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Fundamental Analysis of SBI and HDFC Bank
1. VIVA Institute of Management & Research, Shirgoan, Virar(E)
A PROJECT REPORT
ON
A Study on Fundamental Analysis of Banking Sector SBI & HDFC Bank
Summer Project Report submitted to the University of Mumbai in Partial
Fulfilment for the award of degree of
Master of Management Studies (MMS)
Specialization: Operations
By
KHANDAGALE DEVRAM RISHABH
Roll No. 23
Batch: 2020-21
VIVA INSTITUTE OF MANAGEMENT & RESEARCH
Shirgaon, Virar (East)
(Affiliated to the University of Mumbai, Approved by AICTE New Delhi) INDIA.
August 2020
2. VIVA Institute of Management & Research, Shirgoan, Virar(E)
LATE SHRI VISHNU WAMAN THAKUR CHARITABLE TRUST’S
VIVA Institute of Management & Research
Shirgaon, Virar (E), Dist. Palghar, Pin - 401305
(Approved by AICTE, DTE, Affiliated to the University of Mumbai)
This is to certify that Mr. KHANDAGALE DEVRAM RISHABH
is a bonafide student of our Institute and the Summer Project Report titled “A Study on
Fundamental Analysis of Banking Sector SBI & HDFC Bank” submitted by him is in partial
fulfillment for the award of the Degree of MASTER OF MANAGEMENT STUDIES (MMS)
by the University of Mumbai during the Academic Year 2020-21.
Dr. HireshLuhar
Director
Date:
Place:Virar (East)
3. VIVA Institute of Management & Research, Shirgoan, Virar(E)
Declaration
This is to state that the Summer Project titled “A Study on Fundamental Analysis of Banking
Sector SBI & HDFC Bank” is original work done by me and being submitted in partial fulfilment for
the award of the degree, Master of Management Studies of the University of Mumbai. This Summer
Projectreport has not been submitted earlier either to this University, or, to any other affiliated college of
this University, or, to any other University / Institution for the fulfilment of the requirement of theMMS
Course.
Date:
Place: Virar (East)
---------------------------------
(Signature of Student)
RISHABH DEVRAM KHANDAGALE
4. 3
Acknowledgement
At the outset of this project, Researcher would like to express profound thanks to few people
without whose help, completion of this project would not have been possible.
I thankfully acknowledge the help that I have obtained from the teachers of Masters of
Management Studies Department for their support and co-operation right from the stage the projectwas
conceived.
The Researcher is very grateful to Dr. Hiresh Luhar, Director of VIVA Institute of
Management and Research, for giving the researcher this opportunity to do this project in
“Impact of E-Commerce On Supply Chain management”.
I must convey my heartfelt gratitude to my Project Incharge Prof. Suraj wadhva for his valuable
guidance and advice in completing this project and for being an excellent mentor throughout the summer
project journey.
I would also thank my Head of Department Mr. Lalit.P.Patil for his coordination and
cooperation and for giving necessary advice, kind guidance and encouragement.
My thanks and appreciation also go to my classmates and friends in developing the projectand to
the people who have willingly helped me out with their abilities. I will be always indebtedto them.
Date:
(Signature of Student)
Place: Virar (East) RISHABH DEVRAM KHANDAGALE
(Name of the
5. 4
EXECUTIVE SUMMARY
In the growing global competition the productive of any business concern depends upon the
behavioural aspect of consumers. This topic deals with the customers preparation towards other
advanced products from SBI and HDFC investment.
The second unit is to introduce the banking sector which gives a brief idea regarding the
banking sector in India.
The third unit comprises all about SBI, its market share, its achievements, analysis of its
balance sheet and profit and loss statement.
The fourth unit is introduction to HDFC its market share its achievements, analysis balance
sheet and profit and loss statement which shows the analysis of data through balance sheet
profit and loss statement of data collected from surveys.
The fifth unit shows the comparison between SBI and HDFC with the help of analysis of ratio
with its charts and deals with the findings, suggestions and conclusions which is very much
important after analysis ma As we know only that only analysis is not the end of a research so
in the sixth chapter the conclusion part is covered which is made after an in-depth study of the
analysis part of the thesis.
In each of the five chapters as described above every has been scheduled in manner so as to
enable the reader to appreciate to contents easily.
6. INDEX
Chapter
no.
Details Page no.
Candidate Declaration
Certificate by the Guide
Executive summary
1. INTRODUCTION 7
Objective of the study
Scope of the study
8
2. LITERATURE REVIEW
3. RESEARCH METHODOLOGY 9
4. DATA ANALYSIS 10
4.1 Fundamental Analysis 10
Introduction
Meaning & definition
Types of fundamental Analysis
4.2 Banking Sector in India 12-17
Introduction
Market Size
Structure of Banking Sector in India
4.3 Analysis of SBI Bank 18-23
History
Product & Services
Market Share of SBI Bank
Balance sheet of SBI Bank (2 years)
Profit &loss Statement of SBI Bank
4.4 Analysis of HDFC Bank 24-27
History
Product & Services
Market Share of SBI Bank
Balance sheet of SBI Bank (2 years)
Profit &loss Statement of SBI Bank
4.5 Ratio Analysis
5 33-38
7. Ratio Comparision of SBI & HDFC Bank 39
5. Findings & Conclusion 40-46
BIBLIOGRAPHY & REFERENCE 47
ANNEXURE- Questionnaire 48-49
6
8. INTRODUCTION
The banking sector as service sector, and as one of the components of financial
system, plays an important role in the performance of any economy. Banking
institutions in our country have been assigned a significant role in financing the
process of planned economic growth. The efficiency and competitiveness of
banking system defines the strength of any economy. Indian economy is not an
exception to this and banking system in India also plays a vitalrole in the process
of economic growth and development.
