Study of performance of

(Financial Analysis)



Prepared by





Submitted to



Guided by




ACKNOWLEGEMENT

No task is single mans effort .Any job in this world however trivial or
tough cannot be accomplished without the assistance of others. An
assignment puts the knowledge and experience of an individual to litmus
test. There is always a sense of gratitude that one likes to express towards
the persons who helped to change an effort in a success. The opportunity
to express my indebtness to people who have helped me to accomplish
this task.

I deem it a proud privilege to extend my greatest sense of gratitude to my
Project Guide _______________________________ for the keen
interest, inspiring guidance, continuous encouragement, valuable
suggestions and constructive criticism throughout the pursuance of this
report.

I am thankful to Coordinator sir _______________________ for giving
me the opportunity to undertake the study. I am highly indebted to
Professor for sparing time from their busy schedule for providing me
with their able guidance at the time of need and helping me to achieve the
ultimate goal of the study. I would also like to thank Branch Manager,
SBI for their valuable support in helping me to gain this opportunity of
being associated with an organization of such esteem.

Last but not the least, it would be unfair if I dont express my indebtness
to my parents and all my friends for their active cooperation which was of
great help during the course of my training project.










PREFACE


In any organization, the two important financial statements are the
Balance Sheet and Profit & Loss Account of the business. Balance Sheet
is a statement of financial position of an enterprise at a particular point of
time. Profit & Loss account shows the net profit or net loss of a company
for a specified period of time. When these statements of the last few year
of any organization are studied and analyzed, significant conclusions may
be arrived regarding the changes in the financial position, the important
policies followed and trends in profit and loss etc. Analysis and
interpretation of financial statement has now become an important
technique of credit appraisal. The investors, financial experts,
management executives and the bankers all analyze these statements.
Though the basic technique of appraisal remains the same in all the cases
but the approach and the emphasis in the analysis vary. A banker
interprets the financial statement so as to evaluate the financial soundness
and stability, the liquidity position and the profitability or the earning
capacity of borrowing concern. Analysis of financial statements is
necessary because it helps in depicting the financial position on the basis
of past and current records. Analysis of financial statements helps in
making the future decisions and strategies. Therefore it is very necessary
for every organization whether it is a financial or manufacturing, to make
financial statement and to analyze it.


INDEX
Chapter no. PARTICULARS
Page no.
Acknowledgement
Preface
1. Introduction Of Banking


2. Companys Profile


3. Research Methodology


4. Financial Analysis



5.

Findings ,Suggestions And
Conclusion.


6.

Bibliography







Definition Of Bank:

Banking Means "Accepting Deposits for the purpose of lending or Investment of
deposits of money from the public, repayable on demand or otherwise and withdraw
by cheque, draft or otherwise."
-Banking Companies (Regulation)
Act,1949



ORIGIN OF THE WORD BANK:-

The origin of the word bank is shrouded in mystery. According to one view point the
Italian business house carrying on crude from of banking were called banchi
bancheri" According to another viewpoint banking is derived from German word
"Branck" which mean heap or mound. In England, the issue of paper money by the
government was referred to as a raising a bank.


ORIGIN OF BANKING :

Its origin in the simplest form can be traced to the origin of authentic history. After
recognizing the benefit of money as a medium of exchange, the importance of
banking was developed as it provides the safer place to store the money. This safe
place ultimately evolved in to financial institutions that accepts deposits and make
loans i.e., modern commercial banks.


Banking system in India

Without a sound and effective banking system in India it cannot have a healthy
economy.The banking system of India should not only be hassle free but it should be
able to meet new challenges posed by the technology and any other external and
internal factors.
For the past three decades India's banking system has several outstanding
achievements to its credit. The most striking is its extensive reach. It is no longer
confined to only metropolitans or cosmopolitans in India. In fact, Indian banking
system has reached even to the remote corners of the country. This is one of the main
reasons of India's growth process.






HISTORY OF BANKING IN INDIA

Banking in India has its origin as early or Vedic period. It is believed that the
transitions from many lending to banking must have occurred even before Manu, the
great Hindu furriest, who has devoted a section of his work to deposit and advances
and laid down rules relating to the rate of interest. During the mogul period, the
indigenous banker played a very important role in lending money and financing
foreign trade and commerce.

During the days of the East India Company it was the turn of agency house to carry
on the banking business. The General Bank of India was the first joint stock bank to
be established in the year 1786. The other which followed was the Bank of Hindustan
and Bengal Bank. The Bank of Hindustan is reported to have continued till 1906.
While other two failed in the meantime. In the first half of the 19th century the East
India Company established there banks, The bank of Bengal in 1809, the Bank of
Bombay in 1840 and the Bank of Bombay in1843. These three banks also known as
the Presidency banks were the independent units and functioned well. These three
banks were amalgamated in 1920 and new bank, the Imperial Bank of India was
established on 27th January, 1921.

With the passing of the State Bank of India Act in 1955 the undertaking of the
Imperial Bank of India was taken over by the newly constituted SBI. The Reserve
Bank of India (RBI) which is the Central bank was established in April, 1935 by
passing Reserve bank of India act 1935. The Central office of RBI is in Mumbai and
it controls all the other banks in the country.

In the wake of Swadeshi Movement, number of banks with the Indian management
were established in the country namely, Punjab National Bank Ltd., Bank of India
Ltd., Bank of Baroda Ltd., Canara Bank. Ltd. on 19
th
July 1969, 14 major banks of the
country were nationalized and on 15
th
April 1980, 6 more commercial private sector
banks were taken over by the government.

The first bank in India, though conservative, was established in 1786. From 1786 till
today,the journey of Indian Banking System can be segregated into three distinct
phases. They areas mentioned below:

Early phase from 1786 to 1969 of Indian Banks

Nationalization of Indian Banks and up to 1991 prior to Indian banking sector
Reforms.


New phase of Indian Banking System with the advent of Indian Financial &
Banking Sector Reforms after 1991.





To make this write-up more explanatory, I prefix the scenario as Phase I, Phase II and
Phase III.

Phase I

The General Bank of India was set up in the year 1786. Next came Bank of Hindustan
and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank
of Bombay (1840) and Bank of Madras (1843) as independent units and called it
Presidency Banks.

These three banks were amalgamated in 1920 and Imperial Bank of India was
established which started as private shareholders banks, mostly Europeans
shareholders.

In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab
National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906
and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian
Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935.

During the first phase the growth was very slow and banks also experienced periodic
failures between 1913 and 1948. There were approximately 1100 banks, mostly small.
To streamline the functioning and activities of commercial banks, the Government of
India came up with The Banking Companies Act, 1949 which was later changed to
Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965).
Reserve Bank of India was vested with extensive powers for the supervision of
banking in India as the Central Banking Authority.

During those days public has lesser confidence in the banks. As an aftermath deposit
mobilization was slow. Abreast of it the savings bank facility provided by the Postal
department was comparatively safer. Moreover, funds were largely given to traders.


Phase II

Government took major steps in this Indian Banking Sector Reform after
independence. In1955, it nationalized Imperial Bank of India with extensive banking

facilities on a large scale especially in rural and semi-urban areas. It formed State
Bank of India to act as the principal agent of RBI and to handle banking transactions
of the Union and State Governments all over the country.

Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on
19th July,1969, major process of nationalization was carried out. It was the effort of
the then Prime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in
the country was nationalized.
Second phase of nationalization Indian Banking Sector Reform was carried out in
1980 with seven more banks. This step brought 80% of the banking segment in India
under Government ownership.

The following are the steps taken by the Government of India to Regulate
BankingInstitutions in the Country:

1949: Enactment of Banking Regulation Act.
1955: Nationalization of State Bank of India.
1959: Nationalization of SBI subsidiaries.
1961: Insurance cover extended to deposits.
1969: Nationalization of 14 major banks.
1971: Creation of credit guarantee corporation.
1975: Creation of regional rural banks.
1980: Nationalization of seven banks with deposits over 200 crore.

After the nationalization of banks, the branches of the public sector bank India rose to
approximately 800% in deposits and advances took a huge jump by 11,000%.
Banking in the sunshine of Government ownership gave the public implicit faith and
immense confidence about the sustainability of these institutions.


Phase III

This phase has introduced many more products and facilities in the banking sector in
its reforms measure. In 1991, under the chairmanship of M Narasimham, a committee
was set up by his name which worked for the liberalization of banking practices.

The country is flooded with foreign banks and their ATM stations. Efforts are being
put to give a satisfactory service to customers. Phone banking and net banking is
introduced. The entire system became more convenient and swift. Time is given more
importance than money.

The financial system of India has shown a great deal of resilience. It is sheltered from
any crisis triggered by any external macroeconomics shock as other East Asian
Countries suffered. This is all due to a flexible exchange rate regime, the foreign

reserves are high, the capital account is not yet fully convertible, and banks and their
customers have limited foreign exchange exposure.








BANKS IN INDIA

In India the banks are being segregated in different groups. Each group has their own
benefits and limitations in operating in India. Each has their own dedicated target
market. Few of them only work in rural sector while others in both rural as well as
urban. Many even are only catering in cities. Some are of Indian origin and some are
foreign players.

All these details and many more is discussed over here. The banks and its relation
with the customers, their mode of operation, the names of banks under different
groups and other such useful informations are talked about.

One more section has been taken note of is the upcoming foreign banks in India. The
RBI has shown certain interest to involve more of foreign banks than the existing one
recently. This step has paved a way for few more foreign banks to start business in
India.





BANKING STRUCTURE IN INDIA

SCHEDULED BANKS IN INDIA


(1) Scheduled Commercial Banks

Public Sector Banks

Private Sector
Banks

Foreign Banks In
India

Regional Rural
Banks

(26) (25) (29) (95)
Nationalized
Bank
Other Public
Sector Banks
(IDBI)
SBI And Its
Associates

Old Private
Banks
New Private
Banks


(2) Scheduled Cooperative Banks

Scheduled Urban Cooperative Banks

Scheduled State Cooperative Banks




Public Sector Banks

Public sector banks are those banks which are owned by the Government. The Govt.
runs these Banks. In India 14 banks were nationalized in 1969 & in 1980 another 6
banks were also nationalized. Therefore in 1980 the number of nationalized bank 20.
At present there are total 26 Public Sector Banks in India (As on 26-09-2009). Of
these 19 are nationalised banks, 6(STATE BANK OF INDORE ALSO MERGED
RECENTLY) belong to SBI & associates group and 1 bank (IDBI Bank) is classified
as other public sector bank. Welfare is their primary objective.


Nationalised banks

Allahabad Bank
Andhra Bank
Bank Of Baroda
Bank Of India
Bank Of Maharastra
Canara Bank
Central Bank Of India
Corporation Bank
Dena Bank
Indian Bank
Indian Overseas Bank
Oriental Bank Of
Commerce
Punjab & Sind Bank
Punjab National Bank
Syndicate Bank
UCO Bank
Union Bank Of India
United Bank Of India
Vijaya Bank
Other
Public
Sector
Banks

IDBI
(Industrial
Development
Bank Of
India)Ltd.
SBI & its Associates

State Bank of India

State Bank of Hyderabad

State Bank of Mysore

State Bank of Patiala

State Bank of Travancore

State Bank of Bikaner And
Jaipur



(State Bank of Saurastra merged with SBI in
the year 2008 and State Bank of Indore In
2010)






Private Sector Banks

These banks are owned and run by the private sector. Various banks in the country such as
SBI, HDFC Bank etc. An individual has control over there banks in preparation to the share
of the banks held by him.

Private banking in India was practiced since the beginning of banking system in India. The
first private bank in India to be set up in Private Sector Banks in India was IndusInd Bank. It
is one of the fastest growing Bank Private Sector Banks in India. IDBI ranks the tenth largest
development bank in the world as Private Banks in India and has promoted world class
institutions in India.

The first Private Bank in India to receive an in principle approval from the Reserve Bank of
India was Housing Development Finance Corporation Limited, to set up a bank in the private
sector banks in India as part of the RBI's liberalization of the Indian Banking Industry. It was
incorporated in August 1994 as HDFC Bank Limited with registered office in Mumbai and
commenced operations as Scheduled Commercial Bank in January 1995. ING Vysya, yet
another Private Bank of India was incorporated in the year 1930

Private sector banks have been subdivided into following 2 categories:-

Old Private Sector Banks
Bank of Rajasthan Ltd.
Catholic Syrian Bank Ltd.
City Union Bank Ltd.
Dhanalakshmi Bank Ltd.
Federal Bank Ltd.
ING Vysya Bank Ltd.
Jammu and Kashmir Bank Ltd.
Karnataka Bank Ltd.
Karur Vysya Bank Ltd.
Lakshmi Vilas Bank Ltd.
Nainital Bank Ltd.
Ratnakar Bank Ltd.
SBI Commercial and International
Bank Ltd.
South Indian Bank Ltd.
Tamilnad Mercantile Bank Ltd.
United Western Bank Ltd.
New Private Sector Banks

Bank of Punjab Ltd. (since
merged with Centurian Bank)
Centurian Bank of Punjab (since
merged with HDFC Bank)
Development Credit Bank Ltd.
HDFC Bank Ltd.
ICICI Bank Ltd.
IndusInd Bank Ltd.
Kotak Mahindra Bank Ltd.
Axis Bank (earlier UTI Bank)
Yes Bank Ltd.




