A

DESSERTATION REPORT
ON
“Financial Analysis of
ICICI Bank”
FARIDABAD

SUBMITTED TO:
LINGAYA’S University, Lingaya’s in the Partial Fulfillment for
the Degree of Master in Business Administration
(Session 20092011)-MBA 6th trimester

Under Supervision of : Submitted by:

Dr.Rajeev Parashar NAME : LALIT YADAV
FATHER’S NAME :
Mr. VISHPAL YADAV
(Faculty) UNIV. ROLL NO:
09MBA36

LINGAYA’S UNIVERSITY
NACHAULI VILLAGE ,FARIDABAD
 DECLARATION
I, Lalit Yadav, hereby declare that this project entitled “Financial Analysis of
ICICI Bank” at ICICI Bank, Lingayas submitted by me for the award of MBA(Final) of
Lingaya’s University, Lingaya’s, is the original work conducted by me and data provided
in the study authentic to the best of my knowledge.

This report is not submitted to any other Institute or University for award or
Degree of MBA.

Lalit yadav
MBA(Final)
 ACKNOWLEDGEMENT

There is always a sense of gratitude which one express for others for their help and

supervision in achieving the goals. I too express by deep gratitude to each and every one

who has been helpful to me in completing the project report successfully.

First of all, I am highly thankful to Mr. Sunil Prasad (Manager), ICICI Bank,

Kurukshetra for allowing me to pursue my project report on “Financial Analysis of

ICICI Bank".

I also want to convey my sincere sense of gratitude to Dr. Vikas Daryal

(Director, LU) & Ms. Deepika Kohli(H.O.D, MBA Deptt.) for their inspiration &

helpful attitude. I would also like to grab the opportunity to thank Mr. Dr.rajeev

parashar (Faculty, MBA Deptt.) for his helping hand in the completion of the project

report. .

I feel self-short of words to thanks my parents and friends who had directly or

indirectly help me in the completion of the project. I would also like to thank Almighty

God for blessing showered on me during the completion of project report.

Lalit Yadav
 PREFACE

Research word in management is extremely important as it gives a close and depth view

of real life business issues. For the student pursuing any professional course like business

studies who is striving to perform outstanding it is paramount importance that apart from

theoretical knowledge one must also gain practical knowledge.

The main objective of project report is familiarization with the necessary

theoretical inputs and to gain sufficient practical exposure to establish a distant linkage

between the conceptual knowledge acquired at the college and practicing those concepts.

The project report is concerned with the “Financial Analysis of ICICI Bank”

provided by ICICI Bank at faridabad. During my tenure of project, I studied the various

developments tools and deeply analyzed the functions.

 EXEXUTIVE SUMMARY

The concept of this project is to check whether ICICI Bank is performing well year after
year or are lacking in performance. The performance is evaluated by having a look on
Financial Analysis. I analyse the companies financial position with the use of different
ratios. In my project I have compare companies 5 year financial statement.

The purpose of this project is to evaluate the performance of ICICI Bank. It primarily
aims at learning the various factors that can help in evaluation process. It also aims at
providing innovative services and by attaining cost efficiency. I have tried to find out
whether customers and ICICI Bank itself are satisfied with the performance of obligation
or not. I have also tried to find out the areas of improvement.

The first part of the report is about the profile of ICICI Bank that is being undertaken for
study. The second part presents an overview of Objective of the Study and Literature
Review. The third part consists of Research Methodology which includes Sampling, Data
Collection, Statistical and Analytical tool and the Limitations of the study. And the last
part covers the interpretation of the findings and Recommendations along with
Bibliography and annexure.
 CONTENTS

 Certificate from the Organization

 Certificate from the Institute Supervisor

 Summary

 Contents

 Introduction
 Profile of the study
 Justification of study
 Organizational Structure

 Objectives of study

 Literature Review

 Research Methodology and Analytical Tools

• Sampling &Sampling Design
• Analytical Tools
 Statistical Tools
• Trend Analysis
• PCA
• Multiple Regression

 Data Collection

 Hypothesis Testing
• Chi-Square Test
• ANNOVA
• T-test

 Limitations of study

 Results & Discussions/ Findings

 Recommendations

 Bibliography

 Annexure
 • Balance Sheet
• Profit &Loss Account

INTRODUCTION OF BANKING

MEANING AND DEFINITION:

Bank is an institution that deals in money and its substitutes and provides crucial

financial services. The principal type of baking in the modern industrial world is

commercial banking & central banking.

Banking Means "Accepting Deposits for the purpose of lending or Investment of

deposits of money from the public, repayable on demand or otherwise and withdraw by

cheque, draft or otherwise."

-Banking Companies (Regulation) Act,1949

The concise oxford dictionary has defined a bank as "Establishment for custody

of money which it pays out on customers order." Infact this is the function which the

bank performed when banking originated.

"Banking in the most general sense, is meant the business of receiving,

conserving & utilizing the funds of community or of any special section of it."

-By H.Wills & J. Bogan

"A banker of bank is a person, a firm, or a company having a place of business

where credits are opened by deposits or collection of money or currency or where money

is advanced and waned.

 -By Findlay Sheras

A Bank :

 Accept deposits of money from public,

 Pays interest on money deposited with it.

 Lends or invests money

 Repays the amount on demand,

 Allow the money deposited to be with drawn by cheque or draft.

ORIGIN OF WORD BANK:

The origin of the word bank is shrouded in mystery. According to one view point

the Italian business house carrying on crude from of banking were called banchi

bancheri" According to another viewpoint banking is derived from German word

"Branck" which mean heap or mound. In England, the issue of paper money by the

government was referred to as a raising a bank.

ORIGIN OF BANKING :

Its origin in the simplest form can be traced to the origin of authentic history.

After recognizing the benefit of money as a medium of exchange, the importance of

banking was developed as it provides the safer place to store the money. This safe place
ultimately evolved in to financial institutions that accepts deposits and make loans i.e.,

modern commercial banks.

 ICICI BANK17 & 24

Overview :

ICICI Bank is India's second-largest bank with total assets of Rs. 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.The Bank has a network of about 1,308 branches 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 customers 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 Unites
States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International
Finance Centre and representative offices in United Arab Emirates, China, South Africa,
Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established
branches in Belgium and Germany.

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).

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

History
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial
institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was
reduced to 46% through a public offering of shares in India in fiscal 1998, an equity
offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition
of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary
market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. The
Industrial Credit and Investment Corporation of India(ICICI) was formed in 1955 at the
initiative of the World Bank, the Government of India and representatives of Indian
industry. The principal objective was to create a development financial institution for
providing medium-term and long-term project financing to Indian businesses. In the
1990s, ICICI transformed its business from a development financial institution offering
only project finance to a diversified financial services group offering a wide variety of
products and services, both directly and through a number of subsidiaries and affiliates
like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or
financial institution from non-Japan Asia to be listed on the NYSE.