The banking sector is the lifeline of any modern economy. It is one of the
important financial pillars of the financial system which plays a vital role in the
success / fail of an economy. 'The banking system is fuel injection system which
spurs economic growth by mobilizing savings and allocating them to high return
investment. Research confirms that countries with a well-developed banking
system grow faster than hose with a weaker one. The banking system reflects
the economic health of the country. The strength of the economy of any country
basically hinges on the strength and efficiency of the financial system, which, in
turn, depends on a sound and solvent banking system. A sound banking system
efficiently deploys mobilized savings in productive section and a solvent
banking system ensures that the bank is capable of meeting its obligation to the
depositors. The banking sector is dominant in India as it accounts for more than
half the assets of the financialsector.
OBJECTIVE OF THE STUDY
The main objective of project is to do fundamental analysis of a banking
sector of companies.
Secondly to study the present banking system in india.
Analyze the information collected on balance sheet, profit and loss statement, market price
etc.
SCOPE OF THE STUDY
The study greatly giving attention on appraising any changes that perceived and revealed
in the fundamental analysis of banking sector. Furthermore, the study attempted to identify
areasso as to improve the banking sector S
7
BI and HDFC.
9. 8
LITERATURE REVIEW
This paper is basically a literature review of banking industry and effect of IT
based services on customer satisfaction. The study highlights customer satisfaction
levels among young customers in banking industry. A survey indicates the gaps
between customer’s expectations and perception with respect to IT based banking
services. Findings indicated need to improve the IT based services for enhancing
customer satisfaction
The main objective of this research was to determine the dimensions of service.
quality in the banking industry of Iran. For this the study empirically examined the
European perspective (i.e., Gronroos’s model) suggesting that service quality consists
of three dimensions, technical, functional and image. The results from a banking
service sample revealed that the overall service quality is identified more by a
consumer’s perception of technical quality than functional quality
It examined the relationship between the demographics and customers’
satisfaction in internet banking,. It also found out relationship between service quality
and customers’ satisfaction as well as satisfaction in internet banking service provided
by the public sector bank and private sector banks. The study found out that overall
satisfaction of employees, businessmen and professionals are higher in internet
banking service. Also it was found that there is significant difference in the customers’
perception in internet banking services provided by the public and privates sector
banks.
The paper compares public and private sector banks in Vijayawada city using
SERVQUAL model. The findings revealed that private sector banks have good
services to customers and they retained customers by providing better facilities. The
study finds out importance of new products and services for banks for retaining
customers.
10. 9
Research Methodology
The Research and methodology adopted for the present study has been systematic and was
done in accordance to the objective.
Data Collection:
Primary Data Collection:
Data are collected primarily through moneyrediff.com, RBI websites and other related
websites.
Secondary Data Collection:
Secondary are those which are collected afresh and for the first time. And thus happed
to be original in character. Methods of secondary collection are Questionnaire.
11. 10
FUNDAMENTAL ANALYSIS
MEANING AND DIFINITION
Fundamental analysis is a method of evaluating the intrinsic value of an asset and analysing
the factors that could influence its price in the future. This form of analysis is based on external
events and influences, as well as financial statements and industry trends. Fundamental
analysis is one of two major methods of market analysis, with the other being technical
analysis. While technical traders will derive all the information they need to trade from charts,
fundamental traders look at factors outside of the price movements of the asset itself.
TYPES OF FUNDAMENTAL ANALYSIS
Qualitative Factors:
Each industry has differences in terms of its customer base, market share
among firms, industry wide growth, competition, regulation and business
cycle.
Customers:
Some companies serve only a handful of customer. While other serve
millions. In general, it’s a red flag (a negative) if a business relies on a small
number of customers for large portion of its sales because the loss of each
customer could dramatically affect revenue.
Market share:
Understanding a company’s present market share can tell volume about
the company’s business. Market share is important because of economics
of scale.
Industry Growth:
One way of examining a company’s growth potential is to first examine
whether the amount of customers in the overall will grow.
Competition:
Simply looking at serial no. the number of competitors goes a long way
in understanding the competitive landscape for a company.
Regulation:
12. 1
Certain industry are heavily regulated due to the importance or severity of the industry’s
products and services. As important as some of these regulation are to the public, they
can drastically affect the attractiveness of a company for investment purpose.
Economic Analysis
An economic analysis is a process followed by experts to understand how key
economic factors affect the functioning of an organization, industry, region or any other
particular population group, with the purpose of making wiser decisions for the future.
It is a broader term that can mean simple and concise or sophisticated and complex
identification, study and projection of economic variables.
Every common stock is susceptible to the market risk. This feature of almost all
types of common stock indicates their combined movement with fluctuations in the
economic conditions towards the improvement or deterioration.
