TERM PROJECT ON CROSS FUNCTIONAL INTEGRATION REPORT ON STATE BANK OF INDIA

Guided by: prof. Bijoy Guha

Submitted by: GROUP NO A1

Name Roll no. Signature

Shreya Kashyap Sumit Adbe Sangram Sutar Poonam Zawar

44 51 52 57

Contents
EXECUTIVE SUMMARY................................................................................................................................................................................................................. 3 INTRODUCTION ........................................................................................................................................................................................................................... 3 FINANCIAL PERFORMANCES ........................................................................................................................................................................................................ 5 Financial statement ............................................................................................................................................................................................................. 5 Balance Sheet Analysis ........................................................................................................................................................................................................ 5 Ratio analysis: .............................................................................................................................................................................................................................. 6 Graphical representation..................................................................................................................................................................................................... 9 Income Statement ............................................................................................................................................................................................................. 10 Organization structure .............................................................................................................................................................................................................. 11 CORE OPERATIONS .................................................................................................................................................................................................................... 12 TECHNOLOGY AND CHANGES IN STATE BANK OF INDIA........................................................................................................................................................... 14 Expansion plans ......................................................................................................................................................................................................................... 15 CONCLUSION and LEARNINGS: .................................................................................................................................................................................................. 16

EXECUTIVE SUMMARY

The State Bank of India (SBI) was established on 1 July 1955 as more powerful Indian banking system controlled directly by the state. It has a network of 7 banking subsidiaries and 6 non banking subsidiaries. The various products and services offered by bank are personal banking, different term /recurring deposits and loans including car, housing, education loan with some other services like NRI, ATM, Demat services, internet ,core, mobile and international banking along with safe deposits locker, e-pay and gift cheques. SBI acts as an agent of the Reserve Bank of India and performs the functions like borrowing and lending of money and acting as a bankers as well as governments bank. The net worth of SBI in financial year 2012 is 83951.2 crores.Which has grown by 29.18% from 2011 and on an average it has grown 71.21% from last 4 years.The net profit after tax in the year 2012 is 18483.31 crores which has grown by 31.33% and on an average it has grown 36.52% from financial year 2008.During financial year 2012,bank has declared higher dividend that is Rs35.00 and earning per share has also increased to Rs 174.46 from Rs130.15 which represents the concerned of bank towards share holders wealth th maximization.The market value of SBI has surged to Rs 148475 crores which make it the overall 7 most valued company. SBI follows cross-functional (matrix) structure core operations or the key processes of bank includes global market operations by providing products like derivatives, gold forwards, and portfolio management services treasury marketing group markets various treasury products offered by bank which helps it to maintain its attractiveness towards investors, customers, government in compliance with RBI regulations. Corporate Banking Group of the bank as the first strategic business unit deals in market fullfiling the clients objectives effectively and handling high value deals for eg. NTPC ltd, TATA Steel ltd, and Bharti Airtel. It also offers cash management products like multi city cheques and E-payments and is the authorized banker for handling all UMEA payments.it offers trade finance facility, supply chain finance(e-VFS, E-DFS and project finance and leasing SBU). As a mid corporate group it extends export credits, assist in imports in form of cash credit, term loans, letter of credit and bank guarantee etc. it provides e domestic operations like merchant banking and correspondent relations. Implementation of SAP & ERP represents the highlights of technological changes happened in bank which helped in customer satisfaction and increased in the market share. The boards of State Bank of India (SBI) and its associate State Bank of Indore have approved an acquisition of the latter by SBI. State Bank of Saurashtra (SBS), the smallest associate bank of SBI, was merged in August 2008.SBI Mutual Fund has distribution tie-up with Ratnakar Bank.

INTRODUCTION
Review of litreature The evolution of State Bank of India can be traced back to the first decade of the 19th century. It began with the establishment of the Bank of Calcutta in Calcutta, on 2 June 1806. The bank was redesigned as the Bank of Bengal, three years later, on 2 January 1809. It was the first ever joint-stock bank of the British India, established under the sponsorship of the Government of Bengal. Subsequently, the Bank of Bombay (established on 15 April 1840) and the Bank of Madras (established on 1 July 1843) followed the Bank of Bengal. These three banks dominated the modern banking scenario in India, until when they were amalgamated to form the Imperial Bank of India, on 27 January 1921. An important turning point in the history of State Bank of India is the launch of the first Five Year Plan of independent India, in 1951. The Plan aimed at serving the Indian economy in general and the rural sector of the country, in particular. Until the Plan, the commercial banks of the country, including the Imperial Bank of India, confined their services to the urban sector. Moreover, they were not equipped to respond to the growing needs of the economic revival taking shape in the rural areas of the country. Therefore, in order to serve the economy as a whole and rural sector in particular, the All India Rural Credit Survey Committee recommended the formation of a state-partnered and state-sponsored bank. The All India Rural Credit Survey Committee proposed the take over of the Imperial Bank of India, and integrating with it, the former state-owned or state-associate banks. Subsequently, an Act was passed in the Parliament of India in May 1955. As a result, the State Bank of India (SBI) was established on 1 July 1955. This resulted in making the State Bank of India more powerful, because as much as a quarter of the resources of the Indian banking system were controlled directly by the State. Later on, the State Bank of India (Subsidiary Banks) Act was passed in 1959. The Act enabled the State Bank of India to make the eight former State-associated banks as its subsidiaries. The State Bank of India emerged as a pacesetter, with its operations carried out by the 480 offices comprising branches, sub offices and three Local Head Offices, inherited from the Imperial Bank. Instead of serving as mere repositories of the community's savings and lending to creditworthy parties, the State Bank of India catered to the needs of the customers, by banking purposefully. The bank served the heterogeneous financial needs of the planned economic development. Products And Services Personal Banking SBI Term Deposits SBI Loan For Pensioners SBI Recurring Deposits Loan Against Mortgage Of Property SBI Housing Loan Loan Against Shares & Debentures SBI Car Loan Rent Plus Scheme SBI Educational Loan Medi-Plus Scheme Other Services Agriculture/Rural Banking NRI Services ATM Services

