ed to University of Mumbai

MLBAAN
BALBHARATI:
MAGHANMAL J. PANCHOLIACOLLEGE OF COMMERCE
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BTERED UNDER THESOHETIES REGISTRATION ACT, SWAMIVIVEKANAND MARG, KANDIVALI (WEST),MUMBAI - 400067
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CERTIFICA TE
Project Certificate for
BACHELOROF ACCOUNTING &FINANCE (B.A.F.)

This is to certify that the project entitled

"A comparative study on ratio analysis of HDFC and ICICI

Bank" undertaken at the Bal -Bharati's M. J. P College of

Commnerce by Ms.Bamne Akshata Amardeep Seat No.

2099892 in fulfillmnent of B.A.F, degree examination has

been submitted for any other examination and

not

does not form part of any other course undergone by

the candidate.

It is further certified that she has completed all required

phases of the project.

SIGNATURE SIGNA‘URE
(INTERNAL GUIDE) (VICE-PRINCIPAL)
(PROF. MONIKACHANDIWALA) (PROF. MONIKA CHANDIWALA)

SIGNATURE SIGNATURE

(EXTERNAL EXAMINER) (INCHARGE PRINCIPAL)

(PROF. AASHISH A.VAKILNA)
Da. Shedda Shukta
 DECLARATION

embodied in this project

Ithe undersigned Akshata Amardeep Bamne here by, declare that the work
ANALYSIS OF HDFC BANK AND
work titled *A COMPARATIVE STUDY ON RATIO
under the guidance of
ICICIBANK" my own contribution tothe research work carried out
research work and has not been previously
Prof, Monika Chandiwala is aresult of my own
Diploma to this or any other University.
submitted to any other University for any other Degree/
works of others, it has been clearly indicated as such
Wherever reference has been made to previous
and included in the bibliography.
presented in
further declare that all information of this document has been obtained and
Lhere by
ethical conduct.
accordance with academic rules and

AKSHATA ABAMNE

Certificate by:
Prof. MONIKACHANDIWALA
 ACKNOWLEDGMENT

Iam grateful to have the opportunity to cxpress my heartfelt apprciation to allthose

who havecontributedtothe successful completion of my projcct.

Iwish to express my gratitude and heart-felt thanks to our College Principal, Prof.
Agshish A. Vakilna for his encouragement and giving mepermission for the study.
Ton fhankful to Prof. Monika Chandiwala, our vice-principal and my Project Guide
without whose guidance and encouragement, Icould not have completed my Project
wOTk. In spite of her busy schedule, she spared some of her precious time to me for
this work. Her moral support besides the scholarly guidance in research is the
thankful
foundation of this Project. Thank you, for all the help and guidance. I'm also
co-operation,
to the other faculties of the department for their valuable advices and
forward my thankfulness
ren dered for the successful completionof my project. Iput
Bharti college of commerce for
to he Librarian and the Non-Teaching Staffs of Bal
thank my parents, friends and
their coordination. I also make use of this opportunity to
Without them it would have been
classmates who have been a source of inspiration.
impossible for me to complete the project successfully.
LIST OF CONTENT:

CHAPTER SR.NO TITLE PAGE

NO.
ABSTRACT 1-2
1 INTRODUCTION 3- 14
1.1 Meaning of ratio
1.2 Introduction to ratio analysis
1.3 What is ratio analysis
1.4 What does ratio analysis tell you?
1.5 Types Of ratio analysis
1.6 Uses of ratio analysis
1.7 Advantages of ratio analysis
1.8 Significance AndUsefulness of Ratio Analysis
2 RESEARCH AND METHODOLOGY 15-17
2.1 Introduction of research
2.2 Meaning of research
2.3 Meaning of research methodology
2.4 Identification of research problem
2.5 Objectives of the study
2.6 Scope of the study
2,7 Source of data
2.8 Period of the study
2.9 Sample of the study
2.10 Limitations of the study
3 COMPANY PROFILE - ICICIBANK 18 - 25

3.1 Introduction
3.2 Profile of icici Bank
3.3 Introduction
3.4 Vision
3.5 Mission
3.6 History
3.7 Products
3.8 Acquisition
3.9 Role in Indian financial infrastructure
3.10 Awards
 PROFILE OF HDFC BANK 26-40
4.1 Introduction
4.2 Vision
4.3 Mission
4.4 History
4.5 Product
4.6 Acquisition
4.7 Investments
4.8 Listings and shareholders
4.9 Corporate social responsibility- PARIVARTAN
4.10 Awards
4.11 Mission, Business Strategy and Approach to
Business
4.12 Retail banking
4.13
Wholesale banking
4.14
Information technology
4.15 Cyber security
4.16 Innovation In retail business
4.17 Innovation in wholesale business
COMPARISON BETWEEN ICICI BANK41 - 54
AND HDFC BANK
5.1 ICICIBank and HDFCbank
5.2 ICICIVS HDFC: Stock Comparison
5.3 Profitability Of Icici Bank And Hdfc Bank
5.4 Capital Market Performance Analysis Of Icici
Bank And Hdfc Bank
5.5 Net Profit Analysis
5.6 Return Analysis
5.7 Operating Profit Margin
5.8 Net Profit Margin
5.9 Return on assets
S.10 Return on Equity
5.11 Deposits
5.12 Return Ratios
5.13 Investments And Acquisitions
5.14 Valuation Ratios
5.15 Future Prospects
6 DATA ANALYSIS AND INTERPRETATION 55 -72
6.1 Current ratio
6.2 Quick ratio
6.3 Dividend per share
6.4 Net operating profit per share
6.5 Return on net worth
6.6 Net interest income / total funds
6.7 Loans turnover
6.8 Asset turnover ratio
6.9 Other income / total income
6.10 Capital adequacy ratio
6.11 Credit deposit ratio
6.12 Investment deposit ratio
6.13 Cash deposit ratio
6.14 Financial charges coverage ratio
6.15 Earning retention ratio
6.16 Cash earning retention ratio
6.17 Earnings per share
7
CONCLUSION AND SUGGESTION 73- 76
7.1
Findings
7.2 Suggestion
7.3 Conclusion
7.4
Bibliography
Annexure 77- 80
LIST OF FIGURES:

CHAPTER SR.NO TITLE PAGE NO.

3 3.1 Logo of ICICI BANK 20
4 4.1 Logo of HDFC BANK 26
5 5.1 Return on equity - ICICI BANK 42
5.2
Return on equity - HDFC BANK 42
5.3 ROA -ICICI BANK 43
5.4 ROA- HDFC BANK 43
5.5 NIM - 1CICIBANK 44
5.6 NIM - HDFCBANK 45
6 6.1 Current Ratio 55
6.2 Quick ratio 56
6.3 Dividend per share 57
6.4 Net operating profit per share 58
6.5 Return on net worth 59
6.6 Net interest income /total funds 60
6.7 Loans turnover 61
6.8 Asset turnover ratio 62
6.9 Other income / total income 63
6.10 Capitaladequacy ratio 64
6.11 Credit deposit ratio 65
6.12 Investment deposit ratio 66
6.13 Cash deposit ratio 67
6.14 Financial charges coverage ratio 68
6.15 Earning retention ratio 69
6.16 Cash earnings retention ratio 70
6.17 Earnings per share 71
LIST OF TABLES:

CHAPTER SR.NO
TITLE PAGE NO.
4 4.1
Listings and Shareholding 28
5 5.1 Icici bank vs hdfc bank 41
5.2 Deposit ratio 50
S.3 Advances ratio 51
5.4 ROE Ratio 52
5.5 Valuation Ratio 53
6 6.1 Current Ratio 55
6.2 Quick ratio 56
6.3 Dividend per share 57
6.4 Net operating profit per share 58
6.5 Return on net worth 59
6.6 Net interest income / total funds 60
6.7 Loans turnover 61
6.8 Asset turnover ratio 62
6.9 Other income/ total income 63
6.10 Capital adequacy ratio 64
6.11 Credit deposit ratio 65
6.12 Investment deposit ratio 66
6.13 Cash deposit ratio 67
6.14 Financial charges coverage ratio 68
6.15 Earning retention ratio 69
6.16 Cash earnings retention ratio 70
6.17 Earnings per share 71
ABSTRACT

Banking administrations bought to be accessible to the total population of the economy

without segregation. Be that as it may, in India, banks have not possessed the capacity
to cover numerous fragments of Our population. Financial inclusion is conveying
financial administrations at reasonable expenses to burdened and low-income people of
society. The Private Banks has been endeavouring hard endeavours to extend digital
financial inclusion from many years. That numerous changes have been made in
territories identified with financial reasonability, gainfulness intensity, still immense
fragments, particularly the underprivileged segments of the general public, have not
gotten to fundamental banking administrations. This article provides a discussion on
major two private banks which providing digital financial inclusion service from past
one decade and also its comparative study.
Bank is very important for our country and our economy. Banks play an important role
in the economic development of every nation. There are many types of banks like,
Merchant bank, Co-operative bank, National bank, Private bank. Today the knowledge
of banking system and its financial performance is very useful to Bank Customers,
Companies, and Shareholders etc. Here compare to financial position of two banks
ICICI bank and HDFC banks with financial tool of ratio and then take a decision that
who get a strong financial position.
The article is an attempt to analyze and examine the profitability performance of two
selected private banks in India; HDFC bank and ICICI bank. The article also aims to
draw a comparison between the profitability performances of these two banks in order
to come up with clear understanding of new banking strategies. Mathematical and
statistical tools and techniques such as Ratio, Trends, Simple & multiple correlations
are used to analyze data. The most appropriate Parametric and Non parametric test are
employed and the analysis of data is presented through different graphs and tables. The
findings reveal that HDFC Bank is generating more profitability than ICICI bank.
Abstract-The article is an attempt to analyze and examine the profitability performance
of two selected private banks in India; HDFC bank and ICICI bank. The article also
aims to draw a comparison between the profitability performances of these two banks
in order to come up with clear understanding of new banking strategies. Mathematical

1
and statistical tools and techniques such as Ratio, Trends, Simple & multiple
correlations are used to analyze data. The most appropriate Parametric and Non
parametric test are employed and the analysis of data is presented through different
graphs and tables. The findings reveal that HDFC Bank is generating more profitability
than ICICI bank.
Financial analysis is done to identify the financial strengths and weaknesses of the two
banks by properly establishing relationship between the items of Balance Sheet and
Profit & Loss Account.
It helps in better understanding of banks financial position, growth, and performance
by analysing the financial statements with various tools and evaluating the relationship
between various elements of financial statements. The research paper is aimed to
analyse and compare the Financial Performance of HDFC and ICICI Bank and offer
suggestions for the improvement of efficiency in select banks. For the purpose of
analysis of comparative financial performance of the select banks, an attempt is made
to examine the financial performance of the banks using various accounting and
statistical techniques to arrive at conclusion.

2
 CHAPTER 1

INTRODUCTION AND IDENTIFICATION

1.1 MEANING OF RATIO:

Absolute numbers tell very little. Assume that two companies A and B, operating within
the same industry supply the information:

One can easily say that Company B makes the most profit. But which company is most
profitable? The answer for this will naturally call for further additional information
relating to profit such as size of the company, the total sales it generates or to how much
capital is invested in it. Hence, an assessment or a judgment is made based on making
some sort of comparison. Extending the example,

If net profit is compared with Sales, an assessment can be made on which company
generates the most net profit per Re.1 received from customers. Company A : Net
Profit/ sales * 100 i.e. 5 percent and Company B it is 20 percent. If the net profit is
expressed in terms of investments made by the owners in each company, it is Net Profit
/ Net worth *100. For Company A, it is 10% and for it is 25%. It is also known as
Return on Capital Employed. ROCE. Ratios are useful in two ways:

1. To make inter-business comparisons

2. To make comparisons across financial periods

A ratio is simply one number expressed in terms of another. It is a means of highlighting

in arithmetical terms the relationship between figures drawn from various financial
statements. Therefore, it refers to the numerical or quantitative relationship between
two variables or items. A ratio expresses simply in one number the result of comparison
between two figures. It is calculated by dividing one figure by the other. The quotient
so obtained is the ratio of the figures.

Ratio can be expressed in the following three forms:

1. As proportion

2. As percentage

3. As turnover or rate

3
The Dictionary meaning of Analysis is “separation or breaking up of anything into its
elements or component parts”. Ratio Analysis is, therefore, a technique of analysis and
interpretation of financial statements. Ratio analysis is the process of establishing and
interpreting various ratios for helping in making certain decisions. It involves the
methods of calculating and interpreting financial ratios to assess the firm’s performance
and status.

1.2 INTRODUCTION OF RATIO ANALYSIS: -

Ratio analysis is referred to as the study or analysis of the line items present in the
financial statements of the company. It can be used to check various factors of a
business such as profitability, liquidity, solvency and efficiency of the company or the
business.

Ratio analysis is mainly performed by external analysts as financial statements are the
primary source of information for external analysts.

The analysts very much rely on the current and past financial statements in order to
obtain important data for analyzing financial performance of the company. The data or
information thus obtained during the analysis is helpful in determining whether the
financial position of a company is improving or deteriorating.

Ratio analysis can mark how a company is performing over time, while comparing a
company to another within the same industry or sector.

Ratio analysis may also be required by external parties that set benchmarks often tied
to risk.

While ratios offer useful insight into a company, they should be paired with other
metrics, to obtain a broader picture of a company's financial health.

Examples of ratio analysis include current ratio, gross profit margin ratio, inventory
turnover ratio.

4
 1.3 WHAT IS RATIO ANALYSIS: -
The term ratio analysis refers to using investment ratios (and multiples) to gain
quantitative insight into a company’s profitability, liquidity, and operational efficiency.
The ratios are drawn from a company’s past and present financial data. It can be used
to look at an individual company’s performance, or comparatively across a sector,
region, or peer group.

There are various approaches to classifying ratios. One approach is to classify them as
investor ratios and the other as management ratios. Investor ratios are used by equity
investors to evaluate a company’s health and ability to generate the return for their
investment – given the risks involved.

Management ratios can be subdivided into operating, financial, and cash flow ratios.
These ratios look more carefully at the ways in which a company is organized and
managed at the fundamental level of the business – namely operating performance and
financial structure. Further, if ratios are to be of any value, they must be related to other
information benchmarks – such as previous performance of the company – trends, other
companies (who are competitors), and forecasts or budgets.

1.4 MEANING AND DEFINITION: -

Ratio analysis is a conceptual technique which dates back to the inception of
accounting, as a concept. Financial analysis as a scientific tool is used to carry out the
calculations in the area of accounting. In order to appraise the valid and existent worth
of an enterprise, the financial tool comes handy, regularly. Besides, it also allows the
firms to observe the performance spanning across a long period of time along with the
impediments and shortcomings. Financial analysis is an essential the mechanism for a
clear interpretation of financial statements. It aids the process of discovering, the
existence of any cross-sectional and time series linkages between various ratios.
Formerly, Security qualified as a major requisite for banks and financial institutions, to
consider and grant loans and advances. However, there’s been a complete paradigm
shift in the structure. Currently, lending is based on the evaluation of the actual need of
the firms. Financial viability of the proposal, as a base to grant loans, is now been given
precedence over security. Further, an element of risk is imperative in every business
decision. Credits, run a higher risk, as a part of any decision making in business and so,
Ratio analysis and other quantitative techniques mitigate the risk to some the extent by

5
providing a fair and rational assessment of risks. Ratio analysis broadly explains the
process of computing, acts as a vital tool in determination and presentation of the
relationship of related items and groups of items of the financial statements. The
financial position of a unit is concretely and clearly encapsulated by the means of ratio
analysis. The significance of Ratio Analysis for a holistic Financial Analysis remains
unflinchingly supreme. Ratio can be used in the form of a percentage, Quotient, and
Rates. In other words, it can be expressed as a to b; a: b (a is to b) or as a simple fraction,
integer and decimal. A ratio is calculated by dividing one item or figure by another item
or figure.

1.5 WHAT DOES RATIO ANALYSIS TELL YOU?

Investors and analysts employ ratio analysis to evaluate the financial health of
companies by scrutinizing past and current financial statements. Comparative data can
demonstrate how a company is performing over time and can be used to estimate likely
future performance. This data can also compare a company's financial standing with
industry averages while measuring how a company stacks up against others within the
same sector.

Investors can use ratio analysis easily, and every figure needed to calculate the ratios is
found on a company's financial statements.

