SUBMITTED TO:

MISS SVATI GOYAL

Submitted by:
Vibhu babbar
Roll no. A12
(10901344)
INDEX
HDFC

• INTRODUCTION
• OBJECTIVE OF STUDY
• BACKGROUN OF HDFC
• HISTORY OF HDFC
• MANAGEMENT OF HDFC
• HDFC POSITION RELATIVE TO ITS INDUSTRY
• IMPACT OF CAPITAL STRUCTURE ON THE RISK AND
RETURN OF A FIRM

ICICI
• BACKGROUN OF HDFC
• HISTORY OF HDFC
• MANAGEMENT OF HDFC
• HDFC POSITION RELATIVE TO ITS INDUSTRY
• IMPACT OF CAPITAL STRUCTURE ON THE RISK AND
RETURN OF A FIRM

COMPARISON BETWEEN ICICI AND HDFC BANK

REFRENCES
INTRODUCTION

HDFC Bank was incorporated in August 1994 in the name of 'HDFC Bank Limited',
with its registered office in Mumbai, India. The Bank commenced operations as a
Scheduled Commercial Bank in January 1995.
The housing development finance Corporation Limited (HDFC) was amongst the first
to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a
bank in the private sector, as part of the RBI's liberalization of the Indian Banking
Industry in 1994
Headquartered in Mumbai, HDFC Bank, has a network of over 531 branches spread
over 228 cities across India. All branches are linked on an online real-time basis.
Customers in over 120 locations are serviced through Telephone Banking. The Bank
also has a network of about over 1054 networked ATMs across these cities.

OBJECTIVE

To analyse the financial position of the bank, and seeking its relation to other
competitors, credit availability, share price valuation from last 3 years, capital
structure of the company, liquidity position of the company, the value of firm in the
industry. I will also analyse that how these credit ratings and liquidity position of the
company and the free capital structure of the company is helping in its operations.
From the history and background of the company I will see the goodwill of the bank
and what are main core areas in which it deals.

HISTORY OF HDFC BANK

• The Bank was incorporated on 30th August.

•A new private sector Bank promoted by housing Development Corporation

Ltd. (HDFC), a premier housing finance company. The bank is the first of its
kind to receive an in-principle approval from the RBI for establishment of a
bank in the private sector.
• Certificate of Commencement of Business was received on 10th October 1994
from RBI.
• HDFC Bank has entered the banking with around 50 corporate, including
some leading multinational companies, flagship companies of local business
houses and strong public sector companies.
HDFC Bank has become the first bank in India to link up Its automated teller
machine (ATM) network with all the three major payment systems
world-wide.
BACKGROUND OF HDFC BANK

Company Background - HDFC Bank

Industry Name Finance -Banks Private
sector House Name HDFC Group

Year Of Incorporation 1994

Regd. Office Address HDFC Bank House,

Senapati Bapat Marg,

Mumbai, Maharashtra

Pin Code 400013

Tel. No. 022-66521000

Fax No. 022-24960737

Auditors

Haribhakti & Co.

MANAGEMENT – HDFC BANK

Name Designation

Jagdish Capoor Part Time Chairman

Renu Karnad Director
Ashim Samanta Director
Gautam Divan Director
Aditya Puri Managing Director
Paresh Sukthankar Executive Director
Keki Mistry Director
Arvind Pande Director
Harish Engineer Executive Director

CAPITAL STRUCTURE

YEAR 2008-09
INSTRUMENT EQUITY
AUTHORISED CAPITAL 214.75cr
ISSUED CAPITAL 214.75cr
Share no’s 425384109
PAID UP: face value 10
: capital 214.75cr

YEAR 2007-08
INSTRUMENT EQUITY
AUTHORISED CAPITAL 214.75cr
ISSUED CAPITAL 214.75cr
Share no’s 354432920
PAID UP: face value 10
: capital 214.75cr

YEAR 2006-07
INSTRUMENT EQUITY
AUTHORISED CAPITAL 214.75cr
ISSUED CAPITAL 214.75cr
Share no’s 319389608
PAID UP: face value 10
: capital 214.75cr
Market Capital 89259.94 crs
Earning Per Share(TTM) 52.77
P/E 32.54
P/C 28.77
Book Value 320.80
Price/Book 6.08
Div(%) 100.00%
Div Yield(%) 0.51
Market Lot 1.00

Interpretation:

• The number of shares in the bank is increasing, i.e. in the year 2006-07 it was
319389608 shares which increases to 354432920 shares in the year 2007-08
and in 2008-09 it was 425384109 shares. I have analysed from the study that
the equity share capital of the bank was Rs 319.39 crs in the year 2006-07
and this has increased to 425.38 in 2008-09 thus increasing the number of
shares. The earning per share which I have analysed by dividing the total
earnings and number of shares is 52.77 which is good for the bank .
• The rise in earning per share creates demand for its share in the market. Now
the current price of the share is Rs 1950 instead of its book value which is Rs
320.

