Finance is the science of funds management.

The general areas of finance are business finance, personal finance (private finance), and public finance. Finance includes saving money and often includes lending money. The field of finance deals with the concepts of time, money, risk and how they are interrelated. It also deals with how money is spent and budgeted. One fact of finance is through individuals and business organizations, which deposit money in a bank. The bank then lends the money out to other individuals or corporations for consumption or investment and charges interest on the loans. Loans have become increasingly packaged for resale, meaning that an investor buys the loan (debt) from a bank or directly from a corporation. Bonds are debt instruments sold to investors for organizations such as companies, governments or charities. The investor can then hold the debt and collect the interest or sell the debt on a secondary market. Banks are the main facilitators of funding through the provision of credit, although private equity, mutual funds, hedge funds, and other organizations have become important as they invest in various forms of debt. Financial assets, known as investments, are financially managed with careful attention to financial risk management to control financial risk. Financial instruments allow many forms of securitized assets to be traded on securities exchanges such as stock exchanges, including debt such as bonds as well as equity in publicly traded corporations. Central banks, such as the Federal Reserve System banks in the United States and Bank of England in the United Kingdom, are strong players in public finance, acting as lenders of last resort as well as strong influences on monetary and credit conditions in the economy.
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FINANCIAL STATEMENT ANALYSIS AND INTERPRETATION Financial statements, as used in corporate business houses, refer to a set of reports and schedules which an accountant prepares at the end of a period of time for a business enterprise. The financial statements are the means with the help of which the accounting system performs its main function of providing summarized information about the financial affairs of the business. These statements comprise balance sheet or position statement and profit and loss account or income statement. Of course to give a full view of financial analysis of an undertaking, in addition to the above, the business may also prepare a Statement of Retained Earnings and a Cash Flow Statement. In India, every company has to present its financial statements in the form and contents as prescribed under section 211 of Companies Act 1956.

RESEARCH DESIGN Research design is planning a strategy of conducting a research. It plans as to what is to be observed, how it is to be observed, when/where it is to be observed, and how to analyze the observations, goals of the research will be achieved. Research design is a purposeful scheme of action purposed to be carried out in a sequence during a process of research focusing management problem to be tackled. Identification and presentation of an appropriate research design problem is perhaps one of the most important needs of research design.
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Objective of the study 1. To know the financial position of the bank in comparison to other banks(i.e., Punjab National Bank, Bank of Baroda, State Bank of India). 2. To make a study of the past and present financial performance of the bank in comparison with other banks. 3. To analyze the profit level of the bank.

Scope of study: The present study is confirmed to Financial Analysis of Canara Bank in comparison with other selected banks. The study will help to explore the growth of banking sector: it would help to analyze the role played by banking in the economic development of the country.

Tools used: Under this study various ratios were used like cost of deposits, yield on advances, net interest margin. PBDT margin, net profit margin, returns on equity, book value, earnings per share, payout ratio.

Methodology of the study: Financial data about the bank has been collected for five years. Various ratios were used on this data to analyze the performance of the bank in comparison to other selected nationalized banks.
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The data required for completing the study were from two sources i.e. 1. Primary sources: Primary data was collected through discussions with the project manager and accounts department.

2. Secondary sources: Secondary data was obtained through a personal observation of annual report. In addition to this, information was obtained from journals, websites and related books like financial management.

Limitations of the study: There are certain limitations of the study conducted: 1. Analysis of financial statement has been restricted to five years. Financial statements include the annual reports of the company. 2. The ratios are compared on the basis of the figures obtained from the annual reports and data given in the finance department. 3. Only few ratios are taken into account. 4. Detailed study of the financial statements was not possible due to time constraint.

Origin of bank: Money lending in India is an age old profession with a history of about 200yrs. In the late 18th century, Tippu Sultan, was accredited to have conceived the idea of organizing Banking as a part of state machinery for extending credit facilities to the needy at an affordable rates. At the late 18th century, there were hardly any Banks in India. At the time of an American Civil War, a void was created as the supply of cotton to Lancashire stopped from the Americans. Some Banks were opened at the time which functioned as entities to finance industry, including speculative trades in cotton, with large exposure to speculative ventures; most of the banks opened in India that period could not service and failed. The depositors lost money and lost interest in keeping deposits with Banks. Subsequently, in India remained the exclusive domain of the Europeans for the next several decades until the beginning of the 20 th century. Banking in India originated with the General Bank of India which came into existence in 1786. This was followed by Bank of Hindustan which was established in 1870. Both these Banks are now defunct. Banking in India on modern lines started with the establishment of three presidency banks under Presidency Banks Act 1876 i.e., Bank of Calcutta, Bank of Bombay and Bank of Madras. In 1921 all the presidency banks were amalgamated to form the Imperial Bank of India. State Bank of India the biggest Commercial bank in India was formed in 1955 by passing of State Bank of India Act 1955, and entire assets and liabilities of Imperial Bank of India was taken over. A couple of decades later, foreign banks like HSBC and credit Lyonnais started their Calcutta operations in the 1850s. At that point of
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time, Calcutta was the most active trading port, mainly due to the trade of the British empire, and due to which banking activities took root and there and prospered. The first fully Indian owned Bank was the Allahabad Bank set up in 1865. By the 1900s, the market expanded with the establishment of the Banks like Punjab National Bank, in 1895 in Lahore; Bank of India, in 1906 in Mumbai- both of which were founded under private ownership. Indian banking sector was formally regulated by Reserve Bank of India from 1935. After Indias independence in 1947, the Reserve Bank was nationalized and given broader powers. In the 1900s the then Narasimha Rao government embarked on a policy of liberalization and gave licenses to a small number of private banks which came to be known as New Generation tech-savvy Banks, which included banks like ICICI Bank and HDFC Bank.

Origin of the word bank The word bank was borrowed in Middle English from Middle French banque, from Old Italian banca, from Old High German banc, bank "bench, counter". Benches were used as desks or exchange counters during the Renaissance by Florentine bankers, who used to make their transactions atop desks covered by green tablecloths. The earliest evidence of money-changing activity is depicted on silver Greek drachms coin from ancient Hellenic colony Trapezes on the Black Sea, modern Trabzon, presented in the British Museum in London. The
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coin shows a banker's table laden with coins, a pun on the name of the city. In fact, even today in Modern Greek the word Trapeza means both a table and a bank. Definition of Bank: Banking Regulation Act of India, 1949 defines Banking as accepting, for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise and withdrawal by cheques, draft, order or otherwise. Public sector banks are those in which the government of India holds a major stake. They are the foundation of Indian Banking system and account for more than 70 percent of total banking industry assets. Private Banks are those who do not have government stake. They may be publically listed and traded on stock exchanges and are witnessing immense growth and progress. They are leaders in internet banking, mobile banking, phone banking, ATMs. Branches of foreign banks having operation in India are called foreign banks. Scheduled banks are those which are entered in the second schedule of RBI Act 1934. Initially it was a share holders bank and it was nationalize with effect from 1st January 1949, on passing of the Reserve Bank of India (Transfer of Public Ownership) Amendment Act, 1948. The banks that are included under this schedule are those that satisfy the criteria laid down vide section 42 Act. They have a paid up capital and reserve of aggregate value not less than Rs. 5 lakhs and which satisfies their affairs and carried out in the interest of their depositors. All commercial bank India and foreign, regional banks and state co-operative banks come under this category.
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A bank is a financial intermediary and appears in several related basic forms:

A central bank issues money on behalf of a government, and regulates the money supply A commercial bank accepts deposits and channels those deposits into lending activities, either directly or through capital markets. A bank connects customers with capital deficits to customers with capital surplus on the world's open financial markets. A savings bank, also known as a building society in Britain is only allowed to borrow and save from members of a financial cooperative

Banks often start as microcredit or savings clubs which become formalized, first as credit unions and later savings banks which transform themselves from cooperatives to limited liability companies. A fuller description of these forms appears below. Banking is generally a highly regulated industry, and government restrictions on financial activities by banks have varied over time and location. The current sets of global bank capital standards are called Basel II. In some countries such as Germany, banks have historically owned major stakes in industrial corporations while in other countries such as the United States banks are prohibited from owning non-financial companies. In Japan, banks are usually the nexus of a cross-share holding entity known as the keiretsu. In Iceland banks had very light regulation prior to the 2008 collapse.

