Financial Management

Analysis of Banking Industry

Submitted to Prof Manoj Anand 3/23/2011

Submit By Group-8, Section-B
PGP26076 – Ankur Dutt PGP26086 - Gagandeep Singh Nanda PGP26106 - Paresh Jha PGP26119 - Shiv Kumar Seth PGP26120 - Shravan Kumar Mukhopadhyay

Contents
Overview of the Indian Banking Sector................................................................................................... 2 AXIS BANK ......................................................................................................................................... 3 HDFC BANK ....................................................................................................................................... 3 ICICI BANK ........................................................................................................................................ 3 PUNJAB NATIONAL BANK .............................................................................................................. 4 STATE BANK OF INDIA .................................................................................................................... 4 Risk Profile & Estimation of WACC ......................................................................................................... 5 ESTIMATION OF E ......................................................................................................................... 5 ESTIMATION OF COST O F EQUITY ............................................................................................... 6 ESTIMATION OF COST O F DEBT ................................................................................................... 6 ESTIMATION OF WACC ................................................................................................................... 7 ESTIMATION OF THE RISK PROFILES ........................................................................................... 7 Capital structure Analysis...................................................................................................................... 11 AXIS BANK ....................................................................................................................................... 12 HDFC BANK ..................................................................................................................................... 13 ICICI BANK ...................................................................................................................................... 14 PUNJAB NATIONAL BANK ............................................................................................................ 15 STATE BANK OF INDIA .................................................................................................................. 16 Dividend Policy ...................................................................................................................................... 17 References ............................................................................................................................................ 22

capturing the 36th rank.0 per cent in the total bank credit. In terms of the market capitalization. Amongst the private banks. Indian banks continue to be well-regulated.9 per cent of the aggregate deposits.7 percent rise in net profits at US$ 204.4 per cent. Foreign banks and regional rural banks had a share of 4. 20 Indian banks have been included in the Brand Finance Global Banking 500. the most dominant segment of the financial sector.0 per cent and 3. For the purpose of this study we have chosen the top 5 banks (in terms of their market capitalization) in India namely State Bank of India. nationalised banks hold the highest share of 52. 2010 approved to provide an additional amount of US$ 1. as always. Axis Bank and Punjab National Bank. Axis Bank.9 per cent and 2. with SBI and its associates at 23. respectively.5 per cent. as a group. HDFC Bank. The proposed capital infusion would enhance the lending capacity of the PSBs to meet the credit requirement of the economy in order to maintain and accelerate the economic growth momentum. these five banks together account for more than 62 percent of the total market capitalization of all banks in India. reported a net profit of US$ 166. Significantly.7 per cent in 2009-10. accounted for 51. HDFC Bank. The share of other scheduled commercial banks. In fact. and under the regulator's watchful eye. have emerged stronger.3 million for the quarter ended September 30. on December 1. With respect to gross bank credit also.5 per cent.3 million a year ago.5 per cent respectively in the total bank credit. The Cabinet. According to RBI's 'Quarterly Statistics on Deposits and Credit of Scheduled Commercial Banks: March 2010'. ICICI Bank. in addition to the US$ 3. on a year-onyear basis. foreign banks and regional rural banks in aggregate deposits were 17.28 per cent increase from US$ 120. mode of capitalization and other terms and conditions would be decided in consultation with the banks at the time of infusion. the State Bank of India (SBI) has become the first Indian bank to be ranked among the Top 50 banks in the world. to ensure Tier I CRAR (Capital to Risk Weighted Assets) of all Public Sector Banks (PSBs) at 7 per cent and also to raise Government of India holding in all PSBs to 58 per cent. the country’s thirdlargest private sector lender. India’s second largest private lender reported a 32. while State Bank of India (SBI) and its associates accounted for 22.1 per cent and other scheduled commercial banks at 17. It also approved that the exact amount. 5. as per the Brand Finance study.1 per cent.33 billion.3 million for the second quarter of this financial year. a 38.OVERVIEW OF THE INDIAN BANKING SECT OR The banking system remains. nationalised banks. owing to strong growth in interest income. . bank credit grew by 16. 2010.32 billion already provided in the Budget 2010-11. In the annual international ranking conducted by UK-based Brand Finance Plc.

