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SACHIN AGARWALT.Y.B.A.F. ROLL. NO.1

2

CERTIFICATIONLETTER

TO WHOM IT MAY CONCERN

This is to certify that the Project Report entitled RATIO ANALYSIS OF ICICI Bankhas been completed by: SACHIN R. AGARWAL under my supervision. To the best ofmy knowledge, this is his own work and he has not submitted the same elsewhere for theaward of any other degree or diploma.

I approve it for submission in the partial fulfillment of the requirement as a project workfor the subject of Management accounts-2.

Date: 28TH

AUGUST,2010

PROF. JUSTIN

Place:Mumbai Lecturer T.Y. B.A.F.,

K.C.COLLEGE, MUMBAI

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ACKNOWLEDGEMENT

No task is single mans effort .Any job in this world however trivial or tough cannot beaccomplished without the assistance of others. An assignment puts the knowledge andexperience of an individual to litmus test. There is always a sense of gratitude that onelikes to express towards the persons who helped to change an effort in a success. Theopportunity to express my indebtness to people who have helped me to accomplish this

task.

I deem it a proud privilege to extend my greatest sense of gratitude to my Project GuidePROF.JUSTIN (lecturer B.A.F.) for the keen interest, inspiring guidance, continuousencouragement, valuable suggestions and constructive criticism throughout the pursuanceof this report.

I am thankful to Coordinator sirKAILASH CHANDAKfor giving me the opportunityto undertake the study. I am highly indebted for sparing time from their busy schedulefor providing me with their able guidance at the time of need and helping me to achievethe ultimate goal of the study. I would also like to thankMR. RAJ (Branch Manager,

ICICI Bank, VILE PARLE (W)) for their valuable support in helping me to gain thisopportunity of being associated with an organization of such esteem.

Last but not the least, it would be unfair if I dont express my indebtness to my parentsand all my friends for their active cooperation which was of great help during the courseof my training project.

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PREFACE

In any organization, the two important financial statements are the Balance Sheet andProfit & Loss Account of the business. Balance Sheet is a statement of financial positionof an enterprise at a particular point of time. Profit & Loss account shows the net profit ornet loss of a company for a specified period of time. When these statements of the last

few year of any organization are studied and analyzed, significant conclusions may bearrived regarding the changes in the financial position, the important policies followedand trends in profit and loss etc. Analysis and interpretation of financial statement hasnow become an important technique of credit appraisal. The investors, financial experts,management executives and the bankers all analyze these statements. Though the basictechnique of appraisal remains the same in all the cases but the approach and theemphasis in the analysis vary. A banker interprets the financial statement so as toevaluate the financial soundness and stability, the liquidity position and the profitabilityor the earning capacity of borrowing concern. Analysis of financial statements isnecessary because it helps in depicting the financial position on the basis of past andcurrent records. Analysis of financial statements helps in making the future decisions and

strategies. Therefore it is very necessary for every organization whether it is a financial ormanufacturing, to make financial statement and to analyze it.

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Table of contentChapter

no.

PARTICULARS Page no.

Acknowledgement 3

Preface 4

1. Introduction Of Bankinga. Introduction of banking.b. History of banking in

Indiac. Fact files of banks in Indiad. Indian banking industry.

6-1278

1112

2. Companys Profilea. Introduction to ICICI Bank

b.

ICICI Bank todayc. Business profile...d. Business objectivee. Awards and recognition

13-2515

21222324

3. Ratio Analysisa. Introduction of the topicb. Balance sheet of ICICI Bank..c. Profit and Loss Account of ICICI

Bank..d. Calculation of various ratios..

26-442730

3233

4. Findings ,Suggestions And

Conclusion.

45-49

5. Bibliography 50

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INTRODUCTION TO BANKING

SECTOR IN INDIA

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Definition Of Bank:

Banking Means "Accepting Deposits for the purpose of lending or Investment of depositsof money from the public, repayable on demand or otherwise and withdraw by cheque,draft or otherwise."

-Banking Companies (Regulation) Act,1949

ORIGINOF THE WORD BANK:-

The origin of the word bank is shrouded in mystery. According to one view point theItalian business house carrying on crude from of banking were called banchi bancheri"According to another viewpoint banking is derived from German word "Branck" whichmean heap or mound. In England, the issue of paper money by the government wasreferred to as a raising a bank.

ORIGINOF BANKING :

Its origin in the simplest form can be traced to the origin of authentic history. Afterrecognizing the benefit of money as a medium of exchange, the importance of bankingwas developed as it provides the safer place to store the money. This safe place ultimatelyevolved in to financial institutions that accepts deposits and make loans i.e., modern

commercial banks.

Banking system in India

Without a sound and effective banking system in India it cannot have a healthyeconomy.The banking system of India should not only be hassle free but it should be ableto meet new challenges posed by the technology and any other external and internalfactors.For the past three decades India's banking system has several outstanding achievements

to its credit. The most striking is its extensive reach. It is no longer confined to onlymetropolitans or cosmopolitans in India. In fact, Indian banking system has reached evento the remote corners of the country. This is one of the main reasons of India's growthprocess

HISTORY OF BANKING IN INDIA

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Banking in India has its origin as early or Vedic period. It is believed that the transitionsfrom many lending to banking must have occurred even before Manu, the great Hindufurriest, who has devoted a section of his work to deposit and advances and laid downrules relating to the rate of interest. During the mogul period, the indigenous banker played a very important role in lending money and financing foreign trade andcommerce.

During the days of the East India Company it was the turn of agency house to carry onthe banking business. The General Bank of India was the first joint stock bank to beestablished in the year 1786. The other which followed was the Bank of Hindustan andBengal Bank. The Bank of Hindustan is reported to have continued till 1906. While othertwo failed in the meantime. In the first half of the 19th century the East India Companyestablished there banks, The bank of Bengal in 1809, the Bank of Bombay in 1840 andthe Bank of Bombay in1843. These three banks also known as the Presidency banks werethe independent units and functioned well. These three banks were amalgamated in 1920and new bank, the Imperial Bank of India was established on 27th January, 1921.

With the passing of the State Bank of India Act in 1955 the undertaking of the ImperialBank of India was taken over by the newly constituted SBI. The Reserve Bank of India(RBI) which is the Central bank was established in April, 1935 by passing Reserve bankof India act 1935. The Central office of RBI is in Mumbai and it controls all the otherbanks in the country.

In the wake of Swadeshi Movement, number of banks with the Indian management wereestablished in the country namely, Punjab National Bank Ltd., Bank of India Ltd., Bankof Baroda Ltd., Canara Bank. Ltd. on 19th July 1969, 14 major banks of the country were

nationalized and on 15th April 1980, 6 more commercial private sector banks were takenover by the government.

