SUMMER INTERNSHIP PROJECT

Submitted to IIMT College of Management in partial fulfillment of requirements for the award of Master of Business Administration A PROJECT REPORT ON COMPARATIVE ANALYSIS OF FINANCIAL REPORT OF THREE BANKS OF INDIA

Submitted To: Neeraj Sir Guided By: Praveen Sir Submitted By: Md. Shamim Akhtar MBA (3rd Sem) 1171270022

ACKNOWLEDGEMENT

Perseverance inspiration and motivation have always played a key role in success of any venture. I hereby express my deep sense of gratitude to all the personalities involved directly and indirectly in my project work.

The satiation and euphoria that accompany the successful completion of the project would be incomplete without the mention of the people who made it possible.

I would like to take the opportunity to thank and express my deep sense of gratitude to my corporate mentor Mr. Rajiv Singh and my faculty mentor Prof. Praveen Sir (Faculty). I am greatly indebted to both of them for providing their valuable guidance at all stages of the study, their advice, constructive suggestions, positive and supportive attitude and continuous encouragement, without which it would have not been possible to complete the project.

I would also like to thank Mr. Amar Majumdar (General Manager) who in spite of busy schedule has co-operated with me continuously and indeed, his valuable contribution and guidance have been certainly indispensable for my project work.

I am thankful to Mr. Tarique Ahmed for giving me the opportunity to work with Central Bank of India and learn.

I owe my wholehearted thanks and appreciation to the entire staff of the company for their cooperation and assistance during the course of my project.

I hope that I can build upon the experience and knowledge that I have gained and make a valuable contribution towards this industry in coming future.

Md. Shamim Akhtar

PREFACE
This project report has been prepared as per the requirement of the syllabus of MBA course structure under which the students are the required to undertake project. It was a first hand experience for us as that we were exposed to the professional set-up and were facing the market, which was really a great experience. During project period, I had very touching experiences. When business is involved, experiences counts a lot, as we know, experience are an instrument, which leads towards success. Now I take this opportunity to present the project report and sincerely hope that it will be as much knowledge enhancing to the readers as it was to use during the field work and the compilation of the report

Md. Shamim Akhtar

DECLARATION

I, undersigned MR. SHAMIM AKHTAR, student of IIMT COLLEGE OF MANAGEMENT, GREATER NOIDA declare that this project on COMPARATIVE STUDY OF FINANCIAL REPORT OF CENTRAL BANK OF INDIA WITH SBI AND ICICI BANKI is being submitted in the partial fulfillment of the requirement of MBA OF IIMT, GREATER NOIDA the work conduct under the guidance of Mr. Praveen Sir.

Md. Shamim Akhtar

TABLE OF CONTENT
SR. No 1. Introduction: Need of the study Objective of study Bank Profile: Central Bank of India State Bank of India ICICI Bank Product and Services Balance Sheet Ratio Analysis Comparative Analysis : Liquidity Ratio: Current Ratio Quick Ratio Payout Ratio: Dividend Payout Ratio Earning Retention Ratio Per Share Ratio: Earning Per Share Profitability Ratio: Operating Margin Gross Profit Margin Net Profit Margin Return on Net Worth Leverage Ratio: Debt Equity Ratio Fixed Asset Turnover Ratio 7. 8. 9. 10. 11. 12. Importance Research Methodology Conclusion Recommendation & Limitation Bibliography Annexure 7-8 Topic Pg. No.

2.

9-

3. 4. 5. 6.

INTRODUCTION

INTRODUCTION

After preparation of the financial statements, one may be interested in knowing the position of an enterprise from different points of view. This can be done by analyzing the financial statement with the help of different tools of analysis such as ratio analysis, funds flow analysis, cash flow analysis, comparative statement analysis, etc. Here I have done financial analysis by ratios. In this process, a meaningful relationship is established between two or more accounting figures for comparison. Financial ratios are widely used for modeling purposes both by practitioners and researchers. The firm involves many interested parties, like the owners, management, personnel, customers, suppliers, competitors, regulatory agencies, and academics, each having their views in applying financial statement analysis in their evaluations. Practitioners use financial ratios, for instance, to forecast the future success of companies, while the researchers' main interest has been to develop models exploiting these ratios. Many distinct areas of research involving financial ratios can be discerned. Historically one can observe several major themes in the financial analysis literature. There is overlapping in the observable themes, and they do not necessarily coincide with what theoretically might be the best founded areas. Financial statements are those statements which provide information about profitability and financial position of a business. It includes two statements, i.e., profit & loss a/c or income statement and balance sheet or position statement. The income statement presents the summary of the income earned and the expenses incurred during a financial year. Position statement presents the financial position of the business at the end of the year. Before understanding the meaning of analysis of financial statements, it is necessary to understand the meaning of analysis and financial statements. Analysis means establishing a meaningful relationship between various items of the two financial statements with each other in such a way that a conclusion is drawn. By financial

statements, we mean two statements- (1) profit & loss a/c (2) balance sheet. These are prepared at the end of a given period of time. They are indicators of profitability and financial soundness of the business concern. Thus, analysis of financial statements means establishing meaningful relationship between various items of the two financial statements, i.e., income statement and position statement Parties interested in analysis of financial statements

NEED OF STUDY
Analysis of financial statement has become very significant due to widespread interest of various parties in the financial result of a business unit. The various persons interested in the analysis of financial statements are:-

Short- term creditors: They are interested in knowing whether the amounts owing to them will be paid as and when fall due for payment or not. Long term creditors: They are interested in knowing whether the principal amount and interest thereon will be paid on time or not.

Shareholders: They are interested in profitability, return and capital appreciation.

Management: The management is interested in the financial position and performance of the enterprise as a whole and of its various divisions.

Trade unions: They are interested in financial statements for negotiating the wages or salaries or bonus agreement with management.

Taxation authorities: These authorities are interested in financial statements for determining the tax liability.

Researchers: They are interested in the financial statements in undertaking research in business affairs and practices.

Employees: They are interested as it enables them to justify their demands for bonus and increase in remuneration.

You have seen that different parties are interested in the results reported in the financial statements. These results are reported by analyzing financial statements through the use of ratio analysis.

OBJECTIVE OF STUDY
To study of Analysis of financial statements is an attempt to assess the efficiency and performance of an enterprise. There is no denying the fact that ratio analysis is one of the most important tool in the hands of the company for the successful operation of the business. It is imperative for the manager to properly assess the future requirement of in the company. Keeping in the view this objective in mind, the company assigned me this challenging project of financial analysis of the company. The project itself speaks for the importance of the study. Following are some main objectives of study are: The overall objective of a business is to earn a satisfactory return on the funds invested in it. Financial analysis helps in ascertaining whether adequate profits are being earned on the capital invested in the business or not. It also helps in knowing the capacity to pay the interest and dividend. It helps the management to study the position of their firm in respect of sales expenses, profitability and using capital.etc. The purpose of financial statements analysis is to help the management to make a comparative study of the profitability of various firms.

 Analysis also helps the management in preparing budgets by forecasting next years profit on the basis of past earnings. It also helps the management to find out shortcomings of the business so that remedial measures can be taken to remove these shortcomings. The purpose of financial analysis is to assess the financial potential of business . Analysis also helps in taking decisions; (a) Whether funds required for the purchase of new machinery and equipments are provided from internal resources of business or not. (b) How much funds have been raised from external sources. The different tools of analysis tell us whether the firm has suffucient funds to meet its short-term and long-term liabilities or not.

