Group 2 Bfsi

FINANCIAL ANALYSIS OF COMPANIES IN

THE BANKING SECTOR

ICICI BANK, YES BANK AND BANK OF BARODA

SECTION C, GROUP 2:

ANKIT RJA (14P128)

ARUSHI JAIN (14P133)

HARNOOR SINGH LAMBA (14P141)

PRATHIHASTH REKABU (14P155)

SHASHANK (14P167)

SUNANDINI GUPTA (14P174)

ObjectivesThe objective of the project is to analyze three players in the banking industry in India, namely:

ICICI Bank:

ICICI Bank is an Indian multinational banking and financial services company headquartered in Vadodara. It is India's largest private sector bank with total assets of Rs. 5,946.42 billion (US$ 99 billion) at March 31, 2014 and profit after tax Rs. 98.10 billion (US$ 1,637 million) for the year ended March 31, 2014. The Bank has a network of 3,800 branches and 11,162 ATMs in India, and has a presence in 19 countries.

Yes Bank:

YES BANK is a private bank in India with headquarters in Mumbai. It was founded in 2004 by promoters Ashok Kapur and Rana Kapoor, which had a collective shareholding of 29%. It is now India’s fourth largest private sector Bank. It has a widespread branch network of over 572 branches across 375 cities, with 1170+ ATMs and 2 National Operating Centers in Mumbai and Gurgaon. In 2010, the bank announced the roll-out of a strategic blueprint, named Version 2.0 of the bank, to further accelerate its business growth in the retail banking space, with the objective to achieve by 2015, a balance sheet size of INR 1,500 billion.

Bank of Baroda:

Bank of Baroda (BoB) is an Indian state-owned banking and financial services company headquartered in Vadodara. It is the second-largest bank in India, after State Bank of India. Based on 2012 data, it is ranked 715 on Forbes Global 2000 list. BoB has total assets in excess of INR 3.58 trillion, a network of 4464 branches in India, and over 2000 ATMs.

Analysis ObjectivesThese three banks would be gauged to take decisions on the following fronts:

1. Short Term Investment2. Short Term Lending3. Long Term Investment4. Long Term Lending5. Strategic Decision

Introduction

Banking The Banking sector is one of the most important sectors of the Indian economy. Given the ability of the banking sector to affect the economy, this sector is one of the most regulated sectors in India. The main regulatory body is Reserve Bank of India (RBI). A strong and viable banking industry is extremely necessary for economic progress while a weak banking sector is a cause for problems in the economy. Banking is used for policy transmissions and for sustaining economic growth.

Outlook of the Sector

RBI Policy1. With RBI committed to bring the CPI inflation down to 8% by January 2015 and to 6% by January

2016, banks are unlikely to see much increase in money supply with them and key rates are most likely to remain unchanged.

2. Recently RBI has restructured the LAF window with greater reliance on term repos (.75% of NDTL compared to 0.25% of NDTL through overnight repo) to encourage the existence of a term structure for these rates. This term structure would be a better guidance of the liquidity supply in the economy.

3. With the introduction of a portion of counter cyclical buffer and liquidity coverage ratio as part of BASEL III implementation process, the reserves available with the bank will decrease. However, to offset this, RBI has relaxed certain restrictions on BASEL bonds such as tier I bonds are now open to retail investors as well and tier II bond can be issued as a perpetual bond as well. Moreover government has allocated INR 11,200 crore as infusion of capital in public sector banks.

4. Differentiated licensing will give a boost to financial inclusion as more people, especially in the rural areas will be connected to the financial system by means of payment banks, post offices, etc. Concentration ratios in the rural areas will increase as public sector banks and established NBFCs will face more competition from the entry of these small banks.

5. Recent debt restructuring policies will enable the banks in tackling wilful defaulters better; meanwhile also better manage the high NPA levels present especially in public banks.

6. The new interest cap announced by RBI would positively impact smaller NBFCs as they can now borrow at a higher interest rate compared to relatively larger NBFCs.

Government1. Aggressive financial inclusion plan of the government through Jan Dhan Yojana will help the

banks by providing them with future funds at a low cost. These accounts also contain an overdraft facility which could boost future interest income of these banks.

2. In its maiden budget, the new government has laid an emphasis on infrastructure projects and provided regulatory freedom for banks to invest in infrastructure bonds which would lead to better interest margins for these banks.

3. With the government mooting consolidation of public banks, concentration ratios in the banking sector could see a significant change and if achieved efficiently could boost the profitability of these banks.

4. Increase in FDI limits to 49% in the insurance sector is going to bring the much needed long term capital to Indian insurance companies which could lead to these companies tapping the true potential of Indian insurance industry.

Other Events1. Public sector banks are witnessing high NPA levels, with maximum NPA visible in agricultural

credit (close to 4.4% in FY 14). Below average monsoon, which has a very high probability could lead to increase in NPAs in this credit segment.

2. Any breakout of ISIS crisis in southern parts of Iraq or escalation of Ukraine crisis could lead to increase in crude oil prices and thus could lead to inflationary situation in the economy.

3. Growth in US economy or any signs of increase in interest rates in the US Treasury market, would lead to another round of flight of capital like the one that the country witnessed in 2013, leading to current account problems and currency depreciation. However, the boost given to investor confidence due to the new government will lead to inflow of capital and would negate any such outflow of capital.

4. Revivial in economy would lead to higher levels of disposable incomes and more appetite among consumers to borrow, which would lead to retail credit growth for the banks while growth in IIP figues for the last quarter and higher industrial confidence, which is visible with higher levels of HSBC PMI index, would lead to rise in industrial credit as well.

Public BanksPublic banks are majorly concerned with problems of higher levels of NPAs and implementation of BASEL III norms. Moreover a bad monsoon could aggravate the already high NPAs in the agriculture credit segment. However government support in terms of budgetary capital allocation and benefits of financial inclusion will be reaped by these banks in the near future. The sector is also expected to witness activity with respect to consolidation of banks especially SBI with one or two of its associates. Government could also liquidate its shareholding in the some of the banks, which would fund their capital infusion in these banks without putting pressue on the fiscal situation of the government.

Private BanksCompared to PSU banks, private sector banks are better placed with strong growth in credit, CASA accounts, higher margins and higher asset quality (i.e. lesser NPA). Moreover most of the private banks are better equipped to implement the BASEL III capital requirements. All these banks are mainly concentrated in urban and semi-urban centres so protecting them from exposure to the agriculture sector. Leaving aside Kotak Mahindra Bank, most of the banks in this segment are valued with P/E ratio less than 15 and P/B ratio close 2.5. Estimated growth for these banks is high, indicating opportunities in these banks.

