Banking

Contents

Part A: Core business to drive profitabilityExecutive summary 1Business 9Interest rate outlook and yields 37Profit and loss account 49Profitability 57

November 2004Annual review

Banking

Client Servicing([email protected]),

022-56913561

Contact detailsHead of Research: Rajnish Rastogi([email protected])

Analyst: Yatin Gupte

([email protected])

Summary

The net profitability margin(NPM) of banks will rise from1.36 per cent in end-March2003 to 1.45 per cent by March2006, despite a continuingdecline in spreads, on accountof the cost-control measuresthey have adopted. Thebusiness of the industry isexpected to grow by 14.2 percent CAGR between 2003-04and 2005-06, led by continuedgrowth in retail finance, recoveryin commercial credit and growthin agricultural credit. Assetquality will also improve, withnet NPAs expected to touch 2.54per cent by 2005-06. Interestrates have started to hardenduring 2004-05, which willdramatically reduce un-bookedprofits from the investmentportfolio.

Part C: Industry statisticsIndustry structure 123Financial system in India 129Industry performance (tables) 137Industry performance (graphs) 161Player profiles 173

Part B: State of the industryOverview 61Business 67Spreads & net profitability margin 89Profit and loss account 99Other income 103Operating expenses 109Important ratios 121

Part D: Annexure 289

CRIS INFAC BANKING ANNUAL REVIEW: NOVEMBER 2004, 291 PAGES i

Sections

Opinion

Executive summary 1

- Net profitability margin expected to rise 1

- Business to grow by 14.2 per cent CAGR in 2003-04 to 2005-06 2

- Asset quality of banks to improve 4

- Interest rates to harden from 2004-05 6

- Unbooked profits on investments to reduce dramatically 7

- Key ratios: Return on assets to be under pressure due to slow

growth in fee-based income 7

- Challenges faced by banks in an increasing interest rate scenario 8

1.0 Business 9

- Business of scheduled commercial banks to grow at 14.2 per cent 9

- Sources of funds: Deposits 10

- Borrowings to grow at 7.1 per cent CAGR 16

- Equity capital & reserve and surplus 17

- Capital adequacy ratio 19

- Advances 20

- With the improvement of credit offtake, credit deposit ratio to

touch 62% by 2005-06 29

- Increasing credit deposit ratio to slow down the growth rate

of investments 29

- Asset quality 30

- Cash in hand and balances with RBI grew at a CAGR of 4.1

per cent from 1997-98 to 2002-03 35

2.0 Interest rate outlook and yields 37

- Interest rates to harden in 2004-05 37

- Yields and cost of scheduled commercial banks 41

- Yield on investments 43

3.0 Profit and loss account 49

- Interest earned 49

- Interest expended 50

- Fee-based income: Core and non-core 51

- Profit on sale of investments 52

- Operating expenses to grow 8.8 per cent 54

- Provision & contingencies 55

4.0 Profitability 57

- Net profitability margin highly susceptible to changes in

operating expenses 57

- Other key ratios 58

Continued...

CRIS INFAC BANKING ANNUAL REVIEW: NOVEMBER 2004, 291 PAGESii

Boxes1.0 Business

01 Alternative investment products 15

02 Movement & stock of foodgrains at FCI 22

03 Impact on the spreads of interest rate reduction on FCI credit 23

04 Corporate Debt Restructuring Mechanism (CDR) 32

05 Sector-wise NPA of scheduled commercial banks 33

06 Recent guidelines issued by RBI pertaining to CRR 36

2.0 Interest rate outlook and yields

01 Fiscal deficit 39

3.0 Profit and loss account

01 Prudential norm on classification of investment portfolio of banks 53

4.0 Profitability

01 Net profitability margin 58

FiguresExecutive summary

01 Business of scheduled commercial banks 2

02 Non-food credit 3

03 Asset quality 4

04 Non-performing assets 5

05 Average yield on G-Sec 7

1.0 Business

01 Proportion of different sources of funds of SCBs 10

02 Interest rate on deposits vs growth in term deposits 12

03 Ownership of savings deposits 13

04 Ownership of deposits within the household sector - 2002 13

05 Growth in saving deposits 13

06 Ownership of current deposits with SCB 14

07 Ownership of deposits within the household sector - 2002 14

08 Growth in borrowings 16

09 Growth in borrowings (excluding ICICI Bank) 16

10 CRAR of top six banks 19

11 Food credit 20

12 Agricultural credit 24

13 Retail credit 25

14 Operating rates 27

15 Credit deposit ratio 29

16 Investment-deposit ratio 30

continued...

...continued

CRIS INFAC BANKING ANNUAL REVIEW: NOVEMBER 2004, 291 PAGES iii

...continued

Figures17 Asset quality 30

18 Incremental NPA provision 34

19 Comparison of CRR with proportion of cash in hand with T&DL 35

2.0 Interest rate outlook and yields

01 Average WPI-All commodities 40

02 Weekly WPI inflation 40

03 Yield on advance portfolio vis-a-vis benchmark 3-year G-Sec 42

04 Yield on investment portfolio vis-a-vis benchmark 5-year G-sec yield 44

05 Yield on deposits portfolio vis-a-vis benchmark 2-year G-Sec yield 16

4.0 Profitability

01 Spreads & NPM 58

TablesExecutive summary

01 Net profitability margin (NPM) 1

02 Key ratios 7

1.0 Business

01 Business of scheduled commercial banks in India 9

02 Sources of funds of scheduled commercial banks 10

03 Deposits of scheduled commercial banks from 1999-00 to 2005-06 11

04 Share of deposits 11

05 Proportion of different categories of deposits in the incremental deposits 11

06 Growth of deposits 11

07 Share of different investment alternatives in incremental investible funds 15

08 Equity and reserve surplus 17

09 Distributions of scheduled commercial banks by CRAR 18

10 Assets of the scheduled commercial banks 20

11 Food and non-food credit of scheduled commercial banks 20

12 Movement - food grains by FCI (provisional) 22

13 Stock in Central pool as on 30/06/2004 22

14 Impact on yield on advances 23

15 Non-food credit growth 24

16 Projected investments 27

17 NPAs of scheduled commercial banks 31

18 Progress under CDR Scheme 33

19 Sector-wise composition of NPAs of public sector banks (1999-2003) 33

20 Impact of CRR rate reduction on yields 36

continued...

CRIS INFAC BANKING ANNUAL REVIEW: NOVEMBER 2004, 291 PAGESiv

...continued

Tables2.0 Interest rate outlook and yields

01 Average yields of government securities 37

02 Projected interest rates of government securities 37

03 Fiscal deficit and market borrowing 38

04 Tax revenues and industrial growth 39

05 Yields & costs of scheduled commercial banks 41

06 Maturity profile of loans and advances of scheduled commercial banks 42

07 Maturity profile of investments of scheduled commercial banks 43

08 Maturity profile of term deposits of scheduled commercial banks 45

09 Maturity profile of borrowings of scheduled commercial banks 47

10 Average cost of borrowings of scheduled commercial banks 47


01 Profit and loss account 49

02 Interest on borrowings of scheduled commercial banks 50

03 Non-interest income - break-up 51

04 SCBs: Unbooked appreciation 52

05 Employee cost of scheduled commercial banks 54

06 Provisions and contingencies of scheduled commercial banks 55

4.0 Profitability

01 Net profitability margin (NPM) 57

02 Key ratios 58

03 Projected profit and loss account of the scheduled commercial banks 59

04 Projected balance sheet of all scheduled commercial banks 60

CRIS INFAC BANKING ANNUAL REVIEW: NOVEMBER 2004, 291 PAGES9

Business1.0

Business of scheduled commercial banks to grow at 14.2 per cent

Business of scheduled commercial banks in India Table 1(Rs billion) 1999-00 2000-01 2001-02 2002-03 2003-04 E 2004-05 F 2005-06 F CAGR

2000-03CAGR 1

2000-03 CAGR

2003-06

Deposits 9,325 10,935 12,472 14,045 15,688 17,658 19,929 14.6 13.7 12.4

Advances 4,559 5,407 6,635 7,599 8,703 10,372 12,300 18.6 16.0 17.4

Business 13,884 16,343 19,107 21,644 24,392 28,030 32,229 16.0 14.5 14.2

E: Estimated F: Forecasted 1 Excluding ICICI Bank

Source: RBI and CRIS INFAC estimates

In the banking industry, business is defined as the sum of the deposits and advances as on

a particular date.

CRIS INFAC estimates that the business of scheduled commercial banks will grow from Rs 21,644

billion in 2002-03 to Rs 32,229 billion by 2005-06 at a CAGR of 14.2 per cent, led by continued

growth in retail finance, gradual recovery in commercial credit, pick-up in agriculture credit and

growth in deposits.

During 2003-04 to 2005-06, their advances will grow by 17.4 per cent on the back of growth

in retail finance, and commercial and agriculture credit. Deposits are expected to grow by 12.4

per cent CAGR.

From 2000-01 to 2002-03, the business of the scheduled commercial banks grew by 16.0 per

cent (14.5 per cent) CAGR.

The 14.5 per cent CAGR growth in business was mainly driven by a 16 per cent CAGR growth

in advances (excluding ICICI Bank). Due to the slowdown in industrial growth, many corporates

restructured themselves to survive; hence, credit offtake was low. With reduced avenues for investment

of surplus funds, banks turned to retail financing. The retail finance portfolio grew by around

27 per cent during the same period.

Due to the merger of ICICI Ltd with ICICI Bank on March 30, 2002, all the growth figures

for scheduled commercial banks (SCBs) for the period 1999-00 to 2002-03 are distorted. Hence,

for a better comparison, we have calculated the growth figures excluding ICICI Bank, which

are indicated in brackets throughout this Annual Review.


Sources of funds: DepositsOverview

The main sources of funds for the banking sector are deposits and borrowings. In addition, internal

accruals and funds raised through equity form part of the funds available to banks for meeting

their funding requirements. CRIS INFAC expects no significant change in the funding pattern

during 2003-04 to 2005-06

Sources of funds of scheduled commercial banks Table 2

(Rs billion) 1999-2000 2000-01 2001-02 2002-03 2003-04 F 2004-05 F 2005-06 F

Capital 205.60 211.44 236.16 236.46 246.46 250.46 254.46

Reserves and surplus 446.75 500.19 645.70 781.80 950.80 1,111.03 1,309.71

Deposits 9,324.68 10,935.27 12,472.39 14,044.90 15,688.27 17,657.65 19,928.76

Borrowings 491.15 594.85 1,117.05 912.19 945.09 1,023.06 1,121.96

Total 10,468.18 12,241.75 14,471.30 15,975.35 17,830.62 20,042.20 22,614.90

Source: RBI & CRIS INFAC

Proportion of different sources of funds of SCBs Figure 1

1997-98

Deposits88

Borrowings4

Reserves and surplus

5

Capital3

(per cent)2002-03

Borrowings6

Reserves and surplus

5Capital

1

Deposits88

(per cent)

Source: CRIS INFAC

Deposits expected to grow at a CAGR of 12.4 per centDeposits consist of demand deposits (current account deposits), savings deposits and term deposits.

CRIS INFAC expects the deposits of all scheduled banks to grow from a level of Rs 14,045

billion as of March 2003 to Rs 19,929 billion as of March 2006 at a CAGR of 12.4 per cent.

This will be driven by a growth of 8.5 per cent, 16.2 per cent and 11.7 per cent in demand

deposits, savings deposits and term deposits, respectively.

Time and demand deposits of all scheduled commercial banks have been growing a CAGR of

14.6 per cent (13.7 per cent) during 2000-01 to 2002-03, driven primarily by the growth in

term deposits and savings deposits, which grew by a CAGR of 13.8 per cent and 16.7 per

cent (excluding ICICI Bank), respectively.


The proportion of term deposits in the total deposit mix has increased from 64 per cent in

1991-92 to around 66 per cent in 2002-03.

Deposits of scheduled commercial banks from 1999-00 to 2005-06 Table 3

Share of deposits Table 4

On an incremental deposit basis, the proportion of term deposits dropped from 70 per cent

in 1998-99 to 61 per cent in 2002-03 due to falling interest rates. In the next 3 years, the

proportion of term deposits is likely to go up, albeit at a slow rate, due to the expected

rise in the interest rates and the introduction of technology-driven products.

Proportion of different categories of deposits in the incremental deposits Table 5

Growth of deposits Table 6

(Per cent) 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 F 2004-05 F 2005-06 F

Demand deposits 15.01 17.98 8.11 9.59 7.60 4.25 4.75 3.25

Savings bank deposits 17.83 18.88 16.03 17.07 18.06 16.50 16.00 16.00

Term deposits 21.45 15.99 19.69 13.96 11.74 11.37 12.61 13.19Source: RBI and CRIS INFAC

(Rs billion) 1999-2000 2000-01 2001-02 2002-03 2003-04 E 2004-05 F 2005-06 F CAGR 2000-2003 (per cent)

CAGR 1

2000-03 (per cent)

CAGR 2003-2006 (per cent)

Demand deposits 1,308.6 1,414.7 1,550.3 1,668.1 1,739.0 1,821.6 1,880.8 8.4 8.1 4.1

Savings bank deposits 2,012.9 2,335.5 2,734.2 3,228.0 3,760.6 4,362.3 5,060.3 17.1 16.7 16.2

Term deposits 6,003.3 7,185.1 8,187.9 9,148.8 10,188.7 11,473.7 12,987.7 15.1 13.8 12.4

Deposits 9,324.7 10,935.3 12,472.4 14,044.9 15,688.3 17,657.7 19,928.8 14.6 13.7 12.4

E: Estimate; F: Forecast1 Excluding ICICI BankSource: RBI and CRIS INFAC Research

(per cent) 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 E 2004-05 F 2005-06 F

Demand deposits 14 14 14 13 12 12 11 10 9

Savings bank deposits 22 21 22 21 22 23 24 25 25

Term deposits 64 65 64 66 66 65 65 65 65

Deposits 6,663 7,978 9,325 10,935 12,472 14,045 15,688 17,658 19,929

E: Estimate; F: Forecast

Source: RBI and CRIS INFAC Research

(per cent) 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 F 2004-05 F 2005-06 F

Demand deposits 11.01 14.81 6.59 8.83 7.49 4.31 4.19 2.61

Savings bank deposits 19.48 23.74 20.03 25.94 31.40 32.41 30.55 30.73

Term deposits 69.51 61.45 73.38 65.23 61.11 63.28 65.25 66.66

Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Source: CRIS INFAC


Increase in interest rates to spur term deposits growthCRIS INFAC is of the view that term deposits will grow at a 12.4 per cent CAGR during 2003-

04 to 2005-06, from Rs 9,148.8 billion as of March 2003 to Rs 12,737.9 billion as of March

2006 on the back of the expected increase in the interest rate of term deposits.

From 2000-2003, term deposits recorded a growth of 15.1 per cent (13.8 per cent) CAGR on

account of their perceived safety, in comparison to other investment instruments like equity and

mutual funds.

Term deposits have shown a strong correlation with the interest rates of deposits, with the

coefficient of correlation at 0.82. For the purpose of our study, we have considered the interest

rates offered on deposits with a 3-5 year tenure. CRIS INFAC believes that the interest rate

offered on term deposits (3-5 year tenure) will rise from 5.25 per cent in 2003-04 to 6.15

per cent in 2004-05 (an increase of 90 bps) and go up further by 35 bps to 6.50 per cent

in 2005-06. This will result in term deposits growing at 11.37 per cent, 12.61 per cent and

13.19 per cent in 2003-04, 2004-05 and 2005-06, respectively.

Growth in term deposits moves in line with interest rate movement

Interest rate on deposits vs growth in term deposits Figure 2

5.0

6.0

7.0

8.0

9.0

10.0

11.0

12.0

13.0

1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04E 2004-05P 2005-06P

(per cent)

-

5.0

10.0

15.0

20.0

25.0

(per cent)

Interest rates on deposits (3-5 years maturity) growth in term deposits (%)

Source: RBI and CRIS INFAC

The regression equation y = 1.89 x - 0.44.

Where, y = growth rate of term deposits, x = interest rate on deposits (3 - 5 years maturity).

Savings deposits to grow at 16.2 per cent from 2003-04 to 2005-06CRIS INFAC estimates that savings deposits will grow at a CAGR of 16.2 per cent from Rs

3,228 billion as of end-March 2002 to Rs 5,060 billion as of March 2006.

Savings deposits accounted for nearly 23 per cent of the total deposit base of scheduled commercial

banks in India as on March 31, 2003.


As on the last reporting Friday of March 2002, nearly 88 per cent of the total savings deposits

of scheduled commercial banks were owned by the household sector. Of these around 90 per

cent were owned by individuals. About 79 per cent of the savings deposits are owned by

individuals and are, hence, considered as a stable source of funds.

Ownership of savings deposits Ownership of deposits within the household

sector -2002 Figure 4

(per cent)

Household 88

Foreign5

Corporate sector

1Govt.

6

(per cent)

Individuals90

Religious Institutions

1

Proprietary and Partnership

1

Others(not elsewhere classified)

5

Trusts Associations

Clubs etc.1


Growth in saving deposits Figure 5

Source: CRIS INFAC Research

During 2000-01 to 2003-04, savings deposits registered a CAGR of 17.1 per cent (16.7 per

cent). The year-on-year growth in savings deposits has remained more or less stable at 16-

17 per cent. This is primarily because Indians are generally inclined to save more, and growth

in savings deposits is not very much driven by interest rate movement.

Given the stable nature of these deposits and the ‘save more' mindset of the Indian public,

CRIS INFAC expects the growth in savings deposits to be stable at 16.0-16.5 per cent CAGR

during 2003-04 to 2005-06.

Figure 3


5.00

9.00

13.00

17.00

21.00

1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 P 2004-05 P 2005-06 P

(per cent)


Technology-driven products to taper growth in demand depositsCRIS INFAC estimates that demand deposits (current account) will grow at a CAGR of 4.1 per

cent from Rs 1,668 billion as of March 2003 to Rs 1,881 billion by end-March 2006, due to

the introduction of newer, technology-driven products/facilities.

Firms maintain demand deposits to meet their day-to-day cash requirements. With the advent

of new technology-driven products such as electronic fund transfers, Real Time Gross Settlements

(RTGS) and Cash Management Systems (CMS), the clearing cycle has shortened. RTGS and CMS

allow quick transfer of funds to and from any part of the country. This will encourage corporates/

firms to reduce their balances in demand deposits, and probably slow down their growth. Further,

customer-friendly products that are introduced by banks with the aid of technology (swipe-in

and swipe-out) will divert some portion of demand deposits towards fixed deposits.

During 2000-01 to 2003-04, demand deposits have grown by a CAGR of 8.4 per cent (8.1

per cent) from Rs 1,308.6 billion as of March 2000 to Rs 1,668.1 billion as of March 2003.

Demand deposits are the most volatile component of the deposits that banks have, and their

year-on-year growth has shown an uneven trend over a 10-year period. During the last few

years, a declining trend has been observed on account of the downturn in the industry.

Ownership of current deposits with SCB Ownership of deposits within the household

sector - 2002 Figure 7

(per cent)

Govt.18

Foreign3

Corporate sector

16

Household 47

Financial Sector

16

(per cent)

Other individuals

20

Traders33

Proprietary and Partnership

33

Educational Institutions

3

Trusts Associations

Clubs etc.3

Others8


As on the last reporting Friday of March 2002, the corporate and the financial sectors together

owned 32 per cent of the current deposits of scheduled commercial banks. Further, 47 per

cent of the total current deposits were owned by the household sector, of which around 66

per cent were owned by traders and partnership firms together. Thus, close to 63 per cent

of the demand deposits are owned by the business class, and are hence treated as the most

volatile component of deposits.

Figure 6



Alternative investment products Box 1

Overview

Besides term deposits, investors have the option of investing in insurance, small savings schemes, mutual funds and the

like. While the share of small savings schemes in total investments has remained more or less stable, the share of

insurance and mutual funds in the total pie is increasing. This has led to a drop in the share of the bank liability product

(term deposits + savings deposits) from 68 per cent in 1998-99 to 57 per cent in 2002-03. But, going forward, we expect

it to increase marginally to 58 per cent by 2005-06. The following table indicates the share of various investment alternatives

in the incremental inflows of investible money in the economy.

Share of different investment alternatives in incremental investible funds Table 7Year Life

insurance premium

Share in the

incremental money

supply (%)

Term deposits

Share in the

incremental money

supply (%)

Savings Deposits

Share in the

incremental money

supply (%)

Small Savings

Schemes

Share in the

incremental money

supply (%)

M utual funds

Share in the

incremental money

supply (%)1998-99 22,806 13 91,419 53 25,626 15 28,541 17 2,695 2

1999-00 27,462 14 82,738 42 31,964 16 32,214 16 22,117 11

2000-01 34,898 15 118,186 50 32,262 14 37,577 16 11,135 5

2001-02 50,094 21 100,274 42 39,870 17 37,769 16 8,024 3

2002-03 55,738 22 96,092 38 49,381 19 40,602 16 13,480 5

2003-04 F 60,755 22 96,062 35 53,262 19 49,534 18 16,850 6

2004-05 F 65,676 20 121,313 38 60,170 19 59,441 18 15,165 5

2005-06 F 70,463 19 141,532 39 69,797 19 71,329 19 12,890 4

F: Forecast

Source: CRIS INFAC Estimates

Insurance sector

The life insurance sector, which was earlier a monopoly of the Life Insurance Corporation of India (LIC), was opened up

to the private sector in 1999-2000. From 1996-97 to 2002-03, the total insurance premium increased by a CAGR of 22.8

per cent from Rs 162 billion to Rs 557.3 billion in 2002-03.

However, during 2000-01 to 2001-02, the removal of assured returns schemes across insurance products of the Life

Insurance Corporation of India has resulted in their becoming less attractive to investors. Since LIC still accounts for a

significant portion of the life insurance market, the drop in its growth will result in a marginal decline in the growth rate of

insurance premiums. CRIS INFAC expects insurance premiums to grow at a CAGR of 8.04 per cent from 2002-03 to 2005-

06.

Mutual funds as an investment channel

The performance of the mutual fund industry is dependent on the performance of the capital markets; hence, money would

flow in the mutual funds during a boom, but would flow back to the banks during a downturn.

Growth in small savings scheme to remain constant

In the last 3 years, the interest rates on small savings schemes has come down by around 400 basis points. Despite this,

the average post-tax returns on these schemes are higher than the post-tax returns on term and other deposits. But the

higher lock-in period (of 6-7 years) of these schemes has mitigated their attractiveness, particularly since interest rates

are expected to increase in the short to medium term. Consequently, CRIS INFAC expects small savings schemes to grow

at a CAGR of around 7.5 per cent from 2003-04 to 2005-06.


Borrowings to grow at 7.1 per cent CAGRCRIS INFAC estimates the borrowings of scheduled commercial banks to grow at a CAGR of

7.1 per cent from Rs 912 billion as of March 2003 to Rs 1,122 billion by end-March 2006,

led by a strong growth in advances.

During 2000-01 to 2002-03, borrowings of scheduled commercial banks grew by 22.9 per cent

(5.4 per cent) CAGR.

Growth in borrowings Figure 8 Growth in borrowings (excluding ICICI Bank) Figure 9

Source: RBI and CRIS INFAC Research Source: RBI and CRIS INFAC Research

In 2002-03, the borrowings of scheduled commercial banks recorded a negative growth rate of

18 per cent, primarily on account of:

ICICI Bank replacing its high cost borrowings (of the erstwhile ICICI Limited) with term and savings

account deposits.

Excess liquidity prevailing in the system and lesser opportunity to invest the available funds.

Banks taking advantage of reduced interest rates to prune their high-cost debt portfolio.

CRIS INFAC estimates a marginal growth in borrowings in 2003-04. The liquidity position was

comfortable throughout 2003-04, hence the demand for borrowings is expected to be low. Further,

we also expect ICICI Bank to continue replacing its high cost borrowings with low cost deposits,

but at a slower pace. However, as the demand for credit gradually increases, the demand for

borrowings would increase, which will push up the growth in borrowings to 9 per cent in 2004-

05 and 10 per cent in 2005-06

(per cent)

11.8 21

.1

8.3

9.7

-18.

3

87.8

3.6

-40.0

-20.0

0.0

20.0

40.0

60.0

80.0

100.0

1999

-200

0

2000

-01

2001

-02

2002

-03

2003

-04

F

2004

-05

F

2005

-06

F

(per cent)

11.2

20.2

6.9 8.

0 9.0 10

.0

-8.9

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

25.0

1999

-200

0

2000

-01

2001

-02

2002

-03

2003

-04

2004

-05

2005

-06


Equity capital & reserve and surplus

Equity and reserve surplus Table 8

(Rs billion) 1999-00 2000-01 2001-02 2002-03 2003-04 E 2004-05 F 2005-06 F CAGR 1999-00 -

2002-03

CAGR 2003-04 -2005-06

New equity raised 205.6 211.4 236.2 236.5 246.5 250.5 254.5 4.8 2.5

Reserve & surplus 446.8 500.2 645.7 781.8 950.8 1100.7 1276.2 20.5 17.7

E: Estimates, F: Forecast

Source: RBI & CRIS INFAC estimates

Another source of funds for the banking sector is the equity capital. In the last 10 years, the

total equity capital raised by banks has gone up, although it is not the main source of funds

for banks. With stricter capital adequacy norms and the growing loan book size, banks will need

to infuse more capital to maintain a healthy capital adequacy ratio. Many of the public sector

banks have reduced the government stake by raising equity from the market. In 2002-03, the

total amount raised by public sector banks through equity was approximately Rs 7.7 billion. In

2003-04, public sector banks are estimated to raise nearly Rs 6.0 billion. Hence, in order to

maintain a healthy capital adequacy ratio, going forward, banks will embark on infusing more

equity capital. CRIS INFAC estimates equity capital to grow at CAGR of 2.5 per cent in the

next year.

The retained earnings of banks have grown at a CAGR of 20.5 per cent from 1999-00 to 2002-

03. This was primarily on account of the over 31.2 per cent CAGR growth in net profits in

the same period. CRIS INFAC expects profits after tax to grow at a CAGR of 10.3 per cent

during 2003-04 to 2005-06 and the dividend payout ratio to be at 18.5 per cent. We also

expect addition to the reserves through an increase in share premium, which is expected to

grow in line with the projected growth in the equity capital. CRIS INFAC expects retained earnings

to grow at a CAGR of 18.8 per cent in the next 3 years, based on the above factors.


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ble

9


As of March 2003, all scheduled commercial banks, except two banks, had their CRAR above

the stipulated norms. Between March 2002 and March 2003, we see a marked improvement

in the nationalised banks, with all banks having capital adequacy above the stipulated norm of

9 per cent. This can be attributed to the increase in profitability and the fresh capital raised

by many banks. With the likely implementation of new Capital Accord (Basel II), many banks,

especially those having a global presence, have been holding capital in excess of the stipulated

norm.

CRAR of top six banks Figure 10

Source: CRIS INFAC Research

From the sample of six banks listed above, we see that the capital adequacy ratio of all banks,

except ICICI Bank, has improved. The capital adequacy ratio of PSBs has shown a significant

improvement in comparison to that of the new private sector banks. This is on account of

the aggressive lending strategy of new private sector banks in comparison to the aggressive

capital raising strategy of the public sector banks.

CRIS INFAC expects advances to grow faster than deposits. With the expected increase in credit

demand, banks will prefer to increase their loan portfolio instead of investments. This will result

in banks shifting their focus from investments towards advances. This shift from the risk free

assets to risky assets and the impending implementation of the new Basel accord, which is

expected to increase the risk weights of the assets, would require banks to raise capital to

maintain CAR above the stipulated norm.

Capital adequacy ratioCapital to risk-weighted assets ratio (CRAR)

12.8

12.2

11.1 11

.6

10.2

12.8

11.3

10.7

13.9

11.4

10.7

13.4

12.7

12.0

11.1

11.1

12.0

13.513

.9

13.0

11.7

10.4

13.1 13

.5

8.0

10.0

12.0

14.0

16.0

Bank Of Baroda Bank Of India H D F C Bank Ltd. ICICI Bank Ltd Punjab NationalBank

State Bank OfIndia

(per cent)

Mar-01 Mar-02 Mar-03 Mar-04


Advances

Assets 1999-00 2000-01 2001-02 2002-03 2003-04 E 2004-05 P 2005-06 P CAGR 2000-03

CAGR 2001-04

cash and balances with RBI 869 863 899 891 943 998 1056 0.9 5.8

Balances with bank and money call and short notice

961 1246 1385 900 976 1121 1289 -2.2 12.7

Investments 4216 5007 5975 7100 7934 8484 9150 19.0 8.8

Advances 4559 5407 6635 7599 8703 10372 12300 18.6 17.4

Fixed assets 155 163 202 203 205 207 210 9.3 1.1

Other assets 765 759 827 890 897 905 914 5.2 0.9

Total assets 11525 13446 15923 17585 19658 22087 24919 15.1 12.2

P: Projected

Source: RBI and CRIS INFAC Estimates

Assets of the scheduled commercial banks Table 10

Advances to grow at CAGR of 17.4 per cent from 2003-04 to 2005-06Advances are divided into food and non-food credit. Non-food credit is further divided into agricultural

credit, retail credit and other commercial credit.

Food and non-food credit of scheduled commercial banks Table 11

(Rs billion) 1999-2000 2000-01 2001-02 2002-03 2003-04E 2004-05P 2005-06P CAGR (2000-03)

CAGR (2003-06)

Food credit 257 400 540 495 365 427 459 24.42% -2.45%

Non-food credit 4300 5007 6095 7105 8338 9945 11841 18.22% 18.56%


Food credit to show a negative CAGR of 2.5 per cent

Food credit Figure 11


0

100

200

300

400

500

600

1999-2000 2000-01 2001-02 2002-03 2003-04E 2004-05P 2005-06P

(Rs billion)


Food credit includes banks' credit to the Food Corporation of India (FCI) for procuring foodgrains

from the market, at the minimum support prices, to be distributed through the public distribution

system.

CRIS INFAC believes food credit will show a negative CAGR of 2.45 per cent during 2003-

04 to 2005-06. In sharp contrast to the accelerated growth witnessed in 2001-02, food credit

declined steeply by 26.2 per cent in 2003-04 after declining by 8.3 per cent in 2002-03. The

steep decline in food credit was on account of lower procurement and higher offtake of food

grains from the public distribution system.

The government has emphasised the need to improve the functioning of the public distribution

system. This, coupled with the drop in the stock levels of FCI due to higher offtake of foodgrains

through the public distribution system in earlier years, should increase the FCI's procurement

in 2004-05. However, its procurement is likely to be influenced by the availability of storage

capacity at its various godowns. FCI has over 23 million tonnes (owned & hired) of storage

capacity in over 1,700 godowns all over India.

Higher procurement will lead to increased credit. However, recently, the Central government permitted

FCI to raise money from the market to the tune of Rs 50 billion. Though banks can subscribe

to these bonds, they will have to compete with other market players, which will reduce their

food credit exposure.

During the last quarter of 2003-04, banks had reduced the interest rate charged on the food

credit by about 150 bps from a level of 10.95 per cent, which will have an impact of about

6.23 basis points (annualised) on the yield on advances. Further, if FCI decides to raise Rs

50 billion of its requirement from the market, the yield on advances would face a further impact

of 2.28 basis points (annualised).

CRIS INFAC expects food credit to grow at a rate of 17 per cent in 2004-05 but taper to

7 per cent in subsequent years.


Movement - food grains by FCI (provisional) Table 12

(million tonnes) Foodgrains Sugar Total

1996-1997 23.6 1.2 24.8

1997-1998 19.1 1.1 20.2

1998-1999 19.1 1.1 20.2

1999-2000 22.1 0.7 22.8

2000-2001 16.2 0.3 16.5

2001-2002 20.5 0.3 20.8

2002-2003 24.8 0.2 25

2003-2004 29.9 0.8 29.98

2004-2005 10.6 Upto July'04 0.3 10.63

Source: Food Corporation of India

The total foodgrain stocks in the Central grain pool were estimated at around 29.9 million tonnes in the beginning of July.

This comprised 19.15 million tonnes of wheat and 10.76 million tonnes of rice. The stock in the central pool as on June 30,

2004, is above the buffer stock norms

Movement & stock of foodgrains at FCI Box 2

Stock in Central pool as on 30/06/2004 Table 13

Buffer stock norms

(million tonnes) 1st Jul 1st Oct 1st Jan 1st Apr

Rice 10.0 6.5 8.4 11.8

Wheat 14.3 11.6 8.4 4.0

Total 24.3 18.1 16.8 15.08

Source: FCI website

(million tonnes / Prov.)

With FCI With state govt. / agencies

Grand total

Rice 8.92 1.85 10.76

Wheat 7.17 11.97 19.15

Total 16.09 13.82 29.91

A food ministry sponsored study has concluded that the foodgrain requirement of the public distribution system and

welfare schemes can be met with lower grain procurement and stockholding than at present


Impact on the spreads of interest rate reduction on FCI credit Box 3

The total outstanding food credit as in March 2003 was Rs 495 billion, which amounted to 9 per cent of the outstanding

loans and advances of public sector banks as on March 31, 2003. Banks were earning a yield 10.95 per cent on their FCI

exposure till December 2003-quarter end.

The rate of 10.95 per cent is based on the prime lending rate (PLR) of five large public sector banks: State Bank of India,

Punjab National Bank, Canara Bank, Bank of Baroda and Bank of India. During 2001-02 to 2002-03, the range of decline

of the average PLR of these public sector banks at 125 bps (12 to 10.75 per cent) has been much lower than the decline

on the 10-year Government of India (GOI) securities, which has fallen by around 400 bps (April 2001 to March 2003)

During the last quarter of 2003-04, banks agreed to reduce their lending rate to FCI by 150 bps to 9.45 per cent.

Recently, the Centre allowed FCI to borrow up to Rs 50 billion from the bond market, which would reduce the banks’

exposure to FCI, as they would compete with other players in the open market. Till date, FCI has not raised any loans from

the market.

We have tried to calculate the impact of these significant developments on the yield on advances

Impact on yield on advances Table 14

(Rs million) Current Refinancing Total Impact

Average food credit exposure (2004-05) 396,177

Maximum refinance available 50,000

Total advances (average) 9,537,673 9,537,673 9,537,673

Original interest rate 10.95% 10.95%

Reduced interest rate 9.45% 9.45%

2-year GOI security yield rate 5.10%

Original interest income on FCI exposure 43,381 43,381

Revised interest income on FCI exposure 37,439 4,725 35,264

Interest rate on G-Sec 2,550

Loss of revenue (5,943) (2,175) (8,118)

Expected reduction in the yields (in bps) (6.23) (2.28) (8.51)

Source: CRIS INFAC estimates

The impact of the reduction in the interest rate works out to 6.23 basis (annualised). If FCI were to access the bond

market, banks can subscribe to these bonds, but would earn a low yield, because we believe the pricing of the paper would

be at par with GOI paper of a similar duration., as the market borrowings would be backed with a GOI guarantee.

Assuming an average G-Sec yield of 5.10 per cent during 2004-05 for 2-year paper, the impact on the spreads of banks

is estimated to be 2.28 basis points (annualised).

We have not factored in these developments in our projections. The total impact of the above-mentioned developments on

the yield on carry business and spreads is estimated at around 8.5 basis points.


Continued growth in the retail credit, coupled with the expected recovery in commercial credit, to drive growth in non-food credit

Non-food credit growth Table 15

(Rs billion) 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 E 2004-05 F 2005-06 F CAGR 2000-03

CAGR 2003-06

Agri credit 371 433 504 591 711 854 1,025 1,281 1,601 19 23

Retail credit 348 408 516 659 825 1,051 1,582 2,136 2,670 27 36

Other credit 2,494 2,791 3,279 3,757 4,559 5,200 5,731 6,528 7,570 17 13

Total non-food 3,212 3,633 4,300 5,007 6,095 7,105 8,338 9,945 11,841 18 19

E: Estimates, F: Forecasted

CAGR is in per centSource: RBI and CRIS INFAC

Non-Food credit constitutes about 96 per cent of the total advances.

CRIS INFAC estimates that non-food credit will grow at a CAGR of 18.6 per cent during 2003-

04 to 2005-06, driven by the continued growth in retail finance and the expected pick-up in

agricultural and industrial credit.

During 2000-01 to 2003-04, non-food credit recorded a CAGR of 18.2 per cent, primarily due

to increased demand for retail credit, which grew at a CAGR of 27 per cent during the same

period.

Government's directive to push agriculture credit growth

Agricultural credit Figure 12

433504

591

711

854

1025

1281

1601

0

200

400

600

800

1000

1200

1400

1600

1800

1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04P 2004-05P 2005-06P

(Rs billion)



Along with the direct finance to farmers, lending to allied farming activities (public and private),

subscription to bonds issued by NABARD (national bank for Agricultural and Rural Development),

loans to co-operative marketing societies, loans to co-operative banks of producers, etc are all

classified as agriculture credit. Agriculture lending is classified as priority sector lending. Every

scheduled commercial bank is expected to ensure that priority sector advance constitute 40 per

cent of net bank credit (in case of foreign banks, the priority sector advance ratio is 3.2 per

cent), which further has a sub-limit of 18 per cent towards agriculture credit.

CRIS INFAC expects agriculture credit to grow from Rs 854 billion (March 2003 end) to Rs

1,601 billion (March 2006 end) at a CAGR of 23.31 per cent, driven by the government's emphasis

on improving credit delivery to the agriculture sector.

During 1999-2000 to 2002-03, agriculture credit recorded a CAGR of 19.2 per cent from Rs

504.3 billion as of end-March 2000 to Rs 853.8 billion as of end-March 2003. The growth in

agriculture credit has been steady, due to low penetration of agricultural credit in the rural areas

and uneven agriculture output over the years.

The government has laid emphasis on improving the credit delivery to the agriculture sector

and thus improving agriculture production in the country. The Ministry of Finance has advised

all banks to increase their agriculture credit by 30 per cent over the next 3 years, from 2004-

05 to 2007-08. Further, several measures have been initiated, like increasing the credit limit

of the kisan credit card scheme, special agricultural credit plans, etc. The Reserve Bank of India

has directed banks to restructure / reschedule the overdue agriculture loans, waive margin money

requirement for agricultural loans up to Rs 50,000, etc.

Agriculture credit had been growing between 17-18 per cent during the last few years. Several

banks have started restructuring their operations to meet the targeted agricultural growth. Banks

have set up strategic business unit to cater to the agriculture credit demand. However, we feel

the projected growth rate of 30 per cent to be optimistic. CRIS INFAC expects the growth

in agricultural advances to be around 23 per cent CAGR during the 2002-03 to 2005-06.

Continued growth in housing finance to drive retail credit

Retail credit Figure 13

408516

659

825

1051

1582

2136

2670

0

500

1000

1500

2000

2500

3000

1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04P 2004-05P 2005-06P

(Rs billion)



CRIS INFAC estimates the net outstanding retail finance portfolio of the banks to grow at a

CAGR of 36 per cent during the period 2003-04 to 2005-06, from Rs 1,051 billion as of end-

March 2003 to Rs 2,670 billion as of end-March 2006, driven by continued growth in housing,

commercial vehicles and car finance.

The projected growth in the outstanding retail finance in the next 3 years would be mainly

driven by the following factors.

Continued growth expected in housing finance, and cars and commercial vehicles finance.

Increasing market share of banks vis-à-vis NBFCs in the retail finance pie.

Increasing tenures of the loans.

During 2000-01 to 2002-03, the retail finance portfolio of banks has grown at a CAGR of 27

per cent from Rs 516.4 billion to Rs 1,051.4 billion. This steady growth in retail finance portfolio

was mainly on account of the following factors:

Focus of large public and private sector banks on disbursements to the household sector for housing

loans, commercial vehicles, cars and two wheelers

Increasing penetration of banks vis-à-vis NBFCs.

Lower interest rates, contributing to increase in demand, and rising tenure of car, housing and commercial

vehicle portfolio.

We expect outstanding housing finance, which constitutes almost 52 per cent of the total retail

finance, to grow at a CAGR of 40 per cent, while the outstanding car finance and commercial

vehicle finance will grow at a CAGR of 35 per cent each, during 2003-04 to 2005-06. Car

finance constitutes nearly 24 per cent of the retail finance portfolio.

Banks, with their low cost funds advantage, will continue to dominate the retail finance market

and CRIS INFAC expects banks to increase their market share in the retail finance market.

Other commercial credit to grow at 13.3 per cent CAGR, driven by gradual pick-up in industrial creditOther commercial credit consists of the credit availed by large, medium and small-scale industries

covering various sectors.

CRIS INFAC estimates other commercial credit segment to grow from Rs 5,199.5 billion as of

end-March 2003 to Rs 7,570.0 billion as at March 2006 at a CAGR of 13.3 per cent, led by

the gradual upturn in the investment cycle in the manufacturing sector and a sustained growth

in the service sector.

Upturn in the investment cycle to boost credit from the manufacturing sectorThe manufacturing sector has not seen any major capacities being set up in the last 3 years.

Consequently, many industries are reaching nearly full capacity utilisation levels. The present capacities

are not sufficient to meet the expected growth in demand in various industries, which has increased

the operating rates. Hence we expect capacity additions across all manufacturing sectors, which

in turn would increase the demand for credit.


Operating rates Figure 14

NoteThe operating rates projected for the period 2003-04 to 2007-08 are without considering any capacity built up.Source: CRIS INFAC

Projected investments Table 16

(Rs billion) 1998-03 2003-08

Steel 50.00 60.00

Aluminium 19.25 98.00

Paper 32.00 80.00

Cement 63.00 120.00

Petrochemicals 20.00 60.00

MMF and FI 7.00 91.50

Refining & Marketing 187.64 622.00

Oil & Gas 397.50 807.50

Total 776.39 1,939.00

Source: CRIS INFAC

A CRIS INFAC industry study has identified eight industries, which are listed above, where significant

capital expenditure is projected. During 1998-99 to 2002-03, these sectors have made investment

to the tune of Rs 776.39 billion. During the next 5-year period, these eight industries are projected

to make investment to the tune of Rs 1,939 billion, which is 2.5 times the investments made

by these industries in the last 5 years. Based on our study, these eight sectors account for

almost 67 per cent of the total manufacturing sector (based on the capital expenditure), which

gives a total capital expenditure requirement for the entire manufacturing sector of Rs 2,908.5

billion. Out of a capital expenditure of Rs 2,908.50 billion, almost Rs 349 billion would have

taken place in 2003-04, while Rs 494 billion will occur in 2004-05 and Rs 756 billion in 2005-

06.

We estimate a total debt requirement of Rs 803.4 billion, to fund the capex requirement of

the first 3 years (2003-04 to 2005-06). Of this, banks are expected to fund to the tune of

Rs 281.2 billion, in the form of term loan.

50

55

60

65

70

75

80

85

90

95

100

1998-99 2000-01 2002-03 2004-05 2006-07

(per cent)

Steel Aluminium Paper Cement

60

65

70

75

80

85

90

95

100

105

1998-99 2000-01 2002-03 2004-05 2006-07

(per cent)

Petrochemicals Fibres Refining


Short-term credit requirement for the manufacturing sectorCRIS INFAC expects banks' short-term loan to the manufacturing industry to increase by Rs 541

billion during 2003-04 to 2005-06, driven by a 13.5 per cent growth in the topline of the

manufacturing sector during the said period.

CRIS INFAC, based on its study, expects the net sales of the manufacturing sector to grow

at CAGR of 13.5 per cent between 2003-04 and 2005-06. Increase in sales would result in

higher working capital requirement. But, due to better working capital management by corporates,

we expect a marginal drop in the working capital requirements of the industry.

The ratio of working capital gap to net sales has been showing an increasing trend. We believe

this was due to companies changing their debt mix more towards short term to take advantage

for the falling interest rates. But as the interest rates harden, firms would resort to long-term

loans to lock their exposure at lower interest rates.

Telecom, hotel industry to drive credit growth in service sectorIn 2002-03, the services sector accounted for around 51 per cent of the total GDP (at constant

prices at factor cost). GDP in the service sector had clocked impressive growth rates of over

9 per cent during 1997-98 to 1999-2000. The services sector has grown at a steady pace,

though there have been fluctuations in the growth in agricultural and industrial production. Crisil

Centre of Economic Research (CCER) expects the services sector GDP to record a year on

year growth of 8.4 per cent and 7.5 per cent in 2004-05 and 2005-06, respectively.

Telecom, and hotel & tourism sectors constitute 45-50 per cent of the entire service sector

in terms of bank finance (both short term and long term). As per our telecom industry study,

the external funding requirement for the industry is almost Rs 414 billion during 2003-04 to

2005-06, of which, it is estimated that banks will fund Rs 145 billion in the form of term

loans and working capital.

As per CRIS INFAC's hotel industry study, we expect capital expenditure of Rs 31.20 billion

during 2003-04 to 2007-08. Our analysis indicate that almost 80 per cent of the investment

in the hotel industry is expected to place in the first 3 years (2003-04 to 2005-06). Analysing

the funding pattern in the hotel industry, we expect banks to fund Rs 8.39 billion. With the

expected revival of the hotel industry, and in view of new capacities, we expect the working

capital requirement of the industry to grow from an average 23 per cent of sales to 26 per

cent of sales over the 3-year period (2003-04 to 2005-06). The incremental net disbursement

of working capital in the sector for 2003-05 to 2005-06 is estimated at Rs 19.37 billion.

As mentioned earlier, hotel & tourism and telecom industry represent almost 45-50 per cent

of the entire service sector. Hence, based on our estimate the incremental gross funding of

banks to the service sector in next 3 years (2003-04 to 2005-06) is Rs 407 billion.

Other sectors (including SSI credit)Based on our study, other industry represents approximately 25-30 per cent of the total small

medium and large industry. CRIS INFAC estimates the gross disbursement to this sector during

2003-04 to 2005-06 to be Rs 822 billion.


With the improvement of credit offtake, credit deposit ratio to touch 62% by 2005-06

Credit deposit ratio Figure 15

(per cent)

49

62

59

55

50

5453

4849

40

45

50

55

60

65

1998 1999 2000 2001 2002 2003 2004 E 2005 P 2006 P

Source: CRIS INFAC

With industrial recession, and the resultant low demand for credit, the credit-deposit ratio had

been as low as 48 per cent in 1999, but with the gradual recovery in the commercial credit

and continued growth in the retail credit, we estimate total advance to grow at 17.4 per cent

CAGR during 2003-04 to 2005-06. During the same period, total deposits will increase by 12.4

per cent. This would push up the credit deposit ratio to 62 per cent by end-March 2006,

tightening the liquidity of the banking system.

Increasing credit deposit ratio to slow down the growth rate of investmentsCRIS INFAC estimates the investments portfolio of banks to grow at CAGR of 8.8 per cent

during 2003-04 to 2005-06.

With low credit offtake, banks had no avenues to deploy funds. Hence they parked them in

investments, both SLR and Non-SLR, or were holding on cash. The investment to deposit ratio

grew from 42 per cent in 1998 to 51 per cent in 2003 and is estimated to have been 50.5

per cent in 2004.

Going forward, with the expected increase in demand for commercial credit, banks would prefer

lending to the industrial sector than invest in government securities, as the former yields higher

returns. Further, to meet the demand for commercial credit, banks would prune their investment

portfolio.

With the estimated slow down in investments, the investment-deposit ratio is expected to taper

to 46 per cent by March 2006.


Investment-deposit ratio Figure 16

(per cent)

46

42

43

45

46

4848

5151

30

35

40

45

50

55

1998 1999 2000 2001 2002 2003 2004 E 2005 P 2006 P

Source: CRIS INFAC

Asset quality

Asset quality Figure 17

Source: RBI and CRIS INFAC estimate

The share of standard assets to increaseWith better credit management, restructuring of loan portfolios and higher provisions/write off,

the share of standard assets has increased from 85.3 per cent in 1998-99 to 91.2 per cent

in 2002-03; it is expected to grow further to 94.2 per cent by 2005-06. The share of sub-

standard and doubtful assets has shrunk from 5.0 per cent and 7.8 per cent, respectively, in

1998-99 to 2.6 per cent and 5.1 per cent, respectively, in 2002-03; it is expected to drop

further to 1.5 per cent and 3.3 per cent, respectively, by 2005-06.

75

80

85

90

95

100

1999 2000 2001 2002 2003 2004 E 2005 P 2006 P

(per

cen

t)

Standard Sub-standard assets Doubtful assets Loss assets


Net NPA expected to be around 2.5 per cent

NPAs of scheduled commercial banks Table 17

CRIS INFAC estimates that by March 2006 the gross NPA will come down to 5.82 per cent

as against as 8.84 per cent as of March 2003, while net NPA will drop to 2.54 per cent from

4.42 per cent during the same period.

At the gross level, the gross NPAs, which stood at Rs 687.80 billion as on March 31, 2003,

are expected to have fallen to Rs 669.15 billion as on March 31, 2004, but would rise thereafter

to Rs 710.56 billion as in March 2006, with the growth in advances.

CRIS INFAC estimates that gross NPAs will fall further to 5.84 per cent by end-March 2006.

The prime drivers are expected to be:

Credit administration: Improved credit management, by improving the process of credit appraisals,

providing extensive training staff members undertaking appraisals, putting in place an effective system

of post disbursement monitoring of accounts.

Risk management: Increased focus on the improving risk management, with the aid of information

technology.

Improving corporate performance: Since March 2003, the corporate sector performance has improved

significantly, and we expect it to continue improving its profitability in the current industrial upturn,

which will help improve the risk profile of loans given to the industrial sector.

Legal remedies: Banks would continue to take recourse to legal remedies such as DRT and SARFEASI, to

pressurise defaulters to clear the overdues.

The gross NPA of the scheduled commercial banks have fallen from 12.8 per cent as of end-

March 2000 to 8.8 per cent as of end-March 2003, while net NPAs had fallen from 6.8 per

cent to 4.4 per cent during the same period. The primary drivers for the improvement are:

Higher provisions: The falling interest rate and corresponding increase in profit on sale of investments

provided banks enough room to increase their provisioning / write off of bad loans while maintaining

profit growth.

Regulatory measures: Regulators introduced various measures, such as One Time Settlement Scheme(OTS),

Corporate Debt Restructuring (CDR) etc, which allowed banks to restructure the bad loans or settle the

bad loans at a discount. It also prevented potential NPAs from becoming NPAs.

Legal reforms: Reforms in the legal systems, in the form of strengthening the Debt Recovery Tribunal

(DRT) and enactment of the Securities and Reconstruction of Financial Assets and Enforcement of Security

Interest (SARFAESI) Act, 2002, enabling banks to pressurise the defaulters to clear the overdues, and thus

clean their balance sheet.

Best practices: Banks started adopting best practices, and building strong credit risk management to

improve their loan portfolio

Basis 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 E 2004-05 P 2005-06 P

Gross NPA Rs in Billion 587.22 608.4 639.63 709.53 687.80 677.21 698.61 728.09

Net NPA Rs in Billion 280.20 300.73 324.61 355.46 327.64 274.17 273.32 309.59

Gross NPA per cent 14.70 12.79 11.45 10.42 8.84 7.66 6.62 5.82

Net NPA per cent 7.63 6.77 6.17 5.50 4.42 3.20 2.66 2.54

Provision for NPA Rs in Billion 307.49 318.81 361.68 383.95 377.16

Provision cover per cent 43.34 46.35 53.41 54.96 51.80

P: ProjectedSource: RBI and CRIS INFAC


Corporate Debt Restructuring Mechanism (CDR) Box 4

Objective:

The objective of CDR is to ensure a timely and transparent mechanism for restructuring the corporate debts of viable

entities, outside the purview of BIFR, DRTs and other legal proceedings, for all concerned.

Structure:

CDR will have a three-tier structure consisting of:

(a) (a) CDR Standing Forum and its core group - CDR standing forum is a self empowered body, which lays

down policies and guidelines, guides and monitors the progress of corporate debt restructuring. A CDR core

group is carved out of the CDR standing forum to assist the standing forum in convening meetings and taking

decision relating to policy, on behalf of the standing forum. The core group will consists of chief executives of IDBI,

ICICI Bank, SBI, Bank of Baroda, Bank of India, Punjab National Bank, Indian Banks Association and a representative

of the Reserve Bank of India.

(b) CDR Empowered Group - The individual cases of corporate debt restructuring shall be decided by the CDR

Empowered Group, consisting of ED level representatives of IDBI, ICICI Bank and SBI as standing members, in

addition to ED level representatives of financial institutions and banks who have an exposure to the concerned

company. The level of representations of banks/ financial institutions on the CDR Empowered Group should be at

a sufficiently senior level to ensure that concerned banks/ FI abide by the necessary commitments including

sacrifices, made towards debt restructuring.

After the Empowered Group decides that restructuring of the company is prima-facie feasible and the enterprise

is potentially viable in terms of the policies and guidelines evolved by the standing forum, the detailed restructuring

package will be worked out by the CDR cell in conjunction will the lead institution. The empowered group has to

examine the viability and rehabilitation potential of the company and approve the restructuring package within a

specified time frame of 90 days or at best 180 days.

The decision of the CDR Empowered group shall be final. If restructuring is not found viable, the creditors would

then be free to take necessary steps for immediate recovery of dues and / or liquidation or winding up of the

company, collectively or individually.

(c) The CDR cell: The CDR Standing Forum and the CDR Empowered Group will be assisted by the CDR cell in all

their functions. The CDR cell will make the initial scrutiny of the proposal received from borrowers/ lenders. If the

rehabilitation is prima facie feasible, the CDR cell will proceed to prepare a detailed rehabilitation plan with the help

of lenders and experts, if necessary.

The salient features of the revised CDR scheme are as follows:

It will cover only multiple banking accounts/ syndication / consortium accounts with outstanding exposure of Rs 20

crore and above. It will not apply to accounts involving only one financial institutions or one bank.

It will be a voluntary system based on Debtor-Credit Agreement (DCA) and Inter-Creditor Agreement (ICA).

The scheme will be applicable only to standard and sub-standard accounts.

There would be no requirement of the account/ company being sick, NPA or being in default for a specified period

before reference to the CDR Group.

Request of any corporate indulging in wilful default or misfeasance will not be considered for restructuring under CDR.

Reference to CDR could be triggered by (a) any or more of the secured creditors who have a minimum 20 per cent

share in either working capital or term finance, or (b) by the concerned corporate, if supported by a bank or financial

institution having stake as in (a) above.

Lenders who do not wish to commit additional financing or wish to sell their existing stake will be provided with the exit

options.

‘Stand-still' agreement binding for 90 days or 180 days by debtors and creditors respectively, under which both sides

commit themselves not to take recourse to any legal action during the 'stand-still period'.

If 75 per cent of the secured creditors by value, agree to a debt restructuring package, the same would be binding on

the remaining secured creditors.

Continued...


As on June 30, 2003, out of 57,915 cases (involving Rs 822.66 billion) filed by banks to the DRTs, 22,163 cases (involving

Rs 196.33 billion) have been adjudicated and the amount recovered so far stood at Rs 57.87 billion.

...continued

Progress under CDR Scheme Table 18

(Rs billion) No. of Cases Amount Involved

Cases refererred to CDR forum 71 537.36

Final schemes approved 41 386.38

Rejected 18 72.52

Pending 12 78.46

Source: Report on Trends and Progress of Banking India, 2002-03

Sector-wise NPA of scheduled commercial banks Box 5

While the gross NPA (as a percentage of advances) is falling in all the sectors, it is highest under the priority sector, with

a drop of almost 10 percentage points. The NPAs under the public sector are the lowest, essentially due to the government

backing. The NPAs are the highest under the priority sector because of the industries and sectors to which advance are

given. Priority sector is more of directed lending, which puts pressure on the banks to meet the required target, which

leads to some lapse in the credit assessment of the proposal. But, over the years, banks have improved their systems

and, also with the restructuring of bad loans, NPAs are witnessing a declining trend.

Sector-wise composition of NPAs of public sector banks (1999-2003) Table 19

(Rs billion)

Advances NPA per cent Advances NPA per cent Advances NPA per cent

1999 937 226 24.12 395 15 3.8 1642 276 16.8

2000 1082 237 21.92 465 11 2.3 1974 285 14.5

2001 1270 242 19.02 710 17 2.4 2166 273 12.6

2002 1476 252 17.04 914 9 1.0 2416 284 11.8

2003 1763 249 14.15 924 11 1.2 2807 268 9.5

0.47 0.02 0.51

Source: Trends & progress of Banking in India 2002-03 and statistical tables

Non-priority sectorPriority sector Public sector

'Provision for NPA' charge to P&L expected to decreaseWith the expected fall in the profit on sale of investments, banks would have less leeway

to make provisions for NPAs. We expect banks to have made the highest provisions during

2003-04, with the increase in the interest rates. Hence, the provision for NPA would have increased

to Rs 178 billion in 2003-04.

Since banks would have already made additional provisions in the previous years, the incremental

provision are expected to be relatively smaller. Moreover, we expect banks to further strengthen

their credit management, leading to an up gradation in the existing NPAs. This would lead to

a reduction in the provision requirements for provision for NPAs' due to write back of the excess

provisions made in the earlier years. These factors would reduce the provision for NPA charged

to the P&L, from Rs 178 billion in FY 2004, to Rs 159 billion for 2004-05 and Rs 135 billion

for 2005-06.


We do not expect the growth in agricultural credit to affect the NPA loans (declared/book)

of the banks' assets, because of the following:

Agriculture credit accounts for only 12 per cent of the total advances.

Lenient norms for recognising NPA in the agriculture sector.

Restructuring of old agricultural loans, as per the RBI's recent directives.

Strategic business units (SBUs) set up by several banks, to cater to the agricultural credit demand. This

focus approach would also help in better monitoring of these advances.

Announcements made by banks to recruit agriculture specialist, for the agricultural credit division.

CRIS INFAC expects the actual NPAs on the books of banks to be higher than the declared

NPAs (book NPAs) on account of the following:

Aggressive agriculture credit disbursement policies

The aggressive agricultural credit disbursement policies pursed by banks under directives of RBI

and the government will result in the inherent risk of an increase in the agricultural advances

assets. Further, despite lenient NPA recognition norms historically, agricultural advances have higher

NPA levels vis-à-vis non-priority sector advances.

Unseasoned housing finance portfolio

As per CRIS INFAC estimates, housing finance accounts for more than 50 per cent of the retail

credit. Banks have aggressively pursued housing finance during the last 3 years (2000-01 to

2003-04), as a result of which the housing loan book size has more than quadrupled during

this time of declining interest rates. The housing portfolio has not yet seasoned and has not

been stress tested during a hardening interest rate environment. Therefore, the current NPA levels

of this sector are expected to be understated.

Incremental NPA provision Figure 18

135132

159

178

0

40

80

120

160

200

2003 2004 P 2005 P 2006 P

(Rs billion)



Cash in hand and balances with RBI grew at a CAGR of 4.1 per cent from 1997-98 to 2002-03

The cash and bank balances with the banks consist primarily of cash with branches, cash in

ATMs and the remaining cash balances with the RBI for maintaining the CRR ratio. Given the

view that banks are substantially stronger than they were in the early nineties, coupled with

a view that CRR was not longer an effective tool in controlling inflation and credit offtake,

the RBI decided to bring down the CRR levels on a deferred manner in 1997-98. Since then

the CRR levels have come down from a high of 11 per cent in 1998-99 to the present level

of 5 per cent, after touching a low of 4.5 per cent. Further, CRR was also required to strengthen

the bank against large withdrawals that result in the bank not been in a position to pay its

obligation.

The RBI has raised the CRR levels from 4.5 per cent to 5.0 per cent in two stages. The

hike in the CRR would increase the cash and bank balance. But, the RBI initiated measure

is more from keeping the inflation under check, and as the inflation pressure subsides, the CRR

would be reduced. The RBI has retained its medium term objective of gradually lowering the

CRR to 3 per cent. The CRR reduction is part of the RBI's endeavour to make available more

resources with bank to lend. CRIS INFAC expects the cash in hand and balances with the RBI

to growth at a small rate of 5.8 per cent, as per the historical trend.

Comparison of CRR with proportion of cash in hand with T&DL Figure 19


4.00

5.00

6.00

7.00

8.00

9.00

10.00

11.00

1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06

(per cent)

Cash in hand and balance with RBI as a percentage of T &DL CRR ratio


Recent guidelines issued by RBI pertaining to CRR Box 6

The Reserve Bank of India has recently increased CRR of schedule commercial banks, by 50 basis points of their net

demand and time liabilities, in two stages, effective from fortnight beginning from September 18, 2004 and October 2, 2004

to 4.75 per cent and 5.0 per cent respectively.

Further, with effect from the fortnight beginning September 18, 2004, banks will be paid interest at the rate of 3.5 per cent

per annum on their eligible cash balances maintained with RBI under CRR requirement as against the current practice of

payment of interest at the Bank rate (6.0 per cent per annum).

Impact of CRR rate reduction on yields Table 20(Rs million) 2005 with CRR

impact2005 without CRR impact

D&T liabilities 18,680,707 18,680,707

Average funds deployed in carry 19,480,370 19,480,370

CRR requirement 5.00% 4.50%

Interest rate 3.50% 6.00%

Interest income 12,360 15,891

Contirbution to yield on avg funds deployed (in bps)

6.7 8.7

Loss of revenue 3,531

Impact on yield (in basis points) 1.9

Source: CRIS INFAC

With the reduction in the rate of interest offered on the CRR deposits, we expect the banks to take an additional hit of 2

basis points (annualised) on their spreads.


Interest rate outlook and yields2.0

Interest rates to harden in 2004-05According to estimates by the CRISIL Centre for Economic Research (CCER) and CRIS INFAC,

the benchmark 10-year yield on government securities is estimated to rise by 183 basis points

(bps) during 2004-05 to 7.00 per cent by March 2005 from 5.17 per cent as of end-March

2004. The benchmark yield is expected to go up further by 50 bps during 2005-06 to touch

7.50 per cent by March 2006.

Rising inflation and the gradual increase in credit demand has led to a hardening of interest

rates. Banks have started moving to the short end of the curve with the rise in interest rates.

As per CCER estimates, interest rates for corporate are expected to go up by an additional

40-50 bps over the corresponding G-Sec yield.

In general, the movement of interest rates depends on:

Growth in money supply

Growth in credit offtake

International interest rate.

Expected rate of inflation

Fiscal deficit, and the resultant borrowing programme of the government

Average yields of government securities Table 1

Projected interest rates of government securities Table 2

(per cent)

I year 3 year 5 year 10 year

1999-00 10.29 10.62 10.88 11.41

2000-01 9.88 10.07 10.33 10.96

2001-02 7.24 7.48 7.74 8.69

2002-03 5.98 6.19 6.43 6.91

2003-04 4.63 4.80 4.93 5.31

2004-05 P 4.92 5.32 5.61 6.10

2005-06 P 5.56 6.07 6.52 7.25

P: Projected

Source: Crisil Centre for Economic Research, CRIS INFAC

Tenure

(per cent)

I year 3 year 5 year 10 year

March 31, 2003 5.88 6.42 6.35 6.47

March 31, 2004 4.29 4.59 4.78 5.17

March 31, 2005 P 5.40 5.93 6.36 7.00

March 31, 2006 P 5.75 6.20 6.67 7.50

P: Projected

Source: RBI, Crisil Centre for Economic Research, CRIS INFAC

Tenure


Tightening money supplyThe year-on-year growth in money supply (M3) was higher at 16 per cent in 2003-04, compared

to 15 per cent in 2002-03. In its credit policy for 2004-05, the Reserve Bank of India (RBI)

has projected the expansion of money supply at 14 per cent. CRIS INFAC estimates the credit

deposit ratio to go up to 62 per cent as on March 31, 2006.

With the changing rupee-dollar parity and the increase in forward premiums, foreign currency

borrowings are likely to become costlier, which will slow down the growth in external commercial

borrowings. The inflows from non-resident Indians (NRIs) and foreign institutional investors (FIIs)

are also likely to be affected, with the expected recovery in the US economy and the corresponding

increase in the interest rate.

Recently, the RBI increased the limit of borrowings under the Market Stabilisation Scheme (MSS)

from Rs 600 billion to Rs 800 billion; thus, an additional liquidity of Rs 200 billion would be

absorbed from the banking system. Moreover, the 50 bps increase in the CRR limit in two

stages is estimated to absorb another Rs 80 billion from the system.

These factors are expected to put pressure on the liquidity in the system.

Credit growthAs explained in the previous chapter, non-food credit is estimated to grow at 18.56 per cent

during 2003-04 to 2005-06, with the credit deposit ratio likely to touch 62 per cent by end-

March 2006.

International interest ratesThe US Federal Department has increased the Fed Rate thrice in a span of three months, each

time by 25 bps, to 1.75 per cent, indicating a revival of the US economy, and giving a direction

to the interest rates. US short-term rates are expected to rise by another 100 bps over the

next 12 months. This would lead to a further rise in the domestic interest rate. (The short-

term interest rates in India show a strong correlation with the short-term interest rates in the

US.)

Fiscal deficit

Fiscal deficit and market borrowing Table 3

2001-02 2002-03 2003-04 2004-05 2004-05Basis Actuals Actuals RE BE CCER Est

Fiscal deficit Rs in billion 1409.55 1450.73 1321.03 1374.07 1574.07

Budgeted market borrowings Rs in billion 773.5253 958.59 1071.94 903.65 1040

Actual market borrowings Rs in billion 926.3 1120.48 879.94

As a percentage of GDP per cent 6.2 5.9 4.8 4.4 5.0

Source: Budget Documents


The Central government's fiscal deficit is funded mainly through its market borrowings. Hence,

with the increase in the fiscal deficit, the market borrowings would go up, leading to pressure

on the interest rate. CCER estimates that the fiscal deficit will touch 5 per cent of GDP as

against the budget estimates of 4.4 per cent, due to shortfall in the budgeted tax collections.

With the expected increase in the fiscal deficit, CCER estimates the government's market borrowings

to rise by Rs 136.35 billion, which will push the interest rate up.

Fiscal deficit Box 1

The budget assumes a nominal GDP growth of 12.7 per cent for 2004-05. Assuming an inflation of 5.0-5.5 per cent, this

translates into a high real growth of about 7.2-7.7 per cent. As per CCER's assessment, sustaining such a high growth

over a strong base of 8.2 per cent growth in the previous year is unlikely. CCER expect real GDP growth of only 6.0-6.5

per cent even if the monsoons are normal.

The central government has assumed a growth of 24.6 per cent in its gross tax revenues in 2004-05, over a high growth

of 17.9 per cent in 2003-04. This translates into an increase in the tax/GDP ratio to 10.2 per cent in 2004-05 from 9.2 per

cent in 2003-04. According to CCER, this projected growth in revenues is optimistic.

The table below documents the expected shortfall in gross tax revenues under alternate assumptions of industrial growth.

The estimates of gross tax revenues have been computed using the ratio of tax collections to nominal industrial GDP

observed during 2003-04.

Tax revenues and industrial growth Table 4

If the tax/industrial GDP ratio of 2003-04 is assumed to hold in the current fiscal, we get a significant revenue shortfall,

ranging from Rs 244.71 billion to Rs 303.36 billion. This is likely to be an overestimate of the shortfall because of some

changes in the tax regime and imposition of new taxes. Even if we optimistically assume the benefits from new taxes and

efficiency improvement in tax collections at Rs 100 billion, we end up with a shortfall of about Rs 200 billion under a realistic

assumption for industrial growth. The Budget is thus relying upon the recovery of large arrears in direct and indirect taxes

to meet the revenue targets. This expected revenue shortfall would increase the fiscal deficit to 5 per cent of the GDP from

a projected 4.4 per cent of the GDP.

For more details, please refer our Budget document.

Gross tax revenue

Gross tax revenue

Expected shortfall

(per cent) (per cent) (per cent) (EST) (BE)

6.5 5.5 12.0 285,612 317,733 32,121

7.0 5.7 12.7 287,397 317,733 30,336

8.0 6.0 14.0 290,712 317,733 27,021

9.0 6.0 15.0 293,262 317,733 24,471

Note

1) Rs in crores

Sources: CRISIL Simulations

Industrial growth

Industrial inflation

Nominal industrial

growth

2004-05BE


Average inflation in 2004-05 seen in 6.0-6.5 per cent rangeThe expected increase in inflation results in an increase in interest rates. This is because lenders

demand compensation for the fact that the future interest and principal they receive will not

be worth as much as the money they lend, in terms of the goods and services it would purchase.

CCER estimates that average inflation will be about 6.0-6.5 per cent in 2004-05. Surging international

crude oil prices, the rainfall deficiency in some parts of the country and rising metal prices

will all exert upward pressure on inflation. Basic metals, alloys and metal products remained

the major contributor to the overall manufacturing inflation during the first quarter of 2004-05.

High domestic and international coal prices and higher iron ore prices have put an additional

upward pressure on steel prices (which is a major constituent of basic metals group).

But global commodity prices are expected to soften. In addition, the government has reduced

the excise and customs duties on commodities like oil, metals and sugar, which will result in

lower prices. Moreover, the base effect will come to play from September onwards, softening

the rate of inflation to some extent.

Average WPI-All commodities Figure 1 Weekly WPI inflation Figure 2

Source: CCER Source: CCER

In 2003-04, average inflation was high at around 5.5 per cent, compared to 3.4 per cent in

2002-03 and 3.6 per cent in 2001-02. This was largely due to the rising inflationary trends

in the second half of the financial year, largely due to rising manufacturing sector prices.

Taking all these factors into consideration, CCER has forecast the average inflation for 2004-

05 to be in the range of 6.0-6.5 per cent and nearly 5.0-5.5 per cent in 2005-06.

For more details on inflation, please refer to CRISIL's EcoView of August 2004.

2.0

3.0

4.0

5.0

6.0

7.0

2001-02 2002-03 2003-04 2004-05 E 2005-06 E

(per cent)

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

06/0

1/20

01

06/0

4/20

01

06/0

7/20

01

06/1

0/20

01

06/0

1/20

02

06/0

4/20

02

06/0

7/20

02

06/1

0/20

02

06/0

1/20

03

06/0

4/20

03

06/0

7/20

03

06/1

0/20

03

06/0

1/20

04

06/0

4/20

04

06/0

7/20

04

(per cent)


Yields and cost of scheduled commercial banks

Yields & costs of scheduled commercial banks Table 5

(Per cent) 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 E 2004-05 F 2005-06 F

Yield on advances (i) 12.30 11.71 11.46 10.19 9.93 9.37 9.32 9.69

Yield on investments (ii) 12.05 11.85 11.28 10.75 9.80 8.49 8.07 7.85

Yield on AFCB (iii) 11.15 10.77 10.61 9.88 9.52 8.78 8.47 8.56

Cost of deposits (iv) 8.03 7.68 7.35 7.14 6.46 5.82 5.59 5.76

Cost of borrowings (v) 11.59 11.73 12.32 8.53 11.13 9.80 9.58 9.83

Interest Cost on FB (vi) 7.96 7.68 7.41 7.06 6.63 5.91 5.67 5.84

Spreads (iii - vi) 3.19 3.10 3.19 2.82 2.89 2.87 2.80 2.72

E: Estimate; F: Forecast

AFCB: Average Funds in Carry Business

FB: Funds Borrowed

Source: CRIS INFAC estimates

SpreadsSpreads are defined as the difference between the yield on carry business and the cost of

borrowings. (The yield on carry business is the ratio of the total interest earned to the average

funds deployed in the carry business. Carry business is the total funds deployed, excluding investments

in shares, subsidiaries and others.) Generally, in an increasing interest rate regime, both yields

and costs go up; conversely, in a declining interest rate scenario, both yields and costs go down.