ICICI BANK ICICI Bank is India's second-largest bank with total assets of Rs.97 Crore equity shares of Rs. corporate/wholesale banking and other banking business. Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC) and other four PSU insurance companies. The New India Assurance Company Ltd.e. life and non-life insurance.25 billion (US$ 896 million) for the year ended March 31. The HDFC Group holds 23. and United India Insurance Company Ltd. as part of the RBI's liberalisation of the Indian Banking Industry in 1994. As on 30th June. 2010. About 27. two banks – State Bank of India and Punjab National Bank are state owned banks whereas the remaining three are privately owned banks.. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995. The Oriental Insurance Company Ltd. India. The paid-up capital as on said date is Rs. National Insurance Company Ltd. 459. 2010 the authorized share capital of the Bank is Rs. 40.00 billion (US$ 81 billion) at March 31. with its registered office in Mumbai.I). 3. 409. after the Government of India allowed new private banks to be established.each).45% of the equity is held by Foreign Institutional Investors (FIIs) and the Bank has about 0. venture capital and asset . 10/. The bank today has a presence in 19 countries.90 crores with the public holding (other than promoters and GDRs) at 53.7 crores (45.63 % of the Bank's equity and about 17. AXIS BANK Axis Bank was the first of the new private banks to have begun operations in 1994. The Bank operates in four segments: treasury. including India..Moreover.44 million shareholders.634. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited'. i. The Bank was promoted jointly by the Administrator of the specified undertaking of the Unit Trust of India (UTI . retail banking. HDFC BANK The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector.62%. 550 crores. 2010 and profit after tax Rs. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries in the areas of investment banking. among these five banks. The Bank's American Depository Shares (ADS) are listed on the New York Stock Exchange (NYSE) and the Bank's Global Depository Receipts (GDRs) are listed on Luxembourg Stock Exchange.05 % of the equity is held by the ADS Depository (in respect of the bank's American Depository Shares (ADS) Issue). The shares are listed on the Bombay Stock Exchange Limited and the National Stock Exchange of India Limited. 2010 is capitalized to the extent of Rs. The Bank as on 31st December.

namely Treasury. Malaysia and Indonesia. the Bank received permission from RBI for setting up a representative office in Sydney. business and many other parameters. bullion business. they are in the process of entering into Canada. Punjab National Bank was incorporated in the year 1895 at Lahore and was nationalised in July 1969 along with 13 other banks.30. life and non-life insurance business. Mid Corporate Accounts Group and Stressed Assets Management Group. including 46 extension counters among Nationalized Banks. Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates. Hong Kong. Russia and Canada. PUNJAB NATIONAL BANK Punjab National Bank is a state-owned commercial bank and is one of the Big Four Banks of India.700 equity shares of Rs 10 each which resulted in the reduction of the government's shareholding in the Bank. The Treasury segment includes the investment portfolio and trading in foreign exchange contracts and derivative contracts. In addition to the banking services. with 40. Singapore. China. The Bank provides banking services to the customer.01% respectively. Thailand. Recently. Also. credit card. The Corporate/ Wholesale Banking segment comprises the lending activities of Corporate Accounts Group.16% as on Mar’10 as per Basel II with Tier I and Tier II capital ratio at 9. mutual funds. security trading. South Africa.management. Australia. PNB is ranked as the second largest bank in the country after SBI in terms of branch network. the Bank came out with their first Initial public offer (IPO) for 5. In March 2002. Sri Lanka.85% share of CASA deposits. and gold coins and asset management business. factoring. The company is having an aim to increase the customer base to 150 million by the year 2013. The Bank has the largest domestic network of 4997 offices. provides a range of financial services. pension fund management and primary dealership in the money market. The bank has a strong capital base with capital adequacy ratio of 14. STATE BANK OF INDIA State Bank of India is the largest state-owned banking and financial services company in India. The Bank currently has subsidiaries in the United Kingdom. The Bank operates in four business segments.15% and 5. the Bank through their subsidiaries. Corporate/ Wholesale Banking.60. The Retail Banking segment consists of branches in National Banking Group. which primarily includes personal . and also operate credit card and debit card business. ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). branches in United States. During the FY 2009-10. Bahrain. merchant banking. Bangladesh. They offer banking products. the Bank achieved a net profit of Rs 3905 crores. which include life insurance. Retail Banking and Other Banking Business.

