Financial Statement #7 - 2010 - Allahabad Bank

A Case Study of
Allahabad Bank
We are
Trying to
understand
Balance Sheet
of a Bank
Balance
Sheet
!!!????
BALANCE SHEET OF ALLAHABAD BANK AS ON

(Rs. in crores)
31-Mar-06 31-Mar-07 31-Mar-08 31-Mar-09 31-Mar-10
Capital & Liabilities
Capital
Reserves & Surplus
Deposits
Borrowings
Other Liabilities & Provisions
446.70
446.70
446.70
446.70
446.70
3,191.83
4,030.13
4,774.35
5,405.25
6,306.25
48,499.69
59,543.66
71,616.38
46.77
257.15
1,792.00
937.04
5,435.48
3,107.00
3,386.11
4,309.89
5,887.23
3,455.03
84,971.79 1,06,055.75
TOTAL 55,291.99 67,663.74 82,939.32 97,648.011,21,699.21
Assets
Cash & Balances with RBI
2,662.06
4,067.94
6,288.86
5,115.38
We tried to understand the liabilities

side of a bank balance sheet in the
previous class
Balances with Banks & money at Call and

short notice
7,183.78
1,727.92
874.03
753.24
1,521.38
1,984.45
Investments
17,984.65
18,746.07
23,400.25
29,651.05
38,428.62
Advances
29,147.78
41,290.03
49,720.47
58,801.76
71,604.87
Fixed Assets
742.72
1,056.33
1,071.47
1,109.75
1,118.27
Other Assets
3,026.87
1,629.34
1,705.04
1,448.68
1,379.22
TOTAL 55,291.99 67,663.74 82,939.32 97,648.011,21,699.21

Contingent Liability
21,062.95
20,319.71
55,535.46
55,535.46
49,080.79
Bills for collection
1,396.62
1,515.47
1,410.84
1,410.84
2,944.37
Now, we shall be looking at the ASSETS

side of the Balance Sheet
Assets Side
FINANCIAL STATEMENT ANALYSIS A STUDY OF BANKS FINANCIAL STATEMENTS
(Rs. in crores)
31-Mar-06
31-Mar-07
31-Mar-08
31-Mar-09
31-Mar-10
446.70
446.70
446.70
446.70
446.70
3,191.83
4,030.13
4,774.35
5,405.25
6,306.25
48,499.69
59,543.66
71,616.38
84,971.79
1,06,055.75
46.77
257.15
1,792.00
937.04
5,435.48
3,107.00
3,386.11
4,309.89
5,887.23
3,455.03
55,291.99
67,663.74
82,939.32

Capital
Reserves & Surplus
Deposits
Borrowings
TOTAL
Reducing Liquidity
Assets
97,648.01 1,21,699.21
2,662.06
4,067.94
6,288.86
5,115.38
7,183.78
Balances with Banks & money at Call and short

notice
1,727.92
874.03
753.24
1,521.38
1,984.45
Investments
17,984.65
18,746.07
23,400.25
29,651.05
38,428.62
Advances
29,147.78
41,290.03
49,720.47
58,801.76
71,604.87
Fixed Assets
742.72
1,056.33
1,071.47
1,109.75
1,118.27
Other Assets
3,026.87
1,629.34
1,705.04
1,448.68
1,379.22
55,291.99
67,663.74
82,939.32
21,062.95
20,319.71
55,535.46
55,535.46
49,080.79
1,396.62
1,515.47
1,410.84
1,410.84
2,944.37
TOTAL
97,648.01 1,21,699.21
(Rs. in crores)
31-Mar-06
31-Mar-07
31-Mar-08
31-Mar-09
31-Mar-10
446.70
446.70
446.70
446.70
446.70
3,191.83
4,030.13
4,774.35
5,405.25
6,306.25
48,499.69
59,543.66
71,616.38
84,971.79
1,06,055.75
46.77
257.15
1,792.00
937.04
5,435.48
3,107.00
3,386.11
4,309.89
5,887.23
3,455.03
55,291.99
67,663.74
82,939.32
2,662.06
4,067.94
6,288.86
5,115.38
7,183.78