However, in a declining interest rate regime, the rate of decline in yields is faster than the

rate of decline in costs. The converse is also true in a rising interest rate regime.

We expect the interest rates to go up from 2004-05. The yield on carry business is mainly

driven by the yield on investments and the yield on advances. Going forward, we expect the

yield on investments to fall, despite an increase in the rate of interest, as securities are still

being re-priced from historically higher interest rates to the relatively lower rates that are prevalent

now. This is putting pressure on the yield on carry business and, in turn, on spreads. The

spreads of the scheduled commercial banks have fallen from 3.19 per cent in 1998-99 to 2.89

per cent in 2002-03. They are expected to fall by an additional 0.17 percentage points to

reach a level of 2.72 per cent in 2005-06.

As has been explained in earlier sections, the developments pertaining to FCI would reduce

the spreads for 2004-05 by 8.5 basis points (annualised) from an estimated 2.80 per cent to

2.72 per cent and the reduction of the interest rate offered on CRR deposits will further reduce

the spreads by 2 bps (annualised) from 2.72 per cent to 2.70 per cent. We have not factored

these developments in our projections. Hence, the combined effected of these developments

is estimated to around 10 bps.

Yield on carry business:The yield on carry business dropped to 9.52 per cent in March 2003 from 11.15 per cent

in March 1999. As noted earlier, the yield on carry business is mainly influenced by the yield

on advances and yield on investments. The continuous drop in the yield on carry business during

this period was on account of the drop in both the yield on advances and yield on investments.

CRIS INFAC expects the yield on carry business to drop sharply to 8.47 per cent in March

2005, but rise again to 8.56 per cent in March 2006. However, the rise will not be in line

with the increase in interest rates because the yield on investments will continue to fall.


Yield on advances40 per cent of loans and advances are of short-term duration:

Maturity profile of loans and advances of scheduled commercial banks Table 6

(Per cent) Years< 1 between 1 & 3 Between 3 & 5 Above 5

2000 40.5 38.1 11.7 9.7

2001 41.6 38.4 7.4 12.6

2002 42.9 31.8 11.2 14.1

2003 40.8 33.4 11.1 14.7

2004 P 40.8 33.4 11.1 14.7


Banks have predominantly been providers of working capital finance to the industry, which is

reviewed and renewed every year and hence classified in the 'less-than-1-year' maturity bucket.

This is indicated by a steady percentage of advances, approximately 40 per cent, being classified

in the 'less-than-1-year' maturity bucket. With the merger of ICICI Ltd with ICICI Bank, the

advances classified under the 'above-5-year' maturity bucket have increased from 9.7 per cent

in 1999-00 to 14.1 per cent in 2001-02. Moreover, banks have started focusing on retail finance,

which has also influenced the increase in the share of advances classified under various buckets

above 1 year. The retail finance loans are generally in the nature of term loans, which have

tenures of more than 3 years.

Yield on advance portfolio vis-a-vis benchmark 3-year G-Sec Figure 3

E: Expected; P: Projected

Source: CRIS INFAC

9.79.39.49.9

10.2

11.511.7

12.3

10.1

6.2

11.4

10.6

6.1

5.3

4.8

7.5

4.0

6.0

8.0

10.0

12.0

14.0

1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 E 2004-05 P 2005-06 P

yield on advance portfolio benchmark 3-year G-sec yields

(per cent)


The above graph compares the relationship between the average yield earned by the banks

on their advance portfolio vis-à-vis the movement of the yield on the 3-year government securities.

Based on the average duration of the loans and advances portfolio of scheduled commercial

banks, we feel that the 3-year G-Sec paper is representative of the general interest rate scenario.

Over the period 1999-2000 to 2002-2003, the yield on advances had fallen continuously with

the general fall in the interest rates. Yield on advances dropped from 11.7 per cent in 1999-

00 to 9.9 per cent in 2002-03, while the yield on the 3-year benchmark G-Sec dropped from

10.6 per cent in 1999-00 to 6.2 per cent in 2002-03. As per our study of the maturity profile

of loans and advances, it is estimated that in any particular year, that year's disbursements accounted

for about 48-50 per cent of the outstanding loans and advance portfolio. This indicated that

every year approximately 50-52 per cent of the bank's loan yielded a higher rate of interest

than the interest rates prevailing in that year. Further, the banks had not reduced their lending

rate in line with drop in the interest rates. These factors led to a slower drop in the yield

on advances vis-à-vis costs.

With the continuing slide of the interest rate during 2003-04, we estimate the yield on advances

to have declined to 9.4 per cent. The 3-year G-Sec yield is estimated to have dropped to

its lowest level of 4.8 per cent in 2003-04. With the hardening of interest rates during 2004-

05, banks are expected to start hiking the interest rate on the incremental advances, both fixed

and floating, which would help in increasing the yields on advances. But, we expect the yield

on advances to drop marginally to its lowest level of 9.3 per cent in 2004-05 before rising

to 9.7 per cent in 2005-06, in spite of the increase in the interest rate, because part of the

portfolio earning a higher yield (contracted at higher rates compared to prevailing rates) is getting

re-priced at a comparatively lower rate of interest. However, in the subsequent years, as more

advances get re-priced at higher interest rates, the yield on advances will go up.

Yield on investmentsMaturity profile of investments

Maturity profile of investments of scheduled commercial banks Table 7

The above table indicates that almost two-thirds of the investment portfolio is more than 3

years.

Per cent< 1 between 1 & 3 Between 3 & 5 Above 5

2002 17.0 16.9 17.3 51.1

2003 17.0 15.9 14.3 52.0

2004 P 18.1 15.0 13.8 53.1


Years


Yield on Investments

Yield on investment portfolio vis-a-vis benchmark 5-year G-sec yield Fig 4


Source: CRIS INFAC

The above graph compares the relationship between the average yield earned by the banks

on their investment portfolio vis-à-vis the movement of the yield on the 5-year government

securities. Based on the average duration of the loans and advances portfolio of scheduled commercial

banks, we feel that the 5-year G-Sec paper is representative of the general interest rate scenario.

Assuming the maturity profile of investments to remain the same, CRIS INFAC estimates the

yield on investments to have fallen sharply to 8.5 per cent during 2003-04 from 9.8 per cent

in 2002-2003. However, in the subsequent years, the decline would be marginal in comparison

to the fall in 2004-05, as the incremental investments would get invested at higher yields.

As per the maturity profile of investments as in March 2003, approximately 30 per cent of

the outstanding investments portfolio is getting re-priced every year at the prevailing interest

rates.

Till the mid-1990s, interest rates were very high and stable. But then the interest rate started

falling. However, as only 30 per cent of the outstanding investments are re-priced every year,

only incremental investments are at new rates, hence the impact of falling interest rates would

come with a lag effect. The average yield of the benchmark 10-year G-Sec, which was quoting

12.04 per cent in 1997-98, fell to 5.31 per cent in 2002-03.

The interest rates have started to rise from such low levels. But the securities are still being

re-priced from higher interest rates to comparatively lower interest rates, hence the yield would

continue to fall. However, the net yield, although it will continue to decline, will drop less

significantly in 2005-06, due to a combination of factors: the reduction in the percentage of

securities being re-priced at comparatively lower rates, and some short end securities being re

priced at higher interest rate. Hence, the yield will continue to fall until a substantial portion

of the old investments is re-priced at higher rates. Beyond that, the yield will start increasing

if the interest rates continue to rise.

7.8

10.3

6.5

8.18.5

9.810.7

11.311.812.0

5.64.9

6.47.7

10.911.7

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

1999 2000 2001 2002 2003 2004 E 2005 P 2006 P

yield on investment portfolio benchmark 5-year G-sec yields

(per cent)


However, with rising interest rates, banks will try to reduce the duration of the investment portfolio

by moving to the short end of the curve to avoid losses driven by higher interest rates.

Interest costThe average interest cost of the scheduled commercial banks dropped to 6.63 per cent in March

2003 from 7.96 per cent in March 1999. The drop in the interest cost has been on account

of the drop in both the cost of deposits and the cost of borrowings. CRIS INFAC estimates

that interest cost will fall to 5.84 per cent in March 2006, after touching a low of 5.67 per

cent in March 2005. The drop in the interest cost will be less than that on the yield on carry

business, primarily because of slower drop in the cost of deposits.

Cost of depositsMaturity profile of term deposits

Maturity profile of term deposits of scheduled commercial banks Table 8

Per cent

< 1 between 1 & 2 Between 2 & 3 Between 3 & 5 Above 5

1998-99 27.1 22.5 15.8 22.7 11.8

1999-00 28.9 22.6 15.6 22.1 10.8

2000-01 31.1 22.3 14.9 20.9 10.7

2001-02 34.8 22.7 13.7 19.0 9.8

2002-03 36.2 22.3 13.5 18.7 9.4

2003-04 P 36.2 22.3 13.5 18.7 9.2


Years

The maturity profile of term deposits is likely to remain stable, with around 36 per cent of

the portfolio expected to mature every year.

With interest rates moving southwards, banks had reduced the interest rates offered on term

deposits and also reduced the spreads between the interest rate offered on the long tenure

and short tenure deposits, which led to an increase in the share of deposits classified under

up to 2-year maturity bucket.

Going forward, in spite of the expected jump in the interest rate, banks will desist from making

an immediate upward revision in the interest rate in the near future. But as the liquidity pressure

mounts, they will start increasing the spread between the long tenure and short tenure deposit

rates, which is likely to have impact on term deposits and, thereby, on its maturity profile.


Average cost of deposits

Yield on deposits portfolio vis-a-vis benchmark 2-year G-Sec yield

Yield on deposits portfolio vis-a-vis benchmark 2-year G-Sec yield Figure 5


Source: CRIS INFAC

The above graph compares the relationship between the average interest cost the banks pay

on their deposits portfolio vis-à-vis the movement of the yield on the 2-year government securities.

Based on the average duration of the deposits portfolio of the scheduled commercial banks,

we feel the 2-year G-Sec paper is representative of the general interest rate scenario.

Term deposits constitute around 65 per cent of total deposits. Further, as per the maturity profile

of term deposits as on March 31, 2003, approximately 42 per cent of the outstanding deposits

were re-priced. We do not expect any material change in the maturity pattern during 2003-

04 to 2005-06. Only 30 per cent of the term deposits outstanding as on March 31, 2003 are

maturing after 3 years and, hence, would get re-priced then, by when interest rates will already

be high; the remaining 70 per cent would have re-priced much earlier.

The yield on deposits had been falling consistently in line with the decline in the interest rates,

but the drop is not as steep as that observed in government securities, indicating that deposits

are generally showing a low elasticity to interest rates. The average cost of deposits had dropped

from 8.0 per cent in 1998-99 to 6.5 per cent in 2002-03, while the yield on the 2-year benchmark

G-Sec dropped from 11.2 per cent in 1998-99 to 6.5 per cent in 2002-03. We expect the

average cost of deposits to fall further to 5.8 per cent in 2003-04, as compared to 6.5 per

cent in 2002-03. The benefit of the drop in interest rate has been coming with a lag effect,

driven by the maturity profile of the deposits.

The other components of deposits, both savings account (interest rate on the same are administered)

and current account, are not very sensitive to the interest rate movement.

CRIS INFAC expects the cost of deposits to drop further in 2003-04 and 2004-05 to 5.8 per

cent and 5.6 per cent, respectively. It will then rise marginally to 5.8 per cent in 2005-06

5.85.65.8

6.57.1

7.4

7.78.0

5.8

5.14.7

6.1

7.4

10.0

10.5

11.2

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

12.0

1999 2000 2001 2002 2003 2004 E 2005 P 2006 P

Yield on deposits portfolio Benchmark 2-year G-sec yield

(per cent)


due to the higher incremental pricing of the deposits. We expect the cost of deposits to rise

further with the hardening of interest rates, but the rise would not be very steep as the interest

rates are not expected to touch the historical highs prevailing in the late 1990s, and also because

the cost of deposits have low elasticity to interest rates.

Cost of borrowingsMaturity profile of borrowings

Maturity profile of borrowings of scheduled commercial banks Table 9

Most of the borrowings raised by the banks are for the purpose of tying up the short-term

liquidity mismatches and are, hence, generally of a short-term nature. The above table validates

this; almost 67-70 per cent of the borrowings of the scheduled commercial banks are classified

in the less than 1-year maturity bucket. Essentially, almost 70 per cent of the outstanding borrowings

of the bank are re-priced at the prevailing interest rate.

With such a maturity profile, the banks are likely to take a hit in a rising interest rate scenario.

But borrowings constitute only 5 to 6 per cent of the total liability, hence there will not be

any appreciable impact.

Keeping in view the main purpose for which borrowings are raised, CRIS INFAC expects the

same maturity profile to continue during 2003-04 to 2005-06.

Average cost of borrowings

Average cost of borrowings of scheduled commercial banks Table 10

(Per cent) 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 E 2004-05 F 2005-06 F

Including ICICI Bank 11.6 11.7 12.3 8.5 11.1 9.8 9.6 9.8

Excluding ICICI Bank 11.5 11.6 12.3 11.8 9.8

E: Estimated; F: Forecast

Source: CRIS INFAC

Per cent

< 1 between 1 & 3 Between 3 & 5 Above 5

2002 63.1 20.2 11.9 4.9

2003 71.7 20.2 11.9 4.9

2004 P 67.4 20.8 3.4 4.1


Years


With the liquidity overhang in the system, banks had reduced their borrowings. The drop in

the interest rates also helped banks to cut their cost of borrowings, which is evident with the

cost of borrowings (excluding ICICI) dropping to 9.8 per cent as in March 2003 from 12.3

per cent as in March 2001.

We expect the cost of borrowings to fall in sharply in 2003-04 (inclusive of ICICI Bank) to

9.8 per cent from 11.1 per cent in 2002-03, It is expected to drop further to 9.6 per cent

in 2004-05, but then go up to 9.8 per cent in 2005-06.

The impact of the rise in interest rates is seen to be faster in the case of borrowings.


Profit and loss account3.0

Interest earnedCRIS INFAC estimates the total interest income to grow at a CAGR of 9.1 per cent during

2003-04 to 2005-06, with interest on advances expected to grow at a CAGR of 15.8 per cent.

Between 2000-01 and 2002-03, the total interest income grew at a CAGR of 12.1 per cent

(9.9 per cent), primarily led by 13.1 per cent (10.0 per cent) CAGR in the interest on advances.

Interest on loans and advancesThe interest income from loans & advances is expected to grow at a CAGR of 15.8 per cent

for the period 2003-04 to 2005-06, in comparison to 13.1 per cent (10.0 per cent) for the

period 2000-01 to 2002-03.

During the period 2000-01 to 2002-03, although advances grew by a CAGR of 18.6 per cent,

the interest income on advances grew at a much lower figure of 13.1 per cent CAGR. This

was due to general fall in the interest rates (yield on loans and advances dropped from 11.7

per cent in 1999-2000 to 9.9 per cent in 2002-03).

The 13.1 per cent growth during 2000-01 to 2002-03 was led by a strong growth in the outstanding

retail credit, which grew by around 28 per cent CAGR in the same period. During 2003-04

to 2005-06, advances are expected to grow by a CAGR of 17.4 per cent, while the interest

on the loans and advances is estimated to grow at 15.8 per cent CAGR. The yield on loans

and advances is expected to drop marginally from 9.9 per cent for 2002-03 to 9.7 per cent

for 2005-06.

Profit and loss account Table 1

(Rs billion) 2000 2001 2002 2003 2004 P 2005 P 2006 P CAGR (2000 - 2003)

CAGR 1

(2000-2003)CAGR

(2003 - 2006)

Interest earned 1,034.4 1,195.7 1,321.7 1,458.8 1,507.6 1,650.5 1,895.0 12.1 9.9 9.1

Interest/discount on advances/bills 489.2 570.9 613.3 707.0 764.1 889.2 1,098.8 13.1 10.0 15.8

Income on investments 454.7 519.9 590.1 640.6 638.1 662.3 691.9 12.1 10.7 2.6

Other income 160.9 173.7 244.3 320.1 372.7 311.2 293.9 25.8 24.4 -2.8

Total income 1,195.3 1,369.4 1,565.9 1,778.9 1,880.4 1,961.7 2,188.9 14.2 12.1 7.2

Interest expended 718.8 811.2 908.5 969.2 955.5 1,026.0 1,187.3 10.5 7.7 7.0

Gross profit 476.5 558.2 657.5 809.7 924.9 935.7 1,001.6 19.3 7.3

Operating profit 190.1 204.8 305.9 413.2 487.4 462.2 491.6 29.5 6.0

Net profit 78.0 71.0 121.9 176.3 191.7 189.2 236.4 31.2 10.3

Net profit margins (per cent)(incldg profit on sale of inv)

1.8 1.6 2.0 2.4 2.5 2.0 1.8

P: Projected1 Excluding ICICI BankSource: RBI & CRIS INFAC Estimates


Interest on investmentsCRIS INFAC estimates investments to grow at a CAGR of 8.8 per cent during 2003-2006 while

the interest on investments is expected to grow only at a CAGR of 2.6 per cent. During the

same period, the yield on investments is expected to fall to 7.8 per cent by end-March 2006

from 9.8 per cent as of end-March 2003.

From 2000-01 to 2002-03, the interest on investment grew by 12.1 per cent (10.7 per cent),

though the investments recorded a growth of 19 per cent CAGR. This is due to general drop

in the interest rates. (The yield on investments dropped to 9.8 per cent by March 2003 from

11.8 per cent as of end-March 2000.)

Interest expendedTotal interest expended is expected to grow at a CAGR of 7.2 per cent from 2003-04 to

2005-06, with interest on deposits expected to grow at 8.1 per cent, while the other interest

component is expected to show a negative growth rate of 2.3 per cent.

Interest on depositsCRIS INFAC expects total time and demand deposits to grow at 12.4 per cent CAGR during

2003-04 to 2005-06, while the interest on deposits is seen growing by only 8.1 per cent CAGR

during the same period. The cost of deposits is expected to drop to 5.8 per cent by March

2006, from 6.5 per cent at March 2003.

During 2000-01 to 2002-03, the interest on deposits grew at a rate of 8.8 per cent, though

the deposits grew by 14.6 per cent. This is primarily due to the fall in the cost of deposits

in line with the prevailing soft interest rate scenario. The cost of deposits dropped from 7.7

per cent as of March 2000 to 6.5 per cent as of March 2003.

Interest on borrowings

Interest on borrowings of scheduled commercial banks Table 2

(Rs billion) 1998-99 1999-00 2000-01 2001-02 2002-03

Interest on total borrowings (All SCBs) 42.3 54.6 66.9 73.0 112.9

Interest on total borrowings (ICICI Bank) 0.5 0.9 1.1 1.7 54.6

Interest on total borrowings (All SCBs excluding ICICI Bank) 41.8 53.7 65.7 71.3 58.3

Source: RBI, Statistical tables relating to Banks in India

From 2000-01 to 2002-03, the interest on borrowings recorded a CAGR of 27.4 per cent, although

borrowings grew at a CAGR of 22.9 per cent. The cost of borrowings dropped from 11.7 per

cent as of March 2000 to 11.1 per cent as of March 2003.

The interest on borrowings is expected to show a negative growth of 2.3 per cent during 2003-

04 to 2005-06.


Fee-based income: Core and non-coreDrop in treasury profits to hit other income growth

Non-interest income - break-up Table 3

(Rs billion) 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03

Commission, exchange and brokerage 66 75 83 89 93 107

Net profit (loss) on sale of investments 19 9 30 32 94 143

Others 38 45 48 53 57 71

Total non-interest income 123 129 161 174 244 320

Non-interest income is a source of incremental revenues for banks and helps in maintaining a

stable bottomline, as it is not sensitive to interest rates and is, hence, less volatile.

Banks generate fee-based income through the issuance of guarantees, letters of credit, drafts etc,

and by other income in the form of exchange profits, processing fees, income from demat activity,

income credit cards, and other routine banking business.

Banks have started acting as corporate agents of various mutual funds and insurance companies

by distributing their products through their branch networks. This gives them an opportunity to

earn other income in the form of commissions. Further, banks are also contemplating foraying

into activities such as advising clients on fund management and other value-added services. This

will give them an opportunity to generate fee-based income in the form of commission and

brokerage

Another component of other income is profit on sale of investments. But with interest rates

hardening, the profit from sale of investments will come down.

CRIS INFAC expects non-interest income (excluding profit on sale of investments) to grow at

CAGR of 13.0 per cent, driven by the greater thrust of banks on core fee-based income. The

drastic fall that is expected in profits on sale of investments will take its toll on total other

income, which is expected to a show a negative CAGR of 7 per cent during 2003-04 to 2005-

06.

(Rs billion) 2003-04 E 2004-05 F 2005-06 F CAGR 2000-03

(per cent)

CAGR 2003-06

(per cent)

Commission, exchange and brokerage 127 138 149 9 12

Net profit (loss) on sale of investments 160 60 0 68 -100

Others 86 98 110 14 16

Total non-interest income 373 295 258 26 -7

E: Estimate; F: ForecastSource: RBI and CRIS INFAC


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In the last 3 years, interest rates fell by more than 550 basis points in a falling interest rates

scenario. This enabled scheduled commercial banks to book huge gains, estimated at around Rs.

390.96 billion in the last 3 years (2000-01 to 2003-04), on their investment portfolio.

As of March 2004, banks had unbooked profits of Rs 754.25 billion on their investment portfolio

of government securities (which stood at Rs 6,532.4 billion). In 2004-05, we expect banks to

book profits to the tune of 10 per cent of the unbooked profits. CRIS INFAC expects the

yield on 5 year G-sec to rise by 165 bps to 6.67 per cent by the end of March 2006 from

a level of 5.02 per cent as of March 2004. By this time, the investment book of SCBs is

expected to rise by Rs 1,182 billion to Rs 7,715 billion.

In recent times, the Reserve Bank of India (RBI) has been increasingly issuing floating rate

long dated securities as part of the government of India's (GOI) borrowing programme. Between

April 1, 2004 and September 10, 2004, the RBI raised Rs 540 billion through long dated GOI

securities, of which approximately Rs 220 billion, nearly 40 per cent of the total debt raised,

was through floating rate securities. Going forward, we expect this ratio to increase further. CRIS

INFAC estimates that 50 per cent of RBI's borrowing during the financial year 2004-05 will be

through floating rate government securities. This ratio is expected to rise further to 80 per cent

in 2005-06. The floating rate bonds are generally priced as a 1-year security, hence the movement

in the interest rate would have a lesser impact on the value of the security.

Consequently, we expect the unbooked profit of the investment portfolio to provide a cushion

of a further 83 basis points increase in interest rates, beyond the level prevailing by end of

March 2006 (6.67 per cent). Thus, banks' investment portfolio can sustain an interest rate rise

of 7.5 per cent on the 5 year G-Sec, which works out an increase of 248 basis points from

an interest rate of 5.02 per cent prevailing in March 2004.

Prudential norm on classification of investment portfolio of banks Box 1

A recent notification from the RBI regarding classification of the investment portfolio of banks allows the latter to exceed

the present limit of 25 per cent of total investments under the held-to-maturity (HTM) category provided the excess

comprises only of statutory liquid ratio (SLR) securities, and the total SLR securities held in the HTM category is not more

than 25 per cent of their demand and time liabilities (DTL).

Earlier, banks were allowed to shift SLR securities to the HTM category once in an accounting year. Under the new

notification, banks will be allowed to shift SLR securities to the HTM category one more time (in addition to the one already

allowed) any time during the current accounting year. Such shifting has to be done at the lower of the acquisition cost/ book

value/market value on the date of transfer. The bank should fully provide for the depreciation, if any, on such a transfer.

No fresh non-SLR securities are permitted to be included under the HTM category, while those already held as a part of

the HTM category will continue.

CRIS INFAC is of the view that this notification will help banks in reducing the negative impact of the rise in interest rates

on their investment portfolio and help them postponing booking losses against the valuation of the portfolio. This step

would have a positive impact on the bank's profit & loss account.


Operating expenses to grow 8.8 per centWage cost to grow at 6.83 per cent

Employee cost of scheduled commercial banks Table 5

(Rs billion) Basis 1998 1999 2000 2001 2002 2003

Total staff Nos 1,023,971 1,017,490 1,006,631 926,518 901,288 n.a.

Total employee cost Nos 148 175 194 243 231 250

Total business (deposits + advances) Rs in billion 10,000 11,780 13,875 16,343 19,107 21,644

Employee cost as percentage of business per cent 1.5 1.5 1.4 1.5 1.2 1.2

Business per empoyee (Rs in million) Rs in million 9.8 11.6 13.8 17.6 21.2 -

Offices Nos 66,400 67,453 67,906 67,896 68,174 68,540

Business per office Rs in million 151 175 204 241 280 316

n.a.: Not available

Source: RBI, Statistical tables relating to Banks in India

Since 1998, the number of employees in scheduled commercial banks has fallen by 12 per

cent. During the same period, there has been a rapid improvement in the productivity in the

banking system. This is evident from the steep increase in the business per employee, which

stood at Rs 21.2 million in 2002 compared to Rs 9.8 million in 1998.

During 2000-01, 26 out of the 27 public sector banks (PSBs) had introduced voluntary retirement

schemes. RBI had permitted PSBs to amortise VRS-related expenditure over a period of 5 years.

As on March 31, 2003, the total cost of the scheme amounted to Rs 123 billion, and the

balance of unamortised amount was Rs 69.47 billion as on March 31, 2003, to be amortised

over 2-3 years.

From 2000-01 to 2003-04, staff costs grew by 8.89 per cent, but the staff cost net of VRS

recorded a CAGR of 5.5 per cent. During this period, the business of the scheduled commercial

banks grew at a CAGR of 16 per cent.

With greater automation, the productivity can improve further. CRIS INFAC expects the staff

cost to grow at a CAGR of 6.78 per cent from 2003-04 to 2005-06.

Other expenses to rise because of increased automation and marketingCRIS INFAC estimates other expenses (excluding staff cost) to grow at a CAGR of 12 per cent

during 2003-04 to 2005-06, in comparison with a 16 per cent CAGR (2000-01 to 2002-03)

in the previous corresponding 3-year period.

Printing and stationery, advertisement, postage and depreciation are the main drivers of growth

in other expenses. Banks are aggressively advertising their products through various channels of

communication, which will increase its outgo on this head. Moreover, with increasing automation

in banking operations, and the usage of ATMs and Internet as channels for distribution of products,

the charge on account of depreciation and rent is also likely to go up.

Over the years, due to the pressure on spreads, banks had controlled costs by rationalising operations.

Additionally, they will have to focus on operating expenses in order to maintain their profitability.


Provision & contingencies

Provisions and contingencies of scheduled commercial banks Table 6

(Rs billion) 2002-03 2003-04 P 2004-05 P 2005-06 P

Provision for NPA 132 178 159 135

Provision for standard assets 3 3 4 5

Provision for tax 85 97 89 91

Other provisions 17 17 17 17

Total 237 296 270 248


Provision and contingencies can be broadly divided into three categories: Provision for NPA and

standard assets, provision for taxation, and other provisions.

In the past 3 years, banks have increased their provisioning for non-performing assets. Although

improving their loan portfolio was one of the key motives, the falling interest rate scenario

and the corresponding increase in profit on sale of investments were key factors that led to

this. CRIS INFAC estimates that banks will make higher provision for NPAs in 2003-04, but

the same will decline in the subsequent years. As the banks have already made additional provisions

in the earlier years, the incremental provisions come down in the subsequent years. Further,

we also expect an improvement in the asset quality due to the strengthening of the credit

management system in banks. This will further reduce the provision requirements with the reversal

of excess provisions.

As per norms, the banks have to make a provision of 0.25 per cent on standard assets. We

believe that the provision for standard assets will grow at 13.3 per cent per over the next

3 years, with the expected improvement in the asset quality and rising share of standard assets

in the total advances.

This page is intentionally left blank


Profitability4.0

Net profitability margin highly susceptible to changes in operating expenses

Net profitability margin (NPM) Table 1

Although spreads will decline, CRIS INFAC is of the opinion that the net profitability margins

(NPM) of scheduled commercial banks will go up from 1.36 per cent in March 2003 to 1.45

per cent by March 2006. Going forward, we expect banks to continue to rein in their costs

and bring the operating cost ratio (operating expenses/average funds deployed) down to 2.28

per cent by March 2006.

With spreads still under pressure, we expect banks to retain their focus on curbing operating

costs by streamlining and restructuring the operational processes, which will further reduce the

operating expense cost ratio to 2.28 per cent in 2005-06, from 2.53 per cent in 2003-04.

The net profitability margin of scheduled commercial banks has remained flat at 1.36 per cent

from 1998-99 to 2002-03, despite a decline in the contribution of core fee-based income (this

is actually a ratio - core fee-based income/average funds deployed) to the NPM from 97 per

cent in 1998-99 to 74 per cent in 2002-03. This has been due to the banks' focus on controlling

their operating expenses, which has led to a drop in the operating expense ratio from 3.15

per cent in 1998-99 to 2.53 per cent in 2002-03. As remarked earlier, we expect the NPM

to increase to 1.45 per cent in 2005-06, as banks continue their focus on controlling operating

costs, which will reduce the operating expense ratio to 2.28 per cent by 2005-06. However,

the stable core-fee based income ratio will restrict the rise in NPM to some extent. Fee-based

income is a high margin revenue stream and provides stability to the bottomline due to its

insensitivity to interest rate movement.

Although the share of core fee-based income in NPM shrank to 74 per cent in 2002-03, from

89 per cent in 2000-01, it still remains a major contributor. In future, we expect this declining

trend to continue, reducing the share of core-fee based income from 73 per cent in end-March

2004 to 69 per cent by end-March 2006. Although the share of core fee-based income is expected

to fall, it will still help banks to maintain a steady bottomline as it is insensitive to interest

rate changes and forms a large component of the NPM.

1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 E 2004-05 F 2005-06 F

Interest yield on carry business (i) 11.15 10.77 10.61 9.88 9.52 8.78 8.47 8.56

Interest cost (ii) 7.96 7.68 7.41 7.06 6.63 5.91 5.67 5.84

Spreads ( iii = i - ii ) 3.19 3.10 3.19 2.82 2.89 2.87 2.80 2.72

Op. Expenses/average funds deployed (iv) 3.15 2.91 3.06 2.56 2.53 2.50 2.40 2.28

Core fee-based income/average funds deployed (v) 1.32 1.20 1.10 0.98 1.00 1.06 1.04 1.01Net profitability margin (vi = iii - iv +v) 1.36 1.39 1.24 1.24 1.36 1.44 1.44 1.45Other Income (vii) 0.22 0.44 0.40 0.80 1.04 1.06 0.45 0.15Total profit margin (viii = vi + vii) 1.59 1.82 1.64 2.04 2.40 2.50 1.90 1.60F: Forecast; E: EstimatesNoteCarry business: Funds deployed less investment in shares, investments in subsidiaries and other investments. Other income, includesprofit on sale of investmentsSource: CRIS INFAC


Total profit margin (including non-core fee-based income)The major component of non-core fee-based income is profit on sale of investments. With profit

on sale of investments rising from 2001-02 to 2003-04, the total profit margin also began to

rise, but with the expected drop in the profit on sale of investments from 2004-05, the total

profit margin is seen declining to 1.01 per cent.

Other key ratios

Net profitability margin Box 1

CRISIL uses the net profitability margin (NPM) to measure the profitability of a lending business. In CRISIL’s opinion, the

measure of profitability for a lending business should capture its ability to generate income by deploying borrowed funds.

While such a measure should capture the cost of operations and core non-fund income of the business, it should not be

influenced by the returns from the business funded by equity capital. In parametric definition, NPM is equivalent to the yield

on the fund-based business less the cost of borrowings plus non-fund (fee) income less operating expenses.

Spreads & NPM Figure 1

Source: CRIS INFAC

Key ratios Table 2

(Per cent) 1999 2000 2001 2002 2003 2004 2005 2006

Return on assets 0.49 0.68 0.53 0.77 1.00 0.98 0.80 0.83

Cost-to-income ratio (with profit on sale of investment) 64.81 60.10 63.32 53.47 48.97 47.30 51.48 52.80

Cost-to-income ratio (w/o profit on sale of investment) 66.24 64.13 67.14 62.48 59.41 57.20 55.07 52.80

Source: CRIS INFAC

1.00

1.50

2.00

2.50

3.00

3.50

1999 2000 2001 2002 2003 2004 P 2005 P 2006 P

(per cent)

Spreads NPM Total profit margin


The return on assets ratio, which had reached 1 per cent for March 2003, is expected to fall

to 0.98 per cent for March 2004 and further to 0.80 per cent for March 2005. This drop can

be attributed to the fall in other income, including profit on sale of investments, which is expected

to fall with the hardening of interest rates. But the impact of the increase in interest rates

on the spreads would come with a lag effect, which would then pull up the return on assets

to 0.83 per cent by March 2006.

The ongoing thrust of banks on controlling costs will lead to a drop in the cost-to-income ratio

(without profit on sale of investments) during 2003-04 to 2005-06. The cost-to-income ratio (with

profit on sale of investment) is estimated to increase due to the expected fall in the treasury

profits.

Projected profit and loss account of the scheduled commercial banks Table 3

(Rs billion) 1999-00 2000-01 2001-02 2002-03 2003-04 E 2004-05 P 2005-06 PInterest earned 1,034 1,196 1,322 1,459 1,508 1,651 1,895Interest/discount on advances/bills 489 571 613 707 764 889 1,099Income on Investments 455 520 590 641 638 662 692Other income 161 174 244 320 373 295 258Commission exchange and brokerage 83 89 93 107 127 138 149Net profit/ (loss) on sale of investments 30 32 94 143 160 60 0Others 48 53 57 71 86 98 110Total income 1,195 1,369 1,566 1,779 1,880 1,946 2,153Interest expended 719 811 908 969 955 1,026 1,187Interest on deposits 664 744 835 856 865 932 1,082Other interest 55 67 73 113 91 94 105Gross profit 477 558 657 810 925 920 966Operating expenses 286 353 352 397 437 474 510Operating profit 190 205 306 413 487 446 456Provisions and contingencies 112 134 184 237 296 270 248 Provision for NPA n.a. n.a. n.a. 132 178 159 135 Provision for tax n.a. n.a. n.a. 85 97 89 91

Provision for standard assets n.a. n.a. n.a. 3 3 4 5 Other provisions n.a. n.a. n.a. 17 17 17 17Net profit 78 71 122 176 192 177 208

n.a.: Not available, P: Projected



Projected balance sheet of all scheduled commercial banks Table 4

(Rs billion) 1999-00 2000-01 2001-02 2002-03 2003-04 E 2004-05 P 2005-06 P

Liabilities

Capital 206 211 236 236 246 250 254

Reserve and surplus 447 500 646 782 951 1,101 1,276

Deposits 9,325 10,935 12,472 14,045 15,688 17,658 19,929

Demand deposits 1,309 1,415 1,550 1,668 1,818 1,973 2,131

Savings deposits 2,013 2,335 2,734 3,228 3,761 4,362 5,060

Term deposits 6,003 7,185 8,188 9,149 10,109 11,323 12,738

Borrowings 491 595 1,117 912 945 1,023 1,122

Other liabilities and provisions 1,057 1,204 1,452 1,608 1,828 2,055 2,337

Total liabilities 11,525 13,446 15,923 17,584 19,658 22,087 24,919

Assets

Cash and balances with RBI 869 863 899 891 943 998 1,056Balances with bank and money call and short notice

961 1,246 1,385 900 976 1,121 1,289

Investments 4,216 5,007 5,975 7,100 7,934 8,484 9,150

Advances 4,559 5,407 6,635 7,599 8,703 10,372 12,300

Fixed assets 155 163 202 203 205 207 210

Other assets 765 759 827 890 897 905 914

Total assets 11,525 13,446 15,923 17,585 19,658 22,087 24,919

P: Projected



Sections

State of the industry

Continued...

1.0 Overview 61

- Spreads 61

- Net profitability margin (NPM) 62

- Outlook 63

- Business 64

- Investments 65

- Asset quality 66

- Overall assessment 67

2.0 Business 69

- Other scheduled commercial banks clocked the highest growth 69

- Advances 71

- Deposits 76

- Investments 79

- Non-performing assets 82

3.0 Spreads & net profitability margin 89

- Spreads 89

- Net profitability margin (NPM) 94

4.0 Profit and loss account 99

- Total interest income 99

- Interest expended 101

5.0 Other income 103

- Other income (excluding profit on sale of investment) as

per cent of total income 103

- Profit on sale of investment 106

6.0 Operating expenses 109

- Staff cost 109

- Other operating expenses (Operating expenses excluding staff cost) 113

- Cost-income ratio 115

7.0 Important ratios 121

- Credit-deposit ratio 122


...continued

continued...

Figures

1.0 Overview

01 Net profitability margin 62

02 Group-wise business of banks 1998 to 2003 64

03 Group-wise SLR Securities to NTDL 65

2.0 Business

01 Group-wise business of banks 1998 to 2003 69

02 Share of bank groups 71

03 Advances of OSCBs 72

04 Advances of OSCBs (Ex ICICI Bank) 72

05 Advances of nationalised banks 72

06 Advances of SBI Group 73

07 Foreign banks - outstanding advances 74

08 Break-up of deposits - OSCBs 76

09 Total deposits - OSCBs 76

10 Deposits break-up - SBI & associates 77

11 Total deposits - SBI & associates 77

12 Break-up of deposits - Nationalised banks 78

13 Total deposits - Nationalised banks 78

14 Break-up of deposits - Foreign banks 78

15 Total deposits - Foreign banks 78

16 Statutory liquidity ratio - excluding gold 80

17 Group-wise SLR Securities to NTDL 80

6.0 Operating expenses

01 Group-wise share of employee cost in operating cost 109

02 SBI & associates: No of employees vs cost per employee 110

03 Nationalised banks: No of employees vs cost per employee 111

04 OSC banks: No of employees vs cost per employee 112

05 Foreign banks: No of employees vs cost per employee 113

06 SBI & associates: Cost-income ratio 116

07 Nationalised banks: Cost-income ratio 117

08 OSC banks: Cost-income ratio 118

09 Foreign banks: Cost-income ratio 119

7.0 Important ratios

01 Credit-deposit ratio 122

02 Investment-deposit ratio 122

CRIS INFAC BANKING ANNUAL REVIEW: NOVEMBER 2004, 291 PAGES iii

...continued

Tables

1.0 Overview

01 Spreads 61

2.0 Business

01 Advances to the priority sector by public sector banks 75

02 Advances to the priority sector by private sector banks 75

03 Advances to the priority sector by foreign banks 75

04 SBI & associates 83

05 Nationalised banks 84

06 Other SCBs 85

07 Other SCBs (net of ICICI Bank) 85

08 Foreign banks 86

3.0 Spreads & net profitability margin

01 Spreads: SBI and associates 89

02 Spreads: Nationalised banks 89

03 Spreads: Other scheduled commercial banks 90

04 Spreads: Foreign banks 90

05 NPM: Foreign banks 94

06 NPM: Nationalised banks 95

07 NPM: SBI and associates 96

08 NPM: Other scheduled commercial banks 97


01 OSC Banks: Interest income 99

02 SBI and associates: Total interest income 99

03 Nationalised banks: Interest income 100

04 Foreign banks: Interest income 100

05 OSC Banks: Interest expended 101

06 SBI and associates: Total interest expended 101

07 Nationalised banks: Interest expended 101

08 Foreign banks: Interest expended 102

5.0 Other income

01 Other income (ex treasury profits) as per cent of total income 103

02 Core fee income as per cent of other income 103

03 Core fee-based income 104

04 Share of profit on sale of investments in total income 106

05 Profit on sale of investments 106

continued...

...continued

Tables

6.0 Operating expenses

01 Other operating expenses 113

7.0 Important ratios

01 SBI & associates 121

02 Nationalised banks 121

03 Other scheduled commercial banks 121

04 Foreign banks 121


Overview1.0

Spreads

Spreads Table 1

1999 2000 2001 2002 2003

SBI and assoc 3.01 2.87 2.81 2.52 2.58

Nationalised banks 3.27 3.08 3.32 3.11 3.29

OSCBs 2.60 2.73 2.78 2.01 2.00

Foreign banks 3.74 4.08 4.03 3.30 3.35

Source: CRIS INFAC

During 1998-99 to 2002-03, only the spreads of nationalised banks improved (by 2 basis points);

spreads declined in all other categories. In 2002-03, foreign banks had the highest spreads, while

other scheduled commercial banks (OSCBs) had the lowest spreads.

The primary reason for the drop in the spreads was the faster decline in the yield on the

carry business vis-à-vis interest cost, due to the decline in interest rates. As indicated in the

earlier section, the yield on carry business is mainly influenced by the yield on advances and

the yield on investments.

Vis-à-vis other banks, public sector banks (nationalised banks and the SBI Group), because of

their historically higher exposure to long tenure securities, have seen a slower drop in the yield

on investments. Private sector banks (other scheduled commercial banks) and foreign banks have

comparatively lesser exposure to long tenure securities, which increases their re-pricing ratio.

Foreign banks recorded the highest drop in the yield on advances. These banks have a strong

presence in trade finance and foreign currency lending. Trade finance advances are generally

for the short term and hence get re-priced at a faster rate. The foreign currency loans also

get re-priced as they carry a floating rate of interest. These factors pulled down the yield on

advances for these banks at a faster rate. However, with hardening interest rates, the yield on

advances will also rise.

The decline in interest rates also resulted in a drop in the cost of deposits and, in turn, in

the interest cost. But, as explained in the earlier section, because of the low elasticity of cost

of deposits to interest rate movement, the drop in the cost of deposits was not steep. Foreign

banks recorded the highest drop in the cost of deposits on account of the increased proportion

of demand deposits in the low cost deposits (low cost deposits are made up of demand deposits

and savings deposits), lower reliance on deposits and funding support from their parent companies.

With the hardening of interest rates, we believe that the foreign banks' loans would get re-

priced at a faster rate, but the expected drop in the yield on the investments would restrict

the rise in the yield on carry business. But since they continue to have the lowest cost of

deposits, they will be able to maintain spreads.

The spreads of public sector banks are expected to be under pressure during 2003-04 to 2005-

06, as the continued drop in the yield on investments will restrict the rise in the yield on


carry business. Despite the hardening interest rates, their yield on investments will continue to

fall on account of higher exposure to long tenure securities. The securities would get re-priced

from historical higher yields to lower yields, which will lower the yield on investments. Hardening

interest rates will increase the cost of deposits (albeit at a steeper rate) and cost of borrowings.

The spreads of private sector banks are also expected to reduce during 2003-04 to 2005-06,

due to the expected fall in the yield on investments. The yield on advances is expected to

improve with the gradual increase in demand from commercial credit. As ICICI Bank continues

to replace its high cost borrowings with low cost deposits, the interest cost is expected to

reduce, which will restrict the drop in spreads.

Net profitability margin (NPM)

Net profitability margin Figure 1

0.5

1.0

1.5

2.0

2.5

3.0

3.5

1999 2000 2001 2002 2003

SBI & assoc Nat banks OSCBs Foreign banks All SCBs

Source: CRIS INFAC

All segments, except OSCBs, either improved their NPM or at least maintained it during 1998-

99 to 2002-03. In 2002-03, foreign banks had the highest NPM of 2.5 per cent, followed by

the public sector banks with a NPM of 2.4 per cent. OSCBs had the lowest NPM of 0.79 per

cent in 2002-03.

Despite the decline in spreads and a reduction in the contribution of core fee income to the

NPM (measured as a proportion of core fee income ratio to the NPM) there has been an improvement

in NPM. This has been on account of cost control measures adopted by the banks, especially

the public sector banks, which led to drop in the operating cost ratio (operating expenses as

a per cent of average funds deployed). Contrary to the industry trend, other scheduled commercial

banks witnessed a jump in the contribution of core fee income ratio to NPM.

Public sector banks had introduced voluntary retirement schemes (VRS), which helped them to

reduce manpower cost and increase productivity. This helped the segment in improving the operating

expense ratio. Foreign banks have the highest operating expense ratio amongst all the bank

groups because of their higher wage structure and investments in technology and infrastructure.

But high spreads and support from core fee income help them in sustaining high costs. Private


sector banks are expanding their operations, hence there was a marginal saving in their operating

expense ratio during 1997-98 to 2002-03.

Foreign banks had the highest core fee income ratio, on account of their strong presence in

trade finance, correspondent banking services, treasury management and cash management services.

This provides them with an opportunity to earn fee income without taking high exposure.

Public sector banks had one of the lowest core fee income ratios, because they were not quick

off the blocks in venturing into new business areas to generate fee income; besides, a high

average funds base led to a low core fee income ratio. Of the public sector banks, nationalised

banks had the lowest core fee income ratio during 2002-03.

Private banks (OSCBs), especially the new private sector banks, were amongst the first to foray

into new business areas like credit cards, depository services and third party distribution, which

helped them in generating fee income.

OutlookCRIS INFAC is of the view that since spreads are under pressure all banks will have to concentrate

on controlling their operating expenses and find new ways of generating fee income.

Since manpower accounts for more than 70 per cent of the operating expense for the public

sector banks, they need to control their staff cost by either increasing productivity or controlling

cost. However, with public sector banks investing in technology and introducing new product

delivery platforms, their other operating expenses are estimated to rise. The operating expense

ratio may come under pressure in the short run, but it will fall as the benefits of investment

in technology begin to accrue. However, in the short run, the pressure on the operating expense

ratio will be reduced due to the expected demand for credit from the commercial sector. We

expect the core fee income ratio to continue to decline because of increased competition. CRIS

INFAC expects the NPM to be marginally under pressure in the next year, but improve afterwards,

with increasing spreads and savings in operating expenses.

Other scheduled commercial banks, especially the new private sector banks, are expanding their

operations and are in their growth stage. Hence their operating expenses will increase, and the

benefits of their investment will accrue, albeit only after a while. Till then the operating expense

ratio may either remain stable or increase marginally, which can put pressure on the NPM. The

core fee income ratio will continue to fall, but a slower pace, because of the increase in lending

to the commercial sector and also due to the forays into new business activities.

Foreign banks will continue have a high NPM on account of higher spreads and a high core

fee income ratio. But as competition intensifies in areas where they are strong, their spreads

and core fee income will reduce. Hence, we are of the view that foreign banks will have

to control their operating expenses.


Business

Group-wise business of banks 1998 to 2003 Figure 2

0

1000

2000

3000

4000

5000

6000

7000

8000

SBI & ass Nat banks Other SCBs Foreign banks

Rs/billion

1997-98 1998-99 1999-00 2000-01 2001-02 2002-03

Source: CRIS INFAC

The business of other scheduled commercial banks (OSCBs) grew at 22 per cent (16 per cent)

CAGR from 1999-00 to 2002-03, the highest amongst all the bank segments, driven by the

strong growth in advances. The growth in advances was mainly driven by the growth in the

retail credit. The business of the foreign banks grew by 12.7 per cent CAGR, which is lower

than the industry average and also the lowest amongst all the bank groups. Both advances and

deposits grew at a comparatively slower pace, in comparison to the peer groups.

For all bank groups, except for the SBI Group, business growth had been primarily driven by

the higher growth in advances. The deposits of the SBI Group grew at 15.1 per cent CAGR,

in comparison to a 13.6 per cent CAGR growth in advances.

The business of nationalised banks increased by 14.2 per cent CAGR during 1999-00 to 2002-

03, driven by a 17.3 per cent CAGR growth in advances. The growth in advances was driven

by the increase in commercial credit, which is contrary to what was witnessed in OSCBs.

The share of OSCBs in the business increased from 13 per cent in 1999-00 to 16 per cent

in 2002-03, due to their aggressive expansion strategy.

The low cost deposit ratio was the highest in public sector banks and the lowest in OSCBs.

However, during 1997-98 to 2002-03, the low cost deposit ratio went up for the private sector

banks, while it fell for public sector banks, especially the SBI Group. Foreign banks had the

highest proportion of demand deposits in the low cost deposits (no interest is paid on demand

deposits), which contributed towards the lower cost of deposits.


Investments

Group-wise SLR Securities to NTDL Figure 3

20.0

25.0

30.0

35.0

40.0

45.0

50.0

1997-98 1998-99 1999-00 2000-01 2001-02 2002-03

SBI & associates Natonalised banks Other SCBs

Other SCBs (ex ICICI Bank) Foreign banks SLR requirement

Source: CRIS INFAC

All bank groups increased their exposure to SLR securities, mainly during 2002-03, due to the

slowdown in credit offtake. While this high exposure helped almost all the groups in booking

healthy profits during a period of soft interest rates, it can lead to losses during a period of

hardening interest rates (due to the mark-to-market valuation of the investment portfolio).

The SBI Group continuously increased its exposure to SLR securities during 1998-99 to 2002-

03 and has the highest SLR ratio (government and approved securities as a percentage of net

time and demand liabilities). With the expect hardening of interest rates, the SBI Group will

suffer losses on account of the valuation of these securities (as the portfolio carries a higher

proportion of securities purchased during the last 2 years). However, on account of its high

exposure towards SLR securities, we believe that the portfolio will carry sufficient unbooked profits

to provide a cushion against rising interest rates. Nationalised banks, unlike the SBI Group, had

a stable SLR ratio during 1998-99 to 2001-02, but the ratio increased in 2002-03 (to take advantage

of the soft interest scenario and book high treasury gains). CRIS INFAC believes that the investment

portfolio of nationalised banks will have unbooked profits (although it may be far lower than

that of the SBI Group) to protect them against rising interest rates. Hence, of the two public

sector bank groups, nationalised banks will have higher losses from the valuation of the investment

portfolio and sale of investments.

Private sector banks and foreign banks maintained the SLR ratio in the range of 26-27 per cent

during 1998-99 to 2001-02, but increased their exposure during 2002-03, when the acquisition

cost of the securities was high (because of low interest rates). However, with the hardening

interest rates, the losses from the valuation of investments or sale of investments would be

high. Further, because of this group's comparatively low exposure to securities, especially high

tenure ones, we expect that unbooked profits in the investment portfolio will be only marginal,

which will not provide much resistance against increasing interest rates and is likely to result

in the booking of high treasury losses.


All bank groups will book treasury losses, but we expect these to be lower for the SBI Group

and higher for foreign banks. Banks, therefore, need to reduce their exposure to investment

by reducing the duration of the investment portfolio.

Asset qualityBased on our study of the gross and net NPA ratios of various bank groups, we found that

there was a marked improvement in the declared asset quality of the nationalised banks and

the SBI Group, while it was only marginally better for OSCBs and foreign banks.

The marked improvement in the case of public sector banks (nationalised and SBI Group) has

been primarily due to higher provisions and write-offs. These banks recorded a healthy growth

in the profit from sale of investments, which helped them in writing off bad loans and also

making excess/additional provisions towards NPAs. However, the improvement observed in the

case of SBI Group was more at the gross NPA level, whereas in the case of the other three

groups, the improvement was more at the net NPA level. This indicates that the SBI Group

improved its credit management to improve asset quality, while other bank groups increased

their provisioning cover.

A comparison of the share of gross NPA ratios and net NPA ratios of the various bank groups

to the industry average, during the period 1999-00 to 2002-03, revealed that the SBI Group

had increased its asset quality both at the gross level and the net level. There was a slight

deterioration in the asset quality of the nationalised banks at the gross level, but there was

an improvement at the net NPA level, due to higher provisioning cover. Foreign banks witnessed

a marginal deterioration in the asset quality at both gross and net levels, but more at the net

level due to the decrease in the provisioning cover.

In case of other scheduled commercial banks, excluding ICICI Bank, the asset quality worsened

at the gross level, but remained stable at the net NPA level on account of the higher NPA

provision. Aggressive lending polices adopted by the private sector banks led to a worsening

of the asset quality at the gross levels, but they were able to maintain the net NPA ratios

with higher provisions. Including ICICI Bank, the asset quality worsened at both levels; gross

and net.

Other scheduled commercial banks, especially the new private sector banks, are aggressively increasing

the loan book by compromising a little on the asset quality. But the group is making higher

provisions in maintaining a stable net NPA.

Nationalised banks and the SBI Group are concentrating more on improving the asset quality.

While nationalised banks are focussing on improvement at the net levels, the SBI Group is concentrating

on improvement at the gross levels. Both groups had reduced the provisioning covers.

The healthy growth in treasury profits helped banks in increasing their provision cover, but there

will not be much leeway in future to make higher provisions towards NPAs due to the expected

fall in treasury profits. Hence banks need to improve their credit management to improve their

asset quality


Overall assessmentForeign banks

During 1999-00 to 2002-03, foreign banks held on to their share of the business and also maintained

the highest spreads. Greater spreads and a high core fee income ratio helped them in sustaining

high operating expenses. The high proportion of short-term assets and the low reliance on term

deposits will help these banks in improving spreads. They will continue to have a high core

fee income ratio, but are likely to face competition from other bank groups, who are increasing

their worldwide presence. Foreign banks have the lowest NPA ratios and, with their stringent

credit assessment norms, will continue to maintain them.

Other scheduled commercial banksSince these banks, especially the new private sector banks, are expanding their operations operating

expenses will be high. But the benefits of these large investments will accrue to them in the

near future. The yield on carry business is likely to improve with the gradual increase in credit

demand from the commercial sector. However, the improvement could be restricted due to the

expected drop in the yield on investments. Because of the aggressive lending strategy adopted

by the new private sector banks, the asset quality may deteriorate, although the banks will

try to maintain the net NPA ratio. Private sector banks have to concentrate on their credit management

systems to improve the asset quality. OSCBs will continue to focus on retail finance. This, coupled

with increased credit to the commercial sector, will enable a healthy growth in advances.

Public sector banks (State Bank of India & associates, & nationalised banks)These banks need to rein in their operating costs by controlling manpower costs and rationalising

operations. Investments in technology may result in surplus staff, which can affect productivity

(if the excess manpower is not utilised properly). The gradual increase in commercial sector

credit will enable a healthy growth in advances. Public sector banks need to reduce their exposure

to investments by focusing on the core activity of lending. Moreover, these banks have started

focusing on retail finance, which will contribute to the growth in advances, which will help in

improving the yield on carry business, and thus spreads. In addition, they need to strengthen

their interest rate risk management and credit risk management. We believe that the structure

of pricing of loans needs to be reviewed. We also expect the asset quality of the public sector

banks to improve on account of the expected improvement in credit management.

But PSBs need to improve and be aggressive in their communication and business strategies

to garner more customers, if they want to attain mass in the retail finance segment.



Business2.0

Other scheduled commercial banks clocked the highest growth

Group-wise business of banks 1998 to 2003 Figure 1

0

1000

2000

3000

4000

5000

6000

7000

8000

SBI & ass. Nat banks Other SCBs Foreign banks

(Rs/billion)

1997-98 1998-99 1999-00 2000-01 2001-02 2002-03

Source: CRIS INFAC

The business of all scheduled commercial banks grew at 16 per cent (14.5 per cent) CAGR

from 1999-00 to 2002-03.

During the same period, the business of other scheduled commercial banks (OSCBs) grew at

22 per cent (16 per cent) CAGR, the highest amongst all the bank segments, driven by a

strong growth in advances. The business of foreign banks grew by 12.7 per cent CAGR, which

is lower than the industry average and is also the lowest amongst all the bank groups. Both

advances and deposits of foreign banks grew at a comparatively slower pace, in comparison

with the other groups.

For all the groups, except the SBI Group, business growth was primarily on the back of the

higher growth in advances. The deposits of the SBI Group grew at 15.1 per cent CAGR, in

comparison to a 13.6 per cent CAGR growth in advances.

Due to the merger of ICICI Ltd with ICICI Bank on March 30, 2002, the growth figures

for the scheduled commercial banks (SCBs) for the period under consideration are slightly

misleading. Hence, for a better comparison, we have also calculated the growth figures excluding

ICICI Bank, which are indicated in brackets.


Other scheduled commercial banks (OSCBs)Business grew by 22 per cent (16 per cent) CAGR from Rs 1,694 billion (Rs 1,559 billion)

in March 2000 to Rs 3,446 billion (Rs 2,432 billion) as of March 2003, driven by a strong

growth of 35.2 per cent (17.5 per cent) CAGR in advances. Deposits grew at 22.1 per cent

(15.2 per cent) CAGR during 1999-00 to 2002-03.

While the share of advances in funds deployed has gone up from 44.4 per cent (45.3 per

cent) in 1998-99 to 50.7 per cent (47.8 per cent) in 2002-03, the share of investments increased

from 37.8 per cent (37.4 per cent) in 1998-99 to 39.2 per cent (40.3 per cent) in 2002-

03. The growth in advances was primarily driven by the focus on retail credit, especially by

new private sector banks.

State Bank of India & associates (SBI Group)The business of the SBI Group grew at 14.6 per cent CAGR from Rs 3,853 billion in March

2000 to Rs 5,802 billion in March 2003, driven by a 15.1 per cent CAGR growth in deposits.

During the same period, advances grew at 13.6 per cent CAGR. The share of advances in

funds deployed declined from 46.2 per cent in 1998-99 to 40.64 per cent in 2002-03, while

the proportion of investments in the funds deployed increased from 34.4 per cent in 1998-

99 to about 48 per cent in 2002-03.

Nationalised banksThe business grew at a 14.2 per cent CAGR from Rs 7,041 billion in March 2000 to Rs 10,485

billion in March 2003, driven by a 17.3 per cent CAGR growth in advances. Deposits grew

at a slower rate of 12.7 per cent CAGR.

The share of advances in funds deployed increased from 42.4 per cent in 1998-99 to 48 per

cent in 2002-03, while the share of investment in funds deployed increased from 40.6 per cent

in 1998-99 to 43 per cent in 2002-03.

Foreign banksForeign banks clocked the lowest growth in business amongst various bank categories, at a CAGR

of 12.7 per cent during 1999-00 to 2002-03. The business grew from Rs 849 billion in March

2000 to Rs 1215 billion in March 2003, driven by 13.6 per cent CAGR growth in advances.

Deposits grew at a slower rate of 12.0 per cent CAGR.

The share of advances in the funds deployed increased from 42.6 per cent in 1998-99 to 50.2

per cent in 2002-03, while the share of investments in the funds deployed went up from 38.0

per cent in 1998-99 to 39.3 per cent in 2002-03.


Share of bank groups Figure 2

1999-2000

Nat Bank52

Other SCB13

Forgn Banks6

SBI & Ass29

(per cent)

2002-03

Forgn Banks6

SBI & Ass28

Nat Bank50

Other SCB16

(per cent)

Source: CRIS INFAC

Though the share of nationalised banks in the total business of scheduled commercial banks

is reducing, it is still approximately 50 per cent. The share of other scheduled commercial banks

has increased from 13 per cent in 1999-00 to 16 per cent in 2002-03, due to the aggressive

growth strategy adopted by them.

AdvancesOverview

OSCBs recorded the highest growth in advances amongst all the bank groups, while the foreign

banks, along with the SBI Group, recorded the lowest growth. For OSCBs, the high growth was

due to the focus on retail credit. The advances of OSCBs grew at 35.2 per cent (17.5 per

cent) CAGR during 1999-00 to 2002-03. The advances of nationalised banks also recorded a

healthy growth of 17.2 per cent CAGR, driven by the growth in commercial credit and agriculture

credit.

For foreign banks and nationalised banks, the growth of advances was lower than that of the

industry. Increased competition from new private sector banks, coupled with low credit demand

from the large corporates, slowed down the growth of advances of foreign banks.

For the SBI Group, the growth of advances was low on account of a less aggressive lending

strategy and greater competition.

A study of the composition of loans and advances indicates that the SBI Group and nationalised

banks have, over the years, been providers of working capital finance to the industry. Going

forward, with the increasing focus of these groups on retail credit, the proportion of term loans

in working capital is expected to rise further.

Other scheduled commercial banksThe advances of OSCBs grew faster than the industry average of 16 per cent (excluding ICICI

Bank). Advances grew from Rs 557 billion (Rs 521 billion) in 1999-00 to Rs 1,377 billion (Rs

844 billion) in 2002-03. Due to the slowdown in industrial activity, the demand for credit from

the commercial sector was low. Hence all the banks directed their efforts towards retail credit.

OSCBs, especially the new private sector banks - ICICI Bank, HDFC Bank, UTI Bank etc -

were amongst the first to shift their focus towards retail finance. This helped them to post

a healthy growth in advances. Today ICICI Bank and HDFC Bank are the leaders in retail finance.


The term loan of OSCBs grew at 75 per cent (34 per cent) CAGR from Rs 164 billion (Rs

161 billion) in 1999-00 to Rs 882.03 billion (Rs 385 billion) in 2002-03 on account of the

enhanced focus on retail credit. Because of lower demand for credit from the commercial sector,

working capital finance grew at a slower rate of 8 per cent (8.4 per cent) CAGR between

1999-00 and 2002-03.

The share of term loans in total advances increased from 29 per cent (31 per cent) in 1999-

00 to 64 per cent (46 per cent) in 2002-03.

Nationalised banksThe advances of nationalised banks also grew faster than that of the industry. Advances grew

by 17.3 per cent CAGR from Rs 2,231 billion in 1999-00 to Rs 3,601 billion in 2002-03, on

the back of a steady growth in both commercial and agricultural credit. As per our retail finance

study, nationalised banks were slow to shift their focus towards retail finance in the initial years.

However, many nationalised banks have now announced plans to focus on the retail finance

portfolio.

Advances of OSCBs Figure 3 Advances of OSCBs (Ex ICICI Bank) Figure 4

Source: CRIS INFAC Source: CRIS INFAC

Advances of nationalised banks Figure 5

Source: CRIS INFAC

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03

(Rs/crores)

Term loans Short term/working capital loans

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

1997-98 1998-99 1999-00 2000-01 2001-02 2002-03

Term loans Short term/ working capital loans

(Rs/crores)

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

1997-98 1998-99 1999-00 2000-01 2001-02 2002-03

term loans short term/working capital loans

(Rs/crores)


Term loans grew at a CAGR of 19.5 per cent, from Rs 830.1 billion as of end-March 2000

to 1,416.43 billion as of end-March 2003. Working capital loans grew from Rs 1,401 billion in

1999-00 to Rs 2,185 billion in 2002-03 at 16 per cent CAGR.

The share of term loans increased from about 37 per cent in 1999-00 to 39 per cent in 2002-

03. With the slowdown in industrial activity there was less demand for working capital loans,

which resulted in an increase in the share of term loans in total advances.

State Bank of India & associatesDuring 2000-01 to 2002-03, amongst the scheduled commercial banks, the SBI Group accounted

for the second largest portfolio of advances after nationalised banks.

In the same period, the SBI Group's advances grew from Rs 1,290 billion in 1999-00 to Rs

1,892 billion in 2002-03, at a CAGR of 13.6 per cent. This lower-than-industry growth in advances

was on account of the lower growth in commercial credit. The group is also facing competition

from the new private sector banks and nationalised banks. Although the group was not aggressive

in retail finance earlier, SBI has now announced plans to increase its focus on retail finance.

(SBI plans to have 60 branches totally dedicated towards retail lending.) These measures, coupled

with the expected recovery in the commercial credit, will help the group in posting a healthy

growth in advances.

Advances of SBI Group Figure 6

Source: CRIS INFAC

Term loans of the group grew at 22 per cent CAGR from Rs 420 billion in 1999-00 to Rs

741 billion in 2002-03. The working capital loans grew at 11 per cent CAGR to Rs 1,151 billion

in 2002-03 from Rs 871 billion in 1999-00.

The share of term loans in total advances increased from 33 per cent in 1999-00 to 39 per

cent in 2002-03. The increase in the share of term loans has been in line with the industry.

The slow growth in working capital loans led to an increase in the share of term loans.

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

1997-98 1998-99 1999-00 2000-01 2001-02 2002-03

Term loans Short term/ working capital loans

(Rs/crores)


Foreign banksThe advances of foreign banks grew from Rs 356 billion in 1999-00 to Rs 522 billion in 2002-

03 at 13.6 per cent CAGR, one of the lowest amongst all categories. Foreign banks, due to

their limited reach, are not aggressive in retail finance. Further, most of the foreign banks prefer

lending only to select large corporates. Hence, due to the lower demand for credit on account

of general recession in the industrial activity, advances grew at a slower rate.

Foreign banks - outstanding advances Figure 7

Source: CRIS INFAC

Among the scheduled commercial banks, foreign banks are the only group in which the term

loans have recorded a lower CAGR than the short term/working capital loans. Term loans grew

from Rs 173.9 billion in 1999-00 to Rs 249.7 billion in 2002-03 at a rate of 12.8 per cent

CAGR, while working capital finance grew from Rs 182 billion in 1999-00 to Rs 272 billion

in 2002-03 at rate of 14.3 per cent CAGR. Foreign banks, because of their worldwide network,

are strong in trade finance; especially export finance and cash management systems, where the

lending is of short duration. These activities drove the growth in working capital credit. The

low demand for corporate credit, coupled with the limited presence of foreign banks in retail

finance, restricted the growth in the term loans. Only a few of the foreign banks are aggressive

in retail finance.

In addition, foreign banks have a strong presence in foreign currency loans - FCNR (B) term

loans or ECBs - which are generally of 3-5 years tenure and are classified under term loans.

This contributes to a higher proportion of term loans in advances vis-à-vis that of public sector

banks. The lower growth in the term loans vis-à-vis working capital finance led to the a drop

in the share of term loans.

0

10,000

20,000

30,000

40,000

50,000

60,000

1997-98 1998-99 1999-00 2000-01 2001-02 2002-03

Term loans Short term/working capital loans

(Rs/crores)


Priority sector advancesAs per the directive of the Reserve Bank of India, all scheduled commercial banks, except foreign

banks; have to lend 40 per cent of the net bank credit to the priority sector, with more focus

on the weaker sections. Foreign banks operating in India are required to lend 32.0 per cent

of their net bank credit towards the priority sector.

Public sector banks (State Bank of India & associates, and nationalised banks)The outstanding priority sector advances of PSBs increased by 18.6 per cent during 2002-03.

As on the last reporting Friday in March 2003, the priority sector lending constituted 42.5 per

cent of the net bank credit. Funding to agriculture and self-help groups helped the public sector

banks in achieving the target.

Advances to the priority sector by public sector banks Table 1

(as on the last reporting Firday) Basis Mar-00 Mar-01 Mar-02 Mar-03

Priority sector lending Rs in billion 1275 1491 1712 2031

As per cent of net bank credit per cent 40.3 43.7 43.1 42.5

Source: RBI

Other scheduled commercial banksThe total priority sector advances extended by private sector banks rose as a proportion of

net bank credit, with the priority sector growing by 43 per cent in 2002-03. During 2000-

01, OSCBs did not achieve the prescribed priority sector targets as some of the new private

sector banks had been allowed certain concessions for meeting priority sector norms. Housing

finance was classified as a priority sector with a limit of Rs 10 lakh (in the mid-term credit

policy 2004-05, this limit was raised to Rs 15 lakh); hence with the growth in housing finance,

the group witnessed a sudden rise in the priority sector ratio during 2002-03.

Advances to the priority sector by private sector banks Table 2

(as on the last reporting Firday) Basis Mar-01 Mar-02 Mar-03

Priority sector advance Rs in billion 216 257 367

As per cent of net bank credit per cent 36.7 40.9 44.4

Source: RBI

Foreign banks

Advances to the priority sector by foreign banks Table 3

(as on the last reporting Firday) Basis Mar-01 Mar-02 Mar-03

Priority sector advance Rs in billion 116 134 148

As per cent of net bank credit per cent 33.5 34 33.9

Source: RBI

As on the last reporting Friday of March 2003, priority sector lending constituted 33.9 per cent

of the net bank credit. Foreign banks have maintained the priority sector ratio at a level of

33.5-34 per cent.

All the bank groups had met their overall priority sector lending targets.


DepositsOverview

Deposits with scheduled commercial banks are classified into three categories

Current deposits: Current deposits are those maintained by business class to meet the short-term

contingencies. No interest is payable on current deposits.

Savings deposits: Savings deposits are the deposits maintained by the households. RBI administers the

interest rate offered on these deposits.

Term deposits: These are also knows as fixed deposits or time deposits and are generally payable at the

end of a fixed period. Term deposits constituted 64-65 per cent of the total deposits during1997-98 to

2002-03.

SummaryOSCBs recorded the highest growth in deposits amongst all the bank groups. During 1999-00

to 2002-03, deposits grew at 22 per cent (15.2 per cent) CAGR, followed by the SBI Group,

whose deposits grew at 15.1 per cent CAGR. The 12 per cent CAGR growth in deposits of

foreign banks was the lowest amongst all the bank groups.

The strong growth in deposits of OSCBs was due to the aggressive growth strategies adopted

by the new private sector banks.

The SBI Group's extensive branch expansion enabled it to achieve a healthy growth in term

deposits. However, for foreign banks, their limited branch network acted as a hindrance in the

growth of deposits. Moreover, foreign banks also offered lower interest rates on term deposits.

Of the three categories of deposits, savings deposits recorded the highest growth in all the

bank groups. The growth was the highest for OSCBs on the back of a relatively lower base

and the aggressive marketing strategy they adopted.

Nationalised banks and the SBI Group have the highest low cost deposit ratios (the proportion

of demand deposits and savings deposits to total deposits) among all bank groups. As of March

2003, the low cost deposit ratio was nearly 37 per cent for the SBI Group, while it was approximately

36 per cent for nationalised banks. Though OSCBs have the lowest low cost deposit ratio, they

are giving tough competition to the nationalised banks and the SBI Group by increasing their

market share in low cost deposits. Among all the groups, foreign banks have the highest composition

of demand deposits in low cost deposits.