The oldest bank still in existence is Monte dei Paschi di Siena, headquartered in Siena, Italy, and has been operating continuously since 1472.

Standard activities Banks act as payment agents by conducting checking or current accounts for customers, paying cheques drawn by customers on the bank, and collecting cheques deposited to customers' current accounts. Banks also enable customer payments via other payment methods such as telegraphic transfer, EFTPOS, and ATM. Banks borrow money by accepting funds deposited on current accounts, by accepting term deposits, and by issuing debt securities such as banknotes and bonds. Banks lend money by making advances to customers on current accounts, by making installment loans, and by investing in marketable debt securities and other forms of money lending. Banks provide almost all payment services, and a bank account is considered indispensable by most businesses, individuals and governments. Non-banks that provide payment services such as remittance companies are not normally considered an adequate substitute for having a bank account. Banks borrow most funds from households and non-financial businesses, and lend most funds to households and non-financial businesses, but nonbank lenders provide a significant and in many cases adequate substitute for bank loans, and money market funds, cash management trusts and

other non-bank financial institutions in many cases provide an adequate substitute to banks for lending savings too.

Channels Banks offer many different channels to access their banking and other services:

ATM is a machine that dispenses cash and sometimes takes deposits without the need for a human bank teller. Some ATMs provide additional services. A branch is a retail location Call center Mail: most banks accept check deposits via mail and use mail to communicate to their customers, e.g. by sending out statements Mobile banking is a method of using one's mobile phone to conduct banking transactions

Public Sector Banks in India Among the public sector banks in India, United bank of India is one of the 14major banks which were nationalized on july19, 1969. Its predecessor, in the Public Sector Banks, the United Bank of India Ltd., was formed in 1950 with the amalgamation of four banks viz, Comilla Banking corporation Ltd. (1914), Bengal Central Bank Ltd. (1918), Comilla Union Bank Ltd. (1922), and Hooghly Bank Ltd Oriental Bank of Commerce (OBC), a government of India undertaking offers domestic, NRI and services. OBC is implementing a GRAMEEN PROJECT in
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Dehradun District (UP) and Hanumangard District (Rajasthan) disbursing small loans. This Public Sector Bank in India has implementation 14 point action plan for strengthing of credit delivery to women and has designated 5 branches as specialized branches for women entrepreneurs.

Private Banks Private Banks are banks that are not incorporated. A nonincorporated bank is owned either by an individual or a general partner(s) with limited partner(s). In any such case, the creditors can look to both the entirety of the banks estates as well as the entirety of the soleproprietors/ generals-partners assets. These banks have a long tradition in Switzerland, dating back to at least the revocation of the Edict of Nantes (1685). However most have now become incorporated companies, so that the term is rarely true anymore. There are relatively few corporative banks remaining in U.S.; but there are a few such as Brown Brothers Harriman and Co., which is a general partnership about 30 members. This is also true of private banks abroad, reputable old banks like Duncan Lawrie Bank, London, truly hard to find. Private Banks and Private banking can also refer to nongovernment owned Banks in generals, in contrast to government-owned (or nationalized) Banks, which were prevalent in communist socialist and some social democratic (liberal) states in the 20th century. Private Banks as a form of organization should also not be confused with Private Banks that offer financial services to high net worth individuals and others.

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IMPORTANCE OF BANKS IN MORDEN ECONOMY: Banks play a significant role in the economic development of a country. The economic importance of banks is as follows: 1. Banks mobilize the small, scattered and idle savings of the people and make them available for productive purposes. 2. By offering attractive interest on the savings of the people deposited with them, banks promote the habit of thrift and savings among the people. 3. By accepting the savings of the people, banks provide safety and security to the surplus money of the depositors. 4. Banks provide a convenient and economical means of payment. The cheque system introduced by banks is of great help for making patents and the use of cheques economizes time and trouble involved in settlement of business obligations. 5. Banks provide a convenient and economical means of transfer of funds from one place to another. 6. Banks contribute the economic development of backward regions, by moving funds from one place to another. 7. Banks influence the rate of interest in the money market. 8. Banks help trade and commerce, industry and agriculture by meeting their financial requirements. 9. Banks always make it a point to help industrious, the prudent, the punctual and the honest, and discourage the dishonest, the spend thrift, the gambler, the lair and the rouge. Thus banks act as public conservators of commercial virtues.

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Company Profile Sri Ammembal Subba Rao Pai, founder of the bank, was born in Mulki on 19.11.1852. A great visionary, Sri Ammembal Subba Rao started Canara High School in 1891 and Canara Girls high School in 1894 in Mangalore. He was of the firm belief that education is the firm foundation on which a good society and a strong nation can be built. Similarly, when some banks failed and some other banks were charging exorbitant interest on loans, Sri Pai started Canara Permanent Fund Ltd in Mangalore on 01.07.1906. The capital for the bank was a mere Rs 30,000.00 and first deposit of Rs 50,000.00. For collecting capital amount, the founder travelled in bullock cart and collected the amount from households. The seed thus sown on 01.07.1906 grew up as giant tree robust branches and today is known as Canara Bank. Noble thought of a founder Sri Ammembal Subba Rao Pai A good bank is not only the financial heart of the community, but also one with an obligation of helping in every possible manner to improve the economic conditions of the common people. FOUNDING PRINCIPLES 1. To remove Superstition and ignorance. 2. To spread education among all to sub-serve the first principle. 3. To inculcate the habit of thrift and savings. 4. To transform the financial institution not only as the financial heart of the community but the social heart as well. 5. To assist the needy. 6. To work with sense of service and dedication.

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7. To develop a concern for fellow human being and sensitivity to the surroundings with a view to make changes/remove hardships and sufferings. Sound founding principles, enlightened leadership, unique work culture and remarkable adaptability to changing banking environment have enabled Canara Bank to be a frontline banking institution of global standards. Brief Profile of Canara Bank Widely known for customer centricity, Canara Bank was founded by Sri Ammembal Subba Rao Pai, a great visionary and philanthropist, in July 1906, at Mangalore, then a small port in Karnataka. The Bank has gone through the various phases of its growth trajectory over hundred years of its existence .Growth of Canara Bank was phenomenal, especially after nationalization in the year 1969, attaining the status of the national level player in terms of geographical reach and clientele segments. Eighties was characterized by business diversification for the Bank. In June 2006 the Bank completed a century of operation in Indian Banking industry. The event full journey of the Bank has been characterized by several memorable milestones. Today Canara Bank occupies a premier position in the comity of Indian Banks. Bank has an unbroken record of profit since its inception.

