PES University

Department of Commerce.

Topic: BANK OF INDIA

FINANCIAL ANALYSIS

(COMMON SIZE BALANCE SHEET)

Presented by: Srushti D S

B.Com

srushtids137@gmail.com

Research Guide: Prof. Sangeetha S Kumar.

(Assistant Professor)

PES University.

sangeethaskumar@pes.edu
Abstract:-

“This research paper covers the Bank of India in broad terms, concentrating on the company's
profile, industry dynamics, and financial performance. The study reveals the bank's financing
arrangements through a systematic process, which includes a common-size balance sheet
examination. The introduction emphasizes the importance of knowing a large institution's
financial landscape, while the firm description goes into its historical past, mission, and
operational details. The findings provide insights into financial stability, risk exposure, and
operational efficiency.

The methodology ensures study transparency and the references include a variety of sources
to lend credibility. The study adds useful insights to financial analysis, influencing strategic
decisions and exciting discussions on prospective expansion in banking.”

Introduction:-

“The Bank of India is an essential component of the Indian subcontinent's financial

environment, with a rich history spanning more than a century. Founded in 1906, the bank
has grown into a major financial organization that plays a critical role in setting the nation's
financial direction. This research paper conducts a thorough financial study of the Bank of
India, with a special emphasis on examining its financial health via the perspective of a
standard balance sheet using a common-size balance sheet as a financial tool.”

“With a long history and an extensive system of branches, it has made a substantial
contribution to the prosperity of the nation. The bank is dedicated to customer-focused
operations and provides a wide range of services, including consumer and corporate banking.
The Bank of India, a critical institution, continues to play an important role in establishing
and sustaining India's dynamic financial landscape.”

“A common-size balance sheet is a financial statement that shows each line item on the
balance sheet as a proportion of the total assets. This presentation format enables analysts,
investors, and financial professionals to readily evaluate the relative sizes of different
components on a company's balance sheet. This format is useful for comparing the relative
proportions of assets, liabilities, and equity between organizations, as well as tracking
changes in a company's financial structure over time. It gives information about the”
“company's liquidity, leverage, and financial condition. Common-size financial statements
are frequently used in financial analysis and are part of a toolkit of tools for assessing and
comparing organizations' financial performance.”

Background of the Company:-

“Bank of India was created on September 7, 1906, by a group of prominent businessmen

from Mumbai, Maharashtra, India. The bank was privately owned and controlled until July
19, 1969, when it was nationalized alongside 13 other banks. The Bank began with a single
office in Mumbai, a paid-up capital of ₹5 million, and 50 staff. It has now grown into a
powerful organization with a strong national presence and foreign operations. In terms of
business volume, the Bank leads all nationalized banks. The bank has more than 5,084
branches in India, distributed throughout all states and union territories, including specialty
branches. These branches are managed by 54 zonal offices. There are 60 branches 5
subsidiaries and 1 joint venture abroad.”

“The previous holders of the Bank of India name had failed and were no longer in operation
by the time a diverse group of Hindus, Muslims, Parsees, and Jews helped create the current
Bank of India in Bombay in 1906. Banks in India were either owned by Europeans and
serviced primarily the interests of European trading houses, or by various communities and
met the banking needs of their respective communities. In 1921, BoI secured an agreement
with the Bombay Stock Exchange to handle its clearing house.”

“BoI's international development began in 1946, when it established a branch in London,

becoming the first Indian bank to do so. This was also the first post-World War II foreign
branch of an Indian bank. In the 1950s, BoI established various overseas offices, including
Tokyo and Osaka in 1950, Singapore in 1951, Kenya and Uganda in 1953, Aden in 1953 or
1954, and Tanganyika in 1955. After a brief hiatus, BoI resumed its worldwide growth,
founding a branch in Hong Kong in 1960. A branch in Nigeria followed in 1962.”

