Professional Documents
Culture Documents
1
DECLARATION
I, Kumari Priya studying in Sharda University do hereby declare that this project relating to the
study of ratio analysis and the title “ Comparative Study Of Financial Performance Of State
Bank Of India And Bank Of Baroda” has been prepared by me after undergoing the study
I, further declare that this project work is the outcome of my efforts and not a replica of any other
report/work submitted to any University/ Boards.
2
ACKNOWLEDGEMENT
With the deepest gratitude I wish to thank every person who has supported me helping to prepare
the project.
I would also like to acknowledge and express my gratitude to the following people who had
written the articles and research the topic which it had totally gave me a strong feeling and idea
to do the project.
For generously sharing their wisdom, love, and destiny. My friends are always supported with
their love and bearing my improper behaviour while prepare the file. They had always made me
to think in logical idea and their also helped me in journey to prepare a project.
Thanks to Sharda University where it has been always making to have a practical test and
encouraging the creativity of the students.my sincere to our beloved teacher Rakesh Sharma who
had always been to clarify my doubts in the project.
And finally to my family who made their efforts to come across to make my education in
university. Their always made my day by providing me with every facility to come to my destiny
in the future times.
3
PREFACE
In any organization, the two important financial statements are the Balance Sheet and Profit &
Loss Account of the business. Balance Sheet is a statement of financial position of an enterprise
at a particular point of time. Profit & Loss account shows the net profit or net loss of a company
for a specified period of time. When these statements of the last few year of any organization are
studied and analyzed, significant conclusions may be arrived regarding the changes in the
financial position, the important policies followed and trends in profit and loss etc. Analysis and
interpretation of financial statement has now become an important technique of credit appraisal.
The investors, financial experts, management executives and the bankers all analyze these
statements. Though the basic technique of appraisal remains the same in all the cases but the
approach and the emphasis in the analysis vary. A banker interprets the financial statement so as
to evaluate the financial soundness and stability, the liquidity position and the profitability or the
earning capacity of borrowing concern. Analysis of financial statements is necessary because it
helps in depicting the financial position on the basis of past and current records. Analysis of
financial statements helps in making the future decisions and strategies. Therefore it is very
necessary for every organization whether it is a financial or manufacturing, to make financial
statement and to analyze it.
4
Table of content
5
INTRODUCTION OF BANKING
INTRODUCTION OF BANKING
DEFINITION OF BANK
Banking Means "Accepting Deposits for the purpose of lending or Investment of deposits of
money from the public, repayable on demand or otherwise and withdraw by cheque, draft or
otherwise."
The origin of the word bank is shrouded in mystery. According to one view point the Italian
business house carrying on crude from of banking were called banchi bancheri" According to
another viewpoint banking is derived from German word "Branck" which mean heap or mound.
In England, the issue of paper money by the government was referred to as a raising a bank.
ORIGIN OF BANKING :
Its origin in the simplest form can be traced to the origin of authentic history. After recognizing
the benefit of money as a medium of exchange, the importance of banking was developed as it
provides the safer place to store the money. This safe place ultimately evolved in to financial
institutions that accepts deposits and make loans i.e., modern commercial banks.
6
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.
Banking in India has its origin as early or Vedic period. It is believed that the transitions from
many lending to banking must have occurred even before Manu, the great Hindu furriest, who
has devoted a section of his work to deposit and advances and laid down rules relating to the rate
of interest. During the mogul period, the indigenous banker played a very important role in
lending money and financing foreign trade and commerce.
During the days of the East India Company it was the turn of agency house to carry on the
banking business. The General Bank of India was the first joint stock bank to be established in
the year 1786. The other which followed was the Bank of Hindustan and Bengal Bank. The Bank
of Hindustan is reported to have continued till 1906. While other two failed in the meantime. In
the first half of the 19th century the East India Company established there banks, The bank of
Bengal in 1809, the Bank of Bombay in 1840 and the Bank of Bombay in1843. These three
banks also known as the Presidency banks were the independent units and functioned well.
These three banks were amalgamated in 1920 and new bank, the Imperial Bank of India was
established on 27th January, 1921.
With the passing of the State Bank of India Act in 1955 the undertaking of the Imperial Bank of
India was taken over by the newly constituted SBI. The Reserve Bank of India (RBI) which is
the Central bank was established in April, 1935 by passing Reserve bank of India act 1935. The
Central office of RBI is in Mumbai and it controls all the other banks in the country.
In the wake of Swadeshi Movement, number of banks with the Indian management were
established in the country namely, Punjab National Bank Ltd., Bank of India Ltd., Bank of
Baroda Ltd., Canara Bank. Ltd. on 19th July 1969, 14 major banks of the country were
nationalized and on 15th April 1980, 6 more commercial private sector banks were taken over by
the government.
7
The first bank in India, though conservative, was established in 1786. From 1786 till today,the
journey of Indian Banking System can be segregated into three distinct phases. They areas
mentioned below:
Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms.
New phase of Indian Banking System with the advent of Indian Financial & Banking
Sector Reforms after 1991.
Phase I
The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and
Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay
(1840) and Bank of Madras (1843) as independent units and called it Presidency Banks.
These three banks were amalgamated in 1920 and Imperial Bank of India was established which
started as private shareholders banks, mostly Europeans shareholders.
In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National
Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of
India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore
were set up. Reserve Bank of India came in 1935.
During the first phase the growth was very slow and banks also experienced periodic failures
between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the
functioning and activities of commercial banks, the Government of India came up with The
Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per
amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive
powers for the supervision of banking in India as the Central Banking Authority.
During those day’s public has lesser confidence in the banks. As an aftermath deposit
mobilization was slow. Abreast of it the savings bank facility provided by the Postal department
was comparatively safer. Moreover, funds were largely given to traders.
Phase II
Government took major steps in this Indian Banking Sector Reform after independence. In1955,
it nationalized Imperial Bank of India with extensive banking facilities on a large scale especially
in rural and semi-urban areas. It formed State Bank of India to act as the principal agent of RBI
and to handle banking transactions of the Union and State Governments all over the country.
8
Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th
July,1969, major process of nationalization was carried out. It was the effort of the then Prime
Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country was
nationalized.
Second phase of nationalization Indian Banking Sector Reform was carried out in 1980 with
seven more banks. This step brought 80% of the banking segment in India under Government
ownership.
The following are the steps taken by the Government of India to Regulate Banking
Institutions in the Country: 1949: Enactment of Banking Regulation Act.
1955: Nationalization of State Bank of India.
1959: Nationalization of SBI subsidiaries.
1961: Insurance cover extended to deposits.
1969: Nationalization of 14 major banks.
1971: Creation of credit guarantee corporation.
1975: Creation of regional rural banks.
1980: Nationalization of seven banks with deposits over 200 crore.
After the nationalization of banks, the branches of the public sector bank India rose to
approximately 800% in deposits and advances took a huge jump by 11,000%.
Banking in the sunshine of Government ownership gave the public implicit faith and immense
confidence about the sustainability of these institutions.
Phase III
This phase has introduced many more products and facilities in the banking sector in its reforms
measure. In 1991, under the chairmanship of M Narasimhama, a committee was set up by his
name which worked for the liberalization of banking practices. The country is flooded with
foreign banks and their ATM stations. Efforts are being put to give a satisfactory service to
customers. Phone banking and net banking is introduced. The entire system became more
convenient and swift. Time is given more importance than money. The financial system of India
has shown a great deal of resilience. It is sheltered from any crisis triggered by any external
macroeconomics shock as other East Asian Countries suffered. This is all due to a flexible
exchange rate regime, the foreign reserves are high, the capital account is not yet fully
convertible, and banks and their customers have limited foreign exchange exposure.
BANKS IN INDIA
In India the banks are being segregated in different groups. Each group has their own benefits
and limitations in operating in India. Each has their own dedicated target market. Few of them
9
only work in rural sector while others in both rural as well as urban. Many even are only catering
in cities. Some are of Indian origin and some are foreign players.
All these details and many more is discussed over here. The banks and its relation with the
customers, their mode of operation, the names of banks under different groups and other such
useful information’s are talked about.
One more section has been taken note of is the upcoming foreign banks in India. The RBI has
shown certain interest to involve more of foreign banks than the existing one recently. This step
has paved a way for few more foreign banks to start business in India.
10
(2) Scheduled Cooperative Banks
Public sector banks are those banks which are owned by the Government. The Govt. runs these
Banks. In India 14 banks were nationalized in 1969 & in 1980 another 6 banks were also
nationalized. Therefore in 1980 the number of nationalized bank 20. At present there are total 26
Public Sector Banks in India (As on 26-09-2009). Of these 19 are nationalised banks, 6(STATE
BANK OF INDORE ALSO MERGED RECENTLY) belong to SBI & associates group and 1
bank (IDBI Bank) is classified as other public sector bank. Welfare is their primary objective.
11
Private Sector Banks
These banks are owned and run by the private sector. Various banks in the country such as ICICI
Bank, HDFC Bank etc. An individual has control over there banks in preparation to the share of
the banks held by him.
Private banking in India was practiced since the beginning of banking system in India. The first
private bank in India to be set up in Private Sector Banks in India was IndusInd Bank. It is one of
the fastest growing Bank Private Sector Banks in India. IDBI ranks the tenth largest development
bank in the world as Private Banks in India and has promoted world class institutions in India.
The first Private Bank in India to receive an in principle approval from the Reserve Bank of
India was Housing Development Finance Corporation Limited, to set up a bank in the private
sector banks in India as part of the RBI's liberalization of the Indian Banking Industry. It was
incorporated in August 1994 as HDFC Bank Limited with registered office in Mumbai and
commenced operations as Scheduled Commercial Bank in January 1995. ING Vysya, yet another
Private Bank of India was incorporated in the year 1930
12
Foreign Banks In India
13
Cooperative banks in India
The Cooperative bank is an important constituent of the Indian Financial System, judging by the
role assigned to co operative, the expectations the co operative is supposed to fulfil, their
number, and the number of offices the cooperative bank operate. Though the co operative
movement originated in the West, but the importance of such banks have assumed in India is
rarely paralleled anywhere else in the world. The cooperative banks in India plays an important
role even today in rural financing. The businesses of cooperative bank in the urban areas also has
increased phenomenally in recent years due to the sharp increase in the number of primary co-
operative banks.
Co operative Banks in India are registered under the Co-operative Societies Act. The cooperative
bank is also regulated by the RBI. They are governed by the Banking Regulations Act 1949 and
Banking Laws (Co-operative Societies) Act, 1965.
14
Rural banking in India started since the establishment of banking sector in India. Rural Banks
in those days mainly focussed upon the agro sector. Regional rural banks in India penetrated
every corner of the country and extended a helping hand in the growth process of the country.
SBI has 30 Regional Rural Banks in India known as RRBs. The rural banks of SBI is spread in
13 states extending from Kashmir to Karnataka and Himachal Pradesh to North East. The total
number of SBIs Regional Rural Banks in India branches is 2349 (16%). Till date in rural banking
in India, there are 14,475 rural banks in the country of which 2126 (91%) are located in remote
rural areas.
Apart from SBI, there are other few banks which functions for the development of the rural areas
in India.
