Bank Performance Analysis

HDFC BANK
PROFITABILITY ANALYSIS
Mar-16

Total Assets ₹ 7,492,817,528.00

Earning Assets
Balances with RBI ₹ 300,583,087.00
Balances with Banks in Deposit Accounts ₹ 6,824,510.00
Balances with Banks & money at Call & Short Notice ₹ 88,605,293.00
Balances with Banks Outside India ₹ 78,040,290.00
Investments + ₹ 1,958,362,768.00
Advances + ₹ 4,645,939,589.00
Fixed Assets ₹ 33,431,573.00
Other Assets ₹ 381,030,418.00
Total Earning Assets ₹ 7,078,355,537.00
Interest bearing Liabilities
Saving Deposits ₹ 1,478,861,798.00
Term & Other Deposits ₹ 3,985,380,122.00
Borrowings ₹ 849,689,823.00
Subordinated Debt
Total Interest bearing liabilities ₹ 6,313,931,743.00
Other Liabilities ₹ 367,251,338.00
Equity Capital ₹ 5,056,373.00
Reserves ₹ 721,721,274.00
Total Equity ₹ 726,777,647.00
Total Equity & Liability ₹ 7,407,960,728.00
Interest Income ₹ 602,214,451.00
Interest Expenditure ₹ 326,299,330.00
Non-interest operating income ₹ 107,517,233.00
Operating Revenue ₹ 709,731,684.00
Non-interest operating Expenditure ₹ 169,797,000.00
Provisions and Contingencies ₹ 90,673,223.00
Profit Before tax ₹ 186,379,231.00
Taxes ₹ 63,417,100.00
Profit After tax ₹ 122,962,131.00

Profitability Ratios

Return on Assets= NI/ TA 1.64%

Equity Multiplier TA/ TE 10.31

TE/ TA 9.70%

ROE=ROA X EM 16.92%

NI/ OR 17%
OR/ TA 9.47%
TA/ TE 10.31
ROE = NI/OR*OR/TA*TA/TE 16.92%

(II - IE)/ TA 3.68%

(OI-OE)/ TA -0.83%
Provisions/TA 1.21%
ROA 1.64%

(II- IE)/E A 3.90%

EA/ TA 94.47%
(II - IE)/ TA 3.68%

NIM 4.30%
II/ EA 8.51%
IE/ Intt Bearing Liab 5.17%
Intt Bearing Liabilities/ EA 89.20%
Spread 3.34%

Efficiency ratio= Non intt exp/ (Net Interest Income+Non intt income 23.92%

Risk Ratios
Liquidity Risk= Short term securities/ Deposits 0.36
Interest Rate Risk = Interest Sensitive Assets/ Interest Sensitive Liabil 0.49
Credit Risk = Provisioning / Assets 0.012
Capital Risk = Capital / Assets 0.00067
Leverage ratio= Total equity/Total assets 0.10
Total capital ratio= (Total equity + Long-term debt + Reserve for
loan losses)/Total assets 15.50%
Provision for loan loss ratio= PLL/ TL (provision for loan losses/total
loans and leases) NA
Loan Ratio==Net
Netcharge-offs
loans/ Totalon
assets 0.11
Loss Ratio loans (gross charge-offs minus
recoveries)/ Total loans and leases
NA
Reserve Ratio = Reserve for loan losses (reserve for loan losses last
year minus gross charge-offs plus PLL and recoveries)/Total loans
and leases NA
Nonperforming ratio= Nonperforming assets (nonaccrual loans and
restructured loans)/Total loans and leases
0.28%
Operating efficiency (cost control)= Wages and salaries/Total
expenses
11.49%
Volatile liability dependency ratio= (Total volatile liabilities -
Temporary investments)/Net loans and leases NA
Other Financial Ratios
Tax rate = Total taxes paid/Net income before taxes 34.03%

