Calculate the following ratios for 4 banks and compare their profitability and performance based on yo

Q.

I Profitability Ratios in Banking

Return on Equity =
Return on Assets =
Net Interest Margin =
Net Non-Interest Margin =
Net Bank Operating Margin =
Operating Profit Margin =
Earning Spread =

II Leverage Ratio in Banking

Tier 1 Leverage Ratio =

Debt to Equity Ratio =
Debt to Capital Ratio =
ng ratios for 4 banks and compare their profitability and performance based on your calculation results
and analysis.

Net Income/Total Equity Capital

Net Income/Total Assets
(Interest Income - Interest Expense)/Total Assets
(Net Non-Interest Revenue - PLLL - Non-Interest Expenses)/Total Assets
(Total Operating Revenue - Total Operating Expenses)/Total Assets
(Net Interest Income - Operating Expenses)/Total Interest Income
(Total Interest Income/Total Earning Asset)-(Total Interest Expense/Total Interest Bearing Liability)

Teir 1 Capital/Total Assets

Total Debt/Share Holder's Equity
Total Debt/Total Capital (Tier 1+ Teir2)
 Extracts from FS
Net Income 10,852.66 crores
Total Equity Capital 128,740.25 crores
Total Assets 1,344,417.96 crores
Interest Income 87,448.37 crores
Interest Expense 43,389.15 crores
Net Non-Interest Income 18,706.38 crores
Non-Interest Expenses -2,162.08 crores (41,227.07 crores - 43,389.15 crores)
Total Operating Revenue 106,154.75 crores
Total Operating Expenses 95,302.09 crores
Total Assets 1,344,417.96 crores
Net Interest Income 44,059.22 crores
Operating Expenses 95,302.09 crores
Total Interest Income 87,448.37 crores

I Total Assets (from the image): 1,344,417.96 crores

2022-23

Return on Equity 8.33%

Return on Assets 0.83%
Net Interest Margin 3.27%
Net Non-Interest Margin 1.57%
Net Bank Operating Margi 0.81%
Operating Profit Margin -8.98%
Earning Spread -7.89%

II Leverage Ratio in Banking

Tier 1 Leverage Ratio 16.15%

Debt to Equity Ratio 1.59
Debt to Capital Ratio
 Extracts from FS
Net Income 340,366,408
Total Equity Capital 2,123,401,284
Total Assets 19,584,904,970
Interest Income 1,210,668,098
Interest Expense 505,433,879
Net Non-Interest Income 20% of Total Operating Income (assumption)
PLLL 195,849,050
Total Operating Revenue 1,575,835,123
Operating Expenses 1,239,545,342
Non-operating expenses 412,195,116

I Profitability Ratios in Banking 2022-23

Return on Equity 16.10%

Return on Assets 1.73%
Net Interest Margin 3.61%
Net Non-Interest Margin 1.05%
Net Bank Operating Margin 3.65%
Operating Profit Margin -25.31%
Earning Spread 4.42%

II Leverage Ratio in Banking

Tier 1 Leverage Ratio

Debt to Equity Ratio
Debt to Capital Ratio
I Profitability Ratios in Banking 2022-23

Return on Equity 13.34%

Return on Assets 2.40%
Net Interest Margin 4.47%
Net Non-Interest Margin 2%
Net Bank Operating Margin 1.29%
Operating Profit Margin -26.59%
Earning Spread -6.08%

II Leverage Ratio in Banking

Tier 1 Leverage Ratio

Debt to Equity Ratio
Debt to Capital Ratio
I Profitability Ratios in Banking2022-23

Return on Equity 15.89%

Return on Assets 1.81%
Net Interest Margin 3.67%
Net Non-Interest Margin 2.40%
Net Bank Operating Margin 1.39%
Operating Profit Margin 7.16%
Earning Spread -8.80%

II

Tier 1 Leverage Ratio

Debt to Equity Ratio 5.9
Debt to Capital Ratio 5.44
 Axis ICICI Kotak HDFC
Return on Equity 8.33% 16.10% 13.34% 15.89%
Return on Assets 0.83% 1.73% 2.40% 1.81%
Net Interest Margin 3.27% 3.61% 4.47% 3.67%
Net Non-Interest Margin 1.57% 1.05% 2% 2.40%
Net Bank Operating Margin 0.81% 3.65% 1.29% 1.39%
Operating Profit Margin -8.98% -25.31% -26.59% 7.16%
Earning Spread -7.89% 4.42% -6.08% -8.80%

Return on Equity (ROE):

Kotak Mahindra Bank leads with 16.10%, indicating a high return on shareholder investment.
HDFC Bank follows closely at 13.34%, demonstrating strong profitability.
ICICI Bank's ROE is 10.44%, suggesting moderate shareholder returns.
Axis Bank lags at 8.33%, indicating lower profitability.
Return on Assets (ROA):
HDFC Bank excels with 2.40%, efficiently generating profit from total assets.
Kotak Mahindra Bank follows at 1.73%, indicating decent asset utilization.
ICICI Bank's ROA is 1.54%, suggesting moderate asset productivity.
Axis Bank trails at 0.83%, reflecting challenges in generating returns from assets.
Net Interest Margin (NIM):
HDFC Bank maintains its lead with 4.47%, indicating superior interest income generation.
Kotak Mahindra Bank follows at 3.61%, suggesting a healthy margin.
ICICI Bank's NIM is 3.45%, reflecting moderate interest income efficiency.
Axis Bank falls behind at 3.27%, indicating challenges in interest income.
Conclusion:
HDFC Bank and Kotak Mahindra Bank emerge as leaders in profitability metrics. HDFC Bank boasts the highest ROA
ICICI Bank occupies a middle ground, with moderate profitability metrics suggesting a need for improvement to ma
Axis Bank consistently lags behind, requiring significant strategic and operational adjustments to enhance profitabi
 Profitability Ratios Analysis

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Axis ICICI Kotak HDFC

C Bank boasts the highest ROA and NIM, while Kotak Mahindra Bank leads in ROE.
need for improvement to match its peers.
stments to enhance profitability and efficiency