PROJECT REPORT

ON
“RATIO ANALYSIS”
OF

ICICI Bank

Submitted by: Under the Guidance of:

SACHIN AGARWAL PROF. JUSTIN

Lecturer, T.Y.B.A.F.,
T.Y.B.A.F. Roll no. 01 K.C. COLLEGE

Dept. of BAF/BBI/BFM/BMS
K.C.COLLEGE, MUMBAI
 CERTIFICATION LETTER

TO WHOM IT MAY CONCERN

This is to certify that the Project Report entitled “RATIO ANALYSIS OF ICICI Bank”
has been completed by: SACHIN R. AGARWAL” under my supervision. To the best of
my knowledge, this is his own work and he has not submitted the same elsewhere for the
award of any other degree or diploma.

I approve it for submission in the partial fulfillment of the requirement as a project work
for the subject of Management accounts-2.

Date: 28TH AUGUST,2010

PROF. JUSTIN
Place:Mumbai Lecturer T.Y. B.A.F.,
K.C.COLLEGE, MUMBAI

ACKNOWLEDGEMENT

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No task is single man’s effort .Any job in this world however trivial or tough cannot be
accomplished without the assistance of others. An assignment puts the knowledge and
experience of an individual to litmus test. There is always a sense of gratitude that one
likes to express towards the persons who helped to change an effort in a success. The
opportunity to express my indebtness to people who have helped me to accomplish this
task.

I deem it a proud privilege to extend my greatest sense of gratitude to my Project Guide

PROF.JUSTIN (lecturer B.A.F.) for the keen interest, inspiring guidance, continuous
encouragement, valuable suggestions and constructive criticism throughout the pursuance
of this report.

I am thankful to Coordinator sir KAILASH CHANDAK for giving me the opportunity

to undertake the study. I am highly indebted for sparing time from their busy schedule
for providing me with their able guidance at the time of need and helping me to achieve
the ultimate goal of the study. I would also like to thank MR. RAJ (Branch Manager,
ICICI Bank, VILE PARLE (W)) for their valuable support in helping me to gain this
opportunity of being associated with an organization of such esteem.

Last but not the least, it would be unfair if I don’t express my indebtness to my parents
and all my friends for their active cooperation which was of great help during the course
of my training project.

PREFACE

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In any organization, the two important financial statements are the Balance Sheet and
Profit & Loss Account of the business. Balance Sheet is a statement of financial position
of an enterprise at a particular point of time. Profit & Loss account shows the net profit or
net loss of a company for a specified period of time. When these statements of the last
few year of any organization are studied and analyzed, significant conclusions may be
arrived regarding the changes in the financial position, the important policies followed
and trends in profit and loss etc. Analysis and interpretation of financial statement has
now become an important technique of credit appraisal. The investors, financial experts,
management executives and the bankers all analyze these statements. Though the basic
technique of appraisal remains the same in all the cases but the approach and the
emphasis in the analysis vary. A banker interprets the financial statement so as to
evaluate the financial soundness and stability, the liquidity position and the profitability
or the earning capacity of borrowing concern. Analysis of financial statements is
necessary because it helps in depicting the financial position on the basis of past and
current records. Analysis of financial statements helps in making the future decisions and
strategies. Therefore it is very necessary for every organization whether it is a financial or
manufacturing, to make financial statement and to analyze it.

Table of content
Chapter no. PARTICULARS Page no.
Acknowledgement 3
Preface 4
1. Introduction Of Banking 6-12
a. Introduction of banking…………………. 7
b. History of banking in 8
India…………………………………………
c. Fact files of banks in India……………… 11
d. Indian banking industry…………………. 12

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2. Company’s Profile 13-25
a. Introduction to ICICI Bank………… 15
b. ICICI Bank today…………………… 21
c. Business profile……………………... 22
d. Business objective…………………… 23
e. Awards and recognition……………… 24

3. Ratio Analysis 26-44

a. Introduction of the topic……… 27
b. Balance sheet of ICICI Bank….. 30
c. Profit and Loss Account of ICICI
Bank…………………………….. 32
d. Calculation of various ratios………….. 33

4. Findings ,Suggestions And 45-49

Conclusion……………………….

