ANALYSIS OF FINANCIAL

STATEMENT OF ICICI BANK

SUMMER TRAINING PROJECT REPORT ON

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR
BACHELOR IN BUSINESS ADMINISTRATION (GEN)
(Session)
PREPARED BY:
YUGANKAR
BBA(GEN)
ENROLL NO.
UNDER THE GUIADENCE OF:
MRS. RUCHI JAIN
BERI INSTITUTE OF TECHNOLOGY RESEARCH

AFFILATED TO GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY

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 CERTIFICATE
This is to certify that YUGANKAR of BERI INSTITUTE OF
TECHNOLOGY, TIKRI KALAN
has successfully completed project report on title “ICICI
BANK”.
This project has been done as a partial fulfillment for
BACHELOR IN BUSINESS ADMINISTRATION (BBA)
course. The student has also made his project to my entire
satisfaction and as per requirement of the course.

The work has not been anywhere else for the award of degree. All
source of information have been duly mentioned.
MR. AMIT GUPTA
(Project Guide)
MAIMS

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 ACKNOWLEDGEMENT
"Accomplishment of any task necessarily depends upon the willingness and
enthusiastic contribution of time and energy of many people."

From the starting till the completion of this project,

there are many people without whose assistance all my efforts would have
been fruitless. I, therefore, acknowledge all who generously helped me by
sharing their time, experience and knowledge with me without which this
project would have never been accomplished.

Words can’t express my sincere thanks to the entire

faculty of BITTR, under the prestigious GGSIPU who had been a constant
source of guidance throughout my project period.

I extend my profound thanks to

JHA SIR for his invaluable
guidance and support.
I must express my gratitude to
MRS. RUCHI JAIN (my project guide) whose perceptive
guidance, constant encouragement, constructive criticism and affection were
the light of guidance during my tenure of my work.

Finally, I would like to state that the project not only

fulfilled an academic requirement, but would also help me in future
endeavors in the years to come.

YUGANKAR

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EXECUTIVE SUMMARY

In any organization, the two important financial statements are theBalance

sheet & Profit and loss account of the business. Balance sheet is a statement

of the financial position of an enterprise at a particular point of time. Profit and loss
account shows the net profit or net loss of a company for a specified period of time.
When these statements of the last few year of any organization are studied and
analyzed, significant conclusions may be arrived regarding the changes in the
financial position, the important policies followed and trends in profit and loss etc.
Analysis and interpretation of the financial statement has now become an important
technique of credit appraisal. The investors, financial experts, management executives
and the bankers all analyze these statements. Though the basic technique of appraisal
remains the same in all the cases but the approach and the emphasis in analysis vary.
A banker interprets the financial statement so as to evaluate the financial soundness
and stability, the liquidity position and the profitability or the earning capacity of
borrowing concern. Analysis of financial statement is necessary because it help in
depicting the financial position on the basis of past and current records. Analysis of
financial statement helps in making the future decision and strategies. Therefore, it is
very necessary for every organization whether it is a financial or manufacturing etc. to
make financial statement and to analyse it.

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 CHAPTER – 1

INTRODUCTION

Industrial Review

BANKING SCENARIO

The Indian Banking industry, which is governed by the Banking Regulation Act of India,
1949 can be broadly classified into two major categories, non-scheduled banks and
scheduled banks. Scheduled banks comprise commercial banks and the co-operative
banks. In terms of ownership, commercial banks can be further grouped into nationalized
banks, the State Bank of India and its group banks, regional rural banks and private sector
banks (the old/ new domestic and foreign). These banks have over 67,000 branches
spread across the country.

The first phase of financial reforms resulted in the nationalization of 14 major banks in
1969 and resulted in a shift from Class banking to Mass banking. This in turn resulted in
a significant growth in the geographical coverage of banks. Every bank had to earmark a
minimum percentage of their loan portfolio to sectors identified as “priority sectors”. The
manufacturing sector also grew during the 1970s in protected environs and the banking
sector was a critical source. The next wave of reforms saw the nationalization of 6 more
commercial banks in 1980. Since then the number of scheduled commercial banks
increased four-fold and the number of bank branches increased eight-fold.
After the second phase of financial sector reforms and liberalization of the sector in the
early nineties, the Public Sector Banks (PSB) s found it extremely difficult to compete
with the new private sector banks and the foreign banks. The new private sector banks

5
first made their appearance after the guidelines permitting them were issued in January
1993. Eight new private sector banks are presently in operation. These banks due to their
late start have access to state-of-the-art technology, which in turn helps them to save on
manpower costs and provide better services.

During the year 2000, the State Bank Of India (SBI) and its 7 associates accounted for a
25 percent share in deposits and 28.1 percent share in credit. The 20 nationalized banks
accounted for 53.2 percent of the deposits and 47.5 percent of credit during the same
period. The share of foreign banks (numbering 42), regional rural banks and other
scheduled commercial banks accounted for 5.7 percent, 3.9 percent and 12.2 percent
respectively in deposits and 8.41 percent, 3.14 percent and 12.85 percent respectively in
credit during the year 2000.

Current Scenario

The industry is currently in a transition phase. On the one hand, the PSBs, which are the
mainstay of the Indian Banking system are in the process of shedding their flab in terms
of excessive manpower, excessive non Performing Assets (Npas) and excessive
governmental equity, while on the other hand the private sector banks are consolidating
themselves through mergers and acquisitions.

PSBs, which currently account for more than 78 percent of total banking industry assets
are saddled with NPAs (a mind-boggling Rs 830 billion in 2000), falling revenues from
traditional sources, lack of modern technology and a massive workforce while the new
private sector banks are forging ahead and rewriting the traditional banking business
model by way of their sheer innovation and service. The PSBs are of course currently
working out challenging strategies even as 20 percent of their massive employee strength
has dwindled in the wake of the successful Voluntary Retirement Schemes (VRS)
schemes.

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The private players however cannot match the PSB’s great reach, great size and access to
low cost deposits. Therefore one of the means for them to combat the PSBs has been
through the merger and acquisition (M& A) route. Over the last two years, the industry
has witnessed several such instances. For instance, Hdfc Bank’s merger with Times Bank
Icici Bank’s acquisition of ITC Classic, Anagram Finance and Bank of Madura.
Centurion Bank, Indusind Bank, Bank of Punjab, Vysya Bank are said to be on the
lookout. The UTI bank- Global Trust Bank merger however opened a pandora’s box and
brought about the realization that all was not well in the functioning of many of the
private sector banks.

Private sector Banks have pioneered internet banking, phone banking, anywhere banking,
mobile banking, debit cards, Automatic Teller Machines (ATMs) and combined various
other services and integrated them into the mainstream banking arena, while the PSBs are
still grappling with disgruntled employees in the aftermath of successful VRS schemes.