notice
1,727.92
874.03
753.24
1,521.38
1,984.45
Investments
17,984.65
18,746.07
23,400.25
29,651.05
38,428.62
Advances
29,147.78
41,290.03
49,720.47
58,801.76
71,604.87
Fixed Assets
742.72
1,056.33
1,071.47
1,109.75
1,118.27
Other Assets
3,026.87
1,629.34
1,705.04
1,448.68
1,379.22
55,291.99
67,663.74
82,939.32
21,062.95
20,319.71
55,535.46
55,535.46
49,080.79
1,396.62
1,515.47
1,410.84
1,410.84
2,944.37

Capital
Reserves & Surplus
Deposits
Borrowings
TOTAL
97,648.01 1,21,699.21
Assets
TOTAL
97,648.01 1,21,699.21
Cash and Balances with Reserve

Bank Of India
ALLAHABAD BANK
(Rs. in crores)
Cash in Hand
Balances with Reserve Bank of
India
TOTAL
31-Mar-06
31-Mar-07
31-Mar-08
31-Mar-09
31-Mar-10
220.93
284.07
320.35
359.807
379.8799
2,441.13
3,783.87
5,968.51
4,755.57
6,803.90
2,662.06
4,067.94
6,288.86
5,115.38
7,183.78
It includes cash in hand including foreign currency notes

and the balance maintained with the Reserve Bank of India
as Cash Reserve Ratio which is at present is 6%. These are
the balances on which banks do not earn any interest.
(Rs. in crores)
31-Mar-06
31-Mar-07
31-Mar-08
31-Mar-09
31-Mar-10
446.70
446.70
446.70
446.70
446.70
3,191.83
4,030.13
4,774.35
5,405.25
6,306.25
48,499.69
59,543.66
71,616.38
84,971.79
1,06,055.75
46.77
257.15
1,792.00
937.04
5,435.48
3,107.00
3,386.11
4,309.89
5,887.23
3,455.03
55,291.99
67,663.74
82,939.32
2,662.06
4,067.94
6,288.86
5,115.38
7,183.78

notice
1,727.92
874.03
753.24
1,521.38
1,984.45
Investments
17,984.65
18,746.07
23,400.25
29,651.05
38,428.62
Advances
29,147.78
41,290.03
49,720.47
58,801.76
71,604.87
Fixed Assets
742.72
1,056.33
1,071.47
1,109.75
1,118.27
Other Assets
3,026.87
1,629.34
1,705.04
1,448.68
1,379.22
55,291.99
67,663.74
82,939.32
21,062.95
20,319.71
55,535.46
55,535.46
49,080.79
1,396.62
1,515.47
1,410.84
1,410.84
2,944.37

Capital
Reserves & Surplus
Deposits
Borrowings
TOTAL
97,648.01 1,21,699.21
Assets
TOTAL
97,648.01 1,21,699.21
ALLAHABAD BANK
(Rs. in crores)
These
are
the
balances
31-Mar-2006
31-Mar-2007
31-Mar-2008
31-Mar-2009
31-Mar-2010
BALANCES WITH BANKS AND MONEY AT CALL AND SHORT NOTICE on which banks earn
I. IN INDIA
some interest income.
(i) Balances with Banks
a) In Current Accounts
350.84
411.24
415.80
386.38
339.21
b) In other deposit Accounts
920.00
190.00
120.00
20.00
294.97
(ii) Money at Call and Short

Notice
a) With Banks
100.00
b) With Other Institutions
TOTAL
1,270.84
701.24
535.80
406.38
634.18
a) In Current Accounts
100.15
59.30
174.97
475.90
429.82
b) In other deposit Accounts
356.92
61.44
52.04
42.46
639.10
920.45
II. OUTSIDE INDIA