INDUSTRY ANALYSIS:
It is clear there is certain level of market risk faced by every stock and the stock
price decline during recession in the economy. Another point to be remembered is that
defensive kind of stock is affected less the recession as compared to the cyclical
category of stock. In industry analysis, each industries are highlighted that can stand
well in front of advance economic conditions.
Company analysis:
In company analysis different companies are considered and evaluated from the
selected industry so that most attractive company can be identified. Company analysis
is also referred to security analysis in which stock picking activity is done different
analysts have different approaches of conducting company analysis like.
13. 2
BANKING SECTOR IN INDIA
A bank financial institutions and a financial intermediary that accepts deposits and
channels those deposits into lending activities either directly or through capital markets. A
Bank connects customers that have capital deficits to customers with capital surpluses. Due to
their critical status within the financial system and the economy generally, bank are highly
regulated in most countries. They are generally subject to minimum capital requirements which
are based on an international set of capital standards. A bank financial institutions and a
financial intermediary that accepts deposits and channels those deposits into lending activities
either directly or through capital markets. A Bank connects customers that have capital deficits
to customers with capital surpluses. Due to their critical status within the financial system and
the economy generally, bank are highly regulated in most countries. They are generally subject
to minimum capital requirements which are based on an international set of capital standards,
known as the Basel accords. Banking in India originated in the last decades of the 18th century
.The first Bank were The General Bank of India which started in 1786,and Bank of Hindustan,
which started in 1790; both are now defunct . The oldest bank in existence in India is the state
Bank of India, which originated in the Bank of Calcutta in June 1806, which almost
immediately became the bank of Bengal. This was one of the three presidency banks, the other
two being the bank of Bombay and the bank of Madaras, all three of which were established
under charters from the British East India company. For many years the presidency banks acted
as quasi-central banks, as did
their successors. The three banks merged in 1921 to from the Imperial Bank of India, which,
upon India's independence, became the state Bank of India in 1955.
MARKET SIZE
The Indian banking system consists of 27 public sector banks, 26 private sector bank
46 foreign banks, 56 regional rural banks, 1,574 urban cooperative banks and 93,913 rural
cooperative banks in addition to cooperative credit institutions. Public – sector banks control
more than 70 per cent of the banking system assets, there by leaving a comparatively smaller
share for its private peers. Banks are also encouraging their customers to mange their finances
using mobile phones. ICRA estimates that credit growth in India’s banking sector would be at
serial no. 7-8 percent in 2019-2020
14. 3
STRUTURES OF BANKING SECTOR IN INDIA
Reserve Bank of India(RBI) :
The country had no central bank prior to the establishment of the RBI. The RBI is the
supreme monetary and banking authority in the country and controls the banking system in
India. Its called the Reserve Bank as it keeps the reserves of all commercial banks.
Scheduled and Non- scheduled Banks:
A schedule bank is a bank that is listed under the second schedule of RBI Act, 1934. In
order to be included under this schedule of the RBI Act, banks have to fulfill certain conditions
such as having a paid-up capital and reserve of least 0.5 million and satisfying the Reserve
Bank that its affairs are not being conducted in a manner prejudicial to the interests of its
depositors scheduled banks are further classified into commercial and cooperative banks. Non-
scheduled banks are those which are not included in the second schedule of the RBI act 1934,
At serial no. present these are only three such banks in the country.
15. 4
1. COMMERCIAL BANKS
A commercial bank is a type of financial institution that accepts deposits, offers
checking account services, makes various loans, and offers basic financial products like
certificate of deposit (CDs) and savings accounts to individuals and small businesses. A
commercial bank is where most people do their banking, as opposed of investment bank.
Commercial banks make money by providing loans and earning interest income from
those loans. The types of loans a commercial bank can issue vary and may include mortgages,
auto loans, business loans, and personal loans. A commercial bank may specialize in just one
or a few types of loans.
Customer deposits, such as checking accounts, savings accounts, money market
accounts, and CDs, provide banks with the capital to make loans. Customers who deposit
money into these accounts effectively lend money to the bank and are paid interest. However,
the interest rate paid by the bank on money they borrow is less than the rate charged on money
they lend.
Scheduled Commercial Banks(SCBs):
Schedule commercial banks (SCBs)account for a major proportion of the business of
the scheduled banks. SCBs in India are categorized into the five groups based on their
ownership and their nature of operations. State Bank of India and its six associates (excluding
State Bank of Saurashtra ,which has been merged with the SBI with effect from August 13,
2008) are recognised as a separate category of SCBs, because of the distinct statutes (SBI
Act,1955 and SBI Subsidiary Banks Act,1959)that govern them.Foreign banks are present in
the country either through complete branches/ subsidiary route presence or through their
representative offices.
16. 5
TYPES OF COMMERCIAL BANKS:
a. Public Sector Banks:
These are banks where majority stake is held by the Government of India.
Examples of public sector banks are: SBI, Bank of India, Canara Bank, etc.
b. Private Sector Banks:
These are banks majority of share capital of bank is held by private individual. These
banks are registered as companies with limited lability.
Example of private sector banks are: ICICI Bank, Axis Bank, HDFC, etc.
c. Foreign Banks:
These banks are registered and have their headquarters in a foreign country but operate
their branches in our country.