After consideration of various corporate structuring alternatives in the context of the

emerging competitive scenario in the Indian banking industry, and the move towards
universal banking, the managements of ICICI and ICICI Bank formed the view that the
merger of ICICI with ICICI Bank would be the optimal strategic alternative for both
entities, and would create the optimal legal structure for the ICICI group's universal
banking strategy. The merger would enhance value for ICICI shareholders through the
merged entity's access to low-cost deposits, greater opportunities for earning fee-based
income and the ability to participate in the payments system and provide transaction-
banking services. The merger would enhance value for ICICI Bank shareholders through
a large capital base and scale of operations, seamless access to ICICI's strong corporate
relationships built up over five decades, entry into new business segments, higher market
share in various business segments, particularly fee-based services, and access to the vast
talent pool of ICICI and its subsidiaries. In October 2001, the Boards of Directors of
ICICI and ICICI Bank approved the merger of ICICI and two of its wholly-owned retail
finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital
Services Limited, with ICICI Bank. The merger was approved by shareholders of ICICI
and ICICI Bank in January 2002, by the High Court of Gujarat at Ahmedabad in March
2002, and by the High Court of Judicature at Mumbai and the Reserve Bank of India in
April 2002. Consequent to the merger, the ICICI group's financing and banking
operations, both wholesale and retail, have been integrated in a single entity.
ICICI to ICICI Bank
1955 :

The Industrial Credit and Investment Corporation of India Limited (ICICI) incorporated
at the initiative of the 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. Mr.A.Ramaswami
Mudaliar elected as the first Chairman of ICICI Limited.

ICICI emerges as the major source of foreign currency loans to Indian industry. Besides
funding from the World Bank and other multi-lateral agencies, ICICI was also among the
first Indian companies to raise funds from international markets.

1956 : ICICI declared its first dividend of 3.5%.

1958 : Mr.G.L.Mehta appointed the second Chairman of ICICI Ltd.

1960 : ICICI building at 163, Backbay Reclamation, inaugurated.

1961 : The first West German loan of DM 5 million from Kredianstalt obtained.

1967 : ICICI made its first debenture issue for Rs.6 crore, which was oversubscribed.

1969 : The first two regional offices in Calcutta and Madras set up.

1972 :

The second entity in India to set up merchant banking services.

Mr. H. T. Parekh appointed the third Chairman of ICICI.

1977 : ICICI sponsored the formation of Housing Development Finance Corporation.

Managed its first equity public issue.

1984 : Mr. S. Nadkarni appointed the sixth Chairman of ICICI.

1985 : Mr. N.Vaghul appointed the seventh Chairman and Managing Director of ICICI.

1986 :

ICICI became the first Indian institution to receive ADB Loans.

ICICI, along with UTI, set up Credit Rating Information Services of India Limited,
India's first professional credit rating agency.
ICICI promotes Shipping Credit and Investment Company of India Limited.

The Corporation made a public issue of Swiss Franc 75 million in Switzerland, the first
public issue by any Indian entity in the Swiss Capital Market.

1987 : ICICI signed a loan agreement for Sterling Pound 10 million with Commonwealth
Development Corporation (CDC), the first loan by CDC for financing projects in India.

1988 : Promoted TDICI - India's first venture capital company.

1993 :

ICICI Securities and Finance Company Limited in joint venture with J. P. Morgan set
up.

ICICI Asset Management Company set up.

1994 : ICICI Bank set up.

1997 :

ICICI Ltd was the first intermediary to move away from single prime rate to three-tier
prime rates structure and introduced yield-curve based pricing.

The name The Industrial Credit and Investment Corporation of India Ltd changed to
ICICI Ltd.

ICICI Ltd announced the takeover of ITC Classic Finance.

1998 :

Introduced the new logo symbolizing a common corporate identity for the ICICI Group.

ICICI announced takeover of Anagram Finance.

1999 :

ICICI launched retail finance - car loans, house loans and loans for consumer durables.

ICICI becomes the first Indian Company to list on the NYSE through an issue of
American Depositary Shares.

2000 :

ICICI Bank became the first commercial bank from India to list its stock on NYSE.
ICICI Bank announces merger with Bank of Madura.

2001 :

The Boards of ICICI Ltd and ICICI Bank approved the merger of ICICI with ICICI Bank.

2002 :

ICICI Ltd merged with ICICI Bank Ltd to create India’s secondlargest bank in terms of
assets.

ICICI assigned higher than sovereign rating by Moody’s.

ICICI Bank launched India’s first CDO (Collateralised Debt Obligation) Fund named
Indian Corporate Collateralised Debt Obligation Fund (ICCDO Fund).

ICICI Bank launched Private Banking.

ICICI Bank Home Shoppe, the first-ever permanent aggregation and display of housing
projects in the county, launched in Pune,

ATM-on-Wheels, India’s first mobile ATM, launched in Mumbai.

2003 :

The first Integrated Currency Management Centre launched in Pune.

ICICI Bank’s representative office inaugurated in Dubai.

Representative office set up in China. : ICICI Bank’s UK subsidiary launched.

India’s first ever "Visa Mini Credit Card", a 43% smaller credit card in dimensions
launched.

ICICI Bank subsidiary set up in Canada.

ICICI Bank became the market leader in retail credit in India.

2004 :

Mobile banking service in India launched in association with Reliance Infocomm.

Kisan Loan Card and innovative, low-cost ATMs in rural India launched.
ICICI Bank and CNBC TV 18 announced India’s first ever awards recognizing the
achievements of SMEs, a pioneering initiative to encourage the contribution of Small and
Medium Enterprises to the growth of Indian economy.

ICICI Bank opened its 500th branch in India.

ICICI Bank introduced 8-8 Banking wherein all the branches of the Bank would remain
open from 8a.m. to 8 p.m. from Monday to Saturday.

2005 :

First rural branch and ATM launched in Uttar Pradesh at Delpandarwa, Hardoi.

"Free for Life" credit cards launched wherein annual fees of all ICICI Bank Credit Cards
were waived off.

ICICI Bank became the largest bank in India in terms of its market capitalization.

2006 :

ICICI Bank subsidiary set up in Russia.

Introduced a new product - ‘NRI smart save Deposits’ – a unique fixed deposit scheme
for nonresident Indians.

Representative offices opened in Thailand, Indonesia and Malaysia

2007 :

Sangli Bank amalgamated with ICICI Bank.

ICICI Bank raised Rs 20,000 crore (approx $5 billion) from both domestic and
international markets through a follow-on public offer.

Launched India’s first ever jewellery card in association with jewelry major Gitanjali
Group.

ICICI Bank became the first bank in India to launch a premium credit card -- The Visa
Signature Credit Card.

ICICI Bank became the first private bank in India to offer both floating and fixed rate on
car loans, commercial vehicles loans, construction equipment loans and professional
equipment loans.

In a first of its kind, nation wide initiative to attract bright graduate students to pursue a
career in banking, ICICI Bank launched the "Probationary Officer Programme".
Launched Bank@home services for all savings and current a/c customers residing in
India

2008 :

ICICI Bank enters US, launches its first branch in New York.

ICICI Bank enters Germany, opens its first branch in Frankfurt

ICICI Bank launched iMobile, a breakthrough innovation in banking where practically all
internet banking transactions can now be simply done on mobile phones.

Functions of ICICI :
The corporation has been established for the purpose of assisting industries in the
private sector by undertaking the following functions :-
i) Assisting in the creation, expansion and modernization of such enterprises.
ii) Encouraging and promoting the participation of privete capital, both internal and
external.
iii) Encouraging and promoting private ownership.
iv) Expansion of investment market.
v) Providing finance in the form of long or medium-term loans.
vi) Underwriting issue of shares and debentures.
vii) Making funds available for re-investment.