BANK PROFILE

CENTRAL BANK OF INDIA

Central Bank Of India:

Type

Public, Trade as BSE & NSE Central Bank

Industry

Financial & Commercial Bank

Founded

21 December 1911 (100 years ago)

Headquarters :

Mumbai, India

Key people

Mr. M.V TANKSALE

Revenue

Rs. 19,149.50 crore (US$3.47 billion) (2010-11)

Website

www.centralbankofindia.co.in

PROFILE:

Central Bank of India is a government-owned bank, is one of the oldest and largest commercial banks in India. It is based in Mumbai. The bank has 4100 branches and 270 extension counters across 27 Indian states and three Union Territories. Established in 1911, Central Bank of India was the first Indian commercial bank which was wholly owned and managed by Indians. The establishment of the Bank was the ultimate realisation of the dream of Sir Sorabji Pochkhanawala, founder of the Bank. Sir Pherozesha Mehta was the first Chairman of a truly 'Swadeshi Bank'. In fact, such was the extent of pride felt by Sir Sorabji Pochkhanawala that he proclaimed Central Bank of India as the 'property of the nation and the country's asset'. He also added that 'Central Bank of India lives on people's faith and regards itself as the people's own bank'. During the past 99 years of history the Bank has weathered many storms and faced many challenges. The Bank could successfully transform every threat into business opportunity and excelled over its peers in the Banking industry. A number of innovative and unique banking activities have been launched by Central Bank of India and a brief mention of some of its pioneering services are as under: 1921 Introduction to the Home Savings Safe Deposit Schemeto build saving/thrift habits in all sections of the society. 1924 An Exclusive Ladies Department to cater to the Bank's women clientele. 1926 Safe Deposit Locker facility and Rupee Travellers' Cheques. 1929 Setting up of the Executor and Trustee Department. 1932 Deposit Insurance Benefit Scheme.

1962 Recurring Deposit Scheme.

Subsequently, even after the nationalisation of the Bank in the year 1969, Central Bank continued to introduce a number of innovative banking services as under: 1976 The Merchant Banking Cell was established. 1980 Centralcard, the credit card of the Bank was introduced. 1986 'Platinum Jubilee Money Back Deposit Scheme' was launched. 1989 The housing subsidiary Cent Bank Home Finance Ltd. was started with its headquarters at Bhopal in Madhya Pradesh. 1994 Quick Cheque Collection Service (QCC) & Express Service was set up to enable speedy collection of outstation cheques. Further in line with the guidelines from Reserve Bank of India as also the Government of India, Central Bank has been playing an increasingly active role in promoting the key thrust areas of agriculture, small scale industries as also medium and large industries. The Bank also introduced a number of Self Employment Schemes to promote employment among the educated youth. Among the Public Sector Banks, Central Bank of India can be truly described as an All India Bank, due to distribution of its large network in 27 out of 29 States as also in 3 out of 7 Union Territories in India. Central Bank of India holds a very prominent place among the Public Sector Banks on account of its network of 3967 branches and 27 extension counters at various centres throughout the length and breadth of the country. Customers' confidence in Central Bank of India's wide ranging services can very well be judged from the list of major corporate clients such as ICICI, IDBI, UTI, LIC, HDFC as also almost all major corporate houses in the country. Mr. M.V TANKSALE has been appointed as Chairman & Managing Director, Central Bank of India with effect from June 29, 2011. Prior to his appointment as Chairman & Managing Director, Central Bank of India Shri Tanksale was the Executive Director, Punjab National Bank since March 2009. Central Bank of India, one of the leading Public Sector Banks in the

country has paid a Dividend of 192.66 crore to the Government of India for the Financial Year 2010-11. Shri M V Tanksale, Chairman & Managing Director, Central Bank of India has handed over the Dividend Cheque of 192.66 crore to (Centre) Honble Union Finance

Minister Shri Pranab Mukherjee on 19/08/2011 at New Delhi. Central bank of India is one of 18 Public Sector banks in India to get recapitalisation finance from the government over the next 24 months. The infusion of funds will improve the financial health of the banks as their capital adequacy ratio (CAR) will be raised more than desired level of 12 percent. The increase in CAR of the banks will also enable them to lend more money. The CAR of Central Bank of India was less than 12 percent as on 30 June 2006. The wholly owned public sector bank, based in Mumbai, will convert an amount of crore out of its 800

1,124.14-crore total equity capital into perpetual non-cumulative preference

shares.The preference shares would carry an annual floating coupon rate of eight per cent, which would be benchmarked to 100 basis points above the repo rate. It will shore up the balance-sheet of the bank and enable it to raise capital from the markets. According to an official statement, the equity capital restructuring would lead to an improvement in the bank's credit rating as also facilitate the adoption of Basel II norms. For financial year 2008-2009, Central Bank of India's Q3 standalone net profit went up at 353.26 crore from up at 201.01 crore (YoY). The bank's standalone net interest income, NII was 544.85 crore (YoY).

671.94 crore versus

Central Bank of India has approached the Reserve Bank of India (RBI) for permission to open representative offices in five locations - Singapore, Dubai, Doha, London and Hong Kong. This is the first time the bank is venturing an independent overseas foray after the Sethia scam in the 1970s forced the bank to close down its London office. RBI had then asked the other two banks, who had operations in London, to close down. As on 31 March 2011, the bank's reserves and surplus stood at 6,868.85 crore. Its total

business at the end of the last fiscal amounted to 2,09,757.33 crore.The bank had a staff strength of 37,241 as on Nov 2006. Central Bank of India partnered with TCS [ Tata Consultancy Services ] for its Core Banking Solution. The solution set to be implemented will include B@NCS from Sydney-based Financial Network Solutions (FNS), Exim Bills Trade Finance software from China Systems and eTreasury from TCS. With all of its branches in the core banking system (CBS).

FUCTION OF CENTRAL BANK OF INDIA

Note Issue: It is considered one of the primaryfunctions of a central bank.

Banker's Bank: The second main function of acentral bank is that of being a bank of thebanks.

Banker to the Government: The central bankof the country happens to be a banker to thegovernment. This function normally involvestwo things: (i) providing ordinary bankingservices to the government, and (ii) being apublic debt agent and underwriter to thegovernment.

Credit Control: Over the years, credit controlhas become a leading function of a moderncentral bank.

Custodian of Foreign Exchange Reserves: Central bank of a country is also a custodianof its official foreign exchange reserves. Thisarrangement helps the authorities inmanaging and co-ordinating the monetarymatters of the country more effectively.

BOARD OF DIRECTRORS
1. Shri. M.V.Tanksale Chairman & Managing Director

2. Smt Vijayalakshmi R. Iyer Executive Director

3. Shri Rajiv Kishore Dubey Executive Director

4. Shri Alok Tandon Director

5. Shri Salim Gangadharan RBI Nominee Director Regional Director

6. Shri Brijlal Kshatriya Director

7. Prof. N. Balakrishnan Director 8. Shri Guman Singh Director

9. Shri Romesh Sabharwal Director

10. Major (Retd.) Ved Prakash Director

11. Shri B S Rambabu Director

BRICK MORTAR PRESENCE

Total Branches

3559

Rural

1379

Urban

681

Semi Urban

894

Metropolitan

605

ATMs

400

CBS Branches

1223

Zonal Offices

16

Regional Offices

78

Number of RRB

Total No. of RRB Branches

1734

ICICI BANK

ICICI BANK:
Type : Public, Trade as BSE & NSE ICICI Bank. NYSE IBN

Industry

Financial Services, Banking

Founded

1955

Headquarters :

Mumbai, Maharashtra, India

Key people

Mr. Vikas Kumar

Revenue

US$ 13.812 billion (2010-11)

Website

www.icicibank.com

PROFILE:

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal 1998, an equity offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the initiative of the World Bank, the Government of India and representatives of Indian industry. The principal objective was to create a development financial institution for providing medium-term and long-term project financing to Indian businesses.

In the 1990s, ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group offering a wide variety of products and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE.

After consideration of various corporate structuring alternatives in the context of the emerging competitive scenario in the Indian banking industry, and the move towards universal banking, the managements of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI Bank would be the optimal strategic alternative for both entities, and would create the optimal legal structure for the ICICI group's universal banking strategy. The merger would enhance value for ICICI shareholders through the merged entity's access to low-cost deposits, greater opportunities for earning fee-based income and the ability to participate in the payments system and provide transaction-banking services. The merger would enhance value for ICICI Bank shareholders through a large capital base and scale of operations, seamless access to ICICI's strong corporate relationships built up over five

decades, entry into new business segments, higher market share in various business segments, particularly fee-based services, and access to the vast talent pool of ICICI and its subsidiaries.

In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002. Consequent to the merger, the ICICI group's financing and banking operations, both wholesale and retail, have been integrated in a single entity.