This procedure gave the Beta Equity of each of the banks. Los Angeles. Frankfurt. Axis Bank) are private sector banks and two of them ( SBI. RISK PROFILE & ESTIMATION OF WACC We intentionally chose the five banks such that three of them (HDFC. Male in the Maldives. The D/E ratio for each of the banks were then found by dividing the five yearly Interest by the loans outstanding in that period which is explained more in details in the Capital Structure analysis.The Government of India nationalized the Imperial Bank of India in the year 1955. and name was changed to State Bank of India. Then the E is relevered by using the same above formula this time taking A as the industry beta for each of the banks. Johannesburg. and representative offices in Bhutan and Cape Town. with the Reserve Bank of India taking a 60% stake. including lending activities to corporate customers having banking relations with branches in the National Banking Group. They have branches of the parent in Colombo. ICICI.banking activities. Muscat. PNB) being public sector banks. Dhaka. State Bank of India was incorporated in the year 1955. Osaka. Hong Kong. Sydney. The Returns on the Stock for a particular week were calculated by using the formula: ln P1 / P0. . and Tokyo. They have offshore banking units in the Bahamas. The E for each bank is then unlevered to find the A by using the formula A = E / ( 1 + D/E* (1 – Tc)) The A are then averaged by weights of the market capitalization of each of the banks to find the industry A. New York. The bank went public in the year 1993 with the issuance of 2 crore equity shares of Rs 100 each. London and environs. ESTIMATION OF  E The first step in the project was to get the stock prices for each of the five banks along with the returns of the BSE Sensex for the period 1st Jan 2005 to 1 st Jan 2011. Bahrain. The bank has 131 overseas offices spread over 32 countries. The weekly returns were then regressed for the entire period to find the value of E. and Singapore.

84 PNB 12944. Valued at 19.37% 0.680 15.787 16.94% ICICI 7.790 33. We found the average weekly returns on the BSE sensex from 1 st Jan 2005 to 1st Dec 2010 for each of the years.873 33.36 % .154 2.582 14.Axis Bank Lever the Asset beta Unlevered Industry Asset beta Current Market Debt to Market Total equity Ratio Corporate Tax Rate Levered Equity beta 0.358 3.66% ESTIMATION OF COST OF DEBT Since data on the bond yields was not available.515 SBI 47322.345 33.99% 11.37% 0.66% 1.32 .851 17.775 ICICI 17592.358 0.406 33. This was our rm .60% SBI 7.3 162908. The cost of equity for each of the banks is then found by using the CAPM model : re = rf + (rm – rf)*E Equity Cost of Capital Risk free rate on 10-years Govt Sec.72% HDFC 7.99%.844 17.99% 11.358 HDFC Bank ICICI Bank PNB SBI 0.358 0.02 241363.37% 0.68 HDFC 7786.53 143014. the return to lenders r d before taxes was calculated as: Interest Expense / Average outstanding debt for the year.66% 1.66% 1.99% 11.66% 0.59% PNB 7. in % Market Risk Premium (%) on equity Levered Equity beta Cost of Equity using CAPM in % Axis Bank 7.99% 11. Hence the cost of debt will be Kd = rd*(1-Tc) Cost of Debt Interest expense Average debt for FY '10 Axis Bank 6633. we tried to find the Average market risk premium.993 ESTIMATION OF COST OF EQUITY Once the E has been found for each of the banks.022 8.843 2.99% 11.66% 2. This was then multiplied by 52 to get the average annual returns.358 0.37% 0.357 6.038 33. The risk free return rf was found by finding the yield 10 year GOI bonds as on 17th March 2011 and was found to be 7.37% 0.57 290975.48 851457.