In a span of just four years, ICICI Bank has emerged as a consumer banking behemoth.
With a retail book of over Rs 56,000 crore (Rs 560 billion) and a market share that is the
envy of competition -- it has a share of over 30 per cent -- ICICI Bank today has reached
a commanding position.

The bank boasts of the widest integrated technology platform in the country and only a
fourth of its business takes place at its branches.

Its legacy of non-performing assets (NPAs) -- for which it has been rated below its peers
-- is now almost history with net NPLs (non-performing loans) down to 2 per cent.

Armed with a much stronger balance sheet, ICICI Bank is aggressively foraying into
overseas markets and also has an eye on rural India.

This year consumer credit will grow by about Rs 40,000 crore (Rs 400 billion) from Rs
145,000 crore (Rs 1,450 billion) to Rs 185,000 crore (Rs 1,850 billion).

Last year, despite competition from small savings, incremental deposits grew at 15 per
cent and this year, too, the RBI (Reserve Bank of India) is pegging deposit growth at 15

7
per cent. That's not too different from the historic growth rate of 17 per cent over 30
years. I acknowledge that small savings pose competition; they have a lot of arbitrage.

But, interestingly, mutual funds were not competitors. MFs, I find, are competitors when
interest rates decline; they don't have ability to compete when rates rise.

Also insurance companies, which saw money because of the tax incentives, could be
under pressure with the incentives going.

Today, ICICI Bank, India has the largest market share and value among all banks in retail
or consumer financing. ICICI Bank is the largest issuer of credit cards in India. It was the
first bank to offer a wide network of ATM's and had the largest network of ATM's till
2005,before SBI caught up with it.

ICICI bank now is widely seen as a sophisticated bank able to take on many global banks
in the Indian market. The bank is expanding in overseas markets. It has operations in the
UK, Hong Kong, Singapore and Canada. It acquired a small bank in Russia recently. It
has tie-ups with major banks in the US and China. The bank is aggressively targeting the
NRI (Non Resident Indian) population for expanding its business.

The global opportunity spectrum is changing dramatically, and in the next three years,
our global business will contribute one-third of our book -- topline and bottomline. Today
it's about 10-12 per cent. The NRI is a great customer and the other is the Indian
corporate who is globalising -- either in the trade business or is setting up businesses
abroad.

Our USP (unique selling proposition) is our technology; we can get him to talk to his
constituents online. The NRI is an interesting link because today he has tremendous
needs in India; he wants to remit money, buy a home, especially the H1 visa guys. This
year 10 per cent of our home loans will be to NRIs.

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Company Profile

ICICI BANK
ICICI Bank is India’s second-largest bank with total assets of 3,997.95 billion
(US$ 100 billion) at March 31, 2008 and profit after tax of Rs. 41.58 billion for the
year ended March 31, 2008. ICICI Bank is the most valuable bank in India in terms
of market capitalization and is ranked second amongst all the companies listed
on the Indian stock exchanges. In terms of free float market capitalization*.

The Bank has a network of about 1308branches and 3,950 ATMs in India and presence in
18 countries. ICICI Bank offers a wide range of banking products and financial services
to corporate and retail customer through a variety of delivery channels and through its
specialized subsidiaries and affiliates in the areas of investment banking, life and non-life
insurance, venture capital and asset management. The Bank currently has subsidiaries in
the United Kingdom, Russia and Canada, branches in Singapore, Bahrain, Hong Kong,
Sri Lanka and Dubai International Finance Center and representative offices in the United
States, United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and
Indonesia. UK subsidiary has established a branch in Belgium.

ICICI Bank's equity shares are listed in India on Bombay Stock Exchange

9
(BSE) and the National Stock Exchange (NSE) of India Limited and its American
Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).

HISTORY

• 1955 The Industrial Credit and Investment Corporation of India Limited (ICICI)
was incorporated at the initiative of World Bank, the Government of India and
representatives of Indian industry, with the objective of creating a development
financial institution for providing medium-term and long-term project financing
to Indian businesses.

• 1994 ICICI established Banking Corporation as a banking subsidiary. formerly

Industrial Credit and Investment Corporation of India. Later, ICICI Banking
Corporation was renamed as 'ICICI Bank Limited'. ICICI founded a separate legal
entity, ICICI Bank, to undertake normal banking operations - taking deposits,
credit cards, car loans etc.

• 2001 ICICI acquired Bank of Madura (est. 1943). Bank of Madura was a Chettiar
bank, and had acquired Chettinad Mercantile Bank (est. 1933) and Illanji Bank
(established 1904) in the 1960s.

• 2002 The Boards of Directors of ICICI and ICICI Bank approved the reverse
merger of ICICI, ICICI Personal Financial Services Limited and ICICI Capital
Services Limited, into ICICI Bank. After receiving all necessary regulatory

10
 approvals, ICICI integrated the group's financing and banking operations, both
wholesale and retail, into a single entity.

Also in 2002, ICICI Bank bought the Shimla and Darjeeling branches that
Standard Chartered Bank had inherited when it acquired Grindlays Bank.

ICICI started its international expansion by opening representative offices in New

York and London.

• 2003 ICICI opened subsidiaries in Canada and the United Kingdom (UK), and in
the UK it established an alliance with Lloyds TSB. It also opened an Offshore
Banking Unit (OBU) in Singapore and representative offices in Dubai and
Shanghai.

• 2004 ICICI opens a rep office in Bangladesh to tap the extensive trade between
that country, India and South Africa.

• 2005 ICICI acquired Investitsionno-Kreditny Bank (IKB), a Russia bank with

about US$4mn in assets, head office in Balabanovo in the Kaluga region, and
with a branch in Moscow. ICICI renamed the bank ICICI Bank Eurasia. Also,
ICICI established a branch in Dubai International Financial Centre and in Hong
Kong.

• 2006 ICICI Bank UK opened a branch in Antwerp, in Belgium. ICICI opened

representative offices in Bangkok, Jakarta, and Kuala Lumpur.

• 2007 ICICI amalgamated Sangli Bank, which was headquartered in Sangli, in

Maharashtra State, and which had 158 branches in Maharashtra and another 31 in

11
 Karnataka State. Sangli Bank had been founded in 1916 and was particularly
strong in rural areas.

ICICI also received permission from the government of Qatar to open a branch in
Doha.

ICICI Bank Eurasia opened a second branch, this time in St. Petersburg.

• 2008 The US Federal Reserve permitted ICICI to convert its representative office
in New York into a branch.

ICICI also established a branch in Frankfurt.

