A REPORT ON
COMPARISON ANALYSIS OF yes
bank &Punjab national BANK
By:
RAHUL SINGH
13BSPHH010480
Section: C
Distribution List:
Prof. SURYANARAYAN MOHAPATRA,
Department Of Finance, ICFAI Business School, Hyderabad
Date of Submission: 15th September 2014
TABLE OF CONTENTS
S. NO CONTENT PAGE
1. BANKING INDUSTRY INTRODUCTION. 3
2. YES BANK HISTORY. 5
3. PNB BANK HISTORY. 6
4. RATIO ANALYSIS OF YES BANK AND PNB BANK. 7
5. COMPANY ANALYSIS. 13
6. CONCLUSION. 17
7. REFERENCES. 18
1. BANKING INDUSTRY
India is considered among the top economies in the world, with tremendous potential for its
banking sector to flourish. The banking in India started with the establishment of the General
Bank of India in 1786. Later the Bank of Hindustan was also established. However, both the
banks are not in functional state currently. It’s the State Bank of India, which is currently the
oldest bank in India in existence, established in 1806.Since the beginning, due to huge market
potential, a number of banking companies have come up in India, which include both, public
sector as well as private sector banks. However, the list of top 10 banking companies in India has
mostly been dominated by the State Bank of India (SBI).
Since the initial days, the State Bank of India has dominated the Indian banking industry
accounting for nearly 20% of the Indian banking system’s deposit base. It also has got almost
20% of the credit portfolio.
The recent economic slowdown, like many other industries, also affected the Indian banking
industry. However, it showed resilience to the global recession. In the next 5-10 years, the sector
is expected to create up to two million new jobs driven by the efforts of the RBI and the
Government of India to expand financial services into rural areas. Two new banks have already
received licenses from the government, and the RBI’s new norms will offer incentives to banks to
spot bad loans and take necessary recourse to curb the practices of rogue borrowers.
Market size
The size of banking assets in India totaled US$ 1.8 trillion in FY 13 and is expected to touch
US$ 28.5 trillion in FY 25.Bank deposits have grown at a compound annual growth rate (CAGR)
of 21.2 per cent over FY 06-13. In FY 13, total deposits were US$ 1,274.3 billion.
The revenue of Indian banks increased from US$ 11.8 billion to US$ 46.9 billion over the period
2001-2010. Profit after tax also reached US$ 12 billion from US$ 1.4 billion in the period.
Credit to housing sector grew at a CAGR of 11.1 per cent during the period FY 08-13. Total
banking sector credit is anticipated to grow at a CAGR of 18.1 per cent (in terms of INR) to
reach US$ 2.4 trillion by 2017.
In FY 14, private sector lenders experienced significant growth in credit cards and personal loan
businesses. ICICI Bank saw 141.6 per cent growth in personal loan disbursement in FY 14, as
per a report by Emkay Global Financial Services. The bank also experienced healthy growth of
20.8 per cent in credit card dues, according to the report. Axis Bank’s personal loan business also
grew 49.8 per cent, with its credit card business expanding by 31.1 per cent.
Investments:
HDFC Bank and state-owned United Bank of India plan to tap the equity markets to raise funds
to enhance capital base and lending. HDFC Bank plans to raise Rs 10,000 crore (US$ 1.66
billion) while the board of Kolkata-based United Bank will seek approval for raising about Rs
1,300 crore (US$ 216.47 million) by selling shares to increase its capital base.
Export-Import Bank of India (Exim Bank) will increase its focus on supporting project exports
from India to South Asia, Africa and Latin America, as per Mr. Yaduvendra Mathur, Chairman
and MD, Exim Bank. The bank has moved up the value chain by supporting project exports so
that India earns foreign exchange. In 2012-13, Exim Bank had lent support to 85 project export
contracts valued at Rs 24,255 crore (US$ 4.03 billion) secured by 47 companies in 23 countries.
IndusInd Bank will soon begin its asset reconstruction business. The private-sector lender plans
to partner asset reconstruction companies (ARCs) for this venture. “I think our new initiative,
which is going to launch in the next two months, is about asset reconstruction. We will do asset
reconstruction within the bank but in tie-ups with ARCs. The business plan is ready. We believe a
huge stock of assets is coming into the ARCs as a business area that we need to look at and we
will exploit,” as per Mr. Romesh Sobti, CEO and MD, IndusInd Bank.
Jammu and Kashmir (J&K) Bank plans to increase its presence outside India. The bank is
looking to establish branches in London and Dubai to enhance its relationship with current
customers who have business interests in West Asia and Europe. “We have a number of business
relationships in these countries and it makes sense for us to have a presence there,” as per
Mr.Mushtaq Ahmad, Chairman and CEO, J&K Bank.
Government Initiatives:
The RBI has announced a few measures in its bi-monthly monetary policy on June 3,
2014 which includes an increase in the foreign exchange remittance limit to US$ 125,000
from the previous limit of US$ 75,000.
State Bank of India (SBI) has announced a one-year rural fellowship programme ‘SBI
Youth for India (SBI YFI)’ for 2014 to draft the country’s youth to become change agents
in the country‘s rural regions. The programme is for young professionals who are keen to
leadthe change for a better India.
The RBI has simplified the rules for credit to exporters. Exporters can now receive long-
term advance credit from banks for up to 10 years to service their contracts. Exporters
have to have a satisfactory record of three years to receive payments from banks, who can
adjust the payments against future exports.
The RBI has enabled overseas investors, including foreign portfolio investors (FPIs) and
