1.

0 INTRODUCTION

1.1 INTRODUCTION TO THE STUDY

Financial analysis is the process of identifying the financial strengths and weaknesses
of the firm by properly establishing relationships between the items of the balance
sheet and profit & loss account.

Financial analysis is the starting point for making plans, before using any
sophisticated forecasting and planning procedure. Understanding the past is
prerequisite for anticipating the future.

The focus of financial analysis is on key figures in the financial statements and the
significant relationship that exists between them. The analysis of financial statement
is a process of evaluating the relationship between the component parts of financial
statements to obtain a better understanding of the firm’s position and performance.
The first task of the 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 the conclusions.

Therefore in brief financial analysis is the process of selection, relation and

evaluation. This project is an attempt to throw light on the financial analysis of
corporation bank.

1.2 STATEMENT OF THE PROBLEM

The financial statement analysis measures the changes in the financial performance of
the company. Company’s financial conditions are changing from year to year, which
affect the profitability position of the company. To have a very clear understanding of
the profitability and financial position of a business, the financial statements will have
to be analyzed and interpreted. Financial analysis is the process of identifying the
strengths and weakness of the company with the help of accounting information
provided by the Profit and Loss Account and Balance sheet. It is the technique of X-
raying the financial position as well as progress of a firm. Financial analysis will give

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the management considerable insight into the levels and areas of strength or
weakness. Hence the study on analysis of financial statement is relevant.

1.3 OBJECTIVES OF THE STUDY

Financial statements are prepared from the accounting records by the firm. The
generally accepted accounting principles and procedures are followed to prepare these
statements. The basic objective of the financial statements is to assist in decision
making.

The other objectives are

 To provide reliable information that assist in estimating the earnings potential of

the enterprise.
 To judge the financial position of the concern.
 To know the trends of the business, that is trends in regard to purchase, sales,
profits, liquidity, solvency etc.
 To measure the efficiency of operations.
 To estimate the future prospects of the concern.
 To facilitate analytical presentation of data.
 To provide other required information about changes in economic resources and
obligation.

1.4 METHODOLOGY OF STUDY

Data are facts, figures and other relevant materials, past and present, serving as basis
for study and analysis. Without analysis of factual data no specific inferences can be
drawn on the questions under study. Inferences based on imagination and guess work
cannot provide correct answers to research questions. The relevance, adequacy and
reliability of data determine the quality of findings of a study. Data are of two kinds.
i.e, Primary Data and Secondary Data

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Primary data

Primary data are original sources from which the researcher directly collects data that have
not been previously collected. These are also known as first hand information. Primary data
are collected through;

(1) Questionnaire
(2) Personal interview
(3) Survey method

Secondary data

These are the data already collected by someone else for some other purpose.
Secondary data is that which is obtained through:

 Company's catalogues
 Brochures
 Magazines
 Company's website.
 Annual report of the organization.

Data is the foundation of all marketing research. As mentioned above, secondary data
was not available to find out the solution for the business problem. Secondary data are
those data that have been previously gathered for the purpose of solving the current
problem under investigation. This situation compelled to gather information through
primary data.

1.5 SAMPLING DESIGN

Sampling technique may be classified as Non-Probability and Probability technique.

Non-probability sampling techniques rely on the researcher’s judgments.
Consequently, that do not permit an objective evaluation of the precision of the
sample results, and the estimates obtained are not statistically projectable for the
population.

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The commonly used Non-Probability sampling techniques include Convenience sampling,
Judgment sampling, Quota sampling and Snowball sampling. Probability sampling
techniques includes Simple random sampling, systematic sampling, stratified sampling,
Cluster sampling, Sequential sampling, and double sampling.
The choice between Probability and Non-probability sampling should be based on the nature
of research, degree of error tolerance, relative magnitude of sampling and non-sampling
errors, variability in the population and statistical and operational consideration. In the
present research study, convenient sampling method under Non-Probability sampling is
adopted. Sample size selected is 50 respondents which consist of customers of Corporation
Bank.
1.6 SCOPE OF THE STUDY

The purpose of the study is to understand the financial position and operational
efficiency of Corporation bank. The study includes the analysis of financial statements
and its impacts on users of financial information and all the stakeholders. Stakeholders
means all the constituents of an organization which include the shareholders , Board of
Directors , Employees, Customers, government , Trade Union and Public at large.

1.7 IMPORTANCE OF THE STUDY

Financial statement is prepared at a certain point of time according to established

convention. These statements are prepared to suit the requirement of the proprietor.
For measuring the financial soundness, efficiency, profitability and future prospects of
the concern, it is necessary to analyze the financial statement. Following purposes are
served by the Financial analysis: -
 Helps in evaluating the operational efficiency of the bank:- It is necessary to analyze
the financial statement for matching the total expenses incurred in the current year
comparing with the total expenses of the previous year and evaluate the managerial
efficiency of the concern.
 Helps in evaluating the short and long term financial position:- It is necessary to
analyze the financial statement for comparing the current assets and current liabilities
to evaluate the short term and long term financial soundness.

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 Help in calculating the profitability:-It is necessary to analyze the financial statement
to know the Gross profit and Net profit .
 Help in indicating the trend of achievements :- Analysis of financial statements
help in comparing the financial position of previous year and also compare
various expenses, purchases and sales , gross and net profit .cost of goods sold ,
total value of assets and liabilities can be compared easily with the help of
analysis of financial statements.
 Forecasting , budgeting and deciding future line of action:- The potential growth
of the business can be predicted by the analysis of financial statement which helps
in deciding future line of action. Comparisons of actual performance with target
show all the shortcomings.
1.8 PERIOD OF THE STUDY
The data was collected over a period of three months (October 2017- December
2017). The study was conducted collecting data from Corporation bank, Kasaragod
branch and from bank officials authorized to give information. It took three months to
complete the project.
1.9 LIMITATIONS OF THE STUDY

Financial analysis is a powerful mechanism of determining financial strengths and

weaknesses of a firm. But, the analysis is based on the information available in the
financial statements. Thus, the financial analysis suffers from serious inherent
limitations of financial statements. Following are the limitations:

a) Bank officials were very much busy with their work and heavy schedules. So they
were unwilling to talk during usual office hours.
b) At some point of time officials were unwilling to provide information due to their
privacy concerns.
c) Financial analysis was suffering from the limitations of financial statements.
d) Financial analysis is based only upon monetary information and non-monetary
items are completely ignored.

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e) Analysis is only a means and not an end in itself. The analyst has to make
interpretation and draw his own conclusions. Different people may interpret the
same analysis in different ways.

1.10 CHAPTER SCHEME

CHAPTER NUMBER CHAPTER NAME

1 INTRODUCTION

2 INDUSTRY PROFILE

3 COMPANY PROFILE

DATA ANALYSIS &

4
INTERPRETATION
FINDINGS, SUGGESTIONS &
5
CONCLUSION

APPENDICES

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 3.0 INDUSTRY PROFILE

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. Banking in India has its origin as early as Vedic Period. It is believed
that the transition from money lending to banking must have occurred even before
Manu, the great Hindu Jurist who has devoted a section of his work to deposits and
advances and laid down the rules relating to rates of interest. During the days of East
India Company it was the turn of the agency houses to carry on the banking business.