NATURE OF BUSINESS:

ICICI is a financial intermediary which brings together the savers and borrowers in the
economic system. It collects funds from surplus units and lends the same to those units
whose income exceeds its expenditure. In the pursuit of these objectives the ICICI Bank
Limited (ICICI Bank) offers products and services in the areas of commercial banking to
retail and corporate customers (both domestic and international), treasury and investment
banking and other products, such as insurance and asset management. Its commercial
banking operations for retail customers consist of retail lending and deposits, distribution
of third-party investment products and other fee-based products and services, as well as
issuance of unsecured redeemable bonds. ICICI Bank provides a range of commercial
banking and project finance products and services, including loan products, fee and
commission-based products and services, deposits and foreign exchange and derivatives
products to corporations, growth-oriented middle market companies and small and
medium enterprises.

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ONWNERSHIP TYPE

JOINT STOCK COMPANY:

ICICI BANK LIMITED, is the joint stock company which is incorporated under the

Companies Act, 1956 and licensed as a bank under the Banking Regulation Act, 1949

ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the
National Stock Exchange of India Limited and its American Depositary Receipts (ADRs)
are listed on the New York Stock Exchange (NYSE).

VISION

To be the leading provider of financial services in India and a major

global bank.

To be the preferred brand for total financial and banking solutions for both corporates and
individuals

To be the dominant Life, Health and Pensions player built on trust by world-class people
and service.

This we hope to achieve by:

• Understanding the needs of customers and offering them superior products and
service
• Leveraging technology to service customers quickly, efficiently and conveniently
• Developing and implementing superior risk management and investment
strategies to offer sustainable and stable returns to our policyholders

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 • Providing an enabling environment to foster growth and learning for our
employees
• And above all, building transparency in all our dealings

The success of the company will be founded in its unflinching commitment to 5 core
values -- Integrity, Customer First, Boundaryless, Ownership and Passion. Each of the
values describe what the company stands for, the qualities of our people and the way we
work.

We do believe that we are on the threshold of an exciting new opportunity, where we can
play a significant role in redefining and reshaping the sector. Given the quality of our
parentage and the commitment of our team, there are no limits to our growth.

MISSION

We will leverage our people, technology, speed and financial capital to:

• be the banker of first choice for our customers by delivering high quality, world-
class products and services.
• expand the frontiers of our business globally.
• play a proactive role in the full realisation of India’s potential.
• maintain a healthy financial profile and diversify our earnings across businesses
and geographies.
• maintain high standards of governance and ethics.
• contribute positively to the various countries and markets in which we operate.
• create value for our stakeholders
• Provide the social facilities to the society

IN order to build some brand equity by doing social service, ICICI Bank has decided to
undertake a MISSION for reducing low birth weight incidence at the village level.
14
Undertaken by ICICI Bank's Social Initiatives Group, the bank has decided to identify
effective and scalable strategies for delivering the services required to impact female
nutritional status to tackle the incidence of low birth babies.

Appointing several partners to work on this project an ICICI Bank official says, ``This is
going to be a significant MISSION supported by the bank and the aim to understand
whether a suitably trained health worker working with the public health system and the
integrated child development scheme can provide quality services to impact low birth
incidence at the village level.''

The MISSION is based in Ranchi district in Jharkhand and is being implemented through
a partnership between the Department of Health, Government of Jharkhand, Krishi Gram
Vokas Kendra(KGVK) and Care, both of whom are NGOs based in Jharkhand and the
Child in Need Institute (CINI), an NGO based in West Bengal.

Adds the ICICI Bank official, ``ICICI Bank needs to participate in the all round
development of the country by focusing on some of its fundamental problems.

It seeks to perform this role primarily as a funding agency, through its Social Initiatives
Group.''

ICICI Bank's Social Initiative Group's (SIG) mission is ``to identify and support
initiatives designed to improve the capacities of the poorest of the poor to participate in
the larger economy.''

The group seeks to achieve its mission by supporting initiatives that are cost-effective,
capable of large-scale replication and have the potential for near and long-term impact.

``ICICI Bank believes in strengthening or supplementing existing systems rather than

investing in parallel structures.

The purpose is also to build long-term relationships with sustainable partners,'', adds the
bank official.

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In the past, ICICI Bank has undertaken projects in the area of elementary education and
micro financial services.

BOARD OF DIRECTORS

Mr. Narendra Murkumbi --------- Director

Mr. Madhabi Puri Buch --------- Executive director

Mr. P M Sinha ---------- Director

Mr. M K Sharma ---------- Director

Mr. Sonjoy Chatterjee ----------- Executive director

Mr. Anupam Puri ----------- Director

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Mr. T S Vijayan ----------- Director

Mr. K V Kamath ----------- Managing Dtr & CEO

Mr. N Vaghul ----------- Chairman

Mr. Marti G Subrahmanyam ----------- Director

Mr. Sridar Iyengar ------------ Director

Mr. Lakshmi N Mittal ------------ Director

Mr. V Prem Watsa ------------ Director

Mr. Chanda D Kochhar ------------ Joint Managing Dtr

Mr. V Vaidyanathan ------------- Executive Director

Mr. Arun Ramanathan ------------- Director

REGISTERED OFFICE

SUBSIDIARIES

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ICICI SECURITIES

ICICI Securities, Ltd. operates as an investment banking company in India. It offers

corporate finance services, including advisory services related to joint ventures, mergers,
acquisitions, divestitures, spin-offs, and leveraged buyouts; equity capital markets
services, such as initial public offerings, rights offerings, convertible offerings, and
private placement and international offerings for unlisted and listed entities; private
equity/venture capital services; and infrastructure advisory services. The company also
provides services related to fixed income and money markets, which include designing
instruments, pricing, structuring, documentation, and placing the issue with institutional
investors; debt trading, including corporate bond trading and derivatives trading; and debt
research services. In addition, ICICI Securities provides research, sale, and trading

18
services related to equities markets. Further, the company deals in securities markets
transactions in the United States, as well as provides research and investment advice to
the U.S. investors. Additionally, it offers corporate advisory services in the United
Kingdom and Singapore.

Today ICICI Securities Ltd is the largest equity house in the country providing end-to-
end solutions (including web-based services) through the largest non-banking distribution
channel so as to fulfill all the diverse needs of retail and corporate customers. ICICI
Securities (I-Sec) has a dominant 74

position in its core segments of its operations - Corporate Finance including Equity
Capital Markets Advisory Services, Institutional Equities, Retail and Financial Product
Distribution.

With a full-service portfolio, a roster of blue-chip clients and performance second to

none, we have a formidable reputation within the industry. Today ICICI Securities is
among the leading Financial Institutions both on the institutional as well as retail side.

Headquartered in Mumbai, I-Sec operates out of several locations in India.

