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SUBMITTED TO: SUBMITTED BY:

Ms.Shegorika Lalchandani Jaya sarpal

Priyanka dutta

Shaily bhardwaj

Shivangi gupta

Shivani tomar

Shweta rai

Surajit roy

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INDEX

BANKING SECTOR IN INDIA3

STATE BANK OF INDIA..4

HSBC BANK-OVERVIEW9

HDFC OVERVIEW12

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BANKING SECTOR IN INDIA

The last decade has seen many positive developments in the Indian banking sector. The policymakers, which comprise the Reserve Bank of India (RBI), Ministry of Finance and relatedgovernment and financial sector regulatory entities, have made several notable efforts to improveregulation in the sector. The sector now compares favorably with banking sectors in the regionon metrics like growth, profitability and non-performing assets (NPAs). A few banks haveestablished an outstanding track record of innovation, growth and value creation. This isreflected in their market valuation. However, improved regulations, innovation, growth andvalue creation in the sector remain limited to a small part of it. The cost of bankingintermediation in India is higher and bank penetration is far lower than in other markets. Indiasbanking industry must strengthen itself significantly if it has to support the modern and vibranteconomy which India aspires to be.

The banking sector in India is broadly divided into two groups:

commercial banks and co-operative banks.

On the basis of ownership mold, commercial banks are grouped into three categories

y state owned or public sector banks (PSBs),

y private banks under Indian ownership

y foreign banks.

There are 27 PSBs, which all account for 80 per cent of commercial banking asset.

Today, in the deregulated market, banks decide on their lending and borrowing rates. In thecompetitive money and capital markets, the inability to offer competitive market rates adds to thedisadvantage of marketing and building new business. In the face of the deregulated bankingindustry, an ideal competitive working will be reached when the banks are able to earn adequateamount of non-interest income to cover their entire operating expenses.

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STATE BANK OF INDIA

SBI is the largest bank in India.The bank traces its ancestry to British India, through the ImperialBank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent. The Government of India nationalised the Imperial Bank ofIndia in 1955, with the Reserve Bank of India taking a 60% stake, and renamed it the State Bankof India. In 2008, the Government took over the stake held by the Reserve Bank of India.

y SBI provides a range of banking products through its vast network in India and overseas,including products aimed at NRIs.

y The State Bank Group, with over 16000 branches, has the largest branch network inIndia. With an asset base of $250 billion and $195 billion in deposits, it is a regionalbanking giant.

y It has a market share among Indian commercial banks of about 20% in deposits andadvances, and SBI accounts for almost one-fifth of the nations loans.

y The State bank of India is the 29th most reputed company in the world according toForbes.

y State Bank of India is one of the Big Four Banks of India with ICICI Bank, Axis Bankand HDFC Bank.

y The bank has 141 overseas offices spread over 32 countries as on 31st Dec 2009. It has branches of the parent in Colombo, Dhaka, Frankfurt, Hong Kong, Johannesburg,London and environs, Los Angeles, Male in the Maldives, Muscat, New York, Osaka,

Sydney, and Tokyo. It has offshore banking units in the Bahamas, Bahrain, andSingapore, and representative offices in Bhutan and Cape Town.

y SBI operates several foreign subsidiaries. In 1990 it established an offshore bank, StateBank of India (Mauritius).

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ANALYSIS OF THE STOCK PRICES OF SBI

