity in the bank except in 2009-10. But the other three banks show a higher liquidity when compared to HDFC. But thebanks are under the guidance of RBI and they have to follow the liquidity norms laiddown by RBI.

Solvency Ratios
1. Total Debt To Equity Ratio Total Debt to Equity Ratio = (Total Debt /Shareholders Equity) HDFC Bank: Year Total Debt to Equity Ratio ICICI Bank: Year Total Debt to Equity Ratio Axis Bank Year Total Debt to Equity Ratio

2008 8.76

2009 9.75

2010 7.78

2008 5.27

2009 4.42

2010 3.91

2008 9.99

2009 11.49

2010 8.81

State Bank of India Year 2008 Total Debt to 10.96 Equity Ratio 2. Interest Coverage Ratio

2009 12.81

2010 12.19

Interest Coverage Ratio = (Earnings Before Income Tax / Interest Expenses)

29

Financial Analysis of HDFC Bank Group 4

HDFC Bank: Year 2008 Interest Coverage 1.79 Ratio

2009 1.44

2010 1.63

ICICI Bank: Year 2008 Interest Coverage 1.25 Ratio Axis Bank Year 2008 Interest Coverage 1.46 Ratio State Bank of India Year 2008 Interest Coverage 1.37 Ratio 3. Loan to Depost Ratio

2009 0.25

2010 0.33

2009 1.43

2010 1.62

2009 1.36

2010 0.33

Loan to Deposit Ratio = (Total Loans Lent / Total Deposit) HDFC Bank: Year Loan to Deposit Ratio ICICI Bank: Year Loan to Deposit Ratio

2008
65.28

2009
66.64

2010 76.00

2008 84.99

2009 91.44

2010 90.04

Axis Bank Year Loan to Deposit Ratio

2008 65.94

2009 68.89
30

2010 71.87

Financial Analysis of HDFC Bank Group 4

State Bank of India Year 2008 Loan to Deposit 77.51 Ratio

2009
74.97

2010
75.96

Interpretation of Solvency Ratios The Total Debt To Equityratio indicates what proportion of equity and debt

the company is usingto finance its assets. A high total debt/equity ratio generally means that a company has beenaggressive in financing its growth with debt. This can result in volatile earnings as aresult of the additional interest expense. In the case of HDFC Bank, this ratio has decreased over the period ending March 2010. There is growth of the bank and it is able to manage its funds fromthe internal sources. The equity capital has increased its share in the liabilities in balancesheet in comparison to the outside debts. This helps the bank to maintain highcredit reputation in market. The other banks were able to reduce the ratio substantially.
The Interest Coverageratio is used to determine how easily a company can

pay interest on outstanding debt. The interest coverage ratio is calculated by dividing a bank's earnings before interest and taxes (EBIT) of one period by the bank's interest expenses of the same period. The lower the ratio, the more the company is burdened by debt expense. When a company's interest coverage ratio is 1.5 or lower, its ability to meet interest expenses may be questionable. An interest coverage ratio below 1 indicates the company is not generating sufficient revenues to satisfy interest expenses. The ratio for the year ending 2010 is 1.63 which is reasonable and not below1.5. This indicates that the bank is in a sound financial health and is able to pay theinterest on its
31

Financial Analysis of HDFC Bank Group 4

outstanding debts. The ratio was best in 2007-08 among the three financialyears. But has reduced in the year 2009 to 1.44 and increased to 1.63 in 2009-10. The bank has maintained a somewhat healthy ratioover the years. The ratios for SBI and ICICI are substantially lower.
The Loan To Depositratio is indicative of the percentage of funds lent by the

bank out of the total amount raised through deposits. Higher ratio reflects ability of the bank to make optimal use of the available resources. The point to note here is that loans given by bank would also include its investments in debentures, bonds and commercial papers of the companies. This ratio forms an integral part of analysis as it indicates theamount of reliability the bank has earned in the minds of its customers and evidence of itsrobustness. The ratio has increased over the period ending March 2010 to 76 which is a healthy sign. The ratio of ICICI bank is the highest though it shows a slight decline in the ratio over the period. Capital Market Ratios
1. Price - earnings Ratio Price earnings Ratio = Average Stock Price / Earnings Per Share HDFC Bank (30/12/10):35.74 ICICI Bank (30/12/10): 31.50 Axis Bank (30/12/10): 21.42 State Bank of India (30/12/10): 19.04

2. Dividend Per Share HDFC Bank: Year Dividend Per Share

2008
8.50

2009
10.00 32

2010
12.00

Financial Analysis of HDFC Bank Group 4

ICICI Bank: Year Dividend Per Share Axis Bank Year Dividend Per Share

2008
11.00

2009
11.00

2010
12.00

2008
6.00

2009
10.00

2010
12.00

State Bank of India Year 2008 Dividend Yield 21.50 Ratio

2009
29.00

2010
30.00

3. Book Value Per Share Book Value Per Share = (Equity Share Capital + Reserves & Surplus / No. of Equity Shares) HDFC Bank: Year Book Value Per Share ICICI Bank: Year Book Value Per Share Axis Bank Year Book Value Per Share