Demat Services Corporate Banking Internet Banking Mobile Banking International Banking Safe Deposit Locker RBIEFT E-Pay E-Rail SBI Vishwa Yatra Foreign Travel Card Broking Services Gift Cheques

Subsidiaries The State Bank Group includes a network of banking subsidiaries and several non-banking subsidiaries. Through the establishments, it offers various services including merchant banking services, fund management, factoring services, primary dealership in government securities, credit cards and insurance. The banking subsidiaries are: State Bank of Bikaner & Jaipur State Bank of Bikaner and Jaipur (SBBJ) is an amalgamation of State Bank of Jaipur with State Bank of Bikaner. It is a subsidiary of State Bank of India. The Bank took over the business of 'the Govind Bank Pvt. Ltd.' on 25th April, 1966. In Rajasthan, SBBJ commands nearly 30% business of entire scheduled commercial bank's businesses. As on 30.06.2004, the total business of the Bank has crossed 25700 crore Rupees. State Bank of Hyderabad State Bank of Hyderabad was established on 08.08.1941 as Hyderabad State Bank and acted as the Central Bank of Hyderabad. In 1953, it took over the assets and liabilities of the Hyderabad Mercantile Bank Ltd. The same year, it started conducting Government and Treasury business as agent of RBI. In 1956, the Bank was taken over by Reserve Bank of India as its first subsidiary and its name was changed from Hyderabad State Bank to State Bank of Hyderabad. It became a subsidiary of the State Bank of India on the 01.10.1959 and is now the largest Associate Bank of State Bank of India. State Bank of Mysore State Bank of Mysore was established in 1913. Earlier it was known as Bank of Mysore Ltd. In March 1960, it became the associate of State Bank of India. SBI holds 92.33% shares of the Bank. Its shares are listed in Bangalore, Chennai and Mumbai stock exchanges. As on 31.03.2005, the Bank has a network of 633 branches and 20 extension counters in India which includes 6 SSI branches, 4 Industrial Finance branches, 6 specialised Personal Banking branches, 10 Agricultural Development Branches, 2 Treasury branches, 1 Asset Recovery branch and 7 Service branches. State bank of saurashtra State Bank of Saurashtra was established in the year 1950 as a statutory corporation of Bhavnagar Darbar Bank under the Saurashtra State Bank (Amalgamation) Ordinance. In the same year on 1st of July, the four banks were merged to form its branches. They were Rajkot State Bank, Porbandar State Bank, Palitana Darbar Bank and Vadia State Bank. In 1960, the Bank joined the State Bank family. In 1950, the Bank had deposits of Rs. 7 crores. Now, as on 31.03.2004, the total deposits is Rs. 10674.76 croress. Today it is spread over 13 States and Union Territory of Daman & Diu and has a network of 419 branches. The paid up Capital and Reserves are Rs. 767.41 crores and the Capital Adequacy Ratio of 14.53% as at the end of March 2004.

State Bank of Travancore State Bank of Travancore was established as Travancore Bank Ltd. in the year 1945 and then it was sponsored by the erstwhile Princely State of Travancore. Later it became the associate of State Bank of India according to the SBI subsidiary Banks Act 1959. State bank of Patiala State Bank of Patiala is an associate bank of State Bank of India. State Bank of Patiala (SBP), originally named Patiala State Bank, and currently an associate bank of the State Bank of India, was founded on 17 November 1917. SBP was founded by Maharaja Bhupinder Singh, Maharaja of the princely state of Patiala of Undivided India, and the functions of the Bank included the normal functions of commercial banks, as also some functions similar to functions of a central bank for the princely state of Patiala Non banking subsidiaries SBI Capital Markets Ltd SBI Funds Management Pvt Ltd SBI Factors & Commercial Services Pvt Ltd SBI Cards & Payments Services Pvt. Ltd. (SBICPSL) SBI Life Insurance Company Ltd. SBI General Insurance. Branches The corporate center of SBI is located in Mumbai. In order to cater to different functions, there are several other establishments in and outside Mumbai, apart from the corporate center. The bank boasts of having as many as 14 local head offices and 57 Zonal Offices, located at major cities throughout India. It is recorded that SBI has about 10000 branches, well networked to cater to its customers throughout India. ATM Services SBI provides easy access to money to its customers through more than 8500 ATMs in India. The Bank also facilitates the free transaction of money at the ATMs of State Bank Group, which includes the ATMs of State Bank of India as well as the Associate Banks State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Indore, etc. You may also transact money through SBI Commercial and International Bank Ltd by using the State Bank ATM-cum-Debit (Cash Plus) card. Worldwide network of SBI Bank SBI Bank India has 52 Foreign Offices in 34 countries. SBI India serves the international needs of its foreign customers, in addition to conducting retail operations. The focus of the offices of SBI is India-related business. Few of the countries where SBI Bank has branches are as under:

Australia, Bahamas, Bahrain, Bangladesh, Belgium, Bhutan, Canada, France, Germany, Hong Kong, Japan, Maldives, Mauritius, Muscat, Nepal, Nigeria, Oman, Russia, Singapore, Sri Lanka, South Africa, UK, USA MISSION To retain the banks position as the premier Indian financial services. It also aims to be a group with world class standards and significant global business commitments to excellence in customer, shareholder and employee satisfaction so as to play a leading role in expanding and diversifying financial services while continuing Emphasis on its development banking role VISION To be a premier Indian financial services group with global perspective, world class standard of the efficiency and professionalism and also its core institutional values, To retain its position in the country as a pioneer in developing countries, It also aims to maximize its shareholders value through high sustained earnings per share, To become an institution with a culture of mutual care and commitment.It also focuses on a pleasant working Environment to have continuous learning opportunities. The State Bank of India acts as an agent of the Reserve Bank of India and performs the following functions: (1) Borrows money:- The Bank borrows money from the public by accepting deposits such as current account deposits, fixed deposits and savings deposits. (2) Lends money:- It lends money to merchants and manufacturers for short periods. It also lends to farmers and co-operative institutions. It lends mostly on the security of easily realizable commodities like rice, wheat, cotton, oil-seeds, cloth, gold and government securities. The Bank can lend against agricultural bills upto a maximum period of fifteen months and incase of other bills upto a maximum period of six months. (3) Bankers Bank:-The State Bank of India acts as the bankers bank. In discharging this responsibility, the bank provides loans to commercial bank when required and also rediscount their bill. It also acts as the clearing house of the commercial bank. (4) Governments Bank:- The State Bank of India also acts as the agent of the Reserve Bank of India. As an agent, the State Bank of India maintains the treasuries of the State Government. The Bank also manages the debts floated by the State Governments. (5) Remittance:- The State Bank of India facilitates remittance of money from one place to another. It also helps in the transfer on the funds of the State and Central Government. (6) Functions as Central Bank:- The State Bank of India performs the functions of a Central Bank. (7) Subsidiary functions:- The State Bank performs various subsidiary services also. It collects checks, drafts, bill of exchange, dividends interest, salaries and pensions on behalf of its customers. It purchases and sells securities on behalf of its customer. It receives valuables and documents for safe custody and maintains safe deposit vaults. .

Awards and Recognitions Best Online Banking Award, Best Customer Initiative Award & Best Risk Management Award (Runner Up) by IBA Banking Technology Awards 2010 The Bank of the year 2009, India (won the second year in a row) by The Banker Magazine Best Bank Large and Most Socially Responsible Bank by the Business Bank Awards 2009 Best Bank 2009 by Business India The Most Trusted Brand 2009 by The Economic Times Most Preferred Bank & Most preferred Home loan provider by CNBC Visionaries of Financial Inclusion By FINO Technology Bank of the Year by IBA Banking Technology Awards SKOCH Award 2010 for Virtual corporation Category for its e-payment solution The Brand Trust Report:[14] 11th most trusted brand in India.

Net Worth (cr.)

90000 80000 70000 60000 50000 40000 30000 20000 10000 0 2008 2009 2010 2011 2012

FINANCIAL PERFORMANCES
Financial statement A financial statement (or financial report) is a formal record of the financial activities of a business, person, or other entity. For a business enterprise, all the relevant financial information, presented in a structured manner and in a form easy to understand, are called the financial statements. They typically include four basic financial statements, accompanied by a [1] management discussion and analysis: Statement of Financial Position: also referred to as a balance sheet, reports on a company's assets, liabilities, and ownership equity at a given point in time. Statement of Comprehensive Income: also referred to as Profit and Loss statement (or a "P&L"), reports on a company's income, expenses, and profits over a period of time. A Profit & Loss statement provides information on the operation of the enterprise. These include sale and the various expenses incurred during the processing state. Statement of Changes in Equity: explains the changes of the company's equity throughout the reporting period Statement of cash flows: reports on a company's cash flow activities, particularly its operating, investing and financing activities. Balance Sheet Analysis

1. 2.

3. 4. 5.

