FUNDAMENTIAL &

TECHNICAL ANALYSIS OF

BANKING SECTOR

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INTRODUCTION

The efficient, dynamic and effective banking sector plays a

very important role in accelerating the rate of economic

growth in any economy. The Government of India

introduced economic and financial sector reforms in

1991 and banking sector reforms were part and parcel of

financial sector reforms. These were initiated in 1991 to

make Indian banking sector more efficient, strong and

dynamic.

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Purpose & Scope

• The main purpose of the banking sector analysis is to

examine a risk and return characteristics of public sector

banks and private sector banks securities. The main aim

is to know which bank sector is worthwhile to invest.

• The scope of this project is to forecast of the share price

in the future and estimating the intrinsic value of banks

security based on forecast of earnings or dividends. It

helps in guiding investor the appropriate portfolio for

investment and whether the shares should be

purchased, held or sold.

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Objectives of Project

• To perform Banking Sector Analysis by using

fundamental analysis (EIC framework).

• To evaluate 3 public sector banks and 3 private sector

banks.

• To do the Comparative study of private sector and public

sector Banks.

• To find and compare the customer satisfaction of public

and private sector banks.

• To study the financial services offered by IIFL.

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Methodology

Primary Source & Secondary Source :-Primary sources is original data, problem or project

specified data which is collected to serve a particular purpose. In these, the authenticity or relevance is really high. Types of primary source data is: - Questionnaire, Interview, Oberservations, focus group discussions.

– Electronic published reports: - Crisis, IIFL research reports etc.

– Books :- Security Analysis and Portfolio Management – S.Kelvin

– Newspaper:- Economic Times , Times of India.

– Government Reports:- Economic survey (2011-12).

– Banks Annual Report

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DATA ANALYSIS

Customer Preference:-Market share of public sector bank is around 70-65% , in

which the major portion is of SBI group then Punjab National Bank , Bank of Baroda , Bank of India . While the market share of private sector banks is 16% , ICICI is largest private sector bank followed by HDFC , AXIS ,KOTAK Bank . Many customer wants to have accounts in both public and private banks . The reason for this can be they have good offer in private banks and charges is nominal in public banks. Private banks provides many offers like Axis bank offer special women account, women will be not changed for demand drafts, interest rate is high , shopping benefits etc. attracts customers to have two or more accounts.

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Major players in industry:-

• Public sector banks – SBI, PNB, Bank of Baroda,

Bank of India etc.

• Private sector banks- HDFC, ICICI Bank, AXIS

Bank, Yes Bank etc.

• Foreign Banks – Standard Chartered Bank, HSBC,

City Bank etc.

• Regional Rural Banks – Andhra Pradesh gramin

bank , Uttranchal Gramin Bank etc.

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DATA ANALYSIS

Customer Preference:-Market share of public sector bank is around 70-65% , in

which the major portion is of SBI group then Punjab National Bank , Bank of Baroda , Bank of India . While the market share of private sector banks is 16% , ICICI is largest private sector bank followed by HDFC , AXIS ,KOTAK Bank . Many customer wants to have accounts in both public and private banks . The reason for this can be they have good offer in private banks and charges is nominal in public banks. Private banks provides many offers like Axis bank offer special women account, women will be not changed for demand drafts, interest rate is high , shopping benefits etc. attracts customers to have two or more accounts.

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CAMELS RATIO

• Capital adequacy

• Asset quality

• Management quality

• Earning ability

• Liquidity

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References

• 2013.Indian banking Industry-January 2013.Dinodia Capital Advisors.

• IM Pandey: Financial Management 10th edition : Vikas publications.

• Katuri Nageshwar Rao :Indian Banking : Icfaipublications

• Banking research\emerging Banks in India :ICFAI research team http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/0TPB021112FLS.pdf : RBI

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• Trishar Boruah (2013) Switching to Direct Plan.[Online]. Available from: http://www.valueresearchonline.com/story/h2_storyview.asp?str=22834 [Accessed 1st May 2013]

• S.Kelvin : Security Analysis and Portfolio Management

• Research Reports. India infoline (online).Available from http://www.indiainfoline.com/Research/

• Company Annual statement :money control(online) Available from http://www.moneycontrol.com/

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