ICICI Bank has formulated a Code of Business Conduct and Ethics for its directors and employees. ICICI Bank is India's second-largest bank with total assets of Rs. 4,736.47 billion (US$ 93 billion) at March 31, 2012 and profit after tax Rs. 64.65 billion (US$ 1,271 million) for the year ended March 31, 2012. The Bank has a network of 2,768 branches and 9,363 ATMs in India, and has a presence in 19 countries, including India.

ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries in the areas of investment banking, life and non-life insurance, venture capital and asset management.

The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established branches in Belgium and Germany.

ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).

 ICICI Bank in the Private Sector Bank category won the Best Technology Bank Of The Year Best Financial Inclusion Initiative and Best Use Of Technology In Training and e-Learning by Indian Bank's Association (IBA) Technology Awards. The Bank also received the first runner up for Best Online Bank, Best Customer Relationship Initiative and Best Use Of Mobility Technology in Banking by IBA Technology Awards. ICICI Bank awarded the Best SME Bank for Treasury and Working Capital (India) by The Asset Triple A. ICICI Bank received the Best Trade Finance House and Best Cash Management House by The Corporate Treasurer Alliance Country Awards. ICICI Bank awarded the Best Private Sector Bank in Global Business Development, Rural Reach and SME financing categories by Dun & Bradstreet - Polaris Financial Technology Banking Awards. Ms. Chanda Kochhar, Managing Director and CEO, was ranked 59th in the World's 100 Most Powerful Women by Forbes magazine. For the fifth year in a row, ICICI Bank was awarded the "Best Foreign Exchange Bank (India)" by Finance Asia Country Awards. The Bank also received the "Best Bond House (India)". Ms. Chanda Kochhar awarded the 3rd Asian Corporate Director Recognition Award 2012 by Corporate Governance Asia. ICICI Bank awarded the Best Trade Finance bank in India by GTR Asia Leaders in Trade Awards 2012. Ms. Chanda Kochhar, Managing Director & CEO, ranked 5th in the list of "Most Powerful CEOs", in the corporate India's definitive power listing, by The Economic

Times Corporate Dossier. She also tops the list of "Top Women CEOs", in the country. ICICI Bank featured as the top Indian brand to be listed in the annual BrandZ's Top 100 Most Valuable Global Brands study. ICICI Bank won the "Best Bond House (India) 2011", by IFR Asia ICICI Bank awarded the Best Bank (India) by Global Finance ICICI Bank won the "Century International Quality Era Award" at Geneva. The award recognizes commitment towards Quality, Excellence, Customer Satisfaction, Leadership and Strategic Planning as established in the QC 100 model of Total Quality Management (TQM). For the second year in a row, Ms. Chanda Kochhar, Managing Director & CEO, is in the Power List 2012 of 25 most influential women professional in India, by India Today. Ms. Chanda Kochhar, Managing Director & CEO, is amongst the nine Indian women to be named in the Forbes magazine's inaugural 'Asia Power Businesswomen list' Mr. N.S.Kannan, Executive Director & CFO, received the "Best CFO", in the Banking / Financial Services category by CNBC - TV 18. ICICI Bank was recognised for the first Credit Default Swap (CDS) deal in India at the Fimmda annual conference in Kuala Lumpur. Ms. Chanda Kochhar, Managing Director & CEO was awarded the "CNBC Asia India Business Leader Of The Year Award". She also received the "CNBC Asia's CSR Award 2011"

BOARD OF DIRECTRORS
1. Mr. K. V. Kamath Chairman

2. Mr. Sridar Iyengar

3. Dr. Swati Piramal

4. Mr. Homi R. Khusrokhan

5. Mr. Arvind Kumar

6. Mr. M.S. Ramachandran

7. Dr. Tushaar Shah

8. Mr. V. Sridar

9. Ms. Chanda Kochhar Managing Director & CEO

10. Mr. N. S. Kannan Executive Director & CFO

11. Mr. K. Ramkumar Executive Director

12. Mr. Rajiv Sabharwal Executive Director

STATE BANK OF INDIA

STATE BANK OF INDIA :

Type : Public, Trade as BSE & LSE SBID. NYSE IBN

Industry

Financial Services, Banking 1st July 1955

Founded

Headquarters :

Mumbai, Maharashtra, India

Key people

Mr. Pratip Chaudhuri

Revenue

US$ 36.950 billion (2011-12)

Website

www.sbi.co.in

PROFILE:

The State Bank of India, the countrys oldest Bank and a premier in terms of balance sheet size, number of branches, market capitalization and profits is today going through a momentous phase of Change and Transformation the two hundred year old Public sector behemoth is today stirring out of its Public Sector legacy and moving with an ability to give the Private and Foreign Banks a run for their money. The bank is entering into many new businesses with strategic tie ups Pension Funds, General Insurance, Custodial Services, Private Equity, Mobile Banking, Point of Sale Merchant Acquisition, Advisory Services, structured products etc each one of these initiatives having a huge potential for growth.

The Bank is forging ahead with cutting edge technology and innovative new banking models, to expand its Rural Banking base, looking at the vast untapped potential in the hinterland and proposes to cover 100,000 villages in the next two years.

It is also focusing at the top end of the market, on whole sale banking capabilities to provide Indias growing mid / large Corporate with a complete array of products and services. It is consolidating its global treasury operations and entering into structured products and derivative instruments. Today, the Bank is the largest provider of infrastructure debt and the largest arranger of external commercial borrowings in the country. It is the only Indian bank to feature in the Fortune 500 list.

The Bank is changing outdated front and back end processes to modern customer friendly processes to help improve the total customer experience. With about 8500 of its own 10000 branches and another 5100 branches of its Associate Banks already networked, today it offers

the largest banking network to the Indian customer. The Bank is also in the process of providing complete payment solution to its clientele with its over 21000 ATMs, and other electronic channels such as Internet banking, debit cards, mobile banking, etc.

With four national level Apex Training Colleges and 54 learning Centres spread all over the country the Bank is continuously engaged in skill enhancement of its employees. Some of the training programs are attended by bankers from banks in other countries.

The bank is also looking at opportunities to grow in size in India as well as internationally. It presently has 173 foreign offices in 33 countries across the globe. It has also 7 Subsidiaries in India SBI Capital Markets, SBICAP Securities, SBI DFHI, SBI Factors, SBI Life and SBI Cards - forming a formidable group in the Indian Banking scenario. It is in the process of raising capital for its growth and also consolidating its various holdings.

Throughout all this change, the Bank is also attempting to change old mindsets, attitudes and take all employees together on this exciting road to Transformation. In a recently concluded mass internal communication programme termed Parivartan the Bank rolled out over 3300 two day workshops across the country and covered over 130,000 employees in a period of 100 days using about 400 Trainers, to drive home the message of Change and inclusiveness. The workshops fired the imagination of the employees with some other banks in India as well as other Public Sector Organizations seeking to emulate the programme.

The CNN IBN, Network 18 recognized this momentous transformation journey, the State Bank of India is undertaking, and has awarded the prestigious Indian of the Year Business, to its Chairman, Mr. O. P. Bhatt in January 2008.

BOARD OF DIRECTRORS
1. Shri Pratip Chaudhuri Chairman 2. Shri Hemant G. Contractor Managing Director

3. Shri Diwakar Gupta Managing Director

4. Shri A. Krishna Kumar Managing Director

5. Shri Dileep C. Choksi Director

6. Shri S. Venkatachalam Director

7. Shri D. Sundaram Director

8. Shri Parthasarathy Iyengar Director

9. Shri Jyoti Bhushan Mohapatra Workmen Employee Director

10. Dr. Rajiv Kumar Director

11. Shri Deepak Ishwarbhai Amin Director

12. Shri D. K. Mittal Director 13. Dr. Subir V. Gokarn Director

PRODUCT & SERVICES

PRODUCT AND SERVICES

CENTRAL BANK OF INDIA: Personal Banking Agricultural & Rural Banking NRI Services International Banking Corporate Banking Net Banking Mobile Phone Banking Online Services Internet Banking Collection of Direct Tax Karnataka Commercial Tax Online Share Trading E-Tax Payments Visa Bill Pay Online recharge Credit Card Bill Payment

Other Services Mutual Fund Govt. Business Depository Services Direct Tax Payment Government Business Cash Management Services

 Depository Services:
A Depository is an organization, which holds investors' securities in electronic form. The depository also provides services related to various transactions in such securities. A depository interfaces with its investors through Depository Participants.

