“A STUDY OF COMPARATIVE ANALYSIS OF BOI AND AXIS BANK”

A project submitted to
University of Mumbai for partial completion of the degree of
Bachelor in commerce (Accounting Finance)
Under the faculty of commerce

By
Mr. Ranjan Shrikant Pandey
Under the guidance of
Dr. Shabab Rizvi

Pillai College
Arts, Commerce, and Science College (Autonomous) New
Panvel 410206

1
 UNIVERSITY OF MUMBAI A
PROJECT REPORT ON

“A STUDY OF COMPARATIVE ANALYSIS OF BOI ANDAXIS BANK” IN

PARTIAL FULFILLMENT FOR BACHLER OFCOMMERCE
(ACCOUNTING AND FINANCE) SEMESTER
VI
2021-22

UNDER THE GUIDANCE OF

DR. Shabab Rizvi

SUBMITTED BY

MR. Ranjan Shrikant Pandey

PILLAI COLLEGE OF ARTS, COMMERCE & SCIENCE COLLEGE

(AUTONOMUS) NEW PANVEL 410206

2
 CERTIFICATE

To whomsoever it may concern

This is to certify that MR. RANJAN SHRIKANT PANDEY has worked and duly completed his project work
for the degree of B.Com. (Accounting and Finance) under the faculty of Commerce in Pillai college of Arts,
Commerce and Science college, New Panvel in the subject of project work and his project is entitled
“A STUDY OF COMPARATIVE ANALYSIS OF BOI AND AXISBANK” under my supervision. I further
certify that the entire work has been done by the learner under my guidance and no part of it has been submitted
previously for any degree or diploma of any university.

It is his own work and facts reported by his personal findings and investigations.

Seal of
college

Dr. Shabab Rizvi

Name and Signature of Guiding Teacher

Date of submission:

3
 DECLARATION BY LEARNER

I the undersigned MR. RANJAN SHRIKANT PANDEY hereby, declare that the work embodied in this
project world titled “A STUDY OF COMPARATIVE ANALYSIS OF BOI AND AXIS BANK” forms my
own contribution to research work carried out under guidance of DR. SHABAB RIZVI is a result of my own
research work and has not been previously submitted to any other university for any other degree/diploma to
this or any other university.

Wherever reference has been made to previous works of others, it has been clearly indicated as such and
included in the bibliography.

I, here by further declare that all information of this document has been obtained and presented in
accordance with academic rules and ethical conduct.

Mr. Ranjan Shrikant Pandey

(Name and signature of the learner)

Certified by

Dr. Shabab Rizvi

(Name and signature of guiding teacher)

4
 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are so numerous and the depth is so enormous.

I would like to acknowledge the following as being idealistic channels and fresh dimension incompletion of
this project.

I take this opportunity to thank University of Mumbai for giving me chance to this project.

I would like to thank my Principal for providing the necessary facilities required for completion of this
project.

I take this opportunity to thank our coordinator and project guide Dr. Shabab Rizvi, for his moral support
and guidance that made this project successful.

I would like to thank my college library, for having provided various reference books and magazines related
to project.

Lastly I would like to thank each and every person who directly or indirectly helped me in the completion of
project especially my parents and peers who supported me throughout the project.

5
 INDEX

CHAPTER TITLE PAGE NO.

NO.

1. INTRODUCTION 9

INDIAN BANKING SYSTEM 10

GROWTH OF BANKING 11

THE STRUCTURE OF INDIAN BANKING 14

SYSTEM

2. RESEARCH & METHODOLOGY 15

OBJECTIVE OF RESEARCH

RESEARCH METHODOLOGY

LIMITATIONS OF STUDY

BANK PROFILE 17
BOI

ABOUT LOGO

MISSION AND VISION

BOI ANNUAL REPORT FOR FINANCIAL 18

YEAR 2019-20
DOMESTIC BUSINESS 20
OVERSEAS BUSINESS

GLOBAL BUSINESS

AXIS BANK 21

HISTORY 22
SERVICES 23
INTERNATIONAL BANKING 24

CORE VALUES 25 6
` AXIS BANK ANNUAL REPORT FOR 26-38
FINANCIAL YEAR 2019-20
3. LITERATURE REVIEW 39-40

4. DATA ANALYSIS, INTERPRETATION & 41

PRESENTATION
BOI: PRODUCT AND SERVICES OFFERED 42
BY BOI
RISK MANAGEMENT 43

AXIS BANK: PRODUCT AND SERVICES 44

OFFERED BY AXIS BANK
RISK MANAGEMENT 45

FINANCIAL STATEMENT ANALYSIS 46

RATIO ANALYSIS 47
BALANCE SHEET RATIOS 48
CAPITAL ADEQUACY RATIO 49

DEBT SERVICE COVERAGE RATIO

LIQUIDITY RATIO 50
LEVERAGE RATIOS 51
PROFITABILITY RATIOS 52
MANAGEMENT EFFICIENCY RATIOS 53
INVESTMENT VALUATION RATIOS 54
PROFIT AND LOSS ACCOUNT RATIO 55
OPERATING EXPENSES RATIO 56

CASH FLOW INDICATOR RATIO 57

EARNING RETENTION RATIO 59
ADJUSTED CASH FLOW TIMES 61

5. FINDING, SUGGESTION & CONCLUSION 63

7
BIBLIOGRAPHY 66

8
 CHAPTER: - 1

1. INTRODUCTION

A bank is an institution that deals with money and its substitutes and provides other financial Services.
Banks accept deposits and make loans or make an investment to derive a profit from the difference in the
interest rates paid and charged, respectively.

In India the banks are being categorized in different groups. Each group has their own benefits and
limitations. Each has their own dedicated target market. Few of them work in rural sectors while the others
work in both rural as well as the urban sectors. There are banks from Indian Origin and also from foreign
origin.

Every bank plays an important role in the economic development of the country. Finance is regarded as the
oxygen of trade and industry. The development of banks in the country has placed India amongst the top 5
fastest growing economics of the world. Whole of the world is looking towards India as prospective
dominant player in the world’s markets. The banks today have touched the life of every citizen. Whether he
has to keep his money in the bank, and keep his valuable safe; to book the tickets for rail and air journeys; to
pay insurance premium, Telephone bills and electricity bills to purchase/sale securities from capital market,
to take loan for business, for education, for house or for consumer items, everywhere the bank is present.
Banking is an important system and a growing sector of developing economy

9
 INDIAN BANKING SYSTEM

In India banking was originated in the first decade of 18th century with The General Bank of India which
came into existence in 1786. This was followed by Bank of Hindustan. Both these banks are now defunct.
State Bank of India is the oldest bank in existence in India and was established as “The Bank of Bengal” in
Calcutta in June 1806. A couple of decades later, foreign banks started their operations in Calcutta in 1850s.
Calcutta was the most active trading port, mainly due to the trade of the British Empire, and due to which
banking activity took roots the reand prospered.

Allahabad Bank was the first fully Indian owned bank, which was established in 1865. , The market
expanded with the establishment of banks by the 1900s such as Punjab National Bank, in

1895 in Lahore and Bank of India , in 1906, in Mumbai . Both these banks were under private ownership.
The Reserve Bank of India took up the responsibility of regulating the Indian banking sector in 1935. After
independence in 1947, the Reserve Bank became nationalized and was given regulatory powers.

The Public Sector emerged as the driver of economic growth and due to globalization, the public sector faced
new challenges in the developed economies. The public sector no longer had the right to operate in the
sellers’ market and had to face competition from domestic and international competitors. In the 20th century,
the political opinions were in favors that the intervention as well as investment by Government in
commercial activities should be reduced to a great extent.

A healthy economy is obtained by this effective banking. The banking system of India is not only hassle free
but it also accepts the new challenges of the technology and also the external and internal factors. For the
past 30 years Indian banking system has received several outstanding achievements.

It is no longer confined only to metropolitans or cosmopolitans in fact, Indian banking system has reached
even to the remote areas. The government’s regular policy for Indian bank since1969 has paid rich returns
with the nationalization of 14 major private banks of India

10
 GROWTH OF BANKING

Journey of Indian Banking System can be segregated into three distinct phases. They are as mentioned
below:

Phase I: Early phase from 1786 to 1969 of Indian Banks

Phase II: Nationalization of Indian Banks and up to 1991 prior to Indian banking sector

Phase III: New phase of Indian Banking System with the advent of Indian Financial & Banking

Sector Reforms after 1991 .

Phase: I

In 1786, The General Bank of India was established and then Bank of Hindustan and Bengal Bank were set
up. Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843)were established by The
East India Company as the independent units. These three banks we remerged in 1920 and Imperial Bank of
India was established and it started as private shareholders banks. In 1865 Allahabad Bank was established
and Punjab National Bank Ltd. Was set up in1894 by Indians at Lahore. Between 1906 and 1913, Bank of
India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were formed.
Finally Reserve Bank of India came into existence in 1935.