(i) Balances with Banks
(ii) Money at Call and Short

Notice
a) With Banks
b) With Other Institutions
TOTAL
457.07
172.79
217.44
1,115.00
1,350.27
Total (I+II)
1,727.91
874.03
753.24
1,521.38
1,984.45
(Rs. in crores)
31-Mar-06
31-Mar-07
31-Mar-08
31-Mar-09
31-Mar-10
446.70
446.70
446.70
446.70
446.70
3,191.83
4,030.13
4,774.35
5,405.25
6,306.25
48,499.69
59,543.66
71,616.38
84,971.79
1,06,055.75
46.77
257.15
1,792.00
937.04
5,435.48
3,107.00
3,386.11
4,309.89
5,887.23
3,455.03
55,291.99
67,663.74
82,939.32
2,662.06
4,067.94
6,288.86
5,115.38
7,183.78

notice
1,727.92
874.03
753.24
1,521.38
1,984.45
Investments
17,984.65
18,746.07
23,400.25
29,651.05
38,428.62
Advances
29,147.78
41,290.03
49,720.47
58,801.76
71,604.87
Fixed Assets
742.72
1,056.33
1,071.47
1,109.75
1,118.27
Other Assets
3,026.87
1,629.34
1,705.04
1,448.68
1,379.22
55,291.99
67,663.74
82,939.32
21,062.95
20,319.71
55,535.46
55,535.46
49,080.79
1,396.62
1,515.47
1,410.84
1,410.84
2,944.37

Capital
Reserves & Surplus
Deposits
Borrowings
TOTAL
97,648.01 1,21,699.21
Assets
TOTAL
97,648.01 1,21,699.21
Investments
The banks are required to classify their entire investment

portfolio under three categories viz. Held to Maturity,
Available for Sale and Held for Trading.
In the balance sheet, the investments will also be disclosed

as per six classifications viz.:
i) Government securities
ii) other approved securities
iii) Shares
iv) Debentures & Bonds
v) Subsidiaries/ joint ventures
vi) Others (CP, Mutual Fund Units, etc.).
Investments (continued)
Presently,
SLR is 25%.
Banks should decide the category of the investment at the

time of acquisition and the decision should be recorded
accordingly.
Note that SLR investments are the part of the Investments.
Any investment over and above SLR limit can be used to

banks obtain liquidity from the Reserve Bank under the
liquidity adjustment facility (LAF) against the collateral of
eligible securities.
Held to Maturity
The securities acquired by the banks with the intention to hold them up to
maturity will be classified under Held to Maturity.
The investments included under Held to Maturity should not exceed 25 per
cent of the banks total investments.
Banks are allowed to exceed the limit of 25 percent of total investment under
HTM category provided:
(a) the excess comprises only of SLR securities, and
(b) the total SLR securities held in the HTM is not more than 25 percent of their DTL
as on
the last Friday of the second preceding fortnight.
Held to Maturity(continued)
Investments classified under Held to Maturity category need not be marked

to market and will be carried at acquisition cost unless it is more than the face
value, in which case the premium should be amortized over the period
remaining to maturity.
Profit on sale of investments in this category should be first taken to the Profit
& Loss Account and thereafter be appropriated to the Capital Reserve
Account. Loss on sale will be recognized in the Profit & Loss Account.
Held for Trading
The Securities acquired by the banks with the intention to trade by

taking the advantage of the short-term price/interest rate movements
will be classified under Held for Trading.
These securities are to be sold within 90 days. If the bank is not able to
sell the security within 90 days due to exceptional circumstances such as
tight liquidity conditions, or extreme volatility, or market becoming
unidirectional, the security should be shifted to the Available for Sale
category.
Profit or loss on the sale of investments under this category would be

taken to Profit and Loss Account.
The individual scrips in the Held for Trading category will be marked to
market at monthly or at more frequent intervals for each classification
of assets in this category.
Held for Trading(continued)
Based on the marked to market valuation for each

classification of assets under this category Held for trading
If
the figure results in net appreciation, the same is to be

ignored.
If
the figure results in net depreciation, the same is to be

charged to Profit And Loss Account under the heading of
Provisions and Contingences.
However,
the book value of the securities is not to be changed

after revaluation.
Available for Sale
The Securities which do not fall within the two categories