Towards a Better Life

The ICICI Group was formed with the objective of supporting India’s growth and
development. ICICI partner the growth of Indian business and help individuals improve
their quality of life, through convenient access to financial products and services. It is
focusing on the full spectrum of financial services needs, from banking in rural areas to
banking for the Indian community overseas. In addition to financial services, it support
initiatives for socio-economic development through projects focused on healthcare,
education and access to markets.
It seek to improve access to opportunity, and the ability to make the most of it, for
businesses and individuals - to help people move towards a better life.

Vision

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

Mission

Leverage 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 realization 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.
ICICI GROUP21
Board Committees19
Board Governance &
Audit Committee
Remuneration Committee
Mr. Sridar Iyengar Mr. N. Vaghul
Mr. Narendra Murkumbi Mr. Anupam Puri
Mr. M. K. Sharma Mr. M. K. Sharma
Mr. P. M. Sinha
Prof. Marti G. Subrahmanyam

Customer Service
Credit Committee
Committee
Mr. N. Vaghul Mr. N. Vaghul
Mr. Narendra Murkumbi Mr. Narendra Murkumbi
Mr. M.K. Sharma Mr. M .K. Sharma
Mr. P.M. Sinha Mr. P. M. Sinha
Mr. K. V. Kamath Mr. K. V. Kamath

Fraud Monitoring
Risk Committee
Committee
Mr. M. K. Sharma Mr. N. Vaghul
Mr. Narendra Murkumbi Mr. Sridar Iyengar
Mr. K. V. Kamath Prof. Marti G. Subrahmanyam
Ms. Chanda D. Kochhar Mr. V. Prem Watsa
Mr. V. Vaidyanathan Mr. K. V. Kamath
Share Transfer &
Asset-Liability
Shareholders'/ Investors'
Management Committee
Grievance Committee
Mr. M. K. Sharma Ms. Chanda D. Kochhar
Mr. Narendra Murkumbi Ms. Madhabi Puri-Buch
Ms. Chanda D. Kochhar Mr. Sonjoy Chatterjee
Ms. Madhabi Puri-Buch Mr. V. Vaidyanathan

Committee of Directors

Mr. K. V. Kamath
Ms. Chanda D. Kochhar
Ms. Madhabi Puri-Buch
Mr. Sonjoy Chatterjee
Mr. V. Vaidyanathan
 O rga niza tio n S truc ture
B o a rd o f D ire c to rs

Zo na l H e a d s

R e g io na l M a na g e r

B ra nc h H e a d

F ina nc e M a na g e r S a le s M a na g e r

UM UM UM
 JUSTIFICATION OF THE STUDY

Financial Statements are prepared primarily for decision

making. They play a dominant role in setting the framework of managerial decisions. But
the information in the financial statement is not an end in itself as no meaningful
information can be drawn from these statements alone.

The information provided in the financial statements is of immense

use in making decisions through analysis & interpretation of financial statements. The
Financial Analysis is the process of identifying the financial strength & weakness of the
firm by properly establishing relationship between the items of the Balance sheet &
Profit/ Loss A/c.

The purpose of Financial Analysis is to diagnose the information

contained in Financial Statements so as to judge the profitability & financial soundness of
the firm. The analysis & interpretation of Financial Statements is essential to bring out
the mystery behind the figures in Financial Statements.

Financial Statements Analysis is an attempt to determine the

significance & meaning of financial statements data so that forecast may be made of the
future earning, ability to pay interest & debt maturities & profitability of a sound
dividend policy.
 OBJECTIVES OF THE STUDY

It tells that why we are doing training in the company and what is our main motive in the
training.

The present study was carried out with the following objectives:

Primary:

 To analyze the Financial statements of the bank to its true financial position.

Secondary:

 To know the shortcomings in bank.

 To inform management about the financial condition of the bank.
 Inform investors enabling them to take the investment decision.
 To spot out strength & weakness of bank.
 LITERARURE REVIEW

1. Berry G.C., “Marketing Research10” pg15 “Some theoretical knowledge about

the type of data”.

2. S.C Gupta, “Fundamentals of Statistics11” pg112, “From here I found the

definitions that are the base for the statistical tools”.

3. Hooda R.P. “Statistics for Business and Economics12” pg209-212 “Calculation

of trend analysis and its interpretation”.

4. Horne James.C.Van, “Fundamental of Financial Management13” pg125-130

“From this I got how to analyse the financial condition”.

5. Chandra Prasanna , “Fundamental of Financial Management14”, pg103-108 “this

book help me to analyse the balance sheet , how can we say that the firm is going

well or not”.

6. Cooper R.Donald , “Business Research Methods15”, pg176-180 “all about

sampling design, its meaning”.

7. Goel D.K., “Anlysis of Financial Statements16”, pg 1-15 . From this I have

taken theory of financial statements.
8. http://www.icicibank.com/pfsuser/aboutus/overview/overview.htm17

9. http://www.icicibank.com/Pfsuser/aboutus/boardirectors/boardmembers.htm18

10. http://www.icicibank.com/Pfsuser/aboutus/boardirectors/boardcommittee.htm19

11. http://www.icicibank.com/Pfsuser/aboutus/resultsann/webcast.htm20

12. http://www.icicibank.com/Pfsuser/aboutus/icicigroup/icicigroup.htm21
 13. http://www.icicibank.com/pfsuser/aboutus/investorelations/annualreport/icicibank
/annualreport.htm22

14. http://www.icicibank.com/Pfsuser/aboutus/newsroom/awards/awards.htm23

15. http://www.icicibank.com/pfsuser/aboutus/newsroom/history/history.htm24

RESEARCH METHODOLOGY1

"Research comprises of defining & redefining hypothesis or suggested solutions,

collecting, organizing & evaluating data making deductions & reaching conclusion"-

Cliford Woody.

The term research Methodology here comprises of all research activities carried

on in connection with the "Financial Analysis of ICICI Bank".

The basic purpose of research methodology is to describe the research procedure.

It helps the researches to adopt the right way to move on for carrying the study.

STEPS IN RESEARCH PROCEDURE

* Defining and analyzing the problem.

* Determining sources of information

* Preparing data collection format

* Collection of data

* Analysis of data

* Interpretation of data

* Preparation of report
Meaning of Research:

Research is defined as “a scientific and systematic search for pertinent information

on a specific topic”. Research is an art of scientific investigation. Research is a
systematized effort to gain now knowledge. It is a careful investigation or inquiry
especially through search for new facts in any branch of knowledge. Research is an
academic activity and this term should be used in a technical sense. Research comprises
defining and redefining problems, formulating hypothesis or suggested solutions. Making
deductions and reaching conclusions to determine whether they if the formulating
hypothesis. Research is thus, an original contribution to the existing stock of knowledge
making for its advancement. The search for knowledge through objective and systematic
method of finding solutions to a problem is research.