History of banking industry

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. 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 are as
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.
Phase I

The General Bank of India was set up in the year 1786. Next came Bank was
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

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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.
Phase II
Government took major steps in this Indian Banking Sector Reform after
independence. IN 1955, 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.
By the 1960s, the Indian banking industry has become an important tool to facilitate
the development of the Indian economy. At the same time, it has emerged as a large
employer, and a debate has ensued about the possibility to nationalize the banking
industry. Indira Gandhi, the then Prime Minister of India expressed the intention of
the GOI in the annual conference of the All India Congress Meeting. Seven banks
forming subsidiary of State Bank of India was nationalized in 1960 on 19th July,
1969, major process of nationalization was carried out.
A second dose of nationalization of 6 more commercial banks followed in 1980. The
Stated reason for the nationalization was to give the government more control of
credit delivery. With the second dose of nationalization, the GOI controlled around
91% of the banking business of India. Later on, in the year 1993, the government
merged New Bank of India with Punjab National Bank. It was the only merger
between nationalized banks and resulted in the reduction of the number of
nationalized banks from 20 to 19.

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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.
Phase IV (Liberalization)
In the early 1990s, the then Narsimha Rao government embarked on a policy
of liberalization, licensing a small number of private banks. These came to be
known as New Generation tech-savvy banks and included Global Trust Bank. This
move, along with the rapid growth in the economy of India, revitalized the banking
sector in India, which has seen rapid growth with strong contribution from all the
three sectors of banks, namely, government banks, private banks and foreign banks.
The next stage for the Indian banking has been setup with the proposed relaxation in
the norms for Foreign Direct Investment, where all Foreign Investors in banks may be
given voting rights which could exceed the present cap of 10%, at present it has gone
up to 49% with some restrictions. Currently, banking in India is generally fairly
mature in terms of supply, product range and reach-even though reach in rural India
still remains a challenge for the private sector and foreign banks. In terms of quality
of assets and capital adequacy, Indian banks are considered to have clean,
strong and transparent balance sheets relative to other banks in comparable
economies in its region. With the growth in the Indian economy expected to be strong
for quite some time-especially in its services sector-the demand for banking services,

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especially retail banking, mortgages and investment services are expected to be
strong. One may also expect M&A, takeovers, and asset sales. In March 2006, the
Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak
Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has
been allowed to hold more than 5% in a private sector bank since the RBI announced
norms in 2005 that any stake exceeding 5% in the private sector banks would need to
be vetted by them.
Main functions of banks
The banking functions can be mainly classified into primary functions and secondary
functions and they are
Primary functions
The primary functions of a bank are also known as banking functions. They are the
main functions of a bank. These primary functions of banks are explained below.
A. Accepting Deposits
The bank collects deposits from the public. These deposits can be of different
types, such as:-

a. Saving Deposits
b. Fixed Deposits
c. Current Deposits
d. Recurring Deposits

a. Saving Deposits : This type of deposits encourages saving habit among the public.
The rate of interest is low.. This account is suitable to salary and wage earners. This
account can be opened in single name or in joint names.

b. Fixed Deposits : Lump sum amount is deposited at one time for a specific period.
Higher rate of interest is paid, which varies with the period of deposit. Withdrawals
are not allowed before the expiry of the period.

c. Current Deposits: This type of account is operated by businessmen. Withdrawals

are freely allowed. No interest is paid. The account holders can get the benefit of
overdraft facility.

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d. Recurring Deposits: This type of account is operated by salaried persons and petty
traders. A certain sum of money is periodically deposited into the bank. Withdrawals
are permitted only after the expiry of certain period. A higher rate of interest is paid.

B. Granting of Loans and Advances: The bank advances loans to the business
community and other members of the public. The rate charged is higher than what it
pays on deposits. The difference in the interest rates (lending rate and the deposit rate)
is its profit.

The types of bank loans and advances are:-

a. Overdraft
b. Cash Credits
c. Loans
d. Discounting of Bill of Exchange

a. Overdraft: This type of advances is given to current account holders. A certain

amount is sanctioned as overdrafts which can be withdrawn within a certain period of
time say three months or so. Interest is charged on actual amount withdrawn. An
overdraft facility is granted against a collateral security. It is sanctioned to
businessman and firms.

b. Cash Credits: The client is allowed cash credit up to a specific limit fixed in
advance. It can be given to current account holders as well as to others who do not
have an account with bank. Separate cash credit account is maintained. Interest is
charged on the amount withdrawn in excess of limit. The cash credit is given against
the security of tangible assets and / or guarantees.

c. Loans: It is normally for short term say a period of one year or medium term say a
period of five years. Now-a-days, banks do lend money for long term. Repayment of
money can be in the form of installments spread over a period of time or in a lump
sum amount. Interest is charged on the actual amount sanctioned, whether withdrawn
or not. The rate of interest may be slightly lower than what is charged on overdrafts
and cash credits. Loans are normally secured against tangible assets of the company.

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d. Discounting of bill of exchange: The bank can advance money by discounting or
by purchasing bills of exchange both domestic and foreign bills. The bank pays the
bill amount to the drawer or the beneficiary of the bill by deducting usual discount
charges. On maturity, the bill is presented to the acceptor of the bill and the amount is
collected.

Secondary functions: The bank performs a number of secondary functions, also

called as non-banking functions. These important secondary functions of banks are
explained below.

1. Agency Functions: The bank acts as an agent of its customers. The bank performs
a number of agency functions which includes:-

a. Transfer of Funds
b. Collection of Cheques
c. Periodic Payments
d. Portfolio Management
e. Periodic Collections
f. Other Agency Functions

a. Transfer of Funds: The bank transfer funds from one branch to another or from
one place to another.

b. Collection of Cheques: The bank collects the money of the cheques through
clearing section of its customers. The bank also collects money of the bills of
exchange.

c. Periodic Payments: On standing instructions of the client, the bank makes periodic
payments in respect of electricity bills, rent, etc.

d. Portfolio Management: The banks also undertake to purchase and sell the shares
and debentures on behalf of the clients and accordingly debits or credits the account.
This facility is called portfolio management.

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e. Periodic Collections: The bank collects salary, pension, dividend and such other
periodic collections on behalf of the client.

f. Other Agency Functions: They act as trustees, executors, advisers and

administrators on behalf of its clients. They act as representatives of clients to deal
with other banks and institutions.

