Task 18

RATIOS
Peer comparison of SBI and PNB with other PSB
Interest income / Total asset:
PARTICULARS MARCH 2020 MARCH 2019 MARCH 2018
SBI 6.42 6.51 6.33
PNB 6.44 6.6 6.25
BOB 6.57 6.45 6.15
UNION BANK 6.74 6.88 6.7
CANARA BANK 6.71 6.73 6.54
This ratio refers to the interest earned on the total assets used for this purpose to determine whether
the rate is good, too high, or too low in order for the responsible management to decide whether to
continue leaving these assets as is or use them differently. From the above chart we can find that
union bank has the highest ratio as compared to other banks.Sbi has the lowest ratio and the interest
income earned compared to assets is low for SBI .

Non-interest income / Total asset

PARTICULARS MARCH 2020 MARCH 2019 MARCH 2018
SBI 2.2 1.97 2.14
PNB 1.1 0.93 1.14
BOB 1.01 0.96 1.06
UNION BANK 1.04 1.01 1.11
CANARA BANK 1.59 1.39 1.17
Sbi has the highest ratio and it increased from last year.BOB ha the lowest ratio but the ration
increased as compared to last year.The ratio of all banks increased from last year

Operating profit / Total Asset

PARTICULARS MARCH 2020 MARCH 2019 MARCH 2018
SBI -1.76 -1.89 -2.26
PNB -1.05 -2.2 -2.75
BOB -0.93 -0.82 -1.32
UNION BANK -1.58 -1.59 -2.17
CANARA BANK -1.86 -1.31 -1.81
Operating return on assets is used to show a company’s operating income that is generated per
rupees invested specifically in its assets that are used in its everyday business operations.All the banks
have negative ratio which says that there operating profit is not at good level.BOB has the highest
ratio and canara bank has the lowest ratio as compared to other banks
Operating expense / Total asset
PARTICULARS MARCH 2020 MARCH 2019 MARCH 2018
SBI 3.13 2.95 2.65
PNB 1.42 1.48 1.75
BOB 1.71 1.55 1.51
UNION BANK 1.47 1.57 1.4
CANARA BANK 2.16 2.04 1.55
Operating expense to total asset ratio of SBI was high compared to other banks and there is significant
rise in SBI, BOB and Canara bank. Union bank has the lowest ratio and there is increase in ratio of PNB.

Interest expense/total asset

PARTICULARS MARCH 2020 MARCH 2019 MARCH 2018
SBI 3.83 4 4.05
PNB 4.34 4.39 4.3
BOB 4.17 3.96 3.89
UNION BANK 4.65 4.79 4.77
CANARA BANK 4.83 4.54 4.61
Interest expense to total asset ratio is high for Canara bank and union bank while SBI has the lowest
ratio, there is decrease in the ratio for SBI, Union bank, PNB and BOB and canara bank has shown
an increase in the ratio.

CAMEL ANALYSIS OF SBI

CAPITAL ADEQUACY RATIO

PARTICULARS MARCH 2020 MARCH 2019 MARCH 2018
Capital Adequacy Ratio 13.13 12.72 12.60

ASSET QUALITY
PARTICULARS MARCH 2020 MARCH 2019 MARCH 2018
GROSS NPA 149,091.85 172,753.60 223,427.46
GROSS NPA (%) 6.00 8.00 11.00
NET NPA 51,871.30 658,947.40 110,854.70
NET NPA (%) 2.23 3.00 6.00
NET NPA TO 2.00 3.00 6.00
ADVANCES (%)
CREDIT DEPOSIT 73.75 73.79 80.38
RATIO
EPS 22.15 2.58 -5.34
MANAGEMENT
PARTICULARS MARCH 2020 MARCH 2019 MARCH 2018
RETURN ON INVESTMENT 0.47 0.05 -0.12
RETURN ON EQUITY 8.69 0.98 -2.21

EARNINGS
PARTICULARS MARCH 2020 MARCH 2019 MARCH 2018
GROSS PROFIT -7.93 7.62 6.81
MARGIN%
NET PROFIT MARGIN% 6.73 1.21 -1.82
NET INTEREST 2.59 2.50 2.27
MARGIN
NET INTEREST 6.42 6.51 6.33
INCOME