“It has long played an important role in promoting revenue growth, facilitating trade and
commerce, and contributing to the nation's overall financial stability. The bank's commitment
to innovation, customer-focused approach, and commitment to high ethical standards have
established it as a reputable financial institution. As the Bank of India navigates the
challenges of the modern banking landscape, its rich past provides a solid basis for future
undertakings and triumphs.”
Industry Analysis:-

“India's banking sector has evolved significantly over the years, becoming a dynamic and
robust industry that is critical to the country's economic success. With a diversified landscape
that includes public sector banks, private banks, and foreign banks, the industry has seen
significant developments in technology, regulatory frameworks, and customer-centric efforts.
The introduction of digital technologies has been a crucial factor, in enabling convenient and
efficient banking services for the growing population.”

“Government policies such as demonetization and the search for a cashless economy have
hastened the digitalization of financial services, resulting in the development of online
banking, mobile banking, and digital payment systems. This transformation has not only
enhanced accessibility for urban customers but has also expanded financial inclusion into
previously neglected rural areas. Furthermore, the emergence of financial technology firms
has brought about creative solutions, disrupting old banking practices and creating healthy
competition.”

“Regulatory measures, such as the Goods and Services Tax (GST) and the Insolvency and
Bankruptcy Code (IBC), have helped to make the banking sector more transparent and
accountable. However, the industry has encountered challenges including non-performing
assets (NPAs) and liquidity issues, necessitating regulatory action to tighten risk management
techniques and governance frameworks.”

“The banking system in India is a combination of public and private ownership, with public
sector banks accounting for the majority of market share. The recent wave of mergers and
consolidation in the public sector has intended to create larger, more resilient enterprises
capable of weathering economic shocks and improving operational efficiency. Private banks,
on the other hand, have succeeded in client service and good innovation, capitalizing on their
agility to respond to shifting market circumstances.”

“To summarize, India's banking system is in change, with technological breakthroughs,

regulatory reforms, and a shifting competitive landscape. As the sector evolves, banks will
need to be able to embrace innovation, manage risks effectively, and adapt to the different
requirements of a growing population to succeed and remain sustainable.”
Company Profile:-

“Industry:- The Bank of India is part of the financial services business, specifically the
banking sector. It is one of India's leading public sector banks, offering a diverse range of
financial goods and services to people, corporations, and government institutions. The bank
performs standard banking functions such as receiving deposits, lending, and facilitating
other financial transactions. It also helps the country's economic development by assisting
sectors including agriculture, industry, and trade through its various banking operations.”

“Bank of India is a state-owned commercial bank headquartered in Mumbai. The Bank offers
a diverse range of banking products and financial services to both business and retail
customers. The bank offers specialist services to businesses (including foreign exchange),
NRIs, merchant banking, and others. They also have specialist branches that focus on asset
recovery, high-tech agriculture financing, lease finance, treasury, and small-scale companies.
The Bank provides mutual funds, venture capital, depository services, bullion trading, and
credit cards. The bank operates in three main segments: Treasury Operations, Wholesale
Banking Operations, and Retail Banking Operations. Treasury Operations encompasses the
complete investment portfolio, including dealing with government and other assets, money
market operations, and foreign exchange (Forex) operations. Wholesale banking
encompasses any advances that are not covered under Retail Banking. The bank has a robust
network of 5,083 domestic branches, 5690 ATMs, and 23 international branches. The
domestic branches are overseen by 54 zonal offices and eight NBG offices. Currently, the
Bank of India has an overseas presence in 22 international countries spread over 5
continents.”

“Global presence:- The Bank of India, founded in 1906 in Mumbai, played a crucial role in
Indian banking history. It began managing the Bombay Stock Exchange's clearinghouse in
1921 and grew globally, opening branches in London in 1946 and other foreign sites between
1950 and 1962. After becoming nationalized in 1969, the bank welcomed technology
improvements, opening the first completely computerized branch with ATMs in 1989
Notable events include the selling of its Uganda operations in 1972, the establishment of a
Paris branch in 1974, and the implementation of Core Banking Solutions in 2008. In 2007, it
began bullion banking and created strategic alliances with financial organizations. The bank's
growth continues with subsidiaries in Tanzania and Uganda.”
“It has had issues in recent years, including being placed on the Prompt Corrective Action
Framework in 2017.”