The first bank in India, though conservative, was established in 1786. From 1786 tilltoday,the journey of Indian Banking System can be segregated into three distinct phases.They areas mentioned below:

Early phase from 1786 to 1969 of Indian Banks

Nationalization of Indian Banks and up to 1991 prior to Indian banking sectorReforms.

New phase of Indian Banking System with the advent of Indian Financial &Banking Sector Reforms after To make this write-up more explanatory, I prefixthe scenario as Phase I, Phase II and Phase III.

Phase I

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1949: Enactment of Banking Regulation Act. 1955: Nationalization of State Bank of India. 1959: Nationalization of SBI subsidiaries. 1961: Insurance cover extended to deposits. 1969: Nationalization of 14 major banks. 1971: Creation of credit guarantee corporation. 1975: Creation of regional rural banks. 1980: Nationalization of seven banks with deposits over 200 crore.

After the nationalization of banks, the branches of the public sector bank India rose toapproximately 800% in deposits and advances took a huge jump by 11,000%.Banking in the sunshine of Government ownership gave the public implicit faith andimmense confidence about the sustainability of these institutions.

Phase III

This phase has introduced many more products and facilities in the banking sector in itsreforms measure. In 1991, under the chairmanship of M Narasimham, a committee wasset up by his name which worked for the liberalization of banking practices.

The country is flooded with foreign banks and their ATM stations. Efforts are being putto give a satisfactory service to customers. Phone banking and net banking is introduced.The entire system became more convenient and swift. Time is given more importancethan money.

The financial system of India has shown a great deal of resilience. It is sheltered from anycrisis triggered by any external macroeconomics shock as other East Asian Countriessuffered. This is all due to a flexible exchange rate regime, the foreign reserves are high,the capital account is not yet fully convertible, and banks and their customers havelimited foreign exchange exposure.

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Fact Files of Banksin India

The first Bank in India to be given an ISO certification. Canara Bank

The first Bank in Northern India to get ISO 9002 certificationfor their selected branches.

Punjab and SindBank

The first Indian Bank to have been started solely with Indian capital. Punjab NationalBank

The first among the Private Sector Banks in Kerala to become ScheduledBank in 1946 under the RBI act.

South Indian Bank

Indias oldest,largest and the most successful commercial bank offering thewidest possible rang of domestic,international and NRI products andservices,through its vast network in India and overseas.

State Bank of India

Indias second largest Private Sector Bank and is now the largest scheduledcommercial bank in India.

The Federal BankLimited

Bank which started as Private Shareholders Banks,mostly Europeanshareholders.

Imperial Bank ofIndia

The first Indian Bank to open a branch outside India in London in 1946 andthe first to open a branch in continental Europe at Paris in 1974

Bank of India,founded in 1906 inMumbai.

The oldest Public Sector Bank in India having branches all over India andserving the customers for the last 132 years.

The first Indian Commercial Bank which was wholly owned and managedby Indians.

Allahabad Bank

Central Bank ofIndia

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COMPANYS PROFILE

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Type PrivateBSE & NSE:ICICI,NYSE: IBN

Industry Banking

InsuranceCapital Markets and alliedindustries

Founded 1955 (as Industrial Credit and

Investment Corporation of

India)

Headquarters ICICI Bank Ltd.,ICICI Bank Towers,Bandra Kurla,Mumbai, India

Key people

K.V. Kamath,ChairmanChanda Kochhar, ManagingDirector & CEOSandeep Bakhshi, DeputyManaging DirectorN.S. Kannan, ExecutiveDirector & CFOK. Ramkumar, ExecutiveDirectorSonjoy Chatterjee, Executive

Director

Products Loans, Credit Cards, Savings,Investment vehicles, Insuranceetc.

Revenue USD 15.06 billion

Total assets USD 120.61 billion (at

March 31, 2009.)

Website www.icicibank.com

CHANDA KOCHAR

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INTRODUCTION TO ICICI BANK

History OfICICI 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 institutionfor providing medium-term and long-term project financing toIndian businesses. Mr.A.Ramaswami Mudaliar elected as the firstChairman of ICICI Limited. ICICI emerges as the major source offoreign currency loans to Indian industry. Besides funding from theWorld Bank and other multi-lateral agencies, ICICI was also

among the first Indian companies to raise funds from internationalmarkets.

1956 : ICICI declared its first dividend of 3.5%. 1958 : Mr.G.L.Mehta appointed the second Chairman of ICICI

Ltd. 1960 : ICICI building at 163, Backbay Reclamation, inaugurated. 1961 : The first West German loan of DM 5 million from

Kredianstalt obtained. 1967 : ICICI made its first debenture issue for Rs.6 crore, which

was oversubscribed. 1969 : The first two regional offices in Calcutta and Madras set up.

1972 : The second entity in India to set up merchant bankingservices. : Mr. H. T. Parekh appointed the third Chairman ofICICI.

1977 : ICICI sponsored the formation of Housing DevelopmentFinance Corporation. Managed its first equity public issue.

1978 : Mr. James Raj appointed the fourth Chairman of ICICI. 1979 : Mr.Siddharth Mehta appointed the fifth Chairman of ICICI. 1982 : 1982 : ICICI became the first ever Indian borrower to raise

European Currency Units. : ICICI commences leasing business. 1984 : Mr. S. Nadkarni appointed the sixth Chairman of ICICI. 1985 : Mr. N.Vaghul appointed the seventh Chairman and

Managing Director of ICICI. 1986 : ICICI became the first Indian institution to receive ADB

Loans. : ICICI, along with UTI, set up Credit Rating InformationServices of India Limited, India's first professional credit ratingagency. : ICICI promotes Shipping Credit and InvestmentCompany of India Limited. : The Corporation made a public issueof Swiss Franc 75 million in Switzerland, the first public issue byany Indian entity in the Swiss Capital Market.

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1987 : ICICI signed a loan agreement for Sterling Pound 10million with Commonwealth Development Corporation (CDC), thefirst loan by CDC for financing projects in India.

1988 : Promoted TDICI - India's first venture capital company.

1993 : ICICI Securities and Finance Company Limited in jointventure with J. P. Morgan set up. : ICICI Asset ManagementCompany set up.

1994: ICICI established Banking Corporation as a bankingsubsidiary.formerly Industrial Credit and Investment Corporationof India. Later, ICICI Banking Corporation was renamed as 'ICICIBank Limited'. ICICI founded a separate legal entity, ICICI Bank,to undertake normal banking operations - taking deposits, creditcards, car loans etc.

1996 : ICICI Ltd became the first company in the Indian financialsector to raise GDR. : SCICI merged with ICICI Ltd. : Mr.K.V.Kamath appointed the Managing Director and CEO of ICICILtd

1997 : ICICI Ltd was the first intermediary to move away fromsingle prime rate to three-tier prime rates structure and introducedyield-curve based pricing. : The name The Industrial Credit andInvestment Corporation of India Ltd changed to ICICI Ltd. : ICICILtd announced the takeover of ITC Classic Finance.

