A REPORT
ON
ANALYSIS OF FINANCIAL STATEMENT
OF INDUSIND BANK
PRESENTED BY:
Charu Kapoor
Id no.WBBBA15130
BBA V Semester
INTRODUCTION :
INDUSIND BANK LIMITED IS A MUMBAI BASED INDIAN NEW GENERATION BANK. THE BANK
OFFERS COMMERCIAL, TRANSACTIONAL AND ELECTRONIC BANKING PRODUCTS AND
SERVICES. INDUSIND BANK WAS INAUGURATED IN APRIL 1994 BY THE UNION FINANCE
MINISTER MANMOHAN SINGH .
AS ON JUNE 30, 2016, INDUSIND BANK HAS 1,004 BRANCHES, AND 1885 ATM’S SPREAD ACROSS
625 GEOGRAPHICAL LOCATIONS OF THE [Link] ALSO HAS REPRESENTATIVE OFFICES IN
LONDON, DUBAI AND ABU DHABI. MUMBAI HAS THE MAXIMUM NUMBER OF BANK
BRANCHES FOLLOWED BY NEW DELHI AND CHENNAI .
INDUSIND BANK HAS MAJORLY ACQUIRED ITS NAME FROM INDUS VALLEY CIVILIZATION. IT
WAS PROMOTED BY MR SRICHAND P HINDUJA, A LEADING NON-RESIDENT INDIAN
BUSINESSMAN AND HEAD OF THE HINDUJA GROUP. THE START UP CAPITAL AMOUNT IS RS
1,000 MILLION .
banking
Corporate
others
banking
Products
and services
Online Internation
banking al banking
Wealth
manageme
nt services
Strength- Weakness-
backing of Hinduja group. Lags behind many banks
Give importance to in capital structure.
customers Few numbers of branches
Opportunity-
SWOT across the country
Threat-
Mobile banking ,internet Competition
banking.
New bank licenses to be
Improving brand. issued by RBI
Aggressive marketing.
Mission and vision:
[Link] bank wishes that it could become a relevant
business and banking partner to their clients.
[Link] focus to remain customer responsive.
[Link] become a forerunner in the market place in
term of profitability, productivity and efficiency.
[Link] mission is to add value to the Shareholders
and emerge as the “best-in-class” in the chosen
parameters. They even believe in doubling their
profits, clients and branches in the next three
years.
BOARD OF DIRECTORS OF INDUSIND BANK:
MR. R. SESHASAYEE, CHAIRMAN
MRS. KANCHAN CHITALE
MR. VIJAY VAID
MR. T. ANANTHA NARAYANAN
MR. RANBIR SINGH BUTOLA
MR. YASHODHAN KALE
MR. SHANKER ANNASWAMY
DR. T. T. RAM MOHAN
MR. ROMESH SOBTI, MANAGING DIRECTOR AND CEO
COMPANY SECRETARY
MR. HARESH K. GAJWANI
THE AWARDS AND RECOGNITIONS OF BANK:
MOVED UP 6 RANKS,TO 13TH PLACE FROM 19TH PLACE OF LAST YEAR, MAKES US THE TOP RAISER IN THE
BRANDZ TOP 50 VALUABLE BRANDS OF 2015 AS ADJUDGED BY WPP AND MILLWARD BROWN.
AWARDED AS THE BEST BANK 2015 BY BUSINESS INDIA.
BANKER OF THE YEAR AWARDED TO MR ROMESH SOBTI, MD & CEO AT THE 17 TH EY ENTREPRENEUR OF THE YEAR OF 2015
INDIA AWARDS.
BEST BANK AWARD FOR ELECTRONIC PAYMENT SYSTEM AMONG MID-SIZED BANKS BY IDRBT FOR THE YEAR 2015-16.
EXCELLENCE IN PROCUREMENT SUSTAINABILITY RUNNER-UP AWARD IN 3 RD ANNUAL CPO FORUM.
THE ASIAN BANKER ACHIEVEMENT AWARDS 2015.
GOLDEN PEACOCK AWARD FOR INNOVATION MANAGEMENT PRESENTED AT 15 TH LONDON GLOBAL CONVENTION ON
CORPORATE GOVERNANCE & SUSTAINABILITY.
GOLDEN PEACOCK AWARD A STRATEGIC TOOL TO LEAD THE COMPETITION WINNER OF ‘GOLDEN PEACOCK INNOVATION
MANAGEMENT AWARD 2015’.