Depository Participants maintain investors' accounts (Demat accounts), which are similar to Savings Bank/Current accounts with a Bank. Purchase and sale of securities can be done through Demat Account. As a Depository Participant of Central Depository Services (India) Ltd. (CDSL), Central Bank of India facilitates to open Demat Account at any of the following Designated Branches and view your holdings through Internet

SME Services: The Micro Small and Medium enterprises (MSMEs) have been accepted as the engine of economic growth and play an important role in the equitable economic development of country.

Our Bank has shown growth of MSE credit from Rs.9317 crore as on 31.03.2010 toRs.12444 crore as on 31.03.2011 representing an increase of 33.56%. The principal objective of this policy is to improve our portfolio of MSE credit to Rs.17000 crore by 31.03.2012 and Rs.26000 crore by 31.03.2016. In addition to above our other objectives are as under: Banks positive commitment to its MSE customers to provide easy, speedy and transparent access to banking services in their day to day operations and in times of financial difficulty.

Hassle free credit to Micro and Small Enterprise

 Mutual Fund Services:

Mutual Funds pool money of various investors to purchase a wide variety of securities while pursuing a specific goal. Selection of Securities for the purpose is done by the specialists from the field. Returns generated are distributed to the Investors.

At Central Bank, our AMFI (Association of Mutual Funds of India) certified advisors would help you to select the most suitable Mutual Fund schemes for your portfolio through asset allocation strategies

.Through the selected branches of Central Bank of India you can invest in various schemes of UTI Mutual Fund , TATA Mutual Fund , Franklin Templeton Mutual Fund , Reliance Mutual Fund , Sundaram Mutual Fund , Kotak Mahindra Mutual Fund , ICICI Prudential Mutual Fund , DSP Blackrock Mutual Fund , IDFC Mutual Fund , L&T Mutual Fund and Prinicipal Pnb Mutual Fund . All these fund houses have decent performance record.

PRODUCT AND SERVICES

STATE BANK OF INDIA:

Personal Banking Agricultural & Rural Banking NRI Services International Banking Corporate Banking Services Govt. Business SME

Personal Banking:
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

Personal Banking Deposit Schemes Personal Finance Corp Salary Package Services

Agricultural Agricultural Banking Micro Credit Regional Rural Banks

NRI Services Types of Account NRE term deposit

International Banking Trade Finance Merchant Banking Correspondent Banking

Corporate Banking Corporate Accounts Mid Corporate Group Project Finance

Services Internet Banking Mobile Banking ATM Services

Government Business Government Account

SME SME Credit Card SME Loan

 Agricultural & Rural Banking:

State Bank of India Caters to the needs of agriculturists and landless agricultural labourers through a network of 6600 rural and semi-urban branches. There are 972 specialized branches which have been set up in different parts of the country exclusively for the development of agriculture through credit deployment .These branches include 427 Agricultural Development Branches (ADBs) and 547 branches with Development Banking Department (DBDs) which cater to agriculturists and 2 Agricultural Business Branches at Chennai and Hyderabad catering to the needs of hi tech commercial agricultural projects.

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.

The branch also has farmer's meet in villages to explain to farmers about various schemes offered by the bank. To give special focus to agriculture lending Bank has set up agri business unit. Bank has also agri specialists in various disciplines to handle projects/ guide farmers in their agri.

ventures. Advances are given for very small activity covering poorest of the poor to hi-tech activities involving large fund outlays.

We are the leaders in agri finance in the country with a portfolio of Rs. 18,000 cars in agri advances to around 50 lac farmers.

NRI Services:
World Class Services from a Bank you can Trust Indians everywhere should become enlightened International citizens. Wherever you are, whichever country you live, enrich that nation, not only in financial terms, but also with your sweat knowledge and dignity since that is the tradition of the country from where you came. At the same time, remember we have a common umbilical connectivity to our motherland, India.

 International Banking :
International banking services of State Bank of India are delivered for the benefit of its Indian customers, non-resident Indians, foreign entities and banks through a network of 84 offices/branches in 32 countries spread over all time zones. The network is augmented by a cluster of Overseas and NRI branches within India and correspondent links with over 522 banks, the world over. Bank's Joint Ventures and Subsidiaries abroad further underline the Bank's international presence.

The services include corporate lending, loan syndications, merchant banking, handling Letters of Credit and Guarantees, short-term financing, collection of clean and documentary credits and remittances.

The Bank has carved a niche for itself in the Euro land with branches located in Antwerp, Paris and Frankfurt. Indian banks and corporate are able to avail single-window Euro services from the Bank's Frankfurt branch.

Corporate Banking:
SBI is a one shop providing financial products / services of a wide range for large, medium and small customers both domestic and international.

Working Capital Financing: Assistance extended both as Fund based and Non-Fund based facilities to Corporate, Partnership firms, Proprietary concerns

Working Capital finance extended to all segments of industries and services sector such as IT Term Loans to support capital expenditures for setting up new ventures as also for expansion, renovation etc.

Deferred Payment Guarantees to support purchase of capital equipments.

Corporate Loans For a variety of business related purposes to corporate.

Export Credit To Corporate / Non Corporate

Strategic Business Units (i) (ii) (iii) Corporate Accounts Group (CAG) Project Finance Lease Finance

An exclusive unit providing one s shopping to Corporate A dedicated set up specialised in financing of infrastructure and other large projects Exclusive set up for handling large ticket leases.

Pricing SBI's Prime Lending Rates (PLR) is among the lowest Presently Bank has two PLR's SBAR for loans payable on demand and up to one year

Services:
Listed on the left are Services, SBI offers to its customers. DOMESTIC TREASURY SBI VISHWA YATRA FOREIGN TRAVEL CARD BROKING SERVICES REVISED SERVICE CHARGES ATM SERVICES INTERNET BANKING E-PAY E-RAIL RBIEFT SAFE DEPOSIT LOCKER GIFT CHEQUES

 Government Business:
State Bank of India's linkage with Government business is widespread. No wonder that out of 9315 branches in India, about 7000 branches are conducting Government Business. The large network of our branches provides easy access to the common man to deposit the following Government dues and pension payments.

SME:
State Bank of India has been playing a vital role in the development of small scale industries since 1956.The Bank has financed over 8 lakhs SSI units in the country. It has 55 specialised SSI branches, 99 branches in industrial estates and more than 400 branches with SIB divisions . The Bank finances for Small Business activities which are of special significance to a large number of people as many of these activities can be started with relatively lower investment and with no special skills on the part of the entrepreneurs.

PRODUCT AND SERVICES

ICICI BANK:
Personal Banking Rural Banking & Agri Business NRI Services International Banking Corporate Banking Services SME Banking

Personal Banking: Safety Deposit Flexibility Deposit Personal Finance Home Loan Education Loan Car Loan Liquidity Returns ICICI Bank offers a wide Variety of Deposit Products to suit your banking requirements.

Safety Flexibility Liquidity Returns

Home Loan Education Loan Car Loan Simplified Documentation Quick Processing Hassle Free

Exclusive Economical Expert Advice ICICI Bank's powerpacked, feature-rich investment options for meeting all your investment needs.

ATM Card Debit Card Credit Card World Class Service and Acceptance National and International acceptance.

Life Insurance Wealth Insurance Property Insurance Secure, Reliable Convenient Buying Insurance policies online.