1998 : Introduced the new logo symbolizing a common corporateidentity for the ICICI Group. : ICICI announced takeover ofAnagram Finance.

1999 : ICICI launched retail finance - car loans, house loans andloans for consumer durables. : ICICI becomes the first IndianCompany to list on the NYSE through an issue of AmericanDepositary Shares.

2000 : ICICI Bank became the first commercial bank from India tolist its stock on NYSE.

2001: ICICI acquired Bank of Madura (est. 1943). Bank of Madurawas a Chettiarbank, and had acquired Chettinad Mercantile Bank(est. 1933) and Illanji Bank (established 1904) in the 1960s. InOctober 2001, the Boards of Directors of ICICI and ICICI Bankapproved the merger of ICICI and two of its wholly owned retailfinance subsidiaries, ICICI Personal Financial Services Limitedand ICICI Capital Services Limited, with ICICI Bank.

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2002 : The merger was approved by shareholders of ICICI andICICI Bank in January 2002, by the High Court of Gujarat atAhmadabad in March 2002, and by the High Court of Judicature atMumbai and the Reserve Bank of India in April 2002. Consequentto the merger, the ICICI group's financing and banking Operations,both wholesale and retail, have been integrated in a single entity.At the same time, ICICI started its international expansion byopening representative offices in New York and London. In India,ICICI Bank bought the Shimla and Darjeeling branches thatStandard Chartered Bank had inherited when it acquired GrindlaysBank.

2003 : The first Integrated Currency Management Centre launchedin Pune. ; ICICI Bank announced the setting up of its first everoffshore branch in Singapore. ; The first offshore banking unit(OBU) at Seepz Special Economic Zone, Mumbai, launched. ;ICICI Banks representative office inaugurated in Dubai. ;Representative office set up in China. : ICICI Banks UKsubsidiary launched. ; Indias first ever "Visa Mini Credit Card", a43% smaller credit card in dimensions launched. ; ICICI Banksubsidiary set up in Canada. ; Temasek Holdings acquired 5.2%stake in ICICI Bank. ; ICICI Bank became the market leader inretail credit in India. In the UK it established an alliance withLloyds TSB. It also opened an Offshore Banking Unit (OBU) inSingapore and representative offices in Dubai and Shanghai.

2004 : Max Money, a home loan product that offers the dual benefit of higher eligibility and affordability to a customer,introduced. : Mobile banking service in India launched inassociation with Reliance Infocomm. : Indias first multi-brandedcredit card with HPCL and Airtel launched. : Kisan Loan Card andinnovative, low-cost ATMs in rural India launched. : ICICI Bankand CNBC TV 18 announced Indias first ever awards recognizingthe achievements of SMEs, a pioneering initiative to encourage the

contribution of Small and Medium Enterprises to the growth ofIndian economy. : ICICI Bank opened its 500th branch in India. :ICICI Bank introduced partnership model wherein ICICI Bankwould forge an alliance with existing micro finance institutions(MFIs). The MFI would undertake the promotional role ofidentifying, training and promoting the micro-finance clients andICICI Bank would finance the clients directly on therecommendation of the MFI. : ICICI Bank introduced 8-8 Banking

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wherein all the branches of the Bank would remain open from8a.m. to 8 p.m. from Monday to Saturday. : ICICI Bank introducedthe concept of floating rate for home loans in India. At the sametime, ICICI opened a representative office in Bangladesh to tap theextensive trade between that country, India and South Africa.

2005 : First rural branch and ATM launched in Uttar Pradesh atDelpandarwa, Hardoi. ; "Free for Life" credit cards launchedwherein annual fees of all ICICI Bank Credit Cards were waivedoff. ; ICICI Bank and Visa jointly launched mChq arevolutionary credit card on the mobile phone. ; Private BankingMasters 2005, a nationwide Golf tournament for high networthclients of the private banking division launched. This event is thelargest domestic invitation amateur golf event conducted in India. ;First Indian company to make a simultaneous equity offering of$1.8 billion in India, the United States and Japan. ; ICICI acquiredInvestitsionno-Kreditny Bank (IKB), a Russia bank with aboutUS$4mn in assets, head office in Balabanovo in the Kaluga region,and with a branch in Moscow. ICICI renamed the bank ICICI BankEurasia. Also, ICICI established a branch in Dubai InternationalFinancial Centre and in Hong Kong.ICICI Bank became the largest bank in India in terms of its market capitalization. ; ICICI Bankbecame the first private entity in India to offer a discount to retailinvestors for its follow-up offer.

2006 : ICICI Bank became the first Indian bank to issue hybridTier-1 perpetual debt in the international markets. : ICICI Banksubsidiary set up in Russia. ; Introduced a new product - NRIsmart save Deposits a unique fixed deposit scheme fornonresident Indians. : Representative offices opened in Thailand,Indonesia and Malaysia. ; ICICI Bank UK opened a branch inAntwerp, in Belgium ; ICICI Bank became the largest retail playerin the market to introduce a biometric enabled smart card that

allow banking transactions to be conducted on the field. A low-cost solution, this became an effective delivery option for ICICIBanks micro finance institution partners. ; Financial counselingcentre Disha launched. Disha provides free credit counseling,financial planning and debt management services. ; Bhoomi pujaconducted for a regional hub in Hyderabad, Andhra Pradesh.

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credit card, which is designed to earn accelerated reward points tothe card holders with every British Airways flight or by spendingon everyday purchases.

2009: ICICI Bank Board appoints Mr K. V. Kamath as non-executive Chairman and Ms Chanda Kochhar as ManagingDirector & CEO effective May 1, 2009, while the existing non-executive Chairman Mr N Vaghul retires after completing his termon April 30, 2009 ; ICICI bank ties up with BSNL Cell One for bill payments, it will facilitate bill payment for BSNL Cell Oneusers through www.icicibank.com across all the 27 circles ofBSNL. ; ICICI Bank Limited acting through its Hong KongBranch (ICICI Bank) signed an agreement on Export Credit Linetotaling up to US$100 million with the Japan Bank forInternational Cooperation (JBIC) which constitutes theinternational wing of Japan Finance Corporation. ; ICICI BankLimited acting through its Hong Kong Branch (ICICI Bank) signeda loan agreement with the Export-Import Bank of China (ChinaExim) for USD 98 million under the Two- step Buyer Credit(Export Credit) arrangement. ICICI Bank is the first Indian Bankto have entered into this arrangement with China Exim ; ICICIBank with Singapore Airlines launched ICICI Bank SingaporeAirlines Visa Platinum Credit Card, the Card has exclusive privileges especially designed for the members. ; ICICI Bankannounced an association with mChek, Indias leading mobile payment solutions provider, to facilitate mChek services to all

ICICI Bank Debit and Credit Card customers. These are electroniccards issued to the customers with mChek application on theirmobile phone. ; Ms Chanda Kochhar took charge as the ManagingDirector & CEO of ICICI Bank from May 1, 2009.