Initially the growth was very slow and the banks also experienced periodic failures between 1913and 1948.
There were approximately 1100 banks. The Government of India formed The Banking Companies Act, 1949
to streamline the functioning and activities of commercial banks. This Act was later changed to Banking
Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of1965). Reserve Bank of India was vested
with extensive powers for the supervision of banking in India as the Central Banking Authority. At that time
people had less trust on the banks. Due to this the deposit mobilization was slow and the savings bank
facility provided by the Postal department was much safer.

11
Phase: II

In 1955, Government nationalized Imperial Bank of India with more banking facilities on a large-scale in
rural and semi-urban areas. Due to this State Bank of India became the principal agent of RBI and it also
handled banking transactions of the Union and State Governments all over the Country. On 19th July 1960
seven banks forming subsidiary of State Bank of India were nationalized and on 1969, major process of
nationalization was carried out. Fourteen major commercial banks in the country were nationalized. In 1980
seven more banks were nationalized. Due to this 80% of the banking segment came under Government
ownership. The following are the steps taken by the Government of India to Regulate Banking Institutions in
the Country:

1949: Enactment of Banking Regulation Act.

1955: Nationalization of State Bank of India.

1959: Nationalization of SBI subsidiaries.

1961: Insurance cover extended to deposits.

1969: Nationalization of 14 major banks.

1971: Creation of credit guarantee corporation.

1975: Creation of regional rural banks.

1980: Nationalization of seven banks with deposits over 200 corers.

After the banks were nationalized, the branches of the public sector bank moved up to approximately 800%
in deposits and advances took a huge jump by 11,000%.

12
Phase: III

This phase has introduced many more products and facilities in the banking sector in its reforms measure. In
1991, under the chairmanship of M Narasimham , a committee was set up by his name which worked for the
liberalization of banking practices. The country is flooded with foreign banks and their ATM stations.
Efforts are being put to give a satisfactory service to customers. Phone banking and net banking is
introduced. The entire system became more convenient and swift. Time is given more importance than
money. The financial system of India has shown a great deal of resilience. It is sheltered from any crisis
triggered by any external macroeconomics shock as other East Asian Countries suffer

Current
Ratio

Liquidity
Ratio

Quick
Ratio

13
 THE STRUCTURE OF INDIAN BANKING SECTOR

The Indian banking industry has Reserve Bank of India as its Regulatory Authority. This is a mix of the
Public sector, Private sector, Co-operative banks and foreign banks. The private sector banks are again split
into old banks and new banks.

14
 CHAPTER NO 2

RESEARCH METHODOLOGY

OBJECTIVE OF RESEARCH

Each research study has its own specific purpose. It is like to discover to Question through the application of
scientific procedure. But the main aim of our research to find out the truth that is hidden and which has not
been discovered as yet. Our research study following objectives:-

• To compare the financial of Bank of India and Axis Bank.

• To know and compare the profitability of Bank of India and Axis Bank.
• To offer findings and suggestions to enhance the financial performance of Bank of India and Axis
Bank.

RESEARCH METHODOLOGY

 RESEARCH DESIGN: The present analytical study relate to critical evaluation of BOI and Axis Bank
for the period of 2 years (2017-2018 and 2018-17). Any project requires a basic plan of action, or a series
of actions chalked out, in order to accomplishes the objectives effectively and efficiently with in a time
framework, without deviating from the original target. In other words, we can say that, from where we
are and where we want to go, the process involved is carefully transformed in to a blue print called the
Research design.
 DATA COLLECTION: The present study is mainly based on secondary data obtained from the annual
report of Bank of India and Axis Bank. To supplement the data RBI Publication, Bank quest, various
books and different website related banking industries Etc. Have used for better reliability. Opinions
expressed in Business standard, Newspapers, accounting literature, Annual review and different
publications also used in this study.

Annual Report of BOI

Annual Report of Axis Bank

15
WEBSITES

www.bankofindia.com.in

www.axisbank.com.in www.investopedia.com

www.moneycontrol.com.in

LIMITATION OF STUDY

• This study is related to selected Bank of India and Axis Bank only.
• The secondary data, which used for this study is based on annual reports of the bank. The quality of
this research depends on quality and reliability of data published in annual reports of banks.
• The present study is largely based on ratio analysis such analysis has its own limitations which also
applies to the study.
• Comparing the ratios it gives current and past trends, but not future trends.

16
 BANK PROFILE

ABOUT LOGO

Bank of India symbol is goddess lakshmi inside star it means your money will increase by the bless of maa
lakshmi and safe inside stars. Stars also represent branches spreads all over the world like stars everywhere in
sky all customers is like family.

MISSION, VISION

Mission Statement: To provide superior, proactive banking services to niche markets globally, while
providing cost-effective, responsive services to others in our role as a development bank, and in so doing, meet
the requirements of our stakeholders.

Vision Statement: To become the bank of choice for corporate, medium businesses and up market retail
customers and to provide cost effective developmental banking for small business, Mass market and rural
markets.

17
 BOI Annual Report for Financial Year 2019-18

The Bank’s Operating Profit as on March 31, 2019 is 9,733 core as against 6,036 core as on March 31, 2018
showing YoY growth of 61.25%.

The Gross Advances at ` 393,788 core , grew by 3.18% YoY and 1.75% QoQ. Retail schematic loans increased
by 10.63% YoY and stood at Rs 41,793 core as on March 31, 2019. Retail loans share in Total Domestic
Advances increased YoY, from 14% in March 2018 to 15% inarch 2019.

Priority Sector advances stood at 113,027 core which constitutes 40.47% of ANBC. Agriculture advances were
Rs 54,303 core forming 19% of ANBC .The share of Retail Time Deposits of 1crore and less constitutes 76%
of Bank’s total time deposits.

Bank’s Global Gross NPA ratio declined sequentially and was 13.22% as on March 31, 2019 against 13.38%
as on December 2018. Global Net NPA ratio declined to 6.90% as against 7.09% on December 31, 2018.

• The Provision Coverage Ratio improved from 51.14% in March 2018 to 61.47% inarch 2019

The Bank declared PAT of ` -1,558 core in FY2018- 17 as against ` -6,089 core PAT for corresponding
period last year, reduced the loss by 74.41%

• NII during FY 2018-17 has improved to ` 11,826 core as compared to ` 11,725 core in FY
2017-2018, an increase of 0.87% YoY.
• Net Interest Margin (NIM) on domestic operations has improved from 2.50% in FY20172018
to 2.60% in FY 2018-17. NIM on overseas operations was 1.25% for FY 2018-Overall the
global NIM has improved to 2.20% in FY 2018-17 from 2.11% in FY 2017-2018.
• Non-Interest Income during FY 2018-17 has improved to ` 6,772 core as compared to `3,653
core in FY 2017-2018 increase of 85% YoY.
• Debit cards base increased to 471.49 Lakh as on March 31, 2019 from 352.72 Lakh as on
March 31, 2018.
• Internet Banking users (Retail) increased to 40.68 Lakh as on March 31, 2019 from
33.81Lakh as on March 31, 2018.
• Mobile Banking users increased to 1.51 Lakh as on March 31, 2019 from 1.22 Lakh as on
March 31, 2018.

18
 DOMESTIC BUSINESS

• CASA deposits increased by 30.24% on Y-O-Y, SB deposits grew by 31.92% and CD

by20.86%. Share of low cost deposits (CASA), in domestic deposits improved from
34.18%as on 31-03-2018 to 39.84% as on 31.03.2019.
• Domestic deposits increased by 12.23% from ` 3, 77,309 core to ` 4, 23,457 core.
• Advances registered a growth of 6.38% from ` 2, 68,579 core to ` 2, 85,725 core.
• Priority Sector lending constituted 40.47% of Adjusted Net Bank Credit and the share of
Agricultural Credit to Adjusted Net Bank Credit was 19.44%.
• Schematic Retail Credit grew by 10.63% from Rs 37,777 core to Rs 41,793 core.
• Overall, Domestic business has grown by 9.80% from ` 6, 45,888 core to ` 7, 09,183
croreduring FY 2018-17.

OVERSEAS BUSINESS

• Overseas business has de-grown by 9.70% during FY 2018-17 compared to last year degrowth
of 2.87%.

GLOBAL BUSINESS

• Global business has grown by 4.38% during FY 2018-17 compared to last year de-growth of
5.19%. Total Business mix (Deposits + Advances) reached at ` 9, 33,820crore, a growth of
`39,153 core.
• Total deposits increased by 5.27% to ` 5, 40,032 core.
• Advances increased by 3.18% to ` 3, 93,788 core.