Ratios are comparison points for companies. They evaluate stocks within an industry.
Likewise, they measure a company today against its historical numbers. In most cases,
it is also important to understand the variables driving ratios as management has the
flexibility to, at times, alter its strategy to make its stock and company ratios more
attractive. Generally, ratios are typically not used in isolation but rather in combination
with other ratios. Having a good idea of the ratios in each of the four previously
mentioned categories will give you a comprehensive view of the company from
different angles and help you spot potential red flags.

1.6 TYPES OF RATIO ANALYSIS: -

Liquidity Ratios
This type of ratio helps in measuring the ability of a company to take care of its short-
term debt obligations. A higher liquidity ratio represents that the company is highly rich
in cash.

6
The types of liquidity ratios are:

(1) Current Ratio: The current ratio is the ratio between the current assets and current
liabilities of a company. The current ratio is used to indicate the liquidity of an
organization in being able to meet its debt obligations in the upcoming twelve months.
A higher current ratio will indicate that the organization is highly capable of repaying
its short-term debt obligations.

CURRENT RATIO = CURRENT ASSETS / CURRENT LIABILITIES

(2) Quick Ratio: The quick ratio is used to ascertain information pertaining to the
capability of a company in paying off its current liabilities on an immediate basis.

The formula used for the calculation of a quick ratio is-

QUICK RATIO = (CASH AND CASH EQUIVALENTS + MARKETABLE

SECURITIES + ACCOUNTS RECEIVABLES) / CURRENT LIABILITIES

2. Profitability Ratios
This type of ratio helps in measuring the ability of a company in earning sufficient
profits.

The types of profitability ratios are: –

(1) Gross Profit Ratios: Gross profit ratios are calculated in order to represent the
operating profits of an organization after making necessary adjustments pertaining to
the COGS or cost of goods sold.

The formula used for the calculation of gross profit ratio is-

GROSS PROFIT RATIO = (GROSS PROFIT / NET SALES) * 100

(2) Net Profit Ratio: Net profit ratios are calculated in order to determine the overall
profitability of an organization after reducing both cash and non-cash expenditures.

The formula used for the calculation of net profit ratio is-

GROSS PROFIT RATIO = (GROSS PROFIT / NET SALES) * 100

(3) Operating Profit Ratio: Operating profit ratio is used to determine the soundness
of an organization and its financial ability to repay all the short term and long-term debt
obligations.

7
The formula used for the calculation of operating profit ratio is-

OPERATING PROFIT RATIO = (EARNINGS BEFORE INTEREST AND

TAXES / NET SALES) * 100

(4) Return on Capital Employed (ROCE): Return on capital employed is used to

determine the profitability of an organization with respect to the capital that is invested
in the business.

The formula used for the calculation of ROCE is:

ROCE = EARNINGS BEFORE INTEREST AND TAXES / CAPITAL

EMPLOYED

3. Solvency Ratios
Solvency ratios can be defined as a type of ratio that is used to evaluate whether a
company is solvent and well capable of paying off its debt obligations or not.

The types of solvency ratios are: –

(1) Debt Equity Ratio: The debt-equity ratio can be defined as a ratio between total
debt and shareholders fund. The debt-equity ratio is used to calculate the leverage of an
organization. An ideal debt-equity ratio for an organization is 2:1.

The formula for debt-equity ratio is-

DEBT EQUITY RATIO = TOTAL DEBTS / SHAREHOLDERS FUND

(2) Interest Coverage Ratio: The interest coverage ratio is used to determine the
solvency of an organization in the nearing time as well as how many times the profits
earned by that very organization were capable of absorbing its interest-related expenses.

The formula used for the calculation of interest coverage ratio is-

INTEREST COVERAGE RATIO = EARNINGS BEFORE INTEREST AND

TAXES / INTEREST EXPENSE

4. Turnover Ratios
Turnover ratios are used to determine how efficiently the financial assets and liabilities
of an organization have been used for the purpose of generating revenues.

The types of turnover ratios are: –

8
(1) Fixed Assets Turnover Ratios: Fixed assets turnover ratio is used to determine the
efficiency of an organization in utilizing its fixed assets for the purpose of generating
revenues.

The formula used for the determination of fixed assets turnover ratio is-

FIXED ASSETS TURNOVER RATIO = NET SALES / AVERAGE FIXED

ASSETS

(2) Inventory Turnover Ratio: Inventory turnover ratio is used to determine the speed
of a company in converting its inventories into sales.

The formula used for calculating inventory turnover ratio is-

INVENTORY TURNOVER RATIO = COST OF GOODS SOLD / AVERAGE

INVENTORIES

(3) Receivable Turnover Ratio: Receivable turnover ratio is used to determine the
efficiency of an organization in collecting or realizing its account receivables.

The formula used for calculating the receivable turnover ratio is-

RECEIVABLES TURNOVER RATIO = NET CREDIT SALES / AVERAGE

RECEIVABLES

5. Earnings Ratios
Earnings ratio is used for the purpose of determining the returns that an organization
generates for its investors.

The types of earnings ratios are: –

(1) Profit Earnings Ratio: P/E ratio indicates the profit earning capacity of the
company.

The formula used for the calculation of profit earnings ratio is:

PROFIT EARNINGS RATIO = MARKET PRICE PER SHARE / EARNINGS

PER SHARE

(2) Earnings per Share (EPS): EPS signifies the earnings of an equity holder based
on each share.

The formula used for EPS is:

9
EPS = (NET INCOME – PREFERRED DIVIDENDS) / (WEIGHTED AVERAGE
OF OUTSTANDING SHARES)

1.7 USES OF RATIO ANALYSIS: -

1. Comparisons

One of the uses of ratio analysis is to compare a company’s financial performance to

similar firms in the industry to understand the company’s position in the market.
Obtaining financial ratios, such as Price/Earnings, from known competitors and
comparing it to the company’s ratios can help management identify market gaps and
examine its competitive advantages, strengths, and weaknesses. The management can
then use the information to formulate decisions that aim to improve the company’s
position in the market.

2. Trend line

Companies can also use ratios to see if there is a trend in financial performance.
Established companies collect data from the financial statements over a large number
of reporting periods. The trend obtained can be used to predict the direction of future
financial performance, and also identify any expected financial turbulence that would
not be possible to predict using ratios for a single reporting period.

3. Operational efficiency

The management of a company can also use financial ratio analysis to determine the
degree of efficiency in the management of assets and liabilities. Inefficient use of assets
such as motor vehicles, land, and building results in unnecessary expenses that ought
to be eliminated. Financial ratios can also help to determine if the financial resources
are over or under-utilized.

1.8 ADVANTAGES OF RATIO ANALYSIS: -

Ratio analysis is widely used as a powerful tool of financial statement analysis. It

establishes the numerical or quantitative relationship between two figures of a financial
statement to ascertain strengths and weaknesses of a firm as well as its current financial
position and historical performance. It helps various interested parties to make an
evaluation of certain aspect of a firm’s performance.

10
The following are the principal advantages of ratio analysis:

1. Forecasting and Planning:

The trend in costs, sales, profits and other facts can be known by computing ratios of
relevant accounting figures of last few years. This trend analysis with the help of ratios
may be useful for forecasting and planning future business activities.

2. Budgeting:

Budget is an estimate of future activities on the basis of past experience. Accounting

ratios help to estimate budgeted figures. For example, sales budget may be prepared
with the help of analysis of past sales.

3. Measurement of Operating Efficiency:

Ratio analysis indicates the degree of efficiency in the management and utilization of
its assets. Different activity ratios indicate the operational efficiency. In fact, solvency
of a firm depends upon the sales revenues generated by utilizing its assets.

4. Communication:

Ratios are effective means of communication and play a vital role in informing the
position of and progress made by the business concern to the owners or other parties.

5. Control of Performance and Cost:

Ratios may also be used for control of performances of the different divisions or
departments of an undertaking as well as control of costs.

6. Inter-firm Comparison:

Comparison of performance of two or more firms reveals efficient and inefficient firms,
thereby enabling the inefficient firms to adopt suitable measures for improving their
efficiency. The best way of inter-firm comparison is to compare the relevant ratios of
the organization with the average ratios of the industry.

7. Indication of Liquidity Position:

Ratio analysis helps to assess the liquidity position i.e., short-term debt paying ability
of a firm. Liquidity ratios indicate the ability of the firm to pay and help in credit
analysis by banks, creditors, and other suppliers of short-term loans.

11
8. Indication of Long-term Solvency Position:

Ratio analysis is also used to assess the long-term debt-paying capacity of a firm. Long-
term solvency position of a borrower is a prime concern to the long-term creditors,
security analysts and the present and potential owners of a business. It is measured by
the leverage/capital structure and profitability ratios which indicate the earning power
and operating efficiency. Ratio analysis shows the strength and weakness of a firm in
this respect.

9. Indication of Overall Profitability:

The management is always concerned with the overall profitability of the firm. They
want to know whether the firm has the ability to meet its short-term as well as long-
term obligations to its creditors, to ensure a reasonable return to its owners and secure
optimum utilization of the assets of the firm. This is possible if all the ratios are
considered together.

10. Signal of Corporate Sickness:

A company is sick when it fails to generate profit on a continuous basis and suffers a
severe liquidity crisis. Proper ratio analysis can give signal of corporate sickness in
advance so that timely measures can be taken to prevent the occurrence of such
sickness.

11. Aid to Decision-making:

Ratio analysis helps to take decisions like whether to supply goods on credit to a firm,
whether bank loans will be made available etc.

12. Simplification of Financial Statements:

Ratio analysis makes it easy to grasp the relationship between various items and helps
in understanding the financial statements.

1.9 SIGNIFICANCE AND USEFULNESS OF RATIO ANALYSIS:

Ratios as a tool of financial analysis provide symptoms with the help of which any
analyst is in a position to diagnose the financial health of the unit. Financial analysis
may be compared with biopsy conducted by the doctor on the patient in order to
diagnose the causes of illness so that treatment may be prescribed to the patient to help
him recover. As, already hinted different groups of persons are interested in the affairs
12
of any business entity, therefore, significance of ratio analysis for various groups is
different and may be discussed as follows:
Usefulness to the Management:
1. Decision Making: -
Mass of information contained in the financial statements may be unintelligible a
confusing. Ratios help in highlighting the areas deserving attention and corrective
action facilitating decision making.
2. Financial Forecasting and Planning:-
Planning and forecasting can be done only by knowing the past and the present. Ratio
help the management in understanding the past and the present of the unit. These also
provide useful idea about the existing strength and weaknesses of the unit. This
knowledge is vital for the management to plan and forecast the future of the unit.
3. Communication: -
Ratios have the capability of communicating the desired information to the relevant
persons in a manner easily understood by them to enable them to take stock of the
existing situation:
4. Co-ordination is Facilitated: -
Being precise, brief and pointing to the specific areas the ratios are likely to attract
immediate grasping and attention of all concerned and is likely to result in improved
coordination from all quarters of management.
5. Control is more Effective:-
System of planning and forecasting establishes budgets, develops forecast statements
and lays down standards. Ratios provide actual basis. Actual can be compared with the
standards. Variances to be computed an analyzed by reasons and individuals. So it is
great help in administering an effective system of control.
Usefulness to the Owners/Shareholders:
Existing as well as prospective owners or shareholders are fundamentally interested in
the (a) long-term solvency and (b) profitability of the unit. Ratio analysis can help them
by analyzing and interpreting both the aspects of their unit.
Usefulness to the Creditors:
Creditors may broadly be classified into short-term and long term. Short-term creditors
are trade creditors, bills payables, creditors for expenses etc., they are interested in
analyzing the liquidity of the unit. Long-term creditors are financial institutions,
debenture holders, mortgage creditors etc., they are interested in analyzing the capacity
13
of the unit to repay periodical interest and repayment of loans on schedule. Ratio
analysis provides, both type of creditors, answers to their questions.
Usefulness to Employees:
Employees are interested in fair wages: adequate fringe benefits and bonus linked with
productivity/profitability. Ratio analysis provides them adequate information regarding
efficiency and profitability of the unit. This knowledge helps them to bargain with the
management regarding their demands for improved wages, bonus etc.
Usefulness to the Government:
Govt. is interested in the financial information of the units both at macro as well as
micro levels. Individual unit's information regarding production, sales and profit is
required for excise duty, sales tax and income tax purposes. Group information for the
industry is required for formulating national policies and planning. In the absence of
dependable information, Govt. plans and policies may not achieve desired results.

1.10 APPLICATIONS OF RATIO ANALYSIS: -

The fundamental basis of ratio analysis is to compare multiple figures and derive a
calculated value. By itself, that value may hold little to no value. Instead, ratio analysis
must often be applied to a comparable to determine whether or a company's financial
health is strong, weak, improving, or deteriorating.

Ratio Analysis Over Time

A company can perform ratio analysis over time to get a better understanding of the
trajectory of its company. Instead of being focused on where it is today, the company
is more interested doing this type of analysis is more interested in how the company
has performed over time, what changes have worked, and what risks still exist looking
to the future. Performing ratio analysis is a central part in forming long-term decisions
and strategic planning.

To perform ratio analysis over time, a company selects a single financial ratio, then
calculates that ratio on a fixed cadence (i.e. calculating its quick ratio every month). Be
mindful of seasonality and how temporarily fluctuations in account balances may
impact month-over-month ratio calculations. Then, a company analyzes how the ratio
has changed over time (whether it is improving, the rate at which it is changing, and
whether the company wanted the ratio to change over time).

14
 Ratio Analysis Across Companies
Imagine a company with a 10% gross profit margin. A company may be thrilled with
this financial ratio until it learns that every competitor is achieving a gross profit margin
of 25%. Ratio analysis is incredibly useful for a company to better stand how its
performance compares to similar companies.

To correctly implement ratio analysis to compare different companies, consider only

analyzing similar companies within the same industry. In addition, be mindful how
different capital structures and company sizes may impact a company's ability to be
efficient. In addition, consider how companies with varying product lines (i.e. some
technology companies may offer products as well as services, two different product
lines with varying impacts to ratio analysis).

Ratio Analysis Against Benchmarks

Companies may set internal targets for what they want their ratio analysis calculations
to be equal to. These calculations may hold current levels steady or strive for
operational growth. For example, a company's existing current ratio may be 1.1; if the
company wants to become more liquid, it may set the internal target of having a current
ratio of 1.2 by the end of the fiscal year.

Benchmarks are also frequently implemented by external parties such lenders. Lending
institutions often set requirements for financial health. If these benchmarks are not met,
an entire loan may be callable or a company may be faced with an adjusted higher rate
of interest to compensation for this risk. An example of a benchmark set by a lender is
often the debt service coverage ratio which measures a company's cash flow against the
debt balances.

Examples of Ratios Used in Financial Analysis: -

There are several hundred possible ratios that can be used for analysis purposes, but
only a small core group is typically used to gain an understanding of an entity. These
ratios include the following:

● Current ratio. Compares current assets to current liabilities, to see if a business has
enough cash to pay its immediate liabilities.

15
● Days sales outstanding. Determines the ability of a business to effectively issue credit
to customers and be paid back on a timely basis.

● Debt to equity ratio. Compares the proportion of debt to equity, to see if a business has
taken on too much debt.

● Dividend payout ratio. This is the percentage of earnings paid to investors in the form
of dividends. If the percentage is low, it is an indicator that there is room for dividend
payments to increase substantially.

● Gross profit ratio. Calculates the proportion of earnings generated by the sale of goods
or services, before administrative expenses are included. A decline in this percentage
could signal pricing pressure on a company's core operations.

● Inventory turnover. Calculates the time it takes to sell off inventory. A low turnover
figure indicates that a business has an excessive investment in inventory, and therefore
is at risk of having obsolete inventory.

● Net profit ratio. Calculates the proportion of net profit to sales; a low proportion can
indicate a bloated cost structure or pricing pressure.

● Price earnings ratio. Compares the price paid for a company's shares to the earnings
reported by the business. An excessively high ratio signals that there is no basis for a
high stock price, which could presage a stock price decline.

● Return on assets. Calculates the ability of management to efficiently use assets to

generate profits. A low return indicates a bloated investment in assets.