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ICICIBANKTODAY

ICICI Bank(BSE: ICICI) (formerly Industrial Credit and Investment Corporation ofIndia) is India's largest private sector bank by market capitalisation and second largestoverall in terms of assets. Trotal assets of Rs. 3,562.28 billion (US$ 77 billion) atDecember 31, 2009 and profit after tax Rs. 30.19 billion (US$ 648.8 million) for the ninemonths ended December 31, 2009. The Bank also has a network of 1,640+ branches (ason February 11, 2010) and about 4,721 ATMs in India and presence in 18 countries, aswell as some 24 million customers (at the end of July 2007). ICICI Bank offers a widerange of banking products and financial services to corporate and retail customersthrough a variety of delivery channels and specialised subsidiaries and affiliates in theareas of investment banking, life and non-life insurance, venture capital and assetmanagement. (These data are dynamic.) ICICI Bank is also the largest issuer of credit

cards in India. ICICI Bank has got its equity shares listed on the stock exchanges atKolkataand Vadodara, Mumbaiand the National Stock Exchange of India Limited,and its ADRs on the New York Stock Exchange (NYSE). The Bank is expanding inoverseas markets and has the largest international balance sheet among Indian banks.ICICI Bank now has wholly-owned subsidiaries, branches and representatives offices in18 countries, including an offshore unit in Mumbai. This includes wholly ownedsubsidiaries in Canada, Russia and the UK (the subsidiary through which the HiSAVEsavings brand is operated), offshore banking units in Bahrain and Singapore, an advisory branch in Dubai, branches in Belgium, Hong Kong and Sri Lanka, and representativeoffices in Bangladesh, China, Malaysia, Indonesia, South Africa, Thailand, the UnitedArab Emirates and USA. Overseas, the Bank is targeting the NRI (Non-Resident Indian)

population in particular.

ICICI reported a net profit of Rs. 3,758 crore (US$ 741 million) for FY2009. The bank'sCurrent and savings account (CASA) ratio increased to 28.7% at March 31, 2009 from26.1% at March 31, 2008. Increase of Rs. 5,286 crore in CASA deposits in quarter endedMarch 31,2009.ICICI Bank is one of the BigFourBanks of India with State Bank of India, Axis Bankand HDFC Bank

ICICI Bank Group

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BUSINESS PROFILE

Products & Services

Personal Banking

y Depositsy Loans

y Cardsy Investments

y Insurance

y Demat Services

y Wealth Management

NRI Banking

y Money Transfery Bank Accounts

y Investments

y Property Solutionsy Insurance

y Loans

Business Banking

y

Corporate Net Bankingy Cash Managementy Trade Services

y FXOnline

y SME Servicesy Online Taxes

y Custodial Services

Head OfficeICICI Bank9th Floor, South TowersICICI Towers

Bandra Kurla ComplexBandra (E)Mumbai.Phone: 91-022-653 7914

Website: www.icicibank.com

Capital structure

LIFE PLUSSeniorcitizenssavings

account

Saving Accounts

Young Stars Account

Family Banking Account

CarLoan

Two Wheelers Loan

Credit Cards

Investments

Travel Cards

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The Authorized Capital of ICICI Bank is 214.75 Crores. The Issued, Subscribed and Paid Up

Capital is divided into 1113250642 equity shares @ Rs.10/- each.

BUSINESSOBJECTIVE

Vision

To be the leading provider of financial services in India and a major global bank.

Mission

y We will leverage our people, technology, speed and financial capital to: be thebanker of first choice for our customers by delivering high quality, world-classservice.

y Expand the frontiers of our business globally.

y Play a proactive role in the full realisation of Indias potential.

y Maintain a healthy financial profile and diversify our earnings across businessesand geographies.

y Maintain high standards of governance and ethics.y Contribute positively to the various countries and markets in which we operate.

y Create value for our stakeholders.

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AWARDS & RECOGNITION

For the third year in a row ICICI Bank has won The Asset Triple A Country Awards for Best Domestic Bank

in India.

ICICI Bank won the Most Admired Knowledge Enterprises (MAKE) India 2009 Award. ICICI Bank won the

first place in "Maximizing Enterprise Intellectual Capital" category, October 28, 2009.

Ms Chanda Kochhar, MD and CEO was awarded with the Indian Business Women Leadership Award at

NDTV Profit Business Leadership Awards , October 26, 2009.

ICICI Bank received two awards in CNBC Awaaz Consumer Awards; one for the most preferred auto loan

and the other for most preferred credit Card, on September 30, 2009.

Ms. Chanda Kochhar, Managing Director & CEO ranked in the top 20 of the World's 100 Most PowerfulWomen list compiled by Forbes, August 2009.

Financial Express at its FE India's Best Banks Awards, honoured Mr. K.V. Kamath, Chairman with the

Lifetime Achievement Award , July 25, 2009.

ICICI Bank won Asset Triple A Investment Awards for the Best Derivative House, India. In addition ICICIBank were Highly commended , Local Currency Structured product, India for 1.5 year ADR GDR linked

Range Accrual Note., July 2009.

ICICI bank won in three categories at World finance Banking awards on June 16, 2009 Best NRI Services bank Excellence in Private Banking, APAC Region

Excellence in Remittance Business, APAC Region.

ICICI Bank Mobile Banking was adjudged "Best Bank Award for Initiatives in Mobile Payments and

Banking" by IDRBT, on May 18, 2009 in Hyderabad.

ICICI Bank'sb2 branchfree banking was adjudged "Best E-Banking Project Implementation Award 2008" by

The Asian Banker, on May 11, 2009 at the China World Hotel in Beijing.

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ICICI Bank bags the Best bank in SME financing (Private Sector) at the Dun & Bradstreet Banking awards2009.

ICICI Bank NRI services wins the Excellence in Business Model Innovation Award in the eighth Asian

Banker Excellence in Retail Financial Services Awards Programme.

ICICI Bank's Rural Micro Banking and Agri-Business Group wins WOW Event & Experiential MarketingAward in two categories - Rural Marketing programme of the year and Small Budget On GroundPromotion of the Year. These awards were given for Cattle Loan 'Kamdhenu Campaign' and 'Talkies on themove campaign' respectively.

ICICI Bank's Germany Branch has been certified by Stiftung Warrentest. ICICI Bank is ranked 2nd amongs

57 savings products across 19 banks

ICICI Bank Germany won the yearly banking test of the investor magazine uro in the call moneycategory.