The Financial performance of the Bank for the year 2018-17 is summarized below: (Amount
in core)
Particulars Growth (%)

Net Interest Income 11,724 11,826 0.87

Non-Interest Income 3653 6772 85.38

Operating Expenses 9341 8866 -5.09

19
Operating Profit 6036 9733 61.25
Provisions / Contingencies 12125 11291 -6.88

Net Profit -6088 -1558 74.41

Earnings per share (Rs.) -83.01 -15.72 81.06

Book Value per share (Rs.) 246.82 188.62 -23.68

Return on Equity (%) -26.1 -7.78 -26.1 -7.78 -

Return on Average Assets (%) -0.94 -0.24 -

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AXIS BANK

AXIS Bank is one of the fastest growing banks in private sector. Axis Bank Ltd is the
third largest of the private-sector banks in India offering a comprehensive suite of
financial products.
The Bank operates in four segments, namely treasury, retail banking, corporate/ wholesale banking and other
banking business.

The bank has its head office in Mumbai and Registered office in Ahmadabad. It has 3304 branches, 14,003
ATMs, and nine international offices. The bank employs over 55,000 people and had a market capitalization
of 1.28 trillion (US$20 billion) (as on March 31, 2019). It offers the entire spectrum of financial services
large and mid-size corporate, SME, and retail businesses.

As of 30 Jun. 2018, 30.81% shares are owned by promoters & promoter group (United India Insurance
Company Limited, Oriental Insurance Company Limited, National Insurance Company Limited, New India
Assurance Company Ltd, GIC, and LIC & UTI). Remaining 69.19% shares are owned by Mutual Funds
Institutions, FIIs, Financial Institutions (banks), Insurance Companies, corporate bodies & individual
investors among others.

21
 HISTORY

UTI Bank opened its registered office in Ahmadabad and corporate office in Mumbai in December 1993.
The first branch was inaugurated on 2 April 1994 in Ahmadabad by Dr. Minoan Singh, the Finance Minister
of India. UTI Bank began its operations in 1993, after the Government of India allowed new private banks to
be established. The Bank was promoted In 1993 jointly by the Administrator of the Unit Trust of India
Life Insurance Corporation of India (LIC), General Insurance Corporation, National Insurance Company, The
New India Assurance Company, The Oriental Insurance Corporation and United India Insurance Company.
In the year 2001, the bank along with Global Trust Bank (GTB) had a merger proposal to create the largest
private sector bank, but due to Medias issues both the banks withdraw the merger proposal.

In the year 2003, the Bank was given the authorized to handle Government transactions such as collection of
Government taxes, to handle the expenditure related payments of Central Government Ministries and
Departments and pension payments on behalf of Civil and Non-civil Ministries such as defense, posts,
telecom and railways. In December 20003, the Bank launched their merchant acquiring business.

In the year 2005, the Bank raised $239.3 million through Global Depositary Receipts. They won the award
Outstanding Achievement Award for the year 2005 from Indian Banks Association for IT Infrastructure,
delivery capabilities and innovative solutions.

In December 2005, the Bank set up Axis Securities and Sales Ltd (originally incorporated as UBL Sales Ltd)
to market credit cards and retail asset products. In October 2006, they set up Axis Private Equity Ltd,
primarily to carry on the activities of managing equity investments and provide venture capital support to
businesses.

In the year of 2007, the bank again raised $218.67 million through Global Depository Receipts. They opened
153 new branches during the year, which includes 43 extension counters that have been upgraded to
branches and 8 Service branches/ CPCs. They also opened new overseas offices at Singapore, Dubai and
Hong Kong and a representative office in Shanghai.

During the year 2007-08, the Bank opened 143 new branches, taking the number of branches to651 which
included 33 extension counters that have been upgraded to branches. Also, they expanded overseas with the
opening of a branch at the Dubai International Finance Centre. The bank changed their name from UTI Bank
Ltd to Axis Bank Ltd with effect from July 30, 2007 to avoid confusion with other unrelated entities with
similar name.

During the year 2008-09, the Bank opened 176 new branches that include 12 extension counters that have been
upgraded to branches taking the total number of branches and ECs to 835. During the year, they opened 831
ATMs, thereby taking the ATM network of the Bank from 2,764 to3, 595.

22
In May 2008, the Bank established Axis Trustee Services Company Ltd as a wholly owned subsidiary
company, which is engaged in trusteeship activities. In December 2008, they launched their new investment
advisory service exclusively for High Net Worth clients.

In January 2009, the Bank set up Axis Asset Management Company Ltd to carry on the activities of managing
a mutual fund business. Also, they incorporated Axis Mutual Fund Trustee Ltd to act as the trustee for the
mutual fund business.

During the year 2010-11, 407 new branches were added to the Banks network taking the total number of
branches and extension counters (ECs) to 1,390. Of these, 564 branches/ ECs are in Semi-urban and rural areas
and 826 branches/ECs are in metropolitan and urban areas. The Bank is present in all states and Union
Territories (except Lakshadweep) covering 921 centers. The ATM network of the Bank increased from 4,293
to 6,270.

During the year, the Bank also opened a Representative Office in Abu Dhabi. This was in addition to the
existing branches at Singapore, Hong Kong and DIFC (Dubai International Financial Centre) and
representative offices at Shanghai and Dubai.

In 2013, Axis Bank’s subsidiary, Axis Bank UK commenced banking operations. Axis Bank UK has a
branch in London.

In 2017, Axis Bank opens its representative office in Dhaka.

SERVICES

• Retail Banking

In the retail banking category, the bank offers services such as lending to individuals/small businesses
subject to the orientation, product and granularity criterion, along with liability products, card services,
Internet banking, automated teller machines (ATM) services, depository, financial advisory services, and
Non-resident Indian (NRI) services. Axis bank is a participant in RBI’s NEFT enabled participating banks
list

• Corporate Banking
1) Credit: The Bank offers various loan and fee-based products and services to Large and
Midcorporate customers and Small and Medium Enterprise (SME) businesses. These products

23
 and services include cash credit facilities, demand and short-term loans, project finance, export
credit, factoring, channel financing, structured products, discounting of bills, documentary
credits, guarantees, foreign exchange and derivative products. Liability products including
current accounts, certificates and deposits and time deposits are also offered to large and mid-
corporate segments.
2) Transaction Banking: Formed in April 2017, TxB provides integrated products and services to
customers in areas of current accounts, cash management services, capital market services, trade,
foreign exchange and derivatives, cross-border trade and correspondent banking services and tax
collections on behalf of the Government and various State Governments in India.
3) Syndication: The Bank also provides services of placement and syndication in the form of local
currency bonds, rupee and foreign term loans and external commercial borrowings.

Investment Banking and Trustee Services

The Bank provides investment banking and trusteeship services through its owned subsidiaries. Axis
Capital Limited provides investment banking services relating to equity capital markets, institutional
stock broking besides M&A advisory. Axis Trustee Services Limited is engaged in trusteeship activities,
acting as debenture trustee and as trustee to various securitization trusts.

INTERNATIONAL BANKING

The Bank continues to offer corporate banking, trade finance, treasury and risk management solutions
through the branches at Singapore, Hong Kong, DIFC, Shanghai and Colombo, and also retail liability
products from its branches at Hong Kong and Colombo. The representative office at Dhaka was
inaugurated during the current financial year. Through the representative Office at Dhaka .

• Treasury:

The Treasury manages the funding position of the Bank and also manages and maintains its regulatory
reserve requirements. It invests in sovereign and corporate debt instruments and engages in proprietary
trading in equity and fixed income securities, foreign exchange, currency futures and options. It also

24
 invests in commercial papers, mutual funds and floating rate instruments as part of the management of
short-term surplus liquidity. In addition, it also offers a wide range of treasury products and services to
corporate customers.

• VISION:

To be the preferred financial services provider excelling in customer service delivery through insight,
empowered employees and smart use of technology.