ICICI Securities Inc., the stepdown wholly owned US subsidiary of the company is a
member of the National Association of Securities Dealers, Inc. (NASD). As a result of
this membership, ICICI Securities Inc. can engage in permitted activities in the U.S.
securities markets. These activities include Dealing in Securities and Corporate Advisory
Services in the United States and providing research and investment advice to US
investors.

ICICI Securities Inc. is also registered with the Financial Services Authority, UK (FSA)
and the Monetary Authority of Singapore (MAS). The company is based in Mumbai,
India. ICICI Securities, Ltd. operates as a subsidiary of ICICI Bank Limited.

ICICI PRUDENTIAL LIFE INSURANCE

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ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank - one of
India's foremost financial services companies-and Prudential plc - a leading international
financial services group headquartered in the United Kingdom. Total capital infusion
stands at Rs. 47.80 billion, with ICICI Bank holding a stake of 74% and Prudential plc
holding 26%.

We began our operations in December 2000 after receiving approval from Insurance
Regulatory Development Authority (IRDA). Today, our nation-wide team comprises of
2099 branches (inclusive of 1,116 micro-offices), over 276,000 advisors; and 18
bancassurance partners.

ICICI Prudential is the first life insurer in India to receive a National Insurer Financial
Strength rating of AAA (Ind) from Fitch ratings. For three years in a row, ICICI
Prudential has been voted as India's Most Trusted Private Life Insurer, by The Economic
Times - AC Nielsen ORG Marg survey of 'Most Trusted Brands'. As we grow our
distribution, product range and customer base, we continue to tirelessly uphold our
commitment to deliver world-class financial solutions to customers all over India.

ICICI VENTURE

ICICI Venture is one of the largest and most successful private equity firms in India with
funds under management in excess of USD 2 billion.

ICICI Venture, over the years has built an enviable portfolio of companies across sectors
including pharmaceuticals, Information Technology, media, manufacturing, logistics,
textiles, real estate etc thereby building sustainable value.

It has several “firsts” to its credit in the Indian Private Equity industry. Amongst them are
India’s first leveraged buyout (Infomedia), the first real estate investment (Cyber
Gateway), the first mezzanine financing for a acquisition (Arch Pharmalabs) and the first
‘royalty-based’ structured deal in Pharma Research & Development (Dr Reddy’s).

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ICICI Venture is a subsidiary of ICICI Bank, the largest private sector financial services
group in India.

ICICI LOMBARD

ICICI Lombard is a leading insurance company that is a joint undertaking between two
major organizations - ICICI Bank Limited and Fairfax Financial Holdings Limited, a
Canada based company. They have a share amount of 74:26. ICICI Lombard has
received approvals from various pioneer organizations of finance world.

This ISO 9001: 2000 certified company is the first general insurance company in India.
ICICI Lombard General Insurance Company Limited offers the best insurance coverage
and provides extensive customer care services. With its registered office at Mumbai,
ICICI Lombard is spread all over the country. This insurance company has its office at 65
different locations of India.

ICICI Lombard is the leading private general insurance company in India. It is known for
its simple and quick documentation. Its claim to fame is its extremely fast mode of
settlement. Online policies are offered almost instantly. The product line of ICICI
Lombard General Insurance Company Limited is extensive and covers almost all the
fields.

The security system of the data transfer is made tight by 128-bit encryption. It is the first
company to have online interface for providing digitally signed documents.

This Insurance Company has been honored with numerous prestigious awards. It received
the following awards:

• Economic Times Avaya Global Connect Customer Responsiveness Award 2006

• Best Housing Insurance in the Smart Living Awards by 360 degrees, a Times of
India Group subsidiary, in Nov 2006

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 • Gold Shield for "Excellence in Financial Reporting" by the ICAI (Institute of
Chartered Accountants of India), 2006
• General Insurance Company of the Year at the 10th Asia Insurance Industry
Awards

ICICI Lombard offers a range of products and services, which include:

• Health Insurance
• Home Insurance
• Motor Insurance
• Overseas Travel insurance
• Student Medical Insurance
• Domestic Travel Insurance
• Fire Insurance
• Marine Insurance
• Industrial Insurance
• Corporate Insurance
• Liability Insurance
• Credit Insurance
• Shop Insurance

COMPETITORS

Top ICICI Bank Competitors are:

• STATE BANK OF INDIA

• PUNJAB NATIONAL BANK

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 • CANARA BANK

STATE BANK OF INDIA

State Bank of India is the nation's largest and oldest bank. Tracing its roots back some
200 years to the British East India Company (and initially established as the Bank of
Calcutta in 1806), the bank operates more than 15,000 branches within India, where it
also owns majority stakes in six associate banks. State Bank of India (SBI) has more than
80 offices in nearly 35 other countries, including multiple locations in the US, Canada,
and Nigeria. The bank has other units devoted to capital markets, fund management,
factoring and commercial services, credit cards, and brokerage services. The Reserve
Bank of India owns about 60% of State Bank of India.

PUNJAB NATIONAL BANK

Punjab National Bank (PNB) is one of India's largest nationalized banks, with some
4,500 locations. The financial institution offers services in personal and corporate
banking, including industrial, agricultural, and export finance, as well as international
banking. Its personal lending services include loans for housing, autos, and education.
PNB's diverse client list includes Indian conglomerates, small and mid-sized businesses,
non-resident Indians, and multinational companies. The bank was established in Lahore
in 1895 -- before the country was partitioned into India and Pakistan in 1947.

23
CANARA BANK

Canara Bank has a can-do attitude about banking in India. One of India's largest banks,
Canara Bank (also known as CanBank) has a network of more than 2,500 branches
throughout India and branches in Hong Kong and London. All of Canara Bank's branches
-- including those located in rural areas -- are computerized, in a country where it is not a
given that banks can make such a claim. (The bank considers 30% of its branches to be
located in rural areas.) The modernization of all branches allows the bank to offer its
customers networked ATMs, telebanking, internet banking, and debit card services. Other
services include asset management and factoring. The financial institution is 73% owned
by India's government.

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MARKET SHARE

Advances Market share

FY04 (Rs bn)

SBI 1,955 22.7%

ICICI Bank 631 7.3%

Canara Bank 476 5.5%

PNB 472 5.5%

Bank of India 458 5.3%

Bank of Baroda 356 4.1%

HDFC Bank 177 2.1%

Standard Chartered 162 1.9%

Total 4,687 54.4%

The fact that the top 8 banks account for barely 54 per cent of the market share suggests
that several smaller players occupy the remaining 46 per cent.

25
ICICI Bank’s global network, today, spans 18
countries.

26
Chapter 2- Conceptual discussion

Finance is the science of funds management. The general areas of finance are business
finance, personal 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 facet 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

Financial analysis (also referred to as financial statement analysis or accounting

analysis) refers to an assessment of the viability, stability and profitability of a business,
sub-business or project.

