Bank Performance Analysis- IDBI Ban

PROFITABILITY ANALYSIS
Particulars Mar-16

Rs in' 000
1 Total Assets 3742570183
2 Earning Assets 3309938952
Balances with RBI 138273792
Balances with Banks in Deposit Accounts -
Balances with Banks & money at Call & Short Notice 24606072
Balances with Banks Outside India -
Investments + 988124599
Advances + 2158934489
Fixed Assets 75219250
Other Assets 357411981
Total Earning Assets
3 Interest bearing Liabilities 3346613332
Saving Deposits 398499261
Term & Other Deposits 2252374673
Borrowings 695739398
Subordinated Debt -
other liabilities 114757936
Total Liabilities 3461371268
Equity Capital 21202712
Reserves 259996203
Total equity 281198915
Total Equity and Liabilities 3742570183
5 Interest Income 280582001
6 Interest Expenditure 219309773
10 Non-interest operating income 35180546
Operating Revenue 315762547
11 Non-interest operating Expenditure 42058259
12 Provisions and Contingencies 90632283
Provisions and Contingencies include provision for tax
Profit After tax/PBT -36237768
Salaries and wages 17626113
Loan Loss and Other Provisions 103614766
total expenses 352000315
Recoveries
NPA 146433900

ProfitabilityRatios
Return on Assets= NI/ TA -0.97%

Equity Multiplier TA/ TE 13.31

TE/ TA 7.51%

ROE=ROA X EM -12.89%

NI/ OR -0.11

OR/ TA 8.44%

TA/ TE 1.131

ROE= (NI/OR)*(OR/TA)*(TA/TE) -1.09%

(II - IE)/ TA -5.86%

(OI-OE)/ TA -0.18%

Provisions/TA 0.0242

ROA 2.42%

(II- IE)/E A 1.85%

EA/ TA 88.44%

(II - IE)/ TA 1.64%

NIM 0.085

II/ EA 8.48%

IE/ Intt Bearing Liab 0.0655

Intt Bearing Liabilities/ EA 1.011

Spread 0.019

Efficiency ratio= Non intt exp/ (Net Interest Income+Non intt income) 0.133

Risk Ratios
Liquidity Risk= Short term securities/ Deposits
Interest Rate Risk = Interest Sensitive Assets/ Interest Sensitive Liabilities
Credit Risk = Provisioning / Assets

2.42%

Capital Risk = Capital / Assets 0.57%

Leverage ratio= Total equity/Total assets 7.5%

Total capital ratio= (Total equity + Long-term debt + Reserve for loan losses)/Total
assets 28.87%

Provision for loan loss ratio= PLL/ TL (provision for loan losses/total loans and leases)

4.80%

Loan Ratio = Net loans/ Total assets 57.69%

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
0.047993473877011

Nonperforming ratio= Nonperforming assets (nonaccrual loans and restructured

loans)/Total loans and leases
6.78%

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

5.01%

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 N/A
Gap ratio = (Interest rate-sensitive assets – Interest rate-sensitive liabilities)/
Total assets
 Analysis- IDBI Bank

LITY ANALYSIS
Mar-17 Mar-18 Mar-19 Mar-20

Rs in' 000 Rs in' 000 Rs in '000 Rs in' 000

3624879583 3511367775 3211113980 3007133325
3166331065 2973686972 2614220857 2423361763
133496268 131691998 127316979 105391727
- - - -
193826835 206118745 85722245 199557923
- - - -
930748691 918476777 933277254 819958328
1908259271 1717399452 1467904379 1298453785 total loans and leases
74332261 68529278 83099081 82067595
384216257 469151525 513794042 501703967

3245796562 3109620946 2724778312 2589627079

503837467 571251023 614135061 656581451
2178319322 1906514651 1657766012 1565557068
563639773 631855272 452877239 367488560
- - - -
146459910 182667267 102868582 69148998
3392256472 3292288213 2827646894 2658776077
20588151 30838627 77362949 103805940
212034959 188240935 306104137 244551308
232623110 219079562 383467086 348357248
3624879582 3511367775 3211113980 3007133325
278053848 230462528 221020952 208542191
220194388 173762042 161624579 138411192
42074248 72433609 35353288 46312254
320128096 302896137 256374240 254854445
52431495 48920047 52584613 64471691
98196699 161785109 192294759 180445587

-50694486 -81571061 -150129711 -128474025

23055310 19003021 23177880 33637133
132088990 205168401 265239249 136986526
370822582 384467198 406503951 383328470