2. General Utility Functions: The bank also performs general utility functions, such
as:-

a. Issue of Drafts, Letter of Credits, etc.

b. Locker Facility
c. Underwriting of Shares
d. Dealing in Foreign Exchange
e. Project Reports
f. Social Welfare Programmes
g. Other Utility Functions

a. Issue of Drafts and Letter of Credits: Banks issue drafts for transferring money
from one place to another. It also issues letter of credit, especially in case of, import
trade. It also issues travelers’ cheques.

b. Locker Facility: The bank provides a locker facility for the safe custody of
valuable documents, gold ornaments and other valuables.

c. Underwriting of Shares: The bank underwrites shares and debentures through its
merchant banking division.

d. Dealing in Foreign Exchange: The commercial banks are allowed by RBI to deal
in foreign exchange.

e. Other Utility Functions: It acts as a referee to financial standing of customers. It

collects creditworthiness information about clients of its customers. It provides
market information to its customers, etc. It provides travelers’ cheque facility

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Emerging trends in banking

Today, we are having a fairly well developed banking system with different classes of
banks public sector banks, foreign banks, private sector banks – both old and new
generation, regional rural banks and co-operative banks with the Reserve Bank of
India as the fountain Head of the system.
In the banking field, there has been an unprecedented growth and diversification of
banking industry has been so stupendous that it has no parallel in the annals of
banking anywhere in the world.
During the last 41 years since 1969, tremendous changes have taken place in the banking
industry. The banks have shed their traditional functions and have been innovating, improving
and coming out with new types of the services to cater to the emerging needs of their
customers.
Massive branch expansion in the rural and underdeveloped areas, mobilization of savings and
diversification of credit facilities to the either to neglected areas like small scale industrial
sector, agricultural and other preferred areas like export sector etc. have resulted in the
widening and deepening of the financial infrastructure and transferred the fundamental
character of class banking into mass banking.
There has been considerable innovation and diversification in the business of major
commercial banks. Some of them have engaged in the areas of consumer credit, credit cards,
merchant banking, leasing, mutual funds etc. A few banks have already set up subsidiaries for
merchant banking, leasing and mutual funds and many more are in the process of doing so.
Some banks have commenced factoring business.

The major challenges faced by banks today are as to how to cope with competitive
forces and strengthen their balance sheet. Today, banks are groaning with burden of
NPA’s. It is rightly felt that these contaminated debts, if not recovered, will eat into
the very vitals of the banks. Another major anxiety before the banking industry is the
high transaction cost of carrying Non Performing Assets in their books. The
resolution of the NPA problem requires greater accountability on the part of the
corporate, greater disclosure in the case of defaults, an efficient credit information
sharing system and an appropriate legal framework pertaining to the banking system
so that court procedures can be streamlined and actual recoveries made within an

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acceptable time frame. The banking industry cannot afford to sustain itself with such
high levels of NPA’s thus, “lend, but lent for a purpose and with a purpose ought to
be the slogan for salvation.”

The Indian banks are subject to tremendous pressures to perform as otherwise their
very survival would be at stake. Information technology (IT) plays an important role
in the banking sector as it would not only ensure smooth passage of interrelated
transactions over the electric medium but will also facilitate complex financial
product innovation and product development. The application of IT and e-banking is
becoming the order of the day with the banking system heading towards virtual
banking.

Banking landscape is changing very fast. Many new players with different muscle
powers will enter the market. The Reserve Bank in its bid to move towards the best
international banking practices will further sharpen the prudential norms and
strengthen its supervisor mechanism. There will be more transparency and
disclosures.

In the days to come, banks are expected to play a very useful role in the economic
development and the emerging market will provide ample business opportunities to
harness. Human Resources Management is assuming to be of greater importance. As
banking in India will become more and more knowledge supported, human capital
will emerge as the finest assets of the banking system. Ultimately banking is people
and not just figures.

Indian banking system

Currently the Indian banking industry has a diverse structure. The present structure of
the Indian banking industry has been analyzed on the basis of its organized status,
business as well as product segmentation.

The entire organized banking system comprises of scheduled and non-scheduled

banks. Largely, this segment comprises of the scheduled banks, with the unscheduled
ones forming a very small component. Banking needs of the financially excluded

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population is catered to by other unorganized entities distinct from banks, such as,
moneylenders, pawnbrokers and indigenous bankers.

 Commercial banks: Commercial banks have been in existence for many

decades. Commercial Banks mobilize savings in urban areas and make them
available to large and small individual and trading units mainly for Working
Capital requirements. After1969, Commercial Banks are broadly classified into
nationalized public sector banks and private sector banks. The State Bank of India
and its associate Banks along with another 20 banks are the public sector banks. The
private sector banks include a small number of Indian Scheduled banks which have
not been nationalized.
 Public Sector Banks: Public sector banks are those which are owned by the
Central Government either directly or through the Reserve Bank of India. They are
also known as Nationalized Banks. Eg: State Bank of India and its subsidiaries,
Allahabad Bank, Corporation Bank, Vijaya Bank, Canara Bank, Bank of Baroda,
Punjab National Bank, Syndicate Bank, the Oriental Bank of Commerce etc.
 Private Sector Banks: Private Sector banks are those which are owned and
controlled by private entrepreneurs. Private sector banks are classified as Private
sector Indian Banks and Private Sector Foreign Banks. Private Sector India
Banks are those which are owned and controlled by Indian Entrepreneurs.
Indus land Bank was the first private bank to be set up in India. ING Vyasa
Bank, HDFC Bank, ICICI Bank, UTI Bank (Now Axis Bank), Centurion Bank.
 Regional Rural Banks: The Regional Rural Banks (RRB) came into existence
since the middle of 1970’s with the specific objective of providing credit and
deposit facilities particularly to the small and marginal farmers, agricultural
laborers and artisans and small entrepreneurs.
 Co-operative banks: In India, co-operative Banks has assigned an important
role in the development of vital areas such as agriculture, rural and small-scale
industry, retail distribution; housing etc. the cooperative banking sector has been
developed in the country to replace the village moneylenders. They also
promote savings of the farmers and meet their credit needs for cultivation. The

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 cooperative banking sectors are not only in rural areas but now they have spread
to urban areas also.
 Scheduled banks and non-scheduled banks: Under the RBI Act, 1934, banks
were classified as Scheduled banks and non-scheduled banks. the scheduled
banks are those which have are included in the schedule(second)of RBI
Act,1934.these banks have a paid up capital and reserves of an aggregate value
of not less than Rs.5 lakhs and which satisfy RBI that their affairs are
carried out in the interest of their depositors. Scheduled Banks comprise
commercial banks and the cooperative banks, In terms of ownership,
Commercial banks can be further grouped into nationalized banks, the State
Bank of India and its group banks, Regional Rural Banks and Private sector
Banks (old, new, domestic and foreign).These banks have over 67,000 branches
spread across the country. Non-scheduled banks are those which have not been
included in the second schedule of RBI Act, 1934.at present, there are three non-
scheduled banks in India.