Gap ratio = (Interest rate-sensitive assets – Interest rate-sensitive

liabilities)/ Total assets
NA
Bank Performance Analysis

Mar-17 Mar-18 Mar-19 Mar-20

₹ 8,746,875,883.00 ₹ 10,769,323,294.00 ₹ 12,696,864,984.00 ₹ 15,458,248,252.00

₹ 378,968,755.00 ₹ 1,046,704,730.00 ₹ 467,636,184.00 ₹ 722,051,210.00

₹ 9,716,581.00 ₹ 2,091,212.00 ₹ 4,242,945.00 ₹ 12,476,849.00
₹ 110,552,196.00 ₹ 182,446,097.00 ₹ 345,840,208.00 ₹ 144,135,970.00
₹ 98,757,385.00 ₹ 127,888,848.00 ₹ 247,215,133.00 ₹ 140,658,814.00
₹ 2,144,633,366.00 ₹ 2,422,002,416.00 ₹ 2,905,878,784.00 ₹ 3,918,266,581.00
₹ 5,545,682,021.00 ₹ 6,583,330,908.00 ₹ 8,194,012,167.00 ₹ 9,937,028,781.00
₹ 36,267,379.00 ₹ 36,072,045.00 ₹ 40,300,043.00 ₹ 44,319,155.00
₹ 422,298,200.00 ₹ 368,787,038.00 ₹ 491,739,520.00 ₹ 539,310,892.00
₹ 8,288,310,304.00 ₹ 10,364,464,211.00 ₹ 12,164,825,421.00 ₹ 14,874,618,205.00

₹ 1,935,786,335.00 ₹ 2,238,102,098.00 ₹ 2,487,003,765.00 ₹ 3,103,771,353.00

₹ 4,500,610,228.00 ₹ 5,649,604,298.00 ₹ 6,744,405,519.00 ₹ 8,371,251,594.00
₹ 740,288,666.00 ₹ 1,231,049,700.00 ₹ 1,170,851,238.00 ₹ 1,446,285,372.00

₹ 7,176,685,229.00 ₹ 9,118,756,096.00 ₹ 10,402,260,522.00 ₹ 12,921,308,319.00

₹ 567,093,181.00 ₹ 457,637,181.00 ₹ 551,082,863.00 ₹ 673,943,976.00
₹ 5,125,091.00 ₹ 5,190,181.00 ₹ 5,446,613.00 ₹ 5,483,286.00
₹ 889,498,416.00 ₹ 1,057,759,776.00 ₹ 1,486,616,908.00 ₹ 1,704,377,008.00
₹ 894,623,507.00 ₹ 1,062,949,957.00 ₹ 1,492,063,521.00 ₹ 1,709,860,294.00
₹ 8,638,401,917.00 ₹ 10,639,343,234.00 ₹ 12,445,406,906.00 ₹ 15,305,112,589.00
₹ 693,059,578.00 ₹ 802,413,550.00 ₹ 989,720,505.00 ₹ 1,148,126,509.00
₹ 361,667,334.00 ₹ 401,464,913.00 ₹ 507,288,285.00 ₹ 586,263,979.00
₹ 122,964,990.00 ₹ 152,203,042.00 ₹ 176,258,849.00 ₹ 232,608,187.00
₹ 816,024,568.00 ₹ 954,616,592.00 ₹ 1,165,979,354.00 ₹ 1,380,734,696.00
₹ 197,033,442.00 ₹ 226,903,821.00 ₹ 261,193,700.00 ₹ 306,975,289.00
₹ 111,827,380.00 ₹ 151,380,575.00 ₹ 186,715,716.00 ₹ 224,922,278.00
₹ 221,390,712.00 ₹ 266,972,983.00 ₹ 321,996,653.00 ₹ 366,071,550.00
₹ 75,894,300.00 ₹ 92,105,700.00 ₹ 111,215,000.00 ₹ 103,498,400.00
₹ 145,496,412.00 ₹ 174,867,283.00 ₹ 210,781,653.00 ₹ 262,573,150.00

Profitability Ratios

1.66% 1.62% 1.66% 1.70%

9.78 10.13 8.51 9.04

 10.23% 9.87% 11.75% 11.06%

16.26% 16.45% 14.13% 15.36%

18% 18% 18% 19%

9.33% 8.86% 9.18% 8.93%
9.78 10.13 8.51 9.04
16.26% 16.45% 14.13% 15.36%

3.79% 3.72% 3.80% 3.63%

-0.85% -0.69% -0.67% -0.48%
1.28% 1.41% 1.47% 1.46%
1.66% 1.62% 1.66% 1.70%

4.00% 3.87% 3.97% 3.78%

94.76% 96.24% 95.81% 96.22%
3.79% 3.72% 3.80% 3.63%

4.30% 4.30% 4.30% 4.30%

8.36% 7.74% 8.14% 7.72%
5.04% 4.40% 4.88% 4.54%
86.59% 87.98% 85.51% 86.87%
3.32% 3.34% 3.26% 3.18%