5. Bibliography………………………………………… 50

INTRODUCTION to
BANKING sector in India

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 Definition Of Bank:

Banking Means "Accepting Deposits for the purpose of lending or Investment of deposits
of money from the public, repayable on demand or otherwise and withdraw by cheque,
draft or otherwise."
-Banking Companies (Regulation) Act,1949

ORIGIN OF THE WORD “BANK”:-

The origin of the word bank is shrouded in mystery. According to one view point the
Italian business house carrying on crude from of banking were called banchi bancheri"
According to another viewpoint banking is derived from German word "Branck" which
mean heap or mound. In England, the issue of paper money by the government was
referred to as a raising a bank.

ORIGIN OF BANKING :

Its origin in the simplest form can be traced to the origin of authentic history. After
recognizing the benefit of money as a medium of exchange, the importance of banking
was developed as it provides the safer place to store the money. This safe place ultimately
evolved in to financial institutions that accepts deposits and make loans i.e., modern
commercial banks.

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 Banking system in India

Without a sound and effective banking system in India it cannot have a healthy
economy.The banking system of India should not only be hassle free but it should be able
to meet new challenges posed by the technology and any other external and internal
factors.
For the past three decades India's banking system has several outstanding achievements
to its credit. The most striking is its extensive reach. It is no longer confined to only
metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even
to the remote corners of the country. This is one of the main reasons of India's growth
process

 HISTORY OF BANKING IN INDIA

Banking in India has its origin as early or Vedic period. It is believed that the transitions
from many lending to banking must have occurred even before Manu, the great Hindu
furriest, who has devoted a section of his work to deposit and advances and laid down
rules relating to the rate of interest. During the mogul period, the indigenous banker
played a very important role in lending money and financing foreign trade and
commerce.

During the days of the East India Company it was the turn of agency house to carry on
the banking business. The General Bank of India was the first joint stock bank to be
established in the year 1786. The other which followed was the Bank of Hindustan and
Bengal Bank. The Bank of Hindustan is reported to have continued till 1906. While other
two failed in the meantime. In the first half of the 19th century the East India Company
established there banks, The bank of Bengal in 1809, the Bank of Bombay in 1840 and
the Bank of Bombay in1843. These three banks also known as the Presidency banks were
the independent units and functioned well. These three banks were amalgamated in 1920
and new bank, the Imperial Bank of India was established on 27th January, 1921.

With the passing of the State Bank of India Act in 1955 the undertaking of the Imperial
Bank of India was taken over by the newly constituted SBI. The Reserve Bank of India
(RBI) which is the Central bank was established in April, 1935 by passing Reserve bank
of India act 1935. The Central office of RBI is in Mumbai and it controls all the other
banks in the country.

In the wake of Swadeshi Movement, number of banks with the Indian management were
established in the country namely, Punjab National Bank Ltd., Bank of India Ltd., Bank
of Baroda Ltd., Canara Bank. Ltd. on 19th July 1969, 14 major banks of the country were
nationalized and on 15th April 1980, 6 more commercial private sector banks were taken
over by the government.

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The first bank in India, though conservative, was established in 1786. From 1786 till
today,the journey of Indian Banking System can be segregated into three distinct phases.
They areas mentioned below:

 Early phase from 1786 to 1969 of Indian Banks

 Nationalization of Indian Banks and up to 1991 prior to Indian banking sector

Reforms.

 New phase of Indian Banking System with the advent of Indian Financial &
Banking Sector Reforms after To make this write-up more explanatory, I prefix
the scenario as Phase I, Phase II and Phase III.
Phase I

The General Bank of India was set up in the year 1786. Next came Bank of Hindustan
and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of
Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency
Banks.