Other scheduled commercial banks (OSCBs)

Break-up of deposits - OSCBs Figure 8 Total deposits - OSCBs Figure 9


50%

60%

70%

80%

90%

100%

1998 1999 2000 2001 2002 2003

Term deposits Savings deposits Demand deposits

0

500

1000

1500

2000

2500

1998 1999 2000 2001 2002 2003

(Rs/billion)


OSCBs recorded the highest growth of 22.1 per cent (15.2 per cent) CAGR in total deposits

between 1999-00 and 2002-03, mainly due to the new private sector banks who are aggressively

expanding their operations. The share of deposits of OSCBs in the deposits of all scheduled

commercial banks went up between 1997-98 and 2002-03, while it fell for nationalised banks

and foreign banks. OSCBs, especially the new private sector banks, had started introducing technology-

driven customised products, which also helped in the impressive growth in deposits.

Low cost deposits (demand and saving deposits) constituted 24 per cent of the total deposits,

which is the lowest amongst all the scheduled commercial banks. OSCBs do not have a wide

network of branches that provide support in garnering more low cost deposits. Moreover, the

technology-driven customised products introduced by the new private sector banks allow customers

to switch between savings and term deposits.

State Bank of India and associates

Deposits break-up - SBI & associates Figure 10 Total deposits - SBI & associates Figure 11


The total deposits of the SBI Group grew from Rs 2,563 billion in 1999-00 to Rs 3,910 billion

in 2002-03 at a rate of 15.1 per cent, while the industry grew at a rate of 14.6 per cent

(13.7 per cent). The SBI Group's wide branch network helped it to achieve a healthy growth

in deposits. The India Millennium Deposit (IMD) also spurred the growth in deposits. SBI mobilised

deposits worth Rs 257 billion through the IMD scheme.

Low cost deposits constitute 37 per cent of the total deposits as of March 2003, which is the

highest amongst all scheduled commercial banks. The group's wide branch network helped it

in maintaining the low cost deposit ratio at a high level. However, the share of low cost deposits

in the total deposits fell from 42.6 per cent in 1997-98 to 37.0 per cent in 2002-03, due

to the increase in competition.

50%

60%

70%

80%

90%

100%

1998 1999 2000 2001 2002 2003


0

500

1000

1500

2000

2500

3000

3500

4000

4500

1998 1999 2000 2001 2002 2003

(Rs/billion)


Nationalised banks

Break-up of deposits - Nationalised banks Figure 12 Total deposits - Nationalised banks Figure 13


The total deposits of nationalised banks grew at 12.7 per cent CAGR, which was lower than

that of the industry (all scheduled commercial banks). Total deposits grew from Rs 4,810 billion

in 1999-00 to Rs 6,884 billion in 2002-03 on account of the low interest rates offered by the

group on term deposits. Further, nationalised banks are facing stiff competition from the new

private sector banks, who have capitalised on their technological edge and better service and

increased their market share.

Low cost deposits constituted 36 per cent of the total deposits. The share of term deposits

had been stable at 36 per cent during 1999-00 to 2002-03. The term deposits of nationalised

banks grew at 12.5 per cent CAGR during 1999-00 to 2002-03, which is lower than the industry

average of 15.1 per cent (13.8 per cent).

Foreign banks

Break-up of deposits - Foreign banks Figure 14 Total deposits - Foreign banks Figure 15


50%

60%

70%

80%

90%

100%

1998 1999 2000 2001 2002 2003


0

1000

2000

3000

4000

5000

6000

7000

8000

1998 1999 2000 2001 2002 2003

(Rs/billion)

50%

60%

70%

80%

90%

100%

1998 1999 2000 2001 2002 2003

Term deposits Saving deposits Demand deposits

0

100

200

300

400

500

600

700

800

1998 1999 2000 2001 2002 2003

(Rs/billion)


The total deposits of foreign banks grew from Rs 493 billion in 1999-00 to Rs 693 billion

in 2002-03 at a CAGR of 12 per cent. Their limited branch network proved hindered the growth

of deposits.

The share of low cost deposits in total deposits increased from 31.5 per cent in 1999-00 to

33.8 per cent in 2002-03. Within low cost deposits, demand deposits have a higher share as

foreign banks generally prefer to cater to corporate clients who maintain current account deposits,

and also because they are strong in the cash management system. Generally foreign banks rely

less on deposits to meet their funding needs. The funding requirements are met through the

support of their parent organisations or by raising borrowings. Deposits constitute only about

70-75 per cent of the borrowed funds for foreign banks, while they constitute more than 95

per cent of the borrowed funds for public sector banks.

Savings deposits of foreign banks grew at 23 per cent CAGR from a lower deposit base of

Rs 49 billion in 1999-00 to Rs 90 billion in 2002-03. Foreign banks generally cater to high

net worth individuals (HNIs) and NRI deposits. Further, only very few banks - such as HSBC,

Standard Chartered Bank, Citibank and ABN Amro - are into the retail banking business. Many

banks had hived off their retail business are concentrating on the institutional business. But of

late, foreign banks (those who are active in the retail business) are also, with the aid of technology,

luring customers to maintain low cost deposits with them. Of late a few foreign banks have

started increasing their branch network, which is helping them in increasing their savings deposits.

The lower deposit base, especially term loans, and their focus on HNIs and NRIs help them

to keep the low cost deposit ratio at a very high level.

InvestmentsUnder section 24 (b) of the Banking Regulation Act, 1949, every bank is required to maintain,

at the close of business every day, a minimum proportion of its net demand and time liabilities

(NDTL) as liquid assets in the form of cash and gold and un-encumbered approved securities.

The ratio of liquid assets to demand and time liabilities is known as Statutory Liquidity Ratio

(SLR). In 1997-98, the Reserve Bank of India fixed the SLR to be maintained on all the demand

and time liabilities, including inter-bank borrowings, at 25 per cent, which is applicable till date.

Banks hold a major portion of their investments in government securities and other approved

securities. The proportion of government securities, along with the approved securities, to the

net demand and time liabilities has been over 30 per cent during 1997-98 to 2002-03 for all

SCBs as a whole.


Public sector banks (nationalised banks and SBI Group) had been investing in SLR securities

well above the RBI stipulated norm, vis-à-vis other scheduled commercial banks and the foreign

banks. The SLR ratio (SLR securities to net time and demand liabilities) of OSCBs and foreign

banks has been marginally above the stipulated norm during 1997-98 to 2000-01, indicating that

they utilised their funds better. However, during 2002-03, with low demand for credit from the

commercial sector and excess liquidity in the system, banks in all the groups had increased

their exposure to the SLR securities.

This increased exposure helped many banks in booking huge treasury profits during the soft

interest rate scenario that prevailed then. But, with the hardening of interest rates, this high

exposure could impact their bottom line. Further, there will be a drop in the yield on investments

as the re-pricing would be from a historically higher interest rate to current lower yields. The

higher the exposure, the higher would be the loss on valuation of the investments.

Of the bank groups, the highest exposure to SLR investments was by the SBI Group (48 per

cent of NTDL) followed by nationalised banks (36 per cent of NTDL) in 2002-03. OSCBs had

the lowest exposure of 30 per cent of NTDL in 2002-03.

Though the SBI Group has the highest exposure to SLR securities (as a per cent of net demand

and time liabilities), we believe that the unbooked profit of the investment portfolio will offer

a sufficient cushion against losses arising from the increase in interest rates.

The investment portfolio of nationalised banks is also expected to have some cushion (on account

of their historically higher exposure towards SLR securities), although it will be significantly lower

than that of the SBI Group. Hence the impact would be more in the form of a drop in the

yield on investments.

Other scheduled commercial banks and foreign banks have a comparatively lower exposure to

SLR securities, which should lead to a comparatively lower loss from the valuation of investment

portfolio. However, we believe that their investment portfolio does not carry significant unbooked

profits to mitigate the impact of the interest rate rise and its resultant impact on the bottomline.

Further, we also expect the yield on investments to come down.

Statutory liquidity ratio - excluding gold Figure 16

20.00

25.00

30.00

35.00

40.00

1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03

(per cent )

GSEC + Other approved SLR requirement

Group-wise SLR Securities to NTDL Figure 17


20.0

25.0

30.0

35.0

40.0

45.0

50.0

1997-98 1998-99 1999-00 2000-01 2001-02 2002-03

(per cent)

SBI & associates Natonalised banks

Other SCBs Other SCBs (ex ICICI Bank)

Foreign banks SLR requirement


CRIS INFAC believes that the impact of increasing interest rates on the investment portfoliowill be the highest on foreign banks, followed by OSCBs and nationalised banks. The least impactwill be on the SBI Group.

State Bank of India & associatesThis group's investment in SLR securities rose continuously to touch a high of 48 per centin 2002-03 from 34 per cent in 1997-98. The group recorded the highest growth rate in depositsamongst all the scheduled commercial banks, which, coupled with the low credit offtake, forcedit to increase its exposure.

During the period of falling interest rates, the group was continuously increasing its exposureto SLR securities. Such a high exposure would have led to an increase the acquisition cost ofinvestments (cost of acquisition of the securities is inversely related to yield on the security).,In an increasing the interest rate scenario, such a high exposure will have a negative impacton the profit and loss account, both in the form of treasury losses (losses from mark-to-marketvaluation of the investment portfolio) and the drop in the yield on investments. We believethe outstanding portfolio as of March 2003 would include a high proportion of securities purchasedduring the last 3 years, whose cost of acquisition would have been high. Hence, in a hardeninginterest the group is expected to book treasury losses on account of mark-to mark valuationof securities.

But, as noted earlier, we believe that the portfolio will have sufficient unbooked profits to cushionthe impact of the interest rate rise and the drop in the yield on investments.

Nationalised banksNationalised banks maintained a stable exposure to SLR investments at 32-33 per cent of thenet time & demand deposits during 1997-98 to 2001-02. But with low demand for credit fromthe commercial sectors during 2002-03, they increased the exposure to SLR securities to approximately36 per cent.

During 2002-03, interest rates were very low and almost touched rock bottom in 2003-04. Thisis likely to have increased the cost of acquisition of the investments. Further this would alsoincrease the proportion of these securities in the total outstanding investment portfolio. Hence,with hardening of interest rates, nationalised banks are likely to face heavy losses on accountof mark-to-market valuations. Further, we also expect a drop in the yield on investments.

Nationalised banks, due to their historically high exposure to SLR securities, will have some cushionto withstand the impact of the rise in the interest rates and be able to reduce the lossesfrom treasury operations, although this cushion will be lower than that of the SBI Group.

Foreign banksThe exposure of foreign banks in SLR securities was maintained at 27 per cent of the nettime and demand deposits during 1997-98 to 2000-01, but in 2001-02, the ratio dropped to24 per cent. During 2002-03, with low credit offtake, foreign banks significantly increased itsexposure towards SLR securities. The proportion of SLR securities to net time and demand depositstouched 34 per cent in 2002-03. As explained earlier, the interest rates being low during 2002-03, the cost of acquisition of the investments is likely to be high. As the outstanding investmentportfolio would have high proportion of securities acquired recently, it will increase the overallcost of the portfolio. With the hardening of interest rates, foreign banks are likely to see anegative impact on their bottomline on account of the reduced yield on investments and also

suffer losses on account of valuation of the portfolio.


We believe that due to historically lower exposure of this group towards SLR securities, theirinvestment portfolio does not have sufficient unbooked profits to mitigate the effects of hardeninginterest rates.

Other scheduled commercial banksA trend similar to that of foreign banks is seen in other scheduled commercial banks, bothincluding and excluding ICICI Bank. OSCBs had kept a steady SLR of 25-27 per cent during1997-98 to 2000-01, but it dropped to 25 per cent in 2001-02. In 2002-03, this increased to30 per cent. This ratio was lowest amongst all bank groups, hence we believe that the impactof hardening interest rates should be comparatively lower on this group vis-à-vis other bankgroups.

We expect the impact to be two fold: one by way of dropping the yield on investmentsand second by way of losses on valuation of the investment portfolio. We believe the investmentportfolio of OSCBs will not have any cushion to bear the impact of the hardening of interestrates, and that their bottomline will get impacted due to losses on account of investment portfolio.

Non-performing assetsThe Indian banking industry had always been plagued with the problem of high levels of nonperforming assets, which can be attributed to factors like archaic policies, industrial inefficiency,lack of adequate legal recourse to the lenders, wilful defaulters etc.

Based on the study of the gross and net NPA ratios of various bank groups, we find thatthere has been a marked improvement in the declared asset quality of the nationalised banksand the SBI Group, while there has been only a marginal improvement in the case of OSCBsand foreign banks.

The marked improvement seen in the case of public sector banks (nationalised and SBI Group)was primarily due to higher provisions and write-offs. These banks accounted a healthy growthin the profit from sale of investments, which helped them in writing off bad loans and alsomaking excess/additional provisions towards NPAs. Both the SBI Group and nationalised banksrecorded a growth of 73 per cent CAGR and 54.5 per cent CAGR, respectively, in the profitsfrom the sale of investments.

The improvement observed in the case of the SBI Group has been more at the gross NPAlevel, whereas in the case of the other three groups, the improvement is more at the netNPA level. During 1999-00 to 2002-03, the provision cover for the SBI Group reduced by morethan 100 bps, while it went up in the case of other bank groups. An improvement in thegross NPA generally indicates an improvement in the bank's systems and procedures, whereasan improvement in the net NPA indicates that the bank's balance sheet has the strength tosustain higher provisions.

A comparison of the share of gross NPA ratios and net NPA ratio of the various groups tothe industry average, during 1999-00 to 2002-03, reveals that the SBI Group has increased itsasset quality both at the gross level and the net level. There has been a slight deteriorationin the asset quality of the nationalised banks at the gross level, but it has improved at thenet NPA level on account of higher provision cover. Foreign banks witnessed a marginal deteriorationin the asset quality at both gross and net levels, but more at the net level, on account of

the decrease in the provision cover.

In case of other scheduled commercial banks, excluding ICICI Bank, the asset quality at the

gross level worsened, but remained stable at the net NPA level, on account of higher NPA

provisions. Aggressive lending polices adopted by the private sector banks led to worsening of


the asset quality at the gross level, but, with higher provisions, they were able to maintain

the net NPA ratios. Including ICICI Bank, the asset quality has worsened at both levels, gross

and net.

Take awayOther scheduled commercial banks, especially the new private sector banks are aggressively increasing

the size of their loan book, by compromising a little on the asset quality. But the group is

making higher provisions in maintaining a stable net NPA.

Nationalised banks and SBI Group are concentrating more on improving the asset quality. While

nationalised banks are concentrating on an improvement in the net levels, the SBI Group is

concentrating on an improvement at the gross levels. They had reduced the provision cover.


SBI & associates Table 4

The gross NPAs of the SBI Group declined from 14.08 per cent in 1999-2000 to 8.68 per

cent in 2002-03 because the write offs/recoveries in the last 4 years were higher than the

additions to gross NPAs, indicating an improvement in the NPA management systems over the

last few years.

In 2002-03, the additions to gross NPAs were Rs 5,791 crore while the deletion from gross

NPAs was Rs 8,198 crore.

Net NPAs declined in line with the drop in the gross advances. During 1999-00 to 2002-03,

the ratio of net NPAs to net advances declined from 6.77 per cent in 1999-2000 to 4.12 per

cent in 2002-03. During the same period, there was a drop in the NPA provision cover for

the group as a whole, from 55.7 per cent in 1999-00 to 54.3 per cent in 2002-03, indicating

a lower provision towards non-performing loans. This may be on account of the higher reversal

of provisions for NPA due to the write-off and restructuring of NPAs.

The share of SBI Group in gross advances of all scheduled commercial banks declined from

29.6 per cent in 1999-2000 to 25.3 per cent in 2002-03 while the share of gross NPAs has

also declined at a faster rate from 32.8 per cent in 1999-00 to about 24.9 per cent in 2002-

03. The ratio of share of gross NPAs of the SBI Group to all SCBs to the share of gross

advances reduced from 1.11 per cent in 1999-00 to 0.98 per cent in 2002-03.

1999-00 2000-01 2001-02 2002-03 CAGR (per cent) (1999-00 to 2002-03)

Gross NPAs1 (i) 19,773 20,593 19,451 17,044 -4.83

Net NPAs1 (ii) 8,752 9,450 8,968 7,796 -3.78

Gross NPA as % of gross advances (iii) 14.08 12.73 11.23 8.68

Net NPAas % of net advances (iv) 6.77 6.27 5.45 4.12

Provisioning cover % (v) 55.74 54.11 53.89 54.26

Share of SBI in gross NPAs of all SCBs (vi) 32.79 32.29 27.87 24.86

Share of SBI in net NPAs of all SCBs (vii) 29.80 29.76 24.99 22.99

Share of SBI in net advances of all SCBs (viii) 29.10 28.61 25.49 25.59

Share of SBI in gross advances of all SCBs (ix) 29.63 28.96 25.90 25.27

Ratio of SBI shares in gross NPA to gr adv ( vi/ ix) 1.11 1.12 1.08 0.98

Ratio of SBI shares in net NPA to net adv ( vii/ viii) 1.02 1.04 0.98 0.901 Rs in croresSource: RBI & CRIS INFAC


The share of SBI Group in net advances of all scheduled commercial banks declined from 29.10

per cent in 1999-2000 to 25.59 per cent in 2002-03 while the share of net NPAs declined

from 29.8 per cent to about 23.0 per cent. The ratio of share of net NPAs of the SBI Group

to all SCBs to the share of net advances reduced from 1.02 per cent in 1999-00 to 0.90 per

cent in 2002-03.

The above ratios indicate improvement in the assets quality of the group, with more emphasis

on an improvement in gross NPAs.

Nationalised banks

Nationalised banks Table 5

The ratios of gross NPAs to gross advances declined from 13.91 per cent in 1999-2000 to 9.72

per cent in 2002-03, on account of recovery and write-offs of sticky assets. During 1999-00

to 2002-03, the gross NPAs increased from Rs 33,260 crore in 1999-00 to Rs 36,849 crore in

2002-03.

The provisioning cover increased from 43.93 per cent in 1999-2000 to 50.93 per cent in 2002-

03, which led to a drop in the net NPA ratio to 4.77 per cent in 2002-03 from 7.8 per

cent in 1999-00. The huge profits from the sale of investment made by the nationalised banks,

especially in 2001-02 and 2002-03, enabled them to increase their provisioning cover.

The share of the nationalised banks in total gross advances of all scheduled commercial banks

has declined from 50.5 per cent in 1999-2000 to 48.8 per cent in 2002-03; however, the proportion

of gross NPAs of nationalised banks to gross NPAs of the all scheduled commercial banks declined

at a marginally slower rate from 55.2 per cent to 53.8 per cent. But this improvement is not

that significant when compared to the industry. The ratio of the nationalised banks' share of

gross NPA to the gross advances of all SCBs, has remained stable at 1.1 per cent between

1999-98 and 2002-03, indicating a stable reported asset quality of the group. The credit management

of the group needs to be improved to arrest the further rise in the NPAs.

But on comparing the group's performance with the industry on a net NPA level, we find that

the share of net advances of the nationalised banks has declined from 50.30 per cent in 1999-

1999-00 2000-01 2001-02 2002-03 CAGR (per cent) (1999-00 to 2002-03)

Gross NPAs1 (i) 33,260 34,180 36,706 36,849 3.47

Net NPAs1 (ii) 17,048 17,993 19,298 17,799 1.45

Gross NPA as % of gross advances ( iii ) 13.91 12.16 11.01 9.72

Net NPAas % of net advances (iv ) 7.8 7.01 6.01 4.77

Provisioning cover % ( v ) 43.93 42.35 45.41 50.93

Share of nationalised banks in gross NPAs of all SCBs ( vi ) 55.15 53.60 52.59 53.74

Share of nationalised banks In net NPAs of all SCBs ( vii ) 58.04 56.66 53.77 52.50

Share of nationalised banks in net advances of all SCBs ( viii ) 50.30 50.27 48.95 48.72

Share of nationalised banks in gross advance ( ix) 50.45 50.32 49.86 48.79

Ratio of nat. bank shares in gross NPA to gr adv ( vi/ ix) 1.09 1.07 1.05 1.10

Ratio of nat. bank shares in net NPA to net adv ( vii/ viii) 1.15 1.13 1.10 1.081 Rs in croresSource: RBI & CRIS INFAC


00 to 48.72 per cent in 2002-03; however, the proportion of net NPAs of nationalised banks

to net NPAs of the all scheduled commercial banks declined drastically from 58.04 per cent

to 52.50 per cent on account of higher provisions/ write-offs of sticky assets. This improvement,

when compared to the industry, is marginal. The ratio of the nationalised banks' share of net

NPA to the net advances has declined from 1.15 per cent in 1999-00 to 1.08 per cent in

2002-03, indicating a marginal improvement in the reported net asset quality of the group. The

group had been making higher provision towards NPAs to improve the declared asset quality.

Other scheduled commercial banks (private banks)

Other SCBs Table 6

The private banks have seen their gross NPAs grow at a CAGR of 36.46 per cent (14.16 per

cent) during 1999-2000 to 2002-03.The proportion of gross NPAs to gross advances declined

from 8.17 (8.28 per cent) per cent to 8.08 per cent (7.71 per cent) during 1999-00 and 2002-

03, which is a marginal improvement in comparison to that of the nationalised banks and the

SBI Group. A significant increase in the gross NPA level in 2001-02 and 2002-03 is due to

the merger of ICICI Ltd with ICICI Bank.

Other SCBs (net of ICICI Bank) Table 7

1999-00 2000-01 2001-02 2002-03 CAGR (per cent) (1999-00 to 2002-03)

Gross NPAs1 (i) 4,638 5,897 11,210 11,787 36.46

Net NPAs1 (ii) 2,817 3,592 6,058 6,077 29.21


Net NPAas % of net advances ( iv ) 5.41 5.44 5.73 4.93


Share of other SCBs in gross NPAs of all SCBs (vi ) 7.69 9.25 16.06 17.19

Share of Other SCBs In net NPAs of all SCBs ( vii ) 9.59 11.31 16.88 17.93

Share of Other SCBs in net advances of all SCBs ( viii ) 12.57 12.95 18.03 18.63

Share of other SCBs in gross advances of all SCBs 11.98 12.61 17.39 18.77

Ratio of other SCBs shares in gross NPA to gr adv ( vi/ ix) 0.64 0.73 0.92 0.92

Ratio of other SCBs shares in net NPA to net adv ( vii/ viii) 0.76 0.87 0.94 0.961 Rs in croresSource: RBI & CRIS INFAC

1999-00 2000-01 2001-02 2002-03 CAGR (per cent) (1999-00 to 2002-03)

Gross NPAs1 (i) 4,544 5,488 6,197 6,760 14.16

Net NPAs1 (ii) 2,761 3,438 3,433 3,269 5.79

Gross NPA/Gross advances ( iii ) 8.28 8.51 8.51 7.71



Share of other SCBs in gross NPAs of all SCBs (vi ) 7.53 8.61 8.88 9.86

Share of other SCBs in net NPAs of all SCBs ( vii ) 9.40 10.83 9.56 9.64

Share of other SCBs In net advances of all SCBs ( viii ) 11.52 11.43 11.26 11.95

Share of other SCBs in gross advances (ix) 11.62 11.66 11.65 12.20

Ratio of other SCBs shares in gross NPA to gr adv ( vi/ ix) 0.65 0.74 0.76 0.81

Ratio of other SCBs shares in net NPA to net adv ( vii/ viii) 0.82 0.95 0.85 0.811 Rs in croresSource: RBI & CRIS INFAC


During 1999-00 and 2002-03, the net NPAs as a proportion of net advances declined from 5.41

per cent (5.3 per cent) to 4.9 per cent (3.9 per cent) as the banks increased their provisioning

cover from 39.26 per cent (39.23 per cent) in 1999-2000 to 48.44 per cent (51.64 per cent)

in 2002-03. Increased treasury profits helped banks in making a higher provision.

The marginal improvement witnessed in the gross NPAs, when compared to the industry performance,

reveal a different picture altogether. The proportion of gross advances of the private banks in

total net advances of all scheduled commercial banks increased from 12 per cent (11.6 per

cent) in 1999-00 to 18.8 per cent (12.2 per cent) on 2002-03, while the proportion of gross

NPAs of the private banks in the total net NPAs increased from 7.7 per cent (7.5 per cent)

to 17.2 per cent (9.9 per cent). The ratio of the shares of gross NPAs to gross advances increased

substantially from 0.64 in 1999-00 to 0.92 in 2002-03. The new private sector banks have been

aggressive in their lending and have hence seen an increase in the gross NPAs. The group's

share in the advances also went up substantially. Of all the bank groups, the private sector

banks' performance as regards NPAs has been miserable. The group needs to tighten credit management

policies to keep the NPAs under control.

The proportion of net advances of private banks in the total net advances of all scheduled

commercial banks increased from 12.57 per cent (11.52 per cent) in 1999-00 to 18.63 per

cent (11.95 per cent) in 2002-03, while the proportion of net NPAs of the private banks in

the total net NPAs increased from 9.59 per cent (9.40 per cent) to 17.93 (9.64) per cent.

The ratio of the share of net NPAs to the share of net advances has also increased 0.76 per

cent (0.82 per cent) in 1999-00 to 0.96 per cent (0.81 per cent) in 2002-03. In spite of

the significant increase in the proportion of gross NPAs, we do not see a similar rise in the

proportion of net NPA, which has been on account of higher provisions towards NPA. The group

has been resorting to higher provisions to maintain a stable net NPA. Excluding ICICI Bank,

the ratio of shares of net NPA to net advances has been stable between 1999-00 and 2002-

03.

Foreign banks

Foreign banks Table 81999-00 2000-01 2001-02 2002-03 CAGR (per cent)

(1999-00 to 2002-03)

Gross NPAs1 (i) 2,633 3,100 2,460 2,905 3.33

Net NPAs1 (ii) 757 723 827 929 7.06




Share of foreign banks in gross NPAs of all SCBs ( vi ) 4.37 4.86 3.52 4.24

Share of foreign banks in net NPAs of all SCBs ( vii ) 2.58 2.28 2.35 2.85

Share of foreign banks in net advances of all SCBs ( viii ) 8.03 8.18 7.53 7.06

Share of foreign banks in gross advances (ix ) 7.95 8.11 6.84 7.16

Ratio of foreign banks shares in gross NPA to gr adv ( vi/ ix) 0.55 0.60 0.52 0.59

Ratio of foreign banks share in net NPA to net adv ( vii/ viii) 0.32 0.28 0.31 0.401 Rs in croresSource: RBI & CRIS INFAC


Foreign banks, due to their stringent risk management practices, have maintained the lowest

NPA levels among all the scheduled commercial banks. The proportion of gross NPAs to gross

advances declined from 6.99 per cent in 1999-2000 to 5.22 per cent in 2002-03, while the

proportion of net NPAs to net advances declined from 2.41 per cent to 1.76 per cent. However,

the drop in the net NPAs has not been in proportion with the drop in the gross NPAs on

account of lower provision cover. The provision cover had dropped from 71.25 per cent in

1999-00 to 68.02 per cent in 2002-03.

The share of foreign banks in gross advances of all scheduled commercial banks declined from

8.0 per cent in 1999-2000 to 7.2 per cent in 2002-03, and the share of net NPAs also declined

from 8.03 per cent in 1999-00 to 7.06 per cent in 2002-03. The share of gross NPAs in all

SCBs declined from 4.37 per cent in 1999-00 to 4.24 per cent with the decline in the share

of gross NPAs. However, the share of net NPAs increased from 2.58 per cent to 2.85 per

cent on account of lower provision cover. The drop in the share of gross NPAs in not in

line with the drop in the share of gross advances, indicating a decline in the incremental asset

quality.

The share of foreign banks in net advances of all scheduled commercial banks declined from

8.03 per cent in 1999-2000 to 7.06 per cent in 2002-03; the share of gross NPAs also declined

during this period. However the share of net NPAs grew from 2.58 per cent in 1999-00 to

2.85 per cent in 2002-03 on account of lower provisioning. The ratio of the group's share in

the net NPAs to the share of net advances increased to 0.40 per cent in 2002-03 from 0.32

per cent in 1999-00.

The performance of the group, when compared to the industry, indicates a decline in the asset

quality. The ratio of the share of gross NPA to gross advances increased from 0.55 per cent

in 1999-00 to 0.59 per cent in 2002-03, while the ratio of shares of net NPA to net advances

increased from 0.32 per cent in 1999-00 to 0.40 per cent in 2002-03.



Spreads & net profitability margin3.0

SpreadsThe spreads of all bank groups, except nationalised banks, dropped during 1998-99 to 2002-

03. In the case of nationalised banks, spreads improved by 2 basis points (bps) during the

same period. Other scheduled commercial banks (OSCBs) witnessed the steepest decline in spreads.

On an absolute level, foreign banks, with a spread of 3.35 per cent, were the leaders in 2002-

03, followed by nationalised banks with a spread of 3.29 per cent.

The primary reason for the drop in the spreads, across categories, was the sharper decline in

the yield on carry business in comparison to the interest cost. As interest rates declined, the

yield on advances and the yield on investments both fell faster than the cost of deposits, which

mounted pressure on spreads. Compared to other segments, the decline in the yield on investments

was higher in the case of OSCBs and foreign banks.

Spreads: SBI and associates Table 1

1999 2000 2001 2002 2003

Yield on carry business (I) 10.79 10.48 10.21 9.90 9.38

Yield on advances 11.32 10.89 10.75 9.72 9.04

Yield on investments 12.06 11.70 10.68 10.77 9.74

Interest cost (II) 7.78 7.61 7.39 7.39 6.80

Cost of deposits 8.11 7.90 7.58 7.57 7.02

Cost of borrowings 10.98 10.62 12.43 13.44 10.56

Spreads (II - I) 3.01 2.87 2.81 2.52 2.58

Source: CRIS INFAC

Spreads: Nationalised banks Table 2

1999 2000 2001 2002 2003




Interest cost (II) 7.66 7.61 7.30 7.08 6.33

Cost of deposits 7.64 7.51 7.17 6.95 6.21


Spreads (II - I) 3.27 3.08 3.32 3.11 3.29

Source: CRIS INFAC


Foreign banksSpreads

Foreign banks had the highest spreads in 1998-99, but they declined to 3.35 per cent in 2002-

03 due to the higher drop in the yield on carry business. Despite this, foreign banks had the

highest spreads among all bank groups.

Yield on carry businessThe yield on carry business dropped by 381 bps from 12.50 per cent in 1998-99 to 8.69

per cent in 2002-03. This was primarily due to a 428 bps drop in the yield on advances

from 14.98 per cent in 1998-99 to 10.7 per cent in 2002-03, and a 394 bps drop in the

yield on investments from 12.20 per cent in 1998-99 to 8.26 per cent in 2002-03. The loan

books of foreign banks generally have a high proportion of short-term loans and advances, which

led to a faster drop in the yield on advances.

Moreover, foreign banks generally lend foreign currency loans and ECBs, which carry a floating

rate of interest. With the drop in the global interest rate, the yield on advances suffered. Further,

foreign banks also started facing competition from the new private sector banks, forcing them

to reduce the rate of interest. With the hardening of interest rates, the yield on advances is

expected to improve.

Foreign banks have very little exposure to long tenure securities, and the re-pricing of securities

they hold is faster than that of other bank groups, which resulted in a drop in the yield on

investments. But, in 2002-03, these banks increased their exposure to SLR securities, when the

Spreads: Other scheduled commercial banks Table 3

1999 2000 2001 2002 2003




Interest cost (II) 9.42 8.28 7.91 6.53 7.73

Cost of deposits 9.31 8.11 7.80 7.34 6.62


Spreads (II - I) 2.60 2.73 2.78 2.01 2.00

Source: CRIS INFAC

Spreads: Foreign banks Table 4

1999 2000 2001 2002 2003




Interest cost (II) 8.76 7.41 7.35 6.61 5.34

Cost of deposits 9.01 7.23 6.74 6.08 5.31


Spreads (II - I) 3.74 4.08 4.03 3.30 3.35

Source: CRIS INFAC


acquisition cost of these securities was high. With the hardening of interest rates, this group

will suffer from the drop in the yield on investments and also the losses arising from the mark-

to-market valuation of the securities.

Interest costThe interest cost dropped by 342 bps from 8.76 per cent in 1998-99 to 5.34 per cent in

2002-03, driven by a 370 bps drop in the cost of deposits, which fell from 9.01 per cent

in 1998-99 to 5.31 per cent in 2002-03.

Historically, the reliance of foreign banks on deposits has been lesser than that of the other

bank groups. The interest rates that they offer on deposits are also lower than that offered

by public sector banks. This, coupled with the increased share of low cost deposits, has helped

them to achieve the highest drop in the cost of deposits during 1998-99 and 2002-03. Although

the low cost deposit ratio of foreign banks is lesser than that of the public sector banks, the

proportion of demand deposits in low cost deposits is higher than that of the public sector

banks, which supported the drop in the cost of deposits.

Borrowings constitute 25-30 per cent of the borrowed funds of the foreign banks. Borrowings

are generally of short duration, hence the drop in the cost of borrowings has been in line

with the general drop in the interest rates. Moreover, foreign banks also get funding support

from their parent companies at a very low cost, and sometimes even free of cost.

Nationalised banksSpreads

The spreads of nationalised banks increased marginally by 2 bps from 3.27 per cent in 1998-

99 to 3.29 per cent in 2002-03, driven by a 133 bps drop in the interest cost.

The yield on carry business dropped by 131 bps to 9.61 per cent in 2002-03, on account

of the slower drop in the yield on investments.

Yield on carry businessThe yield on carry business fell from 10.93 per cent in 1998-99 to 9.61 per cent in 2002-

03. The yield on advances dropped by 237 bps from 12.2 per cent in 1998-99 to 9.82 per

cent in 2002-03, while the yield on investments slipped by just 153 bps from 11.72 per cent

in 1998-99 to 10.18 per cent in 2002-03.

The drop in the yield on advances was in line with the industry.

Across all categories, the lowest drop in the yield on investment was witnessed in case of nationalised

banks. This is due to the high exposure to long tenure securities, which lowered the re-pricing

ratio, and also because the group maintained a steady SLR.

Interest costThe cost of deposits of nationalised banks dropped by 143 bps from 7.64 per cent in 1998-

99 to 6.21 per cent in 2002-03. Nationalised banks were quick to respond to the declining

interest rates by revising downwards the interest rate on term deposits. Nationalised banks have

one of the highest low cost deposit ratio of 36 per cent (next only to 37 per cent of the

SBI Group). This helped banks in this category in lowering the cost of deposits.


State Bank of India & associatesSpreads

The spreads of nationalised banks declined by 43 bps from 3.01 per cent in 1998-99 to 2.58

per cent in 2002-03. A faster decline was witnessed in both the yield on advances and the

yield on investments, which pulled down the yield on carry business. A slower decline in the

cost of deposits, vis-à-vis other bank groups, restricted the fall in the interest cost.

Yield on the carry businessThe yield on carry business dropped by 141 bps from 10.8 per cent in 1998-99 to 9.4 per

cent in 2002-03. During the same period, the yield on the advances fell by 228 bps from

11.32 per cent to 9.04 per cent and the yield on investments slipped by 232 bps from 12.06

per cent in 9.74 per cent.

In 1998-99, this group enjoyed a higher yield on investments, compared to the nationalised

banks, but in 2002-03, the yield on investments fell below that of the nationalised banks. We

believe that this occurred due to the SBI Group's increasing exposure to SLR securities during

1998-99 to 2002-03, with the proportion of SLR securities to NTDL touching 46 per cent during

2002-03. With falling interest rates, every successive years' exposure to SLR securities was at

a higher acquisition cost, which pulled down the yield. Further, the group had also booked healthy

treasury profits by selling high-yield securities, which may have also contributed to the drop

in the yield.

In the case of the nationalised banks, the yield on investments was steady at 11.4-11.7 per

cent during 1998-99 to 2001-02, but dropped to 10.2 per cent in 2002-03 when the group

increased its exposure to SLR securities, with the SLR touching 36 per cent. Though nationalised

banks also booked healthy profits on investments, the growth in treasury profits was less than

that of the SBI Group.

The yield on investments is higher than the yield on advances, which may be on account of

the group's historically higher exposure to higher tenure government securities.

The SBI Group has also shown a trend similar to that witnessed in the nationalised banks, with

approximately 50 per cent of the loans and advances classified under 'more than 1 year' maturity

bucket, and approximately 70 per cent of the investments being classified under 'more than

1 year' maturity buckets.

The drop in the yield on advances has been in line with the industry. The 228 bps drop

in the yield on advances has been the lowest amongst all the bank groups. For the SBI Group,

the yield on advances in 2002-03 was lower than that of the nationalised banks, due to the

lower lending rates that it offered on advances.

Interest costThe interest cost declined by 133 bps from 7.66 per cent in 1998-99 to 6.33 per cent in

2002-03, with the cost of deposits dropping from 7.64 per cent in 1998-99 to 6.21 per cent

in 2002-03.

For this group, the proportion of low cost deposits to total deposits dropped to 37 per cent

in 2002-03 from 43 per cent in 1997-98, but the ratio was still the highest amongst all the


scheduled commercial banks. A study of the composition of low cost deposits reveals that the

share of savings deposits in low cost deposits rose from 52 per cent in 1997-98 to 61 per

cent in 2002-03.

Further, the drop in the interest cost was restricted due to the higher interest obligation (on

account of Resurgent India Bonds and India Millennium Deposits). The outstanding deposits under

RIB/IMD stood at Rs 437.3 billion as on March 31, 2003, in the books of SBI. Excluding RIB/

IMD, the cost of deposits for SBI fell from 8.05 per cent in 1998-99 to 6.43 per cent in

2002-03.

Borrowings are generally raised to meet mismatches in short-term liquidity and are a very small

proportion of the banks' total borrowings. The change in the cost of borrowing has a minor

impact on the interest cost

Other scheduled commercial banksSpreads

Spreads dropped by 60 bps from 2.60 per cent (2.57 per cent) in 1998-99 to 2.00 per cent

(2.60 per cent) in 2002-03. The steeper fall in the yield on investment dragged down the

yield on carry business, which in turn put pressure on the spreads. If we exclude ICICI Bank

from the OSCBs group, we observe a 3 bps increase in spreads, to 2.60 per cent in 2002-

03.

Yield on carry businessThe yield on carry business declined by 229 bps (265 bps) from 12.02 per cent (12 per cent)

in 1998-99 to 9.73 per cent (9.36 per cent) in 2002-03, after touching the lowest level of

8.5 per cent (10.3 per cent) in 2001-02. This sudden drop was due to the merger of ICICI

with ICICI Bank.

The yield on advances dropped to 10.9 per cent (10.2 per cent) in 2002-03 from 13.6 per

cent (13.47 per cent) in 1997-98, while the yield on investments shrank to 9.0 per cent (9.38

per cent) in 2002-03 from 12.2 per cent (12.3 per cent) in 1997.98. The higher fall in the

yield on investments was due to the group's lower exposure to high coupon securities. Further,

based on a study of the maturity profile of a sample set of private sector banks, we find

that, for this group, the re-pricing of securities took place at a faster rate as compared to the

public sector banks. Securities maturing within 1 year were 38 per cent in case of the sample

private sector banks, while it was 10 per cent and 20 per cent in the case of a sample set

of nationalised banks and SBI group, respectively.

The drop in the yield on advances was due to the aggressive lending strategy adopted by

the group, especially the new private sector banks. Further, the drop has been in line with

the industry.

Interest costThe interest cost increased from 9.42 per cent (9.43 per cent) in 1998-99 to 7.73 per cent

(6.76 per cent) in 2002-03, with cost of deposits dropping by 269 bps (262 bps) from 9.31

per cent (9.35 per cent) in 1998-99 to 6.62 per cent (6.73 per cent) in 2002-03.


There was a marginal improvement in the low cost deposit ratio from 22 per cent in 1997-

98 to 24 per cent in 2002-03. However, the proportion of savings in low cost deposits increased

from 47 per cent in 1997-98 to 53 per cent in 2002-03. The fall in the cost of deposits

has been in line with general drop in the interest rate.

Many OSCBs, especially the old private sector banks, offer a high rate of interest on term deposits,

as compared to the public sector banks (nationalised banks and SBI Group). The low cost of

deposits, 24 per cent in 2002-03, was the lowest amongst all bank groups. Moreover, the technology-

driven products introduced by many private sector banks (OSCBs) allow customers to switch

between term and savings accounts; this increases the liability of term deposits. These factors

contribute to the higher cost of deposits.

The cost of borrowings dropped from a high of 15.23 per cent (14.57 per cent) in 1999-

00 to 12.55 per cent (9.45 per cent) in 2002-03 after touching a low of 3.3 per cent (12.03

per cent) in 2001-02. This sudden spike was because of the merger of ICICI Ltd with ICICI

Bank. ICICI Ltd's high cost deposits were merged with the banking system, which led to a

sudden surge in the interest cost. With the ICICI Bank's focus on replacing its high cost borrowings

with low cost of deposits, there will be a drop in the cost of borrowings and a reduction

in the share of borrowings in total borrowings.

Net profitability margin (NPM)All segments, except OSCBs, either improved their NPM or at least maintained it during 1998-

99 to 2002-03. In 2002-03, foreign banks had the highest NPM of 2.5 per cent, followed by

public sector banks with a NPM of 2.4 per cent.

Foreign banks

NPM: Foreign banks Table 5

1999 2000 2001 2002 2003

Spreads ( I ) 3.74 4.08 4.03 3.30 3.35

Operating expense as per cent of AFD (II) 4.05 3.58 3.70 3.45 3.15

Core-fee-income as per cent of AFD (III) 2.74 2.54 2.47 2.14 2.35

Net profitability margin (I - II + III) 2.43 3.04 2.81 1.99 2.55

AFD: Average funds deployed

Source: CRIS INFAC

The NPM improved marginally to 2.55 per cent in 2002-03, from 2.43 per cent in 1998-99,

despite the fall in the spreads. The operating expense ratio dropped by 90 bps to 3.1 per

cent in 2002-03 from 4.05 per cent in 1998-99. However, the entire benefit could not be passed

on to the NPM due to the drop in the core fee income ratio (also called core fee-based income

ratio, which is core fee income as a percentage of average funds deployed), which dropped

by 39 bps to reach 2.35 per cent by 2002-03 from 2.74 per cent in 1998-99.

In spite of the sharpest decline (in percentage points) in the operating expense ratio (operating

expense as a percentage of average funds deployed), foreign banks still continue to have a

very high operating expense ratio amongst all bank groups. The high operating cost is on account

of the heavy investments in infrastructure and technology, and staff cost.


Foreign banks, due to their worldwide network, are strong in providing banking services like

trade finance, custody and cash management services, due to which their fee-based income is

high. They are also strong in treasury operations and foreign exchange remittances, which aid

them in generating fee income in the nature of exchange gains.

Though the ratio had been declining, foreign banks continued to enjoy the highest core fee

income ratio amongst all the banking groups. Foreign banks lend foreign currency loans, and

the syndication charges/processing charges recovered are high. They are also strong in trade finance

and correspondent-banking services, where they earn fee-based income without taking exposure.

This leads to a high core fee income ratio. The ratio of core fee income ratio to NPM dropped

by 20 percentage points between 1998-99 and 2002-03, to 92 per cent in 2002-03, in line

with the industry trend, yet it was a major factor in keeping the NPM stable.

Greater spreads and high core fee based income help foreign banks in managing higher operating

expenses and, thus, have a high NPM. The foreign banks' NPM of 2.55 per cent in 2002-

03 was the highest amongst all scheduled commercial banks.

But as more private sector banks venture into areas where foreign banks are strong, competition

will increase, which will exert pressure on spreads and core fee income. Foreign banks will

thus need to control to their operating costs to have a stable NPM.

Nationalised banks

NPM: Nationalised banks Table 6

1999 2000 2001 2002 2003

Spreads ( I ) 3.27 3.08 3.32 3.11 3.29





Source: CRIS INFAC

Despite stable spreads, the NPM of nationalised banks improved by 22 bps (the highest amongst

all bank groups) to 1.42 per cent in 2002-03 from 1.20 per cent in 1998-99. This can be

attributed to the savings in operating expenses. The operating expense ratio dropped to 2.6

per cent in 2002-03 from 3.1 per cent in 1998-99, after touching a high of 3.15 per cent

in 2000-01. The sudden spike was on account of the voluntary retirement schemes (VRS) introduced

by nationalised banks. The savings in manpower could be seen through 2001-02 and 2002-03,

when the operating expenses ratio started declining to reach 2.62 per cent in 2002-03.

However, the drop in the core fee-based income ratio restricted the increase in the NPM to

1.4 per cent. The ratio of core fee-based income to the average funds deployed had declined

to 0.7 per cent in 2002-03 from 1.0 per cent in 1998-99, thereby reducing its contribution

to the NPM to 53 per cent in 2002-03 from 0.83 per cent in 1998-99.


Nationalised banks had the lowest core fee income ratio amongst all the SCBs. Further, the group's

share in fee-based income reduced by about 5 percentage points during 1998-99 and 2002-

03 to reach 34 per cent in 2002-03. Healthy spreads and control over operating costs helped

the NPM to improve.

Going forward, with the pressure on spreads as the yield on investments drop, the group needs

to concentrate on increasing its core fee-based income and control operating expenses to maintain

the growth in NPM. With staff cost accounting for more than 70 per cent of the operating

expenses, the group needs to utilise manpower efficiently and improve productivity.

To compete with the more aggressive private sector banks, the group will have to invest in

technology, which will also increase the operating expense ratio and render some staff as excess.

This can pull down the productivity.


NPM: SBI and associates Table 7

1999 2000 2001 2002 2003

Spreads ( I ) 3.01 2.87 2.81 2.52 2.58





Source: CRIS INFAC

The NPM declined by just 9 bps to 1.35 per cent in 2002-03 from 1.44 per cent in 1998-

99, despite the 43 bps decline in spreads and the fall in the contribution of core fee-based

income from more than 100 per cent (115 per cent) in 1998-99 to 82 per cent in 2002-

03. This has been on account the SBI Group's focus on controlling operating expenses. The

operating expense ratio declined by 89 bps from 3.23 per cent in 1998-99 to 2.34 per cent

in 2002-03. During 2000-01, the operating expense ratio increased to 3.13 per cent from 2.89

per cent in 1999-00, because of impact of voluntary retirement scheme introduced by the group.

The operating expense ratio of 2.34 per cent during 2002-03 is lower than that of the nationalised

banks.

The core fee income ratio declined by 55 bps from 1.66 per cent in 1998-99 to 1.11 per

cent in 2002-03, in line with the industry trend. Although the share of core fee income shrank

to 82 per cent in 2002-03, it still remains the major contributor to the NPM.

The core fee income ratio at 1.11 per cent is better than that of nationalised banks and other

scheduled commercial banks.

Staff cost accounts for than 70 per cent of the operating expense, hence, with increasing pressure

on the spreads, the group will have to control staff cost and improve productivity to maintain

a stable NPM. The group has planned investments in technology to compete effectively with

other players. This is likely to result in excess manpower, which need to be utilised effectively

so that overall productivity can be improved. Along with controlling operating costs, the SBI

Group also need to continue its focus on increasing core fee income, so that NPM is stable.


Other scheduled commercial banks

NPM: Other scheduled commercial banks Table 8

1999 2000 2001 2002 2003

Spreads ( I ) 2.60 2.73 2.78 2.01 2.00





Source: CRIS INFAC

With the drop in spreads, the NPM declined to 0.8 per cent (1.21 per cent) in 2002-03 from

1.4 per cent (1.26 per cent) in 1998-99. Further, the core fee income ratio declined by 20

bps (27 bps) from 1.24 per cent (1.22 per cent) in 1998-99 to 1.04 per cent (0.95 per cent)

in 2002-03. However, the drop was restricted due to the marginal savings in the operating expenses

ratio. The operating expenses ratio dropped to 2.25 per cent (2.33 per cent) in 2002-03 from

2.49 per cent (2.25 per cent) in 1998-99. But the operating expense ratio increased from 2.17

per cent (2.17 per cent) in 2000-01 to 2.25 per cent (2.33 per cent) in 2002-03 due to

the aggressive branch expansion undertaken by this group, especially the new private sector

banks - HDFC Bank, UTI Bank, ICICI Bank, IDBI Bank, Kotak Mahindra Bank etc. Many of

the private sector banks are still in the growth stage and expanding their reach (new private

sector banks), or are in the technology upgradation mode, the benefits of which are expected

to accrue to them in later years.

Contrary to the industry trend, the contribution of the core-fee income ratio to the NPM increased

from 0.91 per cent (0.97 per cent) in 1998-99 to 1.32 per cent (0.78 per cent) in 2002-

03. New private sector banks, especially ICICI Bank, have been pioneers in venturing into new

business segments, which has helped them in generating higher fee-based income. ICICI Bank

was among the first to venture into credit cards, providing depository services, third-party business

(acting as corporate agents for distribution of mutual fund and insurance products of the leading

mutual fund and insurance companies) and private banking services to their clients. Further, the

huge thrust on retail credit also helped in the generation of fee-based income, in the form

of processing fees.

Since most of the banks in this group are in a growth phase, we believe that it will take

some time for the operating expense ratio to stabilise. With spreads under pressure and operating

expense ratio expected to increase, the group needs to increase its focus on improving the

core fee income by venturing into new business areas.



Profit and loss account4.0

Total interest incomeOther scheduled commercial banks (OSCBs)

OSC Banks: Interest income Table 1

Other scheduled commercial banks (OSCBs) recorded the highest growth in total interest income

amongst all bank groups. The total interest income of OSCBs grew at a CAGR of 25.34 per

cent (14.51 per cent) between 1997-98 and 2002-03, driven by a 24.54 per cent (11.87 per

cent) CAGR growth in income from advances and 26.46 per cent (17.88 per cent) CAGR growth

in income from investments. Between 1998-99 and 2002-03, the yield on advances declined

by 264 (332) basis points, while the yield on investments declined by 325 (293) basis points.

Advances grew by 31.18 per cent (19.72 per cent ) CAGR while investments went up by

32.0 per cent (22.7 per cent ) CAGR between 1998-99 and 2002-03.


SBI and associates: Total interest income Table 2

During 1998-99 to 2002-03, the total interest income of the SBI Group grew at a CAGR of

14 per cent, with income from advances, income from investments, and income from RBI &

inter-bank funds growing at a CAGR of 8.6 per cent, 18.6 per cent and 34.3 per cent, respectively.

The low growth in income from advances was mainly on account of falling interest rates (the

yield on advances declined from 11.32 per cent to 9.04 per cent), coupled with poor credit

offtake.

Rs billion 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 CAGR (per cent) (1997-98 to 2002-03)

Interest/discount on advances/bills 46.3 53.0 60.3 72.3 80.7 138.9 24.5

Income on Investments 28.5 38.4 50.0 63.1 73.9 92.1 26.5

Int on bal with RBI and other inter-bank funds

3.6 6.9 7.1 8.4 9.7 8.5 18.9

Other interest income 0.4 1.7 1.3 1.1 1.2 4.4 58.7

Total interest income 78.8 100.0 118.7 145.0 165.5 243.8 25.3

Source: RBI & CRIS INFAC research





8.0 13.4 18.3 19.6 33.7 35.1 34.3

Other interest earned 11.5 20.1 17.6 21.8 16.1 14.5 4.6




Income on investments grew faster than income on advances, as the SBI Group substantially

increased its exposure towards SLR securities during 1997-98 to 2002-03. Further, we believe

that the SBI Group has a relatively high exposure to high coupon securities in its investment

portfolio.

Nationalised banks

Foreign banks: Interest income Table 4

Nationalised banks: Interest income Table 3Rs billion 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 CAGR (per cent)

(1997-98 to 2002-03)


Income on Investments 166.9 196.9 230.9 256.2 278.3 300.8 12.5Int on bal with RBI and other inter-bank 19.7 24.6 24.1 28.8 30.8 21.2 1.5

Others 4.0 7.9 4.8 4.6 4.4 9.2 18.4



Interest income grew at 11.87 per cent CAGR during 1997-98 to 2002-03, driven by a 12.5

per cent CAGR growth in income on investments. During the period under consideration advances

grew at a CAGR of 17.28 per cent, while investments grew by a CAGR of 15.86 per cent.

However, the interest on advances grew by only 12.1 per cent CAGR in comparison with a

12.5 per cent CAGR growth in the income on investments. This was primarily because, between

1998-99 and 2002-03, the decline in the yield on advances (237 basis points) was greater than

the fall in the yield on investments (153 basis points), which offset the growth in the advances

portfolio. The yield on advances is linked to the decline in the PLR (which dropped rapidly

during 1998-2003) while the yield on investments depends on the composition of securities in

the investment portfolio of the bank. Several nationalised banks carried high coupon securities

in their portfolio.

Foreign banks





4.4 5.9 5.0 5.8 6.1 3.0 -7.5

Other interest income 0.9 1.3 1.2 1.3 0.9 1.4 7.8



The total interest income of foreign banks grew at a CAGR of 5.74 per cent between 1997-

98 and 2002-03, the lowest growth rate among all categories. Income from advances grew at

a CAGR of 4.83 per cent and income from investments grew at a CAGR of 9.59 per cent.

Advances grew at a CAGR of 12.2 per cent during the same period while investments grew

at a CAGR of 17.3 per cent. Between 1998-99 and 2002-03, the yield on advances declined

by 428 basis points while the yield on investments fell by 394 basis points.


Interest expendedOther scheduled commercial banks

OSC Banks: Interest expended Table 5

The total interest expended grew at a CAGR of 25.8 per cent (12.93 per cent) between 1997-

98 and 2002-03. The interest on deposits and interest on RBI/interbank borrowings grew at a

CAGR of 17.70 per cent (13.26 per cent) and 19.80 per cent (9.75 per cent) respectively.

The steep growth in the ‘others' category was because ICICI Bank classified Rs 5,280 crore

of interest on borrowings of the erstwhile ICICI as other interest expense.

State Bank of India & associates

SBI and associates: Total interest expended Table 6

During 1997-98 and 2002-03, total interest expended grew at a CAGR of 14.37 per cent, driven

by a 15.21 per cent CAGR growth in interest on deposits. For SBI and associates, the cost

of deposits had been higher than the average cost of deposits for all scheduled commercial

banks due to the higher interest obligation (on account of Resurgent India Bonds and India

Millennium Deposits). With excess liquidity and low demand for credit the borrowings of the

bank group came down, which in turn led to a drop in the interest on RBI/ inter-bank borrowings.

Nationalised banks

Nationalised banks: Interest expended Table 7


Interest on deposits 55.1 72.6 81.2 97.6 112.3 124.5 17.7

Interest on RBI/inter-bank borrowings 1.9 2.9 4.2 4.3 5.0 4.7 19.8Others 2.0 2.9 4.1 5.0 5.8 56.8 94.8

Total interest expended 59.0 78.4 89.6 106.9 123.1 186.0 25.8




Interest on RBI/inter-bank borrowings 5.3 5.4 6.4 6.2 4.6 2.3 -15.7

Others 5.4 5.1 4.7 7.5 9.9 9.2 11.4Total interest expended 139.0 169.8 199.0 229.0 265.6 272.1 14.4




Interest on RBI/inter-bank borrowings(a) 4.5 5.9 7.1 7.7 6.8 5.7 4.9

Others(b) 7.3 6.2 10.2 11.8 14.5 15.2 15.9Total interest expended 262.6 308.6 354.8 387.9 426.0 426.5 10.2



Between 1997-98 and 2002-03, total interest expended grew at a CAGR of 10.18 per cent,

with interest on deposits growing at a CAGR of 10.09 per cent. The slow growth in the interest

on deposits was on account of a fall in the interest rate offered on term deposits. The cost

of deposits dropped by approximately 140 basis points to 6.2 per cent in 2002-03, while total

deposits grew by 14 per cent CAGR during 1997-98 to 2002-03.

Foreign banks

Foreign banks: Interest expended Table 8

Between 1997-98 and 2002-03, the total interest expended grew at a CAGR of 3.7 per cent

while the interest on deposits grew at a CAGR of 1.3 per cent. However, during the same

period, the interest on RBI/ inter bank borrowings grew at a CAGR of 13.6 per cent as the

share of borrowings in the total liabilities went up from 15 per cent to 20 per cent.

While the domestic banks focus on mobilising deposits to meet their funding requirements, foreign

banks (on account of the restricted branch network) have a higher proportion of borrowings

in their total borrowed funds vis-à-vis their domestic peers. This higher proportion of borrowings

of foreign banks has resulted in an increase in their interest on borrowings.



Interest on RBI/inter-bank borrowings(a) 7.2 9.6 12.4 17.1 20.7 13.5 13.6Others(b) 1.7 1.7 2.5 4.1 2.3 1.6 -0.9

Total interest expended 42.2 52.0 49.9 57.7 60.5 50.7 3.7



Other income5.0

Besides interest income, banks also earn fee income from services such as issuing letters of

credit, providing bank guarantees, bill collection, and cash management services, for which they

charge commission or brokerage, income in the form of draft charges and bank charges. These

sources of income together constitute the "other income" of a bank. Banks also earn income

by way of profits on the sale of their investments, which is also classified as other income.

Other income can be divided into two broad categories: core fee income, and other income.

Core fee income is the income generated from the banks' core activities such as mobilising

deposits, lending and other normal banking services. Income from other allied activities like credit

cards, depository services and third-party distribution are also classified under core fee income.

On the other hand, the profits on sale of investments, fixed assets and other miscellaneous

income are classified as other income. Since these are not regular sources of income, banks

need to concentrate on core fee income to maintain stable profitability.

Other income (excluding profit on sale of investment) as per cent of total income

Other income (ex treasury profits) as per cent of total income Table 1

(per cent) 1998 1999 2000 2001 2002 2003

SBI and assoc 14.0 14.1 12.9 11.8 11.2 10.9

Nationalised banks 9.7 9.5 9.0 8.5 7.9 7.8

OSCBs 10.6 10.8 10.4 10.0 8.6 10.2

Foreign banks 18.3 18.2 18.6 18.0 17.2 21.4

All SCBs 11.7 11.6 11.0 10.4 9.6 10.0

Source: CRIS INFAC

During 1997-98 to 2002-03, the share of other income (excluding profit on sale of investment)

in total income has decreased for all the categories, except foreign banks. To a certain extent,

this decline is the result of an increase in the total income on account of an increase in the

profit on sale of investments.

Core fee income as per cent of other income Table 2

(per cent) 1998 1999 2000 2001 2002 2003

SBI and associates 92.6 94.1 85.6 80.4 76.9 62.0


OSCBs 55.1 73.3 54.6 69.2 36.9 37.3

Foreign banks 82.0 93.6 85.2 82.7 64.6 78.8

All SCBs 78.3 85.6 73.2 73.2 54.8 48.9

Source: CRIS INFAC


Foreign banksForeign banks have the highest proportion of other income (other income excluding the profit

on sale of investment) to the total income amongst all categories. The share of other income

in total income increased from 18.3 per cent in 1997-98 to 21.4 per cent in 2002-03. During

1997-98 to 2001-02, the proportion of other income (excluding profit on sale of investments)

in total income had been stable between 17 per cent and 18 per cent, but it jumped to

21.4 per cent in 2002-03, driven by an impressive 24 per cent growth in the profit from exchange

transactions. Moreover, interest income recorded a negative growth of 7.6 per cent during the

same period due to low credit offtake.

The core fee income of foreign banks grew at 9 per cent CAGR during 1997-98 to 2002-

03, driven by the 11 per cent CAGR growth in profit on exchange transactions. Foreign banks,

due to their global presence, are strong players in foreign exchange transactions and trade finance

transactions. Further, the syndication fee/processing fee on foreign currency lending, in which

they are strong, help foreign banks in increasing their fee-based income. However, restrictive

branch networks hampers their fee income in the form of commission and exchange income.

State Bank of India & associatesThe share of other income (excluding profit on sale of investments) in total income has declined

from a high of 14 per cent in 1997-98 to 10.9 per cent in 2002-03, primarily due to the

increased profit on sale of investments. During 1997-98 to 2002-03, other income grew at 8.8

per cent CAGR, while total income grew at 14.5 per cent CAGR.

During 1997-98 to 2002-03, commission exchange and brokerage grew at 8.4 per cent CAGR,

while miscellaneous income went up from Rs 1.8 billion in 1997-98 to Rs 7.34 billion in 2002-

03, a growth of 31 per cent CAGR. The growth in commission exchange and brokerage is

on account the SBI Group's wide branch network.

The growth of the SBI Group's other income is lower than that of OSCBs on account of the

following factors.

Higher base effect

Its late entry into other areas that generate fee-based income

Core fee-based income Table 3

(Rs in billion) 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 CAGR % (1998-2003)

SBI and associates 33.9 39.7 41.3 43.1 46.3 49.6 7.9

Nationalised banks 36.8 41.3 44.3 47.3 48.9 52.8 7.5

OSCBs 8.6 10.6 12.5 14.5 15.7 27.0 25.6

Foreign banks 15.7 17.4 18.3 20.8 21.1 24.4 9.2

All SCBs 96.0 110.1 117.8 127.2 133.9 156.4 10.3

Source: CRIS INFAC


Other scheduled commercial banksThe proportion of other income to the total income declined marginally from 10.6 per cent

(10.5 per cent) in 1997-98 to 10.2 per cent (9.2 per cent) in 2002-03, due to the increase

in the profit on sale of investment. During 1997-98 to 2002-03, other income grew at 26 per

cent (13 per cent) CAGR, while the total income grew at 27 per cent (16 per cent) CAGR.

Other scheduled commercial banks recorded the highest growth in core fee income amongst

all the scheduled commercial banks. During 1997-98 to 2002-03, core fee income of OSCBs

grew by 25.6 per cent (13.8 per cent) CAGR, driven by a 30 per cent (18 per cent) CAGR

growth in commission, exchange and brokerage and a 32 per cent (10 per cent) CAGR growth

in other miscellaneous income.

This growth can be attributed to the following factors:

Increase in reach through branch expansion (especially new private sector banks).

Higher service charged in comparison to the public sector banks (nationalised and SBI Group)

The entry of new private sector banks into new areas that generate fee-based income, such as credit

cards, depository services, and third-party distributions.

Increased focus on retail finance, especially by new private sector banks, which aided in generating fee-

based income (in form of processing fees).

Low base effect.

We believe that the new private sector banks will continue to explore new avenues to increase

other income, which will enable them to diversify their revenue stream and also provide stability

to their bottomline.

Nationalised banksThe share of other income in the total income of nationalised banks dropped from 9.7 per

cent in 1997-98 to 7.8 per cent in 2002-03 due to higher growth in the profit on sale of

investments.

Other income (excluding profit on sale of investments) grew at 8 per cent CAGR during 1997-

98 to 2002-03, driven by an 8 per cent CAGR growth in commission, exchange and brokerage

and a 15 per cent CAGR growth in miscellaneous income.

During 1997-98 to 2002-03, total income grew at 13.2 per cent CAGR, with interest income

growing at 11.9 per cent CAGR.

In the case of nationalised banks, the trend that is observed is similar to that seen in the

SBI Group, i.e., growth was slower because nationalised banks were slow in foraying into different

areas to diversify their revenue stream.


Profit on sale of investment

Share of profit on sale of investments in total income Table 4

(per cent) 1998 1999 2000 2001 2002 2003

SBI and associates 0.7 0.3 1.3 1.8 2.3 5.5


OSCBs 6.0 1.8 5.7 2.7 11.9 12.7

Foreign banks 3.7 1.0 2.2 2.9 7.9 4.2

All SCBs 2.1 0.8 2.5 2.3 6.0 8.0

Source: CRIS INFAC

Profit on sale of investments Table 5

Profit on sale of investments increased substantiallyThe share of profit on sale of investments in the total income has increased for all categories.

The falling interest rate scenario has helped all groups to post a healthy growth in treasury

profits.

Nationalised banksNationalised banks had recorded the highest increase in the share of profit on sale of investments

in the total income; it went up from a mere 1.9 per cent in 1997-98 to 8.9 per cent in

2002-03. The high exposure of nationalised banks to high coupon securities gave them an opportunity

to book healthy profits during the soft interest rates scenario prevalent then.

Our study of the maturity profile of investments of a sample set of banks falling within this

group reveals that approximately 65 per cent of the securities are classified in 'over the 3-

year' maturity bucket. (In a hardening interest rate scenario, however, the profit on sale of investments

will come down).

Other scheduled commercial banksThe proportion of profit on sale of investments in the total income has gone up from 6.0

per cent (5.8 per cent) in 1997-98 to 12.7 per cent (12.1 per cent) in 2002-03. The OSCBs

have the highest share of profit on sale of investments in the other income amongst all groups.

Compared to public sector banks (SBI Group and nationalised banks), the share of interest income

in the total income is lower for the OSCBs, as they focused on increasing their fee-based income

by venturing into new business opportunities. Further, with the impressive growth in the profit

on sale of investments, its proportion in total income increased.

(Rs in billion) 1998 1999 2000 2001 2002 2003 CAGR (per cent)

SBI and associates 1.7 0.9 4.5 7.0 10.2 26.7 72.6


OSCBs 5.6 2.1 8.1 4.4 24.9 40.0 48.0

Foreign banks 3.3 1.0 2.3 3.5 10.3 5.1 9.5

All SCBs 18.7 8.7 29.9 31.7 94.2 142.6 50.2

Source: CRIS INFAC


With the hardening of interest rates, as explained in the earlier chapters, banks in this group

are expected to book losses from the sale of investments, which will pull down the proportion

of profit on sale of investments in total income.

State Bank of India & AssociatesThe share of profit on sale of investments in the total income of the SBI Group had also

gone up impressively, rising from a mere 0.7 per cent in 1997-98 to 5.5 per cent in 2002-

03. The profit on sale of investments recorded a highest growth of 73 per cent CAGR during

1997-98 to 2002-03.

With their strong core business, the SBI Group had, over the years, relied less on other income

including profit on sale of investments. The soft interest rate scenario and the high exposure

to high coupon SLR helped the group to post a healthy growth in the profit on sale of investments

and thus increase the share of treasury profits in total income.

Foreign banksForeign banks had registered a marginal increase in the share of profit on sale of investments

in the total income during the period under review. The share rose from 3.7 per cent in 1997-

98 to 4.2 per cent in 2002-03.

Foreign banks recorded the lowest growth of 10 per cent CAGR in the profit on sale of investments

during 1997-98 to 2002-03. Since foreign banks had comparatively lesser exposure to high coupon

securities, the profit on sale of investments was less. Our study of the maturity profile of investment

as of March 31, 2003, of a sample set of foreign banks, reveals that 43 per cent of the securities

are classified in the 'up to 1 year' maturity bucket.

Lower profit on sale of investments led to a marginal growth in the share of profit on sale

of investments in total income. Also, the higher growth in other income (excluding profit on

sale of investments) in comparison to profit on sale of investments slowed down the increase

the share of profit on sale of investments in total income.

With the estimated loss on sale of investments, this share is expected to drop.



Operating expenses6.0

The staff cost accounts for a major portion of the operating expense for all the bank groups,

particularly so in the case of public sector banks. Hence, all the players need to control their

manpower costs to control their operating expenses.

We have made an attempt to analyse the performance of the various categories in two areas:

staff cost, and other operating expenses (i.e., operating expenses excluding staff cost).

Staff cost

Group-wise share of employee cost in operating cost Figure 1

Source: CRIS INFAC and RBI

State bank of India and associatesHighest proportion of staff cost in total operating expenses among all SCBs

Among all the scheduled commercial banks, the proportion of staff cost in total operating expenses

is highest for the SBI Group. Due to the high levels of recruitment in earlier years, the proportion

of staff cost to the operating expense is high for these banks. Further, banks in this group

spent very little on technology, and most of the work was carried out manually. Even today,

not all branches of SBI are computerised.

The proportion of staff cost in the total operating cost has, however, declined from about 75

per cent in 1997-98 to about 71 per cent in 2002-03, due to a reduction in the number of

employees from about 308,817 in 1997-98 to 282,923 in 2002-03, coupled with an increase

in the non-staff operating expenses (which grew at 14.1 per cent CAGR during the same period).

The reduction in the staff strength is on account of the voluntary retirement schemes (VRS)

launched by the group. The technology upgradation drive, along with the focus on computerisation

of all branches, had contributed to the growth in non-staff expenditure, along with expenses

on advertising and sales etc.

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

SBI & associates Natonalised banks Other SCBs Foreign banks All SCBs

(per cent)


Between 1997-98 and 2002-03, the SBI Group recorded a CAGR of 9.67 per cent in its staff

cost while its cost per employee grew at a CAGR of 11.6 per cent. The group's cost per

employee of Rs 0.262 million is the lowest amongst all scheduled commercial banks. Among

the public sector banks, the SBI Group has in place a separate wage agreement. As of March

31, 2002, 25 per cent of the work force of this group constituted the management cadre, whereas

it was 29 per cent in the case of nationalised banks.

SBI & associates: No of employees vs cost per employee Figure 2

275,000

285,000

295,000

305,000

315,000

1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03

Nu

mb

er o

f em

plo

yees

125,000

175,000

225,000

275,000

325,000

Co

st p

er e

mp

loye

e (R

s)

Number Of employees Cost per employee

VRS

Nationalised banksThe nationalised banks recorded a CAGR of 10.42 per cent in the staff cost between 1997-

98 and 2002-03. The number of employees declined from 570,595 in 1997-98 to 472,514 in

2002-03, leading to a higher growth in the cost per employee. However, the staff cost as a

percentage of total operating expenses reduced to 70.7 per cent for 2002-03 from 74 per cent

in 1999-00 on account of VRS schemes and improved efficiencies.

Akin to what was observed in the SBI Group, the legacy of heavy staff recruitment in the

earlier years in this group has contributed to the higher share of staff cost. Moreover, lesser

dependence on the technology and a wide branch network forced these banks to recruit more

staff.

Although, in 1997-98, the nationalised banks' cost per employee of Rs 0.139 million was lesser

than that of the SBI Group, in 2002-03 it was higher than that of the latter, at Rs 0.276

million. This is despite the sharper drop in the number of employees. The staff cost of nationalised

banks grew at 10.4 per cent CAGR during 1997-98 to 2002-03, possibly on account of the

difference in the wage agreement for the two groups and also due to higher proportion of

management staff in the total staff strength vis-à-vis the SBI group.



Other scheduled commercial banks (OSCBs)The proportion of the staff cost in operating expenses declined sharply from about 49 per cent

(50 per cent) in 1997-98 to about 36 per cent (44 per cent) in 2002-03, largely due to the

focus of the private sector banks on automation, and advances in technology. For example, at

the end of 2003, ICICI Bank had 1,675 ATM machines and about 70 per cent of its customer-

induced transactions take place through electronic channels.

