Financial Analysis of banking sector of India

Financial Analysis of positing sector of IndiaFinancial Analysis of deponeing sector of India Special Reference to Private Sector cantsFinancial debates atomic number 18 those statements which provide randomness ab discover 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 grade. Position statement presents the financial position of the business at the end of the year. This paper is return to present all the components of balance sheet and profit and loss account in common size and analyze the individual item in ease Sheet bring in Loss A/c as compare to total liabilities/Assets/Income/Expenditure.ObjectivesTo compare the financial position with the help of equilibrise Sheet and Profit and Loss AccountTo compare the financial performance through a commo n-size financial statement.IntroductionAfter preparation of the financial statements, one may be interested in knowing the position of an enterprise from different points of view. This squirt be done by analyzing the financial statement with the help of different tools of abstract such as super acid size statement analysis, funds flow analysis, cash flow analysis, Common size/ comparative statement analysis, etc. here I have done financial analysis by Common size financial statement analysis. Common size financial statement analysis, in any case called vertical analysis, is just one technique that financial managers use to analyze their financial statements. It is not another type of income statement. It is just a tool that is utilize to analyze the income statement and position statement. With the use of this method of common-size financial statements, the comparisons between the financial statements of different companies become easy. In this method, each of symbols in the financial statements are reported in the form of percentage. This percentage is the figure of one frequent base figure. This base figure determines the percentile of all the figures in the common-size financial statements. By using this method, it is easy to compare the financial statements of the same company from different periods or comparing the companies of different size. Due to this method, the bias between the company sizes is removed, and investor can effectively compare the financial statements. The selection of base figure depends on the financial statements head. In income statements, the revenue can be selected as the base figure and all the incomes and expenses can be measured against it.Moreover, in the balance sheet of the company, all the related items are split up by the total of their items. For example, if the investor wants to find out the percentage of the inventory in balance sheet, he or she will have to divide the figure of inventory with the total assets.M ethodologyFor the purpose of this consider individual item of balance sheet converted into common size i.e.in deoxycytidine monophosphate for this purpose an individual item in balance sheet shared out by total assets/total liabilities and converted into 100.This is also to profit and loss account i.e. individual item in profit and loss account divided by total income/total expenditure and converted into100.For this analysis tether years Balance Sheet and Profit and loss account of top three private banks viz.ICICI bank,HDFC bank and bloc bank was analyzed.Balance Sheets as on thirty-first March 2011Capital and LiabilitiesAxis(Rs.000)HDFC(Rs.000)ICICI(Rs.000)Capital4,105,4580.1694,652,2570.167115211290.283Reserves and Surplus185,882,7977.6582491404268.982539,388,24413.277Deposits1,892,378,01077.9672,085,864,05475.2062,256,021,07755.535Borrowings262,678,82410.822143,940,6105.1891,095,542,77126.968 early(a) Liabilities and edible82,088,6273.382289,928,56510.453159,863,4673.935 c ontribute2,427,133,7161002,773,525,9121004,062,336,688100AssetsCash and Balance with RBI138,861,6305.721251,008,1589.050209,069,7035.146Balance with Banks and Money at call and Short Notice75,224,9293.09945,680,1911.647131,831,1283.245Investments719,916,20829.661709,293,65625.5731,346,859,63033.154Advances1,424,078,28658.6731,599,826,65457.6822,163,659,01453.26Fixed Assets22,731,4560.93621,706,4800.78247,442,5511.167Other Assets46,321,2071.908146,010,7735.264163,474,6624.024 score 2,427,133,7161002,773,525,9121004,062,336,688100Axis(Rs.000)HDFC(Rs.000)ICICI(Rs.000)IncomeInterest Earned151,548,05876.589199,282,12282.13259,740,52879.62Other Income46,321,33823.41043,351,52717.8766,478,92520.38 tote up197,869,396100242,633,649100326,219,453100ExpenditureInterest Expended85,918,23052.39493,850,83946.15169,571,51561.728Operating Expenses47,794,28129.14571,529,14135.17166,172,49224.088 purvey and Contingencies30,271,97918.46037,989,66018.68038,961,68414.183 sum total 163,984,490100203,369, 640100274,705,691100Profit Loss Account for the year ended 31st March 2011Balance Sheets as on 31st March 2012Capital and LiabilitiesAxis(Rs.000)HDFC(Rs.000)ICICI(Rs.000)Capital4,132,0390.1444,693,3770.138115515370.243Reserves