Foreign Banks In India
ABN AMRO Bank N.V.
Abu Dhabi Commercial Bank Ltd
American Express Bank
Antwerp Diamond Bank
Arab Bangladesh Bank
Bank International Indonesia
Bank of America
Bank of Bahrain & Kuwait
Bank of Ceylon
Bank of Nova Scotia
Bank of Tokyo Mitsubishi UFJ
Barclays Bank
BNP Paribas
Calyon Bank
ChinaTrust Commercial Bank
Citibank
DBS Bank
Deutsche Bank
HSBC (Hongkong & Shanghai Banking Corporation)
JPMorgan Chase Bank
Krung Thai Bank
Mashreq Bank
Mizuho Corporate Bank
Oman International Bank
Shinhan Bank
Socit Gnrale
Sonali Bank
Standard Chartered Bank
State Bank of Mauritius


Cooperative banks in India


The Cooperative bank is an important constituent of the Indian Financial System,
judging by the role assigned to co operative, the expectations the co operative is
supposed to fulfil, their number, and the number of offices the cooperative bank
operate. Though the co operative movement originated in the West, but the
importance of such banks have assumed in India is rarely paralleled anywhere else in
the world. The cooperative banks in India plays an important role even today in rural
financing. The businessess of cooperative bank in the urban areas also has increased
phenomenally in recent years due to the sharp increase in the number of primary co-
operative banks.
Co operative Banks in India are registered under the Co-operative Societies Act. The
cooperative bank is also regulated by the RBI. They are governed by the Banking
Regulations Act 1949 and Banking Laws (Co-operative Societies) Act, 1965.

Rural banks in India

Rural banking in I ndia started since the establishment of banking sector in India.
Rural Banks in those days mainly focussed upon the agro sector. Regional rural banks
in India penetrated every corner of the country and extended a helping hand in the
growth process of the country.

SBI has 30 Regional Rural Banks in India known as RRBs. The rural banks of SBI is
spread in 13 states extending from Kashmir to Karnataka and Himachal Pradesh to
North East. The total number of SBIs Regional Rural Banks in India branches is 2349
(16%). Till date in rural banking in India, there are 14,475 rural banks in the country
of which 2126 (91%) are located in remote rural areas.

Apart from SBI, there are other few banks which functions for the development of the
rural areas in India. Few of them are as follows.

Haryana State Cooperative Apex Bank Limited

The Haryana State Cooperative Apex Bank Ltd. commonly called as HARCOBANK
plays a vital role in rural banking in the economy of Haryana State and has been
providing aids and financing farmers, rural artisans, agricultural labourers,
entrepreneurs, etc. in the state and giving service to its depositors.

NABARD

National Bank for Agriculture and Rural Development (NABARD) is a development
bank in the sector of Regional Rural Banks in India. It provides and regulates credit
and gives service for the promotion and development of rural sectors mainly
agriculture, small scale industries, cottage and village industries, handicrafts. It also

finance rural crafts and other allied rural economic activities to promote integrated
rural development. It helps in securing rural prosperity and its connected matters.

Sindhanur Urban Souharda Co-operative Bank

Sindhanur Urban Souharda Co-operative Bank, popularly known as SUCO BANK is
the first of its kind in rural banks of India. The impressive story of its inception is
interesting and inspiring for all the youth of this country.

United Bank of India

United Bank of India (UBI) also plays an important role in regional rural banks. It has
expanded its branch network in a big way to actively participate in the developmental
of the rural and semi-urban areas in conformity with the objectives of nationalisation.

Syndicate Bank

Syndicate Bank was firmly rooted in rural India as rural banking and have a clear
vision of future India by understanding the grassroot realities. Its progress has been
abreast of the phase of progressive banking in India especially in rural banks.











Fact Files of Banks in India

The first Bank in India to be given an ISO certification.


Canara Bank

The first Bank in Northern India to get ISO 9002 certification
for their selected branches.


Punjab and Sind
Bank


The first Indian Bank to have been started solely with Indian capital.

Punjab National
Bank

The first among the Private Sector Banks in Kerala to become Scheduled
Bank in 1946 under the RBI act.


South Indian Bank

Indias oldest,largest and the most successful commercial bank offering the
widest possible rang of domestic,international and NRI products and
services,through its vast network in India and overseas.


State Bank of India

Indias second largest Private Sector Bank and is now the largest scheduled
commercial bank in India.


The Federal Bank
Limited

Bank which started as Private Shareholders Banks,mostly European
shareholders.


Imperial Bank of
India

The first Indian Bank to open a branch outside India in London in 1946 and
the first to open a branch in continental Europe at Paris in 1974


Bank of India,
founded in 1906 in
Mumbai.

The oldest Public Sector Bank in India having branches all over India and
serving the customers for the last 132 years.


Allahabad Bank


The first Indian Commercial Bank which was wholly owned and managed by
Indians.

Central Bank of
India






INDIAN BANKING INDUSTRY

The Indian banking market is growing at an astonishing rate, with Assets expected to
reach US$1 trillion by 2013. An expanding economy, middleclass, and technological
innovations are all contributing to this growth.

The countrys middle class accounts for over 320 million People. In correlation with
the growth of the economy, rising income levels, increased standard of living, and
affordability of banking products are promising factors for continued expansion.
Total deposits are estimated to grow to US$ 1,452.7 billion in FY14.


Indian Banking Industry Analysis
Indian banks total asset size is recorded at US$ 1.5 trillion in FY12 and is expected to
reach US$ 28.5 trillion by 2025. Increase in working population and growing
disposable incomes will increase the demand for banking and related services.
Housing and personal finance are expected to remain key demand drivers.
Indian banks currently devote around 15 per cent of total spending on technology.
Public sector banks account for over 73 per cent of interest income in the sector.
Deposits have grown at a compound annual growth rate (CAGR) of 21.2 per cent
during FY06-13; in FY13 total deposits stood at US$ 1,274.3 billion.
Mobile, Internet banking and extension of facilities at ATM stations are expected to
improve operational efficiency. Total number of ATMs in India have increased to
104,500 in 2012 and is further expected to double over the next two years, thereby
taking the number of ATMs per million population from 85, at present, to about 170





Growth
Total credit off-take is estimated to grow to US$ 1,140 billion in FY14.



Assets

Total banking sector assets have increased at a compound annual growth rate (CAGR)
of 8.2 per cent to USD1.5 trillion during FY1

Growth
Deposits have grown at a CAGR of 21.2 per cent during FY06
13.




The Indian banking Industry is in the middle of an IT revolution, Focusing on the
expansion of retail and rural banking. Players are becoming increasingly customer -
centric in their approach, which has resulted in innovative methods of offering new
banking products and services. Banks are now realizing the importance of being a big
player and are beginning to focus their attention on mergers and acquisitions to take
advantage of economies of scale and/or comply with Basel II regulation.Indian
banking industry assets are expected to reach US$1 trillion by 2013 and are poised to
receive a greater infusion of foreign capital, says Prathima Rajan, analyst in Celent's
banking group and author of the report. The banking industry should focus on having
a small number of large players that can compete globally rather than having a large
number of fragmented players.





State Bank of India (SBI) is a multinational banking and financial services company
based in India. It is a government-owned corporation with its headquarters in
Mumbai, Maharashtra. As of December 2013, it had assets of US$388 billion and
17,000 branches, including 190 foreign offices, making it the largest banking and
financial services company in India by assets.
State Bank of India is one of the Big Four banks of India, along with ICICI Bank,
Punjab National Bank and Bank of Baroda.
The bank traces its ancestry to British India, through the Imperial Bank of India, to
the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in
the Indian Subcontinent. Bank of Madras merged into the other two presidency
banksBank of Calcutta and Bank of Bombayto form the Imperial Bank of India,
which in turn became the State Bank of India. Government of India owned the
Imperial Bank of India in 1955, with Reserve Bank of India taking a 60% stake, and
renamed it the State Bank of India. In 2008, the government took over the stake held
by the Reserve Bank of India.
SBI is a regional banking behemoth and has 20% market share in deposits and loans
among Indian commercial banks.

EVOLUTION OF SBI


The origin of the State Bank of India goes back to the first decade of the nineteenth
century with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806.
Three years later the bank received its charter and was re-designed as the Bank of
Bengal (2 January 1809). A unique institution, it was the first joint-stock bank of
British India sponsored by the Government of Bengal. The Bank of Bombay (15 April
1840) and the Bank of Madras (1 July 1843) followed the Bank of Bengal. These
three banks remained at the apex of modern banking in India till their amalgamation
as the Imperial Bank of India on 27 January 1921.

Primarily Anglo-Indian creations, the three presidency banks came into existence
either as a result of the compulsions of imperial finance or by the felt needs of local
European commerce and were not imposed from outside in an arbitrary manner to
modernise India's economy. Their evolution was, however, shaped by ideas culled
from similar developments in Europe and England, and was influenced by changes
occurring in the structure of both the local trading environment and those in the
relations of the Indian economy to the economy of Europe and the global economic
framework.





Bank of Bengal H.O.


Establishment

The establishment of the Bank of Bengal marked the advent of limited liability, joint-
stock banking in India. So was the associated innovation in banking, viz. the decision
to allow the Bank of Bengal to issue notes, which would be accepted for payment of
public revenues within a restricted geographical area. This right of note issue was
very valuable not only for the Bank of Bengal but also its two siblings, the Banks of
Bombay and Madras. It meant an accretion to the capital of the banks, a capital on
which the proprietors did not have to pay any interest. The concept of deposit banking
was also an innovation because the practice of accepting money for safekeeping (and
in some cases, even investment on behalf of the clients) by the indigenous bankers
had not spread as a general habit in most parts of India. But, for a long time, and
especially upto the time that the three presidency banks had a right of note issue, bank
notes and government balances made up the bulk of the investible resources of the
banks.


The three banks were governed by royal charters, which were revised from time to
time. Each charter provided for a share capital, four-fifth of which were privately
subscribed and the rest owned by the provincial government. The members of the
board of directors, which managed the affairs of each bank, were mostly proprietary
directors representing the large European managing agency houses in India. The rest
were government nominees, invariably civil servants, one of whom was elected as the
president of the board.





Group Photogaph of Central Board (1921)


Business

The business of the banks was initially confined to discounting of bills of exchange or
other negotiable private securities, keeping cash accounts and receiving deposits and
issuing and circulating cash notes. Loans were restricted to Rs.one lakh and the period
of accommodation confined to three months only. The security for such loans was
public securities, commonly called Company's Paper, bullion, treasure, plate, jewels,
or goods 'not of a perishable nature' and no interest could be charged beyond a rate of
twelve per cent. Loans against goods like opium, indigo, salt woollens, cotton, cotton
piece goods, mule twist and silk goods were also granted but such finance by way of
cash credits gained momentum only from the third decade of the nineteenth century.
All commodities, including tea, sugar and jute, which began to be financed later, were
either pledged or hypothecated to the bank. Demand promissory notes were signed by
the borrower in favour of the guarantor, which was in turn endorsed to the bank.
Lending against shares of the banks or on the mortgage of houses, land or other real
property was, however, forbidden.

Indians were the principal borrowers against deposit of Company's paper, while the
business of discounts on private as well as salary bills was almost the exclusive
monopoly of individuals Europeans and their partnership firms. But the main function
of the three banks, as far as the government was concerned, was to help the latter raise
loans from time to time and also provide a degree of stability to the prices of
government securities.




Old Bank of Bengal


Major change in the conditions

A major change in the conditions of operation of the Banks of Bengal, Bombay and
Madras occurred after 1860. With the passing of the Paper Currency Act of 1861, the
right of note issue of the presidency banks was abolished and the Government of India
assumed from 1 March 1862 the sole power of issuing paper currency within British
India. The task of management and circulation of the new currency notes was
conferred on the presidency banks and the Government undertook to transfer the
Treasury balances to the banks at places where the banks would open branches. None
of the three banks had till then any branches (except the sole attempt and that too a
short-lived one by the Bank of Bengal at Mirzapore in 1839) although the charters had
given them such authority. But as soon as the three presidency bands were assured of
the free use of government Treasury balances at places where they would open
branches, they embarked on branch expansion at a rapid pace. By 1876, the branches,
agencies and sub agencies of the three presidency banks covered most of the major
parts and many of the inland trade centres in India. While the Bank of Bengal had
eighteen branches including its head office, seasonal branches and sub agencies, the
Banks of Bombay and Madras had fifteen each.





Bank of Madras Note Dated 1861 for Rs.10


Presidency Banks Act

The presidency Banks Act, which came into operation on 1 May 1876, brought the
three presidency banks under a common statute with similar restrictions on business.
The proprietary connection of the Government was, however, terminated, though the
banks continued to hold charge of the public debt offices in the three presidency
towns, and the custody of a part of the government balances. The Act also stipulated

the creation of Reserve Treasuries at Calcutta, Bombay and Madras into which sums
above the specified minimum balances promised to the presidency banks at only their
head offices were to be lodged. The Government could lend to the presidency banks
from such Reserve Treasuries but the latter could look upon them more as a favour
than as a right.




Bank of Madras
The decision of the Government to keep the surplus balances in Reserve Treasuries
outside the normal control of the presidency banks and the connected decision not to
guarantee minimum government balances at new places where branches were to be
opened effectively checked the growth of new branches after 1876. The pace of
expansion witnessed in the previous decade fell sharply although, in the case of the
Bank of Madras, it continued on a modest scale as the profits of that bank were
mainly derived from trade dispersed among a number of port towns and inland centres
of the presidency.