INDUSLND BANK BAGS THREE AWARDS IN INDIAN BANKING ASSOCIATIONS ANNUAL TECHNOLOGY AWARD 2015-16.
WINNER-BEST PAYMENT INITIATIVE FOR BANKS STRONG INTEGRATED PAYMENT TECHNOLOGY INFRASTRUCTURE
PRODUCT & SERVICES OFFERED, INNOVATIVE PAYMENT INITIATIVES ELECTRONIC BENEFIT TRANSFER READINESS,
CUSTOMER COMMUNICATION & HUGE INCREASE ON USER ADOPTION ON VARIOUS ELECTRONIC TRANSFER
MECHANISMS.
CMO ASIA 2015 AWARD FOR EXCELLENCE IN SOCIAL MEDIA & DIGITAL MARKETING FOR BEST INTEGRATED DIGITAL
CAMPAIGN FOR VIDEO BRANCH.
RESEARCH METHODOLOGY
• Primary Objective:
• To know about the profile and products and services of IndusInd Bank
• To analyse the financial statements of IndusInd Bank to assess its true financial position.
objective • Secondary Objective:
• To find out the shortcomings in IndusInd Bank.
• To see whether IndusInd Bank is going well or not.
• The Research design that I have in this report is a Descriptive Research Design because it will ensure
minimization of bias and maximization of reliability of data collected. Research has got a very clear
Research objective and clear cut data requirements. In this research one needs to use the fact and information
design already available through financial statements of earlier year and analyse it with the available
material. Hence, I would say that the research is both Descriptive and Analytical in nature.
• The required data for the research are basically secondly in nature and thus the sources from where
the data are collected are:
• The annual reports of the company.
Sources of • Internet: which include the financial data which is being collected from the official website i.e.
data and its [Link] and some other websites to gain more knowledge about the bank
• Brochures from the Bank.
collection • The valuable cooperation extended by staff members and the branch manager of IndusInd bank
procedure of Agra, Sanjay place branch.
• The data is mainly collected in the form of secondary data.
DATA ANALYSIS AND ITS
INTERPRETATION
COMAPARATIVE BALANCE SHEET INTERPRETATION
BY ANALYSING THE BALANCE SHEET OF INDUSIND BANK THE FOLLOWING TRENDS CAN BE PRESENTED:
THE COMPARATIVE BALANCE SHEET CLEARLY SHOWS THAT THE ASSETS AND LIABILITIES OF THE BANK HAVE
INCREASED IN THE YEAR 2016 BY 28, 269,63 (25.28%).
FIXED ASSETS HAVE INCREASED DURING 2015-2016 BY 97.76, I.E., 8.45%. THIS FACT SHOWS THAT THE BANK HAS UTILISED
MAJOR PORTION OF FUNDS RAISED THROUGH ISSUE OF SHARES AND LONG-TERM LOAN FOR ACQUIRING FIXED ASSETS.
THERE CAN BE SEEN A DECREASE IN THE BALANCE WITH BANKS BY 1,153.16 (17.09%). SIMILARLY, THERE IS AN INCREASE
IN THE BALANCE WHICH IS KEPT WITH THE RBI OF THE COUNTRY BY 12.04% THUS DEPICTING THE GOOD FINANCIAL
POSITION OF THE BANK.
THERE CAN BE SEEN AN INCREASE IN THE ADVANCES AND DEPOSITS OF THE BANK WHICH CLEARLY DEPICTS THE
HEALTHY BANKING PRACTICES OF THE BANK.
THE BORROWINGS OF THE BANK ARE ALSO INCREASING BY 7.45 % WHICH DO NOT SHOW A GOOD SIGN AS IT CLEARLY
SHOWS THE DEPENDENCY OF BANK ON OUTSIDE FUNDS.
IF WE COMPARE THE FINANCIAL POSITION OF THE BANK IT IS ESPECIALLY MUCH BETTER IN THE YEAR 2015-16.
COMPARATIVE INCOME STATEMENT
INTERPRETATION
BY ANALYSING THE COMPARATIVE INCOME STATEMENTS OF THE BANK SHOWS THE
FOLLOWING TREND:
THE NET PROFIT OF THE FIRM HAS INCREASED BY 492.7 I.E., 27.46% THUS SHOWING THAT
THE BANK HAS BEEN ABLE TO INCREASE ITS PROFIT THROUGH THE YEARS THOUGH THE
INCREASE IS NOT VERY LARGE.