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VISION To emerge as a Best Practices Bank by pursuing global benchmarks in profitability, operational efficiency, asset quality, risk management and expanding the global reach. MISSION To provide quality Banking services with enhanced customer orientation, higher value creation for stake holders and to continue as a responsive corporate social citizen by effectively blending commercial pursuits with social banking. WORK CULTURE Work culture where family concept is practiced among the employees. Receptivity to new ideas. Opportunities for experimentation. Facilities which supports growth Record cordial industrial relations SUBSIDIARIES CANARA ROBECO ASSET MANAGEMENT COMPANY LIMITED CANBANK FINANCIAL SERVICES LIMITED CANARA BANK SECURITIES LIMITED CANBANK COMPUTER SERVICES LIMITED CAN FIN HOMES LIMITED CANBANK FACTORS LIMITED
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 CANBANK VENTURE CAPITAL FUND LIMITED

FOREIGN BRANCHES Foreign Branches- London, Leicester, Hong Kong, shanghai, Sharjah representation, Commercial bank of India, Moscow (joint venture with SBI). Al Razouki International Exchange Co, UAE, Eastern Exchange Establishment. HRD PRACTICES From a small town Bank, started way back in 1906, today we have grown to become a frontline Banking Institution of India with sound foundations. Canara bank considers Human Resources as a most valuable asset. The workforce has inherited a unique heritage of open and informal family culture. There are a series of people-building HRD initiatives. The emerging challenge of a liberalized economy entails on Canara bank a responsibility for developing motivated and knowledgeable workforce to meet the requirements. Towards this end, Canara Bank has been a fore runner in establishing its own training system way-back in 1950s itself. Canara Apex Level Training College at Bangalore ably supported by 13 Regional Centers spread over length and breadth of the country takes care of the knowledge, skill, and attitudinal development of the employees. Being
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proactive to the requirements of empowered workforce, the Bank also sponsors individuals to external training programmers both within and outside the country. In order to ensure that a well motivated workforce contributes towards the growth of the institution, Canara Bank has made inroads towards establishment of Quality Circle concept among its employees. The growth of this concept can be gauged by the fact that as on date, Canara have over 700 active quality circles. These quality circles have carved out a niche for themselves at various National and International level competitions and have returned with handsome prizes. Canara Banks Quality Circles have been participating in the international Conventions consistently since 1998.

Vision QC of Overseas Branch, Chennai participated in the ICQCC '98 at Colombo MIPLADEV QC of our Circle Office, Madurai participated in the ICQCC '99 at Mauritius Our Garden QC participated in the ICQCC 2000 held at Singapore during November 2000. In the International Convention on Quality Circles held at Lucknow from 17th to 19th Dec. 2002, 10 of our Quality Circles had participated and won prizes. In order to ensure that local area specific issues are addressed and

redressed, development of HRD Cells at the local controlling offices of the Bank, viz., Circle Offices and Regional Offices, have boosted the morale and commitment of the workforce. These Cells which have been set-up for giving focused attention towards effective implementation of
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formal HRD systems of the Bank are really taking the concept of Human Resource Management to the grass-root levels. Canara Banks workforce consists of:

Sportspersons including outstanding cricketers Renowned musicians. Canara Bank are on a strong wicket with Venkatesh Prasad, Vijay Bharadwaj and Sunil Joshi (cricketers) on banks side, Kaverappa, Sunil Benjamin (Hockey players) , Vimal Kumar (Badminton), Can overcome any hurdles, with M K Asha and B N Sumavathy (athletes) in canara banks team.

COMMUNITY CONCERNS Consistent with its philanthropic roots and genuine concerns for the needy, Bank has taken several initiatives including the following:

KPJ Prabhu Artisans Training, Production & Marketing Centre at Jogaradoddi, Bidadi, Bangalore Rural District and C E Kamath Institute for Rural Artisans at Karkalla provide training for artisans in wood carving, stone carving, sheet metal embossing and terra cotta and marketing their products. Rural Women Self Employment Training Institute at Harohalli, Mahila Abhyudaya Yojana Gramina Mahila Jagruthi Kendras Centre for Entrepreneurship Development for Women provides counseling, guidance & training to make women self-reliant.

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A D Pai Institute for Rural Development at Vajrahalli and Rural Self Employment Promotion and Resource Guidance Centre at Holalur, Shimoga District provide training to rural youths for self employment. Rural Clinic Service and Mahila Shushrusha Yojana provide medical facilities in remote and backward villages and provide incentives to doctors to set up clinics in such areas. Cangrama Shikshana Kendra Adult education centers, Canara Bank Golden Jubilee Education Fund provide adult literacy and assist student fraternity by providing books, equipments, sponsoring libraries etc. Grama Jala Yojana Adarsha Grama Project & Jalayoga Scheme provides safe drinking water facility in backward villages. Hari Kalyana Yojana, Tribal Counseling Centres, Dr.Ambedkar Self-Employment Training Institute at Pudupudur and Subba Rao Pai Self-Employment Training Institute at Wandoor train SC/ST and minority youths to take up self-employment training. Rural Development and Self Employment Training Institutes and Rural Resource Development Centres provide training in adopting appropriate technology.

Computer Training Centre for Urban Poor at Bangalore trains urban poor in the IT field and computers.

Kalagrama - An art village, a complex of 18 houses (at K.P.J. Prabhu Artisans Training, Production & Marketing Centre, and Jogaradoddi) has been set-up to assist the artisans who have

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undergone training in traditional arts to pursue and practice art for mutual learning and benefit.

Canara Bank Institute of Information Technology (CBIIT), Alleppy has been set-up with an objective of imparting training to the rural youth of South Kerala in the field of Information Technology. The training is offered free of cost and backed up by post training follow-up to ensure credit linkage and settlement. Canara Bank Institute of Information Technology (CBIIT), Thiruvananthapuram has been set-up with an objective of imparting training in the field of Information Technology to the unemployed youth of Thiruvananthapuram and nearby districts. The training is offered free of cost in computer packages with emphasis on self-employment/wage employment in the IT field.

Organization Structure BRANCHES Our Bank has a network of more than 3002 branches, spread over 22 States/4 Union Territories of the country and, which are administered through

Head Office at Bangalore:- Organizational Structure 34 Circle Office

BRANCHES AND OFFICES ABROAD The Bank has overseas presence as below: 1. BRANCH at LONDON. 2. BRANCH at HONG KONG.
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3. BRANCH at SHANGHAI, CHINA. 4. A joint venture Bank in Moscow - COMMERCIAL BANK OF INDIA LLC - (CBIL) with State Bank of India on 60:40 bases. 5. Canara bank have identified 21 overseas centers for opening branches/offices, out of which, we have approval from RBI for opening branches in South Africa, Germany, Bahrain, Sultanate of Oman , Qatar, USA, Tanzania, Japan, Sharjah (UAE), Brazil and a Second Branch in UK. 6. The Bank's International Operations is being supported by a network of 537 Correspondent Banks, spread over 94 Countries. 7. Further, Bank has rupee drawing arrangement with 20 Exchange Houses and 18 Banks in the Middle East for channelizing the remittances of expatriates. 8. Electronic funds transfer (EFT) was introduced with the following 11 Exchange Companies/Banks for reducing the time for crediting remittances. EXISTING ARRANGEMENT 1. AL RAZOUKI INTL., DUBAI 2. EASTERN EXCHANGE, DOHA 3. BAHARAIN INDIA INTL EXCHANGE CO BAHRAIN 4. AL FARDAN EXCHANGE 5. ZENJ EXCHANGE COMPANY 6. UAE EXCHANGE COMPANY 7. LAXMIDAS TARIA VED EXCHANGE 8. MUSANDAM EXCHANGE 9. CANARA BANK, HONG KONG
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10.CANARA BANK, LONDON 11.AL ROSTAMANI INTL EXCHANGE CO Important milestones Year 1st July 1906 Canara Hindu Permanent Fund Ltd. Formally registered with a capital of 2000 shares of Rs. 50/- each, with 4 1910 1969 1976 1983 1984 1985 1987 1989 1989-90 1992-93 1995-96 2001-02 employees Canara Hindu Permanent Fund renamed as Canara Bank Ltd. 14 Major Banks in the country including Canara Bank, nationalized on July 19. 1000th branch inaugurated Overseas branch at London inaugurated Cancard (the Banks Credit Card) launched Merger with the Laksmi Commercial Bank limited Commissioning of Indo Hong Kong International Finance Ltd Canbank Mutual Fund and Canfin Homes launched Canbank venture capital fund started Canbank factors Ltd, the factoring subsidiary launched Became the first Bank to articulate and adopt the directive principle of Good Banking Became the first Bank to be conferred with ISO 9002 certification for one of the branches in Bangalore Opened a Mahila Banking Branch, first of its kind at Bangalore, for catering exclusively to the financial 2002-03 2003-04 2004-05 requirements of women clientele. Maiden IPO of the Bank Launched internet and mobile banking services 100% branch computerization

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2005-06

Entered 100th year in Banking service. Launched core Banking solution in selected branches Number One Position in aggregate Business among Nationalized Banks

2006-07

Retained number one position in Aggregate Business among Nationalized Banks. Singed MoUs for commissioning two JVs in insurance and management with international majors.