Held to Maturity and Held for Trading will be classified
under Available for Sale.
Profit or loss on the sale of investments under this category

would be taken to Profit and Loss Account.
The individual scrips in the Available for Sale category will be

marked to market at the quarterly intervals or at more
frequent intervals for each classification of assets in this
category.
Available for Sale(continued)
Based on the marked to market valuation for each

classification of assets under this category Available for
Sale
If
the figure results in net appreciation, the same is to be

ignored.
If the figure results in net depreciation, the same is to

be charged to Profit And Loss Account.
However,
the book value of the securities is not to be

changed after revaluation.
(Rs. in crores)
31-Mar-06
31-Mar-07
31-Mar-08
31-Mar-09
31-Mar-10
446.70
446.70
446.70
446.70
446.70
3,191.83
4,030.13
4,774.35
5,405.25
6,306.25
48,499.69
59,543.66
71,616.38
84,971.79
1,06,055.75
46.77
257.15
1,792.00
937.04
5,435.48
3,107.00
3,386.11
4,309.89
5,887.23
3,455.03
55,291.99
67,663.74
82,939.32
2,662.06
4,067.94
6,288.86
5,115.38
7,183.78

notice
1,727.92
874.03
753.24
1,521.38
1,984.45
Investments
17,984.65
18,746.07
23,400.25
29,651.05
38,428.62
Advances
29,147.78
41,290.03
49,720.47
58,801.76
71,604.87
Fixed Assets
742.72
1,056.33
1,071.47
1,109.75
1,118.27
Other Assets
3,026.87
1,629.34
1,705.04
1,448.68
1,379.22
55,291.99
67,663.74
82,939.32
21,062.95
20,319.71
55,535.46
55,535.46
49,080.79
1,396.62
1,515.47
1,410.84
1,410.84
2,944.37

Capital
Reserves & Surplus
Deposits
Borrowings
TOTAL
97,648.01 1,21,699.21
Assets
TOTAL
97,648.01 1,21,699.21
Advances
Advances are classified Performing Assets and NonPerforming Assets (NPA).
An asset becomes NPA when it ceased to generate income

for a bank. NPA is defined as a loan or an advance or a
credit facility where interest and/or principal remains
overdue for a period more than 90 days.
NPA are classified as

1.
SUB-STANDARD ASSETS
2.
DOUBTFUL ASSETS
3.
LOSS ASSETS
Advances (continued)
A SUB-STANDARD ASSET would be one which remain

NPA for a period less than or equal to 12 months.
A asset would be classified as DOUBTFUL ASSET if it

remained in the SUB-STANDARD ASSETS category for 12
months.
A LOSS ASSET is one where the bank has identified the

loss and at whatever point of time, if a bank identifies
loss on a asset, at that point, it has to be recognized as a
Loss Asset.
Income Recognition of NPA
Income from non-performing assets (NPA) is

not recognized on accrual basis but is booked as
income only when it is actually received.
Provisioning Norms
SUB-STANDARD ASSETS - A general provision of 10

percent on total outstanding should be made without
making any allowance for guarantee cover and securities
available.
However, the unsecured exposures which are identified as

substandard would attract additional provision of 10 per cent, i.e.,
a total of 20 per cent on the outstanding balance.
But in case of infrastructure loan accounts which are classified as
sub-standard will attract a provisioning of 15 per cent instead of
the aforesaid prescription of 20 per cent.
Provisioning Norms
DOUBTFUL ASSETS - 100 percent of the extent to which the advance is not
covered by the realizable value of the security to which the bank has a valid
recourse. In regard to the secured portion, provision may be made on the following
basis:
Period for which the advance has
remained in doubtful category
Provision
requirement (%)
Up to one year
20
One to Three years
30
More than three years
100
LOSS ASSETS - The entire asset should be written off.
Provisioning Norms
STANDARD ASSETS Provisions will be made as follows: (With Effect from