• The increase in number of shares of the bank in the preceding years clarifies
that the bank has gone through expansion. And It is also clear from the
increase in capital over years that the bank has increases its area of
operations.
• Here company did not issue a debenture. That’s why we can say that this is a
unlevered firm. Unlevered firms are those firms which did not take any risk.
COMPANY POSITION RELATIVE TO INDUSTRY
HDFC Bank and
Competitors [36]
Net Worth (Capital Capital
% of Net NPA
Bank Reserve) in INR Adequacy Ratio
to Net advance
billion (%)
State bank of India 490.33 1.78 13.47
ICICI Bank 468.20 1.55 13.97
Punjab National
123.18 0.64 12.96
Bank
HDFC Bank 114.97 0.47 13.60
Bank of Baroda 110.44 0.47 12.91
Bank of India 105.89 0.52 12.95
Canara Bank 105.00 0.84 13.25
IDBI Bank 88.20 1.30 11.95
Axis Bank 87.69 0.42 13.73
Union Bank of India 73.48 0.17 12.51
Central Bank of India 59.43 1.45 10.42
Oriental Bank of
57.76 0.99 12.12
Commerce
Allahabad Bank 52.21 0.80 12.04

From this table we can sa that company position relative to its industry is very
good ,because here only two banks are there which have a more capital adequacy
ratio then the HDFC banks ,and other banks have a less capital adequacy ratio then
the HDFC bank ,so we can say that company position is good ,and if they want to
come at top then the finance manager has to take a different steps like they have to
more focus on the cost control techniques.
CHANGE IN SHARE PRICE IN 3 YEARS

YEAR Rs (crs)

YEAR END 2007 - 960

YEAR END 2008 - 1320
YEAR END 2009 - 967

INTERPRETATION:
The price of share in 2007 was approximately 960 which increases to 1320 in 2008.
This means that the company has gained more market value, from the balance sheet
and profit and loss account I have analysed that the equity share capital of the bank
has increased from 309 in 2005 to 425 in 2009. This means that the company has
widen its operations. I have analysed the profit and loss account from which I come to
know that the selling and distribution expenses of the company has increased.

And when selling expenses are increasing, it is obvious that the sales are also
increasing. When sales are increasing the demand and market value for share
increases and thus increase the price of share.

There may be many other reasons in the fluctuations of the share price in these three
years.
These are ads follows;

1) Increase in earning per share

2) Increase in market goodwill
3) Fall of share price in 2008 -09 end is all because of the recession impact.
4) Increase in share price might be because of amalgamation of hdfc bank
with the centurion bank of Punjab on 23 may 2008.
BALANCE SHEET OF HDFC BANK