These three banks were amalgamated in 1920 and Imperial Bank of India was established
which started as private shareholders banks, mostly Europeans shareholders.

In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab
National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and
1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank,
and Bank of Mysore were set up. Reserve Bank of India came in 1935.

During the first phase the growth was very slow and banks also experienced periodic
failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To
streamline the functioning and activities of commercial banks, the Government of India
came up with The Banking Companies Act, 1949 which was later changed to Banking
Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of
India was vested with extensive powers for the supervision of banking in India as the
Central Banking Authority.

During those day’s public has lesser confidence in the banks. As an aftermath deposit
mobilization was slow. Abreast of it the savings bank facility provided by the Postal
department was comparatively safer. Moreover, funds were largely given to traders.

Phase II

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Government took major steps in this Indian Banking Sector Reform after independence.
In1955, it nationalized Imperial Bank of India with extensive banking facilities on a large
scale especially in rural and semi-urban areas. It formed State Bank of India to act as the
principal agent of RBI and to handle banking transactions of the Union and State
Governments all over the country.

Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th
July,1969, major process of nationalization was carried out. It was the effort of the then
Prime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country
was nationalized.
Second phase of nationalization Indian Banking Sector Reform was carried out in 1980
with seven more banks. This step brought 80% of the banking segment in India under
Government ownership.

The following are the steps taken by the Government of India to Regulate
BankingInstitutions in the Country:

 1949: Enactment of Banking Regulation Act.

 1955: Nationalization of State Bank of India.
 1959: Nationalization of SBI subsidiaries.
 1961: Insurance cover extended to deposits.
 1969: Nationalization of 14 major banks.
 1971: Creation of credit guarantee corporation.
 1975: Creation of regional rural banks.
 1980: Nationalization of seven banks with deposits over 200 crore.

After the nationalization of banks, the branches of the public sector bank India rose to
approximately 800% in deposits and advances took a huge jump by 11,000%.
Banking in the sunshine of Government ownership gave the public implicit faith and
immense confidence about the sustainability of these institutions.

Phase III

This phase has introduced many more products and facilities in the banking sector in its
reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was
set up by his name which worked for the liberalization of banking practices.

The country is flooded with foreign banks and their ATM stations. Efforts are being put
to give a satisfactory service to customers. Phone banking and net banking is introduced.
The entire system became more convenient and swift. Time is given more importance
than money.

The financial system of India has shown a great deal of resilience. It is sheltered from any
crisis triggered by any external macroeconomics shock as other East Asian Countries

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suffered. This is all due to a flexible exchange rate regime, the foreign reserves are high,
the capital account is not yet fully convertible, and banks and their customers have
limited foreign exchange exposure.

Fact Files of Banks in India

The first Bank in India to be given an ISO certification. Canara Bank

The first Bank in Northern India to get ISO 9002 certification Punjab and Sind
for their selected branches. Bank

The first Indian Bank to have been started solely with Indian capital. Punjab National
Bank

The first among the Private Sector Banks in Kerala to become Scheduled South Indian Bank
Bank in 1946 under the RBI act.

India’s oldest,largest and the most successful commercial bank offering the State Bank of India
widest possible rang of domestic,international and NRI products and
services,through its vast network in India and overseas.

India’s second largest Private Sector Bank and is now the largest scheduled The Federal Bank
commercial bank in India. Limited

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 Bank which started as Private Shareholders Banks,mostly European Imperial Bank of
shareholders. India

The first Indian Bank to open a branch outside India in London in 1946 and Bank of India,
the first to open a branch in continental Europe at Paris in 1974 founded in 1906 in
Mumbai.

The oldest Public Sector Bank in India having branches all over India and Allahabad Bank
serving the customers for the last 132 years.