The staff cost grew at a CAGR of 19.90 per cent between 1997-98 and 2002-03 while the

cost per employee grew at a CAGR of 18.33 per cent from Rs 0.14 million in 1997-98 to

0.32 million in 2002-03. The private sector banks have been expanding aggressively and are

still growing, hence their staff strength has gone up from about 61,700 in 1997-98 to about

66,000 in 2002-03.

The cost of per employee for this group is higher than that of public sector banks, because

of the higher salary structure. But the staff cost accounts for just 36 per cent of the total

operating expense in comparison to 70-71 per cent observed in public sector banks. The branch

network of new private sector banks is not as large as that of public sector banks. In addition,

they have made massive investments in technology, which reduces their staff requirements. An

ATM is manned by just one person and performs numerous basic banking operations. OSCBs

make use of the DSA channel to source clients.

Since their inception, the operations of OSCBs, especially the new private sector banks, are heavily

technology-driven, hence the staff strength of these banks is not as high as that of public sector

banks.

Nationalised banks: No of employees vs cost per employee Figure 3

400,000

450,000

500,000

550,000

600,000

1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03

Nu

mb

er o

f em

plo

yees

125,000

175,000

225,000

275,000

325,000

Co

st p

er e

mp

loye

e (R

s)

Number of employees Cost per employee

VRS



Foreign banksMany multinational banks have set up their operations in India. Today there are about 38 foreign

banks operating in India. Foreign banks have seen the proportion of operating expenses in the

total expenses rise from about 24 per cent in 1997-98 to about 32 per cant in 2002-03.

Foreign banks have the lowest proportion of staff cost in total operating expenses among all scheduled commercialbanks

The proportion of staff costs in the operating expenses has remained stable at almost 32 per

cent during 1997-98 to 2002-03. This is much lower than the average for all scheduled commercial

banks as foreign banks spend huge amounts on non-staff expenses like technology, advertising,

sales and marketing, apart from the expenses on employees.

Between 1997-98 and 2001-02, the staff cost of foreign banks grew at 16 per cent CAGR

while the cost per employee grew at a CAGR of about 19 per cent (from Rs 0.4 million

in 1997-98 to Rs 0.8 million in 2001-02). The number of employees has declined from 15,354

in 1997-98 to 13,827 in 2001-02. During the same period, foreign banks recorded the highest

CAGR in the cost per employee among all the scheduled commercial banks, .

In terms of cost per employee, the wide gap between foreign banks and other bank groups

can be attributed to the following factors:

Higher wage structure, as compared to the other bank groups.

Drop in the staff strength.

High investments in technology and infrastructure, which helps in reducing human intervention in routine

banking operations.

Low branch network, which reduces the need for high staff strength.

Higher spreads and other income, which aid banks in sustaining high staff cost.

OSC banks: No of employees vs cost per employee Figure 4

50,000

55,000

60,000

65,000

70,000

75,000

80,000

1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03

Nu

mb

er o

f em

plo

yees

125,000

175,000

225,000

275,000

325,000

375,000

Co

st p

er e

mp

loye

e (R

s)


ICICI Merger



Other operating expenses (Operating expenses excluding staff cost)

Foreign banks: No of employees vs cost per employee Figure 5

10,000

11,000

12,000

13,000

14,000

15,000

16,000

1997-98 1998-99 1999-2000 2000-01 2001-02

Nu

mb

er o

f em

plo

yees

350,000

450,000

550,000

650,000

750,000

850,000

Co

st p

er e

mp

loye

e (R

s)


Other operating expenses Table 1(Rs billion) 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 CAGR

1998 to 2003

SBI Group 15.6 22.3 23.5 29.0 27.3 30.2 14.10


Other SCBs 8.8 11.1 12.9 17.7 22.7 37.6 33.72

Foreign banks 13.1 18.1 17.3 21.2 22.7 22.2 11.08

Source: RBI

Other scheduled commercial banksDuring 1997-98 and 2002-03, the other scheduled commercial banks recorded a growth of 34

per cent (21 per cent) CAGR in other operating expenses, the highest amongst all bank groups.

In terms of expense heads, repairs and maintenance recorded the highest growth with a growth

of 51 per cent CAGR during 1997-98 to 2002-03. This may be on account of the renovations

carried out on the existing branch to meet client aspirations, and an increase in the maintenance

contracts entered into by the banks.

‘Depreciation', which constitutes a significant portion of operating expense, has grown at 35 per

cent (20 per cent) CAGR during the period under review. The proportion of depreciation in

the operating expenses has increased from 13.35 per cent to about 18 per cent during the

above period, on account of the greater investment in technology. As the private sector continues

to grow and expand its network the proportion of depreciation is expected to increase.

Along with depreciation, advertisement, printing & stationery and postage & telephone charges

have also recorded a substantial growth on account of the aggressive communication and promotion

strategy that players have adopted.



With the new private sector banks expanding their operations and the older private sector banks

upgrading their technology, we expect other operating expenses of this group to increase, especially

those relating to depreciation, advertisement and postage and telephone.

SBI & associatesAs observed earlier, other operating expenses account for only 30 per cent of the total operating

expense, but, going forward, we expect that to increase as the banks in the group embark

on increasing their investments in technology to upgrade their branch networks.

The other operating expense ratio increased at 14 per cent CAGR during 1997-98 to 2002-

03, driven by a 25 per cent CAGR growth in depreciation, 17 per cent growth in the advertisement

and 7 per cent CAGR growth in printing and stationery.

Increased spending on technology led to a higher growth in depreciation charge. In 2002-03,

SBI alone had computerised about 41 per cent of its total branches, constituting about 82 per

cent of its business volumes

A comparison between the other operating expenses of SBI Group and OSCBs reveals that the

former are not aggressive in marketing and communications. To put the figures in perspective,

the total advertisement and publicity expense for the SBI Group in 2002-03 was Rs 0.42 billion

(a growth of 8 per cent CAGR), while it was Rs 1.36 billion for OSCBs. Similarly, postage,

telegram and telephone expenses for the SBI group in 2002-03 was Rs 0.81 billion, while it

was Rs 2.62 billion for OSCBs. This is probably because the OSCBs generally focus on retail

finance, while the SBI Group's focus was on wholesale lending.

With the SBI Group planning to focus on retail finance too, these expenses are expected to

increase further.

Nationalised banksNationalised banks, with the largest network of 33,942 offices, have the highest operating expenses

among the scheduled commercial banks. During 1997-98 to 2002-03, the number of offices of

nationalised banks as a proportion of offices of all scheduled commercial banks had remained

almost constant at 50 per cent, but the proportion of operating expenses of the nationalised

banks in operating expenses of all scheduled commercial banks has declined from about 51

per cent to about 47 per cent. The aggressive expansion by the new private sector banks

has resulted in a significant increase in the operating expenses for private banks, leading to

a decline in the nationalised banks' share in total operating expenses.

The other operating expense has increased at a CAGR of 11.9 per cent during 1997-98 to

2002-03, driven by a 20 per cent CAGR growth in depreciation, a 15 per cent CAGR growth

in auditors fees and a 14 per cent CAGR growth in advertisement and publicity.

The 20 per cent CAGR growth in depreciation is on account of the expenditure on technological

upgradation of offices and branch expansion. The number of offices went up from 33,263 in

1997-98 to 33,942 in 2002-03.


With nationalised banks starting to advertise their products through various media, their advertisement

expenses have increased, although they are still less than the amount spent by OSCBs. A very

similar trend is also seen in case of postage and telephone expenses. Nationalised banks had

also adopted a business model similar to that of the SBI Group.

With banks in this group increasing their focus on retail finance and also venturing into other

areas for diversifying their income, their other operating expenses are expected to increase.

Foreign banksHigh proportion of selling cost/ professional fees

Other operating expenditure (total operating expenses less staff cost) grew at 11 per cent CAGR

between 1997-98 and 2002-03, driven by a 21 per cent CAGR growth in law charges, a 12

per cent CAGR growth in depreciation and a 10 per cent CAGR growth in repairs and maintenance.

Foreign banks recorded the lowest growth in the other operating expenses amongst all scheduled

commercial banks. CRIS INFAC believes that foreign banks are not in an aggressive expansion

mode, compared to OSCBs, and have the necessary technology in place. The operations of the

foreign banks have also stabilised. These factors could lead to a comparatively lower growth

in operating expenses.

Among all scheduled commercial bank groups, the proportion of other operating expenditure in

total operating expenses is the highest for this group, indicating a heavy investment in infrastructure.

Vis-à-vis other bank categories, depreciation, for banks in this group, has grown at a slower

pace as these banks already have a technology platform and continue to get support from their

parent organisations.

Foreign banks also invest heavily in advertising and postage and telephone to reach out to

the customers.

Cost-income ratioState Bank of India and AssociatesMarginal improvement in the operating efficiency

The cost income ratio for SBI and its associates declined from about 57 per cent in 1997-

98 to about 48 per cent in 2002-03. However, when we exclude the profit on sale of investments

from the net income and recalculate the cost income ratio, there was a decline of only about

2.8 percentage points.

There was a marginal improvement in the operating efficiency of the group during this period.


From the above graph, we observe that the cost-income ratio jumped in 2000-01 to 65.2 per

cent from 58.6 per cent in 1999-00 and again slipped to 52.1 per cent in 2001-02, primarily

on account of the VRS launched by the group in 2000-01. Further, the healthy growth in the

profit on sale of investment, coupled with savings in staff cost from VRS, helped bring down

the cost-income ratio.

Excluding profit on sale of investments, the cost-income ratio remained almost stable in 2002-

03, on account of slower growth in interest income and other income Low credit demand and

declining interest rates restricted the growth in interest income. Further, operating expenses also

went up mainly due to the growth in the staff cost (on account of higher contribution towards

retirement benefits) and higher depreciation charges.

Nationalised banksHighest improvement in efficiencies, cost-income ratio declines by 800 basis points (excluding the profit on sale ofinvestments)

Nationalised banks recorded the maximum improvement in operating efficiencies among all scheduled

commercial banks between 1997-98 and 2002-03.

The cost-income ratio of the nationalised banks (including profit on sale of investments) declined

from about 67 per cent in 1997-98 to about 50 per in 2002-03. Apart from the improvement

in operating efficiency, the huge profits from the sale of investments contributed to this sharp

decline. The savings in staff cost has also helped the group to improve operating expenses.

However, the cost-income ratio, when calculated after excluding the profit on sale of investments,

declined from about 70 per cent in 1997-98 to about 62 per cent in 2002-03. With the expected

increase in productivity, this ratio is expected to decline further.

SBI & associates: Cost-income ratio Figure 6

40

45

50

55

60

65

70

1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03

(per cent)

Cost income ratio with profit on sale of investments Cost income ratio without profit on sale of investments



The above graph depicts a rise in the cost-income ratio in 2000-01 and then a sudden decline,

from a high of 68.2 per cent in 2000-01 to 50 per cent in 2002-03. The rise was due to

a charge arising due to VRS. Savings in staff cost, coupled with increased profit on sale of

investments, helped in achieving a decline in the cost-income ratio.

In 2002-03, however, despite the steep decline, the cost-income ratio, with and without profit

on sale of investments, was still higher than the SBI Group. This is on account of historically

higher operating costs and higher operational inefficiencies. Many branches of nationalised banks

were reporting losses. But a comparison of the improvement in the ratios of both these sectors

shows that nationalised banks recorded greater improvement, on account of higher efficiency and

cost-control initiatives.

Other scheduled commercial banksOperating efficiencies decline during 1997-98 and 2002-03

The private sector banks expanded aggressively during the period under consideration and are

still on a growth path. Once this aggressive growth strategy slows down, the cost-income ratio

will improve significantly and investments in technology and networks will bring about substantial

savings.

The cost-income ratio (including the profit on sale of investments) of private sector banks recorded

a decline of 3.70 percentage points from 48.75 per cent in 1997-98 to 45.05 per cent in

2002-03. However, if the profit on sale of investments is excluded while calculating the cost-

income ratio, there was an increase in the cost-income ratio from about 58 per cent (58 per

cent) in 1997-98 to about 65 per cent (63 per cent) in 2002-03.

Nationalised banks: Cost-income ratio Figure 7

45

50

55

60

65

70

75

80

1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03

(per cent)




The cost-income ratio (without profit on sale of investment) of 65 per cent for the group for

the period 2002-03 is the highest amongst all the bank groups. As the new private sector banks

expanded their operations, the operating cost went up. This, coupled with the aggressive lending

methods adopted by the big players, increased the pressure on spreads of banks in this category.

With many banks still expanding their operations we expect this ratio to keep rising for the

next 2 years.

Foreign banksLower growth in net total income increases cost income ratio of most efficient bank group

Among all the scheduled commercial banks, foreign banks have the lowest cost-income ratio,

indicating high operating efficiencies.

Between 1997-98 and 2003-03, the net total income of foreign banks recorded a CAGR of 9.33

per cent, while the operating expenses posted a CAGR of 11.05 per cent.

Consequently, the cost-income ratio for foreign banks (including profit on sale of investments)

increased from 43.15 per cent in 1997-98 to 46.66 per cent in 2002-03. When the profit on

sale of investments is excluded, the cost-income ratio increases from about 46 per cent in 1997-

98 to about 50 per cent in 2002-03.

Foreign banks were able to maintain healthy spreads and, hence, have been able to sustain

a high operating cost. Further, their core-fee income ratio is also the highest amongst all bank

groups, which helps them to have the lowest cost-income ratio amongst all categories.

With foreign banks now aggressively competing with public sector and private banks, banks need

to maintain their low cost-income ratio by controlling costs, for a stable NPM.

OSC banks: Cost-income ratio Figure 8

40

45

50

55

60

65

70

1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03

(per cent)




Highest operating and staff cost per officeThe cost-income ratio (without profit on sale of investments) shot up to 57.7 per cent in 2001-

02 from 53 per cent in 2000-01. This was on account of slower growth in the net total income,

excluding profit on sale of investment. The interest income grew by 2.5 per cent, while the

interest expended grew by 5 per cent in 2001-02 over 2000-01.

However, during 2002-03, the cost-income ratio fell steeply because of the increase in other

income, coupled with lesser operating expenses, mainly driven by savings in staff expenses.

Foreign banks: Cost-income ratio Figure 9

40

45

50

55

60

1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03

(per cent)





Important ratios7.0

SBI & associates Table 1

Important ratios 1998-99 1999-2000 2000-01 2001-02

Return on assets (per cent) 0.93 0.47 0.72 0.52

Business per employees (Rs million) 10.64 12.58 16.10 18.15

Operating profit per employees (Rs in lakh) 1.51 1.91 2.00 3.07

Source: CRIS INFAC

Nationalised banks Table 2





Source: CRIS INFAC

Other scheduled commercial banks Table 3





Source: CRIS INFAC

Foreign banks Table 4





Source: CRIS INFAC

Foreign banks continue to have high productivity ratios, both in terms of business and operating

profits. The business per employee doubled between 1998-99 and 2001-02, and the operating

profit per employee also doubled. Foreign banks are way ahead of other players in terms of

productivity. This has been achieved by higher spreads and greater reliance on technology.

In terms of productivity ratios, the performance of other scheduled commercial banks (OSCBs)

has also been impressive. The business per employee has doubled, while the operating profit

per employee has almost tripled during the period under consideration. Productivity will improve

further due to the aggressive strategy being adopted by new private sector banks.

On the other hand, productivity growth has been lower in public sector banks because a high

staff base.


Credit-deposit ratio

Credit-deposit ratio Figure 1

35.0

40.0

45.0

50.0

55.0

60.0

65.0

70.0

75.0

80.0

1998 1999 2000 2001 2002 2003

SBI and Assoc Nationalised BanksOSCB Foreign BanksAll SCB

35.0

40.0

45.0

50.0

55.0

60.0

65.0

1998 1999 2000 2001 2002 2003

SBI and Assoc Nationalised BanksOSCB Foreign BanksAll SCB

Investment-deposit ratio Figure 2


The movement in the credit-deposit ratio has been in line with the industry. The ratio has

gone up for all the bank groups, except the SBI Group, which has witnessed a drop. For

foreign banks, the credit-deposit ratio is high because of the low deposit base. The share of

borrowings in the total liabilities is higher for foreign banks in comparison with the other bank

groups.

Due to the low credit offtake, banks had parked their funds in investments, which drove the

growth in the investment-deposit ratio. For almost all banks, the growth in the investment-deposit

ratio has been steep in comparison to the rise in the credit-deposit ratio.

CRIS INFAC BANKING ANNUAL REVIEW: NOVEMBER 2004, 291 PAGESi

Sections

Charts

Continued...

1.0 Industry structure 123

2.0 Financial system in India 129

3.0 Industry performance (tables) 137

4.0 Industry performance (graphs) 161

5.0 Player profiles 173

1.0 Industry structure

01 Evolution: Indian banking 125

02 Banks and DFIs: Important activities 126

2.0 Financial system in India

01 Financial system in India: Overview 129

Industry statistics

Figures

4.0 Industry performance

01 SCBs: Profits 161

02 SCBs: NIM 161

03 SCBs: Segment-wise NIM 162

04 Advances, IIP and imports: Growth 162

05 SCBs: Advances 162

06 IIP and credit: Growth 163

07 Advances: Average yields 163

08 Outstanding loans and advances: Break-up by interest rates 163

09 SCBs: Investments 164

10 PSU banks: Number of banks achieving CRAR 164

11 Gross NPAs and net NPAs 164

12 Investment and advances: Average yield 165

13 SCBs: Other income to total income 165

14 M3 and deposits 165

15 M3 and reserve money: Growth 166

16 Deposits: Demand, savings and time deposits (excl RRBs) 166

17 Incremental deposits: Break-up by deposit type (excl RRBs) 166


...continued

Figures

18 Deposits: Growth (excl RRBs) 167

19 NRI deposits: Growth 167

20 Deposits: Average costs 167

21 Term deposits: Interest rates (March 2003) 168

22 Incremental credit-deposit ratio 168

23 Incremental borrowing-deposit ratio 168

24 SCBs: Operating costs 169

25 SCBs: Segment-wise operating costs as a percentage of average assets 169

26 Overheads as a percentage of operating income 169

27 Overheads as a percentage of average assets 170

28 Operating costs: India vis-à-vis other countries 170

29 SCBs (excl RRBs): Number of branches 170

30 SCBs: Number of employees 171

31 Investments: Average yields 171

32 BSE volumes and capital issues 171

Tables1.0 Industry structure

01 Scheduled commercial banks: Progress since 1950 123

02 Financial markets: Total assets 124

03 Indian banking system: Key financials 124

04 Financial institutions: Financial performance 126

05 Financial institutions: Liabilities and assets 127

2.0 Financial system in India

01 Household sector savings in financial and physical assets 130

02 Proportion of gross household savings in financial assets 131

03 Banks and financial institutions: Financial assets 132

04 Indian financial system: Key financials 132

05 Capital markets: Resources mobilised 133

06 Mutual funds vis-à-vis bank deposits 134

07 Incremental mutual fund collections to bank deposits 134

08 Banks: Investments in shares 135

09 NBFCs: Total assets and deposits 135

10 NBFCs: Net owned funds vis-à-vis public deposits (excl RNBCs) 136

Continued...

CRIS INFAC BANKING ANNUAL REVIEW: NOVEMBER 2004, 291 PAGESiii

Tables

...continued

3.0 Industry performance

01 25 banks: Financials 137

02 Public sector banks: Priority sector advances 137

03 Banks: Capital adequacy ratio 138

04 Public sector banks: Capital adequacy ratio 140

05 Capital adequacy ratio: 2003-04 140

06 Scheduled commercial banks: Capital infusion (1991-92 to 2003-04) 140

07 Public sector banks: Recapitalisation support by the government 141

08 Public sector banks: Writing down of capital base 142

09 Public sector banks: Amounts returned to the government 142

10 Public sector banks: Public/rights issues 143

11 Old private sector banks: Public/rights issues 144

12 New private sector banks: Public issues 145

13 Public sector banks: Government ownership 145

14 Public sector banks: Net worth 146

15 Scheduled commercial banks: Net worth 146

16 NRI deposits (1991-2003) 146

17 Commercial banks: Branch network 147

18 Banks: Distribution of net NPAs as a percentage of net advances 147

19 Banks: Segment-wise incremental ratio of gross and net NPAs 148

20 Banks: Segment-wise incremental gross and net NPAs 149

21 Scheduled commerical banks: Gross and net NPAs 149

22 Public sector banks: Net NPAs as a percentage of net advances 150

23 Public sector banks: Classification of loan assets 150

24 New private sector banks: Key financial parameters (2003-04) 151

25 Old private sector banks: Key financial parameters (2003-04) 152

26 Select public sector banks: Key financial parameters (2003-04) 156

27 Scheduled commercial banks: Segment-wise financial performance (2003-04) 158

28 Scheduled commercial banks: Segment-wise financial ratios (2003-04) 159

29 Scheduled commercial banks: Segment-wise share (2003-04) 160

5.0 Player profiles

01 Financial comparison of key banks: 2003-04 173

02 State Bank of India 175

03 Bank of Baroda 180

04 Bank of India 185

05 Canara Bank 190

06 Punjab National Bank 195

07 Oriental Bank of Commerce 200

08 Dena Bank 205

09 Corporation Bank 210

continued...

CRIS INFAC BANKING ANNUAL REVIEW: NOVEMBER 2004, 291 PAGESiv

Tables

...continued

10 State Bank of Travancore 215

11 ICICI Bank 220

12 HDFC Bank 225

13 IndusInd Bank 230

14 Global Trust Bank 234

15 The Federal Bank Ltd 239

16 Bank of Rajasthan 244

17 Citibank 249

18 HongKong Bank 254

19 Standard Chartered Bank 259

20 State Bank of Bikaner & Jaipur 264

21 UTI Bank Ltd 269

22 The South Indian Bank Ltd 274

23 The Jammu & Kashmir Bank Ltd 279

24 The Karnataka Bank Ltd 284


Industry structure1.0

Scheduled commercial banks: Progress since 1950 Table 1

1951 1969 1984 1992 1996 1999 2000 2001 2002 2003

Number of commercial banks n.a. 89 n.a. 276 293 301 298 300 297 292

Total branches in India 4,151 8,262 45,332 60,570 64,937 67,157 67,868 67,937 68,195 68,561

- Rural - 1,833 25,372 35,269 32,982 32,859 32,852 32,585 32,503 32,406

- Semi-urban - 3,342 9,262 11,356 13,832 14,462 14,841 14,843 14,962 15,090

- Urban - 1,584 5,769 8,279 9,964 10,841 10,994 11,193 11,328 11,553

- Metropolitan - 1,503 4,929 5,666 8,159 8,995 9,181 9,316 9,402 9,512

Population per branch (in '000) 75 65 15 14 15 15 15 15 15 16

Deposits in India (Rs crore) 909 4,646 63,852 237,566 433,819 722,203 851,593 989,141 1,131,188 1,280,853

Deposits as a percentage of national income 9.0 15.5 37.9 49.5 46.1 50.3 53.5 56.0 49.3 51.8

Per capita deposits (Rs) 0 88 940 2,738 4,644 7,359 8,542 9,770 11,008 12,253

Deposits per branch (Rs crore) 0.2 0.6 1.4 3.9 6.7 10.8 12.5 14.6 16.6 18.7

Total bank credit (Rs crore) 727 3,599 43,058 131,520 254,015 368,837 454,069 529,271 609,053 729,214

Credit per branch (Rs crore) 0.2 0.4 0.9 2.2 3.9 5.5 6.7 7.8 8.9 10.6

Bank credit to priority sectors (Rs crore) - 504 14,834 47,318 80,831 126,309 155,779 182,255 205,606 n.a.

Share of priority sector advances in - 14.0 34.5 36.0 31.8 34.2 34.3 34.4 33.8 n.a.

gross credit

Credit-deposit ratio (per cent) 80.0 77.5 67.4 55.4 58.6 51.1 53.3 53.5 53.8 56.9

Investment-deposit ratio (per cent) - 29.3 36.3 38.0 38.0 35.3 36.6 37.1 38.7 42.7

Cash-deposit ratio (per cent) - 8.2 14.5 18.2 12.4 9.4 9.8 8.4 7.1 6.5

n.a.: Not available

Source: Statistical Tables Relating to Banks in India 2002-2003


Financial markets: Total assets Table 2(Rs crore) 2002-03 2001-02 2000-01 1999-2000 1998-99 Share of

assets1

Growth (per cent)

All financial entities (A+B+C)1 1,944,410 1,825,416 1,643,939 1,431,256 1,240,059 100 n.a.

All banks (excl co-operative banks) (A) 1,760,659 1,593,226 1,343,543 1,147,888 987,508 91 10.51

Commercial banks 1,698,916 1,536,424 1,294,974 1,105,464 950,718 87 10.58

State Bank Group 493,954 449,289 402,877 336,394 285,835 25 9.94

Nationalised banks 791,281 706,109 626,892 554,206 484,310 41 12.06

Old private banks 105,110 93,229 84,605 73,123 65,475 5 12.74

New private banks 192,170 174,477 78,776 58,931 38,531 10 10.14

Foreign banks in India 116,401 113,321 101,824 82,810 76,567 6 2.72

Regional rural banks 61,743 56,802 48,569 42,424 36,790 3 8.70

All India financial institutions (B) 183,751 173,900 246,518 232,043 205,502 9 5.66

NBFCs1 (C) - 58,290 53,878 51,324 47,049 n.a. n.a.

n.a.: Not available1 NBFC data for 2002-03 is not available

Note

All India financial institutions include IDBI, IFCI, IIBI, IDFC, TFCI, Exim Bank, NABARD, NHB and SIDBI.

Source: CRIS INFAC

Indian banking system: Key financials Table 3(Rs crore) Number Number

of branches

Total assets

Total deposits

Total income

Profit Spread (per cent)

Gross NPA

Gross NPA/gross loans

and advances

Year

Scheduled commercial 90 54,275 1,975,020 1,575,145 183,767 22,273 3.0 n.a. n.a. 2003-04

banks (excl RRBs)

Public sector banks 27 48,150 1,471,428 1,226,838 137,603 16,547 3.1 n.a. n.a. 2003-04

Nationalised banks 8 34,411 922,171 793,947 85,712 10,929 3.3 n.a. n.a. 2003-04

State Bank Group 19 13,739 549,257 432,891 51,891 5,618 2.8 n.a. n.a. 2003-04

OSCBs 30 5,903 367,276 268,550 33,154 3,484 2.5 n.a. n.a. 2003-04

Foreign banks in India 33 222 136,316 79,757 13,010 2,242 3.9 n.a. n.a. 2003-04

Regional rural banks n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 2003-04

Figures exclude data of co-operative banks.

Source: Trends and Progess of Banking in India


Evolution: Indian banking Chart 1

Period Event

The British Raj Commercial banks (entities with unlimited liability) established.

1800s Banks specialised in providing short-term credit for trade.

1896 The Presidency Act allowed the establishment of state partnered banks.

1921 Four large banks were merged to form the Imperial Bank of India (which later became State Bank of India).

1934 The Reserve Bank of India Act was passed.

1935 The RBI came into existence.

Post-Independence era The Indian banking system progressed in terms of functions and geographic coverage.

The proportion of industrial credit was higher than agricultural credit.

1949 The Banking Regulation Act 1949, gave RBI the powers to regulate, supervise and develop the banking

system.

After 1949 There was consolidation in the banking industry, and large commercial banks emerged through mergers

and amalgamations.

1955 The Imperial Bank of India was rescheduled as the State Bank of India.

1967 A scheme for social control on banks was introduced, in order to increase the availability of banking

facilities, and change the uneven distribution of lending by banks.

Jul 1969 14 major banks, each with deposits of over Rs 500 crore, were nationalised by the Ministry of Finance.

1974 Targets for priority sector lending were set.

1980 The government further nationalised six banks.

Aug 1991 The Narasimham Committee was formed, in order to re-examine the financial system.

1992-93 Income recognition and capital adequacy norms were introduced, and interest rates were rationalised.

Losses of public sector banks amounted to Rs 3,648 crore.

1993 Public sector banks accounted for 93 per cent of the total branches in India, 87 per cent of the total

deposits, and 89 per cent of the total loans.

1994 Private sector banks were permitted to commence operations. The interest rates on loans of over Rs

200,000 were deregulated, allowing banks to fix prime lending rates. Banks were allowed to issue capital,

up to 49 per cent of the equity, from the capital markets, by amending the Banking Companies (Acquisition

and Transfer of Undertakings) Act 1970/80.

1995-96 19 of the 27 scheduled commercial banks were able to achieve the stipulated capital adequacy ratio.

1997 Limited and conditional autonomy was provided to public sector banks.

1998 The committee on financial sector reforms (Narasimham Committee II) reviewed the progress of reforms,

and recommended a plan for the implementation of second generation reforms.

Norms for capital adequacy and a reduction in non-performing assets were evolved.

Interest rates on term deposits of over 15 days were deregulated.

1999 Guidelines on asset-liability management and risk management were issued.

2000 In the Union Budget, the government announced its intention to reduce its equity in public sector banks

to 33 per cent.

HDFC Bank acquired Times Bank; the first private sector merger in India.

2001 RBI issued licences to 2 new banks, Kotak Mahindra and Rabo Bank.

FDI limit in the banking sector increased to 51 per cent.

2002 Union Government allows the conversion of the branch operations of foreign banks into subsidiaries.

RBI approves the merger of ICICI and ICICI Bank, making it the second largest bank in India, in terms of

assets. Kotak Mahindra Finance, an NBFC, announces its intention to convert itself into a bank.

2003 Kotak Mahindra Bank commenced operations on March 24, 2003.

2004 HSBC acquired 20 per cent in UTI Bank.

FDI limit in private banks increased from 49 per cent to 74 per cent.

RBI placed moratorium on GTB's operations on 24th July 2004

RBI announced the merger of GTB with OBC on 26th July 2004

IDBI converted itself into a commercial bank from 1st October 2004.

Source: CRIS INFAC


Banks and DFIs: Important activities Chart 2

Financial institutions: Financial performance Table 4(Rs crore) 1998-99 1999-2000 2000-01 2001-02 2002-03 Change

(per cent)

Income 21,614 24,410 25,867 17,206 15,822 -8.0

Interest income 20,297 22,152 23,519 14,391 13,194 -8.3

Other income 1,317 2,258 2,348 2,815 2,628 -6.6

Expenditure 18,381 21,148 23,748 15,944 14,130 -11.4

Interest expended 15,675 18,245 19,567 13,284 11,825 -11.0

Provisions 308 687 1,579 1,501 947 -36.9

Other expenses 2,398 2,216 2,602 1,159 1,358 17.2

-Wage bill 294 362 476 404 391 -3.2

Net profit 3,233 3,263 2,119 1,262 1,692 34.1

Total assets 205,502 232,043 246,518 170,247 182,223 7.0

Ratios (per cent)1

Net profit 1.6 1.4 0.9 0.7 0.9 -

Income 10.5 10.5 10.5 9.9 8.6 -

Interest income 9.9 9.6 9.5 8.3 7.2 -

Other income 0.6 1.0 1.0 1.6 1.4 -

Expenditure 8.9 9.1 9.6 8.3 7.2 -

Interest expended 7.6 7.9 7.9 7.6 6.4 -

Other expenses 1.2 1.0 1.1 0.7 0.7 -

Wages 0.1 0.2 0.2 0.2 0.2 -

Provisions and contigencies 0.2 0.3 0.6 0.9 0.5 -

Spread (net interest income) 2.3 1.7 1.6 0.6 0.7 -1 Ratios calculated as a percentage of total assets

Notes

1) For 1998-99 to 2000-01, financial institutions comprise IDBI, ICICI, TFCI, EXIM Bank, NABARD, SIDBI, IDFC, IFCI, NHB and IIBI.

2) For 2001-02 and 2002-03, financial institutions comprise IDBI, TFCI, EXIM Bank, NABARD, SIDBI, IDFC, IFCI, NHB and IIBI.

Source: RBI's Report on Trend and Progress of Banking in India 2002-03

Commercial banking or Investment banking Other financial servicessimilar in nature

Banks Accepting chequable deposits Investments in securities Factoring Granting loans and advances Underwriting of issues Hire-purchase

Loan syndication LeasingMerchant bankingCredit cardsDealing in goldMutual fundHousing finance

DFIs Granting long-term loans and advances Underwriting and Commercial bankingGranting short-term loans and advances / subscribing directly to Housing financeworking capital finance shares / debentures of Credit ratingAccepting term deposits and corporate bodies Custodial servicesissuing CDs on prescribed Brokerageterms and conditions Investor services

Registrar’s servicesProject consultancyDebenture trusteeship

NoteThe activities are performed either directly or through subsidiaries.Source: RBI


Fin

anci

al in

stit

uti

on

s: L

iab

ilit

ies

and

ass

ets

T

able

5

Ch

ang

e1

Rs

cro

reP

er c

ent

Rs

cro

reP

er c

ent

Rs

cro

reP

er c

ent

Rs

cro

reP

er c

ent

Rs

cro

reP

er c

ent

(per

cen

t)

Lia

bili

ties

205,

502

100.

023

2,04

510

0.0

246,

523

100.

017

3,90

010

0.0

183,

751

100.

05.

7

Cap

ital

7,69

83.

78,

731

3.8

7,86

63.

26,

811

3.9

6,78

43.

7-0

.4

Res

erve

s20

,519

10.0

36,6

1915

.839

,147

15.9

16,8

369.

718

,259

9.9

8.5

Bon

ds a

nd d

eben

ture

s99

,360

48.4

114,

017

49.1

125,

597

50.9

83,5

9548

.189

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48.8

7.2

Dep

osits

10,5

815.

113

,350

5.8

17,8

217.

215

,088

8.7

20,1

4411

.033

.5

Bor

row

ings

41,3

0520

.141

,413

17.8

37,7

1515

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14.0

21,8

6211

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0.4

Oth

er li

abilit

ies

26,0

4012

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7.7

18,3

767.

527

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15.6

27,0

6314

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.4

Ass

ets

205,

502

100.

023

2,04

510

0.0

246,

523

100.

017

3,90

010

0.0

183,

751

100.

05.

7

Cas

h an

d ba

nk b

alan

ce11

,338

5.5

8,31

13.

68,

880

3.6

5,62

83.

28,

014

4.4

42.4

Inve

stm

ent

22,9

6911

.228

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12.4

29,6

6212

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12.5

21,7

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4

Loan

s an

d ad

vanc

es14

6,35

371

.216

7,20

172

.117

9,78

672

.913

1,51

075

.613

6,82

374

.54.

0

Bills

dis

coun

ted/

redi

scou

nted

2,38

71.

24,

008

1.7

3,64

11.

52,

987

1.7

1,60

60.

9-4

6.2

Fix

ed a

sset

s8,

291

4.0

7,35

53.

28,

174

3.3

3,22

61.

92,

988

1.6

-7.4

Oth

er a

sset

s14

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6.9

16,4

937.

116

,380

6.6

8,87

85.

112

,560

6.8

41.5

1 20

02-0

3 ov

er 2

001-

02

Not

es

1) F

or 1

998-

99 to

200

0-01

, fin

anci

al in

stitu

tions

com

pris

e ID

BI,

ICIC

I, T

FC

I, E

XIM

Ban

k, N

AB

AR

D, S

IDB

I, ID

FC

, IF

CI,

NH

B a

nd II

BI.

2) F

or 2

001-

02 a

nd 2

002-

03, f

inan

cial

inst

itutio

ns c

ompr

ise

IDB

I, T

FC

I, E

XIM

Ban

k, N

AB

AR

D, S

IDB

I, ID

FC

, IF

CI,

NH

B a

nd II

BI.

So

urc

e: R

BI's

Rep

ort

on

Tre

nd

an

d P

rog

ress

of

Ban

kin

g in

Ind

ia 2

002-

03

2002

-03

199

8-99

199

9-20

0020

00-0

120

01-0

2



Fina

ncia

l sy

stem

in

Indi

a2.

0

Fin

anci

al s

yste

m in

Ind

ia:

Ove

rvie

w

Ch

art

1

IDF

C: I

nfra

stru

ctur

e D

evel

opm

ent F

inan

ce C

orpo

ratio

n of

Indi

a

PF

C: P

ower

Fin

ance

Cor

pora

tion

IFC

I: In

dust

rial F

inan

ce C

orpo

ratio

n of

Indi

a N

AB

AR

D: N

atio

nal A

gric

ultu

ral B

ank

for

Rec

onst

ruct

ion

& D

evel

opm

ent

IIB

I: In

dust

rial I

nves

tmen

t Ban

k of

Indi

a S

FC

: Sta

te F

inan

ce C

orpo

ratio

n

TF

CI:

Tou

rism

Fin

ance

Cor

p of

Indi

aS

IDC

: Sta

te In

dust

rial D

evel

opm

ent C

orpo

ratio

n

EX

IM: E

xpor

t Im

port

Ban

k of

Indi

a

FII:

For

eign

Inst

itutio

nal I

nves

tor

So

urc

e: C

RIS

INF

AC

Min

istr

y of

Fin

ance

Res

erve

Ban

k of

Indi

a (R

BI)

Sec

uriti

es a

nd E

xcha

nge

Boa

rd o

f In

dia

(SE

BI)

Pen

sion

fund

s,

Pro

vide

nt fu

nds

Fin

anci

al in

stitu

tions

Com

mer

cial

ban

ksN

on-b

anki

ng fi

nanc

e co

mpa

nies

(N

BF

Cs)

Cap

ital m

arke

tsM

utua

l fun

ds

Ter

m-le

ndin

g i

nstit

utio

ns

ID

FC

IFC

I

IIBI

Sec

tora

l ins

titut

ions

TF

CI

EX

IM

PF

C

NA

BA

RD

Sta

te le

vel

ins

titut

ions

SF

Cs

SID

C

Sto

ck e

xcha

nge

Mer

chan

t ban

kers

Und

erw

riter

s

Sto

ck b

roke

rs

F

IIs

R

etai

l inv

esto

rs


Household sector savings in financial and physical assets Table 1

(Rs crore) 1997-98 1998-99 1999-2000 2000-01 2001-02 P 2002-03 E

GDP at market prices 1,522,547 1,740,985 1,936,831 2,089,499 2,282,143 2,469,564

Gross domestic savings 352,178 374,659 468,681 495,986 535,185 597,697

Percentage of GDP 23.1 21.5 24.2 23.7 23.5 24.2

Household savings 268,437 326,802 404,401 458,215 519,040 559,258


- Financial assets (net) 146,777 180,346 205,743 222,721 254,304 254,407


- Physical assets 121,660 146,456 198,658 235,494 264,736 304,851


Private corporate sector 63,486 65,026 84,329 86,142 78,849 84,169


Public sector 20,255 -17,169 -20,049 -48,371 -62,704 -45,730

Percentage of GDP 1.3 -1.0 -1.0 -2.3 -2.7 -1.9

P: Provisional; E: Estimate

Source: Handbook of Statistics on the Indian Economy, 2002


Pro

po

rtio

n o

f g

ross

ho

use

ho

ld s

avin

gs

in f

inan

cial

ass

ets

Tab

le 2

2000

-01

2001

-02P

2002

-03P

2003

-041

6.3

9.7

8.5

10.1

41.0

39.4

41.5

42.9

32.5

35.3

36.3

40.5

2.9

2.6

1.6

0.2

5.6

3.6

3.7

2.3

0.1

-2.1

-0.1

-0.1

4.1

2.7

1.6

1.4

3.1

1.5

0.8

0.7

0.0

0.1

0.0

0.0

-0.4

-0.6

-0.5

-0.4

0.1

0.0

0.0

0.0

1.3

1.8

1.3

1.1

15.7

17.9

18.6

17.7

1.7

5.8

4.3

4.0

14.0

12.1

14.3

13.7

13.6

14.2

15.5

14.9

12.9

13.5

14.8

14.5

0.2

0.3

0.2

0.1

0.5

0.4

0.5

0.3

19.3

16.1

14.3

13.0

100.

010

0.0

100.

010

0.0

(per

cen

t)19

90-9

119

91-9

219

92-9

319

93-9

419

94-9

519

95-9

619

96-9

719

97-9

819

98-9

919

99-2

000

Cu

rren

cy10

.612

.08.

212

.210

.913

.38.

67.

410

.58.

8

Dep

osi

ts33

.328

.942

.542

.645

.542

.548

.146

.638

.836

.3

With

ban

ks27

.221

.333

.627

.935

.326

.325

.737

.833

.730

.8

With

non

-ban

king

com

pani

es2.

23.

37.

510

.67.

910

.616

.43.

93.

81.

7

With

co-

oper

ativ

e ba

nks

and

soci

etie

s4.

75.

03.

25.

23.

05.

86.

45.

34.

64.

3

Tra

de d

ebt (

net)

-0.8

-0.6

-1.7

-1.1

-0.8

-0.2

-0.4

-0.4

-3.3

-0.4

Sh

ares

an

d d

eben

ture

s14

.323

.317

.213

.511

.97.

36.

62.

93.

47.

7

Priv

ate

corp

orat

e bu

sine

ss4.

16.

08.

47.

58.

06.

63.

61.

31.

53.

4

Co-

oper

ativ

e ba

nks

and

soci

etie

s0.

20.

10.

10.

10.

10.

10.

10.

10.

10.

0

Uni

ts o

f UT

I5.

813

.37.

04.

32.

70.

22.

40.

30.

90.

8

PS

U b

onds

0.8

0.8

0.1

0.5

0.1

0.1

0.1

0.1

0.0

0.1

Mut

ual f

unds

(ot

her

than

UT

I)3.

33.

11.

61.

21.

10.

30.

31.

10.

83.

4

Cla

ims

on

go

vern

men

t13

.57.

24.

96.

39.

17.

77.

412

.913

.612

.3

Gov

ernm

ent s

ecur

ities

0.2

-0.4

0.0

0.4

0.1

0.4

0.4

1.6

0.7

0.9

Sm

all s

avin

gs13

.27.

64.

95.

99.

07.

47.

011

.313

.011

.3

Insu

ran

ce f

un

d9.

510

.38.

88.

77.

811

.210

.211

.311

.312

.1

Life

insu

ranc

e fu

nd8.

59.

48.

08.

07.

210

.49.

510

.610

.611

.2

Pos

tal i

nsur

ance

0.2

0.2

0.2

0.2

0.2

0.3

0.3

0.3

0.3

0.3

Sta

te in

sura

nce

0.7

0.7

0.6

0.5

0.5

0.5

0.4

0.4

0.5

0.6

Pro

vid

ent

and

pen

sio

n f

un

d18

.918

.318

.416

.714

.718

.019

.218

.822

.422

.8

To

tal

100.

010

0.0

100.

010

0.0

100.

010

0.0

100.

010

0.0

100.

010

0.0

1 P

relim

inar

y

P: P

rovi

sion

al

So

urc

e: R

BI A

nn

ual

Rep

ort

200

3-04


Banks and financial institutions: Financial assets Table 3

(Rs crore)

1990-91 1997-98 1998-99 1999-00 2000-01 P 2001-02 P 2002-03 P

I. Banks 2,32,786 6,54,406 7,61,326 8,88,781 10,50,276 12,69,034 14,44,993

Scheduled commercial banks 2,22,613 6,28,332 7,26,129 8,51,100 10,09,150 12,23,008 13,98,967

Non-scheduled commercial banks 77 - - - - - -

Total commercial banks 2,22,690 6,28,332 7,26,129 851,100 10,09,150 12,23,008 1398967

State co-operative banks 10,096 26,074 35,197 37,681 41,126 46,026 46,026

II. Financial institutions 1,27,975 4,00,418 4,60,758 522,079 5,75,346 5,54,393 567,296

Term-lending institutions (All-India)1 57,372 1,74,980 2,05,817 2,22,790 2,40,530 1,70,247 182,223

State-level institutions2 10,049 21,203 21,629 24,518 24,992 25,012 25,012

Investment institutions 3 58,566 1,97,321 2,27,023 2,67,817 3,01,870 350,538 350,538

Other institutions4 1,988 6,914 6,289 6,954 7,954 8,596 9,523

Total 3,60,761 10,54,824 12,22,084 14,10,860 16,25,622 18,23,427 2,012,289

P: Provisional

2 Includes SFCs and SIDCs3 Includes UTI, LIC, and GIC and its former subsidiaries4 Includes DICGC and ECGCSource: Trends and Progress of Banking in India, 2003

As at the end of March

1 Term-lending institutions include IDBI, NABARD, ICICI, IFCI, EXIM Bank, IIBI, NHB, IDFC, and SIDBI. From the end of March 2002 the data does not include ICICI, as it was merged with ICICI Bank.

Indian financial system: Key financials Table 4(Rs crore) Number Number

of branches

Total assets

Total deposits

Total income

Profit Spread (per cent)

Gross NPA

Gross NPA / loans and

advances

Year

Scheduled commercial banks 90 54,275 1,975,020 1,575,145 183,767 22,273 3.05 n.a. n.a. 2003-04

Regional rural banks 196 14,777 63,614 48,346 5,931 524 3.10 n.a. n.a. 2002-03

Financial institutions 9 n.a. 183,751 20,144 15,882 1,693 0.70 n.a. n.a. 2002-03

NBFCs (excl RNBCs) 905 n.a. 39,832 5,933 5,357 -212 n.a. n.a. n.a. 2001-02

RNBCs 5 n.a. 18,458 12,889 n.a. n.a. n.a. n.a. n.a. 2001-02

n.a.: Not available

Source: Trends and Progress of Banking in India, 2003


Cap

ital

mar

kets

: R

eso

urc

es m

ob

ilis

ed

Tab

le 5

(Rs

cro

re)

1994

-95

1995

-96

1996

-97

1997

-98

1998

-99

1999

-200

0

Pri

mar

y ca

pit

al m

arke

ts (

deb

t an

d e

qu

ity)

30,3

7532

,650

29,5

2037

,738

63,4

0777

,660

Pri

vate

pla

cem

ent

n.a

.13

,361

15,0

6630

,099

49,6

7961

,259

Pub

lic s

ecto

rn.

a.9,

290

12,5

7320

,896

32,6

8141

,856

Priv

ate

sect

orn.

a.4,

071

2,49

39,

202

16,9

9819

,404

Pro

spec

tus

and

rig

hts

/ IP

O27

,305

16,9

9811

,060

4,65

79,

365

7,70

4

Ban

ks a

nd F

Is in

the

publ

ic s

ecto

r1,

476

4,35

22,

551

Gov

ernm

ent c

ompa

nies

888

1,00

065

043

00

Non

-gov

ernm

ent p

ublic

com

pani

es26

,417

15,9

9810

,410

3,13

85,

013

5,15

3

- E

quity

sha

res

17,4

1411

,877

6,10

11,

162

2,56

32,

753

- P

refe

renc

e sh

ares

131

150

754

600

- D

eben

ture

s8,

871

3,97

04,

233

1,97

22,

391

2,40

1

PS

U b

on

ds

3,07

02,

291

3,39

42,

983

4,36

38,

697

Inte

rnat

ion

al c

apit

al m

arke

ts9,

348

5,04

413

,279

18,9

355,

590

n.a

.

Eu

ro-i

ssu

es6,

110

496

3,27

64,

378

2,10

53,

487

GD

R5,

027

496

1,62

54,

330

2,10

5n.

a.

FC

CB

1,08

30

1,65

148

0n.

a.

EC

B3,

238

4,54

810

,003

14,5

573,

485

n.a

.

Mu

tual

fu

nd

s11

,275

-5,8

33-2

,037

4,06

42,

695

22,1

17

n.a.

: Not

ava

ilabl

e

P: P

rovi

sion

al

So

urc

e: H

and

bo

ok

of

Sta

tist

ics

on

Ind

ian

Eco

no

my

2000

-01

2001

-02

2002

-03

P20

03-0

4 P

74,1

9970

,568

68,8

2662

,425

67,8

3664

,876

66,9

4859

,215

44,7

3136

,256

41,8

7144

,349

23,1

0628

,620

25,0

7714

,866

6,36

25,

692

1,87

83,

210

1,47

2n.

a.n.

a.n.

a.

0n.

a.n.

a.n.

a.

4,89

05,

692

1,87

83,

210

2,60

886

046

01,

959

142

00

0

2,14

04,

832

1,41

81,

251

16,6

3214

,436

7,52

912

,536

n.a

.n

.a.

n.a

.n

.a.

4,19

7n

.a.

n.a

.n

.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a

.n

.a.

n.a

.n

.a.

11,1

3510

,120

4,58

347

,684


Mutual funds vis-à-vis bank deposits Table 6(Rs crore) Net assets of Bank deposits Mutual funds to bank

mutual fund (excl RRBs) deposits (per cent)

1991-92 37,973 264,991 14.3

1992-93 47,734 299,602 15.9

1993-94 62,430 349,345 17.9

1994-95 72,967 403,403 18.1

1995-96 74,315 457,639 16.2

1996-97 70,197 537,557 13.1

1997-98 58,918 643,743 9.2

1998-99 70,624 766,814 9.2

1999-2000 103,453 896,728 11.5

2000-01 90,587 1,055,233 8.6

2001-02 100,594 1,205,930 8.3

2002-031 109,299 1,355,880 8.1

2003-04 139,616 1,575,140 8.91 Mutual funds: The 2002-03 figure includes Rs 29,835 crore assets under management

of the Specified Undertaking of the Unit Trust of India

Source: Report on Trend and Progress of Banking in India and AMFI

Incremental mutual fund collections to bank deposits Table 7(Rs crore) Mutual fund Bank deposits Mutual fund/bank

deposits (per cent)

1992-93 13,021 34,611 37.6

1993-94 11,243 49,743 22.6

1994-95 11,275 54,058 20.9

1995-96 -5,833 54,236 -10.8

1996-97 -2,037 79,918 -2.5

1997-98 4,064 106,186 3.8

1998-99 2,695 123,071 2.2

1999-2000 22,117 129,914 17.0

2000-01 11,135 158,505 7.0

2001-02 10,120 150,697 6.7

2002-03 P 4,583 149,950 3.1

2003-04 P 47,684 219,260 21.7

P: Provisional

Note

Figures for mutual fund collections during the 1998-99 to 2000-01 period are provisional.

Source: Handbook of Statistics on Indian Economy


Banks: Investments in shares Table 8

(Rs crore) 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03

Investments in shares 3,565 4,741 6,128 4,840 6,194 6,774

Deposits 666,306 797,828 932,469 1,093,527 1,247,239 1,404,490

Per cent of deposits 0.5 0.6 0.7 0.4 0.5 0.5

Source: Statistical Tables Relating to Banks in India

NBFCs: Total assets and deposits Table 9

(Rs crore) 1997-98 1998-99 1999-2000 2000-01 2001-02

NBFCs of which RNBCs





Number of reporting 1,420 9 1,547 11 1,005 9 981 7 910 5

companies

Total assets 34,790 10,718 47,049 11,081 51,324 11,317 53,878 16,244 58,290 18,458

Public deposits 13,572 10,249 20,429 10,644 19,342 11,004 18,084 11,625 18,822 12,889

Net owned funds 8,573 -1,085 9,118 -666 6,223 -443 4,943 -179 4,383 111

Note

Figures are as of end March.

Source: Report on Trend and Progress of Banking in India 2002-03


NBFCs: Net owned funds vis-à-vis public deposits (excl RNBCs) Table 10

(Rs crore) 1998-99 1999-2000

No of reporting

companies

Net owned funds

Public deposits

Public deposits as a multiple of

NOF

No of reporting

companies

Net owned funds

Public deposits


NOF

Up to 0.25 736 38 650 17.1 205 -215 395 -1.8

0.25-0.5 319 70 116 1.6 360 116 194 1.7

0.5-5 332 443 1,068 2.4 314 502 363 0.7

5-10 55 336 265 0.8 43 294 202 0.7

10-50 64 1,285 2,107 1.6 46 1,060 2,773 2.6

50-100 11 787 1,271 1.6 9 628 878 1.4

100-500 18 3,946 4,287 1.1 19 4,280 3,533 0.8

Over 1,000 1 1,121 22 0.0 - - - -

Total 1,536 8,027 9,785 1.2 996 6,666 8,338 1.3

(Rs crore) 2000-01 2001-02

No of reporting

companies

Net owned funds

Public deposits


NOF

No of reporting

companies

Net owned funds

Public deposits


NOF

Up to 0.25 225 -859 807 - 214 -1,351 1,120 -

0.25-0.5 346 116 188 1.6 300 103 128 1.2

0.5-5 305 498 692 1.4 298 477 361 0.8

5-10 34 224 94 0.4 30 204 80 0.4

10-50 37 775 777 1.0 38 798 718 0.9

50-100 12 804 924 1.1 11 798 846 1.1

100-500 14 3,063 2,299 0.8 14 3,243 2,680 0.8

Over 1,000 1 501 679 1.4 - - - -

Total 974 5,122 6,460 1.3 905 4,272 5,933 1.4

NOF: Net owned funds

Notes

1) Figures are as of end March.

2) In 1999-2000, there were no reporting companies with net owned funds over Rs 1,000 crore.

Source: Report on Trend and Progress of Banking in India 2002-03


Industry performance3.0

25 banks: Financials Table 1

(Rs crore) 2003-04 H1

2002-03 H1

2003-04 Q3

2002-03 Q3

2003-04 9M

2002-03 9M

2003-041 2002-03

Income 64,234.3 58,957.9 30,934.5 30,172.9 95,168.7 89,130.8 123,579.7 121,470.0

Interest earned 50,164.4 49,167.0 25,169.8 24,732.1 75,334.2 73,899.1 97,536.7 99,617.4

Other income 14,069.9 9,790.9 5,764.7 5,440.7 19,834.6 15,231.7 26,043.0 21,852.5

Expenditure 56,562.9 53,434.2 25,259.2 25,219.5 81,822.1 78,653.7 108,523.4 109,624.6

Interest expended 32,249.1 33,923.0 15,426.0 16,828.6 47,675.1 50,751.6 60,678.1 67,424.2

Operating expenses 13,671.8 11,931.1 7,136.8 6,208.3 20,808.6 18,139.5 28,261.0 25,770.5

Provisions and contingencies 10,642.0 7,580.0 2,696.4 2,182.6 13,338.3 9,762.6 19,584.3 16,429.9

Operating profit 18,313.4 13,103.7 8,371.6 7,135.9 26,685.0 20,239.7 34,640.6 28,275.3

Net profit 7,671.4 5,523.7 5,675.2 4,953.3 13,346.6 10,477.1 15,056.3 11,845.4

Net interest spread 17,915.3 15,244.0 9,743.8 7,903.5 27,659.0 23,147.5 36,858.6 32,193.3

H1: First half; 9M: Nine months1 Excludes Indusind Bank and Global Trust Bank

Note

These 25 banks comprise 70 per cent of the total deposits of scheduled commercial banks in India.

Source: Press releases

Public sector banks: Priority sector advances Table 2

(Rs crore) 1968-69 1997-98 1998-99 1999-2000

Rs crore Per cent Rs crore Per cent Rs crore Per cent Rs crore Per cent

Agriculture 162 5.4 34,305 15.7 40,078 16.3 45,296 14.3

Small-scale industry 257 8.5 38,109 17.5 42,674 17.3 46,045 14.6

Other priority sectors 22 0.7 18,881 8.7 24,448 9.9 30,816 9.7

Total priority sector 441 14.6 91,319 41.8 107,200 43.5 127,478 40.3

Net bank credit 3,016 100.0 218,219 100.0 246,203 100.0 316,427 100.0

(Rs crore) 2000-01 2001-02 2002-03 2003-04

Rs crore Per cent Rs crore Per cent Rs crore Per cent Rs crore Per cent

Agriculture 53,571 15.7 63,082 15.9 73,507 15.4 90,541 11.9

Small-scale industry 48,400 14.2 49,743 12.5 52,988 11.1 65,855 8.6

Other priority sectors 40,791 12.0 53,712 13.5 71,448 15.0 107,438 14.1

Total priority sector 149,116 43.7 171,185 43.1 203,095 42.5 263,834 34.5

Net bank credit 341,291 100.0 396,954 100.0 477,899 100.0 763,855 100.0

Note

The figures under the column 'Per cent' indicate the share in net bank credit.Source: RBI's Report on Trend and Progress of Banking in India 2002-03


Ban

ks:

Cap

ital

ad

equ

acy

rati

o

Tab

le 3

(per

cen

t)19

95-9

619

96-9

719

97-9

819

98-9

9

199

9-20

00

200

0-01

2001

-02

Tie

r I

Tie

r II

To

tal

Tie

r I

Tie

r II

To

tal

Tie

r I

Tie

r II

To

tal

Pu

blic

sec

tor

ban

ks

Sta

te B

ank

of In

dia

11.6

12.2

14.6

12.5

8.3

3.2

11.5

8.6

4.2

12.8

9.2

4.1

13.4

Sta

te B

ank

of P

atia

la9.

511

.313

.212

.510

.81.

812

.610

.71.

712

.410

.02.

612

.6

Sta

te B

ank

of H

yder

abad

9.9

10.8

10.8

10.7

9.3

1.6

10.9

9.6

2.7

12.3

9.5

4.2

13.7

Sta

te B

ank

of T

rava

ncor

e9.

48.

211

.510

.37.

53.

611

.17.

74.

111

.87.

84.

812

.5

Sta

te B

ank

of B

ikan

er &

Jai

p u9.

38.

810

.712

.311

.11.

312

.411

.60.

812

.410

.91.

412

.3

Sta

te B

ank

of M

ysor

e8.

810

.811

.610

.27.

44.

111

.56.

84.

411

.26.

75.

111

.8

Sta

te B

ank

of S

aura

shtr

a12

.412

.118

.114

.414

.10.

414

.513

.70.

213

.912

.11.

113

.2

Sta

te B

ank

of In

dore

8.8

9.3

9.8

12.4

8.6

2.7

11.3

9.1

3.6

12.7

8.2

4.6

12.8

Alla

haba

d B

ank

10.8

11.0

11.6

10.4

7.1

4.4

11.5

6.7

3.8

10.5

6.2

4.4

10.6

And

hra

Ban

k5.

112

.112

.411

.010

.03.

413

.49.

83.

613

.48.

83.

812

.6

Ban

k of

Bar

oda

11.2

11.8

12.1

13.3

8.9

3.2

12.1

8.5

4.3

12.8

7.6

3.8

11.3

Ban

k of

Indi

a8.

410

.39.

110

.66.

93.

710

.67.

64.

612

.26.

44.

310

.7

Ban

k of

Mah

aras

htra

8.

59.

110

.99.

86.

94.

811

.76.

44.

310

.66.

64.

611

.2

Can

ara

Ban

k10

.410

.29.

511

.07.

81.

99.

67.

32.

59.

88.

13.

811

.9

Cen

tral

Ban

k of

Indi

a2.

69.

410

.411

.96.

74.

511

.25.

74.

310

.05.

24.

49.

6

Cor

pora

tion

Ban

k11

.311

.316

.913

.212

.70.

112

.813

.00.

313

.316

.81.

117

.9

Den

a B

ank

8.3

10.8

11.9

11.1

7.1

4.6

11.6

4.4

3.4

7.7

4.4

3.3

7.6

Indi

an B

ank

- ve

-18.

81.

4-

ve-

ve-

- ve

- ve

--

ve0.

90.

91.

7

Indi

an O

vers

eas

Ban

k6.

010

.19.

310

.25.

24.

09.

25.

84.

410

.26.

24.

710

.8

Orie

ntal

Ban

k of

Com

mer

ce17

.017

.515

.314

.112

.50.

212

.711

.50.

411

.89.

61.

411

.0

Pun

jab

and

Sin

d B

ank

5.5

9.2

11.4

10.9

7.5

4.1

11.6

6.9

4.6

11.4

6.4

4.3

10.7

Pun

jab

Nat

iona

l Ban

k8.

29.

28.

810

.86.

73.

610

.36.

83.

410

.26.

34.

410

.7

Syn

dica

te B

ank

8.4

8.8

10.5

9.6

7.2

4.2

11.5

7.9

3.8

11.7

8.5

3.7

12.1

UC

O B

ank

7.8

3.2

9.1

9.6

6.6

2.6

9.2

5.4

3.7

9.1

4.9

4.8

9.6

Uni

on B

ank

of In

dia

9.5

10.5

10.9

10.1

6.7

4.8

11.4

6.2

4.7

10.9

6.2

4.9

11.1

Uni

ted

Ban

k of

Indi

a3.

58.

28.

49.

68.

21.

49.

67.

03.

410

.48.

83.

212

.0

Vija

ya B

ank

0.0

11.5

10.3

10.0

6.0

4.6

10.6

8.0

3.5

11.5

8.9

3.4

12.3

2002

-03

Tie

r I

Tie

r II

To

tal

Tie

r I

Tie

r II

To

tal

8.8

4.7

13.5

8.3

5.2

13.5

10.4

3.2

13.6

9.9

3.7

13.6

9.8

5.0

14.8

8.4

5.9

14.3

6.8

4.5

11.3

6.2

5.1

11.4

10.5

2.6

13.1

9.0

3.9

12.9

7.2

4.4

11.6

7.2

4.4

11.5

11.7

2.0

13.7

11.0

3.5

14.5

9.4

3.7

13.1

8.3

4.1

12.4

6.4

4.8

11.2

6.3

6.3

12.5

8.2

5.4

13.6

8.2

5.5

13.7

8.1

4.6

12.7

8.5

5.4

13.9

7.6

4.5

12.0

7.5

5.5

13.0

5.9

5.9

11.8

7.0

4.9

11.9

7.9

4.7

12.5

7.8

7.8

15.6

5.7

4.9

10.5

6.2

6.2

12.4

17.3

1.2

18.5

16.5

3.6

20.1

5.3

4.0

9.3

5.2

4.3

9.5

7.5

3.3

10.9

7.7

5.2

12.8

5.8

5.5

11.3

6.7

5.8

12.5

10.7

3.3

14.0

9.9

4.6

14.5

6.1

4.3

10.4

6.4

4.7

11.1

7.1

4.9

12.0

7.0

6.1

13.1

7.7

3.3

11.0

6.8

4.7

11.5

5.2

4.9

10.0

6.1

5.8

11.9

6.9

5.6

12.4

6.5

5.9

12.3

12.6

2.5

15.2

15.0

2.0

17.0

7.4

5.2

12.7

8.4

5.7

14.1

2003

-04

Con

tinu

ed..

.


...c

onti

nued

2002

-03

Tie

r I

Tie

r II

To

tal

Tie

r I

Tie

r II

To

tal

8.9

2.4

11.3

8.35

2.83

11.1

8

14.9

2.1

17.0

15.1

2.01

17.1

1

6.7

4.6

11.2

6.26

5.22

11.4

8

6.6

3.2

9.8

n.a.

n.a.

n.a.

6.4

3.8

10.2

5.33

4.8

10.1

3

1.1

0.9

2.0

3.08

4.41

7.5

0.0

0.0

0.0

0.0

0.0

0.0

9.5

1.6

11.1

8.03

3.63

11.7

7.1

4.1

11.1

6.09

4.27

10.4

6.0

3.6

9.6

5.84

4.54

10.4

8.5

5.1

13.6

7.74

4.9

12.6

25.7

0.3

26.0

14.6

40.

6115

.3

6.4

4.5

10.9

6.44

4.77

11.2

10.1

2.1

12.1

8.91

3.84

12.8

8.4

2.9

11.3

8.79

2.32

11.1

1

14.5

3.6

18.1

11.1

73.

3714

.54

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

6.8

3.8

10.6

7.11

3.76

10.8

7

13.7

7.4

21.1

15.6

87.

2422

.92

15.2

2.2

17.4

9.32

5.1

14.4

2

10.7

1.9

12.6

11.4

91.

9913

.48

10.5

0.4

10.9

10.3

40.

410

.74

2003

-04

(per

cen

t)19

95-9

619

96-9

719

97-9

819

98-9

9

199

9-20

00

200

0-01

2001

-02

Tie

r I

Tie

r II

To

tal

Tie

r I

Tie

r II

To

tal

Tie

r I

Tie

r II

To

tal

Old

pri

vate

sec

tor

ban

ks

Ban

k of

Raj

asth

an11

.110

.15.

50.

85.

10.

65.

78.

91.

710

.610

.02.

112

.1

Kar

ur V

ysya

Ban

k10

.912

.814

.514

.514

.50.

715

.215

.10.

415

.615

.61.

316

.9

Fed

eral

Ban

k8.

49.

29.

410

.37.

73.

611

.37.

72.

610

.37.

03.

710

.6

Vys

ya B

ank

11.9

14.2

12.5

10.6

8.2

4.0

12.2

8.4

3.6

12.1

8.0

3.6

11.6

Uni

ted

Wes

tern

Ban

k10

.710

.29.

911

.68.

63.

411

.96.

63.

09.

67.

02.

89.

8

New

pri

vate

sec

tor

ban

ks

Cen

turio

n B

ank

2.6

1.6

4.2

Glo

bal T

rust

Ban

k9.

410

.210

.312

.09.

93.

813

.78.

83.

912

.77.

43.

811

.2

HD

FC

Ban

k23

.513

.513

.911

.99.

62.

612

.28.

72.

411

.110

.83.

113

.9

ICIC

I Ban

k17

.513

.013

.511

.117

.42.

219

.610

.41.

211

.67.

54.

011

.4

IDB

I Ban

k-

--

--

--

--

-6.

43.

29.

6

Ban

k of

Pun

jab

35.0

18.7

16.3

13.2

9.8

0.0

9.8

8.5

2.5

11.0

8.5

4.4

12.8

Kot

ak M

ahin

dra

Ban

k-

--

--

--

--

-30

.50.

030

.5

UT

I Ban

k-

--

--

--

--

-6.

44.

210

.7

Indu

sInd

Ban

k18

.212

.917

.915

.212

.11.

213

.212

.62.

415

.010

.52.

112

.5

Fo

reig

n b

anks

Citi

bank

10.1

9.5

8.6

10.0

7.0

3.6

10.6

7.9

3.3

11.2

8.4

2.7

11.0

Hon

gkon

g B

ank

11.7

11.9

9.8

9.3

5.7

4.6

10.3

8.6

3.7

12.4

7.5

3.5

10.9

AN

Z G

rindl

ays

Ban

k9.

59.

09.

19.

06.

05.

010

.96.

95.

612

.56.

56.

513

.1

Sta

ndar

d C

hart

ered

Ban

k13

.88.

69.

38.

36.

03.

59.

56.

72.

99.

66.

92.

49.

3

Ban

k of

Am

eric

a8.

78.

49.

09.

312

.40.

512

.912

.50.

513

.013

.57.

621

.1

Deu

tsch

e B

ank

8.5

9.3

9.7

9.5

10.4

0.0

10.4

12.5

0.2

12.7

13.7

0.9

14.6

AB

N A

mro

Ban

k8.

29.

29.

89.

38.

21.

910

.19.

51.

911

.411

.22.

013

.2

Am

eric

an E

xpre

ss B

ank

9.0

10.4

9.9

9.3

9.9

0.2

10.1

9.4

0.2

9.6

10.3

0.4

10.7

n.a.

: Not

ava

ilabl

e

So

urc

e: IB

A' P

erfo

rman

ce H

igh

ligh

ts o

f P

ub

lic, P

riva

te &

Fo

reig

n B

anks

in In

dia


Public sector banks: Capital adequacy ratio Table 4Number of banks 0-4

per cent4-8

per cent8-10

per centOver 10 per cent

Total

1993-94 11 8 4 4 27

1994-95 3 11 8 5 27

1995-96 5 3 13 6 27

1996-97 2 0 9 16 27

1997-98 1 0 7 19 27

1998-99 1 0 4 22 27

1999-2000 1 01 42 22 27

2000-01 1 11 22 23 27

2001-02 1 11 22 23 27

2002-03 0 11 12 25 27

2003-04 0 0 1 26 271 4-9 per cent2 9-10 per centSource: IBA' Performance Highlights of Public, Private & Foreign Banks in India

Capital adequacy ratio: 2003-04 Table 5Number of banks Less than 4

per cent4-9

per cent9-10

per centOver 10 per cent

Total

SBI - - - 1 1

SBI associates - - - 7 7

Nationalised banks 0 0 1 18 19

Old private sector banks n.a. n.a. n.a. n.a. n.a.

New private sector banks - 1 - 7 8

Foreign banks n.a. n.a. n.a. n.a. n.a.

Total 0 1 1 33 35

n.a. Not available

Source: IBA' Performance Highlights of Public, Private & Foreign Banks in India

Scheduled commercial banks: Capital infusion (1991-92 to 2003-04) Table 6

(Rs crore)

Public sector banks - Recapitalisation support by government 1 22,516

Public sector banks - Public and right issues 9,428

Old private sector banks - Capital issues 1,043

New private sector banks - Capital issues 2,987

Total 35,9741 Figures for 2002-03Source: CRIS INFAC


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Public sector banks: Writing down of capital base Table 8

(Rs crore) 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03

Allahabad Bank - - 532 - - - - - -

Andhra Bank - - - - 243 - 48 - 50

Bank of India - 1,370 - - - - - - -

Bank of Maharashtra - - - - 418 - - - -

Canara Bank - - - 507 - - - - 277

Central Bank of India - - - - - - - 681 -

Dena Bank - 136 - - - - - - -

Indian Overseas Bank - - 1,000 - - - - - -

Punjab and Sind Bank - - - - 462 - - - -

Punjab National Bank 425 - - - - - - - -

Syndicate Bank - - - - 943 - - - -

UCO Bank - - - - - - - - 1,665

Union Bank - - - - - - - - 58

Vijaya Bank - - - - - 297 - - -

Total 425 1,506 1,532 507 2,067 297 48 681 2,050

Source: RBI's Report on Trend and Progress of Banking in India

Public sector banks: Amounts returned to the government Table 9

(Rs crore) 1996-97 1997-98 2000-01 2001-02 2002-03

Andhra Bank - - 48 - 50

Bank of Baroda 381 - - - -

Bank of India 93 - - 150 -

Canara Bank - - - - 278

Corporation Bank 30 - - - -

Punjab National Bank - 138 - - -

Vijaya Bank - - - 25 -

Union Bank - - - - 58

Total 504 138 48 175 386

Source: CRIS INFAC


Public sector banks: Public/rights issues Table 10

(Rs crore) Period Amount Issue price

Public issue

State Bank of India Dec 1993 2,212.2 90

Oriental Bank of Commerce Oct 1994 360.0 50

Dena Bank Dec 1996 180.0 20

State Bank of India Oct 1996 1,270.41 233

Bank of Baroda Dec 1996 850.0 75

Bank of India Feb 1997 675.0 35

Corporation Bank Oct 1997 304.0 70

State Bank of Bikaner and Jaipur Nov 1997 73.4 440

State Bank of Travancore Jan 1998 90.0 500

Syndicate Bank Oct 1999 125.0 10

Vijaya Bank Dec 2000 100.0 10

Andhra Bank Feb 2001 150.0 10

Indian Overseas Bank Feb 2001 111.2 10

Union Bank Of India Aug 2002 288.2 16

Allahabad Bank Oct 2002 100.0 10

Canara Bank Nov 2002 385.0 35

Indian Overseas Bank Sep 2003 240.0 24

Uco Bank Sep 2003 240.0 12

Vijaya Bank Oct 2003 240.0 24

Bank of Maharashtra Feb 2004 230.0 23

Rights issue

State Bank of India Dec 1990 130.0 260

State Bank of India Jan 1994 792.0 60

State Bank of Bikaner and Jaipur Feb 1996 62.4 400

State Bank of Indore Feb 1996 52.5 600

State Bank of Mysore Feb 1996 84.0 350

State Bank of Travancore Feb 1996 82.5 5501 GDR issueSource: RBI's Report on Trend and Progress of Banks in India


Old private sector banks: Public/rights issues Table 11


Public issue

Nedungadi Bank Jan 1992 1.4 10

United Western Bank Jan 1994 6.0 20

Federal Bank Mar 1994 31.9 90

Sangli Bank Dec 1994 37.5 100

Karnataka Bank Oct 1995 54.1 120

Dhanalaxmi Bank Mar 1996 41.4 50

Jammu & Kashmir Bank May 1998 70.3 38

City Union Bank Jun 1998 21.0 35

South Indian Bank Sep 1998 51.2 32

Rights issue

Karur Vysya Bank Nov 1991 3.0 60

Nedungadi Bank Jan 1992 1.0 10

Federal Bank Mar 1993 9.3 35

Bank of Rajasthan Jul 1994 10.0 20

Karnataka Bank Oct 1995 27.0 60

United Western Bank Oct 1995 71.6 40

Lakshmi Vilas Bank Nov 1995 20.0 35

Vysya Bank Jan 1996 46.3 35

Bank of Madura Feb 1996 33.0 70

Federal Bank Feb 1996 111.2 150

Nedungadi Bank Feb 1996 20.4 30

Lord Krishna Bank Feb 1998 25.5 17

Catholic Syrian Bank Dec 1998 15.7 32

Bank of Rajasthan Oct 1999 67.3 15

Bharat Overseas Bank 1999-2000 10.5 n.a.

