priject

An appraisal on the overall financial performance of Indian bank

ANTUVANE S11397108

Introduction

• In any bank, the two important financial statements are

the Balance Sheet and Profit & Loss Account of the

business.

• When these statements of the last few year of any

organization are studied and analyzed, significant

conclusions may be arrived.

Indian banking industry

Profile of Indian bank

• The bank was established on 15th of August, 1907

• Bank was nationalized in 19th July of the year 1969

• Lead bank for nine districts

• A leader in rural development

• Pioneer in introducing the latest technology

• Three subsidiary companies

• 1958 branches all over India

OBJECTIVE

• To analyze the profitability, solvency and liquidity of the bank.

• To analyze and compare the financial statements of Indian

bank for a period of four years from 2009-2012

• To study the various financial activities and analyze the

financial performance of Indian bank

LIMITATIONS

• The present study aims to evaluate the financial performance

of the bank only for the past four year’s performance with the

help of financial statement.

• To analyze the performance of the bank with restricted data

available to public

DATA ANALYSES

Current ratio

2009 2010 2011 20120

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

1.79 1.771.6

1.29

•Current ratio is the relationship between the total current asset and current liabilities

•The ideal current ratio for a bank is 1.33: 1

Net profit ratio

2009 2010 2011 201214

14.5

15

15.5

16

16.5

17

17.5

18

18.5

19

15.82

17.21

18.2518.57

•The net profit percentage is the ratio of after-tax profits to net sales.

2009 2010 2011 20120

5

10

15

20

25

30

3526.13

30.41 31.22 31.72

Operating profit ratio

•The operating profit ratio is an indicator of banks earning power from its

current operations

•Indian bank shows a healthy sign based on the operating profit ratio

2009 2010 2011 20123.3

3.4

3.5

3.6

3.7

3.8

3.9

3.54

3.713.75

3.9

Net interest margin

Net interest margin (NIM) is a measure of the difference between the interest income generated by banks and the amount of interest paid out to their lenders

2009 2010 2011 201212

12.212.412.612.8

1313.213.413.613.8

14

13.98

12.71

13.5613.47

Capital adequacy ratio

•Capital adequacy ratio is the measure of a bank's financial strength

• It is also called CRAR-Capital to Risk-weighted Assets Ratio.

2009 2010 2011 201205

101520253035404550

48.56

38.64 36.92 38.71

Cost to income ratio

•Cost-to-income ratio equals a bank's operating costs divided by its operating

income

•The cost-to-income ratio shows the efficiency of a firm in minimizing costs

while increasing profits

2009 2010 2011 20120

0.5

1

1.5

2 1.62 1.671.53

1.31

Return on asset

•Return on asset is an indicator of how profitable a bank is relative to its total assets.

• ROA gives an idea as to how efficient bank is at using its assets to generate earnings

2009 2010 2011 20120.65

0.7

0.75

0.8

0.85

0.9

0.89

0.81 0.8

0.760000000000005

Non performing asset NPA

NPA Recovery during 2011-12 stood at ` 466.26 crore as against ` 363.04 crore 2010-11.NPA has a decreasing trend; Different mechanisms like Lok Adalat, DRT, SARFAESI, Negotiated settlements and OTS policy have resulted in reduction in NPA.

•Reserves and surplus have shown an increase of 12.56percent in 2012.

•Borrowings of the bank have increased tremendously in the year 2012, with an increase of 279percent form the year 2008.

•Investments have been increasing consistently in all these four years. It has increased from 3.86percent in 2009 to 73.29percent in 2012.

•Advances increased at a higher rate than the deposits . Deposits increased to 97.89percent in 2012, whereas advances increase to 126percent in 2012.

Findings from financial statement

Financial snapshot

•The bank may take efforts to increase its current assets

•Securities given against loans and the creditworthiness of the person have to

carefully monitor to avoid NPA.

•New schemes can be in the form of higher rate of interest and shorter maturity

period for FD’s

•Indian bank can also think for improving its day-to -day service to its clients.

• Proper independent working atmosphere should be developed

•Indian bank can simplify the procedure of advances for quick disbursement

Suggestion

Conclusion

•The bank has succeeded in maintaining a reasonable profitability position

•Current assets and liabilities (current liquidity) of the bank is satisfactory

•. Level of NPA is showing a decreasing trend which is good for the

growth of the bank.

•The financial position and overall performance of the bank is satisfactory

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