“Services offered:- Bank of India offers up to nine distinct types of savings account options
to meet the diverse demands of its clients. BOI savings accounts include services such as
Internet banking, mobile banking, credit card rewards, and more. Bank of India offers 13
different types of current accounts to meet the demands of its customers. These accounts
offer a variety of financial services, such as fund transfers, cheques, and cash. It provides
house loans up to Rs.500 lakh with payback terms of up to 30 years, with a decent margin
and low processing fees. BOI Star Home Loan provides consumers with complimentary
personal accident insurance coverage. Personal loans of up to Rs.10 lakh are available at a
competitive interest rate and with an easy repayment plan. Salaried workers, experts, and
individuals with high net worth are eligible for this loan. Customers can use fixed deposit
schemes to deposit money and earn significant income on their investments. Individuals,
blind people, minors, and illiterate people can open BOI recurring deposits for 10 years. Bank
of India provides credit card options to a wide range of consumers and for every requirement.
It also provides credit cards that can be used for a variety of purposes, including shopping,
holidays, dining, and other daily requirements. The company provides its customers with 12
debit cards to select from. Customers who use Bank of India debit cards can deposit or
withdraw funds whenever they choose, without having to wait in huge lines. To make balance
inquiries simpler for its customers, the bank offers a variety of options such as net banking,
mobile banking, SMS banking, passbook, a missed call facility, and so on. BOI Mobile
banking allows customers to check their accounts, see passbooks, transfer funds, and much
more. BOI Mobile is a secure, simple channel for banking at any time and from any location.
BOI provides its customers with a variety of Internet banking services that are available
around the clock, 365 days a year. To conduct successful net banking, consumers must first
register on the BOI website. BoI has a well-established 24-hour customer support system that
allows for simple and convenient access to one's account and provides information about
various products and services.”

“Competitors:- The Bank of India confronts stiff competition in India's financial environment
from both public and private sector institutions. State Bank of India (SBI) is a key competitor
among public sector banks due to its broad network and wide range of financial products. In
the private sector, ICICI Bank and HDFC Bank are fierce competitors noted for their great
financial performance and innovative offerings. The advent of small finance banks and
payment banks, such as Paytm Payments Bank and Equitas Small Finance Bank, fuels
competition by focusing on digital platforms and specific customer categories. To remain
competitive, the Bank of India must stress innovation, customer-centricity, and technical
developments.”

“ Organization Members:- The company's executive team is a renowned group of

professionals with a wide range of expertise and experience. Subrat Kumar, P R Rajagopal,
Swarup Dasgupta, and M Karthikeyan serve as Executive Directors, each bringing their
perspective to the organization's strategic direction. Dr. Bhushan Kumar Sinha is the
Government Nominee Director, bringing unique public-sector viewpoints. Rajneesh
Karnatak, who serves as both Managing Director and CEO, is in charge of directing the
company's overall operations and growth. Subrata Das, a Nominee Director, and. Munish
Kumar Ralhan, a Part-Time Non-Official Director, offer further assistance and oversight.
Veni Thapar and. V V Shenoy both serve as Shareholder Directors on the board,
demonstrating the importance of shareholder representation in decision-making. Sankar Sen,
Chief Financial Officer, Ashok Kumar Pathak, Sudhiranjan Padhi,. Abhijit Bose, Manoj Das,
and. Prakash Kumar Sinha, all serving as Chief General Managers, contribute to the effective
management of various functions within the organization. Prashant Thapliyal, General
Manager and Chief Vigilance Officer oversees compliance and ethical procedures. Rajesh V
Upadhya is the Company Secretary and Compliance Officer, in charge of the company's legal
and regulatory matters. Rajesh Sadashiv Ingle and Geetha Nagarajan, both General
Managers, as well as. Kuldeep Jindal and. Bikram Keshari Mishra, who also serve as General
Managers, add to the organization's overall success and progress.”

Mission – “To provide superior, proactive banking service to niche markets globally, while
providing cost-effective, responsive service to others in our role as a development bank, and
in doing so, meet the requirements of our stakeholders.”