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 3.0 COMPANY PROFILE
CORPORATION BANK Ltd.
History
Corporation Bank is one of the oldest Banking Institutions in the Dakshina Kannada
district of Karnataka and one of the oldest banks in India. As the saying goes on “A
thousand mile journey starts with small step”. A step was taken by Shri Khan Bahadur
Haji Abdullah Haji Kasim Saheb Bahadur, a businessman of Udupi way back on the
12th of March 1906 with a group of philanthropist founded the ‘Canara Banking
Corporation of Udupi Limited’.
A handful of people representing the various interestsdecided to promote the ‘Canara
Banking Corporation of Udupi Limited’. Eleven persons who included 4 pleaders, 2
Educationist, 1 insurance agent and 1 retired sub magistrate where the first signatories
of the Articles of Association and Memorandum of Association of the bank who had
in all 111 shares.
The need to start this bank was felt because there was no such facility at Udupi, an
Important trading Centre next to Mangalore in Dakshin Kannada district. The
indigenous banking was largely in the hands of few rich private individuals and
something had to be done to provide relief to the common man from the clutches of
the money lenders who held fully sway. What inspired the founding fathers was the
fervor of swadeshism, for promoting the bank, the founder president made an appeal
saying, the primary object in forming the ‘Corporation Bank’ is not only to cultivate
habit of thrifts amongst all classes of people, without distinction of the cast or creed,
but also habit of co-operation amongst all classes. This is swadeshism, pure and
simple and every lover of the country is expected to come forward and co-operate in
achieving the ending view. It was called through co-operation of all, shorn of
distinction of caste and creed “ The Canara Banking Corporation Limited” as the
institution was called then, started functioning as a“Nidhi” with a humble beginning.
The initial capital was Rs 5000.
Corporation Bank which was founded in 1906 and today it is a “100 year young
bank”. The bank had its origin in the temple town, Udupi which was then a part of
Dakshin Kannada District. The credit of introducing the bank goes to the Canara

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Banking Corporation of Udupi Limited. Corporation Bankis a public sector bank
which has been silently creating waves among the domestic banks in India. It is one of
the Nationalized Banks in India.
The bank withstood the challenges of the financial sector reforms and has emerged as
the one of the financially and fundamentally strong, well-capitalized, technological
sophisticated, efficient, effective and one of the most profitable bank in India.
Corporate Vision
“To evolve into a strong, sound and globally competitive financial system, providing
integrated services to customers from all segments, leveraging on technology
and human Resources, adopting the best accounting and ethical practices and
fulfilling corporate and social Responsibilities towards all stake holders.”
Corporate Mission
 To become a provider of World-Class financial services.
 To meet customer expectations, especially through innovation and technological
initiatives.
 To maintain leadership in inclusive banking.
 To enhance shareholder’s wealth by sustained, profitable and financially sound
growth with prudent risk management systems.
 To fulfill national and social obligation as responsible corporate citizen.
 To create environment, intellectually satisfying and professionally rewarding to
the employees.
 To emerge as role model for ethical values and good corporate governance.

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The Logo
SarveJanahSukhinoBhavanthu which means Prosperity for All

The Bank's motto “SarveJanahSukhinoBhavanthu” in Sanskrit, which means

“Prosperity for All " is well-professed by the Bank in its day-to-day-operations.
The Bank's logo has various components, namely Kamadhenu(denoting wish
fulfillment), Kalpatharu(eternity), Balance (justice for all), Wheel (industrial
progress) and Wheat Grains (agricultural prosperity) which stand for universal
prosperity and as a wish-fulfilling credo. The logo in its present form was
incorporated in 1972 when the name of the Bank was changed from Canara Banking
Corporation (Udipi) Ltd. to Corporation Bank Ltd.
Subsidiaries

The Bank has one Subsidiary viz. Corp Bank Securities Ltd formed as a Primary
Dealer to deal in Government Securities. The Subsidiary has recorded impressive
performance over the years

Corp Bank Securities Limited: Corp Bank Securities Limited is a wholly owned
subsidiary of Corporation Bank in Securities Trading. Having built core competence
in treasury operations over the years, the Bank has identified securities business as a
thrust area and has set up an exclusive subsidiary, with an authorised and fully paid up
capital of Rs. 100 crore. The objective behind setting up the subsidiary is to provide
depth and breadth in the Government of India Securities market. The subsidiary
primarily deals in trading of government securities, bonds and treasury bills. The

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Registered Office of the subsidiary is at Mumbai. The subsidiary declared was open
by Hon'ble Shri Balasaheb Vikhe Patil, Union Minister

Top Management

Name Designation

Shri Jai Kumar Garg Managing Director and Chief

Executive Officer

Shri PVBN Murthy Chief Vigilance Officer

Shri Gopal Murli Bhagath Executive Director

SWOT ANALYSIS

SWOT analysis is a process that identifies an organization's strengths, weaknesses,

opportunities and threats. Specifically, SWOT is a basic, analytical framework that assesses
what an entity (usually a business, though it can be used for a place, industry or product) can
and cannot do, for factors both internal (the strengths and weaknesses) as well as external (the
potential opportunities and threats). Using environmental data to evaluate the position of a
company, a SWOT analysis determines what assists the firm in accomplishing its objectives,
and what obstacles must be overcome or minimized to achieve desired results: where the
organization is today, and where it may be positioned in the future.

SWOT analysis of Corporation bank Ltd.

Strengths:

 Equal presence in rural and urban areas

 Strong financial performance
 Employee base over 12000 people
 Customized banking solutions

21
Weaknesses:

 Lack of Pan India presence

 Less publicity and branding in comparison with leading Indian banks

Opportunities:

 Innovative products and services

 Government Funding

Threats:

 Economic crisis and volatile markets

 Changing RBI policies
 Presence on other banks

22
 4.0 DATA ANALYSIS AND INTERPRETATION

Trend Analysis: It is analysis in which there is the study of the trend of main items
in the financial statements over a number of years.

Table No 4.1: Showing Trend Analysis

Particulars Deposits Advances Net Profit

2012 21724.6 12029.2 415.99
Percentage 100% 100% 100%
2013 23190.9 13889.7 504.13
Percentage 107% 115% 121%
2014 27233.1 18546.3 402.16
Percentage 125% 154% 97%
2015 32876.5 23962.4 444.46
Percentage 151% 200% 107%
2016 42356.9 29949.7 536.14
Percentage 195% 249% 129%
(Rs in crores)

Chart No 4.1: Showing Trend Analysis

Trend Analysis
Deposits Advances Net Profit

129%

107% 249%
97% 200%
121%
100% 154%
100% 115%
195%
151%
100% 107% 125%

2012 2013 2014 2015 2016

23
Interpretation: There is a continuous increase in deposits till the year ending
2016.Similarly advances also shows as increasing trend till the year ending 2016.
There has been an substantial increase in net profit till the year ending 2016The
overall performance of the bank is satisfactory

24
Earnings Per Share (EPS):The earnings per share of the company help in
determining the market price per shares of the company.

EPS=Net Profit after Tax-Preference Dividend/No. of Equity Shares

Table No4.2: Showing Earnings per Share Ratio

Year Net Profit after No of Equity Earnings per

Tax Shares Share
2012 734.99 14.34 51.24
2013 892.77 14.34 62.24
2014 1170.25 14.34 81.58
2015 1413.28 14.81 95.43
2016 1506.42 14.81 101.72
(Rs in crores)

Chart No 4.2: Showing earning per Share

EPS

101.72
95.43
81.58
62.24
51.24

2012 2013 2014 2015 2016

Interpretation: Earnings per share of the bank shows an increase from from 51.24 in
the year 2012 to 101.72 in the year 2016.