Example of foreign banks in India are: HSBC, Citi bank, Standard Chartered Bank, etc.
d. Regional Rural Banks:
Regional Rural Banks were established under the provisions of an ordinance
promulgated on the 26th September 1975 and the RRB Act,1976 with an objective to
ensure sufficient institutional credit for agriculture and other rural sectors.
17. 6
2. Cooperative Banks
Cooperative bank is an institution established on the cooperative basis and dealing in
ordinary banking business. Like other banks, the cooperative banks are founded by collecting
funds through shares, accept deposits and grant loans.
Cooperative banks are the primary banking products and are specialists in agricultural
activities, some small scale industries and self- employed workers.
Co-operative banks function on the basis of “no-profit no-loss”
The cooperative banking structure in India is divided into following main 5 categories:
PRIMARY URBAN CO-OPRATIVE BANKS
PRIMARY AGRICULTURAL CERDIT SOCIETIES
DISTRICT CENTRAL CO-OPERATIVE BANKS
STATE CO-OPEARTIVE BANKS
LAND DEVELOPMENT BANKS
Difference between schedule commercialandscheduleCo-operativeBanks:
The basic difference between scheduled commercial banks schedule cooperative
banks is in their holding pattern. Schedule cooperative banks are cooperative credit
institutions that are registered under the cooperative societies. Act. These work
according to the cooperative principles of mutual assistance. Also, unlike
commercial banks, these banks work on the basis of “no-profit no-loss”.
18. 7
Types of Business of Banks
Retail Banking:
Loans to individuals (housing loan, auto loan, education loan and other personal loan) or
small business
Wholesale Banking:
to mid and large corporate (project finance, working capital loans, terms loans etc.)
Treasury operations:
Investment in bonds, equity, mutual funds, commodities, derivatives trading and forex
operations.
Other Banking Activities:
Hire purchase activities, leasing business, merchant banking, syndication services, etc.
19. 18
ANALYSIS OF “STATE BANK OF INDIA”
HISTORY
The roots of the State Bank of India lie in the first decade of the 19th century when
the Bank of calcutta later renamed the bank of Bengal was established on 2 June 1806. The
Bank of Bengal was one of three Presidency banks, the other two being the Bank of
Bombay (incorporated on 15 April 1840) and the Bank of Madras (incorporated on 1 July
1843). All three Presidency banks were incorporated as joint stock of companies and were the
result of royal charts. These three banks received the exclusive right to issue paper currency
till 1861 when, with the Paper Currency Act, the right was taken over by the Government of
India. The Presidency banks amalgamated on 27 January 1921, and the re-organized banking
entity took as its name Imperial Bank of India. The Imperial Bank of India remained a joint-
stock company but without Government participation.
Pursuant to the provisions of the State Bank of India Act of 1955, the Rr, which is
Reserve Bank of India which is India’s central Bank, acquired a controlling interest in the
Imperial Bank of India. On 1 July 1955, the Imperial Bank of India became the State Bank of
India. In 2008, the Government of India acquired the Reserve Bank of India's stake in SBI so
as to remove any conflict of interest because the RBI is the country's banking regulatory
authority.
In 1959, the government passed the State Bank of India (Subsidiary Banks) Act. This
made eight banks that had belonged to princely states into subsidiaries of SBI. This was at the
time of the First Five Year Plan, which prioritized the development of rural India. The
government integrated these banks into the State Bank of India system to expand its rural
outreach. In 1963 SBI merged State Bank of Jaipur (est. 1943) and State Bank of Bikaner
(est.1944).
SBI has acquired local banks in rescues. The first was the Bank of Bihar (est. 1911),
which SBI acquired in 1969, together with its 28 branches. The next year SBI acquired National
Bank of Lahore (est. 1942), which had 24 branches. Five years later, in 1975, SBI acquired
Krishna ram Baldeo Bank, which had been established in 1916 in Gwalior state, under the
patronage of Maharaja madhao Rao Scindia. The bank had been the Dukan Pichadi, a small
moneylender, owned by the Maharaja. The new bank's first manager was Jall N. Broacha, a
Parsi. In 1985, SBI acquired the Bank of Cochin in Kerala, which had 120 branches. SBI was
the acquirer as its affiliate, the State Bank of Travancore already had an extensive network in
Kerala. There was, even before it actually happened, a proposal to merge all the associate banks
into SBI to create a single very large bank and streamline operations.
The first step towards unification occurred on 13 August 2008 when State Bank of
Saurashtra merged with SBI, reducing the number of associate state banks from seven to six.
On 19 June 2009, the SBI board approved the absorption of State Bank of Indore in which SBI
20. held 98.3%. (Individuals who held the shares prior to its takeover by the government held the
balance of 1.7%.)
The acquisition of State Bank of Indore added 470 branches to SBI's existing network
of branches. Also, following the acquisition, SBI's total assets approached ₹10 trillion. The
total assets of SBI and the State Bank of Indore were ₹9,981,190 million as of March 2009.
The process of merging of State Bank of Indore was completed by April 2010, and the SB
Indore branches started functioning as SBI branches on 26 August 2010.
On 7 October 2013,Arundhati Bhattacharya became the first woman to be appointed
Chairperson of the bank. Mrs. Bhattacharya received an extension of two years of service to
merge into SBI the five remaining associate banks.
Foreign subsidies Non-banking subsidies
SBI International(maturities)ltd. SBI capital markets Ltd.