Recent Developments in Banking Sector

Asset QualityThe credit quality of banks has deteriorated significantly in the past three years. Gross NPAs increased from 2.4 % of gross advances in March 2011 to 4.1 % in March 2014. Net NPAs

showed similar trends and were 2.2 % of net advances in March 2014. Both Public Sector Banks and Foreign Banks have seen this deterioration, while Private Sector Banks

have been able to relatively resist it, with their gross NPA ratio improving from 2.5 % to 1.9 % and net NPA ratio showing only a slight increase.

This increase in non-performing assets has mainly happened due to slowdown in the domestic economy since the global recession, causing strain on a number of companies and projects.

Non-priority sector has contributed more to the problem, accounting for 64 % of the total gross NPAs at the end of March 2014, up from 60 % at end-March 2013.

About 36 per cent of the overall bad assets in the system have been created by six sectors of the economy — infrastructure, metals, textiles, chemicals, engineering and mining. However, these sectors have only 30 per cent of the credit share

Industrial sector was the single largest contributor, accounting for over 58 % of the gross NPAs of the banks at end-March 2014.

Retail credit has shown improvement in gross NPA ratio from 2.3 % to 2 % in the year 2013-14.

How does bad asset quality affect a bank?

ProfitabilityHigher NPAs imply lower income from the assets of the bank. This has to be accompanied by the higher provisioning requirements, adding to the cost and thus reducing the profits of the banks. This adversely affects the NIM and ROE of the banks. The profitability of bank decreases not only by the amount of NPAs, but the opportunity cost of these assets also affects the profitability. This is to say that if the banks were able to invest the amount equal to the NPAs in some other return earning project/asset, they could earn profits. But since the funds are blocked with the borrowers, banks cannot park these funds anywhere else. So NPAs not only affect current profit but also future stream of profit, which may lead to loss of some long-term beneficial opportunity.

LiquidityMoney gets blocked; decreased profit leads to lack of enough cash at hand which leads to borrowing money for shortest period of time which leads to an additional cost to the company. Difficulty in operating the functions of a bank due to lack of money is another impact of NPAs.

Involvement of managementTime and efforts of management is another indirect cost which bank has to bear due to NPAs. Time and efforts of management in handling and managing NPAs would have diverted to some fruitful activities, which would have given good returns. Nowadays banks have special employees to deal and handle NPAs, which is an additional cost to the bank.

Public SentimentThere is a definite loss of faith associated with the NPA numbers rising and this cannot be compensated by larger profits.

To overcome the problem of deteriorating asset quality, several steps have been taken by RBI

Recognition of NPAs: RBI, in its circular dated February 26, 2014, gave the guidelines regarding recognition of financial stress by the banks. According to the guidelines, before a loan account turns into a NPA, banks are required to identify incipient stress in the account by creating three sub-categories under the Special Mention Account (SMA) category as given in the table below:

SMA Sub-categories Basis for classification

SMA-0 Principal or interest payment not overdue for more than 30 days but account showing signs of incipient stress

SMA-1 Principal or interest payment overdue between 31-60 days

SMA-2 Principal or interest payment overdue between 61-90 days

On identifying SMAs, banks need to report such SMA status of borrowers who have an aggregate fund and non-fund based exposure of INR 50 million and above to Central Repository of Information on Large Credits (CRILC). On failure to do so, banks will be subjected to accelerated provisioning for these accounts, which means bank have to make much larger provisions for these assets at an early period. RBI also prescribes formation of a Joint Lenders’ Forum (JLF) and adoption of a Corrective Action Plan (CAP) which includes rectification, restructuring and recovery to deal with NPAs.

Asset Reconstruction Companies:ARCs are governed by the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).ARCs are specialized entities for recovery and liquidation of assets. Banks and financial institutions which want to clear the stressed assets off their balance sheets may divest their assets with an ARC. ARCs acquire these assets at a discount and make recovery from the borrowers directly. They are also permitted to acquire debt from other ARCs subject to certain conditions. Qualified Institutional Buyers (QIBs) are the main source of funding for ARCs. As part of the restructuring process, borrowers are either given more time to pay back money or given loans at softer interest rates to nurse them back into health. At present, there are 14 ARCs operating in India.

In August 2014, RBI came up with tightened norms for these companies to improve discipline and bring about transparency in the sale and purchase of bad loans. As per the norms, ARCs are now required to pay upfront 15% of the bid value of NPAs. This payment was limited to 5% earlier. Also, ARCs will get at least 2 weeks to carry out due diligence before bidding for the stressed assets. The companies are expected to plan the recovery from the acquired NPAs within 6 months and report about the wilful defaulters to the Joint Lenders’ Forum (JLF) for stressed assets at quarterly intervals.The government increased the FDI limit in ARCs from 49% to 74% and further to 100% last year. This will bring the much needed capital and foreign expertise in this segment. However, RBI rules stipulate that a single entity cannot hold more than 49 per cent stake, which acts as a hindrance in attracting foreign capital. Government is also considering setting up a National Asset Management Company that would act as a nodal agency for acquiring NPAs from the banks and recovering them as well as helping the sick banks revive and grow. Currently, only partial takeover of large assets is done by the ARCs. The NAMCO will enable banks to sell of large stressed assets completely.

Corporate Debt Restructuring (CDR)CDR is a framework to ensure timely and transparent mechanism for restructuring the corporate debts of viable entities facing financial difficulties. It is a tool to offer aid to borrowers in distress, owing to circumstances beyond the borrower’s control such as a general downturn in the economy or a sector. It might also be warranted by legal or other issues that cause delays, particularly in cases of project implementation. CDR has the dual objective of revival of distressed corporates and safety of the money lent by the bank and financial institutions.Restructuring may involve providing extended moratorium, spreading the obligations over a longer period of time, converting part of the debt into equity or preference capital etc., reducing the interest rate, making payments out of promoters contribution/ sale of surplus assets etc.Restructured advances for all scheduled commercial banks increased from 2.5 per cent of gross advances in June 2011 to 5.9 per cent in March 2014. PSBs accounted for 92% of such restructuring. This reflects potential hidden stress in the quality of loan assets. To counter this, RBI made debt restructuring norms more stringent. According to the new rules, promoter's contribution has been raised to 20% (from 15%) of the sacrifice made by lenders or 2% of the restructured loan, whichever is higher. This money has to be paid up front. Also, from June 2013, the provisioning requirement for fresh restructured loans was increased to 3.5 per cent from2.75 per cent. These requirements will further be increased to 5 per cent by March 2016. To discourage banks from liberally restructuring loans, RBI has said that from April 2015 an account will have to be classified as sub-standard as soon as it is restructured. However, for new projects RBI has relaxed the condition, under which a loan has to be categorized as a restructured asset. Earlier, banks had to restructure loans if the date of commencement of commercial operation is delayed by six months. The new regulations extended this to one year. Till then, the loan will be treated as a standard asset. By June 2014, CDR Cell had approved 486 cases of restructuring, which aggregated to Rs. 348502 crores. Another 20 cases were still under consideration for approval.