25
Dividend per Share (DPS): It is expressed by dividing dividend paid to equity
shareholders by number of equity shares.

DPS=Dividend Paid to Equity Shareholders/No of Equity Shares

Table No 4.3: Showing Dividend per Share Ratio

Year DividendDividend
per Paid
Share=Dividend Paid Dividend
No of Equity to Equity
per
Shareholders/No of Equity Shares
Shares Share
2012 176.18 14.34 12.29
2013 209.75 14.34 14.63
Dividend per Share=Dividend Paid to Equity
2014 276.89 14.34 19.31
Shareholders/No of Equity Shares
2015 344.32 14.81 23.25
2016 352.92 14.81 23.83
(Rs in crores)

Chart No 4.3: Showing Dividend per Share Ratio

Dividend Per Share

23.25 23.83
19.31
14.63
12.29

2012 2013 2014 2015 2016

Interpretation: Dividend per share is increasing year by year and investors are
getting benefit. Investors will get back their investment in the form of dividend. It has
been increased from 12.29 in 2012 to 23.83 in 2016.

26
Payout Ratio: Payout ratio is calculated only for those years in which the net profit is
positive and dividend is declared
Payout Ratio=Dividend per Share/Earnings per
Share
Table 4.4: Showing Payout Ratio

Year DPS EPS Payout Ratio

Payout Ratio=Dividend per Share/Earnings per
2012 Share 12.29 51.24 0.2399

2013 14.63 62.24 0.2351

2014 19.31 81.58 0.2367

Payout Ratio=Dividend per Share/Earnings per
2015 23.25 95.43 0.2436
Share
2016 23.83 101.72 0.2342

Table 4.4: Showing Payout Ratio

Payout Ratio

0.2436
0.2399
0.2367
0.2351 0.2342

2012 2013 2014 2015 2016

Interpretation: From the survey it is clear that pay out ratioover different years are
fluctuating. It was 0.2399 in 2012 decreased to 0.2351 in 2013 and again started
increased to 0.2367. It went up again to 0.2436 in 2015 and fall down to 0.2342 in
2016.

27
Retention Ratio: Retention ratio referred to as plough back ratio. It is the amount of
retained earnings relative to earnings.
Retention Ratio=1-Payout Ratio

Table No 4.5: Showing Retention Ratio

Year Payout Ratio Retention Ratio

2012 0.2399 0.7601

2013 0.2351 0.7649

2014 0.2367 0.7633

2015 0.2436 0.7564

2016 0.2342 0.7658

(Rs in crores)

Chart No 4.5: Showing Retention Ratio

Retention Ratio

0.7649 0.7658
0.7633
0.7601
0.7564

2012 2013 2014 2015 2016

Interpretation: As we saw above payout ratio is increasing, but in decreasing rate.

This is obvious that retention ratio is increasing in increasing rate. It was 0.7601 in
2012. And in 2016 it touched 0.7658.

28
Net Profit Ratio: This ratio indicates the net margin on a sale of Rs.100. It is
calculated as follows

Net Profit Ratio=Net Profit/Net Sales*100

Table No 4.6: Showing Net Profit Ratio

Year Net Profit Net Sales Net Profit Ratio

2012 734.99 4516.55 16.27
2013 892.77 6067.35 14.71
2014 1170.25 7294.60 16.04
2015 1413.28 9135.24 15.47
2016 1506.42 13,017.78 11.57
(Rs in crores)

Chart No 4.6: Showing Net Profit Ratio

Net Profit Ratio

16.27 14.71 16.04 15.47

11.57

2012 2013 2014 2015 2016

Interpretation: Although both sales and net profit have increased during the above
period but the net profit ratio is fluctuating. This is because of the reason that the net
profits have not increased in the same proportion as of the sales. It was 16.27 in 2012
and 11.57 in 2016.

29
Operating Profit Ratio: It is the ratio of Operating profit over Sales. This ratio is
calculated as follows:

Operating Profit Ratio=Operating Profit/Net Sales*100

Table No 4. 7: Showing Operating Profit Ratio

Operating Profit Ratio=Operating Profit/Net
Year Sales*100 Operating Profit Sales Operating Profit
Ratio
2012 1241.14 4516.55 27.70
2013 Operating 1751.62
Profit Ratio=Operating
6067.35 Profit/Net
29.61
2014 Sales*100 2136.73 7294.60 28.37
2015 2533.91 9135.24 27.73
2016 2855.97 13,017.78 21.94
Operating
(Rs in crores) Profit Ratio=Operating Profit/Net
Sales*100
Chart No 4.7: Showing Operating Profit ratio

Operating Profit Ratio=Operating Profit/Net

30
Sales*100
25

20

15 Operating Profit Ratio

10

0
2012 2013 2014 2015 2016

Interpretation: In the year 2012 the operating profit was 27.70%. It has been
declining from last four years. This may be due to the reason that operating expenses
have been increased more as compared to sales during the above period consequently
reducing operating profits.

30
Debt Equity Ratios: This ratio indicates the relationship between long-term debts
and shareholders’ funds.
Debt-Equity Ratio=Debt/Equity

Table No 4.8: Showing Debt Equity Ratio

Year Debt Equity Debt–Equity

Ratio
2012 2137.60 4228.51 0.51

2013 4089.89 4896.51 0.84

2014 9077.52 5774.84 1.57

2015 15965.38 7137.80 2.24

2016 14248.09 8275.91 1.72

(Rs in crores)

Chart No 4.8: Showing Debt Equity ratio

2.5

1.5
Debt –Equity Ratio
1

0.5

0
2012 2013 2014 2015 2016

Interpretation: The standard or ideal debt equity ratio is 1:1. The debt equity ratio is
more than the standard ratio, so the bank should try to maintain a balance by reducing
the level of debt so that the ratio will be satisfactory.

31
Credit- Deposit Ratio: The ratio shows the relationship between the amounts of
deposits generated by the bank as well as their deployment towards disbursement of
loan and advances.

Credit Deposit Ratio=Credits/Deposits*100

Table No 4.9: Showing Credit Deposit Ratio

Year Advances Deposits Credit-Deposit

Ratio
2012 39185.57 55424.42 70.70
2013 48512.16 73983.91 65.57
2014 63202.56 92733.67 68.15
2015 86850.40 116747.50 74.39
2016 100469.02 136142.20 73.80
(Rs in crores)

Chart No 4.9: Showing Credit Deposit Ratio

76
74
72
70
68 Credit - Deposit Ratio
66
64
62
60
2012 2013 2014 2015 2016

Interpretation: Above table exhibits credit deposit ratio of the bank during last 5
years. In the year 2012 ratio was 70.70% and in the year 2013 it dropped, but in the
next two years it increased and in the current year it has been dropped.

32
Solvency Ratio: The solvency ratio is a measure of the solvency of a concern.
Solvency of a concern means the ability of a concern to meet its outside liabilities out
of its total assets.