16
 CHAPTER NO 2

RESEARCH METHODOLOGY

In the current investigation, an attempt has been made to gauge, assess, and consider
the monetary performance of ICICI Bank and HDFC Bank. The examination is based
on auxiliary data gathered from yearly reports of individual banks, magazines, diaries,
archives, and other distributed data. The examination spans a five-year period, for
example, from 2015-16 to 2019- 20. Credit Deposit Ratio, Interest Expenses to Total
Expenses, Interest Income to Total Income, Other Income to Total Income, Net Profit
Margin, Net Worth Ratio, Percentage Change in Total Income, Percentage Change in
Total Expenditure, Percentage Change in Deposits, and Percentage Change in
Advances were all used to investigate and analyse patterns in financial business and
monetary execution. To investigate patterns in financial business benefit, the mean,
standard deviation, standard error, coefficient of variation, and compound annual
growth rate (CAGR) were used

2.1INTRODUCTION OF RESEARCH:
Research is an activity that leads us to finding new facts, information, assisting us in
verifying the available knowledge and in making us question things that are difficult to
understand as per existing data. To be successful manager it is important for you to
know how to go about making the right decisions by being knowledgeable about the
various steps involved in finding solutions to problematic issues. It may be understood
in following terms also:
∙ Research is a continuous activity in majority of disciplines and professions.
∙ It is helpful in critical assessment of the way we work, execute policies, and give
instructions in our professions.
∙ It is systematic observation of processes to find better ways to do things and to reduce
the effort being put in to achieve an objective and identifying the validity of the targets.
∙ In fact research is a subconscious activity that we are involved in at all times whether
it is purchase of daily use articles, a car, an electronic good or planning a holiday.

17
2.2 MEANING OF RESEARCH:
Research is a process to discover new knowledge to find answers to a question. The
word research has two parts re (again) and search (find) which denote that we are taking
up an activity to look into an aspect once again or we want to look for some new
information about something. E.g Front Office Executive has to learn about the
facilities, timings, key features of products and services available at the hotel if one
wants to become a wonderful sales professional other than being a host. "All progress
is born of inquiry. Doubt is often better than overconfidence, for it leads to inquiry, and
inquiry leads to invention" is a famous Hudson Maxim in context of which the
significance of research can well be understood.
2.3MEANING OF RESEARCH METHODOLOGY:
Research methodology is a way of explaining how a researcher intends to carry out
their research. It's a logical, systematic plan to resolve a research problem. A
methodology details a researcher's approach to the research to ensure reliable, valid
results that address their aims and objectives. It encompasses what data they're going
to collect and where from, as well as how it's being collected and analysed.

2.4IDENTIFICATION OF RESEARCH PROBLEM:

There are a considerable number of private banks all over Indian offering banking
services to millions of clients. However, most of them do not enjoy much popularity
and most importantly derive lower annual profit. This can be attributed to several
factors either related to marketing, professional service offered, or added value services.
Profitability of banks determines the success of strategies being implemented and
approached adopted for expanding customer base and increase profit. HDFC Bank and
ICICI Bank are two notable private banks that more often feature as leading in the
banking sector in the country. To get a closer examination of the profitability
performance of these banks, this study analyses the secondary data released by these
banks in the eight consecutive years.
2.5 OBJECTIVES OF THE STUDY:
1. An analytical study of the banks with the help of ratio analysis.
2. To compare the overall performance of the HDFC Bank and ICICI Bank.
3. To study the financial performance of HDFC Bank and ICICI Bank.
4. To give the Findings and Suggestions to enhance the performance of the banks.

18
2.6 SCOPE OF THE STUDY:
Financial statement analysis is used to identify the past trends and relationships between
financial and profitability statement items. Both internal users and external users such
as analysts, creditors, and investors of the bank financial statements need to assess a
company’s profitability, liquidity, and solvency. The most common methods we use for
financial statement analysis are trend analysis, common-size statements, and ratio
analysis. These methods include calculations and comparisons of the results to
historical and secondary data of the banks, competitor annual reports, or industry
averages to determine the relative strength and performance of the company being
analyzed. This study shows the financial performance of these two banks HDFC and
ICICI Bank’s with the help of ratio analysis.
2.7 SOURCE OF DATA:
SECONDARY DATA:
Using existing data generated by large government Institutions, healthcare facilities etc.
as part of organizational record keeping. The data is then extracted from more varied
datafiles. Secondary data is a past data. It has a very quick and easy process. The sources
of secondary data are Government publications, websites, books, journals, articles,
internal records, etc. The cost effectiveness of secondary data is economical. It has a
short term collection time. Primary data may or may not be specific to researcher’s
need. It is available in refined form. Secondary data has relatively less accuracy and
reliability.
2.8 PERIOD OF THE STUDY:
The data collected for this research is for the five consecutive years. i.e. 2018 to 2022.
2.9 SAMPLE OF THE STUDY:
The sample of the study only includes two banks; HDFC Bank and ICICI Bank. The
study relies largely on secondary data that is obtained from the annual reports of the
selected banks. The collected data is duly edited, classifies, tabulated according to the
needs of the objectives of the study. The data has been presented through different
graphs and tables. Data has been converted in to relative measure such as ratios,
percentages rather than the absolute data.

19
2.10 LIMITATION OF THE STUDY:
The limitation of the study is only that the data is collected by secondary source of the
banks. The data is taken from the past five years and one report of the banks and
whatever the outcome will come be depend on this secondary data. The data is taken
from consecutive past five years.
This study covers only 2 banks listed and actively traded on NSE and BSE out of whole
banking industries therefore the results might or might not be same for the whole
banking industry.

20
 CHAPTER NO. 3
COMPANY PROFILE – ICICI BANK

3.1INTRODUCTION
Sumit K. Majumdar, and Pradeep Chhibber. (1999) investigated the
relationship between the degrees of obligation in capital construction and
execution using an Indian firm as an example. Existing hypotheses place a
positive relationship; however, examination of the data reveals that the
relationship for Indian firms is entirely negative. The design of capital
business sectors in India, where both current and long haul lending
establishments are government-owned, was theorised to represent the
discovery of this relationship, and it confirmed that corporate
administration components that work in the West will not work in the
Indian setting unless the credit capital inventory is privatized. Rasoul
Rezvanian and Seyed Mehdian. (2002) examined the creation execution
and cost construction of a Singaporean business bank using a parametric
methodology in the system of a trans log cost work and a non - parametric
methodology in the structure of straight programming. The parametric
system results indicated that the normal expense bend of these banks is U
shaped, and there were economies of scale for small and medium-sized
banks. It demonstrated the value of economies of scale for all banks,
regardless of size. The nonparametric results revealed that if all
Singaporean banks had been generally effective, they could have cut costs
by 43 percent. The sources of this expense failure appear to be caused by
both allocate and specialized flaws.

21
Barr, R.S., Killgo, K.A., Siems, T.F. and Zimmel, S. (2002) evaluated the
relative usefulness and execution of US business banks from 1984 to 1998.
It depicted the CAMELS rating framework used by bank analysts and
controllers, and discovered that funds with high proficiency scores also
have strong CAMELS evaluations. It was discovered that the other
relationship recognized and recommends the use of DEA to assist
investigators and strategy creators comprehend associations in greater
profundity, controllers and inspectors to foster observing devices, and
banks to benchmark their cycles. IhsanIsik, M. Kabir Hassan.(2003)
examined the financial liberation and overall factor usefulness change in
Turkish commercial banks. It discovered that all types of Turkish banks,
albeit to varying degrees, have recorded critical usefulness gains driven
primarily by efficiency enhancements rather than specialized
advancement. Productivity increases, in any case, were mostly inferable
from more developed asset the board rehearses rather than more developed
scales. It also demonstrated that, in the new environment, private banks
began to close the presentation gap with public banks. Prashanta Kumar
Banerjee (2003) evaluated the operational and financial performance of
Indian Factoring Companies. Calculating is a multibillion-dollar global
industry. It provides various advantages such as consistent income, lower
organization costs, reduced credit risks, and more opportunities for centre
exercises. Both domestic and global thinking are gaining popularity at a
rapid pace in all parts of the world. In the year 1991, the calculated
administrations made a passage in India. Since then, numerous figuring
organisations, including SBI Factors and Commercial Services Ltd., Can
bank Factors Ltd., Wipro Finance Ltd., Integrated Finance Company Ltd.,
and Foremost Factors Ltd., have been offering figuring administrations in
India. It confirmed that India has been working on functional and monetary
execution of the elements over time. Chiang Kao and Shilang-Tai Liu

22
(2004) forecasted the exhibitions of 24 Taiwanese commercial banks based
on their financial projections. Estimates based on uncertain monetary data
are addressed in ranges rather than as single qualities. To predict
proficiency, a DEA model for span information is detailed. Forecasts for
proficiency scores are also introduced as reaches. It was discovered that all
of the proficiency scores determined from the information contained in the
fiscal reports distributed a while later fall within the corresponding
expected ranges of the proficiency scores which we had determined from
the monetary hypotheses. It demonstrated that even the poor performances
of the two banks taken over by the Financial Reorganization Fund of
Taiwan could be predicted ahead of time using this research. Barathi
Kamath. G (2007) evaluated and investigated the Value-Added Intellectual
Coefficient (VAIC) for estimating the value-based execution of the Indian
financial sector over a long period of time, from 2000 to 2004. It confirmed
the presence of significant differences in the presentation of Indian banks
in various sections, as well as an improvement in overall execution over
the investigation time frame. There was a clear preference for presenting
unfamiliar banks alongside homegrown banks.

23
 3.2 ROFILE OF ICICI BANK:

LOGO:

FIG 3.1 LOGO OF ICICI BANK

3.3 INTRODUCTION:

ICICI Bank Limited is an Indian Private bank. It is headquartered at Mumbai. It offers

a wide range of banking products and financial services for corporate and retail
customers through a variety of delivery channels and specialized subsidiaries in the
areas of investment banking, life, non-life insurance, venture capital and asset
management.

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 specialized
subsidiaries in the areas of investment banking, life and non-life insurance, venture
capital and asset management. The bank currently has subsidiaries in the United
Kingdom and Canada; branches in United States, Singapore, Bahrain, Hong Kong, Sri
Lanka, Qatar, Oman, Dubai International Finance Centre, China and South Africa; as
well as representative offices in United Arab
Emirates, Bangladesh, Malaysia and Indonesia. The company's UK subsidiary has also
established branches in Belgium and Germany.

24
 3.4 VISION:

To be the leading provider of financial services in India and a major global bank.

3.5 MISSION:

We will leverage our people, technology, speed and financial capital to:

● Be the banker of first choice for our customers by delivering high quality,
world-class products and services.

● Expand the frontiers of our business globally.

● Play a proactive role in the full realization of India’s potential.

● Maintain a healthy financial profile and diversity our earnings across business
and geographies.

● Maintain high standards of governance and ethics.

● Contribute positively to the various countries and markets in which we operate.

● Create value for our stakeholders.

3.6 HISTORY:

ICICI was formed in 1955 at the initiative of the World Bank, the Government of India
and representatives of Indian industry. The principal objective was to create a
development financial institution for providing medium-term and long-term project
financing to Indian businesses. Until the late 1980s, ICICI primarily focused its
activities on project finance, providing long-term funds to a variety of industrial
projects. With the liberalization of the financial sector in India in the 1990s, ICICI
transformed its business from a development financial institution offering only project
finance to a diversified financial services provider that, along with its subsidiaries and
other group companies, offered a wide variety of products and services. As India’s
economy became more market-oriented and integrated with the world economy, ICICI
capitalized on the new opportunities to provide a wider range of financial products and
services to a broader spectrum of clients. ICICI Bank was incorporated in 1994 as a

25
part of the ICICI group. In 1999, ICICI became the first Indian company and the first
bank or financial institution from non-Japan Asia to be listed on the New York Stock
Exchange.

The Industrial Credit and Investment Corporation of India (ICICI) established on 5

January 1955 and Sir Arcot Ramasamy Mudaliar was elected as the first Chairman of
ICICI Ltd. It was structured as a joint-venture of the World Bank, India's public-sector
banks and public-sector insurance companies to provide project financing to Indian
industry. ICICI Bank was established by ICICI, as a wholly owned subsidiary in 1994
in Vadodara. The bank was founded as the Industrial Credit and Investment
Corporation of India Bank, before it changed its name to ICICI Bank. The parent
company was later merged with the bank.

In the 1990s, ICICI transformed its business from a development financial institution
offering only project finance to a diversified financial services group, offering a wide
variety of products and services, both directly and through a number of subsidiaries and
affiliates like ICICI Bank. ICICI's shareholding in ICICI Bank was reduced to 46%
through a public offering of shares in India in 1998, followed by an equity offering in
the form of American depositary receipts on the NYSE in 2000. ICICI Bank acquired
the Bank of Madura Limited in an all-stock deal in 2001 and sold additional stakes to
institutional investors during 2001–02. ICICI Bank launched Internet
Banking operations in 1998.

In 1999, ICICI become the first Indian company and the first bank or a financial
institution from non-Japan Asia to be listed on the NYSE.

ICICI, ICICI Bank, and ICICI subsidiaries ICICI Personal Financial Services Limited
and ICICI Capital Services Limited merged in a reverse merger in 2002. During
the financial crisis of 2007–2008, customers rushed to ICICI ATMs and branches in
some locations due to rumors of bank failure. The Reserve Bank of India issued a
clarification on the financial strength of ICICI Bank to dispel the rumors.

In March 2020, the board of ICICI Bank Ltd. approved an investment of ₹10
billion (US$130 million) in Yes Bank, resulting in a 5% ownership interest in Yes.

26
 3.7 PRODUCTS: -

ICICI Bank offers products and services such as online money transfers, tracking
services, current accounts, savings accounts, time deposits, recurring deposits,
mortgages, loans, automated lockers, credit cards, prepaid cards, debit cards and digital
wallets called ICICI pocket.

ICICI bank launched 'ICICIStack' which provides online services such as payment
options, digital accounts, instant car loans, insurance, investments, loans etc

3.8 ACQUISITION: -

● 1996: ICICI Ltd. A diversified financial institution with headquarters in Mumbai

● 1997: ITC Classic Finance, incorporated in 1986, ITC Classic was a non-bank
financial firm that engaged in hire, purchase and leasing operations. At the time of
being acquired, ITC Classic had eight offices, 26 outlets and 700 brokers.
● 1997: SCICI (Shipping Credit and Investment Corporation of India)
● 1998: Anagram (ENAGRAM) Finance. Anagram had built up a network of some
50 branches in Gujarat, Rajasthan, and Maharashtra that were primarily engaged in
the retail financing of cars and trucks. It also had some 250,000 depositors.
● 2001: Bank of Madura
● 2002: The Darjeeling and Shimla branches of Grindlays Bank
● 2005: Investitsionno-Kreditny Bank (IKB), a Russian bank
● 2007: Sangli Bank. Sangli Bank was a private sector unlisted bank, founded in
1916, and 30% owned by the Bahte family. Its headquarters were in Sangli in
Maharashtra, and it had 198 branches. It had 158 in Maharashtra and 31
in Karnataka, and others in Gujarat, Andhra Pradesh, Tamil Nadu, Goa, and Delhi.
Its branches were relatively evenly split between metropolitan areas and rural or
semi-urban areas.
● 2010: The Bank of Rajasthan (BOR) was acquired by the ICICI Bank in 2010
for 30 billion (US$380 million). RBI was critical of BOR's promoters not reducing
their holdings in the company. BOR has since been merged with ICICI Bank.

27
3.9 ROLE IN INDIAN FINANCIAL INFRASTRUCTURE

ICICI bank has contributed to the setting up of a number of Indian

institutions to establish financial infrastructure in the country over the years:

● The National Stock Exchange was promoted by India's leading financial

institutions (including ICICI Ltd.) in 1992 on behalf of the Government of
India with the objective of establishing a nationwide trading facility for
equities, debt instruments and hybrids, by ensuring equal access to investors
all over the country through an appropriate communication network.
● In 1987, ICICI Ltd along with UTI set up CRISIL as India's first
professional credit rating agency.
● NCDEX (National Commodities and Derivatives EXchange) was set up in
2003, by ICICI Bank Ltd, LIC, NABARD, NSE, Canara Bank, CRISIL,
Goldman Sachs, Indian Farmers Fertiliser Cooperative Limited (IFFCO)
and Punjab National Bank.
● ICICI Bank facilitated the setting up of "FINO Cross Link to Case Link
Study" in 2006, as a company that would provide technology solutions and
services to reach the underserved and underbanked population of the
country. Using technologies like smart cards, biometrics and a basket of
support services, FINO enables financial institutions to conceptualise,
develop and operationalise projects to support sector initiatives
in microfinance and livelihoods.
● Entrepreneurship Development Institute of India (EDII), was set up in 1983,
by the erstwhile apex financial institutions like IDBI, ICICI, IFCI and SBI
with the support of the Government of Gujarat as a national resource
organisation committed to entrepreneurship development, education,
training and research.
● Eastern Development Finance Corporation (NEDFI) was promoted by
national level financial institutions like ICICI Ltd in 1995 at Guwahati,
Assam for the development of industries, infrastructure, animal husbandry,
agri-horticulture plantation, medicinal plants, sericulture, aquaculture,
poultry and dairy in the North Eastern states of India.[36]

28
 ● Following the enactment of the Securitisation Act in 2002, ICICI Bank,
together with other institutions, set up Asset Reconstruction Company India
Limited (ARCIL) in 2003. ARCIL was established to acquire non-
performing assets (NPAs) from financial institutions and banks with a view
to enhance the management of these assets and help in the maximisation of
recovery.
● ICICI Bank has helped in setting up Credit Information Bureau of India
Limited (CIBIL), India's first national credit bureau in 2000. CIBIL
provides a repository of information (which contains the credit history of
commercial and consumer borrowers) to its members in the form of credit
information reports.