Debt Recovery TribunalsA total of 6 new Debt Recovery Tribunals will be set up by the government, as declared in the Union Budget 2014-15. Till now, the Government of India has constituted thirty three Debts Recovery Tribunals and five Debts Recovery Appellate Tribunals across the country. They are responsible for enforcing provisions of the Recovery of Debts Due to Banks and Financial Institutions (RDDBFI) Act, 1993 and Securitization and Reconstruction of Financial Assets and Enforcement of Security Interests (SARFAESI) Act, 2002.

Bank Credit by Sectors:

Agriculture & Allied ActivitiesTotal advances in agriculture and allied activities stood at INR 7,186 billion as of June 27, 2014. The advances has more than tripled in the last seven years, however credit quality in agriculture is deteriorating with expected NPA to rise if the country experiences poor monsoon. GNPA for this sector stood at 4.4% in FY 14.

IndustryOutstanding advances in this segment stood at INR 25,174 billion as of June 27, 2014. The advances have risen by more than 278% in the last seven years and credit quality in this segment is just better than the agriculture segment. GNPA for this sector stood at 3.7% in FY 13.

ServicesOutstanding advances in this segment stood at INR 13,365 billion as of June 27, 2014. The advances have more than tripled in the last seven years and credit quality in this segment is just better than the agriculture segment. GNPA for this sector stood at 3.4% in FY 13.

Personal LoansAdvances in the personal loan segment also known as retail segment have almost doubled in last seven years. Net outstanding advances as on June 27, 2014 stood at INR 10,665 billion. This segment has the lowest amount of GNPA, i.e. close to 2.1% as of FY 13 estimate.

PSBs in TroubleThe financial turmoil of 2008-09 and economic slowdown in 2011-12 and 2012-13 have impacted asset quality for PSBs more adversely than their private counterparts. Gross NPAs of PSBs increased from 2.1% of gross advances in 2007-08 to 4.7% in 2013-14. PSBs accounted for 92% of the total NPAs of the banking system in 2013-14. Increasing NPAs have put stress on the profitability of these banks. Finance Ministry in August 2014 called for better risk management on the part of PSBs to check the rising concerns over the deteriorating asset quality and for professionalism in the processes of these banks.

Another issue that the banks are facing is compliance with adequacy norms. Banks are currently required to have a capital adequacy ratio of 9%. But in line with the Basel III, RBI has directed the banks to bring the ratio up to 11.5% latest by March 31, 2019. The transition period was initially set to be till March 31, 2018; but following the concerns over the potential stress on the asset quality, specifically for PSBs, and its consequent impact on their profitability, RBI extended the period by one year. While most of the large private banks have comfortable levels of capital to fulfil the requirements, PSBs face a challenge in the same. For example, in February 2014, UBI's capital adequacy ratio as per the new Basel formula fell to a bare minimum level of 9.01% and the Tier-1 capital to 5.6% — below the required 6%. So much so the bank had to put restrictions on lending to save capital. To be able to sustain and grow UBI and the like need to raise capital from public. At least Rs. 2,40,000 crores need to be infused into the sector by 2018. This in itself is a challenging task for the PSBs. Non-equity instruments are highly expensive and risky for the banks, given the new set of guidelines regarding the coupon payments. The new guidelines stipulate that banks will be allowed to pay coupon from only the current year’s profits

and the total coupon payout will be capped at 40 per cent of the bank’s total distributable surplus for the year. On the other hand, raising capital through equity is equally difficult given their weak performance in recent quarters and their low equity valuations. Government support is thus their only resort to be able to revive.

However, government is not very willing to extend such support for a long time. To reduce the fiscal burden, it is planning to cut its stake in PSBs to 58%. In June 2014, it indicated to bankers that it may not be able to support them forever. In the Union Budget 2014-15, public sector banks were allowed to sell their shares to retail investors so long as the government shareholding does not go below 51 percent. These funds can be used to recapitalize banks and fund their expansion, helping in greater penetration of banks in the underserved areas.

Not only this, both RBI and government have noted the fragmented nature of the Indian banking system and the small size of the typical banks. At the end of 2013, only one Indian bank could make it up to the list of top 100 banks in the world by assets. SBI, the largest bank of India is almost one tenth the size of the largest bank of the world. Due to their small size, Indian banks are not able to compete globally in terms of fund mobilization, credit disbursal, investment and rendering of financial services. With RBI granting new licenses, it would become increasingly difficult for these banks to survive in the competitive environment. The government is thus now encouraging consolidation of smaller banks with the larger ones. For instance, in July 2014, it asked IDBI Bank and Union Bank of India to prepare a consolidation plan. However, consolidation may not come about as easily as it seems. Banks need to consider human resource issues, geographical spread and technology platforms before materializing any plans. As noted by a partner at EY, consolidation would make sense only when the government is able to cut on duplication in branches, people and infrastructure. This would mean closing down of overlapping branches, leading to retrenchments and dissatisfaction amongst employees. Further, differences in culture and technology platforms being currently used would act as hindrance for any consolidations. The times to come will tell how successfully banks and government are able to tackle them and attain their objectives.

Priority Sector LendingBanks have been assigned a special role in the economic development of the country, besides ensuring the growth of the financial sector. The banking regulator, the Reserve Bank of India, has hence prescribed that a portion of bank lending should be for developmental activities, which it calls the priority sector. As defined by RBI, priority sector refers to those sectors of the economy which may not get timely and adequate credit in the absence of this special dispensation. Typically, these are small value loans to farmers for agriculture and allied activities, micro and small enterprises, poor people for housing, students for education and other low income groups and weaker sections.