Solvency Ratio=Outside Liabilities/Total Assets

Table No 4.10: Showing Solvency Ratio

Year Outside Liabilities Total Assets Solvency Ratio

2012 62369.16 66597.67 0.93651
2013 82009.29 89905.81 0.91217
2014 105892.44 111667.31 0.94829
2015 136370.70 143508.59 0.95026
2016 155284.48 163560.42 0.94940
(Rs in crores)

Chart No 4.10: Showing Solvency Ratio

0.96
0.95
0.94
0.93 Solvency Ratio

0.92
0.91
0.9
0.89
2012 2013 2014 2015 2016

Interpretation: Though no standard or ideal solvency ratio has been established, one
can say that higher the solvency ratio of the concern, the stronger is its financial
position.

33
Fixed Assets to Net Worth Ratio:

This ratio indicates the proportion of fixed assets financed by the owners or the
proprietors.

Fixed Assets to Net Worth Ratio=Net Fixed Asset/Net Worth

Table No 4.11 Showing Fixed Assets to Net worth Ratio

Year Net Fixed Assets Net Worth Fixed Assets to

Net Worth Ratio
2012 271.75 4228.51 0.0643
2013 298.92 4896.51 0.0610
2014 289.26 5774.84 0.0501
2015 331.01 7137.80 0.0463
2016 355.98 8275.91 0.0430
(Rs in crores)

Chart No 4.11: Showing Fixed Asset to Net worth Ratio

Fixed Assets to Net Worth Ratio

0.0643 0.061
0.0501 0.0463 0.043

2012 2013 2014 2015 2016

Interpretation: The standard fixed assets to net worth ratio for an industrial
undertaking are 67%. That is, fixed assets should not constitute more than 67% of the
proprietor’s fund. Here since the ratio is less than 67% it indicates that the owners
have financed not only the fixed assets, but also a good portion of current assets.

34
Interest Expense Ratio: Interest expense reveals the relationship between the interest
expended and the total income.

Interest
Table Expense Ratio=Interest
No 4.12Showing Expended/Total
Interest Expense Ratio Income*100

Year Interest Expended Total Income Interest Expense

Ratio
2012 3073.24 5216.33 58.92
2013 4376.37 7174.57 61.00
2014 5084.35 8481.03 59.95
2015 6195.50 10391.13 59.62
2016 9870.89 14510.40 68.03
(Rs in crores)

Chart No 4.12 Showing Interest Expense Ratio

70
68
66
64
62 Interest Expense Ratio
60
58
56
54
2012 2013 2014 2015 2016

Interpretation: It that the interest expenditure is raising till 2013and then there is a
decrease in the year 2014 and 2015, thereafter an increase in 2016.

35
Proprietary Ratio: It is also called shareholders equity to total equity ratio or net
worth to total assets ratio or equity ratio..

Proprietary Ratio=Shareholder’s Fund/Total Assets

Table No 4.13 Showing Proprietary Ratio

Year Shareholder’s Total Assets Proprietary Ratio

Fund
2012 4228.51 66597.68 0.0634
2013 4896.51 89905.81 0.0544
2014 5774.84 111667.29 0.0517
2015 7137.80 143508.59 0.0497
2016 8275.91 163560.42 0.0506
(Rs in crores)

Chart No 4.13: Showing Proprietary Ratio

0.07
0.06
0.05
0.04
Proprietary Ratio
0.03
0.02
0.01
0
2012 2013 2014 2015 2016

Interpretation: Higher the proprietary ratio, stronger is the financial position of the
concern, and vice versa. Generally, a ratio of 5:1 is considered ideal.

36
Return on Net Worth: It measures the profitability of the business in view of the
shareholders. It judges the earning capacity of the company and the adequacy of
return on proprietor’s funds.
Return on Net worth=NPIT /Shareholder’s Funds*100

NPIT: Net Profit after Interest and Tax

Table No 4.14: Showing Return on Net worth Ratio

Year Net Profit after Shareholder’s Return on Net

Interest & Tax Fund Worth
2012 734.99 4228.51 17.38
2013 892.77 4896.51 18.23
2014 1170.25 5774.84 20.26
2015 1413.28 7137.80 19.79
2016 1506.04 8275.91 18.20
(Rs in crores)

Chart No 4.14 : Showing Return on Net Worth Ratio

20.5
20
19.5
19
18.5
18 Return on Net Worth
17.5
17
16.5
16
15.5
2012 2013 2014 2015 2016

Interpretation: The net profit after and tax have increased slowly till the year 2014.
Consequently the net worth ratio has increased considerably from 2012 to 2014. But
the next two years that is in 2015and 2016 there was a decline.

37
Net Non-performing Assets (NPA)Ratio: NPAs refer to the loans given by a bank
that it classifies as doubtful. This means that the bank has low or no hopes of
recovering money on these loans.

Net Non-performing Asset Ratio = Net NPA / Net Advance

Table No 4.15: Showing Net NPA Ratio

Year Net NPA Net Advance Net NPA Ratio

2012 12693.00 39185.57 0.32
2013 13829.90 48512.16 0.29
2014 19724.56 63202.56 0.31
2015 39774.35 86850.40 0.46
2016 86938.53 100469.02 0.87
(Rs in Crores)
Chart No 4.15: Showing Net NPA Ratio

Net NPA Ratio

0.87

0.46
0.32 0.29 0.31

2012 2013 2014 2015 2016

Interpretation: The Net NPA Ratio is showing an increase from the year 2012 and it
is showing a huge increase in the year 2016.

38
Loan to Asset Ratio: This is the ratio of Total Loans to Total Assets

The ratio is calculated as follows:

Loan to Asset Ratio = Total Loans / Total Assets

Table No 4.16: Showing Loans to Total Assets

Year Total Loans Total Assets Loans to Assets

Ratio
2012 2137.60 66597.68 0.0321
2013 4089.89 89905.81 0.0454
2014 9077.52 111667.29 0.0812
2015 15965.38 143508.59 0.1112
2016 14248.09 163560.42 0.0871
(Rs in Crores)

Chart No 4.16: Showing Gross NPA Ratio

Gross NPA Ratio

1.47
1.26
1.14
1.02
0.91

2012 2013 2014 2015 2016

Interpretation: The Gross NPA Ratio was declining till the year 2015 and in2016, It
has been recovered or increase.