Ganesh Bank of Kurundwad 1999-2000 0.5 n.a.

Nainital Bank 1999-2000 2.5 n.a.

Ratnakar Bank 1999-2000 5.9 n.a.

Sangli Bank 1999-2000 3.2 n.a.

Vysya Bank1 2000-01 75.5 n.a.

Bank of Rajasthan 2000-01 35.8 10

Lord Krishna Bank 2001-02 36.0 12

Dhanalaxmi Bank 2001-02 27.5 15

Karnataka Bank 2002-03 33.6 25

Karur Vysya Bank 2002-03 36.0 601 Preference issue to foreign collaborators

n.a.: Not available

Source: CRIS INFAC


New private sector banks: Public issues Table 12


Bank of Punjab Mar 1995 95.0 10

Global Trust Bank Aug 1994 95.8 10

HDFC Bank Mar 1995 90.0 10

ICICI Bank Aug 1997 144.41 35

IndusInd Bank Nov 1997 180.0 45

UTI Bank Sep 1998 31.5 21

UTI Bank Sep 1998 42.01 21

IDBI Bank Feb 1999 72.0 18

Times Bank Jul 1999 35.0 10

Centurion Bank Sep 1999 33.8 10

Global Trust Bank 1999-2000 125.8 85

HDFC Bank 1999-2000 186.2 94

ICICI Bank Mar 2000 763.42 240

HDFC Bank Jul 2001 780.72 217

UTI Bank Sep 2001 157.63 34

IDBI Bank4 Sep 2003 154.2 221 Offer for sale by promoters2 ADR issue3 Private placement of shares4 Rights issueSource: CRIS INFAC

Public sector banks: Government ownership Table 13

(per cent) 1998-99 1999-2000 2000-01 2001-02 2002-03

Allahabad Bank 100 100 100 100 71

Andhra Bank 100 100 67 67 63

Bank of Baroda 66 66 66 66 66

Bank of India 77 77 77 69 69

Bank of Maharashtra 100 100 100 100 100

Canara Bank 100 100 100 100 73

Central Bank of India 100 100 100 100 100

Corporation Bank 68 68 68 57 57

Dena Bank 71 71 71 71 71

Indian Bank 100 100 100 100 100

Indian Overseas Bank 100 100 75 75 75

Oriental Bank of Commerce 67 67 67 67 67

Punjab and Sind Bank 100 100 100 100 100

Punjab National Bank 100 100 100 100 100

Syndicate Bank 100 74 74 74 74

Union Bank of India 100 100 100 100 61

United Bank of India 100 100 100 100 100

UCO Bank 100 100 100 100 100

Vijaya Bank 100 100 72 70 70

Note

In 2000-01 and 2001-02, government ownership was lowered in Andhra Bank, Indian Overseas Bank,

Vijaya Bank and and Punjab National Bank.

Source: IBA' Performance Highlights of Public Sector Banks in India


Public sector banks: Net worth Table 14

Rs lakh 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98

Capital 3,925 4,499 10,259 14,689 14,132 13,870 16,071

Reserves and surplus 3,888 5,127 8,721 11,358 14,267 19,389 24,698

Total 7,813 9,626 18,980 26,047 28,399 33,259 40,769

Rs lakh 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Capital 14,405 14,234 14,547 15,013 14,175 14676

Reserves and surplus 27,447 31,819 35,358 42,276 51,407 64,549

Total 41,852 46,052 49,905 57,289 65,583 79,225


Scheduled commercial banks: Net worth Table 15

1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98

Capital 4,053 4,673 10,548 15,225 16,261 16,873 19,363

Reserves and surplus 4,979 7,189 11,750 15,643 20,504 26,874 34,000

Total 9,032 11,862 22,298 30,868 36,765 43,747 53,363

1998-99 1999-2000 2000-01 2001-02 2002-03 2003-041

Capital 18,166 18435.2 19,095 20,949 21,594 22,322

Reserves and surplus 36,791 43451.87 48,647 62,555 76,274 94,246

Total 54,957 61887.07 67,741 83,504 97,868 116,5681 excluding RRBsSource: IBA' Performance Highlights of Public Sector Banks in India

NRI deposits (1991-2003) Table 16

($ million) 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

FCNR(A) 10,103 9,792 10,617 9,300 7,051 4,255 2,306 1 - - - - - -

FCNR(B) - - - 1,108 3,063 5,720 7,496 8,467 8,323 8,172 9,076 9,673 10,199 10,961

NR(E)RA 3,618 3,025 2,740 3,523 4,556 3,916 4,983 5,637 6,220 6,758 7,147 8,449 14,923 20,559

NR(NR)RD - - 621 1,754 2,486 3,542 5,604 6,262 6,758 6,754 6,849 7,052 3,407 1,746

FC(O)N - - - 12 10 13 4 2 - - - - - -

FC(B&O)D 265 732 1,037 533 - - - - - - - - - -

Total 13,986 13,549 15,015 16,230 17,166 17,446 20,393 20,369 21,301 21,684 23,072 25,174 28,529 33,266

Change - -437 1,466 1,215 936 280 2,947 -24 932 383 1,388 2,102 3,355 4,737

FC(B&O)D: Foreign currency (bank and other) deposits; FC(O)N: Foreign currency (ordinary) non-repatriable deposits; FCNR(A):

Foreign currency non-resident (accounts); FCNR(B): Foreign currency non-resident (banks); NR(E)RA: Non-resident (external)

rupee accounts; NR(NR)RD: Non-resident (non-repatriable) rupee deposits.

Note

Figures are as at the end of March.

Source: RBI Annual Report


Commercial banks: Branch network Table 17

(nos) 1969 1984 1991 1996 1997 1998 1999 2000 2001 2002 2003

Rural 1,860 25,372 35,187 33,000 32,918 32,857 32,791 32,649 32,631 32,434 32,386

Semi-urban 3,344 9,262 11,269 13,586 13,783 13,985 14,205 14,431 14,509 14,742 14,830

Urban 1,456 5,769 7,615 9,116 9,379 9,692 9,931 10,130 10,219 10,493 10,650

Metro 1,661 4,929 6,119 7,403 7,573 7,816 8,069 8,346 8,441 8,590 8,648

Total 8,321 45,332 60,190 63,105 63,653 64,350 64,996 65,556 65,800 66,259 66,514

Note

Figures are for June.


Banks: Distribution of net NPAs as a percentage of net advances Table 18

(nos) 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03

Public sector banks 27 27 27 27 27 27 27 27

Up to 10 per cent 19 17 17 18 22 22 24 25

Over 10 and up to 20 per cent 6 9 9 8 5 5 3 2

Over 20 per cent 2 1 1 1 0 0 0 0

Old private sector banks 25 25 25 25 24 23 22 21

Up to 10 per cent 22 22 21 17 18 16 17 19


Over 20 per cent 0 0 0 3 1 3 2 1

New private sector banks 9 9 9 9 8 8 8 9

Up to 10 per cent 9 9 9 9 8 8 8 8


Over 20 per cent 0 0 0 0 0 0 0 0

Foreign banks in India 31 39 42 41 42 42 40 36

Up to 10 per cent 30 36 34 27 31 31 26 28


Over 20 per cent 0 2 2 3 4 5 9 4

Total 92 100 103 102 101 100 97 93



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Banks: Segment-wise incremental gross and net NPAs Table 20

(Rs crore)

1998-99 1999-2000 2000-01 2001-02 2002-03 1998-99 1999-2000 2000-01 2001-02 2002-03

Scheduled commercial banks 7,908 1,686 3,475 7,120 -2,147 4,260 2,053 2,394 3,093 -2,790

- Public sector banks 6,058 1,322 1,740 1,801 -2,387 2,979 1,976 1,781 -19 -2,995

- Nationalised banks 2,939 190 920 2,681 119 1,297 1,641 1,089 468 -1,822

- State Bank Group 3,119 1,132 819 -880 -2,506 1,683 335 693 -487 -1,173

- Old private sector banks 990 31 605 505 -283 760 61 377 243 -272

- New private sector banks 479 75 674 5,195 421 320 27 291 2,734 479

- Foreign banks in India 381 257 457 -380 103 200 -11 -55 135 -2


Incremental gross NPAs Incremental net NPAs

Scheduled commerical banks: Gross and net NPAs Table 21

(Rs crore) Gross advances

Gross NPAs

Change1 Gross NPAs as a percentage of

gross advances

Net advances

Net NPAs

Change1 Net NPAs as a percentage of net advances

1996-97 301,698 47,300 5,639 15.7 276,421 22,340 4,043 8.1

1997-98 352,696 50,815 3,515 14.4 325,522 23,761 1,421 7.3

1998-99 399,436 58,722 7,907 14.7 367,012 28,020 4,259 7.6

1999-2000 475,113 60,408 1,686 12.7 444,292 30,073 2,053 6.8

2000-01 558,766 63,741 3,333 11.4 526,328 32,461 2,388 6.2

2001-02 680,958 70,861 7,120 10.4 645,859 35,554 3,093 5.5

2002-03 778,043 68,714 -2,147 8.8 740,473 32,764 -2,790 4.41 Change in NPAs over the previous yearSource: RBI's Report on Trend and Progress of Banking in India 2002-03


Public sector banks: Classification of loan assets Table 23

(percentage of advances) 1997 1998 1999 2000 2001 2002 2003 2003

Standard assets 82.2 84.0 84.1 86.0 87.6 88.9 90.6 92.2

Total NPAs 17.9 16.1 15.9 14.0 12.4 11.1 9.4 7.8

- Sub-standard assets 5.1 5.1 4.9 4.3 3.3 3.1 2.6 2.6

- Doubtful assets 10.7 9.1 9.0 8.0 7.6 6.6 5.6 4.3

- Loss assets 2.1 1.9 2.0 1.7 1.5 1.4 1.2 0.9

Total advances (Rs crore) 244,214 284,971 325,328 380,077 442,134 509,369 577,813 661,975

Note

The figures are as at end March.


Public sector banks: Net NPAs as a percentage of net advances Table 22

(per cent) 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Allahabad Bank 16.0 14.8 15.1 12.5 12.2 11.2 11.1 7.1 2.4

Andhra Bank 3.3 4.1 2.9 4.3 3.5 3.0 2.5 1.8 0.9

Bank of Baroda 8.2 7.5 6.6 7.7 7.0 6.8 5.0 3.7 3.0

Bank of India 7.0 6.9 7.3 7.3 8.6 6.7 6.0 5.6 4.5

Bank of Maharashtra 9.4 9.7 8.7 8.7 7.0 7.4 5.8 4.8 2.5

Canara Bank 7.5 9.3 7.5 7.1 5.3 4.8 3.9 3.6 2.9

Central Bank of India 13.5 14.4 12.2 9.8 9.8 9.7 8.0 6.7 5.6

Corporation Bank 2.3 3.6 2.9 2.0 1.9 2.0 2.3 1.7 1.8

Dena Bank 7.3 9.4 8.3 7.7 13.8 18.3 16.3 11.8 9.4

Indian Bank 23.9 25.2 26.0 21.7 16.2 10.1 8.3 6.2 2.7

Indian Overseas Bank 8.6 7.6 6.3 7.3 7.7 7.0 6.3 5.2 2.9

Oriental Bank of Commerce 3.6 5.6 4.5 4.5 3.6 3.6 3.2 1.4 0.0

Punjab and Sind Bank 10.3 12.0 10.8 10.5 9.4 12.3 11.7 10.9 9.6

Punjab National Bank 12.7 10.4 9.6 9.0 8.5 6.7 5.3 3.9 1.0

State Bank of India 6.6 7.3 6.1 7.2 6.4 6.0 5.6 4.5 3.5

State Bank of Bikaner and Jaipur 6.1 8.0 7.1 10.5 10.1 7.8 5.0 4.1 1.2

State Bank of Hyderabad 9.9 11.4 10.9 8.8 7.3 7.8 5.0 3.3 0.7

State Bank of Indore 9.6 11.3 11.0 10.1 7.6 5.9 3.6 2.7 0.0

State Bank of Mysore 8.6 11.0 10.8 10.6 8.1 7.7 7.4 5.2 3.0

State Bank of Patiala 6.6 5.9 7.0 8.2 6.1 4.9 2.9 1.5 0.0

State Bank of Saurashtra 5.7 6.1 6.6 7.7 7.9 6.9 5.0 3.5 0.0

State Bank of Travancore 7.4 8.8 12.2 10.8 8.8 7.8 5.7 3.1 1.4

Syndicate Bank 8.4 7.5 5.8 3.9 3.2 4.1 4.6 4.3 2.6

UCO Bank 11.4 13.7 11.1 10.8 8.8 6.4 5.5 4.4 3.7

Union Bank of India 5.9 7.0 7.7 8.7 8.0 6.9 6.3 4.9 2.9

United Bank of India 23.3 19.2 14.1 14.7 12.9 10.5 7.9 5.5 3.8

Vijaya Bank 11.9 9.6 7.6 6.7 6.6 6.2 6.0 2.6 0.9



New private sector banks: Key financial parameters (2003-04) Table 24

Unit ICICI Bank

HDFC Bank

UTI Bank IndusInd Bank

Centurion Bank

IDBI Bank Bank of Punjab

Kotak Mahindra

Branches1 nos 446 231 140 53 60 97 107 4

Number of employees1 nos 10617 4791 2338 941 945 1453 1158 545

Total income Rs crore 11959 3029 2127 1331 397 947 472 384

Operating profit Rs crore 2372 1008 686 445 12 285 103 127

Net profit Rs crore 1637 510 278 262 -105 132 37 79

Total assets Rs crore 125229 42307 24150 15086 3549 13002 4839 5817

Advances Rs crore 62096 17745 9363 7812 1556 7399 2353 2097

Investments Rs crore 42743 19257 7793 3972 1004 3914 1572 2883

Deposits Rs crore 68109 30409 20954 11200 3029 10048 4137 4459

Paid-up equity capital Rs crore 966 285 232 290 57 214 105 60

Net worth Rs crore 8011 2693 1138 800 62 618 244 606

Income/ average assets per cent 10.3 8.3 2.9 10.7 11.4 9.0 10.6 9.63

Interest earned / average assets per cent 7.7 7.0 7.3 7.9 9.6 7.0 7.7 7.2

Other income / average assets per cent 2.6 1.3 2.5 2.8 1.8 2.0 2.9 2.4

Expenditure / average assets per cent 8.3 5.6 6.6 7.1 11.1 6.3 8.1 6.5

Interest expended / average assets per cent 6.0 3.3 4.7 5.4 5.9 3.9 4.6 3.0

Operating expenses / average assets per cent 2.2 2.2 1.9 1.7 5.2 2.5 3.5 3.5

Provisions and contingencies / average assets

per cent 0.6 1.4 1.9 1.5 3.4 1.5 1.4 1.2

Operating profit / average assets per cent 1.9 2.4 2.8 4.8 0.1 3.2 1.9 4.4

Return on assets per cent 1.4 1.4 1.3 2.1 -3.0 1.3 0.8 2.0

Net interest margin per cent 1.6 3.7 2.6 2.5 3.7 3.2 3.1 4.3

Capital adequacy

CRAR- Total per cent 6.1 8.0 6.4 8.9 3.1 5.8 7.7 14.6

CRAR- Tier-I per cent 4.3 3.6 4.8 3.8 4.4 4.5 4.9 0.6

Asset quality

Net NPA Rs crore n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Net NPAs / net advances per cent n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Net NPA / net worth per cent n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Productivity 1

Business per employee Rs lakhs 955.52 712.40 1032.70 1482.01 438.99 712.83 465.18 274.75

Profit per employee Rs lakhs 13.00 14.51 17.54 34.46 2.30 11.02 9.41 24.62

Deposits per branch Rs crore 108.0 96.9 121.2 162.2 47.2 62.2 33.5 64.2

Valuation

Book value Rs 130 95 49 36 1 29 23 102

Stock price Rs 217 304 93 30 12 37 24 284

Market capitalisation Rs crore 13395 8659 2158 658 654 795 248 1694

Price / book value times 1.67 3.22 1.90 0.82 10.62 1.29 1.02 2.79

Deposits / market capitalisation times 5.08 3.51 9.71 17.02 4.63 12.64 16.66 2.63

EPS Rs 26.56 17.89 12.02 11.90 -1.85 6.18 3.53 13.23

Current PE times 8.18 17.00 7.75 2.51 -6.22 6.00 6.71 21.51

n.a.: Not available1 For the year 2002-03

Source: IBA's Performance Highlights of Private Sector Banks


Old private sector banks: Key financial parameters (2003-04) Table 25

Continued...

Unit

Branches1 nos

Number of employees1 nos

Total income Rs crore

Operating profit Rs crore

Net profit Rs crore

Total assets Rs crore

Advances Rs crore

Investments Rs crore

Deposits Rs crore

Paid-up equity capital Rs crore

Net worth Rs crore

Income / average assets per cent

Interest earned / average assets per cent

Other income / average assets per cent

Expenditure / average assets per cent

Interest expended / average assets per cent

Operating expenses / average assets per cent


per cent

Operating profit / average assets per cent

Return on assets per cent

Net interest margin per cent

Capital adequacy

CRAR- Total per cent

CRAR- Tier-I per cent

Asset quality

Net NPA Rs crore

Net NPAs / net advances per cent

Net NPA / net worth per cent

Productivity1

Business per employee Rs lakhs

Profit per employee Rs lakhs

Deposits per branch Rs crore

Valuation

Book value Rs

Stock price Rs

Market capitalisation Rs crore

Price / book value times

Deposits / market capitalisation times

EPS Rs

Current PE times

Jammu & Kashmir Bank

ING Vysya Bank

Federal Bank

Karnataka Bank

United Western Bank

South Indian Bank

454 371 420 360 231 391

7,112 4,969 6,217 4,320 3,275 3,550

1,823 1,287 1,490 1,119 596 915

628 262 437 330 133 242

406 59 136 133 31 84

21206 13198 15114 10577 7139 9254

9285 7047 7701 4668 3744 4197

8451 4085 5507 4879 2413 3962

18661 10478 13477 9407 6430 8280

48 23 22 40 30 36

1,594 747 649 698 304 395

9.6 10.4 10.9 11.3 9.1 10.8

8.0 7.5 8.7 8.6 7.1 8.1

1.6 2.9 2.2 2.7 2.0 2.8

6.3 8.3 7.7 8.0 7.1 8.0

4.7 5.5 5.6 6.4 5.2 5.7

1.5 2.8 2.1 1.6 1.9 2.3

1.2 1.6 2.2 2.0 1.6 1.9

3.3 2.1 3.2 3.3 2.0 2.9

2.1 0.5 1.0 1.3 0.5 1.0

3.3 2.0 3.1 2.2 1.9 2.4

13.0 6.1 6.3 10.5 5.3 5.8

3.9 4.9 5.2 2.6 4.8 5.5

n.a. n.a. n.a. n.a. n.a. n.a.



287.00 242.42 270.00 275.32 242.00 265.00

5.00 1.69 1.69 2.55 0.83 2.04

32.3 24.8 26.1 23.0 23.3 17.5

329 277 293 173 94 110

296 363 201 92 29 61

1,436 na 446 371 86 219

0.9 1.3 0.7 0.5 0.3 0.6

13 na 30 25 75 38

83.8 25.4 61.5 32.9 10.4 23.6

3.5 14.3 3.3 2.8 2.8 2.6


...continued

continued...

Unit

Branches1 nos




Net profit Rs crore


Advances Rs crore


Deposits Rs crore


Net worth Rs crore








per cent




Capital adequacy



Asset quality

Net NPA Rs crore



Productivity1




Valuation

Book value Rs

Stock price Rs




EPS Rs

Current PE times

Karur Vysya Bank

Bank of Rajasthan

Development Credit Bank

Tamilnad Mercantile Bank

Catholic Syrian Bank

214 336 59 n.a. n.a.

2,833 4,207 1,327 n.a. n.a.

722 680 441 606 476

215 185 54 170 123

161 69 17 81 56

7107 8455 5393 5089 4307

4023 2432 2440 2114 1898

2173 4353 2084 2354 1819

5911 7406 4474 4404 3880

18 108 39 28 11

712 329 290 224 194

10.9 9.3 9.0 12.3 11.7

9.7 6.9 7.2 11.0 8.7

1.1 2.4 1.8 1.4 2.9

7.6 6.8 7.9 8.9 8.6

5.3 4.3 5.2 6.6 5.8

2.4 2.5 2.7 2.3 2.9

0.8 1.6 0.7 1.8 1.6

3.2 2.5 1.1 3.5 3.0

2.4 0.9 0.4 1.6 1.4

4.5 2.6 2.0 4.4 3.0

15.1 8.4 8.9 17.4 7.0

2.0 2.8 5.4 3.7 4.3

n.a. n.a. n.a. n.a. n.a.



288.00 164.64 463.00 270.83 164.94

4.41 1.63 2.60 2.88 1.57

23.9 15.8 62.0 2.5 1.2

1,187 29 n.a. n.a. n.a.

283 30 n.a. n.a. n.a.

170 321 n.a. n.a. n.a.

0.2 1.0 n.a. n.a. n.a.

35 23 n.a. n.a. n.a.

268.4 6.4 n.a. n.a. n.a.

1.1 4.7 n.a. n.a. n.a.


...continued

continued...

Unit

Branches1 nos




Net profit Rs crore


Advances Rs crore


Deposits Rs crore


Net worth Rs crore








per cent




Capital adequacy



Asset quality

Net NPA Rs crore



Productivity1




Valuation

Book value Rs

Stock price Rs




EPS Rs

Current PE times

Lakshmi Vilas Bank

Bharat Overseas Bank

City Union Bank

Sangli Bank Dhanalakshmi Bank

216 80 123 184 159

1,983 1,029 1,408 2,026 1,305

373 230 343 165 249

91 57 118 28 67

41 35 57 12 17

3821 8455 3191 1992 2445

2039 1392 1547 648 1139

1338 936 1279 1080 895

3296 2472 2847 1859 2156

12 16 24 22 32

227 127 203 86 134

10.6 4.2 11.8 8.7 11.0

8.1 3.6 9.5 7.1 8.4

2.5 0.6 2.3 1.6 2.6

8.0 3.2 7.7 7.2 8.0

5.8 2.1 6.2 4.3 5.3

2.3 1.1 1.5 2.9 2.7

1.4 0.4 2.1 0.8 2.2

2.6 1.0 4.0 1.5 2.9

1.2 0.6 2.0 0.6 0.8

2.4 1.6 3.3 2.8 3.0

8.5 9.8 10.7 11.0 8.6

5.3 6.5 2.6 2.7 4.9




228.00 317.00 230.05 91.31 222.06

1.72 2.77 2.37 0.59 1.15

12.8 26.9 18.8 9.1 11.6

n.a. n.a. 85 n.a. n.a.

n.a. n.a. 58 n.a. n.a.

n.a. n.a. 138 n.a. n.a.

n.a. n.a. 0.7 n.a. n.a.

n.a. n.a. 21 n.a. n.a.

n.a. n.a. 23.8 n.a. n.a.

n.a. n.a. 2.4 n.a. n.a.


...continued

n.a.: Not available1 For the year 2002-03Source: Performance Highlights of Private Sector Bank

Unit

Branches1 nos




Net profit Rs crore


Advances Rs crore


Deposits Rs crore


Net worth Rs crore








per cent




Capital adequacy



Asset quality

Net NPA Rs crore



Productivity1




Valuation

Book value Rs

Stock price Rs




EPS Rs

Current PE times

Lord Krishna Bank

Nainital Bank

Ratnakar Bank

SBI Commercial

Ganesh Bank of Kurundwad

n.a. 59 71 2 29

n.a. 646 531 111 240

235 83 77 60 23

48 21 14 26 2

26 12 8 18 1

2605 854 815 489 222

1118 236 346 121 97

1047 410 258 143 78

2311 759 715 373 208

57 15 18 100 2

137 67 54 100 11

10.5 10.2 9.9 11.1 10.8

7.5 8.6 8.4 7.3 8.7

3.1 1.6 1.5 3.8 2.1

8.3 7.7 8.1 6.3 9.9

5.9 4.6 5.5 4.8 7.5

2.4 3.1 2.6 1.5 2.4

1.0 1.0 0.7 1.5 0.3

2.2 2.5 1.8 4.8 0.9

1.2 1.5 1.1 3.3 0.6

1.5 4.1 2.9 2.5 1.2

10.1 14.3 13.5 28.8 7.9

6.5 4.3 3.1 1.7 4.1




264.17 115.38 179.73 621.78 126.52

2.36 1.17 1.81 -7.71 1.39

1.8 11.3 9.0 247.2 -









Select public sector banks: Key financial parameters (2003-04) Table 26

Continued...

Unit

Branches1 nos




Net profit Rs crore


Advances Rs crore


Deposits Rs crore


Net worth Rs crore








per cent




Capital adequacy



Asset quality

Net NPA Rs crore



Productivity1




Valuation

Book value Rs

Stock price Rs




EPS Rs

Current PE times

Andhra Bank

Bank of Baroda

Canara Bank

Corporation Bank

1,100 2,753 2,424 684

12,991 40,313 47,566 10,729

2,799 7,359 9,080 2,718

930 2,485 2,859 907

464 967 1,338 504

27,009 85,109 99,539 29,154

12,885 35,601 47,639 13,890

10,317 38,019 35,793 10,685

22,941 72,967 86,345 23,191

400 295 410 143

1,453 5,131 5,252 2,769

11.2 9.7 10.0 9.8

8.6 7.6 7.7 7.9

2.6 2.1 2.3 1.9

7.6 6.7 6.9 6.5

5.1 4.4 4.8 4.5

2.5 2.2 2.1 2.1

1.8 1.9 1.7 1.5

3.6 3.1 3.1 3.3

1.8 1.2 1.5 1.8

3.5 3.2 3.0 3.5

8.2 8.5 7.8 16.5

5.5 5.4 7.8 3.6

n.a. n.a. n.a. n.a.

n.a. n.a. n.a. n.a.

n.a. n.a. n.a. n.a.

250.75 252.50 236.65 314.60

5.81 4.26 4.20 6.29

19.1 24.1 29.7 31.8

36 175 125 193

42 169 122 214

1,693 4,960 4,988 3,076

1.2 1.0 1.0 1.1

14 15 17 8

11.6 33.0 32.6 35.1

3.7 5.1 3.7 6.1


...continued

n.a.: Not available1 For the year 2002-03

Source: Performance Highlights of Public Sector Bank

Unit

Branches1 nos




Net profit Rs crore


Advances Rs crore


Deposits Rs crore


Net worth Rs crore








per cent




Capital adequacy



Asset quality

Net NPA Rs crore



Productivity1




Valuation

Book value Rs

Stock price Rs




EPS Rs

Current PE times

OBC Punjab National Bank

Union Bank of India

State Bank of India

989 4,037 2,020 9081

13,507 58,981 25,706 208,998

4,022 9,647 5,348 38,073

1,533 3,121 1,483 7,775

686 1,109 712 3,105

41,007 102,332 58,317 407,815

19,681 47,225 29,426 157,934

16,794 42,125 22,442 185,676

35,674 87,916 50,559 318,619

193 265 460 526

2,677 4,955 3,087 20,231

10.7 10.2 9.8 9.7

8.8 8.3 8.3 7.8

1.9 2.0 1.5 1.9

6.6 6.9 7.1 7.3

4.9 4.4 5.1 4.9

1.7 2.5 2.0 2.4

2.3 2.1 1.4 1.5

4.1 3.3 2.7 2.0

1.8 1.2 1.3 0.8

3.9 3.8 3.2 2.9

9.9 7.0 6.5 8.3

4.6 6.1 5.9 5.2

n.a. n.a. n.a. n.a.

n.a. n.a. n.a. n.a.

n.a. n.a. n.a. n.a.

336.76 196.74 273.33 207.60

24.46 3.90 5.07 3.72

30.1 18.8 22.2 32.6

139 175 57 384

208 204 44 468

4,002 5,411 2,023 24,608

1.5 1.2 0.8 1.2

9 16 25 13

35.6 41.8 15.5 59.0

5.8 4.9 2.8 7.9


Scheduled commercial banks: Segment-wise financial performance (2003-04) Table 27

(Rs crore) Total (excl RRBs)

Public sector banks

Nationalised banks

State Bank Group

Other Scheduled

C i l

Foreign banks in

I diBanks (nos) 90 27 19 8 30 33

Branches1 51,685 46,752 33,130 13,622 4,749 184

Number of employees1 835,716 752,860 471,471 281,389 71,071 11,785

Income 183,767 137,603 85,712 51,891 33,154 13,010

Interest income 144,028 109,496 68,540 40,956 25542 8990

Other income 39,739 28,107 17,172 10,935 7,612 4020

Expenditure 161,494 121,056 74,783 46,273 29,670 10,768

Interest expended 87,567 65,766 40,370 25,396 17,529 4272

Provisions and contingencies 30,400 22,929 14,184 8,745 4,727 2744

Operating expenses 43,527 32,361 20,229 12,132 7,414 3752

-Wage bill 26,195 22,421 14,068 8,353 2,574 1200

Net profit 22,273 16,547 10,929 5,618 3,484 2,242

Operating profit 52,673 39,476 25,113 14,363 8,211 4,986

Spread 56,461 43,730 28,170 15,560 8,013 4,718

Total assets 1,975,023 1,471,429 922,171 549,258 367,278 136,316

Spread (percentage of total assets) 2.9 3.0 3.1 2.8 2.2 3.5Operating expenses (percentage of total assets)

2.2 2.2 2.2 2.2 2.0 2.8

Wage bill (percentage of total assets) 1.3 1.5 1.5 1.5 0.7 0.9

Profit (percentage of total assets) 1.1 1.1 1.2 1.0 0.9 1.6

Gross NPA n.a. n.a. n.a. n.a. n.a. n.a.

Net NPA n.a. n.a. n.a. n.a. n.a. n.a.

Gross NPAs / gross advances (per cent) n.a. n.a. n.a. n.a. n.a. n.a.

Gross NPAs / total assets (per cent) n.a. n.a. n.a. n.a. n.a. n.a.

Net NPAs / net advances (per cent) n.a. n.a. n.a. n.a. n.a. n.a.

Net NPAs / total assets (per cent) n.a. n.a. n.a. n.a. n.a. n.a.

Net NPA / net worth (per cent) n.a. n.a. n.a. n.a. n.a. n.a.

Asset per employee (Rs lakhs)1 236.3 195.4 195.6 195.2 516.8 1156.7

Business per employee (Rs lakhs)1 291.9 247.0 255.8 232.2 618.3 1,190.2

Income per employee (Rs lakhs)1 22.0 18.3 18.2 18.4 46.6 110.4

Profit per employee (Rs lakhs)1 2.7 2.2 2.3 2.0 4.9 19.0

Wages per employee (Rs lakhs)1 0.0 3.0 3.0 3.0 3.6 10.2

Employee per branch (Nos)1 16.2 16.1 14.2 20.7 15.0 64.0

Wage costs per branch (Rs lakhs)1 0.0 48.0 42.5 61.3 54.2 652.2

NPA: Non-performing asset; n.a.: Not available1 For the year 2002-03Source: RBI's Trend and Progress of Banking in India and Statistical Tables Relating to Banks in India


Scheduled commercial banks: Segment-wise financial ratios (2003-04) Table 28

(Rs crore) Total Public sector banks

Nationalised banks

State Bank

Group

Other Scheduled

Commercial Banks

Foreign banks in

India

Banks (nos) 90 27 19 8 30 33

Liabilities 1,975,023 1,471,429 922,171 549,258 367,278 136,316

Capital 22,323 14,676 13,640 1,036 3,002 4,645

Reserves and surplus 94,245 64,549 37,835 26,714 19,496 10,200

Deposits 1,575,145 1,226,838 793,947 432,891 268,550 79,757

Borrowings 96,491 30,736 13,921 16,815 40,366 25,389

Other liabilities and provisions 186,819 134,630 62,828 71,802 35,864 16,325

Assets 1,975,023 1,471,429 922,171 549,258 367,278 136,316

Cash and bank balances with RBI 113,244 84,242 58,080 26,162 21,725 7,277

Balances with banks and money at call and short notice

82,226 57,449 30,115 27,334 15,116 9,661

Investments 802,066 625,678 377,903 247,775 134,802 41,586

Advances 864,143 632,740 412,224 220,516 170,896 60,507

Fixed assets 21,403 11,527 8,178 3,349 7,926 1,950

Other assets 91,941 59,793 35,671 24,122 16,813 15,335

Key ratios

Deposits/Total liabilities (per cent) 80 83 86 79 73 59

RONW (per cent) 19.1 20.9 21.2 20.2 15.5 15.1

ROA (per cent) 1.13 1.12 1.19 1.02 0.95 1.64

NPA: Non-performing asset; ROA: Return on assets; RONW: Return on net worth

Source: RBI's Trend and Progress of Banking in India


Scheduled commercial banks: Segment-wise share (2003-04) Table 29

(per cent) Number of banks

Number of branches1

Employees1 Total assets

Deposits Advances Investments

Scheduled commercial banks 90 51,685 833,261 1,975,020 1,575,145 864,143 802,066

Share of total (per cent)

Public sector banks 27 90.46 90.66 74.50 77.89 73.22 78.01

- Nationalised banks 19 64.10 56.71 46.69 50.40 47.70 47.12

- State Bank Group 8 26.36 33.95 27.81 27.48 25.52 30.89

Other Scheduled Commercial banks 30 9.19 7.90 18.60 17.05 19.78 16.81

Foreign banks in India 33 0.36 1.44 6.90 5.06 7.00 5.18

(per cent) Networth

Gross NPA

Net NPA Total income

Wage bill

Net profit

Operating profit

Spread

Scheduled commercial banks 116,558 n.a. n.a. 183,767 26,195 22,273 52,673 56,461

Share of total (per cent)

Public sector banks 67.96 n.a. n.a. 74.88 85.59 74.29 74.95 77.45

- Nationalised banks 44.16 n.a. n.a. 46.64 53.70 49.07 47.68 49.89

- State Bank Group 23.80 n.a. n.a. 28.24 31.89 25.22 27.27 27.56

Other Scheduled Commercial banks 19.30 n.a. n.a. 18.04 9.83 15.64 15.59 14.19

Foreign banks in India 12.74 n.a. n.a. 7.08 4.58 10.07 9.47 8.36

n.a.: Not available1 Figures for the year 2002-03Source: CRIS INFAC


Industry performance4.0

SCBs: Profits Figure 1

Source: CRIS INFAC

SCBs: NIM Figure 2

(Rs crore)

-10,000

0

10,000

20,000

30,000

40,000

50,000

60,000

1991-92

1992-93

1993-94

1994-95

1995-96

1996-97

1997-98

1998-99

1999-2000

2000-01

2001-02

2002-03

2003-04

Net profit Operating profit Spread


(Rs crore)

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

1991-92

1992-93

1993-94

1994-95

1995-96

1996-97

1997-98

1998-99

1999-2000

2000-01

2001-02

2002-03

2003-04

NIM (NII as a percentage of avg assets) Operating profit to avg assets


SCBs: Segment-wise NIM Figure 3

1

2

3

4

5

1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000

2000-01 2001-02 2002-03 2003-04

(per cent)

Private banks Foreign banks Public sector banks

Source: CRIS INFAC

Advances, IIP and imports: Growth Figure 4

-5

0

5

10

15

20

25

30

1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000

2000-01 2001-02 2002-03 2003-04

(per cent)

Advances IIP Imports

Source: Report on Trend and Progress of Banking in India & Statistical

Tables Relating to Banks in India

SCBs: Advances Figure 5

0% 20% 40% 60% 80% 100%

1991-92

1992-93

1993-94

1994-95

1995-96

1996-97

1997-98

1998-99

1999-2000

2000-01

2001-02

2002-03

2003-04

Bills purchases and discounted Term loans Cash credit, overdraft

Source: Report on Trend and Progress of Banking in India


Advances: Average yields Figure 7

6

8

10

12

14

16

1992-93 1994-95 1996-97 1998-99 2000-01 2002-03

(per cent)


IIP and credit: Growth Figure 6

0

5

10

15

20

25

30

Apr-95 Apr-96 Apr-97 Apr-98 Apr-99 Apr-00 Apr-01 Apr-02 Apr-03 Apr-04

(per cent)

IIP Credit

Source: CSO, RBI’s Weekly Statistical Supplement

Outstanding loans and advances: Break-up by interest rates Figure 8

0

5

10

15

20

25

30

< 6 6-9 10-11 12-13 14-<15 15- <16 16 - <17 17 - <18 18 - 19 20>

(per cent)

Source: Statistical Tables relating to Banks in India


SCBs: Investments Figure 9

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

1991-92 1993-94 1995-96 1997-98 1999-2000 2001-02 2003-04

(Rs crore)

Total investments Government securities in India


PSU banks: Number of banks achieving CRAR Figure 10

0

5

10

15

20

25

30

1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000

2000-01 2001-02 2002-03 2003-04

(nos)

Source: IBA’ Performance Highlights of Public, Private & Foreign Banks in India

Gross NPAs and net NPAs Figure 11

3

5

7

9

11

13

15

17

19

1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03

(per cent)

Gross NPAs to gross advances Net NPAs to net advances

Source: RBI


Investment and advances: Average yield Figure 12

(per cent)

6

8

10

12

14

16

18

1992-93 1994-95 1996-97 1998-99 2000-01 2002-03

Average yield of investments Average yield on advances


SCBs: Other income to total income Figure 13

10

12

14

16

18

20

22

1991-92 1993-94 1995-96 1997-98 1999-2000 2001-02 2003-04

(per cent)

Source: CRIS INFAC

M3 and deposits Figure 14

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

1991-92 1993-94 1995-96 1997-98 1999-2000 2001-02 2003-04

(Rs crore)

Total deposits M3

Source: CRIS INFAC


M3 and reserve money: Growth Figure 15

0

5

10

15

20

25

30

1991-92 1993-94 1995-96 1997-98 1999-2000 2001-02 2003-04

(per cent)

M3 growth Reserve money growth

Source: CRIS INFAC

Deposits: Demand, savings and time deposits (excl RRBs) Figure 16

0

10

20

30

40

50

60

70

1991-92 1993-94 1995-96 1997-98 1999-2000 2001-02 2003-04

(per cent)

Demand deposits Savings deposits Term deposits


Incremental deposits: Break-up by deposit type (excl RRBs) Figure 17

0

20

40

60

80

100

1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000

2000-01 2001-02 2002-03 2003-04

(per cent)

Demand deposits Savings deposits Term deposits



Deposits: Growth (excl RRBs) Figure 18

0

5

10

15

20

25

1992-93 1994-95 1996-97 1998-99 2000-01 2002-03

(per cent)

Demand deposits Savings bank deposits Term deposits


NRI deposits: Growth Figure 19

-1,500

-1,000

-500

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

1991-92

1992-93

1993-94

1994-95

1995-96

1996-97

1997-98

1998-99

1999-2000

2000-01

2001-02

2002-03

($ million)

Source: RBI’s Handbook of Statistics on the Indian Economy

Deposits: Average costs Figure 20

(per cent)

4

5

6

7

8

9

10

1992-93 1994-95 1996-97 1998-99 2000-01 2002-03

Source: CRIS INFAC


Term deposits: Interest rates (March 2003) Figure 21

(per cent)

0

5

10

15

20

25

30

35

40

< 6 6-8 8-9 9-10 10-11 11-12 12-13 > 13

Source: Basic statistical returns (RBI)

Incremental credit-deposit ratio Figure 22

0

20

40

60

80

100

1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

(per cent)


Incremental borrowing-deposit ratio Figure 23

-20

-10

0

10

20

30

40

1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

(per cent)



SCBs: Operating costs Figure 24

0

10,000

20,000

30,000

40,000

50,000

1991-92 1993-94 1995-96 1997-98 1999-2000 2001-02 2003-04

(Rs crore)

Operating expenses Salaries

Source: CRIS INFAC

SCBs: Segment-wise operating costs as a percentage of

average assets Figure 25

Source: CRIS INFAC

Overheads as a percentage of operating income Figure 26

20

22

24

26

28

30

32

1991-92 1993-94 1995-96 1997-98 1999-2000 2001-02 2003-04

(per cent)

Overheads as a percentage of operating income Spreads as a percentage of operating income

Source: CRIS INFAC

1.5

2.0

2.5

3.0

3.5

4.0

4.5

1992-93 1994-95 1996-97 1998-99 2000-01 2002-03

(per cent)

Private banks Foreign banks Public sector banks


Overheads as a percentage of average assets Figure 27

2.0

2.4

2.8

3.2

3.6

4.0

4.4

1991-92 1993-94 1995-96 1997-98 1999-2000 2001-02 2003-04

(per cent)

Overheads as a percentage of avg assets Spread as a percentage of avg assets

Source: CRIS INFAC

Operating costs: India vis-à-vis other countries Figure 28

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

India USA Germany UK France Italy Spain Canada Sweden Japan

(per cent)


SCBs (excl RRBs): Number of branches Figure 29

45,000

46,000

47,000

48,000

49,000

50,000

51,000

52,000

53,000

1991-92

1992-93

1993-94

1994-95

1995-96

1996-97

1997-98

1998-99

1999-2000

2000-01

2001-02

2002-03

(nos)

Source: CRIS INFAC


SCBs: Number of employees Figure 30

800,000

820,000

840,000

860,000

880,000

900,000

920,000

940,000

960,000

980,000

1991-92 1993-94 1995-96 1997-98 1999-2000 2001-02

(nos)

Source: CRIS INFAC

Investments: Average yields Figure 31

Source: Statistical Tables Relating to Banks in India and Handbook ofStatistics Relating to Indian Economy

BSE volumes and capital issues Figure 32

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1991-92 1993-94 1995-96 1997-98 1999-2000 2001-02 2003-04

(Rs crore)

Turnover BSE Capital issues-equity

Source: RBI, CMIE

9.0

10.0

11.0

12.0

13.0

14.0

1992-93 1994-95 1996-97 1998-99 2000-01

(per cent)

Average yield of investments Interest rate on Central govt securities



Player profiles5.0

Financial comparison of key banks: 2003-04 Table 1

Continued...

(per cent)

SBI BoB BOI Canara Bank

PNB OBC Dena Bank

Average assets (Rs crore) 407,815 85,109 80,577 99,539 102,332 41,007 10,081

Branches (nos) 9,093 2,730 2,562 2,469 4,022 1,013 1,130

Employees (nos) 207,039 39,803 42,977 47,796 58,839 13,602 10,957

Interest earned1 7.5 7.2 7.2 7.0 7.6 8.0 17.2

Other income1 1.9 2.0 2.2 2.1 1.8 1.8 6.1

Interest expended1 4.7 4.2 4.5 4.3 4.1 4.5 11.3

Operating expenses1 2.3 2.1 2.2 1.9 2.3 1.4 4.7

Provisions (excluding taxes)1 1.1 1.1 1.0 1.2 1.3 0.9 3.6

Profit before taxes1 0.9 1.1 1.3 1.3 1.1 6.3 2.6

Provision for taxes1 0.4 0.7 0.5 0.3 0.6 1.1 1.2

Profit after taxes1 0.5 0.5 0.8 1.0 0.4 5.2 1.4

Gross NPA (Rs crore) 12,667 3,980 433 3,127 4,670 1,211 1,484

Net NPA (Rs crore) 5,442 1,761 1,234 1,378 449 0 884

Quality of assets

Net NPAs to advances 3.5 3.0 4.5 2.9 1.0 0.0 9.4

Capital adequacy 13.5 13.9 13.0 12.7 13.1 14.0 9.5

Profitability

Net Profitability Margin 1.2 1.9 1.8 1.5 1.9 2.6 1.0

Spreads 2.6 3.5 3.2 2.9 3.8 3.7 2.7

Average cost of deposits 5.9 4.8 4.6 5.2 4.8 5.5 6.1

Average yield on investments 8.8 8.6 8.0 9.0 9.7 10.3 9.5

Average yield on advances 7.6 8.3 7.5 8.7 8.9 9.0 9.2

Growth

Growth in advances 14.6 0.7 7.6 17.7 17.4 25.5 11.6

Growth in deposits 7.6 9.8 10.8 19.8 16.0 19.7 11.3

Growth in investments 7.7 26.0 11.2 17.5 23.8 13.6 14.5

Productivity

Employee per branch (nos) 23 15 17 19 15 13 10

Assets per branch (Rs crore) 44.8 31.2 31.5 40.3 25.4 40.5 8.9

Assets per employee (Rs crore) 2.0 2.1 1.9 2.1 1.7 3.0 0.9

Public sector banks


...continued

(per cent)ICICI Bank

HDFC Bank

IndusInd South Indian Bank

Federal Bank

Bank of Rajasthan

Citibank HongKong Bank

Standard Chartered

Bank

Average assets (Rs crore) 125,229 42,307 9,318 8,441 13,658 7,292 27,418 23,133 31,829

Branches (nos) 413 312 69 410 432 354 20 38 66

Employees (nos) 13,609 5,673 n.a. 3,534 6,363 n.a. n.a. n.a. n.a.

Interest earned1 7.1 6.0 10.6 8.1 8.7 6.9 8.3 6.1 7.9

Other income1 2.4 1.1 3.7 2.8 2.2 2.4 3.2 3.0 2.2

Interest expended1 5.6 2.9 7.2 5.7 5.6 4.3 3.4 3.1 3.4

Operating expenses1 2.1 1.9 2.3 2.3 2.1 2.5 3.7 2.7 2.4

Provisions (excluding taxes)1 0.4 0.7 1.9 0.9 1.7 1.2 1.0 0.9 1.7

Profit before taxes1 1.3 3.9 5.5 1.0 1.0 0.9 2.1 1.7 1.8

Provision for taxes1 0.2 0.5 0.1 0.9 0.5 0.4 1.5 0.8 0.8

Profit after taxes1 1.1 3.4 5.4 0.1 0.4 0.6 0.6 0.9 1.0

Gross NPA (Rs crore) 3,048 336 259 328 601 237 393 419 482

Net NPA (Rs crore) 2,037 28 212 190 223 73 214 68 84

Quality of assets

Net NPAs to advances 2.2 0.2 2.7 4.6 2.9 3.0 1.4 0.7 0.5

Capital adequacy 10.4 11.7 12.8 11.3 11.5 11.2 11.1 14.5 10.9

Profitability

Net Profitability Margin 0.43 3.12 1.45 0.32 1.60 3.81 4.15 2.42 4.66

Spreads 1.40 4.24 2.70 2.21 3.00 3.45 5.06 3.08 5.42

Average cost of deposits 5.20 3.93 5.05 6.15 5.92 4.86 4.16 3.45 3.77

Average yield on investments 6.22 8.10 8.00 8.88 8.68 8.04 7.75 6.58 6.77

Average yield on advances 10.53 7.52 10.59 9.17 10.26 8.48 9.93 8.40 10.47

Growth

Growth in advances 16.5 51.0 46.1 16.2 23.9 9.5 20.8 17.4 23.8

Growth in deposits 41.4 35.9 30.3 20.7 23.1 39.8 15.3 27.1 10.8

Growth in investments 20.5 43.8 56.7 32.1 21.0 64.7 -4.9 26.7 -1.4

Productivity

Employee per branch (nos) 33 18 n.a. 9 15 n.a. n.a. n.a. n.a.

Assets per branch (Rs crore) 303.2 135.6 135.0 20.6 31.6 20.6 1370.9 608.8 482.3

Assets per employee (Rs crore) 9.2 7.5 n.a. 2.4 2.1 n.a. n.a. n.a. n.a.1 as per cent of average assets

n.a. - not available

Source: CRIS INFAC

Old private sector banks Foreign banksNew private sector banks


State Bank of India Table 2

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 20002-03 2003-04

Liabilities

Capital 526 526 526 526 526 526 526 526

Reserves and surplus 7,450 9,082 9,876 11,621 12,935 14,698 16,677 19,705

Deposits 110,702 131,091 169,042 196,821 242,828 270,560 296,123 318,619

Borrowings 6,960 8,093 9,079 9,278 10,722 9,324 9,304 13,431

Other liabilities and provisions 30,835 30,880 33,986 43,259 48,632 53,120 53,246 55,534Total 156,473 179,673 222,509 261,505 315,644 348,228 375,876 407,815

Assets

Cash and balances with RBI 10,847 13,415 17,392 18,903 18,496 21,873 12,738 19,041

Balances with bank and money at call 16,906 19,231 35,820 28,233 42,213 43,058 32,443 24,525

Investments 46,828 54,982 71,287 91,879 122,876 145,142 172,348 185,676

Advances 62,233 74,237 82,360 98,102 113,590 120,806 137,758 157,934

Fixed assets 1,171 1,506 2,194 2,478 2,593 2,415 2,389 2,645

Other assets 18,488 16,301 13,456 21,910 15,875 14,934 18,201 17,994Total 156,473 179,673 222,509 261,505 315,644 348,228 375,877 407,815

Deposits

Demand 25,647 27,814 30,692 36,182 40,328 42,313 44,772 50,291

Savings 24,028 29,208 34,321 41,507 47,893 56,396 65,783 79,596

Term 61,026 74,070 104,029 119,132 154,607 171,851 185,568 188,732Total 110,701 131,091 169,042 196,821 242,828 270,560 296,123 318,619Deposits of branches in India 123548.7 160,255 187,639 234,896 262,549 288,866 309798.2Deposits of branches abroad 7543 8,787 9,182 7,932 8,011 7,257 8820Total 110,701 131,091 169,042 196,821 242,828 270,560 296,123 318,619Borrowings

RBI 0 0 0 670 0 0 0 0

Other banks 0 0 0 0 0 0 0 0

Other institutions and agencies 883 837 1,076 1,670 2,537 2,153 1,572 1,365

Forex borrowings 6,077 7,256 8,003 6,938 8,185 7,170 7,732 12,066Total 6,960 8,093 9,079 9,278 10,722 9,323 9,304 13,431

Other liabilities and provisions

Inter-office adjustments 0 0 555 0 0 4,722 3,685 5,823

Bills payable 8,403 8,755 10,796 10,563 13,598 13,875 14,036 15,665

Interest accrued 7,338 7,620 10,101 13,081 16,966 19,286 20,060 17,428

Others (including provisions) 15,093 14,505 12,533 19,615 18,068 15237 15,465 16,618Total 30,834 30,880 33,986 43,259 48,632 53,120 53,246 55,534

Balance with RBI 10,354 12,906 16,894 18,345 17,628 20,820 11,602 17,756

Cash in hand 493 508 498 558 868 1,053 1,136 1,285Advances

Bills purchases and discounted 6,656 7,933 7,741 9,235 12,840 11,555 12,405 14,859

Cash credit and overdraft 38,472 43,553 45,991 54,979 61,197 64,178 69,117 69,329

Term loans 17,105 22,750 28,627 33,888 39,553 45,073 56,237 73,746Total 62,233 74,237 82,360 98,102 113,590 120,806 137,758 157,934

Secured 53,277 62,787 69,122 83,668 90,358 98,526 109,924 119,388

Government guarantee 7,805 9,097 8,169 8,494 8,703 6,307 9,185 11,937

Unsecured 1,151 2,353 5,068 5,940 14,530 15,974 18,650 26,608Total 62,233 74,237 82,360 98,102 113,590 120,806 137,758 157,934

continued...


(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 20002-03 2003-04

Priority sector 16,945 19,523 23,090 25,878 30,153 31,591 35,112 42,706

Public sector 10,064 12,088 13,465 9,490 20,271 21,990 24,783 25,875

Banks 225 785 470 361 442 185 86 2,277

Others 27,788 31,744 34,234 49,808 48,372 53,764 63,869 71,169

Total domestic advances 55,022 64,140 71,259 85,537 99,239 107,530 123,850 142,026

Advances outside India 7,211 10,097 11,101 12,564 14,351 13,276 13,909 15,907

Total 62,233 74,237 82,360 98,102 113,590 120,806 137,758 157,934

Investments

Investments outside India 1,115 2,221 2,690 3,200 3,961 4,669 4,462 3,992

Investments in India

- Government securities 33,973 39,025 51,568 67,747 96,127 117,029 143,727 157,738

- Other approved securities 7,472 7,158 6,464 5,914 5,705 5,220 4,527 4,194

- Shares 514 694 1,014 1,155 984 950 993 902

- Debentures 2,858 4,132 6,658 9,820 11,111 12794.04 16,166 15,875

- Subsidiaries 874 987 1,043 1,111 1,173 1,186 1,189 1,436

- Others 22 765 1,849 2,932 3,815 3,293 1,283 1,539

Total 45,713 52,761 68,596 88,679 118,916 140,473 167,886 181,684

Total investments 46,828 54,982 71,287 91,879 122,876 145,142 172,348 185,676Movement in NPA

Gross NPA

Opening balance n.a. n.a. n.a. 14,065 15,246 15,875 15,486 13,506

Additions n.a. n.a. n.a. 3,681 4,352 4,170 4,889 5,721

Reductions n.a. n.a. n.a. 2,500 3,724 4,559 6,668 6,560

Closing balance n.a. n.a. n.a. 15,246 15,875 15,486 13,506 12,667

Net NPA-Closing balance n.a. n.a. n.a. 6,284 6,856 6,810 6,183 5,442

Profit and loss statement

Interest earned

Interest discount on advances and bills 8,137 7,829 8,581 9,554 11,143 11,063 11,229 11,267

Income on investments 5,521 6,392 7,585 9,506 11,230 14,272 15,258 15,716

Interest on balances with RBI 722 632 1,101 1,573 1,703 3,055 3,274 2,499

Others 570 1,027 1,840 1,567 1,927 1,420 1,327 978

Total 14,950 15,879 19,108 22,201 26,003 29,810 31,087 30,460

Other income

Commission exchange and brokerage 1,805 2,038 2,379 2,567 2,632 2,817 2,977 3,121

Profit on sale of investments 26 117 73 269 477 352 1,695 3,073

Loss on sale of investments 0 0 0 0 0 0 0 0

Profit on sale of f ixed assets 0 0 0 0 0 15 0 0

Loss on revaluation of investments 0 0 -1 1 0 -19 -5 -1

Profit on forex transactions 699 505 569 329 304 408 464 503

Income from subsidiaries 40 50 62 65 77 103 137 161

Lease Income 0 0 0 0 0 267 221 172

Miscellaneous income 73 110 203 338 528 234 252 582

Total 2,643 2,820 3,285 3,569 4,018 4,174 5,740 7,612

Total income 17,593 18,699 22,392 25,770 30,021 33,985 36,827 38,073

...continued

continued...


...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 20002-03 2003-04

Interest expended

Interest on deposits 8,301 9,586 12,197 14,397 16,643 19,554 20,174 18,123

Interest on RBI 482 481 474 557 521 364 195 161

Others 808 406 373 319 591 810 740 990

Total 9,591 10,473 13,044 15,273 17,756 20,729 21,109 19,274

Operating expenses

Salaries 3,323 3,558 4,140 4,478 6,012 5153 5689 6448

Others 1,281 1,163 1,756 1,818 2,287 1,633 1,760 2,099

Depreciation 0 0 0 0 0 425 494 698

Total 4,604 4,721 5,897 6,296 8,299 7,211 7,942 9,245

Provisions and contingencies 2,048 1,644 2,424 2,151 2,363 4,013 5,870 6,213

Total expenses including provisions 16,243 16,838 21,365 23,719 28,417 31,952 34,922 34,732

Profit for the year 1,350 1,861 1,027 2,051 1,604 2,032 1,905 3,341

Profits inclusive of provisions 3,398 3,505 3,451 4,202 3,967 6,045 7,775 9,553

Contingent liabilities

Claims against banks 209 247 324 331 245 391 451 764

Liability for partly paid investments 15 8 6 6 69 9 44 67

Liability for outstanding forex contracts 14,138 32,005 38,518 49,065 48,157 53,447 52,326 58,720

Guarantees

- In India 10,736 9,283 9,251 9,036 8,706 11,726 9,249 11,012

- Outside India 2,705 5,211 6,033 5,763 6,175 3,369 5,771 5,195

Acceptances and endorsements 11,742 10,830 9,786 12,942 12,895 12,591 15,868 21,119

Others 2,854 2,370 2,497 5,239 7,422 20,679 22,398 15,015

Total 42,399 59,954 66,415 82,383 83,669 102,213 106,106 111,892

Provisions and contingencies

Provison for doubtful debts 833 1,300 1,423 1,264 1,470 2,153 2,592 3694

Provision for wealth tax and interest tax 205 127 140 161 0 0 0 45

Provision for depreciation on investments 4 -964 15 -538 -116 198 420 508

Provision for income tax 925 1,001 383 979 971 1,603 2,149 1,566

Others 81 180 463 285 37 58 709 400

Total 2,048 1,644 2,423 2,151 2,363 4,013 5,870 6,213

Financial analysis

Growth in deposits (per cent)

Overall 15 18 29 16 23 11 9 8

Demand 14 8 10 18 11 11 5 6

Savings 13 22 18 21 15 18 17 21

Term 16 21 40 15 30 11 8 2

Share of deposits (per cent)

Demand 23 21 18 18 17 16 15 16

Savings 22 22 20 21 20 21 22 25

Term 55 57 62 61 64 64 63 59

continued...


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 20002-03 2003-04

Profitability (per cent)

Return on assets 0.9 1.1 0.5 0.8 0.6 0.6 0.5 0.9

Return on equity 20.1 21.2 10.3 18.2 12.5 14.2 11.8 17.8

Gearing (times) 18.6 17.7 20.4 20.5 22.4 21.9 20.8 19.2

Staff costs to operating expenses 72.2 75.4 70.2 71.1 72.4 71.5 71.6 69.7

Non-fund income to total income 15.0 15.1 14.7 13.9 13.4 12.3 15.6 20.0

Operating expenses to total income 26.2 25.2 26.3 24.4 27.6 21.2 21.6 24.3

Operating expenses to deposits 4.2 3.6 3.5 3.2 3.4 2.7 2.7 2.9

Earning per share (Rs) 25.7 35.4 19.5 39.0 30.5 38.6 36.2 63.5

Cost to income ratio 57.5 57.4 63.1 60.0 67.7 54.4 50.5 49.2

Cost to income ratio (w/o profit on invest) 57.7 58.2 63.6 61.5 70.4 55.9 56.6 58.8

Financial management (per cent)

Interest cost n.a. 7.64 7.74 7.53 7.34 7.39 6.88 5.78

Average cost of deposits 8.0 7.9 8.1 7.9 7.6 7.6 7.1 5.9

Average cost of borrowings 13.2 11.8 9.9 9.5 11.1 11.7 10.0 10.1

Yield on carry business n.a. 10.90 10.69 10.35 10.08 9.81 9.31 8.38

Average yield on investments 12.2 12.6 12.0 11.7 10.5 10.6 9.6 8.8

Average yield on advances 13.3 11.5 11.0 10.6 10.5 9.4 8.7 7.6Spreads n.a. 3.25 2.95 2.82 2.74 2.41 2.42 2.61Operating expenses to AFD n.a. 3.2 3.2 2.8 3.1 2.3 2.3 2.5Core fee income to AFD n.a. 1.7 1.7 1.4 1.2 1.1 1.0 1.1Net Profitability Margin n.a. 1.8 1.4 1.4 0.8 1.2 1.1 1.2

Deposits to borrowings (times) 10.6 16.1 17.5 19.9 22.0 25.6 30.4 27.0

Capital adequacy 12.2 14.6 12.5 11.5 12.8 13.4 13.5 13.5Provisions as a percentage of profit before 60.3 46.9 70.2 51.2 59.6 66.4 75.5 65.0

provisions

Provisions as a percentage of networth 30.5 18.7 24.2 19.1 18.5 26.4 34.1 30.7

Liquidity (per cent)

Credit-deposit ratio 56 57 49 50 47 44.7 46.5 49.6

Incremental C/D ratio 17 59 21 57 34 26.0 66.3 89.7

Borrowings to total deposits 6 6 5 5 4 3 3 4

Cash-deposit ratio 0 0 0 0 0 0 0 0

Investment-deposit ratio 42 42 42 47 51 54 58 58

Incremental I/D ratio 21 40 43 74 67 80 106 59

Reserves as a percentage of net worth 93 95 95 96 96 97 97 97

Growth (per cent)

Advances 4 19 11 19 16 6 14 15

Deposits 15 18 29 16 23 11 9 8

Investments 7 17 30 29 34 18 19 8

Salaries cost n.a. 7 16 8 34 -14 10 13

Commission and fee 2 13 17 8 3 7 6 5

Interest income 15 6 20 16 17 15 4 -2


...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 20002-03 2003-04

Others

Branches (nos) 8,888 8,925 8,982 9,043 9,078 9085 9081 9093

Advances per branch (Rs crore) 7.00 8.32 9.17 10.85 12.51 13.30 15.17 17.37

Operating expenses per branch (Rs crore) 0.52 0.53 0.66 0.70 0.91 0.79 0.87 1.02

Employees (nos) 236,204 239,649 237,504 233,433 212,649 209462 208998 207039

Income per employee (Rs crore) 0.07 0.08 0.09 0.11 0.14 0.16 0.18 0.18

Income/employee expenses (times) 5.29 5.26 5.41 5.76 4.99 6.60 6.47 5.90

Total income (per cent)

Interest 85 85 85 86 87 88 84 80

Forex 4 3 3 1 1 1 1 1

Commission and brokerage 10 11 11 10 9 8 8 8

Share of advances (per cent)

Priority 27 26 28 26 27 26 25 27

Public 16 16 16 10 18 18 18 16

Inter-bank 0 1 1 0 0 0 0 1

Others 45 43 42 51 43 45 46 45

Abroad 12 14 13 13 13 11 10 10


Bills 11 11 9 9 11 10 9 9

Cash credits 62 59 56 56 54 53 50 44

Term loans 27 31 35 35 35 37 41 47


Secured 86 85 84 85 80 82 80 76

Government guaranteed 13 12 10 9 8 5 7 8

Unsecured 3 3 3 4 4 13 14 17

Share of investments (per cent)

Government securities 73 71 72 74 78 81 83 85

Other approved securities 16 13 9 6 5 4 3 2

Shares and debentures 1 1 1 1 1 1 1 0

Debentures 6 8 9 11 9 9 9 9

Subsidiaries 2 2 1 1 1 1 1 1

Others 0 1 3 3 3 2 1 1

Gross NPAs (per cent) 16.0 14.1 n.a. 14.3 12.9 n.a. n.a. n.a.

Net NPAs (per cent) 7.3 6.1 7.2 6.4 6.0 5.6 4.5 3.5

n.a.: Not available

Source: CRIS INFAC


(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Liabilities

Capital 254 293 294 294 294 294 294 295


Deposits 32,157 39,126 44,614 51,308 53,986 61,804 66,441 72,967

Borrowings 340 476 479 479 936 693 625 875

Other liabilities and provisions 3,156 3,576 4,241 3,694 5,044 4,585 4,971 6,135

Total 37,640 45,842 52,232 58,605 63,322 70,910 76,425 85,109

Assets

Cash and balances with RBI 3,048 3,665 3,684 3,506 4,370 2581.068 3,466 3,057


Investments 10,927 13,359 15,905 18,557 19,857 23,833 30,179 38,019

Advances 16,532 19,803 21,092 24,393 27,421 33,663 35,348 35,601

Fixed assets 570 581 597 608 647 692 697 815

Other assets 1,880 1,712 2,619 2,571 2,961 3,774 3,383 3,407

Total 37,640 45,842 52,232 58,605 63,322 70,910 76,425 85,109

Deposits

Demand 4,190 4,689 5,243 5,525 5,625 6,328 6,039 6,772

Savings 6,423 7,802 9,107 10,842 12,185 14,047 16,419 19,780

Term 21,544 26,635 30,264 34,941 36,176 41,429 43,983 46,415

Total 32,157 39,126 44,614 51,308 53,986 61,804 66,441 72,967

Deposits of branches in India 27,995 33,536 38,904 44,957 47,869 54,532 59,402 64,346

Deposits of branches abroad 4,162 5,590 5,710 6,351 6,117 7,272 7,040 8,621

Total 32,157 39,126 44,614 51,308 53,986 61,804 66,441 72,967

Borrowings

RBI 0 0 0 0 0 140 0 0

Other banks 7 4 17 6 1 167 12 9

Other institutions and agencies 322 473 433 363 850 386 613 225

Forex borrowings 0 0 29 0 85 0 0 640

Total 329 476 479 479 936 693 625 875


Inter-office adjustments 0 0 0 0 0 0 0 308

Bonds/Debentures 500 1,100 1,099 1,200 1,200 1,200 1,500

Bills payable 885 873 872 782 702 1,004 1,256 1,032

Interest accrued 281 340 418 501 518 494 326 366

Others (including provisions) 1,989 2,363 2,951 2,411 3,824 1,887 2,189 2,929

Total 3,155 3,576 4,241 3,694 5,044 4,585 4,971 6,135

Balance with RBI 2,833 3,448 3,437 3,238 4,015 2,253 3,048 2,655

Cash in hand 215 217 248 268 355 328 402 418

Advances



Term loans 3,978 5,011 6,550 7,986 9,231 12,059 13,473 14,711

Total 16,532 19,803 21,092 24,393 27,421 33,663 35,348 35,601

Continued...

