comparitive analysis of AXIS BANK & kotak mahindra bank

A PROJECT REPORT

OF

AXIS BANK

&

KOTAK MAHINDRA BANK

SUBMITTED BY: Pruthvirajsinh Jadeja

08BBA016

S.Y B.B.A

SUBMITTED TO: PROF. RUPAL DESAI

S.M.I.T (BHUJ)

PREFACE

As a student of management, practical knowledge is a

must with full theoretical concepts. Therefore in order to acquire the

knowledge we were given a this project as one of its subjects to include in

our BBA syllabus by shree KSKV Kachchh University. So for this said

purpose we have made this project of financial management in which we

have compared the two banks i.e. Axis bank and kotak mahendra bank

ACKNOWLEDGEMENT

I am very much thankful to our institute as well as to our teachers. I

also thank to the KSKV Kachchh University for designing for such a valuable

subject as a part of our study. I also thank to our concerned faculty for

leading us in every path for the given subject. This study will also help us to

increase our analytical power so that I am very thankful to our college

authorities.

Thanking You,

Pruthviraj S Jadeja

INTRODUTION

AXIS BANK

Axis Bank was the first of the new private banks to have begun operations in 1994, after the Government of India allowed new private banks to be established. The Bank was promoted jointly by the Administrator of the specified undertaking of the Unit Trust of India (UTI - I), Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC) and other four PSU insurance companies, i.e. National Insurance Company Ltd., The New India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India Insurance Company Ltd.

The Bank has strengths in both retail and corporate banking and is committed to adopting the best industry practices internationally in order to achieve excellence.

The Bank's Registered Office is at Ahmadabad and its Central Office is located at Mumbai. The Bank has a very wide network of more than 896 branches and Extension Counters (as on 31st December 2009). The Bank has a network of over 4055 ATMs (as on 31st December 2009) providing 24 hrs a day banking convenience to its customers. This is one of the largest ATM networks in the country.

The Bank today is capitalized to the extent of Rs. 403.63 crores with the public holding (other than promoters and GDRs) at 53.72%.

KOTAK MAHINDRA BANK

Kotak Mahindra Bank is one of India's leading financial private banking institutions. It offers banking solutions that covers almost every sphere of life. Some of its financial services include commercial banking, stock broking, mutual funds, life insurance and investment banking. Established under the brand of Kotak Mahindra Finance Ltd in 1984, it was given the license to carry on with banking business by the Reserve Bank of India in February 2003. It is the first company in the Indian banking history to convert to be converted from a private financial institution to a bank.

HISTORY

LOGO:

Axis Bank, previously called UTI Bank, was the first of the new private banks to have begun operations in 1994, after the Government of India allowed new private banks to be established. The Bank was promoted jointly by the Administrator of the Specified Undertaking of the Unit Trust of India (UTI-I), Life Insurance Corporation of India (LIC), General Insurance Corporation Ltd., National Insurance Company Ltd., The New India Assurance Company, The Oriental Insurance Corporation and United Insurance Company Ltd. UTI-I holds a special position in the Indian capital markets and has promoted many leading financial institutions in the country. The bank changed its name to Axis Bank in April 2007 to avoid confusion with other unrelated entities with similar name.[2] Shikha Sharma was named as the bank's managing director and CEO on 20 April 2009. As on the year ended March 31, 2009 the Bank had a total income of Rs. 13,745.04 crores and a net profit of Rs 1,812.93 crores.

Axis Bank is one of the Biggest Bank of India like State Bank of India, ICICI Bank and HDFC BankAt the end of October 2009, the Bank has a very wide network of more than 925 Branch offices and Extension Counters.The Bank has a network of over 3900 ATM's (as on 31st October 2009). The Bank has loans now (as of June 2007) account for as much as 70 per cent of the bank’s total loan book of Rs 2,00,000 crore. For HDFC Bank, retail assets are around 57 per cent (Rs 28,000 crore) of the total loans as of March 2007.

http://en.wikipedia.org/wiki/HDFC_Bank

http://en.wikipedia.org/wiki/ICICI_Bank

http://en.wikipedia.org/wiki/State_Bank_of_India

http://en.wikipedia.org/wiki/State_Bank_of_India

http://en.wikipedia.org/wiki/Axis_Bank#cite_note-1

In the case of Axis Bank, retail loans have declined from 30 per cent of the total loan book of Rs 25,800 crore in June 2006 to around 23 per cent of loan book of Rs.41,280 crore (as of June 2007). Even over a longer period, while the overall asset growth for Axis Bank has been quite high and has matched that of the other banks, retail exposures grew at a slower pace.