Research Problem

The first step while conducting research is careful definition of Research Problem. “To
ERR IS THE HUMAN” is a proverb which indicates that no one is perfect in this world.
Every researcher has to face many problems which conducting any research that’s why
problem statement is defined to know which type of problems a researcher has to face
while conducting any study. It is said that,
“Problem well defined is problem half solved.”
Basically, a problem statement refers to some difficulty, which researcher experiences in
the context of either a theoretical or practical situation and wants to obtain the solution
for the same.
The problem statement here is:
“To make a Financial Analysis of Financial statements of ICICI BANK,
KURUKSHETRA”.
RESEARCH DESIGN

A research design is like arrangement of conditions for collections & analysis of

data in a manual that aims to combine relevance to the research purpose with economy in

procedures.

A research design is purely & simply the framework of plans for a study that

guides the collections & analysis of data the research design is the conceptual structure

within which the research is conducted. It constitutes the blue print for the collection,

measurement & analysis of the data.

The research design with help to answer the following questions :

* Why the study is being made ?

* From where the data needed can be collected ?

* What time is required for the study to be competed & how much material is

needed.

* What will be the technique for data collections?

* How the data can be analyzed?

* How the answers to above questions can be found with minimum efforts, time &

money?
 TYPES OF RESEARCH DESIGN

Exploratory Research Design

These designs are the first step to start any research & are absolutely essential to

obtain the proper definition of the problem. It helps in classifying the concepts of the

study. The major emphasis is the discovery of ideas and insights by study the available

information.

DESCRIPTIVE RESEARCH DESIGN

These are concerned with describing the characteristics of a particulars

phenomenon in detail the descriptive study requires a clear specifications of who, what,

when, where, why & how aspects of research.

The methodology adopted to achieve the project objective involved descriptive

research method.
SAMPLING DESIGN:

A sample design is a definite plan for obtaining a sample from the sampling frame. It

refers to the technology or the procedure that is adopted in selecting the sampling units

from which inferences about the population is drawn. Sampling design is determines

before the collection of the data.

Several decision have to be taken in context to the decision about appropriate sample

selection so that accurate data is obtained & efficient results are drawn.

Following questions have to be considered while sampling design:

 What is the relevant population?

 What is the parameter of interest?

 What is the sampling frame?

 What is the type of sample?

 What sample size is needed?

 How much will it cost?

Sampling is necessary because it is almost impossible to examine the entire parent

population (i.e. the entire universe) various factors such as time available cost, purpose of
study etc. make it necessary for the researchers to choose a sample. It should neither be
too small nor too big. It should be manageable. The sample size of past 5 years is taken
for present study.
DATA COLLECTION

Two types of data resources are used:

Primary Data:
• Observation method
• Interview

Secondary Data:

The secondary data have been collected from

• Published sources - Journals & Magazines, Newspaper.

• Unpublished Sources such as Bank internal reports prepare by them given to their
analyst & trainees for investigation.
• Website like ICICIbank.com & some other sites.

ANALYSIS AND INTERPRETATION OF DATA

The data collected in the aforesaid manner have been tabulated in the condensed form to
draw the meaningful results. The different techniques are adopted to analyze the data. All
the data and material is arranged through internal resources and the last part of the project
drawn from the report, a brief summary and recommendation and giving the final touch
to the report by stating a conclusion.
 INTRODUCTION OF THE TOPIC16

Financial Statement

Meaning of Financial Statement: Financial statements are those statements which

provide information about the profitability and the financial position of a business. These
statements include two statements:-

• Income Statement or Profit & Loss Account

• Statement of Financial Position or Balance Sheet

Income Statement or Profit & Loss Account :- It shows the net results of the
business operations, i.e., net profit or loss during an accounting period.

Statement of Financial Position or Balance Sheet :- It shows the nature and

amount of assets, liabilities and capital of a business and indicates the financial position
of the business at a particular date.
 FINANCIAL ANALYSIS

Financial statements present a mass of complex data in absolute monetary terms and
reveal little about the liquidity, solvency and profitability of the business. In financial
analysis, the data given in financial statements is classified into simple groups and a
comparison of various groups is made with one another to pin-point the strong points and
weaknesses of a business.

“Financial statements consist in separating facts according to some definite plan,

arranging them in groups according to certain circumstances and then presenting
them in a convenient and easily read and understandable form.”

Finney and Miller

Purpose of Financial Analysis

The purpose of financial analysis depends on the needs of the person who is analyzing
these statements. These varying needs may be:-

• To know the earning capacity or profitability.

• To know the solvency.

• To know the financial strength.

• To know the trend of the business.

• To provide useful information to the management.

• To know the efficiency of management.

 Tools for Financial Analysis
Financial statements contain absolute figures of assets, liabilities, revenues, expenses and
profit or loss of an enterprise. They are not readily understandable to their users. Hence
they are analysed to present them in simple and understandable form. Various tools or
devices employed for analyzing the financial statements are as follows:

1. Comparative Statements
2. Common Size Statements
3. Trend Analysis
4. Accounting Ratios
5. Cash Flow Statements
6. Funds Flow Statements

RATIO2 , 3 & 5

Relationship between two figures, expressed in arithmetical terms is called a

“Ratio”.

“A ratio is simply one number expressed in terms of another. It is found by dividing

one number into the other.”

Uses of Accounting Ratios:

1) Helpful in analysis of financial statements

2) Simplification of accounting data
3) Helpful in comparative study
4) Helpful in locating the weak spots of the business
5) Helpful in forecasting
6) Study of financial soundness
Limitations of Accounting Ratio:

1) False accounting data gives false ratios

2) Ratios may be misleading in the absence of absolute data
3) Limited use of single ratio
4) Window-dressing
5) Ratio alone are not adequate for proper conclusion

Steps involved in the Ratio Analysis:

1) Selection of relevant data from the financial statement depending upon the
objective of the analysis.
2) Calculation of appropriate ratios from the above data.
3) Comparison of the calculated ratio with the ratio of the same firm in the past, or
the ratios developed from projected financial statements or the ratio of some
other firms or the comparison with ratios of industry to which the firm belongs.
4) Interpretation of the ratio.
 Current Ratio=Current assets / Current liabilities

Years 2004 2005 2006 2007 2008

Current Ratio 0.50 0.51 0.62 0.61 0.72

Current Ratio

0.80 0.72
0.70 0.62 0.61
0.60 0.51
Current Ratio

0.50
0.50
0.40 Current Ratio
0.30
0.20
0.10
0.00
2004 2005 2006 2007 2008
Years

Interpretation:

• This ratio is used to assess the firm’s ability to meet its short term liabilities on
time. A Current ratio of 2:1 is supposed to be an ideal ratio. The higher the ratio,
the better it is, because the firm will be able to pay its current liabilities more
easily.