It is performed by professionals who prepare reports using ratios that make use of
information taken from financial statements and other reports. These reports are usually
presented to top management as one of their bases in making business decisions. Based
on these reports, management may:

• Continue or discontinue its main operation or part of its business;

• Make or purchase certain materials in the manufacture of its product;

27
 • Acquire or rent/lease certain machineries and equipment in the production of its
goods;
• Issue stocks or negotiate for a bank loan to increase its working capital;
• Make decisions regarding investing or lending capital;
• Other decisions that allow management to make an informed selection on various
alternatives in the conduct of its business.

Goals

Financial analysts often assess the firm's:

1. Profitability - its ability to earn income and sustain growth in both short-term and
long-term. A company's degree of profitability is usually based on the income statement,
which reports on the company's results of operations;

2. Solvency - its ability to pay its obligation to creditors and other third parties in the
long-term;
3. Liquidity - its ability to maintain positive cash flow, while satisfying immediate
obligations;

Both 2 and 3 are based on the company's balance sheet, which indicates the financial
condition of a business as of a given point in time.

4. Stability- the firm's ability to remain in business in the long run, without having to
sustain significant losses in the conduct of its business. Assessing a company's stability
requires the use of both the income statement and the balance sheet, as well as other
financial and non-financial indicators.

Methods

Financial analysts often compare financial ratios (of solvency, profitability, growth, etc.):

28
 • Past Performance - Across historical time periods for the same firm (the last 5
years for example),
• Future Performance - Using historical figures and certain mathematical and
statistical techniques, including present and future values, This extrapolation
method is the main source of errors in financial analysis as past statistics can be
poor predictors of future prospects.
• Comparative Performance - Comparison between similar firms.

These ratios are calculated by dividing a (group of) account balance(s), taken from the
balance sheet and / or the income statement, by another, for example :

Net income / equity = return on equity (ROE)

Net income / total assets = return on assets (ROA)

Stock price / earnings per share = P/E ratio

Comparing financial ratios is merely one way of conducting financial analysis. Financial
ratios face several theoretical challenges:

• They say little about the firm's prospects in an absolute sense. Their insights about
relative performance require a reference point from other time periods or similar
firms.
• One ratio holds little meaning. As indicators, ratios can be logically interpreted in
at least two ways. One can partially overcome this problem by combining several
related ratios to paint a more comprehensive picture of the firm's performance.
• Seasonal factors may prevent year-end values from being representative. A ratio's
values may be distorted as account balances change from the beginning to the end
of an accounting period. Use average values for such accounts whenever possible.
• Financial ratios are no more objective than the accounting methods employed.
Changes in accounting policies or choices can yield drastically different ratio
values.

29
 • They fail to account for exogenous factors like investor behavior that are not
based upon economic fundamentals of the firm or the general economy
(fundamental analysis).

Financial analysts can also use percentage analysis which involves reducing a series of
figures as a percentage of some base amount. For example, a group of items can be
expressed as a percentage of net income. When proportionate changes in the same figure
over a given time period expressed as a percentage is known as horizontal analysis.
Vertical or common-size analysis, reduces all items on a statement to a “common size” as
a percentage of some base value which assists in comparability with other companies of
different sizes .

Another method is comparative analysis. This provides a better way to determine trends.
Comparative analysis presents the same information for two or more time periods and is
presented side-by-side to allow for easy analysis.

30
Chapter 3- Research and Methodology

Methodology

To know which method is used for, completing the project firstly we have to know
basically what primary data and secondary data are.

Primary Data
Information collected for the specific purpose at hand or specifically for the currently
undertaken.

Secondary Data
Information that already exists somewhere, have been collected for another purpose.

I used secondary data for this project. I refer some books and also some websites for the
project. These books and websites are mentioned in the bibliography.

Limitations of the study

Although sincere efforts have been done to collect authentic and relevant

Information ,the study may have the following limitations.

• Limited scope: scope of the study is limited because of limited time. So;

results of the study may not be generalized as whole.

• Results may be inaccurate: This study is based on the assumption that

perceptions are true and factual althoughat times that maynot be the case.

• Existence of biases: though every care has been undertaken to eliminate

such biases , but considering the human factor possibility Of small bias

having come up cannot be ruled out altogether .

31
 • Consumer behavior: Consumer behavior is dynamic in nature and thus

Over the time, finding of today may be invalid tomorrow.

• Sample size: The Sample size taken is small and may not be sufficient

to predict the 100% accuracy and hence finding may not be generalized

STUDY OF CASH FLOW STATEMENT

MEANING: Cash flow statement or statement of cash flows is a

financial statement that shows a company's incoming and outgoing money (sources and
uses of cash) during a time period (often monthly or quarterly). The statement shows how
changes in balance sheet and income accounts affected cash and cash equivalents, and
breaks the analysis down according to

operating, investing, and financing activities. As an analytical tool the

statement of cash flows is useful in determining the short-term viability of a
company, particularly its ability to pay bills.

PURPOSE: The cash flow statement reflects a firms liquidity or

solvency. The main purpose to make cash flow statement are as follows:
1.provide information on a firm's liquidity and solvency and its ability to
change cash flows in future circumstances
2. provide additional information for evaluating changes in assets, liabilities
and equity
3.improve the comparability of different firms' operating performance by
eliminating the effects of different accounting methods
4. indicate the amount, timing and probability of future cash flows

32
ACTIVITIES INVOLVED IN CASH FLOW:

The cash flow statement is partitioned into cash flow resulting from operating activities,
cash flow resulting from investing activities, and cash flow resulting from financing
activities.
Operating activities: Operating activities include the production, sales and

delivery of the company's product as well as collecting payment from its customers. This
could include purchasing raw materials, building inventory, advertising.

Investing activities: Investing activities focus on the purchase of the long-term

assets a company needs in order to make and sell its products, and the selling of
any long-term assets.
Financing activities: Financing activities include the inflow of cash from
investors such as banksand shareholders, as well as the outflow of cash

to shareholders asdividends as the company generates income. Other activities which

impact the long-term liabilities and equity of the company are also listed in the financing
activities section of the cash flow statement.

Analysis of cash flow statement is necessary for every organisation to depict its
cash inflow and outflow.

FINANCIAL STATEMENT ANALYSIS

MEANING: Financial statement analysis is the process of examining

relationships among financial statement elements and making comparisons with relevant
information. It is a valuable tool used by investors and creditors, financial analysts, and
others in their decision-making processes related to stocks, bonds, and other financial
instruments. With a great understanding of the balance sheet & p&l account and how it is
constructed, we can look at some techniques to analyze the information contained within
the balance sheet & p&l account.