LIQUIDITY
PARTICULARS MARCH 2020 MARCH 2019 MARCH 2018
CURRENT RATIO 0.08 0.09 0.08
QUICK RATIO 8.57 9.13 8.09

VALUATION
PARTICULARS MARCH 2020 MARCH 2019 MARCH 2018
PRICE TO EARNINGS 8.89 124.32 -46.80
RATIO
PRICE TO BOOK VALUE 0.77 1.22 1.09
RATIO
DIVIDEND PAYOUT 0.03 0.98 -4.39
RATIO

CAMEL ANALYSIS OF PUNJAB NATIONAL BANK

CAPITAL ADEQUACY RATIO
PARTICULARS MARCH 2020 MARCH 2019 MARCH 2018
CAPITAL 14.00 10.00 10.00
ADEQUACY RATIO

ASSET QUALITY
PARTICULARS MARCH 2020 MARCH 2019 MARCH 2018
EPS 0.80 -29.68 -54.71
NET NPA% 2.23 3.01
GROSS NPA 6.15 7.53
CREDIT DEPOSIT 67.47 67.74 67.52
MANAGEMENT
PARTICULARS MARCH 2020 MARCH 2019 MARCH 2018
RETURN ON 95.34 100.72 156.80
INVESTMENT
RETURN ON EQUITY 0.74 -22.51 -31.26

EARNINGS
PARTICULARS MARCH 2020 MARCH 2019 MARCH 2018
GROSS PROFIT 14.21 15.50 18.38
MARGIN
NET PROFIT MARGIN% 0.66 -19.22 -25.82
NET INTEREST 2.10 2.21 1.95
MARGIN

LIQUIDITY
PARTICULARS MARCH 2020 MARCH 2019 MARCH 2018
CURRENT RATIO 0.05 0.05 0.05
QUICK RATIO 38.14 35.12 22.71

VALUATION
PARTICULARS MARCH 2020 MARCH 2019 MARCH 2018
PRICE TO EARNINGS 246.06 -10.81 -4.57
RATIO
PRICE TO BOOK VALUE 0.37 1.03 0.68
RATIO
DIVIDEND PAYOUT
RATIO

INVESTOR PROFILE SHEET

Personal information

My name is Ram Krishnan

I am 47 years or age employed with Hedge Wealth Management Services as a Financial

Advisor. In my profession, I work with a team that provides need based Financial Advisory

services to retail, HNI and corporate clients. As the New Year 2020 in mid, I have decided to

prepare/review my personal financial plan.

Spouse name: Lekshmi Mohan

Age: 45

Life parameters

• My expected life: 75 years

• My spouse expected life :80 years

• My retirement age :60

• My monthly salary (FY2019-2020): Rs 65,000

Other income:

• Rents – Rs 25,000

• My monthly expenses/outflows of cash:

• Household expenses: Rs 30,000

• School fees for children: Rs 20,000

• House rent – 0

• Electricity, phone etc: Rs 1800

• Car loans +EMI: Rs 14,000+Rs 5000

• Any other loan repayments, EMI:

• Insurance Premiums: Rs 6,000 p. a

My Family Assets:

• House: Rs 50,00,000

• Other property: Rs 30,00,000

• Car: Rs 13,00,000

• Providend Fund: Rs 5000

• My liabilities:

• Car loan: Rs 13,00,000

• Home loan: Rs 30,000 p.m. for 45 years

• Personal loan: Rs 9,000 p.m. for 10 years

Assumptions regarding economic factors (% per year)

• Inflation: 3.34%

• Expected return on risk free investments: 3.22%

My Goals (input numbers based on current costs and expected cost escalations when you

will actually need it)

1. Create a Retirement corpus needed at retirement age to sustain same lifestyle till expected

life time

• Investment in Post Office Monthly Income Scheme (POMIS) Account for 5 years at Rs

8,00,000 at 7.80%

• Investment in tax free bonds with the capital raised in tax free bonds

• And investing in Senior Citizens Saving Scheme in the 5th year.

2. Provide for basic / higher education for children.

1 st child 2 nd child
1 st to 10th standard 300000 500000
Graduation 200000 400000
Post graduation 600000 1200000

3. Marriage expenses for each child at their respective age of 25 years

4. Build a dedicated fund for planned vacation expenses – Rs 3,00,000

5. Ensure sufficient life coverage in place for self. – Rs 10,00,000