central bank of india presentation
TRANSCRIPT
-
7/28/2019 Central Bank of India Presentation
1/23
Group 2
Jyoti Belani PG 11 004Priyanka Manchandani PG 11 025
Tejas Somaiya PG 11 055
Khusboo Kothari PG 11 086Jaydeep Rathod PG 11 104
-
7/28/2019 Central Bank of India Presentation
2/23
A government-owned bank, is one of the oldest and largestcommercial banks in India.
Bank has 4100 branches and 270 extension counters across 27Indian states and three Union Territories.
Established in 1911, Central Bank of India was the first Indiancommercial bank which was wholly owned and managed byIndians.
Sir Pherozesha Mehta was the first Chairman of a truly'Swadeshi Bank'.
Presently, Shri. M.V.Tanksale Chairman & ManagingDirector. Subsidiaries : Centbank Financial Services Limited
Centbank Home Finance Limited
-
7/28/2019 Central Bank of India Presentation
3/23
Government of
India 79.15%
FI s 10.32%
FII s 2.48%
Insurance Cos. 0.61%
Other Body 1.39%
Public 5.76%
Others 0.29%
%Holding
Government of
India
FI s
FII s
Insurance Cos.
Other Body
Public
79.15%
-
7/28/2019 Central Bank of India Presentation
4/23
1531
1073
797713
0
200
400600
800
1000
12001400
1600
1800
Rural Semi Urban Urban Metropolitan
Branches
4114
-
7/28/2019 Central Bank of India Presentation
5/23
80827 92212115748 130468 153601
116365
151506 167813188286
203538197192
243718283561
318754
357139
0
100000
200000
300000
400000
500000600000
700000
800000
Sep'08 Sep'09 Sep'10 Sep'11 Sep'12
Business (in Cr)
Total
Deposit
Credit
CAGR 15%
CAGR 17.84%
CAGR 16.0%
-
7/28/2019 Central Bank of India Presentation
6/23
Total Business of the Bank increased to Rs 357,139 crore from Rs 318754
crore in Sep-11, recording Y-o-Y growth of 12.04%.
ROA improved to 0.58% in Q2-2012-13 from 0.46% in Q2-2011-12.
NIM stood at 2.68% in Q2-2012-13.
Gross NPA % is at 5.54 % and Net NPA % at 3.80%
CRAR under Basel II is at 11.51%.
CASA showed a rise of 3.49 % from 63,076 Cr to 65275 Cr.
Total Loans and Advance increased by 14.7% from 1,31,407 Cr to1,50,725 Cr.
EPS 7.85.
Overview of Performance
-
7/28/2019 Central Bank of India Presentation
7/23
2.59
2.993
2.532.59
2.642.68
2.2
2.3
2.42.5
2.6
2.7
2.82.9
3
3.1
Mar'11 Jun'11 Sep'11 Dec'11 Mar'12 Jun'12 Sep'12
NIMs
%
-
7/28/2019 Central Bank of India Presentation
8/23
Amount (in Cr)
12.16%
10.57%
12.35%
64.%
Segment Amount (in Cr)
Corporate
Credit
98,363
Agriculture 18,677
MSE 14,692
Retail 18,964
TOTAL 1,53,601
-
7/28/2019 Central Bank of India Presentation
9/23
Equity capital:
The bank has authorized capital of Rs.3000.00 Crore as on 31st March
2012, the bank has issued, subscribed and paid up equity capital of
Rs.736.12crore.
Out of this, 79.15% shareholding of shares is with the Government ofIndia as of 31st March 2012.
Tier 1 Capital: 10978.41 CrTier 2 Capital : 6485.64 Cr
Total Capital : 17464.04 Cr
-
7/28/2019 Central Bank of India Presentation
10/23
The bank has adopted :
Standardized approach for credit risk.
Basic indicator approach for operational risk and
Standardized duration approach for market risk.
Capital requirements for credit risk
Fund Based : 10705.32 Cr
Non Fund Based: 578.89 Cr
Capital requirements for market risk:Interest rate risk : 439.73CrForeign exchange risk: 25.4 Cr
Equity Risk: 239.32 CrCapital requirements for operational risk:
685.35 Cr
-
7/28/2019 Central Bank of India Presentation
11/23
The amount of capital that a firm, usually in financialservices, needs to ensure that the company stayssolvent.
Economic capital is calculated internally and is theamount of capital the firm should have to support anyrisks it takes on.
It is used for measuring and reporting market andoperational risks across a financial organization.
It measures risk using economic realities rather thanaccounting and regulatory rules, which have beenknown to be misleading.
It is thought to give a more realistic representation of afirm's solvency.
-
7/28/2019 Central Bank of India Presentation
12/23
It is the amount one would anticipate receiving on an
investment that has various known or expected rates
of return.