Cost of debt before taxes (rd) in % Cost of debt after taxes (Kd) in % 4.36% 3.77 12.0771% 4.83 15.5577% 5.56% 3.17 14.43% 131991.01% 31954.13 12.17% .64% 3.78% 3.26 180320.1708% 6.81 296280.42 158469.17 13.41% 106210.05% 4.81% 88458.55 907127.89% ESTIMATION OF THE RISK PROFILES BSE Sensex 25000 20000 15000 10000 5000 BSE Sensex 0 Annual Standard deviation of BSE 27.08 268592.6871% ESTIMATION OF WACC The WACC was calculated by using the formula: RWACC = Kd*D/V + Ke*E/V The calculations are as below: Banks Axis Bank HDFC ICICI PNB SBI Debt Market Value of Equity WACC in % 47368.0110% 5.

96% Annual Standard deviation of ICICI 50.13% .Axis Bank 1800 1600 1400 1200 1000 800 600 400 200 0 Axis Bank Annual Standard deviation of Axis Bank 46.

PNB 1600 1400 1200 1000 800 600 400 200 0 PNB Annual Standard deviation of PNB 40.30% .53% Annual Standard deviation of SBI 41.

78% .Annual Standard deviation of HDFC 36.

we may conclude that the industry Debtequity ratio is nearly 5.0257 81128819 17.5-8.127.368.35 2.83 3.954.42 88.2255 100 464329961 100 1151422189 100 . Thus since PSU owned banks have shareholding pattern starkly different from that of the privately owned banks.26 106210.77 180. they seem to be over-leveraged.7745 837941433 72.5.5) as compared to their privately owned counter-parts who have much lower D/E ratio (in the range of 2-3.1118 837941433 72.991.55 Total Debt (Rs crore) Debt to Mkt Equity 158469.320.458. PSU banks have majority of shareholding lying with the state.04 2.9743 383201142 82.895 721512292 62.08 131. Company Name Axis Bank HDFC Bank ICICI Bank PNB SBI Mkt value of Equity (Rs crore) 47.4722 313480756 27.3978 153084705 37.1299 372904074 90.6627 116429141 10.41 6. Private Banks Ownership Pattern as on 3112-2010 Foreign (Promoter & Group) Indian (Promoter & Group) Total of Promoter Non Promoter (Institution) Non Promoter (NonInstitution) Total Non Promoter Total Promoter & Non Promoter Custodians(Against Depository Receipts) Grand Total Axis Bank HDFC Bank ICICI Bank #Shares 0 % Holding 0 #Shares 0 % Holding 0 #Shares 0 0 0 % Holding 0 0 0 153084705 37.7745 219819369 53.81 31.17 907.17 268592.87 This can be explained based on the differences in the share-holding pattern. We also observed that the state-owned banks have much higher D/E ratio (6.744 87735313 18.3468 108643220 23.3978 171680740 41.13 296280. which means there market capitalization is not a true indicative of their value.8835 186822609 40.5).6275 274557922 59.3468 108643220 23.79 8.CAPITAL STRUCTURE ANALYSIS Looking at the set of the five companies chosen together.5277 36996446 409900520 9.2349 48138629 11.