252058000 2866514000 148374400 54394900

 -1.40% -2.32% -4.68% -4.27%

15.58 16.03 8.37 8.63

6.42% 6.24% 11.94% 11.58%

-21.79% -37.23% -39.15% -36.88%

-0.16 -0.27 -0.59 -0.50

8.83% 8.63% 7.98% 8.47%

1.145 1.181 1.228 1.241

-1.60% -2.74% -5.74% -5.30%

-6.07% -4.95% -5.03% -4.60%

-0.29% 0.67% -0.54% -0.60%

0.0271 0.0461 0.0599 0.0600

2.71% 4.61% 5.99% 6.00%

1.83% 1.91% 2.27% 2.89%

87.35% 84.69% 81.41% 80.59%

1.60% 1.61% 1.85% 2.33%

 0.088 0.078 0.085 0.086

8.78% 7.75% 8.45% 8.61%

0.0678 0.0559 0.0593 0.0534

1.025 1.046 1.042 1.069

0.020 0.022 0.025 0.033

0.164 0.162 0.205 0.253

2.71% 4.61% 5.99% 6.00%

0.57% 0.88% 2.41% 3.45%

6.4% 6.2% 11.9% 11.6%

25.61% 30.08% 34.31% 28.36%

6.92% 11.95% 18.07% 10.55%

52.64% 48.91% 45.71% 43.18%

0.06921962440187 0.11946457812192 0.18069245708 0.1054997317444

13.21% 166.91% 10.11% 4.19%

6.22% 4.94% 5.70% 8.78%

N/A N/A N/A N/A

 Analysisandcomments

total loans and leases

ANALYSIS AND COMMENTS

Return on Asset (ROA) shows how effectively an organisation uses its
assets. A low, or even negative ROA demonstrates that the company
cannot efficiently use its assets to produce revenue, so this is not a
favourable opportunity for investment at this time.

Equity multiplier is a a risk metric calculating the part of the assets

of a company which is funded not by debt but by equity. The ratio
is decreasing in the last two years showing that the debt burden has
decreased and assets are more financed through equity

This ratio tells the total equity to total assets which has increased till
2019 but now decreasing, stating the inflow of total equity in the
company.
ROE is a measure of profitability as well the efficiency of the bank,
here negative ROE states that the bank is in high financial distress,
and is not performing well

The negative ratio indicates, the falling efficiency of the bank to

generate profits, the bank is under loss and is spending more than
it is earning.
This ratio tells the operating revenues earned from the total assets,
higher it is better it is, the company has positive and growing ratio
indicating efficiency to generate revenues
The relationship between the assets and the equity. The ratio is almost
equal stating that the total assets that have been funded by shareholders
are same.
The ROE states the efficiency and performance of the bank, here
negative ROE states that the bank is unable to earn profits and
thus is under financial crunch.
This ratio tells the interest earned on the total assets, it reflect
banks' reliance on interest from bank lending as a source of
funding. The negative rate indicates that banks rely on non interest
sources of funds
This ratio tells the operating revenues earned from the total assets,
higher it is better it is, the company has negative ratios indicating that
operating expenses are higher than the total assets
This ratio tells us what amount of provisons have been set aside against
total assets,for bad loans, low ratio indicate that no valuable assets have
been taken care off and the bank is vulnerable.
The ROA figure shows investors how successful the business is to
turn capital into net profits. The higher the ROA, the better since
the bank earns more money on less investment. Here, the ROA is
increasing

This ratio shows a positive figure, showing that it earned more interest
from its assets and investments then it spend on its interest., thus
profitability

This ratio is generally used for determining the share of an active

income-generating business assets. It gives the bank – or any individual
investor – insight into the probability of the business making a profit.
Here, it is decreasing
This ratio tells the interest earned on the total assets, it reflect
banks' reliance on interest from bank lending as a source of
funding. The positive rate indicates that banks rely on interest
sources of funds
Net Margin of Interest (NIM) indicates how much money a bank
receives at interest on loans relative to the amount it pays at interest on
deposits. NIM is a profitability and growth metric for a bank. Here it is
positive but almost 0, thus the bank is at risk.
This ratio shows the interest income being earned from the earning
assets or useful assets of the bank, the ratio is increasing showing that
the interest earned is high from the earning assets
This ratio tells the interest expenses from the interest bearing debt and
liabilities, the interest is higher thus interest bearing instruments thus
negative impact
This ratio tells the interest bearing liabilities to earning assets, how
much is interest bearing liabilities of the udeful earning assets, positive
shows that liabilities are more than the earning assets
The ratio of money it receives to money it pays out is called the bank
spread. A high spread means a higher profit margin.

The efficiency ratio, Banks strive for lower e fficiency ratios since a
lower e fficiency ratio indicates that the bank is earning more than it is
spending

The higher credit risk ratios tells a higher interest rate being charged by
investors. Its ratio is calculated as a percentage or likelihood that
lenders will suffer losses due to the borrower’s inability to repay the
loan on time

The ratio measures a bank's financial stability by measuring its

available capital as a percentage of its risk-weighted credit exposure.
The higher the more likely a bank can withstand negative shocks to its
balance sheet.

The leverage ratio measures a bank's core capital to its total assets.

The ratio uses tier 1 capital to judge how leveraged a bank is in relation
to its consolidated assets. The ratio is increasing thus more equity

It is a solvency ratio, Bank regulators enforce this ratio to ensure credit

discipline in order to protect depositors and promote stability and
efficiency in the financial system. It is decreasing so it is not a good
sign

The ratio indicates the loan loss provision coverage ratio is an indicator
of how protected a bank is against future losses. A higher ratio means
the bank can withstand future losses better, including unexpected losses
beyond the loan loss provision.The ratio is decreasing which is not a
good factor

The higher the ratio, the higher the risk. The higher the risk, the higher
the return, here the ratio is decreasing
It tells the reserve ratio that has been kept for all the total loans and
leases, so higher it is the better it is to be able to meet its losses from
reserves

NPAs indicate how much of a bank's loans are in danger of not being

repaid. Higher is the NPA ratio, higher is the banks bad quality of
assets, here it has decreased in the last year which is a positive sign.

This ratio tells the operating efficiency, as how much part of the total
expenses are going to the wages and salaries, lower it is better it is, but
here the ratio is increasing which is not a good signal thus proving
inefficiency.