Bank of Baroda Table 3


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Secured 13,653 17,052 19,031 22,660 23,920 28,326 29,113 28,501

Government guarantee 613 815 329 585 785 1,581 1,777 2,802

Unsecured 2,266 1,937 1,732 1,148 2,716 3,756 4,459 4,298Total 16,532 19,803 21,092 24,393 27,421 33,663 35,348 35,601

Priority sector 4,921 5,739 6,057 6,592 6,660 7,677 9176.21 9,925

Public sector 1,582 2,689 2,785 2,670 3,400 5,785 5,160 3,577

Banks 18 20 9 84 398 503 530 466

Others 7,897 8,952 9,358 12,063 12,970 14,152 14,049 15,228Total 14,418 17,401 18,209 21,409 23,429 28,116 28,914 29,197

Advances outside India 2,114 2,402 2,882 2,984 3,992 5,547 6,434 6,404Total 16,532 19,803 21,092 24,393 27,421 33,664 35,348 35,601

Investments

Investments outside India 511 610 908 1,172 1,395 1,946 1,802 1,963




- Shares 225 235 222 249 299 332 412 517

- Debentures 1,268 1,921 2,553 2,866 3,300 3,834 4,400 4510

- Subsidiaries/JV 102 152 174 187 155 215 236 255

- Others 134 321 611 1,275 1,450 1,582 520 2,007Total 10,417 12,749 14,997 17,385 18,463 21,887 28,377 36,056

Total investments 10,928 13,359 15,905 18,556 19,857 23,833 30,179 38,019

Movement in NPA

Gross NPA

Opening balance n.a. n.a. n.a. 3,686 3,897 4186 4489 4168

Additions n.a. n.a. n.a. 829 1,124 1035 717 1078

Reductions n.a. n.a. n.a. 617 836 731 1039 1266

Closing balance n.a. n.a. n.a. 3,897 4,186 4489 4168 3980Net NPA-Closing balance n.a. n.a. n.a. 1,686 1,851 1913 1700 1761


Interest earned

Interest/Discount on advances/bills 2,237 2,235 2,385 2,591 2,938 3,060 3,066 2,800


Interest on balances with RBI 324 408 558 493 613 429 230 197

Others 52 18 135 143 55 99 98 217Total 3,762 4,171 4,821 5,220 5,757 5,956 6,098 6,146

Other income

Commission exchange and brokerage 244 235 247 280 298 305 344 344

Profit on sale of investments 14 71 33 86 102 415 631 1018

Loss on sale of investments 0 -2 0 0 0 0 0

Profit on sale of fixed assets 1 0 0 0 -13 1 0 1

Profit/Loss on revaluation of investments 0 0 0 0 62 0 0 0


Income from investments 4 5 3 4 1 5 6 11

Lease income 0 0 0 0 0 0 0 0

Miscellaneous income 111 98 154 140 170 149 141 176Total 459 543 578 641 755 993 1,262 1,720

Total income 4,221 4,714 5,400 5,862 6,512 6,949 7,359 7,866


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Interest expended

Interest on deposits 2,374 2,676 3,079 3,251 3,581 3,848 3,775 3,365Interest on RBI/Inter bank 21 44 69 80 75 72 65 49

Others 157 118 100 175 163 156 154 162

Total 2,552 2,838 3,248 3,507 3,820 4,076 3,994 3,575

Operating expenses

Salaries 606 652 845 896 1,146 1,056 1,129 1,253

Others 254 383 321 354 385 416 431 477

Depreciation 32 35 41 52 77 91 89 76

Total 892 1,071 1,207 1,303 1,608 1,563 1,648 1,805

Provisions and contingencies 500 347 572 549 780 763 944 1,518


Profit for the year 277 459 421 503 323 546 773 967

Profits inclusive of provisions 777 806 945 1,052 1,085 1,309 1,717 2,485





Guarantees

- In India 2,317 2,857 2,337 2,126 2,007 3,261 2,060 2,156

- Outside India 1,022 785 848 1,199 1,443 1,425 1,202


Others 348 298 347 568 596 641 448 1,069

Total 10,187 13,118 13,215 13,304 19,720 14,916 24,419 30,318


Provison for NPAs/Stadard assets 298 323 361 342 509 482 464 968Depreciation in values of investments 87 -245 15 -33 58 -14 1 -101Provision for taxation 52 258 147 240 185 250 398 566Other Provisions 63 12 49 0 27 45 81 86Total 500 347 572 549 780 763 944 1,518

Financial analysis


Overall 13 22 14 15 5 14 8 10

Demand 12 12 12 5 2 12 -5 12

Savings 14 21 17 19 12 15 17 20

Term 13 24 14 15 4 15 6 6


Demand 13 12 12 11 10 10 9 9

Savings 20 20 20 21 23 23 25 27

Term 67 68 68 68 67 67 66 64


Domestic 87 86 87 88 89 88 89 88

Abroad 13 14 13 12 11 12 11 12


...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04


Return on assets 0.8 1.1 0.9 0.9 0.5 0.8 1.0 1.2

Return on equity 14.9 19.7 15.2 16.4 9.8 15.2 18.8 20.3

Gearing (times) 17.9 16.2 17.0 17.1 17.9 17.5 16.4 15.6







Cost to income ratio (w/o profit on invest) 53.9 59.3 56.9 57.4 62.0 63.6 60.3 55.2Financial management (per cent)

Interest cost 7.68 7.51 7.12 7.06 6.84 6.06 4.99


Average cost of borrowings 23.2 40.2 35.3 53.3 33.7 28.0 33.2 28.1Yield on carry business 10.91 10.79 10.48 10.57 10.03 9.26 8.45


Average yield on advances 13.7 12.3 11.7 11.4 11.3 7.8 7.8 8.3Spreads 3.23 3.28 3.36 3.51 3.18 3.20 3.45Operating expenses to AFD 2.72 2.61 2.50 2.79 2.48 2.38 2.36Core fee income to AFD 1.07 1.01 0.92 0.90 0.79 0.80 0.79Net Profitability Margin 1.57 1.68 1.79 1.61 1.49 1.62 1.88


Capital adequacy 11.8 12.1 13.3 12.1 12.8 11.3 12.7 13.9Provisions as a percentage of profit before 64.4 43.1 55.4 52.2 70.2 58.3 55.0 61.1provisions

Provisions as a percentage of networth 25.2 13.0 18.1 17.0 22.7 19.9 21.5 29.6Liquidity (per cent)

Credit-deposit ratio 51 51 47 48 51 54 53 49

Incremental C/D ratio 14 47 23 49 113 80 36 4





Reserves as a percentage of net worth 87 89 90 91 91 92 93 94Growth (per cent)

Advances 3 20 7 16 12 23 5 1

Deposits 13 22 14 15 5 14 8 10

Investments 14 22 19 17 7 20 27 26

Salaries cost 10 8 30 6 28 -8 7 11

Commission and fee -28 -4 5 13 6 3 13 0

Interest income 7 11 16 8 10 3 2 1Others

Branches (nos) 2,493 2,522 2,573 2,652 2,669 2,679 2,753 2,730



Employees (nos) 45,759 45,935 46,187 47,054 46,360 38,899 40,313 39,803

continued...




...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04


Interest 89 88 89 89 88 86 83 78

Forex 2 3 3 2 2 2 2 2



Priority 30 29 29 27 24 23 26 28

Public 10 14 13 11 12 17 15 10

Inter bank 0 0 0 0 1 1 1 1

Others 48 45 44 49 47 42 40 43

Abroad 13 12 14 12 15 16 18 18


Bills 8 7 6 6 6 6 7 7

Cash credit 68 68 62 61 61 58 55 52

Term loans 24 25 31 33 34 36 38 41


Secured 83 86 90 93 87 84 82 80

Government guarantee 4 4 2 2 3 5 5 8

Unsecured 14 10 8 5 10 11 13 12



Other approved 18 14 11 10 9 7 5 4

Shares 2 2 1 1 2 1 1 1

Debentures 12 14 16 15 17 16 15 12

Subsidiary 1 1 1 1 1 1 1 1

Others 1 3 4 7 8 7 2 6

Outside India 0.05 0.05 0.06 0.06 0.07 0.08 0.06 0.05

Gross NPAs (per cent) 17.2 14.6 16.0 14.7 14.1 n.a. n.a. n.a.

Net NPAs (per cent) 8.9 6.6 7.7 7.0 6.8 5.0 3.7 3.0

n.a.: Not available

Source: CRIS INFAC


Bank of India Table 4

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Liabilities

Capital 597 638 638 638 638 488 488 488


Deposits 31,973 39,339 44,430 47,744 51,679 59,711 64,098 71,003

Borrowings 1,453 1,557 2,979 1,876 1,798 3,348 4,027 4,521

Other liabilities and provisions 2,581 3,127 4,107 3,934 3,404 3,902 4,628 5,326

Total 37,946 46,338 53,923 56,065 59,567 69,806 76,294 84,860

Assets



Investments 10,671 13,030 15,282 16,666 18,225 22,084 24,435 27,163

Advances 18,337 22,021 24,327 25,231 31,823 38,311 42,633 45,856

Fixed assets 516 696 710 741 763 705 737 799

Other assets 1,946 3,813 2,760 4,534 2,331 2,102 1,492 2,485

Total 37,946 46,338 53,923 56,065 59,567 69,806 76,294 84,860

Deposits

Demand 5,385 5,094 5,976 6,093 5,896 7,194 5,350 5,839

Savings 6,155 7,303 8,516 9,916 11,165 12,885 15,000 18,062

Term 20,433 26,941 29,938 31,735 34,618 39,632 43,749 47,102

Total 31,973 39,339 44,430 47,744 51,679 59,711 64,098 71,003


Deposit of branches abroad 5,733 7,970 9,341 9,218 8,796 10,475 10,424 11,288

Total 31,973 39,339 44,430 47,744 51,679 59,711 64,098 71,003

Borrowings

RBI 0 235 586 766 505 235 0 0

Other banks 242 191 220 275 699 1,093 832 481

Other institutions and agencies 658 794 1,690 796 493 513 473 948

Forex borrowings 553 338 483 39 101 1,507 2,722 3,092

Total 1,453 1,558 2,979 1,876 1,798 3,348 4,027 4,521



Bills payable 720 1,147 838 902 933 854 866 835


Others(including provisions) 1,258 1,840 2,486 2,822 2,271 2,700 3,397 4,099

Total 2,581 3,127 4,107 3,934 3,404 3,902 4,628 5,326

Balance with RBI 2,040 2,932 3,437 3,028 3,665 3,438 3,131 3,977

Cash in hand 241 199 202 201 172 194 219 254

Advances



Term loans 3,528 6,543 9,275 10,011 12,879 15,683 14,891 17,967

Total 18,337 22,021 24,327 25,231 31,823 38,311 42,633 45,856

Continued...


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Secured 13,898 15,979 17,975 18,833 23,112 25,388 27,597 31,436

Government guarantee 2,604 2,257 2,051 2,930 4,327 6,063 6,187 6,048

Unsecured 1,835 3,784 4,301 3,468 4,384 6,860 8,849 8,372Total 18,337 22,021 24,327 25,231 31,823 38,311 42,633 45,856

Priority sector 4,746 5,761 6,272 6,593 7,599 9,181 11,534 12,873

Public sector 1,192 2,195 2,228 2,589 3,390 4,661 4,812 5,505

Banks 44 104 1 6 7 6 234 6

Others 7,917 8,578 9,669 9,909 12,663 14,683 14,827 16,635Total 13,899 16,637 18,171 19,098 23,660 28,531 31,407 35,019

Advances outside India 4,438 5,383 6,156 6,133 8,163 9,779 11,226 10,837Total 18,337 22,021 24,327 25,231 31,823 38,311 42,633 45,856

Investments

Investments outside India 1,518 2,205 2,707 2,816 3,338 5,337 6318.4 4,580Investments in India

- Government securities 7,052 7,929 1,089 10,640 11,859 13,536 14,843 17,583 - Other approved securities 1,296 1,277 1,204 1,138 1,136 992 926 868 - Shares 299 267 289 173 231 182 179 - Debentures 770 1,205 1,517 1,517 1,401 1,668 1,845 2,783 - Subsidiaries 21 21 21 76 171 173 181 173 - Others 14 94 83 190 147 146 140 998Total 9,153 10,825 4,181 13,850 14,887 16,747 18,116 22,583


Movement in NPA

Gross NPAs


Additions n.a. n.a. n.a. 1,304 911 1355 1226 1204




Interest earned

Interest/discount on advances/bills 2,234 2,461 2,627 2,750 3,129 3,293 3,563 3,309



Others 42 37 287 128 25 48 80 196Total 3,513 3,936 4,591 4,737 5,317 5,609 5,928 5,796

Other income



Loss on sale of investments

Profit on sale of land, buildings 0 32 1 0 0 0 26 11

Loss on revaluation of investments


Income from subsidiaries 3 0 1 2 2 2 48 18

Lease income 0 0 0 0 0

Miscellaneous income 148 111 160 212 235 226 236 229Total 490 580 574 786 862 1,103 1,668 1,792

Total income 4,003 4,516 5,164 5,522 6,179 6,712 7,596 7,588


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Interest expended

Interest on deposits 2,231 2,469 2,900 3,062 3,216 3,314 3,413 3,087

Interest on RBI 140 182 280 310 344 316 326 316

Others 2 0 0 71 103 138 153 192

Total 2,373 2,651 3,181 3,443 3,663 3,769 3,892 3,594

Operating expenses

Salaries 714 770 924 999 1,339 1,087 1,126 1,172

Others 289 330 288 336 343 370 436 491

Depreciation 48 67 67 61 74 68.23 87 88

Total 1,051 1,167 1,279 1,396 1,744 1,531 1,649 1,752

Provisions and contingencies 219 333 504 510 520 903 1,179 1,234


Profit for the year 360 365 201 173 252 509 876 1,008

Profits inclusive of provisions 579 697 705 683 772 1,412 2,055 2,242





Guarantees

- In India 1,916 1,793 1,767 2,276 2,440 2,818 2,987 3,211

- Outside India 294 695 788 406 404 517 747 916


Others 1,298 1,500 2,553 3,401 4,984 7,254 10,228 15,877

Total 18,194 24,811 21,720 26,156 41,545 50,981 52,174 65,723

Provisions and Contingencies

Provison for NPAs 4 316 352 386 351 642 682 634

Depreciation in values of investments 98 -122 0 -43 67 0 25 42

Provision for taxation 115 116 110 77 66 191 338 399

Other Provisions 2 22 42 90 36 136 347 433

Total 219 333 504 510 520 903 1,179 1,234

Financial analysis


Overall 16 23 13 7 8 16 7 11

Demand 29 -5 12 10 11 15 9 11

Savings 11 19 17 -1 -5 19 0 8

Term 15 32 13 7 8 16 7 11


Demand 17 13 13 13 11 12 8 8

Savings 19 19 24 26 26 26 28 30

Term 64 68 67 66 67 66 68 66


Domestic 82 80 79 81 83 82 84 84

Abroad 18 20 21 19 17 18 16 16


...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04


Return on assets 1.0 0.9 0.4 0.3 0.4 0.8 1.2 1.3

Return on equity 22.5 17.1 8.5 7.0 9.7 18.4 27.5 26.7

Gearing (times) 18.6 19.0 21.4 21.3 21.2 23.5 20.5 20.2








Interest cost 6.96 7.05 6.97 6.98 6.37 5.86 4.95


Average cost of borrowings 9.0 12.1 12.4 15.7 24.3 17.7 13.0 11.9Yield on carry business 10.76 10.60 9.99 10.63 9.86 9.24 8.11


Average yield on advances 13.2 12.2 11.3 11.1 11.0 9.4 8.8 7.5Spreads 3.80 3.56 3.02 3.65 3.49 3.38 3.17Operating expenses to AFD 3.02 2.77 2.76 3.25 2.48 2.34 2.25Core fee income to AFD 1.13 1.05 1.01 1.02 0.91 0.88 0.90Net Profitability Margin 1.91 1.83 1.27 1.41 1.92 1.92 1.82




Credit deposit ratio 57 56 55 53 62 64 67 65



Cash deposit ratio 1 1 0 0 0 0 0 0




Advances 18 20 10 4 26 20 11 8

Deposits 16 23 13 7 8 16 7 11

Investments 11 22 17 9 9 21 11 11

Salaries cost 9 8 20 8 34 -19 4 4


Interest income 22 12 17 3 12 5 6 -2Others

Branches (number) 2,475 2,495 2,515 2,532 2,534 2548 2559 2562


Operating expenses/branch (Rs crore) 0.42 0.47 0.51 0.55 0.69 0.60 0.64 0.68

Employees (number) 53,295 52,518 53,047 52,428 44,052 43420 43141 42977

continued...




...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04


Interest 88 87 89 86 86 84 78 76

forex 2 2 2 2 2 2 2 3



Priority 26 26 26 26 24 24 27 28

Public 7 10 9 10 11 12 11 12

Inter-bank 0 0 0 0 0 0 1 0

Others 43 39 40 39 40 38 35 36

Abroad 24 24 25 24 26 26 26 24


Bills 10 8 7 7 8 9 9 9

Cash credit 71 62 55 53 51 50 56 52

Term loans 19 30 38 40 40 41 35 39


Secured 76 73 74 75 73 66 65 69


Unsecured 10 17 18 14 14 18 21 18




Shares 0 2 4 2 1 1 1 1

Debentures 7 9 22 9 8 8 8 10

Subsidiary 0 0 0 0 1 1 1 1

Others 0 1 1 1 1 1 1 4

Outside India 14 17 39 17 18 24 26 17

Gross NPAs (per cent) 11.8 11.6 n.a. n.a. n.a. n.a. n.a. n.a.

Net NPAs (per cent) 6.9 7.3 7.3 8.6 6.7 6.7 5.4 4.5

n.a.: Not available

Source: CRIS INFAC


Canara Bank Table 5

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Liabilities

Capital 485 578 578 578 578 578 410 410

Reserves and surplus 1,564 1,725 1,835 2,018 2,237 2894 3739 4842

Deposits 31,445 38,045 41,959 48,001 59,070 64030 72095 86345

Borrowings 459 498 1,382 1,324 1,466 267 94 755

Other liabilities and provisions 1,705 2,267 2,366 2,481 3,089 4366 5717 7188

Total 35,657 43,112 48,119 54,402 66,439 72,135 82,055 99,539

Assets



Investments 12,280 16,031 17,357 20,023 21,445 23,220 30,458 35,793

Advances 14,413 16,825 19,530 23,547 27,832 33,127 40,472 47,639

Fixed assets 419 430 550 560 650 659 660 680

Other assets 1,622 2,106 2,504 2,728 3,341 2,632 2,768 3,401

Total 35,657 43,112 48,120 54,402 66,439 72,135 82,055 99,539

Deposits

Demand 5,722 6,283 5,897 7,104 7,847 7,148 7,837 8,654

Savings 6,705 8,077 9,543 11,129 12,786 14,511 17,260 20,512

Term 19,018 23,686 26,518 29,768 38,436 42,370 46,998 57,179

Total 31,445 38,045 41,959 48,001 59,070 64,030 72,095 86,345


Deposits of branches abroad 877 1,064 1,064 1,285 1,407 1,544 1,277 1,968

Total 31,445 38,045 41,958 48,001 59,070 64,030 72,095 86,345

Borrowings

RBI 0 0 375 530 430 0 0 0

Other banks 0 0 0 0 0 0 5 297



Total 459 498 882 824 666 267 94 755



Unsecured redeemable bonds 0 0 500 500 800 1,250 1,750 2,000

Bills payable 958 1,269 1,025 999 1,328 1,116 1,607 1,540


Others (including provisions) 667 966 1,287 1,431 1,735 1,925 2,292 3,393

Total 1,705 2,267 2,866 2,981 3,889 4,366 5,717 7,188

Balance with RBI 3,985 3,781 3,797 3,516 3,473 7,364 5,133 6,287

Cash in hand 251 272 298 322 413 496 475 604

Advances



Term loans 3,740 4,443 5,777 7,885 8,730 10,290 13,431 19,243

Total 14,413 16,825 19,530 23,547 27,832 33,127 40,472 47,639

Continued...


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Secured 12,233 13,921 15,832 18,062 21,379 21826 32178 38654

Government guarantee 1,187 1,417 1,594 2,359 1,965 6311 2579 2366

Unsecured 993 1,487 2,104 2,127 4,487 4989 5715 6619Total 14,413 16,825 19,530 22,547 27,832 33,127 40,472 47,639

Priority sector 5,267 6,006 6,271 6,807 8,069 9288 12170 16152

Public sector 1,344 1,721 2,911 4,702 6,205 7375 7592 7774

Banks 25 123 96 95 98 138 450 511

Others 7,586 8,655 9,795 11,511 12,997 15610 19694 22690Total 14,222 16,505 19,071 23,115 27,369 32,411 39,906 47,127

Advances outside India 191 319 459 432 463 716 566 512Total 14,413 16,825 19,530 23,547 27,832 33,127 40,472 47,639

Investments

Investments outside India 77 91 300 402 499 527 520 547


- Government securities 6,824 9,394 9,955 11,775 14,449 16572 23307 28133

- Other approved securities 1,827 1,809 1,683 1,627 1,549 1246 865 878

- Shares 133 204 246 256 200 236 221 236

- Debentures 2,636 3,600 3,978 4,940 4,390 4215 4975 4926

- Subsidiaries/JV 132 138 134 135 132 132 132 132

- Others 651 795 1,059 889 226 292 438 941Total 12,203 15,940 17,056 19,621 20,946 22,693 29,938 35,246


Movement in NPA

Gross NPA


Additions n.a. n.a. n.a. 750 793 652 1228 1890


Closing balance n.a. n.a. n.a. 2,015 2,243 2112 2475 3127Net NPA-Closing balance n.a. n.a. n.a. 1,244 1,346 1,288 1,454 1,378


Interest earned

Interest/discount on advances/bills 1,972 2,015 2,283 2,488 2,920 3130 3591 3818

Income on investments 1,220 1,527 2,070 2,042 2,234 2497 2686 2994


Others 7 24 0 1 0 36 0 52Total 3,414 3,824 4,657 4,852 5,618 6,371 6,692 7,007

Other income



Loss on sale of investments

Profit on sale of fixed assets 0 0 1 1 1 1 1 0

Loss on revaluation of investments 0 0 0 0 0 0 0 0


Income from Investments 9 5 32 52 30 0 53 46

Lease Income

Miscellaneous income 96 156 179 234 239 313 291 288Total 455 608 663 836 918 1,429 1,478 2,073

Total income 3,869 4,432 5,319 5,687 6,536 7,799 8,170 9,080


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Interest expended

Interest on deposits 2,148 2,604 2,993 3,234 3,575 4350 4224 4121

Interest on RBI /inter bank 54 20 13 19 29 22 9 13

Others 76 124 124 162 132 178 191 189

Total 2,278 2,748 3,131 3,414 3,735 4,550 4,424 4,324

Operating expenses

Salaries 641 691 880 951 1,253 1123 1162 1273

Others 251 268 296 323 351 377 477 510

Depreciation 45 51 55 75 66 93 109 114

Total 937 1,010 1,231 1,350 1,670 1,593 1,748 1,897

Provisions and contingencies 507 469 732 687 846 915 978 1,521


Profit for the year 147 204 225 236 285 741 1,020 1,339

Profits inclusive of provisions 654 674 957 923 1,131 1,656 1,999 2,860




Liability for outstanding forex contracts 8,196 10,632 8,505 14,800 27,515 26895 39686 36109

Guarantees

- in India 3,401 3,394 3,645 4,145 4,425 5413 7019 9422

- outside India 22 21 10 40 34 59 76 81

Acceptances and endorsements 1,945 1,893 1,877 2,498 2,471 2954 3790 6198

Others 373 338 299 225 69 704 9 3

Total 14,091 16,477 14,820 22,438 35,202 36,024 51,177 52,441


Provision for NPAs 260 398 506 466 409 386 476 1239

Depreciation on investments -25 -90 0 0 8 13 18 18

Taxation 124 80 100 121 191 310 300 330

Contingencies 148 82 126 100 239 207 184 -66

Total 507 470 732 687 846 915 978 1,521

Financial analysis


Overall 20 21 10 14 23 8 13 20

Demand 20 10 -6 20 10 -9 10 10

Savings 16 20 18 17 15 13 19 19

Term 21 25 12 12 29 10 11 22


Demand 18 17 14 15 13 11 11 10

Savings 21 21 23 23 22 23 24 24

Term 60 62 63 62 65 66 65 66


Domestic 97 97 97 97 98 98 98 98

Abroad 3 3 3 3 2 2 2 2


...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04


Return on assets 0.4 0.5 0.5 0.5 0.5 1.1 1.3 1.5

Return on equity 7.4 9.4 9.5 9.4 10.5 23.6 26.8 28.5

Gearing (times) 16.4 17.7 18.9 20.0 22.6 19.8 18.8 18.0








Interest cost - 7.56 7.48 7.29 6.74 7.20 6.36 5.32


Average cost of borrowings 12.8 30.2 14.6 13.3 11.5 23.0 110.6 47.8Yield on carry business - 10.63 11.27 10.46 10.14 9.87 9.23 8.20


Average yield on advances 14.3 12.9 12.6 11.6 11.4 10.3 9.8 8.7Spreads - 3.06 3.78 3.17 3.40 2.68 2.88 2.88Operating expenses to AFD - 2.72 2.88 2.81 2.94 2.43 2.37 2.18Core fee income to AFD - 1.14 1.12 1.11 1.00 0.93 0.87 0.78Net Profitability Margin - 1.48 2.02 1.47 1.46 1.18 1.37 1.47









Incremental I/D ratio n.a. 57 34 44 13 36 90 37


Advances 10 17 16 21 18 19 22 18

Deposits 20 21 10 14 23 8 13 20

Investments 15 31 8 15 7 8 31 18

Salaries cost n.a. 8 27 8 32 -10 4 10



Branches (nos) 2,262 2,312 2,379 2,397 2,405 2409 2424 2469



Employees (nos) 54,316 54,703 55,097 55,363 48,257 47796 47566 47796

continued...




...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04


Interest 88 86 88 85 86 82 82 77

Forex 2 2 2 2 2 2 2 2



Priority 37 36 32 29 29 28 30 34

Public 9 10 15 20 22 22 19 16

Inter-bank 0 1 0 0 0 0 1 1

Others 53 51 50 49 47 47 49 48

Abroad 1 2 2 2 2 2 1 1


Bills 13 9 12 12 9 9 9 9

Cash credit 61 65 58 55 60 60 58 51

Term loans 26 26 30 33 31 31 33 40


Secured 85 83 81 80 77 66 80 81


Unsecured 7 9 11 9 16 15 14 14





Debentures 21 22 23 25 20 18 16 14

Subsidiary 1 1 1 1 1 1 0 0

Others 5 5 6 4 1 1 1 3

Outside India 1 1 2 2 2 2 2 2


Net NPAs (per cent) 9.3 7.5 7.1 5.3 4.8 3.9 3.6 2.9

n.a.: Not available

Source: CRIS INFAC


Punjab National Bank Table 6

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Liabilities

Capital 351 212 212 212 212 377 265 265

Reserves and surplus 991 1,442 1,718 2,060 2,457 3,004 3,768 4,747

Deposits 30,806 35,174 40,777 47,483 56,131 64,123 75,813 87916

Borrowings 345 265 197 662 673 409 662 1289

Other liabilities and provisions 2,550 2,675 3,419 3,710 4,032 5,002 5,713 8114

Total 35,043 39,768 46,323 54,129 63,505 72,915 86,222 102,332

Assets

Cash and balances with RBI 3,655 4,900 5,016 5,477 5,366 5,102 6,569 6742

Balances with bank and money at call 961 561 824 753 704 1,297 1,509 2078Investments 13,977 15,907 18,573 22,099 25,128 28,207 34,030 42125Advances 14,068 16,043 19,047 22,572 28,029 34,369 40,228 47225Fixed assets 586 595 617 681 724 796 885 900Other assets 1,796 1,762 2,246 2,547 3,555 3,144 3,002 3261Total 35,043 39,768 46,323 54,129 63,505 72,915 86,222 102,332

Deposits

Demand 3,270 3,772 4,846 5,437 6,311 6,758 9,888 9,900

Savings 9,435 11,564 13,679 15,875 18,530 21,664 25,648 30,423

Term 18,101 19,838 22,252 26,171 31,290 35,701 40,277 47,593

Total 30,806 35,174 40,777 47,483 56,131 64,123 75,814 87,916


Deposits of branches abroad 0 0 0 0 0 0 0 0

Total 30,806 35,174 40,777 47,483 56,131 64,123 75,814 87,916

Borrowings

RBI 0 0 0 513 300 269 0 4

Other banks 27 7 5 11 44 32 184 572



Total 345 265 197 662 673 409 662 1,289



Bills payable 838 878 632 706 745 866 948 1,396


Others (including provisions) 1,259 1,201 1,629 2,352 2,796 3,617 4,238 5,883

Total 2,549 2,676 3,419 3,710 4,032 5,002 5,713 8,114

Balance with RBI 3,359 4,590 4,678 5,049 4,920 4,371 5,940 6,043

Cash in hand 295 310 338 428 445 578 629 700

Advances



Term loans 3,795 4,833 6,734 7,983 9,872 13,431 16,448 22,609

Total 14,067 16,042 19,047 22,572 28,029 34,639 40,228 47,225

Continued...


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Secured 13,306 14,991 18,336 21,634 26,503 32,601 36,714 42,123


Unsecured 143 132 254 602 1,139 1,275 2,852 4,737Total 14,067 16,042 19,047 22,572 28,029 34,369 40,228 47,225

Priority sector 4,380 5,275 6,595 8,323 10,857 13,441 16,034 20,735Public sector 1,495 1,745 2,417 3,065 4,408 6,225 6,860 6,519

Banks 52 12 12 10 28 237 237 205

Others 8,140 9,010 10,023 11,173 12,736 14,466 17,097 19,766Total 14,067 16,042 19,047 22,572 28,029 34,369 40,228 47,225


Investments





- Shares 62 99 364 325 257 344 270 267

- Debentures 1,623 2,317 2,698 2,651 3,306 5,383 5,458 5,766

- Subsidiaries/JV 149 189 227 254 213 212 220 206

- Others 282 154 122 146 406 495 326 465Total 13,976 15,906 18,564 22,090 25,120 28,197 34,021 42,116


Movement in NPA

Gross NPA






Interest earned

Interest/Discount on advances/bills 1,954 1,961 2,182 2,514 2,824 3,318 3,712 3,876



Others 6 46 108 52 146 99 296 110Total 3,654 3,992 4,448 5,155 5,863 6,648 7,485 7,780

Other income


Profit on sale of investments 35 237 79 215 242 447 677 1,265

Loss on sale of investments 0 0 0 0 0 -9 -5 -29


Loss on revaluation of investments 0 0 0 0 -26 -58 -70 -118



Lease income 0 0 0 0 0 0 0 0


Total income 4,123 4,629 4,993 5,882 6,642 7,625 8,735 9,647


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Interest expended

Interest on deposits 2,343 2,540 2,677 3,367 3,609 4122 4,163 3,926

Interest on RBI/inter bank 6 3 12 29 39 48 8 13

Others 90 156 106 142 176 183 191 215

Total 2,439 2,699 2,795 3,538 3,825 4,353 4,361 4,155

Operating expenses

Salaries 811 871 1,069 1,184 1,459 1,316 1,476 1,654

Others 224 222 267 297 338 398 469 535

Depreciation 29 35 40 43 75 85 129 181

Total 1,064 1,128 1,376 1,524 1,872 1,799 2,074 2,371

Provisions and contingencies 382 324 449 412 482 911 1,475 2,012







Liability for outstanding forex contracts 2,131 3,628 3,190 3,942 12,619 16431 16,364 19,543

Guarantees

- In India 1,784 2,133 2,075 1,947 2,119 2616 3,151 3,995

- Outside India 336 583 535 613 431 449 382 1,131

Acceptances and endorsements 1,594 1,634 1,692 1,978 2,441 2807 3,376 7,168

Others 96 131 130 155 13 21 102 140

Total 6,656 9,005 8,454 9,564 18,208 22,885 23,571 32,230


Provison for NPAs 194 337 240 249 341 631 833 1194Depreciation in values of investments 0 -333 0 -8 20 -35 133 -31

Provision for taxation 123 276 159 124 111 199 341 661Other Provisions 65 44 51 47 10 116 168 188

Total 382 324 449 412 482 911 1,475 2,012

Financial analysis


Overall 14 14 16 16 18 14 18 16

Demand 5 15 28 12 16 7 46 0

Savings 14 23 18 16 17 17 18 19

Term 15 10 12 18 20 14 13 18


Demand 11 11 12 11 11 11 13 11

Savings 31 33 34 33 33 34 34 35

Term 59 56 55 55 56 56 53 54


Domestic 100 100 100 100 100 100 100 100

Abroad 0 0 0 0 0 0 0 0


...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04


Return on assets 0.7 1.3 0.9 0.8 0.8 0.8 1.0 1.2

Return on equity 19.0 31.9 20.8 19.4 18.8 18.6 22.3 24.5

Gearing (times) 25.1 23.0 23.0 22.8 22.8 20.6 20.4 19.4







Cost to income ratio (w/o profit on invest) 64.5 66.6 64.9 71.6 72.7 63.7 56.1 56.1Financial management (per cent)Interest cost n.a. 7.90 7.17 7.82 7.19 7.08 6.11 4.95


Average cost of borrowings 11.5 52.1 51.3 39.9 32.3 42.7 37.1 23.4Yield on carry business n.a. 11.55 11.16 11.10 10.81 10.53 10.02 8.71


Average yield on advances 14.6 13.0 12.4 12.1 11.2 10.6 9.9 8.9Spreads n.a. 3.65 3.99 3.27 3.62 3.45 3.91 3.76Operating expenses to AFD n.a. 3.22 3.40 3.23 3.40 2.81 2.74 2.63Core fee income to AFD n.a. 1.02 1.05 1.01 0.97 0.85 0.79 0.76Net Profitability Margin n.a. 1.45 1.64 1.05 1.19 1.50 1.96 1.89





Incremental credit deposit ratio 38 45 54 53 63 79 50 58




Incemental I/D ratio 55 44 48 53 35 39 50 67


Advances 11 14 19 19 24 23 17 17

Deposits 14 14 16 16 18 14 18 16

Investments 17 14 17 19 14 12 21 24

Salaries cost 7 7 23 11 23 -10 12 12



Branches (nos) 3,765 3,793 3,822 3,853 3,879 3,857 4,037 4,022



Employees (nos) 67,616 66,599 65,705 64,733 58,309 57,859 58,981 58,839

continued...




...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04


Interest 89 86 89 88 88 87 86 81

Forex 2 1 1 1 1 1 1 1

Commission, brokerage 6 6 7 6 6 6 5 6


Priority 31 33 35 37 39 39 40 44

Public 11 11 13 14 16 18 17 14

Inter bank 0 0 0 0 0 1 1 0

Others 58 56 53 49 45 42 42 42

Abroad 0 0 0 0 0 0 0 0


Bills 10 9 8 8 9 7 7 6

Cash credit 63 61 57 56 56 54 52 46

Term loans 27 30 35 35 35 39 41 48


Secured 95 93 96 96 95 95 91 89


Unsecured 1 1 1 3 4 4 7 10




Shares 0 1 2 1 1 1 1 1

Debentures 12 15 15 12 13 19 16 14

Subsidiary 1 1 1 1 1 1 1 0

Others 2 1 1 1 2 2 1 1



Net NPAs (per cent) 10.4 9.6 9.0 8.5 6.7 5.3 3.9 1.0

n.a.: Not available

Source: CRIS INFAC


Oriental Bank of Commerce Table 7

Continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Liabilities

Capital 193 193 193 193 193 193 193 193

Reserves and surplus 749 889 1,039 1,236 1,356 1,427 1,917 2,484

Deposits 10,054 13,058 16,805 22,095 24,680 28,488 29,809 35,674

Borrowings 107 99 108 514 227 817 1,166 1,100

Other liabilities and provisions 456 542 640 504 616 1,311 914 1,556

Total 11,559 14,780 18,784 24,541 27,072 32,237 33,999 41,007

Assets


Balances with bank and money at call 635 322 370 358 621 981 628 967

Investments 4,388 5,957 7,839 11,560 12,298 13,698 14,781 16,794

Advances 4,886 6,318 7,708 9,326 11,076 14,158 15,677 19,681

Fixed assets 76 121 140 135 130 143 145 162

Other assets 472 482 705 888 918 906 872 770

Total 11,559 14,782 18,784 24,541 27,072 32,237 33,999 41,007

Deposits

Demand 1,217 1,379 1,537 1,884 2,070 2,307 2,744 3,113

Savings 1,935 2,418 2,981 3,657 4,249 4,848 5,762 7,074

Term 6,902 9,261 12,287 16,554 18,362 21,334 21,302 25,487

Total 10,054 13,058 16,805 22,095 24,680 28,488 29,809 35,674



Total 10,054 13,058 16,805 22,095 24,680 28,488 29,809 35,674

Borrowings

RBI 0 0 0 100 0 0 0 0

Other banks 3 2 0 3 0 1 0 0



Total 107 99 108 514 226 817 1,166 1,100



Bills payable 121 105 150 122 137 227 159 207


Others (including provisions) 128 150 181 226 288 896 534 1,092

Total 458 542 640 504 616 1,311 914 1,556

Balance with RBI 140 1,432 1,818 2,046 1,817 2,152 1,686 2,424

Cash in hand 961 148 205 229 212 199 210 210

Advances

Bills purchases and discounted 451 611 751 681 672 691 905 869


Term loans 1,453 1,806 2,319 3,097 3,690 5,921 7,032 10,678

Total 4,886 6,318 7,708 9,326 11,076 14,158 15,677 19,681


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Secured 4,194 5,448 6,596 7,645 8,946 10,483 12,089 14,942

Government guarantee 593 787 963 1,305 1,533 2,207 1,929 1,563

Unsecured 99 83 148 375 597 1,468 1,660 3,175Total 4,886 6,318 7,708 9,326 11,076 14,158 15,677 19,681

Priority sector 1,958 2,474 3,061 3,702 4,293 5,455 6,028 7,488

Public sector 244 325 336 536 661 879 1,471 3,241

Banks 24 31 29 0 25 30 3 1

Others 2,660 3,488 4,281 5,088 6,098 7,794 8,175 8,950Total 4,886 6,318 7,708 9,326 11,076 14,158 15,677 19,681


Investments




- Other approved securities 439 444 498 472 499 498 491 459

- Shares 21 127 176 252 159 143 133 124

- Debentures 1,124 2,323 2,990 4,069 3,904 4,183 3,732 3,546

- Subsidiaries/JV 0 0 0 0 0 0 0 0

- Others 44 98 105 204 374 322 267 214Total 4,388 5,957 7,839 11,560 12,298 13,698 14,781 16,794


Movement in NPA

Gross NPA

Opening balance n.a. n.a. n.a. 498 528 586 952 1146



Closing balances n.a. n.a. n.a. 528 586 952 1146 1211Net NPA-Closing balance n.a. n.a. n.a. 336 397 436 225 0


Interest earned

Interest/Discount on advances/bills 708 739 933 1,011 1,203 1,416 1,536 1,591

Income on investments 494 669 847 1,367 1,441 1,546 1,613 1,633


Others 13 7 23 2 21 6 68 5Total 1,251 1,458 1,873 2,458 2,759 3,049 3,304 3,301

Other income



Loss on sale of investments 0 0 0 0 -4 -5 -20 -7


Loss on revaluation of investments 0 0 0 0 -10 -28 -26 -5


Income from Investments 1 5 14 19 16 9 10 0

Lease income 0 0 0 0 0 0

Miscellaneous income 6 14 18 15 31 41 32 50Total 104 138 174 221 268 474 541 722

Total income 1,355 1,596 2,046 2,679 3,027 3,523 3,845 4,022


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Interest expended

Interest on deposits 782 939 1,270 1,718 1,937 2,030 2,032 1,786

Interest on RBI /inter bank 7 11 10 15 12 10 3 6

Others 12 9 9 12 20 29 55 53

Total 801 959 1,290 1,745 1,968 2,068 2,090 1,845

Operating expenses

Salaries 154 185 217 231 315 288 348 366

Others 87 98 127 155 168 162 152 177

Depreciation 12 17 26 42 41 39 42 50

Total 253 301 371 428 524 490 541 594

Provisions and contingencies 121 127 156 227 331 597 706 847


Profit for the year 180 210 230 279 203 2,437 2,598 2,581





Liability for outstanding forex contracts 253 562 537 599 594 1,020 1,015 2711

Guarantees

- In India 774 1,041 852 949 1,029 1,249 1,478 1844

- Outside India 7 25 20 24 28 48 64 76

Acceptances and endorsements 292 271 354 406 428 464 489 1746

Others 21 17 16 12 14 12 5 2

Total 1,420 2,017 1,963 2,189 2,352 2,990 3,331 6,525


Provison for NPAs 52 77 101 127 274 139 328 89

Depreciation in values of investments 2 4 0 0 -30 16 -6 0

Provision for taxation 66 46 52 60 79 249 279 460

Other Provisions 0 0 3 40 9 193 105 298

Total 120 127 156 227 331 597 706 847

Financial analysis


Overall 15 30 29 31 12 15 5 20

Demand 18 13 11 23 10 11 19 13

Savings 18 25 23 23 16 14 19 23

Term 14 34 33 35 11 16 0 20


Demand 12 11 9 9 8 8 9 9

Savings 19 19 18 17 17 17 19 20

Term 69 71 73 75 74 75 71 71


Domestic 100 100 100 100 100 100 100 100

Abroad 0 0 0 0 0 0 0 0


...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04


Return on assets 1.6 1.6 1.4 1.3 0.8 8 8 7

Return on equity 20.4 20.8 19.9 20.9 13.6 154 139 108

Gearing (times) 11.3 12.7 14.3 16.2 16.5 19 15 14

Staff costs to operating expenses 61 62 58 54 60 59 64 62

Non-fund income to total income 8 9 8 8 9 13 14 18

Operating expenses to total income 19 19 18 16 17 14 14 15

Operating expenses to deposits 3 2 2 2 2 2 2 2



Cost to income ratio (w/o profit on invest) 45.8 48.2 50.5 48.9 54.6 43.0 39.7 35.7Financial management (per cent)Interest cost n.a. 8.14 8.51 8.77 8.24 7.58 6.89 5.42


Average cost of borrowings n.a. 19.4 18.9 8.7 8.4 7.3 5.8 5.2Yield on carry business n.a. 11.71 11.85 12.07 11.36 10.85 10.44 9.13

Average yield on investments 12.4 12.9 12.3 14.1 12.1 12 11 10

Average yield on advances 14.8 13.2 13.3 11.9 11.8 11 10 9Spreads n.a. 3.57 3.34 3.30 3.12 3.27 3.55 3.71Operating expenses to AFD n.a. 2.39 2.31 2.07 2.12 1.71 1.69 1.63Core fee income to AFD n.a. 0.89 0.79 0.66 0.61 0.56 0.53 0.54Net Profitability Margin n.a. 2.07 1.83 1.90 1.61 2.12 2.39 2.63









Incemental I/D ratio n.a. 52 50 70 29 37 82 34


Advances 5 29 22 21 19 28 11 26

Deposits 15 30 29 31 12 15 5 20

Investments 22 36 32 47 6 11 8 14

Salaries cost 9 20 17 7 36 -8 21 5



Branches (nos) 755 841 899 915 932 967 989 1013

Advances per branch (Rs crore) 6.47 7.51 8.57 10.19 11.88 15 16 19


Employees (nos) 13,580 14,238 14,447 14,398 13,588 13589 13507 13602

continued...




...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04


Interest 92 91 92 92 91 87 86 82

Forex 2 2 2 1 1 1 1 1



Priority 40 39 40 40 39 39 38 38

Public 5 5 4 6 6 6 9 16

Inter bank 0 0 0 0 0 0 0 0

Others 54 55 56 55 55 55 52 45

Abroad 0 0 0 0 0 0 0 0


Bills 9 10 10 7 6 5 6 4

Cash credit 61 62 60 59 61 42 45 54

Term loans 30 29 30 33 33 42 45 54


Secured 86 86 86 82 81 74 77 76


Unsecured 2 1 2 4 5 10 11 16




Shares 0 2 2 2 1 1 1 1

Debentures 26 39 38 35 32 31 25 21

Subsidiary 0 0 0 0 0 0 0 0

Others 1 2 1 2 3 2 2 1



Net NPAs (per cent) 5.6 4.5 4.5 3.8 3.6 3.2 1.4 0.0

n.a.: Not available

Source: CRIS INFAC


Dena Bank Table 8

Continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04Liabilities

Capital 207 207 207 207 207 207 207 207Reserves and surplus 296 339 489 620 574 770 792 848Deposits 7,861 10,115 11,795 13,287 14,573 15,355 16,491 18,349Borrowings 111 179 586 755 377 266 228 308Other liabilities and provisions 1,239 1,424 1,766 1,983 2,177 2,245 2,444 2,447Total 9,714 12,264 14,843 16,851 17,909 18,842 20,162 22,160Assets

Cash and balances with RBI 801 1,395 1,314 1,251 1,198 1,024 1,115 1,233Balances with bank and money at call 353 478 487 318 1,033 509 337 218Investments 3,719 4,601 5,646 6,915 6,816 7,648 8,500 9,736Advances 4,043 5,147 6,396 7,118 7,002 7,523 8,436 9,412Fixed assets 154 163 289 335 327 316 296 294Other assets 644 480 710 914 1,533 1,823 1,478 1,266Total 9,714 12,264 14,843 16,851 17,909 18,842 20,162 22,160Deposits

Demand 1,120 1,101 1,219 1,599 1,633 1,682 1,699 1,941Savings 2,170 2,483 2,910 3,350 3,951 4,362 4,854 5,680Term 4,571 6,530 7,666 8,338 8,989 9,311 9,938 10,728Total 7,861 10,115 11,795 13,287 14,573 15,355 16,491 18,349

Deposits of branches in India 7,861 10,115 11,795 13,287 14,573 15,355 16,491 18,349Deposits of branches abroad 0 0 0 0 0 0 0 0Total 7,861 10,115 11,795 13,287 14,573 15,355 16,491 18,349Borrowings

RBI 0 0 230 367 187 103 0 0Other banks 3 0 169 50 0 0 0 0Other institutions and agencies 109 179 186 337 190 164 132 93Forex borrowings 0 0 0 0 0 96 216Total 112 179 586 755 377 266 228 308Other liabilities and provisions

Inter-office adjustments 0 0 0 0 0 0 0 23Bills payable 320 272 332 255 298 306 261 177Interest accrued 501 552 735 931 1,054 1,013 1,064 997Others (including provisions) 417 600 699 797 826 926 1,120 1,250Total 1,238 1,424 1,766 1,983 2,177 2,245 2,444 2,447

Balance with RBI 723 1,310 1,222 1,140 1,095 1082 981 908Cash in hand 78 85 92 111 102 151 134 116Advances

Bills purchases and discounted 479 588 563 605 537 546 668 687Cash credit and overdraft 2,222 2,788 3,429 3,997 3,418 3,591 4,058 3,699Term loans 1,343 1,772 2,402 2,515 3,046 3,386 3,710 5,026Total 4,044 5,147 6,395 7,118 7,002 7,523 8,436 9,412


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Secured 3,157 4,324 5,282 5,981 5,915 7,079 7,342 8,188Government guarantee 587 758 948 952 899 163 461 527Unsecured 300 65 164 185 188 281 633 697Total 4,044 5,147 6,395 7,118 7,002 7,523 8,436 9,412

Priority sector 1,629 2,183 2,669 2,855 2,739 2,828 3,167 3,815Public sector 306 460 496 743 852 1,360 1,408 1,497Banks 4 12 2 28 49 0 0 0Others 2,105 2,492 3,227 3,492 3,362 3,334 3,861 4,100Total 4,044 5,147 6,395 7,118 7,002 7,523 8,436 9,412Advances outside India 0 0 0 0 0 0 0 0Total Advances 4,044 5,147 6,395 7,118 7,002 7,523 8,436 9,412Investments

Investments outside India 0 0 0 0 0 0 0 0Investments in India

- Government securities 2,503 2,976 3,409 4,313 4,285 5,256 5,979 7,601 - Other approved securities 343 344 605 287 276 294 315 298 - Shares 35 58 43 59 120 127 145 113 - Debentures 697 1,202 1,523 2,161 2,049 1,909 1,800 1,503 - Subsidiaries/JV 10 16 19 22 22 22 22 22 - Others 131 6 47 64 64 39 239 200Total 3,719 4,601 5,646 6,906 6,816 7,648 8,500 9,736Total Investments 3,719 4,601 5,646 6,906 6,816 7,648 8,500 9,736Movement in NPA

Gross NPA

Opening balance n.a. n.a. n.a. 858 1400 1928 1996 1617Additions n.a. n.a. n.a. 785 788 496 294 459Reductions n.a. n.a. n.a. 244 259 428 673 591Closing balance n.a. n.a. n.a. 1,400 1,928 1966 1617 1484Net NPA-Closing balance n.a. n.a. n.a. 983 1,280 1,227 997 884Profit and loss statement

Interest earned

Interest/Discount on advances/bills 580 678 799 832 839 810 872 817Income on investments 406 512 641 715 816 825 836 868Interest on balances with RBI 27 24 44 32 39 59 45 45Others 1 3 8 8 22 15 18 6Total 1,014 1,216 1,492 1,587 1,716 1,708 1,772 1,735Other income

Commission exchange and brokerage 59 71 71 86 84 78 77 82Profit on sale of investments 11 61 16 74 37 202 240 443Loss on sale of investments -5 0 0 0 0 0 0 -2Profit on sale of fixed assets 0 0 0 0 0 0 0 0Loss on revaluation of investments 0 0 0 0 0 0 0 0Profit on forex transactions 19 19 35 20 16 16 19 24Income from Investments 0 0 0 0 3 4 15 9Lease income 0 0 0 0 0 0 0 0Miscellaneous income 27 34 30 32 59 53 86 61Total 111 184 153 212 199 353 437 617Total income 1,125 1,400 1,645 1,799 1,916 2,062 2,209 2,353


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04Interest expended

Interest on deposits 579 735 958 1,043 1,139 1,166 1,125 1,071Interest on RBI /Inter-bank 14 3 10 29 28 21 3 3Others 47 52 83 98 100 79 76 69Total 640 790 1,051 1,169 1,267 1,266 1,204 1,143Operating expenses

Salaries 212 245 276 293 434 323 366 339Others 71 82 88 101 124 90 89 105Depreciation 8 10 14 18 21 24 28 28Total 291 337 378 411 580 437 483 472

Provisions and contingencies 121 169 106 156 334 324 380 480Total expenses including provisions 1,052 1,296 1,535 1,736 2,182 2,026 2,067 2,095Profit for the year 73 105 110 63 -266 35 142 258

Profits inclusive of provisions 194 274 216 219 68 359 522 738Contingent liabilities

Claims against banks 14 84 70 54 101 68 127 157Liability for partly paid investments 11 0 0 0 0 0 0 0Liability for outstanding forex contracts 408 480 715 1,369 3,014 573 1,180 3,548Guarantees

- In India 725 740 808 619 783 1,052 1,035 1,188 - Outside India 0 0 0 0Acceptances and endorsements 691 753 728 798 512 507 662 875Others 137 165 180 146 524 59 147 71Total 1,986 2,223 2,501 2,986 4,933 2,259 3,151 5,840Provisions and contingencies

Provision for NPAs 68 141 93 166 290 316 270 206Provision for depreciation in the value of inves 0 0 8 -38 41 5 9 0Provision towards income tax 17 24 5 25 0 19 50 121Others 36 4 1 3 3 -16 51 153Total 121 169 106 156 334 324 380 480Financial analysis


Overall 21 29 17 13 10 5 7 11Demand 26 -2 11 31 2 3 1 14Savings 14 14 17 15 18 10 11 17Term 24 43 17 9 8 4 7 8Share of deposits (per cent)

Demand 14 11 10 12 11 11 10 11Savings 28 25 25 25 27 28 29 31Term 58 65 65 63 62 61 60 58Share of deposits (per cent)

Domestic 100 100 100 100 100 100 100 100Abroad 0 0 0 0 0 0 0 0


...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04Profitability (per cent)

Return on assets 0.8 1.0 0.8 0.4 -1.5 0.2 0.7 1.2Return on equity 18.7 20.0 17.8 8.3 -33.1 4.0 14.4 25.1Gearing (times) 18.3 21.5 20.3 19.4 21.9 18.3 19.2 20.0Staff costs to operating expenses 72.9 72.6 73.0 71.2 74.9 73.9 75.7 71.8Non-fund income to total income 9.9 13.1 9.3 11.8 10.4 17.1 19.8 26.2Operating expenses to total income 25.9 24.1 23.0 22.9 30.3 21.2 21.9 20.0Operating expenses to deposits 3.7 3.3 3.2 3.1 4.0 2.8 2.9 2.6Earning per share (Rs) 3.5 5.1 5.3 3.0 -12.9 1.7 6.9 12.5Cost to income ratio 60.0 55.2 63.6 65.3 89.5 54.8 48.1 39.0Cost to income ratio (w/o profit on invest) 61.4 61.3 65.4 74.0 94.9 73.4 63.2 61.5Financial management (per cent)

Interest cost n.a. 8.38 9.03 8.66 8.58 8.12 7.32 6.38Average cost of deposits 8.1 8.2 8.7 8.3 8.2 7.8 7.1 6.1Average cost of borrowings 16.7 38.0 24.3 18.8 22.6 30.9 32.2 26.9Yield on carry business n.a. 11.99 11.81 10.88 10.97 10.56 10.27 9.08Average yield on investments 12.5 12.3 12.5 11.4 11.9 11.4 10.4 9.5Average yield on advances 15.6 14.7 13.8 12.3 11.9 11.1 10.9 9.2Spreads n.a. 3.62 2.78 2.22 2.39 2.44 2.96 2.69Operating expenses to AFD n.a. 3.28 2.97 2.79 3.66 2.67 2.75 2.42Core fee income to AFD n.a. 1.04 0.95 0.83 0.82 0.74 0.79 0.70Net Profitability Margin n.a. 1.38 0.76 0.25 -0.46 0.51 1.00 0.97Deposits to borrowings (times) 19.6 62.0 28.7 18.7 24.6 46.5 64.4 64.9Capital adequacy 10.8 11.9 11.1 11.6 7.7 7.6 6.0 9.5Provisions as a percentage of profit before 62.4 61.6 49.0 71.2 490.2 90.1 72.7 65.0provisions


Credit-deposit ratio 51 51 54 54 48 49 51 51Incremental C/D ratio 46 49 74 48 -9 67 80 53Borrowings to total deposits 1 2 5 6 3 2 1 2Cash-deposit ratio 1 1 1 1 1 1 1 1Investment-deposit ratio 47 45 48 52 47 50 52 53Incemental I/D ratio n.a. 39 62 85 -8 106 75 67Reserves as a percentage of net worth 59 62 70 75 74 79 79 80Growth (per cent)

Advances 19 27 24 11 -2 7 12 12Deposits 21 29 17 13 10 5 7 11Investments 35 24 23 22 -1 12 11 15Salaries cost 14 15 13 6 48 -26 13 -7Commission and fee -2 20 0 21 -2 -7 -1 6Interest income 24 20 23 6 8 0 4 -2Others

Branches (nos) 1,143 1,156 1,166 1,170 1,175 1,135 1,135 1,130Advances per branch (Rs crore) 3.54 4.45 5.49 6.08 5.96 6.63 7.43 8.33Operating expenses per branch (Rs crore) 0.25 0.29 0.32 0.35 0.49 0.38 0.43 0.42Employees (nos) 15,610 15,109 14,881 14,412 10,947 10,700 10,553 10,957Income per employee (Rs crore) 0.07 0.09 0.11 0.12 0.17 0.19 0.21 0.21Income/employee expenses (times) 5.31 5.72 5.97 6.14 4.41 6.39 6.04 6.95

continued...


...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04Total income (per cent)

Interest 90 87 91 88 90 83 80 74Forex 2 1 2 1 1 1 1 1Commission and brokerage 5 5 4 5 4 4 4 3Share of advances (per cent)

Priority 40 42 42 40 39 38 38 41Public 8 9 8 10 12 18 17 16Inter-bank 0 0 0 0 1 0 0 0Others 52 48 50 49 48 44 46 44Abroad 0 0 0 0 0 0 0 0Share of advances (per cent)

Bills 12 11 9 9 8 7 8 7Cash credit 55 54 54 56 49 48 48 39Term loans 33 34 38 35 44 45 44 53Share of advances (per cent)

Secured 78 84 83 84 84 94 87 87Government guarantee 15 15 15 13 13 2 5 6Unsecured 7 1 3 3 3 4 8 7Share of investments (per cent)

Government securities 67 65 60 62 63 69 70 78Other approved securities 9 7 11 4 4 4 4 3Shares 1 1 1 1 2 2 2 1Debentures 19 26 27 31 30 25 21 15Subsidiary 0 0 0 0 0 0 0 0Others 4 0 1 1 1 1 3 2Outside India 0 0 0 0 0 0 0 0Gross NPAs (per cent) 15.1 13.7 n.a. n.a. n.a. n.a. n.a. n.a.Net NPAs (per cent) 9.4 8.3 7.7 13.5 18.4 16.3 11.8 9.4n.a.: Not available

Source: CRIS INFAC


Corporation Bank Table 9(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04Liabilities

Capital 82 120 120 120 120 143 143 143Reserves and surplus 318 729 855 1,025 1,228 1,903 2,227 2,625Deposits 6,673 9,352 12,601 14,280 16,560 18,924 21,725 23191Borrowings 271 70 198 296 595 1,424 803 934Other liabilities and provisions 810 943 1,209 1,042 1,200 1,210 1,374 2,260Total 8,154 11,214 14,983 16,762 19,703 23,604 26,272 29,154Assets

Cash and balances with RBI 804 1,004 1,220 1,162 1,088 1,336 1,284 1,694Balances with bank and money at call 601 1,156 1,228 1,120 2,097 2,010 1,145 1,142Investments 3,287 4,154 5,511 5,962 6,860 8,056 10,670 10,685Advances 3,015 4,303 6,286 7,777 8,666 10,987 12,029 13,890Fixed assets 64 92 117 143 155 199 233 249Other assets 383 505 622 597 837 1,015 911 1,493Total 8,154 11,214 14,983 16,762 19,703 23,604 26,272 29,154Deposits

Demand 1,472 1,443 1,647 1,910 2,137 2,314 2,922 3,559Savings 1,096 1,316 1,600 1,958 2,247 2,609 3,276 4,324Term 4,105 6,593 9,355 10,412 12,177 14,001 15,527 15,308Total 6,673 9,352 12,601 14,280 16,560 18,924 21,725 23,191



Total 6,673 9,352 12,601 14,280 16,560 18,924 21,725 23,191Borrowings

RBI 0 0 134 146 210 351 25 0Other banks 233 0 0 0 130 510 170 7Other institutions and agencies 38 70 63 150 255 563 509 41Forex borrowings 0 0 0 0 0 0 99 886Total 271 70 198 296 595 1,424 803 934Other liabilities and provisions

Inter-office adjustments 166 205 239 193 0 0 0 0Bills payable 390 347 509 361 639 583 710 1,130Interest accrued 28 40 51 63 79 56 47 54Others (including provisions) 226 350 410 424 483 572 616 1,076Total 810 943 1,209 1,042 1,200 1,210 1,374 2,260

Balance with RBI 741 936 1,124 1,065 980 1,215 1,130 1,449Cash in hand 62 68 91 91 102 121 154 245Advances

Bills purchases and discounted 279 547 441 455 594 610 811 1,098Cash credit and overdraft 1,621 2,187 2,888 3,055 4,153 5,824 6,041 6,028Term loans 1,115 1,569 2,957 4,268 3,918 4,553 5,177 6,764 Total 3,015 4,303 6,286 7,777 8,666 10,987 12,029 13,890

Continued...


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Secured 2,281 3,196 4,606 5,733 7,145 7,221 9,895 11,549Government guarantee 448 477 621 919 328 1,476 392 530Unsecured 286 630 1,060 1,126 1,194 2,290 1,742 1,811Total 3,015 4,303 6,286 7,777 8,666 10,987 12,029 13,890

Priority sector 952 1,257 1,873 2,257 2,869 3,052 3,970 4,979Public sector 412 431 588 1,628 1,576 2,938 2,095 1,123Banks 4 2 90 22 0 31 232 230Others 1,647 2,613 3,736 3,870 4,221 4,967 5,731 7,557Total 3,015 4,303 6,286 7,777 8,666 10,987 12,029 13,890

Advances outside India 0 0 0 0 0 0 0 0Total 3,015 4,303 6,286 7,777 8,666 10,987 12,029 13,890Investments


- Government securities 1,713 2,114 2,945 3,700 4,612 5,866 8,346 8,671 - Other approved securities 338 351 335 321 307 243 188 181 - Shares 38 81 72 84 44 55 55 59 - Debentures 675 1,065 1,605 1,501 1,532 1,658 1,788 1,542 - Subsidiaries/JV 0 3 10 85 88 115 115 115 - Others 523 540 543 271 278 120 179 117Total 3,287 4,154 5,511 5,962 6,860 8,057 10,670 10,685Total investments 3,287 4,154 5,511 5,962 6,860 8,057 10,670 10,685Movement in NPA

Gross NPA

Opening balance n.a. n.a. n.a. n.a. 433 485 587 657Additions n.a. n.a. n.a. n.a. 136 246 177 162Reductions n.a. n.a. n.a. n.a. 85 143 107 227Closing balance n.a. n.a. n.a. n.a. 485 587 657 722Net NPA-Closing balance n.a. n.a. n.a. n.a. 171 253 198 250Profit and loss statement

Interest earned

Interest/Discount on advances/bills 403 427 608 806 934 997 1,020 991Income on investments 366 522 634 689 744 824 965 1,094Interest on balances with RBI 40 48 93 94 94 91 65 44Others 20 30 20 15 33 34 52 73Total 829 1,028 1,356 1,604 1,805 1,946 2,103 2,201Other income

Commission exchange and brokerage 73 95 125 130 131 124 117 131Profit on sale of investments 2 1 11 58 67 135 266 224Loss on sale of investments 0 0 0 0 0 0 0 0Profit on sale of fixed assets 0 2 0 0 0 0 1Loss on revaluation of investments 0 0 0 0 0 0 0 0Profit on forex transactions 13 22 29 35 37 53 40 27Income from investments 0 0 0 9 11 18 37 33Lease income 0 0 0 0 0 0 0 0Miscellaneous income 23 26 31 39 47 52 71 101Total 111 144 198 271 292 382 532 517Total income 940 1,171 1,555 1,875 2,097 2,328 2,634 2,718


...continued

continued...


Interest on deposits 493 623 961 1,116 1,184 1,285 1,270 1,190Interest on RBI /Inter-bank 2 3 6 17 20 19 16 18Others 16 13 11 13 20 17 24 29Total 511 639 978 1,146 1,223 1,320 1,310 1,237Operating expenses


Provisions and contingencies 121 136 114 193 270 315 437 403Total expenses including provisions 815 1,005 1,363 1,643 1,835 2,150 2,395 2,214Profit for the year 125 167 192 232 262 177 239 505


Claims against the banks 13 36 49 45 50 50 39 44Liability for partly paid investments 10 0 19 0 0 0 0 0Liability for outstanding forex contracts 1,261 2,100 1,654 2,066 3,832 2665 4485 4,267Guarantees

- In India 365 564 813 831 994 0 0 1,548 - Outside India 7 13 21 34 23 0 0 62Acceptances and endorsements 262 259 293 411 443 466 668 1,353Others 20 14 20 10 23 27 18 46Total 1,938 2,987 2,870 3,397 5,364 3,208 5,211 7,320Provisions and contingencies

Provision for NPAs 35 47 46 70 99 129 174 106Provision for depreciation in the value of inves 2 3 0 8 29 23 42 12Provision towards income tax 83 85 67 105 135 152 211 267Others 2 1 9 8 0 0 0Total 120 136 114 193 270 315 437 403Financial analysis


Overall 16 40 35 13 16 14 15 7Demand 23 -2 14 16 12 8 26 22Savings 20 20 22 22 15 16 26 32Term 13 61 42 11 17 15 11 -1Share of deposits (per cent)

Demand 22 15 13 13 13 12 13 15Savings 16 14 13 14 14 14 15 19Term 62 70 74 73 74 74 71 66Share of deposits (per cent)

Domestic 100 100 100 100 100 100 100 100Abroad 0 0 0 0 0 0 0 0


...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04Profitability (per cent)

Return on assets 1.7 1.7 1.5 1.5 1.4 0.8 1.0 1.8Return on equity 34.4 26.7 21.1 21.9 21.0 10.5 10.8 19.6Gearing (times) 19.4 12.2 14.4 13.6 13.6 10.5 10.1 9.5Staff costs to operating expenses 62.3 56.1 60.9 58.3 58.6 41.5 39.5 49.6Non-fund income to total income 11.8 12.3 12.8 14.4 13.9 16.4 20.2 19.0Operating expenses to total income 19.5 19.6 17.4 16.2 16.3 22.1 24.6 21.1Operating expenses to deposits 2.7 2.5 2.1 2.1 2.1 2.7 3.0 2.5Earning per share (Rs) 15.2 13.9 16.0 19.4 21.8 12.4 16.7 35.2Cost to income ratio 42.7 43.1 46.9 41.7 39.1 51.1 49.0 38.7Cost to income ratio (w/o profit on invest) 42.9 43.2 47.9 45.3 42.3 59.0 61.3 45.6Financial management (per cent)Interest cost n.a. 7.47 8.48 8.12 7.47 6.82 5.93 5.10

Average cost of deposits 7.9 7.8 8.8 8.3 7.7 7.2 6.2 5.3Average cost of borrowings 6.9 9.5 12.6 12.3 8.8 3.5 3.6 5.4Yield on carry business n.a. 11.99 11.49 10.99 10.65 9.63 8.97 8.48Average yield on investments 13.5 14.0 13.1 12.0 11.6 11.0 10.3 10.2Average yield on advances 14.8 11.7 11.5 11.5 11.4 10.1 8.9 7.6Spreads n.a. 4.52 3.01 2.87 3.18 2.81 3.04 3.38Operating expenses to AFD n.a. 2.51 2.18 2.01 1.97 2.51 2.73 2.18Core fee income to AFD n.a. 1.42 1.36 1.22 1.10 0.99 0.81 0.80Net Profitability Margin n.a. 3.43 2.20 2.09 2.31 1.29 1.12 1.99Deposits to borrowings (times) 23.6 46.9 81.9 54.5 34.6 17.6 18.3 25.9Capital adequacy 11.3 16.9 13.2 12.8 13.3 17.9 18.5 20.1Provisions as a percentage of profit before 49.2 44.9 37.3 45.3 50.8 64 65 44provisions


Credit-deposit ratio 45 46 50 54 52 58 55 60Incremental C/D ratio 61 48 61 89 39 98 37 127Borrowings to total deposits 4 1 2 2 4 8 4 4Cash-deposit ratio 1 1 1 1 1 1 1 1Investment-deposit ratio 49 44 44 42 41 43 49 46Incemental I/D ratio n.a. 32 42 27 39 51 93 1Reserves as a percentage of net worth 80 86 88 90 91 93 94 95Growth (per cent)

Advances 23 43 46 24 11 27 9 15Deposits 16 40 35 13 16 14 15 7Investments 54 26 33 8 15 17 32 0Salaries cost 21 13 28 7 13 7 20 11Commission and fee 20 30 31 4 0 -5 -5 12Interest income 24 24 32 18 12 8 8 5Others

Branches (nos) 507 581 617 648 652 659 684 717Advances per branch (Rs crore) 5.95 7.41 10.19 12.00 13.29 17 18 19Operating expenses per branch (Rs crore) 0.36 0.40 0.44 0.47 0.52 0.78 0.95 0.80Employees (nos) 9,379 9,615 10,182 10,587 10,837 10801 10729 10734

continued...

Income per employee (Rs crore) 0.10 0.12 0.15 0.18 0.19 0.22 0.25 0.25Income/employee expenses (times) 8.25 9.09 9.43 10.58 10.48 10.88 10.29 9.56


...continued



Priority 32 29 30 29 33 28 33 36Public 14 10 9 21 18 27 17 8Inter-bank 0 0 1 0 0 0 2 2Others 55 61 59 50 49 45 48 54Abroad 0 0 0 0 0 0 0 0Share of advances (per cent)


Secured 76 74 73 74 82 66 82 83Govt. guarantee 15 11 10 12 4 13 3 4Unsecured 9 15 17 14 14 21 14 13Share of investments (per cent)

Government securities 52 51 53 62 67 73 78 81Other approved securities 10 8 6 5 4 3 2 2Shares and debentures 1 2 1 1 1 1 1 1Debentures 21 26 29 25 22 21 17 14Subsidiary 0 0 0 1 1 1 1 1Others 16 13 10 5 4 1 2 1Outside India 0 0 0 0 0 0 0 0Gross NPAs (per cent) 9.9 7.6 n.a. n.a. n.a. n.a. n.a. n.a.Net NPAs (per cent) 3.6 2.9 2.0 1.9 2.0 2.31 1.65 1.8n.a.: Not available

Source: CRIS INFAC


State Bank of Travancore Table 10

Continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Liabilities

Capital 35 50 50 50 50 50 50 50

Reserves and surplus 174 302 331 384 465 560 673 875

Deposits 6,464 7,468 8,650 10,183 11,573 13,460 15,926 19,721

Borrowings 92 126 140 61 38 64 48 271

Other liabilities and provisions 1,026 1,187 1,743 1,757 2,357 2,360 2,336 3,086Total 7,790 9,133 10,914 12,435 14,483 16,493 19,033 24,003

Assets

Cash and balances with RBI 777 642 631 566 705 994 829 958

Balances with bank and money at call 350 819 1,132 1,339 1,201 998 413 449

Investments 2,626 3,301 4,384 4,872 5,453 6,372 8,039 10,778

Advances 3,659 4,001 4,252 5,131 6,397 7,436 9,171 11,132

Fixed assets 44 47 45 52 67 69 72 106

Other assets 333 324 470 475 660 625 509 580Total 7,790 9,133 10,914 12,435 14,483 16,493 19,033 24,003

Deposits

Demand 732 969 931 1,047 1,247 1,217 1,109 1,494

Savings 1,313 1,582 1,995 2,328 2,654 3,084 3,869 4,758

Term 4,419 4,917 5,725 6,808 7,671 9,158 10,948 13,470Total 6,464 7,468 8,650 10,183 11,573 13,460 15,926 19,721




RBI 0 0 0 16 8 40 0 0

Other banks 0 0 0 0 0 0 1 0


Forex borrowings 17 55 79 0 0 0 43 267Total 92 126 140 61 46 64 48 271



Bills payable 304 334 376 355 179 410 384 401

Interest accrued 426 545 693 669 841 953 958 1,058

Others (including provisions) 296 291 346 497 706 808 724 1,031Total 1,026 1,187 1,742 1,757 2,357 2,360 2,336 3,086

Balance with RBI 746 609 597 531 663 936 790 919

Cash in hand 32 33 34 35 41 57 39 39Advances

Bills purchases and discounted 242 358 428 406 691 506 856 1,279


Term loans 789 821 928 1,324 1,543 2,035 3,074 4,191Total 3,659 4,001 4,252 5,131 6,397 7,436 9,171 11,132

Secured 3,270 3,510 3,639 4,139 4,985 4969 7238 8793


Unsecured 92 201 273 441 867 1311 1183 1484Total 3,659 4,001 4,252 5,131 6,397 7,436 9,171 11,132


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 20002-03 2003-04

Priority sector 1,209 1,302 1,409 1,705 2,016 2260 3081 4143

Public sector 538 618 677 962 1,313 1732 1248 1570

Banks 0 2 0 7 2 1 28 131

Others 1,777 2,078 1,965 2,457 2,648 3442 4813 5288Total 3,525 4,001 4,051 5,131 5,978 7436 9171 11132

Advances outside India 134 0 0 0 0 0 0 0Total 3,659 4,001 4,051 5,131 5,978 7436 9171 11132

Investments





- Shares 183 231 370 30 36 34 36

- Debentures 143 158 200 336 348 288 358 419


- Others 59 114 70 79 45 48 40 24Total 2,626 3,459 4,584 5,207 5,453 6,372 8,039 10,778


Movement in NPA

Gross NPA




Closing balance n.a. n.a. n.a. 811 758 718 635 662Net NPA-Closing balance n.a. n.a. n.a. 452 496 425 280 154


Interest earned

Interest/Discount on advances/bills 600 553 475 515 621 683 790 868

Income on investments 269 372 470 560 611 680 725 828


Others 19 38 56 61 64 50 18 13Total 909 982 1,019 1,160 1,315 1,454 1,584 1,740

Other income








Lease income 0 0 0 0 0 0 0 0


Total income 1,033 1,130 1,172 1,354 1,509 1,684 1,885 2,210


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Interest expended

Interest on deposits 604 659 724 823 859 958 1002 996

Interest on RBI /Inter-bank 18 22 26 25 36 2 2 1

Others 39 33 31 30 25 70 57 60

Total 661 714 781 878 920 1,029 1,062 1,057

Operating expenses

Salaries 167 152 173 221 277 245 269 317

Others 47 58 67 73 69 55 59 68

Depreciation 7 8 0 0 14 17 20 34

Total 221 217 240 294 359 317 348 419


Total expenses including provisions 993 1,067 1,129 1,288 1,412 1,412 1,412 1,412


Profits inclusive of provisions 151 200 150 182 230 230 230 230




Liability for outstanding forex contracts 395 476 798 1,941 2937 4,252 7,279 10,061

Guarantees

- In India 471 395 387 382 380 352 462 677

- Outside India 9 18 20 3 3 9 1 3


Others 150 151 231 214 261 133 316 112

Total 1,413 1,310 1,747 2,878 3,969 5,107 8,493 11,398



Provision for depreciation in the value of inves 15 -69 -6 -4 9 4 9 5

Provision towards income tax 34 67 14 38 25 47 101 143

Others 0 33 -62 22 -8 7 14 46

Total 110 137 107 116 133 200 284 456

Financial analysis


Overall 19 16 16 18 14 16 18 24

Demand 38 32 -4 12 19 -2 -9 35

Savings 7 21 26 17 14 16 25 23

Term 21 11 16 19 13 19 20 23


Demand 11 13 11 10 11 9 7 8

Savings 20 21 23 23 23 23 24 24

Term 68 66 66 67 66 68 69 68


...continued

(Rs crore) 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Financial parameters


Return on assets 0.6 0.7 0.4 0.6 0.7 0.6 0.5 0.5

Return on equity 19.7 22.6 11.8 16.3 20.5 17.3 14.6 11.8

Gearing (times) 36.3 25.0 27.6 27.7 27.1 26.0 25.3 24.9









Interest cost n.a. 9.65 9.14 8.88 8.22 8.00 7.01 5.75





Average yield on advances 17.1 14.4 11.5 11.0 10.8 9.9 9.5 8.5

Spreads n.a. 2.76 1.84 1.88 2.25 1.89 2.29 2.61

Operating expenses to AFD n.a. 2.68 2.51 2.64 2.80 2.14 2.03 2.01

Core fee income to AFD n.a. 1.62 1.47 1.44 1.20 0.99 0.94 0.89

Net Profitability Margin n.a. 1.70 0.81 0.68 0.65 0.74 1.20 1.50

Deposits to Borrowings(times) n.a. 64.02 60.54 93.35 219.25 246.10 261.51 111.75

Capital adequacy 8.2 11.5 n.a. 11.1 11.8 12.5 11.3 11.4

Provisions as a percentage of profit before 73.3 68.3 71.3 63.5 57.7 67.3 74.5 82.4

provisions








Incemental I/D ratio 67 92 32 42 49 68 72

Reserves as a percentage of net worth 83 86 87 88 90 92 93 95

Growth (per cent)

Advances 9 9 6 21 25 16 23 21

Deposits 19 16 16 18 14 16 18 24

Investments -22 -10 10 15 6 0 8 18

Salaries cost 22 -9 14 28 25 -12 10 18

Commission and fee 9 6 19 16 -5 -4 12 7

Interest income 19 8 4 14 13 11 9 10

continued...