E-Banking Online Transaction Mobile Banking Mobile Bill Online Shopping Insurance premium Payment

 International Banking :
In 2001, we identified international banking as a key opportunity, aiming to cater to the cross-border needs of clients and leveraging our domestic banking strengths to offer products internationally. We have made significant progress in the international business since we set up our first overseas branch in Singapore in 2003. ICICI Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in Singapore, Bahrain, Hong Kong, Sri Lanka, Dubai International Finance Centre, Qatar Financial Centre and the United States and representative offices in the United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. The Banks wholly owned subsidiary ICICI Bank UK PLC has nine branches in the United Kingdom and a branch each in Belgium and Germany. ICICI Bank Canada has eight branches including three in Toronto. ICICI Bank Eurasia LLC has six branches including three branches in Moscow and one in St. Petersburg. Banking at your fingertips!!! Why be inline when you can be online for paying your utility bills, mobile bills, prepaid mobile recharge, Shopping, Credit card, insurance premium and lots more. Our international strategy is focused on building a retail deposit franchise, diverse wholesale funding sources and strong syndication capabilities to support our corporate and investment banking business; achieving the status of a non-resident Indian (NRI) community bank in key markets; and expanding private banking operations for India-centric asset classes. During fiscal 2008, we focused on deepening our presence in existing overseas locations and expanding our operations in key markets. In line with our strategy to establish a presence in large markets with significant savings pools, we entered into Germany through a branch established by ICICI Bank UK PLC. We have been able to successfully leverage our technology advantage to create a growing international deposit base. Total deposits of ICICI Bank UK PLC and ICICI Bank Canada increased by 76.0% from Rs. 191.28billion at March 31, 2007 to Rs. 335.86 billion at March 31, 2008. We also received approval for and commenced branch operations in the United States. We have established a strong franchise among NRIs by offering a comprehensive product suite, technology enabled access, a wide distribution network in India and alliances with local banks in various markets. Currently, we have over 500,000 NRI customers. We have undertaken significant brand-building initiatives in international markets and have emerged

as a well-recognised financial services brand for NRIs. We continue to maintain a market share of 25% in inward remittances to India. During fiscal 2008, we launched innovative products like instant money transfer and enhanced our focus on customer relationship management and process automation. Additionally, we also undertook the development of low cost remittance products in non-India geographies with correspondent tie-ups for disbursements in over 100 such geographies. Through our international private banking services, we offer various products to mass affluent and high net worth clients based on their financial needs and risk appetite. The offerings range from simple deposits and loans to more sophisticated structured products, private equity and products giving exposure to the real estate sector in India.

Corporate Banking :
Our corporate banking strategy is based on providing comprehensive and customised financial solutions to our corporate customers. We offer a complete range of corporate banking products including rupee and foreign currency debt, working capital credit, structured financing, syndication and transaction banking products and services. Our corporate and investment banking franchise is built around a core relationship team that has strong relationships with almost all of the countrys corporate houses. The relationship team is product agnostic and is responsible for managing banking relationships with clients. We have also put in place product specific teams with a view to focus on specific areas of expertise in designing financial solutions for clients. Through our relationship teams working in tandem with product solution teams, we have deepened our client relationships across our product portfolio or esulting in significant growth in income and wallet share among all our top corporate clients, as compared to the previous year. We have created an integrated Global Investment Banking Group, which is responsible for working with the relationship team in India and our international subsidiaries and branches, for origination, structuring and execution of investment banking mandates on a global basis. We have also restructured our delivery team for transaction banking products by creating dedicated sales teams for trade services and transaction banking products. This has been done with the intent to increase our market share from transaction banking products, which will translate into recurring fee income for the Bank. We have also focused on increasing market

share in trade finance by leveraging and further strengthening correspondent banking relationships.

SME Banking :
During fiscal 2008, our small enterprises customer base increased by 26% to about 1.1 million accounts. We have introduced our service offerings in over 400 new branches, increasing our coverage to over 1,000 branches. We have continued to focus on shaping the small and medium enterprises sphere in India through initiatives such as the Emerging India Awards, the SME CEO Knowledge Series - a platform to mentor and assist SME entrepreneurs, and the SME Dialogue - a weekly feature in a leading financial newspaper sharing SME best practices and success stories. During the year, we have launched several new products and services like the SME toolkit an online business and advisory resource for SMEs.

Rural Banking & Agri-Business:

We believe the rural economy has high growth potential and offers large credit growth opportunities. Towards this end, our suite of products and services is targeted to address the needs of both the farm and non-farm sectors. Our retail product suite encompasses loans for crop production, purchase of farm equipment; commodity based finance as well as various savings, investment and insurance products. We also offer micro-finance and jewel loans. We have also focused on enhancing credit to farmers by leveraging on corporate partnerships. For example, we have partnered with various dairies to provide financing to farmers for purchase of milch cattle. We also provide credit and banking services to SMEs active in the agricultural value chain. To enhance our service quality and product delivery capabilities we have developed a large network of rural branches which is further augmented by non-branch channels. Rural banking in India is still at a nascent stage and the deployment of technology channels and modern banking methods for rural lending continues to be an evolving process. We have put in place a robust risk management structure to Mitigate and manage credit, operational and fraud risks. Through this, we aim to create a strong foundation for scaling up of our rural business.

BALANCE SHEET

BALANCE SHEET

BALANCE SHEET AS ON 31ST MARCH 2012 ASSETS Owner's fund: Equity share capital Share application money Preference share capital Reserves & surplus Loan funds: Secured loans Unsecured loans Total Uses of funds: Fixed assets Gross block Less : revaluation reserve Less : accumulated depreciation Net block Capital work-in-progress Investments Net current assets: Current assets, loans & advances Less : current liabilities & provisions Total net current assets Miscellaneous expenses not written Total Rs. (Crore)

736.12 -1,617.00 8,201.45

-1,96,173.33 2,06,727.90

3,770.80 1,896.96 1,296.89 576.95 -59,243.27

6,443.11 8,255.29 -1,812.18 -58,008.04

BALANCE SHEET

BALANCE SHEET AS ON 31ST MARCH 2012 ASSETS Owner's fund: Equity share capital Share application money Preference share capital Reserves & surplus Net Worth Deposits Borrowings Total Debt Assets Cash & Balance with RBI Balance with Banks, Money at call Advances Investments Gross Block Less : accumulated depreciation Net block Capital work-in-progress Other Assets Rs. (Crore)

671.04 --83,280.16 83,951.20

1,043,647.36

127,005.57 1,170,652.93

54,075.94 43,087.23 867,578.89 312,197.61 14,792.33 9,658.46 5,133.87 332.68 53,113.02

Total Assets

1,335,519.24

BALANCE SHEET

BALANCE SHEET AS ON 31ST MARCH 2012 ASSETS Owner's fund: Equity share capital Share application money Preference share capital Reserves & surplus Loan funds: Secured loans Unsecured loans Total Uses of funds: Fixed assets Gross block Less : revaluation reserve Less : accumulated depreciation Net block Capital work-in-progress Investments Net current assets: Current assets, loans & advances Less : current liabilities & provisions Total net current assets Miscellaneous expenses not written Total Rs. (Crore)

1,152.77 2.39 -59,250.09

-2,55,499.96 3,15,905.20

9,424.39 -4,809.70 4,614.69 -1,59,560.04

34,618.88 17,576.98 17,041.89 -1,81,216.62

RATIO ANALYSIS

RATIO ANALYSIS
A Ratio: is defined as an arithmetical/quantitative/numerical relationship between two numbers. Ratio analysis is a very important and age old technique of financial analysis.

A tool used by individuals to conduct a quantitative analysis of information in a company's financial statements. Ratios are calculated from current year numbers and are then compared to previous years, other companies, the industry, or even the economy to judge the performance of the company. Ratio analysis is predominately used by proponents of fundamental analysis.

There are many ratios that can be calculated from the financial statements pertaining to a company's performance, activity, financing and liquidity. Some common ratios include the price-earnings ratio, debt-equity ratio, earnings per share, asset turnover and working capital.