India witnessed rapid commercialisation in the last quarter of the nineteenth century
as its railway network expanded to cover all the major regions of the country. New
irrigation networks in Madras, Punjab and Sind accelerated the process of conversion
of subsistence crops into cash crops, a portion of which found its way into the foreign
markets. Tea and coffee plantations transformed large areas of the eastern Terais, the
hills of Assam and the Nilgiris into regions of estate agriculture par excellence. All
these resulted in the expansion of India's international trade more than six-fold. The
three presidency banks were both beneficiaries and promoters of this
commercialisation process as they became involved in the financing of practically
every trading, manufacturing and mining activity in the sub-continent. While the
Banks of Bengal and Bombay were engaged in the financing of large modern
manufacturing industries, the Bank of Madras went into the financing of large modern
manufacturing industries, the Bank of Madras went into the financing of small-scale
industries in a way which had no parallel elsewhere. But the three banks were
rigorously excluded from any business involving foreign exchange. Not only was
such business considered risky for these banks, which held government deposits, it
was also feared that these banks enjoying government patronage would offer unfair

competition to the exchange banks which had by then arrived in India. This exclusion
continued till the creation of the Reserve Bank of India in 1935.




Bank of Bombay


Presidency Banks of Bengal

The presidency Banks of Bengal, Bombay and Madras with their 70 branches were
merged in 1921 to form the Imperial Bank of India. The triad had been transformed
into a monolith and a giant among Indian commercial banks had emerged. The new
bank took on the triple role of a commercial bank, a banker's bank and a banker to the
government.

But this creation was preceded by years of deliberations on the need for a 'State Bank
of India'. What eventually emerged was a 'half-way house' combining the functions of
a commercial bank and a quasi-central bank.

The establishment of the Reserve Bank of India as the central bank of the country in
1935 ended the quasi-central banking role of the Imperial Bank. The latter ceased to
be bankers to the Government of India and instead became agent of the Reserve Bank
for the transaction of government business at centres at which the central bank was
not established. But it continued to maintain currency chests and small coin depots
and operate the remittance facilities scheme for other banks and the public on terms
stipulated by the Reserve Bank. It also acted as a bankers' bank by holding their
surplus cash and granting them advances against authorised securities. The
management of the bank clearing houses also continued with it at many places where
the Reserve Bank did not have offices. The bank was also the biggest tenderer at the
Treasury bill auctions conducted by the Reserve Bank on behalf of the Government.

The establishment of the Reserve Bank simultaneously saw important amendments
being made to the constitution of the Imperial Bank converting it into a purely
commercial bank. The earlier restrictions on its business were removed and the bank

was permitted to undertake foreign exchange business and executor and trustee
business for the first time.


Imperial Bank

The Imperial Bank during the three and a half decades of its existence recorded an
impressive growth in terms of offices, reserves, deposits, investments and advances,
the increases in some cases amounting to more than six-fold. The financial status and
security inherited from its forerunners no doubt provided a firm and durable platform.
But the lofty traditions of banking which the Imperial Bank consistently maintained
and the high standard of integrity it observed in its operations inspired confidence in
its depositors that no other bank in India could perhaps then equal. All these enabled
the Imperial Bank to acquire a pre-eminent position in the Indian banking industry
and also secure a vital place in the country's economic life.




Stamp of Imperial Bank of India
When India attained freedom, the Imperial Bank had a capital base (including
reserves) of Rs.11.85 crores, deposits and advances of Rs.275.14 crores and Rs.72.94
crores respectively and a network of 172 branches and more than 200 sub offices
extending all over the country.


First Five Year Plan

In 1951, when the First Five Year Plan was launched, the development of rural India
was given the highest priority. The commercial banks of the country including the
Imperial Bank of India had till then confined their operations to the urban sector and
were not equipped to respond to the emergent needs of economic regeneration of the

rural areas. In order, therefore, to serve the economy in general and the rural sector in
particular, the All India Rural Credit Survey Committee recommended the creation of
a state-partnered and state-sponsored bank by taking over the Imperial Bank of India,
and integrating with it, the former state-owned or state-associate banks. An act was
accordingly passed in Parliament in May 1955 and the State Bank of India was
constituted on 1 July 1955. More than a quarter of the resources of the Indian banking
system thus passed under the direct control of the State. Later, the State Bank of India
(Subsidiary Banks) Act was passed in 1959, enabling the State Bank of India to take
over eight former State-associated banks as its subsidiaries (later named Associates).

The State Bank of India was thus born with a new sense of social purpose aided by
the 480 offices comprising branches, sub offices and three Local Head Offices
inherited from the Imperial Bank. The concept of banking as mere repositories of the
community's savings and lenders to creditworthy parties was soon to give way to the
concept of purposeful banking subserving the growing and diversified financial needs
of planned economic development. The State Bank of India was destined to act as the
pacesetter in this respect and lead the Indian banking system into the exciting field of
national development.



MISSION, VISION & VALUES

Mission, Vision & Values

VISION

My SBI.
My Customer first.
My SBI: First in customer satisfaction

MISSION

We will be prompt, polite and proactive with our customers.
We will speak the language of young India.
We will create products and services that help our customers achieve their
goals.
We will go beyond the call of duty to make our customers feel valued.
We will be of service even in the remotest part of our country.
We will offer excellence in services to those abroad as much as we do to those
in India.
We will imbibe state of the art technology to drive excellence.


VALUES

We will always be honest, transparent and ethical.
We will respect our customers and fellow associates.
We will be knowledge driven.
We will learn and we will share our learning.
We will never take the easy way out.
We will do everything we can to contribute to the community we work in.
We will nurture pride in India






BOARD OF DIRECTORS


List of Directors on the Central Board of
State Bank of India
(As on 28
th
December, 2013)

Sr.
No.
Name Designation
1 Smt. Arundhati Bhattacharya Chairman
2 Shri Hemant G. Contractor Managing Director
3 Shri A. Krishna Kumar Managing Director
4 Shri S.Vishvanathan Managing Director
5 Shri P. Pradeep Kumar Managing Director
6 Shri S. Venkatachalam Director
7 Shri D. Sundaram Director
8 Shri Parthasarathy Iyengar Director
9 Shri Thomas Mathew Director
10 Shri Jyoti Bhushan Mohapatra Workmen Employee
Director
11 Shri S.K. Mukherjee Officer Employee
Director
12 Dr. Rajiv Kumar Director
13 Shri Deepak I. Amin Director
14 Shri Harichandra Bahadur Singh Director
15 Shri Tribhuwan Nath Chaturvedi Director
16 Shri Rajiv Takru Director
17 Dr. Urjit R. Patel Director



Operations

SBI provides a range of banking products through its network of branches in India

and overseas, including products aimed at non-resident Indians (NRIs). SBI has 14
regional hubs and 57 Zonal Offices that are located at important cities throughout
India.
Domestic presence
SBI had 14,816 branches in India, as on 31 March 2013, of which 9,851 (66%)
were in Rural and Semi-urban areas. In the financial year 2012-13, its revenue was
INR 200,560 Crores (US$ 36.9 billion), out of which domestic operations
contributed to 95.35% of revenue. Similarly, domestic operations contributed to
88.37% of total profits for the same financial year.
International presence


The Israeli branch of the State Bank of India located in Ramat Gan.
As of 28 June 2013, the bank had 180 overseas offices spread over 34 countries. It
has branches of the parent in Moscow, Colombo, Dhaka, Frankfurt, Hong Kong,
Tehran, Johannesburg, London, Los Angeles, Male in the Maldives, Muscat,
Dubai, New York, Osaka, Sydney, and Tokyo. It has offshore banking units in the
Bahamas, Bahrain, and Singapore, and representative offices in Bhutan and Cape
Town. It also has an ADB in Boston, USA.
The Canadian subsidiary, State Bank of India (Canada) also dates to 1982. It has
seven branches, four in the Toronto area and three in the Vancouver area.
SBI operates several foreign subsidiaries or affiliates. In 1990, it established an
offshore bank: State Bank of India (Mauritius). SBI (Mauritius) has 15 branches in
major cities/towns of the country including Rodrigues.



State Bank of India (S.B.I.) Branch at Tsim Sha Tsui, Hong Kong
In 1982, the bank established a subsidiary, State Bank of India (California), which
now has ten branches nine branches in the state of California and one in
Washington, D.C. The 10th branch was opened in Fremont, California on 28
March 2011. The other eight branches in California are located in Los Angeles,
Artesia, San Jose, Canoga Park, Fresno, San Diego, Tustin and Bakersfield.
In Nigeria, SBI operates as INMB Bank. This bank began in 1981 as the Indo-
Nigerian Merchant Bank and received permission in 2002 to commence retail
banking. It now has five branches in Nigeria.
In Nepal, SBI owns 55% of Nepal SBI Bank, which has branches throughout the

country. In Moscow, SBI owns 60% of Commercial Bank of India, with Canara
Bank owning the rest. In Indonesia, it owns 76% of PT Bank Indo Monex.
The State Bank of India already has a branch in Shanghai and plans to open one in
Tianjin.
In Kenya, State Bank of India owns 76% of Giro Commercial Bank, which it
acquired for US$8 million in October 2005.
Associate banks

SBI main branch at Mumbai lit up

Main Branch of SBI in Mumbai.
SBI has five associate banks; all use the State Bank of India logo, which is a blue
circle, and all use the "State Bank of" name, followed by the regional
headquarters' name:

State Bank of Bikaner & Jaipur
State Bank of Hyderabad
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore

Earlier SBI had seven associate banks, all of which had belonged to princely states
until the government nationalised them between October 1959 and May 1960. In
tune with the first Five Year Plan, which prioritised the development of rural
India, the government integrated these banks into State Bank of India system to
expand its rural outreach. There has been a proposal to merge all the associate
banks into SBI to create a "mega bank" and streamline the group's operations.
The first step towards unification occurred on 13 August 2008 when State Bank of
Saurashtra merged with SBI, reducing the number of associate state banks from
seven to six. Then on 19 June 2009 the SBI board approved the absorption of State
Bank of Indore. SBI holds 98.3% in State Bank of Indore. (Individuals who held
the shares prior to its takeover by the government hold the balance of 1.77%.)
The acquisition of State Bank of Indore added 470 branches to SBI's existing
network of branches. Also, following the acquisition, SBI's total assets will inch
very close to the INR10 trillion mark (10 billion long scale). The total assets of
SBI and the State Bank of Indore stood at INR9,981,190 million as of March
2009. The process of merging of State Bank of Indore was completed by April
2010, and the SBI Indore branches started functioning as SBI branches on 26
August 2010.
SBI Mumbai LHO.


State Bank of India Mumbai LHO.
Non-banking subsidiaries

Apart from its five associate banks, SBI also has the following non-banking
subsidiaries:
SBI Capital Markets Ltd
SBI Funds Management Pvt Ltd
SBI Factors & Commercial Services Pvt Ltd
SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)
SBI DFHI Ltd
SBI Life Insurance Company Limited
SBI General Insurance
In March 2001, SBI (with 74% of the total capital), joined with BNP Paribas (with
26% of the remaining capital), to form a joint venture life insurance company
named SBI Life Insurance company Ltd. In 2004, SBI DFHI (Discount and
Finance House of India) was founded with its headquarters in Mumbai.
Other SBI service points
SBI has 27,000+ ATMs and SBI group (including associate banks) has 32,752
ATMs. SBI has become the first bank to install an ATM at Drass in the Jammu &
Kashmir Kargil region. This was the Bank's 27,032nd ATM on 27 July 2012.

Logo and slogan

The logo of the State Bank of India is a blue circle with a small cut in the bottom
that depicts perfection and the small man the common man - being the center of
the bank's business. The logo came from National Institute of Design(NID),
Ahmedabad and it was inspired by Kankaria Lake, Ahmedabad.
Slogans: "PURE BANKING, NOTHING ELSE", "WITH YOU - ALL THE
WAY", "A BANK OF THE COMMON MAN", "THE BANKER TO EVERY
INDIAN", "THE NATION BANKS ON US"

Listings and shareholding

As on 30 June 2013, Government of India held around 62% equity shares in SBI.
Over 800,000 individual shareholders hold approx. 5.7% of its shares. Life
Insurance Corporation of India is the largest non-promoter shareholder in the
company with 10.9% shareholding.
Shareholders Shareholding
Promoters: Government of India 62.31%

Insurance Companies 11.90%
Foreign Institutional Investors 09.79%
Individual shareholders 05.70%
GDRs 02.71%
Others 07.59%
Total 100.0%
The equity shares of SBI are listed on the Bombay Stock Exchange, where it is a
constituent of the BSE SENSEX index, and the National Stock Exchange of India,
where it is a constituent of the S&P CNX Nifty.
Its Global Depository Receipts (GDRs) are listed on the London Stock Exchange.
Employees

SBI is one of the largest employers in the country having 228,296 employees as on
31st March 2013, out of which there were 46,833 female employees(21%) and
2,402 disabled employees(1%). On the same date, SBI had 43,550 Schedule
Caste(19%) and 16,764 Schedule Tribe employees(7%). The percentage of
Officers, Assistants and Sub-staff was 35%, 48% and 17% respectively on the
same date.
Hiring drive: The bank hired 20,682 Assistants in FY 2012-13, from over 30 lakh
applicants, for expansion of the branch network and to mitigate staff shortage,
particularly at rural and semi-urban branches. In the same year, it recruited 847
probationary officers from around 17 lakh candidates which applied for officers
position.
Staff productivity: As per its Annual Report for FY 2012-13, each employee
contributed to revenues of INR 944 Lacs and net profit of INR 6.45 Lacs.
Recent awards and recognitions

SBI was ranked 298th in the Fortune Global 500 rankings of
the world's biggest corporations for the year 2012.