CORE VALUES
The core values that reflect across the policies and decisions of the Bank comprise:

• Customer Centricity
• Ethics
• Transparency
• Teamwork
• Ownership

25
AXIS BANK Annual Report for Financial Year 2019-18

(Amount in core)
Financial Performance Growth

Net Profit 8,223.66 3,679.28 -55.26%

EPS Diluted (Rs)annualized 34.4 15.34 -55.41%

Net Interest Income 6,832.97 18,093.12 7.49%

Other Income 9,371.46 11,691.31 24.75%

Fee Income 7,501.97 7,882.01 5.07%

Trading Income 1,246.91 3,400.34 172.70%

Miscellaneous Income 622.58 408.96 -34.31%

Operating Revenue 26,204.43 29,784.43 13.66%

Core Operating Revenue 24,712.646 26,384.09 6.76%

Operating Expenses 10,100.82 12,199.91 20.78%

Core Operating Profit 14,611.82 14,184.18 -2.93%

The Financial performance of the Bank for the year 2019-18 is summarized below: (Amount
in core)
Financial Performance Growth

26
Net Profit 8,223.66 3,679.28 -55.26%

EPS Diluted (Rs) annualized 34.4 15.34 -55.41%

Net Interest Income 6,832.97 18,093.12 7.49%

Other Income 9,371.46 11,691.31 24.75%

Fee Income 7,501.97 7,882.01 5.07%

Trading Income 1,246.91 3,400.34 172.70%

Miscellaneous Income 622.58 408.96 -34.31%

Operating Revenue 26,204.43 29,784.43 13.66%

Core Operating Revenue 24,712.646 26,384.09 6.76%

Operating Expenses 10,100.82 12,199.91 20.78%

Core Operating Profit 14,611.82 14,184.18 -2.93%

27
 BANK OF INDIA

PRODUCT & SERVICES OFFERED BANK OF INDIA BY

In spite of being a public sector bank, this bank has got all kinds of products and services, which one can get
in a modern bank. With their firm adherence to the policy of caution and prudence, they have been one of the
leaders in introducing different kinds of innovative banking services and solutions. Following are the
different services offered by B.O.I in India

1. Ancillary Services

2. Cards

3. Deposit Schemes

4. Bank of India loans

5. Bank of India Personal loans

6. NRI Banking of BOI

7. NRI Deposit Schemes

8. Online Services

1. Ancillary Services

Some of popular supplementary services offered by the bank are as follows:

• Depository Services
• Gold Loan
• Insurance (Domestic Travel, Health, Education, etc.)
• Mutual Fund
• Remittance
• Safe Custody
• Safe Deposit Locker
• Star Cash Management Service

2. Cards

Apart From the normal credit or debit cards, this bank even offers valued visa or master cards to its
28
worldwide customers. The names of some of the cards offered by this Indian bank are given below:
• Bank of India Master Card
• Bank of India VISA Card
• Gift Card
• Platinum Debit Card
• VISA Electron

29
3. Deposit Schemes
This bank offers varied types of deposit schemes like savings accounts, current accounts, salary accounts,
fixed deposits, term deposits, recurring deposit, double benefit deposit, income certificates (Both quarterly
and monthly ) and many more. To name a few of these products are:
• Jai Jawan Salary Plus Accounts (New)
• Star Benefit C. D. Plus Accounts
• Star Diamond Savings Account
• Star Flexi Recurring Deposit Scheme
• Star Sunidhi Tax Saving Deposit Scheme
• Star Suraksha S. B. Plus Account
• Star Power Salary Account

4. BOI Loans
Type Amount Categories by Rate of Loan Repayment
MIN. Individual interest
MAX.
BOI Star Min Rs.10000 Normal Persons / Men 14.60% up to 3 years in
Personal Up to 10 For Women – 14.10% unsecured scheme
Loan Lakh Senior Citizens – 12.60% & 5 years in
secured category
Bank of Max Star Up to 30 years
India Rs.3 cores Home/Diamond/Smart
Home loan
Loan (for woman) 8.55%
(for others) 8.60%
PRADHAN MANTRI
AWAS YOJANA 8.40%
BOI Star Max Individuals Max(Individuals)
Vehicle Rs.50 laces 7 years –
Loan Rs.100 laces. For Companies and 1 Year 4wheelers
corporate entities MCLR 5 years –
+ 0.85% 2wheelers
For Corporate
/Firms 5 years

Star limit up to Students for pursuing 1 Year Up to Rs. 7.5

education Rs.7.50 laces higher education in MCLR lacks 10 years
loan Above India and abroad +1.70% Above Rs.
Rs.7.50 laces 1 Year 7.5 lacks 15
MCLR year
+ 2.50%

30
All Rate of Interest under Retail Loans is linked to 1 year MCLR. Any concession granted in Retail Loan is
subject to minimum 1 year MCLR MCLR w.e.f . 10thSEPTEMBER 2019 is 8.30% p.a.
5. NRI Banking of BOI

Besides the different deposit schemes for NRI this bank in India offers varied other types of international
banking services, some of which are mentioned below:

• F.C.N.R (Foreign Currency Non-resident) Accounts

• Forex Card
• Integrated Treasury
• N. R. E. (Non-resident External) Accounts
• Star e-Remit

6. NRI Deposit Schemes

Non Resident Indians (NRIs) have a choice of two schemes for depositing their savings with Bank of India,
which are:-

• Foreign Currency Non Resident (FCNR) Accounts

• Non-Resident External (NRE) Accounts

7. Foreign Currency Deposit Schemes

• Eligible Depositors: All individual Indian Residents will be allowed to open such account. However,
the facility will not be available to corporate /partnership / Firm / trusts, HUF etc. Registered/ based
in India.
• Currency of the account: Account will be maintained in GBP, USD and EURO Currencies.
• Nature of Account: Fixed Deposit for a period of 1 month (minimum) 3months, 6 months and 1 year
(maximum).
• Minimum amount of Deposit: Minimum amount of deposit will be as follows: USD - 5000/- GBP -
5000/- Euro – 5000/-

8. Online Services

The different kinds of online services offered by BOI are as follows:

• Bill Payment
• Fund Transfer (Inter-Bank)
• Internet Banking
• Mobile Banking

31
 • Share Trading
• Tax Payment
• Ticket Booking

SAFE DEPOSIT LOCKER

For the safety of your valuables we offer our customers safe deposit vault or locker facilities at large number
of our branches. There is a nominal annual charge, which depends on the size of the locker and the centre in
which the branch is located.

RISK MANAGEMENT

Risk and Control:

Bank has established mechanisms to ensure ongoing assessment of relevant risks on an individual as well as
consolidated basis. Risk Management is a Board driven function with the Risk Management Committee of
the Board at apex level supported by operational level committees of Top Executives for managing various
risks. The process of Risk Management consists of identification, measurement, monitoring and control.
These processes are covered in policies viz., Enterprise Wide Risk Management, Credit Risk Management,
Operational Risk Management, Market Risk Management, Derivatives, ALM, Foreign Exchange and
Dealing room operations. The identification, measuring, monitoring & mitigation of potential risks, in all
activities and products are done through detailed analysis and vetting of the same by the operational level
risk committees and task forces.

Tools and systems of prudential limits, new Basel Compliant Credit Rating Models, Credit Audit, VaR
models for Market Risks, Self-assessment exercise coupled with tracking of Key Risk Indicators for
Operational Risk have been introduced for assessing/measuring the identified risks.

Bank has migrated to computation of Capital Adequacy under New Capital Adequacy Framework (Basel II)
based on standardized Approach for Credit and Market Risk and Basic Indicator Approach for Operational
Risk as per RBI guidelines effective 31.03.2008.

The Bank undertakes Internal Capital Adequacy Assessment Process (ICAAP) on a yearly basis for
assessment/measurement of various risks, the limits of its risk-bearing capacity and appropriate level of
internal capital in relation to the risks and the Risk Appetite. Stress Testing Process is in place for enhancing
risk assessment by providing the bank a better understanding of the likely impact even in extreme
circumstances.

32
Bank’s Information Risk Management System has clear objectives to obviate cyber-security risks in the face
of acceleration in Bank’s business by strengthening internal controls to protect brand, reputation and assets
of the Bank. Bank has implemented various information security projects for monitoring of Real-Time
Information Security attempts/incidents/ events on 24x7basis.

Bank is vigilant of the security and privacy of the data related to its patrons and account holders and takes
utmost care to protect it from cyber-attacks. Bank has developed reasonable resiliency to provide
uninterrupted services in adverse situations. Bank has put in place Captive Security Operation Centre (SOC)
at Data Center. The Bank is ISO 27001 (ISMS) and ISO 22301 (BCMS) certified and the PCI-DSS V3
certification is under process. Other advanced security tools like Privilege User Management, Database
Activity Monitoring have been operational zed. Security solutions like Anti-APT and anti- DDoS tools are
under installation process. Risk and vulnerability assessment exercises are routinely carried out for all
critical application and services with in-time remedial activities.

AXIS BANK
Axis Bank Products and Services

Axis Bank offers a range of financial products and services to its clients throughout the country. It also has

special strength in retail and corporate banking. Axis Bank offers following services: Retail Banking

1. Accounts

2. Deposits

3. Cards

4. Loans

1. ACCOUNTS

There are various types of savings accounts scheme available

1. Easy access Savings Account: This account is apt for individuals who wish to keep their money in safe
hands and at the same time wish to reap some benefits out of it. The holder of the account receives a Visa
classic debit card along and is free to withdraw an amount of Rs.40000 from ATM and may choose to
shop up to Rs.1 Lakh per day. The bank provides the account holder with a free multicity cheque book per
quarter and also allows the account holder to make5 cash transactions per month amounting to a
maximum ofRs.10 Lakh . The account holder is also entitled to receive discounts more than 15% in
certain restaurants get edge Loyalty reward points on the same.