-
7/28/2019 Central Bank of India Presentation
13/23
Spread 6.30%
Operating Expenses (%) Operating Expenses /Deposits & Borrowings
1.79%
Cost of Funds (%) Cost of Liabilities +Operating Expenses
8.48%
Expected Return Spread + Cost of funds 14.78%
Significance Level 5% 1.64
Credit Value at Return (%) Expected Return *Significance Level
24.244%
Total Assets 147512.85Provisions & Contingencies 2168.61
Expected Loss Total Assets / Provisions& Contingencies
1.47%
Economic Capital Credit Value at Return -Expected Loss 22.774%
-
7/28/2019 Central Bank of India Presentation
14/23
1.47%
22.77%
95%
-
7/28/2019 Central Bank of India Presentation
15/23
RAROC an adjustment to the return on an investment that
accounts for the element of risk.
It gives decision makers the ability to compare the returns on
several different projects with varying risk levels. By discounting risky cash flows against less risky cash flows,
RAROC accounts for changes in the profile of the
investment. In general, the higher the risk, the higher the
return.
-
7/28/2019 Central Bank of India Presentation
16/23
NIM Revenue Expenses 2.34%
ROC Expected Return *Economic Capital
3.3667%
Risk Adjusted Return NIM + ROC Expected Loss 4.237%
RAROC Risk Adjusted Return /Economic Capital
18.603%
-
7/28/2019 Central Bank of India Presentation
17/23
Profitability-Subsequent to the Basel III norms, the capital of manybanks will reduce by around 60% because of the phased removal ofcertain components of capital from Tier 1.
In addition, the risk weightings are expected to grow by nearly 200%.The twin impact of these two stipulations will greatly reduce the ROE
and the profitability of banks Capital acquisition-Indian banks need to infuse additional capital
over the next 5 years. Different estimates of additional capital infusion have been announced
by various agencies. International credit ratings agency, Fitch, estimates this figure to be at
around USD 50 billion, while ICRA projects a figure of around USD80 billion. Macquarie Capital Securities predicts that there will be a USD 35
billion dilution in the existing capital of PSU banks subsequent toadoption of the stringent Basel III capital accord.
-
7/28/2019 Central Bank of India Presentation
18/23
Liquidity Needs-One of the basic tenets of prudent banking is toborrow long and lend short.
There must be a match between the duration of liabilities and theduration of assets, which is at the heart of asset-liabilitymanagement.
Limits on lending-A leverage ratio of 3% has to be adhered toby all banks, which translate into a limit on assets at 33 times ofthe capital. Before the recent financial crisis, international bankswere leveraging 50 times, but this was not captured in the riskframework as low risk assets allow higher leverage.
This anomaly is sought to be removed by having a simple leverageratio of 3%.
Thereby, if a bank wishes to acquire more assets, it can do so onlyby increasing its capital.
-
7/28/2019 Central Bank of India Presentation
19/23
Bank consolidation-Basel III will set off a process of churning inthe banking industry.
Smaller banks will find it difficult to meet the new Baselguidelines, and a process of consolidation is underway.
Smaller banks will find it difficult to raise more capital and meetthe liquidity requirements.
This will result in reduction of the scope of operations of thesmaller banks, rendering them less profitable.
Stability in the Banking system-Basel III incorporates bothmicro-prudential regulations and macro-prudential regulations. Micro-prudential guidelines ensure the viability and risk
compliance of individual banks, while macro-prudentialguidelines target the stability of the banking system as a whole.
-
7/28/2019 Central Bank of India Presentation
20/23
As per our internal assessment, additional capital required at
the end of the transition period for Basel-III i.e. 31/03/2018 is
Rs. 14,067 crores .
This is proposed to be raised through follow on public issue.
Bank has robust plan to contain gross NPA at 3.50% and Net
NPA at 2.00% .
Return on Average Assets will be significantly improved to
0.50% by the financial year 2012-13
Leverage technology to increase fee based income. Shifting focus from wholesale banking to retail banking.
-
7/28/2019 Central Bank of India Presentation
21/23
The Finance Ministry has recently decided to inject of Rs
12,000 crores in 12 public sector banks including State Bank
of India, Central Bank of India and the United Bank of India
in the form of investments.
Out of the proposed Rs. 12000 crores SBI will get 0.56 %,CBI will get 0.99 % and UBI will get 0.73 %.
~ 1200 Cr to CBI.
Recently , Large lenders asked to handhold small banks. in
which CBI was asked to divide banks inseven pools and alarge bank has been appointed as coordinator for each group,
to improve internal policies and procedures.
-
7/28/2019 Central Bank of India Presentation
22/23
Central Bank of India to be leading
Indian Bank
Allahabad Bank
Bank of MaharashtraThe banks have been asked to continuously interact and work
collectively on issues such as human resources, e-governance,
internal audit, fraud detection and protection, recovery, asset-
liability mismatch and business process re-engineering.
Adding fuel towards consolidation of small banks with larger
banks
-
7/28/2019 Central Bank of India Presentation
23/23