and Surplus223,953,3847.840294,5533788.716592,500,88512.509Deposits2,201,043,03377.0592,467,064,45973.002,554,999,56153.94Borrowings340,716,72111.928238,465,0867.0571,401,649,07329.592Other Liabilities and Provisions86,432,7573.026374,318,69011.077175,769,8463.710Total2,856,277,9341003,379,094,9901004,736,470,902100AssetsCash and Balance with RBI107,029,2143.747149,910,9454.436204,612,9354.319Balance with Banks and Money at call and Short Notice32,309,9431.13159,466,3181.759157,680,1993.329Investments931,920,85932.627974,829,09428.8481,595,600,43033.687Advances1,697,595,38659.4331,954,200,29257.832,537,276,57953.568Fixed Assets22,593,2500.79123,471,9400.69446,146,8700.974Other Assets64,829,2822.269217,216,4016.428195,153,8894.120Total 2,856,277,9341003,379,09 4,9901004,736,470,902100 Profit Loss Account for the year ended 31st March 2012Axis(Rs.000)HDFC(Rs.000)ICICI(Rs.000)IncomeInterest Earned219,946,47480.228272,863,51783.880335,426,52281.720Other Income54,202,16319.77152,436,94916.1275,027,59818.279Total274,148,637100325,300,466100410,454,120100ExpenditureInterest Expended139,769,02460.316149,895,78054.78228,084,96465.958Operating Expenses60,070,99525.92385,900,57131.39378,504,43322.702Provision and Contingencies31,886,56413.76037,833,20813.82639,212,15111.339Total 231,726,583100273,629,559100345,801,548100Balance Sheets as on 31st March 2013Capital and LiabilitiesAxis(Rs.000)HDFC(Rs.000)ICICI(Rs.000)Capital4,679,5450.1374,758,8380.117115811970.216Reserves and Surplus326,399,0549.5843638818098.925655,478,39212.211Deposits2,526,135,88174.1762,960,917,69972.6212,926,136,25754.511Borrowings439,510,98412.906394,966,1279.6871,453,414,94427.076Other Liabilities and Provisions108,881,1203.197352,705,3778.651321,336,0215.986Total3,405,606,58 41004,077,229,8501005,367,946,811100AssetsCash and Balance with RBI147,920,8834.343146,308,7903.588190,527,3093.549Balance with Banks and Money at call and Short Notice56,428,7161.656129,002,8453.164223,647,8794.166Investments1,137,375,37033.3971,109,604,12427.2141,713,935,99331.929Advances1,969,659,57457.8352,472,451,15160.6402,902,494,35154.07Fixed Assets23,556,4200.69127,733,1620.68046,470,5870.865Other Assets70,665,6212.074192,129,7784.712290,870,6925.418Total 3,405,606,5841004,077,229,8501005,367,946,811100Profit Loss Account for the year ended 31st March 2013Axis(Rs.000)HDFC(Rs.000)ICICI(Rs.000)IncomeInterest Earned271,825,74480.579358,610,21383.409400,755,96982.764Other Income65,511,06319.42071,329,64516.59083,457,01217.235Total337,336,807100429,939,858100484,212,981100ExpenditureInterest Expended175,163,11161.343196,954,47454.567262,091,84865.366Operating Expenses69,142,37524.214115,518,96332.00590,128,83722.478Provision and Contingencies41,236,99214.44148,463,62113.42748,7 37,56912.155Total 285,542,478100360,937,058100400,958,254100Capital to Total Liabilities Year shit of BankAxisHDFCICICI2010-110.160.160.282011-120.140.130.242012-130.130.110.21Interpretation Capital Common size statement of ICICI Bank was more than Axis Bank HDFC Bank in these three years. It is also seen that in all these three years Capital Common size statement of these banks were decreased systematically.Reserve and surplus to Total Liabilities YearName of BankAxisHDFCICICI2010-117.688.9813.272011-127.848.7112.502012-139.588.9212.21InterpretationCommon size statement of Accumulated Reserve and Surplus of ICICI Bank was more than Axis Bank HDFC Bank, but this Common size statement consistently decreases. This Common size statement of Axis bank consistently increases.Deposits to Total LiabilitiesYearName of BankAxisHDFCICICI2010-1177.9675.2055.532011-1277.0573.0053.942012-1374.1772.6254.51InterpretationDeposit Common size statement Axis bank was more than HDFC ICICI bank howev er this Common size statement of Axis bank and HDFC bank consistently decreases.Borrowings to Total LiabilitiesYearName of BankAxisHDFCICICI2010-1110.825.1826.962011-1211.927.0529.592012-1312.909.6827.07InterpretationAs regards to borrowings, ICICI bank has more borrowings than Axis bank and HDFC bank, it is also depicts that borrowings of Axis bank and HDFC bank consistently increases.Other liabilities Provisions to Total LiabilitiesYearName of BankAxisHDFCICICI2010-113.3810.453.932011-123.0211.073.712012-133.198.655.98InterpretationOther liabilities and provisions of HDFC bank was more than Axis bank and ICICI bank and it is upto10% on an average, however the axis bank ICICI bank maintains this Common size statement upto 3% on an average.Cash Balances with RBI to Total Assets YearName of BankAxisHDFCICICI2010-115.729.055.142011-123.744.434.312012-134.343.583.54InterpretationCash balance of HDFC bank in year 2010-11 was in highest Common size statement. Cash balance of HDFC bank and ICICI bank continuously decreases.Balance with Banks and Money at call and Short Notice to Total Assets YearName of BankAxisHDFCICICI2010-113.091.643.242011-121.131.793.322012-131.65