FROM 22 FEBRUARY TO 31 MARCH

DATE OPENING CLOSING HIGH LOW RETURNS

22 feb 1920 1916.35 1935 1910.5 -0.232

23 feb 1914.9 1911.9 1934.5 1906.6 0.489

24 feb 1906 1921.25 1930 1900 -0.396

25 feb 1925 1913.65 1930 1903.4 3.169

26 feb 1925 1974.3 2032 1915 0.626

2 march 1990.55 1986.65 2011 1974.2 1.800

3 march 1989.1 2022.4 2025.9 1989.1 0.509

4 march 2023 2032.7 2044.7 2012 0.713

5 march 2045 2047.2 2059 2021.1 0.916

8 march 2060 2065.95 2112.5 2033.1 -1.033

9 march 2032.55 2044.6 2078 2032.55 -0.359

10 march 2050.2 2037.25 2050.2 2026.4 0.417

11 march 2040 2045.75 2052.8 2018.3 0.105

12 march 2042 2047.9 2052.8 2038.65 -1.602

15 march 2039.5 2015.1 2044.75 2011.1 0.037

16 march 2017.05 2015.85 2025 1997.6 0.568

17 march 2020.05 2027.3 2042 2015.65 0.11618 march 2030 2029.65 2050.5 2010.5 1.419

19 march 2040 2058.45 2065.85 2033.3 -0.850

22 march 2025.15 2040.95 2053.8 2010 0.372

23 march 2042 2048.55 2056.65 2018.6 0.049

25 march 2044.65 2049.55 2061.6 2025.2 1.137

26 march 2054.85 2072.85 2078 2045.05 1.071

29 march 2075 2095.05 2105 2073 -0.597

30 march 2095.05 2082.55 2121.95 2075 -0.209

31 march 2085 2078.2 2098.9 2073.35

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y The prices have shown a little fluctuation whereas there has been a constant increase inthe share prices of SBI. The opening price was 1920 on 22nd February and the openingprice on 31st march was 2085.

y The maximum percentage change (Returns) has been:

3.169% on 25th February

-1.602% on 12th March

y No major fluctuations have taken places.

y The highest share price of SBI has gone upto 2121.95 on 30th March.

y The lowest has been 1903.4 on 25th February.

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REASONS FOR THE FLUCTUATIONS IN

THE SHARE PRICES OF SBI

y Wednesday, 24 Feb 2010

State Bank of India plans to raise up to $4.3 billion through a rights equity issue in2010/11. The bank is required to raise Rs 400 billion ($8.6 billion) to Rs 500 billion tofulfill the demand of the loans in the economy.

On 25 February the percentage return was 3.169%, the highest from 22 nd February to 31stMarch. The news has turned out to have a positive impact on the share prices of SBIbecause of the reason that the people trusts the brand and also because it is a governmentbank.

y

Thursday, 25 Feb 2010.

According to the budget 2010: Additional banks licenses to private players and Nonbanking financial companies will be provided .More bank branches, more ATM s, betterservices will be provided. Indian stock market made a very strong positive reaction afterthe union budget speech of Pranab Mukherjee. The sensex shot up over 391 points as theFinance minister announced huge public investments along with a reduction in surchargefor corporates in his budget speech.

The return was 3.169%, which was the highest because of such a positive news whichfloated in the market.

y Wednesday, 10 Mar 2010

State Bank of India plans to raise Rs 500 million to Rs 1 billion through a retail bond

issue in the next fiscal year. The funds will be raised through a 10-year retail bond issue.

State Bank of India's next fiscal year begins April 1.

The return became positive from -0.359% to 0.417%.

y On 26 March 2010

The board of State Bank of India (SBI) in its meeting on 26 March 2010 has approved the

issuance of 1,16,052 shares of face value of Rs. 10 each to the minority shareholders of

State Bank of Indore. The issued capital of State Bank of India has increased from Rs.

634.97 crore to Rs. 635.08 crore..

This showed a positive change with the share price reaching to 2078 and the return was

1.071%.

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y Monday, 29 Mar 2010

State Bank of India and Societe Generale Securities Services have jointly launched SBI

Custodial Services Pvt. Ltd. to offer securities services to institutional investors. The

partners expect the joint venture to do business of about $10 billion in its first year of

operation. The bank by assets holds 65% of the joint venture, while French group Societe

Generale holds the remaining stake.

The share prices on 30th march reached highest for the month which was 2121.95.

y SBI decided to extend its 8 per cent special home loan scheme, popularly known as teaser

rates, till April 30.