SBI(California) SBI Fund Management Pvt.
Ltd.
SBI (canada) SBI Factors & commercial services pvt.
Ltd.
INMB Bank Ltd. Lagos SBI Cards & payment service pvt ltd.
BANK SBI Indonesia SBI general insurance Company ltd.
Listing and shareholding:
Government of India held around 61.23% equity shares in SBI. Life Insurance Corporation of
India is the largest non-promoter shareholder in the company with 8.82% shareholding.
shareholders Shareholding
Promoters: Government of India 61.23%
FIIs/GDRs/OCBs/NRIs 11.17%
Banks & Insurance Companies 10.00%
Mutual Fund & UTI 8.29%
Others 9.31%
Total 100.0%
19
21. Products and services
Working capital finance:
SBI offers working capital finance to meet the entire range of short term requirements
that arise within a co-operate day to day operational cycle.
The SBI working capital loans can help your company in financing inventories
managing internal cash flows, supporting supply chains, funding production and marketing
operations, providing each support to business expansion and carrying current assets.
Project finance:
The SBI has formed a dedicated project finance strategy. Unit to access credit proposals
from and extend team loans for large industry and infrastructure projects. Apart from this,
project team loans for medium sized projects and smaller clients are delivered through the CAG
and the NBG.
The loans are approved on the basis of strong in house appraisal of the cost and viability
of the ventures as well as the credit standing of promoters.
Different Payments Guarantees:
SBI can extend deferred payment guarantees to industrial projects for obtaining important
equipment. The DPG standby credit guaranteeing deferred payment usually payments for
capital goods.
Corporate Team loan:
SBI cooperate team can support your company in funding on going business expansion,
repaying high cost debt, technology u gradation, R&D expenditures, leavening specific cash
streams that accrue in your company, implementing early retirement schemes and
supplementing working capital.
Structured Finance
SBI structured finance involves assembling unique credit configurations to meet the complex
fund requirements of large industrial and infrastructure projects. Structured finance can be a
combination of funded and non- funded facilities as well as other credit enhancement tools.
Lease contracts for instance to fit the multilayer financial requirements large and long-
gestation projects. 20
22. 1
MARKE SHARE OF SBI BANK
The above table display the data comparing public and private sector banks analysing various
paraments like the Net Interest Income. Provision, Net Profit and advances.
At it can be seen from the above table, amongst all the Public Sector Bank. The State Bank of
India grabbed the highest market share, with an earning of approximately rs.134.7 billion, i.e.
Around 28% of the entire market share toppling all the others by a substantial margin.
25. FUNDAMENTAL ANALYSIS OF “HDFC” BANK”
HISTORY:
The Housing Development Finance Corporation Limited or HDFC was among the
first financial institutions in India to receive an “in principle” approval from the Reserve
Bank of India (RBI) to set up a bank in the private sector. This was done as part of RBI’s
policy for liberalisation of the Indian banking industry in 1994.
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.
HDFC Bank Ltd is one of India's premier banks. Headquartered in Mumbai HDFC
Bank is a new generation private sector bank providing a wide range of banking services
covering commercial and investment banking on the wholesale side and
transactional/branch banking on the retail side. As of 30September 2017 the bank's
distribution network was at 4729 branches and 12259 ATMs across 2669 cities and towns.
HDFC Bank also has one overseas wholesale banking branch in Bahrain a branch in Hong
Kong and two representative offices in UAE and Kenya. The Bank has two subsidiary
companies namely HDFC Securities Ltd and HDB Financial Services Ltd. The Bank has
three primary business segments namely banking wholesale banking and treasury. The retail
banking segment serves retail customers through a branch network and other delivery
channels. This segment raises deposits from customers and makes loans and provides other
services with the help of specialist product groups to such customers. The wholesale banking
segment provides loans non-fund facilities and transaction services to corporate public
sector units government bodies financial institutions and medium-scale enterprises. The
treasury segment includes net interest earnings on investments portfolio of the Bank.The
Bank's ATM network can be accessed by all domestic and international Visa/MasterCard
Visa Electron/Maestro Plus/Cirrus and American Express Credit/Charge cardholders. The
Bank's shares are listed on the Bombay Stock Exchange Limited and The National Stock
Exchange of India Ltd. The Bank's American Depository Shares (ADS) are listed on the
New York Stock Exchange (NYSE) and the Bank's Global Depository Receipts (GDRs) are
listed on Luxembourg Stock Exchange .HDFC Bank Ltd Was incorporated on August 30
1994 by Housing Development Finance C
2o
4rporation Ltd. In the year 1994 Housing
Development Finance Corporation Ltd was amongst the first to receive an 'in principle'
26. 15
approval from the Reserve Bank of India to set up a bank in the private sector as part of the
RBI's liberalization of the Indian Banking Industry. HDFC Bank commenced operations as
a Scheduled Commercial Bank in January 1995. Ramon House Churchgate branch was
inaugurated on 16 January 1995 as the first branch of the bank. In March 1995 HDFC Bank
launched Rs 50-crore initial public offer (IPO) (5 crore equity shares at Rs 10 each at par)
eliciting a record 55 times oversubscription. HDFC Bank was listed on the Bombay Stock
Exchange on 19 May 1995. The bank was listed on the National Stock Exchange on 8
November 1995.In the year 1996 the Bank was appointed as the clearing bank by the
NSCCL. In the year 1997 the launched retail investment advisory services. In the year 1998
they launched their first retail lending product Loans against Shares. In the year 1999 the
Bank launched online real-time NetBanking. In February 2000 Times Bank Ltd owned by
Bennett Coleman & Co. / Times Group amalgamated with the Bank Ltd. This was the first
merger of two new generation private banks in India. The Bank was the first Bank to launch
an International Debit Card in association with VISA (Visa Electron). In the year 2001 they
started their Credit Card business. Also they became the first private sector bank to be
authorized by the Central Board of Direct Taxes (CBDT) as well as the RBI to accept direct
taxes. During the year the Bank made a strategic tie-up with a Bangalore-based business
solutions software developer Tally Solutions Pvt Ltd for developing and offering products
and services facilitating on-line accounting and banking services to SMEs. On 20 July 2001
HDFC Bank's American depositary receipt (ADR) was listed on the New York Stock
Exchange under the symbol HDB. Also they made the alliance with LIC for providing online
payment of insurance premium to the customers.