Uses of Ratio Analysis: There are various uses of Ratio analysis, some of which are as follows: It helps in managerial decision making It helps in financial forecasting and planning It helps in communicating the financial strength of a concern It helps in control It is an essential part of budgetary control and Standard costing It helps an investor/prospective investor in decision making It provides information to the creditors about the solvency of the firm It helps the employees by providing information about the profitability of the concern It helps the government in policy making by providing financial information about the industry/firm etc It facilitates inter-firm; intra-firm; and firm-industry comparison

Classification of Ratio:
In view of the diverse requirements of the various users of the ratios, the ratios can be classified into four categories. Performance of a company is evaluated using the ratio analysis in the following different:

Directions Profitability (Profitability Ratios)

Efficiency of Assets (Activity Ratios)

Short-term Solvency (Liquidity Ratios)

Long-term Solvency (Leverage Ratios) Evaluation Performance of Company in the Context of Ratio Analysis

1. Liquidity Ratios: They measure the firms ability to meet current obligations.

2. Leverage Ratios: These ratios show the proportion of debt and equity in financing the firms assets. 3. Activity Ratios: They reflect the firms efficiency in utilising the assets.

4. Profitability Ratios: These ratios measure overall performance and effectiveness of the Firm

COMPARATIVE ANALYSIS

COMPARATIVE FINANCIAL ANALYSIS

LIQUIDITY RATIO:
Liquidity ratios are highly useful to creditors and commercial banks that provide short-term credit. Short-term refers to a period not exceeding one year. Liquidity ratios measure the firms ability to meet current obligations, as and when they fall due.

A firm should ensure that it does not suffer from lack of liquidity and also does not have excess liquidity.

In the absence of adequate liquidity, the firm would not be able to pay creditors, who have supplied goods and services, on the due date promised. Firms goodwill suffers, in case of default in payment. In fact, dissatisfied suppliers, normally, refuse to supply, further. Who can finance, indefinitely? Loss of creditworthiness may result in legal problems, finally, culminating in the closure of business of a company, even. If the firm maintains more liquidity, it will not experience any difficulty in making payments. However, a higher degree of liquidity is bad, as idle assets earn nothing, while there is cost for the funds. The firms funds will be, unnecessarily, tied up in liquid assets.

Common liquidity ratios include the current ratio, the quick ratio and the operating cash flow ratio. Different analysts consider different assets to be relevant in calculating liquidity. Some analysts will calculate only the sum of cash and equivalents divided by current liabilities because they feel that they are the most liquid assets, and would be the most likely to be used to cover short-term debts in an emergency.

 Current Ratio :
Current Ratio is defined as the relationship between current assets and currently abilities. It is also known as working capital ratio. This is calculated by dividing total current assets by total current liabilities.

Current Ratio = Current Assets / Current Liabilities

CURRENT RATIO AT 31-MARCH 2012

Sr. No.

Bank Name

Percentage

1.

Central Bank of India

0.78%

2.

State Bank of India

0.65%

3.

ICIC Bank

1.97%

COMPARISION BY PIE CHART

16.71%

20.24%

12.05%

Central Bank of India

State Bank of India

ICIC Bank

INTERPRETATION: Current ratio of ICICI is higher than SBI and Central Bank of India, means ICICI has a high ability to pay for its liabilities, and then secondly comes Central Bank of India and SBI has a low ability to pay for liabilities in comparison with ICICI and Central Bank of India.

 Quick Ratio :
It is also known as the "Acid Test" ratio; it is a refinement of the current ratio and is a more conservative measure of liquidity. The ratio expresses the degree to which your current Company's current liabilities are covered by the most liquid current assets. Generally, any value of less than 1 to 1 implies a "dependency" on inventory or other current assets to liquidate short-term debt. It is calculated as :

Cash + Trade receivables / Total current liabilities.

QUICK RATIO AT 31-MARCH 2012

Sr. No.

Bank Name

Percentage

1.

Central Bank of India

20.24%

2.

State Bank of India

12.05%

3.

ICIC Bank

16.71%

COMPARISION BY PIE CHART

16.71%

20.24%

12.05%

Central Bank of India

State Bank of India

ICIC Bank

INTERPRETATION: Central Bank Of India has a high quick ratio means it has enough current assets to cover its current liabilities, while SBI and ICICI have a low quick ratio in comparison with Central Bank Of India.

 PAYOUT RATIO:
The amount of earnings paid out in dividends to shareholders. Investors can use the payout ratio to determine what companies are doing with their earnings. Calculated as:

Payout Ratio = Dividends per share / Earning per share

For example, a very low payout ratio indicates that a company is primarily focused on retaining its earnings rather than paying out dividends. The payout ratio also indicates how well earnings support the dividend payments: the lower the ratio, the more secure the dividend because smaller dividends are easier to pay out than larger dividends.

Dividend Payout Ratio :

Dividend payout ratio is the fraction of net income a firm pays to its stockholders in dividends:

Dividend payout ratio = Dividends / Net Income for the same period

The part of the earnings not paid to investors is left for investment to provide for future earnings growth. Investors seeking high current income and limited capital growth prefer companies with high Dividend payout ratio. However investors seeking capital growth may prefer lower payout ratio because capital gains are taxed at a lower rate. High growth firms in early life generally have low or zero payout ratios. As they mature, they tend to return more of the earnings back to investors. Note that dividend payout ratio is a reciprocate ratio to dividend cover, which is calculated as EPS/DPS.

DIVIDEND PAYOUT RATIO AT 31-MARCH 2012

Sr. No. 1. 2. 3.

Bank Name Central Bank of India State Bank of India ICIC Bank

Percentage 47.49% 22.59% 32.82%

COMPARISION BY CONE CHART

47.49%

32.82%

22.59%

Central Bank of India State Bank of India ICIC Bank

INTERPRETATION: Central Bank of India has a high dividend payout ratio, so the Investors who are seeking high current income and limited capital growth should be invest in Central Bank of India. ICICI and SBI have a low dividend payout ratio, so investors who are seeking capital growth should be invest in ICICI and SBI because capital gains are taxed at a lower.

 Earning Retention Ratio :

The percent of earnings credited to retained earnings. In other words, the proportion of net income that is not paid out as dividends. Calculated as:

Net Income Dividends / Net Income It can also be calculated as one minus the dividend payout ratio.

EARNING RETENTION RATIO AT 31-MARCH 2012

Sr. No.

Bank Name

Percentage

1.

Central Bank of India

52.66%

2.

State Bank of India

77.45%

3.

ICIC Bank

67.19%

COMPARISION BY BAR CHART

80.00%

77.45%

70.00% 67.19%

60.00% 52.66% 50.00%

40.00%

30.00%

20.00%

10.00%

0.00% Central Bank of India State Bank of India ICIC Bank

INTERPRETATION: Earning retention ratio is the opposite of the dividend payout ratio. SBI and ICICI have a high earning retention ratio, so the Investors who are seeking high current income and limited capital growth should be invest in SBI and ICICI. Central Bank of India has a low earning retention ratio, so the investors who are seeking capital growth should be invest in Central Bank of India.

 PER SHARE RATIO: Earning Per Share Ratio :

The portion of a company's profit allocated to each outstanding share of common stock. Earnings per share serve as an indicator of a company's profitability. Calculated as: = Net Income Dividends on Preferred Stock / Average Outstanding Shares When calculating, it is more accurate to use a weighted average number of shares outstanding over the reporting term, because the number of shares outstanding can change over time. However, data sources sometimes simplify the calculation by using the number of shares outstanding at the end of the period. Diluted EPS expands on basic EPS by including the shares of convertibles or warrants outstanding in the outstanding shares number. Earnings per share are generally considered to be the single most important variable in determining a share's price. It is also a major component used to calculate the price-toearnings valuation ratio.

EARNING PER SHARE RATIO AT 31-MARCH 2012

Sr. No. 1.

Bank Name Central Bank of India

Percentage

5.49%

2.

State Bank of India

56.09%

3.

ICIC Bank

174.46%

COMPARISION BY PYRAMID BAR CHART

174.46%

56.09%

5.49%

Central Bank of India

State Bank of India

ICIC Bank

INTERPRETATION: This ratio is an indicator of a company's profitability. From above graph we can say that ICICI has a high profitability than SBI and Central Bank of India . So, SBI comes at second position and Central Bank of India comes at third position in profitability.