The first Indian Commercial Bank which was wholly owned and managed Central Bank of
by Indians. India

INDIAN BANKING INDUSTRY

The Indian banking market is growing at an astonishing rate, with Assets expected to
reach US$1 trillion by 2010. An expanding economy, middleclass, and technological
innovations are all contributing to this growth.
The country’s middle class accounts for over 320 million People. In correlation with the
growth of the economy, rising income levels, increased standard of living, and
affordability of banking products are promising factors for continued expansion.

The Indian banking Industry is in the middle of an IT revolution, Focusing on the

expansion of retail and rural banking. Players are becoming increasingly customer
-centric in their approach, which has resulted in innovative methods of offering new
banking products and services. Banks are now realizing the importance of being a big

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playerand are beginning to focus their attention on mergers and acquisitions to take
advantage of economies of scale and/or comply with Basel II regulation.“Indian banking
industry assets are expected to reach US$1 trillion by 2010 and are poised to receive a
greater infusion of foreign capital,” says Prathima Rajan, analyst in Celent's banking
group and author of the report. “The banking industry should focus on having a small
number of large players that can compete globally rather than having a large number of
fragmented players.

COMPANY’S PROFILE

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Type Private
BSE & NSE:ICICI,
NYSE: IBN

Industry Banking
Insurance
Capital Markets and allied
industries

Founded 1955 (as Industrial Credit

and Investment Corporation
of India)

Headquarters ICICI Bank Ltd.,

INTRODUCTION TO ICICI BANK
ICICI Bank Towers,
Bandra Kurla,
Mumbai, India

 History Of ICICI
K.V. Kamath,Chairman
Chanda Kochhar, Managing
 1955: The Industrial Credit
Director & CEO
Key people Sandeep Bakhshi, Deputy and Investment Corporation
Managing Director of India Limited (ICICI)
N.S. Kannan, Executive was incorporated at the
Director & CFO initiative of World Bank, the
K. Ramkumar, Executive Government of India and
Director representatives of Indian
Sonjoy Chatterjee, Executive industry, with the objective
Director of creating a development
financial institution for
providing medium-term and
Products Loans, Credit Cards, Savings, long-term project financing
Investment vehicles, Insurance
to Indian businesses.
etc.
CHANDA KOCHAR
Mr.A.Ramaswami Mudaliar
elected as the first Chairman
Revenue ▲ USD 15.06 billion of ICICI Limited. ICICI
emerges as the major source
of foreign currency loans to
Total assets ▲ USD 120.61 billion (at Indian industry. Besides
March 31, 2009.)
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Website www.icicibank.com
 funding from the World Bank and other multi-lateral agencies,
ICICI was also among the first Indian companies to raise funds
from international markets.

 1956 : ICICI declared its first dividend of 3.5%.

 1958 : Mr.G.L.Mehta appointed the second Chairman of ICICI

Ltd.

 1960 : ICICI building at 163, Backbay Reclamation, inaugurated.

 1961 : The first West German loan of DM 5 million from

Kredianstalt obtained.

 1967 : ICICI made its first debenture issue for Rs.6 crore, which
was oversubscribed.

 1969 : The first two regional offices in Calcutta and Madras set up.

 1972 : The second entity in India to set up merchant banking

services. : Mr. H. T. Parekh appointed the third Chairman of
ICICI.

 1977 : ICICI sponsored the formation of Housing Development

Finance Corporation. Managed its first equity public issue.

 1978 : Mr. James Raj appointed the fourth Chairman of ICICI.

 1979 : Mr.Siddharth Mehta appointed the fifth Chairman of ICICI.

 1982 : 1982 : ICICI became the first ever Indian borrower to raise
European Currency Units. : ICICI commences leasing business.

 1984 : Mr. S. Nadkarni appointed the sixth Chairman of ICICI.

 1985 : Mr. N.Vaghul appointed the seventh Chairman and

Managing Director of ICICI.