3.10 Awards - 2023

● ICICI Bank has emerged as the 'Bank of the Year' for 2021-22 at the
Business Today - KPMG Best Banks Awards for

● the third year in a row. The award is the most prestigious accolade given to
an institution under the BT-KPMG Best Banks study. In addition, ICICI
Bank has won the award in the 'Best in Innovation' category for InstaBIZ, its
Business Banking application.

29
 CHAPTER NO.4
COMPANY PROFILE -HDFC BANK

LOGO:

FIG 4.1 LOGO OF HDFC BANK

4.1 INTRODUCTION:

The Housing Development Finance Corporation Limited or HDFC was among the first
financial institutions in India to receive an “in principle” approval from the Reserve
Bank of India (RBI) to set up a bank in the private sector.

HDFC Bank Limited is an Indian banking and financial services company

headquartered in Mumbai. It is India's largest private sector bank by assets and world's
10th largest bank by market capitalization as of April 2021.It is the third largest
company by market capitalization of $122.50 billion on the Indian stock exchanges. It
is also the fifteenth largest employer in India with nearly 150,000 employees.

4.2VISION:

“To be the premier financial partner in ensuring sustainable housing and living
standards”

30
 4.3 MISSION:

Committed to provide financial solutions for sustainable living and assist entrepreneurs
in value addition.

4.4 HISTORY:
This was done as part of RBI’s policy for liberalization of the Indian banking industry
in 1994.HDFC Bank was incorporated in August 1994 in the name of HDFC Bank
Limited, with its registered office in Mumbai, India. The bank commenced operations
as a Scheduled Commercial Bank in January 1995.As of 30 June 2022, the bank's
distribution network was at 6,378 branches across 3,203 cities. It has installed
430,000 POS terminals and issued 23,570,000 debit cards and 12 million credit cards
in FY 2017. It has a base of 1, 52,511 permanent employees as of 30 June 2022.
4.5 PRODUCT: -
HDFC Bank provides a number of products and services including wholesale
banking, retail banking, treasury, auto loans, two-wheeler loans, personal loan, loans
against property, consumer durable loan, lifestyle loan and credit cards. Along with this
various digital products are Payzapp and SmartBUY. .
4.6 ACQUISITION: -

HDFC Bank merged with Times Bank in February 2000. This was the first merger of
two private banks in the New Generation private sector banks category. Times
Bank was established by Bennett, Coleman and Co. Ltd., commonly known as The
Times Group, India's largest media conglomerate.

In 2008, Centurion Bank of Punjab (CBoP) was acquired by HDFC Bank. HDFC
Banks board approved the acquisition of CBoP for ₹95.1 billion in one of the largest
mergers in the financial sector in India.

In 2021, the bank acquired a 9.99% stake in FERBINE, an entity promoted by Tata
Group, to operate a Pan-India umbrella entity for retail payment systems, similar
to National Payments Corporation of India.

In September 2021, the bank partnered with Paytm to launch a range of credit cards
powered by the global card network Visa.

On April 4, 2022, HDFC Bank announced merger with HDFC Limited.

31
4.7INVESTMENTS:

In March 2020, Housing Development Finance Corporation, parent company of HDFC

Bank, made an investment of ₹1,000 crores in Yes Bank. As per the scheme of
reconstruction of Yes Bank, 75% of the total investment by the corporation would be
locked in for three years. On 14 March, Yes Bank allotted 100 crore shares of the face
value of ₹2 each for consideration of ₹10 per share (including ₹8 premium) to the
Corporation aggregating to 7.97 percent of the post issue equity share capital of Yes
bank.

4.8LISTINGS AND SHAREHOLDING:

The equity shares of HDFC Bank are listed on the Bombay Stock Exchange and
the National Stock Exchange of India. Its American depositary receipts are listed on
the NYSE issued through JP Morgan Chase Bank.

Its global depository receipts (GDRs) was listed on the Luxembourg Stock Exchange
but was terminated by board of directors following its low trading volume.

32
 Shareholders (as of 30 September 2021) Shareholding

Promoter group (HDFC) 25.88%

Foreign institutional investor(FII) 38.30%

Individual shareholders 13.25%

Qualified institutional buyer 4.74%

Insurance companies 2.94%

Unit Trust of India/mutual funds 14.57%

Financial institutions/banks 0.4%

Central government 0.6%

TABLE 4.1 LISTING AND SHAREHOLDING

4.9CORPORATE SOCIAL RESPONSIBILITY – PARIVARTAN

Parivartan is an umbrella term for all of the corporate social responsibility initiatives
by HDFC Bank.

HDFC Bank's Parivartan initiative spent ₹535 crore in FY 2019–20.

HDFC Bank spent Rs 634.91 crore towards Parivartan, in FY 2020-21. Out of Rs 634.9
crore, over Rs 110 crore was allocated and utilised towards initiatives focused
on COVID-19 relief. HDFC Bank pledges to become carbon neutral by 2032 .

33
4.10 AWARDS AND RECOGNITION
2016

● Best Banking Performer, India in 2016 by Global Brands Magazine Award.

● Best Performing Branch in Microfinance among private sector banks by
NABARD, 2016, Award for Best Performance in Microfinance
● KPMG study of India's Best Banks, Bank of the year & best digital
banking initiative award 2016
● BrandZ Rankings, Most Valued brand in India for third successive year
● FinanceAsia poll on Asia's Best Companies 2015, Best managed public
company – India
● J. P. Morgan Quality Recognition Award, Best in class straight through
processing rates.

● Company of the year: The Economic Times Corporate Excellence Awards

● Best Performing Private Bank in Total Aadhaar Generation & Update:
Aadhaar Aadhaar Excellence Award
● NPCI - National Payments Excellence Awards

● 2019
● Best Bank: New Private Sector – FE Best Bank awards
● Winner in Innovation and Inclusiveness in Priority Sector Lending – 11th
Inclusive Finance India Awards (IFI) 2019
● Ranked 1st in 2019 BrandZ Top 75 Most Valuable Indian Brands HDFC
Bank was featured for the 6th consecutive year.
● Among The Most Honored Company List, Institutional Investor All-Asia
(ex-Japan) Executive Team 2019 survey
● India’s Best Bank, Euromoney Awards for Excellence 2019
● Bank of the Year and Best Large Bank, Business Today – Money Today
Financial Awards 2019
● Best Bank in India 2019, by Global magazine FinanceAsia.
● Ranked 60th in 2019 BrandZ Top 100 Most Valuable Global
Brands] HDFC Bank was featured BrandZ Top 100 Most Valuable Global

34
 Brands 2019 for the 5th consecutive year. The Bank's brand value has gone
up from $20.87 billion in 2018 to $22.70 billion in 2019.
● Best Large Bank & Fastest Growing Large Bank in 2019, by Business
World Magna Awards
● India's leading private sector bank: Dun & Bradstreet BFSI Award

2020

● Best Bank in India: Euromoney Awards[52]

● Best Bank in India: FinanceAsia Country Awards

2021

● Best bank in india: FinanceAsia Country Awards

● Best bank for SMEs: Asiamoney best bank award
● Best bank in india:[[Euromoney#The Euromoney Awards for
Excellence|The Euromoney Awards for Excellence
● Ranks No. 1 in Mass Affluent category:Euromoney Private Banking and
Wealth Management Survey
● On 12 January 2022 HDFC BANK has been adjudged ' Best Private Bank
in India' at the Global Private Banking Awards 2021, Organised by
Professional Wealth Management (PWM)

2022

● Best Bank In India: Euromoney Awards for Excellence 2022

4.11 MISSION, BUSINESS STRATEGY AND APPROACH TO

BUSINESS

Your Bank’s mission is to be a “World Class Indian Bank” benchmarking itself against
international standards and best practices in terms of product offerings, technology,
customer service levels, risk management, audit and compliance.
The objective is to continue building sound customer franchises across distinct
businesses so as to be a preferred provider of banking services for its target retail and

35
wholesale customer segments and to achieve a healthy growth in profitability,
consistent with the Bank’s risk appetite.
Your Bank’s business philosophy is based on five core values: Customer Focus,
Operational Excellence, Product Leadership, People and Sustainability. Based on these
cornerstones, it is your Bank’s aim to meet the financial needs of customers while
ensuring service of the highest quality.
Your Bank is committed to do this while ensuring the highest levels of ethical standards,
professional integrity, corporate governance and regulatory compliance. The Bank
understands and respects its fiduciary role and responsibility to all stakeholders and
strives to meet their expectations. The cardinal principles of independence,
accountability, responsibility, transparency, fair and timely disclosures serve as the
basis of your Bank’s approach to corporate governance.
Your Bank believes that diversity and independence of the Board, transparent
disclosures, shareholder communication and effective regulatory compliance are
necessary for creating and sustaining shareholder value. Your Bank has infused these
principles into all its activities.
Your Bank also has a well–documented Code of Ethics / Conduct which defines the
high business responsibility and ethical standards to be adhered to while conducting the
business of the Bank and mandates compliance with legal and regulatory requirements.
All employees, including senior management have to affirm annually that they have
adhered to the Code of Conduct rules.
Consistent with the mission and approach, your Bank’s business strategy emphasises
the following:
• Increase market share subject to striking an optimal balance between risk and margin,
in India's expanding banking and financial services industry
• Increase geographical reach
• Cross–sell broad financial product portfolio across customer base
• Continue investments in technology to support digital strategy
• Maintain strong asset quality through disciplined credit risk management
• Maintain a low cost of funds
• Integrating activities in community development, social responsibility and
environmental responsibility with business practices and operations

36
4.12 RETAIL BANKING

The growth in your Bank’s retail banking business was robust during the year ended
March 31, 2016. Your Bank’s total Retail Deposits grew by 20.9 per cent to Rs. 436,383
crore in the year ended March 31, 2016, driven by Retail Term Deposits which grew
faster at 23.4 per cent during the same period.
The Bank’s Retail Advances grew by 28.6 per cent to Rs. 248,319 crore during the year
ended March 31, 2016 driven primarily by growth in Personal Loans, Auto Loans,
Home Loans, and Credit Cards. Retail Advances include loans which fulfil the criteria
of orientation, nature of product, granularity and low value of individual exposures for
retail exposures as laid down by the Basel Committee.
The growth in Retail Advances has been primarily due to two factors. First is the
extensive network of branches across the length and breadth of the country which
allows the Bank to reach out to different customer segments. Second is the emphasis
on innovation across multiple channels, which offers customers choice, convenience
and a superior experience. Faster and more efficient platform deliveries across ATMs,
Internet, Phones and Mobiles have been the cornerstone of the growth in Retail
Advances. Focus on cutting edge analytics and Customer Relationship Management
(CRM) has helped the Bank to understand the customers’ life cycle better and offer
them products appropriate to their profile and needs. Further, analytics also allow the
Bank to target potential customers in a cost effective manner. This enables your Bank
to strengthen its relationship with existing customers, as well as forge new
relationships. Focus on analytics and CRM also helps in understanding the risk profile
of customers and helps improve fraud control and collections.
During the year under review, your Bank added 506 branches taking its physical
distribution network to 4,520 branches in 2,587 cities / towns from 4,014 branches in
2,464 cities / towns as on March 31, 2015. Number of ATMs increased to 12,000 from
11,766 during the same period. The Bank’s focus on semi–urban and under–banked
markets continued with 55 per cent of its branches in such areas. The Bank’s customer
base has grown to 3.77 crore.
In order to provide its customers greater choice, flexibility and convenience, your Bank
continued to make significant headway (investments) in its multichannel servicing

37
strategy, offering its customers the use of ATMs, Internet, Phones and MobileBanking
in addition to its expanded branch network to serve their banking needs. PhoneBanking
services are available even for Non Resident Indian (NRI) customers across the globe.
The Bank continued its focus on existing customers for its credit cards portfolio, with
over 75 per cent of new cards issued to this segment. As part of its strategy to drive
usage of its credit cards, the Bank also has a significant presence in the ‘merchant
acquiring’ business, with the total number of point–of–sale (POS) terminals installed
crossing 2.8 lakh.
In addition to the aforementioned products, the Bank operates in the home loan business
in conjunction with HDFC Limited. Under this arrangement, the Bank sells loans
provided by HDFC Limited through its branches. HDFC Limited approves and
disburses the loans, with the Bank receiving a sourcing fee for these loans. The Bank
has the option to purchase up to 70 per cent of the fully disbursed home loans sourced
under this arrangement either through the issue of mortgage backed pass through
certificates (PTCs) or by a direct assignment of loans.
The balance is retained by HDFC Limited. A fee is paid to HDFC Limited for the
administration and servicing of the loans. Your Bank originated, on an average,
approximately Rs. 1,300 crore of home loans every month in the year under review.
During the same period, the Bank purchased from HDFC Limited home loans worth
Rs. 12,773 crore under the “loan assignment” route.
Your Bank also distributes Life Insurance, General Insurance and Mutual Fund
products through its tie–ups with insurance companies and mutual fund houses. Third
Party Distribution Income contributed approximately 14 per cent of total fee income
for the year ended March 31, 2016, compared to 15 per cent of the total fee income for
the previous year.
The Bank’s data warehouse, customer relationship management (CRM) and analytics
solutions have helped it target existing and potential customers in a cost effective
manner and offer them products appropriate to their profile and needs. Apart from
reducing costs of acquisition, this has also helped in deepening customer relationships
and greater efficiency in fraud control and collection activities resulting in lower credit
losses. The Bank is committed to investing in advanced technology in this area which
will provide a cutting edge to its product and service offerings.

38
4.13 WHOLESALE BANKING

Your Bank provides its corporate and institutional clients a wide range of commercial
and transactional banking products, backed by high quality service and relationship
management. The Bank’s Wholesale Banking business covers not only the top end of
the corporate sector but also the Emerging Corporate Segment and SMEs. It has a
number of business groups catering to various segments with a wide range of banking
services covering their Working Capital, Term Finance, Trade Services, Cash
Management, Investment Banking services, Foreign Exchange and Electronic Banking
requirements.
Your Bank provides its customers’ access to both Working Capital and Term Financing.
Working Capital Loans and Short Tenor Term Loans continued to account for a large
share of its Wholesale Advances. During the year ended March 31, 2016, growth in the
Wholesale Banking business continued to be driven by new customer acquisition and
securing a higher share of the wallet of existing customers by cross–selling with a focus
on optimizing yields and increasing product penetration.
Your Bank’s Financial Institutions and Government Business Group (FIG) offers
commercial and transaction banking products to financial institutions, mutual funds,
insurance companies, public sector undertakings, central and state government
departments. The main focus for this segment remained the offering of various deposit
and transaction banking products besides deepening these relationships by offering
Funded, Non–Funded, Treasury and Foreign Exchange products. Your Bank is
authorised to collect Direct Taxes. It made a total collection of nearly Rs. 1,90,000 crore
during the year and was ranked second in terms of total collections made by any Bank.
Your Bank is also authorised to collect Excise as well as Service Tax and collected over
Rs. 97,000 crore, during the year. Governments of 13 States have authorised your Bank
to collect State Taxes / Duties. These mandates enable a greater convenience to
customers and help the exchequer in mobilizing resources in a seamless manner.
The Bank continues to be the market leader in cash settlement services for major stock
and commodity exchanges in the country. Your Bank’s Investment Banking Group has
established itself as a leading player in Debt Capital Markets and Project Finance. In
recognition of the strong position enjoyed by the Bank in the Debt Capital Market,

39
Bloomberg ranked it No. 2 amongst book runners in INR bonds for Calendar Year
2015.
Your Bank has executed a well thought out strategy of offering a full range of banking
products under one roof to the commercial vehicle and infrastructure equipment market.
It has, in a short span of time, established itself as one of the preferred and trusted
brands in this segment with an enviable list of MoUs and Programmes with the leading
commercial vehicles and Original Equipment Manufacturers (OEMs). Your Bank
offers under one roof, Commercial Vehicle and Equipment Working Capital Loans,
Bank Guarantee, Tax Payments, Cash Management Services and other banking services
enabling it to cut down on transaction time and costs for customers.
Your Bank’s Cash Management Business (CMS) (including all outstation collection,
disbursement and electronic fund transfer products across its various customer
segments) registered volumes of over Rs. 39 lakh crore. The Bank is one of the front
runners in making significant progress in web–enabling its CMS business. In line with
the Bank’s overall drive towards digitization, it has further ensured a larger conversion
of physical payments into electronic in the Cash Management Business.
The Bank has succeeded in leveraging its market position, expertise and technology to
create a competitive advantage and build market share by offering customised
solutions. From customised ERP integrations to high–end SAP certified solutions, the
Bank has been a leading proponent of adopting innovative technology.
As part of the Bank’s on–going digital transformation, the Bank extended its “Trade on
Net” offering on mobile. This product enables customers to avail of Remittances,
Letters of Credit, and Guarantees through the net platform. It gained enormous
acceptance with customers due to the savings and convenience it offers.

