Date post: | 21-Nov-2014 |
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Economy & Finance |
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SAPM Project
Banking Sector AnalysisBy P132004 Amit Kumar Jain
P132019 Prashil TekadeP132021 Purva ShrivastavaP132028 Ritika GuptaP132033 Sayan BanerjeeP132043 Vipul SrivastavaP132045 Yashpal Raghav
Economic Analysis
• GDP Growth Slowest In Four Years; Sinks To 4.4% in Q1
• Q1 (2013-14)=4.4% vs Q1 (2012-13)=4.8%
Rupee ValuationRupee Depreciation
Industry Analysis
Major Challenges• Deteriorating Asset Quality
– Deteriorating NPA’s• Basel-III Implementation:
– Will be in force from 31st March 2018– As Per RBI domestic bank need a common Tier –I Capital (Core Capital) :-
• 5.5% of Risk Weighted Asset (RWAs)• 2.5% capital conservation buffer (CCB)
– Additional 5 lakh Crore in next 5year• 1.75laks Crore of above in form of equity capital, this means we government need to put
money in equity of around 70k-100k
– As per S&P forecast Domestic bank need to raid 2.6Lakh crore to meet new capital standards.
• Increased Competition:– Large no of players and homogenous service, competition is very high– Demand for cutting edge technology to increase operation efficiency.
Positive for Sectors
• Uptick in Credit and Deposit growth
Positive for Sectors
• Financial Inclusion Program:– 40% of Indian does not have access to any kind of
banking services– RBI mandated for the banks to open 25% branches
in rural area and 40% credit to priority sector– Numbers of rural branches have crossed 31,000 in
number
Positive for Sectors
• Mobile banking, next major technological leap– As per RBI, As of March 2013, 55 banks with a
customer base of around 23mn were providing Mobile Banking Service in India compared to 49 banks and 13million as of March 2012
– The regulatory relaxations in the transaction limits on Mobile Banking and for transactions ,has resulted in over 53 billion Transactions aggregating Rs 60 billion being processed during 2012-13
RECENT DEVELOPMENTS
• RBI tightens loan restructuring norms; raises provision to 5% from June 1 from 2%
• RBI relaxes branch opening norms for banks– RBI has relaxed its norms for banks to open branches in Tier I cities
to push financial inclusion, i.e., the process of spreading banking services to unbanked areas. Now banks can open branches in such centers without its prior permission.
• RBI eased rules to avail Swap Facility on Foreign Currency Borrowings– RBI lowered the three-year minimum maturity requirement to avail
the swap facility for banks foreign currency borrowings to one year.– However, RBI has allowed this facility up to 3 years.
Effective Date
Fix Range LAF Rates Bank Rate
Repo Reverse Cash Reserve Ratio
Marginal Standing Facility
Statutory Liquidity Ratio
29-10-2013 8.75 7.75 6.75 - 8.75 -07-10-2013 9.00 - - - 9.00 -20-09-2013 9.50 7.50 6.50 - 9.50 -15-07-2013 10.25 - - - 10.25 -03-05-2013 8.25 7.25 6.25 - 8.25 -19-03-2013 8.50 7.50 6.50 - 8.50 -09-02-2013 - - - 4.00 - -29-01-2013 8.75 7.75 6.75 - 8.75 -03-11-2012 - - - 4.25 - -22-09-2012 - - - 4.50 - -11-08-2012 - - - - - 23.0017-04-2012 9.00 8.00 7.00 - 9.00 -10-03-2012 - - - 4.75 - -13-02-2012 9.50 - - - - -28-01-2012 - - - 5.50 - -25-10-2011 - 8.50 7.50 - 9.50 -16-09-2011 - 8.25 7.25 - 9.25 -26-07-2011 - 8.00 7.00 - 9.00 -16-06-2011 - 7.50 6.50 - 8.50 -03-05-2011 - 7.25 6.25 - 8.25 -17-03-2011 - 6.75 5.75 - - -25-01-2011 - 6.50 5.50 - - -18-12-2010 - - - - - 24.0002-11-2010 - 6.25 5.25 - - -16-09-2010 - 6.00 5.00 - - -
Price To Earning
10-Nov-0
3
16-Feb-04
24-May
-04
30-Aug-0
4
06-Dec-
04
14-Mar-
05
20-Jun-05
26-Sep-05
02-Jan-06
10-Apr-0
6
17-Jul-0
6
23-Oct-
06
29-Jan-07
07-May
-07
13-Aug-0
7
19-Nov-0
7
25-Feb-08
02-Jun-08
08-Sep-08
15-Dec-
08
23-Mar-
09
29-Jun-09
05-Oct-
09
11-Jan-10
19-Apr-1
0
26-Jul-1
0
01-Nov-1
0
07-Feb-11
16-May
-11
22-Aug-1
1
28-Nov-1
1
05-Mar-
12
11-Jun-12
17-Sep-12
24-Dec-
12
01-Apr-1
3
08-Jul-1
3
14-Oct-
130
5
10
15
20
25
30
P/EExponential (P/E)
Price to Book Ratio
10-Nov-0
3
01-Mar-
04
21-Jun-04
11-Oct-
04
31-Jan-05
23-May
-05
12-Sep-05
02-Jan-06
24-Apr-0
6
14-Aug-0
6
04-Dec-
06
26-Mar-
07
16-Jul-0
7
05-Nov-0
7
25-Feb-08
16-Jun-08
06-Oct-
08
26-Jan-09
18-May
-09
07-Sep-09
28-Dec-
09
19-Apr-1
0
09-Aug-1
0
29-Nov-1
0
21-Mar-
11
11-Jul-1
1
31-Oct-
11
20-Feb-12
11-Jun-12
01-Oct-
12
21-Jan-13
13-May
-13
02-Sep-13
0
1
2
3
4
5
6
P/BExponential (P/B)
Dividend Yield
10-Nov-0
3
16-Feb-04
24-May
-04
30-Aug-0
4
06-Dec-
04
14-Mar-
05
20-Jun-05
26-Sep-05
02-Jan-06
10-Apr-0
6
17-Jul-0
6
23-Oct-
06
29-Jan-07
07-May
-07
13-Aug-0
7
19-Nov-0
7
25-Feb-08
02-Jun-08
08-Sep-08
15-Dec-
08
23-Mar-
09
29-Jun-09
05-Oct-
09
11-Jan-10
19-Apr-1
0
26-Jul-1
0
01-Nov-1
0
07-Feb-11
16-May
-11
22-Aug-1
1
28-Nov-1
1
05-Mar-
12
11-Jun-12
17-Sep-12
24-Dec-
12
01-Apr-1
3
08-Jul-1
3
14-Oct-
130
0.5
1
1.5
2
2.5
3
3.5
Div YieldExponential (Div Yield)
Price Analysis of Bank Index
•Thank You