Vision - “To become the bank of choice for corporates, medium business and upmarket retail
customers and developmental banking for small business, mass market and rural markets.”

“Share price:- The bank's total domestic business climbed by 5.70% to Rs. 998,700 crore as
of March 31, 2023. CASA deposits increased by 2.72%, totaling Rs. 252,149 crore, or
44.73% of domestic deposits. Total deposits increased by 2.95%, reaching Rs. 567.063 crore.
Gross domestic advances rose by 9.56% to Rs. 431,637 crore, with RAM advances
accounting for 55.11%. Priority sector loans made up 43.28%, with agricultural credit
accounting for 19.00%. Retail credit rose by 17.4% to Rs. 94,716 crore, while MSME credit
climbed by 9.31% to Rs. 70,777 crore. Overseas business increased significantly by 33.30%
to Rs. 186,738 crore. Total foreign deposits increased by 33.04 percent to Rs. 1,02,523 crore.
The global business expanded by 9.27%, reaching Rs. 11,85,438 crore. Total deposits rose
6.64% to Rs. 669,586 crore, while gross advances jumped by 12.87% to Rs. 515,852 crore.
Financial metrics revealed a 34.09% increase in operating profit at Rs. 13,393 crore. Non-
interest income fell to Rs. 7,100 crore, while net profit in FY23 was Rs. 4,023 crore. The
capital adequacy ratio was 16.28%, while net worth rose by 11.35% to Rs. 41,127 crore.
Gross NPA fell by 17.36% to Rs. 37,686 crore, with a percentage drop from 9.98% to 7.31%.
Net NPAs fell by 18.25% to Rs. 8,054 crore, with a percentage fall of 2.34% to 1.66%. The
book value per share is Rs.100.20.”

“Directors Report:- As of March 31, 2023, the bank's domestic business has grown by 5.70%
to Rs. 998,700 crore. Notable features include a 2.72% YoY increase in CASA deposits,
which totaled Rs. 252,149 crore and constituted 44.73% of domestic deposits. Total deposits
rose 2.95% to Rs. 567,063 crore, while gross domestic advances grew by 9.56% year on year
to Rs. 431,637 crore. Retail credit and MSME credit increased by 17.4% and 9.31%,
respectively. The bank's abroad business grew by 33.30%, reaching Rs. 186,738 crore, while
its global business increased by 9.27%, reaching Rs. 11,85,438 crore. The global CD ratio
was 77.04% as of March 31, 2023. These figures represent the bank's robust performance and
expansion in both domestic and international markets.”

“Management discussion and analysis:- In fiscal year 2022-23, the global economy faced
severe problems, including economic uncertainty, geopolitical tensions, and financial
volatility as a result of the Russia-Ukraine conflict. The war interrupted supply systems,
creating inflationary pressures and impeding global economic recovery. Central banks around
the world responded by tightening monetary policy and hiking interest rates, posing a risk to
global economic growth by reducing consumption and output. According to IMF predictions,
global output will drop from 6.4% in 2021 to 3.4% in 2022. Advanced economies increased
by 2.7% while emerging markets and developing economies expanded by 4.0%. Global
commerce fell from 10.4% in 2021 to 5.1% in 2022 due to supply chain disruptions and
slowing global growth. Global inflation climbed from 4.7% in 2021 to a high of 8.7% in
2022. Currency depreciation, capital flight, investor risk aversion, and debt distress were
among the obstacles that emerging market economies faced. Toward the close of FY 23, a
new period of turbulence began in the global economy, particularly in the financial sectors of
the United States and Europe. This instability highlighted flaws in the banking industry,
prompting fears about contagion across the whole financial system.”