Domestic banks, both public and private sector and foreign banks with more than 20 branches have to lend 40% of their Adjusted Net Bank Credit(ANBC) or credit equivalent amount of Off-Balance Sheet Exposure, whichever is higher, to the priority sector. Foreign banks with less than 20 branches have to lend 32% of their ANBC or credit equivalent amount of Off-Balance Sheet Exposure, whichever is higher,

to the priority sector. There are sub-targets for different sectors within the main target for the banks to fulfill.

In January 2014, it was recommended by a RBI panel to increase the priority sector lending target to 50%. However, any action is yet to be taken in this regard.

Priority Sector includes the following categories:

Agriculture (Direct and Indirect finance): Direct finance to agriculture shall include short, medium and long term loans given to farmers, farmers’ partnership firms and corporate bodies, and Self Help Groups for agriculture and allied activities.

Micro and Small Enterprises (Direct and Indirect Finance): Bank loans to micro and small enterprises, both manufacturing and service are eligible as priority sector. These include food and agro processing units, khadi and village industries and other manufacturing and service concerns as defined under the MSMED Act.

Education: Education loans include loans and advances granted to only individuals for educational purposes up to Rs. 10 lakhs for studies in India and Rs. 20 lakhs for studies abroad.

Housing: Loans to individuals for purchase/construction/repairs of a dwelling unit per family (excluding loans sanctioned to bank’s own employees) are included. Besides, loans for housing projects for economically weaker sections and to Housing Finance Companies (HFCs) also qualify under PSL subject to certain conditions.

Export Credit: Export Credit extended by foreign banks with less than 20 branches will be reckoned for priority sector target achievement. For domestic banks and foreign banks with 20 and above branches, export credit is not a separate category under priority sector.

Others: Several other loans classify as priority sector lending as notified by the RBI.

Financial InclusionFinancial Inclusion is the process of ensuring access to appropriate financial products and services needed by all sections of the society in general and vulnerable groups such as weaker sections and low income groups in particular at an affordable cost in a fair and transparent manner by mainstream institutional players. The various initiatives taken by the government and RBI in this regard are as follows:

Pradhan Mantri Jan Dhan Yojana: The new Narendra Modi government rolled out the Jan Dhan Yojana with a target of universal access to banking facilities. The scheme aims to ensure that every household has at least two bank accounts. It was launched on 28 August, 2014, when more than 1.5 crore bank accounts were opened up in a single day. Each of these came with a RuPay debit card, Rs.1 lakh accident insurance cover and an additional Rs. 30,000 life insurance cover. These benefits will apply to all accounts opened before January 26, 2015. After six months of satisfactory operations, the account would be eligible for Rs 5,000 overdraft facility,

designed to take the poor out of the clutches of moneylenders. The program aims to cover at least 7.5 crore families before the next Republic Day. The second phase of the program is intended to be implemented between 2015 and 2018 and will cover aspects like micro insurance and pension. All the 6 lakh villages are to be mapped according to the sub service area, and villages with over 2,000 populations will get full-fledged brick & mortar bank branches as per the scheme. The government is also keen that the banking sector should add 7,000 branches and 20,000 ATMs as part of the plan.

Differentiated banking licensesIndia currently follows the universal banking model where banks are holding companies that operate different businesses like asset management, insurance, asset reconstruction, stock broking, etc., through subsidiaries, joint ventures and affiliates. RBI issues a single class of banking license to both domestic as well as foreign banks and all of them are eligible to carry out all banking operations. This will change with the issue of differentiated banking licenses. As mentioned by the Finance Minister in the Union Budget 2014-15, differentiated banks serving niche interests, local area banks, payment banks etc. are contemplated to meet credit and remittance needs of small businesses, unorganized sector, low income households, farmers and migrant work force. RBI came out with draft guidelines for licensing of Payment Banks and Small Banks in April 2014.

Payment Banks: Payment banks would be similar to banks for the depositors. They will be allowed to accept demand deposits and provide payment and remittance services. But they will not be allowed to accept term deposits or lend money. They will thus provide small savings accounts and a banking system for migrant labor workforce, low income households etc. Payment banks will also be required to have at least 25 per cent of access points in rural centers, further helping in financial inclusion.

Small Banks: Small banks will be set up with an objective of financial inclusion by providing savings accounts to underserved sections of society and supplying credit to small business units, farmers and other unorganized sector entities. The basic difference in these banks would be that the area of operations for them will be restricted to particular groups of districts which are in close proximity and enjoy the same culture.

The existing non-bank Prepaid Payment Instruments issuers, Non-Banking Finance Companies (NBFCs), corporate BCs, mobile telephone companies, super-market chains, companies, real sector cooperatives and public sector entities can apply to set up Payments Banks.

Other Steps towards Financial Inclusion1. With the objective of ensuring greater financial inclusion and increasing the outreach of the

banking sector, RBI enables banks to use the services of Non-Governmental Organisations/ Self Help Groups (NGOs/ SHGs), Micro Finance Institutions (MFIs) and other Civil Society Organisations (CSOs) as intermediaries in providing financial and banking services through the use of Business Facilitator and Correspondent models. Nearly 2,48,000 Business Correspondent (BC) agents had been deployed by banks as on March 31, 2014 which are providing services through more than 3,33,000 BC outlets.

2. Another step taken to promote inclusion is increase financial literacy, i. e. to create awareness about the formal financial system by conducting financial literacy camps in the unbanked areas of the country. The National Centre for Financial Education (NCFE) has also been set up for the same purpose.

3. RBI has simplified the Know Your Customer (KYC) norms for opening bank accounts. The major changes include:

Single document valid as proof for identity and address No proof required for current address No separate KYC documentation required for transfer of account from one branch to

another of the same bank Time intervals for periodic updation of KYC for existing low/medium and high risk

customers increased from 5/2 years to 10/8/2 years, respectively

Infrastructure LendingThe RBI, in order to encourage infrastructure development and affordable housing, has made lending to infrastructure sector by the banks easier. Infrastructure and core industries projects generally have long gestation periods and large capital requirements. Banks currently face issues like asset liability mismatch while lending for such projects, and thus do not lend for more than 12-15 years. To overcome the issues, new set of guidelines have been issued.