November 5, 2009)
Category of Standard Assets
Provision
requirement (%)
Direct Advances to Agricultural and SME Sectors
0.25
Advances to Commercial Real Estate (CRE) Sector
1.00
All other Loans and Advances
0.40
Provisioning Norms
STANDARD ASSETS Provisions will be made as follows: (With Effect from

November 15, 2008:
Category of Standard Assets
Provision
requirement (%)
Direct Advances to Agricultural and SME Sectors
0.25
All other Loans and Advances
0.40
(Rs. in crores)
31-Mar-06
31-Mar-07
31-Mar-08
31-Mar-09
31-Mar-10
446.70
446.70
446.70
446.70
446.70
3,191.83
4,030.13
4,774.35
5,405.25
6,306.25
48,499.69
59,543.66
71,616.38
84,971.79
1,06,055.75
46.77
257.15
1,792.00
937.04
5,435.48
3,107.00
3,386.11
4,309.89
5,887.23
3,455.03
55,291.99
67,663.74
82,939.32
2,662.06
4,067.94
6,288.86
5,115.38
7,183.78

notice
1,727.92
874.03
753.24
1,521.38
1,984.45
Investments
17,984.65
18,746.07
23,400.25
29,651.05
38,428.62
Advances
29,147.78
41,290.03
49,720.47
58,801.76
71,604.87
Fixed Assets
742.72
1,056.33
1,071.47
1,109.75
1,118.27
Other Assets
3,026.87
1,629.34
1,705.04
1,448.68
1,379.22
55,291.99
67,663.74
82,939.32
21,062.95
20,319.71
55,535.46
55,535.46
49,080.79
1,396.62
1,515.47
1,410.84
1,410.84
2,944.37

Capital
Reserves & Surplus
Deposits
Borrowings
TOTAL
97,648.01 1,21,699.21
Assets
TOTAL
97,648.01 1,21,699.21
(Rs. in crores)
31-Mar-06
31-Mar-07
31-Mar-08
31-Mar-09
31-Mar-10
446.70
446.70
446.70
446.70
446.70
3,191.83
4,030.13
4,774.35
5,405.25
6,306.25
48,499.69
59,543.66
71,616.38
84,971.79
1,06,055.75
46.77
257.15
1,792.00
937.04
5,435.48
3,107.00
3,386.11
4,309.89
5,887.23
3,455.03
55,291.99
67,663.74
82,939.32
2,662.06
4,067.94
6,288.86
5,115.38
7,183.78

notice
1,727.92
874.03
753.24
1,521.38
1,984.45
Investments
17,984.65
18,746.07
23,400.25
29,651.05
38,428.62
Advances
29,147.78
41,290.03
49,720.47
58,801.76
71,604.87
Fixed Assets
742.72
1,056.33
1,071.47
1,109.75
1,118.27
Other Assets
3,026.87
1,629.34
1,705.04
1,448.68
1,379.22
55,291.99
67,663.74
82,939.32
21,062.95
20,319.71
55,535.46
55,535.46
49,080.79
1,396.62
1,515.47
1,410.84
1,410.84
2,944.37

Capital
Reserves & Surplus
Deposits
Borrowings
TOTAL
97,648.01 1,21,699.21
Assets
TOTAL
97,648.01 1,21,699.21
(Rs. in crores)
31-Mar-06
31-Mar-07
31-Mar-08
31-Mar-09
31-Mar-10
446.70
446.70
446.70
446.70
446.70
3,191.83
4,030.13
4,774.35
5,405.25
6,306.25
48,499.69
59,543.66
71,616.38
84,971.79
1,06,055.75
46.77
257.15
1,792.00
937.04
5,435.48
3,107.00
3,386.11
4,309.89
5,887.23
3,455.03
55,291.99
67,663.74
82,939.32
2,662.06
4,067.94
6,288.86
5,115.38
7,183.78

notice
1,727.92
874.03
753.24
1,521.38
1,984.45
Investments
17,984.65
18,746.07
23,400.25
29,651.05
38,428.62
Advances
29,147.78
41,290.03
49,720.47
58,801.76
71,604.87
Fixed Assets
742.72
1,056.33
1,071.47
1,109.75
1,118.27
Other Assets
3,026.87
1,629.34
1,705.04
1,448.68
1,379.22
55,291.99
67,663.74
82,939.32
21,062.95
20,319.71
55,535.46
55,535.46
49,080.79
1,396.62
1,515.47
1,410.84
1,410.84
2,944.37