SBI won "Best Public Sector Bank" award in the D&B India's study on 'India's
Top Banks 2013'.
State Bank of India won three IDRBT Banking Technology Excellence Awards
2013 for Electronic Payment Systems, Best use of technology for Financial
Inclusion, and Customer Management & Business Intelligence in the large
bank category.
SBI won National Award for its performance in the implementation of Prime
Ministers Employment Generation Programme (PMEGP) scheme for the year
2012.
Best Online Banking Award, Best Customer Initiative Award & Best Risk
Management Award (Runner Up) by IBA Banking Technology Awards 2010
SKOCH Award 2010 for Virtual corporation Category for its e-payment solution
SBI was the only bank featured in the "top 10 brands of India" list in an annual
survey conducted by Brand Finance and The Economic Times in 2010.
The Bank of the year 2009, India (won the second year in a row) by The Banker
Magazine
Best Bank Large and Most Socially Responsible Bank by the Business Bank
Awards 2009
Best Bank 2009 by Business India

The Most Trusted Brand 2009 by The Economic Times.
SBI was named the 29th most reputed company in the world according to Forbes
2009 rankings
Most Preferred Bank & Most preferred Home loan provider by CNBC
Visionaries of Financial Inclusion By FINO
Technology Bank of the Year by IBA Banking Technology Awards
SBI was 11th most trusted brand in India as per the Brand Trust Report 2010.

Major competitors

Some of the major competitors for SBI in the banking sector are Axis Bank, ICICI
Bank, HDFC Bank, Punjab National Bank, Bank of Baroda, Canara Bank and
Bank of India. However in terms of average market share, SBI is by far the largest
player in the market.


Products offered by SBI.

PERSONAL BANKING



State Bank of India offers a wide range of services in the Personal Banking Segment
which are indexed here.
Click on each of them to access the details. Our products are designed with flexibility
to suit your personal requirements. Enjoy 24 hour facility through our ATMs -
growing speedily it has crossed the 21000 mark Watch this space for more details.



SBI Term Deposits

SBI Loan For Pensioners

SBI Recurring Deposits

Loan Against Mortgage Of Property

SBI Housing Loan

Loan Against Shares & Debentures

SBI Car Loan


Rent Plus Scheme

SBI Educational Loan

Medi-Plus Scheme

SBI Personal Loan


e-Invest (ASBA) IPO

AGRICULTURE / RURAL


State Bank of India Caters to the needs of agriculturists and landless agricultural
labourers through a network of more than 9992 rural and semi-urban branches. Apart
from the branches, there are 428 Agricultural Development Branches (ADBs) which
also cater to agriculturists. We are the leaders in agri finance in the country with a
portfolio of Rs. 1,25,000 crores in agri advances for more than 1 crore farmer
families.

Our branches have covered a whole gamut of agricultural activities like crop
production , horticulture , plantation crops, farm mechanization, land development
and reclamation, digging of wells, tube wells and irrigation projects, forestry,
construction of cold storages and godowns, processing of agri-products, finance to
agri-input dealers, allied activities like dairy , fisheries, poultry, sheep-goat, piggery
and rearing of silk worms.


To give special focus to agriculture lending Bank has also appointed agri specialists in
various disciplines to handle projects/ guide farmers in their agri ventures. Advances
are given to borrowers for very small activities covering poorest of the poor to hitech
activities involving large fund outlays.

We have set up eighteen Agri Commercial Branches (ACBs) which will handle high
value agri financing involving large investments. It envisages lending through
corporate partnerships and other large enterprises for commodity financing,
investment credit, other high value agriculture segments like horticulture, floriculture
& food processing etc. It also focuses on Agri related SME including setting up of
Rice and Dhal mills, seed processing industry, food processing industry, large and
small scale dairy units, etc.


Traditionally, rural business is associated with agriculture and allied activities. Of late
however, the trickle down effect of economic growth, renewed focus on infrastructure
development, and employment generation in rural areas have led to huge investment
by the Government in rural India, with a view to bridge the urban and rural divide.

Considering that agriculture would continue to be significant driver of Indian
economy, with the possibilities of rapid growth in emerging areas like contract
farming, agro-processing and agro-export zones, etc., a separate Agri Business Unit
(ABU) with a distinct organizational structure has been set up in the Bank and under
noted objectives has been created in 2004:-

o Providing focused attention on the banking requirements of the agriculture
segment,

o Achieving 18% target under agricultural advances as required under priority sector
norms,

o Focus on micro finance and SHG opportunities (now part of non-farm sector in
Rural Business),

o Focus on Key Corporate and Institutional relationships in agriculture, emerging
opportunities, and special initiatives, as may be necessary,

o Focus on product development and management,

o Reduce NPA levels in Agriculture,

o Make agriculture a commercial proposition.

ABU has six departments headed by Deputy General Managers. :-

Agri Business, Planning, Monitoring and Market Intelligence.

NPA-AGRI

Corporate and Institutional Relationship.

Product Development and Management.

Lead Bank & RSETI.

Regional Rural Banks.


We also have an effective Marketing and recovery team in each region with
responsibilities for marketing and building relationships with dealers of agri-products,
organizing promotional events and for loan sanction, processing, monitoring and
recovery.

With a collective effort of Govt. and the people, we are set forth to continue growth in
the rural and agri development and become the Banker to Every Indian.


SERVICES

Listed are Services, SBI offers to its customers.

DOMESTIC TREASURY

BROKING SERVICES

REVISED SERVICE CHARGES

ATM SERVICES

INTERNET BANKING

STATE BANK MOBICASH

E-PAY

E-RAIL

RBIEFT

SAFE DEPOSIT LOCKER

MICR CODES


FOREIGN INWARD REMITTANCES
SME
Current Accounts, Deposits and Transaction Banking
SBI Asset Backed Loan
Fleet Finance Scheme
eDFS
Collateral Free Loans


Internet Banking
Mobile Banking
State Bank MobiCash
ATM Services
Demat Services

Govt. Business
Govt.Accounts
Public Provident Fund
SBI e-Tax

Corporate Banking
Corporate Accounts
Mid Corporate Group
Project Finance
Products & Services


NRI Services
Accounts & Deposits
Remittances
Loans
Investments






Research
methodology

The procedure adopted for conducting the research requires a lot of attention as it has
direct bearing on accuracy, reliability and adequacy of results obtained. It is due to
this reason that research methodology, which we used at the time of conducting the
research, needs to be elaborated upon. It may be understood as a science of studying
how research is done scientifically. So, the research methodology not only talks about
the research methods but also considers the logic behind the method used in the
context of the research study. Research Methodology is a way to systematically study
and solve the research problems. If a researcher wants to claim his study as a good
study, he must clearly state the methodology adapted in conducting the research the
research so that it way be judged by the reader whether the methodology of work
done is sound or not.

The Research Methodology here includes:-

Objective of study

Meaning of Research.

Research Problem.

Research Design.

Data Collection method.

Analysis and interpretation of Data

Limitation of study

















OBJECTIVE OF THE STUDY


Objectives are the ends that states specifically how goal be achieved. Every study
must have an objective for which all the efforts have been done. Without objective no
research can be conducted and no result can be obtained. On the basis of objective all
the research process is followed. Objectives are the main aspect of every study. The
objective of the study
gives direction to go through the research problem. It guides the researcher and keeps
him on track. I have two objectives regarding my research project. These are shown
below :-
1. Primary objective
2. Secondary objective

1. Primary objective :-
1) To study the software used in SBI.
2) To analyse the financial statements of the corporation to assess its
true financial position by the use of ratios.

2. Secondary objective :-
1) To find out the shortcomings in SBI.
2) To see whether SBI is going well or not in different areas.







IMPORTANCE OF THE STUDY

By FINANCIAL PERFORMANCE ANALYSIS OF SBI we would be able
to get a fair picture of the financial position of SBI.

By showing the financial performance to various lenders and creditors it is
possible to get credit in easy terms if good financial condition is maintained in
the company with assets outweighing the liabilities.

Protecting the property of the business.

Compliances with legal requirement.






Meaning of Research:


Research is defined as a scientific and systematic search for pertinent information on
a specific topic. Research is an art of scientific investigation. Research is a
systematized effort to gain now knowledge. It is a careful investigation or inquiry
especially through search for new facts in any branch of knowledge. Research is an
academic activity and this term should be used in a technical sense. Research
comprises defining and redefining problems, formulating hypothesis or suggested
solutions. Making deductions and reaching conclusions to determine whether they if
the formulating hypothesis. Research is thus, an original contribution to the existing
stock of knowledge making for its advancement. The search for knowledge through
objective and systematic method of finding solutions to a problem is research.




Research Problem

The first step while conducting research is careful definition of Research Problem.
To ERR IS THE HUMAN is a proverb which indicates that no one is perfect in this
world. Every researcher has to face many problemswhich conducting any research
thats why problem statement is defined to know which type of problems a researcher
has to face while conducting any
study. It is said that,
Problem well defined is problem half solved.

Basically, a problem statement refers to some difficulty, which researcher
experiences in the context of either a theoretical or practical situation and
wants to obtain the solution for the same.

The problem statement here is:-

TO MAKE A FINANCIAL ANALYSIS OF FINANCIAL
STATEMENTS OF SBI













Research Design


A research designs is the arrangement of conditions for collection and analysis data in
a manner that aims to combine relevance to the research purpose with economy in
procedure. Research Design is the conceptual structure with in which research in
conducted. It constitutes the blueprint for the collection measurement and analysis of
data. Research Design includes and outline of what the researcher will do form
writing the hypothesis and it operational implication to the final analysis of data. A
research design is a framework for the study and is used as guide in collection and
analyzing the data. It is a strategy specifying which approach will be used for
gathering and analyzing the data. It also include the time and cost budget since most
studies are done under these two cost budget since most studies are done under theses
tow constraints. The design is such studies must be rigid and not flexible and most
focus attention on the following:-

What is the study about?
Why is the study being made?
Where will the study be carried out?
What type of data is required?
Where can be required data be found?
What period of time will the study include?
What will be sample design?
What techniques of data collection will be used?
How will the data be analyzed?
In what style will the report be prepared?



TYPES OF RESEARCH DESIGN :

EXPERIMENTAL RESEARCH DESIGN
EXPLORATORY RESEARCH DESIGN
DESCRIPTIVE& DIAGNOSTIC RESEARCH

Exploratory Research Design: This research design is preferred when researcher has
a vague idea about the problem the researcher has to explore the subject.

Experimental Research Design The research design is used to provide a strong
basis for the existence of casual relationship between two or more variables.

Descriptive Research Design It seeks to determine the answers to who, what,
where, when and how questions. It is based on some previous understanding of the
matter.

Diagnostic Research Design It determines the frequency with which something
occurs or its association with something else.

RESEARCH DESIGN USED IN THE STUDY:

Descriptive research design is used in this study because it will ensure the
minimization of bias and maximization of reliability of data collected. Descriptive

study is based on some previous understanding of the topic. Research has got a very
specific objective and clear cut data requirements The researcher had to use fact and
information already available through financial statements of earlier years and analyse
these to make critical evaluation of the available material. Hence by making the type
of the research conducted to be both Descriptive and Analytical in nature. From the
study, the type of data to be collected and the procedure to be used for this purpose
were decided.


Data Collection Method

The process of data collection begins after a research problem has been
defined and research design ahs been chalked out. There are two types of
data

PRIMARY DATA -
It is first hand data, which is collected by researcher itself. Primary data is collected
by various approaches so as to get a precise, accurate, realistic and relevant data. The
main tool in gathering primary data was investigation and observation. It was
achieved by a direct approach and observation from the officials of the company.

SECONDARY DATA - it is the data which is already collected by someone else.
Researcher has to analyze the data and interprets the results. It has always been
important for the completion of any report. It provides reliable, suitable, adequate and
specific knowledge.

TYPE OF DATA USED IN THE STUDY

The required data for the study are basically secondary in nature and the data are
collected from

The audited reports of the company.
INTERNET which includes required financial data collected form SBIs
official website i.e www.sbi.co.in and some other websites on the internet for
the purpose of getting all the required financial data of the bank and to get
detailed knowledge about SBI for the convenience of study.
Brouchers of SBI.
The valuable cooperation extended by staff members and the branch manager
of SBI,dharmshala contributed a lot to fulfill the requirements in the collection
of data in order to complete the project.


Methods of data analysis

The data collected were edited, classified and tabulated for analysis. The analytical
tools used in this study are:


ANALYTICAL TOOLS APPLIED:

The study employs the following analytical tools:
1. Comparative statement.
2. Trend Percentage.
3. Ratio Analysis.
4. Cash Flow Statement.

Limitations of study

Difficulty in data collection.
Limited knowledge about the bank in the initial stages.
Branch manager was reluctant for giving financial data of the
bank.
The analysis and interpretation are based on secondary data
contained in the published annual reports of SBI for the study
period.
Due to the limited time available at the disposable , the study
has been confined for a period of 5 years (2005-2009).
Ratio itself will not completely show the companys good or
bad financial position.
Inter firm comparison was not possible due to the non
availability of competitors data.
The study of financial performance can be only a means to
know about the financial condition of the company and
cannot show a through picture of the activities of the
company
.





INTRODUCTION OF THE TOPIC


Meaning Of Financial Statements
Financial statements refer to such statements which contains financial information
about an enterprise. They report profitability and the financial position of the business
at the end of accounting period. The team financial statement includes at least two
statements which the accountant prepares at the end of an accounting period. The two
statements are: -

The Balance Sheet
Profit And Loss Account

They provide some extremely useful information to the extent that balance Sheet
mirrors the financial position on a particular date in terms of the structure of assets,
liabilities and owners equity, and so on and the Profit And Loss account shows the
results of operations during a certain period of time in terms of the revenues obtained
and the cost incurred during the year. Thus the financial statement provides a
summarized view of financial positions and operations of a firm.