If the sharp decline in the retail asset book in the past year in the case of Axis Bank is part of a deliberate business strategy, this could have significant implications (not necessarily negative) for the overall future profitability of the business.

Despite the slower growth of the retail book over a period of time and the outright decline seen in the past year, the bank’s fundamentals are quite resilient. With the high level of mid-corporate and wholesale corporate lending the bank has been doing, one would have expected the net interest margins to have been under greater pressure. The bank, though, appears to have insulated such pressures. Interest margins, while they have declined from the 3.15 per cent seen in 2003-04, are still hovering close to the 3 per cent mark. (The comparable margins for ICICI Bank and HDFC Bank are around 2.60 per cent and 4 per cent respectively. The margins for ICICI Bank are lower despite its much larger share of the higher margin retail business, since funding costs also are higher).

LOGO:

The Kotak Mahindra group is a financial organization established in 1985 in India. It was previously known as the Kotak Mahindra Finance Limited, a non-banking financial organization. In February 2003, Kotak Mahindra Finance Ltd, the group's flagship company was given the license to carry on banking business by the Reserve Bank of India (RBI). Kotak Mahindra Finance Ltd. is the first company in the Indian banking history to convert to a bank.

The bank is headed by K.M. Gherda as Chairman and Uday Kotak as Executive Vice Chairman & Managing Director. Shankar Acharya is the chairman of board of Directors in the company.

The Bank has its registered office at Nariman Bhavan, Nariman Point, Mumbai.

The Kotak Mahindra Group was born in 1985 as Kotak Capital Management Finance Limited. This company was promoted by Uday Kotak, Sidney A. A. Pinto and Kotak & Company. Industrialists Harish Mahindra and Anand Mahindra took a stake in 1986, and that's when the company changed its name to Kotak Mahindra Finance Limited. Since then it's been a steady and confident journey to growth and success. 1986 Kotak Mahindra Finance Limited starts the activity of Bill Discounting

1987 Kotak Mahindra Finance Limited enters the Lease and Hire Purchase market.1991 Auto Finance division is started.1991 The Investment Banking Division is started. Takes over FICOM, one of India's largest financial retail marketing networks.1992 Enters the Funds Syndication sector

1995 Brokerage and Distribution businesses incorporated into a separate company - Kotak Securities. Investment Banking division incorporated into a separate company - Kotak Mahindra Capital Company.1996 The Auto Finance Business is hived off into a separate company - Kotak Mahindra Prime Limited (formerly known as Kotak Mahindra Primus Limited). Kotak Mahindra takes a significant stake in Ford Credit Kotak Mahindra Limited, for financing Ford vehicles. The launch of Matrix Information Services Limited marks the Group's entry into information distribution.

1998 Enters the mutual fund market with the launch of Kotak Mahindra Asset Management Company.2000 Kotak Mahindra ties up with Old Mutual plc. for the Life Insurance business. Kotak Securities launches its on-line broking site (now www.kotaksecurities.com). Commencement of private equity activity through setting up of Kotak Mahindra Venture Capital Fund.

2001 Matrix sold to Friday Corporation Launches Insurance Services 2003 Kotak Mahindra Finance Ltd. converts to a commercial bank - the first Indian company to do so.

2004 Launches India Growth Fund, a private equity fund.2005 Kotak Group realigns joint venture in Ford Credit; Buys Kotak Mahindra Prime (formerly known as Kotak Mahindra Primus Limited) and sells Ford credit Kotak Mahindra. Launches a real estate fund

2006 Bought the 25% stake held by Goldman Sachs in Kotak Mahindra Capital Company and Kotak Securities.

BALANCE SHEETS

KOTAK MAHENDRA BANK

KOTAK MAHINDRA BANK LIMITEDCONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2009

(Rupees in thousands)