Mar '05 Mar '06 Mar '07 Mar '08 Mar '09
12 mths 12 mths 12 mths 12 mths 12 mths
Capital and Liabilities:
Total Share Capital 309.88 313.14 319.39 354.43 425.38
Equity Share Capital 309.88 313.14 319.39 354.43 425.38
Share Application Money 0.43 0.07 0.00 0.00 400.92
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves 4,209.97 4,986.39 6,113.76 11,142.80 14,226.43
Revaluation Reserves 0.00 0.00 0.00 0.00 0.00
Net Worth 4,520.28 5,299.60 6,433.15 11,497.23 15,052.73
Deposits 36,354.25 55,796.82 68,297.94 100,768.60142,811.58
Borrowings 5,290.01 4,560.48 2,815.39 4,478.86 2,685.84
Total Debt 41,644.26 60,357.30 71,113.33 105,247.46145,497.42
Other Liabilities & Provisions5,264.46 7,849.49 13,689.13 16,431.91 22,720.62
Total Liabilities 51,429.00 73,506.39 91,235.61 133,176.60183,270.77
Mar '05 Mar '06 Mar '07 Mar '08 Mar '09
12 mths 12 mths 12 mths 12 mths 12 mths
Assets
Cash & Balances with RBI 2,650.13 3,306.61 5,182.48 12,553.18 13,527.21
Balance with Banks, Money
1,823.87 3,612.39 3,971.40 2,225.16 3,979.41
at Call
Advances 25,566.30 35,061.26 46,944.78 63,426.90 98,883.05
Investments 19,349.81 28,393.96 30,564.80 49,393.54 58,817.55
Gross Block 1,290.51 1,589.47 1,917.56 2,386.99 3,956.63
Accumulated Depreciation 582.19 734.39 950.89 1,211.86 2,249.90
Net Block 708.32 855.08 966.67 1,175.13 1,706.73
Capital Work In Progress 0.00 0.00 0.00 0.00 0.00
Other Assets 1,330.57 2,277.09 3,605.48 4,402.69 6,356.83
Total Assets 51,429.00 73,506.39 91,235.61 133,176.60183,270.78
Contingent Liabilities 84,585.95 138,898.60202,126.73582,835.94396,594.31
Bills for collection 5,342.70 5,239.26 7,211.88 17,092.85 17,939.62
Book Value (Rs) 145.86 169.24 201.42 324.38 344.44
INTERPRETATION:
The assets of the bank in year 2005 were Rs 2650 which increased to Rs 13527 Crs in
the year 2009. This shows that the bank has expand a lot within 4 years. it has
increased its assets by nearly 5 times. Depreciation has increased from582.9 in 2005
to Rs 2249.90 Crs in 2009, this means that the bank has invested in its fixed assets.
The bank has invested Rs 58817 in 2009 as compared to Rs19350 Crs in the year
2005. This shows that the company has increases its area of operation. The cash and
bank balance of the company was Rs2650.13 Crs in the year 2005 which increase to
Rs 13527.21 Crs in the year 2009. So this is increasing its value among other banks.
The liabilities of the company are also increasing ie. It was Rs 51429 Crs in the year
2005 and after wards with the increase in its business over other banks its liabilities
increases and thus positively affects its growth.

The capital adequacy is also well above the minimum period

required. These factors hold the potential to sustain growth rates in the next 12-24
months in the housing finance business. In the asset management business, they will
be managing close to Rs.10, 000 crores at the end of March 2009. The growth has
been due to both organic growth and acquisitions. The increase in size of operations
will only augment its contribution to HDFC’s profits. However, its importance as a
growth engine for the future cannot be underestimated given the prospects for the
housing finance industry .The Bank’s total balance sheet size increased by 21.4%
from Rs.183,271 crores as of March 31, 2009 to Rs. 222,459 crores as of March 31,
2010. Total deposits were at Rs. 167,404 crores, an increase of 17.2% over March 31,
2009.

PROFIT & LOSS A/C OF HDFC BANK

PARTICULARS ------------------- in Rs. Cr. -------------------

Mar '05 Mar '06 Mar '07 Mar '08 Mar '09
12 mths 12 mths 12 mths 12 mths 12 mths
Income
Interest Earned 3,093.49 4,475.34 6,889.02 10,115.00 16,332.26
Other Income 637.36 1,213.64 1,510.24 2,205.38 3,470.63
Total Income 3,730.85 5,688.98 8,399.26 12,320.38 19,802.89
Expenditure
Interest expended 1,315.56 1,929.50 3,179.45 4,887.12 8,911.10
Employee Cost 276.67 486.82 776.86 1,301.35 2,238.20
Selling and Admin Expenses 506.44 943.03 727.53 974.79 2,851.26
Depreciation 144.07 178.59 219.60 271.72 359.91
Miscellaneous Expenses 634.49 1,035.10 2,113.28 3,295.22 3,197.49
Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00
Operating Expenses 1,261.62 2,170.85 2,590.66 3,935.28 7,290.66
Provisions & Contingencies 300.05 472.69 1,246.61 1,907.80 1,356.20
Total Expenses 2,877.23 4,573.04 7,016.72 10,730.20 17,557.96
Mar '05 Mar '06 Mar '07 Mar '08 Mar '09
12 mths 12 mths 12 mths 12 mths 12 mths
Net Profit for the Year 853.62 1,115.94 1,382.54 1,590.18 2,244.94
Extraordionary Items -0.26 0.00 -0.35 -0.06 -0.59
Profit brought forward 405.32 602.34 1,455.02 1,932.03 2,574.63
Total 1,258.68 1,718.28 2,837.21 3,522.15 4,818.98
Preference Dividend 0.00 0.00 0.00 0.00 0.00
Equity Dividend 140.07 172.23 223.57 301.27 425.38
Corporate Dividend Tax 19.64 24.16 38.00 51.20 72.29
Per share data (annualised)
Earning Per Share (Rs) 27.55 35.64 43.29 44.87 52.77
Equity Dividend (%) 45.00 55.00 70.00 85.00 100.00
Book Value (Rs) 145.86 169.24 201.42 324.38 344.44
Appropriations
Transfer to Statutory
242.01 -265.37 288.38 436.05 641.25
Reserves
Transfer to Other Reserves 66.56 87.08 114.14 159.02 224.50
Proposed Dividend/Transfer
159.71 196.39 261.57 352.47 497.67
to Govt
Balance c/f to Balance Sheet 602.34 1,455.02 1,932.03 2,574.61 3,455.57
Total 1,070.62 1,473.12 2,596.12 3,522.15 4,818.99