2008
324.38

2009
344.44

2010
470.19

2008
417.64

2009
444.94

2010
463.01

2008
245.13

2009
284.50

2010
395.99

State Bank of India Year 2008 Book Value Per 776.48 Share

2009
912.73

2010
1,038.76

33

Financial Analysis of HDFC Bank Group 4

Interpretation of Capital Market Ratios

The Price Earningsratio (P/E Ratio) is a valuation ratio of a company's

current share price compared to its per-share earnings. In general, a high P/E suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E. However, the P/E ratio doesn't tell us the whole story by itself. It's usually more useful to compare the P/E ratios of one company to other companies in the same industry, to the market in general or against the company's own historical P/E. Here we can see that HDFC Bank has a higher P/E ratio of 35.74. When compared to the other three banks HDFC has the highest ratio with ICICI Bank close behind at 31.50.
Dividends Per Share(DPS)

is the sum of declared dividends for every ordinary

share issued. Dividend per share (DPS) is the total dividends paid out over an entire year (including interim dividends but not including special dividends) divided by the number of outstanding ordinary shares issued. Dividends are a form of profit distribution to the shareholder. Having a growing dividend per share can be a sign that the company's management believes that the growth can be sustained. HDFC Bank has a growing DPS value which is 12.00 for the period ending March 2010 while it was 10.00 for the period ending March 2009 thus representing an increase of 20% which is a very healthy sign for investors as well as the management which can be confident that the growth can be sustained. The increase in the ratios of the other three banks is also similar with State Bank of India showing the highest DPS of 30.0.
The Book Value Per Share (BV)relates the shareholder's equity to the

number of shares outstanding, giving the shares a raw value. It is measure used by owners of common shares in a firm to determine the level of safety associated with
34

Financial Analysis of HDFC Bank Group 4

each individual share after all debts are paid accordingly. Should the company decide to dissolve, the book value per common indicates the dollar value remaining for common shareholders after all assets are liquidated and all debtors are paid. In simple terms it would be the amount of money that a holder of a common share would get if a company were to liquidate.The BV value for HDFC Bank for the year ending March 2010 has substantially increased to 470.19 from 344.44 from the previous year which can be interpreted as a healthy sign as far as investors are concerned and also for the management. The share price as of 31-12-2010 is 2346.50 and BV value is 464.14. This could be interpreted as a healthy situation. The book values of ICICI Bank, Axis Bankand SBI have risen in the period with SBT having the highest Book Value Per Share value of 1038.76 in the period ending March 2010.

35

Financial Analysis of HDFC Bank Group 4

Common Size Analysis of HDFC Bank

Here a common size financial statement analysis of HDFC Bank for three periods is performed (FY ending March of that year).
Common Size Balance Sheet of HDFC Bank Ltd as on 31st March 2008, 09, 10 (Rs. million) 31-Mar-10 %BT 31-Mar-09 %BT 31-Mar-08 %BT 4577.43 0.21 4253.84 0.23 3544.33 0.27 0.00 0.00 0.00 0.00 0.00 0.00 4577.43 0.21 8263.00 0.45 3544.33 0.27 210618.37 9.47 142209.46 7.76 111428.08 8.37 1674044.39 75.25 1428115.80 77.92 1007685.91 75.67 129156.93 5.81 91636.37 5.00 45949.24 3.45 9.27 162428.23 100.00 0.95 26.35 56.56 13.46 2.68 100.00 1832707.73 17067.29 588175.49 988830.47 175066.17 63568.31 1832707.73 8.86 163158.48 12.25 100.00 0.93 32.09 53.95 9.55 3.47 100.00 1331766.03 11750.92 493935.38 634268.93 147783.39 44027.41 1331766.03 100.00 0.88 37.09 47.63 11.10 3.31 100.00

Equity Capital Preference Capital Share Capital Reserves and Surplus Deposits Borrowings Other Provisions and 206159.44 Liabilities Capital and Liabilities (BT) 2224585.70 Fixed Assets 21228.11 Investments 586076.16 Advances 1258305.94 Cash & Money at Call 299423.99 Other Current Assets 59551.50 Properties and Assets (BT) 2224585.70