Sche-dule

As at 31st March, 2009 As at 31st March, 2008

CAPITAL AND LIABILITIES

Capital 1 3,456,689 3,446,728

Reserves and Surplus 2 61,768,752 54,792,335

Minority Interest 2A 628,602 512,334

Employees' Stock Options (Grants) Outstanding 919,086 582,140

Deposits 3 138,227,781 136,919,318

Borrowings 4 110,599,833 127,728,130

Policyholders' Funds 37,380,445 28,416,151

Other Liabilities and Provisions 5 49,357,203 53,574,602

Total 402,338,391 405,971,738

ASSETS

Cash and Balances with Reserve Bank of India 6 10,070,254 16,904,191

Balances with Banks and Money at Call and Short Notice 7

4,304,697 16,051,285

Investments 8 133,130,275 125,696,764

Advances 9 224,976,215 219,846,817

Fixed Assets 10 3,383,402

3,330,288

Other Assets 11 26,439,354 24,108,199

Goodwill on Consolidation 34,194 34,194

Total 402,338,391 405,971,738

Contingent Liabilities 12 604,783,464 1,226,018,423

Bills for Collection 3,175,756 2,908,837

Significant Accounting Policies and Notes to the Consolidated Financial Statements 18

- -

The schedules referred to above form an integral part of this Balance Sheet

AXIS BANK:

RATIO OF AXIS BANK

MARCH 2008

CURRUNT ASSET RATIO

CURRUNT ASSET = 15,28,87,532

CURRUNT LAIBLITY= 2,588,955,997

CURRUNT RATIO = CURRUNT ASSET

CURRUNT LAIBILITIES

= 15,28,87,532

2588955997

= 0.35

MARCH 2009

CURRUNT ASSET RATIO

CURRUNT ASSET = 847.20

CURRUNT LAIBLITY = 3187.21


CURRUNT LAIBILITIES

= 847.20

3187.27

= O.26

COMENT ON CURRUNT RATIO OF DENA BANK

The currunt ratio of dena bank is o.35 in 2008 and 0.26 in 2009 .

It shows that the currunt ratio of dena bank have declined during 2009.

It is also unsetisfctory during currunt year which shows that the working condition of dena bank is weak . the ratio is far away from the decided standerd of currunt ratio that is 2:1 . so dena bank should work hard to make the working condition of bank better .

DEBT EQUTY RATIO

MARCH 2008

TOTAL DEBT = UNSECURED LOANS = 33943.18

OWNER’S FUND =

1. EQUITY CAPITAL = 286.82 2. PREFRANCE CAPITAL = 1279.69

TOTAL OF OWNER’S FUND = 1566.51

DEBT EQUTY RATIO =TOTAL DEBTS

OWNER’S FUND

= 33943.18

1566.51

= 21.67

MARCH 2009


OWNER’S FUND =

1. EQUITY CAPITAL = 286.822. PREFRANCE CAPITAL = 1662.09



OWNER’S FUND

= 43050.61 1948.91= 22.09

COMENT ON DEBT EQUITY RATIO OF DENA BANK

The debt equity ratio of dena bank is 21.67 in 2008 and 22.09 in 2009 . its shows that the debt equity ratio of the bank have increased upto 0.42 % in 2009. So we can see that the working condition of dena bank is good in 2009. It is satisfactory . its mean dena bank have more owner’s fund in comparison of their total debt which will help the bank to run the business very smoothly and satisfy the consumer of it .

PRICE EARNING RATIO

MARCH 2008

PRICE EARNING RATIO = MARKET VALUE OF SHARE

EARNING PER SHARE

EARNING PER SHARE = NET PROFIT AFTER TAX

NUMBER OF EQUITY SHARES

= 329.87

28.6823

= 11.50


EARNING PER SHARE

= 286.82

11.50

= 24.94

PRICE EARNING RATIO

MARCH 2009


EARNING PER SHARE



= 423.37

28.6823

= 14.76


EARNING PER SHARE

= 286.82

14.76

= 19.43

COMENT ON PRICE EARNING RATIO OF DENA BANK

The price earning ratio of dena bank 24.94 in 2008 and 19.43 in 2009 . it shows that the price earning ratio of the bank have declined in 2009 upto 5.51% it shows that the working condition of dena bank according to P.E ratio is weak.