4.14 INFORMATION TECHNOLOGY

Technology is a key enabler and facilitator to the critical goals of your Bank allowing
it to make systems and processes even more efficient. Since inception, your Bank
continued to invest heavily in technology to provide better products and superior
customer experience.

40
Your Bank continues to spread its electronically linked branch network with state–of–
the–art IT enabled core banking platform to ensure customers have access to 24*7
banking services.
Your Bank now has a large branch network in rural India. There are infrastructure
limitations in deep geography. Your Bank has taken steps to address these issues, so
that the Bank can offer various products and seamless services to clients across the
length and breadth of the country. Your Bank also implemented Desktop Virtualisation,
a cloud technology solution, to ensure that your Bank is able to overcome limitations
of telecom networks. Bandwidth acceleration and compression technology has been
implemented to empower rural / semi urban branches to improve the speed of the
telecommunication network. QuickBanking, a mobile app catering to the off–line
Internet has been launched by your Bank.
Your Bank has a large presence in the transactional processing space in most products
including RTGS, NEFT and other electronic payments, Retail Assets and Direct
Banking.
Your Bank has made significant investments in technology re–engineering, system
design and architecture and smart storage capacity. Your Bank maintains state–of–the–
art IT Infrastructure, Products and Services to meet growing business needs. It’s
imperative that these services are provided without any disruption. Your Bank has
sophisticated architecture and well–rehearsed Disaster Recovery set–up, so as to ensure
99.5 per cent up–time of important applications.
These initiatives reaffirmed your Bank’s commitment to a significantly enhanced
customer experience across all channels including Digital Banking.
Your Bank is glad to share that technology initiatives of your Bank have also been
recognized in the form of many awards and accolades including from Institute for
Development and Research in Banking Technology (IDRBT) and Indian Banks’
Association (IBA).

4.15 CYBER SECURITY

Your Bank has setup an effective governance framework to manage cyber security. A
suitable organizational structure has been put in place to ensure that your Bank monitors
various cyber security threats and minimizes them.

41
Your Bank conducts the cyber security threat assessment and mitigation requirements
on a continuous basis and is committed to implement necessary improvements in an
on–going manner.
The Bank has implemented various security initiatives to counter these:
• Regular Vulnerability Assessments and Penetration Tests are carried out to assess and
remedy the vulnerabilities in applications and IT Infrastructure
• Anti–Phishing services have been subscribed to ensure that the phishing sites are
shutdown in a timely manner.This ensures that customers are not lured to
fraudulentsites
• Risk Engine and Transaction Monitoring systems are implemented to monitor
suspicious transactions on Internet Banking, ATM and e–commerce channel
• To monitor cyber–attacks targeted at critical information assets, the Bank has setup
24*7 Cyber Security Command Centre
• Humans being the weakest link in Cyber Security, your Bank has been carrying out
continuous awareness among employees and customers
• The critical websites of the Bank are scanned and monitored continuously for early
detection of any malware
A testimony to the Bank’s crisis preparedness is that it has secured PCI DSS and ISO
27001 certification for its critical information assets. Its efforts have been further
recognized through awards from IDRBT, Data Security Council of India–National
Association of Software and Services Companies (NASSCOM) for various cyber
security initiatives.

4.16 INNOVATION IN RETAIL BUSINESS

• PayZapp with SmartBuy: A comprehensive, convenient and secure payment

solution which allows customers to link their cards once and then pay through one click.
Smart Buy within PayZapp brings the best deals and discounts offered by merchant
partners exclusively for HDFC Bank customers. PayZapp offers the unique
combination of the convenience of 1–click payments and security. PayZapp for
business allows merchants to bill their customers and receive payments instantly over
the mobile, thereby making it easier for them to collect cash remotely and expand their
business.

42
• 10 second Personal Loan: A pre–approved instant loan on NetBanking which is
offered to select customers and is disbursed within 10 seconds of applying.

• ZipDrive: An instant auto loan approval, which allows customers to generate an

online approval with reference number, walk into a dealership and drive out with the
car of their choice. This approval, valid for 30 days, enables the dealer to request HDFC
Bank for the already pre–approved loan sanctioned to the customer.

• Virtual Relationship Manager: Offered to High Net Worth customers by invitation,

this is a 24*7 access to a relationship manager through a safe and secure video interface
on the mobile banking app.

• Chillr: Your Bank’s partner app, which allows customers to send and receive money
using phone book contacts. The app also allows customers to recharge mobiles, DTH,
data cards and make merchant payments.

• Design Your Own Loan Against Securities (LAS): This combines the power of a
loan and a bank account. LAS can be availed against securities ranging from equity to
mutual funds to Kisan Vikas Patra. What’s more, customers can design the loan on the
basis of these securities.

• Loans on ATMs: Your Bank offers 10 second personal loans on ATMs. Various
consumer loans and top–up of existing loans to customers through ATMs will also be
made available in the future.

• Missed Called Recharge: A simple and innovative way of recharging pre–paid

mobile phones. It requires one–time activation of the service. The mobile number gets
recharged for the selected amount, every time the customer gives a missed call to a
particular number.

• MobileBanking Liteapp: A mobile banking app, offering several basic transactions

in Hindi and English targeted at semi–urban as well as rural customers. This app caters
to the off–line internet customers.

43
4.17 INNOVATIONS IN WHOLESALE BUSINESS
• Trade on Net and E Net on Mobile for corporate customers: For cash
management, trade finance, treasury and supply chain services, dynamic digital
platforms like ‘Enet’ and ‘Trade on Net’ offer value additions at every stage of the
financial value chain. With Trade Finance Mobile, the services are now accessible
anytime, anywhere, allowing customers to authorize transactions on–the–go with
OTPbased security.

People

People are a core value of the Bank and they constitute Human Capital. Your Bank
firmly believes that a well–trained and motivated workforce is critical to achieving its
strategic goals. The Bank’s HR strategy is closely allied to its business strategy as
enunciated in the section on ‘Mission, Business Strategy and Approach to Business’.

The five broad pillars of HDFC Bank’s People strategy are:

• Resourcing and Staffing: In an industry where agility in talent acquisition and

deployment is key to geographic expansion and growth, your Bank has leveraged online
recruitment along with other channels like job ready model to develop reach and quality
of hires. It has created a strong leadership pipeline across levels by identifying the right
talent internally and grooming them for challenging roles.

This has resulted in an 85,000 plus strong work force that is well motivated, and trained
to deliver value to the customer.

• Career Management: Your Bank’s talent management processes create

opportunities for employees to develop and grow. The systematic
investment of time in career discussion with employees, competency
assessment, and intensive functional and behavioural training through the
Gurukul programmes sends a strong message of the Bank’s commitment
to employees on career progression.

44
• Employee Engagement: The Bank has nurtured an enabling
performance culture in line with its vision to be a “World Class Indian
Bank”. The performance management system aligns organization goals
with key objectives for each business which drives individuals to strive for
excellence.

In addition, your Bank strives to strengthen its connect with employees and
has created employee engagement events, conducted both at local and
national levels.

o Josh Unlimited: Pan–India Sports event conducted in 26 cities

o Stepathlon: Almost 2500 employees participated in the employee

wellness initiative

o Hunar: In–house Talent competition conducted in 9 cities

o Corporate Online Library: Inculcates reading habit. Almost 1.5 lakh

books made available

o Kwiz Kat: National Banking Quiz with participation by 200 teams

In addition to the aforementioned programmes, employees can participate

in the “HDFC Bank Voice Hunt Contest” in association with Shankar
Mahadevan Academy and “STILLS” which is an inter–corporate
photography contest.

The Bank encourages employees to participate in community and social

work. Through your Bank’s “Employee Payroll Giving” programme,
employees can choose to donate a certain amount from their salary each
month for specific causes.

45
The other flagship programmes are the Blood Donation Drive and the
Bank’s volunteering programme which involves employees imparting
financial literacy as well as relief efforts like the J&K flood relief.

“HDFC Bank Cares” is an initiative to address healthcare needs of

employees. Activities under this programme include Health mailers,
Doctor on Call, Health check–up camps and Health Talks by experts. The
Bank runs an on–site crèche at Kanjurmarg, Mumbai.

These initiatives help create a connect among employees and also helps
them forge an emotional bond with the organization. Further, a strong
feedback mechanism helps shape the programmes and aligns them with
people’s expectations and organization policies.

• Training and Development: Training plans are developed based on

analysis of training needs done in consultation with various businesses. An
extensive bouquet of training programmes are delivered covering on–
boarding, product and process training, advanced programmes and
behavioural training. The on–boarding training ensures that new
employees are trained comprehensively and equipped with necessarily
know–how, as well as functional and behavioural skills required for the
role. The product training and advanced programmes enable skill
development, regular updates and build expertise in staff. The training
methodology has evolved to application-based training to include
simulations, case studies and games. Today, over 100 courses can be
availed on e–learning platforms.

• Rewards: Merit is the driving force in the organization. The distinctive

part of the milieu of rewards both financial and non–financial is the
objectivity and transparency with which it is done. This fair and equitable

46
approach encourages staff to give off their best. The compensation policy
ensures that remuneration is not only competitive but also includes wealth
creation opportunities through long term rewards like ESOPs. The Bank
has a comprehensive compensation policy that has been articulated in line
with the Reserve Bank of India’s guidelines. The “Star Awards” is an
institutionalized recognition programme that periodically recognizes
performers. The “Tejaswi Awards” is a special category to recognize
women achievers.

47
 CHAPTER NO. 5

COMPARISON BETWEEN ICICI BANK AND HDFC BANK

5.1 ICICI BANK AND HDFC BANK

Company overview of ICICI Bank Company Overview of HDFC Bank

One of the leading private banks in India, Another leading private sector bank in India,
ICICI bank has a network of 5,418 branches HDFC bank, was among the first banks in
and 13,626 ATMs across India. The bank was India to receive approval from RBI to set up a
promoted in 1994 by ICICI ltd. But was private sector bank. The bank has a network of
formed in the year 1955 at the initiative of the 5,779 branches and 17,238 ATMs across the
world bank. The primary group companies country.
under the bank are ICICI Prudential Life
Insurance Company, ICICI Securities, ICICI The bank caters to its customers in a wide
Lombard General Insurance Company, ICICI range of services in wholesale banking,
Prudential AMC & Trust, ICICI Venture, Treasury, Retail Banking and more. The group
ICICI Direct, ICICI Foundation, ICICI Home companies under the bank are HDFC Life,
Finance Company Limited. HDFC Pension, HDFC Mutual funds, HDFC
Ergo, HDFC sales and more.
The services offered by the bank are related to
banking, financial services, corporate finance,
insurance, VC & PE, investment banking,
broking and treasury products and more.

TABLE 5.1 OVERVIEW OF ICICI BANK AND HDFC BANK

5.2 ICICI VS HDFC: STOCK COMPARISON

ROE

Return on equity is a measure of the financial performance of the company. It depicts

the return generated on shareholders' equity (shareholders' investments). The more the
ROE, the better it is. The ROE for HDFC Bank as of April 2022 is 16.61%, whereas
the ROE for ICICI bank is 12.56%.

Take a look at the five years ROE data for ICICI and HDFC:

48
 FIG 5.1 ROE OF ICICI BANK

HDFC Bank

FIG 5.2 ROE OF HDFC BANK

ROA

It is a financial ratio that depicts how profitable a company is with its total assets.
The ratio depicts how efficiently a company uses its assets to generate
revenue. The ROA for ICICI Bank as of April 2022 is 1.39%, whereas for HDFC
bank, it is 1.90%.

Take a look at the 5-year data.

ICICI Bank

49
FIG 5.3 ROA OF ICICI BANK

HDFC Bank

FIG 5.4 ROA OF HDFC BANK

P/E

The price to earnings ratio depicts the company's share price to its earnings per share.
This ratio is used to determine if the company is overvalued or undervalued. The P/E
ratio for ICICI bank as of April 2022 is 25.25, whereas for HDFC Bank, it is 20.55.

P/B

50
The P/B ratio measures the market value of the company relative to its book value. The
P/B ratio is used by value investors to identify the best investment opportunities. A ratio
under 1 is considered ideal.

The P/B ratio of HDFC bank as of April 2022 is 3.16, whereas for ICICI bank, it is
3.28.

EPS

EPS or earning per share is a value depicting the earnings in one share out of all the
outstanding shares based on the net income. The EPS for ICICI bank is 66.64, and for
HDFC Bank it is 29.82.

5 Year CAGR return

CAGR or compounded annual growth rate is a measure of an investment's annual

growth rate over time. It is used to measure and compare the past performance of
investments. The 5-year CAGR return of HDFC bank is 12.4% whereas for ICICI bank
it is 25.6%

NIM

NIM or net interest margin is the difference between the amount of money that a bank
is earning in interests and loans and the amount of money it is paying in interest on
deposits. It is one of the prime indicators of a bank's profitability and growth.

The graph below shows the NIM data for both the banks in the last 5 years.

ICICI Bank

FIG 5.5 NIM OF ICICI BANK

51
HDFC Bank

FIG 5.6 NIM OF HDFC BANK

One of the major ratio to look at while analysing banking stocks is the CASA ratio. So,
as far as it is concerned HDFC bank has a CASA ratio of 46.12% while ICICI bank has
a CASA ratio of 46.29.

5.3PROFITABILITY OF ICICI BANK AND HDFC BANK

The average 5-year net profit margin of HDFC bank is 22.22% which is
higher than ICICI Bank which has a ratio of 15.44%.
Net interest margin (NIM) reveals the amount of money that a bank is
earning in interest on loans compared to the amount it is paying in interest
on deposits. HDFC bank has maintained a higher ratio on average than
ICICI bank.
The credit deposit ratio is also known as the Loan deposit ratio is a financial
ratio that measures the value of a bank’s loans to the value of its deposits.
Both the banks have a high CDR ratio. However, the 5-year average of
ICICI is 92.5 which is more than HDFC with 90.7%.