The ICICI Bank was awarded the runner's up position in Gartner Business Intelligence and Excellence Award

for Asia Pacific for its Business Intelligence functions.

ICICI Bank's Organisational Excellence Group was recently awarded ISO 9001:2008 certification by TUVNord. The scope of certification comprised processes around consulting and capability building on methods of

quality & improvements.

ICICI Bank has been awarded the following titles under The Asset Triple A Country Awards for 2009: Best Transaction Bank in India Best Trade Finance Bank in India Best Cash Management Bank in India Best Domestic Custodian in India

ICICI Bank has bagged the Best Cash Management Bank in India award for the second year in a row. The

other awards have been bagged for the third year in a row.

ICICI Bank Canada received the prestigious Canadian Helen Keller Award at the Canadian Helen KellerCentre's Fifth Annual Luncheon in Toronto. The award was given to ICICI Bank its long-standing support to

this unique training centre for people who are deaf-blind.

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RATIO ANALYSIS

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Ratio Analysis:

Meaning :

Absolute figures expressed in financial statements by themselves are meaningfulness.These figures often do not convey much meaning unless expressed in relation to otherfigures. Thus, it can be say that the relationship between two figures, expressed inarithmetical terms is called a ratio.

According to R.N. Anthony.

A ratio is simply one number expressed in terms ofanother. It is found by dividing one number into the other.

TYPESOF RATIOS

1. Proportion or Pure Ratio or Simple ratio.2. Rate or so many Times.

3. Percentage4. Fraction.

OBJECTS AND ADVANTAGES OR USES OF RATIO

ANALYSIS

1. Helpful in analysis of financial statements.2. Simplification of accounting data.3. Helpful in comparative study.4. Helpful in locating the weak spots of the business.

5. Helpful in forecasting6. Estimate about the trend of the business7. Fixation of ideal standards8. Effective control9. Study of financial soundness.

LIMITATION OF RATIO ANALYSIS

1. False accounting data gives false ratios

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2. Comparisons not possible of different firms adopt different3. accounting policies.4. Ratio analysis becomes less effective due to price level5. change6. Ratios may be misleading in the absence of absolute data.7. Limited use of a single Ratio.8. Window-Dressing9. Lack of proper standards.10.Ratio alone are not adequate for proper conclusions11.Effect of personal ability and bias of the analyst.

CLASSIFICATIONOF RATIOS

In view of the financial management or according to the tests satisfied,various ratios have been classifieds as below:

Liquidity Ratios : These are the ratios which measure the short-term solvency orfinancial position of a firm. These ratios are calculated to comment upon the short-termpaying capacity of a concern or the firms ability to meet its current obligations.Long Term Solvency and Leverage Ratios : Long-term solvency ratios convey afirms ability to meet the interest cost and repayment schedules of its long-termobligation e.g. Debit Equity Ratio and Interest Coverage Ration. Leverage Ratios.

Activity Ratios: Activity ratios are calculated to measure the efficiency with which theresource of a firm have been employed. These ratios are also called turnover ratiosbecause they indicate the speed with which assets are being turned over into sales e.g.debtors turnover ratio.

Profitablity Ratios: These ratios measure the results of business operations or overallperformance and effective of the firm e.g. gross profit ratio, operating ratio or capitalemployed. Generally, two types of profitability ratios are calculated.(a) In relation to Sales, and

(b)In relation in Investment

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FUNCTIONALCLASSIFICATION IN VIEWOF

FINANCIAL MANAGEMENTORCLASSIFICATION

ACCORDING TOTESTS

y Liquidity

Ratios

Long-term

Solvency and

Leverage Ratios

Activity Ratios Profitability Ratios

y Current Ratio

y Liquid Ratio(Acid) Test orQuick Ratio.

y Absolute liquidor Cash Ratio.

y DebtorsTurnover Ratio

y CreditorsTurnover Ratio

yInventoryTurnover ratio

Financial Operating

Composite

y Debt- EquityRatio

y Debt to TotalCapital Ratio

y InterestCoverageRatio

y CapitalGearing

Ratio

y InventoryTurnoverRatio.

y Debtors TurnoverRatio

y Fixed AssetsTurnover Ratio

y Total AssetTurnover Ratio

y Working CapitalTurnover Ratio.

yPayables TurnoverRatio

y Capital EmployedTurnover Ratio

In Relation to Sales.Gross Profit Ratio.Operating Ratio.Operating ProfitRatio.Net Profit Ratio.Expenses Ratio

In relation to

investmentsReturn on Investments.Return on capital.Return on Equity Capital.

Return on total ResourcesEarning per share.Price Earning Ratio.

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BALANCESHEETOF ICICI BANK LTD.AsOn Mar 2005,Mar 2006,Mar 2007,Mar2008,Mar2009. (Rs. In crores)

2005 2006 2007 2008 2009

CAPITALAND

LIABILITIES:Total ShareCapital

1086.75 1239.83 1249.34 1462.68 1463.29

Equity ShareCapital

736.75 889.83 899.34 1112.68 1113.29

ShareApplicationMoney

0.02 0.00 0.00 0.00 0.00

Preference Share

Capital

350.00 350.00 350.00 350.00 350.00

Reserves 11813.20 21316.16 23413.92 45357.53 48419.73

RevaluationReserves

0.00 0.00 0.00 0.00 0.00

Net Worth 12899.97 22555.99 24663.26 46820.21 49883.02Deposits 99818.78 165083.17 230510.19 244431.05 218347.82

Borrowings 33544.50 38521.91 51256.03 65648.43 67323.69

Total Debt 146263.25 226161.17 306429.48 356899.69 335554.53

Other LiabilitiesAnd Provisions

21396.17 25227.88 38228.64 42895.39 43746.43

Total Liabilities 167659.42 251388.95 344658.12 399795.08 379300.96

ASSETS:Cash AndBalances WithRBI

6344.90 8934.37 18706.88 29377.53 17536.33

Balances WithBanks,Money AtCall

6585.07 8105.85 18414.45 8663.60 12430.23

Advances 91405.15 146163.11 195865.60 225616.08 218310.85

Investments 50487.35 71547.39 91257.84 111454.34 103058.31Gross Block 5525.65 5968.57 6298.56 7036.00 7443.71AccumulatedDepreciation

1487.61 1987.85 2375.14 2927.11 3642.09

Net Fixed Assets 4038.04 3980.72 3923.42 4108.89 3801.62Capital Work InProgress

96.30 147.94 189.66 0.00 0.00

Other Assets 8702.59 12509.57 16300.26 20574.63 24163.62

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Total Assets 167659.40 251388.95 344658.11 399795.07 379300.96

Contingentliabilities

97507.79 119895.78 177054.18 371737.36 803991.92

Bills forcollection

9803.67 15025.21 22717.23 29377.55 36678.71

Bookvalue(Rs.)