2007-08

Launching of New Brand Identity Incorporation of Insurance and Asset Management, JVs Launching of Online Trading portal launching of a Call Centre switch over to Basel New Capital Adequacy Framework.

2008-09

The Bank crossed the coveted Rs. 3 lakh crore in aggregate business. The Banks 3rd foreign branch at Shanghai commissioned.

2009-10

The Banks aggregate business crossed Rs. 4 lakh crore mark. Net profit of the bank crossed Rs. 3000 crore. The banks branch network crossed the 3000 mark.

Sept 10

Bank successfully achieved 100% implementation of crore Banking Solution. Banks aggregate business crossed Rs. 4.25 lakh crore mark, net profit for 1st half year 2010-112021 crore.

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ANALYSIS OF FINANCIAL STATEMENTS According to Myers, Financial statements analysis is largely a study of relationship among the various financial factors in business as disclosed by a single set of statements and a study of the trend of these financial factors as shown in the series. The significance of financial statements is given below: i. Balance Sheet or Position Statement: Balance Sheet is a statement showing the nature and amount of a companys assets on one side and liabilities and capital on the other. In other words, the balance sheet shows the financial positions on a particular date usually at the end of one year period. Balance sheet shows how the money has been made available to the business of the company and how the money is employed in the business. ii. Profit and Loss Account or Income Statement: earning profit is the principal objective of all business enterprises and Profit and Loss account or Income Statement is the document which indicates the extent of success achieved by a business in meeting this objective. Profits are of primary importance to the board of directors in evaluating the management of a company, to shareholders or potential shareholders in making investment decisions and to banks and other creditors in judging the loan repayment capacities and abilities of the company. It is because of this that the profit and loss or the income statement is regarded as the primary statement and commands a careful scrutiny by all interested parties. It is prepared for a particular period which is

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mentioned along with the title of these statements, which includes the name of the business firms also. iii. Statement of Retained Earnings: this statement is also known as Profit and Loss Appropriation account is generally the part of Profit and Loss account. This statement shows how the profit of the business for the accounting period have been utilized or appropriated towards reserves and dividend and how much of the same is carried forward to the next period. The term Retained Earnings means the accumulated excess of earnings over losses and dividends. The balance shown by Profit and Loss Account is to be transferred to the Balance Sheet through this statement after making necessary appropriations. iv. Cash Flow Statement: this is a statement which summarizes for the period, the cash available to finance the activities of an organization and the uses to which such cash have been put. A statement of cash flow reports cash receipts and payments classified according to the organizations major activities i.e., operating activities, investing activities and financial activities.

Definition of financial statement analysis: According to the author, analysis of financial statements refers to the treatment of information contained in the financial statement in a way so as to afford a full diagnosis of the profitable and financial position of the firm concerned. The process of analyzing financial statements involves the rearranging, comparing and measuring the significance of financial and operating data.
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Such a step helps to reveal the relative significance and effects of items of the data in relation to the time period and/or between two organizations. Interpretation which follows analysis of financial statements is an attempt to reach to logical conclusion regarding the position and progress of the business on the basis of analysis. Thus, analysis and interpretation of financial statements are regarded as complementary to each other.

TYPES OF FINANCIAL STATEMENT ANALYSIS: A distinction may be drawn between various types of financial analysis 1. According to nature of the analyst and the material used by them 2. According to Modus Operandi of analysis 3. According to the Objective of the Analysis

ACCORDING TO NATURE OF THE ANALYST AND THE MATERIAL USED BY HIM a. External Analysis: it is made by those who do not have access to the detailed records of the company. This group, which has to depend almost entirely on published financial statements, includes investors, credit agencies and governmental agencies regulating business in normal way. The position of the external analyst has been improved in recent times owing to the governmental regulations requiring business undertaking to make available detailed information to the public through audited accounts.

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b. Internal Analysis: the internal analysis is accomplished by those who have access to the books of accounts and all other information related to business. While conducting this analysis, the analyst is a part of the enterprise he is analyzing. Analysis for managerial purpose in an internal type of analysis and is conducted by executives and employees of the enterprise as well as governmental and court agencies which may have regulatory and other jurisdiction over the business ACCORDING TO MODUS OPERANDI OF ANALYSIS a. Horizontal Analysis: when financial statements for a number of years, are reviewed and analyzed, the analysis is called horizontal analyses. As it is based on data from year to year rather than on one date or period of time as a whole, this is also known as dynamic analyses. This is very useful for long term trend analysis and planning. b. Vertical Analysis: it is frequently used for referring the ratios developed for one date or for one accounting period. Vertical analysis is also called static analysis. This is not very conductive to proper analysis of the firms financial positions and its interpretation as it does not enable to study data in perspective. This can only be provided by a study conducted over a number of years so that comparisons can be effected. Therefore, vertical analysis is not very useful.

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ACCORDING TO THE OBJECTIVE OF THE ANALYSIS On the basis the analysis can be long-term and short-term analysis: a. Long-term Analysis: this analysis is made in order to study the long-term financial stability, solvency and liquidity as well as profitability and earning capacity of a business. The objective of making such an analysts is to know whether in the long-term the concern will be able to earn a minimum amount which will be sufficient to maintain a reasonable rate of return on investment so as to provide the funds required for modernization, development and growth of the business. b. Short-term Analysis: this analysis is made to determine the shortterm solvency, stability, liquidity and earning capacity of the business. The objective is to know whether in the short-run business enterprises will adequate funds readily available to meet its short-term requirements and sufficient borrowing capacity to meet contingencies in the near future.

OBJECTIVES OF FINANCIAL STATEMENT ANALYSIS: Financial Statement is very much helpful in assessing the financial position and profitability of a concern. The main objectives of analyzing the financial statements are as follows:

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1. The competitive study in regard to one firm with another firm or one department with another department is possible by the analysis of financial statements. 2. Analysis of past results in respects of earning and financial position of the enterprise is of great help in forecasting the future results. Hence it helps in preparing budgets. 3. It facilitates the assessments of financial stability of the concern. 4. The analysis would enable the present and the future earning capacity and the profitability of the concern. 5. The operational efficiency of the concern as a whole as well as department wise can be assessed. Hence the management can easily locate the areas of efficiency and inefficiency. 6. The solvency of the firm, both short-term and long-term, can be determined with the help of financial statement analysis which is beneficial to trade creditors and debenture holders. 7. The long-term liquidity positions of funds can be assessed by the analysis of financial statement.