Interpretation:

The total income of the bank in the year 2005 was Rs 3093.49 crs which increases to
Rs 16332.26 in year 2009 and when we compare it with the expenditures which are
2877.23 in the year 2005 and than increases to 17557.26 in the year 2009. the bank
has problem as it has increased its expenses and the income they are earning is at the
same pace. The company can increase its earning per share by lowering its selling and
distribution expenses.
For the year ended March 31, 2010, the Bank earned total income of Rs. 19,980.5
crores. Net revenues (net interest income plus other income) for the year ended March
31, 2010 were Rs. 12,194.2 crores, up by 13.8% over Rs. 10,711.8 crores for the year
ended March 31, 2009. The Bank’s net profit for year ended March 31, 2010 was Rs.
2,948.7 crores, up 31.3%, over the year ended March 31, 2009. Consolidated net
profit for the Bank increased by 33.6% to Rs. 3,003.7 crores for the year ended March
31,

The Bank earned total income of Rs. 4,956.7 crores. Net revenues were Rs. 3,254.9
crores. Net interest income was Rs. 2,351.4 crores, up by 27% over the quarter ended
March 31, 2009. This was because of the loan growth and a core net interest margin
for the quarter of 4.4%. Other incomes was Rs. 903.6 crores. The main contributor to
other income was fees & commissions of Rs. 765.3 crores, up by 5.7% over Rs. 723.7
crores in the preceding quarter ended December 31, 2009 The other major
component of other income was foreign exchange & derivatives revenue of Rs. 180.1
crore. With an increase in bond yields, the Bank incurred a loss of Rs. 47.3 crores on
revaluation sale of investments for the quarter ended March 31, 2010 as against a
profit of Rs.
243.6 crores in the quarter ended March 31, 2009.
Operating expenses for the quarter were Rs. 1,560.5 crores, an increase of 11.8% over
Rs. 1,396.2 crores during the corresponding quarter of the previous year. The ratio of
operating expenses to net revenues was 47.9%. For the quarter ended March 31,
2010, the profit before tax at Rs.1,254.5 crores grew by 37.4% over the corresponding
quarter of the previous year. After providing Rs. 417.8 crores for taxation, the Bank
earned a Net Profit of Rs. 836.6 crores, an increase of 32.6% over the quarter ended
march 31,2009

CREDIT RATING OF THE BANK

The Bank has its deposit programs rated by two rating agencies – Credit Analysis &
Research Limited (CARE) and Fitch Ratings India Private Limited. Which represents
instruments considered to be "of the best quality, carrying negligible investment risk".
CARE has also rated the bank's Certificate of Deposit (CD) programme which
represents "superior capacity for repayment of short term promissory obligations".
Fitch Ratings India Pvt. Ltd. has assigned the rating to the Bank's deposit programme,
with the outlook on the rating as "stable". This rating indicates "highest credit
quality" where "protection factors are very high". The Bank also has its long term
unsecured, subordinated (Tier II) Bonds rated by CARE and Fitch Ratings India
Private Limited and its Tier I perpetual Bonds and Upper Tier II Bonds rated by
CARE and CRISIL Ltd. CARE has assigned the rating of "CARE AAA" for the
subordinated

Tier II Bonds while Fitch Ratings India Pvt. Ltd. has assigned the rating "AAA (ind)"
with the outlook on the rating as "stable". CARE has also assigned "CARE AAA
[Triple A]" for the
Banks Perpetual bond and Upper Tier II bond issues. CRISIL has assigned the rating
"AAA / Stable" for the Bank's Perpetual Debt programme and Upper Tier II Bond
issue. In each of the cases referred to above, the ratings awarded were the highest
assigned by the rating agency for those instruments.