Others

Branches (nos) 654 660 664 667 671 674 671 668



Employees (nos) 12,990 13,049 13,234 12,953 12,172 12137 12005 12007




...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04


Interest 88 87 87 86 87 86 84 79

Forex 3 3 2 2 2 2 1 2



Priority 33 33 35 33 34 30 34 37

Public 15 15 17 19 22 23 14 14

Inter bank 0 0 0 0 0 0 0 1

Others 49 52 49 48 44 46 52 48

Abroad 4 0 0 0 0 0 0 0


Bills 7 9 10 8 11 7 9 11

Cash credit 72 71 68 66 65 66 57 51

Term loans 22 21 22 26 24 27 34 38


Secured 89 88 86 81 78 67 79 79

Govt. guarantee 8 7 8 11 9 16 8 8

Unsecured 3 5 6 9 14 18 13 13




Shares 0 5 5 7 1 1 0 0

Debentures 5 5 4 6 6 5 4 4

Subsidiary 0 0 0 0 0 0 0 0

Others 2 3 2 2 1 1 0 0

Net NPAs (per cent) 8.8 12.2 10.8 8.6 7.8 5.7 3.1 1.4

n.a.: Not available

Source: CRIS INFAC


ICICI Bank Table 11

Continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Liabilities

Capital 150 165 165 197 220 963 963 966

Reserves and surplus 32 102 143 953 1,092 5,632 6,321 7,394

Deposits 1,348 2,629 6,073 9,866 16,378 32,085 48,169 68,109

Borrowings 93 192 200 491 1,033 49,219 34,302 30,740

Other liabilities and provisions 159 191 401 566 1,013 16,208 17,057 18,019

Total 1,782 3,279 6,982 12,073 19,737 104,106 106,812 125,229

Assets

Cash and balances with RBI 150 310 466 722 1,232 1,774 4,886 5,408

Balances with bank and money at call 223 563 1,172 2,693 2,362 11,012 1,603 3,062

Investments 435 1,023 2,861 4,417 8,187 35,891 35,463 42,743

Advances 798 1,128 2,110 3,657 7,031 47,035 53,279 62,096

Fixed assets 96 184 200 222 381 4,239 4,061 4,057

Other assets 79 72 172 361 543 4,155 7,521 7,863

Total 1,782 3,279 6,982 12,073 19,737 104,106 106,812 125,229

Deposits

Demand 316 363 577 1,587 2,622 2,736 3,689 7,260

Savings 50 104 227 533 1,881 2,497 3,793 8,372

Term 982 2,162 5,269 7,745 11,876 26,852 40,687 52,477

Total 1,348 2,629 6,073 9,866 16,378 32,085 48,169 68,109




RBI 0 0 148 219 301 141 0 0

Other banks 80 29 42 192 398 2,688 2,447 1,657

Other institutions and agencies 13 163 10 81 325 39,114 25,964 21,309

Forex borrowings 0 0 0 0 9 7,276 5,892 7,774

Total 93 192 200 491 1,033 49,219 34,302 30,740



Bills payable 69 108 112 142 381 817 1,031 1,685

Interest accrued 6 18 23 34 56 2,290 1,619 1,356

Unsecured redeemable bonds 9,751 9,750 9,106

Others(including provisions) 85 66 97 390 577 3,349 4,658 5,872

Total 159 191 232 566 1,013 16,208 17,057 18,020

Balance with RBI 148 303 457 690 1,131 1529 4550 4961

Cash in hand 3 7 9 31 101 246 336 447

Advances

Bills purchased and discounted 76 141 455 701 1,087 1,654 438 1,231

Cash credit and overdraft 632 842 1,384 2,578 4,971 2,403 3,134 6,098

Term loans 89 145 272 378 974 42978 49,708 54,767

Total 798 1,128 2,110 3,657 7,031 47,035 53,279 62,096


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Secured 771 1,057 1,825 2,806 4,947 44,604 50,068 56,801

Government guarantee 0 6 58 98 449 1,029 1,700 615

Unsecured 27 64 227 753 1,635 1,401 1,511 4,679Total 798 1,128 2,110 3,657 7,031 47,035 53,279 62,096

Priority sector 219 329 478 497 1,185 1,986 8,938 14,531

Public sector 0 0 4 104 844 4,356 1,897 707

Banks 15 0 0 15 91 179 101 43

Others 564 799 1,628 3,040 4,912 40,451 42,289 45,751Total 798 1,128 2,110 3,657 7,031 46,973 53,226 61,032

Advances outside India 0 0 0 0 0 62 54 1,064Total 798 1,128 2,110 3,657 7,031 47,035 53,279 62,096

Investments



- Government securities 313 705 1,527 2,815 4,070 22,722 25,549 29,888


- Shares 10 47 138 161 125 1,909 1,642 1,684

- Debentures 69 217 667 1,137 3,070 6,436 5,690 5,549

- Subsidiaries/JV 0 0 0 0 0 607 781 1,104

- Others 42 55 529 304 872 4,134 1,758 4,127Total 435 1,023 2,861 4,417 8,179 35,879 35,454 42,382

Total investments 435 1,023 2,861 4,417 8,187 35,891 35,462 42,743

Movement in NPA

Gross NPA



Additions -from Bank of Mathura n.a. n.a. n.a. 0 238 0 0 0


Closing balances n.a. n.a. n.a. 95 409 5013 5027 3048Net NPA-Closing balance n.a. n.a. 60 56 154 2720 3151 2037


Interest earned

Interest/Discount on advances/bills 134 143 226 348 571 772 6,016 6,074

Income on investments 55 81 208 410 556 1,234 2,910 2,432Interest on balances with RBI 3 32 109 95 109 123 236 211Others 3 4 0 1 7 24 206 178Total 195 260 544 853 1,242 2,152 9,368 8,894

Other income

Commission exchange and brokerage 15 25 37 67 140 230 792 1,072

Profit on sale of investments 11 35 12 101 19 306 492 1,221

Profit on sale of fixed assets 0 0 0 0 0 0 -7 0

Profit on revaluation of investments 2 1 0 0 14 -15 0 0



Lease income 0 0 0 0 0 0 0 0


Total income 238 345 633 1,047 1,462 2,726 11,336 11,959


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Interest expended

Interest on deposits 97 162 372 581 725 1,389 2,480 3,023


Others 27 15 33 63 80 122 5,281 3,763

Total 129 187 426 667 838 1,559 7,944 7,015

Operating expenses

Salaries 6 12 18 36 52 147 403 546

Others 26 31 47 92 246 423 1,417 1,764

Depreciation 8 14 18 25 36 53 191 261

Total 40 58 83 153 334 623 2,012 2,571

Provisions and contingencies 28 50 61 121 129 287 1,365 735

Total expenses including provisions 198 295 569 941 1,301 2,468 11,321 10,322


Profits inclusive of provisions 68 101 125 227 290 545 1,380 2,373


Claims against banks 0 1 0 25 55 1,023 2,025 2,502



Guarantees

in India 186 265 463 756 1,346 9,352 10,635 12,029

outside India 0 0 0 0 0 0 0 0

Liability on account of outstanding derivative 0 0 0 0 0 0 0 0

Acceptances, endorsements 251 287 559 849 1,287 1,739 4,325 6,514

Currency swaps 0 0 0 766 871 2,041 2,901 4,448

Others 11 2 22 29 271 11,817 44,268 121,620

Total 1,496 2,907 5,014 9,780 12,711 41,488 89,438 202,942



Provision for depreciation 5 14 -5 13 -6 -16 309 -10

Provision towards income tax 17 23 34 33 65 121 -426 265

Other provisions 4 0 0 0 7 -93 160 96

Total 28 50 61 121 129 287 1,365 735

Financial analysis


Overall 85 95 131 62 66 96 50 41

Demand 69 15 59 175 65 65 35 97

Savings 168 109 119 135 253 33 52 121

Term 87 120 144 47 53 126 52 29


Demand 23 14 9 16 16 9 8 11

Savings 4 4 4 5 11 8 8 12

Term 73 82 87 79 73 84 84 77


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04



Return on assets 2.7 2.0 1.2 1.1 1.0 0.4 0.0 1.4

Return on net worth 23.7 22.4 22.2 14.4 13.1 6.5 0.2 20.9

Gearing (times) 8.8 11.3 21.6 9.5 14.0 14.8 13.7 14.0








Interest cost n.a. 8.4 9.1 7.9 5.9 3.1 9.6 7.6






Spreads n.a. 3.2 3.1 2.2 2.7 0.9 0.8 1.4



Net Profitability Margin n.a. 2.7 3.0 1.5 1.7 0.3 -0.2 0.43


Capital adequacy 13.0 13.5 11.1 19.6 11.6 11.4 11.1 10.4


provisions







Incemental I/D ratio 46 53 41 58 176 -3 37


Advances 23 41 87 73 92 569 13 17

Deposits 85 95 131 62 66 96 50 41

Investments 66 135 180 54 85 338 -1 21

Salaries cost 38 99 48 100 42 185 174 35


Interest income 68 33 110 57 46 73 335 -5Others

Branches (nos) 22 33 55 81 389 358 446 413



Employees (nos) 445 603 889 1,344 4,491 7,726 10,617 13,609




...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04


Interest 82 75 86 81 85 79 83 74

Forex 4 5 5 2 3 1 1 2



Priority 27 29 23 14 17 4 17 23

Public 0 0 0 3 12 9 4 1

Inter bank 2 0 0 0 1 0 0 0

Others 71 71 77 83 70 86 79 74

Abroad 0 0 0 0 0 0 0 2


Bills 10 12 22 19 15 4 1 2

Cash credit 79 75 66 70 71 5 6 10

Term loans 11 13 13 10 14 91 93 88


Secured 97 94 87 77 70 95 94 91

Government guaranteed 0 1 3 3 6 2 3 1

Unsecured 3 6 11 21 23 3 3 8




Shares 2 5 5 4 2 5 5 4

Debentures 16 21 23 26 38 18 16 13

Subsidiary 0 0 0 0 0 2 2 3

Others 10 5 18 7 11 12 5 10


Net NPAs (per cent) 1.7 1.1 1.8 1.1 1.4 5.5 5.2 2.2

n.a.: Not available

Source: CRIS INFAC


HDFC Bank Table 12

Continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Liabilities

Capital 200 200 200 257 254 281 282 285

Reserves and surplus 44 85 139 508 669 1,670 1,970 2,409

Deposits 1,279 2,192 2,915 8,428 11,658 17,654 22,376 30,409

Borrowings 199 55 448 1,579 1,433 1,823 2,085 2,308

Other liabilities and provisions 93 298 648 885 1,603 2,359 3,712 6,897

Total 1,815 2,830 4,350 11,656 15,617 23,787 30,424 42,307

Assets

Cash and balances with RBI 178 212 292 850 986 1,211 2,082 2,542

Balances with bank and money at call 85 329 248 768 1,625 2,247 1,087 1,116

Investments 730 1,121 1,904 5,748 7,145 12,004 13,388 19,257

Advances 575 842 1,401 3,362 4,637 6,814 11,755 17,745

Fixed assets 99 110 132 237 290 371 529 617

Other assets 148 215 375 691 934 1,140 1,583 1,031

Total 1,815 2,830 4,350 11,656 15,617 23,787 30,424 42,307

Deposits

Demand 409 673 982 2,780 2,856 4,220 4,951 8,835

Savings 69 177 347 1,125 1,903 2,957 4,663 7,804

Term 802 1,341 1,587 4,523 6,899 10,476 12,762 13,769

Total 1,279 2,192 2,915 8,428 11,658 17,654 22,376 30,409




RBI 0 0 124 205 163 97 13 0

Other banks 115 0 98 765 407 920 1,407 1,556



Total 199 55 448 1,429 1,233 1,823 2,085 2,308



Bills payable 30 58 244 372 511 867 851 3,667


Others(including provisions) 52 103 220 482 796 1,075 2,172 2,813

Total 93 198 513 959 1,603 2,359 3,712 6,897

Balance with RBI 174 201 276 809 929 1098.32 1,915 2,288

Cash in hand 5 11 16 41 57 113 167 254

Advances

Bills purchased and discounted 44 275 295 571 716 1,325 2,623 3,194

Cash credit and overdraft 226 235 503 1,468 1,377 1,738 2,608 3,741

Term loans 305 332 603 1,323 2,544 3,751 6,524 10,810

Total 575 842 1,401 3,362 4,637 6,814 11,755 17,745


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Secured 359 535 753 2,958 3,944 6186 9991 15277


Unsecured 129 229 525 205 683 577 1670 2351Total 575 842 1,401 3,362 4,637 6,814 11,755 17,745

Priority sector 130 126 199 586 668 732 1,422 2,498

Public sector 73 7 26 12 505 911 852 335

Banks 0 121 108 169 447 188 22 11

Others 372 588 1,067 2,595 3,017 4,982 9,459 14,900Total 575 842 1,401 3,362 4,637 6,814 11,755 17,745

Advances outside India 0 0 0 0 0 0 0 0Total 575 842 1,401 3,362 4,637 6,814 11,755 17,745

Investments



- Government securities 365 573 868 3,217 3,413 5,295 6,356 11,531


- Shares 0 22 147 257 197 145 108 107

- Debentures 310 482 859 1,866 2,578 4,268 4,167 4,045


- Others 46 45 31 396 944 2,283 2,743 3,566Total 730 1,121 1,904 5,748 7,145 12,004 13,388 19,257

Total investments 730 1,121 1,904 5,748 7,145 12,004 13,388 19,257

Movement in NPA

Gross NPA



Additions due to amalgmation n.a. n.a. n.a. 62 0 0 0 0


Closing balance n.a. n.a. n.a. 122 147 223 265 336

Net NPA-Closing balance n.a. n.a. n.a. 37 21 34 43 28


Interest earned

Interest/Discount on advances/bills 92 118 143 267 493 624 777 1,109

Income on investments 62 104 182 367 636 864 1,113 1,322


Others 8 1 0 0 0 1 3 7Total 162 241 376 680 1,259 1,703 2,014 2,549

Other income



Loss on sale of investments 0 0 0 0 -1 0 0 0

Profit on sale of fixed assets 0 0 0 0 0 -1 1 0

Loss on revaluation of investments 0 0 0 0 0 0 -2 -11



Lease income 0 0 0 0 0 0 0 0

Miscellaneous income 0 0 0 0 1 27 53 59

Total 32 62 68 125 186 333 466 480

Total income 193 303 444 805 1,445 2,036 2,479 3,029


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Interest expended

Interest on deposits 71 104 176 287 639 916 1,063 1,038

Interest on RBI /inter-bank 16 32 40 65 95 133 103 144

Others 0 2 13 23 20 25 25 29

Total 87 138 229 374 754 1,074 1,192 1,211

Operating expenses

Salaries 10 15 22 49 78 109 152 204

Others 26 37 52 96 178 240 334 480

Depreciation 6 11 15 26 54 69 106 126

Total 42 63 89 171 310 418 592 810


Total expenses including provisions 153 240 362 685 1,235 1,739 2,106 2,519


Profits inclusive of provisions 64 103 126 260 382 545 695 1,008





Guarantees

- In India 507 1,024 1,056 1,593 1,741 1,695 1,425 1,642

outside Inida 0 0 0 0 0 0 0 0

Liability on account of outstanding derivative 182 423 445 980 2,952 5,303 18,605 38,940

Acceptances, endorsements 686 837 1,066 956 1,172 944 1,172 1,892

Currency Swaps

Others 190 156 380 245 468 399 535 100

Total 5,302 5,928 8,422 11,633 15,011 20,328 41,560 82,117



Provision for depreciation in the value of inves 2 1 1 6 13 19 50 93

Provision towards income tax 18 31 35 75 105 128 184 210

Others 0 0 0 5 0 14 0 17

Total 23 39 44 139 172 247 323 498

Financial analysis


Overall 87 71 33 189 38 51 27 36

Demand 80 65 46 183 3 48 17 78

Savings 297 158 95 225 69 55 58 67

Term 82 67 18 185 53 52 22 8


Demand 32 31 34 33 24 24 22 29

Savings 5 8 12 13 16 17 21 26

Term 63 61 54 54 59 59 57 45


...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04



Return on assets 2.9 2.7 2.3 1.5 1.5 1.5 1.4 1.4

Return on equity 17.4 23.9 26.4 21.7 24.9 20.7 17.7 20.6

Gearing (times) 6.4 8.9 11.8 14.2 15.9 11.2 12.5 14.7








Interest cost n.a. 7.22 7.75 5.41 6.38 6.36 5.22 3.93






Spreads n.a. 4.95 4.57 4.48 4.42 3.93 3.67 4.24







provisions







Incemental I/D ratio n.a. 43 108 70 43 81 29 73


Advances 56 46 66 140 38 47 73 51

Deposits 87 71 33 189 38 51 27 36

Investments 132 54 70 202 24 68 12 44

Salaries cost 118 46 49 120 61 40 39 34



Branches (nos) 15 33 57 111 131 171 231 312



continued...

Employees (nos) 514 660 984 1,992 2,751 3742 4,791 5,673




...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04


Interest 84 80 85 84 87 84 81 84

Forex 3 4 3 3 3 2 2 2



Priority 23 15 14 17 14 11 12 14

Public 13 1 2 0 11 13 7 2

Inter bank 0 14 8 5 10 3 0 0

Others 65 70 76 77 65 73 80 84

Abroad 0 0 0 0 0 0 0 0


Bills 8 33 21 17 15 19 22 18

Cash credit 39 28 36 44 30 26 22 21

Term loans 53 39 43 39 55 55 56 61


Secured 62 64 54 88 85 91 85 86

Govt. guarantee 15 9 9 6 0 1 1 1

Unsecured 22 27 38 6 15 8 14 13




Shares 0 2 8 4 3 1 1 1

Debentures 42 43 45 32 36 36 31 21

Subsidiary 0 0 0 0 0 0 0 0

Others 6 4 2 7 13 19 20 19

Net NPAs (per cent) 0.0 1.4 1.3 0.8 0.3 0.5 0.4 0.2

n.a.: Not available

Source: CRIS INFAC


IndusInd Bank Table 13

Continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Liabilities

Capital 120 158 159 159 159 159 219 290


Deposits 3,093 4,273 5,018 6,546 7,187 8400 8598 11200

Borrowings 68 63 405 551 412 859 237 2310

Other liabilities and provisions 121 177 215 366 509 383 464 775

Total 3,561 5,026 6,168 7,997 8,653 10205 9901 15086

Assets



Investments 1,055 1,696 2,095 2,732 2,494 2485 2535 3972

Advances 1,928 2,451 2,662 3,677 4,237 5574 5348 7812

Fixed assets 100 127 124 112 96 87 110 298

Other assets 103 165 344 383 477 566 757 751

Total 3,561 5,026 6,168 7,997 8,653 10205 9901 15086

Deposits

Demand 212 342 560 871 651 916 822 857

Savings 27 44 94 135 143 172 225 395

Term 2,855 3,887 4,364 5,541 6,393 7312 7551 9949

Total 3,093 4,273 5,018 6,546 7,187 8400 8598 11200

Deposits of branches in India 3,093 4,273 5,018 6,546 7,187 8400 8598 11200


Total 3,093 4,273 5,018 6,546 7,187 8400 8598 11200

Borrowings

RBI 0 0 263 271 160 209 0 0

Other banks 53 20 31 34 0 260 33 1458



Total 68 63 405 551 412 859 237 2310



Bills payable 37 48 48 81 81 68 157 72


Unsecured non-convertible redeemable debentures

0 0 0 50 102 0 0 0

Others (including provisions) 37 63 99 153 250 245 258 638

Total 120 177 215 366 509 383 464 775

Balance with RBI 242 326 368 360 376 491 554 1311

Cash in hand 2 4 7 10 10 19 21 24

Advances

Bills purchased and discounted 102 311 457 562 897 1360 994 622

Cash credit and overdraft 1,661 1,810 1,732 2,351 2,465 3314 3063 3175

Term loans 164 330 473 764 874 900 1291 4015

Total 1,928 2,451 2,662 3,677 4,237 5574 5348 7812


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Secured 1,682 2,137 2,251 3,196 3,321 4438 3711 6552


Unsecured 221 172 192 302 744 632 589 889Total 1,928 2,451 2,662 3,677 4,237 5574 5348 7812

Priority sector 488 584 654 742 705 948 1000 2515

Public sector 20 25 27 164 640 930 764 869

Banks 25 0 68 167 463 463 932 437

Others 1,395 1,842 1,914 2,605 2,429 3233 2652 3991Total 1,928 2,451 2,662 3,677 4,237 5574 5348 7812

Advances outside India 0 0 0 0 0 0 0 0Total 1,928 2,451 2,662 3,677 4,237 5574 5348 7812

Investments



- Government securities 725 1,264 1,497 2,088 1,827 1954 2020 3770


- Shares 9 17 22 8 3 9 11

- Debentures 272 382 533 569 605 482 415 164


- Others 41 14 21 26 29 19 65 0Total 1,055 1,696 2,095 2,732 2,494 2485 2535 3972

Total investments 1,055 1,696 2,095 2,732 2,494 2485 2535 3972

Movement in NPA

Gross NPA




Closing balances n.a. n.a. n.a. 265 262 417 266 259Net NPA-Closing balance n.a. n.a. n.a. 220 223 367 227 212


Interest earned

Interest/Discount on advances/ 302 343 352 325 372 428 467 697



Others 0 2 0 0 0 0 0 0Total 409 551 594 637 729 710 743 986

Other income



Profit on sale of fixed assets 0 0 0 0 0 0 0 -6

Loss on revaluation of investments 0 0 0 8 0 0 0




Total income 491 706 676 782 845 894 1001 1331


...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Interests expended



Others 69 43 34 25 36 48 37 76Total 310 429 479 501 569 547 558 669

Operating expenses

Salaries 4 7 11 12 13 20 28 50

Others 39 52 55 57 62 54 64 130

Depreciation 13 17 21 22 28 21 25 37Total 56 76 87 90 103 95 118 217

Provisions and contingencies 52 110 74 135 132 202 234 183Total expenses including provisions 418 615 640 726 805 844 911 1069


Profits inclusive of provisions 125 201 110 190 173 252 324 445Provisions and contingencies

Provisions for non-performing assets 7 9 25 92 111 162 230 161

Provision towards Income/Interest tax 30 35 10 6 15 27 5 9

Net Provision for depreciation on investments 14 23 -2 21 -2 8 0 -3

Others 0 42 41 16 8 4 0 16Total 52 110 74 135 132 202 234 183

Financial analysis


Demand 7 8 11 13 9 11 10 8

Savings 1 1 2 2 2 2 3 4

Term 92 91 87 85 89 87 88 89Financial parameters


Return on assets 2.7 2.1 0.7 0.8 0.5 0.5 0.9 2.1

Return on equity 28.7 23.0 7.1 10.5 7.5 9.2 15.5 37.4

Gearing (times) 11.7 8.8 10.6 14.0 14.9 17.2 15.4 17.8








Interest cost n.a. 11.3 9.7 7.9 7.7 6.4 6.1 5.9






Spreads n.a. 2.4 1.7 1.8 1.7 1.6 1.9 2.7



continued...





provisions



...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04




Cash-deposit ratio 0.07 0.09 0.15 0.15 0.14 0.23 0.24 0.21



Advances n.a. 27 9 38 15 32 -4 46

Deposits n.a. 38 17 30 10 17 2 30

Investments n.a. 61 24 30 -9 0 2 57

Commission and fee n.a. 13 -1 -7 1 -20 -11 -10

Interest income n.a. 35 8 7 14 -3 5 33Others

Branches (nos) 18 21 26 27 32 40 53 61



Employees (nos) 251 351 508 513 581 738 941 n.a.

Income per employee (Rs crore) 1.96 2.01 1.33 1.52 1.45 1.21 1.06 n.a.

Income/employee expenses (times) 116.11 94.48 60.02 65.31 63.12 44.08 35.40 26.43Total income (per cent)

Interest 83 78 88 82 86 79 74 74

Forex 2 1 2 1 2 2 1 1

Securities transaction 2 12 0 8 3 14 19 17

Commission and brokerage 6 5 5 4 4 3 2 2Share of advances (per cent)

Priority 25 24 25 20 17 17 19 32

Public 1 1 1 4 15 17 14 11

Inter bank 1 0 3 5 11 8 17 6

Others 72 75 72 71 57 58 50 51

Abroad 0 0 0 0 0 0 0 0Share of advances (per cent)

Bills 5 13 17 15 21 24 19 8

Cash credit 86 74 65 64 58 59 57 41

Term loans 9 13 18 21 21 16 24 51Share of investments (per cent)



Shares 0 1 1 1 0 0 0 0

Debentures 26 23 25 21 24 19 16 4

Subsidiary 0 0 0 0 0 0 0 0

Others 4 1 1 1 1 1 3 0


Net NPAs (per cent) 2.1 4.0 7.2 6.0 5.3 6.6 4.3 2.7

n.a.: Not availableSource: CRIS INFAC


Global Trust Bank Table 14

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Liabilities

Capital 104 104 104 121 121 121 121 121


Deposits 2,279 3,285 4,097 6,199 7,734 6,443 6,921 6,399

Borrowings 91 36 483 399 600 64 26 9


Total 2,652 3,781 5,200 7,531 9,472 7,308 7,666 7,203

Assets



Investments 662 1,215 1,962 2,926 3,865 2,900 2,499 2,118

Advances 1,462 1,756 2,118 3,211 4,100 3,033 3,276 2,246

Fixed assets 124 276 327 338 379 320 301 271

Other assets 124 141 213 318 393 443 786 1,491

Total 2,652 3,781 5,200 7,531 9,472 7,308 7,666 7,203

Deposits

Demand 174 214 380 845 624 653 753 969

Savings 23 47 124 294 407 480 549 717

Term 2,082 3,024 3,594 5,059 6,703 5310 5,619 4,713

Total 2,279 3,285 4,097 6,199 7,734 6,443 6,921 6,399

Borrowings

RBI 50 0 100 60 0 0 0 0

Other banks 0 0 185 75 192 0 0 0



Total 91 36 483 399 600 64 26 9



Bills payable 19 40 55 93 123 60 67 96Interest accrued 39 49 41 44 68 39 33 39Others (including provisions) 40 129 234 269 358 307 351 393Total 98 218 330 406 550 406 451 528

Balance with RBI 249 301 466 505 644 436 638 559

Cash in hand 4 5 7 9 22 48 89 85

Advances


Cash credit and overdraft 819 911 1,051 1,817 2,151 1381 1,094 705

Term loans 180 424 557 799 1,313 1171 1,754 1,250

Total 1,462 1,756 2,118 3,211 4,100 3033 3,276 2,246

Secured 1,200 1,459 1,881 3,090 3,454 2629 2,742 2,023


Unsecured 78 71 71 17 627 396 440 205

Total 1,462 1,756 2,118 3,211 4,100 3,033 3,276 2,246

Continued...


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Priority sector 453 555 513 703 795 664 865 626

Public sector 18 29 0 10 36 7 15 0

Banks 0 0 4 0 49 0 0 6

Others 991 1,172 1,601 2,498 3,220 2361 2,397 1,614Total 1,462 1,756 2,118 3,211 4,100 3033 3,276 2,246

Advances outside India 0 0 0 0 0 0 0 0


Government securities 622 804 1,074 1,742 2,293 1896 1,886 1,544


Shares and debentures 31 388 870 1,155 1,544 996 607 569

Units of UTI (MF) 2 17 0 0 0 0 0 0

Subsidiaries/JV 0 0 0 0 0 0 0 0

Others 0 0 12 34 59 2 0 0Total 662 1,215 1,962 2,937 3,902 2,900 2,499 2,118

Movement in NPA

Gross NPA

Opening balance n.a. n.a. n.a. n.a. 49 238 430 916

Additions n.a. n.a. n.a. n.a. 208 536 762 620

Reductions n.a. n.a. n.a. n.a. 19 344 277 219

Closing balance n.a. n.a. n.a. n.a. 238 430 916 1,317Net NPA-Closing balance n.a. n.a. n.a. 28 154 280 n.a. n.a.


Interest earned

Interest/Discount on advances/ 285 269 292 380 490 396 321 243

bills 0 0



Others 1 1 3 6 9 0 1 6Total 357 394 491 646 897 721 540 354

Other income

Commission exchange and 45 40 31 36 42 45 43 43

brokerage



Profit on sale of fixed asets 0 0 0 0 0 20 0 13

Loss on revaluation of investments 0 0 0 0 0 0 -1 1



Lease income 0 0 0 49 0 0 0 0


Total income 447 521 638 879 1,062 950 731 515


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Interest expended


Interest on RBI /Inter bank 36 14 15 26 17 15 1 1

Others 3 6 15 38 46 42 36 53

Total 290 323 438 507 697 636 517 435

Operating expenses

Salaries 6 9 13 18 30 36 42 37

Others 28 35 44 64 88 83 90 87

Depreciation 20 27 38 42 46 51 45 35

Total 53 71 95 124 164 170 177 159


Total expenses including provisions 390 441 567 770 982 913 1,004 1,328

Profit for the year 57 80 71 109 80 36 -273 -812

Profits inclusive of provisions 104 127 105 248 200 144 36 -79


Provison for NPAs n.a. 20 8 93 81 159 118 440

Depreciation in values of investments n.a. 6 5 0 27 25 81 164

Provision for taxation n.a. 22 15 40 11 -75 0 25

Other Provisions n.a. 0 5 6 2 -1 111 104

Total n.a. 47 34 139 120 108 309 734

Financial analysis


Overall 72 44 25 51 25 -17 7 -8

Demand 17 23 78 123 -26 5 15 29

Savings 95 108 161 138 38 18 14 31

Term 79 45 19 41 32 -21 6 -16


Demand 8 7 9 14 8 10 11 15

Savings 1 1 3 5 5 7 8 11

Term 91 92 88 82 87 82 81 74

Financial parameters (per cent)


Return of assets 2.4 2.5 1.6 1.7 0.9 0.4 -3.6 -10.9

Return on equity 35.3 37.7 26.6 26.5 14.3 7.4 -82.4 -303.8

Gearing (times) 13.4 14.6 16.9 13.3 15.1 17.5 27.7 25.9





Earning per share (Rs) 5.5 7.7 6.8 9.0 6.6 3.0 -22.5 -66.9




...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04


Interest cost 11.2 11.0 9.0 9.2 8.5 7.6 6.4



Yield on carry business 13.7 12.3 11.3 11.6 9.5 8.2 5.9



Spreads 2.4 1.3 2.3 2.4 1.0 0.6 -0.5

Operating expenses to AFD 2.5 2.4 2.1 2.1 2.2 2.7 2.6

Core fee income to AFD 2.6 1.9 2.4 1.3 1.0 1.1 1.3

Net Profitability Margin 2.5 0.8 2.6 1.6 -0.2 -1.0 -1.9


Capital adequacy 10.2 10.3 12.0 13.7 12.7 11.21 0 0

Provisions as a percentage of profit before 44.7 36.9 32.2 56.2 60.1 74.8 848.4 -931.0

provisions





Cash-deposit ratio 0.19 0.16 0.18 0.15 0.28 0.75 1.28 1.34


Incremental I/D ratio 33 55 92 46 61 75 -84 73


Advances 6 20 21 52 28 -26 8 -31

Deposits 72 44 25 51 25 -17 7 -8

Investments 90 84 61 49 32 -25 -14 -15

Commission and fee 12 -12 -21 16 16 8 -6 0

Interest income 109 10 25 32 39 -20 -25 -34Others

Branches (nos) 22 40 63 74 79 84 87

Advances per branch (Rs crore) 66.48 43.90 33.63 43.39 51.89 36.10 37.66 #DIV/0!

Operating expenses per branch (Rs crore) 2.43 1.78 1.50 1.67 2.08 2.02 2.04 #DIV/0!

Employees (nos) 429 532 748 939 1,173 1,147 1,314

Income per employee (Rs crore) 1.04 0.98 0.85 0.94 0.90 0.83 0.56 #DIV/0!


Interest 80 76 77 74 85 76 74 69

Forex 4 4 3 2 2 1 2 4

Commission, brokerage 10 8 5 4 4 5 6 8Share of advances (per cent)

Priority 31 32 24 22 19 22 26 28

Public 1 2 0 0 1 0 0 0

Inter bank 0 0 0 0 1 0 0 0

Others 68 67 76 78 79 78 73 72

continued...


...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04


Bills 32 24 24 19 16 16 13 13

Cash credit 56 52 50 57 52 46 33 31

Term loans 12 24 26 25 32 39 54 56


Secured 82 83 89 96 84 87 84 90


Unsecured 5 4 3 1 15 13 13 9





Subsidiary

Others 0 0 1 1 2 0 0 0

Gross NPAs (per cent) 3.7 2.1 n.a n.a n.a n.a n.a n.a

Net NPAs (per cent) 2.4 1.4 2.2 0.9 3.8 9.2 19.8 28.0

n.a.: Not available

Source: CRIS INFAC


The Federal Bank Ltd Table 15

Continued...


Capital 22 22 21 22 22 22 22 22Reserves and surplus 309 352 301 340 394 427 508 627Deposits 4603 6,424 6,782 6,463 7,665 8,865 10947 13477Borrowings 287 232 488 380 344 374 85 127Other liabilities and provisions 241 281 481 398 396 456 640 862Total 5,462 7,311 8,074 7,603 8,820 10,145 12,202 15,114Assets

Cash and balances with RBI 345 423 446 390 262 460 609 726Balances with bank and money at call 285 228 274 119 215 219 299 566Investments 1456 2,366 2,602 2,666 3,035 3,756 4552 5507Advances 2999 3,921 4,228 4,036 4,854 5,189 6218 7701Fixed assets 134 156 155 145 133 133 162 176Other assets 241 216 370 247 320 388 362 439Total 5,462 7,311 8,074 7,603 8,820 10,145 12,202 15,114Deposits

Demand 265 328 432 437 654 674 588 700Savings 584 663 847 1,000 1,146 1,342 1727 2412Term 3754 5,434 5,503 5,026 5,866 6,850 8632 10365Total 4,603 6,424 6,782 6,463 7,665 8,865 10,947 13,477

Deposits of branches in India 4603 6,424 6,782 6,463 7,665 8,865 10,947 13,477Deposits of branches abroad 0 0 0 0 0 0 0 0Total 4,603 6,424 6,782 6,463 7,665 8,865 10,947 13,477Borrowings

RBI 67 8 33 111 81 38 0 0Other banks 75 55 161 0 0 120 0 0Other institutions and agencies 145 168 294 269 263 209 85 18Forex borrowings 0 0 0 0 0 7 0 109Total 287 232 488 380 344 374 85 127Other liabilities and provisions

Inter-office adjustments 0 0 0 84 53 80 121 83Bills payable 114 112 150 41 47 66 37 147Interest accrued 27 45 34 22 19 17 19 24Others (including provisions) 101 123 297 251 276 293 463 608Total 241 281 481 398 396 456 640 862

Balance with RBI 294 365 389 330 198 384 522 604Cash in hand 52 59 57 61 65 76 87 121Advances

Bills purchases and discounted 954 1,404 1,297 673 857 860 963 1133Cash credit and overdraft 1,456 1,741 1,932 2,144 2,462 2,624 2,842 3521Term loans 590 776 999 1,218 1,535 1,705 2,412 3047Total 2,999 3,921 4,228 4,036 4,854 5,189 6,218 7,701


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Secured 2,317 2,474 2,857 3,286 3,791 4,168 4,988 6007Government guarantee 295 1,114 915 622 694 709 732 837Unsecured 387 333 456 128 369 312 498 857Total 2,999 3,921 4,228 4,036 4,854 5,189 6,218 7,701

Priority sector 697 943 1,228 1430 1,565 1,657 1,952 2412Public sector 57 95 175 160 146 303 226 220Banks 287 100 0 0 1 5 0 0Others 1,959 2,783 2,825 2,446 3,142 3,224 4,040 5068Total 2,999 3,921 4,228 4,036 4,854 5,189 6,218 7,701



- Government securities 986 1,535 1,732 1,776 1,883 2,625 3,456 4455 - Other approved securities 75 78 75 66 61 55 51 31 - Shares 125 140 126 112 82 83 88 - Debentures 362 602 626 662 977 991 926 851 - Subsidiaries/JV 15 15 15 15 1 1 1 1 - Others 18 12 15 21 2 2 35 82Total 1,456 2,366 2,602 2,666 3,035 3,756 4,552 5,507Total investments 1,456 2,366 2,602 2,666 3,035 3,756 4,552 5,507Movement in NPA

Gross NPA

Opening balance n.a. n.a. n.a. 479 490 642 638 528Additions n.a. n.a. n.a. 153 314 191 117 218Reductions n.a. n.a. n.a. 142 163 195 227 145Closing balance n.a. n.a. n.a. 490 642 638 528 601Net NPA-Closing balance n.a. n.a. n.a. 345 489 446 308 223Profit and loss statement

Interest earned

Interest/Discount on advances/bills 385 428 505 529 561 636 660 714Income on investments 151 239 324 318 336 385 423 437Interest on balances with RBI 46 31 27 21 13 20 28 30Others 7 4 3 13 9 1 1 11Total 588 702 859 882 919 1,042 1,111 1,192Other income

Commission exchange and brokerage 22 27 38 48 45 45 50 59Profit on sale of investments 6 33 28 34 20 131 144 174Loss on sale of investments 0 0 0 0 0 0 0 0Profit on sale of fixed assets 0 -1 0 0 0 0 0 0Loss on revaluation of investments 0 0 0 0 2 -4 -8 -1Profit on forex transactions 13 11 15 15 13 13 17 19Income from investments 3 5 10 7 16 7 6 4Lease income 0 0 0 0 0 0 0 0Miscellaneous income 28 17 22 28 29 29 26 42Total 72 93 113 132 125 220 234 298Total income 659 794 972 1,014 1,044 1,263 1,346 1,490


...continued

continued...


Interest on deposits 456 536 742 629 613 705 729 723Interest on RBI/inter bank 4 11 6 14 20 11 4 2Others 13 17 24 59 48 51 39 46Total 472 564 772 701 682 766 772 770Operating expenses


Provisions and contingencies 28 42 47 89 126 223 246 300Total expenses including provisions 613 744 970 968 983 1,181 1,241 1,354Profit for the year 46 50 3 46 61 82 105 136


Claims against banks 7 12 66 53 105 67 132 77Liability for partly paid investments 0 0 0 0 0 0 0 0Liability for outstanding forex contracts 1494 2553 890 1,056 2,871 2650 3,906 4199Guarantees 0 - In India 152 154 184 226 270 286 377 400 - Outside India 8 5 0 0 5 0 0 0Liability on account of outstanding derivative 0 0 0 0 0 0 0 0Acceptances and endorsements 128 133 189 211 229 304 349 534Currency Swaps

Others 19 27 34 41 33 24 17 9Total 1,808 2,883 1,364 1,588 3,512 3,332 4,782 5,220Provisions and contingencies

Provison for NPAs 16 38 39 72 102 154 160 208Depreciation in values of investments 2 2 -23 0 0 20 9 5Provision for taxation 2 3 0 8 23 44 71 75Other Provisions 9 0 31 9 1 5 6 13Total 28 42 47 89 126 223 246 300Financial analysis


Overall 25 40 6 -5 19 16 23 23Demand -8 23 32 1 50 3 -13 19Savings 13 14 28 18 15 17 29 40Term 30 45 1 -9 17 17 26 20Share of deposits (per cent)

Demand 6 5 6 7 9 8 5 5Savings 13 10 12 15 15 15 16 18Term 82 85 81 78 77 77 79 77


...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04Financial Parameters


Return on assets 0.94 0.79 0.03 0.59 0.74 0.86 0.94 1.00Return on equity 16.79 14.3 0.7 13.6 15.7 19.0 21.5 23.1Gearing (times) 15.52 18.5 24.1 20.0 20.2 21.6 22.0 22.3Staff costs to operating expenses 59.8 57.3 61.2 66.7 63.4 63.2 62.8 63.0Non-fund income to total income 10.86 11.7 11.6 13.0 12.0 17.5 17.4 20.0Operating expenses to total income 17.1 17.3 15.6 17.5 16.8 15.1 16.5 19.0Operating expenses to deposits 2.5 2.1 2.2 2.7 2.3 2.2 2.0 2.1Earning per share (Rs) 21.46 1.4 0.1 1.4 1.6 1.9 2.1 2.2Cost to income ratio 60.3 59.7 75.4 56.7 48.3 38.5 38.7 39.3Cost to income ratio (w/o profit on invest) 62.5 69.8 87.4 63.6 51.1 52.2 51.7 51.9Financial management (per cent)

Interest cost n.a. 9.58 10.88 9.81 9.13 8.83 7.58 6.21Average cost of deposits 10.98 8.3 8.1 9.5 8.7 8.5 7.4 5.9Average cost of borrowings 5.88 8.0 9.6 16.8 19.0 17.0 18.8 44.7Yield on carry business n.a. 12.22 12.13 12.22 12.01 11.72 10.54 9.21Average yield on investments 11.57 1.6 1.1 0.8 11.8 11.4 10.2 8.7Average yield on advances 14.71 12.4 12.4 12.8 12.6 12.7 11.6 10.3Spreads n.a. 2.65 1.26 2.42 2.88 2.89 2.96 3.00Operating expenses to AFD n.a. 2.29 2.09 2.40 2.25 2.13 2.09 2.16Core fee income to AFD n.a. 0.77 0.89 1.05 0.94 0.81 0.75 0.76Net Profitability Margin n.a. 1.13 0.05 1.07 1.57 1.57 1.62 1.60Deposits to borrowings (times) 14.97 21.3 18.3 15.3 19.5 23.0 43.2 115.5Capital adequacy 9.23 9.4 10.3 11.3 10.3 10.6 11.2 11.5Provisions as a percentage of profit before 37.49 45.8 94.8 65.8 67.4 73.1 70.1 68.8provisions


Credit-deposit ratio 65 61 62 62 63 59 57 57Incremental credit deposit ratio 85 51 86 60 68 28 49 59Borrowings to total deposits 6 4 7 6 4 4 1 1Cash-deposit ratio 1 1 1 1 1 1 1 1Investment-deposit ratio 32 37 38 41 40 42 42 41Incemental I/D ratio 34 50 66 -20 31 60 38 38Reserves as a percentage of net worth 93 94 93 94 95 95 96 97Growth (per cent)

Advances 35 31 8 -5 20 7 20 24Deposits 25 40 6 -5 19 16 23 23Investments 27 62 10 2 14 24 21 21Salaries cost 17 17 27 -6 9 15 28Commission and fee 17 25 40 28 -6 -1 10 20Interest income 39 19 23 3 4 13 7 7Others

Branches (nos) 377 395 401 404 411 412 420 432Advances per branch (Rs crore) 7.96 9.93 10.54 9.99 11.81 12.59 14.80 17.83Operating expenses per branch (Rs crore) 0.30 0.35 0.38 0.44 0.43 0.46 0.53 0.65

continued...

Employees (nos) 6,094 6,138 6,443 6,421 6,313 6,240 6,217 6363Income per employee (Rs crore) 0.11 0.13 0.15 0.16 0.17 0.20 0.22 0.23Income/employee expenses (times) 9.78 10.06 10.50 8.59 9.42 10.44 9.65 8.36



Interest 89 88 88 87 88 83 83 80Forex 2 1 2 2 1 1 1 1Commission, brokerage 3 3 4 5 4 4 4 4Share of advances (per cent)

Priority 23 24 29 35 32 32 31 31Public 2 2 4 4 3 6 4 3Inter bank 10 3 0 0 0 0 0 0Others 65 71 67 61 65 62 65 66Abroad 0 0 0 0 0 0 0 0Share of advances (per cent)


Secured 77 63 68 81 78 80 80 78Government guarantee 10 28 22 15 14 14 12 11Unsecured 13 8 11 3 8 6 8 11Share of investments (per cent)

Government securities 68 65 67 67 62 70 76 81Other approved securities 5 3 3 2 2 1 1 1Shares 0 5 5 5 4 2 2 2Debentures 25 25 24 25 32 26 20 15Subsidiary 1 1 1 1 0 0 0 0Others 1 0 1 1 0 0 1 1Net NPAs (per cent) 4.9 5.3 7.5 8.6 10.1 8.6 5.0 2.9n.a.: Not available

Source: CRIS INFAC

...continued


Bank of Rajasthan Table 16(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Liabilities

Capital 18 18 18 63 100 100 106 108


Deposits 2,939 2,827 2,985 3,242 3,533 3960 5299 7406

Borrowings 31 40 28 26 18 30 17 176


Total 3,406 3,411 3,671 4,129 4,344 4803 6,130 8,455

Assets



Investments 1,110 1,089 1,090 1,245 1,569 1884 2643 4353

Advances 1,498 1,480 1,487 1,728 1,867 1956 2221 2432

Fixed assets 93 84 80 72 75 62 80 101

Other assets 111 204 403 437 128 183 179 194

Total 3,406 3,411 3,671 4,129 4,344 4803 6,130 8,455

Deposits

Demand 522 480 534 616 680 755 832 931

Savings 442 516 622 698 794 944 1079 1273

Term 1,975 1,831 1,829 1,928 2,059 2261 3388 5201

Total 2,939 2,827 2,985 3,242 3,533 3960 5299 7406

Borrowings

RBI 0 0 0 0 0 0 0 2879

Other banks 1 0 0 0 0 0 0 104



Total 31 40 28 26 18 30 17 3,027



Bills payable 47 46 55 54 66 50 61 56


Others(including provisions) 57 69 105 117 114 162 205 234

Total 248 354 471 605 615 580 528 544

Balance with RBI 345 267 304 305 373 309 315 236

Cash in hand 48 35 39 52 50 44 63 90

Advances


Cash credit and overdraft 856 884 801 994 1,059 1076 1048 1132

Term loans 478 438 509 544 582 700 951 1136

Total 1,498 1,480 1,487 1,728 1,867 1956 2221 2432

Secured 1,160 1,177 1,193 1,377 1,407 1508 1665 1939


Unsecured 154 127 113 122 101 167 256 166

Total 1,498 1,480 1,487 1,728 1,867 1956 2,221 2,432

Continued...


...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Priority sector 551 490 532 506 517 560 496 782

Public sector 139 182 192 203 276 293 252 209

Banks 3 1 2 19 0 0 0 1

Others 805 808 762 1,000 1,073 1102 1474 1440Total 1,498 1,480 1,487 1,728 1,867 1956 2,221 2,432




Shares 8 4 5 10 10 13 33

Debentures 166 112 122 163 282 336 370 327


Others 91 100 21 44 210 146 172 213Total 1,110 1,089 1,090 1,245 1,569 1,884 2,643 4,353

Movement in NPA

Gross NPA




Closing balance n.a. n.a. n.a. 363 357 333 266 237Net NPA-Closing balance n.a. n.a. n.a. 170 n.a. 173 151 73


Interest earned




Others 4 0 12 19 12 4 7 0Total 365 350 350 400 442 453 473 503

Other income



Loss on sale of investments -1 0 0 0 0 0 0 0






Total income 408 396 394 453 499 550 599 680

Interests expended



Others 2 0 0 0 2 3 3 3Total 266 269 286 306 309 323 292 313

Operating expenses

Salaries 53 62 82 90 87 94 104 116

Others 23 24 26 26 33 40 46 53

Depreciation 13 12 12 12 12 11 9 12

continued...

Total 89 98 119 129 132 145 159 182

Provisions and contingencies 45 117 56 6 25 41 80 116Total expenses including provisions 400 484 461 441 467 510 531 611


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Profit for the year 8 -88 -67 12 32 40 68 69

Profits inclusive of provisions 53 29 -11 18 58 81 149 185Contingent Liabilities

Claims against the banks 6 5 12 62 78 0 0 0


Liability for outstanding forex contracts 165 250 192 189 92 266 141 316

Guarantees

- In India 116 171 135 169 92 101 170 181

- Outside India 0 0 0 0 0 0 0 0


Others 56 73 102 55 31 98 94 96Total 505 626 563 579 376 586 544 690


Provision for Non-performing assets 33 94 55 8 22 22 31 22

Depreciation in value of investments 2 14 0 0 -1 3 0 0

Income-tax 9 7 0 -1 1 14 42 28

Others 0 1 2 -1 3 3 7 66Total 45 117 56 6 25 41 80 116

Financial analysis


Overall 17 -4 6 9 9 12 34 40

Demand -10 -8 11 15 10 11 10 12

Savings 12 17 21 12 14 19 14 18

Term 29 -7 0 5 7 10 50 54Share of deposits (per cent)

Demand 18 17 18 19 19 19 16 13

Savings 15 18 21 22 22 24 20 17

Term 67 65 61 59 58 57 64 70Financial parameters (per cent)


Return on assets 0.2 -2.6 -1.9 0.3 0.8 0.9 1.3 0.9

Return on equity 4.3 -46.5 -35.5 5.4 14.8 19.6 26.4 22.5

Gearing (times) 17.2 16.9 18.6 15.1 23.3 19.6 20.5 24.7





Earning per share (Rs) 4.4 -49.0 -37.4 1.9 3.2 4.0 6.5 6.4




...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04


Interest cost n.a. 9.08 9.57 9.58 8.91 8.45 6.20 3.95






Spreads n.a. 2.38 1.79 2.31 2.91 2.44 3.18 3.45



Net Profitability Margin n.a. 0.43 -0.96 -0.45 0.46 -0.15 0.81 1.40



Provisions as a percentage of profit before 84.9 404.8 -507.7 34.3 44.2 50.5 53.9 62.7

provisions









Advances 10 -1 0 16 8 5 14 9

Deposits 17 -4 6 9 9 12 34 40

Investments 25 -2 0 14 26 20 40 65

Commission and fee -6 14 -14 16 4 -17 13 -2

Interest income 25 -4 0 14 11 2 4 6Others

Branches (nos) 298 302 306 310 309 314 336 354



Employees (nos) 4,472 4,388 4,378 4,344 4,288 4282 4207 n.a.

Income per employee (Rs crore) 0.09 0.09 0.09 0.10 0.12 0.13 0.14 n.a.


Interest 90 89 89 88 89 82 79 74

Forex 1 1 1 1 1 1 3 3

Commission and brokerage 5 6 5 5 5 4 4 3Share of advances (per cent)

Priority 37 33 36 29 28 29 22 32

Public 9 12 13 12 15 15 11 9

Inter-bank 0 0 0 1 0 0 0 0

Others 54 55 51 58 57 56 66 59


...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Bills 11 11 12 11 12 9 10 7

Cash credit 57 60 54 57 57 55 47 47

Term loans 32 30 34 31 31 36 43 47


Secured 77 80 80 80 75 77 75 80


Unsecured 10 9 8 7 5 9 12 7




Shares 0 1 0 0 1 1 0 1

Debentures 15 10 11 13 18 18 14 8

Others 8 9 2 4 13 8 7 5


Net NPAs (per cent) 8.5 9.1 9.5 9.7 12.0 8.9 6.8 3.0

n.a.: Not available

Source: CRIS INFAC


Citibank Table 17

Continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04Liabilities Capital 204 228 252 293 365 167 167 167Reserves and surplus 868 984 879 991 1,244 1567 1960 2528Deposits 7,204 7,551 9,437 10,203 14,052 15242 17743 20465Borrowings 622 1,265 1,412 1,623 2,668 3022 3388 3503Other liabilities and provisions 959 998 1,160 1,354 1,432 1497 1982 2933Total 9,652 10,798 12,888 14,172 19,466 21,497 25,240 29,597Assets

Cash and balances with RBI 485 475 663 747 921 1162 1233 3497Balances with banks and call money 1,902 1,972 2,215 1,152 2,298 1517 2590 1711Investments 2,329 2,557 3,774 4,230 5,603 6007 7036 6690Advances 3,984 4,767 5,000 6,620 9,273 11385 12629 15259Fixed assets 211 237 443 425 503 502 526 514Other assets 741 791 793 998 867 923 1227 1927Total 9,652 10,798 12,888 14,172 19,466 21,497 25,240 29,597Deposits

Demand 1,462 1,262 1,890 2,343 2,858 3048 3626 5968Savings 236 231 342 590 846 1605 2295 3478Term 5,505 6,058 7,204 7,270 10,347 10589 11821 11020Total 7,203 7,551 9,437 10,203 14,052 15242 17743 20465



Total 7,203 7,551 9,437 10,203 14,052 15242 17743 20465Borrowings

RBI 177 141 644 521 812 274 0 0Other banks 255 845 559 609 1,343 1853 1310 433Other institutions and agencies 162 266 198 490 510 889 331 523Forex borrowings 27 13 12 2 3 6 1748 2548Total 621 1,265 1,412 1,623 2,668 3022 3388 3503Other liabilities and provisions

Inter-office adjustments 271 312 40 34 0 29 2 1Bills payable 275 265 435 349 350 488 731 808Interest accrued 88 119 106 91 182 166 143 158Others(including provisions) 324 302 578 880 580 814 1106 1966Total 958 998 1,160 1,354 1,112 1497 1982 2933

Balance with RBI 469 454 634 716 866 1099 1179 3433Cash in hand 15 21 29 32 54 63 54 64Advances

Bills purchases and discounted 196 200 264 645 1,032 1128 1110 1203Cash credit and overdraft 581 712 1,543 1,673 2,086 2603 2860 3631Term loans 3,208 3,855 3,192 4,302 6,155 7654 8659 10425Total 3,985 4,767 5,000 6,620 9,273 11,385 12,629 15,259


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Secured 2,180 2,778 2,472 3,021 4,395 5166 6045 8611Government guarantee 15 0 330 0 0 2213 2130 14Unsecured 1,789 1,989 2,197 3,599 4,878 4006 4454 6634Total 3,984 4,767 5,000 6,620 9,273 11385 12629 15259

Priority sector 529 544 760 1,240 1,926 2497 2684 3435Public sector 27 8 8 44 146 418 94 102Banks 0 0 0 0 91 0 47 121Others 3,428 4,215 4,232 5,336 7,110 8471 9804 11601Total 3,984 4,767 5,000 6,620 9,273 11,385 12,629 15,259



- Government securities 1,809 2,107 2,787 3,271 4,585 4814 5663 5288 - Other approved securities 36 36 48 34 19 17 17 15 - Shares 0 0 0 3 3 4 4 4 - Debentures 345 320 860 849 950 1172 1281 1363 - Subsidiaries/JV 0 0 0 0 0 0 0 0 - Others 138 94 79 74 46 0 72 19Total 2,328 2,557 3,774 4,230 5,603 6,007 7,036 6,690Total investments 2,328 2,557 3,774 4,230 5,603 6,007 7,036 6,690Movement in NPA

Gross NPA


Interest earned

Interest/Discount on advances/bills 729 786 823 911 1,124 1313 1361 1385



Others 13 2 10 12 3 0 10 3Total 1,120 1,187 1,345 1,489 1,750 1910 1979 2280Other income

Commission exchange and brokerage 276 299 323 302 343 338 401 462Profit on sale of investments 30 68 97 14 96 303 143 93Loss on sale of investments 0 0 0 0 0 0 0 0Profit on sale of fixed assets -1 -1 -3 2 -2 0Loss on revaluation of investments 0 0 0 0 0 0 0 0Profit on forex transactions 44 48 107 68 80 129 199 304Income from investments 0 0 0 0 0 0 0 0Lease income 0 0 0 0 0 0 0 0Miscellaneous income 3 6 0 6 6 30 14 28Total 353 420 526 388 522 803 756 887Total income 1,473 1,607 1,871 1,877 2,272 2713 2735 3167


...continued


Interest on deposits 534 552 808 704 770 921 886 794Interest on RBI /Inter-bank 37 89 81 93 132 140 102 87Others 90 72 17 49 76 41 42 42Total 661 713 907 846 979 1103 1030 924Operating expenses


Provisions and contingencies 388 361 396 280 408 527 477 662Total expenses including provisions 1,418 1,488 1,754 1,626 1,987 2,388 2,344 2,595Profit for the year 55 119 117 251 285 325 392 572

Profits inclusive of provisions 443 481 513 531 693 853 868 1,233Contingent liabilities

Claims against banks 112 2 2 2 15 0 0 0Liability for partly paid investments 0 0 0 0 0 0 0 0

Liability for outstanding forex contracts 11,001 27,887 27,031 30,903 43,566 60858 69753 130413Guarantees 0 0 - In India 471 476 536 573 884 1558 1753 2372 - Outside India 178 223 113 44 783 351 130 82Acceptances and endorsements 938 1,168 1,344 1,063 1,357 996 1284 1251Others 6 139 168 575 440 9957 15268 1249Total 12,706 29,894 29,194 33,159 47,045 73,720 88,188 135,369Provisions and contingencies

Provisions for non-performing assets 47 84 117 87 77 79 137 165Provision towards Income/Interest tax 329 248 294 231 345 448 350 399Net Provision for depreciation on investments 12 30 -16 -38 -14 0 0 1029Others 0 0 0 0 0 0 -10 -9Total 388 361 395 280 408 527 477 662Financial analysis


Overall 6 5 25 8 38 8 16 15Demand 70 -14 50 24 22 7 19 65Savings 10 -2 48 72 43 90 43 52Term -3 10 19 1 42 2 12 -7Share of deposits (per cent)

Demand 20 17 20 23 20 20 20 29Savings 3 3 4 6 6 11 13 17Term 76 80 76 71 74 69 67 54Financial parameters


Return on assets 0.6 1.2 1.0 1.9 1.7 1.6 1.7 2.1Return on equity 5.3 10.4 9.9 20.8 19.7 19.5 20.3 23.7Gearing (times) 8.2 8.1 10.6 10.3 11.3 11.4 10.9 10.0Staff costs to operating expenses 19.8 18.9 22.4 21.2 23.2 21.5 22.5 25.0

continued...

Operating expenses to total income 24.0 26.1 28.1 20.7 23.0 29.6 27.6 28.0Operating expenses to deposits 25.1 25.7 24.1 26.6 26.5 27.9 30.6 31.9Operating expenses to deposits 5.1 5.5 4.8 4.9 4.3 5.0 4.7 4.9Cost to income ratio 45.47 46.26 46.84 48.51 46.45 47.04 49.10 45.01Cost to income ratio (w/o profit on invest) 47.21 50.04 52.10 49.18 50.19 57.96 53.61 46.96


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04Financial management (per cent)

Iinterest cost n.a. 8.30 8.91 7.21 6.69 6.16 5.07 3.96Average cost of deposits 7.6 7.5 9.5 7.2 6.3 6.3 5.4 4.2Average cost of borrowings 16.0 17.0 7.4 9.3 9.7 6.4 4.5 3.8Yield on carry business n.a. 13.02 12.66 12.28 11.40 10.02 9.11 9.02Average yield on investments 9.7 9.1 9.6 10.7 8.2 6.7 5.5 7.8Average yield on advances 19.5 18.0 16.8 15.7 14.1 12.7 11.3 9.9Spreads n.a. 4.72 3.75 5.07 4.70 3.87 4.03 5.06Operating expenses to AFD n.a. 4.48 4.22 4.10 3.90 3.97 3.84 3.99Core fee income to AFD n.a. 3.79 4.01 3.05 2.76 2.53 2.79 3.08Net Profitability Margin n.a. 4.03 3.55 4.02 3.57 2.42 2.98 4.15Deposits to borrowings (times) 8.8 7.8 6.3 6.5 5.7 5.1 5.1 5.5Capital adequacy 9.5 8.6 10.0 10.6 11.2 11.04 11.3 11.11Provisions as a percentage of profit before 87.6 75.2 77.3 52.7 58.8 61.8 54.9 53.7provisions


Credit-deposit ratio 55 63 53 65 66 75 71 75Incremental C/D ratio 118 225 12 211 69 177 50 97Borrowings to total deposits 9 17 15 16 19 20 19 17Cash-deposit ratio 0 0 0 0 0 0 0 0Investment-deposit ratio 32 34 40 41 40 39 40 33Growth (per cent)

Advances 15 20 5 32 40 23 11 21Deposits 6 5 25 8 38 8 16 15Investments 1 10 48 12 32 7 17 -5Salaries cost 40 7 30 5 31 17 16 34Commission and fee 27 8 8 -7 14 -2 19 15Interest income 27 6 13 11 18 9 4 15Others

Branches (nos) 6 7 8 11 15 18 20 20Advances per branch (Rs crore) 664.00 680.97 624.94 601.83 618.19 632.51 631.43 762.96Operating expenses per branch (Rs crore) 61.50 59.10 56.46 45.47 40.07 42.08 41.87 50.48Employees (nos) 1,479 1,537 1,537 1,308 1,476 1470 1614 n.a.Income per employee (Rs crore) 1.00 1.05 1.22 1.43 1.54 1.85 1.69 n.a.Income/employee expenses (times) 20.17 20.55 18.46 17.71 16.32 16.69 14.49 12.56Total income (per cent)


Priority 13 11 15 19 21 22 21 23Public 1 0 0 1 2 4 1 1Inter bank 86 88 85 81 77 74 78 76Others 86 88 85 81 77 74 78 76Abroad 0 0 0 0 0 0 0 0


...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04Share of advances (per cent)




Source: CRIS INFAC


HongKong Bank Table 18

Continued...


Capital 0 715 715

Reserves and surplus 771 845 782 837 1,091 1231 1583 1738

Deposits 4,527 5,493 6,386 8,755 9,951 12341 12801 16270

Borrowings 16 398 1,118 1,934 3,238 3659 3172 2539

Other liabilities and provisions 479 682 913 1,140 1,314 1908 2639 4095

Total 5,792 7,418 9,199 12,666 15,594 19139 20910 25357Assets


Balances with bank and money at call 437 780 1,301 1,584 1,708 2678 265 716

Investments 1,860 2,221 3,465 4,919 5,792 6274 8870 10395

Advances 2,219 2,808 2,795 4,302 6,246 7836 8202 9628

Fixed assets 401 410 466 502 499 554 512 439

Other assets 514 696 648 853 789 1169 2144 3447

Total 5,792 7,418 9,199 12,666 15,594 19,139 20,910 25,357Deposits

Demand 1,143 1,167 1,255 1,616 1,639 1989 2100 4415

Savings 592 650 863 1,178 1,446 1781 2241 3107

Term 2,792 3,676 4,268 5,960 6,866 8571 8461 8747

Total 4,527 5,493 6,386 8,755 9,951 12,341 12,801 16,270



Total 4,527 5,493 6,386 8,755 9,951 12341 12801 16270Borrowings

RBI 0 72 323 296 137 0 0 0

Other banks 10 224 656 1,117 2,713 3180 2874 1502



Total 16 398 1,118 1,932 3,238 3659 3172 2539Other liabilities and provisions


Bills payable 146 138 210 349 310 438 403 476


Others(including provisions) 92 252 456 493 537 939 1739 3123

Total 479 682 913 1,140 1,298 1908 2639 4095

Balance with RBI 347 487 502 480 559 572 852 660

Cash in hand 14 15 23 25 46 56 66 71

Advances


Cash credit and overdraft 552 1,134 778 588 1,672 3223 3959 4753

Term loans 1,349 1,387 1,731 3,025 3,835 3434 3013 3919

Total 2,219 2,808 2,795 4,302 6,246 7,836 8,202 9,628


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Secured 1,820 2,118 2,167 2,664 3,841 4945 5243 5962


Unsecured 212 514 304 1,153 1,644 1827 2107 3012Total 2,219 2,808 2,795 4,302 6,246 7,836 8,202 9,628

Priority sector 537 581 683 776 1,253 1276 1305 1417

Public sector 1 0 0 0 233 274 30 0

Banks 0 0 0 0 0 73 6 5

Others 1,681 2,227 2,112 3,526 4,760 6212 6862 8206Total 2,219 2,808 2,795 4,302 6,246 7,836 8,202 9,628



Investments in India 0



- Shares 4 1 0 3 3 4 4 4

- Debentures 256 435 1,191 1,723 1,994 1734 1606 1470


- Others 251 59 104 246 159 5 38 23Total 1,860 2,221 3,462 4,918 5,792 6,274 8,870 10,395Total investments 1,860 2,221 3,462 4,918 5,792 6,274 8,870 10,395Movement in NPA

Gross NPA


Interest earned




Others 1 1 2 2 2 2 8 6Total 597 630 763 993 1,320 1,499 1,480 1,414Other income



Loss on sale of investments -1 0 0 0 0 0 0 0

Profit on sale of fixed assets 0 0 0 0 -1 0 3

Loss on revaluation of investments 0 0 0 0 0 0 0



Lease income 0 0 0 0 0 0 0 0

Miscellaneous income 4 2 2 15 46 89 72 108Total 141 202 191 256 396 478 482 705Total income 738 832 954 1,248 1,716 1,978 1,962 2,119


...continued




Others 1 0 0 17 26 26 27 30Total 385 379 516 645 848 997 878 723Operating expenses

Salaries 56 72 98 101 148 155 234 231

Others 84 105 134 165 217 286 313 334Depreciation 22 24 26 32 49 62 67 59Total 163 201 258 298 415 502 614 624

Provisions and contingencies 101 180 127 183 252 312 319 378Total expenses including provisions 649 760 900 1,126 1,515 1,811 1,812 1,726Profit for the year 88 73 54 122 201 167 150 394


Claims against the banks

Currency Options

Single Currency Interest Rate swaps

Liability for outstanding forex contracts n.a. n.a. 27,571 30,050 41,511 60,190 93,434 131483

Guarantees

- In India n.a. n.a. 966 1,119 1,379 1,417 1,274 1521

- Outside India n.a. n.a. 195 82 75 186 521 961

Acceptances, endorsements n.a. n.a. 756 922 1,515 1,282 2,619 2957

Others n.a. n.a. 121 2,757 406 411 409 247Total n.a. n.a. 29,609 34,930 44,886 63,486 98,256 137,169Provisions and contingencies

Provison for bad and doubtful debts 15 44 43 32 15 0 0 0Provision for taxation 105 121 84 147 230 184 173 178Net Provision for depreciation on investments -20 8 0 4 0 0 0 46Others 1 6 0 0 6 128 146 154Total 101 135 84 151 252 312 319 378Financial analysis


Overall 18 21 16 37 14 24 4 27Demand 44 2 8 29 1 21 6 110Savings 16 10 33 36 23 23 26 39Term 10 32 16 40 15 25 -1 3Share of deposits (per cent)

Demand 25 21 20 18 16 16 16 27Savings 13 12 14 13 15 14 18 19Term 62 67 67 68 69 69 66 54Financial parameters


Return on assets 1.2 1.1 0.6 1.1 1.4 1.0 0.8 1.7Return on equity 12.3 9.0 6.6 15.1 20.8 14.3 8.5 16.6Gearing (times) 6.5 7.8 10.8 14.1 13.3 14.5 8.1 9.3Staff costs to operating expenses 34.5 36.0 37.9 33.9 35.7 30.8 38.1 37.1

continued...

Non-fund income to total income 19.1 24.3 20.0 20.5 23.1 24.2 24.6 33.3Operating expenses to total income 22.1 24.1 27.0 23.9 24.2 25.4 31.3 29.5Operating expenses to deposits 3.6 3.7 4.0 3.4 4.2 4.1 4.8 3.8Cost to income ratio 46.22 44.35 58.79 49.40 47.86 51.23 56.67 44.70Cost to income ratio (w/o profit on invest) 46.35 46.41 60.21 53.21 52.68 56.79 61.75 50.20


...continued

continued...