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Limitations of Financial Statement Analysis: 1. Financial statements through expressed in exact monetary terms are not absolutely final and accurate and it depends upon the judgement of the management in respect of various accounting methods. 2. The reliability of analysis depends on the accuracy of the figures used in the financial statements. The analysis will be vitiated by manipulations in the income statement or balance sheet and accounting procedure adopted by the accountant for recording. 3. The results for indications derived from analysis of financial statements may be differently interpreted by different users. 4. The analysis of financial statement relating to a single year only will have limited use. Hence, the analysis may be extended over a number of years so that results may be compared to arrive a meaningful conclusion. 5. When different firms are adopting different accounting producers, records, policies and different items under similar headings in the financial statements, the comparison will be more difficult. It will not provide reliable bases to access the performance, efficiency, profitability and financial condition of firm as compared to industry as a whole. 6. There are different tool of analysis available for the analyst. However, which is to be used in a particular situation depends on
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the skill, training, and expertise of the analyst and the result will vary accordingly. 7. Owing to the fact that financial statements are compiled on the basis of historical costs, while there is a market decline in the value of the monetary unit and resultant rise in prices, the figures in the financial statement loses its functions as an index on current economic realities. Again the financial statements contain both items. So an analysis of financial statement cannot be taken as an indicator for future forecasting and planning. 8. Analysis of financial statements is a tool which can be used profitably by an expert analyst but may lead to faulty conclusions if used by unskilled analyst. So the result cannot be taken as judgments or conclusions. 9. Financial statements are interim reports and therefore cannot be final because the final gain or loss cam is computed only at the termination of the business. Financial statement reflects the progress of the position of the business so analysis of these statements will not be a conclusive evidence of the performance of the business.

31

METHODS OF ANALYSING FINANCIAL STATEMENTS The analysis of financial statements consists of study of relationship and trends, to determine whether or not the financial position and results of operations as well as the financial progress of the company are satisfactory or unsatisfactory. The analytical methods and devices used in analyzing financial statements are as follows: 1. Comparative statements 2. Common size statements 3. Trend analysis 4. Ratio analysis 5. Funds flow statement 6. Cash flow statements. COMMON-SIZE STATEMENTS Common size financial statements are those in which figures reported are converted into percentages to some common base. For this, items in financial statements are presented as percentages or ratios to total of the items and a common base for comparison is provided. Each percentage shows the relation of the individual item to its respective total. Common-size income statement: in a common size income statement, the sales figure is assumed to be equal to 100 and all other figures of costs or expenses are expressed as percentages of sales. A comparative income statement for different periods helps to reveal the efficiency or otherwise of incurring any cost or expense.

32

Common-size balance sheet: in a common size balance sheet, total of assets or liabilities is as 100 and all the figures are expressed as percentage of the total. Comparative common size balance sheets for different periods help to highlight the trends in different items. Comparative statements These financial statements are designed as to provide time perspective to the various elements of financial position contained therein. These statements give data for all the periods started so as to show: a) Absolute money values for each item separately for each of the periods started. b) Increase and decrease in absolute data in terms of money values. c) Increase and decrease in terms of percentages. d) Comparisons expressed in ratios. e) Percentages of totals. Such comparative statements are necessary for the study of trends and direction of movement in the financial position and operating results. This call for a consistency in the practice of preparing these statements, otherwise comparability may be distorted. Comparative statements enable horizontal analysis of figures. Comparative profit and loss or income statements: comparative income statements shows the operating results for a number of accounting periods and changes in the data significantly in absolute periods and changes in the significantly in absolute money terms as well as in relative percentage.

33

Comparative balance sheet: a comparative balance sheet shows the balance of accounts of assets and liabilities on different dates and also the extent of their increases or decreases between these dates thronging lights on the trends and direction of changes in the position over the periods. Trend ratios Trend ratios can be defined as index numbers of the movements of the various financial items in the financial statements for a number of periods. It is a statistical device applied in the analysis of financial statements to reveal the trend of the items with the passage of time. Trend ratios show the nature and rate of movements in various financial factors. They provide a horizontal analysis of comparative statements and reflect the behavior of various items with the passage of time. Trend ratio can be graphically presented for a better understanding by the management. They are very useful in predicting the behaviour of various financial factors in future. However, it should be noted that conclusions should not be drawn on a basis of a single trend. Trends of related items should be carefully studied, before any meaningful conclusion is arrived at.

Computation of Trend Percentages: For calculation of the trend of data shown in the financial statements, it is necessary to have statements for a number of years, and then proceed as under:

34

1. Take one of the statements as the base with reference to which all other statements are to be studied. In selection of the best statements, it should be noted that it belongs to a normal year of business activities. Statement relating to an abnormal year should not be selected as base; otherwise the trend calculated will be meaningless. 2. Every item in the base statement is stated as 100. 3. Trend percentage of each item in other statement is calculated with reference to same item in the base statement.

Limitations of Trend Ratios: a. If the accounting practices have not been consistently followed year after year, these ratios become incomparable and thus misleading. b. Trend ratios do not take into consideration the price level charges. An increasing trend in sales might not be the result of larger sales volume, but may be because of increased sales price due to inflation. In order to avoid this limitation, figures of the current year should be first adjusted for price level changes from the base year and then the trend ratios are calculated. c. Trend ratios must be always read with absolute data on which they are based; otherwise the conclusions drawn may be misleading. It may be that a 100% change in trend ratio may represent an
35

absolute change of Rs.1000 only in one item, while a 20% change in another item may mean an absolute change of Rs.1, 00,000. d. The trend ratios have to be interpreted in the light of certain nonfinancial factors like economic conditions, government policies, management policies etc.

Ratio Analysis According to J. batty the term accounting ratio is used to describe significant relationships which exist between figures shown in a balance sheet, in a profit and loss account, in a budgetary control system or in any other part of the accounting organization. Financial statements contain many information (figures) relating to profit or loss and financial position of the business. If these items in financial statements are considered independently it will be or not be of much use. To make a meaningful reading of financial statements, these items found in financial statements have to be compared with one another. Definition: Ratio is a yardstick used to evaluate the financial conditions and performance of a firm, relating to two pieces of financial data to each other. - James. C. Van Harne

36

Limitation of ratio analysis The following limitations must be taken into account. The standards will differ from industry. Comparison of ratios of firms belonging to different industries is not suggested. Since ratios are calculated from past records, there are no indicators of future. Proper care should be exercised to study only such figures as have a cause and effect relationship, otherwise ratios will only be meaningless or misleading. The reliability and significance attached to ratios depend on the accuracy of data based on which ratios are calculated. The change in price levels due to inflation will distort the reliability of ratio analysis. The analyst should have through knowledge of methods of window-dressing. Single accounting ratio is not useful, at all, unless it is studied with other accounting ratios. This limitation of ratios necessitates interfirm and intra-firm comparison. Ratios are only based on the quantitative information; hence, quantitative information (i.e., character, managerial ability, etc.) puts limits on the ratios.
37

 Ratios are computed on the basis of financial statements which are historical in nature. Knowledge of ratios alone is meaningless unless it is also ascertained how it is made up. Lacks of homogeneity of data, person judgment, lack of consistency etc. are the factors which limit the conclusion to be derived on the basis of accounting ratios. Ratios are calculated form financial statements which are affected by the financial bases and policies adopted on such matters as description and the valuation of stocks.

38

Financial ratios used in banks: Cost of deposits: Formula: Cost of deposits = Interest paid 100 Total deposits

Yield on advances: Yield on advances means the interest earned on the Loans and advances extended by the Bank. Yield on advances is the major contribution to the overall performance of a bank. Formula: Yield on advances = Interest earned 100 Total advances Net interest margin: Net interest margin is similar in concept to net interest spread, but the net interest spread is the nominal average difference between the borrowing and the lending rates, without compensating for the fact that

39

the earning assets and the borrowed funds may be different instruments and differ in volume. The net interest margin can therefore be higher (or occasionally lower) than the net interest spread.