Under the new guidelines, banks can issue long-term bonds with a minimum maturity of seven years to raise resources for lending to (i) long term projects in infrastructure sub-sectors, and (ii) affordable housing. These bonds will be exempted from computation of net demand and time liabilities (NDTL) and would therefore not be subjected to CRR/SLR requirements. They will also get exemption in computation of Adjusted Net Bank Credit (ANBC) for the purpose of Priority Sector Lending.

A 5/25 structure would be allowed while lending for infrastructure projects. This will allow a bank to loan money to a developer for 25 years, with an option of rewriting the terms of the loan or transferring it to another bank or financial institution after five years. Thus banks will be able to match the tenure of the loan with the life cycle of the underlying asset. All these measures will help boost growth of the infrastructure sector through the banking sector.

ANALYSISShort Term InvestmentFor short term investment, we would look at the return that an investor may be able to get, and the associated risk with the same. We have identified following factors to analyze the same:

Short Term Investment

Risk Return

Beta Share Price Trend

PAT Growth

Share Prices for last 1 year: All the three stocks have outperformed the market index, Sensex. ICICI is performing with the industry, i.e. its prices are moving in alignment with the Banking

sector’s performance as a whole. It shows slow growth in the market price. However, in the past 3 months, share prices of all the stocks have remained quite the same and

have underperformed the benchmark index.

Risk Factor – Beta: Yes Bank, having the smallest market capitalization, has the highest beta factor, indicating highest risk. It is followed by ICICI Bank and Bank of Baroda.

P/E Ratio: ICICI has the highest P/E ratio, indicating high growth expectations. Bank of Baroda, which has seen negative growth in Profit after Tax in the year 2012-13, has the lowest P/E.

PAT: Yes Bank is growing at the fastest pace in terms of Profit after Tax. BOB has seen negative growth in the past two years.

Conclusion Yes Bank has the highest speed of growth in terms of both share prices and PAT, but also has the

highest risk. An investor with a high risk appetite should go for this stock. Bank of Baroda comes next in line, with a moderate risk involved and speedy growth in share

prices. Its P/E is low because of negative growth in the previous year and negligible positive growth in this year.

ICICI Bank is the least risky share, with low Beta and steady growth in share prices as well as profits. Investors interested in low risk and assured returns should opt for this investment.

Short Term LendingBanks mainly need short term funds to fulfill regulatory requirements. These include the following:

Cash Reserve Ratio: Banks are required to keep a certain percentage of their net demand and time liabilities in the form of cash in a current account with RBI. This ratio is 4% currently. Of this, 95% has to be maintained on a daily basis, and complete 4% to be reported fortnightly.

Statutory Liquidity Ratio: Banks are required to keep a part of their total deposits as invested in approved securities, predominantly central government securities. Currently the ratio is 22%.

Liquidity Coverage Ratio: Banks are required to hold an amount of highly-liquid assets, equal to or greater than their net cash outflow over a 30 day period. This was proposed under Basel III to be at least 100%. RBI intends to introduce LCR in a phased manner starting with a minimum requirement of 60% from January 1, 2015 and reaching minimum 100% on January 1, 2019.

Common terms in Money Market and inter-bank lending: Call Money Market Notice Money Market Term Money Market Repo: A repurchase agreement between bank and RBI. In a way, collateralized lending by RBI to

banks Bank Rate: Also referred as the discount rate, it is the rate of interest which a central bank

charges on the loans and advances that it extends to commercial banks and other financial intermediaries. Currently it is 9%.

T-Bills: Issued by RBI on behalf of GoI. At present three types of treasury bills are issued through auctions - 91 day, 182 day and 364 day treasury bills.

CD: Issued by banks and DFIs for short term funds for 3 months to 1 year period. CP: Issued by listed companies for working capital needs for 7 days to 1 year period MIBOR: Mumbai Inter Bank Offered Rate. Inspired from LIBOR, not used much currently.

Major ratios identified: Cash to Deposit Ratio Funding Volatility Ratio

Cash to Deposit Ratio:

All the three banks have seen decrease in Cash/Deposit ratio over years, Yes Bank has shown increase in it only in the last financial year.

Bank of Baroda has lowest Cash/Deposit Ratio, indicating that it may be in need of short term funds to pay of its demand liabilities as and when they arise.

ICICI, having a very high ratio, is not in need of the short term funds and thus should not be lent. Similarly, Yes Bank has also a relatively high ratio.

Funding Volatility Ratio:

Calculated as:Liquid assets / current and savings deposits

FVR of BOB is the highest, which makes it the safest of the three for short term lending. The ratio is increasing constantly. But this may also show inefficiencies on the part of the bank

Yes Bank has reduced its ratio drastically as it expanded. ICICI has lowest FVR, but has maintained it over the years. It is comparatively risky.

Conclusion: ICICI is in need of funds but has high funding volatility, implying high risk. It should be given

short term funds, but we should remain cautious of the risk.

Long Term InvestmentWe identified following ratios:

P/BV:

P/BV of BOB has remained quite low, going below the levels of August 2011 in mid-2013. This can be attributed to drastic reduction in its growth rate in 2013 and increasing NPAs.

ICICI has seen increase in P/BV in the last 5 years. This increase is slow though, but quite steady.

Yes Bank has shown large increase in its P/BV. But it has seen large fluctuations too, making it a comparatively risky stock.

NII Growth:

Over last five years, BOB and ICICI have shown growth at a decreasing rate. This could be explained due to economic slump.

Yes Bank has shown increase in NII at an increasing rate, with a 240% growth since 2010. It achieved this mainly by increasing its CASA and thus reducing the cost of funds.

NIM:

NIM of ICICI Bank is increasing rapidly and is highest in absolute terms. This is mainly because of high CASA component in its loan book.

Yes Bank was growing its NIM slowly till the last year and took a leap only in the FY 2013-14

BOB is definitely a bad choice here, with its continuously decreasing NIM. A major reason for this is high rate of NPAs. Unless it goes for complete revamp of its operations, the bank is not expected to grow in future.

Cost Income Ratio: Cost to Income Ratio of ICICI Bank has been

decreasing for the past 3 years. The reason for this is the scale of its operations and corresponding economies.

BOB’s C/I reduced tremendously between 2010 and 2012. But it increased in a similar fashion in the years to follow. Currently it has a very high ratio, indicating low efficiency of operations.

Yes Bank has increased its cost more than its income during the period. This is because of its expansion plans that are expected to reap benefits in the years to come. But this ratio should not increase further, as it will impact its profitability.