Meaning Of Financial Analysis

The term financial analysis is also known as analysis and interpretation of
financial statements refers to the process of determining financial strength and
weakness of the firm by establishing strategic relationship between the items of the
Balance Sheet, Profit and Loss account and other operative data.
The first task of financial analysis is to select the information relevant to the decision
under consideration to the total information contained in the financial statement. The
second step is to arrange the information in a way to highlight significant relationship.
The final step is interpretation and drawing of inference and conclusions. Financial
statement is the process of selection, relation and evaluation.

Features of Financial Analysis

o To present a complex data contained in the financial statement in simple and
understandable form.

o To classify the items contained in the financial statement in convenient and
rational groups.


o To make comparison between various groups to draw various conclusions.
Purpose of Analysis of financial statements

To know the earning capacity or profitability.


To know the solvency.

To know the financial strengths.

To know the capability of payment of interest & dividends.

To make comparative study with other firms.

To know the trend of business.

To know the efficiency of mgt.

To provide useful information to mgt.

Procedure of Financial Statement Analysis

The following procedure is adopted for the analysis and interpretation of
financial statements:-

The analyst should acquaint himself with principles and postulated of
accounting. He should know the plans and policies of the management so that
he may be able to find out whether these plans are properly executed or not.

The extent of analysis should be determined so that the sphere of work may be
decided. If the aim is find out. Earning capacity of the enterprise then analysis
of income statement will be undertaken. On the other hand, if financial
position is to be studied then balance sheet analysis will be necessary.

The financial data be given in statement should be recognized and rearranged.
It will involve the grouping similar data under same heads. Breaking down of
individual components of statement according to nature. The data is reduced to
a standard form.

A relationship is established among financial statements with the help of tools
& techniques of analysis such as ratios, trends, common size, fund flow etc.

The information is interpreted in a simple and understandable way. The
significance and utility of financial data is explained for help in decision
making.

The conclusions drawn from interpretation are presented to the management in
the form of reports.

Types Of Financial Analysis

There are different ways of analysis the financial statements:

1. On The Basis Of Process Of Analysis


a) Horizontal Analysis: This is used when the financial statement of a number
of years are to be analysed. Such analysis indicates the trends and the increase
or decrease in various items not only in absolute figures but also in percentage
form. This analysis indicates the strengths and weaknesses of the firm. This
analysis is also called as dynamic analysis because it also shows the trend of
the business.

b) Vertical Analysis : This is used when financial statements of a particular year
or on a particular date are analyzed. For this type of analysis we generally use
common size statements and the ratio analysis. It involves a study of
quantitative relationship among various items of balance sheet and profit and
loss account. This type of analysis is static analysis because this is based on
the financial results of one year. Vertical analysis is useful when we have to
compare the performance of different departments of the same company.

Among these two types of analysis, horizontal analysis is more useful because it
brings out more clearly the trends of working of a firm. This gives us more
concrete bases for future planning.

2. On The Basis Of Information Available

a) Internal Analysis: This analysis is based on the information available to the
business firm only .Hence internal analysis is made by the management.
Internal analysis is more reliable and helpful for financial decisions.

b) External Analysis : This analysis is made on the basis of published
statements,reports and informations. This analysis is made by external parties
such as creditors,investors,banks,financial analysis etc. external analysis is less
reliable in comparison to internal analysis because of limited and often
incomplete information.

3. On The Basis Of Number Of Firms

a) Inter-Firm Analysis : When financial analysis of two or more companies or
firms are analyzed and compared over a number of accounting period, it is
called inter-firm analysis.

b) Intra -Firm Analysis : intra-firm analysis is concerned with the analysis of
financial performance of different units or departments or segments of the same
enterprise or company. Similarly when financial statements of two or more years of
the same firm are analyzed and compared it is also called as intra-firm analysis.

4. On The Basis Of Objectives

a) Accounting Analysis: Accounting analysis is analysis of past financial
performance and involves examining how generally accepted accounting principles
and conventions have been applied in arriving at the values of assets, liabilities,
revenues and expenses.


b) Prospective Analysis : Prospective analysis involves developing forecasted
financial statements keeping in view the changes that are likely to shape and affect the
business given the assumptions about these changes and the limitation of the
forecasting technique used. This is quite complicated analysis.


Methods/Tools Of Financial Analysis
A number of methods can be used for the purpose of analysis of financial statements.
These are also termed as techniques or tools of financial analysis. Out of these, and
enterprise can choose those techniques which are suitable to its requirements. The
principal techniques of financial analysis are:-

a. Comparative financial statements
b. Common-size statements
c. Trend analysis
d. Ratio analysis
e. Funds flow analysis
f. Cash flow analysis
g. Break even point analysis

a. Comparative Financial Statements:

When financial statements figures for two or mote years are placed side-side to
facilitate comparison, these are called comparative Financial Statements. Such
statements not only show the absolute figures of various years but also provide for
columns to indicate to increase ort decrease in these figures from one year to another.
In addition, these statements may also show the change from one year to another on
percentage form. Such cooperative statements are of great value in forming the
opinion regarding the progress of the enterprise.

Objectives purpose or significance of comparative financial statements

1.To simplify data
2.To make inter period/inter-firm comparison
3.To indicate the trends
4.To enable forecasting
5.To indicate the strengths and weaknesses of the firm
6.To compare the performance
7.To analyse expenses
8.To analyse profits

Tools for comparison of financial statements

Comparative financial statement is a tool of financial analysis that depicts change in
each item of the financial statement in both absolute amount and percentage term,
taking the item in preceding accounting period as base.


Comparison and analysis of financial statements may be carried out using the
following tools:

1.Comparative Balance Sheet : The comparative balance sheet shows increase and
decrease in absolute terms as well as percentages ,in various assets ,liabilities and
capital. A comparative analysis of balance sheets of two periods provides information
regarding progress of the business firm.
The main purpose of comparative balance sheet is to measure the short- term and
long-term solvency position of the business.

2. Comparative Income Statement : Comparative income statement is prepared by
taking figures of two or more than two accounting periods,to enable the analyst to
have definite knowledge about the progress of the business.Compartative income
statements facilitate the horizontal analysis since each accounting variable is analysed
horizontally.

b. Common- Size Statements:
Common size statements are such statements in which the items of financial
statements are covered into percentage of common base. In common-size income
statement, by assuming net sales as 100(i.e %)and other individual items are
converted as percentage of this. Similarly, in common size balance sheet ,total assets
are assumed to be 100 (i.e %) and individual assets are expressed as percentage.



Objectives of common size statements

1. Presenting the change in various items in relation to total assets or total
liabilities or net sales.
2. Establishing a relationship.
3. Providing a common base for comparison.






Types of common size statements

1. Common-Size Balance Sheet : A common size balance sheet is a statement
in which total of assets or liabilities is assumed to be equal to 100 and all the
figures are expressed as percentage of the total. That is why it is known as
percentage balance sheet.
Common-size balance sheet facilitate the vertical analysis since each item of
the Balance Sheet is analyzed vertically.

2. Common-Size Income Statement: Common-size income statement is a
statement in which the figures of net sales is assumed to be equal to 100 and
all other figures of profit and loss A/c are expressed as percentage of net
sales.this statement facilitate the vertical analysiss since each accounting

variable is analyzed vertically. One can draw conclusion, regarding the
behaviour of expenses over period of time by examining these percentages.



c. Trend Analysis:

Trend percentage are very useful is making comparative study of the financial
statements for a number of years. These indicate the direction of movement over a
long tine and help an analyst of financial statements to form an opinion as to whether
favorable or unfavorable tendencies have developed. This helps in future forecasts of
various items. For calculating trend percentages any year may be taken as the base
year. Each item of bease year is assumed to be equal to 100 and on that basis the
percentage of item of each year calculated.



d. Ratio Analysis:

Meaning :

Absolute figures expressed in financial statements by themselves are meaningfulness.
These figures often do not convey much meaning unless expressed in relation to other
figures. Thus, it can be say that the relationship between two figures, expressed in
arithmetical terms is called a ratio.


According to R.N. Anthony.

A ratio is simply one number expressed in terms of
another. It is found by dividing one number into the other.




TYPES OF RATIOS

1. Proportion or Pure Ratio or Simple ratio.
2. Rate or so many Times.
3. Percentage
4. Fraction.


OBJECTS AND ADVANTAGES OR USES OF RATIO
ANALYSIS

1. Helpful in analysis of financial statements.
2. Simplification of accounting data.

3. Helpful in comparative study.
4. Helpful in locating the weak spots of the business.
5. Helpful in forecasting
6. Estimate about the trend of the business
7. Fixation of ideal standards
8. Effective control
9. Study of financial soundness.

LIMITATION OF RATIO ANALYSIS
1. False accounting data gives false ratios
2. Comparisons not possible of different firms adopt different
3. Accounting policies.
4. Ratio analysis becomes less effective due to price level
5. change
6. Ratios may be misleading in the absence of absolute data.
7. Limited use of a single Ratio.
8. Window-Dressing
9. Lack of proper standards.
10. Ratio alone are not adequate for proper conclusions
11. Effect of personal ability and bias of the analyst.


CLASSIFICATION OF RATIOS

In view of the financial management or according to the tests satisfied,
various ratios have been classifieds as below:

Liquidity Ratios : These are the ratios which measure the short-term solvency or
financial position of a firm. These ratios are calculated to comment upon the short-
term paying capacity of a concern or the firms ability to meet its current obligations.
Long Term Solvency and Leverage Ratios : Long-term solvency ratios convey a
firms ability to meet the interest cost and repayment schedules of its long-term
obligation e.g. Debit Equity Ratio and Interest Coverage Ration. Leverage Ratios.

Activity Ratios: Activity ratios are calculated to measure the efficiency with which
the resource of a firm have been employed. These ratios are also called turnover ratios
because they indicate the speed with which assets are being turned over into sales e.g.
debtors turnover ratio.

Profitablity Ratios: These ratios measure the results of business operations or overall
performance and effective of the firm e.g. gross profit ratio, operating ratio or capital
employed. Generally, two types of profitability ratios are calculated.
(a) In relation to Sales, and
(b)In relation in Investment





FUNCTIONAL CLASSIFICATION IN VIEW OF

FINANCIAL MANAGEMENT OR CLASSIFICATION
ACCORDING TO TESTS

Liquidity
Ratios
Long-term
Solvency and
Leverage
Ratios
Activity Ratios Profitability
Ratios
-Current Ratio
-Liquid Ratio
(Acid) Test or
Quick Ratio.
-Absolute liquid or
-Cash Ratio.
-Debtors
Turnover Ratio
-Creditors Turnover
Ratio
-Inventory Turnover
ratio
Financial Operating
Composite
-Debt. Equity
Ratio
-Debt to Total
Capital Ratio
-Interest
Coverage Ratio
-Capital Gearing
Ratio
Inventory Turnover
Ratio.
Debtors Turnover
Ratio
Fixed Assets
Turnover Ratio
Total Asset Turnover
Ratio
Working Capital
Turnover Ratio.
Payables Turnover
Ratio
Capital Employed
Turnover Ratio
In Relation to Sales.
Gross Profit Ratio.
Operating Ratio.
Operating Profit
Ratio.
Net Profit Ratio.
Expenses Ratio
In relation to
investments
Return on
Investments.
Return on capital.
Return on Equity
Capital.
Return on total
Resources
Earning per share.
Price Earning Ratio.

CASH-FLOW STATEMENT
A cash flow statement is a statement showing inflows (receipts) and
outflows (payments) of cash during a particular period. In other words, it is a
summary of sources and applications of each during a particular span of
time.




Objectives of Cash Flow Statement :

1. Useful for Short-Term Financial Planning.
2. Useful in Preparing the Cash Budget.
3. Comparison with the Cash Budget.
4. Study of the Trend of Cash Receipts and Payments.
5. It explains the Deviations of Cash from Earnings.
6. Helpful in Ascertaining Cash Flow from various Separately.
7. Helpful in Making Dividend Decisions.