IMPACT OF CAPITAL STRUCTURE ON THE RISK AND RETURN

ASPECT OF SHAREHOLDER OF A FIRM

As we know that if company take a more risk then they earn a more profit, because
we know that where there is risk there is a gain. so according this statement we can
say that company did not issue any debenture ,means company did not taking any
type of risk. So we can say that company is a risk avoider and also a unlevered firm.
ICICI BANK

ICICI Bank (Industrial Credit and Investment Corporation of India) is

India's largest private sector bank and second largest overall. ICICI Bank has total
assets of about USD 5.6 Billion, a network of over 950 (including 190 branches of
Sangli bank recently taken over by ICICI Bank) branches and offices, and about 3500
ATMs. 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. ICICI Bank's equity shares are
listed in India on stock exchanges at Kolkata and Vadodara, the Stock Exchange,
Mumbai and the National Stock Exchange of India Limited and its ADRs are listed
on the New York Stock Exchange (NYSE). During the year 2005 ICICI bank was
involved as a defendant in cases of alleged criminal practices in its debt collection
operations and alleged fraudulent tactics to sell its products.

Overview:
ICICI Bank is India's second-largest bank with total assets of Rs. 3,446.58
billion at March 31, 2007 and profit after tax of Rs. 31.10 billion for fiscal 2007.
ICICI Bank is the most valuable bank in India in terms of market capitalization and is
ranked third amongst all the companies listed on the Indian stock exchanges in terms
of free float market capitalisation. The Bank has a network of about 950 branches and
3,300 ATMs in India and presence in 17 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 specialised 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 Centre and representative offices in the United States, United
Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia.
ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the
National Stock Exchange of India Limited..

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
Illinois 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
approvals, ICICI integrated the group's financing and banking operations, both
wholesale and retail, into a single entity. At the same time, ICICI started its
international expansion by opening representative offices in New York and
London. In India, ICICI Bank bought the Shimla and Darjeeling branches that
Standard Chartered Bank had inherited when it acquired Grindlays Bank.
• 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 opened a representative 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 Karnataka State. Sangli Bank had been founded in 1916 and was
particularly strong in rural areas. With respect to the international sphere,
ICICI also received permission from the government of Qatar to open a
branch in Doha. Also, 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.
• 2009: ICICI made huge changes in its organisation like elimination of loss
making department and retrenching outsourced staff or renegotiate their
charges in consequent to the recession. In addition to this, ICICI adopted a
massive approach aims for cost control and cost cutting. In consequent of it,
compensation to staff was not increased and no bonus declared for 2008-09.

Background
ICICI Bank is India's second-largest bank and largest private sector bank, with total
assets of EUR 46.1 billion for the quarter ending 30 June,2006. Currently, ICICI
Bank has a network of approximately 630 branches and extension counters, along
with 2,325 [Link] bank offers a wide range of banking products and financial
services to its corporate and retail customers through a variety of delivery channels
and specialised subsidiaries. Its services include investment banking, life and non-life
insurance, venture capital and asset management. ICICI Bank, originally promoted in
1994 by ICICI Limited (an Indian financial institution), was the latter’s wholly-
owned subsidiary. ICICI Ltd merged into ICICI Bank in 2002. The equity shares of
ICICI Bank are listed in India on the Bombay Stock Exchange and the National Stock
Exchange of India Limited, and its American Depositary Receipts are listed on the
New York Stock Exchange.

Overall Current scenario of Banks:

♦ 28 public sector banks (Government of India holding a stake),
♦ 29 private banks (Publicly listed and traded on stock exchanges),
♦ 31 foreign banks.
Management of ICICI:

K. V. Kamath
Managing Director and Chief Executive Officer

Chanda KochharNachiket Mor

Deputy Managing Director Deputy Managing Director

V. VaidyanathanMadhabi Puri Buch

Executive Director Executive Director
Awards & Recognitions ICICI Bank 2008

♦ Excellence in Remittance Business Award, 2008 from Asian Banker.