• Current ratio of the bank is less than 2:1, but it is increasing every year. This
shows that the bank is performing on better liquidity position.
 Quick Ratio= Liquid Assets / Current Liabilities

Years 2004 2005 2006 2007 2008

Quick Ratio 4.18 4.98 6.64 6.04 6.42

Quick Ratio

6.64 6.42
7 6.04
6
4.98
5 4.18
Quick Ratio

4
Quick Ratio
3
2
1
0
2004 2005 2006 2007 2008
Years

Interpretation:

• An ideal quick ratio is 1:1. If it is more, it is considered to be better. This ratio is a

better test of short term financial position of the company than the current ratio.
• As quick ratio is increasing there will be more liquidity.
 Gross Profit Ratio = (Gross Profit / Net Sales) * 100

Years 2004 2005 2006 2007 2008

G.P. Ratio (%) 13.44 17.64 15.10 11.41 12.99

Gross Profit(%)

20 17.64
15.10
Gross profit(%)

15 13.44 12.99
11.41
10 Gross Profit(%)

0
2004 2005 2006 2007 2008
Years

Interpretation:
• This ratio measures the margin of profit available on sales. The higher the gross
profit ratio, the better it is. No ideal standard is fixed for this ratio, but the gross
profit ratio should be adequate.
• As this ratio is decreasing in 2006 and 2007 because of non performing assets.
Now bank has maintain its position in 2008.
 Net Profit Ratio = (Net Profit / Net Sales) *100

Years 2004 2005 2006 2007 2008

N.P.Ratio (%) 13.67 16.32 14.12 16.32 13.67

Net Profit(%)

17 16.32 16.32
16
Net Profit(%)

15
14.12 Net Profit(%)
14 13.67 13.67

13

12
2004 2005 2006 2007 2008
Years

Interpretation:

Net profit ratio is used to measure the overall profitability of the business. The greater the
ratio the more profitable the business will be.

As net profit ratio is in increasing and decreasing trend, the decrease in this ratio is due to
more increase in operating expenses.
 EPS(Earning Per Share) = Net Profit After Tax & Preference
Dividend / No. of Equity Shares

Years 2004 2005 2006 2007 2008

EPS 26.56 27.22 28.55 34.58 37.37

EPS

40 37.37
34.58
35
27.22 28.55
30 26.56
25
EPS

20 EPS
15
10
5
0
2004 2005 2006 2007 2008
Years

Interpretation:
• This ratio measure the earning per share available to ordinary shareholders.
• EPS affects the market value of share. It is an indicator the dividend paying
capacity of the firm.
• As in above graph EPS is increasing, Higher EPS is better for the bank.
 DPS(Dividend Per Share) = Profit Distributed to Equity

Shareholders / No. of Equity Shares

Years 2004 2005 2006 2007 2008

DPS 7.50 8.50 8.50 10.00 11.00

DPS

12.00 11.00
10.00
10.00 8.50 8.50
7.50
8.00
DPS

6.00 DPS
4.00
2.00
0.00
2004 2005 2006 2007 2008
Years

Interpretation:

• All the profits after tax and preference dividend available for equity shareholders
are not distributed among them as dividend. A part of is retained in the business.
The balance of profit is distributed among the equity shareholders.

• DPS is increasing. It is good for Bank as goodwill & market value of shares of
Bank increasing.
 Debt Equity Ratio = Total debt / Equity

Years 2004 2005 2006 2007 2008

DER 8.55 7.98 7.45 9.50 5.27

DER

10 9.50
8.55
9 7.98
8 7.45
7
6 5.27
DER

5 DER
4
3
2
1
0
2004 2005 2006 2007 2008
Years

Interpretation:

• DER of 1:1 is considered satisfactory. This ratio is very significant for the
evaluation of capital structure of a firm. This ratio explains the fact in what
proportion the owners and creditors of the business have provided funds.

• DER is high as shown in above graph, this means that creditors of the firm will
try to interfere in the affairs of the firm. But it decreases in 2008, which shows
 that long term debt are less than equity. So position is good as now it try to
depend more on the internal sources.

Operating Profit Ratio = Operating Cost / Net Sales * 100

Years 2004 2005 2006 2007 2008

Op. 18.1 22.6 18.6 13.3 14.45
Profit 2 3 6 3

Operating Profit(% )

25 22.63
18.66
Operating Profit(%)

20 18.12
14.45
15 13.33
Operating Profit
10

0
2004 2005 2006 2007 2008
Years

Interpretation:

This ratio establishes the relationship between all the operating expenses and sales. It is a
measurement of the efficiency and profitability of the business enterprise. The lower the
operating ratio, more efficient the firm will be.
Operating ratio is increasing. Therefore management should analyse the reason for it.
Dividend Payout Ratio or D/P Ratio = (Total dividend paid to
equity shareholders / Total net profit belonging
to equity shareholders) * 100

Years 2004 2005 2006 2007 2008

D/P 37.4 36.0 34.0 33.8 33.12
Ratio 9 5 8 9
 D/PR

38 37.49
37 36.05
36
35 34.08 33.89
D/PR

34 33.12 DPR
33
32
31
30
2004 2005 2006 2007 2008
Years

Interpretation:

It explains what percentage of profit after tax and preference dividend has been paid to
equity shareholders as dividend.

Interest Coverage Ratio = EBIT / Interest

Years 200 200 200 200 2008

4 5 6 7
 ICR 1.36 1.48 1.39 1.25 1.25

ICR

1.5 1.48

1.45
1.39
1.4 1.36
1.35
ICR

1.3 ICR
1.25 1.25
1.25
1.2
1.15
1.1
2004 2005 2006 2007 2008
Years

Interpretation:
• This ratio shows whether the interest on long term debts of business can be paid
out of profit or not. The grater this ratio, the safer will be the interest of creditors.
• This ratio is decreasing, so Bank may face difficulties to raise loans in future.

Cash-Flow Statement13
A cash flow statement is a statement showing inflows and outflows of cash during a
particular period. It analyses the reasons for changes in balances of cash between the two
balance sheet dates.

Objectives or uses of Cash Flow Statement:

  Useful for Short-Term Financial Planning.

 Useful in preparing Cash Budget.

 Study of the Trend of Cash Receipts and Payments.

 Helpful in ascertaining Cash Flow from various activities separately.

Limitations of Cash-Flow Statements:

 It does not present the true picture of the liquidity of a firm because the liquidity
does not depend upon cash alone.

 Cash-flow statement ignores non-cash charges. Hence, the true position of an

enterprise cannot be judged by cash flow statement.

 It is prepared on cash basis and hence ignores one of the basic concepts of
accounting, namely accrual concept.

Cash Flow Statement

Cash Flow
Statement
for the year ended
March 31,2008 (Rs. In '000)
Year ended Year ended
 31.03.2008 31.03.2007
Cash flow from operating
activities

Net profit before

taxes 50,560,977 36,480,391
Adjustment for:
Depriciation and
amortisation 7,711,011 7,639,002
Net (appreciation) / depriciation on investments 10,279,608 9,918,419
Provision in respect of non performing
assets 27,009,924 21,592,999
Provision for contigencies & others 1,413,354 251,311
Income from subsidiaries -12,783,599 -4,484,915
(Profit) / Loss on sale of fixed assets -656,069 -1,152,224
83,535,206 70,244,982

Adjustment for:
(Increase) / decrease in investments -25,015,908 -19,666,157
(Increase) / decrease in
advances -320,850,355 -511,255,267
(Increase) / decrease in
borrowings 43,122,293 57,039,927
(Increase) / decrease in
deposits 126,079,339 554,270,149
(Increase) / decrease in other assets -27,149,533 -28,758,999
(Increase) / decrease in other liabilities and
provisions 22,330,716 26,886,199
-181,483,448 178,515,852
Refund / (payment) of direct
taxes -18,363,292 -18,141,312
Net cash generated from operating
activities (A) -116,311,534 230,619,522