24.15% 23.77% 22.40% 22.23%

Risk Ratios
0.33 0.31 0.31 0.34
0.48 0.43 0.43 0.47
0.013 0.014 0.015 0.015
0.00059 0.00048 0.00043 0.00035
0.10 0.10 0.12 0.11

14.60% 14.80% 17.10% 18.50%

NA NA NA NA
0.08 0.11 0.09 0.09

NA NA NA NA

NA NA NA NA

0.33% 1.30% 1.36% 1.26%

 11.60% 10.83% 10.10% 10.66%

NA NA NA NA
Other Financial Ratios
34.28% 34.50% 34.54% 28.27%

NA NA NA NA
(amount in thousands)

As per the data obtained after calculating ratios we can see that over the years there has been a rise in the
ROA from 1.66% to 1.7% which indicates that the company is able to manage the assets in an efficent way and
generating positive return over the period of time.

Equity mulitiplier indicates about the financial leverage of the company it shows amount of money used to gainb as
A higher ratio in this case is preferable which is easily evident from the results obtained that over the years these ra

This ratio indicates how much return the company is able to maintain on the equity invested, over the five years it s

It indicates how much income is generated by the firm in response to its operating revenue and the higher the ratio
It shows the proprtion of the companies operating revenue in compareiosn to its total assets, the ratios calculated
Total Asset/Total Equity (Equity Multiplier) depicts that how much assets of the company or firm is financed by the
It indicates the how much the firm is earning in response to its Equity the higher the ratio it is more beneficial for a

It represents interest income minus interest expenditure in response to the total assets. The positive and higher rati
It indicates that how well the firm is doing in its non- interest income and non- interest expenditure in response to

As per the data obtained after calculating ratios we can see that over the years there has been a rise in the ROA fro

This ratio indicates as to how much of total assets are actively used to earn income for the bank, we can infer form

Net intrest margin has been constant over the period which is a measure of the difference between the interest inc

Spread is the difference between the interest rate that a bank charges a borrower and the interest rate a bank pays

This ratio indicates as to how a company is able to manage ts assets and liabilities in the business, in case of banks a

These measure a company's ability to meet its short-term financial obligations. A good liquidity ratio is anything gre
These are used to measure the change in income to be generated due to change in intreset rates, ideally they shou
Credit risk indicates the tendecy that there can be a default in terms of payment on amount given as loan, as per th
The capital-to-asset ratio calculates a company's assets and capital to determine whether there is enough capital to
A figure of 0.5 or less is ideal. HDFC has maintained its ration around 10% which means bank get out of any financia

The capital ratio is the percentage of a bank's capital to its risk-weighted assets. Weights are defined by risk-sensiti

This ratio indicates about how much loan the bank has given in comparison to its assets, the banks hsould not blind

This ratio indicates the amount of NPAs in proportion to the loans provided by the bank, over the period of time HD
Operating efficeny ratios indicate the perfromance of the banks in relation to the amount invested into the busines
 re has been a rise in the
assets in an efficent way and

ount of money used to gainb assets, as per the results obtained we can see that there has been a decline in the equity multiplier for the co
 ned that over the years these ratios have increased and shows a positive sign for the performance of the company.

invested, over the five years it shows a constant position as the returns range form 15 to 16% which shows that company is able to mainta

evenue and the higher the ratio it is beneficial for the firm. The bank has been able to maintain its position over the period of time and als
tal assets, the ratios calculated show that HDFC has reamined stbale for the past tow years with a slight decline in comparision to the prev
mpany or firm is financed by the Equity. The equity multiplier is a ratio that measures a company's financial  leverage, which is the amount o
ratio it is more beneficial for a firm. For, HDFC bank it is 15.36% in 2020 in comparison to 14.13% in year 2019 which is clearly showing th

sets. The positive and higher ratio is good for the firm which simply implies that the firm is generating more interest income from its inves
est expenditure in response to its total assets. For the year 2020 its -0.49% and over the years its is negative which is showing the expendi

e has been a rise in the ROA from 1.66% to 1.7% which indicates that the company is able to manage the assets in an efficent way and gen

for the bank, we can infer form the ratio obtained that more than 90% of the banks total assets actively contribute to its wealth generation

erence between the interest income generated by banks or other financial institutions and the amount of interest paid out to their lenders

nd the interest rate a bank pays a depositor, since over the years the spread of bank has been in the range of 3% (+/-) which indicates that

the business, in case of banks a low efficiency ratio is prefered as it indicates that they are earning more and spending less, HDFC has mai

od liquidity ratio is anything greater than 1. as per the ratios obtained we can say that the company needs to improve its liquidity position
ntreset rates, ideally they should be less than 1 so as the ratios arrived HDFC has been abel to maintained a good position over the period
amount given as loan, as per the ratios obtained we can see that the bank has maintained a constant position over the period of time whi
hether there is enough capital to cover the assets. Higher the ratio, better is the position of the bank, but over the years there has been a d
ans bank get out of any financial crisis easily.