A thorough analysis of a company's balance sheet is extremely important for both stock and bond investors. The analysis of a balance sheet can identify potential liquidity problems. These may signify the company's inability to meet financial obligations. An investor could also spot the degree to which a company is leveraged, or indebted. An overly leveraged company may have difficulties raising future capital. Even more severe, they may be headed towards bankruptcy. These are just a few of the danger signs that can be detected with careful analysis of a balance sheet

Ratio analysis:
Ratio analysis does two things, immediately. The first thing is it allows the company to compare itself with other like companies. If management feels things aren't going well, they can help pinpoint the problem through comparing their ratios with other companies. They may have several ratios that are comparable, but a couple which are way off. That might be where the problem is also, ratio analysis may help by comparing your company with prior periods. If a particular ratio is declining when it would be better if it were staying the same or increasing, then again looking at the ratios are important to find out where the problem lies. Ratios are important to spot trends easily. Liquidity Ratios The following liquidity ratios are all designed to measure a company's ability to cover its short-term obligations. Companies will generally pay their interest payments and other short-term debts with current assets. Liquidity rati year Current ratio Acid ratio(Quick ratio) Loan /deposit

Mar 2012 0.65 12.17 0.12

Mar 2011 0.41 12.80 0.13

Mar 2010 0.43 12.81 0.13

Mar 2009 0.34 11.33 0.11

Mar 2008 0.53 9.63 0.10

Current Ratio The Current Ratio measures a firm's ability to pay their current obligations. The greater extent to which current assets exceed current liabilities, the easier a company can meet its short-term obligations. The current ratio of in 2012 is better than its preceding years. The ideal suggested ratio as 1.33:1 and it shows 0.65:1. But it cannot be interpreted as bank has no sufficient current assets to pay its current liabilities. Since SBI has a Good Reputation in market. Hence bank can operate with lower current ratio because it can run on credit at high level and creditor may give loan for long period. Quick Ratio(Acid Test Ratio) -It is an indicator of a company's short-term liquidity. It measures a company's ability to meet its short-term obligations with its most liquid assets. The higher the quick ratio, the better the position of the company. INTERPRETATION -The quick ratio has been 9.63 in the year 2008 which indicates the banks financial soundness in paying off its short term obligations. It has increased in the next two years but in the year 2011and 2012 it has decreased. The figures indicate that there is excess liquidity in the bank except in 2010 as compared to other years. But the banks are under the guidance of RBI and they have to follow the liquidity norms laid down by RBI. Loan deposit ratioThe ratio is indicative of the percentage of funds lent by the bank out of the total amount raised through deposits. INTERPRETATION -This ratio forms an integral part of analysis as it indicates the amount of reliability the bank has earned in the minds of its customers and evidence of its soundness .The ratio has decreased in the year 2012 as a result of global economic slowdown that has panicked the customers from making any new investments and so lesser credit is being asked for Leverage.

Leverage ratio Leverage is a ratio that measures a company's capital structure. In other words, it measures how a company finances their assets. leverage ratio year Mar Mar Mar Mar Mar 2008 2012 2011 2010 2009 Total Debt 12.43 14.37 12.19 12.81 10.96 /equity Fixed asset 8.06 7.24 7.26 7.20 6.32 turnover ratio Total debt to equity - It indicates what proportion of equity and debt the company is using to finance its assets. A high debt/equity ratio generally means that a company has been aggressive in financing its growth with debt. This can result in volatile earnings as a result of the additional interest expense. INTERPRETATION -There is growth of the bank from 2010 to 2011and it is able to manage its funds from the internal sources. The equity capital has increased its share in the liabilities in balance sheet over 90% in comparison to the outside debts. This helps the bank to maintain high credit reputation in market. But in 2012 it reduced to 12.43 which relatively moderate the financing its growth with debt. Asset turnover ratio The relationship between assets and sales is known as assets turnover ratio. Interpretation The fixed turnover ratio is increasing from past years from 2008, 2009 to 2010 which means that sales are high or the investment in plant and equipment is little low. In 2011 it declines slightly but it again increases to 8.26 in the financial year 2012. Profitability Ratios Profitability is often measured in percentage terms in order to facilitate making comparisons of a company's financial performance against past year's performance and against the performance of other companies. Profitability ratio Particulars Mar 2012 Mar 2011 Mar 2010 Mar 2009 Mar 2008