2 191.7 281.7989 57.1322 2.8 131. Capital Structure . cr) 500 500 500 300 300 300 300 300 230 230 230 300 Issued Capital (Rs.8 231.Axis Bank Ltd.2 191.6 278. cr) 405.6 230.8 131.7 281. It appears company has taken a strategic stand of expanding in phases and has successfully done it over the years.0889 42.7989 37.6 230.7779 37.9514 8.7 273.1122 5.7293 97. We see issued capital rising significantly every twothree years on a consistent basis.4029 59.8678 100 0 18210188 100 634998115 The company has slowly raised equity over the years and has exhausted more than 80% of authorized capital till date.4029 28. Cr) 405.2011 100 #Shares 0 377207200 377207200 183840990 55739737 239580727 616787927 % Holding 0 59.9 115 Shares (nos) 405174119 359005118 357709669 281630787 278690727 273796444 231580570 230185579 191812870 131903170 131903170 115000070 -PAIDUPFace Value 10 10 10 10 10 10 10 10 10 10 10 10 Capital (Rs.9 115 . This indicates how company is effectively utilizing market’s valuation to take finances at regular intervals.2 359 357.6 278.7 273.8 231.2 359 357.9 131. Period From 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1998 1997 To 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1998 Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Instrument Authorized Capital (Rs.9 131.State-owned Banks Ownership Pattern as on 31-12-2010 Foreign (Promoter & Group) Indian (Promoter & Group) Total of Promoter Non Promoter (Institution) Non Promoter (Non-Institution) Total Non Promoter Total Promoter & Non Promoter Custodians(Against Depository Receipts) Grand Total AXIS BANK #Shares PNB SBI 0 182241300 182241300 117015801 16045399 133061200 315302500 0 315302500 % Holding 0 57.

cr) 550 550 550 450 450 450 450 450 450 300 300 300 Issued Capital (Rs. Capital Structure . There can be several reasons why this is done.1 309. when it raised the capital by 11% and 20% respectively as compared to the previous year. Period From 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1995 To 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Instrument Authorized Capital (Rs.9 284.8 282 281.6 243. which indicates how rapidly HDFC has grown.3 200 Shares (nos) 457743272 425384109 354432920 319389608 313142408 309875308 284791713 282045713 281374613 243596261 243278261 200000000 -PAIDUPFace Value 10 10 10 10 10 10 10 10 10 10 10 10 Capital (Rs.HDFC Bank Ltd.4 243.4 354.4 354.4 243. cr) 457.8 282 281. however during the boom periods of 2007 & 2008.7 425. It is also to be noted that there has been a continuous slow increase in the capital amount since 2002.HDFC BANK It is observed that HDFC Bank has raised its authorized capital twice.4 319. Cr) 457.4 319.1 309.4 313.6 243.4 313.7 425.9 284. may be as a way to indicate all the shareholders that the company is looking to expand quickly.3 200 .

7 899.3 889. Since 2007-2008 ICICI has kept the equity capital fixed at around 1100 cr.ICICI Bank Ltd. Capital Structure .8 165 150 -PAIDUPShares (nos) 1114845314 1113250642 1112687495 899266672 889823901 616391905 613021301 220358680 196818880 196818880 165000700 150000700 Face Value 10 10 10 10 10 10 10 10 10 10 10 10 Capital (Rs.7 899.8 1113.8 616. cr) 1114.8 196. Period From 2009 2008 2007 2006 2005 2004 2003 2001 2000 1999 1997 1995 To 2010 2009 2008 2007 2006 2005 2004 2002 2001 2000 1999 1997 Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Instrument Authorized Capital (Rs.4 613 220.8 196.4 613 220.4 196. the company suddenly raised its equity capital by raising the authorized capital more than five-fold. It was a period of rapid growth for ICICI Bank. however we also observe that later on it went on to decrease the authorized capital probably because it observed that the markets are under-valuing it.ICICI BANK During the period 2003-2004. cr) 1275 1275 1275 1000 1000 1550 1550 300 300 300 300 300 Issued Capital (Rs.8 616.4 196.8 165 150 .3 1112. Cr) 1114.3 1112.8 1113.3 889.

3 315.3 265.3 Shares (nos) 315302500 315302500 315302500 315302500 315302500 315302500 265302500 265302500 212241300 -PAIDUPFace Value 10 10 10 10 10 10 10 10 10 Capital (Rs.3 315.PUNJAB NATIONAL BANK PNB has kept its capital nearly fixed at about 315 cr for last 6 years. cr) 3000 1500 1500 1500 1500 1500 1500 1500 1500 Issued Capital (Rs.3 212. indicating that it feels that the market has kept the valuation upto its expectations.3 265.3 315.3 265.2 .3 315.3 315. since it is a state owned company it is probably difficult for it to raise equity because of the plethora of approvals and other hindrances.Punjab National Bank Period From 2009 2008 2007 2006 2005 2004 2003 2002 2001 To 2010 2009 2008 2007 2006 2005 2004 2003 2002 Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Instrument Authorized Capital (Rs.3 315. Cr) 315.3 265. cr) 315.3 315.3 315.3 315.3 265. Capital Structure . which may be taken as an indicative of the fact that the company wants to raise equity capital to finance its growth.3 315. However we also observe that in the last year it has doubled its authorized capital. Also.