33
2. Senior Privilege Savings Account: This account is directed towards Indian senior citizens and aims to
provide them self-dependency post retirement. The holder of the account receives a Visa Classic debit
card along and is free to withdraw an amount of Rs.40000from ATM and may choose to shop up to Rs.1
Lakh per day. The bank provides the account holder with a free multicity cheque book per quarter and
also allows the accountholder to make 5 cash transactions per month amounting to a maximum of Rs.10
Lakh .The accountholder receives a personalized senior citizen card which can be used for availing special
benefits under the scheme.

3. Prime plus Savings Account

4. Prime savings Account

5. Women’s Savings Account

6. Future Star Savings Account

• Current: The various accounts available under this scheme are

I. Normal Current Account: This account allows for a cash withdrawal of Rs 1 Lakh each day along
with 25 free NEFT and RTGS transactions and also allows the customer to make cash transactions
worth up to Rs. 2 Lakh for home branch and up to Rs.1 Lakh for non-home branch.
II. Business Advantage Account: This account allows for a cash withdrawal of Rs.3 Lakhs per month
along with 50 free NEFT and RTGS transactions and also allows the customer to make cash
transactions worth up to Rs. 3 Lakhs for home branch and up toRs.1 Lakh for non-home branch.
III. Sweeps Current Account: This account allows for a cash withdrawal of Rs.1Lakh per day and also
allows the customer to make cash transactions worth up to Rs. 1 core for home branch and up to Rs 1
Lakh for non-home branch.
IV. Local Current Account
V. Business Select Account
VI. Business Classic Account

• Wealth Current Account: A single type of account is available under this scheme:

I. Club 50 Current Account: This account allows for a cash withdrawal of any amount along with 2000 free
NEFT and RTGS transactions and also allows the customer to make cash transactions worth up to Rs. 2
cores every month for home as well as non-home branch

34
2. DEPOSITS

Deposits help customers earn higher rate of interest on the cash deposited in their account. These deposits are
safe and interest earning and are available in different varieties, the details of which are given below:

I. Fixed: These FD’S can be opened for a period of 7 days to 10 years with a minimum amount of
Rs.10000. It can be opened at any of the axis bank branch and these also assure returns.
II. Recurring: The customer can make investments by investing a fixed amount in regular intervals of
time. These scheme can be availed by investing a minimum of Rs.500 per month for a period of 6
months to 10 years
III. Tax Saver Fixed Deposits: A tax exempting deposit which ensures return in the form of interest as
well as tax savings. Can be availed by investing a minimum of Rs.100 and maximum of Rs.150000
for a period of 5 years.

3. CARDS

Cards are also known as plastic money and are considered to be equivalent to cash. These come in various
forms and are handy. The various types of cards being offered by the bank are:

I. Credit Card: Available in numerous variants enables the customer to purchase things and pay
later for the same.
II. Debit Card: Equivalent to holding cash. These cards enable the customer to withdraw cash from
ATM’s or swipe the card in order to make payments.
III. Prepaid Cards: Prepaid are ideal for gifting purpose. These come in the form of gift cards, meal
cards, rewards cards and Smart Pay Card.

35
4. Loans
Type Amount Rate of interest Loan Repayment
MIN.
MAX.

Axis Bank Car 1,00,000 Up 11.00% to12.00% 12 to 60 Months

Loan to 85% onroad
funding

Axis Bank Home 3 Lakhs no Up to Rs 30 laces 12 to 60 Months

Loan upper limit 8.35%
Rs 30 – 75 laces
8.65%
Above 75 laces
8.70%

Axis Bank Rs. 50,000 15.50% to 24% 12 to 60 Months

Personal Loan Rs. 15,00,000

Axis Bank Rs 50,000 <Rs.4 laces and up to Not specify

Education Loan Up to Rs.75 Rs.7.5 laces 13.50%
Laths < Rs 7.5 laces
14.50%

36
Risk Management

The key components of our risk management policy rely on the risk governance architecture, comprehensive
processes and internal control mechanisms based on approved policies and guidelines.

Our risk governance architecture focuses on the key areas of risk such as credit, market (including liquidity)
and operational risk and quantification of these risks, wherever possible, for effective and continuous
monitoring and control. The risk management processes are guided by well-defined policies appropriate for
various risk categories, independent risk oversight and periodic monitoring through the sub-committees of
the Board of Directors. The overall risk appetite and philosophy is set by the Board. The Committee of
Directors, the Risk Management Committee and the Audit Committee of the Board, which are sub
committees of the Board, review various aspects of risk arising from the businesses of the Bank. Various
senior management committees operate within the broad policy framework.

37
 Risk Risk Manager Risk Management
level
External • Global • Monthly sales • Group
Risk Macroeconomics trends. And business Management and
• Global Political intelligence board Level
development Reports
• Act as
information provider
and gain local
knowledge •
Ongoing competence
and capacity assent
of supplies
Business risk • Technological • Ongoing • Group
shift training of managemen
• Technology customers t and
acceptance &system regional
• Competitors integrators manager
• Quality & level
competence
assurance
Financial and • Financing risk • The finance • Group
insurable risk • Currency risk policy state managemen
• Credit risk that the groups t, board
must have and finance
credit facilities department
with at least level
one bank
• Ongoing credit
assessment of
customers
Function specific • IT • Continuous • Division
risk • HR evaluation level
• Operations and security
tests
• Ongoing
competence
and capacity
evaluation
• Business and
Market
evaluation

38
 CHAPTER NO 3

REVIEW OF LITERATURE

Aggarwal , (1979) has conducted a study on nationalized banks with special reference to their social
obligations. The main recommendations of the study were: (I) providing more branch office to the public
particularly in the semi-urban and rural areas and in the lead districts, (ii) providing greater credit facilities to
the public as well as to the priority and neglected sectors, (iii) Helping generation and maintenance of
employment opportunities in the country, (iv) financing the government securities and (v) popularizing the
bill form of credit.

Amandeep , (1983) studies various factors which affect the profitability of commercial banks with the help
of multiple regression analysis. She has tried to determine the share of each factor which determines the
profitability of commercial banks. The trend analysis, ratio analysis, multiple regression analysis was
effectively used to know the profitability of commercial banks.

Angadi and Devraj , (1983) have studies the factors determining the profitability and productivity of public
sector banks (PSBs) in India. The study has been primarily based unpublished financial statements of
respective banks. These authors have observed that though PSBs have discharged their social
responsibilities, their deficiencies in respect of effective mobilization of funds at lower costs, attracting retail
banking business, augmenting earnings from other sources, effective cash and portfolio management etc.
have contributed towards the lower productivity and profitability of these banks.

Arora , S. and Kaur , S (2008) have studied the internal determinants of diversification moves by banks
taking two dependent variables, (I) net interest margin, and (ii) non-interest margin. It has been observed that
all the four explanatory variables viz. (I) Risk, (ii) Technological change, (iii) Cost of production, and (IV)
Regulatory cost have got significant influence on the variations in the structure of income of the banks. It has
also been observed that the variations in income in respect of foreign banks.

Avasthi and Sharma, (2000) have observed that advances in information technology are set to change the
face of the banking business. The authors have also explored the emerging Challenges faced by the banking
industry from a regulatory perspective. Technology has increased manifold the delivery channels used by
banks in retail banking and has made banking much more customer friendly. It has also greatly expanded the
market for banking products, and has also enabled banking in hitherto uncovered areas at lower operating
costs.

Adhivarahan (2001) in his research article has attempted to study the provisions of ‘Information Technology
Act 2000 and its implications on the functioning of banks. The study has pointed out that the number of
39
incidents of e-fraud and on-line breaches is the highest in India. As such, instances of cyber crimes in banking

sector have to be treated with utmost care. For this purpose, it has been suggested that a statutory body similar
to ‘Internet Fraud Center ‘In the United States has to be formed in India.

Birla Institute of Scientific Research (1981) has conducted a study to evaluate the Performance of
nationalized banks in comparison with that of banks in private sector. The emphasis has been on the objectives
of nationalization and their achievements, relative performance of private sector banks and nationalized banks
since 1969 and the effect of Nationalization on rest of the banking sector. The study has revealed that the
growth and development in banking after nationalization has been not just because of transfer of ownership.
Rather, it has been because of various incentives and punitive measures that were implemented with more
vigilance and care after 1969 by the Government and the RBI to make banks fulfill their social responsibilities.
Similarly in the same spheres even better results have been achieved by nonnationalized banks. The
performance of private sector banks in the post-Nationalization era has been noteworthy, especially because
of the odds that they faced in securing the growth of the business. The achievement of significantly high growth
in deposits, advances, and branches etc. has clearly shown the high quality of entrepreneurship and
management of these banks.