State Bank of India

Consolidated Balance Sheet

Mar '13 Mar '12 Mar '11 Mar '10 Mar '09

12 mths 12 mths 12 mths 12 mths 12 mths

Capital and Liabilities:

Total Share Capital 684.03 671.04 635.00 634.88 634.88

Equity Share Capital 684.03 671.04 635.00 634.88 634.88

Share Application Money 0.00 0.00 0.00 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Init. Contribution Settler 0.00 0.00 0.00 0.00 0.00

Preference Share Application
Money
0.00 0.00 0.00 0.00 0.00

Employee Stock Opiton 0.00 0.00 0.00 0.00 0.00

Reserves 124,348.99 105,558.97 82,836.25 82,500.70 71,755.51

Revaluation Reserves 0.00 0.00 0.00 0.00 0.00

Net Worth 125,033.02 106,230.01 83,471.25 83,135.58 72,390.39

Deposits 1,627,402.61 1,414,689.40 1,255,562.48 1,116,464.56 1,011,988.33

Borrowings 203,723.20 157,991.36 142,470.77 122,074.57 64,591.64

Total Debt 1,831,125.81 1,572,680.76 1,398,033.25 1,238,539.13 1,076,579.97

Minority Interest 4,253.86 3,725.67 2,977.17 2,631.27 2,228.27

Policy Holders Funds 0.00 0.00 0.00 0.00 0.00

Group Share in Joint Venture 0.00 0.00 0.00 0.00 0.00

Other Liabilities & Provisions 172,745.65 147,319.73 163,416.58 125,837.97 153,627.10

Total Liabilities 2,133,158.34 1,829,956.17 1,647,898.25 1,450,143.95 1,304,825.73

Mar '13 Mar '12 Mar '11 Mar '10 Mar '09


Assets

Cash & Balances with RBI 89,574.03 79,199.21 119,349.83 82,195.58 74,161.07

Balance with Banks, Money at
Call
55,653.69 48,391.62 35,977.62 39,653.42 51,100.63

Advances 1,392,608.03 1,163,670.21 1,006,401.55 869,501.64 750,362.38

Investments 519,393.19 460,949.14 419,066.45 402,754.13 372,231.45

Gross Block 8,693.50 7,026.67 6,141.13 15,886.95 14,063.96

Accumulated Depreciation 0.00 0.00 0.00 10,359.09 9,127.29

Net Block 8,693.50 7,026.67 6,141.13 5,527.86 4,936.67

Capital Work In Progress 676.43 381.30 345.70 486.03 286.81

Other Assets 66,559.46 70,338.03 60,615.96 50,025.30 51,746.73

Minority Interest 0.00 0.00 0.00 0.00 0.00

Group Share in Joint Venture 0.00 0.00 0.00 0.00 0.00

Total Assets 2,133,158.33 1,829,956.18 1,647,898.24 1,450,143.96 1,304,825.74

Contingent Liabilities 1,136,690.27 1,017,565.55 921,621.06 556,675.30 734,943.70

Bills for collection 0.00 0.00 0.00 197,108.13 175,677.61

Book Value (Rs) 1,827.88 1,583.05 1,314.51 1,309.46 1,140.22






State Bank of India

Standalone Profit & Loss ------------------- in Rs. Cr. -------------------

account
Mar '13 Mar '12 Mar '11 Mar '10 Mar '09

12 mths 12 mths 12 mths 12 mths 12 mths

Income

Interest Earned 119,657.10 106,521.45 81,394.36 70,993.92 63,788.43

Other Income 16,034.84 14,351.45 14,930.42 14,968.15 12,691.35

Total Income 135,691.94 120,872.90 96,324.78 85,962.07 76,479.78

Expenditure

Interest expended 75,325.80 63,230.37 48,867.96 47,322.48 42,915.29

Employee Cost 18,380.90 16,974.04 15,211.62 12,754.65 9,747.31

Selling and Admin Expenses 0.00 0.00 0.00 7,898.23 5,122.06

Depreciation 1,139.61 1,007.17 990.50 932.66 763.14

Miscellaneous Expenses 26,740.65 27,954.03 23,884.37 7,888.00 8,810.75

Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00

Operating Expenses 29,284.42 26,068.99 23,015.44 24,941.01 18,123.66

Provisions & Contingencies 16,976.74 19,866.25 17,071.05 4,532.53 6,319.60

Total Expenses 121,586.96 109,165.61 88,954.45 76,796.02 67,358.55

Mar '13 Mar '12 Mar '11 Mar '10 Mar '09


Net Profit for the Year 14,104.98 11,707.29 7,370.35 9,166.05 9,121.23

Extraordionary Items 0.00 0.00 0.00 0.00 0.00

Profit brought forward 0.34 6.05 0.34 0.34 0.34

Total 14,105.32 11,713.34 7,370.69 9,166.39 9,121.57

Preference Dividend 0.00 0.00 0.00 0.00 0.00

Equity Dividend 2,838.74 2,348.66 1,905.00 1,904.65 1,841.15

Corporate Dividend Tax 375.95 296.49 246.52 236.76 248.03

Per share data (annualised)

Earning Per Share (Rs) 206.20 174.46 116.07 144.37 143.67

Equity Dividend (%) 415.00 350.00 300.00 300.00 290.00

Book Value (Rs) 1,445.60 1,251.05 1,023.40 1,038.76 912.73

Appropriations

Transfer to Statutory Reserves 10,890.29 9,067.85 5,218.83 6,495.14 6,725.15

Transfer to Other Reserves 0.00 0.00 0.00 529.50 306.90

Proposed Dividend/Transfer to Govt 3,214.69 2,645.15 2,151.52 2,141.41 2,089.18

Balance c/f to Balance Sheet 0.34 0.34 0.34 0.34 0.34

Total 14,105.32 11,713.34 7,370.69 9,166.39 9,121.57







State Bank of India

Cash Flow ------------------- in Rs. Cr. -------------------
Mar '13 Mar '12 Mar '11 Mar '10 Mar '09


12 mths 12 mths 12 mths 12 mths 12 mths

Net Profit Before Tax 19950.90 18483.31 14954.23 13926.10 14180.64

Net Cash From Operating Activities 21661.23 -28468.59 34282.27 -1804.99 29479.73

Net Cash (used in)/from
Investing Activities
-1999.41 -1648.56 -1245.28 -1761.52 -1651.93

Net Cash (used in)/from Financing
Activities
-3259.72 2147.66 2057.11 -3359.67 5097.38

Net (decrease)/increase In Cash and
Cash Equivalents
17657.00 -25752.40 35039.34 -6926.18 32925.18

Opening Cash & Cash Equivalents 97163.16 122915.56 87834.81 103110.02 71478.62

Closing Cash & Cash Equivalents 114820.16 97163.16 122874.15 96183.84 104403.80


This cash flow statement example will show you the format and components of a
simple cash flow statement.
There is a common saying in the business world:
Cash is king.
This saying is popular because cash is the lifeblood of the business. Without it, one
cannot pay bills, expand the business by purchasing assets. One cannot pay
employees. As the business owner, one can't even pay oneself!

The cash flow statement is a statement (report) of flows (both in and out of the
business) of cash.
The cash flow statement is a key accounting report. One could show the most
fantastic performance according to the income statement, with huge profits, and yet
have nothing left in the bank. In this situation the business would not survive. How
could this occur? It could occur if all your sales have been made on credit. And it
could occur if additionally you weren't monitoring the cash flows of your business.
In real life this extreme situation would rarely occur, but this example serves to
explain that the cash situation of a business is key. And the cash flow statement,
which shows us what the business has been doing with its cash - provides vital
information.
Like the rest of the financial statements, the cash flow statement is usually drawn up
annually, but can be drawn up more often. Also note that it covers the flows of cash
over a period of time (unlike the balance sheet that provides a snapshot of the
business at a particular date).

CONSOLIDATED RESULTS
FY13 OVER FY12


Operating Profit increased from Rs.40,713 crores in FY12 to Rs.40,922 crores in
FY13.
Net Profit (after minority interest) increased from Rs.15,343 crores in FY12 to
Rs.17,916 crores in FY13 (YOY growth 16.77%).
Earning per Share increased by 10.5% from Rs.242 in FY12 to Rs.267 in FY13.
SBI STAND ALONE RESULTS HIGHLIGHTS
Net Profit increased from Rs.11,707 crores in FY12 to Rs.14,105 crores in
FY13 (20.48% YOY growth).

Cumulative Domestic Net Interest Margin continues to be healthy at 3.66%.
CASA at 46.50%, Saving Bank Deposits cross Rs. 4 lakh crores.


PROFITABILITY
FY13 OVER FY12
Total Interest Income increased from Rs 1,06,521 crores in FY12 to
Rs 1,19,657 crores in FY13 (12.33%YOY growth).
Interest Income on Advances increased from Rs.81,078 crores in FY12 to
Rs. 90,537 crores in FY13 (11.67%YOY growth).
Interest Income on Resource Operations increased from Rs.24,300 crores in
FY12 to Rs.27,746 crores in FY13 (14.18%YOY growth).
Total Interest Expenses increased from Rs.63,230 crores in FY12 to
Rs.75,326 crores in FY13 (19.13%YOY growth).
Interest Expenses on Deposits increased from Rs.55,644 crores in FY12 to
Rs. 67,465 crores in FY13 (21.24%YOY growth).
Operating Expenses increased from Rs.26,069 crores in FY12 to Rs.29,284 crores in
FY13 (12.33%YOY growth).

Staff Expenses increased from Rs.16,974 crores in FY12 to Rs.18,381 crores in
FY13 (8.29%YOY growth).
Operating Profit is at Rs.31,082 crores in FY13.
Net Profit increased from Rs.11,707 crores in FY12 to Rs.14,105 crores in
FY13 (20.48% YOY growth).
Q4FY13 OVER Q4FY12
Interest Income on Advances increased from Rs.22,141 crores in Q4FY12 to
Rs.23,064 crores in Q4FY13 (4.17%YOY growth).
Interest Income on Resources Operations increased from Rs.6,194 crores in
Q4FY12 to Rs.7,201 crores in Q4FY13 (16.26%YOY growth).


Interest paid on deposits increased from Rs.14,822 crores in Q4FY12 to Rs.17,417
crores in Q4FY13 (17.51 %YOY growth).
Non-Interest Income increased from Rs.5,377 crores in Q4FY12 to Rs.5,547 crores
in Q4FY13 (3.16%YOY growth).
Staff Expenses increased from Rs.4,749 crores in Q4FY12 to Rs.5,612 crores
in Q4FY13 (18.18%YOY growth).
Operating Profit is at Rs.7,761 crores.

DEPOSITS

Deposits of the Bank increased from Rs 10,43,647 crores in Mar 12 to
Rs.12,02,740 crores in Mar 13, a growth of 15.24%.

Savings Bank Deposits increased from Rs.3,59,847 crores in Mar 12 to
Rs.4,14,907 crores in Mar 13 (15.30% YOY growth).
ADVANCES

Gross Advances increased from Rs 8,93,613 crores in Mar 12 to Rs 10,78,557 crores
in Mar 13 (20.70% YOY growth).
Credit Deposit Ratio (Domestic) increased from 78.51% in Mar 12 to 82.42% in
Mar 13, an increase of 391 bps.
Large Corporate Advances increased from Rs 1,25,340 crores in Mar 12 to Rs.
1,75,831 crores in Mar 13 (40.28% YOY growth).
Mid-Corporate Advances increased from Rs 1,73,381 crores in Mar 12 to
Rs.2,04,853 crores in Mar 13 (18.15% YOY growth).
Retail Advances increased from Rs.1,82,427 crores in Mar 12 to Rs
2,09,694 crores in Mar 13 (14.95 % YOY growth).
Home loans increased from Rs 1,02,739 crores in Mar 12 to Rs 1,19,467 crores in
Mar 13 (16.28% YOY growth).
Auto Loans
increased by 35.47% YOY from Rs.18,306 crores to Rs.24,800 crores and
Education Loans increased by Rs.12,566 crores to Rs.13,751 crores.
9.43% YOY from
SME Advances increased from Rs. 1,63,745 crores in Mar 12 to Rs.1,84,128
crores in Mar 13 (12.45%YOY growth).
Direct Agri Advances increased from Rs.86,281 crores in Mar 12 to
Rs.1,08,584 crores in Mar 13 (25.85% YOY growth).
International Advances increased from Rs 1,35,724 crores in Mar 12 to
Rs.1,69,065 crores in Mar 13 (YOY growth of 24.57%), with a USD denominated
growth of 16.76%.
ASSET QUALITY:
Gross NPA (%) Net NPA (%) PCR (%)
Mar 12 4.44 1.82 68.10
June 12 4.99 2.22 64.29
Sep 12 5.15 2.44 62.78
Dec 12 5.30 2.59 61.49
Mar 13 4.75 2.10 66.58


KEY FINANCIAL RATIOS (SBI):

Return on Assets has increased from 0.88% in Mar 12 to 0.91% in Mar 13.
Return on Equity decreased from 16.05% in March 12 to 15.94% in Mar 13.
Average Cost of Deposits increased from 5.95% in Mar 12 to 6.29% in Mar 13 (34
bps YOY growth).
Yield on Advances declined from 11.05% in Mar 12 to 10.54% in Mar 13 (51 bps
YOY).

Performance of Associates and Subsidiaries:
Net Profit of the 5 Associate Banks increased from Rs.3,627 crores in FY12 to
Rs.3,678 crores in FY13.
SBI Cards & Payment Services (Pvt) Ltd registered a net profit after tax of Rs.136
crores in FY13 against Rs.38 crores in FY 12 (YOY growth of 259%).
SBI DFHI recorded a YOY growth of 82% in Net Profit from Rs.44 crores (Mar
12) to Rs.80 crores (Mar 13).
The SBI Life Insurance Company Ltd posted a Net Profit after tax of Rs. 622 crores
in FY13, a YOY growth of 11.94%, from Rs.556 crores in Mar 12.
The SBI Capital Market Ltd has posted a Net Profit of Rs. 296 crores in FY13, a
YOY growth of 17.93% over Rs.251 crores in FY 12.
SBI Group Operating Rs.40,713 crores in Profit for FY13 at Rs.40,922 crores is up
by 0.51% from FY12, while Net Profit is up at Rs.17,916 crores from Rs.15,343
crores in FY12, a growth of 16.77%.
Profit Before Tax & Profit After Tax

The graph visually shows how the net profit of the company stand reduced due to the
impact
of Tax.








Total Assets & Asset Turnover Ratio
Total Assets is the sum of all assets, current and fixed. The asset turnover ratio
measures the ability of a company to use its assets to efficiently generate sales. The
higher the ratio indicates that the company is utilizing all its assets efficiently to
generate sales. Companies with low profit margins tend to have high asset turnover.