♦ ICICI Bank has won the Reader’s Digest Trusted Brand Gold Award for
the Bank category in India in 2008.
Features:
♦ Acceptance of
• Credit Cards : Visa, MasterCard
• Debit Cards : Visa Electron, Maestro
♦ State of the art terminal
♦ Zero Balance ICICI Bank account with Cheque book
 ♦ Direct account credits to ICICI Bank account for settlement amounts
♦ New network
♦ Fast transaction speeds
♦ Merchant Training on Usage and Fraud prevention
♦ Prompt Service
♦ Access to ICICI Banks vast portfolio of finance products for your
business and family needs
♦ 24x 7 Merchant service desk to address queries
♦ Presence in all the leading metro cities across India

Balance sheet (in crores)

Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

12 mths 12 mths 12 mths 12 mths 12 mths

Capital and Liabilities:

Total Share Capital 1,086.75 1,239.83 1,249.34 1,462.68 1,463.29

Equity Share Capital 736.75 889.83 899.34 1,112.68 1,113.29

Share Application Money 0.02 0.00 0.00 0.00 0.00

Preference Share Capital 350.00 350.00 350.00 350.00 350.00

Reserves 11,813.20 21,316.16 23,413.92 45,357.53 48,419.73

Revaluation Reserves 0.00 0.00 0.00 0.00 0.00

Net Worth 12,899.97 22,555.99 24,663.26 46,820.21 49,883.02

Deposits 99,818.78 165,083.17 230,510.19 244,431.05 218,347.82

Borrowings 33,544.50 38,521.91 51,256.03 65,648.43 67,323.69

Total Debt 133,363.28 203,605.08 281,766.22 310,079.48 285,671.51

Other Liabilities & Provisions 21,396.17 25,227.88 38,228.64 42,895.39 43,746.43

Total Liabilities 167,659.42 251,388.95 344,658.12 399,795.08 379,300.96

Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

12 mths 12 mths 12 mths 12 mths 12 mths

Assets

Cash & Balances with RBI 6,344.90 8,934.37 18,706.88 29,377.53 17,536.33

Balance with Banks, Money at Call 6,585.07 8,105.85 18,414.45 8,663.60 12,430.23

Advances 91,405.15 146,163.11 195,865.60 225,616.08 218,310.85

Investments 50,487.35 71,547.39 91,257.84 111,454.34 103,058.31

Gross Block 5,525.65 5,968.57 6,298.56 7,036.00 7,443.71

Accumulated Depreciation 1,487.61 1,987.85 2,375.14 2,927.11 3,642.09

Net Block 4,038.04 3,980.72 3,923.42 4,108.89 3,801.62

Capital Work In Progress 96.30 147.94 189.66 0.00 0.00

Other Assets 8,702.59 12,509.57 16,300.26 20,574.63 24,163.62

Total Assets 167,659.40 251,388.95 344,658.11 399,795.07 379,300.96

 Contingent Liabilities 97,507.79 119,895.78 177,054.18 371,737.36 803,991.92

Bills for collection 9,803.67 15,025.21 22,717.23 29,377.55 36,678.71

Book Value (Rs) 170.35 249.55 270.37 417.64 445.17

Analysis of balance sheet

Balance sheet shows that company is increasing their assets year by year but it’s also increase their liabilities
So it means that company is managing their liquidation position. Total asset of company increase year by year
which is good for company

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• Profit and loss account

Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

12 mths 12 mths 12 mths 12 mths 12 mths

Income

Interest Earned 9,409.89 13,784.50 22,994.29 30,788.34 31,092.55

Other Income 3,416.23 5,036.62 6,962.95 8,878.85 8,117.76

Total Income 12,826.12 18,821.12 29,957.24 39,667.19 39,210.31

Expenditure

Interest expended 6,570.89 9,597.45 16,358.50 23,484.24 22,725.93

Employee Cost 737.41 1,616.75 2,078.90 1,971.70
 1,082.29
Selling and Admin Expenses 1,040.49 2,360.72 4,900.67 5,834.95 5,977.72