Wholesale Banking Services:
The bank's target market ranges from large, blue-chip manufacturing companies in the
industrial corporate to small and mid- sized corporate and age-based businesses.
Retail Banking Services:
The objective of the retail bank is to provide its target market customers a full range of financial
products and banking services, giving the customer a one- stop window for all his/her bank
requirements.
Treasury:
within this business, the bank has three main product areas – Foreign Exchange and
Derivatives, local Currency money Market and Debt Securities and equity. The Treasure
business is responsible for the manging the return and market risk on the investment portfolio.
27. 16
Personal Banking NRI Banking Wholesale Banking
Accounts & Deposits Accounts & Deposits Corporate
Loans Investments & Insurance
Loans Payments
Services
Small & Medium
Enterprises
Cards Remittances Financial Institutions &
Trusts
Investments & Insurance Government Sector
Forex
Listing and Shareholding:
The equity share of HDFC bank are listed on Bombay Stock Exchange and National Stock
Exchange of India. Its American Depository Shares are listed on NYSE and the Global
depository receipt are listed on the Luxembourg Stock Exchange where two GDRs represent
one equity share of HDFC bank
.
Shareholders shareholding
Promoter Group (HDFC) 21.75%
Foreign Institutional Investors (FII) 32.4%
Individual Shareholders 8.5%
Bodies Corporate 7.5%
Insurance Companies 5.38%
Mutual Fund/UTI 8.65%
NRI/OCB/Others 0.29%
Financial Institutions/Banks 2.75%
28. 17
PRODUCTS AND SEVICES
1. Accounts & Deposits:
Experience banking of the future with a bank account from HDFC Bank. A world of smart
features, multiple banking channels and prompt customer service awaits you.
(a) Saving Account:
Choose an account to suit your needs - from a basic banking account to feature rich
premium option
Our account come with everything you require to day banking easy. Plus more.
(b) Salary Account:
• Customized Salary account to suit the needs of every corporate
• Expect benefits beyond the ordinary like our Free Insurance Cover
(c) Current Accounts:
• Cost effective banking solutions for your businesses to maximize your cash-flow
• Fast and efficient transactions to help you take advantage of every opportunity
(d) Deposits:
• Whether you want to save regular amounts every month or in lump sum, we have a
solution for you
• Competitive interest rates and flexibility to do more with your money
(e) Safe Deposit Locker:
• Get one close to your work or home.
• Range of size to choose from
(f) Rural Accounts:
• Every banking solutions for farmers
• Accounts that understand your unique requirements
2. Cards:
a) Credit Cards:
• Customised credit cards to match your needs
• State-of-the -art security for online transactions
• Great discounts, cash back offers and reward points 365 days a year
• Quick credit with easy EMIs
29. 18
b) Debit Cards:
• Exiting cash back, discount, miles and waives throughout the year
• Exclusively tailored debit cards that suits your schedule and lifestyle
• Multi-layered online and offline protection
• Card security for misplaced or stolen cards
(c) Pre-paid cards:
• Right partner for international travel
• Affordable and accessible prepaid Forex cards for destinations across the globe
• Multi-purpose advanced payment tool for your every need
3. Demat:
Presenting flexible Demat account. Form simple demat account to 3 in 1 account offering a
combination of Demat , traing and saving account making investing easy !
(a) Demat Account:
• store your equity, mutual funds, IPO, ETFs (gold &mater indices), bank, NCDs
investments in rich-free & paper-free Demat Account.
• Avail free Demat account trial with no account opening fee and waiver on 1st year
AMC.
• Use this safe, easy and affordable mode of tracking and storing your investments
(b) 2 in 1 Account:
Get HDFC Bank Demat and securities trading accounts in a single package .
Invest in stocks IPOs, bonds and NCDs, via seamless online mode. Then store them in
rich-free & paper-free Demat from.
Get state-of-the-art trading platform across all devices.
(c) 3 in 1 Account:
Get HDFC Bank saving account. Demat account ,and online trading account for a
portfolio investment
Receive a customised banking and investment solution to match your needs
4.Investment Products:
Buy and sell mutual funds, equities and derivatives effortlessly.
Monitor real time movement of stock .
(a) Investment advisory reports:
Receive accurate and detailed reports about union budget, investment strategy etc.