The Haryana State Cooperative Apex Bank Ltd. commonly called as HARCOBANK plays a
vital role in rural banking in the economy of Haryana State and has been providing aids and
financing farmers, rural artisans, agricultural labourers, entrepreneurs, etc. in the state and giving
service to its depositors.
NABARD
National Bank for Agriculture and Rural Development (NABARD) is a development bank in the
sector of Regional Rural Banks in India. It provides and regulates credit and gives service for the
promotion and development of rural sectors mainly agriculture, small scale industries, cottage
and village industries, handicrafts. It also finance rural crafts and other allied rural economic
activities to promote integrated rural development. It helps in securing rural prosperity and its
connected matters.
Sindhanur Urban Souharda Co-operative Bank, popularly known as SUCO BANK is the first of
its kind in rural banks of India. The impressive story of its inception is interesting and inspiring
for all the youth of this country.
15
United Bank of India
United Bank of India (UBI) also plays an important role in regional rural banks. It has expanded
its branch network in a big way to actively participate in the developmental of the rural and
semi-urban areas in conformity with the objectives of nationalisation.
Syndicate Bank
Syndicate Bank was firmly rooted in rural India as rural banking and have a clear vision of future
India by understanding the grassroot realities. Its progress has been abreast of the phase of
progressive banking in India especially in rural banks.
The first Bank in Northern India to get ISO 9002 certification Punjab and Sind
Bank
for their selected branches.
The first Indian Bank to have been started solely with Indian capital. Punjab National
Bank
The first among the Private Sector Banks in Kerala to become Scheduled South Indian Bank
Bank in 1946 under the RBI act.
India’s oldest,largest and the most successful commercial bank offering the State Bank of India
16
widest possible rang of domestic,international and NRI products and
services,through its vast network in India and overseas.
India’s second largest Private Sector Bank and is now the largest scheduled The Federal Bank
commercial bank in India. Limited
The first Indian Bank to open a branch outside India in London in 1946 and Bank of India,
the first to open a branch in continental Europe at Paris in 1974
founded in 1906 in
Mumbai.
The oldest Public Sector Bank in India having branches all over India and Allahabad Bank
serving the customers for the last 132 years.
The first Indian Commercial Bank which was wholly owned and managed by Central Bank of
Indians. India
17
The Indian banking market is growing at an astonishing rate, with Assets expected to reach
US$1 trillion by 2010. An expanding economy, middleclass, and technological innovations are
all contributing to this growth.
The country’s middle class accounts for over 320 million People. In correlation with the growth
of the economy, rising income levels, increased standard of living, and affordability of banking
products are promising factors for continued expansion.
The Indian banking Industry is in the middle of an IT revolution, Focusing on the expansion of
retail and rural banking. Players are becoming increasingly customer -centric in their approach,
which has resulted in innovative methods of offering new banking products and services. Banks
are now realizing the importance of being a big playerand are beginning to focus their attention
on mergers and acquisitions to take advantage of economies of scale and/or comply with Basel II
regulation.“Indian banking industry assets are expected to reach US$1 trillion by 2010 and are
poised to receive a greater infusion of foreign capital,” says Prathima Rajan, analyst in Celent's
banking group and author of the report. “The banking industry should focus on having a small
number of large players that can compete globally rather than having a large number of
fragmented players.
18
STATE BANK OF INDIA
19
State Bank Bhavan 8th Floor,
Registered Office Madame Cama Road Nariman Point,
Mumbai, 400021, Maharashtra
Telephone 91-22-22883888/22022678
Fax 91-22-22855348
E-mail gm.snb@sbi.co.in
Website http://www.sbi.co.in
Face Value (Rs) 10
BSE Code 500112
BSE Group A
NSE Code SBIN
Bloomberg SBIN IN
Reuters SBI.BO
ISIN Demat INE062A01012
Market Lot 1
Ahmedabad,Chennai,Delhi,Kolkata,London,Mumbai,
Listing
NSE
Financial Year End 03
Book Closure Month May
AGM Month Jun
Datamatics Financial Services, PlotNo-A-16-17 PartB, Cross
Lane MIDC, Marol Andheri (East), Mumbai - 400 093.
Registrar's Name & Address
91-22-28213383/90/66
91-22-28369408
It is the largest Indian banking and financial services company (by turnover and total assets) with
its headquarters in Mumbai, India. It is state-owned. The bank traces its ancestry to British India,
through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it
the oldest commercial bank in the Indian Subcontinent. Bank of Madras merged into the other
two presidency banks, Bank of Calcutta and Bank of Bombay to form Imperial Bank of India,
which in turn became State Bank of India. The government of India nationalized the Imperial
Bank of India in 1955, with the Reserve Bank of India taking a 60% stake, and renamed it the
State Bank of India. In 2008, the government took over the stake held by the Reserve Bank of
India.
SBI provides a range of banking products through its vast network of branches in India and
overseas, including products aimed at non-resident Indians (NRIs). The State Bank Group, with
20
over 16,000 branches, has the largest banking branch network in India. SBI has 14 Local Head
Offices and 57 Zonal Offices that are located at important cities throughout the country. It also
has around 130 branches overseas.
With an asset base of $352 billion and $285 billion in deposits, SBI is a regional banking
behemoth and is one of the largest financial institutions in the world. It has a market share among
Indian commercial banks of about 20% in deposits and loans. T The State Bank of India is the
29th most reputed company in the world according to Forbes. Also SBI is the only bank featured
in the coveted "top 10 brands of India" list in an annual survey conducted by Brand Finance and
The Economic Times in 2010. The State Bank of India is the largest of the Big Four banks of
India, along with ICICI Bank, Punjab National Bank and HDFC Bank—its main competitors.
State Bank of India is the largest state-owned banking and financial services company in India.
The Bank provides banking services to the customer. In addition to the banking services, the
Bank through their subsidiaries, provides a range of financial services, which include life
insurance, merchant banking, mutual funds, credit card, factoring, security trading, pension fund
management and primary dealership in the money market.
The Bank operates in four business segments, namely Treasury, Corporate/ Wholesale Banking,
Retail Banking and Other Banking Business. The Treasury segment includes the investment
portfolio and trading in foreign exchange contracts and derivative contracts. The Corporate/
Wholesale Banking segment comprises the lending activities of Corporate Accounts Group, Mid
Corporate Accounts Group and Stressed Assets Management Group. The Retail Banking
segment consists of branches in National Banking Group, which primarily includes personal
banking activities, including lending activities to corporate customers having banking relations
with branches in the National Banking Group.
SBI provides a range of banking products through their vast network of branches in India and
overseas, including products aimed at NRIs. The State Bank Group, with over 16,000 branches,
has the largest banking branch network in India. The State bank of India is the 10th most reputed
company in the world according to Forbes. The bank has 156 overseas offices spread over 32
countries. They have branches of the parent in Colombo, Dhaka, Frankfurt, Hong Kong,
Johannesburg, London and environs, Los Angeles, Male in the Maldives, Muscat, New York,
Osaka, Sydney, and Tokyo. They have offshore banking units in the Bahamas, Bahrain, and
Singapore, and representative offices in Bhutan and Cape Town.
State Bank of India was incorporated in the year 1955. The Bank traces their ancestry to British
India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta,
making them the oldest commercial bank in the Indian Sub-continent. The Government of India
nationalized the Imperial Bank of India in the year 1955, with the Reserve Bank of India taking a
60% stake, and name was changed to State Bank of India.
In the year 2001, the SBI Life Insurance Company was started by the Bank. They are the only
Bank that have been permitted 74% stake in the insurance business. The Bank's insurance
subsidiary 'SBI Life Insurance Company' is a joint venture with Cardif S.A in which Cardif holds
26% of the stake.
During the year 2005-06, the bank introduced 'SBI e-tax' an online tax payments facility for
direct and indirect tax payment. They also launched the centralized pension processing. The
21
Bank made a partnership with Tata Consultancy Services for setup C-Edg Technologies and
consulting services to the banking, financial services and insurance industry. The bank was noted
as 'The most preferred bank' in a survey by TV 18 in association with AC Nielsen-ORG Marg.
Also, the Bank was voted as 'The most preferred housing loan provider' in AWAAZ consumer
awards for the year 2006.
In the customer loyalty survey 2006-07 conducted by 'Business World', the Bank was ranked
number one in all parameters of customer satisfaction, service orientation, customer care/ call
center, customer loyalty and home loans. SBI Funds was judged 'Mutual fund of the year' by
CNBC/TV-18/CRISL. The Bank introduced new products and services such as web-based
remittance, instant fund transfer, online-trading and comprehensive cash management.
During the year 2007-08, the Bank launched 965 branches all over the country. They
inaugurated a new state-of-the art Dealing Room with online connectivity to all active forex
intensive Branches at Corporate Centre in Mumbai. They launched a new product, Construction
Equipment Loan to cater to construction Companies. Also, they introduced new products such as
SBI Reverse Mortgage Loan and SBI Home Plus in the areas of Home Loans.
During the year, the RBI transferred their entire shareholding in the Bank representing 59.73%
of the issued capital of the Bank to the Government of India. The Bank acquired 92.03% of
equity of Global Trade Finance Ltd. Consequently, GTFL became a subsidiary of the Bank.
They signed an MoU with the Indian railways for installing ATMs at 682 railway stations. In
March 2008, the Bank opened their 10,000th branch and became only the second bank in the
world to have more than 10,000 branches after China's ICBC. During the year 2008-09, the
company launched Import factoring, a new product in association with SBI Factors &
Commercial Services Ltd. They increased the number of branches for retail sale of gold coins
from 250 to 518. Also, they re-launched Gold Deposit Scheme at 50 branches to mobilize gold
from domestic market for deployment as metal loans to jewellers.
During the year, the Bank opened their 11,111th Branch at Sonapur (Kamrup District) in Assam.
They introduced three new products viz., SBI Special Home Loan, SBI Happy Home Loan and
SBI Lifestyle in response to the stimulus package announced by the Government of India. Also,
they entered into an exclusive arrangement with TATA Motors for handling the booking process
of TATA 'Nano' cars. During the year, the Bank launched on their web-site an on-line
application form for registering Auto Loan enquiries and expeditiously monitoring and
converting these leads into Auto Loans. Also, they launched 'e-invest' for the ASBA
(applications supported by blocked accounts) to aid investors for their equity subscriptions, IPO
and Rights applications.
During the year, the Bank set up a custodial services company namely SBI Custodial Services
Pvt. Ltd., in joint venture with Societe Generale, France. They signed letter of intent for setting
up of joint venture company for undertaking General Insurance Business. Also, they divested
10% equity stake in its wholly owned subsidiary SBI Pension Fund Pvt. Ltd at cost in favour of
its subsidiaries. In October 2008, the Bank signed an MoU with State General Reserve Fund
(SGRF) of Oman, for a general purpose private equity fund.
During the year, State Bank of Saurashtra (SBS), a wholly owned subsidiary of the Bank,
amalgamated with the Bank with effect from August 13, 2008. They signed a joint venture
agreement with Insurance Australia Group for undertaking General Insurance business. Also,
they signed a joint venture agreement with Macquarie Capital Group, Australia and IFC,
Washington for setting up an Infrastructure fund of USD 3 billion for investing in various
22
infrastructure projects in India.