Depreciation 590.36 623.79 544.78 578.35 678.60

Miscellaneous Expenses 1,881.77 2,616.78 3,426.32 3,533.03 4,098.22

Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00

Operating Expenses 3,177.78 5,274.23 8,849.86 10,855.18 10,795.14

Provisions & Contingencies 1,072.25 1,409.35 1,638.66 1,170.05 1,931.10

Total Expenses 10,820.92 16,281.03 26,847.02 35,509.47 35,452.17

Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

12 mths 12 mths 12 mths 12 mths 12 mths

Net Profit for the Year 2,005.20 2,540.07 3,110.22 4,157.73 3,758.13

Extraordionary Items 0.00 0.00 0.00 0.00 -0.58

Profit brought forward 53.09 188.22 293.44 998.27 2,436.32

Total 2,058.29 2,728.29 3,403.66 5,156.00 6,193.87

Preference Dividend 0.00 0.00 0.00 0.00 0.00

Equity Dividend 632.96 759.33 901.17 1,227.70 1,224.58

Corporate Dividend Tax 90.10 106.50 153.10 149.67 151.21

Per share data (annualised)

Earning Per Share (Rs) 27.22 28.55 34.59 37.37 33.78

Equity Dividend (%) 85.00 85.00 100.00 110.00 110.00

Book Value (Rs) 170.35 249.55 270.37 417.64 445.17

Appropriations

Transfer to Statutory Reserves 547.00 248.69 1,351.12 1,342.31 2,008.42

Transfer to Other Reserves 600.01 1,320.34 0.00 0.01 0.01

Proposed Dividend/Transfer to Govt 723.06 865.83 1,054.27 1,377.37 1,375.79

Balance c/f to Balance Sheet 188.22 293.44 998.27 2,436.32 2,809.65

Total 2,058.29 2,728.30 3,403.66 5,156.01 6,193.87

Analysis of profit and loss account

According to the p&l account company has high total income as compare to the total expenses. But
Company is increasing their income after 2007 its means that company more focused or increase their
long term investments.
 •

Capital Structure

Period Instrument Authorized Capital Issued Capital - P A I D U P -

From To (Rs. cr) (Rs. cr) Shares Face Value Capital
(nos)
2008 2009 Equity Share 214.75 214.75 111325064210 214.75
2007 2008 Equity Share 214.75 214.75 111268749510 214.75
2006 2007 Equity Share 214.75 214.75 899266672 10 214.75
2005 2006 Equity Share 214.75 214.75 889823901 10 214.75
2004 2005 Equity Share 214.75 214.75 616391905 10 214.75
2003 2004 Equity Share 214.75 214.75 613021301 10 214.75

Interpretation:
As we can see the company last 5 to 6 year capital structure position it remain same,
so we say that the company have smooth running for long term as it is shown
above(last five year capital is 214.75cr)
Another thing is that company is not issuing a debenture ,so we can say that this
company is unlevered firm
Company position of ICICI in relative industry

COMPANY POSITION RELATIVE TO INDUSTRY

HDFC Bank and
Competitors [36]

Net Worth (Capital Reserve) in % of Net NPA to Net Capital Adequacy Ratio
Bank
INR billion advance (%)

State bank of India 490.33 1.78 13.47

ICICI Bank 468.20 1.55 13.97

Punjab National Bank 123.18 0.64 12.96

HDFC Bank 114.97 0.47 13.60

Bank of Baroda 110.44 0.47 12.91

Bank of India 105.89 0.52 12.95

Canara Bank 105.00 0.84 13.25

IDBI Bank 88.20 1.30 11.95

Axis Bank 87.69 0.42 13.73

Union Bank of India 73.48 0.17 12.51

Central Bank of India 59.43 1.45 10.42

Oriental Bank of
57.76 0.99 12.12
Commerce

Allahabad Bank 52.21 0.80 12.04

Interputation

• From this table we can say that company position relative to its industry is
very good, because here no banks are there which have a more capital
adequacy ratio then the ICICI banks ,and other banks have a less capital
adequacy ratio then the ICICI bank so we can say that company position is
very good ,and if they want to retain the number one position then the finance
manager has to do a work as like as they are doing.
ICICI Bank’s financial position sound; rumours baseless and malicious:

ICICI Bank Limited (NYSE: IBN) is aware that rumours are being repeatedly
circulated in certain centres regarding the financial strength of the Bank. The Bank
states that these rumours are baseless and malicious. As these rumours could create
concern among the Bank’s customers, the Bank reiterates that:

• ICICI Bank has a very strong capital position, having proactively raised Rs. 20,000
crore (about US$ 5 billion) in June 2007, almost doubling its capital base. It has a net
worth of over Rs. 47,000 crore (i.e. over US$ 10 billion) and a capital adequacy ratio
of 13.4% at June 30, 2008, as against the regulatory requirement of 9.0%. This is
among the highest levels of capital adequacy in large Indian banks. This reflects the
healthy capital position and comfortable level of leverage. Its Banking and non-
banking subsidiaries are also well-capitalised.