This news has been a positive news for the customers of SBI and therefore this news hasled to the increase in the share prices of SBI leading to all month high 2121.95 on 30th

march.

y Tuesday, 30 Mar 2010

Business Standard reported that State Bank of India has decided to issue 34 of its sharesfor every 100 shares of State Bank of Indore to its minority shareholders. The centralboard of State Bank of India on March 26 approved a proposal to issue 1.16 lakh shares(of INR10 each) to minority shareholders of the Indore-based associate bank, State Bankof India informed the Bombay Stock Exchange.

The share prices reached an all time high to 2121.95.

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HSBC BANK-OVERVIEW

HSBC Holdings plcis a United Kingdom based public limited company incorporated in

England in 1990, and headquartered London since 1993.As of 2009, it is both the world'slargest banking group and the world's 6th largest company according to a compositemeasure by Forbes magazine.Hong-Kong served as the bank's headquarters until 1992when it was forced to move to London as a condition of completing the acquisition ofMidland Bank.Today, whilst no single geographical area dominates the group's earnings,Hong Kong still continues to be a significant source of its income. Recent acquisitionsand expansion in China are returning HSBC to part of its roots.SBC has an enormousoperational base in Asia and significant lending,investment and insurance activitiesaround the world. The company has a global reach and financial fundamentals matchedby few other banking or financial multinationals.

HSBC is listed on the London, New York, Hong kong,Paris and Bermuda stockexchange,in India (National Stock Exchange) and is a constituent of the FTSE 100 Indexand the Hang Seng Index

In February 2008, HSBC was named the world's most valuable banking brand by TheBankermagazine

HSBC India. In 1959 HSBC acquired The Mercentile Bank of India,London,Chinaestablished in October 1853 in Bombay. HSBC is now one of the fastest growing foreign

banks in India, both in domestic banking and support operations for worldwideoperations.

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Diagram

We have made a line diagram in the excel sheet to show the various returns(prev close-today close)of HSBC Bank from 2nd of march to 31st march .

Prev.close Open PriceHighprice

LowPrice

LastPrice

ClosePrice Return

230.15 225 234.85 209.5 234 234 -3.85

234 230.6 233.95 230.05 231 230.95 3.05

230.95 273.5 273.5 221.5 230 229 1.95

229 221 234.4 215.6 229 228.8 0.2

228.8 218.7 230.4 218.7 226.5 225.85 2.95

225.85 229 229 223.85 225 224.1 1.75

224.1 221 227 220.55 222 222.05 2.05

222.05 217.5 223.95 217.5 223.4 223.15 -1.1

223.15 222.5 224.5 217 224.5 223.55 -0.4

223.55 225.05 227.8 223.6 227.8 225.15 -1.6

225.15 227.05 230 225 228.95 227.3 -2.15227.3 225 234 225 227.15 227.45 -0.15

227.45 227.5 229.45 225 229.45 227.05 0.4

227.05 225 242.5 225 238.05 238.25 -11.2

238.25 238 242.85 237.1 240 238.85 -0.6

238.85 233.3 241 232 234 235 3.85

235 243.8 243.8 235 239.95 239.8 -4.8

239.8 234.15 240.1 234.15 235.1 235.95 3.85

235.95 235.1 243 232 236 237.75 -1.8

237.75 236.1 237 234 237 234.3 3.45

234.3 236.9 237 233.25 234 234 0.3

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Return

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Reasons for Highs

1. The surplus liquidity in excess of one lakh crore on daily basis for the whole last yearpromoted banks to discourage inflow of money. As a result, banks offering lower interestrate. Due to this, landing by the banks rises and their balance sheet looked good. As a

result, their share price rises.

2. In the budget, the government told that government will increase the expenditure oninfrastructure.In the mean time, government urges to the RBI to make loans related toinfrastructure to secured loan. As a result, there were rise in the demand for the share ofHDFC

Reason for Lows:

1.Effect of Inflation The return is sharply negative with inflation well above the banksdeposited rate.As a result, sale in CASA decreases which de-motivate the investor toinvest in HSBC share.