40
 CHAPTER: 4

DATA ANALYSIS, INTERPRETATION AND PRESENTATION

FINANCIAL STATEMENT ANALYSIS

Financial statement of BOI

Particulars

Capital 110554342 81729201

Reserves & Surplus 297097234 301962806

Share Application Money, pending 17219175 13036480

allotment

Deposits 5400320078 5130045218

Borrowings 394056651 510831442

Other liabilities and provisions 143845186 135090405

Total 6263092666 6099139267

Cash and balances with Reserve Bank of 27347621 33962018148

India

Balances with Banks and money at call and 985402911 651796846

short notice

Investments 1278268631 1188489120

Advances 366482018671 3591889592

Fixed Assets 84618581 84803113

Other Assets 276509251 242544448

Total 6263092666 6099139267

41
Contingent Liabilities 3597794264 3538093236

Profit and loss statement

Particulars

INCOME

Interest Earned 392908523 417964698

Other income 67723304 36525388

TOTAL 460631827 454490087

EXPENDITURE

Interest expended 274647356 300718471

Operating expenses 88657966 93415418

Provisions & Contingencies 112909653 121248331

TOTAL 476214945 515382331

PROFIT

Net Profit/(Loss) for the period 15583148 -60892133

Add: Profit/(Loss) brought forward -62486813 -

TOTAL 78069961 -60892133

APPROPRIATIONS

Transfer to Capital Reserve 7498473 1594680

Balance in Profit and Loss Account -85568434 -62486813

Financial statement of Axis Bank

Balances sheet
CAPITAL AND LIABILITIES

42
Capital 4790072 4765664

Reserves & Surplus 552835346 526883409

Deposits 4143787878 3579675603

Borrowings 1050308694 1085803789

Other liabilities & Provisions 262954713 201087731

Total 6014676703 5398210196

ASSETS

Cash and Balances with Reserve Bank of India 308579390 223611495

and money call at short notice

Balances with Banks and Money at Call and 193983441 109642909

Short notice

Investments 1287933704 1315240609

Advances 3730693495 3387737229

Fixed Assets 37468925 35231719

Other Assets 456018748 326746235

Total 6014676703 5398210196

Contingent Liabilities 6696258442 6174463565

Bills for Collection 810553648 512794653

Profit and loss statement

Particulars
INCOME

Interest Earned 445421579 409880364

Other income 12018913107 93714644
TOTAL 562334686 503595008
EXPENDITURE

Interest expended 264490420 241550675

43
 Operating expenses 121999053 101008186
Provisions & Contingencies 139052421 78799519
TOTAL 274457351 258471542
PROFIT
Net Profit/(Loss) for the period 36792792 82236628
Add: Profit/(Loss) brought forward 237664559 176234914
TOTAL 274457351 258471542
APPROPRIATIONS
Transfer to Statutory Res 9198198 20559157
Transfer to/(from) Investment Res -87201871 -418074
Transfer to Capital Res 7555740 620406
Transfer to/(from) Res Fund 17522 17409
Dividend paid 14074287 28085
Bal Trf to P & L A/C c/d 244483275 237664559

Total 274457351 258471542

Ratio Analysis

Ratio Analysis is a form of Financial Statement Analysis that is used to obtain a quick indication of a firm’s
financial performance in several key areas. The ratios are categorized as Short-term Solvency Ratios, Debt
Management Ratios, Asset Management Ratios, Profitability Ratios, and Market Value Ratios.

Ratio Analysis as a tool possesses several important features. The data, which are provided by financial
statements, are readily available. The computation of ratios facilitates the comparison of firms which differ
in size In addition, ratios can be used in a form of trend analysis to identify areas where performance has
improved or deteriorated over time.

Because Ratio Analysis is based upon accounting information, its effectiveness is limited by the distortions
which arise in financial statements due to such things as Historical Cost Accounting and inflation. Therefore,
Ratio Analysis should only be used as a first step in financial analysis, to obtain a quick indication of a
firm’s performance and to identify areas which need to be investigated further.

44
 Balance sheet

The balance sheet is a snapshot of a company’s financial condition. Assets, liabilities and ownership equity
are listed as of a specific date, such as the end of its financial year. The balance Sheet shows if company’s
activity is mainly financed by

• owners’ equity: capital stock, retained earnings, reserve,

• Liabilities: accounts payable, loans payable, tax payable.

Balance Sheet Ratios

BOI Axis Bank BOI Axis Bank

Particulars Average

Current Ratio 0.05 0.05 0.1 0.07 0.075 0.135

Quick Ratio 29.3 30.9 17.1 25.74 44.75 29.97

45
Capital Adequacy ratio:

Capital adequacy ratio is the ratio which determines the bank's capacity to meet the time liabilities and other
risks such as credit risk, operational risk

CAR = Tier 1 Capital + Tier 2 Capital

Risk- weighted asset.

Interpretation

In above case, Capital adequacy ratios of BOI and Axis Bank are decrease. BOI has 12.01 CAP in the year
2019. Whereas Axis Bank has 15.29 CAP in the year 2019 . Here Axis Bank has more capacity to meet the
time liabilities and other risk than BOI.

Advances / Loans Funds (%)

Interpretation

Considering the above data we can say that, Advances / Loans Funds % of BOI is decrease .Whereas
Advances / Loans Funds % of Axis Bank is increase in the year 2019 indicates that the Axis bank business is
really commendable and the Credit Policy it has maintained is absolutely good. Whereas BOI not have such
good business policy. Axis Bank is ahead in terms of its business when compared to BOI, this implies that
Axis Bank has incorporated sound business policies in its bank.

46
 Debt service coverage ratio

The debt service coverage ratio (DSCR), also known as “debt coverage ratio” (DCR), is the ratio of cash
available for debt servicing to interest, principal and lease payments. It is a popular bench mark used in the
measurement of an entity’s (person or corporation) ability to produce enough cash to cover its debt
(including lease) payments. The higher this ratio is, the easier it is to obtain a loan. The phrase is also used in
commercial banking and may be expressed as a minimum ratio that is acceptable to a lender; it may be a
loan condition In corporate finance , DSCR refers to the amount of cash flow available to meet annual
interest and principal payments on debt, including sinking fund payments. In personal finance, DSCR refers
to a ratio used by Bank loan officers in determining debt servicing ability . In commercial real estate finance,
DSCR is the primary measure to determine if a property will be able to sustain its debt based on cash flow.

47
 Debt Coverage Ratios

BOI Axis Bank BOI Axis Bank

Particulars 2018 2019 2018 2019 Average

Credit Deposit 68.91 72.85 92.17 91.1 105.335 137.72

Ratio

Investment 23.43 22.84 32.47 37.38 34.85 51.2018

Deposit Ratio

Cash Deposit 5.82 5.85 6.89 6.2 8.745 9.99

Ratio

Total debt to 18.83 18.19 9.31 8.6 27.925 13.61

Owners fund

Financial Charges 1.35 1.21 1.68 1.69 1.955 2.525

Coverage Ratio

Financial Charges 0.94 0.81 1.2018 1.36 1.345 1.84

Coverage Ratio
Post tax

Credit Deposit Ratio:

Credit-Deposit Ratio is the proportion of loan assets created by a bank from the deposits received. Credits
are the loans and advances granted by the bank. In other words it is the amount lent by the bank to a person
or an organization which is recovered later on calculated as:

CD ratio = Total Advances *100

48
 Total Deposits

Interpretation

In above data, Axis bank has 91.1% CD Ratio is higher than the BOI. This shows that Axis Bank has created
more loan assets from its deposits as compared to the BOI.

Cash Deposit Ratio

Cash – Deposit Ratio is the ratio of how much a bank lends out of the deposits it has mobilized. It indicates

how much of a bank’s core funds are being used for lending, the main banking activity. Calculated as: Cash

– Deposit Ratio (%) = cash in hand +balances with RBI/ Total deposits

Interpretation

In above data, Cash Deposit Ratio of Axis Bank is higher in 2018 and 2019 than the BOI. This shows that
Axis Bank has created more cash assets from its deposits as compared to BOI

Debt to Owners Fund

A company’s debt-to-capital ratio or D/C ratio is the ratio of its total debt to its total capital, its debt and
equity combined. The ratio measures a company’s capital structure, financial solvency, and degree of
leverage, at a particular point in time.

Calculated as:

Debt-To-Capital Ratio = Debt / (Shareholder’s Equity + Debt)

Interpretation

In above data, Debt-To-Capital Ratio of both the banks is decreases in the year 2019. Decrease in the ratio
suggests that lesser reliance on debts as source of financing and vice versa. As we see the ratio of BOI is
higher than the ratio of Axis Bank. It indicates that BOI has more ability pay its debt.

The fixed-charge coverage ratio

The fixed-charge coverage ratio (FCCR) measures a firm’s ability to satisfy fixed charges, such as interest
expense and lease expense.

Calculated as:

FCCR = EBIT + Fixed charges (Before tax)/ Fixed charges (Before tax) + Interest

49
Interpretation

The fixed-charge coverage ratio is higher the ratio the better. From above data, In 2019 BOI has Fixedcharge
coverage ratios. And Axis Bank has 1.69 fixed charge coverage ratios. It means Axis bank fixedcharge
coverage ratio is better than BOI.