33
PURPOSE:The main purpose of analyzing the financial statement are
the following:-
 To assess past performance and current financial position.
 To make predictions about the future performance of a company.
4.4.3 TOOLS FOR ANALYSING

1.PERCENTAGE CALCULATION
There are two popular methods by which we can analyze the financial
statement by calculating percentage as taking a common base.
 Horizontal Analysis

When an analyst compares financial information for two or more years for a single
company, the process is referred to as horizontal analysis, since the analyst is reading
across the page to compare any single line item, such as sales revenues. In addition to
comparing dollar amounts, the analyst computes percentage changes from year to year
for all financial statement balances, such as cash and inventory. Alternatively, in
comparing financial statements for a number of years, the analyst may prefer to use a
variation of horizontal analysis called trend analysis. Trend analysis involves calculating
each year's financial statement balances as percentages of the first year, also known as the
base year. When expressed as percentages, the base year figures are always 100 percent,
and percentage changes from the base year can be determined.

If we want to calculate % change in sales then we apply the following

formula:
Percentage=change in sales /Base Year Sales*100
 Vertical Analysis

When using vertical analysis, the analyst calculates each item on a single financial
statement as a percentage of a total. The term vertical analysis applies because each year's
figures are listed vertically on a financial statement. The total used by the analyst on the
income statement is net sales revenue, while on the balance sheet it is total assets. This

34
approach to financial statement analysis, also known as component percentages, produces
common-size financial statements. Common-size balance

sheets and income statements can be more easily compared, whether

across the years for a single company or across different companies.
If we want to calculate % change of current assets then we apply the
following formula:
Percentage: current assets/total assets*100

2.RATIO ANALYSIS

Financial ratio analysis uses formulas to gain insight into the company and its operations.
For the balance sheet, using financial ratios (like the debt-to-equity ratio) can show you a
better idea of the company’s financial condition along with its operational efficiency. It is
important to note that some ratios will need information from more than one financial
statement, such as from the balance sheet and the income statement. Ratio analysis
facilitates inter-firm and intra-firm comparison.

Ratios are often classified using the following terms:

 LIQUIDITY RATIO
Liquidity ratios are measures of the short-term ability of the company to
pay its debts when they come due and to meet unexpected needs for cash.
• Current Ratio: The current ratio is a rough indication of a firm ability to
service its current obligations. Generally, the higher the current ratio, the

greater the cushion between current obligations and a firm ability to pay them. The
stronger ratio reflects a numerical superiority of current assets over current liabilities
Current ratio is calculated as follows:

Current ratio= Current Assets/Current Liabilities

• Quick Ratio: It is also known as the “acid test” ratio, this is a refinement

35
of the current ratio and is a more conservative measure of liquidity. The quick ratio
expresses the degree to which a company’s current liabilities are recovered by the most
liquid current assets. quick ratio is calculated as follows:

Quick ratio= (cash + marketable securities +

Receivables)/current
liabilities

 SOLVENCY RATIO

Solvency ratios indicate the ability of the company to meet its long-term obligations on a
continuing basis and thus to survive over a long period of time.

•
Debt/Worth Ratio: This ratio expresses the relationship between capital

contributed by creditors and that contributed by owners. It expresses the degree of

protection provided by the owners for the creditors. The higher the ratio, the greater the
risk being assumed by creditors. The lower the ratio, the greater the long-term financial
safety. A firm with a low debt/worth ratio usually has a greater flexibility to borrow in
the future. A more highly leveraged company has a more limited debt capacity.

Debt/worth ratio=Total Liabilities / Tangible Net Worth

 PROFITABILITY RATIO
Profitability ratios are gauges of the company's operating success for a
given period of time

• Return On Assets: Return on assets is a measure of how effectively the

firm’s assets are being used to generate profit. It is calculated as
follows:Return On Assets= Net Income/Total Assets
• Return On Equity: Return on equity is the bottom line measure for
the shareholders, measuring for the profits earned for each rupee
invested in business. It is calculated as follows:
Return on Equity= Net income/shareholder’s equity

36
 Fixed/Worth Ratio: This ratio measures the extent to which owner’s

equity (capital) has been invested in plant and equipment (fixed assets). A lower ratio
indicates a proportionately smaller investment in fixed assets in relation to net worth and
a better cushion for creditors in case of liquidation. Similarly, a higher ratio would
indicate the opposite situation. The presence of substantial leased fixed assets (not shown
on the balance-sheet ) may deceptively lower this ratio.

Fixed Worth Ratio=Net Fixed Assets/ Tangible Net Worth

37
 Weight in Weight in Promoter
Company Variance
Sensex Nifty holdings (%)

Infosys
8.66 3.79 4.87 16.49
Technologies

Reliance
17.41 12.95 4.46 49.03
Industries

ICICI Bank 5.74 2.13 3.61 0

Larsen & Toubro 5.61 2.31 3.3 0

HDFC 5.41 2.37 3.04 0

ITC 6.47 3.44 3.03 0

HDFC Bank 5.08 2.22 2.86 19.38

Wipro 1.06 1.97 -0.91 79.32

DLF 0.75 1.85 -1.1 88.55

ONGC 4.63 8.6 -3.97 74.14

2.98 7.4 -4.42 89.5

NTPC

Chapter 4
38
Finding and Analysis

MANAGEMENT DISCUSSION & ANALYSIS

Summary
•

Profit before provisions and tax increased by 35.5% to Rs. 79.61 billion in fiscal 2008
from Rs. 58.74 billion in fiscal 2007 primarily due to an increase in net interest income
by 29.6% to Rs. 73.04 billion in fiscal 2008 from Rs. 56.37 billion in fiscal 2007 and an
increase in non-interest income by 27.2% to Rs.88.11 billion in fiscal 2008 from Rs.
69.28 billion in fiscal 2007, offset, in part, by an increase in non-interest expenses by
21.9% to Rs. 81.54 billion in fiscal 2008 from Rs. 66.91 billion in fiscal 2007. Provisions
and contingencies (excluding provision for tax) increased by 30.5% during fiscal 2008
primarily due to a higher level of specific provisioning on non- performing loans, offset,
in part by a reduction in general provision on loans. Profit before tax increased by 38.6%
to Rs. 50.56 billion in fiscal 2008 from Rs. 36.48 billion in fiscal 2007. Profit after tax
increased by 33.7% to Rs. 41.58 billion in fiscal 2008 from Rs. 31.10 billion in fiscal
2007.

