Bank Performance Analysis of IDBI Bank

PROFITABILITY ANALYSIS
Mar-16 Mar-17 Mar-18

Rs in Crore Rs in Crore Rs in Crore

1 Total Assets 375387 322371 350592
2 Earning Assets
Balances with RBI 13822.91 13346.91 13163.69
Balances with Banks in Deposit Accounts 0 0 0
Balances with Banks & money at Call & Short Notice 9777.6 19337.16 20522.40
Balances with Banks Outside India
Investments + 92997.14 92934.41 91606.06
Advances + 215893.45 190825.93 171739.95
Total Earning Assets 332491.13 316444.41 297032.1
3 Interest bearing Liabilities
Saving Deposits 265719.83 268538.1 247931.61
Term & Other Deposits
Borrowings 70591.64 56363.98 63185.53
Subordinated Debt
Total Interest bearing liabilities 336311.47 324902.08 311117.14

Equity Capital 2058.82 2058.82 3083.86

Reserves 25662.97 20504.83 18125.87
Total Equity 27721.79 22563.65 21209.73
5 Interest Income 28042.76 27791.37 23026.53
6 Interest Expenditure 21953.81 22039.71 17386.21
10 Non-interest operating income 341035.72 396759.87 701357.99
11 Non-interest operating Expenditure 412958.42 514080.95 474468.76
12 Provisions and Contingencies 903486.93 13236.14 20497.05
Provisions and Contingencies include provision for tax 4.25 203.93 0.00
Profit After tax 3664.80 5158.14 8237.92

Profitability Ratios
Return on Assets= NI/ TA 0.01 0.02 0.02
Equity Multiplier TA/ TE 1354.12% 1428.72% 1652.98%
TE/ TA 0.07 0.07 0.06
ROE=ROA X EM 13.22% 22.86% 38.84%

NI/ OR 0.01 0.01 0.01

OR/ TA 0.91 1.23 2.00
TA/ TE 13.54 14.29 16.53

(II - IE)/ TA 1.62% 1.78% 1.61%

(OI-OE)/ TA -19.16% -36.39% 64.72%
Provisions/TA 2.41 0.04 0.06
ROA 0.98% 1.60% 2.35%
(II- IE)/E A 1.83% 1.82% 1.90%
EA/ TA 88.57% 98.16% 84.72%
(II - IE)/ TA 1.62% 1.78% 1.61%

NIM 0.02 0.02 0.02

II/ EA 8.43% 8.78% 7.75%
IE/ Intt Bearing Liab 0.07 0.07 0.06
Intt Bearing Liabilities/ EA 15.32 14.74 17.89
Spread 0.02 0.02 0.02

Efficiency ratio= Non intt exp/ (Net Interest Income+Non intt income) 0.92 0.93 0.97

Risk Ratios
Liquidity Risk= Short term securities/ Deposits
Interest Rate Risk = Interest Sensitive Assets/ Interest Sensitive Liabilities
Credit Risk = Provisioning / Assets 2.41 0.04 0.06
Capital Risk = Capital / Assets 0.01 0.01 0.01
Leverage ratio= Total equity/Total assets 0.07 0.07 0.06
Total capital ratio= (Total equity + Long-term debt + Reserve for loan
losses)/Total assets 0.97 1.08 0.95
Provision for loan loss ratio= PLL/ TL (provision for loan losses/total
loans and leases)
Loan Ratio = Net loans/ Total assets 0.58 0.59 0.49

Loss Ratio = Net charge-offs on loans (gross charge-offs minus

recoveries)/ Total loans and leases

Reserve Ratio = Reserve for loan losses (reserve for loan losses last year
minus gross charge-offs plus PLL and recoveries)/Total loans and leases

Nonperforming ratio= Nonperforming assets (nonaccrual loans and

restructured loans)/Total loans and leases

Operating efficiency (cost control)= Wages and salaries/Total expenses

Volatile liability dependency ratio= (Total volatile liabilities - Temporary

investments)/Net loans and leases

Other Financial Ratios

Tax rate = Total taxes paid/Net income before taxes
Gap ratio = (Interest rate-sensitive assets – Interest rate-sensitive
liabilities)/ Total assets
 Analysis and comments
Mar-19 Mar-20

Rs in Crore Rs in Crore
320747.30 300258.18 From financial analysis of the IDBI Bank it can be observed that the bank has a robust financial p