During the year 2009-10, the Bank opened 1,049 branches, out of which branches were opened
in metro and urban areas with a view to increase the Bank's reach and be more accessible to
customers. In July 2009, SBI introduced 'SBI Loan to Affluent Pensioners' enabling the
government pensioners to avail personal loans upto Rs 3 lakh.
During the year, the Bank designed a special package, the Defence Salary Package, for
personnel of the three Armed Forces i.e. the Army, Navy and Air Force who maintain their
Salary accounts with them. As of March 2010, the Bank had 12,496 branches and 21,485 Group
ATMs. In June 2009, the company increased their shareholding in Nepal SBI Bank Ltd to
55.02% and thus Nepal SBI Bank Ltd became a subsidiary of the Bank with effect from June 14,
2009.
In May
2010, the Bank selected consortium of Elavon Incorporation, USA and Visa International, USA
as their joint venture (JV) partner for Merchant Acquiring Business. They set up a wholly owned
subsidiary, namely SBI Payment Services Pvt Ltd for conducting Merchant Acquiring Business.
In August 2010, State Bank of Indore was amalgamated with the Bank as per the scheme of
amalgamation approved by the Central Board.
During the year 2010-11, the Bank introduced 2 new products, namely 'Pushpa Ullas' and
'Arthias Plus' on pilot basis. They made substantial progress in establishing itself as a leading PE
fund player of the country. Also, they also signed a Joint Venture agreement with State General
Reserve Fund (SGRF) of Sultanate of Oman, a sovereign entity, to set up a general purpose
private equity fund with an initial corpus of USD 100 mn, expandable further to USD 1.5 bn.
During the year, the Bank opened 576 new branches besides merger of 470 branches of
erstwhile State Bank of Indore. Also, they opened 14 foreign offices during the year, taking the
total to 156. In July 1, 2010, the Bank launched their 'Green Channel Counter' at select branches
across the country.
In General Insurance business, the Bank launched limited operations in April 2010 for the
Corporate and Mid Corporate customers based at Mumbai, and it was expanded to six other
major locations in July 2010. In the Retail segment, the Bank launched their Long Term Home
Insurance business at Mumbai in October 2010, which was gradually extended to cover 56
RACPCs and RASMECCs. General Insurance SME business was launched on a pilot basis in
Mumbai and Chennai in February 2011. During the first quarter of the financial year 2011-12,
the Government of India issued the 'Acquisition of State Bank of India Commercial &
International Bank Ltd. vide notification dated July 29, 2011. Consequent to the said notification,
the undertaking of State Bank of India Commercial & International stands transferred to and vest
in State Bank of India with effect from July 29, 2011.
23
1955 -
On 1st July State Bank of India was constituted under the State Bank
Of India Act 1955, for the purpose of taking over the undertaking and
business of the Imperial Bank of India. The Imperial Bank of India
was founded in 1921 under the Imperial Bank of India Act 1920. The Bank
transacts general banking business of every description including,
foreign exchange, merchant banking and mutual funds
1959 -
On September State Bank of India (Subsidiary Bank) Act was passed.
On October State Bank of Hyderabad become the first subsidiary of SBI.
1960 -
During this period, State Bank of Jaipur, State Bank of Bikaner,
State Bank of Indore, State Bank of Travancore, State Bank of Mysore,
State Bank Patiala and State Bank of Saurashtra became subsidiaries of the
bank.
1962 -
The Bhor State Bank Ltd was Amalgamated with the Bank bring the
Total number of minor State associated banks so amalgamated to five. A scheme for amalgamation of the
Bank of Aundh Ltd., was also approved.
On 20th August, the Unit Bank Ltd. Chennai was taken over by the Bank.
1963 -
In october Branch in London become bankers to the Indian High Commission, thereby
taking over a function till then performed by the office of RBI. Of the other business
transacted by the Branch, an important aspect was medium term loans mostly to Indian
shipping companies.
1969 -
On November 8th the Bank of Behar Ltd was amalgamated.
1972 -
A merchant banking division was set up in the central office to cater to promotional needs
of the corporate sector.
1977 –
During the year bank introduced the Perennial Pension Plan Scheme
Under which if the depositors make a regular monthly payment of a fixed
amount for a period of 84 to 132 months, they become eligible from
the 86th and 134th months respectively for getting a monthly pension of predetermined
amount forever.
In order to meet all the developmental needs of the villages
Including their social and cultural needs, the bank launched an integrated
Rural development programme, aimed at not only covering the credit needs
of agriculture and agricultural activities and village industries, but
also housing and social activities.
1980 -
Bank introduced the cash Certificate Scheme under which deposit
certificate are issued for a fixed period on payment of the issue price
specified for the respective maturity period and the face value
corresponding to the issue price plus interest compounded at
24
quarterly intervals is paid on maturity. The certificates are issued for the
face value of Rs 100, Rs 1000, Rs 10,000 and Rs 50,000 maturing
after 29,65,84 and 120 months.
1982 -
The Non-Resident Investment Cell was set up, which had streamlined
The working operations of the non-resident investment sections at
Important centers.
1983 -
SBI launched self employment scheme, for providing self-employment
To educated unemployed youth. Educated unemployed youths are
Encouraged to undertake self-employment ventures in industry, services and
business.
1984 -
The bank provide need-based rehabitation assistance to large and
medium sick industrial units.
1985 -
During the year, company set up a data bank of sick units available
for taken over by healthy units.With effect from 26th August, the Bank of Cochin Ltd
with 108 branches was also amalgamated with the Bank.
(i) All shares in the Capital of the Imperial Bank of India was
vested in the RBI. The SBI was registered with an Authorised capital of
Rs.20 crores, and an issued and paid up capital of Rs.562,50,000 divided
into 562,500 shares of Rs.100 each.
(ii) Every person who on the 30th June, 1955, was registered as a
holder of shares in the Imperial Bank of India was paid by the
Reserve Bank of India.
44,37,500 No. of shares issued at a premium of Rs 160 per share.
1986 -
At the end of the year 324 sick units with an outstanding of Rs 1069
crores were assisted. Of these, 107 units were considered viable and
60 from them were placed under regular nursing programme.
On 1st August a new subsidiary named SBI Capital Market was
functioning independently, took up leasing business and certain other new
services.
100,00,00 No. of shares issued at a prem. of Rs 160 per share.
1987 -
Up to the end of the year the bank had sponsored 30 Regional Rural
Banks covering 66 backward and underbanked districts in the country.
In terms of deployment, the advances portfolio of overseas offices
rose to Rs 5,767 crores. Investments in inter-bank money markets and
also in prime securities amounted to Rs 2,670 crores by the end of the
year.
1988 -
During the year bank initiated UPTECH an Industrial Technology Group
to direct and guide programmes aimed at facilitating technology
upgradation.
25
Also a scheme to develop enterpreneurship among woman under the name
Stree Shakti was launched. Several concessions in respect of margin
and and rate of interest have been built into the package. Three
pilot programmes were launched at Chennai, Calcutta, and Hyderabad.
On 20th September, the bank inaugurated `SBINET,' an integrated
communication project aimed at improving customer service,
operational efficiency and administrative convenience. The network has been
designed to handle voice, fax data and manages through the trunk
routes and exchanges in important centres.
The bank sponsored 30 RRB's covering 66 divisions in the country.
branches were opened raising the branch network to 2,306.
1989 -
SBICAP, in their capacity as Trustee and Manager of Mutual Fund,
launched two scheme viz., Mangnum Monthly Income Scheme 1989 and
Magnum Tax Service Scheme 1990.
During the same period SBI in association with Morgan Stanley Asset
Management Inc. of USA, launched the India Magnum Fund.
1990 -
New products launched during the year included a Regular Income
Scheme, offering an assured return in excess of 12% and the first Pure
Growth Scheme aimed at capital appreciation. A Second offshore fund of US
$ 12 million called Asian Convertible and Indian Fund was launched in
association with Asian Development Bank, Manila.
During Kharif 1990, the bank introduced an agricultural credit card,
known as SBI Green Card to give greater liquidity and flexibility to
farmers in procuring agricultural inputs. The scheme was introduced
on a pilot basis in 125 intensive centre branches.
As at on 31st March, SBIMF had over 3,40,000 Indian investors and
about Rs 475 crores by way of investible domestic funds.
50,00,000 No. of shares issued at a prem. of Rs 160 per share.
1991 -
During February the bank set up a new subsidiary called the SBI
Factors and Commercial Serviced Pvt. Ltd. for rendering factoring services
to the industrial and commercial units in Western India.
1992 -
The bank sponsored 30 RRBs with a network of 3189 offices covering
102 backward and under banked districts of the country. A sum of Rs
15.25 crores was contributed towards the share capital of the RRBs.
During the period bank intoduced `Stockinvest' scheme. Also
introduced a `Gyan Jyoti' that replaced earlier education loan schemes and
offers substantial augmented assistance to students pursuing higher
studies.
Moreover dedicated NRI branches equipped with State-of-the-art
technology was set up at Mumbai and Delhi to cater to the special
needs of NRI residents.
1993 -
26
During the year as a part of its overseas expansion the bank
established representative office in Tashkent.
During December, the bank issued 124,000,000 equity shares of Rs.10
each for cash at a premium of 90 per share of which 245,00,000
shareseach were reserved for allotment on a preferential basis to Indian
Financial Institutions and Indian Mutual Funds. Balance issued to
thepublic.
Simultaneously it came out with another issue of 50,00,000 12%
unsecured redeemable floating rate bonds in the nature of promisory
notes of the face value of 1000 each. Oversubscription upon a
furtheramount of Rs 500 crores (in all Rs 1000 crores) was to be allowed.
Theface value of each bond would be redeemed at par at the expiry of 10
years from the date of allotment. In the event that the State Bank
decides to exercise its option to call up the bonds they would be
redeemed at the rate of 5% at the end of 5th year, at 3% at the end
of7th year and 1% at the end of 9th year.
It was proposed to issue 1200,00,000 right equity shares of Rs.10
eachat a premium of Rs.50 per share in the proportion of 3:5. Also
another120,00,000 equity shares of Rs.10 each were to be issued at a
premiumof Rs.50 per share to employees on an equitable basis.
250 sick units with the bank were referred to the BIFR including 31
public sector units. Approved rehabilitation packages being
implemented in 85 units and 41 have been recommended to be wound up.
The bank continued to be appointed as the operating agency and
rehabilitation packages were submitted to BIFR in 48 cases.
Equity shares subdivided. 1418,50,000 No. of Equity Shares of Rs.
10each issued at a prem. of Rs 90 per share to the public. Another
1319,78,726 shares of Rs 10 each offered at a prem. of Rs 90 per
shareon Rights basis and to employees.
1994 -
358 sick units with the bank were referred to the BIFR including 55
public sector units. Approved rehabilitation packages implemented
in87 units.
1,80,463 No. of Shares kept in abeyance were issued.
1995 -
351 sick units with the bank were referred to the BIFR including 66
public sector units. Approved rehabilitation packages implemented
in112 units.
683 No. of shares kept in abeyance were allotted.
1996 -
On 3rd October the Bank Issued 261,45,000 GDRs amounting to
5,22,90,000equity shares. 1 GDR is issued to 2 equity shares. The issue price
ofGDR was US $ 14.15 per GDR.
