Ratio analysis of Karur Vysya Bank

1. Net interest margins (NIMs):

Particulars
Net income (Interest Received - Interest Paid) Average assets invested (advances + investements +_balance with RBI) Ratio

2012 917.12

2011 766.86

36490.74 27320.68 2.513 2.806

( source: annual reports of the company)

40000 35000 30000 25000 20000 15000 10000 5000 0 1 Series1 Series2 2 917.12 766.86 27320.68 36490.74

Interpretation: 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. As such, NIM is the net margin earned by the bank on its average earning assets. These assets comprises of advances, investments, balance with the RBI and money at call. The NIM of the Karur Vysya bank is reduced in the year 2012 when compare to 2011 which is not a good sign for bank. It can be verified that the banks Net margin is decreased about 0.3 percent.

2. Cost to income ratio:

Particulars 2012 Operating expenses

Total income Ratio

2011 560.65 3,620.52 0.15 435.53 2,482.03 0.17

( source: annual reports of the company)

cost to income ratio

3,620.52

2,482.03

560.65

435.53

Interpretation: This ratio is calculated by dividing the operating expenses by the total income generated i.e.net interest income plus the other income. The lower the ratio, the better it is for a bank as it would help prop up its profit and return ratios.

3. Other income to total income ratio:

Particulars Other Income

Total income Ratio

2012 350.15 3,620.52 9.67%

2011 264.33 2,482.03 10.65%

Other income to total income ratio

4000 3500 3000 2500 2000 1500 1000 500 0 1 2 Series1 Series2

Interpretation: Other income largely constitutes of fee income such as commission, exchanges and brokerage fees. Banks in developed countries derive nearly 50% of revenues from this stream. For Indian banks, such fees contribute only about 15% -25% of the overall revenues.
4. Credit to deposit ratio: .

Particulars Advances Deposits

Ratio

2012 23,949.19 32,111.59 74.5%

2011 17,814.46 24,721.85 72.05%

( source: annual reports of the company)

Credit to deposit ratio

35000 30000 25000 20000 15000 10000 5000 0 1 2 Series1 Series2

Interpretation: This ratio indicates how much of the advances lent by banks is done through deposits. It is the proportion of loan-assets created by banks from the deposits received. The higher the ratio, the higher the loan-assets created from deposits. Deposits would be in the form of current and saving make optimal use of the available resources
5.Loans-to-Assets

Particulars 2012 Advances Total assets

2011 17,814.46 28224.84 63.11%

23,949.19 37634.90 Ratio 63.63 % ( source: annual reports of the company)

Loans-to-Assets
40,000.00 35,000.00 30,000.00 25,000.00 20,000.00 15,000.00 10,000.00 5,000.00 0.00 Series1 Series2

Axis Title

1 23,949.19 37634.9

2 17,814.46 28224.84

Interpretation The loans to assets ratio measures the total loans outstanding as a percentage of total assets. The higher this ratio indicates a bank is loaned up and its liquidity is low.

5.

Debt Equity Ratio 2012 34084.15 2708.22 12.5854 2011 25251.74 2136.99 11.8164

Particulars Debt Net worth

Ratio

7. Propreitory Ratio Particulars SHF Total Asset

Ratio

2012 2708.22 37634.90 7.196

2011 2136.99 28224.84 7.571

8. Return on Asset Particulars Net Profit after tax total asset

Ratio

2012 501.72 37634.90 0.0133

2011 415.59 28224.84 0.0147

9. Return on SHF Particulars Net Profit Net Worth

Ratio

2012 501.72 2708.22 0.185

2011 415.59 2136.99 0.1944