Formula: Net interest margin = yield on advances cost of deposits

PBDT Margin: Formula: PBDT margin = PBDT 100

Total income Net profit margin: Profit margin is very useful. A higher profit margin indicates a more profitable company that has better control over its costs compared to its competitors. Profit margin is displayed as a percentage; a 20% profit margin. It is also known as Net Profit Margin. Formula:

40

Net profit margin = net profit

100

Total income Return on equity: The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. Formula: Return on equity = net profit Share holders fund 100

Book value: In accounting book value of an asset according to its balance acount balance. For assets the value is based on the original cost of asset less any depreciation, amountization, or impairment costs made against the asset. However, in practice, depending on the sources of the calculation book value may variably include goodwill, intangible assets or both. When intangible assets ang goodwill are explicity excluded, the metric is often specified to be tangible book value. Formula:

41

Book value = share holders fund 100 Number of shares

Earnings per share: Earnings per share serve as an indicator of a company's profitability. When calculating, it is more accurate to use a weighted average number of shares outstanding over the reporting term, because the number of shares outstanding can change over time. However, data sources sometimes simplify the calculation by using the number of shares outstanding at the end of the period. Formula: Earnings per share = Net profit available to equity share holders Number of equity shares

Payout ratio: When calculating the payout ratio, it is more accurate to use a weighted average number of shares outstanding over the reporting term, because the number of shares outstanding can change over time. However, data sources sometimes simplify the calculation by using the number of shares outstanding at the end of the period. Formula:
42

Payout ratio = Dividend amount 100 Net profit

Leverage ratio: A general term describing a financial ratio that compares some form of owner's equity (or capital) to borrowed funds. Gearing is a measure of financial leverage, demonstrating the degree to which a firm's activities are funded by owner's funds versus creditor's funds. Also known as the Net Gearing Ratio.

Formula: Leverage ratio = deposits+borrowings+other liabilities 100 Share holders fund

43

COST OF DEPOSITS: Table No-1 Year Canara Bank Bank of Baroda Punjab National Bank State Bank of India Chart No-1 2006 4.39 4.14 4.11 5.30 2007 5.15 4.34 4.31 5.38 2008 6.92 5.20 5.25 5.94 2009 6.64 5.18 5.86 5.78 2010 5.57 4.46 5.19 5.89

Cost of deposit has created implication on operating performance of the bank. Higher cost leads to lower profitability. While analyzing the data, it is found that in the recent past, the banks cost of deposits increased and it was much higher compared to all other leading
44

nationalized banks but in the recent years the bank managed to overcome this problem.

YIELD ON ADVANCES: Table No-2 Year Canara Bank Bank of Baroda State Bank of India Chart No-2 2006 10.97 11.85 13.68 2007 11.54 11.02 11.94 11.71 2008 13.24 11.07 11.94 11.75 2009 12.39 10.48 12.49 11.76 2010 11.07 9.54 11.50 11.23

Punjab National Bank 12.84

Yield on advances means the interest earned on the Loans and advances extended by the Bank. For Canara Bank Yield on advances has touched 13.24% in 2008. This is highest among the peer group in last 5 years, Except SBI. For Bank of Baroda the Yield has been declining slowly and reached its lowest level o of 9.54%. This is lowest when
45

compared to other leading banks. For SBI the yield is stabilizing above 11%. Overall the Yield has been declining for all Banks in Last 5 years. NET INTEREST MARGIN (NIM): Table No-3 Year Canara Bank 2006 6.58 2007 6.38 6.67 7.64 6.33 2008 6.32 5.87 6.69 5.80 2009 5.75 5.30 6.63 5.98 2010 5.50 5.08 6.31 5.35

Bank of Baroda 7.71 Punjab National Bank 8.73 State Bank of India 8.38

Chart No-3

Interest margin shows the margin of safety. The interest margin of canara bank is not that satisfactory compared to other nationalized banks.

46

So bank has to take necessary steps in this regard to improve its net interest margin.

PBDT MARGIN: Table No-4 Year Canara Bank Bank of Baroda Punjab National Bank State Bank of India Chart No-4 2006 14.75 14.00 14.70 11.89 2007 12.19 11.52 13.47 10.96 2008 10.51 12.03 13.64 12.70 2009 11.49 13.77 14.75 12.92 2010 14.60 16.86 16.49 11.75

PBDT margin indicates the operating profit which it generated from the operating activity of the business. Though there was decline in the

47

operating margin in the year 2007-08. It is slowly picking up and managing to sustain its initial level.

NET PROFIT MARGIN: Table No-5 Year Canara Bank Bank of Baroda State Bank of India Chart No-5 2006 13.31 12.66 10.20 2007 11.03 9.69 11.96 9.68 2008 9.48 10.35 12.60 11.53 2009 10.60 12.48 13.89 11.93 2010 13.89 15.68 15.60 10.66

Punjab National Bank 13.01

This indicates the total profit it earned after deducting the operating and non-operating expenses. Even the net operating margin declined during the recession 2007-08, is showing the remarkable improvement in
48

the recent years. Thanks to some of the innovative policies adopted by the bank.

RETURN ON EQUITY: Table No-6 Year Canara Bank 2006 19.45 2007 24.21 11.87 15.64 14.51 2008 25.69 13.00 22.16 13.72 2009 26.33 17.35 26.59 15.74 2010 29.03 20.25 26.50 13.90

Bank of Baroda 13.39 Punjab National Bank 16.41 State Bank of India Chart No-6 15.94

This indicates the profit earned by the investors on its investment. Higher ratio indicates higher share holders wealth. Canara bank is showing a remarkable improvement in creating the shareholders wealth
49

compared to all other nationalized bank, it is showing the vertical growth in this, which is giving a green signal to the investors to invest.

BOOK VALUE: Table No-7 Year Canara Bank Bank of Baroda State Bank of India Chart No-7 2006 168.43 214.60 525.25 2007 143.13 236.64 312.33 594.69 2008 148.56 302.13 293.27 776.48 2009 191.99 351.15 368.73 912.73 2010 253.82 413.27 467.46 1038.77

Punjab National Bank 278.20

Book value is indicating the unit of asset availabile to each share. Higher ratio indicates higher asset creation and long term solvency. The canara banks book value is not that satisfactory compared to major

50

nationalised banks. So serious effort has to be made to improve the capitalisation of the asset.

EARNINGS PER SHARE: Table No-8 Year Canara Bank Bank of Baroda Punjab National Bank State Bank of India 2006 32.76 28.73 45.65 83.73 2007 34.65 28.08 48.84 86.29 2008 38.17 39.27 64.98 106.56 2009 50.55 60.93 98.03 143.67 2010 73.69 83.67 123.86 144.37

Chart No-8

Earnings per share indicates the share in the profit of each share. Even though there is consistent improvement in the earning per share compared to other banks it is lagging behind. Considering the strong
51

financial ways which the canara bank started with, the bank need to be improved in this regard so as to regain the top position.

PAYOUT RATIO: Table No-9 Years Canara Bank Bank of Baroda Punjab National Bank State Bank of India Chart No-9 2006 20.15 22.97 14.46 7.88 2007 20.20 24.93 14.33 8.11 2008 20.96 20.37 12.31 7.51 2009 15.83 13.13 8.16 5.57 2010 13.57 11.95 8.07 6.93

Payout ratio indicates the proportion of dividend paid out of earnings indirectly it indicates the retention part of the profit. Canara

52

banks retention profit is low compared to other leading nationalised banks.

LEVERAGE RATIO: Table No-10 Year Canara Bank Bank of Baroda Punjab National Bank State Bank of India 2006 18.20 13.46 15.49 16.87 2007 26.52 15.55 15.43 17.10 2008 27.92 15.26 20.19 13.72 2009 26.35 16.72 19.98 15.64 2010 24.03 17.42 18.92 14.97

Chart No-10

Higher leverage ratio indicates greater amount of debt in the capital structure which is an indication to high risk. The leverage ratio of
53

canara bank is very high when compared to other banks,the bank should try to decrease its ratio.