Common Size Income Statement of HDFC Bank Ltd for the periods ending 31st March 2008, 09, 10
Profit/Loss A/C Interest Income 161729 Earned Commission, Exchange and 28305.86 Brokerage Income Lease Income 0 Dividend Income 0 Miscellaneous Income 9770.25 Other Income 38076.11 Total Income (OI) 199805.11 Interest Expenditure 77862.99 31-Mar-10 31-Mar-09 Rs. mln %OI Rs. mln 80.9 163322.61 14.2 24572.97 %OI 83.23 12.52 0 0 4.25 16.77 100 45.41 31-Mar-08 Rs. mln 101150 17145 0 0 5686.5 22831.5 123981.5 48871.2 %OI 81.58 13.83 0 0 4.59 18.42 100 39.42

0 0 0 0 4.89 8333.07 19.1 32906.04 100 196228.65 39 89111.04 36

Financial Analysis of HDFC Bank Group 4 Employee Expenditure Depreciation Other Operating Expenditure Provision and Contingencies Total Expenditure Pretax Income Tax Extra Ordinary and Prior Period Items Net Net Profit Adjusted Net Profit Dividend - Preference Dividend - Equity

22891.76 3943.92 30809.15 34810.28 170318.1 29487.01 0 0 29487.01 29487.01 0 5492.92

11.5 1.97 15.4 17.4

22381.98 3599.09 29346.99 29340.15

11.41 1.83 14.96 14.95 88.56 11.44 0 0 11.44 11.44 0 2.17

13013.5 2717.2 21725.5 14843.3 101170.7 22810.8 6909 0 15901.8 15901.8 0 3012.7

10.5 2.19 17.52 11.97 81.6 18.4 5.57 0 12.83 12.83 0 2.4

85.2 173779.25 14.8 22449.4 0 0 0 14.8 14.8 0 2.75 0 22449.39 22449.39 0 4253.84

Interpretation

From the common size balance sheet, we notice that as on 31st March 2010, equity capital of HDFC bank forms only 0.21% of its liabilities. This ratio is decreasing from 2008 when it was 0.27% and 0.23% in 2009. Share capital had become 0.45% of the total liabilities in 2009 but has decreased to 0.21%. Share capital ratio falling may not be favourable for the investors. But reserves and surplus shows a marked increase to 9.47% of total liabilities in 2010 which indicates the healthy profitability situation. But the bulk of the share of liabilities ie. 75.25% is deposits. Though the percentage has decreased over the previous period, deposits have increased signaling the confidence the public has in the bank. This is a favourable situation for investors and the management. Borrowings have also risen to 5.81% of total liabilities which shows the company has raised money through borrowings. Fixed assets form just 0.95% of the total liabilities. Investments and Advances form the bulk i.e. 26.35% and 56.56% of the total liabilities. Investments have reduced from the previous period where it accounted for 32.09 of total liabilities.
37

Financial Analysis of HDFC Bank Group 4

From the common size income statement we notice that, interest income has reduced over the period ending March 2010 and it now constitutes 80.94% of the total income whereas in the previous period ending March 2009, it was 83.23% of total income.The decrease in interest earned has gone down mainly due to decreases in Interest / discount on advances / bill, income frominvestments, Interest on balance with RBI and other inter-bank funds. There is decrease in investments from 32.09% to 26.35%, which shows that bank has sold some of its investments.However there was an increase in Commission, Exchange and Brokerage Income and Other Income which constitutes 14.17% and 19.06% of the total income respectively. This is a rise from 12.52% and 16.77% which these components constituted in the total income of the period ending 31st March 2009. Operating expenditures is 15.42% of the total income and provision and contingencies 17.42% of the total income. The total income has increased over the previous period and the net profit is 14.76% of the total income which is shows the healthy profitability situation of the bank. This is more favourable compared to the previous year where it was only 11.44% of the total income.
Common Size Statement Analysis of HDFC Bank and Competitor

HDFC Income Interest Earned Other Income Total Income Expenditure Interest expended Employee Cost 7,786.30 2,289.18 16,172.90 3,810.62 19,983.52

ICICI

SBI

80.9 19.1 100 0 39 11.5

25,706.93 7,292.43 32,999.36

77.9013 22.0987 100 0

70,993.92 14,968.15 85,962.07

82.58749 17.41251 100 0

17,592.57 1,925.79

53.3119 5.83584

47,322.48 12,754.65

55.05042 14.83753

38

Financial Analysis of HDFC Bank Group 4

Selling and Admin Expenses Depreciation Miscellaneous Expenses Preoperative Exp Capitalised Operating Expenses Provisions & Contingencies Total Expenses Net Profit for the Year Extraordionary Items Profit brought forward Total Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) Appropriations Transfer to Statutory Reserves Transfer to Other Reserves Proposed Dividend/Transfer to Govt Balance c/f to Balance Sheet 4,532.79 22.7 3,464.38 10.4983 0.34 0.000396 640.52 3.21 1,501.99 4.55157 2,141.41 2.49111 935.15 64.42 120 470.19