Gross NPAs: Gross NPAs as a percentage of advances of

ICICI are quite high at 3.03%. However, it has been able to steadily reduce the same from 4.47% four years ago

BOB is showing increasing trend in Gross NPAs. This is an adverse situation, leading to decreased and increasing risk profits to the bank

Yes Bank is very good is this parameter, having just 0.31 % as NPAs.

EPS: All the three banks have face values of

their shares as Rs. 10, thus making their EPS comparable.

Bank of Baroda shows highest EPS, due to its large scale and expansion in the past. But it has come down after 2012 and has stagnated since then.

EPS of both ICICI and Yes Bank is increasing steadily, with ICICI having much higher EPS.

Dividend Yield: Due to high EPS and increasing Dividend Payout since 2012, BOB has the highest dividend yield.

Though BOB has highest Yield, but the variation in the same over years has also been maximum, making it a little uncertain

ICICI and Yes Bank have similar Dividend Yield, with Yes Bank taking a huge leap in the last year

Both the banks are expected to perform well in the coming years and so expected to maintain

ROE: Yes Bank has highest ROE, which is

consistently increasing over years. It has less equity and more borrowed funds as compared to other banks.

ICICI too has an increasing ROE, but substantially lower than Yes Bank. This is to support its expansion plans.

BOB had highest and an impressive ROE of 20.2% back in 2010. But the ROE has decreased substantially, because it has retained more earnings for expansion, which has given it a relatively lower return.

Conclusion ICICI is a good option for long term investment with steady returns. Interest Margin and C/I

Ratio indicating efficiency are impressive. However, low ROE is a concern. Also, NPAs are much above the industry average, which pose a risk of poor operational efficiency in future.

BOB has high EPS and Dividend Payout, but a decreasing ROE, which means that EPS might also follow suit soon. Falling NIM, increasing operational costs and NPAs, low Capital Adequacy Ratio (discussed later), and slow growth make it a less attractive avenue for long term investment.

Yes Bank is showing very fast growth, with high ROE and NIM and very low NPAs. The bank has large expansion plans too. But increasing cost of operations in relation to the income is a concern. Also, P/BV shows frequent fluctuations, making it a relatively risky stock.

Long Term LendingThe ratios used are:

Return on Assets:

Return on Assets is increasing steadily in case of ICICI Bank, which makes it the best option for long term lending.

Bank of Baroda has shown fall in return on assets and thus should not be considered for lending funds.

Yes Bank is not showing any increase in ROA since 2011. A lender would not like to lend to a stagnated bank.

Credit/ Deposit Ratio: Credit/ Deposit Ratio of ICICI Bank has

improved slightly, while it has decreased in case of both BOB and Yes Bank in the last three years.

ICICI needs long term funds to finance the credit it is currently giving and thus should be preferred in lending money.

BOB with such a low C/D ratio is not fully utilizing its funds to extend credit. Similarly Yes Bank has scope of improvement.

Gross Block: The assets of a bank would include

building, furniture, computer systems and other devices, ATMs etc.

ICICI requires funds as it plans foreign expansion by opening up branches in Australia, SA, Mauritius

Yes Bank has a vast potential of increasing its gross block so as to expand. It has expansionary plans of increasing its branches from current 560 to 750 by 2015. It will require long term funds for the same.

Capital Adequacy Ratio: CAR of ICICI is sufficiently high.

This means it has enough capital to absorb unexpected losses in recovery of assets to a greater extent than others.

BOB has low which means it cannot expand its assets before adding more equity capital. Any long term funds lent to BOB would net be utilized in expansion of operations, until and unless it first increases its core capital base to a comfortable level.

Yes Bank also has lower CAR as compared to ICICI but is in a better position than BOB, and may be lent funds if other parameters are in favor.

Gross NPAs: Gross NPAs as a percentage of advances of

ICICI are quite high at 3.03%. However, it has been able to steadily reduce the same from 4.47% four years ago

BOB is showing increasing trend in Gross NPAs. This is an adverse situation, leading to decreased and increasing risk profits to the bank

Yes Bank is very good is this parameter, having just 0.31 % as NPAs.

Conclusion Comparing the ROA and C/D ratio shows ICICI is an attractive destination for long term lending.

Its CAR is also sufficient due to which it has very less dilution risk. It has shown slow growth in gross block for past some years and would be looking to speed it up, for which it require long term capital. This makes it an attractive entity for parking long term funds.

However, it has high NPAs as compared to the other players, which make it slightly more risky. So long-term lending must be done with caution.

Yes Bank may also be considered for lending, as it has shown very rapid growth in its profits as well as gross block in the past five years. It also has a sufficient CAR percentage and very low NPAs as compared to the other players.

Strategic Decision

ICICI Bank ICICI has a wide network of branches in the country, with 3753 branches and 11,315 ATMs, of

which more than 15% were opened in the last fiscal.

With a huge presence in urban areas, it should increase its penetration in rural and semi urban areas. It has already initiated this, with 75% of its new 653 braches opened in such areas.

Bank should also focus on expansion in foreign countries. It has recently announced its plans to open branches in China, Australia, South Africa and Mauritius. It currently has largest overseas operations amongst Indian private banks with presence in 19 countries , and has vast opportunities to further expand them.

High CASA Ratio should be maintained in the future as well. NPAs are very high as compared to the competitors, which affect the interest margins. Bank needs more prudent risk assessment and provisioning.

Bank of Baroda Global CASA Deposits rose by 22%. But the CASA Ratio has declined, which has led to decreased

the profitability, as measured by NIM. The bank should focus on controlling its costs and improving its operational efficiency, along with expansion.

Asset quality improvement will be a major concern, with rising Gross as well as Net NPAs over the years.

Its Capital Adequacy Ratio of 11.91% will make it highly vulnerable of falling short of the required capital in 2-3 years.

Bank has expressed its interest in acquiring regional banks in response to government’s plans to encourage consolidation.

BOB has correctly decided its motto for FY15 as “RACE Ahead”, which stands for:

Retail Leaning Asset Quality Capacity Building Earnings

Yes Bank Has strong presence in northern

and western India; should focus on increasing presence in eastern and southern parts by raising long term funds. May even look at acquisitions.

Raised funds of $500 million (Rs. 2942 crore) through QIP, raising the CRAR to above 18%, enough to fund 30% growth for more than 2 years.

CASA is just 22 per cent. Should focus on retail banking more to reduce the cost of funds. This will help increasing profitability.