54

PROPREITORY RATIO(%): Table No-11 Year 2006 2007 0.04 0.06 0.06 0.06 2008 0.03 0.06 0.05 0.07 2009 0.04 0.06 0.05 0.06 2010 0.04 0.05 0.05 0.06

Canara Bank 0.05 Bank of Baroda 0.07 Punjab National Bank 0.06 State Bank of India 0.06 Chart No-11

Higher porpreitary ratio indicates high shareholders fund, this inturn indicates higher profitability. Initially the bank had higher propreitary ratio, but in the year 2007-08 the ratio decreased. In the recent years the bank has shown improvement in the propreitary ratio.

55

Advance to deposit: Table No-12 Year Canara Bank Bank of Baroda Punjab National Bank State Bank of India Chart No-12 2006 68 63.97 62.35 68.84 2007 69.18 66.94 69.07 77.46 2008 69.6 70.18 71.79 77.55 2009 73.96 74.84 73.75 73.11 2010 72.16 72.62 74.84 78.58

The advances to deposit for canara bank are rising. The bank increased its advance to deposits from 68 in 2006 to 72.16 in 2010. But it is much less when compared to other nationalized banks, so the bank needs to improve on its advances so that the bank earns more profit on its advances and deposits.

56

Findings and suggestions Findings: 1. The cost of deposit for canara bank was increasing and it was much higher when compared to all other leading nationalized banks. 2. Higher yield on advances during the observation period when compared to other banks which is a good indicator of sound banking system. 3. Net interest margin is not that satisfactory when compared to other nationalized banks. 4. There was a decline in operating margin of canara bank in the year 2007-08, but it is slowly picking up and managing to sustain its initial level. 5. The net operating margin is showing remarkable improvement in the recent years. 6. Canara bank is showing the vertical growth in creating the shareholders worth, which is good sign to the investors to invest. 7. The canara bank book value is not that satisfatory compared to other nationalized banks. 8. Even though there is constant improvement in the earnings per share of canara bank in the recent years, it is lagging behind when compared to other nationalized banks. 9. Canara bank retention profit is low compared to other nationalized banks. 10.The propreitary ratio is not satisfactory when compared to other nationalized banks.

57

Suggestions: 1. The canara bank has to take necessary steps in the regard to improve its net interest margin. 2. A serious effort has to be made to improve the capiitalization of the asset. 3. The bank needs to improve on its retention profit. 4. The bank should try to have control over its leverage ratio. 5. The canara bank should try to improve on its propreitary ratio as the high propreitary ratio indicates high shareholders fund.

58

Conclusion Financial analysis is a process of establishing suitable relationship between the items of the balance sheet and profit and loss account and studying the relationship to know the financial position of the company. The analysis of the data made by me has resulted in the acheivements of the objectives of the project work. This study was undertaken by me with the specific objectives such as studying the financial performance, identifying the operating efficiency of the bank an ratio analysis. The financial analysis reveals a good picture on banks performance except for some areas which were found wanting and bank must immediately try to improve in these areas to become a leading financial institution, overall it can be said that the bank is showing tremendous progress and there is no doubt under the present leadership there is going further uptrend in the coming years. CANARA BANK is the largest commercial bank in india in terms of profits, deposits, assets, branches and employees. It is only the indian bank among the top 20 banks in Asia. However to compete and win the global environment, the bank has to benchmark itself against the best in the world and world class level of effeciency. The bank has constituted RBI guidelines, which meets regular intervals to monitor interest rate scenario, product pricing, profit planning etc.

59

BIBLIOGRAPHY Text books: Khan.M.Y and Jain.P.K, Financial Management,Tata McGrawHill Publishing Company Limited, Fourth edition. Pandey I. M., Financial Management, Vikas publishing house Pvt Ltd., Ninth edition. Maheshwari S. N., Principals of Management Accounting, Sultan Chand and sons, Thirteenth edition.

Websites: www.wekipedia.com www.moneycontrol.com www.allbankingsolutions.com www.canarabank.com

Other resources: Published balance sheet of the year 2006-2010 Annual reports of Canara Bank 2006-10 Annual reports of Bank of Baroda 2006-10 Annual reports of Punjab National Bank 2006-10 Annual reports of State Bank of India 2006-10

60

Balance sheet of canara bank:

Year Mar '06 Capital & liabilities Equity Capital 410.00 Preference Capital 0.00 Share Application 0.00 Money Reserves Revaluation 6608.86 113.38 Mar '07 410.00 0.00 0.00 7701.11 2242.87 142381.45 1574.35 11651.25 165961.03 9,095.19 7,278.74 98,505.69 45,225.54 2861.35 0 2,994.53 165,961.04 Mar '08 410.00 0.00 0.00 7885.63 2204.86 154072.42 2517.23 13438.55 180528.69 13,364.79 4,513.25 107,238.04 49,811.57 2916.87 0 2,684.17 180,528.69 Mar '09 410.00 0.00 0.00 9629.61 2168.16 186892.51 7056.61 13488.91 219645.80 10,036.79 6,622.99 138,219.40 57,776.90 2929.46 0 4,060.26 219,645.80 Mar '10 410.00 0.00 0.00 12129.11 2132.68 234651.44 8440.56 6977.30 264741.09 15,719.46 3,933.75 169,334.63 69,676.95 2859.38 0 3,216.92 264,741.09

Reserves Deposits 116803.23 Borrowings 25.82 Other Liabilities 8860.57 & Provisions TOTAL 132821.86 Assets Cash & Balances 7,914.00 with RBI Balance Banks. Advances Investments Net Block CWIP Other Assets TOTAL with 4,909.56 79,425.70 36,974.18 688.47 0 2,909.95 132,821.8 6

Profit and loss account of canara bank:

Income Year Interest Earned Mar '06 8,711.51 Mar '07 11,364.56
61

Mar '08 14,200.74

Mar '09 17,119.05

Mar '10 18,751.96

Other Income Total Income Expenditure Interest expended Employee Cost Selling and Administration Expenses Miscellaneous Expenses Preoperative Capitalised Total Op Exp PBDT Depreciation Tax Net Profit Supplementary Informations FV Number of Shares Dividend Rate

1,377.51 10,089.02 5,130.01 1,515.30 1,061.42

1,511.80 12,876.36 7,337.73 1,609.29 957.77

2,308.31 16,509.05 10,662.94 1,661.28 1,491.09

2,427.10 19,546.15 12,401.25 1,877.15 1,540.27

3,000.82 21,752.78 13,071.43 2,193.70 2,164.65

894.05 Exp 0 8,600.78 1,488.24 145.03 1,343.21

1402.58 0 11,307.37 1,568.99 148.18 1,420.81

958.76 0 14,774.07 1,734.98 169.97 1,565.01

1481.42 0 17,300.09 2,246.06 173.64 2,072.42

1146.44 0 18,576.22 3,176.56 155.13 3,021.43

10.00 410000000 66

10.00 41000000 0 70

10.00 10.00 410000000 410000000 80 80

10.00 410000000 100

62

Balance sheet of punjab national bank:

Year Capital & Liabilities Equity Capital Preference Capital Share Application Money Reserves Revaluation Mar '06 315.30 0.00 0.00 8758.68 302.38 Mar '07 315.30 0.00 0.00 9826.31 293.85 139859.67 1948.86 10178.51 162422.50 12,372.03 3,273.49 96,596.52 45,189.84 1009.82 0 3,980.80 162,422.5 0 Mar '08 315.30 0.00 0.00 10467.35 1535.70 166457.23 5446.56 14798.23 199020.37 15,258.15 3,572.57 119,501.57 53,991.71 2315.52 0 Mar '09 315.30 0.00 0.00 12824.59 1513.74 209760.50 4374.36 18130.13 246918.62 17,058.25 4,354.89 154,702.99 63,385.18 2397.11 0 Mar '10 315.30 0.00 0.00 15915.63 1491.99 249329.80 19262.37 10317.69 296632.78 18,327.58 5,145.99 186,601.21 77,724.47 2513.47 0 6,320.07 296,632.78

