bfsi sector growth & opportunity - sunaina samriddhi founation

BFSIFueling Economy

SUNAINA SAMRIDDHI FOUNDATION

Industry Overview


• The Financial services sector has risen by 9.5% in the first quarter of 2009-10.

• The banking sector has grown from 89 banks in 1969 to 279 post liberalization in 1995. The number of branches increased from 8262 in 1969 to 82511 by 2010. Over all.

• the banking sector has recorded an annual growth of 19%-21% and a CAGR growth of 19.5% between FY03-07 in terms of total assets.

GROWTH OF BFSI SECTOR


• Indian insurance sector is the fifth largest life insurance market in Asia, with an annual growth of 32-34 % . The total life insurance premium in India is projected to grow to US$ 259.72 billion by 2010-11

• India’s share in the total world m-cap has risen to 2.79 %. Making it the ninth largest market cap in the world

• India received US$ 45 billion in foreign currency remittances from non-resident Indians in 2008, the highest in the world

GROWTH OF BFSI SECTOR


• Fund raising by India Inc. through Initial Public Offers (IPOs) rose by 62 % to US$ 4.2 billion in 2008 from US$ 2.6 billion in 2006

• Expansion of a middle class expected to exceed 500 million by 2010

• Nearly 80% of the Indian population is without Life, Health and Non-life insurance, making it a potential segment

• The mutual fund industry has witnessed a growth of 42.4% in Assets Under Management and the insurance sector has seen a 26.7% growth in terms of total premium earned during the same period

• The Indian BFSI sector could account for over 7.7 % of GDP with over Rs.7,500 billion in market cap by 2010


Financial Services

Commercial Bank

Investment

ServicesInsurance Foreign

Exchange

• Asset Management

• Hedge Fund Managers

• Custody services

• Private banking • Investment Banks • Bank cards • Credit card machine

services and networks

• Insurance Brokerage

• Insurance Underwriting

• Reinsurance

•Currency Exchange

•Wire transfer

•Foreign Currency Banking


Commercial Bank• India has 96 scheduled commercial banks • 27 public sector banks • 31 private banks • 38 foreign banks. • Over 190 regional rural banks

They have a combined network of over 82511 Branches and nearly 44000 ATM


Growth• As per the McKinsey report ‘India Banking

2010’, banking sector index has CAGR of 51% since the year 2001 as compare to 27% growth in the market index .


Future

• credit cards.• consumer finance.• wealth management.• life and general insurance.• investment banking.• mutual funds.

• pension fund regulation.• stock broking services.• custodian services.• private equity.• etc.

• Today, banks have diversified their activities and are getting into new

Further, most of the leading Indian banks are going global, setting up offices in foreign countries, by themselves or through their subsidiaries.


India - Strategic MapSe

rvic

e Q

ualit

y

Rural Urban

Lo wHi

gh

Regional

Citibank

ABN Amro

State Bank of India

ICICI Bank

HDFC

IndusInd Bank

PNB

Andhra Bank

Canara BankCo-operative Banks

Rural Banks

Bank of Baroda

Bank of India

Stan C

HSBC

Geographical Spread


Investment Management Services(Asset Management)

• It Include various securities like shares, bonds and other securities and assets (e.g., real estate, Commodities) and investment is done mainly in form of mutual funds.

• Investors may be institutions, insurance companies, pension funds, corporations etc. or private investors.


Growth

• Business in India is going to increase at least 33% annually.

• The main growth is expected in the retail segment (an estimated growth of 36%).


Future• McKenzie study reveals that growth in Assets

Under Management sector will go upto 440 billion US $.


Insurance• Started in 1818 by Anita Bhavsar at Kolkata as Oriental Life Insurance

Company.• Insurance is a US$41-billion industry in India, and grew by 36% in 2006-07 over

the previous year– Life Insurance - US$35 billion industry with US$24 billion– Non-Life Insurance - US$5.6-billion industry– Motor and health segments account for 56% of total business

• The Indian Insurance industry consists of a total of 34 players– Life: 1 public sector player; 16 private players– Non-life: 6 public sector players; 11 private players

• Major international players like AIG, Aviva, MetLife, New York Life, Prudential, Allianz, Sun Life, Standard Life and Lombard are already present with minority stakes in joint ventures with Indian companies for both Life and Non-life segments


Growth• Currently, a $41 billion industry, India is the world's fifth

largest life insurance market growing at a rapid pace of 32-34% annually as per Life Insurance Council studies.

• Home insurance sector is likely to achieve a 100% growth since home insurance are made compulsory for housing loan approvals by the financial institutions.

• In the coming three years Health insurance sector is all set to become the second largest business after motor insurance.


Future• In India only 0.2% of population is insured

under mediclaim as compare to 75% of USA, which is only 20 lacs.

• Health Insurance Premium in India to surpass Rs. 15000 Crore by 2012-13:IMRS Research

• 65% of Indian population is Young it is the largest customer base for Insurance companies.


Foreign Exchange Services• The primary purpose of the foreign exchange services is to assist international

trade and investment, by allowing businesses to. convert one currency to another currency.

• India is 16th largest foreign exchange market in the world in terms of total daily turnover which was US$34 billion in 2007.

• Average daily turnover of global forex market rose to $3.2 trillion in April 2007, an increase of 69% at current exchange rates and 63% at constant exchange rates.

• Daily global trading volumes would likely reach US$5 trillion by 2010.


Growth


Future• Increase in the world trade will increase the

foreign exchange among the countries.

• World tourism will also increase the Forex activities across the globe.


Employment Opportunities Branch Banking• Banking Sales• Phone Banking / Transactions Processes• Personal Banking & Wealth Management• Wholesale & Corporate Banking

– Treasury– Corporate Finance– Investment Banking– Capital Markets– Rural & Agricultural Banking


Employment Opportunities FINANCIAL SERVICES• Sales• Operations• Financial Planning• Research• Institutional Equities• Compliance & Audits• Fund Accounting• Corporate Finance


Employment Opportunities INSURANCE• Sales• Operations• Support Functions• Underwriting• Actuary


Some Projects • Working Capital management • Capital structure• Ratio Analysis. • Project Appraisal. • Budgeting. • Share trading.• Portfolio Management.• Comparative study of various mutual fund.• FII's & FDI in India


Questions


bfsi sector growth & opportunity - sunaina samriddhi founation

Economy & Finance