• ICICI Bank has consolidated total assets of over Rs. 484,000 crore (over US$ 105
billion), which is diversified across a wide range of asset classes in India and
overseas.

• ICICI Bank is profitable. It made a profit after tax of Rs. 4,158 crore
(over US$ 900 million) in FY2008 and Rs. 728 crore (over US$ 155
million) in the first quarter of this year. This was due to the strong core
performance, which more than offset the impact of adverse debt and
equity market conditions in India and globally since the second half of
FY2008.

CREDIT RATING OF ICICI BANK

MUMBAI: Credit rating agency CARE has reaffirmed its highest safety ratings of
AAA and PR1+ assigned to the various long and short-term instruments of ICICI
Bank Ltd.

The ratings factors in ICICI Bank's financial strength, strong market position,
proactive management, measures taken by the bank to diversify and reduce its loan
portfolio risk among others, CARE said in a release here on Tuesday.

The agency also cited ICICI bank's "strong" technology infrastructure, "significant"
retail reach and satisfactory capital adequacy for the reaffirmation of the ratings.
CARE said it has taken note of media reports on rumours regarding ICICI Bank's
financial position and subsequent withdrawals by depositors, and added the bank had
"swiftly" put in place the necessary logistics and administrative support systems to
ensure availability of sufficient funds.

The rating agency said the steps taken by the bank and assurance by the regulator
have reinforced confidence in ICICI Bank.

Credit rating agency CRISIL had reaffirmed its ratings on ICICI Bank on Tuesday,
after rumours of a liquidity crunch resulted in a panic withdrawal by depositors last
week.

Relation in risk and return

According to the given capital structure of ICICI ,we can say that the capital
structure of the ICICI is stable from last five year, so we can say that company is not
taking any risk, Means Company is a risk avoider.
Another reason is that company did not issue any type of debenture, so again we can
say that in the ICICI bank risk and return relationship is zero
But according to the news the different persons say that following:-
Risk is an integral part of the banking business and ICICI Bank aims at the delivery
of superior shareholder value by achieving an appropriate trade-off between risk and
returns. ICICI Bank is exposed to various risks, including credit risk, market risk and
operational risk. Our risk management strategy is based on a clear understanding of
various risks, disciplined risk-assessment and measurement procedures and
continuous monitoring. The policies and
procedures established for this purpose are continuously benchmarked with
international best practices. A comprehensive range of quantitative and modelling
tools developed by a dedicated risk analytics team supports the risk management
function at ICICI Bank. The Risk, Compliance & Audit Group (RCAG) is responsible
for assessment, management and mitigation of risk in ICICI Bank. This group,
forming a part of the Corporate Centre, is completely independent of all business
operations and accountable to the Risk and Audit Committees of the Board of
Directors. RCAG is organised into six subgroups: Credit Risk Management Group,
Market Risk Group, Credit Policies Group, Internet Audit Group, Retail Risk Group
and Risk Analytics Group
Comparison between the ICICI and HDFC bank

MARCH 2009 HDFC ICICI

BRANCHES 467 565
ATMs 1147 2000
CITIES 211 371
RETAIL ASSEST(RS 18000 56000
CRORE)
DEPOSIT(CRORE) 38000 99800
CAR LOAN(CRORE) 2500 11500
CREDIT CARD(MN) 1.3 3
RETAIL 6.4 13.7
CUSTOMER(MN)
COST OF DEPOSIT 3.2 4.5
NET MARGIN 3.2 2.4

Even in the number of customers ICICI Bank leads by a distance . Nearly 14 million
customers bank with ICICI Bank, while the number for HDFC Bank is less than half
(6.4 million).

ICICI Bank has issued 3 million credit cards -- that is more than twice the number of
HDFC Bank's credit card users. However, industry observers point out that ICICI
Bank's effective users for credit cards may not be high.

Nonetheless, they concede that even with a discounted customer base, the numbers
will still be strong. Even in businesses like online trading where the risks are
relatively low, ICICI Bank commands a two-thirds market share.
So as per the figures we can say that no doubt ICICI have a very strong position in the
market in the form of goodwill or assets but when we talk about the margin rate then
we can say that hdfc is earning more margin then the ICICI that is 3.2 .
Reference

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