Net Interest Income
Net Interest Income is the difference between interest payments the company receives
on loans outstanding and interest payments the company makes to customers on their
deposits.










Networth
Networth is the difference between a company's total assets and its total liabilities. It
is also known as shareholder`s equity.








Dividend
Dividend is a payment made by a company to its shareholders usually as a distribution
of profits. When a company makes profit it can either re-invest it in the business or it
distribute it to its shareholders by way of dividends. The dividend payout ratio is the
amount of dividends paid to shareholders relative to the amount of total net profit of a
company.

A reduction in dividends paid is not appreciated by investors and usually the stock
price moves down as this could point towards difficult times ahead for the company.
On the other hand a stable dividend payout ratio indicates a solid dividend policy by
the company's management.




Book Value (Rs)

Book value is a company's assets minus its liabilities. In simple terms it would be the
amount of money that a share holder would get if a company were to liquidate.





Deposits & Advances Standalone
Deposits are liability to banks, which need money to lend. It is the amount that any
citizen (resident or no-resident) keep with the bank subject to some regulatory
compliance. In turn, banks pay interest on deposits. It is considered the safest form of
investment. Deposits are of two types current and savings deposits (CASA) as well as
term deposits.

Advance is the amount that banks lend to individuals and companies. They charge
interest on loans. Interest rates vary depending on the terms and conditions of such

credit. Banks raise money to lend through different sources like deposits, money
market and so on.

The difference between credit and deposits, is expressed as CD ratio in banking
parlance. Neither an extreme lower nor higher CD ratio is good for banks. Generally,
a high CD ratio means credit growth is higher than deposit growth. Alternatively, it
also suggests, banks may be hiring more from debt market than deposits. A lower CD
ratio means, deposit growth is higher than credit expansion.


Capital Adequacy Ratio
Capital Adequacy Ratio (CAR) is the measure of a bank's capital and expressed in
percentage term. In simple terms, this capital is set aside by banks to protect
depositors. A lower CAR means a bank is prone to the risk of going burst in case of
any crisis. However, a very high CAR means, the bank is not doing enough business.









profitability Analysis
Consolidated

Particulars FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
Net Profit
Margin Ratio
9.88 4.98 7.56 9.02 9.14
Cost to Net
Income Ratio
23.17 31.69 31.15 26.47 56.35
Other Income
to Net Income
Ratio
18.95 25.23 23.14 16.85 34.76

Net profit margin is arrived at by dividing profit after tax by the total income
generated (i.e. interest earned plus other income) and shows what is left for the
shareholders as a percentage of total income.

Cost to net income ratio is particularly important in valuing banks. It is derived by
dividing operating expenses by the net income generated (i.e. net interest income plus
the other income). The ratio highlights the efficiency with which the bank is being run
- the lower it is, the more profitable the bank will be. If this ratio rises from one period
to the next, it means that costs are rising at a higher rate than income. Together these
ratios help in understanding the cost and profit structure of the bank and analysing
business inefficiencies.

Other income largely constitutes of fee income such as commission and brokerage
fees and client based merchant foreign exchange trade, service charges from account
maintenance, transaction banking (including cash management services), syndication
and placement fees, processing fees from loans and commission on non-funded
products (such as letters of credit and bank guarantees) etc. Banks in developed
countries derive nearly 50% of their income from these non-funded sources. A high
other income to net income ratio is good for the bottom line (i.e. net profit) as income
from this stream is derived without significant mobilisation of deposits and hence the
cost associated with this income is relatively lower compared to interest income.


Valuation Analysis
Consolidated

Particulars FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
Net Interest
Income Rs.
29,040.55 33,443.22 45,550.04 57,877.84 61,160.23
Growth (%) - 15.16 % 36.20 % 27.06 % 5.67 %
PAT (Rs.
Cr.)
11,173.06 6,668.38 11,179.94 15,973.30 18,322.99
Growth (%) - (40.32 %) 67.66 % 42.87 % 14.71 %
Earnings Per
Share Basic
(Rs. )
172.68 184.82 168.28 241.55 266.82
Earning Per
Share -
Diluted (Rs. )
172.68 184.82 168.28 241.55 266.82
Price to
Earnings
5.92 11.25 16.99 8.68 7.77
Price Earnings Ratio

Dividend History
Year Rate of dividend
(of face value)
Rs. Closing price* Date*
FY 2008 215 % 21.50 1,464.30 29 May 2008
FY 2009 290 % 29.00 1,756.75 10 June 2009
FY 2010 300 % 30.00 2,272.95 9 June 2010
FY 2011 300 % 30.00 2,327.60 20 May 2011
FY 2012 350 % 35.00 1,970.80 24 May 2012
FY 2013 415 % 41.50 2,130.25 28 May 2013
* Closing Price as on the date of declaration of final (or last) dividend for the
Financial Year.

The Company has maintained an average dividend yield of 1.43 % over the last 5
financial years.
Liquidity and Credit Analysis

Particulars FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
Net Interest
Margin Ratio
(NIM)
2.93 2.66 3.32 3.85 3.34
Capital
Adequacy
Ratio
14.25 13.39 11.98 13.86 12.92
Net NPAs 1.79 1.72 1.63 1.82 2.10

NIM: Banks focus on lending or advancing money at a rate higher than the rate at
which they accept deposits. Net Interest Margin is calculated by dividing the
difference between Interest earned (on advances) and interest expended (on deposits)
by the amount of (average) Invested Assets. If this ratio rises from one period to the
next, it indicates that the bank is able to deploy its funds more efficiently which
results in greater profitability.

Capital Adequacy Ratio (CAR): or Capital to Risk Weighted Assets Ratio (CRAR) is
a measure of a bank's capital (net worth plus subordinated debt) expressed as a
percentage of a bank's risk weighted credit exposures (loans).

Two types of capital are measured: tier I capital, which can absorb losses without a
bank being required to cease trading (such as ordinary share capital and free reserves);
and tier II capital, which can absorb losses in the event of a winding-up and so
provides a lesser degree of protection to depositors (such as long term unsecured
loans and revaluation reserves which is taken at a discount of 55 % while determining
its value for inclusion in Tier II capital).

Measuring credit exposures requires adjustments to be made to the amount of assets
shown on a bank's balance sheet. This is done by weighting the loans made by a bank
according to their degree of riskiness, e.g. loans to Governments are given a 0
%weighting whereas loans to individuals are weighted at 100 %. Similarly off-
balance sheet items such as guarantees and foreign exchange contracts are also
weighted for their riskiness. On-balance sheet and off-balance sheet credit exposures
are added to get total risk weighted credit exposures.

As per the Basel II norms the minimum capital adequacy ratios that apply are:


Tier I capital to total risk weighted credit exposures to be not less than 4 %;
Total capital (Tier I plus Tier II less certain deductions) to total risk weighted credit
exposures to be not less than 8%.

The RBI currently prescribes a minimum capital of 9 % of risk-weighted assets,
which is higher than the internationally prescribed percentage of 8 %.

Applying minimum capital adequacy ratios serves to protect depositors and promote
the stability and efficiency of the financial system.
The Bank is well capitalised with an overall capital adequacy ratio (CAR) of 13.66%
for FY 2012, well above the benchmark requirement of 9% stipulated by Reserve
Bank of India (RBI). Of this, Tier I CAR was 9.45% (9.41% for FY 2011), while the
Tier II CAR was at 4.21% (3.24% for FY 2011).

NPA: Non Performing Asset or NPA is a classification used by financial institutions
that refer to loans that are in jeopardy of default. Once the borrower has failed to
make interest or principal payments for 90 days the loan is considered to be a non-
performing asset. Any rise in the percentage of NPAs results in a sharp decline in the
overall profitability.
Liquidity & Credit Ratios





Ownership pattern
(%)
Shareholding March 2010 March 2011 March 2012 March 2013 December
2013
Promoter 59.41 59.40 61.58 62.31 62.31

FIIs 10.11 12.80 8.70 10.74 8.83
DIIs 17.48 16.57 17.14 16.04 17.91
Others 13.00 11.23 12.58 10.91 10.95
In its latest stock exchange filing dated 31 December 2013, SBI reported a promoter
holding of 62.31 %. Large promoter holding indicates conviction and sincerity of the
promoters. We believe that a greater than 35 % promoter holding offers safety to the
retail investors.

At the same time, institutional holding in the Company stood at 26.74 % (FII+DII).
Large institutional holding indicates the confidence of seasoned investors. At the
same time, it can also lead to high volatility in the stock price as institutions buy and
sell larger stakes than retail participants.


State Bank of India

Key Financial
Ratios



Mar '13 Mar '12 Mar '11 Mar '10 Mar '09

Investment Valuation Ratios

Face Value 10.00 10.00 10.00 10.00 10.00

Dividend Per Share 41.50 35.00 30.00 30.00 29.00

Operating Profit Per Share (Rs) 236.63 271.65 165.38 229.63 230.04

Net Operating Profit Per Share (Rs) 1,749.29 1,587.40 1,281.80 1,353.15 1,179.45

Free Reserves Per Share (Rs) -- -- -- 412.36 373.99

Bonus in Equity Capital -- -- -- -- --

Profitability Ratios

Interest Spread -- -- -- 3.82 4.34

Adjusted Cash Margin(%) 11.23 10.51 9.51 11.62 13.04

Net Profit Margin 10.39 9.68 8.50 10.54 12.03

Return on Long Term Fund(%) 96.35 97.36 98.20 95.02 100.35

Return on Net Worth(%) 14.26 13.94 12.71 13.89 15.74

Adjusted Return on Net Worth(%) 14.26 13.94 12.71 13.91 15.74

Return on Assets Excluding
Revaluations
1,445.60 1,251.05 1,023.40 1,038.76 912.73

Return on Assets Including
Revaluations
1,445.60 1,251.05 1,023.40 1,038.76 912.73

Management Efficiency Ratios

Interest Income / Total Funds 8.25 8.32 7.15 8.52 8.88

Net Interest Income / Total Funds 3.06 3.38 2.86 3.82 3.79

Non Interest Income / Total Funds 1.11 1.12 1.39 0.10 0.11

Interest Expended / Total Funds 5.19 4.94 4.29 4.69 5.09

Operating Expense / Total Funds 1.94 1.96 1.93 2.38 2.06

Profit Before Provisions / Total Funds 2.14 2.47 2.23 1.46 1.75

Net Profit / Total Funds 0.97 0.91 0.65 0.91 1.08

Loans Turnover 0.28 0.28 0.26 0.15 0.16

Total Income / Capital Employed(%) 9.35 9.45 8.54 8.62 8.99

Interest Expended / Capital
Employed(%)
5.19 4.94 4.29 4.69 5.09

Total Assets Turnover Ratios 0.08 0.08 0.07 0.09 0.09

Asset Turnover Ratio 0.09 0.09 0.08 0.09 0.10

Profit And Loss Account Ratios

Interest Expended / Interest Earned 62.95 59.36 60.04 66.66 67.28

Other Income / Total Income 11.82 11.87 16.28 1.21 1.18

Operating Expense / Total Income 20.74 20.73 22.66 27.61 22.91

Selling Distribution Cost Composition -- -- -- 0.26 0.33

Balance Sheet Ratios

Capital Adequacy Ratio 12.92 13.86 11.98 13.39 14.25

Advances / Loans Funds(%) -- -- -- 74.22 78.34

Debt Coverage Ratios

Credit Deposit Ratio -- -- 36.36 75.96 74.97

Investment Deposit Ratio 29.52 30.73 33.45 36.33 36.38

Cash Deposit Ratio 5.34 7.51 8.96 7.56 8.37

Total Debt to Owners Fund 12.16 12.43 14.37 12.19 12.81


Financial Charges Coverage Ratio 0.43 0.52 0.54 0.33 1.36

Financial Charges Coverage Ratio
Post Tax
1.20 1.20 1.19 1.21 1.23

Leverage Ratios

Current Ratio 0.84 0.82 0.77 0.04 0.04

Quick Ratio 12.15 12.05 8.50 9.07 5.74

Cash Flow Indicator Ratios

Dividend Payout Ratio Net Profit 20.12 20.06 26.03 23.36 22.90

Dividend Payout Ratio Cash Profit 18.62 18.47 23.24 21.20 21.13

Earning Retention Ratio 79.88 79.94 73.97 76.67 77.11

Cash Earning Retention Ratio 81.38 81.53 76.76 78.82 78.88

AdjustedCash Flow Times 78.90 82.08 100.91 79.54 75.05


Mar '13 Mar '12 Mar '11 Mar '10 Mar '09

Earnings Per Share 206.20 174.46 116.07 144.37 143.67

Book Value 1,445.60 1,251.05 1,023.40 1,038.76 912.73





Gross NPAs: Rs 60,891.45 crore

The largest Indian commercial bank also has the largest gross NPA at a whopping Rs
60,891.45 crore (Rs 608.91 billion), at 5.56 per cent of advances.