Capital
Reserves & Surplus
Deposits
Borrowings
TOTAL
97,648.01 1,21,699.21
Assets
TOTAL
97,648.01 1,21,699.21
This is in short what I could discuss with you

about the Balance Sheet of a Bank
I am confident that this

will be a step forward to
motivate you to go into
further details of it and
trust that you will keep
it up.

Financial Statement #7 - 2010 - Allahabad Bank

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Financial Statement #7 - 2010 - Allahabad Bank

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A Case Study of

BALANCE SHEET OF ALLAHABAD BANK AS ON

TOTAL 55,291.99 67,663.74 82,939.32 97,648.011,21,699.21

We tried to understand the liabilities

Balances with Banks & money at Call and

TOTAL 55,291.99 67,663.74 82,939.32 97,648.011,21,699.21

Bills for collection

Now, we shall be looking at the ASSETS

BALANCE SHEET OF ALLAHABAD BANK AS ON

Capital & Liabilities

Cash & Balances with RBI

Balances with Banks & money at Call and short

Bills for collection

FINANCIAL STATEMENT ANALYSIS A STUDY OF BANKS FINANCIAL STATEMENTS

BALANCE SHEET OF ALLAHABAD BANK AS ON

Cash & Balances with RBI

Balances with Banks & money at Call and short

Bills for collection

Capital & Liabilities

FINANCIAL STATEMENT ANALYSIS A STUDY OF BANKS FINANCIAL STATEMENTS

Cash and Balances with Reserve

It includes cash in hand including foreign currency notes

BALANCE SHEET OF ALLAHABAD BANK AS ON

Cash & Balances with RBI

Balances with Banks & money at Call and short

Bills for collection

Capital & Liabilities

FINANCIAL STATEMENT ANALYSIS A STUDY OF BANKS FINANCIAL STATEMENTS

b) In other deposit Accounts

(ii) Money at Call and Short

b) With Other Institutions

b) In other deposit Accounts

II. OUTSIDE INDIA

(ii) Money at Call and Short

FINANCIAL STATEMENT ANALYSIS A STUDY OF BANKS FINANCIAL STATEMENTS

BALANCE SHEET OF ALLAHABAD BANK AS ON

Cash & Balances with RBI

Balances with Banks & money at Call and short

Bills for collection

Capital & Liabilities

FINANCIAL STATEMENT ANALYSIS A STUDY OF BANKS FINANCIAL STATEMENTS

The banks are required to classify their entire investment

In the balance sheet, the investments will also be disclosed

FINANCIAL STATEMENT ANALYSIS A STUDY OF BANKS FINANCIAL STATEMENTS

Banks should decide the category of the investment at the

Note that SLR investments are the part of the Investments.

Any investment over and above SLR limit can be used to

FINANCIAL STATEMENT ANALYSIS A STUDY OF BANKS FINANCIAL STATEMENTS

the last Friday of the second preceding fortnight.

FINANCIAL STATEMENT ANALYSIS A STUDY OF BANKS FINANCIAL STATEMENTS

Investments classified under Held to Maturity category need not be marked

FINANCIAL STATEMENT ANALYSIS A STUDY OF BANKS FINANCIAL STATEMENTS

Held for Trading

The Securities acquired by the banks with the intention to trade by

Profit or loss on the sale of investments under this category would be

FINANCIAL STATEMENT ANALYSIS A STUDY OF BANKS FINANCIAL STATEMENTS

Held for Trading(continued)

Based on the marked to market valuation for each

the figure results in net appreciation, the same is to be

the figure results in net depreciation, the same is to be

the book value of the securities is not to be changed

FINANCIAL STATEMENT ANALYSIS A STUDY OF BANKS FINANCIAL STATEMENTS

Available for Sale