52
5.4 CAPITAL MARKET PERFORMANCE ANALYSIS OF ICICI
BANK AND HDFC BANK
The focus of the study is capital market performance analysis of ICICI
bank and HDFC bank. Hence indicators of Economy –Industry-
Company analysis of a bank are performance of market index, banking
index and the particular banking stock price. Sensex generated average
daily return of 0.139 % over a period of ten months from 1st January,
2014 to 31st October, 2014. Banking index generated average daily
return of 0.209 % during that time period. In order to get actual status,
average daily standard deviation of Sensex as well as Banking Index
should be taken into account. Average daily standard deviation of
Sensex was 0.811% and average daily standard deviation of banking
sector was 1.362% during that time period. The coefficient of variation
of Sensex and banking index during that time was 5.82 and 6.52
respectively. Hence it can be concluded that banking sector under
performed with respect to Sensex during that period. The average daily
return of HDFC bank and ICICI bank were 0.164% and 0.208%
respectively. Simultaneously the average daily standard deviation of
HDFC bank and ICICI bank were 1.278% and 1.7272% respectively.
The coefficient of variation of HDFC bank and ICICI bank were 7.80
and 8.29 respectively. On the basis of above-mentioned information
input, it can be said that Sensex has outperformed with 11 respect to
banking index and both HDFC bank and ICICI bank have
underperformed with respect to banking index. If interbank comparison
is to be done, HDFC bank clearly outperformed ICICI bank on the basis
of coefficient of variation. The risk of stock is measured by standard
deviation or root mean square deviation. The formula of standard
deviation is

53
6X= {E[X-E(X)]2 } 1/2 = E(X2 )- E(X)2

бX = Risk of security X

E(X)2 = X2JPJ

E(X) = X JPJ

XJ = the jth investment outcome

M = the number of possible investment outcomes

PJ = the likelihood that the Jth outcome will occur

The total risk of stock can be decomposed into two broad categories which are
known as systematic and unsystematic risk. Systemic risk is the risk which is
beyond the control of any particular company or industry. Unsystematic risk is the
sector specific or company specific risk. The unsystematic risk can be reduced by
pursuing a balanced (within as well between the sectors) diversification strategy
and systemic risk can be reduced by hedging. Stock with higher unsystematic risk
should be avoided as it implies the company or the sector is facing some problem.
Total risk is measured by the variance of the stock. The systematic risk is nothing
but the product of market variance and square of the beta value of the stock. Beta
value shows the stock’s responsiveness to the market index. The beta value of stock
can be defined as covariance between the stock return and market rate of return
divided by market variance. Total risk of HDFC bank and ICICI bank were 0.016%
and 0.030% respectively which were nothing but daily variances of the respective
stocks. Beta value of HDFC bank and ICICI bank were 1.033457 and 1.571059.
The decomposition of systemic and unsystematic risk of HDFC bank were 0.007%
and 0.009% where for ICICI bank the same were 0.016% and 0.014% respectively.
Therefore, ICICI bank stock is riskier than HDFC bank stock in terms of total risk,
market risk, unsystematic risk as well beta value. Alpha value implies risk free rate
of return generated by a risky asset. If alpha value of stock is positive, the stock is
considered to underpriced and vice versa. The alpha value of HDFC bank was +
0.000198 but the same was negative for ICICI bank (0 .000106). Hence HDFC bank

54
 is considered under-priced and ICICI bank is supposed to be over priced on the
basis of alpha value.

5.5 NET PROFIT ANALYSIS

Net Profit Interpretation Net profit of ICICI Bank in pre covid period (1 April 2019 to
31March 2020) was 7930.81 crore and post covid period (1 April 2020 to 31 March
2021) it was 16192.68 crore. It is almost double in post covid period and growth rate is
104%
Net profit of HDFC Bank in pre covid period was 26257 crore and post covid period is
31116.53 crore and growth rate during the period is 18.50%. ICICI bank’s net profit
increased by 8261.87 crore and HDFC bank’s net profit increased by 4859.53 crore
during post covid period Net profit of both ICICI bank and HDFC bank during covid
period or post covid (April 20 to March 21) increased but performance of ICICI bank
are exceptional during this period compare to HDFC bank.

5.6 RETURN ANALYSIS

The study has also tried to compare Pre and post Covid period return analysis of top
two private sector banks of India (HDFC and ICICI Bank) on below financial
parameters.

5.7 OPERATING PROFIT MARGIN

Operating profit margin also known as EBIT and Return on sales is the ratio of
Operating income to net Revenue.
Operating Profit Margin = Operating Income/ Revenue
Operating Profit Margin

BANK NAME PRE COVID-POST COVID

ICICI Bank -11.38 -3.5
HDFC Bank 2.6 4.89
Interpretation
ICICI bank’s operating profit margin is -11.38 in pre covid period and post covid it is -
3.5 In both situation operating profit margin are in loss but in post covid period losses

55
are decline so I can say that operating profit of ICICI bank perform well in post covid
period. HDFC operating profit was 2.6 in pre covid period and post covid period it is
4.89 so HDFC bank shows highly positive growth in post covid period.

5.8 NET PROFIT MARGIN

Net profit margin is the percentage of revenue remaining after all operating expenses,
interest, taxes and preferred stock dividend but not common stock dividends) have been
deducted company’s total revenue. Net profit margin % = Net Profit/ Revenue
Net profit margin

BANK NAME PRE COVID-POST COVID

ICICI Bank 10.60 20.46

HDFC Bank 22.86 25.75

Interpretation

Net profit Margin of ICICI bank during pre covid period is 10.60 which is increased
post covid period up to 20.46. So, in this post covid period makes the highly positive
effect on the profitability of ICICI bank through net profit margin. Net profit margin of
HDFC bank during pre covid is 22.86 and during post covid it is 25.75. So, in the post
covid period make the slightly positive effect on the profitability on HDFC bank
through net profit margin.

5.9 RETURN ON ASSETS

Return on Assets (ROA) is a ratio computed by dividing the net income over total
assets. ROA measure the profit earned per rupee of assets and reflects how well bank
management uses the bank’s real investment resources to generate profit Return on
Assets % = Net Profit /Total Assets Return on Assets

Bank Name Pre covid Post covid

ICICI Bank .72 1.31

HDFC Bank 1.71 1.78

Interpretation

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Return on Assets of ICICI bank during pre post covid time is .72% which is increased
during post covid time up to 1.31%. So, Return on Assets makes the highly positive
effect on the profitability of ICICI bank during post covid time. Return on Assets of
HDFC bank pre post covid time is 1.71% which is increased during post covid time up
to 1.78 %. So, Return on Assets makes the slightly positive effect on the profitability
of HDFC bank during post covid time.

5.10 RETURN ON EQUITY

Return on shareholders’ investment, popularly known as return on investment or return
on equity funds is the relationship between net profits and the proprietors’ funds. Net
profit after interest and tax is divided by the shareholders’ funds. This ratio is one of
the most important ratios used for measuring the overall efficiency of a bank. The
primary objective of business is to maximize its earnings and this ratio indicates the
extent to which this primary objective of business is being achieved. This ratio is of a
great importance to the present and prospective shareholders as well as the management
of the bank.

Return on Net worth % = Profit after tax/ Equity share holder fund

Return on Equity

Bank Name Pre covid Post covid

ICICI Bank 6.99 10.97

HDFC Bank 15.35 15.27

Interpretations

Return on equity of ICICI bank during precovid time is 6.99 which is increased post
covid time up to 10.97. So, because of increase in Return on equity makes the positive
effect on ICICI bank in post covid period. Return on equity of HDFC bank during pre
covid period it is 15.35 which is slightly negative effect during post covid period up to
15.27.

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 5.11 DEPOSITS
Deposits are the primary source of funds for a bank without which it cannot operate.
This is because the bank uses the money it receives from deposits to lend to borrowers.
There are different types of deposits that contribute to the overall deposit base of a bank.
These include deposits from current accounts and savings accounts (CASA), time
deposits (certificate of deposits), fixed deposits, etc.

Given its importance, let's look at the deposit base of HDFC Bank and ICICI Bank and
how it has grown over the last five year

2017- 2018-
2019-2020 2020-2021 2021-2022
2018 2019
Deposit (in
Rs m )
HDFC Bank 78,83,751 92,25,027 1,14,62,071 1,33,37,209 1,55,80,030
ICICI Bank 58,57,961 68,13,169 80,07,845 95,99,400 1,09,13,658
Deposit
Growth (%)
HDFC Bank 17.0% 24.2% 16.4% 16.8%
ICICI Bank 16.3% 17.5% 19.9% 13.7%
TABLE 5.2 DEPOSIT

Clearly, HDFC Bank has a higher deposit base than ICICI Bank. Also, the former has
been growing its deposit base at a faster rate than the latter.

HDFC Bank's deposit base has grown at a CAGR of 14.6% over the last five years.
ICICI Bank's average deposit growth was 13.3% during the same period .

2017- 2018-
2019-2020 2020-2021 2021-2022
2018 2019
Advances (in
Rs m )
HDFC Bank 70,00,338 86,92,227 1,04,36,709 1,18,52,835 1,42,09,423
ICICI Bank 56,68,542 64,69,617 70,62,461 79,18,014 92,03,081
Advances
Growth (%)
HDFC Bank 24.2% 20.1% 13.6% 19.9%

14.1% 9.2% 12.1% 16.2%

ICICI Bank
TABLE 5.3 ADVANCES

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 Even here, HDFC Bank’s advances have grown faster than that of ICICI Bank. For the
last 5 years, HDFC Bank’s advances have grown at a CAGR of 15.2% compared to
ICICI Bank’s 10.2% CAGR during the same period.

For the financial year 2022, HDFC Bank’s advances were 91.2% of its total deposits.
ICICI Bank’s total advances stood at 84.3% of total deposits.

5.12 RETURN RATIOS

Return on equity (RoE) and return on assets (ROA) are two important ratios that
analysts check while comparing banks.
Return on equity (ROE) tells an investor how much profit a company generates on
shareholders capital. It is expressed in terms of percentage.
Return on assets (ROA) tells an investor how much profit a company generates on total
assets the company owns.
Important point to note is loans are assets for banks and ROA is calculated as a ratio of
net income to its total performing (generating interest income) assets. For banks, ROA
of 1% is a benchmark and anything beyond that is considered excellent.

ROE (%) 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

HDFC Bank 16.9% 14.5% 15.5% 15.2% 15.4%
ICICI Bank 7% 3.7% 7.8% 11.7% 14.44%
ROA (%)
HDFC Bank 1.7% 1.7% 1.7% 1.8% 1.8%
ICICI Bank 0.7% 0.3% 0.7% 1.2% 1.50%
TABLE 5.4 RETURN RATIOS

5.13 INVESTMENTS AND ACQUISITIONS

Apart from physical banking outlets, Indian banks have been focusing on developing
digital channels. This is to deliver a seamless banking experience to customers and
reduce their costs.

Banks have been investing and collaborating with fintech companies to leverage their
technological expertise and expand their reach.
HDFC Bank entered into a strategic partnership with Paytm to leverage Paytm’s digital
platform and expand its reach in rural markets where Paytm enjoys good rapport with
small merchants. This partnership will help the bank to grow its retail loan book.
HDFC Bank has also invested in Bengaluru based wealth management tech platform
Smallcase.

Meanwhile, ICICI Bank has partnered with fintech platform Niyo to offer prepaid cards
to MSME workers with the objective to rope them under the banking ecosystem.
The bank has launched “iMobile Pay” to capture a market share in the UPI payment
market which is dominated by fintech companies like Phonepe and Google Pay.

59
 In April 2022, HDFC Bank and HDFC announced a merger enabling HDFC Bank to
tap into home loan business. This will also give an edge to HDFC Bank over its peers
such as ICICI Bank and Axis Bank in terms of loans . In July 2022, RBI has approved
the merger and as per merger agreement HDFC Bank will sell home loans, and HDFC
will approve and disburse them.

5.14 VALUATION RATIOS

While comparing banks, analysts usually use two ratios to find out which is
undervalued. These two ratios are price to book value (P/BV) and price to earnings ratio
(P/E).

Price to book value (P/BV) indicates the price an investor is willing to pay for each
rupee of a company’s book value.
On the other hand, price to earnings indicates how much an investor is willing to pay
for each rupee of a company’s earnings.

A low P/BV and P/E ratio indicates the company’s shares are undervalued.

P/BV 5 year average P/BV P/E 5 year average P/E

HDFC Bank 3.4 3.5 22 22.7
ICICI Bank 3.1 2.2 21.8 28.7
TABLE 5.5 VALUATIO RATIO

HDFC Bank trades at a higher P/BV than ICICI Bank primarily because the market is
giving higher value to HDFC Bank's consistent performance. In terms of P/E both the
banks are trading in the similar range with a slight gap in valuation. Clearly, HDFC
Bank is a little overvalued here, but for the right reasons.

5.15 FUTURE PROSPECTS

A large part of India is still credit averse. A lot of people in India see loans and credit
in a bad light. As a result, India lags behind developed nations in terms of credit.
India's total outstanding loans to gross domestic product (GDP) is just 15% compared
to 80-100% of its western counterparts.
So India has got a lot to cover, and there is a lot of headroom for growth for Indian
banks. Let's look at some of the possibilities of how India may achieve higher credit
growth and financial inclusion.
To start with, as companies adopt China plus one strategy, they see India as an obvious
alternative. The Indian government too is looking at this opportunity to make India a
big manufacturing hub in the world.
Small and medium enterprises (SME) would play a crucial role in making India a
manufacturing hub. Hence, SME financing could be a great opportunity for banks to
grow their loan book.

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Also, it is expected that people currently working in the agriculture sector would shift
to the manufacturing sector once the sector starts growing. Therefore, rural markets
would present a new wave of growth for banks to ride on.
However, digital and financial literacy remains a big challenge. Banks have to tackle
this issue if they wish to leverage the untapped potential of the rural market.

Last but not least, due diligence remains a key to any bank's success. Any bank which
follows a quality due diligence framework and keeps a check on its bad loans will
emerge as a leader.

To sum up, HDFC Bank and ICICI Bank being fundamentally strong stocks and top
players in the industry, are poised to grow as the overall industry grows.

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 CHAPTER NO. 6

DATA ANALYSIS AND INTERPRETATION

6.1 CURRENT RATIOS:

YEAR HDFC ICICI

2018 0.04 0.12
2019 0.05 0.12
2020 0.04 0.09
2021 0.03 0.07
2022 0.05 0.06
TABLE 6.1 CURRENT RATIO

FIG 6.1 CURRENT RATIO OF HDFC AND ICICI BANK

Interpretation
The data you provided shows the current ratio of HDFC Bank and ICICI Bank
from 2018 to 2022. The current ratio is a financial ratio that measures a
company's ability to pay its short-term debts using its current assets. HDFC
Bank's current ratio has remained relatively stable, ranging from 0.03 to 0.05
over the years. In contrast, ICICI Bank's current ratio has declined from 0.12
in 2018 and 2019 to 0.06 in 2022, with a drop in 2020 and 2021. However, it's
important to note that a single financial ratio doesn't provide a complete picture

62
 of a company's financial health, and other financial ratios and qualitative
factors should also be considered when evaluating a company's performance.

6.2 QUICK RATIO:

YEAR HDFC ICICI

2018 17.48 20.44

2019 16.61 18.66

2020 16.62 15.76

2021 17.58 14.52

2022 18.77 14.26

TABLE 6.2 QUICK RATIO

FIG 6.2 QUICK RATIO

Interpretation
The dataset shows the quick ratio of two banks, HDFC and ICICI, over a five-
year period from 2018 to 2022. The quick ratio is a financial ratio that
measures a company's ability to meet its short-term financial obligations using
its most liquid assets. Both banks have experienced a general decrease in their

63
 quick ratios over the past five years, with some minor fluctuations. In 2018,
ICICI had a higher quick ratio than HDFC, but HDFC surpassed ICICI in 2019
and has maintained a higher quick ratio since then. Both banks' quick ratios
are above 1, indicating that they have sufficient liquid assets to meet their
short-term obligations. Based on the data, HDFC has been performing slightly
better than ICICI in terms of its quick ratio over the past few years.

6.3 DIVIDEND PER SHARE:

YEAR HDFC ICICI

2018 13.00 1.50
2019 15.00 1.00
2020 2.50 --
2021 6.50 2.00
2022 15.50 5.00
TABLE 6.3 DIVIDEND PER SHARE

FIG 6.3 DIVIDEND PER SHARE

Interpretation
The dataset shows the dividend per share for two companies, HDFC and ICICI,
over a five-year period from 2018 to 2022. Dividend per share is the portion
of a company's earnings that is distributed to its shareholders for each share of

64
 stock they hold. HDFC had a higher dividend per share than ICICI in all years
except for 2021 and 2022, while ICICI did not pay any dividends in 2020. Both
companies increased their dividend per share from 2018 to 2019, with HDFC
showing a larger increase. In 2022, both companies had their highest dividend
per share over the five-year period, with HDFC showing a larger increase than
ICICI. Overall, HDFC has generally had a higher dividend per share than
ICICI over the past few years, with some fluctuations from year to year.

6.4 NET OPERATING PROFIT PER SHARE:

YEAR HDFC ICICI

2018 309.20 85.51
2019 363.43 98.35
2020 209.39 115.56
2021 219.23 114.40
2022 230.37 124.30
TABLE 6.4 NET PROFIT PER SHARE

FIG 6.4 NET PROFIT PER SHARE

Interpretation
The dataset shows the net operating profit per share for two companies, HDFC
and ICICI, over a five-year period from 2018 to 2022. Net operating profit per

65
 share is a financial metric that indicates how much profit a company is making
per share of its stock outstanding. HDFC had a higher net operating profit per
share than ICICI in all years. Both companies experienced an increase in net
operating profit per share from 2018 to 2019, with HDFC showing a larger
increase. Both companies experienced a decrease in net operating profit per
share from 2019 to 2020, with HDFC again showing a larger decrease. In 2021
and 2022, both companies experienced a slight increase in net operating profit
per share, with HDFC once again showing a slightly larger increase. Overall,
HDFC has generally had a higher net operating profit per share than ICICI
over the past few years, with some fluctuations from year to year.