Liquidity ratios

Liquidity ratios measure a company’s ability to pay debt obligations and its margin of safety through the
calculation of metrics including the current ratio, quick ratio and operating cash flow ratio. Current liabilities
are analyzed in relation to liquid assets to evaluate the coverage of short-term debts in an emergency.
Bankruptcy analysts and mortgage originators use liquidity ratios to evaluate going concern issues, as
liquidity measurement ratios indicate cash flow positioning.

The most basic liquidity ratio or metric is the calculation of working capital. Working capital is the
difference between current assets and current liabilities. If a business has a positive working capital, this
indicates it has more current assets than current liabilities and in the event of an emergency; the business can
pay all of its short-term debts. A negative working capital indicates that a company is illiquid.

50
Leverage Ratios
BOI Axis Bank

Particulars 2018 2019 2018 2019

Current Ratio 0.05 0.05 0.1 0.07

Quick Ratio 29.3 30.9 17.1 25.74

Current Ratio

The current ratio is a liquidity ratio that measures a company's ability to pay short-term and long-term
obligations.

The current ratio considers the current total assets of a company (both liquid and illiquid) relative to that
company’s current total liabilities.

Calculated as:

Current Ratio = Current Assets / Current Liabilities

Interpretation

In 2018, the axis bank ability to cover its current liabilities with its current assets was 0.01. In2019, the ratio
goes up to 0.07 as compared to 2018. Current ratio of BOI is constant in 2019.

This means that the Axis Bank has more ability to pay liabilities, than the BOI. As definition says that
higher the ratio , grater the ability of the banks to pay bills .

Quick Ratio

The quick ratio is an indicator of a company’s short-term liquidity, and measures a company’s ability to meet
its short-term obligations with its most liquid assets. Quick assets are current assets that can be converted to
cash within 90 days or in the short-term.

Calculated as,

Quick ratio = (current assets – inventories) / current liabilities

Interpretation

The table shows that, in 2018 the BOI and Axis Bank have the quick ratio 29.3 and 17.1Respectively. Then
we observe that there is improvement in 2019. When we compare the quick ratio of BOI and Axis Bank,

51
BOI has 30.9 of very liquid assets available to cover short-term debt thus, the BOI is in a good liquidity
position compare to Axis Bank.

52
 Profitability Ratios

Profitability ratios are a class of financial metrics that are used to assess a business’s ability to generate
earnings compared to its expenses and other relevant costs incurred during a specific period of time. For
most of these ratios, having a higher value relative to a competitor’s ratio or relative to the same ratio from a
previous period indicates that the company is doing well.

Some examples of profitability ratios are profit margin, return on assets (ROA) and return on equity (ROE).
Profitability ratios are the most popular metrics used in financial analysis.

Profitability Ratios
BOI Axis Bank BOI Axis
Bank

Particulars 2018 2019 2018 2019 Average

Interest Spread 5.99 6.3 6.84 6.81 9.14 10.245

53
Adjusted Cash 54.21 53.39 54.48 65.17 82.905 87.065
Margin (%)

Net Profit Margin -3.96 -14.56 8.26 20.06 -11.24 18.29

Return on Long 170.83 20188.8 104.66 114.18 255.23 20181.75

term fund (%)

Return on Net -5.06 -19.63 6.59 15.46 -14.875 14.32

Worth (%)

Adjusted Return on 84.2 77.32 54.02 60.9 112.86 84.47

Net Worth (%)

Return on Assets 291.7 379.47 232.83 223.12 481.435 344.39

excluding

Net Profit Margin

Net profit margin is the percentage of revenue left after all expenses have been deducted from sales.

The measurement reveals the amount of profit that a business can extract from its total sales. The formula is:

Net profit margin = (Net profits ÷ Net sales) x 100

Interpretation

In the year 2018 the Axis bank has 8.26 Net profit margins and in 2019 it increases by 11.8. Increase in Net
profit margin it indicates that a bank is pricing its products correctly and is exercising good cost control.

BOI has negative net profit margin in both the year. It indicates that BOI unable to control the cost.

Return on Long Term Fund

Return on Long Term Fund It is calculated by dividing Earnings before Interest & Tax (EBIT) by the net
capital employed. The term net capital employed in the gross capital in the business minus current liabilities
. Thus it represents the long-term funds supplied by creditors and owners of the firm.

54
Interpretation

In above table, Return on Long Term Fund of BOI is decrease from 170.83 to 20188.8 in the year 2019. And
Return on Long Term Fund of Axis Bank is increase from 104.66 to 114.18.Higher the Return on Long
Term Fund it show the good position of bank. Here BOI has higher return on Long Term Fund compare to
the Axis bank. It indicates that BOI is in good position.

Return on assets

Return on assets (ROA) is a financial ratio that shows the percentage of profit a company earns in relation to
its overall resources. Return on assets (ROA) is an indicator of how profitable accompany is relative to its
total assets. ROA gives an idea as to how efficient management is at using its assets to generate earnings.

Return on assets = Net income *100/ Total assets

Interpretation

In above data, Axis bank has 232.83 ROI in the year 2018. In the year 2019 ROI of Axis bank is decrease to
223.12. The decrease in ROA indicates that the Axis bank is generating less profit from all of its resources in
the year 2019 there was an increase in return on assets to 379.4 from 291.7. The higher of this ratio is better
for the bank.

Return on Net Worth

Return on net worth is called ROE. Return on equity (ROE) is a measure of profitability that calculates how

many dollars of profit a company generates with each dollar of shareholders ‘equity. The formula for ROE

is

ROE = Net Income/Shareholders' Equity

Interpretation

Here starting from 2018, the ratio was 6.59 % of axis bank. And goes up in 2019 to 15.46% this increase in
return on net worth is good thing for stockholders and it indicates that axis bank is using the funds provided
by stockholders during the specific year effectively and using it to generate more equity for the owners.

When net income is negative, ROE will also be negative. Here BOI has negative ROE due the negative net
income in 2019. Efficiency ratios measure how effectively the company utilizes these assets, as well as how
well it manage it liabilities.

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Daigram

Net profit
/Total
Fund Ratio

Management
Eficency
Ratio

Toal
Loan
Assets
Turnover
Turnover
Ratio
Ratio

Management Efficiency Ratios

BOI Axis Bank BOI Axis
Bank
Particulars 2018 2019 2018 2019 Average

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Interest income/ 6.36 6.8 7.91 8.3 9.76 12.06
Total funds

Net Interest 1.91 1.91 3.21 3.41 2.865 4.915

Income/ Total funds

Interest expended / 1.1 0.59 2.07 1.9 1.395 3.02

Total funds

Operating expenses/ 4.44 4.9 4.69 4.89 6.89 7.135

Total funds

Profit Before 1.44 1.47 2.07 1.96 2.175 3.05

provisions / Total
funds

Net Profit / Total 1.57 0.98 3.12 3.26 2.06 4.75

funds
Loan Turnover 0.11 0.11 0.13 0.13 0.20185 0.195

Total Income/ 7.45 7.4 9.98 10.2 11.15 15.08

Capital employed
(%)
Interest expended/ 4.44 4.9 4.69 4.89 6.89 7.135
Capital employed
(%)

Total Assets 0.06 0.07 0.08 0.08 0.09 0.12

Turnover Ratios

Net interest margin (NIM)

The difference between interest income and interest expense is known as net interest income. It is the
income, which the bank earns from its core business of lending. The net interest income earned by the bank
on its average earning assets . These assets comprises of advances, investments, balance with the RBI and
money at call. As such it is calculated as,

NIM = (Interest income – interest expenses) / Total Funds

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Loans Turnover Ratio

Loan turnover ratio means the amount of sales, divided by the outstanding loans on the balance Sheet. This
could measure how much sales a company has to pay off its loans.

Interpretation

As per above table, the loan turnover ratio of Axis bank is higher than the BOI. It means Axis Bank is more
dependent on their income to pay their outstanding loan in comparison with BOI

Total Asset turnover ratio

The asset turnover ratio is an efficiency ratio that measures a company’s ability to generate sales from its
assets by comparing net sales with average total assets. In other words, this ratio shows how efficiently a
company can use its assets to generate sales.

Calculated as,

Asset turnover ratio = Net sales /Average Total assets

Interpretation

As we can see that, total asset turnover ratio of Axis Bank is higher than BOI in year the 2019.It means Axis
Bank is more efficient in generating revenue from their assets. A higher ratio is always more favorable.