3 526.3 526. State Bank of India also has kept constant capital for long periods.3 526. It did raise some equity capital during the boom period of 2007-2008.3 526.8 200 Shares (nos) 634882644 634880222 631470376 526298878 526298878 526298878 526298878 526298878 526298878 526298878 526298878 526298878 474009872 474009189 473828726 20000000 -PAIDUPFace Value 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 100 Capital (Rs.3 526.3 526. Capital Structure .3 526.STATE BANK OF INDIA As observed in the case of Punjab National Bank. cr) 635 635 631.3 526.5 526.3 526. Since then the capital has more or less been constant. as opposed to its counter-parts from the private sector. Cr) 634.3 474 474 473.3 526.3 526.9 631.6 526.3 526. cr) 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 Issued Capital (Rs.3 526.3 526.3 526.8 200 .3 526.3 474 474 473.State Bank of India Period From 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1996 1995 1994 1993 1991 To 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 2000 1996 1995 1994 1993 Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Instrument Authorized Capital (Rs.9 634. probably because of good valuation by the markets.

72 1. the company has been aggressive in its dividend payout and increased dividends to 215 percent in 2008 and to 200 percent last year.34 1.34 2.92 2.78 447.65 Dividend (%) 50 50 60 85 110 125 140 140 215 290 300 Div Yield (%) 2.5 2 1.64 2.5 percent over the past decade.15 315.49 1.66 1841. Its dividends have grown from 50 percent in 2000 to 300 percent in 2010.5 0 Dividend Yield % 3 The State bank of India has over the past decade paid out dividends to its shareholders ranging from Rs 263 crores in 2000 to about Rs 1900 Crores in 2010.15 1904.65 2.15 263.5 to 2. the company paid out approximately Rs 1900 Crores in Dividends to its share holders.DIVIDEND POLICY State Bank of India Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Dividend(Rs Cr) 263.36 578. the growth in dividends was slow.82 1357.89 3. The dividend yield though has remained almost constant moving between 1. after 2007.93 657.82 736. .87 736. Between 2004 and 2007. The company paid out 110 percent dividends in 2004 and increased them to 140 percent in 2006 and then maintained the dividends at 140 percent again in 2007. In 2010.5 2.44 350 300 Dividend % 250 200 150 100 50 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Dividend(%) Div Yield(%) 4 3.5 1 0.53 1. However.02 1.

03 6. the company paid out approximately Rs 490 Crores in Dividends to its share holders.Axis Bank Ltd Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Dividend(Rs Cr) 15.83 19.9 76.22 Dividend (%) 12 15 20 22 25 28 35 45 60 100 120 Div Yield (%) 3.7 1.03 140 120 100 Dividend % 80 60 7 6 4 3 40 20 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Dividend(%) Div Yield(%) 2 1 0 Axis bank has been regularly paying dividends to its shareholders over the past decade and has maintained a healthy dividend payout ratio.41 1.11 5. Between 2007 and 2010. the dividend per share has almost tripled from Rs 45 per share in 2007 to Rs 120 per share in 2010.01 5.63 359.92 0.01 486.54 126. In 2010.66 97.79 28. The dividend yield though dropped from 5. Its dividends have grown from 12 percent in 2000 to 120 percent in 2010.72 47.03 percent in 2010.16 0. Dividend Yield % 5 .48 1.73 214.77 2.98 0.48 percent in 2003 to about 1.71 57.