39
COMPARATATIVE STATEMENTS

Comparative Profit and Loss Account

Table No 4.17: Showing Comparative Profit and Loss Account(Rs in crores)

Comparative profit 2011-12 2012-13 2013-14 2014-15 2015-16

and loss account
Particulars INC or % INC or INC % INC or INC or
DEC DEC or DEC DEC
DEC
INCOME
Interest income 1550.8 34.33 1277.25 20.22 2147.56
earned
Other income 407.43 58.22 79.20 7.15 (168.96)

Total income 1958.24 37.54 1306.45 18.20 1978.59

Interest expended 1294.13 42.40 707.97 16.18 1111.15

Operating expenses 109.63 12.29 213.37 20.38 381.75

Total expenditure 1412.76 35.62 921.34 16.98 1492.91

Operating profit 545.47 43.59 385.11 21.98 485.68

Provisions 200.13 107.75 133.56 39.98 214.33

P or L before tax 345.34 32.41 251.55 17.83 271.35

Tax expenses 187.56 56.76 (25.93) (5.00) 28.31

P or L after tax 157.78 21.46 277.48 31.08 243.01

Extraordinary items 0 0 0 0 0

Net profit or loss 157.78 21.46 277.48 31.08 243.01

Interpretation:

Net profits show a fluctuating trend. I .e in the year 2011-12 and 2012-13 it was
increasing trend but when it came to the year 2013-2014 and 2014-2015 it is showing

40
a decreasing trend. Operating expenses from the period shows an increasing trend,
but in the current year it shows a declining trend

41
Comparative Balance Sheet

Table No 4.18: Showing Comparative Balance Sheets (Rs in crores)

Particulars 2010- 2011 2012- 2013- 2014- 2015- 2011- 2011

2011 - 2013 2014 2015 2016 2012 -
2012 2012
INC % INC % INC % INC %
or INC or INC or INC or INC
DEC or DEC or DEC or DEC or
DEC DEC DEC
DEC
Reserves & 667.99 16.35 878.35 18.47 1358.25 24.11 1138.12 16.28
surplus
Capital 0 0 0 0 4.69 3.27 0 0

Deposits 18559.4 33.48 18749.7 25.34 24013.8 25.89 19394.7 16.61

8 5 3
Borrowings (65.20) (3.05) 4267.62 88.72 6887.85 75.87 (2429.6 (8.29
3) )
Other 1145.85 23.83 865.74 26.92 (423.33) (10.37 1236.29 33.80
provisions )

& liabilities
Total 20308.1 30.44 24761.4 28.49 31841.2 28.51 19339.4 36.34
2 8 9 8

Fixed asset 27.16 9.99 (9.66) (3.23) 38.32 13.09 24.97 7.54

Investments 7612.67 43.94 9548.46 38.43 8930.11 25.86 4021.89 9.26

Advances 9326,58 23.80 14690.4 30.28 23647.8 37.41 13300.0 15.68

0 4 1
Cash & 3949.47 395.0 (2992.2 (60.45 293.03 14.98 913.81 68.89
money at 9 0) )

call

42
Other (607.79) (6.89) 3488.09 42.49 (1071.7 (9.16) 1078.82 43.43
assets 1)

Total (20308. 30.44 24761.4 28.49 31841.3 28.51 19339.4 36.34

13) 8 8

Interpretation

 Capital of the bank remains stable during the period 2011-2014. But in 2014-
2016 it was increased.
 Reserves and surplus for the current year is showing a decreasing trend.
 Both deposits and borrowings are showing a fluctuating trend
 Investments are increasing when compared to preceding years.
 A huge fluctuation is revealed from current assets. This shows that the bank is
effectively utilizing its working capital
 Fixed assets shows a fluctuating trend while considering past years in the current
year it has been decreased

43
Common Size Statements

Common-Size Income statement

Table No 4.19: Showing Common-Size Income statement (Rs in Crores)

Particulars 2012 % 2013 % 2014 % 2015 % 2016 %

INCOME
Interest 4516.5 100 6067.3 100 7294.6 100 9135.2 100 13017.7 100

income
earned
Other 699.7 15.4 1107.2 18.2 1186.4 16.2 1255.8 14.4 1492.6 11.5

income
Total 5216.3 115. 7174.5 118. 8481 116. 10391 114. 14510.3 111.
4 2 2 4 5
income
EXPENDITURE
Interest 3073.2 68 4376.3 72.1 5084.3 69.7 6195.5 67.8 9870.88 75.8
4 7 4 0
expended
Operating 891.95 19.7 1046.5 17.2 1259.9 17.2 1641.7 17.9 1783.55 13.7
7 5 0

44
expenses
Total 3965.1 87.7 5422.9 89.3 6344.2 86.9 7837.2 85.7 11654.4 89.5
9 5 9 1 3
expenditure
Operating 1251.1 27.7 1751.6 28.8 2136.7 29.9 2533.9 28.7 2855.97 21.9
4 1 2 1
profit
Provisions 185.73 4.1 340.86 5.6 474.42 6.5 620.27 7.5 950.46 7.3

P or L 1065.4 23.5 1410.7 23.2 1662.3 22.7 1933.6 21.1 1905.51 14.6
1 5 0 4
before tax
Tax 330.42 7.31 517.98 8.5 492.05 6.7 520.36 5.6 399.47 3

expenses
P or L after 734.99 16.2 892.77 14.7 1170.2 16 1413.2 15.4 1506.04 11.5
5 8
tax
Extraordina 0 0 0 0 0 0 0 0 0 0

ry items
Net profit or 734.99 16.2 892.77 14.7 1170.2 16 1413.2 15.4 1506.04 11.5
5 8
loss

Interpretation:

 Net Profit of the bank show fluctuating trend. In the year 2012, it was
16.2%which was decreased to 14.7% in the year 2013. Again in the year 2014
it was increased to 16% which then again decreased to 15.4% & 11.5% in the
years 2015& 2016 respectively.
 Operating profit of the bank was showing an increasing trend till the year
2014. But in 2015& 2016 it decreased to 15.4% and 11.5% respectively.

Common Size Balance Sheet

Table no 4.20: Showing Common size Balance sheet

Particulars 2012 % 2013 % 2014 % 2015 % 2016 %

Reserves 4085 6.1 4653 5.4 5631.4 5 6989.6 4.8 8127.8 4.6

45
& surplus 9

Capital 143.4 0.2 143.4 0.19 143.3 0.1 148.1 0.1 148.1 0.3
1 2 0

Deposits 55424.4 83. 73983.9 85.1 92733. 83 116747 81. 136142 83.
2 6 3 5

Borrowing 2137.6 3.2 4809.8 5.5 9077.5 8.1 15965. 11. 14248 8.7
7 1
s
Other 4807.1 7.2 3215.4 3.6 4081.2 0.3 3657.9 2.5 4894.1 2.9
6
provisions
&
liabilities
Total 66597.6 100 86905.8 100 111667 100 143508 100 163560 100
8

Fixed asset 271.75 0.4 298.92 0.34 289.26 0.2 331.01 0.2 355.9 0.3
0 5 3
Investment 16512.3 24. 24937.7 28.6 34522. 30. 43452. 30. 47474. 29
7 6 9 7 2 6
s
Advances 39185.5 58. 48512.1 55.8 63202. 56. 86850. 60. 100469 61.
8 6 2 5 5 4 5 4

Cash & 1812.3 2.7 4949 5.6 1956.8 1.7 2250.1 1.5 2409.7 1.4

money at
call
Other 8815.6 13. 8207.8 9.4 11695. 10. 10624. 7.4 12850. 7.9
2 9 4 2 8
assets
Total 66597.6 100 86905.8 100 111667 100 143508 100 163560 100
8

Interpretation:

 Reserves and surplus of the bank was 6.19% in the year 2012 and then decreased
to 5.4%, 5.0%, 4.8%, 4.6% in the year 2013, 2014, 2015, 2016 respectively
 The deposits of the bank is showing a fluctuating trend

