Presented by:Group 2 PGPBF 2011-13 NIBM,Pune

BANKING INDUSTRY: FUTURE OUTLOOK

GROWTH PROJECTED AT 8% IN 2011-12 CHALLENGES:

Persistent inflation High oil and commodity prices Slowdown in capital good production and investor spending Global uncertainty

ACTIONS TAKEN BY RBI/Govt. Of India

RBI had increased the repo rate to 8.25%

GOI in budget 2011-12 announced measures for development of education, skills development and R&D to develop human capital Propelled by strong fundamentals Focused on financial inclusion Aggregate deposits are expected to grow by 17.1% Non-food credit to grow by 19.1% Banking regulation Act will be modified to enable RBI to issue new bank licenses GOI has earmarked Rs. 60 Billion for PSBs to maintain minimum 8% Tier 1 capital.

Total business increased to 1,14,332 crore from 1,04,230 crore(9.69% Growth). Current account and savings account (CASA) deposits registered a growth of 15.70 per cent. Share of CASA deposits in total deposits of the Bank improved to 40.44 % against 36.91% for the last year. Cost of deposits improved to 5.38 per cent as compared to 5.90 % for the last year. NIM increased from 2.05 % to 2.80 %.

KEY STATISTICS

BANKING SECTOR

BANK OF MAHARASHTRA

DENA BANK

CAPITAL ADEQUACY RATIO

CREDIT DEPOSIT RATIO Growth in aggregate deposits Credit Growth

Above 10%

13.24%

13.41%

75.7% 15.5%

71.04% 5.44%

69.5% 25.06%

21.5%

16.03%

26.43%

Gross NPAs/Advances
CASA deposits growth Cost of deposits

2.3%
23.51% 5.68%

2.47%
15.70% 5.38%

1.86%
24.15% 5.76%

Benefiting from significant investment in technology Sound capital and high government ownership 76 years of banking experience Strong rural presence Strong presence in Pune Mumbai industrial corridor Largest network of branches by any PSB in Maharashtra Positive recovery performance of the NPAs

Low profitability- decreasing non-interest income Weak geographical spread Net cash flows are negative Risk averse

Centralized processing of retail loans. Mahabank Jewel Loan Scheme Mahabank Top-Up Loan Scheme Mahabank Current Account Diamond Scheme Mahanidhi Scheme 'Maha Chetana' Programme E Lounges one each in Pune, Mumbai and Delhi

Ensuring result-oriented active participation of all staff members: Maha-Chetna program Increasing branch/ATM network: During the year 83 new branches were opened and 72 new ATMs installed Introducing new retail loan products:Maha Jewel Loan" scheme and Maha TopupLoan" scheme, were introduced Accelerate marketing efforts of the Regional offices for increasing the core business: Maha Mitra" teams have been formed in all regional offices towards this goal

Bank plans to offload its entire chunk of bulk deposits of Rs.9000 Cr by Mar 2012 to control cost and preserve margin Better monitoring of asset quality and swift action on non-performing assets: 10 Micro Asset Recovery Centres were established in addition to existing 5 Asset Recovery Branches Focused attention to Mid Corporate advances: Separate verticals have been created in Central Office of the Bank for increasing advances to Mid corporates and for increasing non-interest income through Alternative Channels of Business

Credit Risk Market Risk Operational Risk High Contingent liability( to the tune of Rs 14403 crores) Small size in an era of consolidations Entry of big corporates/competition Concentration risk: 20.85% of total advances to top 20 customers

Thank You