 PROFITABILITY RATIO:
A class of financial metrics that are used to assess a business's ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time. For most of these ratios, having a higher value relative to a competitor's ratio or the same ratio from a previous period is indicative that the company is doing well. Some examples of profitability ratios are profit margin, return on assets and return on equity. It is important to note that a little bit of background knowledge is necessary in order to make relevant comparisons when analyzing these ratios. For instances, some industries experience seasonality in their operations. The retail industry, for example, typically experiences higher revenues and earnings for the Christmas season. Therefore, it would not be too useful to compare a retailer's fourth-quarter profit margin with its first-quarter profit margin. On the other hand, comparing a retailer's fourth-quarter profit margin with the profit margin from the same period a year before would be far more informative.

Operating Margin :
A ratio used to measure a company's pricing strategy and operating efficiency. Operating margin is a measurement of what proportion of a company's revenue is left over after paying for variable costs of production such as wages, raw materials, etc. A healthy operating margin is required for a company to be able to pay for its fixed costs, such as interest on debt. It Is Also known as "operating profit margin." Calculated as:

Operating Margin = Operating Income / Net Sales

Operating margin gives analysts an idea of how much a company makes (before interest and taxes) on each dollar of sales. When looking at operating margin to determine the quality of a company, it is best to look at the change in operating margin over time and to compare the company's yearly or quarterly figures to those of its competitors. If a company's margin is increasing, it is earning more per dollar of sales. The higher the margin, the better.

For example, if a company has an operating margin of 12%, this means that it makes $0.12 (before interest and taxes) for every dollar of sales. Often, nonrecurring cash flows, such as cash paid out in a lawsuit settlement, are excluded from the operating margin calculation because they don't represent a company's true operating performance.

OPERATING MARGIN RATIO AT 31-MARCH 2012

Sr. No.

Bank Name

Percentage

1.

Central Bank of India

6.00%

2.

State Bank of India

24.62%

3.

ICIC Bank

21.99%

COMPARISION BY CONE CHART

24.62%

21.99%

6.00%

Central Bank of India

State Bank of India

ICIC Bank

INTERPRETATION: It shows that operating efficiency of SBI is better than Central Bank Of India and ICICI. While operating efficiency of Central Bank Of India is lower than ICICI and SBI. So rank of operating efficiency of banks can be given as SBI, ICICI and Central Bank Of India

 Gross Profit Margin :

A financial metric used to assess a firm's financial health by revealing the proportion of money left over from revenues after accounting for the cost of goods sold. Gross profit margin serves as the source for paying additional expenses and future savings. It is also known as "gross margin". Calculated as: Gross Profit Margin = Revenue COGS / Revenue

For example, suppose that ABC Corp. earned $20 million in revenue from producing widgets and incurred $10 million in COGS-related expense. ABC's gross profit margin would be 50%. This means that for every dollar that ABC earns on widgets, it really has only $0.50 at the end of the day. This metric can be used to compare a company with its competitors. More efficient companies will usually see higher profit margins.

GROSS PROFIT MARGIN RATIO AT 31-MARCH 2012

Sr. No.

Bank Name

Percentage

1.

Central Bank of India

5.29%

2.

State Bank of India

15.44%

3.

ICIC Bank

20.68%

COMPARISION BY BAR CHART

20.68%

15.44%

5.29%

Central Bank of India

State Bank of India

ICIC Bank

INTERPRETATION: This ratio shows financial position of company. Here, financial position of ICICI is better than SBI and Central Bank of India. So ICICI is at first rank by its financial position than SBI and Central Bank of India.

 Net Profit Margin :

For a business to survive in the long term it must generate profit. Therefore the net profit margin ratio is one of the key performance indicators for your business. The net profit margin ratio indicates profit levels of a business after all costs have been taken into account. It is worth analysing the ratio over time. A variation in the ratio from year to year may be due to abnormal conditions or expenses. Variations may also indicate cost blowouts which need to be addressed. A decline in the ratio over time may indicate a margin squeeze suggesting that productivity improvements may need to be initiated. In some cases, the costs of such improvements may lead to a further drop in the ratio or even losses before increased profitability is achieved. The calculation used to obtain the ratio is:

Net Profit Margin = Net Profit x 100 Sales

NET PROFIT MARGIN RATIO AT 31-MARCH 2012

Sr. No.

Bank Name

Percentage

1.

Central Bank of India

2.61%

2.

State Bank of India

9.73%

3.

ICIC Bank

16.14%

COMPARISION BY PYRAMID CHART

16.14%

9.73%

2.61%

Central Bank of India State Bank of India ICIC Bank

INTERPRETATION: This ratio is key performance indicators for business. Key performance means the profit level of company; from above graph we can say that performance of ICICI is better than SBI and Central Bank of India. So profit level of ICICI is at first rank than comes SBI and Central Bank of India.

 Return On Networth:
Return on Net worth (RONW) is used in finance as a measure of a companys profitability. It reveals how much profit a company generates with the money that the equity shareholders have invested. Therefore, it is also called, Return on Equity (ROE) It is expressed as:RONW = Net Income / Shareholders Equity x 100 The numerator is equal to a fiscal years net income (after payment of preference share dividends but before payment of equity share dividends).The denominator excludes preference shares and considers only the equity shareholding. So, RONW measures how much return the company management can generate for its equity shareholders. RONW is a measure for judging the returns that a shareholder gets on his investment as a shareholder, equity represents your money and so it makes good sense to know how well management is doing with it.

RETURN ON NETWORTH RATIO AT 31-MARCH 2012

Sr. No.

Bank Name

Percentage

1.

Central Bank of India

4.52%

2.

State Bank of India

13.97%

3.

ICIC Bank

10.70%

COMPARISION BY CONE CHART

13.97%

10.70%

4.52%

Central Bank of India

State Bank of India

ICIC Bank

INTERPRETATION: This ratio is useful for comparing the profitability of a company to that of other firms in the same industry. Here, profitability of SBI is more than ICICI and Central Bank of India. So we can say that SBI is at first rank by its profitability than comes Central Bank of India and ICICI.

 LEVERAGE RATIO:
Any ratio used to calculate the financial leverage of a company to get an idea of the company's methods of financing or to measure its ability to meet financial obligations. There are several different ratios, but the main factors looked at include debt, equity, assets and interest expenses. A ratio used to measure a company's mix of operating costs, giving an idea of how changes in output will affect operating income. Fixed and variable costs are the two types of operating costs; depending on the company and the industry, the mix will differ. The most well known financial leverage ratio is the debt-to-equity ratio. For example, if a company has $10M in debt and $20M in equity, it has a debt-to-equity ratio of 0.5 ($10M/$20M). Companies with high fixed costs, after reaching the breakeven point, see a greater increase in operating revenue when output is increased compared to companies with high variable costs. The reason for this is that the costs have already been incurred, so every sale after the breakeven transfers to the operating income. On the other hand, a high variable cost company sees little increase in operating income with additional output, because costs continue to be imputed into the outputs. The degree of operating leverage is the ratio used to calculate this mix and its effects on operating income.

Debt-Equity Ratio :
A measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity.

Debt Equity Ratio = Total Liabilities / Sharehilders Equity

Note: Sometimes only interest-bearing, long-term debt is used instead of total liabilities in the calculation. It is also known as the Personal Debt/Equity Ratio, this ratio can be applied to personal financial statements as well as companies'. A high debt/equity ratio generally means that a company has been aggressive in financing its growth with debt. This can result in volatile earnings as a result of the additional interest expense. If a lot of debt is used to finance increased operations (high debt to equity), the company could potentially generate more earnings than it would have without this outside financing. If this were to increase earnings by a greater amount than the debt cost (interest),

then the shareholders benefit as more earnings are being spread among the same amount of shareholders. However, the cost of this debt financing may outweigh the return that the company generates on the debt through investment and business activities and become too much for the company to handle. This can lead to bankruptcy, which would leave shareholders with nothing. The debt/equity ratio also depends on the industry in which the company operates. For example, capital-intensive industries such as auto manufacturing tend to have a debt/equity ratio above 2, while personal computer companies have a debt/equity of under 0.5.

DEBT-EQUITY RATIO AT 31-MARCH 2012

Sr. No.

Bank Name

Percentage

1.

Central Bank of India

22.13%

2.

State Bank of India

12.43%

3.