Gross profit margin (%) Net profit margin(%) Operating margin

15.44 9.73 16.29

15.93 8.55 16.97

15.88 10.54 16.96

18.48 12.03 19.50

18.09 11.65 19.29

Gross margin profit ratio This ratio measures the quality of a firm's operations. A firm with a high operating margin in relation to the industry average has operations that are more efficient. Typically, to achieve this result, the company must have lower fixed costs, a better gross margin, or a combination of the two. At any rate, companies that are more efficient than their competitors in their core operations have a distinct advantage. Efficiency is good. Advantages are even better. Most investors will tend to prefer a more efficient company. Gross margins percentage were more in years 2008 and 2009 and further starts decreasing in subsequent years but the fluctuations are stable over time which represent uniformity in accounting regularities. Operating Margin. As the name implies, operating margin is the resulting ratio when Operating Income is divided by Net Sales. The company's sales and earnings before interest and taxes are required. The formula to calculate operating profit margin is Operating Profit Margin = Earnings before Interest & Taxes / Sales. This shows the efficiency of the company to manage its business operations to earn profits and its ability to pay for its fixed costs, like interest. The bank has an operating profit margin of around 19 percent from 2008 to 2009 , which means that the company has medium high variable costs but it has declined to around 16% in further subsequent years little high variable cost than previous years. Net Margin As the name implies, Net Margin is a measure of profitability for the sum of a firm's operations. It is equal to Net Profit divided by Net Sales: As with the other ratios you will want to compare Net margin with other companies in the industry. You can also track year-to-year changes in net margin to see if a company's competitive position is improving, or getting worse. Interpretation The bank has a net profit margin of 9.73 percent. The variable costs in the operating profit margin, are the concern because these are variable costs, which the bank has more control over. . -In 2008, 2009the bank had efficiently converted its revenues into actual profits and showed an effective cost control. However in the subsequent year it reached 10.54% as the net profit as a percentage of net revenues came down. And further in 2011 and 2012 the NPM has diminished and net profit to net revenues came down. Lower net profit margins have led to reduction in the returns to the investors. But this reduction is not an outcome of inefficiency but the bank has to spend more on operating expenses to counter the competition from other banks and the margins of profit have squeezed.

Profit analysis

Profit analysis Mar '12 Net Profit 18483.31 Before Tax Tax 6341.37 charges Net profit 12141.94 after tax Earning 174.46 per share Dividend 35.00 per share

Mar '11 14954.23 5709.54 9244.69 130.15 30.00

Mar '10 13926.10 6166.62 7759.48 144.37 30.00

Mar '09 14180.64 6115.12 8065.52 143.67 29.00

Mar '08 10438.90 3929.20 6509.7 106.56 21.50

Earning Per Share: Basic earnings per equity share are computed by dividing net income by the weighted average number of equity shares outstanding for the year. The EPS of Rs10/- nominal value share has shown a consistent and healthy growth for the year 2008 and 2009 but the rate of increase is minimal in 2010. It get further reduced in 2011. In 2012 the earning per share is maximum, which indicates increase in the value of its share. The earning per share has been increasing from 2008 to 2009 The dividend declared from past two years was constant but it has increased in 2012 which represent shareholders wealth maximization. Dividend per share Dividends are a form of profit distribution to the shareholder. The dividend per share has been increasing from 2008 to 2010. It become constant for the next subsequent year and again increased to 35 in the financial year 2012.Growth in dividend was due to the expansion in banking activities. Having a growing dividend per share can be a sign that the bank's management believes that the growth can be sustained Profit analysis Mar '12 Mar '11 Mar '10 Mar '09 Mar '08

Net Profit Before Tax Tax charges Net profit after tax

18483.31

14954.23

13926.10

14180.64

10438.90

6341.37 12141.94

5709.54 9244.69

6166.62 7759.48

6115.12 8065.52

3929.20 6509.7

Net interest margin Net interest margin (NIM) is a measure of the difference between the interest income generated by banks or other financial institutions and the amount of interest paid out to their lenders (for example, deposits), relative to the amount of their (interestearning) assets. The net interest margin has been increasing from year 2009 to 2012 which represent improved liquidity , helping the bank improve NIM to 3.39% Mar 2012 Mar 2011 Mar 2010 Mar 2009 Mar 2008 Net 3.39 2.77 2.33 2.26 2.53 interest margin(%) EPS analysis While scrutinizing EPS metric, we can gauge companies profitability per unit of shareholder ownership eps of sbi is (-13.4%) while its competitors i.e PNB is 40.05% that shows PNB is ahead of SBI by (-301.4%).Hence SBI should improve its EPS in order to increase the worth of its share to sustain in the eyes of investor as well as the share holders. Dividend per share While scrutinizing DPS metric, we customers can decide whether to buy the stock if they are investing in stock market mainly to get dividends. The DPS of sbi is 35.00 while its competitors i.e. is PNBs DPS is 22.00 that shows SBI is ahead of its competitors i.e PNB by 62.09% when it comes to dividend per share. Dividend yield It is used to calculate the earning on investment considering only the returns in the form of total dividends declared by the company during the year. The dividend yield of sbi is 1.5% with that of its competitor i.e PNB which is 2.2%. Which can mean two things:SBI share price can be high.and it can have impressive prospect and is not overly worried about the banks dividend payment Average market capitalization The classification of company into different caps allows investors to gauge growth VS risk potential. The average market caps of SBI is around Rs 1521919 while PNB has Rs 336636 .That shows average market caps of SBI is 22.01% more than that of PNB. scrutinizing it we can say having large market cap SBI is experiencing slower growth but with lower risk. Net sales of PNB is rs 374,473mn and of SBI is 1471,974mn. This shows SBIs net sales is 25.4% more than that of its competitor i.e. PNB. Hence, more the net sales, more is the revenue and more profitability. PAT (Profit After Tax) PAT of PNB is rs 50,255 mn while SBI has more than 32.8% of net sales i.e. rs 15,3431mn from its competitor PNB. As the PAT is more the maximization of shareholders wealth is possible as well as retention of money for further growth and expansion can be made. That will satisfy more to customers as well as the investors upbringing the position of bank in the market.