•
Net interest income increased by 29.6% to Rs. 73.04 billion in fiscal 2008 from Rs. 56.37
billion in fiscal 2007, reflecting an increase of 27.6% or Rs. 711.07 billion in the average
volume of interest-earning assets and an increase in net interest margin to 2.22% in
fiscal 2008 compared to 2.19% in

fiscal 2007.
•

Non-interest income increased by 27.2% to Rs. 88.11 billion in fiscal 2008 from
Rs. 69.28 billion in fiscal 2007 primarily due to a 32.2% increase in fee income and a
14.0% increase in treasury and other non-interest income.
•

39
 Non-interest expenses increased by 21.9% to Rs. 81.54 billion in fiscal 2008 from
Rs. 66.91 billion in fiscal 2007 primarily due to a 28.6% increase in employee
expenses and a 31.6% increase in other administrative expenses.
•

Provisions and contingencies (excluding provision for tax) increased to Rs. 29.05
billion in fiscal 2008 from Rs. 22.26 billion in fiscal 2007 primarily due to higher
level of specific provisioning on retail loans due to change in the portfolio mix
towards non-collateralised loans and seasoning of the loan portfolio, offset in part by
a reduction in general provision on loans due to lower growth in the loan portfolio
relative to fiscal 2007.
•

Total assets increased by 16.0% to Rs. 3,997.95 billion at year-end fiscal 2008
from Rs. 3,446.58 billion at year-end fiscal 2007 primarily due to an increase in
advances by 15.2% and an increase in investments by 22.1%.
•

During the year, we made a follow-on public offering of equity shares in India and
an issuance of American Depository Shares (ADSs) aggregating to Rs. 199.67 billion.
•

The Sangli Bank Limited (Sangli Bank) was amalgamated with ICICI Bank with
effect from April 19, 2007 in terms of the scheme of amalgamation approved by
Reserve Bank of India (RBI) vide its order DBOD No. PSBD 10268/16.01.128/2006-
07 dated April 18, 2007 under section 44A (4) of the Banking Regulation Act, 1949.
Sangli Bank was a banking company incorporated under the Companies Act, 1956
and licensed by RBI under the Banking Regulation Act, 1949. The consideration for
the

40
amalgamation was 100 equity shares of ICICI Bank of face value Rs. 10 each fully
paid-up for every 925 equity shares of face value of Rs. 10 each of Sangli Bank.
Accordingly, on May 28, 2007, ICICI Bank allotted 3,455,008 equity shares of Rs. 10
each, credited as fully paid up, to the shareholders of Sangli Bank. The excess of the
paid-up value of the shares issued over the fair value of the net assets acquired
(including reserves) of Rs. 3.26 billion and amalgamation expenses of Rs. 0.22 billion
have been deducted from the securities premium account.

41
CAPITAL STRUCTURE

Paid UpPaid Up
From To Class OfAuthorizedIssued Paid Up
Shares Face
Year Year Share Capital Capital Capital
(Nos) Value

Equity
2007 2008 1,275.00 1,112.69 1112687495 10 1,112.69
Share

Equity
2006 2007 1,000.00 899.27 899266672 10 899.27
Share

Equity
2005 2006 1,000.00 153.84 153844503 10 153.84
Share

Equity
2005 2006 1,000.00 889.82 889823901 10 889.82
Share

Equity
2004 2005 1,550.00 616.39 350000000 10 350.00
Share

Equity
2004 2005 1,550.00 616.39 616391905 10 616.39
Share

Equity
2003 2004 1,550.00 613.02 613021301 10 613.02
Share

Equity
2001 2002 300.00 220.36 220358680 10 220.36
Share

Equity
2000 2001 300.00 196.82 196818880 10 196.82
Share

Equity
1999 2000 300.00 196.82 196818880 10 196.82
Share

1997 1999 Equity 300.00 165.00 165000700 10 165.00

42
 Share

Equity
1995 1997 300.00 150.00 150000700 10 150.00
Share

Equity
1994 1995 300.00 150.00 150000000 7 105.00
Share

Equity
1994 1995 300.00 150.00 700 10 -
Share

43
BALANCE SHEET(2006-2008)

Balance Sheet (Rs. in millions)

March- March- March-

Liabilities 2008 2007 2006
(12 Months) (12 Months) (12 Months)

Share Capital 14,626.79 12,493.44 12,398.35

Reserves & Surplus 453,575.31 234,139.21 213,161.57

Net Worth (1) 468,202.10 246,632.64 225,559.92

Secured Loans (2) 656,484.34 512,560.26 385,219.14

Unsecured Loans (3) 2,444,310.50 2,305,101.86 1,650,831.71

Total
3,568,996.94 3,064,294.77 2,261,610.77
Liabilities(1+2+3)

March- March- March-

Assets 2008 2007 2006
(12 Months) (12 Months) (12 Months)

Fixed Assets

Gross Block 70,360.04 62,985.63 59,685.65

(-) Acc. Depreciation 29,271.06 23,751.40 19,878.54

Net Block (A) 41,088.98 39,234.23 39,807.12

Capital Work in
0.00 1,896.63 1,479.42
Prgs. (B)

Investments (C) 1,114,543.42 912,578.42 715,473.94

Current Assets, Loans & Advs.

44
 Inventories 0.00 0.00 0.00

Sundry Debtors 0.00 0.00 0.00

Cash And Bank 380,411.29 371,213.25 170,402.25

Loans And Advances 2,461,907.08 2,121,658.60 1,586,726.82

(i) 2,842,318.37 2,492,871.85 1,757,129.06

Current Liab. & Provs.

Current Liabilities 400,673.68 358,817.11 238,016.23

Provisions 28,280.15 23,469.25 14,262.55

(ii) 428,953.83 382,286.36 252,278.78

Net Curr. Assets (i -

2,413,364.55 2,110,585.49 1,504,850.28
ii) (D)

Misc. Expenses (E) 0.00 0.00 0.00

Total Assets
3,568,996.94 3,064,294.77 2,261,610.77
(A+B+C+D+E)

Quarterly Results (Rs. in Millions)

Quarterly Results (Rs. in Millions)

December2008 September2008 December2007

[3 Quarter] [2 Quarter] [3 Quarter]

Sales Turnover 78360.80 78349.80 79117.70

45
Other Income 25145.40 18773.30 24265.90

Total Income 103506.20 97123.10 103383.60

Total Expenditure 17341.10 17400.40 21276.10

Operating Profit 86165.10 79722.70 82107.50

Interest 58456.70 56873.60 59520.80

Gross Profit 27708.40 22849.10 22586.70

Depreciation 0.00 0.00 0.00

Tax 4909.90 3471.70 2681.20

ReportedPAT 12721.50 10142.10 12302.10

Equity Capital 11132.90 11132.90 11122.70

Extra Ordinary Items 0.00 0.00 0.00

Adjusted Profit After Extra Ordinary Item 12721.50 10142.10 12302.10

Book Value 417.43 417.43 0.00

EPS 11.43 9.11 11.06

Dividend 0.00 0.00 0.00

Quarterly Results (in %)