1997 -
Shares issued to employees of the bank bearing distinctive numbers
46,26,00,001 to 47,46,00,000 will not be good delivery. The rights
27
issue was for 12 crore equity shares at a premium of Rs.50
aggregatingRs.720 crore in addition to a further issue of 1.2 crore equity
sharesof Rs.10 at a premium of Rs.50 aggregating Rs.72 crore for State
Bankemployees. The price of the rights had been Rs.60 per share.
After SBI Capital Markets, Manila-based Asian Development bank will
pick up 15 per cent equity stake in the new stock broking subsidiary
ofState Bank of India to be made operational by mid-1997. The balance
85per cent will be subscribed to by SBI.
SBI Securities Ltd the 100 per cent stockbroking subsidiary of SBI,
hasrecently received the much-awaited letter of incorporation from the
Registrar of Companies. Following this, both SBI and ADB will pick
up their respective shares in the new stockbroking firm. SSL will have
anequity base of Rs.50 crore.
The State Bank of India has tied up with GE Capital to float a
venturein Mumbai. State Bank signed the memorandum of understanding with
GE Caps in March.
State Bank will tie up with either VISA or Mastercard or even both
forthe franchise network. GE Caps through this joint venture will be
imparting technology, credit card expertise and payment card
mechanism.
The Reserve bank of India has directed the SBI to set up a 0
million stand-by facility for the Indian oil corporation.
State Bank of India (SBI) signed an agreement with the National
Securities Depository Ltd (NSDL) for dematerialisation of its
shares.
Besides, SBI has also become an equity stake holder in NSDL to the
extent of 4.76%.
SBI Commercial and International Bank, has become the country's
firstpublic sector bank to introduce optical disk (OD) facilities for
datastorage.
1998 -
State Bank of India will kick-start its credit card business on July
1by floating two joint ventures with GE Capital. The largest
financial intermediary in the country will sign the joint venture agreement
withGE Caps in the last week of January.
The State Bank of India on Jan 27 kicked off its foray into the
payment cards business with a joint venture agreement with US-based
Financial services giant, General Electric Capital Corporation (GE Capital).
State Bank of India (SBI) on June 24 signed an exclusive agreement
with the world's largest payment system - Visa International - for
Payment cards in India. The agreement was signed in Mumbai between the SBI
managing director, Mr. O P Sethia, and the general manager and
executivevice president (South East Asia) of Visa, Mr James G Murray.
1999 -
State Bank of India (SBI) has bagged the mandate to syndicate the $
120million loan for the National Thermal Power Corporation (NTPC).
28
The State Bank of India (SBI) proposes to take up the life insurance
and general insurance business once the sector is opened up.
State Bank of India has tied up with its associate banks to market
theSBI Card. The SBI has tied up with State Bank of Patiala in
Chandigarhand State Bank of Mysore in Bangalore to help market its credit
card.
SBI proposes to introduce a value-added service for cardholders
wherebythe credit card can also be used as an ATM card.
The State Bank of India will tie up with international investment
banker Credit SuisseFirst Boston and three domestic public sector
banksto form a gold assaying venture.
The State Bank of India (SBI) has decided to take over SBI Home
Finance(SBIHF), with its assets and liabilities. Having the largest stake,
SBI has been weighing various options for bailing out the joint
venturecompany which has slipped into huge losses.
The State Bank of India (SBI) has signed up with Central Depository
Services (I) (CDSIL) for the dematerialisation of its shares.
SBI shares have already been admitted as security with National
Securities Depository (NSDL). Besides, SBI also has a stake (Rs 10
cr)in the equity of CSDL.
According to an agreement entered into with the development bank,
StateBank of India (SBI) was to reduce its stake in its investment
bankingsubsidiary to below 50 per cent by March 31.
The State Bank of India (SBI) has entered into an agreement with
Moody's Investor Service and Icra, under which SBI will pick up
Moody's11 per cent stake in Icra in case the global rating firm wants to
getout of its investment in India.
State Bank of India (SBI) has taken the lead in `convenience
banking'by becoming the first public sector bank to offer its `savings bank'
account holders the benefits of fixed deposits (higher interest
rates)and current accounts (overdraft facility).
2000 -
The Bank has embarked upon the expansion of its ATM network in the
twincities of Hyderabad and Secunderfabad.
The Bank has become the first government owned financial institution
tojoin the rank of companies declaring interim dividend.
The Bank has proposed to come out with an issue under private
placementof unsecured, non-convertible, subordinated bonds in the nature of
promissory notes of Rs 1 lakh each aggregating Rs 600 crores with an
option to retain oversubscription of up to Rs 40 crores.
The Bank launched the Metal (Gold) Loan Scheme in Coimbatore. This
is the third scheme to be introduced by SBI.
SBI is also forming a subsidiary - SBI Gold and Precious Metals Pvt.
Ltd. with 50 per cent equity participation.
Mr. Vepa Kamesam, Deputy Managing Director, has been appointed as
Managing Director with effect from 1st June.
29
SBI board cleared the setting up of a separate subsidiary forinformation technology.
KC Raut has recently taken charge as general manager at State Bank
ofIndia, Chennai.
The Bank has become the first public sector bank to offer fixed-ratehome loans.
The State Bank of India has tied up with State Bank of Mysore tolaunch
co-branded credit cards as part its strategy to collaborate withassociate banks to expand its cardholder base.
Central Depository Services (India) Ltd has signed an agreement with
State Bank of India as its Depository participant.
State Bank of India and the Exim Bank of the US have signedamemorandum
of understanding, involving 0 million, to support the small and
medium-sized ndian companies to purchase US goods and services.
Mr. Suresh Kumar Mehra, Workmen Directors, ceased to be a member of
theCentral Board of the bank effect from October 1, due to his
retirementat the close of the business on September 30.
The Bank has launched an international credit cards for doctors, the frist of its kind in the country, offering
facilities including specialdiscounts on medical equipment and personal
loans from GE countrywide.
The State Bank of India has introduced a new scheme to boostexports.
The CRISIL has assigned a triple-A (AAA) rating to the State Bank of
India's Rs 3,000 crore bonds programme.
The Bank have decided to close down its fully-owned foreignsubsidiary
- SBI European Bank Ltd., in London.
Mr. S. Mukerji, Managing Director, of the bank retired from the bankon 30th of November.
State Bank of India Mutual Fund has launched the Magnum Gilt Fund,dedicated to
investing in government securities.
2001 -
The Bank has signed an MoU with Cardif S.A. for the bank's lifeinsurance business.
The Bank has introduced Voluntary Retirement Scheme for eligible
employees, open from the 15th January 2001 to the 31st January 2001.
The Bank has incorporated a subsidiary `SBI Life Insurance CompanyLtd.,' for doing life insurance
business. The Bank will install 10 more Automated Teller Machines in the
north-eastern region in addition to the one already commissioned at Guwahati.
State Bank of India launched three more ATMs i n Bangalore.
Mr Y Radhakrishnan has been promoted to the post of managingdirector
of State Bank of India. SBI Cards has set up a special insurance cell in Ahmedabad for
facilitating the claims of SBI cardholders affected by the tragic earthquake in Gujarat.
SBI has assigned the Delhi-based HCL Com Net to provide it ATMteller
inter-connectivity which could involve investments running into
several hundred crores.
SBI chief general manager Madhav M Mehta, who is currently theoperational head in
Gujarat, has been transferred to its corporate office in Mumbai as chief general manager
(CGM).
July 3- Announces the launch of the SBI International card and theSBI
Global Card for global travelers in India. SBI International cards and
SBI Gold Cards would be accepted at over 20 million Visa outletsworldwide and one lakh
outlets in India. State Bank of India has embarked upon an ambitious Rs 800-crore
30
technology upgradation programme. The bank has appointed KPMG, aconsultant in
computer technology, to provide inter connectivitynetworking to the computerised branches
and also to the ATMs acrossthecountry enabling its customers to transact any kind of
business from anywhere.
State Bank of India was presented the award for JD Power AsiaPacific’s2001 India Sales Satisfaction Index
(SSI) and Consumer FinancingSatisfaction (CFS)
State Bank of India has added three more ATMs to its network. ThenewATMs were
installed at SBI's Andheri (west),Goregaon (east),and Borivili (east) branches on September
22. State Bank Of India (SBI) has informed BSE that Shri K.J.Udeshi, ED,RBI has been
nominated on the Central Board of the Bank as nomineeofRBI in place of Dr.Y.V.Reddy,
w.e.f. September 22, 2001 under Sec.19(f)of SBI Act.
State Bank of India has slashed the interest rate on home loans by 0.5per cent to 12 per cent, effective from
September 15.
IN A significant move, the State Bank of India has decided todistance itself from its
subsidiaries - SBI Capital Markets, SBI Gilts, SBIAMCand State Bank of Credit and
Commerce International. They will havethe autonomy, independent chairmen and external executives at thesenio
management level at market-related salaries. At present, the
SBI chairman is the ex-officio chairperson of all the subsidiaries,including the associate
banks.
The new scheme will be aimed only at the award staff, a categorythatwas included with
officers in the January 2001 voluntary retirementscheme.
SBI Cards on July 3, announced the launch of the SBI Internationalcardand the SBI Global
Card for global travelers in India.
- VRS implemented in which around 21,000 employees, includingofficers, were permitted
to retire
- The Bank has crossed another milestone by making a successfulforay
into insurance. SBI is the only Bank to have been permitted a 74%
stake
in the insurance business. The Bank's insurance subsidiary, SBI Life
Insurance Company, a joint venture with the Bank holding 74% and
Cardif S.A., the Joint venture partner, the balance 26%, was incorporated to
undertake life insurance and pension business. Cardif S.A. is a
wholly-owned subsidiary of BNP-Paribas, which is the largest bank in
France and one of the top ten banks in the world. Cardif S.A. is the
largest bancassurance company in France.
2002
31
- In order to reduce risk and develop a transparent and active debt
market in general and government securities market in particular,
the Clearing Corporation of India Ltd. has been set up in Mumbai with the Bank as the chief promoter.
-E K Thakur resigns from Directorship of SBI.
-TCS bags order of Rs 500 crore from SBI.
-SBI has informed that the following change in Directors. 1. Shri A C Kalita, Director on the Bank's
Central Board ceased to be a Director on the Board wef May 13, 2002 on expiry of his term on May 12,
2002.2. Shri Y Radhakrishnan Managing Director & GE (CB) has relinquished office of the Managing
Director as on June 30, 2002 and ceased to be Director on the Board wef July 01, 2002.
-State Bank of India has informed BSE that Mr D C Gupta IAS Secretary
(Financial Sector), Ministry of Finance, Department of Economic
Affairs, New Delhi has been nominated as Director on the Board of
State Bank of India with effect from July 17, 2002 vice Mr S K Purkayastha.
-State Bank of India has informed BSE that the Bank has decided to
close SBI Securities Ltd (SBISL), a subsidiary of the Bank, following
a Directive in this regard from the RBI.
-State Bank Of India has informed that Shri Prithvi Raj Khanna and
Shri Kumar Bery have been duly elected as Directors under Section
19(c) of SBI Act at the General Meeting of the -State Bank of India
has informed that it has appointed Mr Ananta Chandra Kalita, as a
Director on the Central Board of the Bank from amongst the employees
of the Bank, who are workmen, for a period not exceeding six months
commencing from October 03, 2002 or until his successor is appointed
or till he ceases to be workmen employee of State Bank of India, or
until further orders, whichever event occurs earlier.shareholders of
the bank held on September 09, 2002.