170.35 249.55 270.37 417.64 445.17

EPS 27.22 28.55 34.59 37.37 33.78

No. ofequity shares

736716094 889823901 899266672 1112687495 1113250642

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3.EARNING PER SHARE:In order to avoid confusion on account of the varied meanings of the term capitalemployed, the overall profitability can also be judged by calculating earning per sharewith the help of the following formula:

Earning Per Equity Share = Net Profit after Tax Prefrence Dividend

No. of Equity sharesThe earning per share of the company helps in determining the market price of theequity shares of the company. A comparison of earning per share of the company withanother will also help in deciding whether the equity share capital is being effectivelyused or not. It also helps in estimating the companys capacity to pay dividend to itsequity shareholders.

Year Net Income Available

For Shareholders(Rs. In crores)

No. Of Equity

Shares(Rs. In crores)

EPS

2005 2005.2 73.6716 27.22

2006 2540.07

88.9823 28.552007 3110.22 89.9266 34.59

2008 4157.73 111.2687 37.37

2009 3758.13 111.325 33.78

Interpretation:Earning Per Share is the most commonly used data which reflectsthe performance and prospects of the company.It affects the market price of shares.Here the Earning Per Share is shows a persistent increase till the year 2008 after that in the year2009 Earning Per share is followed by a downfall due to decline in profits.

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DIVIDEND PER SHARE :

It is expressed by dividing dividend paid to equity shareholders by no. of equity shares.this showsthe per share dividend given to equity shareholders.It is very helpful for potential investors toknow the dividend paying capacity of the company.It affects the market value of the company.

Dividend PerShare = Dividend PaidTo EquityShareholders

No.OfEquityShares

Year Dividend Paid

(Rs. In crores)

No. Of Equity

Shares(Rs. In crores)

DPS

2005 632.96 73.6716 8.59

2006 759.33 88.9823 8.53

2007 901.17 89.9266 10.02

2008 1227.7 111.2687 11.03

2009 1224.58 111.325 11

Interpretatio

n:Here the Dividend Per Share is increasing year after year except a little decline in 2009.otherwise

the dividend per share ratio of the bank is quite satisfactory which shows the bank has a gooddividend paying capacity.

Dividend Per hare atioofI I I ankforthe

periodof2005-2009

8.59 8.53

10.02

11.03 11

0

2

4

6

8

10

12

2005 2006 2007 2008 2009

Years

Ratio

DividendPerSh re

Ratio

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4.NET PROFIT RATIO:

This ratio indicates the Net margin on a sale of Rs.100. It is calculated as follows:

Net Profit Ratio = Net Profit X 100

Net Sales

This ratio helps in determining the efficiency with which affairs of the businessare being managed. An increase in the ratio over the previous period indicatesimprovement in the operational efficiency of the business. The ratio is thus on effectivemeasure to check the profitability of business.

Year Net Profit(Rs. In crores)

Sales(Rs. In crores)

Net Profit Ratio

(in %)

2005 2005.2 9409.9 21.3

2006 2540.07 13784.49 18.42

2007 3110.22 22994.29 13.52

2008 4157.73 30788.34 13.5

2009 3758.13 31092.55 12.08

Interpretation:Although both the sales and net profit have increased during the above period butthe Net Profit Ratio of the bank is declining continuously. This is because of thereason that net profits have not increased in the same proportion as of the sales.

Net P o t Rat o o ICICI Bank o the pe od o 2005 2009

21 3

18 42

13 52 13 5

12 08

0

5

10

15

20

25

2005 2006 2007 2008 2009

ears

Rato(%)

Ne

P

of

a

o

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5.OPERATING PROFIT RATIO:

This ratio is calculated as follows:

Operating Profit Ratio = Operating Profit X100

Net SalesThe difference between net profit ratio and net operating profit ratio is that net operating profit iscalculated without considering non-operating expenses and non-operating incomes. If we deductthis ratio from 100,the result will be operating ratio. Higher operating profit ratio enable theorganization to recoup non-operating expenses out of operating profits and provide reasonablereturn.

Year Operating Profit(Rs. In crores)

Sales(Rs. In crores)

Operating Profit

Ratio (in %)2005 2956 9409.9 31.41

2006 4690.67 13784.49 34.02

2007 5874.4 22994.29 25.54

2008 7960.69 30788.34 25.85

2009 8925.23 31092.55 28.7

Interpretation:In the year 2005 & 2006 the operating profit is 31.41% & 34.02% respectively. After that it hasbeen consistently declined from the year 2007 till 2008 and again gaining momentum in 2009.This may be due to the reason that operating expenses have been increased more as compared tosales during the above period consequently reducing the operating profits.Therefore the bankshould check on unnecessary operating expenses to correct this situation and to provide asufficient return.

Operating Profit Ratio of ICICI Bank for the period

of 2005-2009

31.4134.02

25.54 25.85

28.7

0

5

10

15

20

25

30

35

40

2005 2006 2007 2008 2009

Years

Rati

Operating Profit Ratio

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7.RETURNONCAPITALEMPLOYED:It establishes relationship between profit before interest and tax and capital employed. It indicates

the percentage of return on the total capital employed in the business.This ratio is also known asReturn On Investment. It measures the overall efficiency and profitabilityof the business inrelation to investment made in business. It also shows how efficiently the resources are used inthe business.comparison of one unit with that of the other or performance in one year with that ofthe same unit is possible. It is calculated as below:

Year Net Profit Before

Interest And Tax(Rs. In crores)

Capital Employed

(Rs. In crores)

Return On Capital

Employed (in %)

2005 9098.09 146263.25 6.22

2006 12694.05 226161.17 5.61

2007 20006.54 306429.48 6.52

2008 28540.34 356

899.69

7.992009 27842.9 335554.53 8.29

Interpretation:The above table exhibit the return on capital employed ratioof the bank for last five years.This ratio measures the earning of the net assets of thebusiness. The ratio was 6.22% in year 2005. After that it rised to the tune of5.61%,6.52%,7.99% and 8.29% in year 2006, 2007, 2008 and year 2009 respectively. Itlead to the conclusion bank rising but very little proportion of return on capital employed.

Return On Capital Employed of ICICI Bank for the

period of 2005-2009

6.22

5.61

6.52

7.99

8.29

0

1

2

3

4

5

6

7

8

9

2005 2006 2007 2008 2009

Years

Ratio

Return On Capital Employed

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9.DEBT-EQUITY RATIO:

The Debt-Equity ratio is calculated to find out the long-term financial position of the firm.Thisratio indicates the relationship between long-term debts and shareholders funds.The soundness oflong-term financial policies of a firm can be determined with the help of this ratio.It helps to assess the soundness of long-term financial policies of a business.It also helps todetermine the relative stakes of outsiders and shareholders.Long-term creditors can assess thesecurity of their funds in a business.it indicates to what extent a firm depends upon lenders tomeet its long-term financial requirements.A low Debt-Equity ratio is considered better from thepoint of view of creditors.