Quarterly Results (in %)

% Change over % Change over

September, 2008 December, 2007

Sales Turnover 0.01 -0.96

Other Income 33.94 3.62

Total Income 6.57 0.12

46
Total Expenditure -0.34 -18.49

Operating Profit 8.08 4.94

Interest 2.78 -1.79

Gross Profit 21.27 22.68

Depreciation 0.00 0.00

Tax 41.43 83.12

ReportedPAT 25.43 3.41

Equity Capital 0.00 0.09

Extra Ordinary Items 0.00 0.00

Adjusted Profit After Extra Ordinary Item 25.43 3.41

Book Value 0.00 0.00

EPS 25.47 3.35

Dividend 0.00 0.00

Profit and loss account

47
RATIO ANALYSIS

Ratios
Profitability Ratios % March- 2008March- 2007March- 2006
(12 months) (12 months) (12 months)
Operating Profit Margin 14.45 13.33 18.66
Gross Profit Margin 12.99 11.41 15.10

48
Net Profit Margin 10.51 10.81 14.12
Turnover Ratios
Inventory Turnover Ratio 0.00 0.00 0.00
Debtor Turnover Ratio 0.00 0.00 0.00
Fixed Asset Turnover Ratio 5.61 4.52 2.93
Solvency Ratio
Current Ratio 0 .73 0 .62 0 .62
Debt Equity Ratio 5.22 9.35 7.32
Interest Covering Ratio 0 .24 0 .23 0 .34
Performance Ratio %
Return On Investment 1.95 1.48 1.74
Return On Networth 8.94 12.79 11.43
Dividend Yield 33.12 33.89 34.08

The above table shows that:- both current ratio and quick ratio is liquidity ratio. The ideal
ratio for current ratio is 2:1 and ideal ratio for quick ratio is 1:1. In these table current
ratio of both year is higher than the ideal ratio which shows that there is enough current
assets which make the bank able to pay its current liabilities on time but quick ratio is
lower than the ideal ratio which shows that bank have not enough liquid assets to pay
their current liabilities. Therefore bank should keep some assets in the form of liquid
assets such as cash, marketable securities etc.

Return on equity, return on assets and operating profit to working funds are profitability
ratio. The higher the profitability ratio of any organization is show the better position of
that organization. The profitability ratio of ICICI bank is very low. It is deceasing from
the previous year.

Fixed/worth ratio measures the extent to which owner’s equity has been invested in plant
and equipment . A lower ratio indicates a proportionately smaller investment in fixed

49
assets. This ratio shows that bank has invested more in current assets than the fixed
assets. It could be a good position in case of liquidation.

SHARE HOLDING PATTERN

50
Chapter 5
Holder's Name No of Shares % Share Holding

Directors 914352 0.08%

OtherCompanies 52612667 4.73%

ForeignNRI 5389371 0.48%

ForeignOcb 50060 0.00%

ForeignOthers 10529566 0.95%

ForeignInstitutions 409979962 36.83%

ForeignIndustries 3790 0.00%

Other
304852852 27.38%
S

NBanksMutualFunds 88067601 7.91%

GeneralPublic 82265782 7.39%

14.25%
FinancialInstitutions 158584639

51
CONCLUSION AND SUGGESION

The balance-sheet along with the income statement is an important tools for investors
and many other parties who are interested in it to gain insight into a company and its
operation. The balance sheet is a snapshot at a single point of time of the company’s
accounts- covering its assets, liabilities and shareholder’s equity. The purpose of the
balance-sheet is to give users an idea of the company’s financial position along with
displaying what the company owns and owes. It is important that all investors know
how to use, analyze and read balance-sheet. P & L account tells the net profit and net
loss of a company and its appropriation.

In the case of ICICI Bank, during fiscal 2008, the bank continued to grow and
diversify its assets base and revenue streams. Bank maintained its leadership in all
main areas such as retail credit, wholesale business, international operation,
insurance, mutual fund, rural banking etc. Continuous increase in the number of
branches, ATM and electronic channels shows the growth take place in bank.

Trend analysis of profit & loss account and balance sheet shows the % change in
items of p & l a/c and balance sheet i.e. % change in 2006 from 2005 and % change in
2007 from 2006. It shows that all items are increased mostly but increase in this year
is less than as compared to increase in previous year. In p & l a/c, all items like
interest income, non-interest income, interest expenses, operating expenses, operating
profit, profit before tax and after tax is increased but in mostly cases it is less than
from previous year but in some items like interest income, interest expenses,
provision % increase is more. Some items like tax, depreciation, lease income is
decreased. Similarly in balance sheet all items like advances, cash, liabilities, deposits
is increased except borrowings which is decreased. % increase in some item is more
than previous year and in some items it is less.

52
Ratio analysis of financial statement shows that bank’s current ratio is better than the
quick ratio and fixed/worth ratio. It means bank has invested more in current assets
than the fixed assets and liquid assets. Bank have given more advances to its customer
and they have less cash in their hand. Profitability ratio of bank is lower than as
compared to previous year. Return on equity is better than the return on assets.

The cash flow statement shows that net increase in cash generated from operating and
financing activities is much more than the previous year but cash generated from
investing activities is negative in both year. There is increase of 159,708,479
thousand RS. in Increase in cash & cash equivalents from previous year. Therefore
analysis of cash flow statement shows that cash inflow is more than the cash outflow
in ICICI Bank.

Thus, the ratio analysis and trend analysis and analysis of cash flow statement shows
that ICICI Bank’s financial position is good. Bank’s profitability is increasing but not
at high rate. Bank’s liquidity position is fair but not good because bank invest more in
current assets than the liquid assets. As we all know that ICICI Bank is on the first
position among all the private sector bank of India in all areas but it should pay
attention on its profitability and liquidity. Bank’s position is stable.

SUGGESTIONS
Some of the recommendation and suggestion are as follows:
o The attention is required on the areas of growth, profitability ,service
level and building talent.
o To increase the profit of bank, bank should decrease their operating
expenses and increase their income.
o To increase its liquidity, bank should keep some more cash in its hand
instead of giving more and more advances.
o Introduce quality consciousness and standardization of the work system
and procedures.
53
o Make manager competitive and introduce spirit of market-orientation and
culture of working for customer satisfaction.
o There is need to build the knowledge and skill base among the employees
in the context of technology.
o Performance measure should not only cover financial aspects i.e.
quantitatively aspects but also the qualitative aspects.

o It is high time to focus on work than the work-achieved.

o Bank should increase its retail portfolio.

o Bank should manage its all risk such as credit, market and operational

risk properly and should be managed by a person who are highly skilled
and qualified.
o Bank should pay attention on its subsidiary “ICICI Prudential Life
Insurance Company Limited”

54