Purpose of Analysis:-

“The use of a common-size balance sheet in the Bank of India's financial analysis is critical
for analyzing and understanding the institution's financial health and performance. This
analytical tool allows for a standardized comparison of multiple components by expressing
each line item as a percentage of total assets, revealing the relative value of different parts on
the balance sheet. This method helps analysts discover trends, assess the composition of
assets and liabilities, and evaluate the Bank of India's overall financial structure. Furthermore,
it enables benchmarking against industry norms and comparable institutions, offering a more
nuanced view of the bank's financial condition and aiding in the development of informed
strategies for long-term growth and risk management. Through the viewpoint of a common-
size balance sheet, the research study can delve further into the complexities of the Bank of
India's financial landscape, bringing useful insights to the broader discourse on banking
sector analysis and financial performance evaluation.”

Literature Review:-

“Mishra et al. (2017) examined BOI's financial performance from 2008 to 2016, determining
that the bank's profitability and ROA decreased while its NPA ratio grew. They attributed
these patterns to the global financial crisis and the domestic economic downturn.

Gupta and Kumar (2019) examined BOI's performance to other public sector banks and
discovered that BOI's ROA and ROE were lower than the industry average. They proposed
that BOI improve its operational efficiency and credit risk management to increase
profitability.

Sharma et al. (2012) used SFA to evaluate the cost-effectiveness of BOI and other public
sector banks. They discovered that BOI's cost efficiency increased over time, but it remained
lower than the efficient frontier. They recommended that BOI should focus on cost reduction
measures to improve its efficiency further.”
Financial Analysis:-

COMMON–SIZE BALANCE SHEET.

2018-2019 2022-2023 2018-2019 2022-2023

PARTICULARS AMT(Rs crore) AMT(Rs crore) Percentage (%) Percentage (%)
Equity Share Capital 2,760.03 4,104.31 0.44 0.50
TOTAL SHARE CAPITAL 2,760.03 4,104.31 0.44 0.50
Revaluation Reserve 6,273.34 6,896.03 1.00 0.85
Reserves and Surplus 32,647.79 47,970.28 5.22 5.88
Total Reserves and Surplus 38,921.13 54,866.31 6.23 6.73
TOTAL SHAREHOLDERS FUNDS 41,681.15 58,970.61 6.67 7.23
Deposits 5,20,862.35 6,69,585.77 83.31 82.10

Borrowings 44,241.17 64,979.02 7.08 7.97

Other Liabilities and Provisions 13,800.17 22,020.21 2.21 2.70
TOTAL CAPITAL AND LIABILITIES 6,25,222.84 8,15,555.61 100.00 100.00
ASSETS
Cash and Balances with Reserve Bank of India 29,236.56 44,034.51 4.68 5.40
Balances with Banks Money at Call and Short 65,574.92 40,360.81 10.49 4.95
Notice
Investments 1,47,639.04 2,04,397.88 23.61 25.06
Advances 3,41,005.94 4,85,899.64 54.54 59.58
Fixed Assets 8,920.04 9,961.00 1.43 1.22
Other Assets 32,846.34 30,901.78 5.25 3.79
TOTAL ASSETS 6,25,222.84 8,15,555.61 100.00 100.00
Findings:-

 “Equity Share Capital increased from Rs 2,760.03 crore in 2018-2019 to Rs 4,104.31

crore in 2022-2023, representing a 48.68% rise. The company needs money, thus
there is an inflow of cash.
 The Revaluation Reserve has been raised from Rs 6,273.34 crore to Rs 6,896.03
crore. Although the percentage decline is minor (1.00% to 0.85%), it is critical to
track the trend.
 Reserves and surplus have grown significantly, from Rs 32,647.79 crore to Rs
47,970.28 crore, demonstrating a strong financial situation. The corporation has
produced greater income and hence boosted its reserves.
 The ratio of Reserves and Surplus to Total Reserves and Surplus has dipped
somewhat, indicating a likely composition shift.
 Total Shareholder Funds have grown significantly from Rs 41,681.15 crore to Rs
58,970.61 crore, reflecting strong equity support. Hence there is more stock purchased
by the public leading to an increase in shareholder's funds.”
 “Deposits have climbed from Rs 5,20,862.35 crore to Rs 6,69,585.77 crore,
demonstrating a boost in depositor confidence.
 Borrowings have also significantly increased from Rs 44,241.17 crore to Rs
64,979.02 crore, presumably for supporting growth or other strategic activities.
 Other Liabilities and Provisions grew from Rs 13,800.17 crore to Rs 22,020.21 crore.
This growth should be analyzed to determine its nature and impact on the
organization's overall financial health.
 Cash and balances with the Reserve Bank of India have increased, implying a good
liquidity position.
 Investments increased significantly from Rs 1,47,639.04 crore to Rs 2,04,397.88
crore, demonstrating a purposeful investment approach.
 Advances have increased significantly, showing a concentration on lending activities.
 Fixed and Other Assets have experienced moderate adjustments.”
Suggestion:-

