Commercial Banking & Management Project 1

(CAMELS AND DUPONT ANALYSIS OF 2 BANKS)

Banks Selected:-
1. Canara Bank

2. Bank of Baroda

Submitted to:-
Dr. Gautam Negi

Submitted by:-
Vidit Mittal (317/2020)
PGDM Finance
 5 Point Du Pont An
Pariculars ↓ Year (2020-21)
Canara Bank
Net Income ₹ 2,558.00
Earnings Before Tax (EBT) ₹ 20,009.00
Earnings Before Interest and Tax (EBIT) ₹ 21,159.00
Revenue ₹ 84,525.08
Average Total Assets ₹ 1,153,675.00
Average Total Equity ₹ 58,884.93

Net Income/EBT (Tax burden) 12.78%

EBT/EBIT (Intrest burden) 94.56%
EBIT/Revenue (EBIT margin) 25.03%
Revenue/Avg. Total Assets (Asset turnover) 7.33%
Avg. Total Assets/ Avg. Total equity (Financial levrage) 1959.20%

ROE(Final Du pont Values) 4.344%

5 Point Du Pont Analysis

Bank of baroda Canara Bank Bank of baroda

₹ 828.95 Tax Expense ₹ 1,150.00 ₹ 959.00
₹ 20,629.80
₹ 21,588.80
₹ 82,859.50
₹ 1,156,640.14 65,885,006
₹ 77,045.72
As we can see the ROE of is about 4 times than ROE of . The major reason for the same o
high assets as a portion of equity indicating that the bank has a lot more leverage(debt) i
4.02% capital structure than equity which is not a good sign as far as their creditors are concern
95.56% BOB also has a greater portion of tax burden on its income it can also be due to lack of
26.05% availablity of current tax that was not mentioned on their annual report. Apart from this
the banks are pretty similar in other aspects with the difference amounting to about abou
7.16% 5% which is not that far of. As per the analysis you should put your money in Canara Bank
1501.24% you can get a better return there.

1.076%
e major reason for the same os
as a lot more leverage(debt) in its
as their creditors are concerned.
it can also be due to lack of
nnual report. Apart from this both
ence amounting to about about 1-
ut your money in Canara Bank as
 Canara Bank
1. Capital Adequeacy 454.821%

a.) CAR = (Tier 1 + Tier 2 )/ RWA 13.18%

b.) Debt to Equity = Long term Debt/ Equity 1297.26%
C.) Advance to total Asset = Advance/total Asset 55.39%

Canara Bank
2. Asset quality 13.25%

a.) Net NPAs to Total Advances 3.82%

b.) Total Inv. To assets 22.68%

Canara Bank
3. Asset Management 2468.273685205
a.) Total asset to Total Deposit 1.141264227773
b.) Return on Equity 4.344%
C.) Net profit to employee 289.9799349302
d.) Business to employee 9581.930101006

Canara Bank
4. Earings Quality 21.66%
a.) Interest income to total income 0.819162609099
b.) Net interest margin 2.75%
c.) ROA 0.222%
d.) Operating profit to total Assets 1.73%

Canara Bank
5. Liquidity 16.56%

a.) Liquid Assets to Total Assets 15.46%

b.) Liquid Assets to total Deposits 17.65%
Bank of baroda
323.590% Capital Adequacy is the capacity of a bank to absorb the unexpected losses that i
of the depositor’s money, thereby, promoting the stability of the financial system
what proportion of the total assets held by the bank are converted into loans, thu
14.99%
versa.
895.62% Out of the 2 banks Canara has a better Capital Adeqaucy majorily beacuse it has m
61.13% Structure.

Bank of baroda Asset Quality is a review of the asset in order to measure the credit risk associate
the quality of the bank’s assets is to find out the amount of Non-Performing Loan
12.85% loans are the loans which are at a risk of not being fully repaid or where the inter
repaid by the borrower. A lower ratio is prefrerd for the metric meaning BOB has
3.09% the metrics are marginally lower than Canara Bank.
22.61%

Bank of baroda Management efficiency is an indispensable constitute of the CAMELS model that
2524.50481296453 endurance of a bank. Therefore, management efficiency signifies the adherence t
prescribed norms, the capability to counter the changing environment, leadership
1.19479674247566 the bank. A higher ratio is a better indicator and BOB slighlty edges Canara bank i
1.0759% its better Total asset to total Deposit and business to employee ratio.
₹ 100.01
₹ 9,996.80

Bank of baroda Earnings Quality reflects the firm current operating performance and is a good in
22.41% performance as well. It is an extremely important parameter that highlights the c
0.850778245101648 and therefore earn consistently.
A higher ratio ensures a higher quality of income where BOB slighlty edges Canar
2.71% income and operating profit to total Assets.
0.072%
1.79%

Bank of baroda Liquidity means the ability of a bank to honor its commitment towards the depos
adequate liquidity position either by increasing the current liabilities or by conve
11.44% also denotes the funds available with the banks to meet their credit demands an
like other metrics exept asset quality a higher ratio is better.
10.42% Canara Bank takes advantage here comfortably as it has performed better in both
12.45%
Baroda.
orb the unexpected losses that it may face. Thus, it ensures the protection
stability of the financial system. Advances to Total Assets tells us that
ank are converted into loans, thus, higher the ratio the better it is and vice
eqaucy majorily beacuse it has more debt than equity in its capital

measure the credit risk associated with it. A common way to measure
amount of Non-Performing Loans with the bank. Non-Performing
g fully repaid or where the interest on the loan may not be fully
for the metric meaning BOB has a better Asset Quality ratio as both
nk.

tute of the CAMELS model that guarantees the growth and the
fficiency signifies the adherence to the adherence to comply with the
hanging environment, leadership and the administrative capability of
BOB slighlty edges Canara bank in this factor too majorily because of
s to employee ratio.

ng performance and is a good indicator of the future operating

parameter that highlights the capability of a bank to sustain quality

where BOB slighlty edges Canara Bank based on ots Interest to total

commitment towards the depositors. Banks can preserve

he current liabilities or by converting their assets into cash quickly. It
o meet their credit demands and the cash flow requirements. Again
tio is better.
s it has performed better in both the parameters over Bank of
 All Data is for year 2020-21
Canara Bank Bank of baroda Metrics
- ₹ 21,800.00 Net NPA's
₹ 200,090,000.00 ₹ 20,629.80 Operating Income
₹ 845,250,765.00 ₹ 82,859.50 Total Income
₹ 692,397,822.00 ₹ 70,495.06 Interst Income
₹ 845,250,800.00 ₹ 82,859.50 Revenue
₹ 588,849,300.00 ₹ 77,045.72 Equity
₹ 499,835,606.00 ₹ 66,847.93 Long term debt
₹ 6,799,728,471.00 ₹ 578,714.70 Long term debt
₹ 339,319,595.00 ₹ 44,474.20 Long term debt
₹ 6,390,489,861.00 ₹ 706,300.51 Advances
₹ 11,536,750,000.00 ₹ 1,155,364.77 Total assets
₹ 2,616,903,940.00 ₹ 261,220.26 Investments
₹ 10,108,745,827.00 ₹ 966,996.92 Deposits
₹ 25,580,000.00 ₹ 828.95 Net Income
88213 82886 Employees
₹ 431,116,229.00 ₹ 38,841.03 Cash balance with RBI
₹ 1,352,964,138.00 ₹ 81,571.77 Balance with with other banks