30. 5. Insurance:
Get comprehensive assistance in identifying and insurance, policies. We help you choose from
a host of life and non-life insurance products under one roof
(a) Life Insurance :
• Insurance policies for pension ,term insurance, endowment, life cover age and accident deaths
• Flexible insurance plans with affordable premium to fulfil your requisites in terms of sun
assured, coverage and returns
• Consistent post-purchase support
(b) Heath Insurance:
• Insurance policies for protection against personal accident, critical, illness , and
hospitalization available
• Flexible insurance plans to cover your expenses due to hospitalization post, hospitalization
treatment disability, injuries, surgical procedures domiciliary treatment, etc
• Renewal bonus for claim-free renewal of insurance policies
(c) Motor Insurance:
Cashless claim service over 3400+ authorised network of garages across India
Insurance policies for all kinds of commercialised and private vehicles available.
(d) Two-Wheeler Insurance:
Online purchased and renewals at competitive premium rates
Comprehensive coverage options such as personal accident cover for owner and driver,
third party liability and protection against loss or damage vehicle of due to accident,
theft, terrorism, riots, strikes, malicious acts, etc.
(e )Home Insurance:
Insurance policy for home structure and its contents
Insurance protection against losses and damages due to fire, theft, burglary, larceny,
natural disasters ,terrorism etc.
6.Forex:
Benefit from HDFC Bank's wide network of correspondent banks and representatives across
the globe. Organize all your foreign exchange when traveling abroad through us - from cash to
a multicurrency Forex card, you can get it all from any HDFC Bank branch.
7.Premium Banking:
Experience person banking like never before. HDFC Bank extends the services of a dedicated
relationship manager for delivering customized
29banking and investments solutions to meet
your need.
31. 21
0
MARKET SHARE OF HDFC BANK
HDFC Bank Ltd. India’s most profitable bank. Is the most valuable bank in India with a market
cap of Rs.3.68trillion, followed by state-run State Bank of India (Rs.2.34 trillion) and ICICI
Bank Ltd.( Rs.62 trillion). Kotak Mahindra Bank is No.4, followed by Axis Bank Ltd.,
IndusInd Bank Ltd., Yes Bank of Baroda and Panjab National Bank.
34. 23
RATIO CAMPARISION BETWEEN “SBI” AND “HDFC” BANKS
RATIO ANALYSIS
Ratio analysis is a quantitative method of gaining insight into a company's liquidity, operational
efficiency, and profitability by studying its financial statements such as the balance sheet and
income statement. Ratio analysis is a cornerstone of fundamental equity analysis.
35. 24
PROFITABILITY RATIO
Profitability ratios are a class of financial metrics that are used to assess a business's ability to
generate earnings relative to its revenue, operating cost, balance sheet assets,or shareholders
equity over time, using data from a specific point in time.
36. 25
Gross Profit Margin = Net sales – COGS/ Net sales
30
25
20
15
10
5
0
2016 2017 2018 2019 2020
-5
-10
SBI HDFC
1.GROSS PROFIT MARGIN:
Gross profit margin is a metric analysts use to assess a company's financial health by
calculating the amount of money left over from product sales after subtracting the cost of goods
sold (COGS). Sometimes referred to as the gross margin ratio, gross profit margin is frequently
expressed as a percentage of sales.
Gross profit margin (%) 2016 2017 2018 2019 2020
SBI 9.28 8.22 6.81 7.62 -7.93
HDFC 13.09 19.29 21.20 14.72 11.62
37. 26
(Net profits ÷ Net sales) x 100 = Net profit margin
2.NET PROFIT MARGIN:
The net profit margin is equal to how much net income or profit is generated as a percentage
of revenue. Net profit margin is the ratio of net profits to revenues for a company or business
segment. Net profit margin is typically expressed as a percentage but can also be represented
in decimal form. The net profit margin illustrates how much of each dollar in revenue collected
by a company translates into profit.
Net profit
Margin (%)
2016 2017 2018 2019 2020
SBI 6.06 5.97 -2.96 0.35 5.36
HDFC 20.99 20.99 21.79 21.29 22.86
38. 37
Return on net worth = Net Income/Net Worth
3.RETURN ON NET WORTH :
The term Return on Net Worth Ratio (RoNW) is the same as the return on equity ratio. The
ratio shows how much profit a company generates with the invested money of equity
shareholders. Hence, you can also call it a Return on Equity Ratio. This ratio is quite helpful
industry.
Return on equity
(%)
2016 2017 2018 2019 2020
SBI
6.89 6.69 -3.37 0.43 6.95
HDFC
16.91 16.26 16.45 14.12 15.35
Chart Title
30
25
20
15
10
5
0
-5
SBI HDFC
2016 2017 2018 2019 2020
39. Dividend Payout Ratio=Net Income
/Dividends Paid
Chart Title
45
40
35
30
25
20
15
10
5
0
2016 2017 2018 2019 2020
SBI HDFC
3.DIVIDEND PAYOUT RATIO:
The dividend payout ratio is the ratio of the total amount of dividends paid out to shareholders
relative to the net income of the company. It is the percentage of earnings paid to shareholders
in dividends. The amount that is not paid to shareholders is retained by the company to pay off
debt or to reinvest in core operations. It is sometimes simply referred to as the 'payout ratio.'