 “Keep a close eye on equity composition, particularly the increase in Equity Share
Capital and the Revaluation Reserve. Examine the reasons behind any noteworthy
changes.
 Calculate the change in the proportion of Reserves and Surplus to Total Reserves and
Surplus. Optimize the capital structure to ensure an optimum debt-equity balance.
 Given the rise in borrowings, make sure that the funds are used efficiently for growth
and value development. Keep track of interest rates and ensure that borrowing
methods are in line with the overall business strategy.
 Investigate the reasons for the rise in Other Liabilities and Provisions. Determine
whether these are sustainable and in line with business goals.
 Maintain a balance between liquidity (cash and balances) and strategic investment.
Ensure that the extra liquidity is wisely invested to create high returns.
 As advances have increased significantly, establish comprehensive risk management
methods to limit potential credit risks and ensure loan portfolio quality.
 Perform frequent financial health checks to detect trends and irregularities. This will
aid in proactive decision-making and timely revisions to the financial plan.
 Communicate financial changes to stakeholders clearly and openly, establishing trust.
Give comprehensive insight into the company's financial strategy and performance.”

Methodology:-

“The information in this research paper is drawn from both primary and secondary sources,
and it takes a thorough analytical approach to the subject at hand. Secondary sources that
provide financial and general information about the company- Bank of India - include
academic journals, research papers, and reliable web databases. Information on the financial
analysis and common-size balance sheet is gathered from a variety of sources as well as from
previously acquired knowledge. The information in the balance sheets, including the
amounts, is taken from the balance sheet of the company, and I solely am the factor
conducting the financial analysis, analyzing the figures of common size, and drawing
conclusions from the data.”
Results:-

“Through my investigation, I have learned a lot more about balance sheets, common size
statements, and, briefly, the forecast for the Bank of India company. Every commerce student
should be able to analyze any company data from the standpoint of finance. Monitoring the
company's performance heavily relies on financial analysis. Financial analysis can be done in
a variety of methods, and conclusions can be drawn in a variety order to conduct a financial
analysis for this article, a standard-size balance sheet has been chosen. Other financial
analysis techniques and their outcomes are not included in this work. Since the company's
information relies heavily on secondary sources, there is a slight possibility that some of the
facts and data are incorrect. This research examines the financial years 2018–2019 and 2022–
2023, which have a 5-year gap between them, rather than comparing each financial year since
the company's founding. This time frame was chosen for the study under the assumption that
5 years is a long time for the company to see significant change and that the pandemic has
interrupted the company's performance before, during, and after this time frame. The impact
of COVID-19 on the financial aspects is also considered while selecting the years for
comparing the data and preparing a common–size balance sheet. It was an excellent
opportunity to learn to write this research report for the first time.”

Conclusion:-

“Over the past five years, the Bank of India has experienced significant development. Its
financial muscles have grown - more capital, deposits, and loans. It's playing the game well,
strategically growing, and putting money to use. However, like any prudent player, the Bank
monitors risks. Borrowing and other liabilities are increasing, therefore cautious management
is required. Another major focus is on maintaining sound loans and avoiding bad debts.
Anyhow, the Bank is not just playing it safe. It is embracing technology and putting
consumers first, preparing for the ever-changing banking landscape. In addition, it is
expanding globally, connecting India to the rest of the world. In short, the Bank of India is a
developing titan, adapting to the circumstances and set for an even brighter future. It's not just
doing well, it's helping shape the future of Indian finance.”
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