Year Debt(Rs. In crores)

Equity(Rs. In crores)

Debt Equity Ratio

2005 154759.45 12899.97 11.99

2006 228832.96 22555.99 10.14

2007 319994.86 24663.26 12.97

2008 352974.87 46820.21 7.53

2009 329417.94 49883.02 6.6

Interpretation:The ratio shows the extent to which funds have been provided by long-term creditors ascompared to the funds provided by the owners.Here the Debt-Equity ratio for the above period isalways high.this shows that the bank is more relying on outside funds as compared to internalsources of capital,in its capital structure. From the long-term lenders point of view this ratio is notsatisfactory.

Debt Equity ratio of ICICI Bank for the period of

2005-2009

11.99

10.14

12.97

7.536.6

0

2

4

6

8

10

12

14

2005 2006 2007 2008 2009

Years

Ratio

Debt Equity Ratio

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11.FIXED ASSETSTURNOVERRATIO:

It is also called as Sales to Fixed Assets Ratio.It measures the efficient use of fixed assets.Thisratio is a measure of efficient use of fixed assets.it is calculated as:

Fixed Assets Turnover Ratio = Cost of goods sold or SalesNet Fixed Assets

It measures the efficiency and profit earning capacity of the business.Higher the ratio,greater isthe intensive utilization of fixed assets and a lower ratio shows under utilization of the fixedassets.This ratio has a special importance for manufacturing concerns where investment in fixedassets,is vey high and the profitability is significantly dependent on the utilization of these assets.

Year Sales(Rs. In crores)

Net Fixed Assets(Rs. In crores)

Fixed Assets

Turnover Ratio

2005 9409.9 4038.04 2.33

2006 13784.49 3980.72 3.46

2007 22994.29 3923.42 5.86

2008 30788.34 4108.89 7.49

2009 31092.55 3801.62 8.17

Interpretation:Here the fixed assets employed in the business shows a decreasing trend except in theyear 2008 where fixed assets have again increased.This may be due to increase in rate ofdepreciation in subsequent years. Neverthless,the fixed assets turnover ratio has beenconsistently increasing.It indicates that fixed assets have been effectively used in thebusiness without much additional investment in the period of study and also the capital isnot blocked in fixed assets

Fixed assets Turnover Ratio of ICICI Bank for the

period of 2005-2009

2.33

3.46

5.86

7.498.17

0

1

2

3

4

5

6

7

8

9

2005 2006 2007 2008 2009

Years

Ratio

Fixed assets Turnover

Ratio

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12.CREDIT-DEPOSIT RATIO:This ratio is very important to assess the credit performance of the bank. The ratio shows the

relationship between the amount of deposit generated by the bank has well as their deployment

towards disbursement of loan and advances. Higher credit deposit ratio shows overall good

efficiency and performance of any banking institution.

100v!Deposits

CreditsRatioDepositCredit

Credit means disbursement of advances

Deposit mean sum of fixed deposit,

Saving deposit and current deposit.

Year Advances(Rs. In crores)

Deposits(Rs. In crores)

Credit Deposit Ratio

(in%)

2005 91405.15 99818.78 91

2006 146163.11 165083.17 88

2007 195865.6 230510.19 842008 225616.08 244431.05 92

2009 218310.85 218347.82 99

Interpretation:Above table exhibits credit deposit ratio of the bank during last 5 years. In the year 2005 ratiowas 91% and it declined to 88% and 84%in the year 2006 and 2007 respectively. In the year2008 and 2009 ratio was increased to 92% and 99% respectively. it leads to conclusion that creditperformance of the bank is very good.

Credit Deposit ratio of ICICI bank for the period of

2005-2009

0.91

0.88

0.84

0.92

0.99

0.75

0.8

0.85

0.9

0.95

1

1.05

2005 2006 2007 2008 2009

Years

Ratio

Credit Deposit ratio

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CASH FLOW STATEMENT OF ICICI BANK

PARTICULARS 2005 2006 2007 2008 2009

Profit before tax 2,527.20 3,096.61 3,648.04 5,056.10 5,116.97

Net cash flow-operatingactivity

9,131.72 4,652.93 23,061.95 11,631.15 -14,188.149

Net cash used in investingactivity

-3,445.24 -7,893.98 18,362.67 17,561.11 3,857.88

Net cash used in fin.activity

-1,227.13 7,350.90 15,414.58 29,964.82 1,625.36

Net inc/dec in cash andequivalent

4,459.34 4,110.25 20,081.10 683.55 -8,074.57

Cash and equivalent beginof year

8,470.63 12,929.97 17,040.22 37,357.58 38,041.13

Cash and equivalent endof year

12,929.97 17,040.22 37,121.32 38,041.13 29,966.56

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FINDINGS,SUGGESTIONS

& CONCLUSION

Findings

Profit before tax for the year ended March 31, 2009 (FY2009) was Rs. 5,117crore (US$ 1,009 million), compared to Rs. 5,056 crore (US$ 997 million) for the

year ended March 31, 2008 (FY2008).

Profit after tax for FY2009 was Rs. 3,758 crore (US$ 741 million) compared toRs. 4,158 crore (US$ 820 million) for FY2008 due to the higher effective tax rateon account of lower proportion of income taxable as dividends and capital gains.

Net interest income increased 15% from Rs. 7,304 crore (US$ 1,440 million) forFY2008 to Rs. 8,367 crore (US$ 1,650 million) for FY2009. While the advancesdeclined marginally year-on-year, the net interest income increased due toimprovement in net interest margin from 2.2% in FY2008 to 2.4% in FY2009.

Operating expenses (including direct marketing agency expenses) decreased 14%to Rs. 6,835 crore (US$ 1,348 million) in FY2009 from Rs. 7,972 crore (US$1,572 million) in FY2008. The cost/average asset ratio for FY2009 was 1.8%compared to 2.2% for FY2008.

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During the year, the Bank has pursued a strategy of prioritizing capitalconservation, liquidity management and risk containment given the challengingeconomic environment. This is reflected in the Banks strong capital adequacyand its focus on reducing its wholesale term deposit base and increasing its CASAratio. The Bank is maintaining excess liquidity on an ongoing basis. The Bank hasalso placed strong emphasis on efficiency improvement and cost rationalization.The Bank continues to invest in expansion of its branch network to enhance itsdeposit franchise and create an integrated distribution network for both asset andliability products.

In line with the above strategy, the total deposits of the Bank were Rs. 218,348 crore(US$ 43.0 billion) at March 31, 2009, compared to Rs. 244,431 crore (US$ 48.2 billion)at March 31, 2008. The reduction in term deposits by Rs. 24,970 crore (US$ 4.9 billion)was primarily due to the Banks conscious strategy of paying off wholesale deposits.During Q4-2009, total deposits increased by Rs. 9,283 crore (US$ 1.8 billion), of whichRs. 5,286 crore (US$ 1.0 billion), or about 57%, was in the form of CASA deposits. TheCASA ratio improved to 28.7% of total deposits at March 31, 2009 from 26.1% at March31, 2008.

The branch network of the Bank has increased from 755 branches at March 31,2007 to 1,438 branches at April 24, 2009. The Bank is also in the process ofopening 580 new branches which would expand the branch network to about2,000 branches, giving the Bank a wide distribution reach in the country.

In line with the strategy of prioritizing capital conservation and risk containment, the loanbook of the Bank decreased marginally to Rs. 218,311 crore (US$ 43.0 billion) at March

31, 2009 from Rs. 225,616 crore (US$ 44.5 billion) at March 31, 2008.

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Liquidity position

The liquid ratio of the bank in the year 2005,2006 and 2009 is 0.60,0.67and 0.68respectively and the year 2007 and 2008 liquid ratio is 0.97 and 0.88 respectivelywhich is close to 1.Though it is not equal to the ideal liquid ratio of 1:1 but still itsunder control. So in nut shell, it can be concluded that the liquidity position of thebank is quite satisfactory.

Capital adequacy and return on capital employed

The Banks capital adequacy at March 31, 2009 as per Reserve Bank of Indiasrevised guidelines on Basel II norms was 15.5% and Tier-1 capital adequacy was11.8%, well above RBIs requirement of total capital adequacy of 9.0% and Tier-1capital adequacy of 6.0%. The above capital adequacy takes into account the impactof dividend recommended by the Board.

Also the capital is being effectively utilized in the bank as it shows better return oncapital employed over years.

Asset quality

At March 31, 2009, the Banks net non-performing asset ratio was 1.96%. During theyear the Bank restructured loans aggregating to Rs. 1,115 crore (US$ 220 million).

Dividend on equity shares

Since the dividend per share has shown a promising increase for the period understudy.It shows that the bank is following a sound dividend policy and is capable ofdistributing higher dividends.in this way the investors will feel investing in capital ofthe bank a much beneficial option and will be reluctant to withdraw capital for a longtime.

Earnings per share

The earnings per share for the period under study also shows a promising increase.itsuggests that bank has better profitability position and in future it can be a better orattractive channel of investment for shareholders.

Higher trends of credit deposit ratio A positive sign

High trends of credit deposit ratio reveals that bank has performed satisfactorily as regardto granting loans and advances to generate income. It suggests that credit performance isgood and the bank is doing its business good by fulfilling its major objective as regards togranting loans and accepting deposits.

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Conclusion

On the basis of various techniques applied for the financial analysis of ICICI Bank wecan arrive at a conclusion that the financial position and overall performance of the bankis satisfactory. Though the income of the bank has increased over the period but not inthe same pace as of expenses. But the bank has succeeded in maintaining a reasonableprofitability position.

The bank has succeeded in increasing its share capital also which has increased around50% in the last 5 years. Individuals are the major shareholders. The major achievement ofthe bank has been a tremendous increase in its deposits, which has always been its mainobjective. Fixed and current deposits have also shown an increasing trend.

Equity shareholders are also enjoying an increasing trend in the return on their capital.Though current assets and liabilities (current liquidity) of the bank is not so satisfactorybut bank has succeeded in maintaining a stable solvency position over the years. As far asthe ratio of external and internal equity is concerned, it is clear that bank has been usingmore amount of external equity in the form of loans and borrowings than owners equity.Banks investments are also showing an increasing trend. Due to increase in advances,the interest received by the bank from such advances is proving to be the major source ofincome for the bank.

Suggestions

Although the short term liquidity position is quite satisfactory as per revealed byliquid ratio but the current ratio is below the ideal ratio of 2:1.So the bank shouldmake efforts to increase its current assets to maintain a safety margin and tomaintain a better liquidity position.

The profitability of the bank for the period under study is not satisfactory. Profitsare increasing but not with same pace as of the expenditure due to higher relianceon debt capital in the form of borrowings and loans for financing capital structure.So in order to improve profitability, the bank should reduce its dependence on

external equities for meeting capital requirements. Consequently, the interestexpenses will decline and profits will increase which is good for the bank.Similarly non productive expenses should be curtailed to improve profitability.

Higher trend of credit deposit ratio reveals that the bank has performedsatisfactorily as regard to granting loans and advances to generate income. Itsuggests that the credit performance of bank is good and it is performing its business well by fulfilling the major objective of granting credit and accepting

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deposit. So in order to have more creditability in the market the bank shouldmaintain its credit deposit ratio.

Though the bank has been successful in increasing its deposits but to furtherimprove upon such situation it can introduce some new and attractive schemes for public. Such schemes can be in the form of higher rate of interest and shortermaturity period for FDs etc.

Bank should try to finance more and more projects. Financing will help it to earnhigher amount of profits.

The bank is having a greater reliance on debt capital. The increasing reliance onexternal equities may prove hazardous in the long run. So in order to remedy thissituation bank should increase its focus on internal equities and other sources ofinternal financing.

Bank can also think for improving its day-to -day service to its clients. Suchservice can be improved by providing prompt service and showing an attitude ofco-operation to its clients. It will help to give a kind of confidence to the publicand build a better public image.

To achieve the objective of Rural development it should open more and morebranches in different rural areas of the country. It will facilitate in providing helpto rural poor farmers and other living below the poverty line. Bank can appointcommission agents for different area who can encourage general public to investin the capital of the bank and make more deposits in ICICI Bank.

The bank should simplify the procedure of advances for quick disbursement.

To achieve organizational success a proper independent working atmosphereshould be developed to achieve desired objective more effectively.

Last but not least, bank should adopt branch automation experiment to control theoperational cost.

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BIBLIOGRAPHY

Books Reffered:

Accountancy. R.K. Mittal,A.K.Jain.

Financial Management- Theory and Practice. Shashi.K.Gupta , R.K. Sharma.

Essentials of Corporate Finance 2nd edition ,Irwin /McGraw-Hill.Ross, S.A.,R.W.Westerfield and B.D. Jordan.

Basic Financial Management ,8th edition ,Prentice -Hall,Inc. Scott, D.F., J.D

Martin, J.W. Petty and A.Keown.

Internet websites:

Www.Icicibank.Com

Www.Moneycontrol.Com

WWW.Money.Rediff.Com

Www.Wikipedia.Org

Www.Google.Com

Www.Scribd.Com

Www.Managementparadise.Com

my ma project 27-08-2010

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