Ratio Analysis of ICICI Bank

and Lloyds Bank

Submitted to Dr. Jeevan Nagarker

Submitted by SASIDHARAN RAVIKUMAR
19020241072
IB – B
Batch 2019 – 2021
Subject Financial Management (semester – II)
ICICI Bank & Lloyds Bank
ICICI Bank
• ICICI Bank is the 2nd largest bank in India with a market capitalization of 3.26 lakh
crore INR.

• Share Price : 545.80 INR.

Lloyds Bank
• Lloyds Banking Group PLC is a British multinational banking and financial services
company with a market capitalization of 52.15 billion USD.

• Share Price : 56.61 GBP.

CAMEL RATING SYSTEM
• CAMEL Rating is the rating system wherein the bank regulators or examiners
(generally the officers trained by RBI), evaluates an overall performance of the
banks and determine their strengths and weaknesses.

• Based on this rating the corrective actions are taken accordingly.

•C -Capital Adequacy
•A -Asset Quality
•M -Management
•E -Earnings
•L -Liquidity
Capital Adequacy - Capital Adequacy Ratio (CAR)
•  Capital Adequacy – The amount of capital a Financial Institution holds in order
to meet the demand of financial regulator (RBI).

• Capital Adequacy Ratio (CAR) =

(%) FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

ICICI BANK
18.34 17.20 16.60 17.26 17.9 16.47
LLOYDS BANK --
22.02 21.54 21.40 21.17 22.89
Source : Bloomberg
Capital Adequacy - Advance to assets ratio
• 
• Aggressiveness of a bank in lending, thus resulting in better profitability.

• Advance to assets ratio =

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

ICICI BANK
0.47 0.47 0.47 0.47 0.46 0.47
LLOYDS BANK --
0.62 0.61 0.64 0.01 0.01
Source : Bloomberg
• Higher ratio is better.
Asset Quality
•  Assets of bank include Current and fixed loans, investments, cash, Government
securities of the bank.
• These assets provide returns to the bank.
• RBI measures the quality of Assets of the bank.
• Asset Quality =

(%) FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

ICICI BANK
1.02 2.09 3.19 4.32 4.81 3.74
LLOYDS BANK
1.674 1.189 1.039 0.966 0.720 --
Source : Bloomberg
Asset Quality
•  Quality of loans given by the bank can be calculated through this ratio.

• Loan Quality =

(%) FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

ICICI BANK 1.93 3.82 5.75 7.95 9.09 7.16

LLOYDS BANK
2.93 2.09 1.88 1.71 1.28 --
Source : Bloomberg
Management - advances to deposits ratio
•  Total advances to total deposits
• Indicates the ability of the bank to convert deposits into high earning advances.

• Advances to Deposits ratio =

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

ICICI BANK
1.04 0.99 0.93 0.90 0.89 0.89
LLOYDS BANK --
1.19 1.17 1.28 0.02 0.02
Source : Bloomberg
Management – Profit Per Employee (PPE)
• 
• Profit Per Employee (PPE) =

• Indicates the Profits generated per employee

• Higher ratio signifies efficiency of the bank.

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

ICICI BANK
1.53 1.80 1.41 1.23 0.92 0.50
LLOYDS BANK --
1.68 1.12 2.73 4.27 6.04
Source : Bloomberg and Annual report
Earnings - Net Interest Margin (NIM)
• Earnings
  - Income from all the operations which include non traditional operations also.

• Net Interest Margin Ratio =

(%) FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

ICICI BANK
2.62 2.71 2.72 2.60 2.46 2.61
LLOYDS BANK

1.27 1.41 1.23 1.30 1.72

--
Source : Bloomberg

A good company will be able to generate more interest income with lesser assets.
Earnings - ROA
• Return on Assets is one of the methods to which is used to measure the
earnings of the bank.

• ROA measures how profitable a bank’s assets are

(%) FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

ICICI BANK
1.48 1.48 1.11 1.03 0.69 0.34
LLOYDS BANK
0.17 0.11 0.32 0.41 0.55 --
Source : Bloomberg
Liquidity
• Liquid assets to total assets
(%) FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

ICICI BANK
7.7 7.3 8.8 10.2 10.4 7.1
LLOYDS BANK
16.46 17.37 17.40 15.64 36.18 --
Source : Bloomberg

• Liquid assets to total deposits

(%) FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
ICICI BANK
16.6 16.0 18.5 20.2 20.5 13.3
LLOYDS BANK
31.48 33.49 34.46 30.57 69.33 --
Source : Bloomberg
Liquidity
•  Banks ability to converts its assets into cash
• Cash maintained by banks and cash held by Central bank to total assets.
• 1. SLR -- =

• 2. CRR -- =

(%) FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

ICICI BANK
(CRR) 1.9 1.8 1.9 2.0 2.0 2.1
ICICI BANK
(SLR) 9.97 9.73 9.76 10.10 9.85 9.82
Source : Bloomberg
Factor Weight of CAMEL SYSTEM
• C -Capital Adequacy - 20%
• A -Asset Quality - 20%
• M -Management - 25%
• E -Earnings - 15%
• L -Liquidity - 10%
• S -Sensitivity - 10%
• TOTAL - 100%
• Extended System of CAMEL is CAMELSSC
o S - System refers to MIS systems used for control, analysis and decision making.
o C - Compliance to rules, regulations and acts
Provision for loan losses
• This shows the measures taken by the bank to protect from bad loans.

• Provision for loan losses is the amount of funds to be set aside by the banks for
prospective losses due to bad loans.

(In Millions of FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

INR)
ICICI BANK
24,818.3 36,307.6 77,188.6 1,57,453.2 1,47,516.1 1,76,113.9
LLOYDS BANK
75,583.3 38,256.3 68,528.4 57,697.6 85,471.8
--
Source : Bloomberg
Current account Savings account ratio (CASA)
• 
• CASA Ratio =

(%) FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

ICICI BANK
43.17 45.15 45.90 50.35 51.80 49.43
LLOYDS BANK
87.02 87.08 85.61 87.42 87.44
--
Source : Bloomberg
Source

• DATA - Bloomberg
• NEWS- Bloomberg, Economic times, Annual Report and ICICI
Newsroom.