74 0.8 0. However. the company paid out approximately Rs 550 Crores in Dividends to its share holders.71 0.06 1. the company has been aggressive in its dividend payout and increased dividends from 45 percent in 2005 to approximately 120 percent in 2010.05 100.64 1. Its dividends have grown from 16 percent in 2000 to 120 percent in 2010.27 425.05 140. The dividend yield of HDFC stock though has remained almost constant at less than one over the past decade only moving above one in 2003 and then again in 2009.03 0. . after 2004.2 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Dividend(%) Div Yield(%) Dividend % 80 60 40 20 0 HDFC bank has over the past decade paid out dividends to its shareholders ranging from Rs 32. In 2010.87 1.62 140 120 100 1.4 1. The company paid out 16 percent dividends in 2000 and increased them to 35 percent in 2005.6 0.4 0.39 48.2 Dividend Yield % 1 0.29 Dividend (%) 16 20 25 30 35 45 55 70 85 100 120 Div Yield (%) 0.07 172.83 0. The growth in dividends was somewhat slow between 2000 and 2004.23 223.72 70.57 301.4 crores in 2000 to about Rs 550 Crores in 2010.34 85.28 0.93 0.63 0.38 549.HDFC Bank Ltd Year End 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Dividend(Rs Cr) 32.

75 44.33 901. .78 544.5 percent with the exception being 2009 when it again shot up to approximately 3. Its dividends have grown from 15 percent in 2000 to 120 percent in 2010.17 1.16 1.17 1223.ICICI Bank Ltd Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Dividend(Rs Cr) 24. The dividend yield of ICICI stock though shot up to almost 6 percent in 2003 but ever since then .61 5.21 1.31 1.86 Dividend (%) 15 20 20 75 75 85 85 100 110 110 120 Div Yield (%) 0.07 459.43 3.06 632.53 2.07 44. In 2010.58 1337.96 1224.6 2.96 759.3 percent. it has remained consistent between 1. the company paid out approximately Rs 1340 Crores in Dividends to its share holders.44 1.26 140 120 100 Dividend % 80 60 40 20 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Dividend(%) Div Yield(%) 6 5 4 3 2 1 0 Dividend Yield % Like its peers ICICI bank has over the past decade paid out dividends to its shareholders ranging from Rs 24 crores in 2000 to about over Rs 1300 Crores in 2010. Ever since 2003.58 1.5-2. The growth in dividends was somewhat slow between 2000 and 2003. the growth of dividends has been somewhat slow and dividends have increased to 120 percent per share in 2010. But in 2004m the company increased its dividends substantially from 20 percent per share to about 75 percent per share.

Its dividends have grown from 24 percent in 2000 to 220 percent in 2010. .56 4. During this period the company’s dividends increased from 24 percent in 2000 to 60 percent in 2005. the growth in its dividends per share has been stupendous. The growth in dividends was somewhat slow between 2000 and 2005.87 2.91 2. The dividend yield of ICICI stock though shot up to almost 3.86 106.07 63.12 174.Punjab National Bank End 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Dividend 50 53.89 630.5-2.2 1. Punjab National bank has over the past decade paid out increasing dividends to its shareholders ranging from Rs 50 crores in 2000 to about Rs 700 Crores in 2010.53 1. the company paid out approximately Rs 700 Crores in Dividends to its share holders.66 Dividend(%) 24 25 30 35 40 60 90 100 130 200 220 Div Yield(%) 0 0 0 3.67 92.3 409. However after 2005.44 1. The company increased its dividends to 90 percent in 2006 and finally to 220 percent last year in 2010.5 percent with the exception being 2009 when it again shot up to approximately 5 percent. In 2010.12 2.61 693.18 315.5 percent in 2003 but ever since then . it has remained consistent between 1.18 189.17 250 200 Dividend % 150 100 50 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Dividend(%) Div Yield(%) 6 5 4 3 2 1 0 Dividend Yield % Much like its peer state owned SBI.

bseindia. v.REFERENCES i.com .economictimes.indiatimes.capitaline.http://www.com Moneycontrol .com Economic Times . iv.http://www.http://www.http://www.com BSE India . iii. ii. Prowess Capitaline .moneycontrol.