ICIC Bank

19.12%

COMPARISION BY CONE CHART

25.00%

20.00%

15.00%

22.13% 10.00% 19.12%

12.43% 5.00%

0.00% Central Bank of India State Bank of India ICIC Bank

INTERPRETATION: This ratio indicates what proportion of equity and debt the company is using to finance its assets. From above diagram we can say that Central Bank of India has a high debt-equity ratio means it is aggressive in financing its growth with debt. Than after SBI has a low debtequity ratio as comparison with ICICI and SBI comes at third rank in debt-equity ratio.

 Fixed Asset Turnover Ratio :

Measure of the productivity of a firm, it indicates the amount of sales generated by each dollar spent on fixed assets, and the amount of fixed assets required to generate a specific level of revenue. Changes in the ratio over time reflect whether or not the firm is becoming more efficient in the use of its Fixed assets = Sales revenue average fixed assets.

FIXED ASSET TURNOVER RATIO AT 31-MARCH 2012

Sr. No.

Bank Name

Percentage

1.

Central Bank of India

0.09%

2.

State Bank of India

0.10%

3.

ICIC Bank

0.09%

COMPARISION BY PYRAMID CHART

0.10% 0.10%

0.10%

0.10%

0.09%

0.09% 0.09% 0.09% 0.09%

0.09%

0.09%

0.08% Central Bank of India State Bank of India ICIC Bank

INTERPRETATION: This ratio shows specific level of revenue by the amount of fixed assets. SBI has a high level of revenue in comparison with ICICI and Central Bank of India. After SBI, ICICI amd Central Bank of India has a high level of revenue.

IMPORTANCE

IMPORTANCE OF RATIO ANALYSIS

Ratio analysis is an important technique of financial analysis. It is a means for judging the financial health of a business enterprise. It determines and interprets the liquidity, solvency, profitability, etc. of a business enterprise. It becomes simple to understand various figures in the financial statements through the use of different ratios. Financial ratios simplify, sumarise, and systemise the accounting figures presented in financial statements. With the help of raito analysis, comparison of profitability and financial soundness can be made between one industry and another. Similarly comparison of current year figures can also be made with those of previous years with the help of ratio analysis and if some weak points are located, remedial measures are taken to correct them.

If accounting ratios are calculated for a number of years, they will reveal the trend of costs, sales, profits and other important facts. Such trends are useful for planning. Financial ratios, based on a desired level of activities, can be set as standards for judging actual performance of a business. For example, if owners of a business aim at earning profit @ 25% on the capital which is the prevailing rate of return in the industry then this rate of 25% becomes the standard. The rate of profit of each year is compared with this standard and the actual performance of the business can be judged easily.

Ratio analysis discloses the position of business with different viewpoint. It discloses the position of business with liquidity viewpoint, solvency view point, profitability viewpoint, etc. with the help of such a study, we can draw conclusion regardings the financial health of business enterprise.

RESEARCH METHODOLOGY

RESEARCH METHODOLOGY

Research Methodology Research as a mean of getting knowledge can be carried out either arbitrarily or ina systematic fashion. It is a purposive investigation. Research may be a mean to know the small change and time forced upon us as individual or as a society. Research as process involves defining the problem, formulating the hypothesis, organizing and evaluating the data, deriving inference and conclusion after careful testing. Data Collection As data is required for any research activity, it is collected (for those both the Primary and Secondary) as follows: Primary Data: I have collected this data through questionnaire. Secondary Data: This data is collected from different sources available consolidated from bookpublication reports, websites where used as a source of secondary data in order todo this project and to collect necessary data. I have used the manuals and leaflets of the Central Bank of India, ICICI, & S.B.I bank. Title of the study:Comparative Analysis of Financial Report of Central Bank of India SBI & ICICI Bank Duration of the Study:30 day (from 1st June to 30th June) Types of research:Descriptive research Primary data collection Through Questionnaire are filled by respondents. Secondary data collection Data collection through Internet, Magazines.

CONCLUSION

CONCLUSION

Ratios make the related information comparable. A single figure by itself has no meaning, but when expressed in terms of a related figure, it yields significant interferences. Thus, ratios are relative figures reflecting the relationship between related variables. Their use as tools of financial analysis involves their comparison as single ratios, like absolute figures, are not of much use. Ratio analysis has a major significance in analysing the financial performance of a company over a period of time. Decisions affecting product prices, per unit costs, volume or efficiency have an impact on the profit margin or turnover ratios of a company. Financial ratios are essentially concerned with the identification of significant accounting data relationships, which give the decision-maker insights into the financial performance of a company. The analysis of financial statements is a process of evaluating the relationship between component parts of financial statements to obtain a better understanding of the firms position and performance. The first task of financial analyst is to select the information relevant to the decision under consideration from the total information contained in the financial statements. The second step is to arrange the information in a way to highlight significant relationships. The final step is interpretation and drawing of inferences and conclusions. In brief, financial analysis is the process of selection, relation and evaluation. Ratio analysis in view of its several limitations should be considered only as a tool for analysis rather than as an end in itself. The reliability and significance attached to ratios will largely hinge upon the quality of data on which they are based. They are as good or as bad as the data itself. Nevertheless, they are an important tool of financial analysis.

RECOMMENDATION & LIMITATIONS

RECOMMENDATIO

Ratio analysis is an important and age-old technique of financial analysis. The following are some of the advantages of ratio analysis: 1. Simplifies financial statements: It simplifies the comprehension of financial statements. Ratios tell the whole story of changes in the financial condition of the business.

2. Facilitates inter-firm comparison: It provides data for inter-firm comparison. Ratios highlight the factors associated with with successful and unsuccessful firm. They also reveal strong firms and weak firms, overvalued and undervalued firms.

3. Helps in planning: It helps in planning and forecasting. Ratios can assist management, in its basic functions of forecasting. Planning, co-ordination, control and communications.

4. Makes inter-firm comparison possible: Ratios analysis also makes possible comparison of the performance of different divisions of the firm. The ratios are helpful in deciding about their efficiency or otherwise in the past and likely performance in the future.

5. Help in investment decisions: It helps in investment decisions in the case of investors and lending decisions in the case of bankers etc.

LIMITATIONS

The ratios analysis is one of the most powerful tools of financial management. Though ratios are simple to calculate and easy to understand, they suffer from serious limitations. 1. Limitations of financial statements: Ratios are based only on the information which has been recorded in the financial statements. Financial statements themselves are subject to several limitations. Thus ratios derived, there from, are also subject to those limitations. For example, non-financial changes though important for the business are not relevant by the financial statements. Financial statements are affected to a very great extent by accounting conventions and concepts. Personal judgment plays a great part in determining the figures for financial statements.

2. Comparative study required: Ratios are useful in judging the efficiency of the business only when they are compared with past results of the business. However, such a comparison only provide glimpse of the past performance and forecasts for future may not prove correct since several other factors like market conditions, management policies, etc. may affect the future operations.

3. Problems of price level changes: A change in price level can affect the validity of ratios calculated for different time periods. In such a case the ratio analysis may not clearly indicate the trend in solvency and profitability of the company. The financial statements, therefore, be adjusted keeping in view the price level changes if a meaningful comparison is to be made through accounting ratios.

4. Lack of adequate standard: No fixed standard can be laid down for ideal ratios. There are no well accepted standards or rule of thumb for all ratios which can be accepted as norm. It renders interpretation of the ratios difficult.

5. Limited use of single ratios: A single ratio, usually, does not convey much of a sense. To make a better interpretation, a number of ratios have to be calculated which is likely to confuse the analyst than help him in making any good decision.

6. Personal bias: Ratios are only means of financial analysis and not an end in itself. Ratios have to interpret and different people may interpret the same ratio in different way.

7. Incomparable: Not only industries differ in their nature, but also the firms of the similar business widely differ in their size and accounting procedures etc. It makes comparison of ratios difficult and misleading.

BIBLIOGRAPHY

BIBLIOGRAPHY

I have referred various sources to collect the data relating to my project. I have also searched various websites to gather information about my project. Like I have referred

Web sites:
www.sbi.com www.icici.com www.pnb.com

Books referred:
Basic Financial Management- M. Y. Khan P K Jain Financial Management-Prasanna Chandra

ANNEXURE