-State Bank of India has informed BSE that Shri Janki Ballabh,
Chairman has relinquished office of Chairman at the close of business
32
hours on his attaining superannuation on October 31, 2002.
-State Bank of India has informed that Smt Vineeta Rai, Secretary
(Banking & Insurance), Ministry of Finance and Company Affairs,
Department of Economic Affairs (Banking Division), New Delhi has been
nominated as Director of the Board with effect from October 30, 2002.
-State Bank of India has informed that the Central Government, after
consultation with the Reserve Bank of India, appointed Shri A K
Purwar, Deputy Managing Director, State Bank as Chairman, State Bank
of India from the date of his taking charge of the post and upto May
31, 2003 i.e. date of his superannuation or until further orders
whichever is earlier. Shri A K Purwar assumed the charge of Chairman,
State Bank of India, on November 13, 2002.
2003
- State Bank of India (SBI) and Maruti Udyog Ltd have announced a
joint initiative aimed at making car finance affordable to middle and
lower middle class customers. Customers will now have transparent car
finance involving no hidden charges and pre-closure penalties, and
also get the dealers' margins, Mr S.K. Bhattacharya, Chief General
Manager, SBI, told newspersons. It will help both the bank and Maruti
to aggressively tap the Andhra Pradesh market, he said. SBI offers
finance facility even for lifetime tax, insurance and accessories of
the vehicle.
- State Bank of India has informed that the Bank has appointed Shri
Ananta Chandra Kalita, Head Assistant, State Bank of India as a
Director on the Central Board of the Bank amongst the employees of
the Bank, who are workmen for a period of 3 years commencing from
July 15, 2003 or until he ceases to be a workmen employee of the Bank
or until further orders, whichever is earlier provided that he shall
not hold the office continously for a period exceeding six year.
- SBI Cards and Payment Services Private Ltd, the credit card
subsidiary of the State Bank of India, introduces two new schemes
recently- SBI Advantage Card to the bank's fixed deposit customers
and SBI International Card for its home loan borrowers
33
medium enterprises (SME) for loans up to Rs 25 lakh
- SBI and ICICI Bank among the top 100 banks in Asia in 2001 as per
the study by Asian Banker Journal
- Introduces SBI Cash Plus, its Maestro Debit Card that allows
customers to access their deposit accounts from ATMs and merchant
establishments
2003
- Starts new 'Plus schemes' loans such as Justice Plus intended for
the judges and court employees, Police Plus for the police personnel,
Teacher Plus for the teaching community and Doctor Plus for the
medical practitioners
- Receives RBI licence to set up offshore banking units (OBUs) in special economic zones (SEZs)
34
- Christens the tieup with Maruti Udyog Ltd. as SBI-Maruti Finance
- Orange, the cellular service operator of the Hutch group for the
Mumbai circle, ties up with State Bank of India for prepaid card
refill options
- NPA (Non Performing Assets) slashed to 4.5 pc, writes off Rs 4,000
crore worth of assets
- Stock price crosses the Rs 400 mark for the first time since
listing on BSE
35
- State Bank of India along with ANZ Investment Bank have consummated
5 year syndicate loan facility of 0 million to Indian
Petrochemicals Corporation (IPCL)
- Inks pact with Mahindra & Mahindra (M&M) for co-branded tractor
scheme SBI-Mahindra Tractor Plus
- Joins hands with Tractors and Farm Equipment Ltd (TAFE) for tractor
loans
- Unveils new retail bank loan product Credit Khazana, which targets
the bank's housing loan account holders
- Appoints Mr C. Narasimhan as the Chief General Manager of the SBI's Kerala Circle
-Unveils Credit Khazana, retail bank loan product, to target the bank's housing loan account holders
-The bank has tied up with TVS motor company to finance two wheeler
loans
36
-The company launched mobile pre-paid cards recharge facility at its
ATM's
-Tied up with ICICI Bank and HDFC for sharing ATM networks
2003-Bank has entered into MOU with both ICICI Bank and HDFC Bank for
sharing Bank's ATM Network with them on bilateral terms.
2004
-State Bank Of India has informed that Reserve Bank of India has
nominated Shri A V Sardesai, Executive Director, Reserve Bank of
India on the Central Board of State Bank of India vice Dr. Rakesh
Mohan.
-State Bank of India has entered into an alliance with HDFC Bank for
sharing ATM networks to be operationalised from February 3, this
year.
2004
-Bank awarded special prize for lending to self help group run by
women
37
-State Bank of India appointed six new Deputy Managing Directors on
February 11, 2004. The new DMDs are: Mr T.S. Bhattacharya, CGM,
Product Development and Marketing, Mr M.M.Lateef, Managing Director,
SBI Gilts, Mr Yogesh Agarwal, CGM, Chandigarh, Mr Krishnamurthy, CGM,
Madras LHO and Mr R.Ramanathan, CGM, Technology and Mr Vijay Anand,
CGM, Corporate Account group. These top level appointments follow the
appointment of the new Managing Director for the bank, Mr Chandan
Bhattacharya, in December.
-SBI enters into ATM sharing agreements with UTI Bank & HDFC Bank
-Join hands with Siemens for financing the medical equipments sold by
Siemens
-Joins hands with VST Tillers to launch SBI-VST Shakti, a new loan
scheme for farm mechanisation programme
-The government has chosen State Bank of India (SBI) for channelising
government credit to other countries which runs into billions of
dollar
38
-SBI unveils Foreign Travel card in Orissa
-State Bank of India, Bangalore Circle, has announced its tie-up with
New India Assurance Company Ltd (NIAC), for distribution of NIAC's
general insurance products in Karnataka
-THE State Bank of India opened its 236th branch in the State at
Tripunithura on June 16
-SBI join hands with Hero Honda to unveil co-branded credit card
-State Bank of India launched its first mobile ATM for increasing the
banking convenience of its customers
-State Bank of India, (SBI) with a view to expand the ambit of its
educational loan schemes, has unveiled a unique educational loan
scheme, christened Nursing Plus, for the nursing students of the
country
39
-SBI offers new scheme`School Plus' for schools
2005
-SBI enters into agreement for bilateral sharing of ATMs with PNB on
May 10, 2005
40
-SBI signed a memorandum of understanding with Small Industries
Development Bank of India for co-financing small and medium
enterprises in Andhra Pradesh, Tamil Nadu, Uttar Pradesh, Jammu &
Kashmir, Jharkhand, Delhi and Bihar
2006
-State Bank of India (SBI) has informed that Shri. Yogesh Agarwal has
been appointed as Managing Director on the Board of the Bank with
effect from October 10, 2006 to the June 30, 2010
2007
- The State Bank of India (SBI) has become the first foreign bank to
set up a branch in the Israel's diamond exchange. Besides diamonds,
they also see huge potential in telecommunications, hi-tech,
chemicals, textiles, agriculture and water management, food
processing, pharma and health care.
2008
-State Bank of India (SBI) has informed that the Government of India
in pursuance of clause (e) of Section 19 of the State Bank of India
Act, 1955 (23 of 1955) has nominated Shri. Arun Ramanathan,
Secretary, Ministry of Finance, Department of Financial Services, New
Delhi as a Director on the Central Board of State Bank of India with
effect from January 18, 2008, vice Shri. Vinod Rai.
-State Bank of India (SBI) has informed that the Central Government,
in consultation with the Reserve Bank of India and in pursuance of
clause (d) of Section 19 of the State Bank of India Act, 1955 (23 of
41
1955), has nominated Dr. (Mrs.) Vasantha Bharucha as a part-time
non-official Director on the Central Board of State Bank of India for
a period of three years with effect from February 25, 2008, vice Shri
Piyush Goel.
- State Bank of India (SBI) has informed that the Central Government,
in consultation with the Reserve Bank of India and in pursuance of
clause (d) of Section 19 of the State Bank of India Act, 1955 (23 of
1955), has nominated Dr. Rajiv Kumar as part-time non-official
director on the Central Board of Directors of State Bank of India for
a period of three years with effect from September 08, 2008 or until
further orders, whichever is earlier.
- State Bank of India (SBI) has signed a Joint Venture Agreement with
Insurance Australia Group to form a Joint Venture Company which will
be engaged in General Insurance business in India.
2009
- State Bank of India on June 30 launched two new home loan products
called as SBI Easy Home Loan and SBI Advantage Home Loan, with zero
processing fees for both waived off till September 30. While SBI Easy
Home is for loans amount up to Rs 30-lakh while the SBI Advantage Home
is for loans above Rs 30-lakh, a press release issued here said.
2010
42
- State Bank of India, with a debit card base of over 70 million,
comprising SBI Cash Plus, SBI Gold Debit Card and SBI Yuva Card, has
added chip and PIN-based Platinum Debit Card to its bouquet on March 26.
43
Borrowings 39703.34 51727.41 53713.68 103011.60 119568.96
Total debt 475224.43 589131.35 795786.81 907127.83 1053501.77
Other liabilities and provisions 60042.26 83362.30 110697.57 80336.70 105248.39
Total liabilities 566565.25 721526.31 964432.08 1053413.73 1223736.20
Expenditure:
Interest expended 23436.82 31929.08 42915.29 47322.48 48867.96
Operating expenses 13251.78 14609.55 18123.66 24941.01 31430.88
Total expenses 42396.48 51619.62 67358.55 76796.02 88959.12
Other provision and contingencies 5707.88 5080.99 6319.60 4532.53 8660.28
Net profit 4541.31 6729.12 9121.23 9166.05 7370.37
Extraordinary items 0.00 0.00 0.00 0.00 0.00
Profit B/F 0.34 0.34 0.34 0.34 0.34
Total 4541.65 6729.46 9121.57 9166.39 7370.69
Preference dividend 0.00 0.00 0.00 0.00 0.00
Equity dividend 736.82 1357.66 1841.15 1904.65 1905.00
Corporate dividend tax 125.22 165.87 248.03 236.76 246.52
Per share data:
EPS 86.29 106.56 143.67 144.37 116.07
Equity dividend (%) 140.00 215.00 290.00 300.00 300.00
Book value 594.69 776.48 912.73 1038.76 1023.40
44
Appropriations
Transfer to statutory reserve 3682.15 5205.69 6725.15 6495.14 2488.96
Transfer to other reserve -2.88 -0.10 306.90 529.50 2729.87
Proposed dividend/ transfer to govt. 862.04 1523.53 2089.18 2141.41 2151.52
Balance C/F to balance sheet 0.34 0.34 0.34 0.34 0.34
Total 4514.65 6729.46 9121.57 9166.39 7370.69
45
II. Expenditure
rounding
off 8857
CRAR%
Total
CRAR
(%)
2009 14.25
year 2010 13.39
2011 11.98
46
14.5 14.25
14
13.39
13.5
13
12.5
11.98
12 Total CRAR (%)
11.5
11
10.5
2009 2010 2011
year
RATIO ANALYSIS:
CURRENT RATIO:
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
year 2007-2011
year Ratio
2007 0.05
2008 0.07
2009 0.04
47
2010 0.04
2011 0.04
LIQUID RATIO:
Liquid ratio is also known as ‘Quick’ or ‘Acid Test ‘Ratio. Liquid assets refer to
assets which are quickly convertible into cash. Current Assets other stock and prepaid expenses
Year Ratio
2007 6.52
2008 6.15
2009 5.74
48
2010 9.07
2011 8.50
quick ratio
10 9.07
9 8.5
8
7 6.52
6.15
5.74
6
5
quick ratio
4
3
2
1
0
1 2 3 4 5
In order to avoid confusion on account of the varied meanings of the term capital
employed, the overall profitability can also be judged by calculating earning per share with the
help of the following formula:
Earning Per Equity Share = Net Profit after Tax –Preference Dividend
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.