Dividend payout ratio(%) 2016 2017 2018 2019 2020
SBI 20.28 20.11 - - -
HDFC 19.53 - - 19.22 24.90
40. COMPARISION RESULT OF SBI AND HDFC BANKS
SBI BANK:
SBI is India’s largest bank in the country with an asset size of over Rs.13 trillion. Although the
bank’s loan book is largely skewed towards corporate ( large, mid and small) loans (50% of
total advance in FY12), the retail side is also fast catching up. SBI has network of almost
14,270 branches and over 22,141 ATMs across the country.
HDFC BANK:
HDFC Bank with 4.2% share of India’s total non-food credit disbursements in FY12,HDFC
Bank is the second largest private sector bank in the country (after ICICI Bank) in term of asset
size. HDFC Standard life (insurance), HDFCAMC (MUTUAL FUNF) and HDFC
securities(equities) .
39
41. 11.5%
84.4%
18-24 26-34 35+
Age Group
Interpretation:
84.4% of people are 35+
11.55% of people are 18-25
11.5% of people are 26-34.
How many Bank are you client
16.7% 1
5.9%
1%
75.5%
one Two Three More than three other
Interpretation:
75.5% of people says that they one Bank client
16.7% of people says that they two Bank client
5.9% of people says that they two Bank 4
c0
lient
1% of people of people says that they more than three Bank client
42. 1
1
1
%
%
%
28.7%
68.3%
Which bank you will prefer
Private sector Public sector cooprative
national privte & public
Interpretation:
1. 68.3% of people says that prefer private sector
2. 28.7% of people says that they prefer public sector
3. 1% of people says that they prefer cooperative
4. 1% of people says that they prefer national
5. In which Bank your account exist?
Interpretation:
8% of people exist bank account in SBI 41
3% of people exist bank account in HDFC
43. 30
13.7%
86.3%
What kind of account do you maintain in this bank?
Interpretation:
76.5% of people says that maintain saving account
19.6% of people says that maintain current account
2% of people says that maintain loan account
1% of people says that maintain credit card account
Does your bank have core banking facility for the customers.
yes no
Interpretation:
86.3% of people says that Yes, core banking facility
13.7% of people says that No, core banking facility
1%
21
%
%
19.6%
76.5%
current saving loan a/c credit card saving and salary
44. 30
18%
8.80%
52.90%
18.60%
personalised service customer service
online banking other
1%
20.6%
49%
23.5%
What do you think of your bank what comes first in your mind?
Interpretation:
52.90% says that personalised service
18.6% says that customer service
8.8% says that online banking
18% says that other
What do you feel about overall service quality of your bank?
Excellent very good Good poor
Interpretation:
20.6% says that Excellent service quality
23.5% says that very good service quality
49% says good service quality
1% says that poor service quality
45. 7.8%
23.5% 6.9%
10.8%
51%
1 2 3 4 5+
11.8%10.8%
20.6% 19.6%
37.3%
What rating you will prefer for SBI bank?
Interpretation:
7.8% of people prefer rating one
6.9% of people prefer rating two
51% of people prefer rating four
10.8% of people prefer rating three
23.5% of people prefer rating five
What rating you will prefer for HDFC bank?
1 2 3 4 5+
Interpretation:
10.8% of people prefer rating one
19.6% of people prefer rating two
20.6% of people prefer rating four
37.3% of people prefer rating three
11.8% of people prefer rating five 44
46. 35
24%
76%
Yes
no
Service
No
Customer services
Improve service
No changes I want
Good interaction with our customers
Bank charges should decrease
Solve there sever problems and provide proper services to all customers. And
spread there new branches in rural areas
yes no
Interpretation:
76% of says that Yes, covid situation bank providing service
24% of says that No, covid situation bank providing service
What changes should be bank do for satisfaction of banking?
No
47. 36
CONCLUSION
Financial reports are required by law and are published both quarterly and annually.
Management discussion and analysis gives investors a better understanding of what the
company does and usually points out same key areas where it performed well.
HDFC Bank which private sector bank offers a larger number of products and services
than the SBI is a much better overall earning, being a PUS than the HDFC Bank.
Ratio sanalysis is very important part of whole business strategic planning.
49. QUESTIONNAIRY
What is your age
1. 18-24
2. 25-34
3. 35+
How many Bank are you client
1. One
2. Two
3. Three
4. More than Three
5. other
Which bank you will prefer?
1. Private sector
2. Public sector
3. other
In which Bank your account exist?
What kind of account do you maintain in this bank?
1. Current account
2. Saving account
3. Loan account
4. Credit card
5. Other
Does your bank have core banking facility for the customers.
1. Yes
2. No
3. Other
What do you think of your bank what comes first in your mind?
1. Personalised service
2. Widw branch service
3. Customer service
4. Online banking service
What do you feel about overall service quality of your bank?
1. Excellent
48
2. Very good
50. 3. Good
4. Poor
5. Other
What rating you will prefer for SBI bank?
1. 1
2. 2
3. 3
4. 4
5. 5+
What rating you will prefer for HDFC bank?
1. 1
2. 2
3. 3
4. 4
5. 5+
In covid situation was bank providing service up to mark?
1. Yes
2. No
3. other
What changes should be bank do for satisfaction of banking?
49