APPENDIX

ICICI BankValuation Ratios FY14 FY13 FY12

P/E 15.02 15.01 16.38P/BV 1.97 1.81 1.69P/CEPS 14.17 14.15 15.11EV/EBIDTA 13.94 13.58 14.37Market Cap/Sales 2.63 2.49 2.49

Ratio AnalysisCredit-Deposit 100.71 99.25 97.71Inv. / Deposit 55.79 60.38 61.16Cash / Deposit 6.54 7.21 8.6Int. Paid / Int. Rcvd 62.71 65.4 68Other Y / Total Y 19.1 17.24 18.28Op. Exp/ Total Y 18.88 18.61 19.13Int. Y / Total Funds 7.79 7.81 7.49Int. Paid / T Funds 4.89 5.11 5.09NII / TFunds 2.91 2.7 2.4Non Int. Y/T Funds 1.84 1.63 1.67Op. Exp. / T Funds 1.82 1.76 1.75Pr. bfr Prov/ T Funds 2.93 2.57 2.32NP/ T funds 1.73 1.62 1.44RONW 14.02 13.1 11.2GNPA (Rs. Cr) 10,505.84 9,607.75 9,475.33NNPA (Rs. Cr) 3,297.96 2,230.56 1,860.84NNPA/ Net Advance 0.97 0.77 0.73CRAR 0 16.9 16.26Tier I Capital (%) 0 11.5 11.09Tier II Capital (%) 0 5.4 5.17Return on Assets (%) 1.78 1.7 1.5

Cash FlowC & CE at Beginning 41417.52 36229.31 34090.08Cash from Op.Activities 4668.6 11102.01 -14332.36Cash Used in Inv Activities -11394.89 -8903.52 -12280.17Cash Used in Fin. Activities 6838.37 2989.72 28751.76Net Inc in C & CE 112.08 5188.21 2139.23C & CE at End 41529.6 41417.52 36229.31

Balance Sheet SOURCES OF FUNDS : Capital 1,155.04 1,153.64 1,152.77Reserves Total 72,051.71 65,547.84 59,250.09Equity Application Money

6.57 4.48 2.38

Deposits 331,913 292,613 255,499Borrowings 154,759 145,341 140,164 Other Liabilities & Prov. 36,996.28 32,601.85 33,426.20 TOTAL LIABILITIES 596,882 537,262 489,496APPLICATION OF FUNDSCash & Balances with RBI 21,821.82 19,052.73 20,461.29Money at Call 19,707.77 22,364.79 15,768.02 Investments 177,021 171,393 159,560 Advances 338,702 290,249 253,727 Fixed Assets 4,678.14 4,647.06 4,614.69 Other Assets 34,950.12 29,555.32 35,364.61 TOTAL ASSETS 596,882 537,262 489,496 Contingent Liability 781,430 789,989 915,465 Bills for collection 13,534.91 12,394.53 7,572.06

Income Statement INCOME :nterest Earned 44,178.15 40,075.60 33,542.65Other Income 10,427.87 8,345.70 7,502.76Total 54,606.02 48,421.30 41,045.41II. ExpenditureInterest expended 27,702.59 26,209.18 22,808.50Payments toEmployees 4,220.11 3,893.29 3,515.28Op. & Admn. Expenses 2,506.39 2,198.79 1,925.30Depreciation 575.97 490.16 524.53Other Expenses, Provisions & Contingencies

5,637.80 4,240.18 3,474.47

Provision for Tax 3,839.50 2,998.20 2,187.42Deferred Tax 313.19 66.02 144.65 Total 44,795.55 40,095.82 34,580.15III. Profit & LossReported Net Profit 9,810.48 8,325.47 6,465.26Extraordinary Items 95.82 25.77 -1.24Adjusted Net Profit 9,714.66 8,299.70 6,466.50Profit brought forward 9,902.29 7,054.23 5,018.18 IV. Appropriations Trfr to Statutory Reserve 2,453.00 2,082.00 1,617.00 Trfr to Other Reserves 1,107.62 795.78 689.39Proposed Dividend 2,833.56 2,599.64 2,122.82Balance carried forward to Balance Sheet

13,318.59 9,902.29 7,054.23

Equity Dividend % 230 200 165Earnings Per Share 82.93 69.63 54.17Book Value 633.8 578.18 523.98

Break up of DepositsDemand Deposits 43,245.41 36,925.52 34,973.06Savings Deposit 99,133.00 85,650.74 76,046.31Term Deposits 189,535.25 170,037.37 144,480.59

Beta 1.7598 Average Weekly Volume 162940

Yes BankValuation Ratios

FY14 FY13 FY12P/E 15.02 15.01 16.38P/BV 1.97 1.81 1.69P/CEPS 14.17 14.15 15.11

EV/EBIDTA 13.94 13.58 14.37Market Cap/Sales 2.63 2.49 2.49

Ratio AnalysisCredit-Deposit 100.71 99.25 97.71

Inv. / Deposit 55.79 60.38 61.16Cash / Deposit 6.54 7.21 8.6Int. Paid / Int. Rcvd 62.71 65.4 68Other Y / Total Y 19.1 17.24 18.28Op. Exp/ Total Y 18.88 18.61 19.13Int. Y / Total Funds 7.79 7.81 7.49Int. Paid / T Funds 4.89 5.11 5.09NII / TFunds 2.91 2.7 2.4Non Int. Y/T Funds 1.84 1.63 1.67Op. Exp. / T Funds 1.82 1.76 1.75Pr. bfr Prov/ T Funds 2.93 2.57 2.32NP/ T funds 1.73 1.62 1.44RONW 14.02 13.1 11.2GNPA (Rs. Cr) 174.93 94.32 83.86NNPA (Rs. Cr) 26.07 6.99 17.46NNPA/ Net Advance 0.05 0.01 0.05CRAR 0 0 0Tier I Capital (%) 0 0 0Tier II Capital (%) 0 0 0Return on Assets (%) 9.92 10.04 10.14

Cash FlowC & CE at Beginning 4065.76 3585.54 3495.98Cash from Op.Activities 4448.93 540.64 3588.49Cash Used in Inv Activities -2798.92 -6741.53 -4863.45Cash Used in Fin. Activities 175.89 6681.11 1364.52Net Inc in C & CE 1825.9 480.22 89.56C & CE at End 5891.66 4065.76 3585.54

Balance Sheet SOURCES OF FUNDS : Capital 360.63 358.62 352.99Reserves Total 6,761.11 5,449.05 4,323.65Equity Application Money 0 0 0 Deposits

