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Banking Summary Presentation
Banking Summary Presentation
Banking Summary Presentation
Important
2008-09?
Trends
Firstly,
FISCAL STIMULUS
sector banks
Private
sector banks
Foreign
banks
OVERALL GROWTH
Overall
MARKET SHARES
2007-08
10
2012-13
Analysis of Advances
11
12
13
IIP
The
Share of long-term
loan has reduced due
to slow-down in the
economy.
Share of short-term
loans is increasing due
to increase debtor
days leading to long
working capital cycle.
17
Five
18
19
Analysis of Deposits
20
Costs of deposits
21
22
DEPOSITS TRENDS
During
23
Year
200607
TermDeposi
ts
Savings Deposits
64%
23%
Current
Deposit
s
Tota
l
13%
100
%
2012100
increasingly
preferring to invest
13
67%
23% in money market
10% instruments
%
such as liquid mutual funds that offer attractive returns over
short maturities, instead of parking money in current accounts
of banks which earn no interest.
24
COST OF DEPOSITS
25
TermDeposits
Savings
Deposits
Current
Deposits
PSB
68%
24%
8%
Private
sector banks
63%
23%
14%
Foreign
banks
56%
15%
29%
26
Analysis of Investments
28
Investments
Investments by banks fall into two broad categories:
Statutory liquidity ratio (SLR) investments:
Government securities and other government-approved
securities.
Non-SLR investments: Commercial papers, shares,
bonds and debentures issued by companies, units of UTI
and other mutual funds.
29
Non-SLR Investments
Traditionally, bonds and debentures used to have a larger
proportion of non-SLR investments but this has been changing
over 5 to 7 years, since 2005.
Banks have been increasingly investing in Shares and mutual
funds.
But since 2011-12, the trend is reversed.
This is partly due to banks turning risk averse and partly due to
policy tightening by RBI in order to curb banks exposure to short
term debt schemes of mutual funds.
31
Analysis of NPAs
32
34
36
RESTRUCTURED ASSETS AS
% OF TOTAL ADVANCES
Sector
Priority Sector
Public Sector
Non-priority
Sector
38
200708
201213
54%
46%
1%
2%
45%
52%
40
41
42
OPERATIONAL EXPENDITURE
43
44
Type of Bank
Average
Average Funds
advances /Staff Deployed / Staff
costs
Costs
54
76
Nationalized
Banks
71
107
Private Sector
Banks
62
98
Foreign Banks
41
78
46
47
48
49
SBI &
Associat
es
Nationali Private
zed
Sector
Banks
Banks
Foreign
Banks
2.35
2.96
2.40
3.56
4.71
Operating 1.90
Expenses
/ AFD
2.01
1.45
2.32
2.77
Core Feebased
Income /
AFD
1.06
0.93
0.56
1.49
1.98
NPM
1.52
1.88
1.51
2.73
3.92
Spreads
50
52
Basel 3 Norms
53
Key Basel 3 norms are higher capital, higher Tier 1 capital and
additional equity in the form CCB
KEY BASEL 3 NORMS
56
58
BACKGROUND
RBI announced that it will issue new banking licenses and
invited applications.
Overall
The
Nine
In
etc.
RBI
59
Financial Services.
60
40%
Maintain
Specific
61
The
abovefor
norms
arebanks
stringent especially 25% branches in
Key
Norms
new
It
62
consistent growth
even during
the
Why High
lot ofand
applications
despite(17-18%
the stringent
norms?
slowdown)
Long-term
unbanked
Customer
last 20 years
Consistent
HDFC
profitability potential:
continuous quarters.
Not
63
just HDFC bank but most of the private sector bank has
64
NEW
PLAYERS
STRATEGIES
Focus
away from
Metros and cities
In urban areas, there are 348 million banking accounts
for 377 million population (saturated)
In rural and semi-urban areas, there are only 344 million
accounts for 833 million people
Use technology as a key differentiator
Cost of one physical transaction is Rs. 40-Rs. 60, through
ATM it is Rs. 15-20 and through a mobile, it is Rs. 1 to
Rs. 1.50
Identify and fill the gaps in the market with
innovative products
Become successful like ICICI Bank and HDFC bank
65