ORIANTAIL BANK OF COMMERCE

RATIO OF ORIANTAL BANK OF COMMERCE

MARCH 2008

CURRUNT ASSET RATIO


CURRUNT LAIBLITY=5232.89


CURRUNT LAIBILITIES

= 1586.61

5232.89

= O.30

MARCH 2009

CURRUNT ASSET RATIO


CURRUNT LAIBLITY=6088.34


CURRUNT LAIBILITIES

= 1984.29

6088.34

= 0.32

COMMENT MENT ONN CURRUNT RATIO

Of the OBC bank is 0.30 in 2008 & 0.32 in 2009. It shows that the current ratio of OBC bank have increase up to 0.02% in 2009. So the banks working condition is better than previous year but the standard of current ratio is 2:1. So as per standard of current ratio, the ratio of OBC bank is not satisfactory. Which shows that the working condition of OBC bank is not good in comparison of the standard.

MARCH 2008


OWNER’S FUND =

1. EQUITY CAPITAL = 250.542. RESERVE SURPLUSE = 5525.36



OWNER’S FUND

=5775.9

77856.70

= 13.48

MARCH 2009


OWNER’S FUND =

1. EQUITY CAPITAL = 250.542. RESERVE SURPLUSE = 6301.81



OWNER’S FUND

= 6452.35

250.54

= 15.25

COMMENT ON DEBT EQUITY RATIO OF OBC BANK

The debt equity ratio of OBC bank is 13.48 in 2008 and 15.25 in 2009 . its shows that the debt equity ratio of the bank have increased upto 1.77 % in 2009. So we can see that the working condition of OBC bank is good in current year. It is satisfactory . its mean OBC bank have more owner’s fund in comparison of their total debt in 2009 which will help the bank to run the business very smoothly and satisfy the consumer of it.

PRICE EARNING RATIO

MARCH 2008


EARNING PER SHARE



= 353.22

2505.40

= 14.09


EARNING PER SHARE

= 250.14

14.09

= 17.75

PRICE EARNING RATIO

MARCH 2009


EARNING PER SHARE



= 905.42

2505.40

= 36.14


EARNING PER SHARE

= 250.14

36.14

= 6.93

COMENT ON PRICE EARNING RATIO OF OBC BANK

The price earning ratio of OBC bank 17.75 in 2008 and 6.93 in 2009 . it shows that the price earning ratio of the bank have declined in 2009 upto 10.82% it shows that the working condition of OBC bank according to P.E ratio is weak.

COMPARISON BETWEEN DENA BANK & OBC OF YEAR 2009

CURRUNT RATIO

As per the year 2009 , the currunt ratio of dena bank is 0.26

And currunt ratio of obc is 0.32 .

Now by observing the currunt ratio of both the banks we can fine that the currunt ratio of obc bank is more than the dena bank it is high up to 0.6%.

It shows that the current asset’s condition of OBC bank is good than Dena bank. It has more liquidity power.

But as per the general standard of current ratio that is 2:1. Both the banks ratios are very less. so the desired standard cannot be maintained.

Bank Caruunt ratio Debt equity ratio

Price earning ratio

Dena bank 0.26 22.09 19.43 Obc 0.32 15.25 6.93

Debt equity ratio

As per the year 2009 the debt equity ratio of dena bank is 22.09 & debt equity ratio of OBC bank is 15.25.

Now by observing the debt equity ratio of both the banks we can fine that the debt equity ratio of dena bank is more than the OBC bank it is high up to 6.84%.

It shows that the owner’s fund or capital of dena bank are more than the OBC bank. Which helps dena bank to compete with its total debts. While in OBC bank they have also more owner’s fund to compete with its total debts but it is less in comparison of dena bank. So the debt equity ratio of dena bank is satisfactory.

Price earning ratio

As per the year 2009 the price earning ratio of dena bank is 19.43 & P.E. ratio of OBC bank is 6.93.

Now by observing the P.E. ratio of both the banks we can find that the P.E. ratio of dena bank is more than the OBC bank it is high up to 12.5%.

It shows that the working condition of dena bank is better than the OBC bank. It indicates that dena bank is more successful to handle the earning per share & market value of its shares in comparison of OBC bank.

comparitive analysis of AXIS BANK & kotak mahindra bank

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