INDIAN OVERSEAS BANK

Project report submitted in partial fulfillment of the requirements of the degree

of

Master of Business Administration

by

ANUSHKA BHUT
Registration no. 210402100010

Under the supervision of

DR. PRAMOD KUMAR PATJOSHI

MBA, Ph.D.
Associate Professor (finance), School of Management,

Centurion University of Technology and Management, Bhubaneswar, Odisha, India

SCHOOL OF MANAGEMENT
CENTURION UNIVERSITY OF TECHNOLOGY AND MANAGEMENT
BHUBANESWAR, ODISHA, INDIA
2023
 ABSTRACT

Banks play an important role in the economic development of every nation. They have control
over a large part of the supply of money in circulation. A bank is a financial intermediary that
accepts deposits and channels those deposits into lending activities. Banks are a fundamental
component of the financial system and are also active players in financial markets. Financial
performance refers to the achievement of the bank in terms of profitability. The profitability of a
bank denotes the efficiency with which a bank deploys its total resources to optimize its net
profits and thus serve as an index to the degree of asset utilization and managerial effectiveness.
In this study an attempt is made to see the financial performance of Indian Overseas Bank with
the different norms.
 INDEX

Sr. No. Chapter Title of the Chapter

1 Chapter - 01 Introduction
2 Chapter - 02 Company Profile
3 Chapter - 03 Research Methodology
4 Chapter - 04 Data Analysis and Interpretation
5 Chapter - 05 Conclusion
 CHAPTER NO.1: INTRODUCTON

1.1. INTRODUCTION:
A good bank is not only the financial heart of the community, but also one with an
obligation of helping in every possible manner to improve the economic conditions of the
common people

A bank is a financial intermediary that accepts deposits and channels those deposits into lending
activities. Banks are a fundamental component of the financial system, and are also active
players in financial markets. The essential role of a bank is to connect those who have capital
(such as investors and depositors), with those who seek capital (such as individuals wanting a
loan or business wanting to grow). Banks thus play an important role in the economic
development of every nation. They have control over a large part of the supply of money in
circulation. Through their influence over the volume of bank money, they can influence in nature
and character of production in any country. Economic development is a dynamic and continuous
process. Banks are the main stay of economic progress of a country, and in the modern economy,
banks have become a part and parcel of all economic activities in India.

1.2. INDIAN BANKING INDUSTRY:-

Banking industry in India functions under the sunshade of Reserve Bank of India- The
regulatory, central bank. Banking industry mainly consists of:

 Commercial banks
 Co-operative banks

The commercial banking structure in India consists of : schedules Commercial Banks and
Unscheduled Bank. Scheduled commercial banks constitute those banks which have been
included in the second schedule of Reserve Bank of Indian (RBI) Act. 1934.

RBI in turn includes only those banks in this schedule which satisfy the criteria laid down vide
section 42 (60) of the Act. Some co-operative banks are scheduled commercial banks although
not all co-operative banks are. Being a part of the second schedule confers some benefits to the
banks in terms of access to accommodation by RBI during the times of liquidity constraints. At
the same time, however this status also subjects the bank certain conditions and obligation
towards the reserve regulation of RBI.

For the purpose of assessment of performance of banks the RBI categories them as public sector
banks, old private sector banks, new private sector banks and foreign banks.

1.3. IMPORTANCE OF BANKING SECTOR:-

The banking system of a country performs functions like:

 Advancement of Credit: Indian banking sector is one of the most active sectors in
advancing loans to individuals and institutions. It plays an important role in providing
funds to different priority sectors like Agriculture, Small scale industries, trading
enterprises, real estate, etc.
 Business Development: Indian banking sector helps a lot in business development by
developing strong ties with foreign countries through establishing branches. Indian banks
also facilitate trade and commerce by providing payment facilities to various local and
international business houses.
 Financial Security: Indian banking system provides financial security to the people by
providing loans at competitive rates, paying reliable remittance services, etc. It helps
people save their money and invest it in different financial instruments like Government
securities, long-term bonds, etc.
 Cash Management: Cash management plays a crucial role in the banking system. It
allows banks to provide quick cash and money transfer. It helps banks manage money
transfers carried out by various business houses and a large number of industrial units.
 Financial stability: The Indian banking sector provides safe and secure financial
services through Money orders, Cash deposits, and cash card services.

CHAPTER NO.2: COMPANY OVERVIEW

2.1. ABOUT COMPANY:

Indian Overseas Bank (IOB) is a major public sector bank based in Chennai (Madras),
established on 10th February 1937 by Mr. M.Ct.M. Chidambaram Chettyar, leader in banking,
insurance and industry areas. Indian Overseas Bank has an ISO certified in-house Information
Technology department, which had developed the software that its branches used to provide
online banking to customers earlier. The bank has achieved 100% networking status as well as
100% CBS status for its branches. IOB also has a network of about 3300 ATMs all over India.
The retail customers of bank are hugely benefitted by its ATM Banking, Any time Branch
Banking (ABB) and IOB STARS (Indian Overseas Bank-Speedy Transfer and realization
Service). The bank has taken a late leap towards internet-enabled banking and data analytics by
implementing Infosys Finacle's latest rack of software executed by American technology
company HPE and became the first public sector bank to get the latest digital banking software,
Finacle 10 suite package from Infosys.

IOB was the first bank to receive ISO 9001 Certification from Det Norske Veritas (DNV),
Netherlands in the month of September 1999 for its Computer Policy and Planning Department.
Besides, in its journey, it has won many awards and accolades too. These include:

 NABARD’s award 2000-2001 for creating maximum number of credit links of Self Help
Groups in comparison to all the other banks in Tamil Nadu.
 Best Award under the category of Banking Technology in the year 2001.
2.2. VISION:-

To emerged as the preferred bank connecting Generations with high standards of ethics and
governance.

2.3. CORE VALUES:-

 Integrity and Transparency

 Innovation and collaboration
 Sustainability

2.4. MISSION:-

To provide best Banking solution through digital and physical experience for customer delight
with skilled manpower

2.5. MILESTONE:-

 1957 – Bank established its own training center

 1964 – Inauguration of IOB's Head Office in Mount Road.
 1974 – Official Language Department established in 1974
 1984 – 1000th branch opened
 1991 – Bank moved its Staff College premises to an own spacious learning zone at
Koyambedu
 1996 – Banks profit reached INR 100 cr. for the first time i.e. USD16.69Mn [1USD=Rs.
59.9150]
 2000 – Initial Public Offer. Follow on Public Offer in 2003.

-The first public sector bank to introduce anywhere banking at its 129 branches in the four
metros, is extending the connectivity to another 100 branches in Hyderabad, Bangalore,
Ahmedabad and Ludhiana
-The first public sector bank in the country to introduce mobile banking services using the
Wireless Application Protocol (WAP).

 2005 – Launched Debit Card

 2006 – Launched VISA Card, Retail Sale of Gold and Non-Life Joint Insurance Bank
reached INR 1 lac crore mark in Total Business
 2006 – 07 Net Profit reached INR 1000 Cr.(US$229.78 Mn) [1USD= Rs. 43.5200] Bharat
Overseas Bank Ltd. Was merged with IOB and First Offsite ATM at Kamatchi Hospital,
Chennai
 2009 – 100% CBS
 2010 – 2000th Branch -Yamuna Vihar, New Delhi-opened
 2011-12 – No. of Branches in Tamil Nadu reached 1000, and IOB celebrated Platinum
Jubilee 2012–13. As on 31.3.2013, total deposits reached INR 202,135 cr. (US$37,236Mn.)
[1USD =Rs. 54.2850]As on 31.3.2013, Total Advances reached INR 164,366cr. (US$30,278
Mn.) As on 31.3.2013, Total Business Mix is at INR 366,501cr. (US$67,514Mn.), Total No.
of Branches 2908
 2014-15 Bank has surpassed the landmark of 3000 ATMs as on 31.07.2014 – Tirumalaipatti
Branch
 2015 – IOB launched new Mobile Banking, m Passbook applications.
 2015-IOB started migration from its in-house CBS platform to Finacle.
 January 2016- All branches successfully migrated from in house CBS platform "CROWN"
to FINACLE.
2.6. PRODUCTS AND SERVICES OF INDIAN OVERSEAS BANK:-
The thoughtfully designed products and services of the Indian Overseas Bank can be listed as
given below:

Personal Banking

 Saving bank
 Current account
 Term deposit
 Retail loans
 Home loans and mortgages
 Depository services
 IOB Fine Gold
 International VISA Cards
 Any Branch Banking
 Multi city cheque facility
 Insurance and mutual fund

Corporate Banking
  Micro Small and Medium Enterprises (MSME)
 IT & ITes BPO
 Cash management services -IOB STARS

Rural

 IOB's commitment for social causes

 Agricultural short time loans
 Financial inclusion
 Agri business consultancy

NRI Accounts

 Non-Resident Ordinary (NRO)

 Resident Foreign Currency Account (RFC)
 Foreign Currency Non-Resident Accounts (Banks)
 NRI home loan scheme
 NRI remittances
 Remittances procedures
 Tracking cell
 Forward cover
 IOB NRI shield
 IOB Expo Gold Card

Forex

 SWIFT centers
 Authorized dealer branches
 Forex collection services
 Overseas cash

Government Business

 E-Payment of direct taxes

 Pension payment scheme
 Sales tax collections
 Provident Fund Scheme 1968
 8 percent savings taxable bond scheme
 Senior citizen scheme 2004

CHAPTER NO.3: RESEARCH METHODOLGY

3.1. STATEMENT OF PROBLEM:

The statement of problem is based on finance and aims to analyse the financial performance
of the Indian Overseas Bank for the past 2 years. Financial performance analysis enables the
outsiders and investors to evaluate the past and current performance and financial position
and to predict future performance. The study is conducted to know whether the financial
performance in the organisation is sound or not with the help of last 2 years financial
statements.

3.2. OBJECTIVE OF THE STUDY:

The study has the following objectives.

1. To provide theoretical framework for analyzing financial statements.

2. To study the financial position of the company and current status of Indian
Overseas Bank.
3. To understand the financial soundness of the company.

3.3. SCOPE OF STUDY:

The study mainly attempts to analyze the financial performance of the company selected for
the study. The financial authorities can use this for evaluating their performance in future,
which will help to analyze financial statements and help to apply the resources of the company
properly for the development of the company and its employees to bring overall growth.

3.4. SOURCES OF DATA COLLECTION:

For the success of the present study data was collected mainly from secondary sources like
annual reports of Indian Overseas Bank for the FY 2020-2021 and FY 2021-22, news letter,
magazines and journals of the company.

3.5. PERIOD OF STUDY:

The data for a period of 2 years that has been taken into consideration to assess the financial
strength and weaknesses of the company.
3.6. TOOLS USED FOR DATA ANALYSIS:

The annual report of the company is compiled and tabulated for the purpose of study. The
techniques used are:

 Comparative study of Balance sheet and Profit and loss account

 Ratio Analysis
 Credit Risk Analysis
 Liquidity Risk Analysis
 Market Risk Analysis

CHAPTER NO.4: DATA ANALYSIS INTERPRETATION AND

PRESENTATION

4.1. COMPARATIVE FINANCIAL ANALYSIS:-

Comparative financial analysis is the process of analyzing the data found in a financial report in
comparison with similar data from other reports. This allows whoever is doing the analysis to get
some context which makes the raw numbers more meaningful.

COMPARATIVE BALANCE SHEET

Indian Overseas Bank

Consolidated Balance Sheet in Rs. Cr.
Schedules Mar-21 Mar-22 Increase/Decrease
Increase/Decrease
12 mths 12 mths (RS) (%)

CAPITAL & LIABILITIES

Capital 1 16,646.79 19,108.49 2461.70 14.79%
Reserves and Surplus 2 451.89 4,115.69 3663.80 810.77%
Deposits 3 2,40,352.78 2,62,213.76 21860.98 9.10%
Borrowings 4 3,671.58 3,070.64 -600.94 -16.37%
Other Liabilities & Provisions 5 13,106.28 11,147.82 -1958.46 -14.94%
TOTAL CAPITAL & LIABILITIES 2,74,229.33 2,99,656.41 25427.08 9.27%
ASSETS
Cash & Balances with Reserve Bank of India 6 12,189.21 16,706.65 4517.44 37.06%
Balances with Banks and Money at call and short notice 7 18,793.23 20,244.61 1451.38 7.72%
Investments 8 95,484.88 98,267.22 2782.34 2.91%
Advances 9 1,27,741.42 1,44,253.56 16512.14 12.93%
Fixed Assets 10 2,918.97 3,366.04 447.07 15.32%
Other Assets 11 17,101.61 16,818.33 -283.28 -1.66%
TOTAL 2,74,229.33 2,99,656.41 25427.08 9.27%

INTERPRETATIONS:-

 As compare with previous FY 2020-21, the above comparative balance sheet reveals that
for the FY 2021-22, the total capital and liabilities and total assets both are increased by
9.27%.
 The total share capital has been increased by 14.79% because issued, subscribed and paid
up capital increased.
 The reserve and surplus increased by 810.77% because both Statutory Reserve and
Capital Reserve are increased and we can say that company has gained accumulated
profits. We can also say that company has reinvested money back into itself, and due to
this the surplus account has expanded.
 The deposits also increased by 9.10% in FY 2021-22 as demand deposits, saving bank
deposits and term deposits are increased. Deposits increasing mean the company may
give more loan to the customer.
 The borrowings are decreased which is -16.37 % in FY 2021-22 as during this year bank
have taken fewer borrowings from other banks, financial institutions, and outside India so
borrowings have been decreased. Borrowings decreased means it indicates good for the
company.
 The other liabilities and provisions are also decreased by 14.94% in 2022 as Bills
Payable, Standard Asset provision and others (including provisions) are decreased.

 In the FY 2021-22 Cash and balances with Reserve Bank of India has increased by 37.06
% due to increase in Cash in hand (including foreign currency notes) and in Reserve bank
of India current account balances.
 The increase in Advances during 2022 i.e., 12.93 % because of increase in Cash credits,
overdrafts and loans repayable on demand, term loans and secured by tangible assets and
government securities.
 Other assets have been decreased by 1.66% because of a decrease in Tax paid in
advance/tax deducted at source (net of provisions) and others.

COMPARATIVE INCOME STATEMENT

Consolidated Profit & Loss account in Rs. Cr.
Schedules Mar-21 Mar-22 Increase/Decrease
Increase/Decrease
12 mths 12 mths (RS) (%)
INCOME
Interest earned 13 16,975.56 16,735.84 -239.72 -1.41%
Other income 14 5,485.65 4,905.33 -580.32 -10.58%
TOTAL 22,461.20 21,641.17 -820.03 -3.65%
EXPENDITURE
Interest expended 15 11,069.45 10,419.49 -649.96 -5.87%
Operating expenses 16 5,569.03 5,458.97 -110.06 -1.98%
Provisions & Contingencies (Net) 5,064.37 4,053.44 -1010.93 -19.96%
TOTAL 21,702.85 19,931.90 -1770.95 -8.16%
PROFIT / LOSS (-)
Net Profit / Loss (-) for the year 758.35 1,709.27 950.92 125.39%
Profit /Loss (-) brought forward -18,979.65 -18,889.51 90.14 -0.47%
TOTAL -18,221.30 -17,180.24 1041.06 -5.71%

INTERPRETATIONS:-

 The net profit shows a huge increase by 125.39% which was from 758.35 cr. (2020-21) to
1709.27 cr. (2021-22) and this may be due to decline in operating expenses and decline in
tax liability in this year.
 The interest expended decreased by 5.87% due to repayment of borrowings.

4.2. RATIO ANALYSIS:-

1. CURRENT RATIO:- Current ratio is equal to current assets divided by current
liabilities. If the current assets of a company are more than twice the current liabilities,
then that company is generally considered to have good short-term financial strength.
CURRENT RATIO = CURRENT ASSETS / CURRENT LIABILITY

Mar-21 Mar-22
Current Ratio 0.69 0.72
 Interpretation

The ratio of is considered as a safe margin of solvency due to the fact that if current assets are
reduced to half (i.e.) 1 instead of 2, then also the creditors will be able to get their payments in
full. Here this ratio is less than 1 which is not satisfactory. This means the bank has not
managed its funds properly in this particular period. Therefore bank should rationally
utilize its funds to maintain an ideal liquid ratio.

2. NET PROFIT RATIO:- This ratio indicates the Net margin on a sale of Rs.100. It is
calculated as follows:

NET PROFIT RATIO = NET PROFIT X 100

NET SALES

This ratio helps in determining the efficiency with which affairs of the business are being
managed.

Mar-21 Mar-22
Net Profit Ratio 3.38% 7.90%

Interpretation

As there is an increase in the ratio over the previous period indicates improvement in the
operational efficiency of the business.

3. OPERATING PROFIT RATIO:- This ratio is calculated as follows:

Operating Profit Ratio = Operating Profit X100

Net Sales

The difference between net profit ratio and net operating profit ratio is that net operating
profit is calculated without considering non-operating expenses and non-operating
income.

Mar-21 Mar-22
Operating Profit Ratio 16.57% 18.81%

Interpretation
 Typically, an operating profit ratio of about 20% is considered good and below 5% is
considered low. As there is good operating profit ratio in the above table so it enable the
organization to recoup non-operating expenses out of operating profits and provide
reasonable return.

4. DEBT- EQUITY RATIO:- The Debt-Equity ratio is calculated to find out the long-term
financial position of the firm. This ratio indicates the relationship between long-term debts
and shareholder’s funds. The soundness of long-term financial policies of a firm can be
determined with the help of this ratio.

Mar-21 Mar-22
Debt Equity Ratio 0.98 0.61

Interpretation

The ratio shows the extent to which funds have been provided by long-term creditors as
compared to the funds provided by the owners. Generally, debt equity ratio of 1:1 is
considered as standard. From above it is clear that the company had not reached the
standard ratio. It shows that the company tends to use less of borrowed fund than the
owner’s fund.

5. PROPRIETORY RATIO:- It is also called shareholders equity to total equity ratio or

net worth to total assets ratio or equity ratio. It helps to determine the long-term solvency of
a company. This ratio measures the protection available to the creditors. Higher the ratio,
lesser is the likelihood of insolvency in future, as the management has to use lessor debts
and vice versa

Proprietory Ratio = Shareholder’s Fund

Total Assets

Mar-21 Mar-22
Proprietory Ratio 6.24% 7.75%

Interpretation
It says that owners have less than 7.75% stake in the total assets of the bank. It is not a
good sign as far the long term solvency is concerned.
4.3. CREDIT RISK(ALTMAN Z SCORE):-

DEFINITION:
The Altman Z-score is the output of a credit-strength test that gauges a publicly traded
manufacturing company's likelihood of bankruptcy.

The Altman Z-score is a formula for determining whether a company, notably in the
manufacturing space, is headed for bankruptcy.
The formula takes into account profitability, leverage, liquidity, solvency, and activity ratios.
An Altman Z-score close to 0 suggests a company might be headed for bankruptcy, while a score
closer to 3 suggests a company is in solid financial positioning.
Altman Z-Score = 6.56X1 + 3.26X2 + 6.72X3 + 1.05X4

Where:
X1 = working capital / total assets
X2 = Net operating profit / total assets
X3 = earnings before interest and tax / total assets
X4= market value of equity / total liabilities
The Altman Z-score is based on five financial ratios that can be calculated from data found on a
company's annual report. The formula for Altman Z-Score is 6.56*(working capital / total assets)
+ 3.26*(net operating profit / total assets) + 6.72*(earnings before interest and tax / total assets)
+ 0.6*(market value of equity / total liabilities).
 Z- SCORE CALCULATION OF INDIAN OVERSEAS BANK

X1=WORKING CAPITAL/ TOTAL ASSETS

WORKING CAPITAL 1950925082 2025371474
TOTAL ASSETS 2740103535 2993771690
X1 0.71198955 0.676528367
X2 = NET OPERATING PROFIT/ TOTAL ASSETS
NET OPERATING PROFIT 13905071 66125752
TOTAL ASSETS 2740103535 2993771690
X2 0.005074652 0.022087774
X3 = EARNING BEFORE INTREST / TOTAL ASSETS
EARNING BEFORE INTREST 8314888 17095553
TOTAL ASSETS 2740103535 2993771690
X3 0.003034516 0.005710373
X4= MARKET VALUE OF EQUITY/TOTAL DEBT
MARKET VALUE OF EQUITY 169448108 221903969
TOTAL DEBT 2570655427 2771867721
X4 0.065916305 0.080055757

Z-SCORE= 6.56*X1 + 3.26*X2 + 6.72*X3 + 1.05*X4 4.776798879 4.632464485

INTERPRETATION:-

 The Z-scores of the of the bank for the respective years are 4.7767 for FY- 2020-21,
4.6324 for FY- 2021-22
 From the above table we can conclude that all the values of z score that are obtained for 2
years are above 2.6, so the firm is said to be in the “safe zone” and has a negligible
probability of filing a bankruptcy.
 If Z-Score are above 1.1 so it indicates the company in the “grey zone” and has moderate
chance to bankruptcy. If the Z value is between 2.6 and 1.1, then the firm is said to be in
the “grey zone” and has a moderate chance of bankruptcy. If the Z value is below 1.1,
then it is said to be in the “distress zone” and has a very high probability of reaching the
stage of bankruptcy.

4.4. LIQUIDITY RISK :-

Liquidity is a term used to refer to how easily an asset or security can be bought or sold in the
market. It basically describes how quickly something can be converted to cash. There are two
different types of liquidity risk. The first is funding liquidity or cash flow risk, while the second
is market liquidity risk, also referred to as asset/product risk. A bank’s liquidity risk is the state
of its financial position, availability of funds, or existence if it cannot pay its debts (even if its
obligations are real or perceived).

Calculation of liquidity risk in bank

 Loans and Advances to Total Assets
 Loans and Advances to Core Deposits
 Large deposits to earning assets
 Bank liabilities without deposits to total assets
 Cash and balances with RBI / other banks and short- term investments to total liabilities.

2020-21 2021-22

LOANS AND ADVANCES/ 0.47 0.48

TOTAL ASSETS
LOANS AND ADVANCES / 0.53 0.55
CORE DEPOSITS
LARGE DEPOSITS / 1.62 1.56
EARNING ASSETS
BANK LIABILITY 0.12 0.12
WITHOUT DEPOSITS/
TOTALAND
CASH ASSETS
BALANCE 0.11 0.12
WITH RBI OR OTHER
BANKS AND OTHER
SHORT TERM

INTERPRETATION:-
 The ratio of loans and advance to total assets in 2021 & 2022 is less than 60%
that indicates bank’s funds could not be over tied-up in loans and advances and
liquidity position would be comfortable when banks hold within the desired limit
which is 60% to 65% but it is less than 60%.
  The ratio of loans and advances to core deposits is below 70% which indicates an
imbalance from the liquidity angle, as considerable portion is funded by non-core
deposits.
 The ratio of large deposit to earning assets is above 50% that indicates sudden
deposit withdrawal may affect the earning assets. Since resources have to
be mobilized at a higher cost if needed on an immediate requirement to fund the
earning assets it may not be profitable for the bank.
 The ratio of bank liabilities without deposits to total is above 10% that indicates
the temporary source of fund for the bank. High level may indicate excessive
dependence on this source for managing the assets.
 The ratio of Cash and balances with RBI / other banks and short term investments
to total liabilities is less than 30% that indicates non safety signal for the banks.

4.5. MARKET RISK: -

Market risk is the risk of losses on financial investments caused by adverse price movements.
Examples of market risk are: changes in equity prices or commodity prices, interest rate moves
or foreign exchange fluctuations. Market risk is one of the three core risks all banks are required
to report and hold capital against, alongside credit risk and operational risk. The standard method
for evaluating market risk is value-at-risk and beta.

Beta= Covariance/ Variance

BETA

Beta is a numeric value that measures the fluctuations of a stock to changes in the overall
stock market. Beta measures the responsiveness of a stock's price to changes in the
overall stock market. On comparison of the benchmark index for e.g. NSE Nifty to a
particular stock returns, a pattern develops that shows the stock's openness to the market
risk. This helps the investor to decide whether he wants to go for the riskier stock that is
highly correlated with the market (beta above 1), or with a less volatile one (beta below
1).

The beta coefficient can be interpreted as follows:

 β =1 exactly as volatile as the market
 β >1 more volatile than the market
 0<β <1 less volatile than the market
 β =0 uncorrelated to the market
 β <0 negatively correlated to the market

2021 2022
BETA 0.72949 1.02230
COVARIANCE 0.00012 0.00011
INTERPRETATION:-

 The given above table has elaborate in the year of 2020-21 beta value is less
than 1 that indicates less volatility in the market means it indicates less risk
and investor gets moderate return here.
 In the FY 2021-22 beta value is greater than 1 that indicates more volatility in
the market it indicates high risk also investor get high return here.

CONCLUSION
 This research mainly related to analysis of the asset and liability management of Indian
Overseas Bank Ltd. The study considers the comparative analysis of balance sheet, P/L,
ratio analysis, credit risk, liquidity risk and market risk.
 For analysing the above objectives, the data has been composed from secondary source
(annual report) for the duration of 2 years from April 1, 2020, to march 1, 2022. From
that analysis, I have found out that the total capital and liabilities and total assets both are
increased in 2022.
 Talking about ratio analysis the net profit and operating profit ratio is also increased and
the bank uses less borrowed funds.
 Talking about Z-scores which shows the credit risk of the bank for the respective years
are above 2.6, so the firm is said to be in the “safe zone” and has a negligible probability
of filing a bankruptcy.
 Talking about the liquidity risk of the bank the liquidity framework should maintain
sufficient liquidity to withstand all kinds of stress events that will be faced. Constant
assessment of liquidity risk management framework and liquidity position is
an important supervisory action that will ensure the proper functioning of the bank. Yes
Bank also has maximum desirable liquidity.
 Lastly the beta value which shows the market risk of the bank was highest in financial
year 2021-22 i.e. 1.02, where the beta for the financial year 2020- 21 was the lowest i.e.
0.72 which means investor will get high return in both the years but high risk will be
there in the year 2022.
THANK YOU

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