Return on assets It represents a companys/banks earnings it had at its disposal. ROA of PNB is 6.1% whereas that of SBI is 5.7% and PNB has 106.9% ahead of SBI hence we can say that SBI is neither asset-high nor asset-light comparatively, the returns on assets of SBI should be little more so that less money can be reinvested to continue to generate earnings and have higher profit per unit of asset. BALANCE SHEET DATA

Return on equity

17.2

14.4

119.1%

Interest coverage Debt to equity ratio

1.3

1.3

102.3%

1.5

1.5

98.2%

Return on equity Of PNB is 17.2% with hike of 119.1% with the SBI that has ROE of 14.4%. Hence, SBI should increase its ROE in order to generate more cash internally within the same industry and from its competitor i.e. PNB it also serve as a better gauge in the investors view to let them know how effectively their capital is being invested. Debt equity ratio Debt to equity ratio of PNB and SBI is same i.e. 1.5%. that determines both of the banks are determined to ascertain their soundness for the long term financial policies of the banks. Hence in this case SBI provides cousin available to outsiders on its liquidation .it also demonstrate that SBI has financed more of its growth through debt since SBI has got good reputation in the market and is highly profitable hence it can fulfill the shareholders equity from the banks obligations to its creditors if liquidated. Interest coverage Of PNB as well as SBI is same i.e 1.3 hence we can say that SBI has good position form its competitors for paying the interest on its debts with its EBIT. The shareholders can have a clear picture of the short term financial health of the bank.

Graphical representation Balance sheet

Income Statement

CASH FLOW

Organization structure

CORE OPERATIONS

1. BUSINESS GROUPS A. GLOBAL MARKETS OPERATIONS Global Markets department mainly handles the banks liquidity and provides foreign exchange services to customers. In addition, it also handles compliance with reserve requirements of RBI. It provides products like derivatives, gold forwards and portfolio management services, and handles the banks proprietary trading and investment portfolio. Being the biggest bank of the country and its role as a market maker, the bank provides the best prices to corporates, ranging from the behemoths to emerging SMEs both in the Public and Private Sector. Treasury Marketing Group It markets various treasury products offered by the Bank, to its customers to mitigate Exchange Rate Risk / Interest Rate Risk in their exposures. Dedicated Treasury Marketing Officers continuously engage with the customers bringing them various inputs about markets as part of advisory services offered by the Bank. This implies that with its global market operations bank is able to maintain its attractiveness towards investors, customers, government in compliance with RBI regulations. Corporate Accounts Group (CAG) CAG has effectively met its strategic objectives of delivering best in class Corporate Banking services to the top most corporates in the country. Nearly five hundred such corporates deal with CAG and the client list includes industry leaders in every segment. Hence bank is able to main its reputation in the market fulfilling the clients objectives effectively and handling high value deals.

Transaction Banking Unit (TBU) TBU, with special focus on Cash Management Product, Trade Finance and Supply Chain (Dealer / Vendor) Finance has expanded its activity during the last two years. 1.Cash Management Product (CMP) CMP Cheque and cash collection services in the Bank are now offered through 1133 authorized branches located at 701 Centres, while payment services comprising Dividend Warrants, Multi City Cheques, IOIs and e-payment are extended through all branches. CMP has been selected as the authorized banker for handling all UMEA payments for 253 PAOs relating to 43 accredited Ministries & Departments. 2.Trade Finance SBI has been awarded the Best Trade Finance Bank in India Award for 2012 by The Asian Banker. e-Trade SBI, a web-based online portal, has been launched by our Bank in March 2011 to provide the means to customers access trade finance services with speed and efficiency by enabling them to lodge Letters of Credit, Bank Guarantees and Bills Collection/negotiation requirements online from any corner of the world. 3. Supply Chain Finance e-VFS ( Electronic Vendor Financing Scheme) e-DFS ( Electronic Dealer Financing Scheme) The above products, which are fully on electronic platform, provide automated payment and settlement of supply chain transactions as also real time MIS to both Industrial Majors(IM) and their vendors and dealers. 4. Project Finance & Leasing SBU (PFSBU) Project Finance & Leasing SBU (PFSBU) focuses on funding large projects in infrastructure sectors like power, telecom, roads, ports, airports, other urban infrastructure as also other non-infrastructure projects in sectors like metals, cement etc., with certain threshold on minimum project cost. In order to further strengthen this specialized outfit, Bank has engaged 19 former CEOs/ Directors of leading PSUs with domain expertise in Energy, Transport, Mining, Telecom, Metals and Fertilizer sectors to provide consultancy support in technical areas. 5. Financial Institutions Business Unit (FIBU) FIBU focuses on capturing potential business opportunities from financial institutions viz. Banks, Mutual Funds, Insurance companies, Brokerage Firms and NBFCs.CMB has handled the settlement banking and transaction banking needs of brokers and mutual funds and has also acted as the Banker to the Issue, Refund Banker to all major IPO/FPO/NFO/Bonds Issues including NHAI, HUDCO, REC, NBCC. Hence through operations by its corporate groups, bank is able to attract the new projects and development happening in the industries giving many other services and facilities to its customers. MID-CORPORATE 1. Facilities are extended to the customers in the form of Cash Credit, Term Loans,Letters of credit, Bank Guarantees, Letters of Comfort, Buyers Credit, Vendor Finance, Supply Chain Finance, Cash Management Product etc., 2. The Group extends export credit to the exporters. 3. The Group also assists its customers in imports through facilities like issue of LC / BG / LOC as well as extension of Buyers Credit facility. Apart from this, the Group also assists Companies in India to acquire assets /companies abroad and also funds the expansion plans of its customers abroad through issuance of LOCs through the Banks International Banking Group. Hence MCG exclusively caters to the banking needs of the units falling under the Mid-Corporate sector. It fulfills the purpose to improve the service levels to the Mid-Corporate customers through improvement of the Turnaround Time (TAT) for credit delivery and ensuring quality in credit appraisal, as well as extension of banks various products to the Mid- Corporate customers through Relationship Management model. . SUPPORT & CONTROL OPERATIONS INFORMATION TECHNOLOGY A. Core Banking: A major infrastructure upgrade of hardware and data storage system has been undertaken for the Primary and the Disaster Recovery set up to ensure uninterrupted and efficient operations, reduce processing time and make provision for scalability. March11 March12 ATMS No. of ATMs of the Group 25005 27286 No. of ATMs of SBI Debit Cards(in lakh) No. of Customers(In lakh) No.of transactions during the Financial year(in lakh) Registered Mobile users(In lakh) No. of successful financial transactions(In lakh) No. of Non financial transactions(In lakh) No. of registered customers(In 20084 728 62.57 1437.46 10.13 49.30 95.23 9.96 22141 910 89.63 2610.32 36.45 190.65 317.72 15.31