2. The news in the market that RBI will increase the interest rate. As HDFC is the highestlender in the real estate sector. The real estate sector will badly affect if interest raterises.So, it indirectly affect the balance sheet of the HSBC bank. So, the price of theHSBC bank share came down.

3.As the amount of NPA increased day by day, and affecting the health of the balancesheet of the company.As a result, there is less demand for the HSBC shares.

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HDFC OVERVIEW

HDFC Bank began operations in 1995 with a simple mission: to be a"World-classIndian Bank". They realised that only a single-minded focus on product quality andservice excellence would help them get there. Today, they are proud to say that they arewell on there way towards that goal.

It is extremely gratifying that there efforts towards providing customer convenience havebeen appreciated both nationally and internationally.

2010

Euro moneyPrivate Bankingand WealthManagementPoll 2010

1) Best Local Bank in India (second year in a row) 2) Best PrivateBanking Services overall (moved up from No. 2 last year)

FinancialInsightsInnovationAwards 2010

Innovation in Branch Operations - Server Consolidation Project

Global FinanceAward

Best Trade Finance Provider in India for 2010

2 BankingTechnologyAwards 2009

1) Best Risk Management Initiative and 2) Best Use of BusinessIntelligence.

SPJIMRMarketingImpact Awards(SMIA) 2010

2nd Prize

Business TodayBest EmployerSurvey

Listed in top 10 Best Employers in the country

They are aware that all these awards are mere milestones in the continuing, never-endingjourney of providing excellent service to there customers. They are confident, however,that with our feedback and support, they will be able to maintain and improve ourservices.

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Diagram

We have made a line diagram in the excel sheet to show the various returns(prev close-

today close)of HDFC Bank from 2nd of march to 31st march .

DATE Open High Low Close RETURNS

2/3/2010 2515.3 2572 2495.45 2560.3 2.399712

3/3/2010 2555 2610 2545.4 2604.65 1.732219

4/3/2010 2594 2612.4 2580 2596.2 -0.32442

5/3/2010 2606 2627.75 2575 2588.35 -0.30236

8/3/2010 2602 2624 2585 2611.25 0.884734

9/3/2010 2607 2665 2586.6 2659.25 1.8382

10/3/2010 2664 2712 2651.1 2705.75 1.748613

11/3/2010 2701 2715 2682.5 2701.55 -0.15522

12/3/2010 2702.55 2720 2671.4 2715.7 0.523773

15/3/2010 2705 2715.7 2667 2675.25 -1.48949

16/3/2010 2680 2703.6 2653 2688.85 0.508364

17/3/2010 2705 2734.75 2693 2726.75 1.409525

18/3/2010 2735 2759.5 2720.3 2737.95 0.410745

19/3/2010 2740 2745 2678.1 2694.45 -1.58878

22/3/2010 2682 2684.95 2601 2624.85 -2.58309

23/3/2010 2643.8 2643.8 2610.1 2621.55 -0.12572

25/3/2010 2610 2623.9 2561.7 2586.15 -1.35035

26/3/2010 2597.6 2640 2592.1 2613 1.038223

29/3/2010 2624.7 2685 2615.1 2661.1 1.840796

30/3/2010 2670.1 2689.7 2631 2661.1 0

31/3/2010 2668 2733.7 2616 2638.7 -0.84176

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Reasons for high

1. Government has decided to increase the investment in the infrastructure project asHDFC bank is the top company in financing and providing loans. So, this the good newsfor investors.

Reasons for low

1.Inflation: As inflation is constantly going up so there is a sharply negative return for thepeoples as the returns is comparatively low compared to the expenditure being done.Therefore CASA is decreasing which is not good for the banks so investors loosing hopeas a result price of shares is decreasing.

2. Bond market is not performing well as the yield for the bond is going up and as a resultvalue of the bond is also coming down. So the liquidity is the matter of concern for thebank.

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