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04Financial management (per cent)

Interest cost 7.08 7.50 6.88 6.92 6.66 5.35 4.05Average cost of deposits 9.0 7.3 7.7 7.0 7.0 6.2 4.8 3.5Average cost of borrowings 4.7 6.5 7.3 7.4 7.4 8.7 8.2 7.7Yield on carry business 11.59 10.72 10.42 10.48 9.51 8.31 7.13Average yield on investments 11.9 11.0 11.4 12.5 11.8 12.1 8.8 6.6Average yield on advances 17.1 13.6 13.2 11.2 11.4 10.1 9.6 8.4Spreads 4.51 3.22 3.55 3.56 2.84 2.96 3.08Operating expenses to AFD 3.59 3.58 3.08 3.24 3.17 3.44 3.14Core fee income to AFD 3.23 2.49 2.11 2.29 2.14 2.00 2.49Net Profitability Margin 4.15 2.13 2.58 2.61 1.82 1.52 2.43Deposits to borrowings (times) 27.9 24.2 7.8 5.0 3.6 3.2 3.7 5.1Capital adequacy 11.9 9.8 9.3 10.3 12.4 11.04 11.3 14.54Provisions as a percentage of profit before 53.4 71.2 70.3 60.0 55.6 65.2 68.0 49.0provisions

Provisions as a percentage of networth 13 21 16 22 23 25 14 15Liquidity (per cent)

Credit-deposit ratio 49 51 44 49 63 63 64 59Incremental C/D ratio 11 61 -2 64 162 67 80 41Borrowings to total deposits 0 7 18 22 33 30 25 16Cash-deposit ratio 0 0 0 0 0 0 1 0Investment-deposit ratio 41 40 54 56 58 51 69 64Growth (per cent)

Advances 3 27 0 54 45 25 5 17Deposits 18 21 16 37 14 24 4 27Investments -13 0 23 76 35 0 13 27Salaries cost 6 28 35 3 47 4 52 -1Commission and fee 36 13 6 20 43 11 8 23Interest income 12 6 21 30 33 14 -1 -4Others

Branches (nos) 21 21 25 26 28 30 33 38Advances per branch (Rs crore) 105.68 133.73 111.79 165.48 223.07 261.19 248.55 253.37Operating expenses per branch (Rs crore) 8 10 10 11 15 17 19 16Employees (nos) 2,357 2,512 2,723 2,780 3,023 3355 3339 n.a.Income per employee (Rs crore) 0.31 0.33 0.35 0.45 0.57 0.59 0.59 n.a.Income/employee expenses (times) 13.11 11.53 9.76 12.36 11.56 12.79 8.38 9.16Total income (per cent)

Interest 81 76 80 80 77 76 75 67Forex 7 10 8 6 6 5 6 8Commission, brokerage 12 12 11 10 10 10 11 12Share of advances (per cent)

Priority 24 21 24 18 20 16 16 15Public 0 0 0 0 4 3 0 0Inter bank 0 0 0 0 0 1 0 0Others 76 79 76 82 76 79 84 85Abroad 0 0 0 0 0 0 0 0


...continued

(Rs crore) 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04Share of advances (per cent)




Source: CRIS INFAC


Standard Chartered Bank Table 19

Continued...

(Rs crore) 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04Liabilities

Capital 0 0 0 374 515 515

Reserves and surplus 580 717 766 1,147 2,285 2,218

Deposits 5,352 5,006 5,088 7,244 18,003 19,949

Borrowings 1,616 2,597 5,601 9,312 4,834 6,124

Other liabilities and provisions 608 787 879 835 3,675 5,539Total 8,156 9,107 12,334 18,911 29,312 34,345Assets

Cash and balances with RBI 662 543 390 595 1,158 1,036

Balances with bank and money at call 231 132 289 616 212 620

Investments 2,720 3,140 5,401 7017 10,223 10,079

Advances 3,381 4,319 5,187 9,033 13,042 16,152

Fixed assets 266 208 173 166 574 438

Other assets 897 765 894 1,483 4,103 6,021Total 8,157 9,107 12,334 18,911 29,312 34,345Deposits

Demand 894 1,134 1,336 2024 3,692 5,125

Savings 563 559 570 709 2,935 3,819

Term 3,896 3,312 3,182 4511 11,376 11,005Total 5,353 5,006 5,088 7,244 18,003 19,949

Deposits of branches in India 5,353 5,006 5,088 7,244 18,003 19,949

Deposits of branches abroad 0 0 0 0 0 0Total 5,353 5,006 5,088 7,244 18,003 19,949Borrowings

RBI 111 129 73 271 300 0

Other banks 1,264 2,013 4,748 8821 2,398 1,738

Other institutions and agencies 233 449 780 198 139 1,802

Forex borrowings 8 6 0 23 1,997 2,584Total 1,616 2,597 5,601 9,312 4,834 6,124Other liabilities and provisions

Inter-office adjustments 0 0 0 0 0 0

Bills payable 47 34 40 1 268 354

Interest accrued 344 274 367 259 284 289

Others (including provisions) 217 479 278 575 3,124 4,895Total 608 787 684 835 3,675 5,539

Balance with RBI 641 506 371 569 926 953

Cash in hand 21 37 19 26 232 83Advances

Bills purchases and discounted 192 216 569 1290 725 993

Cash credit and overdraft 1,427 2,934 3,271 2448 4,315 7,800

Term loans 1,763 1,169 1,348 5295 8,002 7,359Total 3,381 4,319 5,187 9,033 13,042 16,152


...continued

continued...

(Rs crore) 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Secured 1,931 2,700 2,394 4573 7,773 10,315

Government guarantee 358 149 350 426 414 762

Unsecured 1,093 1,469 2,443 4033 4,855 5,075Total 3,381 4,319 5,187 9,033 13,042 16,152

Priority sector 841 910 1,433 1839 2,767 3,976

Public sector 1 21 46 135 216 144

Banks 0 0 0 0 0 0

Others 2,539 3,387 3,708 7059 10,059 12,032Total 3,381 4,319 5,187 9,033 13,042 16,152

Advances outside India 0 0 0 0 0 0Total 3,381 4,319 5,187 9,033 13,042 16,152Investments

Investments outside India 0 0 0 0 0 0Investments in India

- Government securities 1,613 1,906 3,104 4045 6,548 6,998

- Other approved securities 44 44 43 6 26 26

- Shares 25 3 3 214 324 430

- Debentures 978 1,174 2,252 2737 3,325 2,625

- Subsidiaries/JV 0 0 0 0 0 0

- Others 61 14 0 15 0 0Total 2,720 3,140 5,401 7,017 10,223 10,079Total investments 2,720 3,140 5,401 7,017 10,223 10,079Movement in NPA

Gross NPA

Opening balance n.a. 310 366 421 322 427Additions n.a. 162 203 87 242 215Reductions n.a. -106 -147 186 137 160Closing balance n.a. 366 421 322 427 482Net NPA-Closing balance n.a. 88 79 36 41 84Profit and loss statement

Interest earned

Interest/Discount on advances/bills 528 545 697 997 1461 1529

Income on investments 258 367 383 622 758 893

Interest on balances with RBI 53 42 42 24 27 28

Others 37 14 3 2 41 74Total 876 967 1,126 1,645 2,287 2,523Other income

Commission exchange and brokerage 143 167 181 272 349 371

Profit on sale of investments 6 9 21 118 30 64

Loss on sale of investments 0 0 0 0 0 0

Profit on sale of fixed assets 4 -4 0 0 2 6

Profit on revaluation of investments 0 0 0 0 0 0

Profit on forex transactions 57 56 75 110 174 224



Miscellaneous income 4 1 24 17 6 35Total 215 229 301 517 561 699Total income 1,091 1,196 1,426 2161 2848 3223


...continued

Operating expenses to deposits 15.6 10.9 6.7 4.8 12.0 12.7Cost to income ratio 49.7 45.8 49.1 36.6 34.2 36.0Cost to income ratio (w/o profit on invest) 50.3 46.4 50.4 40.5 34.8 37.1

continued...

(Rs crore) 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04Interest expended

Interest on deposits 501 419 353 359 840 715Interest on RBI /Inter-bank 83 147 285 549 292 210Others 0 11 27 25 21 146Total 585 577 666 933 1153 1071Operating expenses

Salaries 90 74 99 143 165 220Others 172 232 229 292 380 497Depreciation 10 23 45 15 34 58Total 252 284 373 450 579 775Provisions and contingencies 86 151 202 15 260 792Total expenses including provisions 922 1,011 1,241 1,398 1,993 2,638Profit for the year 169 185 185 763 855 585Profits inclusive of provisions 255 336 387 778 1,115 1,377Contingent liabilities

Claims against the banks 9 9 9 0 0 0Liability for partly paid investments 0 0 0 0 0 0Single Currency Interest Rate swaps 0 890 4,814 0 0 0Liability for outstanding forex contracts 17,759 22,477 47,098 59929 57629 93216Guarantees - In India 1,856 2,179 2,602 2638 3793 3286 - Outside India 0 0 0 1602 2040 2195Acceptances, endorsements 626 664 492 1307 2921 1944Others 62 91 97 24878 44291 86324Total 20,312 26,311 55,112 90,353 110,674 186,964Provisions and contingencies

Provisions for non-performing assets 89 125 -2 0 0 0Provision towards Income/Interest tax 2 25 205 1 84 266Net Provision for depreciation on investments -6 0 -1 0 5 207Others 0 0 0 14 171 319Total 85 151 202 15 260 792Financial analysisGrowth in deposits (per cent)

Overall n.a. -6 2 42 149 11Demand n.a. 27 18 51 82 39Savings n.a. -1 2 24 314 30Term n.a. -15 -4 42 152 -3Share of deposits (per cent)

Demand 17 23 26 28 21 26Savings 11 11 11 10 16 19Term 73 66 63 62 63 55Financial parameters Profitability (per cent)

Return on assets n.a. 2.1 1.7 4.9 3.5 1.8Return on equity n.a. 5.9 25.0 66.8 39.6 21.1Gearing (times) 13.1 11.7 15.1 11.4 9.5 11.6Staff costs to operating expenses 35.7 26.2 26.6 31.7 28.5 28.4Non-fund income to total income 19.7 19.2 21.1 23.9 19.7 21.7Operating expenses to total income 23.1 23.7 26.2 20.8 20.3 24.0


continued...

...continued

(Rs crore) 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04Financial management (per cent)

Interest cost n.a. 7.87 7.25 6.84 5.82 4.32Average cost of deposits n.a. 8.1 7.0 5.8 6.7 3.8Average cost of borrowings n.a. 7.5 7.6 7.7 4.4 6.5Yield on carry business n.a. 12.87 11.62 11.6 11.1 9.7Average yield on investments n.a. 10.4 9.2 8.6 11.1 6.8Average yield on advances n.a. 14.1 14.7 14.0 13.2 10.5Spreads n.a. 5.00 4.37 4.78 5.25 5.42Operating expenses to AFD n.a. 3.75 3.85 3.15 2.76 2.95Core fee income to AFD n.a. 2.95 2.76 2.74 2.51 2.33Net Profitability Margin n.a. 4.20 3.28 4.37 4.99 4.80Deposits to borrowings (times) n.a. 2.5 1.2 1 2 3Capital adequacy 8.3 9.5 9.6 9 11 11Provisions as a percentage of profit before 33.6 44.8 52.1 2 23 58provisions

Provisions as a percentage of networth 1.4 2.6 3.4 0.2 1.3 3.6Liquidity (per cent)

Credit-deposit ratio 63 86 102 125 72 81Incremental C/D ratio n.a. -271 1052 178 37 160Borrowings to total deposits 38 30 16 9 76 90Cash-deposit ratio 1 1 0 0 5 1Investment-deposit ratio 63 86 102 125 72 81Growth (per cent)

Advances n.a. 28 20 74 44 24Deposits n.a. -6 2 42 149 11Investments n.a. 15 72 -89 1559 -1Salaries cost n.a. -17 34 44 16 33Commission and fee n.a. 16 9 50 28 6Interest income n.a. 10 16 46 39 10Others

Branches (nos) 24 18 19 19 65 66Advances per branch (Rs crore) 11.08 11.54 9.10 8.73 8.83 6.64Operating expenses per branch (Rs crore) 10.48 15.75 19.65 23.67 8.91 11.74Employees (nos) 2,666 1,623 1,654 2142 3673 n.a.Income per employee (Rs crore) 0.41 0.74 0.86 1.01 0.78 n.a.Income/employee expenses (times) 12.13 16.12 14.38 15.16 17.25 14.62Total income (per cent)

Interest 80 81 79 76 80 78Forex 5 5 5 1 0 1Commission, and brokerage 13 14 13 13 12 11Share of advances (per cent)

Priority 25 21 28 20 21 25Public 0 0 1 1 2 1Inter bank 75 78 71 78 77 74Others 75 78 71 78 77 74Abroad 0 0 0 0 0 0


...continued

(Rs crore) 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04Share of advances (per cent)

Bills 6 5 11 14 6 6Cash credit 42 68 63 27 33 48Term loans 52 27 26 59 61 46Share of advances (per cent)

Secured 57 63 46 51 60 64Govt. guarantee 11 3 7 5 3 5Unsecured 32 34 47 45 37 31Share of investments (per cent)

Government securities 59 61 57 58 64 69Other approved securities 2 1 1 0 0 0Shares 1 0 0 3 3 4Debentures 36 37 42 39 33 26Subsidiary 0 0 0 0 0 0Others 2 0 0 0 0 0Net NPAs (per cent) 3.2 2.0 1.5 0.4 0.3 0.5n.a.: Not availableSource: CRIS INFAC


State Bank of Bikaner & Jaipur Table 20

Continued...

(Rs crore) 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Liabilities

Capital 50 50 50 50 50 50 50Reserves and surplus 294 369 473 559 702 853 1,099Deposits 6,525 7,741 9074 10,326 11,661 13,280 15,642Borrowings 112 101 95 69 23 311 616Other liabilities and provisions 1,542 1,967 2,777 2,883 3,116 3,495 2,850Total 8,523 10,228 12,469 13,888 15,552 17,989 20,256Assets

Cash and balances with RBI 767 1,262 1,248 1,341 908 879 1,261Balances with bank and money at call 625 378 1,028 1,090 1,069 904 607Investments 2,827 3,802 4,846 5,325 6,305 7,679 8,430Advances 3,660 3,841 4,401 5,168 5,931 6,773 8,597Fixed assets 46 95 92 90 91 102 113Other assets 597 850 854 874 1,248 1,651 1,248Total 8,523 10,228 12,469 13,888 15,552 17,989 20,256Deposits

Demand 1,117 1,317 1,367 1,621 1,774 2,340 2,302Savings 1,698 2,065 2,413 2,869 3,290 3,893 4,817Term 3,711 4,359 5,294 5,836 6,597 7,047 8,524Total 6,525 7,741 9,074 10,326 11,661 13,280 15,642

Deposits of branches in India 6,525 7,741 9,074 10,326 11,661 13,280 15,642Deposits of branches abroad 0 0 0 0 0 0 0Total 6,525 7,741 9,074 10,326 11,661 13,280 15,642Borrowings

RBI 0 0 0 0 0 0 0Other banks 1 2 4 1 1 0 0Other institutions and agencies 13 10 9 7 5 2 1Forex borrowings 98 88 82 61 17 308 614Total 112 101 95 69 23 311 616Other liabilities and provisions

Inter-office adjustments 69 801 585 528 103 117 197Bills payable 453 21 58 446 755 1,077 896Interest accrued 520 640 846 887 883 978 935Others (including provisions) 500 506 1,289 1,023 1,375 1,322 821Total 1,542 1,967 2,777 2,883 3,116 3,495 2,850

Balance with RBI 745 1,235 1,219 1,306 860 834 45Cash in hand 23 27 29 35 49 1,209 51Advances

Bills purchases and discounted 304 240 290 442 451 663 797Cash credit and overdraft 2,489 2,688 3,030 3,462 3,903 4,118 4,837Term loans 867 914 1,082 1,263 1,578 1,992 2,963Total 3,660 3,841 4,401 5,168 5,931 6,773 8,597

Secured 3,030 3,250 3,819 4,262 4,712 5,288 6,880Government guarantee 426 447 415 679 829 922 859Unsecured 205 144 167 226 390 563 857Total 3,660 3,841 4,401 5,168 5,931 6,773 8,597


...continued

continued...

(Rs crore) 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Priority sector 1,438 1,629 1,827 2,047 2,407 2,923 3,771Public sector 472 547 607 917 1,095 1,114 968Banks 3 5 6 4 8 6 3Others 1,748 1,660 1,961 2,201 2,421 2,730 3,854Total 3,660 3,841 4,401 5,168 5,931 6,773 8,597

Advances outside India 0 0 0 0 0 0 0Total 3,660 3,841 4,401 5,168 5,931 6,773 8,597Investments

Investments outside India 0 0 0 0 0 0 0Investments in India

- Government securities 2,050 2,932 4,004 4,483 5,439 6,785 7,770 - Other approved securities 391 364 329 303 274 228 201 - Shares 56 20 20 12 25 26 25 - Debentures 330 413 410 466 519 505 390 - Subsidiaries/JV 1 1 1 1 1 1 1 - Others 0 71 81 60 47 43 135Total 2,827 3,802 4,846 5,325 6,305 7,587 8,523Total investments 2,827 3,802 4,846 5,325 6,305 7,587 8,523Movement in NPA

Gross NPA

Opening balance n.a. n.a. 675 733 715 585 580Additions n.a. n.a. 196 169 119 167 96Reductions n.a. n.a. 98 228 218 172 192Closing balance n.a. n.a. 773 715 616 580 484Net NPA-Closing balance n.a. n.a. 453 410 342 282 107Profit and loss statement

Interest earned

Interest/Discount on advances/bills 457 460 482 549 605 653 691Income on investments 331 420 522 580 647 716 824Interest on balances with RBI 24 38 37 48 54 58 35Others 38 45 75 89 51 11 24Total 851 964 1,116 1,267 1,357 1,438 1,574Other income

Commission exchange and brokerage 124 136 168 191 196 193 216Profit on sale of investments 12 0 22 18 77 107 227Loss on sale of investments 0 0 0 0 0 0 0Profit on sale of fixed assets 0 0 0 0 0 0 0Loss on revaluation of investments 0 0 0 0 0 0 0Profit on forex transactions 27 19 23 23 21 24 25Income from investments 0 0 0 0 0 0 0Lease income 0 3 8 7 7 6 6Miscellaneous income 0 5 0 0 0 11 17Total 163 164 220 239 301 340 491Total income 1,013 1,127 1,336 1,506 1,658 1,778 2,065


...continued

continued...

(Rs crore) 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Interest expended

Interest on deposits 506 597 692 764 834 866 839Interest on RBI/inter bank 3 6 12 10 5 1 7Others 28 31 39 37 28 19 11Total 537 634 742 811 867 887 857Operating expenses

Salaries 215 251 266 328 289 320 361Others 60 70 79 60 123 107 130Depreciation 6 11 12 12 15 24 36Total 281 332 356 400 427 450 527

Provisions and contingencies n.a. 109 166 163 226 238 380Total expenses including provisions 818 1,075 1,264 1,374 1,520 1,575 1,764Profit for the year 196 53 72 132 138 203 302

Profits inclusive of provisions 196 162 238 295 364 441 681Contingent liabilities

Claims against banks 10 15 11 11 21 21 21Liability for partly paid investments 0 0 0 0 0 0 0Liability for outstanding forex contracts 213 43 157 458 638 1,811 3,395Guarantees

- In India 327 332 345 314 291 274 339 - Outside India 0 0 0 0 0 63 20Acceptances and endorsements 439 378 386 369 353 399 517Others 86 83 71 73 159 261 241Total 1,075 851 970 1,226 1,462 2,829 4,533Provisions and contingencies

Provison for NPAs n.a. 85 80 81 64 104 108

Depreciation in values of investments n.a. 0 0 5 13 -3 -4Provision for taxation n.a. 23 73 71 172 124 199Other Provisions n.a. 1 12 6 -22 12 77Total n.a. 109 166 163 226 238 380Financial analysis


Overall n.a. 19 17 14 13 14 18Demand n.a. 18 4 19 9 32 -2Savings n.a. 22 17 19 15 18 24Term n.a. 17 21 10 13 7 21Share of deposits (per cent)

Demand 17 17 15 16 15 18 15Savings 26 27 27 28 28 29 31Term 57 56 58 57 57 53 54


...continued

(Rs crore) 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Financial Parameters


Return on assets 5 1 1 1 1 1 2Return on equity n.a. 14 15 23 20 25 29Gearing (times) 24 23 23 22 20 19 17Staff costs to operating expenses 76 76 75 82 68 71 68Non-fund income to total income 16 15 16 16 18 19 24Operating expenses to total income 28 29 27 27 26 25 25Operating expenses to deposits 4 4 4 4 4 3 3Earning per share (Rs) 39 11 14 26 28 41 60Cost to income ratio 58.9 67.2 59.9 57.6 54.0 50.5 43.6Cost to income ratio (w/o profit on invest) 60.4 67.2 62.2 59.2 59.8 57.4 53.7Financial management (per cent)

Interest cost 15.14 8.47 8.69 8.08 7.45 6.54 5.39Average cost of deposits n.a. 8.4 8.2 7.9 7.6 6.9 5.8Average cost of borrowings n.a. 34.5 51.8 57.0 73.0 12.3 3.9Yield on carry business 21.75 11.33 10.83 10.44 10.06 9.49 9.02Average yield on investments n.a. 12.7 12.1 11.4 11.1 10.2 10.2Average yield on advances n.a. 12.3 11.7 11.5 10.9 10.3 9.0Spreads 6.61 2.86 2.14 2.36 2.61 2.95 3.63Operating expenses to AFD 7.12 3.87 3.42 3.28 3.15 2.96 3.00Core fee income to AFD 3.82 1.84 1.83 1.75 1.60 1.46 1.42Net Profitability Margin 3.31 0.83 0.55 0.83 1.06 1.44 2.05Deposits to borrowings (times) n.a. 67.1 85.9 118.4 239.5 74.8 31.2Capital adequacy 10.7 12.3 12.4 12.4 13.4 13.2 12.9Provisions as a percentage of profit before n.a. 67.5 69.6 55.3 62.1 53.9 55.7provisions

Provisions as a percentage of networth n.a. 26.1 31.7 26.7 30.1 26.3 33.1Liquidity (per cent)

Credit-deposit ratio 56.1 49.6 48.5 50.0 50.9 51.0 55.0Incremental credit deposit ratio n.a. 14.8 42.0 61.3 57.2 52.0 77.2Borrowings to total deposits 1.7 1.3 1.0 0.7 0.2 2.3 3.9Cash-deposit ratio 0.3 0.3 0.3 0.3 0.4 9.1 0.3Investment-deposit ratio 43.3 49.1 53.4 51.6 54.1 57.8 53.9Incemental I/D ratio n.a. 80.2 78.3 38.3 73.4 84.9 31.8Reserves as a percentage of net worth 85.5 88.1 90.4 91.8 93.4 94.5 95.6Growth (per cent)

Advances n.a. 4.9 14.6 17.4 14.8 14.2 26.9Deposits n.a. 18.6 17.2 13.8 12.9 13.9 17.8Investments n.a. 34.5 27.5 9.9 18.4 21.8 9.8Salaries cost n.a. 17.0 5.8 23.6 -11.9 10.6 12.8Commission and fee n.a. 10.1 23.2 13.7 2.6 -1.6 12.1Interest income n.a. 13.3 15.8 13.5 7.2 5.9 9.4Others

Branches (nos) 767 780 787 792 792 793 801Advances per branch (Rs crore) 4.77 4.92 5.59 6.53 7.49 8.54 10.73Operating expenses per branch (Rs crore) 0.37 0.43 0.45 0.51 0.54 0.57 0.66

continued...

Employees (nos) 15,046 14,970 14,778 13,392 13293 13,209 13,054Income per employee (Rs crore) 0.07 0.08 0.09 0.11 0.12 0.13 0.16Income/employee expenses (times) 4.72 4.49 5.03 4.59 5.74 5.56 5.73


...continued

(Rs crore) 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04


Interest 84.0 85.5 83.5 84.1 81.9 80.9 76.2Forex 2.7 1.7 1.7 1.5 1.3 1.3 1.2Commission, brokerage 12.2 12.1 12.6 12.7 11.8 10.8 10.4Share of advances (per cent)

Priority 39.3 42.4 41.5 39.6 40.6 43.2 43.9Public 12.9 14.2 13.8 17.7 18.5 16.4 11.3Inter bank 0.1 0.1 0.1 0.1 0.1 0.1 0.0Others 47.7 43.2 44.6 42.6 40.8 40.3 44.8Abroad 0.0 0.0 0.0 0.0 0.0 0.0 0.0Share of advances (per cent)

Bills 8.3 6.2 6.6 8.6 7.6 9.8 9.3Cash credit 68.0 70.0 68.8 67.0 65.8 60.8 56.3Term loans 23.7 23.8 24.6 24.4 26.6 29.4 34.5Share of advances (per cent)

Secured 82.8 84.6 86.8 82.5 79.4 78.1 80.0Government guarantee 11.6 11.6 9.4 13.1 14.0 13.6 10.0Unsecured 5.6 3.7 3.8 4.4 6.6 8.3 10.0Share of investments (per cent)

Government securities 72.5 77.1 82.6 84.2 86.3 89.4 91.2Other approved securities 13.8 9.6 6.8 5.7 4.4 3.0 2.4Shares 2.0 0.5 0.4 0.2 0.4 0.3 0.3Debentures 11.7 10.9 8.5 8.8 8.2 6.7 4.6Subsidiary 0.0 0.0 0.0 0.0 0.0 0.0 0.0Others 0.0 1.9 1.7 1.1 0.7 0.6 1.6Net NPAs (per cent) 7.13 10.45 10.14 7.83 5.72 4.13 1.24n.a.: Not availableSource: CRIS INFAC


UTI Bank Ltd Table 21

Continued...

(Rs crore) 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Liabilities

Capital 132 132 132 192 230 232

Reserves and surplus 74 108 170 423 689 906

Deposits 3,041 5,720 9,092 12,287 16,965 20954

Borrowings 521 531 1,146 1,246 719 528

Other liabilities and provisions 148 178 226 227 1,010 1530Total 3,915 6,669 10,766 14,374 19,613 24,150

Assets

Cash and balances with RBI 338 401 881 1,123 1,600 3777

Balances with bank and money at call 158 492 331 628 1,970 1886Investments 1,101 2,065 4,193 6,630 7,841 7793Advances 2,170 3,507 4,821 5,352 7,180 9363Fixed assets 69 85 234 260 306 435Other assets 79 119 306 380 717 896Total 3,915 6,669 10,766 14,375 19,613 24,150

Deposits

Demand 365 666 829 1,151 2,486 5,394

Savings 147 306 569 876 1423.24 2,585

Term 2,529 4,748 7,694 10,260 13,056 12,976Total 3,041 5,720 9,092 12,287 16,965 20,954

Deposits of branches in India 3,041 5,720 9,092 12,287 16,965 20,954

Deposits of branches abroad 0 0 0 0 0 0Total 3,041 5,720 9,092 12,287 16,965 20,954

Borrowings

RBI 43 80 72 51 0 0

Other banks 306 151 505 465 247 98

Other institutions and agencies 171 300 569 730 411 303

Forex borrowings 0 0 0 0 62 127Total 521 531 1,146 1,246 719 528


Inter-office adjustments 9 3 0 1 0 0

Bills payable 50 64 93 102 233 439

Interest accrued 14 3 50 16 21 31

Others (including provisions) 90 112 133 124 777 1,092Total 148 178 226 227 1,010 1,530

Balance with RBI 329 377 833 1,055 1,487 3,624


Bills purchases and discounted 1,401 1,996 1,655 166 210 259

Cash credit and overdraft 586 1,154 2,113 2,597 3,061 3,120

Term loans 183 357 1,053 2,590 3,909 5,985Total 2,170 3,507 4,821 5,352 7,180 9,363


...continued

continued...

(Rs crore) 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Secured 936 1,624 3,024 4,226 6,317 8,239Government guarantee 1,233 1,533 732 67 58 88

Unsecured 1 349 1,066 1,060 804 1,036Total 2,170 3,507 4,821 5,352 7,180 9,363

Priority sector 235 303 348 868 1,639 2,456Public sector 21 93 430 13 111 15

Banks 25 0 0 3 0 0

Others 1,890 3,111 4,043 4,468 5,429 6,892Total 2,170 3,507 4,821 5,352 7,180 9,363

Advances outside India 0 0 0 0 0 0Total 2,170 3,507 4,821 5,352 7,180 9,363

Investments

Investments outside India 0 0 0 0 0 0


- Government securities 771 1,368 2,427 3,649 4,648 5,056

- Other approved securities 0 0 0 0 0 0

- Shares 70 118 192 197 205 190

- Debentures 138 243 1026 1,805 2,960 2,539

- Subsidiaries/JV 0 0 0 0 0 0

- Others 122 336 548 979 27 8Total 1,101 2,065 4,193 6,630 7,841 7,793

Total investments 1,101 2,065 4,193 6,630 7,841 7,793

Movement in NPA

Gross NPA

Opening balance n.a. 157 194 226 282 229

Additions n.a. 63 48 200 86 241

Reductions n.a. 27 16 143 139 195

Closing balance n.a. 194 226 282 229 275Net NPA-Closing balance n.a. 165 181 185 162 112


Interest earned

Interest/Discount on advances/bills 237 297 474 540 736 768


Interest on balances with RBI 18 25 40 31 37 33

Others 2 5 2 7 116 147Total 373 483 890 1,180 1,465 1,587

Other income

Commission exchange and brokerage 33 45 86 98 144 182

Profit on sale of investments 6 40 64 305 246 321Loss on sale of investments 0 0 0 0 0 0

Profit on sale of fixed assets 0 0 0 -1 -2 -1

Loss on revaluation of investments 0 0 0 0 0 0

Profit on forex transactions 5 5 5 9 17 28

Income from investments 0 0 0 0 0 0


Miscellaneous income 2 2 2 1 1.46 9Total 47 91 163 416 410 540

Total income 420 574 1,053 1,595 1,875 2,127


...continued

continued...

(Rs crore) 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Interest expended

Interest on deposits 262 340 704 857 1,057 934

Interest on RBI/inter bank 15 24 33 53 27 19

Others 24 29 54 70 59 68Total 301 393 791 980 1,142 1,021

Operating expenses

Salaries 12 15 29 50 85 121

Others 29 39 79 119 189 236

Depreciation 10 11 22 37 49 62Total 51 65 129 205 323 419

Provisions and contingencies 37 65 46 276 218 408Total expenses including provisions 389 523 967 1,461 1,683 1,849

Profit for the year 31 51 86 134 192 278

Profits inclusive of provisions 68 116 133 410 410 686Contingent liabilities

Claims against banks 26 26 26 36 36 40

Liability for partly paid investments 0 0 0 0 0 0

Liability for outstanding forex contracts 1,758 3,409 4,821 5780 11,176 34,622

Guarantees

- In India 197 290 727 865 984 1,222

- Outside India 0 0 0 0 0 0Liability on account of outstanding derivative contracts

0 0 0 0 0 0

Acceptances and endorsements 387 267 484 528 872 1,535

Currency Swaps 0 0 0 0 0 0

Others 6 12 15 9 1 21Total 2,375 4,005 6,073 7,219 13,068 37,440


Provison for NPAs 13 9 19 59 90 244Depreciation in values of investments 4 2 -2 0 5 4Provision for taxation 15 28 18 79 109 151Other Provisions 18 35 30 197 13 9Total 37 65 46 276 218 408

Financial analysis


Overall n.a. 88 59 35 38 24

Demand n.a. 82 25 39 116 117

Savings n.a. 108 86 54 63 82

Term n.a. 88 62 33 27 -1Share of deposits (per cent) n.a.

Demand n.a. 12 9 9 15 26

Savings n.a. 5 6 7 8 12

Term n.a. 83 85 84 77 62


...continued

(Rs crore) 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04



Return on assets 1.6 1.0 1.0 1.1 1.1 1.3

Return on equity 30.1 22.9 31.8 29.3 25.1 27.1

Gearing (times) 18.0 26.8 34.7 22.4 20.3 20.2

Staff costs to operating expenses 23.6 23.6 22.1 24.1 26.4 28.9

Non-fund income to total income 11.1 15.9 15.5 26.1 21.9 25.4

Operating expenses to total income 12.2 11.4 12.2 12.9 17.2 19.7

Operating expenses to deposits 1.7 1.1 1.4 1.7 1.9 2.0

Earning per share (Rs) 4.2 4.7 5.1 3.2 2.8 3.1

Cost to income ratio 42.79 36.02 49.28 33.39 44.05 37.92

Cost to income ratio (w/o profit on invest) 45.24 46.10 65.20 66.29 66.33 53.43Financial management (per cent)

Interest cost n.a. 7.92 9.51 8.18 7.24 5.13

Average cost of deposits 17.2 7.8 9.5 8.0 7.2 4.9

Average cost of borrowings 14.8 10.1 10.5 10.3 8.7 14.0

Yield on carry business n.a. 10.08 11.48 10.70 9.48 7.74

Average yield on investments 21.2 9.9 11.9 11.1 8.0 8.2

Average yield on advances 21.8 10.5 11.4 10.6 11.7 9.3

Spreads n.a. 2.17 1.97 2.52 2.23 2.62

Operating expenses to AFD n.a. 1.28 1.54 1.72 2.00 2.02

Core fee income to AFD n.a. 0.99 1.18 0.92 1.02 1.05

Net Profitability Margin n.a. 1.88 1.61 1.73 1.26 1.64

Deposits to borrowings (times) 5.8 8.3 8.8 8.9 14.9 30.4

Capital adequacy 11.6 11.4 9.0 10.7 10.9 11.2

Provisions as a percentage of profit before 54.5 56.2 35.0 67.3 53.1 59.4

provisions

Provisions as a percentage of networth 18.0 27.2 15.4 44.9 23.7 35.8Liquidity (per cent)

Credit-deposit ratio 71 61 53 44 42 45

Incremental credit deposit ratio n.a. 50 39 17 39 55

Borrowings to total deposits 17 9 13 10 4 3

Cash-deposit ratio 0 0 1 0 1 1

Investment-deposit ratio 36 36 46 54 46 37

Incemental I/D ratio n.a. 36 63 76 26 -1

Reserves as a percentage of net worth n.a. 45 56 69 75 80Growth (per cent)

Advances n.a. 62 37 11 34 30

Deposits n.a. 88 59 35 38 24

Investments n.a. 88 103 58 18 -1

Salaries cost n.a. 28 85 74 72 42

Commission and fee n.a. 37 93 13 47 27

Interest income n.a. 29 84 33 24 8Others

Branches (nos) 35 49 86 139 192 188

Advances per branch (Rs crore) 61.99 71.56 56.06 38.51 37.40 49.80

Operating expenses per branch (Rs crore) 1.46 1.33 1.50 1.48 1.68 2.23

continued...

Employees (nos) 521 739 1,185 1,721 2,338 3,447

Income per employee (Rs crore) 0.81 0.78 0.89 0.93 0.80 0.62

Income/employee expenses (times) 34.93 37.23 36.91 32.18 22.00 17.54


...continued

(Rs crore) 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04


Interest 89 84 85 74 78 75

Forex 1 1 0 1 1 1

Commission, brokerage 8 8 8 6 8 9Share of advances (per cent)

Priority 11 9 7 16 23 26

Public 1 3 9 0 2 0

Inter bank 1 0 0 0 0 0

Others 87 89 84 83 76 74

Abroad 0 0 0 0 0 0Share of advances (per cent)

Bills 65 57 34 3 3 3

Cash credit 27 33 44 49 43 33

Term loans 8 10 22 48 54 64Share of advances (per cent)

Secured 43 46 63 79 88 88

Government guarantee 57 44 15 1 1 1

Unsecured 0 10 22 20 11 11Share of investments (per cent)

Government securities 70 66 58 55 59 65

Other approved securities 0 0 0 0 0 0

Shares 6 6 5 3 3 2

Debentures 12 12 24 27 38 33

Subsidiary 0 0 0 0 0 0

Others 11 16 13 15 0 0

Net NPAs (per cent) 6.3 4.5 3.4 2.7 2.4 1.3



The South Indian Bank Ltd Table 22

Continued...

(Rs crore) 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Liabilities

Capital 19 35 36 36 36 36 36

Reserves and surplus 93 128 151 183 239 285 359

Deposits 2,738 3,123 3,885 4,669 5,920 6,861 8280

Borrowings 30 108 96 64 61 95 79

Other liabilities and provisions 183 188 276 265 299 352 500Total 3,064 3,582 4,444 5,216 6,555 7,629 9,254

Assets

Cash and balances with RBI 267 265 292 295 301 396 405

Balances with bank and money at call 199 305 227 282 620 384 401Investments 1,006 1,200 1,749 1,998 2,181 2,999 3962Advances 1,466 1,665 2,021 2,468 3,231 3,613 4197Fixed assets 24 28 34 36 44 54 66Other assets 101 120 121 137 179 182 223Total 3,064 3,582 4,444 5,216 6,555 7,629 9,254

Deposits

Demand 169 193 238 227 291 328 398

Savings 371 483 613 718 831 988 1,339

Term 2,199 2,447 3,034 3,724 4,797 5,545 6,544Total 2,738 3,123 3,885 4,669 5,920 6,861 8,280

Deposits of branches in India 2,738 3,123 3,885 4,669 5,920 6,861 8,280

Deposits of branches abroad 0 0 0 0 0 0 0Total 2,738 3,123 3,885 4,669 5,920 6,861 8,280

Borrowings

RBI 0 84 0 52 17 0 0

Other banks 0 0 0 5 2 81 4

Other institutions and agencies 28 18 10 0 0 0 0

Forex borrowings 2 6 85 7 42 14 75Total 30 108 96 64 61 95 79


Inter-office adjustments 18 9 10 20 16 15 5

Bills payable 40 43 53 47 72 60 82

Interest accrued 28 35 46 32 34 32 38

Others (including provisions) 97 101 167 166 178 245 375Total 183 188 276 265 299 352 500

Balance with RBI 233 245 250 247 337 332


Bills purchases and discounted 175 185 194 257 355 393 509

Cash credit and overdraft 731 829 1,038 1,265 1,673 1,588 1,546

Term loans 559 651 790 947 1,203 1,632 2,142Total 1,466 1,665 2,021 2,468 3,231 3,613 4,197


...continued

continued...

(Rs crore) 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Secured 1,291 1,456 n.a. 2,132 2,557 2,763 3,308Government guarantee 15 42 n.a. 88 264 229 300

Unsecured 159 166 n.a. 248 410 621 589Total 1,466 1,665 n.a. 2,468 3,231 3,613 4,197

Priority sector 388 473 n.a. 734 919 1,004 1,291Public sector 10 10 n.a. 77 414 292 464

Banks 0 0 n.a. 0 0 68 66

Others 1,067 1,182 n.a. 1,658 1,898 2,249 2,376Total 1,466 1,665 n.a. 2,468 3,231 3,613 4,197

Advances outside India 0 0 0 0 0 0 0Total 1,466 1,665 2,021 2,468 3,231 3,613 4,197

Investments

Investments outside India 0 0 0 0 0 0 0


- Government securities 654 824 1,391 1,668 1,866 2,614 3,580

- Other approved securities 99 94 92 90 80 71 56

- Shares 19 22 23 14 12 13 10

- Debentures 205 226 221 220 216 240 201

- Subsidiaries/JV 2 3 2.82 0 0 0 0

- Others 28 31 20 6 7 62 116Total 1,006 1,200 1,749 1,998 2,181 2,999 3,962

Total investments 1,006 1,200 1,749 1,998 2,181 2,999 3,962

Movement in NPA

Gross NPA

Opening balance n.a. n.a. n.a. n.a. 257 336 346

Additions n.a. n.a. n.a. n.a. 114 108 134

Reductions n.a. n.a. n.a. n.a. 35 982 152

Closing balance n.a. n.a. n.a. n.a. 336 346 328Net NPA-Closing balance n.a. n.a. n.a. n.a. 213 216 190


Interest earned

Interest/Discount on advances/bills 204 237 264 303 360 374 358

Income on investments 126 148 188 218 236 262 309

Interest on balances with RBI 0 0 18 0 0 0 0

Others 8 15 0 19 20 21 13Total 339 400 469 540 615 657 680

Other income

Commission exchange and brokerage 12 15 20 24 24 19 20

Profit on sale of investments 2 3 33 25 86 133 187

Loss on sale of investments 0 0 0 0 0 0 0

Profit on sale of fixed assets 0 0 0 0 0 0 0Loss on revaluation of investments 0 0 0 0 0 0 0

Profit on forex transactions 5 8 8 8 10 10 9

Income from investments 0 0 0 0 0 0 0

Lease income 0 0 13 0 0 0 0

Miscellaneous income 7 10 0 15 18 18.96 18Total 26 37 75 73 139 180 235

Total income 365 437 543 613 754 838 915


...continued

continued...

(Rs crore) 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Interest expended

Interest on deposits 249 295 332 370 449.2 469 465

Interest on RBI/inter bank 1 4 6 6 3 0 0

Others 11 13 13 16 8 11 14Total 261 312 351 391 460 479 480

Operating expenses

Salaries 54 64 86 85 84 94 131

Others 17 23 23 27 32 41 52

Depreciation 2 3 3 3 4 7 10Total 73 90 113 115 121 142 193

Provisions and contingencies 19 31 54 65 110 144 158Total expenses including provisions 354 433 518 571 692 765 831

Profit for the year 11 4 26 41 62 72 84


Claims against banks 9 19 0 26 15 17 16

Liability for partly paid investments 0 0 0 0 0 0 0

Liability for outstanding forex contracts 80 173 153 140 222 389 457

Guarantees

- In India 75 152 111 103 157 138 150

- Outside India 0 0 0 0 0 0 0Liability on account of outstanding derivative contracts

0 0 0 0 0 0 0

Acceptances and endorsements 70 125 172 158 191 161 179

Currency Swaps 0 0 0 0 0 0 0

Others 0 0 23 0 0 1 1Total 234 469 459 428 586 706 802


Provison for NPAs 9 27 25 39 52 94 108Depreciation in values of investments 0 1 0 0 0 1 0Provision for taxation 7 0 24 25 61 72 77Other Provisions 4 3 5 1 -2 -23 -28Total 19 31 54 65 110 144 158

Financial analysis


Overall n.a. 14 24 20 27 16 21

Demand n.a. 14 23 -5 29 13 21

Savings n.a. 30 27 17 16 19 35

Term n.a. 11 24 23 29 16 18Share of deposits (per cent)

Demand 6 6 6 5 5 5 5

Savings 14 15 16 15 14 14 16

Term 80 78 78 80 81 81 79


...continued

(Rs crore) 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04



Return on assets n.a. 0.12 0.64 0.86 1.06 1.02 1.00

Return on equity n.a. 2.8 14.8 20.5 25.3 24.3 23.6

Gearing (times) 26.2 20.9 22.8 22.9 22.9 22.8 22.4

Staff costs to operating expenses 73.5 71.0 76.7 74.1 69.8 66.5 67.6

Non-fund income to total income 7.1 8.4 13.7 11.8 18.4 21.5 25.7

Operating expenses to total income 20.1 20.6 20.7 18.8 16.0 16.9 21.1

Operating expenses to deposits 2.7 2.9 2.9 2.5 2.0 2.1 2.3

Earning per share (Rs) 1.1 0.3 1.7 2.3 2.6 2.5 2.3

Cost to income ratio 71.0 71.9 58.4 51.8 41.2 39.6 44.4

Cost to income ratio (w/o profit on invest) 72.4 73.6 70.6 58.5 58.3 62.8 78.0Financial management (per cent)

Interest cost n.a. 10.25 9.66 8.91 8.50 7.34 6.21

Average cost of deposits n.a. 10.1 9.5 7.8 7.0 7.3 6.1

Average cost of borrowings n.a. 23.9 18.6 26.8 17.5 13.9 16.7

Yield on carry business n.a. 12.76 12.31 11.66 10.86 9.64 8.42

Average yield on investments n.a. 13.4 12.7 11.6 11.3 10.1 8.9

Average yield on advances n.a. 15.1 14.3 13.5 12.6 10.9 9.2

Spreads n.a. 2.51 2.65 2.75 2.36 2.31 2.21

Operating expenses to AFD n.a. 2.82 2.91 2.47 2.13 2.07 2.36

Core fee income to AFD n.a. 0.90 1.07 0.85 0.76 0.56 0.47

Net Profitability Margin n.a. 0.58 0.80 1.13 0.99 0.80 0.32

Deposits to borrowings (times) n.a. 42.6 34.5 53.6 84.4 81.8 86.8

Capital adequacy 9.4 10.4 10.4 11.2 11.2 10.8 11.3

Provisions as a percentage of profit before 64.6 88.9 67.8 61.2 63.9 66.6 65.2

provisions

Provisions as a percentage of networth 17.1 19.1 29.1 30.0 40.2 44.9 39.9Liquidity (per cent)

Credit-deposit ratio 54 53 52 53 55 53 51

Incremental credit deposit ratio 52 47 57 61 41 41

Borrowings to total deposits 1 3 2 1 1 1 1

Cash-deposit ratio 0 1 1 1 1 1 1

Investment-deposit ratio 37 38 45 43 37 44 48

Incemental I/D ratio 50 72 32 15 87 68

Reserves as a percentage of net worth 83 78 81 84 87 89 91Growth (per cent)

Advances n.a 14 21 22 31 12 16

Deposits n.a 14 24 20 27 16 21

Investments n.a 19 46 14 9 38 32

Salaries cost n.a 18 35 -1 -1 12 39

Commission and fee n.a 28 31 21 -1 -18 5

Interest income n.a 18 17 15 14 7 3Others

Branches (nos) 354 361 n.a. 372 380 391 410

Advances per branch (Rs crore) 4.14 4.61 n.a. 6.64 8.50 9.24 10.24

Operating expenses per branch (Rs crore) 0.21 0.25 n.a. 0.31 0.32 0.36 0.47

Employees (nos) 3,770 3,785 n.a. 3,739 3,697 3,350 3,534

Income per employee (Rs crore) 0.10 0.12 n.a. 0.16 0.20 0.25 0.26

Income/employee expenses (times) 6.76 6.85 6.30 7.19 8.93 8.88 7.00

continued...


...continued

(Rs crore) 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04


Interest 93 92 86 88 82 78 74

Forex 1 2 2 1 1 1 1

Commission, brokerage 3 3 4 4 3 2 2Share of advances (per cent)

Priority 26 28 n.a. 30 28 28 31

Public 1 1 n.a. 3 13 8 11

Inter bank 0 0 n.a. 0 0 2 2

Others 73 71 n.a. 67 59 62 57

Abroad 0 0 0 0 0 0 0Share of advances (per cent)

Bills 12 11 10 10 11 11 12

Cash credit 50 50 51 51 52 44 37

Term loans 38 39 39 38 37 45 51Share of advances (per cent)

Secured 88 87 n.a. 86 79 76 79

Government guarantee 1 3 n.a. 4 8 6 7

Unsecured 11 10 n.a. 10 13 17 14Share of investments (per cent)

Government securities 65 69 80 83 86 87 90

Other approved securities 10 8 5 5 4 2 1

Shares 2 2 1 1 1 0 0

Debentures 20 19 13 11 10 8 5

Subsidiary 0 0 0 0 0 0 0

Others 3 3 1 0 0 2 3

Net NPAs (per cent) n.a. n.a. n.a. 7.1 6.6 6.0 4.6



The Jammu & Kashmir Bank Ltd Table 23

Continued...

(Rs crore) 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04Liabilities

Capital 30 48 48 48 48 48 48Reserves and surplus 245 381 480 651 889 1194 1545Deposits 4,882 6,444 9,422 11,168 12,911 14,675 18661Borrowings 12 209 21 177 185 216 297

Other liabilities and provisions 425 438 590 675 666 661 654Total 5,596 7,519 10,561 12,719 14,699 16,794 21,206Assets

Cash and balances with RBI 883 773 1,402 1,088 1,016 721 1535Balances with bank and money at call 261 567 894 970 952 800 1382Investments 2,061 2,951 4,254 5,425 5,752 6,738 8451Advances 2,158 2,951 3,518 4,763 6,424 8,011 9285Fixed assets 38 63 107 131 167 172 196Other assets 195 214 386 344 387 352 357Total 4,712 7,519 10,561 12,719 14,699 16,794 21,206Deposits

Demand 802 1143 1,821 1,566 2,037 2088 2176Savings 1,042 1,216 1,596 1,873 2,359 2812 3471

Term 3,039 4,085 6,005 7,729 8,515 9775 13,014Total 4,882 6,444 9,422 11,168 12,911 14,675 18,661



Inter-office adjustments 61 37 92 147 20 0 11Bills payable 184 189 237 194 216 186 236Interest accrued 32 45 67 84 88 89 71Others (including provisions) 149 166 195 249 342 386 335Total 425 438 590 675 666 661 654

Balance with RBI 837 716 1,337 1,027 947 635 1,439Cash in hand 46 57 65 60 69 85 96Advances

Bills purchases and discounted 68 161 218 241 288 571 347Cash credit and overdraft 1,485 1,695 1,891 2,220 2,969 3,512 3,858Term loans 605 1,096 1,409 2,302 3,167 3,928 5,080Total 2,158 2,951 3,518 4,763 6,424 8,011 9,285


...continued

(Rs crore) 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Secured 1,125 1,701 1,954 3,202 4,351 5,680 6,306Government guarantee 1,015 1,187 1,348 1,216 1,594 1,554 2,237Unsecured 18 63 216 345 479 777 742Total 2,158 2,951 3,518 4,763 6,424 8,011 9,285

Priority sector 356 610 812 1,179 1,317 1,506 1,966Public sector 1,210 1,714 1424 1,717 2,233 2,327 2,955Banks 1 34 2 3 240 311 200Others 591 593 1,280 1,864 2,634 3,867 4,164Total 2,158 2,951 3,518 4,763 6,424 8,011 9,285



- Government securities 1,418 1,913 2,358 3,209 3,468 3,816 5,041 - Other approved securities 177 250 235 221 141 134 118 - Shares 11 24 128 108 95 82 78 - Debentures 391 702 1,286 1,761 1,877 2,388 2,696 - Subsidiaries/JV 6 6 10 10 10 10 10 - Others 58 56 238 64 161 309 509Total 2,061 2,951 4,254 5,374 5,753 6,738 8,451Total investments 2,061 2,951 4,254 5,374 5,753 6,738 8,451Movement in NPA

Gross NPA

Opening balance n.a. n.a. 244 238 243 237 253Additions n.a. n.a. 67 80 70 87 143Reductions n.a. n.a. 73 75 76 71 110Closing balance n.a. n.a. 238 243 237 253 286Net NPA-Closing balance n.a. 112 113 117 121 127 138Profit and loss statement

Interest earned

Interest/Discount on advances/bills 259 341 381 435 640 760 821Income on investments 249 316 441 568 652 625 664Interest on balances with RBI 23 36 63 73 63 42 36Others

Total 531 694 885 1,077 1,354 1,427 1,521Other income

Commission exchange and brokerage 13 15 20 21.95 28 35 41Profit on sale of investments 20 10 61 0 182 214 226Loss on sale of investments 0 0 0 0 0 0 0Profit on sale of fixed assets 0 0 0 0 0 0 0Loss on revaluation of investments 0 0 0 20 19 0 0Profit on forex transactions 5 6 1 4 4 5 5Income from investments 0 0 0 0 0 2 2

continued...

Lease income 0 0 0 0 0 0 0Miscellaneous income 20 12 24 36 23 32 27Total 58 43 105 81 257 287 302Total income 588 737 990 1,157 1,611 1,715 1,823


...continued

continued...

(Rs crore) 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04Interest expended

Interest on deposits 328 429 573 713 879.44 856 876Interest on RBI/inter bank 1 2 26 4 26 25 15Others 0 0 0 3 10 10 10Total 329 431 598 720 915 892 901Operating expenses


Provisions and contingencies 111 86 112 105 210 214 222Total expenses including provisions 538 651 870 990 1,360 1,366 1,417Profit for the year 50 85 120 168 251 349 406


Claims against banks 6 7 10 9 11 10 9Liability for partly paid investments 1 0 0 0 0 0 0Liability for outstanding forex contracts 554 292 122 1,745 1324 1,880 2,856Guarantees

- In India 14 28 33 188 316 364 304 - Outside India 2 3 0 10 12 8 4Liability on account of outstanding derivative 0 0 0 0 0 0 0Acceptances and endorsements 0 9 8 307 282 481 843Currency Swaps 0 0 0 0 0 0 0Others 23 16 15 7 5 4 2Total 600 355 187 2,266 1,949 2,747 4,017Provisions and contingencies

Provison for NPAs 0 22 20.77 21.12 27.38 13 30Depreciation in values of investments 7 5.13 13 0 6 13 0

Provision for taxation 48 45 57 65 119 134 170Other Provisions 56 14 21 19 59 54 22Total 111 86 112 105 210 214 222Financial analysis


Overall n.a. 32 46 19 16 14 27Demand n.a. 43 59 -14 30 2 4Savings n.a. 17 31 17 26 19 23Term n.a. 34 47 29 10 15 33Share of deposits (per cent)



...continued

(Rs crore) 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04Financial Parameters


Return on assets n.a. 1.40 1.33 1.44 1.83 2.21 2.14Return on equity n.a. 24.3 25.1 27.3 30.6 32.0 28.7Gearing (times) 19.3 16.6 19.0 17.2 14.7 12.5 12.3Staff costs to operating expenses 60.0 63.5 56.4 58.1 61.6 61.0 57.4Non-fund income to total income 9.8 5.8 10.6 7.0 16.0 16.8 16.5Operating expenses to total income 16.7 18.2 16.1 14.2 14.5 15.2 16.1Operating expenses to deposits 2.0 2.1 1.7 1.5 1.8 1.8 1.6Earning per share (Rs) 2.1 2.2 2.5 2.6 2.8 2.9 2.6Cost to income ratio 37.8 43.8 40.7 37.7 33.7 31.6 31.8Cost to income ratio (w/o profit on invest) 40.9 45.3 48.2 37.7 45.7 42.7 42.2Financial management (per cent)

Interest cost n.a. 7.23 7.24 6.78 7.37 6.28 5.26

Average cost of deposits n.a. 7.6 7.2 6.9 7.3 6.2 5.3

Average cost of borrowings n.a. 1.9 22.2 6.4 19.9 17.7 9.8Yield on carry business n.a. 12.00 10.50 9.90 10.44 9.60 8.47

Average yield on investments n.a. 12.6 12.2 11.7 11.7 10.0 8.7

Average yield on advances n.a. 13.4 11.8 10.5 11.4 10.5 9.5Spreads n.a. 4.77 3.26 3.11 3.07 3.31 3.21Operating expenses to AFD n.a. 2.28 1.84 1.48 1.78 1.71 1.59Core fee income to AFD n.a. 0.46 0.38 0.39 0.33 0.37 0.32Net Profitability Margin n.a. 2.95 1.79 2.03 1.63 1.97 1.95Deposits to borrowings (times) n.a. 51.1 69.0 104.2 66.5 68.8 65.0Capital adequacy 20.5 24.5 18.8 17.4 15.5 16.5 16.9Provisions as a percentage of profit before 68.7 50.3 48.2 38.6 45.6 38.0 35.3provisions


Credit-deposit ratio 44 46 37 43 50 55 50Incremental credit deposit ratio 51 19 71 95 90 32Borrowings to total deposits 0 3 0 2 1 1 2Cash-deposit ratio 1 1 1 1 1 1 1Investment-deposit ratio 42 46 45 49 45 46 45Incemental I/D ratio 57 44 67 19 56 43Reserves as a percentage of net worth 89 89 91 93 95 96 97Growth (per cent)

Advances 37 19 35 35 25 16Deposits 32 46 19 16 14 27Investments 43 44 28 6 17 25Salaries cost 45 6 7 50 10 6Commission and fee 12 32 11 28 24 18Interest income 31 28 22 26 5 7Others

continued...

Branches (nos) 370 389 404 426 441 454 475Advances per branch (Rs crore) 5.83 7.59 8.71 11.18 14.57 17.65 19.55Operating expenses per branch (Rs crore) 0.26 0.34 0.39 0.39 0.53 0.57 0.62Employees (nos) 5,689 6,254 6,278 6,470 6,495 7,112 7,085Income per employee (Rs crore) 0.10 0.12 0.16 0.18 0.25 0.24 0.26Income/employee expenses (times) 9.99 8.66 11.02 12.08 11.17 10.82 10.83


...continued

(Rs crore) 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04Total income (per cent)

Interest 90 94 89 93 84 83 83Forex 1 1 0 0 0 0 0Commission, brokerage 2 2 2 2 2 2 2Share of advances (per cent)

Priority 17 21 56 25 21 19 21Public 56 58 38 36 35 29 32Inter bank 0 1 6 0 4 4 2Others 27 20 36 39 41 48 45Abroad 0 0 0 0 0 0 0Share of advances (per cent)

Bills 3 5 6 5 4 7 4Cash credit 69 57 54 47 46 44 42Term loans 28 37 40 48 49 49 55Share of advances (per cent)

Secured 52 58 56 67 68 71 68Government guarantee 47 40 38 26 25 19 24Unsecured 1 2 6 7 7 10 8Share of investments (per cent)

Government securities 69 65 55 60 60 57 60Other approved securities 9 8 6 4 2 2 1Shares 1 1 3 2 2 1 1Debentures 19 24 30 33 33 35 32Subsidiary 0 0 0 0 0 0 0Others 3 2 6 1 3 5 6Net NPAs (per cent) 4.6 3.8 3.2 2.5 1.9 1.6 1.5n.a.: Not available

Source: CRIS INFAC


The Karnataka Bank Ltd Table 24

Continued...

(Rs crore) 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04Liabilities

Capital 13 13 13 13 13 40 40Reserves and surplus 214 248 298 336 428 543 658Deposits 3,408 4,382 5,174 6,076 7,001 8,292 9407

Borrowings 92 125 134 130 97 165 183

Other liabilities and provisions 131 100 122 121 223 224 288Total 3,860 4,869 5,742 6,677 7,763 9,265 10,577Assets

Cash and balances with RBI 417 455 528 394 342 437 389Balances with bank and money at call 208 413 498 451 301 199 361Investments 1,258 1,775 2,063 2,787 3,467 4,433 4879Advances 1,818 2,047 2,451 2,828 3,418 3,900 4668Fixed assets 65 74 72 77 74 79 93Other assets 94 105 130 140 161 218 187Total 3,860 4,869 5,742 6,677 7,763 9,265 10,577Deposits

Demand 252 299 402 395 400 466 569Savings 452 557 694 795 908 1070 1339

Term 2,705 3,527 4,078 4,886 5,693 6756 7,499Total 3,408 4,382 5,174 6,076 7,001 8,292 9,407



Inter-office adjustments 9 12 17 18 4 88 124Bills payable 26 43 40 42 89 2 3Interest accrued 14 9 14 16 14 16 22Others (including provisions) 83 36 52 46 116 118 139Total 131 100 122 121 223 224 288

Balance with RBI n.a. 410 41 346 296 393 393Cash in hand n.a. 45 487 48 46 44 56Advances

Bills purchases and discounted 210 230 276 259 257 277 301Cash credit and overdraft 1,223 1,368 1,596 1,875 2,368 2,490 2,813Term loans 385 449 580 694 793 1,133 1,554Total 1,818 2,047 2,451 2,828 3,418 3,900 4,668


...continued

continued...

(Rs crore) 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Secured 1,528 1,649 1,954 2,297 2,638 2,971 3,492Government guarantee 253 359 424 430 436 602 760Unsecured 37 38 73 101 344 327 417Total 1,818 2,047 2,451 2,828 3,418 3,900 4,668

Priority sector 694 781 916 953 1,195 1,501 1,910Public sector 6 6 12 12 2 65 276Banks 0 0 1 0 0 70 102Others 1,118 1,259 1,523 1,862 2,221 2,263 2,379Total 1,818 2,047 2,451 2,828 3,418 3,900 4,668



- Government securities 946 1,149 1,326 2,162 2,815 3,368 2,970 - Other approved securities 61 64 63 63 59 48 39 - Shares 18 28 31 25 14 5 10 - Debentures 189 484 550 477 486 982 1,767 - Subsidiaries/JV 0 0 0 0 0 0 0 - Others 44 49 93 60 93 30 93Total 1,258 1,775 2,063 2,787 3,467 4,433 4,879Total investments 1,258 1,775 2,063 2,787 3,467 4,433 4,879Movement in NPA

Gross NPA

Opening balance n.a. n.a. 169 223 321 374 538Additions n.a. n.a. 82 121 84 218 132Reductions n.a. n.a. 28 228 317 54 72Closing balance n.a. n.a. 223 321 374 538 598Net NPA-Closing balance n.a. n.a. 140 196 201 286 231Profit and loss statement

Interest earned

Interest/Discount on advances/bils 257 272 302 302 347 400 417Income on investments 161 191 243 243 259 390 405Interest on balances with RBI 10 28 32 32 41 19 18Others 2 0 1 1 7 3 8Total 430 491 578 578 654 811 848Other income

Commission exchange and brokerage 25 30 40 40 46 48 53Profit on sale of investments 9 1 16 16 180 174 196Loss on sale of investments 0 0 0 0 0 0 0Profit on sale of fixed assets 0 0 0 0 0 0 0Loss on revaluation of investments 0 0 0 0 0 0 0Profit on forex transactions 8 11 10 10 10 12 14Income from investments 0 0 0 0 0 0 0Lease income 5 5 4 4 2 2 2Miscellaneous income 1 2 2 2 3 3 5Total 48 48 72 72 241 239 270Total income 478 540 650 650 895 1,051 1,119


...continued

continued...

(Rs crore) 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04Interest expended

Interest on deposits 276 357 447 447 489.9 645 622Interest on RBI/inter bank 3 6 9 9 7 8 7Others 13 12 8 8 5 4 5Total 292 375 464 464 502 657 635Operating expenses


Provisions and contingencies 44 30 23 40 91 143 197Total expenses including provisions 420 497 592 609 723 941 986Profit for the year 58 42 58 41 172 110 133


Claims against banks 7 7 7 7 7 8 10Liability for partly paid investments 0 0 0 0 0 0 0Liability for outstanding forex contracts 1587 1,210 2,642 2,642 1421 881 1,163Guarantees

- In India 84 117 158 158 104 193 248 - Outside India 0 0 0 0 0 0 0Liability on account of outstanding derivative contracts 0 0 0 0 0 0 0Acceptances and endorsements 80 126 170 170 117 203 284Currency swaps 0 0 0 0 0 0 0Others 13 30 35 35 63 124 145Total 1,771 1,489 3,013 3,013 1,712 1,408 1,850Provisions and contingencies

Provison for NPAs 20 17 23 23 37 81 128Depreciation in values of investments -7 0 -18 0 38 0 0Provision for taxation 31 13 17 17 15 62 68Other Provisions 0 0 0 0 0 0 0Total 44 30 23 40 91 143 197Financial analysis


Overall n.a. 29 18 17 15 18 13Demand n.a. 19 35 -2 1 16 22Savings n.a. 23 25 15 14 18 25Term n.a. 30 16 20 17 19 11Share of deposits (per cent)



...continued

(Rs crore) 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04Financial Parameters


Return on assets 3.01 0.97 1.10 0.66 2.38 1.29 1.34Return on equity 51.0 17.3 20.3 12.4 43.4 21.5 20.8Gearing (times) 15.9 17.6 17.4 18.1 16.6 14.9 14.1Staff costs to operating expenses 72.0 69.7 71.3 68.1 68.1 63.4 61.0Non-fund income to total income 10.0 8.9 11.1 11.1 26.9 22.8 24.2Operating expenses to total income 17.6 17.1 16.2 16.2 14.6 13.4 13.8Operating expenses to deposits 2.5 2.1 2.0 1.7 1.9 1.7 1.6Earning per share (Rs) 2.7 1.7 2.0 1.2 4.0 2.0 2.0Cost to income ratio 45.2 56.0 56.7 56.5 33.2 35.7 31.9Cost to income ratio (w/o profit on invest) 47.3 56.3 62.0 61.9 61.2 63.9 53.6Financial management (per cent)

Interest cost n.a. 9.29 9.37 8.00 7.47 8.39 7.03Average cost of deposits n.a. 9.2 9.3 7.9 7.5 8.4 7.0Average cost of borrowings n.a. 16.7 13.3 13.1 10.6 9.2 7.1Yield on carry business n.a. 11.91 11.53 9.80 9.48 9.92 8.87Average yield on investments n.a. 12.6 12.7 10.0 1.3 9.9 8.7Average yield on advances n.a. 14.1 13.4 11.4 11.1 10.9 9.7Spreads n.a. 2.62 2.15 1.80 2.01 1.53 1.84Operating expenses to AFD n.a. 2.20 2.07 1.76 1.87 1.71 1.60Core fee income to AFD n.a. 1.11 1.07 0.91 0.86 0.78 0.74Net Profitability Margin n.a. 1.53 1.16 0.96 1.00 0.60 0.98Deposits to borrowings (times) 37.0 35.9 37.0 42.6 57.6 58.3 50.8Capital adequacy 13.2 10.9 11.0 11.0 11.4 13.4 11.0Provisions as a percentage of profit before 43.0 41.3 27.9 49.5 34.5 56.6 59.6provisions


Credit-deposit ratio 53 47 47 47 49 47 50Incremental credit deposit ratio n.a. 23 51 42 64 37 69Borrowings to total deposits 3 3 3 2 1 2 2Cash-deposit ratio n.a. 1 9 1 1 1 1Investment-deposit ratio 37 41 40 46 50 53 52Incemental I/D ratio n.a. 53 36 80 73 75 40Reserves as a percentage of net worth 94 95 96 96 97 93 94Growth (per cent)

Advances n.a. 13 20 15 21 14 20Deposits n.a. 29 18 17 15 18 13Investments n.a. 41 16 35 24 28 10Salaries cost n.a. 6 17 -5 24 0 5Commission and fee n.a. 21 32 0 14 6 11Interest income n.a. 14 18 0 13 24 5Others

Branches (nos) 324 338 347 354 357 360 370Advances per branch (Rs crore) 5.61 6.06 7.06 7.99 9.57 10.83 12.62Operating expenses per branch (Rs crore) 0.26 0.27 0.30 0.30 0.37 0.39 0.42

continued...

Employees (nos) 3,925 3,929 4,075 4,084 4,144 4,320 4,300Income per employee (Rs crore) 0.12 0.14 0.16 0.16 0.22 0.24 0.26Income/employee expenses (times) 7.89 8.40 8.64 9.06 10.06 11.78 11.90


...continued

(Rs crore) 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04Total income (per cent)

Interest 90 91 89 89 73 77 76Forex 2 2 2 2 1 1 1Commission, brokerage 5 6 6 6 5 5 5Share of advances (per cent)

Priority 38 38 37 34 35 38 41Public 0 0 0 0 0 2 6Inter bank 0 0 0 0 0 2 2Others 61 62 62 66 65 58 51Abroad 0 0 0 0 0 0 0Share of advances (per cent)

Bills 12 11 11 9 8 7 6Cash credit 67 67 65 66 69 64 60Term loans 21 22 24 25 23 29 33Share of advances (per cent)

Secured 84 81 80 81 77 76 75Government guarantee 14 18 17 15 13 15 16Unsecured 2 2 3 4 10 8 9Share of investments (per cent)

Government securities 75 65 64 78 81 76 61Other approved securities 5 4 3 2 2 1 1Shares 1 2 1 1 0 0 0Debentures 15 27 27 17 14 22 36Subsidiary 0 0 0 0 0 0 0Others 4 3 5 2 3 1 2Net NPAs (per cent) 3.1 5.0 5.7 5.7 6.9 7.4 5.0n.a.: Not availableSource: CRIS INFAC


Section

Annexure

Glossary 289


Glossary

Interest cost: The ratio of total interest paid to average borrowed funds.

Borrowed funds: The total of deposits, borrowings and bills payable.

Yield on carry business: Defined as the total interest cost upon the average funds in carry

business.

Funds in carry business: Funds deployed less investment in shares, investments in subsidiaries

and joint ventures and other miscellaneous investments; invested within India and outside India.

Funds deployed: The funds deployed is defined as the total asset of the bank excluding fixed

assets and other assets.

Spreads: Spreads are defined as the difference between the yield on carry business less interest

cost.

Net profitability margin (NPM): NPM is defined as spreads add core fee income ratio less

operating expense ratio.

Relationship between the interest rate and spreads:

Generally, when interest rates are on the rise, both yields and costs go up; conversely, in a

declining interest rate scenario, both yields and costs go down. However, in a declining interest

rate regime, yields go down faster than costs do. The converse is true in a rising interest

rate regime.

Operating expense ratio: The ratio of total operating expense to the average funds deployed.

Core fee income ratio (or core fee-based income ratio): The ratio of the core fee income

to the average funds deployed.

Core fee income (or core fee-based income): Core fee income is total other income excluding

profit on sale of investments, sale of fixed assets and 50 per cent of the miscellaneous income.

Other income: Other income includes income from profit on sale of investments, profit on

sale of assets and half of the miscellaneous income.

Cost-income ratio: Cost-income ratio is the ratio of total operating expenses to the difference

of total income and interest expended.

Cost-income ratio (without profit on sale of investment): Cost-income ratio, when calculated

without considering profit of sale of investments in the net income.

Continued...


Net interest income (NII): The difference between the total interest income and total interest

expended.

Net interest margin (NIM): The ratio of net interest income to average total assets.

Business per employee: The ratio of business to number of employees as at end-March.

Operating profit per employee: The ratio of operating profit (i.e., profit before provisioning

and tax) to the total number of employees as at end-March.

Business: Business is defined as the summation of the advances and deposits for the bank.

Current deposits: Current deposits are those maintained by business class to meet the short-

term contingencies. No interest is payable on current deposits.

Savings deposits: Savings deposits are the deposits maintained by the households. RBI administers

the interest rate offered on these deposits.

Term deposits: These are also knows as fixed deposits or time deposits and are generally

payable at the end of a fixed period.

Low cost deposits: Demand deposits and saving deposits together form low cost deposits

Low cost deposit ratio: The ratio of low cost deposits to the total deposits is termed as

low cost deposit ratio.

Food credit: Food credit is the loan/advance given by the banks to the FCI for procurement

of food from the open market to be distributed through public distribution system

Non-food credit: Non-food credit is the total credit excluding food credit.

Capital adequacy ratio: is the ratio of total risk weighted assets of the bank to the eligible

capital. Minimum stipulated norm is 9 per cent.

Statutory liquidity ratio: Under section 24 (b) of the Banking Regulation Act, 1949, every

bank is required to maintain, at the close of business every day, a minimum proportion of

its net demand and time liabilities (NDTL) as liquid assets in the form of cash and gold and

un-encumbered approved securities. The ratio of liquid assets to demand and time liabilities is

known as Statutory Liquidity Ratio (SLR).

Gross NPAs: Total of the non-performing assets, before making any provisions.

Net NPAs: Non-performing assets net of provisions and amount collected from the NPAs and

kept in suspense.

continued...

...continued


Gross NPA ratio: The ratio of gross NPAs to gross advances

Net NPA ratio: The ratio of net NPAs to net advances.

Basis points: One basis point is one hundredth of a percent.

Return on assets: The ratio of profit after tax to average total assets (includes fixed assets

and other assets)

Credit-deposit ratio: The ratio of total net advances to total deposits.

Investment-deposit ratio: The ratio of total investments to total deposits.

Cost per employee: The ratio of total wage cost for the bank to total number of employees

as at end-March.

...continued

Banking

Documents

commercial credit

core business

deposits portfolio vis

asset quality of banks

loss account profitability

growth rate of investments

deposits borrowings

continued growth