Internet Banking

Mobile Banking

Contact Centre

lakh)

B.Technology development i) ATM State Bank Group has in its stable, variants of ATMs namely Bunch Note Acceptors, Bio metric ATMs, Low Cost Rural ATMs, Solar Powered ATMs, Multi function Kiosks. While cash deposit facility has been activated at some of the ATMs, SBI is now going to deploy a large number of Cash Deposit Machines(Bunch Note Acceptors) at ATM locations which customers can use 24x7 to deposit cash. 50 such machines have already been deployed and they plan to deploy another 600 Cash Deposit Machines this year.Cash out incidents in ATMs have been eliminated.

(ii) Mobile Banking: SBI is the market leader in this space, both in the number and value of the financial transactions with 83.70% market share in number of transactions and 49% share in transaction value (source: RBI data on mobile banking transactions Feb 2012).StateBank Freedom Premium, the new GPRS based mobile banking service has been rolled out. SBI has launched mobile technology based prepaid payment services under the brand name of StateBank MobiCash on pilot basis in Delhi and Mumbai Circles of the bank. \(iii) Internet Banking: Internet banking service is available through www.onlinesbi.co.in for both retail and corporate customers of the bank. Retail Internet Banking: SBI 'Instapay' for utility bills payment,Corporate Internet Banking: CINB Saral- a simplified single user Corporate Internet Banking facility for small entrepreneurs etc. have been added during the year. C. Foreign Offices: 137 branches in 24 countries, including 2 OBUs in India, run their operations on a common banking applications software, with their databases connected to a Central DataCentre backed up by a synchronized Disaster Recovery Site. All foreign offices use Internet Banking channel and 130 ATMs at various locations abroad cater to the Banks overseas customers with most of the ATMs connected to the centralized ATM Switch in India D. Enterprise Data Warehouse: The second phase of Enterprise Data Warehouse Project is under implementation. Dashboards have been developed and deployed to facilitate decision making by top executives of the Bank. Campaign Management tool has been implemented and campaigns through emails/ SMS have been launched by various Business Units targeting customers under various segments.

TECHNOLOGY AND CHANGES IN STATE BANK OF INDIA

Implementation of SAP & ERP State Bank Group aims to respond faster to market demands, enable real-time information access and assign the right people to the right positions at the right time. On Implementation of my SAP ERP help State Bank Group drive advancement and innovation in areas of human capital management and enterprise resource planning such as e- learning, virtual classrooms, career development and successing planning, competency assessment, performance management and property management. Bank set in motion a programme titled "Parivartan" to get employees at all levels to undergo training and charge themselves to better tackle competition and change at the market place The purpose of the programme is to explain to the employees why change is necessary, with examples of transformations of other organisations . RESULT OF CHANGES Customers of State Bank of India can expect to have a positive experience when they visit branches. They can be sure that theyll be welcomed courteously, greeted with a smile, attended to promptly and their grievances listened to carefully. Increased market share.