Year Ratio
2007 86.29
2008 106.56
49
2009 143.67
2010 144.37
2011 116.07
Ratio
160 144.37
143.67
140
116.07
120 106.56
100 86.29
80
Ratio
60
40
20
0
1 2 3 4 5
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
50
2007 14
year 2008 21.5
2009 29
2010 30
2011 30
35
29 30 30
30
25
21.5
20
14
15 dividend per share
10
0
2007 2008 2009 2010 2011
year
This ratio indicates the Net margin on a sale of Rs.100. It is calculated as follows:
Net Sales
This ratio helps in determining the efficiency with which affairs of the business are being
managed. An increase in the ratio over the previous period indicates improvement in the
operational efficiency of the business. The ratio is thus on effective measure to check the
profitability of business.
net
profit
ratio
51
2007 10.12
year 2008 11.65
2009 12.03
2010 10.54
2011 8.55
14
11.65 12.03
12
10.12 10.54
10
8.55
8
0
2007 2008 2009 2010 2011
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 proprietor’s funds. Shareholders and
potential investors are interested in this ratio. It is calculated as below:
Return On Net Worth = Net Profit After Interest And Tax x 100
Shareholder’s Funds
return on
shareholder's
2007 14.5
year 2008 13.72
52
2009 15.74
2010 13.89
2011 12.71
18
15.74
16 14.5
13.72 13.89
14 12.71
12
10
8
return on shareholder's
6
4
2
0
2007 2008 2009 2010 2011
year
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.
Total
Debt to
Owners
Fund
2007 13.92
year 2008 10.96
2009 12.81
2010 12.19
53
2011 14.37
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:
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.
assets
turnover
ratio
2007 5.44
year 2008 6.32
2009 7.2
2010 7.26
2011 7.24
54
8 7.26
7.2 7.24
7 6.32
6 5.44
5
0
2007 2008 2009 2010 2011
year
CREDIT-DEPOSIT RATIO:
This ratio is very important to assess the credit performance of the bank. The ratio shows the
relationship between the amount of deposit generated by the bank as well as their deployment
towards disbursement of loan and advances. Higher credit deposit ratio shows overall good
efficiency and performance of any banking institution.
Credits
Credit Deposit Ratio 100
Deposits
credit
deposit
ratio
2007 73.44
year 2008 77.51
2009 74.97
2010 75.96
55
2011 79.9
82
79.9
80
78 77.51
75.96
76 74.97
credit deposit ratio
74 73.44
72
70
2007 2008 2009 2010 2011
year
cash
deposit
ratio
2007 6.22
YEAR 2008 8.29
2009 8.37
2010 7.56
2011 8.96
56
10
8.96
9 8.29 8.37
8 7.56
7 6.22
6
5
4 cash deposit ratio
3
2
1
0
2007 2008 2009 2010 2011
YEAR
CAPITAL
TURNOVER
RATIO
2007 8.46
YEAR 2008 8.96
2009 8.99
2010 8.62
2011 8.48
57
9.1
8.96 8.99
9
8.9
8.8
8.7 8.62
8.6
8.46 8.48 CAPITAL TURNOVER
8.5
RATIO
8.4
8.3
8.2
8.1
2007 2008 2009 2010 2011
YEAR
total
assets
turnover
ratio
2007 0.08
year 2008 0.09
2009 0.09
2010 0.09
2011 0.08
58
0.092
0.09 0.09 0.09
0.09
0.088
0.086
0.084
0.082
0.08 0.08 total assets turnover ratio
0.08
0.078
0.076
0.074
2007 2008 2009 2010 2011
year
Price earning ratio = market price per share/ earning per share
Price
Earning
(P/E)
2007 11.83
Year 2008 15.38
2009 7.63
2010 14.78
2011 21.92
59
25
21.92
20
15.38 14.78
15
11.83
0
2007 2008 2009 2010 2011
Year
Price to
Book Value
( P/BV)
2007 1.67
year 2008 2.06
2009 1.17
2010 2
2011 2.7
60
3
2.7
2.5
2.06 2
2
1.67
1.5
1.17 Price to Book Value (
1 P/BV)
0.5
0
2007 2008 2009 2010 2011
year
EV/EBIDTA
2007 15.64
year 2008 14.46
2009 13.64
2010 15.33
2011 17.07
EV/EBIDTA
18 17.07
15.64 15.33
16 14.46
13.64
14
12
10
8
EV/EBIDTA
6
4
2
0
2007 2008 2009 2010 2011
year
61
BANK OF BARODA
62
INTRODUCTION
Bank of Baroda (BoB) (BSE: 532134) (Hindi: बैंक ऑफ़ बड़ौदा) is the third largest bank in
India, after the State Bank of India and the Punjab National Bank and ahead of ICICI Bank.[3]
BoB is ranked 763 in Forbes Global 2000 list. BoB has total assets in excess of Rs. 3.58 lakh
crores, or Rs. 3,583 billion, a network of over 3,409 branches and offices, and about 1,657
ATMs. It plans to open 400 new branches in the coming year. It offers a wide range of banking
products and financial services to corporate and retail customers through a variety of delivery
channels and through its specialized subsidiaries and affiliates in the areas of investment
banking, credit cards and asset management. Its total business was Rs. 5,452 billion as of June
30.[4]
As of August 2010, the bank has 78 branches abroad and by the end of FY11 this number should
climb to 90. In 2010, BOB opened a branch in Auckland, New Zealand, and its tenth branch in
the United Kingdom. The bank also plans to open five branches in Africa. Besides branches,
BoB plans to open three outlets in the Persian Gulf region that will consist of ATMs with a
couple of people.
The Maharajah of Baroda, Sir Sayajirao Gaekwad III, founded the bank on 20 July 1908 in the
princely state of Baroda, in Gujarat. The bank, along with 13 other major commercial banks of
India, was nationalized on 19 July 1969, by the government of India.
Cash & Balances with RBI 6413.52 9,369.72 10,596.34 13,539.97 19,868.18
Balance with Banks, Money at
Call 11866.85 12,929.56 13490.77 21,927.09 30,065.89
Advances 83620.87 106,701.320 143985.90 175,035.29 228,676.36
63
Investments 34943.63 43,870.07 52445.88 61,182.38 71,260.63
Gross Block 2244.62 3,787.14 3954.13 4,266.60 4,548.16
Preference dividend 0 0 0 0 0
Equity dividend 252.46 340.94 383.56 639.26 753.35
Corporate dividend tax 0 0 0 0 0
Per share data:
EPS 28.18 39.41 61.14 83.96 108.33
64
Equity dividend (%) 60 80 90 150 165
Book value 237.46 303.18 352.37 414.71 536.16
Appropriations
Transfer to statutory reserve 271.5 444.23 1,136.23 1,162.07 1,387.87
Transfer to other reserve 502.5 650.35 707.41 1,257.00 2,100.46
Proposed dividend/ transfer to govt. 252.46 340.94 383.56 639.26 753.35
Balance C/F to balance sheet 0 0 0 0 0
Current
Ratio
2007 0.04
year 2008 0.03
2009 0.02
2010 0.02
2011 0.02
Current Ratio
0.045 0.04
0.04
0.035 0.03
0.03
0.025 0.02 0.02 0.02
0.02
Current Ratio
0.015
0.01
0.005
0
2007 2008 2009 2010 2011
year
QUICK RATIO:
65
Quick
Ratio
2007 11.29
year 2008 9.56
2009 9.62
2010 21.88
2011 26.38
Quick Ratio
30
26.38
25 21.88
20
15
11.29
9.56 9.62 Quick Ratio
10
0
2007 2008 2009 2010 2011
year
Earnings
Per
Share
2007 28.18
year 2008 39.41
2009 61.14
2010 83.96
2011 108.33
66
Earnings Per Share
120 108.33
100
83.96
80
61.14
60
39.41 Earnings Per Share
40 28.18
20
0
2007 2008 2009 2010 2011
year
Total Debt to
Owners Fund
2007 14.44
year 2008 13.77
2009 14.99
2010 15.96
2011 14.55
67
Cash Deposit
Ratio
2007 4.46
year 2008 5.7
2009 5.8
2010 5.57
2011 6.11
Credit
Deposit Ratio
2007 65.67
year 2008 68.72
2009 72.78
2010 73.6
2011 73.87
68
Credit Deposit Ratio
76
73.6 73.87
74 72.78
72
70 68.72
68
65.67
66 Credit Deposit Ratio
64
62
60
2007 2008 2009 2010 2011
year
Asset
Turnover
Ratio
2007 4.25
year 2008 3.47
2009 4.2
2010 4.48
2011 5.25
3
Asset Turnover Ratio
2
0
2007 2008 2009 2010 2011
year
69
Total Assets
Turnover Ratios
2007 0.07
Year 2008 0.08
2009 0.08
2010 0.08
2011 0.08
Total Income /
Capital
Employed(%)
2007 7.83
year 2008 8.57
2009 8.51
2010 7.86
2011 7.75
70
Total Income / Capital Employed(%)
8.8
8.57 8.51
8.6
8.4
8.2
8 7.83 7.86
7.75 Total Income / Capital
7.8
Employed(%)
7.6
7.4
7.2
2007 2008 2009 2010 2011
year
Net Profit /
Total Funds
2007 0.8
year 2008 0.89
2009 1.09
2010 1.21
2011 1.33
71
Dividend Per
Share
2007 6
Year 2008 8
2009 9
2010 15
2011 16.5
Price earnings ratio = market price per share/ earnings per share
PRICE-
EARNING
2007 7.93
YEAR 2008 7.49
2009 3.95
2010 7.87
2011 9.15
72
10 9.15
9
7.93 7.87
8 7.49
7
6
5
3.95
4 PRICE- EARNING
3
2
1
0
2007 2008 2009 2010 2011
YEAR
PRICE-
BOOK
VALUE
2007 0.91
YEAR 2008 0.94
2009 0.67
2010 1.55
2011 1.8
73
2
1.8
1.8
1.55
1.6
1.4
1.2
0.91 0.94
1
0.8 0.67 PRICE-BOOK VALUE
0.6
0.4
0.2
0
2007 2008 2009 2010 2011
YEAR
ENTERPRISE TO EBIDTA:
EV/EBIDTA
2007 15.9
YEAR 2008 13.93
2009 14.01
2010 15.93
2011 16.64
17 16.64
16.5
15.9 15.93
16
15.5
15
14.5
13.93 14.01 EV/EBIDTA
14
13.5
13
12.5
2007 2008 2009 2010 2011
YEAR
74
TREND ANALYSIS
Trend Analysis is the practice of collecting information and attempting to spot a pattern, or
trend, in the information. In some fields of study, the term "trend analysis" has more formally-
defined meaning.