Cash flow from investing

activities
Investments in subsidiaries -44,379,917 -15,758,166
Income from subsidiaries 12,783,799 4,484,915
Purchase of fixed assets -9,592,487 -4,924,623
Proceeds from sale of fixed
assets 1,064,035 4,347,300
(Purchase) / sale of held to maturity
securities -135,486,579 -171,776,134
Net cash generated from investing
activities (B) -175,611,149 -183,626,708

Cash flow from financing activities

Proceeds from issue of share capital 197,897,060 2,074,414
Net proceeds / (repayment) of bonds 112,316,167 160,717,380
Dividend and dividend tax
paid -10,565,000 -8,646,021
Net cash generating from
financing activities (C) 299,648,227 154,145,774
Effect of exchange fluctuation on
translation reserve (D) -890,065 -327,587

Net increase / decrease in cash and cash

equivalents
(A)+(B)+(C)+
(D) 6,835,479 200,811,001
Cash and cash equivalent as at
April 1 371,213,247 170,402,245
Cash and cash equivalent as at
March 31 378,048,726 371,213,246

Common Size Statements8

Common size statements are those in which individual figures are converted into
percentages to some common base. Percentage of each individual item shows its relation
to its respective total. This type of analysis is called Vertical Analysis since each
accounting variable is analyzed vertically. Common size statements may be prepared for
balance sheet as well as income statement.
Purpose or utility of Common size statements:

 To present the change in various items in relation to net sales, total assets or total
liabilities.
 To establish a relationship.
 To provide for a common base for comparison.

Common Size Balance Sheet

A common size balance sheet is a statement in which total of assets or liabilities is

assumed to be equal to 100 and all the figures are expressed as percentage of the total. In
other words, each asset is expressed as percentage to total assets and each liability is
expressed as percentage to total liabilities.

Purpose or utility of common size balance sheet:

 To analyse changes in individual items of balance sheet.

 To establish the trend in various items of assets & liabilities.
 To judge the relative financial soundness for different enterprises belonging to the
same industry by preparing their common size balance sheets for different
periods.
 To assess the financial strategy adopted by different enterprises belonging to the
same industry.

Common Size Balance Sheet

Common Size Balance Sheet : 2007 2008

%age %age
CAPITAL AND LIABILITIES

Capital 0.36 0.36

Reserve and surplus 6.79 11.34
Deposits 66.89 61.14
Borrowings 14.87 16.42
Other liabilities and provisions 11.09 10.74
Total Capital and Liabilities 100 100

ASSETS

Cash and balances with Reserve Bank of

India 5.43 7.34
Balances with banks and money at call and
short notice 5.34 2.17
Investments 26.48 27.88
Advances 56.83 56.43
Fixed assets 1.14 1.03
Other assets 4.78 5.15
Total Assets 100 100

STATISTICAL TOOLS4 & 11

Introduction:

An educated citizen needs an understanding of basic statistical tool to function in a

world that is becoming increasingly dependant on quantitative information. Statistics
means numerical description to most people. In fact the term statistics is generally used to
mean numerical facts and figures such as agriculture production during a year, rate of
inflation and so on. However as a subject of study, statistics refers to the body of
principles and procedures developed for the collection, classification, summarization and
interpretation of numerical data and for the use of such data.

MEANING:

Broadly speaking, the term statistics has been generally used in two senses:

STATISTICS

PLURAL SINGULAR
SENSE SENSE

Plural Sense refers to the numerical data. Singular Sense refers to a science in which we
deals with the techniques of collecting, classifying, presenting, analyzing and interpreting
the data, the concept in its singular sense, refers to Statistical Method.

PURPOSE:

Without the assistance of Statistical Method, an organization would find it impossible to

make sense of the huge data. The purpose of statistics is to:

• Manipulate
• Summarize
• Investigate
the data so that useful decision making results could be found out. In fact,
every business manager needs a sound background of statistics. Statistics is a set of
decision making techniques which aids businessman in drawing inferences from the
available data.
Statistical tools are the basic measures, which helps in defining the relation between
different items, present, past and future trend of the particular business etc. A wide
variety of statistical tools are available and any of them can be used by any businessman
depending upon the nature of his trade.
Various statistical tools are:-
  Correlation
 Regression
 Time Series
 Index Numbers
 Probability Distribution
 Hypothesis Testing

TREND ANALYSIS12

When estimates of future conditions are made on a systematic basis, the process is
referred as “Forecasting” and the figure or statement obtained is known as “Forecast”.
In this world of uncertainness, economic decision rest upon a forecast of future condition.

Forecasting is concerned with mainly two tasks:-

 • The determination of best basis available for formation of intelligent managerial
expectations.
• Handling of uncertainty about future.

UTILITY OF TREND ANALYSIS:-

 To study the past behaviour of data.

 To forecast the future behaviour.

 Estimation of Trade Cycles.

 Study of present variation.

Trend Analysis of PAT:

Deviation
from
Year PAT(Y) 2006(X) XY X2

2004 1640.30 -2 -3280.60 4

 2005 2007.28 -1 -2007.28 1
2006 2532.95 0 0 0
2007 2995.00 1 2995.00 1
2008 4092.12 2 8184.24 4

N=5 ∑Y=13267.65 ∑X = 0 ∑XY=5891.36 ∑X2=10

The equation of the straight line is:

Y = a + bX

Since ∑X = 0

∑Y
Therefore a = _______
N

∑XY
b = ______
∑X 2

Substituting the values , we get

∑Y 13267.65
a = _______ = ________________ = 2653.53
N 5

∑XY 5891.36
b = ______ = __________ = 589.14
∑X 2
10

Thus, Y = 2653.53 + 589.14 (X)

Computation of Trend Values:

For 2004, X = -2, Yc = 2653.53 + 589.14 (-2) = 3831.81

For 2005, X = -1, Yc = 2653.53 + 589.14 (-1) = 3242.67
For 2006, X = 0, Yc = 2653.53 + 589.14 (0) = 2653.53
For 2007, X = 1, Yc = 2653.53 + 589.14 (1) = 2064.39
For 2008, X = 2, Yc = 2653.53 + 589.14 (2) = 1475.25
 Actual Trend
Year Value Value

2004 1640.30 1475.25

2005 2007.28 2064.39
2006 2532.95 2653.53
2007 2995.00 3242.67
2008 4092.12 3831.81

Trend Analysis

9000
8000
7000
6000
5000 Trend
PAT

4000 Actual
3000
2000
1000
0
2004 2005 2006 2007 2008
Years

Interpretation:

Every year expected profit is in increasing trend from the actual.

PCA(Principal Component Analysis):

Dependent variable: Profit after tax.

Independent variables: Selling expenses, Administrative expenses, Personal expenses,

Financial expenses, Depreciation, Tax charges, Recurring income, Operating profit.
Years PAT Selling Admn. Personal Financial Dep. Tax Recurring Op.