Just three months ago, it was just Rs 51,189.39 crore (Rs 511.89 billion), showing a
rise Rs 9,700 crore (Rs 97 billion) or 19%.
Sounding an alarm of the detoriating asset quality of banks, ratings agency CrisilBSE
-0.49 % has said gross non-performing assets will touch 4.4 per cent and the
restructured book will balloon to Rs 4 lakh crore by the end of this fiscal.
Gross NPAs (non-performing assets) were at 3.3 per cent in March 2013 and grew to
3.7 per cent by the June quarter. We feel they will grow to 4.4 per cent by March
2014, CRISIL Managing Director and Chief Executive Roopa Kudva said here over
the weekend.
An NPA is a debt obligation where the borrower has not paid the interest and
principal repayments to the lender for an extended period of time. Corporate Debt
Restructuring (CDR) allows the reorganisation of a companys outstanding
obligations.
Kudva said restructured assets, under which an accounts repayment period is
extended or interest payment delayed without classifying it as an NPA, will touch Rs
4 lakh crore this fiscal, up from the Rs 3.1 lakh crore in March, 2013.
The system will add up to Rs 1 trillion (lakh crore) of restructured assets during the
fiscal and considering some assets will be reclassified during the fiscal, we feel the
total component will touch Rs 4 trillion by March 2014, Kudva said.
In its annual report released last month, the Reserve Bank of India (RBI) had said the
gross NPAs in the system will touch 4.4 per cent by the end of the fiscal.
Our stress tests suggest that under a severe stress scenario, the gross NPA ratio of
banks may rise to 4.4 per cent by March 2014 but even under such a scenario the
system level capital adequacy ratio of banks will be 12.2 per cent only, which is well
above the required 9 per cent, the RBI report had said.

One of the most important reasons for the rise in the asset quality stress is the
economic gloom. The state-run banks have one of the most dismal records on this
front, with some reporting gross NPAs of over 6 per cent.
There is also a concerted effort from the Finance Ministry to check the phenomenon
of wilful defaulters to prevent assets slipping into the bad category.
State Bank of India (SBI) is all set to bring down its bad assets by offloading about Rs
5000 crore of its total non-performing assets valued at Rs 67799 crore to asset
restructuring companies (ARCs) before the end of the current fiscal.

A senior SBI official was quoted by the media as saying that there are 14 ARCs
functioning at present, and the bank has invited many of them to pick up its stressed
loans of around Rs 5000 crore. SBI will definitely be offloading at least a large
portion of this to the highest bidders. The process should be concluded before the end
of the month, he added.

ARCs typically pay 5-10% of bad loans being bought in cash and the rest could be
security receipts (SRs), the SBI official told the media.

SBI's net profit fell 34.21% to Rs 2234.34 crore on 14.91% increase in total income to
Rs 39060.76 crore in Q3 December 2013 over Q3 December 2012.

On a consolidated basis, SBI's net profit fell 38.93% to Rs 2838.62 crore on 15.12%
increase in total income to Rs 58,642.16 crore in Q3 December 2013 over Q3
December 2012.

SBI's ratio of net non-performing assets to net advances stood at 3.24% as on 31
December 2013, compared with 2.91% as on 30 September 2013 and 2.59% as on 31
December 2012.

The bank's ratio of gross non-performing assets (NPA) to gross advances stood at
5.73% as on 31 December 2013, compared with 5.64% as on 30 September 2013 and
5.30% as on 31 December 2012.


Provisions and contingencies rose 55.54% to Rs 4149.61 crore in Q3 December 2013
over Q3 December 2012. The provisioning coverage ratio as on 31 December 2013
stood at 58.32%.

The bank's Capital Adequacy Ratio (CAR) as per Basel III norms stood at 11.59% as
on 31 December 2013, compared with 11.69% as on 30 September 2013.

In terms of RBI circular dated 23 August 2013 on Investment portfolio of banks -
Classification, Valuation and Provisioning, the bank has option of distributing the net
depreciation on the Available for Sale (AFS) and Held for Trading (HFT) portfolios
on each of the valuation dates in the current financial year i.e. 2013-14 in equal
installments. Accordingly, the bank has provided for a net depreciation as of 31
December 2013 to the extent of Rs 1267.92 crore. The un-provided depreciation as on
31 December 2013 is Rs 633.96 crore.

Government of India holds 62.31% stake in SBI (as on 31 December 2013).











Findings

Directors Report Year End : Mar '13

Financial Performance

Profit

The Operating Profit of the Bank for 2012-13 stood at Rs. 31,081.72 crores as
compared to Rs. 31,573.54 crores in 2011-12 registering a marginal decline of 1.56%.
The Bank has posted a Net Profit of Rs. 14,104.98 crores for 2012-13 as compared to
Rs. 11,707.29 crores in 2011-12 registering a growth of 20.48%.

While Net Interest Income recorded a growth of 2.40%, the Other Income increased
by 11.73%, Operating Expenses increased by 12.33% attributable to higher staff cost
and other expenses.

Net Interest Income

The Net Interest Income of the Bank registered a growth of 2.40% from Rs.
43,291.08 crores in 2011-12 to Rs. 44,331.30 crores in 2012-13. This was due to
higher growth in the advances and investment

portfolios.

The gross interest income from global operations correspondingly rose from Rs.
1,06,521.45 crores to Rs. 1,19,657.10 crores during the year registering a growth of
12.33%.

Interest income on advances in India registered an increase from Rs. 77,309.15 crores
in 2011-12 to Rs. 85,782.26 crores in 2012-13 due to higher volumes. The average
yield on advances in India has declined from 11.05% in 2011-12 to 10.54% in 2012-
13. Interest income on
advances at foreign offices has grown by 26.17%.

Income from resources deployed in treasury operations in India increased by 13.82%
mainly due to higher average resources deployed. The average yield, which was
7.51% in 2011-12, has increased to 7.54% in 2012-13.

Total interest expenses of global operations increased from Rs. 63,230.37 crores in
2011-12 to Rs. 75,325.80 crores in 2012-13. Interest expenses on deposits in India
during 2012-13 recorded an increase of 20.88% compared to the previous year,
whereas the average level of deposits in India grew by 14.3%. The average cost of
deposits has consequently increased from 5.95% in 2011-12 to 6.29% in 2012-13.





Non-Interest Income

Non-interest income stood at Rs. 16,034.84 crores in 2012-13 as against Rs.
14,351.45 crores in 2011-12 registering an increase of 11.73%. During the year, the
Bank received an income of Rs. 715.51 crores (Rs. 767.35 crores in the previous year)
by way of dividends from Associate
Banks/ subsidiaries and joint ventures in India and abroad.

Operating Expenses

There was an increase of 8.29% in the Staff Cost from Rs. 16,974.04 crores in 2011-
12 to Rs. 18,380.90 crores in 2012-13. Other Operating Expenses registered an
increase of 19.89% mainly due to increase in expenses on rent, taxes and lighting,
advertisement & publicity, law charges, postage, telegrams & telephones, insurance
and miscellaneous expenditure.

Operating Expenses, comprising both staff cost and other operating expenses, have
registered an increase of 12.33% over the previous year.

Provisions and Contingencies

Major amounts of provisions made in 2012-13 were as under:

- Rs. 961.29 crores write back from provisions for depreciation on investments,
excluding amortization of premium on Held to Maturity category (as against Rs.
663.70 crores provided towards depreciation on investments in 2011-12).

- Rs. 5,953.88 crores towards Provision for Tax, excluding deferred tax creation of
Rs. 107.97 crores (as against Rs. 6,320.09 crores in 2011-12 excluding deferred tax
reversal of Rs. 455.93 crores).

- Rs. 11,367.79 crores (net of write-back) for non- performing assets (as against Rs.
11,545.85 crores in 2011-12).

- Rs. 749.61 crores towards Standard Assets (as against Rs. 978.81 crores in 2011-
12). Including the current years provision, the total provision held on Standard Assets
amounts to Rs. 5,289.58 crores.

Reserves and Surplus

- An amount of Rs. 4,417.86 crores (as against Rs. 3,516.98 crores in 2011-12) was
transferred to Statutory Reserves.

- An amount of Rs. 19.17 crores (as against Rs. 14.38 crores in 2011-12) was
transferred to Capital Reserve Fund.

- An amount of Rs. 6,453.26 crores (as against Rs. 5,536.50 crores in 2011-12) was
transferred to other Reserve Funds.



Table 1: Key Performance Indicators

Indicators SBI SBI Group

2011-12 2012-13 2011-12 2012-13

Return on Average Assets (%) 0.88 0.91 0.89 0.89

Return on Equity (%) 16.05 15.94 16.49 15.97

Expenses to Income (%)
(Operating Expenses to
Total Net Income) 45.23 48.51 53.51 56.35

Book Value per share (Rs.) 1214.78 1394.79 1540.64 1769.19

Basic Earnings Per Share (Rs.) 184.31 210.06 241.55 266.82

Diluted Earnings Per Share (Rs.) 184.31 210.06 241.55 266.82

Capital Adequacy Ratio (%)
(Basel-I) 12.05 11.22 11.84 11.07

Tier I 8.50 8.23 8.30 8.10

Tier II 3.55 2.99 3.54 2.97

Capital Adequacy Ratio (%)
(Basel-II) 13.86 12.92 13.68 12.82

Tier I 9.79 9.49 9.65 9.46

Tier II 4.07 3.43 4.03 3.36

Net NPAs to Net Advances (%) 1.82 2.10 1.81 2.07




Assets

The total assets of the Bank increased by 17.28% from Rs. 13,35,519.23 crores at the
end of March 2012 to Rs. 15,66,261.04 crores as at the end of March 2013. During
the period, the loan portfolio increased by 20.52% from Rs. 8,67,578.89 crores to Rs.
10,45,616.55 crores.
Investments increased by 12.41% from Rs. 3,12,197.61 crores to Rs. 3,50,927.27
crores as at the end of March 2013. A major portion of the investment was in the
domestic market in government securities.

Liabilities


The Banks aggregate liabilities (excluding capital and reserves) rose by 17.24% from
Rs. 12,51,568.03 crores on 31st March 2012 to Rs. 14,67,377.36 crores on 31st March
2013. The increase in liabilities was mainly contributed by increase in deposits and
borrowings. The Global deposits stood at Rs. 12,02,739.57 crores as on 31st March
2013 against Rs. 10,43,647.36 crores as on 31st March 2012, representing an increase
of 15.24% over the level on 31st March 2012. The borrowings increased by 33.21%
from Rs. 1,27,005.57 crores at the end of March 2012 to Rs. 1,69,182.71 crores as at
the end of March 2013 mainly attributable to borrowings from RBI in India and
borrowings & refinance outside India.

Conclusion

On the basis of various techniques applied for the financial analysis of ICICI Bank we
can arrive at a conclusion that the financial position and overall performance of the
bank is satisfactory. Though the income of the bank has increased over the period but
not in the same pace as of expenses. But the bank has succeeded in maintaining a
reasonable profitability position.

Individuals are the major shareholders. The major achievement of the bank has been a
tremendous increase in its deposits, which has always been its main objective. Fixed
and current deposits have also shown an increasing trend.

Equity shareholders are also enjoying an increasing trend in the return on their capital.
Though current assets and liabilities (current liquidity) of the bank is not so
satisfactory but bank has succeeded in maintaining a stable solvency position over the
years. As far as the ratio of external and internal equity is concerned, it is clear that
bank has been using more amount of external equity in the form of loans and
borrowings than owners equity. Banks investments are also showing an increasing
trend. Due to increase in advances, the interest received by the bank from such
advances is proving to be the major source of income for the bank.




























Suggestions

Although the short term liquidity position is quite satisfactory as per revealed
by liquid ratio but the current ratio is below the ideal ratio of 2:1.So the bank
should make efforts to increase its current assets to maintain a safety margin
and to maintain a better liquidity position.

The profitability of the bank for the period under study is not satisfactory.
Profits are increasing but not with same pace as of the expenditure due to
higher reliance on debt capital in the form of borrowings and loans for
financing capital structure. So in order to improve profitability, the bank
should reduce its dependence on external equities for meeting capital
requirements. Consequently, the interest expenses will decline and profits will
increase which is good for the bank. Similarly non productive expenses should
be curtailed to improve profitability.

Higher trend of credit deposit ratio reveals that the bank has performed
satisfactorily as regard to granting loans and advances to generate income. It
suggests that the credit performance of bank is good and it is performing its
business well by fulfilling the major objective of granting credit and accepting
deposit. So in order to have more creditability in the market the bank should
maintain its credit deposit ratio.

Though the bank has been successful in increasing its deposits but to further
improve upon such situation it can introduce some new and attractive schemes
for public. Such schemes can be in the form of higher rate of interest and
shorter maturity period for FDs etc.

Bank should try to finance more and more projects. Financing will help it to
earn higher amount of profits.

The bank is having a greater reliance on debt capital. The increasing reliance
on external equities may prove hazardous in the long run. So in order to
remedy this situation bank should increase its focus on internal equities and
other sources of internal financing.

Bank can also think for improving its day-to -day service to its clients. Such
service can be improved by providing prompt service and showing an attitude
of co-operation to its clients. It will help to give a kind of confidence to the
public and build a better public image.


To achieve the objective of Rural development it should open more and more
branches in different rural areas of the country. It will facilitate in providing
help to rural poor farmers and other living below the poverty line. Bank can
appoint commission agents for different area who can encourage general
public to invest in the capital of the bank and make more deposits in SBI.

The bank should simplify the procedure of advances for quick disbursement.

To achieve organizational success a proper independent working atmosphere
should be developed to achieve desired objective more effectively.

Last but not least, bank should adopt branch automation experiment to control
the operational cost.















































































BIBLIOGRAPHY


Books Reffered:

Accountancy. R.K. Mittal,A.K.Jain.

Financial Management- Theory and Practice. Shashi.K.Gupta , R.K. Sharma.

Essentials of Corporate Finance 2
nd
edition ,Irwin /McGraw-Hill.Ross,
S.A.,R.W. Westerfield and B.D. Jordan.

Basic Financial Management ,8
th
edition ,Prentice -Hall,Inc. Scott, D.F., J.D
Martin, J.W. Petty and A.Keown.

Internet websites: