GITAM INSTITUTE OF INTERNATIONAL BUSINESS

GITAM UNIVERSITY, RUSHIKONDA

VISAKHAPATNAM (A.P) PIN - 530045

TEAM NAME – SARVODAYATEAM MEMBERS

1. Mr. GOUTAM DASHMBA(IB)E-mail- litu.goutam@gmail.com Mobile No. 09000250633

2. Ms. SHEELU MBA(IB) E-mail –sheelusharma8@gmail.com Mobile No. 09959643382

INTRODUCTION

The Professionals’’ Bank of India Ltd. is a midsized bank in the country. The

bank has positioned itself from financial banking to customer care. The bank

has done excellently in Q2 and Q3 of FY09 and is now more concerned about

the future quarters. This is because they have built a world class human

capital, acquired and institutionalized relation capital. The bank is also

planning to enter adjacent-synergistic business like Insurance, Retail etc. The

bank has re-balanced their portfolio with positioning and capitalization but

the main problem which arises is concerning the limited opportunity due to

competition.

As the major cause of concern in this globalised world is that companies are

more concentrating in RED-OCEAN STRATEGY but for the company like TPBoI

ltd has to concentrate more on BLUE –OCEAN STRATEGY to cater in to new

segment of the market.

THE ROADMAP OF ANALYSIS:-

Before going in to study the company as a whole there many methods to be

followed we in our analysis try to do EIC analysis and Benchmarking analysis

to arrive in to some logical conclusion. We also did comparative analysis with

the major competitor of TPBoI ltd. We also did ratio analysis to arrive at the

current position of the bank .

ISSUES: - Changing the Mid and long-term strategy within the purview of

three major strategic alternatives.

Building World Class Human Capital

Building a Strong Consumer Brand

Allied Businesses

BANKING INDUS T R Y

The Indian banking system is financially stable and resilient to the shocks

that may arise due to higher non-performing assets (NPAs) and the global

economic crisis. RBI, the central bank of the country said that banks should

link more branches to the National Electronic Clearing Service (NECS). There

are more than 80 banks in India including public, private and foreign banks.

Given the demographic shifts resulting from changes in age profile and

household income, consumers will increasingly demand enhanced

institutional capabilities and service levels from banks.

SWOT Analysis of Banking Sector

Strengths

1. Strong policy and regulation.

2. Bank lending has been a driver

of GDP growth and

employment.

3. Aggression towards

development of existing

standards by banks.

Weaknesses

1. Poor technology infrastructure.

2. Weak corporate governance

and restrictive labor laws.

3. Presence of more number of

small banks.

Opportunities

1. Opportunity in retail and

wholesale banking. For this new

skills need to be acquired such

as marketing, sales, credit and

operations.

2. Reach in rural India

3. To trade in commodity and

commodity derivatives.

Threats

1. Rise in inflation because of

which interest rates increased.

2. Increase in number of foreign

banks which pose threat for

private banks.

3. Inability to meet additional

capital requirements.

SWOT Analysis of TPBoI

Strengths

1. Wholesale banking

2. Relationship capital

3. Positioning of product

4. Knowledge bankers to corporate

Weaknesses

1. Human capital

2. Small segment bank

Opportunities

1. Entering retail banking,

microfinance etc..

Threats

1. Competition from other banks

Yearly Report BANKEX Inflation Rate

GDP of the country

Consumer Price Index

2004-05

3,079.50

6.4 7.5 3.8

2005-06

4,641.85

4.4 9.5 4.4

2006-07

5,954.34

5.4 9.7 6.7

2007-08

9,122.20

4.7 9 6.2

2008-09 5,933.13 8.4 6.5 8.7

Comparison of BANKEX , inflation Rate , GDP of the

Country and CPI

These are some of the major indicator on how the country is moving . As we

know BANKEX is the replica of the banking industry and GDP is the replica of

the whole countries growth they are directly proportional with each other.

BANKEX and GDP of the country are inversely related to Inflation Rate and

CPI of the country. So as per the current situation of the country , as the CPI

increasing day by day the company should concentrate more on FINANCIAL

INCLUSION of the SME sector.

In both the graph it can be clearly

visible the relation between BANKEX,

GDP, CPI and Inflation. These graph

clearly indicate the behavior of the

industry, and the economy

COMPARATIVE STUDY WITH SELECTED COMPETITORS in TERMS of BUSINESS:-

2004-05 2005-06 2006-07 2007-08 2008-09

3,079.50 4,641.85

5,954.34

9,122.20

5,933.13

BANKEXBANKEX

0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.502468

1012

Relationship between Inflation rate , GDP and CPI

Inflation Rate GDP of the country

Consumer Price Index

Current Business / BANKS TPBoI ltd

DHANLAXMI BANK

FEDERAL BANK

HDFC BANK

KOTAK BANK

CORPORATE BANKING          

PERSONAL BANKING          

NRI BANKING          

FINANCIAL BANKING          

MICRO-FINANCE    

TRANSACTION BANKING          

DEVELOPMENT &

KNOWLEDGE BANKING  

CASA/ WEALTH

MANAGEMENT          

LIFE-INSURANCE BUSINESS    

This is the comparative analysis of TPBoI with some of the market

competitors. As you can see from the table above that TPBoI is not in the

micro-finance and Retail business including Life Insurance business. So as

the bank is expanding it can enter into micro-finance segment. Microfinance

in India through its two major channels – SBLP and MFIs – served over 33

million Indians in 2008, up by 9 million over the previous financial year. 4

out of 5 microfinance clients in India are women. The loan segment between

Rs. 5,000 and Rs 10,000 has been growing strongest. The outstanding micro-

credit portfolio of India Microfinance was about Rs. 22,000 crore, 75% are

accounted for by SBLP, 20% by large MFIs and 5% by medium and small

MFIs. Urban Microfinance is emerging as a strong growth driver. Also

penetration of life insurance services in rural India is <10%.

BENCHMARK RATIO ANALYSIS:-

Industry >> Analytical Ratios >> Aggregate Key Fin RatiosIndustry - Banks-Pvt Sector

Year Latest 2007 2006 2005 2004No. Of Companies 130 5 81 95 91

KEY RATIOSCredit-Deposit (%) 74.21 76.06 74.32 70.12 67.43

Investment / Deposit (%)42.19 42.16 44.32 47.98 51.6

Cash / Deposit (%) 11.5 9.49 10.8 11.64 11.83Interest Expended / Interest Earned (%) 60.23 65.16 56.41 57.83 62.71Other Income / Total Income (%) 22.41 20.87 24.04 23.65 24.85Operating Expenses / Total Income (%) 28.42 25.38 30.62 29.32 24.42Interest Income / Total Funds (%) 7.57 5.55 7 6.72 7.65Interest Expended / Total Funds (%) 4.56 3.62 3.95 3.89 4.8Net Interest Income / Total Funds (%) 3.01 1.93 3.05 2.84 2.85Non Interest Income / Total Funds (%) 2.19 1.46 2.21 2.08 2.53Operating Expenses / Total Funds (%) 2.77 1.78 2.82 2.58 2.49Profit before Provisions / Total Funds (%) 1.1 0.8 1.24 1.1 1.55

The above table shows the benchmark industry average till 2009 December.

When we compare the industry average with TPBoI Ltd we found that it

matches up to the industry standard. Take for example Investment/

Deposit Ratio is 37.57% which is almost matching the industry

standard and also it has increased by 62.8% on Year on Year basis.

Other Income / Total Income (%) is 38% which way above 22.41%

which shows the consistency of the firm.

So, as per our analysis we thought that as company is in a growth stage of

economy, it should go for expansion and diversification in future which need

a proper well trained human capital with the in-depth knowledge about the

culture as a whole.

HUMAN CAPITAL ANALYSIS:-

Bank Name Number of Branches

No.of Employees

Total Income(Rs Mn)

Net Profit (Rs Mn)

Indian Bank 1395 21302 38960 5045

Corporation Bank 794 10754 31979 4445

Andhra Bank 1213 13169 31324 4855

United Bank of India 1316 17319 28170 2045

State Bank of Patiala 753 11350 28086 3031

Vijaya Bank 924 11494 26808 1269

State Bank of Travancore 690 11642 26497 2587Bank of Maharashtra 1287 14052 25267 508

Dena Bank 1039 10156 22191 730

ABN Amro Bank N.V. 23 3093 19886 2417

Federal Bank Limited, The 472 6366 16535 2252

IndusInd Bank Limited 137 2365 14144 368

ING Vysya Bank Limited 369 4892 14128 91Kotak Mahindra Bank

Limited 78 3597 9370 1182South Indian Bank Limited,

The 424 3709 8336 509Karur Vysya Bank Limited,

The 243 2908 7940 1354Lakshmi Vilas Bank

Limited, The 223 1873 3681 225YES BANK Limited 9 627 2899 553Dhanalakshmi Bank

Limited, The 178 1385 2369 95(Data as on 2007)

(Source: - http://www.dnb.co.in/TopBanks/company_listing.asp?PageNo=6&q=Total_Income )

The table above shows some of the competitors of TPBoI Ltd. The employee

base of TPBoI is 2700 and wants to increase it to 10,000 with 750+ branches

by 2015. To implement this, bank needs to have expansion strategy in all

segments. As the workforce will increase it will lead to more output and

income generation. The bank is delivering extra ordinary results after

every quarter so by looking this, human capital will be attracted. To

motivate, groom and retain human capital, bank need to design a training

program which will be accompanied by varied skill sets required in the

banking industry. The bank should also increase the perks, incentives,

awards in the employment policy. There also can be job rotation and job

enrichment depending on skill set the person posses. Also there should be

state based recruitment process so that it can cover all language and ethnic

group and in return bank will get benefit as the employee will understand

each customers need. This manpower will help in designing the product as

per the demand. As suggested by us the bank should come up with Micro

finance so in that case the bank should appoint sales and marketing team

who should understand the villagers more effectively.  

CONCLUSION:-

As per our Analysis we came to the conclusion that company should go for

Building World Class Human Capital and Allied businesses (A&C). From the

above all analysis we can clearly seen the below mention which shows

company should go for BLUE OCEAN STRATEGY.

1. Overall Growth in the Banking sector

2. Urbanisation in Tier II and Tier III cities.

3. Financial Inclusion concept

4. Growing concern for Corporate Social Responsibilities

5. Key ratios as indicators to go for Human capital employment and

expansion to new business sector.

6. Microfinance is major thrust area because of growing concern of

regulatory and government to uplift the unorganised sector and

priority sector.

So because of above Reason Company should go for Choice A and C.

BIBLIOGRAPHY:-

1. CMIE Report

2. www.capitaline.com

3. www.rbi.org.in

4. http://www.dnb.co.in/TopBanks/company_listing.asp?

PageNo=6&q=Total_Income

5. Different bank website