CORPORATION BANK

NII = Interest Earned – Interest Expended

= 19556.4448- 15486.1042

= 4071.341 crores

Maturity Bucket

Day 12 to7days

8 to 14days

15 to 28Days

29 Days to3 Months

Over 3Monthsand up to6 Months

Over 6Monthsand up to1 year

Over 1Year & upto 3 Years

Over 3Year & upto 5 Years

Over 5Year

∆NII for maturity buckets(CGAP*∆R)∆R= + .1 (10 basis point) 999.041 503.293 -606.116 -305.111 -1286.05 -2017.42 -3095.36 1610.806 4963.012

-69.086

∆R= - .1 (-10 basis point) -999.041 -503.293 606.116 305.111 1286.047 2017.417 3095.357 -1610.81 -4963.01 69.086

CGAP 9990.41 5032.93 -6061.16 -3051.11 -12860.5 -20174.2 -30953.6 16108.06 49630.12-

690.86

For Corporation bank:

CGAP is +ve i.e, (RSA>RSL) for maturity buckets ( Day1, Upto 7 days, Upto 3 years and Upto 5 years)

Correspondingly we can observe that for the above mentioned maturity basket with 10 basis point change in the interest rate, change in NII is positive, which means that with rising interest rate corporation bank earns more interest income than the increase in interest expenses for these baskets. These maturity baskets on cumulative basis have exposure to falling interest rates as when there is -10 basis point change in interest rate, interest income decreases more than interest expense and hence negative change.

For other maturity baskets, falling interest rates are favorable to the company as assets and liabilities in the remaining maturity baskets have exposure to increased interest rate.

CORPORATION BANK has 46.6% risk sensitive assets and 50.7% of risk sensitive liabilities in maturity buckets ( Day1, Upto 7 days, Upto 3 years and Upto 5 years) for which +ve change in interest rate is favorable and remaining 53.4% RSA and 49.3% RSL in maturity baskets which

have risk exposure if interest rates rise. Though the asset liability management of the company is good but since there is marginally higher % of asset in second group of maturity baskets, for the company overall “DECREASE IN INTEREST RATES IS FAVORABLE” but only marginally. Company is to a very high extent protected to exposure from interest rate risk.

DENA BANK

NII = Interest Earned – Interest Expended

=107,63.4852-83,15.6232

= 2447.8620 crore

Change in NII with Change in Interest rate

Maturity Bucket-->

Day 12 to7days

8 to 14days

15 to 28Days

29 Days to3 Months

Over 3Monthsand up to6 Months

Over 6Monthsand up to1 year

Over 1Year & upto 3 Years

Over 3Year & upto 5 Years

Over 5Year

∆NII for maturity buckets(CGAP*∆R)∆R= + .1 (10 basis point) 1.08 -71.49 -150.31 -266.49 -2152.48 -2859.10 -2783.79 -1916.35 1298.79 4650.90∆R= - .1 (-10 basis point) -1.08 71.49 150.31 266.49 2152.48 2859.10 2783.79 1916.35

-1298.79

-4650.90

CGAP 10.82 -714.88 -1503.06 -2664.91 -21524.8 -28591 -27837.9 -19163.5 12987.9 46509For DENA bank:

CGAP is +ve i.e, (RSA>RSL) for maturity buckets ( Day1, Upto 5 years and above 5 years)

Correspondingly we can observe that for the above mentioned maturity basket with 10 basis point change in the interest rate, change in NII is positive, which means that with rising interest rate corporation bank earns more interest income than the increase in interest expenses for these baskets. These maturity baskets on cumulative basis have exposure to falling interest rates as when there is -10 basis point change in interest rate, interest income decreases more than interest expense and hence negative change.

For other maturity baskets, falling interest rates are favorable to the company as assets and liabilities in the remaining maturity baskets have exposure to increased interest rate.

DENA BANK has 40.9% risk sensitive assets and 5 % of risk sensitive liabilities in maturity buckets ( Day1, Upto 5 years and above 5 years) for which +ve change in interest rate is favorable and remaining 59.1% RSA and nearly 95% RSL in maturity baskets which have risk

exposure if interest rates rise. The asset liability management of the company is not good in terms of matching the assets and liabilities exposure to interest rate rise and fall.Majority of the RSAs and RSAs lie in the maturity baskets which have exposure to rise in interest rates, thus for the company overall “DECREASE IN INTEREST RATES IS FAVORABLE”

It can be seen from the above calculations that when the GAP is positive i.e, (RSA>RSL), increase in interest rate or +ve ∆R is favorable for the bank whereas, if GAP is negative i.e, (RSA<RSL), decrease in interest rate or –ve ∆R results into lesser decrease in interest income than the decrease in interest expense and thus is favorable.

BANK OF INDIA

The GAP of the bank is positive i.e. Rate Sensitive Assets are greater than Rate Sensitive Liabilities. But it shows a declining trend that the assets are continually decreasing. When we checked the sensitivity of NII with respect to Interest rate change following points can be noticed:

Since the bank has positive GAP it can afford increase in interest rates. Generally, when there is an increase in interest rates bank maintain a positive GAR i.e. RSA>RSL.

When the interest rates are decreasing, the GAP is also changing into negative. This clearly shows the strategy that should be adopted by banks. Generally, banks maintain a negative GAP with the decrease in the interest rates.

BANK OF MAHARASHTRA

The GAP of the bank is negative i.e. Rate Sensitive Assets are less than Rate Sensitive Liabilities. The current year GAP of the bank is positive which indicates that the asset base of the bank is increasing. The sensitivity analysis of the GAP with respect to interest rate change shows the following results:

With the increase in the interest rate the change in the GAP is decreasing unless for the recent year which shows that earlier when the interest rates were high, bank was maintaining a negative GAP. But as now the interest rates are decreasing the bank is maintaining a positive GAP.

When the interest rate is decreasing there is a positive change in the GAP of the bank, which shows that since the rates were decreasing the bank was maintaining a negative GAP.