For Society TEACHERS DAY 2012 DISTRIBUTION OF WATER PURIFIERS TO SCHOOLS The Bank as part of CSR has decided to lend a helping hand to the Governments efforts in upgrading the infrastructure to needy schools across the country The Bank has so far supported nearly 60,000 schools since April 2011. The support was provided on special occasions like Teachers Day, World Water Day and State Bank Day. It is estimated that over one crore children/students are benefited by these initiatives. State Bank wins Golden Peacock Award for Corporate Social Responsibility-2012

The year 2011-12 saw the CSR activities of the Bank scaling new heights of achievement and glory with our Bank winning the prestigious Golden Peacock Award for Corporate Social Responsibility in 2012. As per the Reserve Bank of India instructions, our Bank earmarks 1% of previous year's net profit, as CSR spend budget for the year. In terms of CSR policy of the Bank, CSR donations are given to only those organizations that enjoy IT exemption under Sec 80.

Green Banking: We effectively propagate and implement sustainable usage of resources including renewable energy. Adopted energy efficient measures. Our Bank is the largest deployer of solar ATMs in the World. Saving more than 2000 tons of CO2 per year. Paperless Banking transaction- Green Channel Banking. The Bank has installed windmills with capacity of 15 MW in three states for internal energy needs. The Bank extends project loans on concessionary interest rates to encourage customers to reduce Green House gases by adopting efficient manufacturing practices. Internal CSR An equal opportunity organization. Provide best of the facilities and healthcare to our employees. A large number of Employee Welfare schemes are in place as motivational incentive. Extensive in-house training facilities. Motivational incentives, Freedom of Association. R & D Fund: The Bank supports research work relevant broadly to the activities of the Bank from its Research & Development Fund. The Bank makes an annual contribution of GBP 100,000 towards a Chair set up by the Bank jointly with RBI at the Asia Research Centre at London School of Economics.

SBI Childrens Welfare Fund: The Bank constituted SBI Childrens Welfare Fund as a Trust in 1983. The Corpus of the Fund is made up of contributions by staff members and matching contribution provided by the Bank. Grants are extended to institutions engaged in the welfare of underprivileged/downtrodden children like orphans, destitute, challenged and deprived, etc. During the FY 2011-12, 8 projects were assisted with `7.26 lacs. SBI Youth for India: SBI Youth for India Fellowship- Bank has granted fellowship to educated youth and deployed them to rural areas to undertake innovative projects to address local problems of rural poor. This touched upon many projects like Rural Employment Guarantee Schemes, IVRS helpline for farmers & fishermen, career guidance, Enhancing marketability of farm produce, Education of rural youth through ICT, Environment protection, and many others.

Expansion plans
This fiscal year country's largest state-owned lender SBI is planning to surpass the last years profit, and announced plans to expand operations overseas through subsidiaries including one in Australia. SBI bank would consolidate its position in retail and corporate banking, stay above the industry averages in critical parameters and sharply rein in the recent surge in non-performing assets (NPAs).The bank would step on the pace and maintain its aggressive growth momentum. SBI would consolidate its gains in market share, profitability, returns to investors and other fronts such as financial inclusion. The SBI was successful as a corporate bank, it would like to expand and consolidate that franchise SBI would not only focus on giving better value to customers on the lending side but also concentrate on the deposit side. Deposit taking ability which is the core of the bank and provides strength in terms of optimal cost of funds would remain as important as before. The bank is planning to take corrective measures to ensure that the percentage of bad loans is below the industry average. NPAs in absolute terms had shown a rise during the third quarter ended December 2010. Yet another aspect, which will be improved upon is the growth in deposits and advances.

CONCLUSION and LEARNINGS:

Basis Focus Share holder More returns society custo mers High return s Employe es Belongin gness EPRS & SAP Safe job suppliers government

Operation Quality Training Governmen

Customer growth Customer services Follow

Safety

Trusted

Security

Benefit

Creditabilit

Compliance

t Tie ups CSR

regulation Distribution Community developmen t

y Wide range Opportu nities Accept Exposur e Helps in initiative

Few learnings that we got from working on this (SBI) project are: 1. Even if the bank is at first position and has a large number of customer base, it has to work persistently, efficiently and effectively on providing the goods and services to the customers, retaining them as well as maintaining its reputation in the market. 2. The bank has achieved excellent growth over a short period of time as compared to its competitors and it happened due to employees dedication towards the organization, varied customer services, growing Indian economy and brand image. 3. Analyzing the last five years performance, the bank has made its growth steadily possible even in the time of recession by making profits as well as declaring dividends which makes the bank to hold the interest of shareholders and in the maximization of their wealth. 4. The bank has not only concentrated on the profit margins but also has dedicates its resources towards society, environment, government, shareholders and all the other stakeholders. This makes this bank as the most popular and customer oriented bank. 5. Being the oldest bank of the country, SBI has always focused on technological advancements like green channel banking, internet banking, mobile banking and easy money transfer which has always kept the bank in the league as well as in the lead. We expect SBI to outperform on account of its stronger core competitiveness and ample levers to deliver healthy operating income growth while managing its provisioning requirements. Also considering banks dominant position and reach, high fee income, superior earnings quality and recent signs of improvement in asset quality. The bottom line is that dividends matter. Evidence of profitability in the form of a dividend check can help investors sleep easily. Profits on paper say one thing about a companys prospects; profits that produce cash dividends say another thing entirely Hence efforts from all the corners is always required to maintain the functioning of the bank for long term growth and prosperity