3,395.83 394.39 3,169.12 0 7,703.41 1,545.11 17,034.82 2,948.70 -0.93 3,455.57 6,403.34 0 549.29 91.23

17 1.97 15.9 0 38.5 7.73 85.2 14.8 -0 17.3 32 0 2.75 0.46 0 0.32 0.6 2.35 0 4.68

6,056.48 619.5 2,780.03 0 10,221.99 1,159.81 28,974.37 4,024.98 0 2,809.65 6,834.63 0 1,337.95 164.04

18.3533 1.87731 8.4245 0 30.9763 3.51464 87.8028 12.1972 0 8.51426 20.7114 0 4.05447 0.4971 0

7,898.23 932.66 7,888.00 0 24,941.01 4,532.53 76,796.02 9,166.05 0 0.34 9,166.39 0 1,904.65 236.76

9.188041 1.084967 9.17614 0 29.01397 5.272709 89.3371 10.6629 0 0.000396 10.6633 0 2.215687 0.275424 0

36.1 120 463.01

0.1094 0.36364 1.40309 0

144.37 300 1,038.76

0.167946 0.348991 1.208393 0

1,867.22

5.65835

6,495.14

7.555821

294.87

1.48

1.04

0.00315

529.5

0.615969

Total

6,403.33

32

6,834.63

20.711

9,166.39

10.6633

39

Financial Analysis of HDFC Bank Group 4

Interpretation

Comparing the common size income statements of HDFC, ICICI and SBI Banks, we see that interest earned forms 81% of the total income of HDFC bank whereas it forms 77.9% and 82.5% of the total incomes of ICICI and SBI respectively. The public sector giant SBI is much larger than both other banks when we compare their interest incomes. Interest expense is just 38% of the total income of HDFC whereas it is much larger in the case of the other two banks. Operating expenses is at the highest ratio with total income for HDFC bank when compared t the other two which indicates that it needs to improve its operational efficiency. But when comparing the net profits, HDFC has the highest ratio of net profit to total income at 14.76% whereas it is 12.19% for ICICI bank and 10.67% for SBI which indicates that HDFCs profitability is good when compared to the other two as 14.76% of its total income constitutes profit. Hence from the managements, creditors and from shareholders perspective profitability situation is good for HDFC bank. HDFC bank gives equity dividend of 2.75% of total income but it is ICICI bank which gives a highest dividend of 4.05% of total income.

40

Financial Analysis of HDFC Bank Group 4

Trend Analysis of HDFC Bank

Here a trend analysis of HDFC Bank is performed from a Managerial, Creditors and Investors perspective.

41

Financial Analysis of HDFC Bank Group 4

3000

2500

2000 Iratio 1500 Eratio Pratio 1000

500

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Creditors perspective:

The financial performance during the fiscal year 2009-10 remained healthy with total net revenues (net interest income plus other income) increasing by 0.91% to Rs. 12,320.38 crores from Rs. 19,802.89crore in 2008-09. The revenue growth was driven both by an increase Commission, Exchange and Brokerage Income and Other Income.
Shareholders perspective:

The Banks basic earnings per share increased from Rs. 52.9 to Rs. 64.42 per equity share. Bank has had a consistent dividend policy of balancing the dual objectives of appropriately rewarding shareholders through dividends and retaining capital to maintain a healthy capital adequacy ratio to support future growth. It has had a consistent track record of moderate but steady increases in dividend declarations over its history with the dividend payout ratio rangingbetween 20% and 25%.Net profit
42

Financial Analysis of HDFC Bank Group 4

increased by 31.35% from Rs. 2244.95 crores in 2008-09 to Rs. 2498.70 crores in 2009-10.

43

Financial Analysis of HDFC Bank Group 4

44

Financial Analysis of HDFC Bank Group 4

3000

2500

2000

1500

Eratio Dratio Pratio

1000

500

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

45

Financial Analysis of HDFC Bank Group 4

46

Financial Analysis of HDFC Bank Group 4

4000 3500 3000 2500 Dratio 2000 1500 1000 500 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Lratio Pratio

Managers perspective:

The financial performance during the years remained healthy. An increment in providing loan shows that the bank is in a sound position, as it is an asset to the bank. The percentage of deposits has been increasing but by comparing the percentage change of loans and deposits, loans have more increase in its percentage change. Deposits and lending rates spiked up sharply. Net profit increased by 31.35% from Rs. 2244.95 crores in 2008-09 to Rs. 2498.70 crores in 2009-10.

47

Financial Analysis of HDFC Bank Group 4

GROUP MEMBERS Karthik Kutty Abhirup Sen Rohan Kurian John Abhimanyu Kumar Vivin Bobby Rohini Vineet Matthew George Abhinandan Bose Vinay

48