46
 The advances has been increased in the last four years 55.82%, 56.5%, 60.5%,
61.4% in the years 2013, 2014, 2015 and 2016 respectively

47
 5.0 FINDINGS, SUGGESTIONS AND CONCLUSION

FINDINGS

 Profit after tax for the year 2016 was Rs. 1506.04 Crores, compared to Rs.
1413.28 Crores for the year 2015
 Also the capital is being effectively utilized in the bank as it shows better
return on capital employed over years.
 Since the dividend per share has shown a promising increase for the period
under study. It shows that the bank is following a sound dividend policy and is
capable of distributing higher dividends.
 The earnings per share for the period under study also show a promising
increase. It suggests that bank has better profitability position and in future it
can be a better or attractive channel of investment for shareholders.
 Trends of credit ratio reveals that bank has performed satisfactorily as regard
to granting loans and advances to generate income. It suggests that credit
performance is good and the bank is doing its business good by fulfilling its
major objective as regards to granting loans and accepting deposits.
 Debt equity ratio has been declined in the current year; this is due to increased
use of shareholders fund to increase the capital adequacy ratio.
 The proprietors’ ratio shows an increasing trend. This reveals the fact that the
major portion of the asset is acquired out of outsiders fund is increasing.
 Corporation bank over the years has achieved a noticeable growth in its
operations and has emerged as strong national bank having its branch network
along the length and breadth of the country. Bank is giving good competition
to its peers and other banks in the industry look up to the systems and
practices adopted by Corp bank.

48
SUGGESTIONS

 Bank should try to finance more and more projects. Financing will help it to
earn higher amounts of profits.
 Bank should think of improving the day to day services to its clients, so that it
will help to give a kind of confidence to the public and build a better public
image.
 The bank should improve interpersonal relationship between the banker and
the borrower through pre-sanction appraisal & adequate supervision and
follow up, which in turn reduces delinquencies.
 Bank can introduce some new and attractive schemes for public.
 To prevent slippages bank should have a proper credit investigation, proper
appraisal and adequate mechanism followed in the bank
 In the event of the unit to which credit is sanctioned by the bank becomes sick,
the bank can come to its aid by restructuring the loan and extending by
concussion in rate of interest and service charges.
 The competition among the banks is increasing over the years with the entry
of private and foreign banks. Banks may have to position itself as strong bank
by undertaking regrinding exercise.
 Bank should increase their branch network and quality of service
 Corporation bank is a strong bank with sound fundamentals and good work
ethics and has lead over the peer banks in the industry. The procedures and
systems of corporation bank is worthy of emulating by others in the banking
industry.

49
CONCLUSION

Corporation bank over the years has been various political, social and economic
transactions. Today, Indian banking is under reform process. Foreign and private
banks are entering into market and are gaining momentum. So it is a crucial stage for
nationalized bank like corporation bank. Its future depends on how it can face threats
and cash on opportunities. Thinking globally considering local aspects is the need of
this hour. So bank must use its vast and strong banking experience to gain a strong
hold in the Indian banking system and build a globally respected brand.

On the basis of the study conducted using various techniques applied for the financial
analysis of corporation 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. The bank is having a
constant share capital in the last five years. The major achievement of bank has been a
tremendous increase in its deposits, which has always been its main objective.

Day by day the activities undertaken by the bank are improving. Today corporation
bank is a vibrant institution. It has spread its branch network throughout the country
as well as in abroad.

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 APPENDIX I

FINANCIAL STATEMENTS

PROFIT AND LOSS ACCOUNT (Rs in crores)

PARTICULARS 2012 2013 2014 2015 2016

INCOME
INTEREST INCOME 4516.55 6067.35 7294.60 9135.25 13017.78
EARNED
OTHER INCOME 699.77 1107.21 1186.42 1255.87 1492.62
TOTAL INCOME 5216.33 7174.57 8481.03 10391.12 14510.40
EXPENDITURE
INTEREST EXPENDED 3073.24 4376.37 5084.35 6195.51 9870.89
OPERATING EXPENSES 891.95 1001.58 1259.95 1641.71 1783.55
TOTAL EXPENDITURE 3965.19 5377.95 6344.30 7837.22 11654.44
OPERATING PROFIT 1251.14 1796.61 2136.73 2553.91 2855.97
PROVISIONS 516.15 858.84 966.47 1140.64 1349.92
PROFIT OR LOSS BEFORE 1065.41 1386.25 1662.30 1933.64 1905.51
TAX
TAX EXPENSES 330.42 493.48 492.05 520.37 399.47
PROFIT OR LOSS AFTER 734.99 892.77 1170.25 1413.27 1506.04
TAX
APPROPRIATIONS
TRANSFER TO 200.00 224.00 350.00 375.00 385.00
STATUTORY RESERVES
REVENUE RESERVES 9.87 - - - -
CAPITAL RESERVES 39.72 379.58 220.22 3.05 21.37
GENERAL RESERVES 269.17 0.41 230.12 584.88 324.73
SPECIAL RESERVES OF 25.00 64.00 78.00 91.00 407.00
INCOME TAX ACT
INTERIM DIVIDEND 64.54 65.54 - - -

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PROPOSED FINAL 86.06 114.75 236.67 292.26 303.66
DIVIDEND
BALANCE CARRIED OVER 40.63 44.49 55.24 67.07 64.28
TO THE BALANCE SHEET
TOTAL 734.99 892.77 1170.25 1413.27 1506.04
EARNINGS PER SHARE 51.24 62.24 81.58 98.50 101.67

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BALANCE SHEET (RS in Crores)

PARTICULARS 2012 2013 2014 2015 2016

RESERVES & 4085.07 4753.07 5631.43 6989.67 8127.79
SURPLUS
CAPITAL 143.44 143.44 143.44 148.13 148.13
DEPOSITS 55424.42 73983.91 92733.67 116747.50 136142.20
BORROWINGS 2137.60 4809.89 9077.52 15965.38 14248.10
OTHER 4807.14 3215.49 4081.24 3657.91 4894.20
PROVISIONS
&LIABILITIES
TOTAL 66597.68 86905.81 111667.30 143508.59 163560.42
FIXED ASSETS 271.75 298.92 289.26 328.97 355.98
INVESTMENTS 16512.38 24937.77 34522.63 43452.74 47474.63
ADVANCES 39185.57 48512.16 63202.56 86850.40 100469.02
CASH & 999.61 4949.09 1956.88 2250.19 2409.75
MONEY AT
CALL
OTHER 9628.37 8207.87 11695.97 10626.29 12851.04
CURRENT
ASSETS
TOTAL 66997.68 86905.81 111667.30 143508.59 163560.42

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 BIBLIOGRAPHY

1) Text books on financial management

o I.M Pandey, financial management, 9th Edition ,2009,Vikas publishing house Pvt
Ltd, New Delhi, PP 517-331
o Jawaharlal, Advanced Management Accounting 1st Edition, 2009, S.Chand and
Company Ltd, New Delhi,.pp 3.6-3.22
o Khan & Jain, “Financial Management”,5thEdition.

2) Bank Website www.corpbank.com

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