6.5 RETURN ON NET WORTH:

YEAR HDFC ICICI

2018 16.45 6.63
2019 14.12 3.19
2020 15.35 6.99
2021 15.27 11.21
2022 15.39 13.97
TABLE 6.5 RETURN ON NET WORTH

FIG 6.5 RETURN ON NET WORT

66
 Interpretation
The provided data shows the return on net worth (RoNW) for two Indian
banks, HDFC and ICICI, from 2018 to 2022. HDFC has had a consistently
higher RoNW than ICICI over the past five years, although its RoNW
decreased slightly in subsequent years. In contrast, ICICI's RoNW has been
more volatile, with a significant drop in 2019 but a subsequent rebound and
steady increase in the following years. While both banks have experienced
some fluctuation in their RoNW over the past five years, HDFC has generally
outperformed ICICI in this metric. However, it's important to consider other
metrics when evaluating their overall financial health.

6.6 NET INTEREST INCOME / TOTAL FUNDS:

YEAR HDFC ICICI

2018 4.16 2.80
2019 4.18 2.94
2020 4.05 3.24
2021 3.96 3.36
2022 3.77 3.60
TABLE 6.6 NII/ TF

TABLE 6.5 RETURN ON NET WORTH

Interpretation

67
 The provided data represents the net interest income (NII) or total funds ratio
for HDFC and ICICI, two Indian banks, from 2018 to 2022. The data shows
that both banks had a similar NII or total funds ratio in 2018, with HDFC at
4.16% and ICICI at 2.80%. However, HDFC's NII or total funds ratio has
remained relatively stable over the following years, ranging between 3.77% to
4.18%, while ICICI's ratio has increased, reaching 3.60% in 2022. Overall,
HDFC had a slightly higher NII to total funds ratio than ICICI during the five-
year period, but the trend indicates that ICICI is catching up. It's important to
note that NII or total funds ratio is just one metric used to evaluate the financial
performance of banks, and other metrics, such as net interest margin and asset
quality, should also be considered for a comprehensive analysis.

6.7 LOANS TURNOVER:

YEARS HDFC ICICI

2018 0.13 0.11

2019 0.13 0.12

2020 0.13 0.12

2021 0.11 0.11

2022 0.10 0.11

TABLE 6.7 LOANS TURNOVER

FIG 6.7 LOANS TURNOVER

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 Interpretation
The provided data represents the loan turnover ratio for two Indian banks,
HDFC and ICICI, from 2018 to 2022. The data indicates that both banks had
a similar loan turnover ratio in 2018, with HDFC at 0.13 and ICICI at 0.11.
The loan turnover ratio remained relatively stable for both banks over the
following years, with HDFC's ratio ranging between 0.10 to 0.13, while
ICICI's ratio ranged between 0.11 to 0.12. In 2021, both banks had a loan
turnover ratio of 0.11, and in 2022, HDFC's ratio decreased to 0.10, while
ICICI's ratio remained at 0.11. Overall, both banks had a relatively stable loan
turnover ratio during the five-year period, with HDFC having a slightly higher
ratio than ICICI in most years. It's important to note that the loan turnover ratio
is just one metric used to evaluate the financial performance of banks, and
other metrics, such as net interest margin, asset quality, and capital adequacy,
should also be considered for a comprehensive analysis.

6.8 ASSET TURNOVER RATIO:

YEARS HDFC ICICI
2018 0.09 0.07
2019 0.09 0.07
2020 0.09 0.08
2021 0.08 0.07
2022 0.07 0.07
TABLE 6.8 ASSSET TURNOVER RATIO

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FIG 6.8 ASSSET TURNOVER RATIO
Interpretation
The provided data represents the asset turnover ratio for two Indian banks,
HDFC and ICICI, from 2018 to 2022. The data indicates that both banks had
a similar asset turnover ratio in 2018, with HDFC at 0.09 and ICICI at 0.07.
The asset turnover ratio remained relatively stable for both banks over the
following years, with HDFC's ratio ranging between 0.07 to 0.09, while
ICICI's ratio ranged between 0.07 to 0.08. In 2021, HDFC's asset turnover ratio
decreased to 0.08, while ICICI's remained at 0.07. In 2022, both banks had an
asset turnover ratio of 0.07. Overall, both banks had a relatively stable asset
turnover ratio during the five-year period, with HDFC having a slightly higher
ratio than ICICI in most years. It's important to note that the asset turnover
ratio is just one metric used to evaluate the financial performance of banks,
and other metrics, such as return on assets, net interest margin, and capital
adequacy, should also be considered for a comprehensive analysis.

70
6.9 OTHER INCOME / TOTAL INCOME:

YEARS HDFC ICICI

2018 15.94 24.07
2019 15.12 18.63
2020 16.85 18.03
2021 17.26 19.34
2022 18.76 17.65
TABLE 6.9 OTHER INCOME

FIG 6.9 OTHER INCOME

Interpretation
The provided data represents the ratio of other income or total income for two
Indian banks, HDFC and ICICI, from 2018 to 2022. The data indicates that
both banks had a different ratio of other income to total income in 2018, with
HDFC at 15.94% and ICICI at 24.07%. Over the following years, HDFC's ratio
ranged from 15.12% to 18.76%, while ICICI's ratio ranged from 17.65% to
24.07%. In 2021, both banks had a higher ratio of other income or total income,
with HDFC at 17.26% and ICICI at 19.34%. However, in 2022, HDFC's ratio
increased to 18.76%, while ICICI's ratio decreased to 17.65%. Overall, the data

71
 suggests that HDFC had a more stable ratio of other income or total income
compared to ICICI, but ICICI had a higher ratio in some years. It's important
to note that the ratio of other income or total income is just one metric used to
evaluate the financial performance of banks, and other metrics, such as net
interest margin, asset quality, and capital adequacy, should also be considered
for a comprehensive analysis.

6.10 CAPITAL ADEQUACY RATIO:

YEARS HDFC ICICI
2018 14.82 18.42
2019 17.11 16.89
2020 18.52 16.11

2021 18.79 19.12

2022 18.90 19.16
TABLE 6.10 CAPITAL ADEQUACY RATIO

FIG 6.10 CAPITAL ADEQUACY RATIO

Interpretation
The data provided represents the capital adequacy ratio (CAR) for two Indian
banks, HDFC and ICICI, from 2018 to 2022. CAR is a measure of a bank's

72
 capital to its risk, indicating the ability of the bank to absorb potential losses.
The data shows that both banks had a different CAR in 2018, with HDFC at
14.82% and ICICI at 18.42%. Over the next few years, HDFC's CAR increased
from 17.11% to 18.90%, while ICICI's CAR ranged from 16.11% to 19.16%.
In 2021 and 2022, both banks had a CAR of above 18%. The data suggests
that both HDFC and ICICI maintained a good level of capital adequacy during
the period, which is a positive sign for their financial stability and ability to
withstand adverse economic conditions. However, it's important to note that
the minimum CAR requirement may vary by country, and different regulators
may have different requirements for different types of banks. Therefore, it's
necessary to compare the CAR of banks with their respective regulatory
requirements to fully evaluate their financial health.

6.11 CREDIT DEPOSIT RATIO:

YEAR HDFC ICICI

2018 84.68 92.92

2019 86.32 90.54

2020 87.56 86.52

2021 85.66 80.95

2022 86.43 79.75

TABLE 6.11 CREDIT DEPOSIT RATIO

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FIG 6.11 CREDIT DEPOSIT RATIO
Interpretation
The data provided shows the credit deposit ratio (CDR) for two Indian banks,
HDFC and ICICI, from 2018 to 2022. The CDR is a measure of a bank's ability
to lend money from the deposits it has received. The data suggests that HDFC
had a higher CDR than ICICI in 2018 and 2019, with HDFC's CDR at 84.68%
and 86.32% respectively, while ICICI's CDR was at 92.92% and 90.54%
respectively. However, from 2020 to 2022, the CDR for both banks decreased,
with HDFC's CDR decreasing from 87.56% to 86.43%, and ICICI's CDR
decreasing from 86.52% to 79.75%. The decreasing trend in the CDR could
indicate a slowdown in loan growth compared to deposit growth, which may
have resulted in lower demand for credit. A low CDR could also imply that
the bank has excess liquidity and is not effectively utilizing its funds to earn
interest income. Overall, the CDR data suggests that both HDFC and ICICI
have experienced some changes in their lending and deposit-taking activities
over the past few years.

74
6.12 INVESTMENT DEPOSIT RATIO:

YEAR HDFC ICICI

2018 31.88 34.68
2019 31.12 33.84
2020 32.96 32.11
2021 33.66 31.16
2022 31.07 29.62
TABLE 6.12 INVESTMENT DEPOSIT RATIO

FIG 6.12 INVESTMENT DEPOSIT RATIO

Interpretation
The investment deposit ratio (IDR) measures the amount of money a bank
invests from the deposits it has received. The data provided shows the IDR for
two Indian banks, HDFC and ICICI, from 2018 to 2022. From the data, it can
be seen that HDFC had a higher IDR than ICICI in 2018 and 2019, with
HDFC's IDR at 31.88% and 31.12% respectively, while ICICI's IDR was at
34.68% and 33.84% respectively. However, from 2020 to 2022, the IDR for
both banks decreased, with HDFC's IDR decreasing from 32.96% to 31.07%,

75
 and ICICI's IDR decreasing from 32.11% to 29.62%. A decrease in the IDR
could indicate that the bank is investing less of its deposits, which may result
in lower returns on investments. It could also suggest that banks are focusing
more on maintaining liquidity and reducing investment risks. Overall, the data
suggests that both HDFC and ICICI have made some changes to their
investment strategies over the past few years in response to market conditions
and other factors.

6.13 CASH DEPOSIT RATIO:

YEAR HDFC ICICI

2018 9.95 6.17

2019 8.85 5.85

2020 5.75 5.14

2021 6.83 4.77

2022 7.85 5.32

TABLE 6.13 CASH DEPOSIT RATIO

FIG 6.13 CASH DEPOSIT RATIO

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Interpretation
The data provided represents the cash deposit ratio for two banks, HDFC and
ICICI, for the years 2018 to 2022. The cash deposit ratio is the ratio of cash
deposits held by the bank to the total deposits received. In 2018, HDFC had a
cash deposit ratio of 9.95% while ICICI had a ratio of 6.17%. In 2019, HDFC's
ratio decreased to 8.85% while ICICI's decreased to 5.85%. In 2020, HDFC's
ratio decreased further to 5.75% while ICICI's decreased to 5.14%. In 2021,
HDFC's ratio increased to 6.83% while ICICI's decreased to 4.77%. Finally,
in 2022, HDFC's ratio increased to 7.85% while ICICI's increased to 5.32%.

6.14 FINANCIAL CHARGES COVERAGE RATIO:

YEARS HDFC ICICI

2018 1.84 1.80
2019 1.81 1.67
2020 1.85 1.70
2021 2.05 1.93
2022 2.18 2.04
TABLE 6.14 FCCR

FIG 6.14 FCCR

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Interpretation
The data provided represents the financial charges coverage ratio for two
banks, HDFC and ICICI, for the years 2018 to 2022. The financial charges
coverage ratio is a measure of a company's ability to cover its financial charges
(such as interest expenses) with its operating income. In 2018, HDFC had a
financial charges coverage ratio of 1.84 times while ICICI had a ratio of 1.80
times. In 2019, HDFC's ratio decreased slightly to 1.81 times while ICICI's
decreased to 1.67 times. In 2020, both banks' ratios increased, with HDFC at
1.85 times and ICICI at 1.70 times. In 2021, both banks' ratios increased
further, with HDFC at 2.05 times and ICICI at 1.93 times. Finally, in 2022,
both banks' ratios continued to increase, with HDFC at 2.18 times and ICICI
at 2.04 times. Overall, the data suggests that both banks were able to cover
their financial charges with their operating income, and both experienced an
improvement in their financial charges coverage ratios over the years.
6.15 EARNING RETENTION RATIO:

YEARS HDFC ICICI

2018 100.00 78.50
2019 80.78 71.31
2020 75.10 100.00
2021 100.00 100.00
2022 100.00 94.07
TABLE 6.15 EARNING RETENTION RATIO

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FIG 6.15 EARNING RETENTION RATIO

Interpretation
The data provided represents the earning retention ratio for two banks, HDFC
and ICICI, for the years 2018 to 2022. The earning retention ratio is a measure
of the amount of earnings retained by a company for reinvestment in the
business rather than being paid out as dividends to shareholders. In 2018,
HDFC had an earning retention ratio of 100% while ICICI had a ratio of
78.50%. In 2019, HDFC's ratio decreased to 80.78% while ICICI's decreased
to 71.31%. In 2020, HDFC's ratio decreased further to 75.10% while ICICI's
ratio increased to 100%. In 2021, both banks had an earning retention ratio of
100%. Finally, in 2022, HDFC's ratio increased back to 100% while ICICI's
decreased to 94.07%. Overall, the data suggests that both banks retained a
significant portion of their earnings for reinvestment in the business, with
HDFC having a higher earning retention ratio than ICICI in most years.

79
6.16 CASH EARNING RETENTION RATIO:

YEARS HDFC ICICI

2018 100.00 80.72
2019 81.77 76.69
2020 76.18 100.00
2021 100.00 100.00
2022 100.00 94.35
TABLE 6.16 CERR

FIG 6.16 CERR

Interpretation
The data provided represents the cash earning retention ratio for two banks,
HDFC and ICICI, for the years 2018 to 2022. The cash earning retention ratio
is a measure of the amount of cash generated by a company that is retained for
reinvestment in the business rather than being paid out as dividends to
shareholders. In 2018, HDFC had a cash earning retention ratio of 100% while
ICICI had a ratio of 80.72%. In 2019, HDFC's ratio decreased to 81.77% while
ICICI's decreased to 76.69%. In 2020, HDFC's ratio decreased further to
76.18% while ICICI's ratio increased to 100%. In 2021, both banks had a cash
earning retention ratio of 100%. Finally, in 2022, HDFC's ratio increased back

80
to 100% while ICICI's decreased to 94.35%. Overall, the data suggests that
both banks retained a significant portion of their cash earnings for
reinvestment in the business, with HDFC having a higher cash earning
retention ratio than ICICI in most years.
6.17 EARNINGS PER SHARE:

YEARS HDFC ICICI

2018 65.88 8.70
2019 49.68 -25.28
2020 25.74 -9.46
2021 27.96 -0.03
2022 39.49 21.15
TABLE 6.17 EARNING PER SHARE

FIG 6.17 EARNING PER SHARE

Interpretation

The data provided represents the earnings per share (EPS) for two banks,
HDFC and ICICI, for the years 2018 to 2022. EPS is a financial ratio that

81
represents the amount of a company's earnings that can be attributed to each
outstanding share of its common stock. In 2018, HDFC had an EPS of 65.88
while ICICI had an EPS of 8.70. In 2019, HDFC's EPS decreased to 49.68
while ICICI's EPS decreased to -25.28, indicating a loss per share. In 2020,
HDFC's EPS decreased further to 25.74 while ICICI's EPS improved to -9.46.
In 2021, both banks had a positive EPS, with HDFC at 27.96 and ICICI at -
0.03. Finally, in 2022, HDFC's EPS increased to 39.49 while ICICI's EPS
improved significantly to 21.15. Overall, the data suggests that HDFC had a
consistently higher EPS than ICICI, indicating that it generated more earnings
per outstanding share of common stock.

82
QUESTIONNAIRE

1. AGE

AGE COUNT PERCENTAGE

%

18-20 10 20 %
21-30 25 50%
31-40 10 20%
41-50 3 6%
50&above 2 4%
TOTAL 50 100%
TABLE 7.1 AGE

Percentage %

6% 4%
20%
18-20
20% 21-30
31-40
41-50
50&above

50%

FIG 7.1 AGE

INTERPRETATION
This question helps to understand the age distribution of the respondents. The
majority of respondents fell into the 21-30 age range, which is a common
demographic for surveys.

83
 2. GENDER

Gender Count Percentage

Male 25 50%

Female 25 50%

Total 50 100%

TABLE 7.2 GENDER

pecentage %

Male
Female
50% 50%

FIG 7.2 GENDER

INTERPRETATION
This question helps to understand the gender distribution of the respondents. In this
case, the majority of respondents identified as female.

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 3. OCCUPATION

OCCUPATION COUNT PERCENTAGE

%

Student 10 20%
Self Employed 12 24%
Employed 23 46%
Business 5 10%
total 100%

TABLE 7.3 OCCUPATION

Percentage %

10%
20%
Student
Self Employed
Employed
46% 24%
Business

FIG 7.3 OCCUPATION

INTERPRETATION

This table shows the occupation of the respondents. The majority of the respondents
are employed (46%), followed by self-employed (24%) and students (20%). The
remaining 10% are engaged in business.

