Financial Statement Analysis of ICICI Bank and a Comparative study with Axis Bank.

Submitted By: Sridhar Kar Roll No: U210049

ICICI bank is the second largest Bank in India and Third largest in market capitalization. Bank has a presence in 19 countries with 2528 branches and over 8000 ATMs. Products- Corporate banking, Finance & Insurance, Investment Banking, Mortgage loan, Private banking & Wealth Management. Revenue: USD 13.82 Billion Profit: USD 1.66 Billion Total Asset: USD 119.69 Billion Total Equity: USD 12.21 Billion Employee: 80000

Source of Information: Directors report Management Discussion and Analysis Schedule and notes of FS Auditors Report

Techniques used for FSA

Horizontal Analysis: It is a comparative information for the current year as well as previous year. Trend Analysis: It is a calculation of percentage change in the Financial Statement items for a number of successive years. Ratio Analysis: It is a establishment of relevant financial relationship between components of financial statements. Financial ratios are the indicators of companys financial health.

Profitability Ratio: It measures the degree of operating success of the company. Profit Margin Ratio Ratio Asset Turnover Ratio Earnings per share Ratio

Profit Margin Ratio Net Profit/Revenue It measures the amount of net profit earned by each rupee of revenue. Year 2011 2010 Asset Turnover Ratio Revenue/ Average Total Asset It measures firms efficiency in utilizing its assets. Year 2011 2010 Earning Per Share NPAT+Peference Dividend/No. of Equity Shares EPS is useful in comparing companies performance Year 2011 2010 Solvency Ratio 1.It indicates the business is affected by the extent of the debt used to finance the asset of the company. 2.The presence of heavy debt in a companys capital structure is thought to reduce the companies solvency because debt is more risky than Equity ICICI BANK 44.72 34.94 AXIS BANK 81.35 66.16 ICICI BANK 0.15 0.16 AXIS BANK 0.21 0.16 ICICI BANK 8.66% 6.46% AXIS BANK 7.29% 7.14%

Debt-to-Equity Ratio Interest Coverage Ratio Credit-to Deposit Ratio NPA Ratio CASA Ratio

Debt-to-Equity Ratio Secured + Unsecured Loan/Shareholders Equity It measures the relationship of capital provided by creditors to the amount provided by the shareholders. Year 2011 2010 Interest Coverage Ratio PBIT/Interest Expenses It measures the protection available to creditors for payment of interest charges by the company Year 2011 2010 Credit -to-Deposit Ratio Total Advances/ Total Deposit It indicates how much of the Advances lent by bank is done through deposit. Higher the ratio, the higher the loan-assets credited from deposit. Year 2011 2010 ICICI Bank 95.90% 89.69% Axis Bank 75.28% 73.85% ICICI BANK 1.39 1.30 AXIS BANK 1.59 1.57 ICICI BANK 6.37 6.04 AXIS BANK 11.83 10.29

Non Performing Assets Ratio Net Net NPA/ Net Customer Assets It used as a measure of the overall quality of the banks loan book. An NPA are those assets for which interest is overdue for more than 90 days. Higher ratio reflects rising bad quality of loans. Year 2011 2010 CASA Ratio Current & Saving a/c deposits / Total Deposits The CASA ratio shows how much deposit a bank has in the form of current and saving account deposits in the total deposit. A higher CASA ratio means higher portion of the deposits of the bank has come from current and savings deposit, which is generally a cheaper source of fund. Higher the CASA ratio better the net interest margin, which means better operating efficiency of the bank. Year 2011 2010 Capital Adequacy Ratio Tier one capital + Tier two capital / Risk Weighted Assets This ratio is used to protect depositors and promote the stability and efficiency of financial system around the world. Year 2011 2010 ICICI BANK 13.11% 29.72% AXIS BANK 17.42% 36.5% ICICI Bank 45% 41% Axis Bank 41% 46% ICICI Bank 0.94% 1.86% Axis Bank 0.26% 0.36%

Capital Market Ratio It relate the market price of a companys share to the company earning & dividends Price Earnings Ratio Market price per Equity share / Earning per Share It is a indicator of firms growth prospect. High price earning ratio indicates the stock market confidence in companys future earning growth Year 2011 2010 Key Ratios at a glance Ratios ROE PE Ratio CASA Ratio NPA Ratio Capital Adequacy Ratio Conclusions Based on the financial assessment of key indicators of banks, ICICI Bank Ltd is leading ahead of Axis Bank. Balance sheet ICICI Bank Annual Report FY2011.pdf Page-80 Profit & Loss account ICICI Bank Annual Report FY2011.pdf Page 81 Cash flow statement ICICI Bank Annual Report FY2011.pdf Page 82 Thank you!!! ICICI (2011) 6.4% 19.78 45% 0.94% 3.11% AXIS (2011) 5.1% 16.09 41% 0.26% 17.42% ICICI (2010) 2.7% 23.47 41% 1.86% 29.72% AXIS (2010) 2.1% 15.26 46% 0.36% 36.5% ICICI BANK 19.78 23.47 AXIS BANK 16.09 15.26