Return on capital employed

Return on capital employed (ROCE) is a financial ratio that measures a company’s profitability and the
efficiency with which its capital is employed. Capital employed is the Total amount of capital that a
company has utilized in order to generate profits

ROCE is calculated as

ROCE = Earnings before Interest and Tax (EBIT) / Capital Employed

Interpretation

As per above data, Axis bank has ROCE of 10.2% higher than BOI. A higher ROCE Indicates more efficient
use of capital. ROCE should be higher than the company’s capital cost; otherwise it indicates that the
company is not employing its capital effectively and is not generating shareholder value

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Investment Valuation Ratios

This includes revenue, gross margin, operating cash flow, EBITDA, pro forma earnings and the list goes on.
Investment valuation ratios attempt to simplify this evaluation process by comparing relevant data that help
users gain an estimate of valuation.

The purpose of this ratio is to give users a quick idea of how much they are paying for each Rs.1 of earnings

operating
profit per
share

investment
valuation
ratio

dividend earing per

per share share

Investment Valuation Ratios

BOI Axis Bank

Particulars 2018 2019 2018 2019

Face Value 10 10 2 2

Dividend Per Share -- -- 5 5

Operating Profit Per Share 27.95 32.66 26.73 30.12

(Rs)

Net Operating Profit Per 372.53 511.4 185.98 172.01

Share (Rs)

Operating Profit per Share (Rs)

Profit earned after subtracting from revenues those expenses that are directly associated with operating the
business, such as cost of goods sold, administration and marketing, depreciation and other general operating

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costs. Operating earnings are an important measure of profitability, and since this metric excludes
nonoperating expenses such as interest and taxes, it enables an assessment of the company's core business
profitability to be made.

Interpretation

As per above data, in the year 2019 operating profit per share of BOI is increase to 32.66 to27.95. Whereas
operating profit per share of Axis bank is also increase to 30.12 from 26.76. It indicates that operating profit
per share of BOI is higher than Axis bank
Profit And Loss Account Ratio
BOI Axis Bank BOI Axis
Bank
2018 2019 2018 2019 Average

Interest expended/ 69.9 71.95 59.38 58.93 105.875 88.845

Interest earned
Other Income/ 14.7 8.04 20.79 18.61 18.72 30.095
Total Income
Operating expenses 19.27 19.92 20.79 24.79 29.23 32.94
/ Total Income

Interest Expended / Interest Earned

Times interest earned (Interest Expended / Interest Earned) is a metric used to measure a company's ability to
meet its debt obligations. The formula is calculated by taking a company's earnings before interest and taxes
(EBIT) and dividing it by the total interest payable on bonds and other contractual debt. Interpretation

As per above data, Times interest earned of BOI is higher in both year compare to Axis bank.

TIE indicates how many times a company can cover its interest charges on a pretax earnings basis. Here
71.95 times a BOI and 58.93 times an Axis bank can cover its interest charges on a pretax earnings basis.

Other income to total income: Fee based income accounts for a major portion of a bank’s other income. A
bank generates higher fee income through innovative products and adapting the technology for sustained
service levels. This stream of revenue is not depended on the bank’s capital adequacy and consequently, the
potential to generate the income is immense. The ratio is also influenced by gains on government securities,
which fluctuates depending on interest rate movement in the economy.

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Interpretation

In above data, Axis bank has higher other income to total income than BOI. The higher ratio indicates
increasing proportion of fee-based income

Operating Expenses Ratio:

OER is considered a measurement of management efficiency. While management can take certain actions to
control expenses, the price of a product or service is typically a function of market demand. The operating
expense ratio allows investors and analysts to understand how efficiently a business is able to produce goods
or supply services

Operating Expense Ratio = Total Operating Expenses / Total Income

Interpretation

In the year 2019 Operating Expenses Ratio of Axis bank is decrease to 19.18 from 20.79. BOI has 19.92
Operating Expenses Ratio in 2018 it increase to 19.92 in the year 2019. BOI expanded its revenues, due to
this operating expense increased at a slightly slower rate, which means management was able to achieve
some scaling of operations.

6.2.11 Cash Flow Indicator Ratios

This ratio, which is expressed as a percentage, compares a company’s operating cash flow to its net sales or
revenues, which gives investors an idea of the company’s ability to turn sales into cash.

It would be worrisome to see a company’s sales grow without a parallel growth in operating cash flow.
Positive and negative changes in a company’s terms of sale and/or the collection experience of its accounts
receivable will show up in this indicator.

Cash Flow Indicator Ratios

BOI Axis Bank

Particulars 2018 2019 2018 2019

Dividend Payment Ratio -- -- 32.54 14.48

Net Profit
Dividend Payment Ratio -- -- 28.59 13.74
Cash Profit
Earning Retention Ratio 100 100 96.03 96.33

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Cash Earning Retention 100 100 96.1 96.38
Ratio
Adjusted Cash Flow Times 20.86 21.14 13.53 10.91

Earnings Per Share (Rs) -14.78 -74.45 15.36 34.51

Earning Retention Ratio

The retention ratio is the proportion of earnings kept back in the business as retained earnings .The retention
ratio refers to the percentage of net income that is retained to grow the business, rather than being paid out as
dividends. It is the opposite of the payout ratio, which measures the percentage of earnings paid out to
shareholders as dividends.

On a per-share basis, the retention ratio can be expressed as 1 – (Dividends per share / EPS).

Interpretation

The retention ratio is 100% for companies that do not pay dividends; therefore here BOI has100% Earning
Retention Ratio and whereas Axis bank has 96.33 % Earning Retention Ratio

Adjusted Cash Flow Times

Adjusted net cash flow or adjusted net income represents a business’s earnings after expenses. In accounting
terms, it shows the earnings before interest, depreciation and taxes, but it also includes additions or
subtractions for such items as the owner’s salary and discretionary, one time and noncash expenses.

Interpretation

In above data, Adjusted Cash Flow Times of BOI is increase to 21.14 from 20.86 in the year2019. Whereas
the Adjusted cash flow times of Axis Bank is decrease to10.91 from 13.53 the annual adjusted net cash flow
provides a starting point to determine potential profits under a new owner and a new management style.

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 CHAPTER: - 5

FINDING, SUGGESTION AND CONCLUSION

FINDINGS

The study provides key findings according to the data analysis and arrives on some conclusions based on the
findings.

• The Net Profit Ratio of Axis Bank contracted by 55% and BOI has net loss Rs.1558crores during f.y
2018- 17
• The average Net worth Ratio of SBI is (14.87) % and that of Axis bank is 14.32%, which implies that
the average Net Worth Ratio of Axis Bank is better than BOI
• The average Earning Retention Ratio of BOI is 150 and Axis bank is 144 which imply that the
average earning Retention Ratio of BOI is 6, which is more than of the Axis bank.
• The average Total Assets turnover ratio of BOI is 0.09 times and of Axis bank is 0.12times, which
implies that the average total Assets of Axis bank is 0.03times, which is more than that of the BOI
• The average Debt-Equity Ratio of BOI is 27.92 times and that of Axis bank 13.61 times , which
implies that the average debt equity ratio of BOI is 14.31 times, which is more than that of the Axis
bank
• The average Return on Long Term Fund of BOI is 255 % and that of Axis bank 20182%,which
implies that the average return on long term fund of BOI is 93, which is more than that of axis bank
• The average Interest Expended to Interest Earned Ratio of BOI is 106 % and that of Axis Bank is
89%, which implies that the average Interest Expended to Interest earned Ratio of BOI is 17% which
is more than that of Axis Bank
• CASA deposits of BOI increased by 30.24% on Y-O-Y, and Savings deposits grew by31.92% and
Current Account Deposits by 20.86%. CASA Deposits of Axis Bank grew26% YOY and Savings
Account balances grew 19% YOY and while the Current Account Deposits grew 37% YOY for the
period ended 31st March 2019.It means that BOI CASA Deposits is higher than axis bank.

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SUGGESTIONS

• An Earnings per Share (EPS) of BOI is negative and bank. Therefore, the BOI may take some
measures expenditure for increasing Earning per share
• Debt-equity Ratio of BOI is higher when compared to Axis bank. As a result, BOI should have a
control on their debts.
• Interest Expended to Interest Earned ratio of Axis bank is less satisfactory when compared to BOI. It
is suggested that the Axis bank may take some steps to increase the interest earning capacity of the
bank.

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CONCLUSION

Bank of India (BOI) and Axis Bank are the two largest banks in India in public and private sectors
respectively. To compare the financial performance of the banks, various ratios have been used to
measure the banks’ profitability, solvency position, and management efficiency.

According to the analysis, both the banks are maintaining the required standards and running profitably.
The comparison of the performance of SBI and AXIS Bank indicates that are significant difference
between performance of BOI and AXIS Bank in terms of Deposits, Advances, Investments, Net Profit,
and Total Assets. From the financial statement it it’s clear that the financial position of Axis Bank is
better than Bank of India. It is inferred that AXIS Bank has an extensive operation than BOI

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8Bibliography

Annual Report of BOI

Annual Report of Axis Bank

WEBSITES

www.bankofindia.co.in www.axisbank.co.in

www.investopedia.com

www.moneycontrol.com

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