ights are defined by risk-sensitivity ratios whose calculation is dictated under the relevant Accord. As per the norms these should not be le

sets, the banks hsould not blindliy give out loans as there can be a greater chnaces of deafult, we can see that over the years the ratio has

ank, over the period of time HDFC has maintained a constant position of 1 to 2% over the last three years which as compared to the other
mount invested into the business, this ratio explanis the realtion of how much expenses hav been incured for employess in realtion to runn
the equity multiplier for the company as it has reduced from 10.01% in to 8.95% which shows that percentage of assets financed by borro
 hat company is able to maintain ist position despite the current pandemic going on.

over the period of time and also the ratio has increased in compariosn to the previous year which shows that the performnace of the bank
ine in comparision to the previous year which shows that they need to improve a bit,.
everage, which is the amount of money the company has borrowed to finance the purchase of assets. declined in such ratio depicts a positi
19 which is clearly showing that the firm is performing well in comparison to previous years.

interest income from its investments than its expenditure on debts in comparison to its assets. For HDFC bank it is showing the positive tr
which is showing the expenditure Is more than the income which can be justifiable in case of banks because most the income is interest in

ets in an efficent way and generating positive return over the period of time.

ribute to its wealth generation, which is a positive sign and indicates that the bank is performing well and is in a stable psoition the ratio h

erest paid out to their lenders, relative to the amount of their assets. a psoitive NIM is prefered which is clearly evident form the data , an

f 3% (+/-) which indicates that there is a stability in the earnings of the banks, and it has a stable positiona as of now.

d spending less, HDFC has maintained a stable position over the period of time and also has show a decline as compared to 24.15% and ca

o improve its liquidity position so that the do not face difficulty while meeting their obligations its ranging from 0.36 to 0.34 over the perio
good position over the period of time and are secure by change in intrest rate fluctuations.
on over the period of time which may not be good but is satisafactory keeping in mind the current pandemic going on, low credit risk is pre
er the years there has been a decline in the ratios of the bank from 0.00068 to 0.00036 which indicates that there may be a mismanageme

e norms these should not be less than 8%, so as per data obtained form annual report we can see that HDFC has miantained its ration und

at over the years the ratio has declined which shows that bank has increased more scruity of borrowers to give them loans, a very high rati

hich as compared to the other banks in the industry is a significant performance, further they need to curtail down this ratio as rduce it.
employess in realtion to running a company, we can see that from the last 3 years the ratios are constant to 10%(round off) which is good
ge of assets financed by borrowed money have reduced .
 the performnace of the bank has improved and it is a positive signal for the stakeholders of the bank.

ed in such ratio depicts a positive sign in a way that less amount is borrowed in order to get assets.

nk it is showing the positive trend over the past 5 years and it is 3.67% in the year 2020 which is indicating that HDFC bank is performing w
e most the income is interest income only but the HDFC bank can improve this ratio by increasing the non- operating interest income.

in a stable psoition the ratio has increased in comparion to the last year form 95.81% to 96.22%

arly evident form the data , and shows that the firm is performing well and profitable.

as compared to 24.15% and came down to 22.23 % which is a positive sign and they should try to reduce it more.

om 0.36 to 0.34 over the period of time. and needs to be improved.

going on, low credit risk is prefered by the banks.

there may be a mismanagement of capital by the company and it needs to be improved.

has miantained its ration under the range of 20% which is a good indicator.

ve them loans, a very high ratio may indicate that banks may be giving too much loans in comp0ariosn to the assets they have this can des

down this ratio as rduce it.

o 10%(round off) which is good as low operating efficency ratios are prefered ,and this shows that bank has been able to maintain good po
hat HDFC bank is performing well.
perating interest income.

e assets they have this can destabilized their position in case of defaults so this should be low.
been able to maintain good position over the period of time.