12730.47 10538.83 Profitability Ratios are also known as profit margin ratios. They are used to evaluate the overall p
0 0
8503.23 19891.57

93072.63 81780.42
146790.44 129841.79
261096.77 242052.61

227371.72 22242.13

45287.72 36748.86

272659.44 58990.99

7736.29 10380.59
29875.4 23643.77
37611.69 34024.36
22071.24 20825.14
16165.62 13847.3
330029.72 447033.3
515378.75 633616.02
1916841.86 1799934.43
0.00 0.00
15116.29 12887.33

0.05 0.04 ROA Is the most commonly used benchmark for bank profitability since it measures the company’s return on i
852.79% 882.48% A high equity multiplier indicates that a company is using a high amount of debt to finance assets.
0.12 0.11
40.19% 37.88% ROE measures how the profitability of a corporation in relation to stockholders’ equity. ROE near the long-ter

0.05 0.03
1.03 1.49
8.53 8.82

1.84% 2.32%
-57.79% -62.14%
5.98 5.99
4.71% 4.29%
 2.26% 2.88%
81.40% 80.61%
1.84% 2.32%

0.02 0.02 Here, the NIM is stable in every year which is significatly indicating the financial stablity of a lender.
8.45% 8.60%
0.06 0.23
16.87 4.26
0.03 -0.15

0.94 0.96 Efficiency ratios measure a company's ability to use its assets and manage its liabilities effectively.Ideal effecien

5.98 5.99 Interestrate rate risk is the potential that a change in overall interest rate will reduce the value of a bond when
0.02 0.03 The capital ratio is a measure of how much capital a bank has available, reported as a percentage of a bank's ri
0.12 0.11 It's a good idea to measure a firm's leverage ratios against past performance and with companies operating in

0.97 0.31

0.46 0.43 The debt ratio is a financial ratio that measures the extent of a company’s leverage. A high ratio also indicates t
t the bank has a robust financial position. IDBI has been raising finance by issuing bonds in the Indian debt market. This is largely due to sustained level of pro

y are used to evaluate the overall performance of a company and how well the company is performing in terms of profit. The ratios are indicators of the compan

easures the company’s return on investment in a format that is easily comparable with other institutions. Here, the ROA of the bank is increasing each each whi
debt to finance assets.

ers’ equity. ROE near the long-term average of the S&P 500 (14%) as an acceptable ratio and anything less than 10% as poor and here the ROE is more than 10
cial stablity of a lender.

liabilities effectively.Ideal effeciency ratio is considered 50%. A high efficiency ratio means the company uses its assets efficiently.

reduce the value of a bond when interst rates rises bond price fall and vice versa. This means thst the market price of existing bonds drops to offset the more att
rted as a percentage of a bank's risk-weighted credit exposures. A bank with a high capital adequacy ratio is considered to be above the minimum requirements
and with companies operating in the same industry to better understand the data. the ideal leverage ratio is 0.5 or less. A high debt/equity ratio generally indica

erage. A high ratio also indicates that a company may be putting itself at a risk of default on its loans if interest rates were to rise suddenly. In general, many inv
his is largely due to sustained level of profitability and lower NPA levels due to better credit risk management by the bank.

t. The ratios are indicators of the company’s efficiency in using the capital committed by shareholders and lenders. It is the most common method of financial ra

A of the bank is increasing each each which means higher the ROA number, the better, because the company is earning more money on less investment.

s poor and here the ROE is more than 10%.

existing bonds drops to offset the more attractive rates of new bond issues.
d to be above the minimum requirements needed to suggest solvency. Therefore, the higher a bank's CAR, the more likely it is to be able to withstand a financia
A high debt/equity ratio generally indicates that a company has been aggressive in financing its growth with debt.

ere to rise suddenly. In general, many investors look for a company to have a debt ratio between 0.3 and 0.6. From a pure risk perspective, debt ratios of 0.4 or l
 the most common method of financial ratios which is used to measure the performance of banks. The RONW, ROA, NPM and OPTWF ratios are selected for t

g more money on less investment.

ely it is to be able to withstand a financial downturn or other unforeseen losses.

ure risk perspective, debt ratios of 0.4 or lower are considered better, while a debt ratio of 0.6 or higher makes it more difficult to borrow money. While a low de
NPM and OPTWF ratios are selected for the present study.
difficult to borrow money. While a low debt ratio suggests greater creditworthiness, there is also risk associated with a company carrying too little debt.
company carrying too little debt.