Although trend analysis is often used to predict future events, it could be used to estimate
uncertain events in the past, such as how many ancient kings probably ruled between two dates,
based on data such as the average years which other known kings reigned.
250
200
150
deposits
advances
100
net profit
50
0
2007 2008 2009 2010 2011
75
INTERPRETATION:
There is a increase in net profits till 2010 but there is a fall in 2011
Bank of Baroda
In percentage(%) figures
450
400
350
300
250 deposits
200 advances
net profit
150
100
50
0
2007 2008 2009 2010 2011
76
INTERPRETATION:
Deposits:-
The trend shows that the deposits are increasing from 2007-2011
Advances:-
The trend of advances shows that it is increasing in those four years 2008-2011
Net profit:-
BETA ANALYSIS
1 2 3 4 5 6 7 8
return- return
averag of SBI-
e of Averag covarian
RETURN RETUR return varianc e of ce of
OF N OF of e of return sensex
MONTH SENSEX SBI SENSEX SBI sensex sensex of SBI and SBI
3,233.
10-Sep 20,069.12 20
3,151.
10-Oct 20,032.34 20 0.00 -0.03 0.01 0.0001 0.01 0.0001
2,994.
10-Nov 19,521.25 10 -0.03 -0.05 -0.01 0.0002 -0.01 0.00014
2,811. -
10-Dec 20,509.09 05 0.05 -0.06 0.06 0.0040 -0.02 0.001407
11-Jan 18,327.76 2,641. -0.11 -0.06 -0.09 0.0088 -0.02 0.002018
77
05
2,632. -
11-Feb 17,823.40 00 -0.03 0.00 -0.01 0.0002 0.04 0.000525
2,767.
11-Mar 19,445.22 90 0.09 0.05 0.10 0.0108 0.09 0.009392
2,805. -
11-Apr 19,135.96 60 -0.02 0.01 0.00 0.0000 0.05 0.000167
2,297.
11-May 18,503.28 80 -0.03 -0.18 -0.02 0.0004 -0.14 0.00289
2,405.
11-Jun 18,845.87 95 0.02 0.05 0.03 0.0010 0.09 0.002686
2,342. -
11-Jul 18,197.20 00 -0.03 -0.03 -0.02 0.0005 0.01 0.000268
1,974.
11-Aug 16,676.75 50 -0.08 -0.16 -0.07 0.0050 -0.12 0.008358
1,945.
11-Sep 16,933.83 55 0.02 -0.01 0.03 0.0008 0.02 0.000683
AVERAGE
RETURN -0.01 -0.04 0.0026 0.00200
COVARIAN 0.001995
CE 59
0.002642
VARIANCE 95
BETA 0.755062
1 2 3 4 5 6 7 8
return
- return
RETUR avera -
N OF ge of avera covarian
BANK RETUR BANK return ge of ce of
OF N OF OF on variance return sensex
MONT BAROD SENSE BAROD sense of on and
H SENSEX A X A x sensex BOB BOB
10-Sep 20,069.12 872.8
10-Oct 20,032.34 1,011.00 -0.0018 0.1583 0.010 0.00011 0.165 0.0018
78
9 9 0
- -
0.012 0.00016 0.072
10-Nov 19,521.25 937.75 -0.0255 -0.0725 8 4 5 0.0009
-
0.063 0.044
10-Dec 20,509.09 896.5 0.0506 -0.0440 3 0.00401 0 -0.003
- -
0.093 0.00876 0.030
11-Jan 18,327.76 869.15 -0.1064 -0.0305 6 8 5 0.0029
-
0.014 0.00021 0.002
11-Feb 17,823.40 870.85 -0.0275 0.0020 8 9 0 -3E-05
0.103 0.01075 0.106
11-Mar 19,445.22 963.15 0.0910 0.1060 7 7 0 0.011
- -
0.003 1.01E- 0.053
11-Apr 19,135.96 912.15 -0.0159 -0.0530 2 05 0 0.0002
- -
11- 0.020 0.00041 0.053
May 18,503.28 863.4 -0.0331 -0.0534 3 4 4 0.0011
0.031 0.00097 0.009
11-Jun 18,845.87 871.9 0.0185 0.0098 2 6 8 0.0003
-
0.021 0.00047 0.007
11-Jul 18,197.20 878.3 -0.0344 0.0073 7 1 3 -0.00016
- -
0.070 0.00501 0.161
11-Aug 16,676.75 736.6 -0.0836 -0.1613 8 8 3 0.0114
0.028 0.00079 0.051
11-Sep 16,933.83 774.8 0.0154 0.0519 1 2 9 0.0015
AVERAGE 0.00264
RETURN -0.0127 -0.0066 3 0.0023
COVARIAN
CE 0.00234
0.00264
VARIANCE 3
0.88438
BETA 5
79
RATIO ANALYSIS
There are many ratios that can be calculated from the financial statements pertaining to a
company's performance, activity, financing and liquidity. Some common ratios include the price-
earnings ratio, debt-equity ratio, earnings per share, asset turnover and working capital.
IN RS. CR.
200903
201103 (12) 201003 (12) (12) 200803 (12) 200703 (12)
INCOME :
II. Expenditure
2009 2164.91
2010 3002.21
2011 4241.8
Sum = 9408.92
Average = 3136.30
80
Standard deviation 1044.466
Total
CRAR
(%)
2009 14.05
year 2010 14.36
2011 14.52
81
14.6
14.52
14.5
14.4 14.36
14.3
14.2
14
13.9
13.8
2009 2010 2011
year
82
RESEARCH METHODOLOGY
83
RESEARCH TOPIC
1. To know the strength and weakness of State Bank Of India and Bank Of Baroda through
Ratio analysis.
2. To evaluate the performance of the companies.
3. To understand the liquidity, profitability and efficiency positions of the companies.
4. To make comparison between the ratios during different periods.
INTRODUCTION
Financial Management is the specific area of finance dealing with the financial decision
corporations make, and the tools and analysis used to make the decisions. The discipline as a
whole may be divided between long-term and short-term decisions and techniques. Both share
the same goal of enhancing firm value by ensuring that return on capital exceeds cost of capital,
without taking excessive financial risks.
Capital investment decisions comprise the long-term choices about which projects receive
investment, whether to finance that investment with equity or debt, and when or whether to pay
dividends to shareholders.
Short-term corporate finance decisions are called working capital management and deal with
balance of current assets and current liabilities by managing cash, inventories, and short-term
borrowings and lending (e.g., the credit terms extended to customers). Corporate finance is
closely related to managerial finance, which is slightly broader in scope, describing the financial
techniques available to all forms of business enterprise, corporate or not.
RESEARCH METHODOLOGY
The conclusive research is being used to study the comparison of the companies.
Data collection:
Secondary data is being taken
Websites
84
1. With this analysis we come to know about the strength and weakness of State Bank Of
India and Bank Of Baroda through Ratio analysis.
2. To evaluate the performance of the companies.
3. To understand the liquidity, profitability and efficiency positions of the companies.
4. To make comparison between the ratios during different periods.
Study is constrained to only the comparison of State Bank Of India and Bank Of Baroda.
TOOLS USED:
Comparative analysis
Ratio analysis
Trend analysis
Beta valuation
Sustainable earnings
STATISTICAL TOOL:
CAPITALINE
SPSS
85
FINANCIAL ANALYSIS
86
Introduction to the topic
RATIO ANALYSIS
FINANCIAL ANALYSIS
Financial analysis is the process of identifying the financial strengths and weaknesses of the firm
and establishing relationship between the items of the balance sheet and profit & loss account.
Financial ratio analysis is the calculation and comparison of ratios, which are derived from the
information in a company’s financial statements. The level and historical trends of these ratios
can be used to make inferences about a company’s financial condition, its operations and
attractiveness as an investment. The information in the statements is used by
Trade creditors, to identify the firm’s ability to meet their claims i.e. liquidity position of the
company.
Investors, to know about the present and future profitability of the company and its financial
structure.
Management, in every aspect of the financial analysis. It is the responsibility of the
management to maintain sound financial condition in the company.
RATIO ANALYSIS
The term “Ratio” refers to the numerical and quantitative relationship between two items or
variables. This relationship can be exposed as
Percentages
Fractions
Proportion of numbers
Ratio analysis is defined as the systematic use of the ratio to interpret the financial statements. So
that the strengths and weaknesses of a firm, as well as its historical performance and current
financial condition can be determined. Ratio reflects a quantitative relationship helps to form a
quantitative judgment.
STEPS IN RATIO ANALYSIS
The first task of the financial analysis is to select the information relevant to the decision
under consideration from the statements and calculates appropriate ratios.
To compare the calculated ratios with the ratios of the same firm relating to the pas6t or with
the industry ratios. It facilitates in assessing success or failure of the firm.
Third step is to interpretation, drawing of inferences and report writing conclusions are
drawn after comparison in the shape of report or recommended courses of action.
87
understanding of financial strengths and weaknesses of a firm. There are a number of ratios
which can be calculated from the information given in the financial statements, but the analyst
has to select the appropriate data and calculate only a few appropriate ratios. The following are
the four steps
involved in the ratio analysis.
Selection of relevant data from the financial statements depending upon the objective of the
analysis.
Calculation of appropriate ratios from the above data.
Comparison of the calculated ratios with the ratios of the same firm in the past, or the ratios
developed from projected financial statements or the ratios of some other firms or the
comparison with ratios of the
industry to which the firm belongs.
INTERPRETATION OF THE RATIOS
The interpretation of ratios is an important factor. The inherent limitations of ratio analysis
should be kept in mind while interpreting them.
The impact of factors such as price level changes, change in accounting policies, window
dressing etc., should also be kept in mind when attempting to interpret ratios.
88
1. LIQUIDITY RATIOS
Liquidity refers to the ability of a concern to meet its current obligations as & when there
becomes due. The short term obligations of a firm can be met only when there are sufficient
liquid assets. The short term obligations are met by realizing amounts from current, floating (or)
circulating assets The current assets should either be calculated liquid (or) near liquidity. They
should be convertible into cash for paying obligations of short term nature. The sufficiency (or)
insufficiency of current assets should
be assessed by comparing them with short-term current liabilities. If current assets can pay off
current liabilities, then liquidity position will be satisfactory.
To measure the liquidity of a firm the following ratios can be
calculated
Current ratio
Quick (or) Acid-test (or) Liquid ratio
Absolute liquid ratio (or) Cash position ratio
89
Quick or liquid assets
Quick Ratio= quick or liquid assets/ current liabilities
Components
Quick Assets Current liabilities
Cash in hand Outstanding or accrued expenses
Cash at bank Bank overdraft
Bills receivable Bills payable
Sundry debtors Short term advances
Marketable securities Sundry creditors
Temporary investments Dividend payable
Income tax payable
(c) ABSOLUTE LIQUID RATIO
Although receivable, debtors and bills receivable are generally
more liquid than inventories, yet there may be doubts regarding their
realization into cash immediately or in time. Hence, absolute liquid ratio
should also be calculated together with current ratio and quick ratio so as to
exclude even receivables from the current assets and find out the absolute
liquid assets.