Exp. Exp. Exp. Exp Charges Income Profit

2004 1640.3 1801.1 539.4 2087.76
68.68 7 546.06 7015.25 4 265.11 452.89
2005 2007.2 1248.3 590.3 2679.78
8 601.71 1 737.41 6570.89 6 522.00 448.46
2532.9 2727.1 623.7 3269.94
2006 5 840.98 8 1082.29 9597.45 9 556.53 466.02
2995.0 1741.6 4946.6 544.7 3793.56
2007 0 3 9 1616.75 16358.5 8 984.25 309.17
2008 4092.1 1750.6 6447.3 23484.2 578.3 5706.85
2 0 2 2078.9 4 5 1611.73 65.58

Variables (axes F1 and F2: 96.35 %)

1 Dep

0.5

Recurring Op. Profit

Selling
income Personal
TaxChargesExp
0 Expenses
Financial.
Admn.Ex Exp.
p

-0.5

-1
-1 -0.5 0 0.5 1
-- axis F1(83.03 %) -->

Interpretation:

After applying PCA Two factors Financial expenses & Administrative expenses are the
most critical factors. Now, to find out the most probable value of dependent variable for
given values of independent variables, I apply multiple regression.

Multiple Regression:
In multiple regression, three variables are studied & one variable is considered dependent
variable & the other two as independent variables. Multiple regression analysis is used to
estimate the most probable value of the dependent variable for given values of the
independent variables.

Dependent variable: Profit after tax.

Independent variable: Administrative. Expenses & Financial Expenses.

Years PAT Admn. Financial

Exp. Exp.
2004 1640.3 1801.17 7015.25
2005 2007.28 1248.31 6570.89
2006 2532.95 2727.18 9597.45
2007 2995.00 4946.69 16358.5
2008 4092.12 6447.32 23484.24

pat / Standardized residuals Standardized residuals

1.5
Obs5

Obs4

0.5

Obs3
0
1000 1500 2000 2500 3000 3500 4000 4500 5000

-0.5 Obs2

-1 Obs1

-1.5 -1.5 -1 -0.5 0 0.5 1 1.5

pat Standardized residuals

Interpretation:

From PCA two factors that comes most important, has more impact on PAT in the 5th year
i.e. 2008.

ANNOVA
Income Expenditure
11519 2416
11838 2587
 17518 4650
28457 8305
39468 10277

In c o m e / S t a n d a r d iz e d r e s id u a ls Sta nda rdize d re s idua ls

0 .8
O bs 5
0 .6

0 .4 O bs 4

0 .2

O bs 3
0
10 0 0 0 15 0 0 0 20 00 0 25 00 0 3 00 00 350 00 40 0 00
-0 .2
O bs 2

-0 .4

O bs 1
-0 .6

-0 .8 -0.8 -0.6 -0.4 -0.2 0 0.2 0.4 0.6 0.8

In c o m e S tanda rdize d res iduals

Fac tor Ex pe nditure

40000

35000

30000

25000
Interpretation:
20000

15000

10000
2416 2587 4650 8305 10277
E xpenditure

HYPOTHESIS TESTING

The main object of sampling theory is the study of test of Hypothesis. In many cases we
are able to make decision about the population only on the basis of sample information.
For example: On the basis of sample data a quality control manager is to determine
whether a process is working properly, a drug chemist is to decide whether a new drug is
really effective in curing the diseases etc. The theory of testing of hypothesis employs
various statistical techniques to arrive such decisions on the basis of sample study.
 t- test

Student's t test for independent samples / two-tailed test:

The test is computed under the assumption that the two theoretical variances are equal.

t (observed value) -0.905

t (critical value) 2.306
DF 8
Two-tailed p-value 0.392
Alpha 0.05

Interpretation:

At the level of significance Alpha=0.050 the decision is to accept the null hypothesis of
equality of the means.

In other words, the difference between the means is not significant.

Chi-square:

It is statistical measures used in context of sampling analysis for testing the significance
of a population variance. As a non-parametric test, it can be used as a test of
independence of attributes and goodness of fit.

Income(O
) Income(E) O-E O-E2 O-E2/E
11518.92 21759.98 -10241.1 10487931 4819.826
 0
11838.10 21759.98 -9921.88 98443703 4524.071
17517.83 21759.98 -4242.15 17995837 827.0153
28457.13 21759.98 6697.15 44851818 2061.207
17707.9 31357113
39467.92 21759.98 4 9 14410.45
TOTAL 26642.57

Chi-square independence test:

Chi-square
(observed value) 20.000
Chi-square (critical
value) 37.652
DF 25
One-tailed p-value 0.747
Alpha 0.05

Interpretation:

At the level of significance Alpha=0.050 the decision is to not reject the null hypothesis
of independence between the observed income and the expected income.

In other words, the dependence between the observed income and the expected income.
is not significant.

SWOT
Strength:

 Good Financial position.

 Continuously increasing profit.
 Total advance increase
 Highly motivated workers & dedicated officers
  Good infrastructures
 Pat increase
 Extensive distribution network comprising 1,308 branches and 3,950 ATMs in
India and presence in 18 countries.
 ICICI bank boats of a strong brand equity
 ISO9001 certified for its depository & custody operation & for its banked
processing a strong brand equity.
 Bank is a market leader in cash settlement services for the major stock exchanges
in the country.
 Bank has also utilized the technology of call centre to enhance its customers.

Weakness:

 Total income increases 56.45% & total expenditure are increases 61.86%.
 Processing charges are more.
 F.a decrease
 Total income increase 56.45% but total expenses are increasing 61.86%.
 Processing charges are more.
 Since the settlement volume on the stock exchange has reduced the floats of the
bank in this business have declined.
 The branches are not proactively selling 3rd party products to the customers.
 Documentations are more.

Opportunity:

 It started its operation in International market.

 Less player in rural market.
 Healthier banks.
 Healthier exposure norms.
  Infrastructural improvements & better system for trading & settlement in the
government security & foreign exchange market.
 Launching of EMI cards for making credit card in this way customer will be
increased.

Threat:

 The bank has started facing competition from other existing players like SBI,
HDFC, AXIS, UTI Banks in the finance market itself, this might reduce margins
in the future.
 In order to squeeze liquidity, RBI increases CRR(Cash reserve ratio), the more the
CRR as deposits by RBI has unfavorable influence on the banking sector.

FINDINGS

 34% increase in profit after tax to Rs. 41.58 billion in FY2008 from Rs. 31.10
billion in FY2007.
 30% increase in net interest income to Rs. 73.04 billion in FY2008 from Rs.
56.37 billion in FY2007.
 32% increase in fee income to Rs. 66.27 billion in FY2008 from Rs. 50.12 billion
in FY2007.
 Net NPA ratio of 1.49% at March 31, 2008 compared to 1.47% at December 31,
2007.
 Operating profit increased by 51% to Rs. 5874 crores financial year 2008 from
Rs. 3888 crores for the year ended 31st march, 2007.
 Tax Expenditure has been increased by 360.55 crores from last fiscal 2007.
 Net equity capital in this fiscal has been increased by 213.34 crores from last
fiscal 2007.
 The percentage of interest expended are more increased as compare to interest
income.
 Net gross profit has been increased by 2086.29 crores from last fiscal 2007.
 Administrative expenses has been increased by 1490.63 crore from last fiscal
2007.

RECOMMENDATIONS

 Bank should reduce the charging on services.

  Bank try to reduce the non performing assets. At March 31, 2007 the bank

N.P.A. constituted 098% of consumer assets.