Reserves Deposits 119684.92 Borrowings 6687.18 Other Liabilities & 9518.93 Provisions TOTAL 145267.40 Assets Cash & Balances 23,394.56 with RBI Balance with Banks. Advances Investments Net Block Capital Work In Progress Other Assets TOTAL 1,397.14 74,627.37 41,055.31 1030.23 0 3,762.79 145,267.40

4,380.84 5,020.20 199,020.37 246,918.62

63

Profit and loss account of punjab national bank:

Income Year Interest Earned Other Income Total Income Expenditure Interest expended Employee Cost Selling and Admin Expenses Miscellaneous Expenses Preoperative Capitalised Provision Contingencies Total Op Exp PBDT Depreciation Tax Net Profit supplementary informations face value Number of Shares Dividend Rate Mar '06 9,584.15 1,478.23 11,062.38 4,917.39 2,114.97 638.79 1765.27 Exp 0 for 9,436.42 1,625.96 186.65 1,439.31 11,146.24 1,734.88 194.8 1,540.08 14,043.57 2,219.01 170.23 2,048.78 18,963.90 3,281.95 191.06 3,090.89 20,904.04 4,128.18 222.83 3,905.35 Mar '07 11,537.48 1,343.64 12,881.12 6,022.91 2,352.45 1,032.50 1738.38 0 Mar '08 14,265.02 1,997.56 16,262.58 8,730.86 2,461.54 884.19 1966.98 0 Mar '09 19,326.16 2,919.69 22,245.85 12,295.30 2,924.38 1,406.42 2337.8 0 Mar '10 21,466.91 3,565.31 25,032.22 12,944.02 3,121.14 1,701.46 3137.42 0

10.00 315300000 66

10.00 315300000 70

10.00 31530000 0 80

10.00 31530000 0 80

10.00 315300000 100

Balance sheet of bank of baroda:

Year Capital Mar '06 & 365.53 0.00 0.00
64

Mar '07

Mar '08

Mar '09

Mar '10

Liabilities Equity Capital 365.53 Preference Capital 0.00 Share Application 0.00

365.53 0.00 0.00

365.53 0.00 0.00

365.53 0.00 0.00

Money Reserves Revaluation

7478.91 0.00

8284.41 0.00 124915.98 1142.56 8437.70 143146.18 6,413.52 11,866.85 83,620.87 34,943.63 1088.81 0 5,212.50 143,146.1 8

10678.40 0.00 152034.13 3927.05 12594.41 179599.52 9,369.72 12,929.56 106,701.3 2 43,870.07 2427 0 4,301.83 179,599.5 2

12470.01 0.00 192396.95 5636.09 16538.15 227406.73 10,596.34 13,490.77 143,985.9 0 52,445.88 2309.72 0 4,578.12 227,406.7 3

14740.86 0.00 241044.26 13350.09 8815.97 278316.71 13,539.97 21,927.09 175,035.29 61,182.38 2284.76 0 4,347.22 278,316.71

Reserves Deposits 93661.99 Borrowings 4802.20 Other Liabilities & 7083.90 Provisions TOTAL 113392.53 Assets Cash & Balances 3,333.43 with RBI Balance with Banks, 10,121.21 Money at Call Advances Investments Net Block Capital Work Progress Other Assets TOTAL 59,911.78 35,114.22 920.73 In 0 3,991.16 113,392.53

65

Profit and loss account of bank of baroda

Income Year Interest Earned Other Income Total Income Expenditure Interest expended Employee Cost Selling and Admin Expenses Miscellaneous Expenses Preoperative Capitalised Total Op Exp PBDT Depreciation Tax Net Profit supplementory informations face value Number of Shares Dividend Rate

Mar '06 7,100.00 1,191.69 8,291.69 3,875.09 1,523.79 714.77 1016.85

Mar '07 9,212.64 1,381.79 10,594.43 5,426.56 1,644.06 646.25 1656.81 0 9,373.68 1,220.75 194.28 1,026.47

Mar '08 11,813.48 2,051.04 13,864.52 7,901.67 1,803.76 927.20 1564.36 0 12,196.99 1,667.53 232 1,435.53

Mar '09 15,091.58 2,757.66 17,849.24 9,968.17 2,348.13 885.24 2189.99 0 15,391.53 2,457.71 230.5 2,227.21

Mar '10 16,698.34 2,806.36 19,504.70 10,758.86 2,350.88 1,627.56 1478.21 0 16,215.51 3,289.19 230.86 3,058.33

Exp 0 7,130.50 1,161.19 111.13 1,050.06

10.00 365530000 66

10.00 365530000 70

10.00 36553000 0 80

10.00 36553000 0 80

10.00 365530000 100

Balance sheet of state bank of india:

66

Year Capital

Mar '06 &

Mar '07

Mar '08

Mar '09

Mar '10

Liabilities Equity Capital 526.30 Preference Capital 0.00 Share Application 0.00 Money Reserves Revaluation 27117.79 0.00

526.30 0.00 0.00 30772.26 0.00 435521.09 39703.34 60042.26 566565.25 29,076.43 22,892.27

631.47 0.00 0.00 48401.19 0.00 537403.94 51727.41 83362.30 721526.31 51,534.62 15,931.72

634.88 0.00 0.00 57312.82 0.00 742073.13 53713.68 110697.57 964432.08 55,546.17 48,857.63

634.88 0.00 0.00 65314.32 0.00 804116.23 103011.60 80336.70 1053413.73 61,290.87 34,892.98

Reserves Deposits 380046.06 Borrowings 30641.24 Other Liabilities & 55538.17 Provisions TOTAL 493869.56 Assets Cash & Balances 21,652.70 with RBI Balance Call Advances Investments Net Block Capital Work Progress Other Assets TOTAL with 22,907.30

Banks, Money at 261,641.5 3 162,534.2 4 2673.11 In 79.82 22,380.84 493,869.5 6 337,336.4 9 149,148.8 8 2676.91 141.95 25,292.31 566,565.2 5 416,768.2 0 189,501.2 7 3139.22 234.26 44,417.03 721,526.3 1 542,503.2 0 275,953.9 6 3574.41 263.44 37,733.27 964,432.0 8 631,914.15 285,790.07 4117.73 295.18 35,112.76 1,053,413.73

Profit and loss account of state bank of india:

Income Year Interest Earned Other Income Total Income Expenditure Mar '06 35,794.93 7,388.69 43,183.62 Mar '07 39,491.03 7,446.76 46,937.79
67

Mar '08 48,950.31 9,398.43 58,348.74

Mar '09 63,788.43 12,691.35 76,479.78

Mar '10 70,993.92 14,968.15 85,962.07

Interest expended 20,159.29 Employee Cost 8,123.04 Selling and Admin 1,853.32 Expenses Miscellaneous Expenses Preoperative Capitalised Total Op Exp PBDT Depreciation Tax Net Profit supplementory information face value Number of Shares Dividend Rate 7912.15 Exp 0 38,047.80 5,135.82 729.13 4,406.69

23,436.82 7,932.58 3,251.14 7173.55 0 41,794.09 5,143.70 602.39 4,541.31

31,929.08 7,785.87 4,165.94 7058.75 0 50,939.64 7,409.10 679.98 6,729.12

42,915.29 9,747.31 5,122.06 8810.75 0 66,595.41 9,884.37 763.14 9,121.23

47,322.48 12,754.65 7,898.23 7888 0 75,863.36 10,098.71 932.66 9,166.05

10.00 52630000 0 66

10.00 52630000 0 70

10.00 63147000 0 80

10.00 63488000 0 80

10.00 634880000 100

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