Absolute liquid ratio = Absolute liquid assets/Current liabilities
90
(a) PROPRIETORY RATIO
A variant to the debt-equity ratio is the proprietary ratio which
is also known as equity ratio. This ratio establishes relationship between
share holders funds to total assets of the firm.
Proprietory ratio = Shareholders funds/ Total assets
Shareholder fund Total Assets
Share capital Fixed assets
Reserve& surplus Current assets
Cash in hand
Cash at bank
Bills receivable
Inventories
Marketable securities
Short term investment
Sundry debtors
Prepaid expenses
3. ACTIVITY RATIOS
Funds are invested in various assets in business to make sales
and earn profits. The efficiency with which assets are managed directly
effect the volume of sales. Activity ratios measure the efficiency (or)
effectiveness with which a firm manages its resources (or) assets. These
ratios are also called “Turn over ratios” because they indicate the speed with which assets are
converted or turned over into sales.
Working capital turnover ratio
Fixed assets turnover ratio
Capital turnover ratio
Current assets to fixed assets ratio
(a) WORKING CAPITAL TURNOVER RATIO
Working capital of a concern is directly related to sales.
Working capital= current assets – current liabilities
It indicates the velocity of the utilization of net working capital.
This indicates the no. of times the working capital is turned over in the
91
Cash in hand Outstanding or accrued expenses
Marketable securities
Sundry debtors
92
This ratio differs from industry to industry. The increase in the
ratio means that trading is slack or mechanization has been used. A decline in the ratio means
that debtors and stocks are increased too much or fixed assets are more intensively used. If
current assets increase with the corresponding increase in profit, it will show that the business is
expanding.
Current assets to fixed assets ratio= current assets/ fixed assets
Current assets Fixed assets
Inventories Vehicles
Sundry debtors
Work in progress
Marketable securities
4. PROFITABILITY RATIOS
The primary objectives of business undertaking are to earn profits. Because profit is the engine,
that drives the business enterprise.
Net profit ratio
Return on total assets
Reserves and surplus to capital ratio
Earnings per share
Operating profit ratio
Price – earning ratio
Return on investments
(a) NET PROFIT RATIO
Net profit ratio establishes a relationship between net profit (after tax) and sales and indicates the
efficiency of the management in manufacturing, selling administrative and other activities of the
firm.
Net profit after tax = net profit-( depreciation+ interest+ income tax)
93
Net sales = income from services
net profit and assets. This ratio is also known as profit-to-assets ratio. It
known.
94
Earning per share = net profit after tax/ no. of equity shares
Price earning ratio = market price per share/ earning per share
Market price per share = capital + reserves& surplus / no. of equity shares
Earning per share = earnings before interest and tax / no. of equity shares
95
the relationship between net profit (after interest and tax) and the
proprietor’s funds.
Return on shareholder’s investment = net profit after interest and tax / shareholder’s fund
96
FINANCIAL COMPARATIVE ANALYSIS
97
BALANCE SHEET OF STATE BANK OF INDIA
IN RS CR.
The capital of bank increased by 19.98%in 07-08, 0.0054% in 08-09, 0.018% in 10-11.
98
In 07-08 deposits increase by 23.39%, 08-09 it increase by 38.08%, 8.36% in 09-10,16.14% in
10-11.
The investment in 10-11 has increased with a low rate as compared to the preceding years
.27.55% in 07-08,45.62% in 08-09,3.56% in 09-10,3.43% in 10-11.
There has been a consistent decline in fixed assets in 07-08 and 08-09 0.070% ,0.13%
respectively. Increased by 0.15% in 09-10, 0.076% in 10-11.
There is a fall of current assets 0.19% in 07-08 mainly due to the repayment of deposits.0.074%
in 08-09, subsequent fall of current assets 0.069% in 09-10, and increase of 0.24% in 10-11.
PROFIT AND LOSS OF STATE BANK OF INDIA FOR THE YEAR ENDING ON
MARCH 2007-2011 IN RS CR.
INCOME:
operating income 11410.95 0.24 18131.04 0.31 9482.29 0.12 10367.38 0.12
EXPENDITURE:
interest expended 8492.26 0.36 10986.21 0.18 4407.19 0.10 1545.48 0.032
3514.11
operating
expenses 1357.77 0.10 0.24 6817.35 0.37 6489.87 0.26
9223.14
Net Profit Of The Year: it shows a fluctuating trend i.e., increased by 48% in2007-08,35% in
2008-09,0.49% in 2009-10 and decline by 19% in 2010-11due to increased tax liability.
Interest Expended: it increases from 36% in 2007-08,18% in 2008-09, 10% in 2009-10 and
3.20% in 2010-11.
99
BALANCE SHEET OF BANK OF BARODA FOR THE YEAR ENDING ON MARCH
2007-2011 IN RS CR.
The capital of the bank shows no change till 2009-10 but it increases by 7.40% in 2010-11.
There is a huge fluctuation in the increase of reserves and surplus. It increases by 28% in 2007-
08,16%in 2008-09,18% in 2009-10 and 39% in 2010-11.
The investments has increased with a low rate . 2007-08- 25%,2008-09 – 19%, 2009-10 – 16.6%,
2010-11-16.47%
100
There is a fluctuating in increase in advances 27% in 2007-08,34.9% in 2008-09, 21.5%in 2009-
10, 30.64% in 2010-11.
There is decline of fixed assets in 2008-09 and 2009-10 with 5% and 1% respectively. The
reason may be the increase in the rate of depreciation in the subsequent years.
There has been an increase in borrowings. 243% in 2007-08, 43.5% in 2008-09, 136% in 2009-
10,67% in 2010-11.
PROFIT AND LOSS OF BANK OF BARODA FOR THE YEAR ENDING ON MARCH
2007-11
INTERPRETATION:
The net profit of the year shows a fluctuating trend i.e., 39.85% in 2007-08,55.15% in2008-
09,37.32% in 2009-10and 38.69% in 2010-11.
101
BETA VALUATION :
state bank of
India bank of Baroda
beta
0.9
0.88
0.86
0.84
0.82 beta
0.8
0.78
0.76
0.74
state bank of bank of baroda
india
The graph shows the compare beta of SBI and BOB which is 0.8 and 0.9 which means that
both are comparatively good. There betas are<1 which means it is goodfor the investors to
invest in the bank as it is less risky in nature.
SUSTAINABLE EARNINGS:
SBI BOB
SUSTAINABLE
EARNINGS 8857 3136
102
SUSTAINABLE EARNINGS
10000
8857
9000
8000
7000
6000
5000
SUSTAINABLE EARNINGS
4000 3136
3000
2000
1000
0
SBI BOB
CRAR% ANALYSIS :
SBI BOB
BASEL-II
CRAR% 11.98 14.52
BASEL-II CRAR%
16 14.52
14
11.98
12
10
8
BASEL-II CRAR%
6
4
2
0
SBI BOB
103
CASH FLOW STATEMENT ANALYSIS OF BANK OFBARODA:
104
FINDINGS, SUGGESTIONS AND CONCLUSIONS
105
State bank of India Bank of Baroda
Particulars
1. Beta valuation 0.8 0.9
2. sustainable earnings ( standard 504 1044
deviation)
Average sustainable earnings 8857 3136
YEAR 2011
SBI BOB
P/E 21.92 9.15
P/BV 2.7 1.8
EV/EBIDTA 17.07 16.64
106
25
21.92
20
17.07 16.64
15
SBI
10 9.15 BOB
5
2.7
1.8
0
P/E P/BV EV/EBIDTA
INTERPRETATION:
P/E RATIO OF State bank of India is 21.92 which is more than the P/E ratio of its peerset bank
of Baroda 9.15 which means that it is overvalued and strongly sound in nature.
P/BV
The ratio of state bank of india is 2.7 and that of its peerset is 1.8 which means the bank is highly
overvalued in nature
EV/EBIDTA
The ratio of state bank of india is 17.07 and that of its peerset is 16.64 which means that the bank
is closely related to its peerset.
107
SBI BOB
credit deposit ratio 79.9 73.87
CASH DEPOSIT 8.96 6.11
90
79.9
80 73.87
70
60
50
credit deposit ratio
40
CASH DEPOSIT
30
20
8.96
10 6.11
0
SBI BOB
CREDIT-DEPOSIT RATIO:
The graph shows that state bank of india and bank of baroda both are performing well as both
banks has overall good efficiency in nature.
SBI-79.9
BOB – 73.87
State bank of India has overall good efficiency and performance of banking institutions.
The graph shows that state bank of India and bank of Baroda is performing well in nature.
108
SUSTAINABLE
EARNINGS
SBI BOB
STANDARD DEVIATION 504 1044
AVERAGE 8857 3136
10000
8857
9000
8000
7000
6000
5000
STANDARD DEVIATION
4000 3136
AVERAGE
3000
2000
1044
1000 504
0
SBI BOB
SUSTAINABLE EARNINGS
OUTCOME:
Since the average sustainable earnings is high and standard deviation of state bank of India is
low which means that the bank is fundamentally sound and it is performing good as compared to
bank of Baroda.
109
INDUSTRY SBI BOB
P/E
RATIO 6.43 21.92 9.15
P/E RATIO
25
21.92
20
15
0
INDUSTRY SBI BOB
INTERPRETATION:
It means that State bank of India P/E ratio is more than the industry/peerset company which
means it is overvalued and it is fundamentally sound in nature as compared to its industry/
peerset bank of Baroda.
110
SBI BOB
dividend payout ratio 26.03 17.76
20 17.76
15
dividend payout ratio
10
0
SBI BOB
INTERPRETATION:
SBI 26.03
BOB 17.76
SBI BOB
111
It is indicated that EPS AND DPS ARE INCREASING OF STATE BANK OF INDIA AS
COMPARED TO BANK OF BARODA .
CONCLUSIONS:
1. State Bank Of India has overall better efficiency and has performed better in the banking
institution as compared to Bank Of Baroda.
2. EPS And DPS Of State Bank Of India is increasing due to increase in the use of debt
rather than the use of improved operations.
3. The P/E Ratio Of State Bank Of India is high as compared to its industry and Bank Of
Baroda which means that SBI is using its funds in a better manner and it is fundamentally
sound in nature.
4. Beta Of State Bank Of India And Bank Of Baroda is less than the market beta which
means that both banks are giving less returns but they are less risky and investors can
invest in these shares.
5. The Average Sustainable Earnings Of State Bank Of India is high and the standard
deviation is low so the bank has its earnings is sustain and more robust in nature as
compared to Bank of Baroda.
6. The Credit Deposit Of State Bank Of India And Bank Of Baroda is close but the ratio is
high which means that State Bank Of India has overall good efficiency and better
performance, i.e., the bank has high credit deposit ratio.
112
REFERENCES:
http://en.wikipedia.org/wiki/State_Bank_of_India
http://en.wikipedia.org/wiki/Bank_of_Baroda
http://www.moneycontrol.com/financials/state bank of India/balance-sheet/SBI
http://www.moneycontrol.com/financials/bankofbaroda/balance-sheet/BOB
http://www.moneycontrol.com/financials/bankofbaroda/profit&loss/BOB
http://www.moneycontrol.com/financials/bankofbaroda/profit&loss/SBI
www.google.com
www.capitaline.com
www.sbi.com
www.investopedia.com
113
114