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 4. EDUCATIONAL STATUS

EDUCATIONAL COUNT PERCENTAGE

STATUS %

Schooling 8 16%

Graduate 25 50%

Post Graduate 13 26%

Masters 4 8%

Total 50 100%

TABLE 7.4 EDUCATIONAL STATUS

Percentage %

8% Schooling
Graduate
25%
50% Post Graduate
Masters
13% Total
4%

FIG 7.4 EDUCATIONAL STATUS

INTERPRETATION

This table shows the educational status of the respondents. The majority of the
respondents are graduates (50%), followed by post-graduates (26%). 16% of the
respondents have completed their schooling, while the remaining 8% have a master's
degree.

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5. ANNUAL INCOME

ANNUAL COUNT PERCENTAGE

INCOME %

100000- 15 30%
200000
200000- 18 36%
300000
300000- 10 20%
400000
400000& 7 14%
above
Total 50 100%

TABLE 7.5 ANNUAL INCOME

Percentage%

14%
30% 100000-200000
200000-300000
20%
300000-400000
400000& above

36%

FIG 7.5 ANNUAL INCOME

INTERPRETATION

This table shows the annual income of the respondents. The majority of the
respondents (36%) have an annual income between 200,000-300,000, followed
by those with an annual income of 100,000-200,000 (30%). 20% of the
respondents have an annual income between 300,000-400,000, while 14% have
an annual income of 400,000 and above.

87
 6. WHAT IS THE PURPOSE OF YOUR STUDY?

PURPOSE COUNT PERCENTAGE

%

To compare the financial 30 60%

performance of the two banks
To determine which bank is more 10 20%
profitable
To identify the strengths and 10 20%
weaknesses of each bank
Total 50 100%

TABLE 7.6 FINANCIAL PERFORMANCE

Percentage %

20% To compare the financial

performance of the two banks
To determine which bank is more
profitable
20% 60%
To identify the strengths and
weaknesses of each bank

FIG 7.6 FINANCIAL PERFORMANCE

INTERPRETATION

In this table shows the financial performance of hdfc bank and icici bank . According
to the study 60% of the respondents want to compare the financial performance of the
banks then 20 % wants to determine which bank is more profitable and remaining 20%
wants to know the strengths and weaknesses of each bank .

7. WHICH RATIO WOULD YOU LIKE TO ANALYZE?

88
 RATIO COUNT PERCENTAGE
%

Return on Equity (ROE) 20 40%

Return on Assets (ROA) 15 30%

Net Interest Margin (NIM) 5 10%

Non-Performing Assets (NPA) 5 10%

Capital Adequacy Ratio 5 10%

(CAR)
Total 50 100%

TABLE 7.7 RATIO ANALYZE

Percentage %

10%
10% Return on Equity (ROE)
40% Return on Assets (ROA)
10% Net Interest Margin (NIM)
Non-Performing Assets (NPA)
Capital Adequacy Ratio (CAR)

30%

FIG 7.7 RATIO ANALYZE

INTERPRETATION

In this table the maximum respondents wants to analyze the ROE – RETURN ON
EQUITY (40%) then RETURN ON ASSETS that is 30% , then NET INTEREST
MARGIN , NON PERFORMNIG ASSETS AND CAPITAL ADEQUENCY RATIO
IS 10% .

89
 8. WHAT IS THE CURRENT ROE OF HDFC BANK AND ICICI BANK?

COMPARISON COUNT PERCENTAGE

%

HDFC Bank's ROE is 18 36%

higher
ICICI Bank's ROE is 10 20%
higher
Both banks have the same 22 44%
ROE
Total 50 100%

TABLE 7.8 ROE

ROE Comparison

36%
HDFC Bank's ROE is higher
44%
ICICI Bank's ROE is higher
Both banks have the same ROE

20%

FIG 7.8 ROE

INTERPRETATION

The given comparison represents a survey of 50 respondents on the relative Return on

Equity (ROE) of HDFC Bank and ICICI Bank. Out of the total respondents, 18 (36%)
have opined that HDFC Bank has a higher ROE, while 10 (20%) have opined that ICICI
Bank has a higher ROE. On the other hand, 22 (44%) respondents have opined that both
banks have the same ROE.

90
 9. WHAT IS THE CURRENT ROA OF HDFC BANK AND ICICI BANK?

COMPARISON COUNT PERCENTAGE

%

HDFC Bank's ROA is 12 24%

higher
ICICI Bank's ROA is 8 16%
higher
Both banks have the same 30 60%
ROA
Total 50 100%

TABLE 7.9 ROA

ROA Comparison

24%

HDFC Bank's ROA is higher

ICICI Bank's ROA is higher

60% Both banks have the same ROA

16%

FIG 7.9 ROA

INTERPRETATION

It can be interpreted that the respondents are also divided in their opinion on the relative
ROA of the two banks, with a slightly higher percentage of respondents (24%)
considering HDFC Bank to have a higher ROA. The survey suggests that a majority of
the respondents (60%) perceive that both banks have a relatively similar ROA.

91
 10.WHICH BANK HAS A HIGHER NIM?

COMPARISON COUNT PERCENTAGE

%

HDFC Bank 20 40%

ICICI Bank 15 30%

OTHERS 15 30%

Total 50 100%

TABLE 7.10 NIM

NIM COMPARISON

30%
40% HDFC Bank
ICICI Bank
OTHERS

30%

FIG 7.10 NIM

INTERPRETATION

The given comparison represents a survey of 50 respondents on their preference among

HDFC Bank, ICICI Bank, and other banks. Out of the total respondents, 20 (40%) have
preferred HDFC Bank, while 15 (30%) have preferred ICICI Bank. The remaining 15
(30%) respondents have preferred other banks.

92
 11. WHICH BANK HAS A LOWER NPA RATIO?

COMPARISON COUNT PERCENTAGE

%

HDFC Bank 30 60%

ICICI Bank 10 20%

OTHERS 10 20%

TOTAL 50 100%

TABLE 7.11 NPA

NPA Comparison Table:

20%

HDFC Bank
ICICI Bank
20% 60% OTHERS

FIG 7.11 NPA

INTERPRETATION

It can be interpreted that HDFC Bank has the highest level of familiarity among the
surveyed respondents, with 60% of them indicating that they are familiar with the bank.
ICICI Bank has the second-highest level of familiarity, with 20% of respondents
indicating that they are familiar with it. The remaining 20% of respondents have
indicated that they are familiar with other banks.

93
 12. WHICH BANK HAS A HIGHER CAR?
COMPARISON COUNT PERCENTAGE
%

HDFC Bank 10 20%

ICICI Bank 20 40%

OTHERS 20 40%

TOTAL 100%

TABLE 7.12 HIGHER CAR

CAR COMPARISON

20%

40% HDFC Bank

ICICI Bank
OTHERS

40%

FIG 7.12 HIGHER CAR

INTERPRETATION

The given comparison represents a survey of 50 respondents on their preferred mode

of banking among HDFC Bank, ICICI Bank, and other banks. Out of the total
respondents, 10 (20%) have preferred HDFC Bank for banking services, while 20
(40%) have preferred ICICI Bank. The remaining 20 (40%) respondents have preferred
other banks.

94
 13. BASED ON THE RATIOS ANALYSED, WHICH BANK DO YOU
THINK IS PERFORMING BETTER OVERALL?

PERFORMANCE COUNT PERCEN

TAGE %

HDFC Bank is performing 25 50%

better overall
ICICI Bank is performing better 10 20%
overall
Both banks are performing 10 20%
equally well
It's difficult to determine 5 10%
without analysing other factors
TOTAL 50 100%

TABLE 7.13 BANK PERFORMANCE

PERCENTAGE %
HDFC Bank is performing
better overall
10%
ICICI Bank is performing
better overall
20%
50%
Both banks are performing
equally well
20%
It's difficult to determine
without analyzing other
factors

FIG 7.13 BANK PERFORMANCE

INTERPRETATION

It can be interpreted that the surveyed respondents are divided in their opinion on the
overall performance of the two banks, with a slightly higher percentage of respondents
(50%) considering HDFC Bank to be performing better overall. However, a significant
percentage of respondents (20%) have opined that ICICI Bank is performing better
overall, and an equal percentage of respondents (20%) have opined that both banks are
performing equally well. A smaller percentage of respondents (10%) have opined that
it's difficult to determine without analysing other factors.

95
 14. WHICH BANK HAS A HIGHER CURRENT RATIO?
COUNT PERCENTAGE
%

HDFC Bank 19 38%

ICICI Bank 14 28%
Both have the same 12 24%
current ratio
Not sure 5 10%
TOTL 50 100%
TABLE 7.14 HIGHER CURRENT RATIO

COUNT

10%

HDFC Bank
38%
24% ICICI Bank
Both have the same current ratio
Not sure

28%

FIG 7.14 HIGHER CURRENT RATIO

INTERPRETATION

Based on the responses, it seems that there is some uncertainty regarding which bank
has a higher current ratio. Although HDFC Bank received the most responses with 19,
ICICI Bank received 14 responses indicating that it may have a higher current ratio.
However, 12 responses suggest that both banks have the same current ratio. This
indicates that there is some ambiguity regarding the current ratio of the two banks and
further analysis may be needed to determine which bank has a higher current ratio.

96
 15. WHICH BANK WOULD YOU LIKE TO RATE?

COUNT PERCENTAGE %

HDFC Bank 21 58%

ICICI Bank 29 42%

TABLE 7.15

COUNT

42% HDFC Bank

58% ICICI Bank

FIG 7.15

INTERPRETATION

The responses suggest that there is a slightly higher interest in rating HDFC Bank as it
received 29 responses compared to ICICI Bank which received 21 responses. This may
be due to various factors such as popularity, customer experience, or market
performance. However, it is important to note that these responses are based on a
limited sample size and may not be representative of the general population. Further
research would be required to draw a more definitive conclusion.

97
CHAPTER NO. 7

CONCLUSION, SUGGESTION AND FINDINGS

7.1 CONCLUSION

i. As stated, earlier analysis and interpretation is done on

the two selected banks i.e. HDFC Bank and ICICI
Bank. On the basis of their ratios.
ii. After analysing the above ratio, it is clear that position
of HDFC is better in comparison to ICICI.
iii. As we saw in the above tables and graph that the ratios
of HDFC banks are better than that of ICICI bank.
iv. But in case of earnings per share the ratio of HDFC
bank is fluctuating while the ratio of ICICI bank was in
negative for three consecutive years.
v. So from the above explanation we can come to a
conclusion that the bank that shows better financial
performance is HDFC Bank compared to ICICI Bank.

98
7.2 SUGGESTION:
Based on the data analysis and findings, the following
recommendations have been made:
1. During the study period, HDFC bank is doing well and is not
suffering from lower profitability, while ICICI bank should
increase its services to improve its profitability.
2. All the companies should manage their debts in a way that
reduces its negative impact on profitability.
3. ICICI bank should be investigated and brought proper
attention to management as soon as possible for their
increase’s operational efficiency.
4. ICICI bank should provide good services so that investors
can invest their money into this bank and makes financial
position stronger.
5. ICICI should increase their earnings per share because it
shows its position in the market.

99
7.3 FINDINGS:
The current ratio of HDFC Bank has remained relatively stable, while the
current ratio of ICICI Bank has declined.

Here both the banks have quick ratios above 1, indicating that they have
sufficient liquid assets to meet their short-term obligations.

HDFC had a higher dividend per share than ICICI in all years except for 2021
and 2022, while ICICI did not pay any dividends in 2020.

HDFC had a higher net operating profit per share than ICICI over the past 5
years, with some fluctuations from year to year.

Both the banks have experienced some fluctuation in their return on net worth
over the past 5 years, HDFC generally outperformed ICICI in the metric.

HDFC had a slightly higher NII to total funds ratio than ICICI during the five-
year period, but the trend indicates that ICICI is catching up.

Both banks had a relatively stable loan turnover ratio during the five-year
period, with HDFC having a slightly higher ratio than ICICI in most years.

The data indicates that both banks had a similar asset turnover ratio in 2018,
with HDFC at 0.09 and ICICI at 0.07.

The data suggests that HDFC had a more stable ratio of other income or total
income compared to ICICI, but ICICI had a higher ratio in some years.

The data suggests that both HDFC and ICICI maintained a good level of capital
adequacy during the period, which is a positive sign for their financial stability
and ability to withstand adverse economic conditions.
The findings are that HDFC bank have a good and a stable ratio, while the ratio
of ICICI bank is not stable.

100
 7.4 BIBLIOGRAPHY

● www.wikipedia.com
● https://corporatefinanceinstitute.com/resources/accounting/ratio-analysis/
● https://en.m.wikipedia.org/wiki/ICICI_Bank
● https://en.m.wikipedia.org/wiki/HDFC_Bank
● https://www.moneycontrol.com/stocks/company_info/print_main.php

● https://insider.finology.in/investing/hdfc-vs-icici

JOURNALS

• Ignited Minds Journals

• Bansal, Rohit. 2014. “A Comparative Analysis of the Financial Ratios of

Selected Banks in the India for the Period of 2011-2014.” Research Journal of
Finance and Accounting

• Chintala, B., & Kumar, G. (2016). A Comparative Study on Financial

Performance of Selected Public & Private Sector Banks in India. Journal of
Commerce & Trade

• Koley, J. (n.d.). Analysis of Financial Position and Performance of Public and

Private Sector Banks in India: A Comparative Study on ICICI and HDFC Bank.
14.

BOOKS
• Chidambaram R.M and Alamelu (1994): “Profitability in Banks – A matter of
Survival, The Banker
• Sanjay J. Bhayani (2006): “Performance of the New Indian Private Banks – A
Comparative Study,Banking
• K. SRINIVAS (2010): “Pre and Post Merger Financial Performance of Merged
Banks- A Select Study”,Indian Journal of Finance, May 2010

101
ANNEXURE
RATIOS

1. Current ratio
2. Quick ratio
3. Dividend per share
4. Net operating profit per share
5. Return on net worth
6. Net interest income / total funds
7. Loans turnover
8. Asset turnover ratio
9. Other income / total income
10. Capital adequacy ratio
11. Credit deposit ratio
12. Investment deposit ratio
13. Cash deposit ratio
14. Financial charges coverage ratio
15. Earning retention ratio
16. Cash earning retention ratio
17. Earnings per share

102
1. AGE
a. 18 -20
b. 21 -30
c. 31 -40
d. 41- 50
e. 50 & above
2. GENDER
a. Male
b. Female
3. OCCUPATION
a. Student
b. Self Employed
c. Employed
D. Business
4. EDUCATIONAL STATUS
a. Schooling
b. Graduate
c. Post Graduate
d. Masters
5. ANNUAL INCOME
a. 100000-200000
b. 200000-300000
c. 300000-400000
d. 400000& above
6. What is the purpose of your study?
a. To compare the financial performance of the two banks
b. To determine which bank is more profitable
c. To identify the strengths and weaknesses of each bank
7 Which ratio would you like to analyze?
a. Return on Equity (ROE)
b. Return on Assets (ROA)
c. Net Interest Margin (NIM)
d. Non-Performing Assets (NPA)
e. Capital Adequacy Ratio (CAR)
8 What is the current ROE of HDFC Bank and ICICI Bank?
a. HDFC Bank's ROE is higher
b. ICICI Bank's ROE is higher
c. Both banks have the same ROE
9 What is the current ROA of HDFC Bank and ICICI Bank?
a. HDFC Bank's ROA is higher
b. ICICI Bank's ROA is higher

103
 c. Both banks have the same ROA
10 Which bank has a higher NIM?
a. HDFC Bank
b. ICICI Bank
11 Which bank has a lower NPA ratio?
a. HDFC Bank
b. ICICI Bank
12 Which bank has a higher CAR?
a. HDFC Bank
b. ICICI Bank

13 Based on the ratios analysed, which bank do you think is performing better
overall?
a. HDFC Bank
b. ICICI Bank
c. Both banks are performing equally well
d. It is difficult to determine without analyzing other factors

14. Which bank has a higher current ratio?

a) HDFC Bank
b) ICICI Bank
c) Both have the same current ratio
d) Not sure

15. Which bank would you like to rate?

a. HDFC Bank
b. ICICI Bank

104
PLAGIARISM REPORT

105
RATIO OF HDFC BANK:

106
RATIO OF ICICI BANK:

107
108