74,192.0266,955.5

9 49,151.70Borrowings

21,314.2920,922.1

5 14,156.49 Other Liabilities & Prov. 6,387.75 5,418.72 5,640.85 TOTAL LIABILITIES 109,015.8

099,104.1

3 73,625.68APPLICATION OF FUNDSCash & Balances with RBI 4,541.57 3,338.76 2,332.54Money at Call 1,350.10 727 1,253.00 Investments 40,950.36 42,976.0 27,757.35 Advances 55,632.96 46,999.5 37,988.64 Fixed Assets 293.47 229.55 177.1 Other Assets 6,247.33 4,833.21 4,117.05 TOTAL ASSETS 109,015.7 99,104.1 73,625.68 Contingent Liability 200,992.9 247,778. 164,125.5 Bills for collection 997.06 677.4 402.05

Income Statement INCOME :Interest Earned 9,981.35 8,294.00 6,307.36

Other Income 1,721.58 1,257.43 857.12Total 11,702.93 9,551.43 7,164.48II. ExpenditureInterest expended 7,265.09 6,075.21 4,691.72Payments toEmployees 784.4 655.54 475.15Op. & Admn. Expenses 393.57 297.78 204.29Depreciation 63.17 51.71 40.82Other Expenses, Provisions & Contingencies 870.42 545.47 302.48Provision for Tax 778.41 667.76 503.63Deferred Tax -69.91 -42.71 -30.61 Total 10,085.15 8,250.75 6,187.48III. Profit & LossReported Net Profit 1,617.78 1,300.68 977Extraordinary Items -0.09 -0.51 -0.93Adjusted Net Profit 1,617.87 1,301.19 977.93Profit brought forward 2,338.37 1,658.39 1,115.06 IV. Appropriations Trfr to Statutory Reserve 404.45 325.17 244.25 Trfr to Other Reserves 4.58 44.58 25.35Proposed Dividend 339.67 250.96 164.07Balance carried forward to Balance Sheet 3,207.46 2,338.37 1,658.39 Equity Dividend % 80 60 40Earnings Per Share 43.45 35.29 27.03Book Value 197.48 161.94 132.49



Bank of BarodaValuation Ratios

FY14 FY13 FY12P/E 7.09 6.61 6.69P/BV 0.86 0.9 1.19

P/CEPS 6.57 6.19 6.33EV/EBIDTA 15.42 15.3 14.7Market Cap/Sales 0.72 0.74 0.99

Ratio AnalysisCredit-Deposit 69.54 71.68 74.76Inv. / Deposit 22.78 23.83 22.4Cash / Deposit 3.08 4.09 6.01Int. Paid / Int. Rcvd 69.27 67.85 65.23Other Y / Total Y 10.28 9.35 10.34Op. Exp/ Total Y 16.44 15.32 15.59Int. Y / Total Funds 6.45 7.08 7.37Int. Paid / T Funds 4.47 4.8 4.8NII / TFunds 1.98 2.28 2.56Non Int. Y/T Funds 0.74 0.73 0.85Op. Exp. / T Funds 1.18 1.2 1.28Pr. bfr Prov/ T Funds 1.54 1.81 2.13NP/ T funds 0.75 0.9 1.24RONW 13.36 15.07 20.64GNPA (Rs. Cr) 11,875.90 7,982.58 4,464.75NNPA (Rs. Cr) 6,034.76 4,192.03 1,543.64NNPA/ Net Advance 1.52 1.28 0.54CRAR 0 0 12.95Tier I Capital (%) 0 0 9.56Tier II Capital (%) 0 0 3.39Return on Assets (%) 6.76 7.34 7.58

Cash FlowC & CE at Beginning 85398.9 64168.54 49934.07Cash from Op.Activities 41016.38 22793.08 14406.5Cash Used in Inv Activities -688.7 -772.45 -337.38Cash Used in Fin. Activities 5151.33 -790.27 165.35Net Inc in C & CE 45479.01 21230.36 14234.47C & CE at End 130877.9 85398.9 64168.54

Balance Sheet SOURCES OF FUNDS : Capital 430.68 422.52 412.38Reserves Total 35,555.00 31,546.92 27,064.47Equity Application Money 0 0 0 Deposits 568,894.3 473,883.3 384,871.1Borrowings 36,812.97 26,579.28 23,573.05 Other Liabilities & Prov. 17,811.50 14,703.38 11,400.46 TOTAL LIABILITIES 659,504.5 547,135.4 447,321.4APPLICATION OF FUNDSCash & Balances with RBI 18,629.09 13,452.08 21,651.46Money at Call 112,248.8 71,946.83 42,517.08 Investments 116,112.6 121,393.7 83,209.40 Advances

397,005.8 328,185.7287,377.2

9 Fixed Assets 2,734.12 2,453.12 2,341.50 Other Assets 12,774.03 9,703.93 10,224.73 TOTAL ASSETS 659,504.5

3547,135.4 447,321.4

Contingent Liability 259,912.7 204,628.91

152,502.81

Bills for collection 31,864.92 25,952.24 22,766.99

Income Statement INCOME :Interest Earned 38,939.71 35,196.65 29,673.72Other Income 4,462.74 3,630.62 3,422.33Total 43,402.45 38,827.27 33,096.05II. ExpenditureInterest expended 26,974.36 23,881.39 19,356.71

Payments toEmployees 4,139.72 3,449.65 2,985.58Op. & Admn. Expenses 1,576.52 1,305.38 1,121.08Depreciation 345.03 300.64 276.57Other Expenses, Provisions & Contingencies 4,869.51 5,059.00 3,330.31Provision for Tax 956.23 350.51 1,018.84Deferred Tax 0 0 0 Total 38,861.37 34,346.56 28,089.09III. Profit & LossReported Net Profit 4,541.08 4,480.72 5,006.96Extraordinary Items 0.16 -0.74 -37.21Adjusted Net Profit 4,540.92 4,481.46 5,044.17Profit brought forward 0 0 0 IV. Appropriations Trfr to Statutory Reserve 1,135.27 1,120.18 1,253.30 Trfr to Other Reserves 2,322.13 2,300.91 2,941.37Proposed Dividend 1,083.68 1,059.63 812.29Balance carried forward to Balance Sheet 0 0 0 Equity Dividend % 215 215 170Earnings Per Share 101.78 102.47 118.72Book Value 835.56 756.64 666.3



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