karnataka bank vs south indian bank_group4_secabc1

8/8/2019 Karnataka Bank vs South Indian Bank_Group4_SecABC1

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GROUP 4 SECTION ABC1

Aniket Daryapurkar

Bhupendra Gurbani

Manish Yadav

Mansoori Umar

Rachit Singhal

Karnataka Bank vs South IndianBank

Performance Analysis


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INTRODUCTIONBanks' performance monitoring, analysis and control

needs special analysis in respect to their operationand performance results from the viewpoint ofdifferent audiences, like investors/owners,regulators, customers/clients, and management

themselves.Evaluation of performances of companies can be

done by comparing it with historical figures and itsindustry competitors in terms of sales, profit, etcbut it doesnt reveal the complete picture.

Comparative ratio analysis technique is quite helpfulin reading between the lines.

Using this technique, we will be evaluating theperformances of two banks i.e. South Indian Bank

and Karnataka Bank.


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Profitability Ratios


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Return on Equity and Return onAssets

Lower profit could be due to high interest expended for KarnatakaBank in FY 10


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Equity Multiplier

Higher EMimplies highfinancial leverage.


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Net Profit Margin and AssetUtilization

Karnataka Bank is better able to useits assets to generate income

SIB is more efficient in FY 10 attranslating its net income into profits


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RatiosY '08 Y '09 Y '10

Karnataa Bank outh ndianankKarnataa Bank outh ndianank

Karnataa Bank outh ndianankROE . %17 52 . %13 06 . %17 02 . %14 93 . %9 12 . %15 74ROA . %1 25 . %0 89 . %1 17 . %0 96 . %0 62 . %0 92EM .14 02 .14 72 .14 59 .15 63 .14 75 .17 19

et Profit Margin . %13 37 . %10 44 . %11 75 . %10 52 . %7 10 . %10 90sset Utilization . %9 35 . %8 50 . %9 93 . %9 08 . %8 71 . %8 40


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Net Interest Margin


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Interest Income to Total AssetsInterest Costs to Total Assets

SIB pays lower costs on its deposits and earns an equalyield on its loans compared to Karnataka Bank


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Operating Expenses to TotalAssets


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RatiosY '08 Y '09 Y '10

KarnatakBank outh ndianankKarnatakBank outh ndianank

KarnatakBank outh ndiananknterest Spread .469 10 .394 14 .473 57 .522 88 .335 63 .568 29NIM . %2 43 . %2 31 . %2 07 . %2 57 . %1 24 . %2 23nterest Income tootal Asset . %8 12 . %7 66 . %8 39 . %8 28 . %7 56 . %7 58nterest Cost tootal Asset . %5 70 . %5 35 . %6 32 . %5 71 . %6 32 . %5 36Burden - .123 34 - .118 09 - .40 35 - .186 17 - .163 35 - .194 83on interestncome to totalassets

. %1 23 . %0 84 . %1 54 . %0 81 . %1 15 . %0 82perating Expenseso total assets . %1 87 . %1 53 . %1 72 . %1 72 . %1 76 . %1 58rovision andontingencies tootal Assets

. %0 54 . %0 73 . %0 73 . %0 70 . %0 02 . %0 55


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Asset Quality Ratios


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Non-Performing Assets vs TotalAssets


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RatiosY '08 Y '09 Y '10Karnataa Bank outh ndianank

Karnataa Bank outh ndianankKarnataa Bank outh ndianankross NPA .379 57 .188 48 .443 2 .260 56 .549 64 211et NPA - .33 97 .116 1 .134 31 .188 61 .61 57utstanding LossProvisions - .154 51 .327 1 .126 25 .361 03 .149 43ross NPA to

otal Assets. %1 96 . %1 10 . %1 94 . %1 28 . %2 03 . %0 83

et NPA toTotalAssets - . %0 22 . %0 88 . %0 73 . %1 19 . %0 27utstanding Lossrovisions toross NPA ratio- . %81 98 . %73 80 . %48 45 . %65 68 . %70 82


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Capital Adequacy Ratio(min. of 9% stipulated by RBI)

karnataka bank vs south indian bank_group4_secabc1

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