 Documentations for loan should also reduce.

 The fixed assets are decrease 1.44% but reserve and surplus increased to

9.84%. Bank try to invest and increase the fixed assets.

 Bank should increase the macro financing.

 Bank try to reduce the burden on employees.

 The total income is increased 56.45% but the total expanses are increased

61.86%. So bank try to reduce the expanses.

 Bank try to focuses on fee based products as wall as services.

 the bank ruler portfolio increased by 37% on a year basis to about RS. 20174

crore. So bank try to more focuses on ruler area.

 The bank try to extend its reach in the small and medium enterprises segment.

 Bank should reduce the charging on services

 Bank try to reduce the non performing assets. At March 31, 2007 the bank N.P.A.

constituted 098% of consumer assets.

 More Prefer to Secured & Short Term Loan

 Control The Collection Expences

 The fixed assets are decrease 1.44% but reserve and surplus increased to 9.84%.

Bank try to invest and increase the fixed assets

 Use Qualative Management System

 Proper Collection System

 Use Quality Control

 Bank should increase the macro financing

 Minimise the unwanted expenses

 Proper Division of Fund

 Improve In Credit Policy

 Improve in taxation Policy

 Improve in Working Capital management

 Bank try to focuses on fee based products as wall as services

Limitations of the Study

 Accuracy

The ratios have been interpreted by comparing the standards with actual.

Wherever that are available in the literature, 100% accuracy can not be

claimed.

 Times Constraints

As the time for my training was six weeks and six weeks

are not sufficient to study the overall information of organization.

 Reliability

Since the organization does not provide you full information.

Because they may not be willing to disclose whole information. So

the reliability on the data is at stake

 Improper arrangement

There were no proper arrangement for the trainees. So we had to

face a lot of difficulties.

 Audit Time

During my tenure of summer training company’s audit work was

conducted. So sometimes we had to return from the organization,

as no third person was allowed to enter the premises, as it was an

official work and they do not wanted to disclose it.

BIBLIOGRAPHY
1. Pandey, I.M. “Financial Management”, 3rd edition, New Delhi, Vikas Publication
House Pvt. Ltd. P-143to145(Approaches of working capital)
2. Maheshwari, “S.N, Advanced Accounting”, 4th edition Sultan Chand & Sons
Publication, New Delhi, 2004, P.No. (b40-b48)(tools of financial analysis)
3. Gupta Shashi.k,,”Managemenet Accounting”, 5th ed,ition,Kalyani
Publishers,New Delhi, P.No 23.1-23.9(working capital management and finance)
4. Goel D.K, “Analysis of financial statement”, 10th edition,Avichal Publishing
Company P.No 2.1-2.38(ratio analysis)
5. Donald R. Cooper and Pamela S. Schindler, “Business Research Methodology”
Eighth Edition’ Tata McGraw Hill Publishing Company Limited, New Delhi.
Chapter 3, Page 82, 86, 87. Chapter 4, Page 101,102 (helped in research design)
6. Kothari C.R., “Research Methodology Methods and Techniques” (Second
Edition) New Age International Publishers, Ansari Road, Daryaganj, New Delhi-
110002. Chapter 4, Page 55-58. Chapter 6, Page 95,100,111. (Methods of data
collection, collection of data, and collection of secondary data” are referred before
the data collection”.)
7. Jain, ,T.R., and Aggarwal, Dr. S.C., “Statistics For M.B.A”,VK publication, PP1-
3 Part b, , 2nd Edition ,PP 131-134 Part (“Correlation” is studied to use these test
in study.)
8. Gupta S.P. and Gupta M.P., “Business Statistics”, Twelfth Edition, Sultan Chand
and Sons Publications. PP 237-241,628-629 (test hypotheses testing)
9. Murray R. Spiegel, “Theory and Problem of Statistics”, Third edition, Tata Mc
Graw Hill Publication, Chapter 12, Pg No.45-48 (correlation and regression)
10. http://www.icicibank.com/pfsuser/aboutus/overview/overview.htm

11. http://www.icicibank.com/Pfsuser/aboutus/boardirectors/boardmembers.htm

12. http://www.iloveindia.com/finance/bank/private-banks/icici-bank.html

13. http://www.icicibank.com/Pfsuser/aboutus/boardirectors/boardcommittee.htm

14. http://www.icicibank.com/Pfsuser/aboutus/resultsann/webcast.htm

15. http://www.icicibank.com/Pfsuser/aboutus/icicigroup/icicigroup.htm
16. http://www.icicibank.com/pfsuser/aboutus/investorelations/annualreport/icicibank
/annualreport.htm

17. http://www.icicibank.com/Pfsuser/aboutus/newsroom/awards/awards.htm

18. http://www.icicibank.com/pfsuser/aboutus/newsroom/history/history.htm

ANNEXURE20
Balance Sheet
ICICI Bank
as on March 31, 2008 (Rs.In‘000s)
Schedule As on As on
31.03.2008 31.03.2007
CAPITAL AND
LIABILITIES

Capital 1 14,626,786 12,493,437

Reserve and
surplus 2 453,575,309 234,139,207
2,305,101,86
Deposits 3 2,444,310,502 3
Borrowings 4 656,484,338 512,560,263
Other liabilities and
provisions 5 428,953,827 382,286,356
Total Capital and 3,446,581,12
Liabilities 3,997,950,762 6

ASSETS

Cash and balances with Reserve Bank of India 6 293,775,337 187,068,794

Balances with banks and money at call and short
notice 7 86,635,952 184,144,452
Investments 8 1,114,543,415 912,578,418
1,958,655,99
Advances 9 2,256,160,827 6
Fixed assets 10 41,088,975 39,234,232
Other assets 11 205,746,256 164,899,234
3,446,581,12
Total Assets 3,997,950,762 6

Contigent 11,513,490,11 5,629,599,06

Liabilities 12 3 0

Bills for collection 42,782,842 40,465,610

Profit and Loss Account

for the year ended (Rs. In '

March 31,2008 000s)

Schedule Year ended Year ended

31.03.2008 31.03.2007

I. INCOME

Interest earned 13 307,883,429 219,955,876

Other income 14 88,107,628 69,278,726
Total Income 395,991,057 289,234,602

II. EXPENDITURE

Interest expended 15 234,842,423 163,584,984

Operating expenses 16 81,541,819 66,905,564
Provisions for contigencies 17 38,029,536 27,641,854
Total Expenditure 354,413,778 258,132,402

III. PROFIT/ LOSS

Net profit for the year 41,577,279 31,102,200

Profit brought forward 9,982,741 2,934,416
Total Profit/ (Loss) 51,560,020 34,036,616

IV. APPROPRIATIONS /
TRANSFERS

Transfer to Statutory Reserve 10,400,000 7,800,000

Transfer to Reserve Fund 3,138 1,168
Transfer to Capital Reserve 1,270,000 1,210,000
Transfer to Special Reserve 1,750,000 4,500,000
Proposed Equity share dividend 12,277,018 9,011,694
Proposed preference share dividend 35 35
Coporate dividend tax 1,496,670 1,530,978
Balance carried over to balance sheet 24,363,159 9,982,741
Total 51,560,020 34,036,616