THE INTEREST EXPENSES ARE ALSO INCREASING BY 792.4 (12.63) THIS IS DUE TO THE
INCREASE IN THE BORROWING OF THE BANK.
THE OPERATING PROFIT OF THE BANK HAS ALSO INCREASED BY A PERCENTAGE MARK OF
33.67.
THUS AN OVERALL INCREASE IN THE OVERALL PROFIT OF THE BANK SHOWS THAT THE
BANK IS LIVING UPTO ITS EXPECTATIONS AND THUS IS GENERATING ENOUGH PROFIT TO
SATISFY ITSELF.
RATION ANALYSIS AND ITS INTERPRETATION
CURRENT RATIO:
CURRENT RATIO = CURRENT ASSETS/CURRENT LIABILITIES
current ratio of indusind bank
3
2.9
2.8
Ratio
2.7 current ratio
2.6
2.5
2014-15 2015-16
Years
Interpretation: An ideal current ratio is 2. In the above situation we can clearly see that the
current ratio is above the benchmark ratio which means that the available funds are not utilised
fully, though with respect to previous year the current ratio of 2015-16 is much better.
QUICK RATIO:
QUICK RATIO= QUICK ASSETS/ CURRENT LIABILITIES
QUICK ASSETS= CURRENT ASSETS- INVENTORY
Quick ratio of Indusind Bank
2
1.5
Ratios
1 Quick ratio
0.5
0
2014-15 2015-16
years
Interpretations: A quick ratio of 1:1 is considered favourable since for every
rupee of current liabilities, there is a rupee of quick assets. We can see that in both
the financial years the bank is generating a ratio which is above the ideal ratio
which can be considered favourable for the bank
NET PROFIT RATIO:
NET PROFIT RATIO= NET PROFIT AFTER TAX / NET SALES
Net Profit Ratio of IndusInd Bank
20
19.5
19
Ratios
18.5 Net Profit Ratio
18
17.5
2014-15 2015-16
Years
Interpretations: Net profit ratio indicates overall efficiency of the business. Thus
the net profit ratio of IndusInd bank is being increasing over the years clearly
depicting an increase in the operational efficiency of the bank.
DEBT- EQUITY RATIO
DEBT - EQUITY RATIO = TOTAL LIABILITIES / SHAREHOLDERS' EQUITY
Debt-Equity Ratio
of Indusind bank
20
15
Ratios
10 Debt-Equity Ratio
5
0
2014-15 2015-16
Years
Interpretations: Debt- equity Ratio is acceptable if it is 2:1, which means debt can be twice the
equity. The basic objective to calculate the Debt-Equity ratio is to measure the relative proportions
of outsider’s funds and shareholders’ funds invested in the company. In case of IndusInd bank the
ratio is increasing through the years which mean that the bank is taking more risk to balance the
financial position. Thus making it unfavourable for the bank.
FIXED SAAET TURNOVER RATIO:
FIXED ASSETS TURNOVER RATIO = NET SALE/AVERAGE FIXED ASSETS.
Fixed asset turnover ratio
of Indusind bank
9.5
9
Fixed Assets turnover
Ratios
8.5 Ratio
8
7.5
2014-15 2015-16
Years
Interpretations: We can clearly see that with the increasing years the fixed
turnover ratio of the bank is also increasing thus depicting that the fixed
assets of the bank have been used effectively in the business and the capital is
also not blocked in fixed assets.
CONCLUSION
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SUGGESTIONS AND
RECOMMENDATIONS
To maintain the better liquidity position and a safety margin the bank
should try to improve its current ratio this would even help to utilise
the funds properly
To improve the profitability, the bank should try to reduce its dependency
on external equities for meeting the capital requirements. Due to this the
interest expenses would decline and the profits would increase which is
good for the bank.
Bank should try to finance in more and more projects. Financing
would help them earn more profit.
They should try and improve their visibility among the consumers as per
the branch of Sanjay place in Agra we received less customers as compared
to the targeted one thus showing the unpopular nature of the bank.
Thus another aspect is that the bank should try to improve its day-to day activities of
the clients. Though the bank is performing very well in all the spheres but if we
compare other private banks to it, it seems to have a lower position amongst them. This
is all due to its slower pace in achieving the prescribed targets.
THANK YOU