Documente Academic
Documente Profesional
Documente Cultură
PG-Finance (2015-2017)
Roll No- 163
Ratio Analysis
S
r.
N
o
Types of Ratios
Banks
Yr (2015-16) INR('000)
KOTAK
HDFC
Liquidity Ratios
1
Cash to demand
deposit
Cash and Bank
Balance
Demand Deposit
Analysis
10,87,97,154
389188380.00
23,28,16,771
88,42,46,701
0.47
0.44
Kotak has a higher profitability ratio against HDFC, this
shows that probability of default on its payment
obligation is lower for Kotak as a higher ratio signifies
lower default probability due to higher liquidity. The
difference in ratios is marginal and hence can also be
attributed to the fact that the volume of deposits held
by HDFC is higher.
Demand to Time
Deposit
2
Total Demand
Deposit
Total Time Deposit
Analysis
Short term
Investment To
Total Assets
Short term
Investment
Total Assets
Analysis
SLR to Total
Investment
SLR
Total Investment
Analysis
23,28,16,771
88,42,46,701
85,86,66,239
3,10,11,33,421
0.27
0.29
Kotak has a lower ratio than HDFC marginally.
However the ratios are almost at par. This shows that
both the banks are trying to maintain adequate
liquidity.
5,88,14,813
29,19,42,854
1,92,25,97,905
7,08,84,55,651
0.03
0.04
Ratio of HDFC is higher than Kotak. The banks try to
maintain a balance between liquidity and profitability.
Hence they may have less liquid investments to
achieve higher profitability.
39,56,80,943
1,47,05,98,575
51,26,02,202
1,63,88,57,691
0.77
0.90
This ratio shows that HDFC is more conservative in
maintaining liquidity as against Kotak due to the
higher volume of deposits maintained by HDFC
Profitability Ratios
1
Asset Utilisation
Ratio
Total Income
Total Assets
Analysis
2,08,97,790
12,29,62,131
18,99,64,179
70,97,31,684
0.11
0.17
HDFC has a higher margin , this shows that HDFC
operations are more efficient than that of Kotak and
hence has a higher profit margin
18,99,64,179
70,97,31,684
1,92,25,97,905
7,08,84,55,651
0.10
0.10
The asset utilisation ratios of both the banks are at
par, this shows that both the banks are trying to
optimise asset utilisation.
3
Cost of Funds
Interest Expense
Interest Bearing
Deposits &
Borrowing
Analysis
Net Interest
Margin
Total Interest Income
- Total Interest
Expense
Total Assets
9,48,38,100
1,59,61,83,606
32,62,99,330
5,99,44,26,666
0.06
0.05
The cost of funds is lower for HDFC as against Kotak ,
this means that bargaining power of HDFC is higher
than Kotak in the market and hence can benefit from
lower cost of funds
6,90,03,738
27,59,15,121
Analysis
1,92,25,97,905
7,08,84,55,651
0.04
0.04
Both command the same interest margin hence both
the banks are trying to optimise their respective
interest income.
Return on Equity
Net Profit
Equity Shareholders
funds
2,08,97,790
33,36,06,410
Analysis
12,29,62,131
72,67,77,647
0.06
0.17
HDFC has a very high ROE as compared to Kotak,
which shows that investors can expect higher returns
from HDFC and shares of HDFC are more valuable
than Kotak
Operating
Efficiency
Operating Expense
Total Assets
Analysis
Non-Interest
Income to Total
Income
Non-Interest Income
54715197
169797000
1,92,25,97,905
7,08,84,55,651
0.03
0.02
As has been seen HDFC has a lower ratio which
signifies it has a higher operational efficiency than
Kotak
2,61,22,341
10,75,17,233
4
Total Income
Analysis
Productivity per
3 employee
NPAT
No. of Employees
(in crores)
Analysis
18,99,64,179
70,97,31,684
0.14
0.15
Both the banks are almost at par in this case as they
are trying to expand their horizon by offering other
services beyond loans and advances to improve
profitability
20897790000
122960000000
46,500
87,263
449414.8387
1409073.72
HDFC has showcased higher productivity per
employee through earlier ratios. Also attrition rate in
HDFC is lowest among all the banks which shows that
a stable work environment influences better
productivity
SummaryFrom the overall ratio analysis it can be seen that HDFC scores higher
than Kotak in terms of liquidity , profitability and efficiency. Though Kotak
matches its scale in asset utilisation and net interest margin , HDFC
benefits from its eearly entrance in the banking sector which Kotak would
take time to build upon in the future.
HDFC bank is the second largest private banking sector in India having
2,201 branches and 7,110 ATMs
HDFC bank is located in 1,174 cities in India and has more than 800
locations to serve customers through Telephone banking
The
banks
ATM
card
is
compatible
with
all
domestic
and international Visa/Master card, Visa Electron/ Maestro, Plus/cirus
and American Express. This is one reason for HDFC cards to be the
most preferred card for shopping and online transactions
HDFC bank has the high degree of customer satisfaction when
compared to other private banks
The attrition rate in HDFC is low and it is one of the best places to work
in private banking sector
HDFC has lots of awards and recognition, it has received Best Bank
award from various financial rating institutions like Dun and Bradstreet,
Financial express, Euromoney awards for excellence, Finance Asia
country awards etc
HDFC has good financial advisors in terms of guiding customers
towards right investments
Weakness
HDFC bank doesnt have strong presence in Rural areas, where as ICICI
bank its direct competitor is expanding in rural market
HDFC cannot enjoy first mover advantage in rural areas. Rural people
are hard core loyals in terms of banking services.
HDFC lacks in aggressive marketing strategies like ICICI
The bank focuses mostly on high end clients
Some of the banks product categories lack in performance and doesnt
have reach in the market
The share prices of HDFC are often fluctuating causing uncertainty for
the investors
Kotak Mahindra
Strenghts
Weakness
KOTAK
10,87,97,1
54
6,90,34,348
3,97,62,806
(in
thousands)
HDFC
38918838
0.00
30,05,83,08
7
8,86,05,293
1,38,64,30
,224
23,28,16,77
1
29,49,47,21
4
85,86,66,23
9
5,46,42,41
,920
88,42,46,70
1
1,47,88,61,
798
3,10,11,33,
421
51,26,02,2
02
40,76,09,72
0
67,13,066
1,63,88,57
,691
1,25,71,05,
578
7,39,032
Calculation Appendix
Total Deposit
Demand Deposits
Savings Bank Deposits
Term Deposits / Time Deposits
Total Investment
Government Securities
Shares
5,18,63,054
74,70,096
5,88,14,813
2,01,08,900
3,87,05,913
2,40,353
4,88,73,774
2,78,29,565
29,05,82,98
7
1,37,26,755
3,87,05,913
29,19,42,85
4
13,59,867
29,05,82,98
7
1,92,25,97
,905
7,08,84,55
,651
39,56,80,9
43
1,88,41,94,
966
1,92,25,97,
905
1,47,05,98
,575
7,00,28,50,
358
7,08,84,55,
651
3,84,02,939
8,56,05,293
Net Profit
2,08,97,79
0
12,29,62,1
31
Interest Earned
18,99,64,1
79
16,38,41,83
8
Other Income
2,61,22,341
70,97,31,6
84
60,22,14,45
1
10,75,17,23
3
Interest Expense
9,48,38,10
0
32,62,99,3
30
6,90,03,73
8
27,59,15,1
21
33,36,06,4
10
72,67,77,6
47
Operating Expense
5,47,15,19
7
16,97,97,0
00
Borrowings
20,97,53,3
82
53,01,84,7
46
Total Assets
Total Income