 1986 : ICICI became the first Indian institution to receive ADB

Loans. : ICICI, along with UTI, set up Credit Rating Information
Services of India Limited, India's first professional credit rating
agency. : ICICI promotes Shipping Credit and Investment
Company of India Limited. : The Corporation made a public issue

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 of Swiss Franc 75 million in Switzerland, the first public issue by
any Indian entity in the Swiss Capital Market.

 1987 : ICICI signed a loan agreement for Sterling Pound 10

million with Commonwealth Development Corporation (CDC), the
first loan by CDC for financing projects in India.

 1988 : Promoted TDICI - India's first venture capital company.

 1993 : ICICI Securities and Finance Company Limited in joint

venture with J. P. Morgan set up. : ICICI Asset Management
Company set up.
 1994: ICICI established Banking Corporation as a banking
subsidiary.formerly Industrial Credit and Investment Corporation
of India. Later, ICICI Banking Corporation was renamed as 'ICICI
Bank Limited'. ICICI founded a separate legal entity, ICICI Bank,
to undertake normal banking operations - taking deposits, credit
cards, car loans etc.
 1996 : ICICI Ltd became the first company in the Indian financial
sector to raise GDR. : SCICI merged with ICICI Ltd. : Mr.
K.V.Kamath appointed the Managing Director and CEO of ICICI
Ltd

 1997 : ICICI Ltd was the first intermediary to move away from
single prime rate to three-tier prime rates structure and introduced
yield-curve based pricing. : The name The Industrial Credit and
Investment Corporation of India Ltd changed to ICICI Ltd. : ICICI
Ltd announced the takeover of ITC Classic Finance.
 1998 : Introduced the new logo symbolizing a common corporate
identity for the ICICI Group. : ICICI announced takeover of
Anagram Finance.
 1999 : ICICI launched retail finance - car loans, house loans and
loans for consumer durables. : ICICI becomes the first Indian
Company to list on the NYSE through an issue of American
Depositary Shares.
 2000 : ICICI Bank became the first commercial bank from India to
list its stock on NYSE.
 2001: ICICI acquired Bank of Madura (est. 1943). Bank of Madura
was a Chettiar bank, and had acquired Chettinad Mercantile Bank
(est. 1933) and Illanji Bank (established 1904) in the 1960s. In

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 October 2001, the Boards of Directors of ICICI and ICICI Bank
approved the merger of ICICI and two of its wholly owned retail
finance subsidiaries, ICICI Personal Financial Services Limited
and ICICI Capital Services Limited, with ICICI Bank.

 2002 : The merger was approved by shareholders of ICICI and

ICICI Bank in January 2002, by the High Court of Gujarat at
Ahmadabad in March 2002, and by the High Court of Judicature at
Mumbai and the Reserve Bank of India in April 2002. Consequent
to the merger, the ICICI group's financing and banking Operations,
both wholesale and retail, have been integrated in a single entity.
At the same time, ICICI started its international expansion by
opening representative offices in New York and London. In India,
ICICI Bank bought the Shimla and Darjeeling branches that
Standard Chartered Bank had inherited when it acquired Grindlays
Bank.

 2003 : The first Integrated Currency Management Centre launched

in Pune. ; ICICI Bank announced the setting up of its first ever
offshore branch in Singapore. ; The first offshore banking unit
(OBU) at Seepz Special Economic Zone, Mumbai, launched. ;
ICICI Bank’s representative office inaugurated in Dubai. ;
Representative office set up in China. : ICICI Bank’s UK
subsidiary launched. ; India’s first ever "Visa Mini Credit Card", a
43% smaller credit card in dimensions launched. ; ICICI Bank
subsidiary set up in Canada. ; Temasek Holdings acquired 5.2%
stake in ICICI Bank. ; ICICI Bank became the market leader in
retail credit in India. In the UK it established an alliance with
Lloyds TSB. It also opened an Offshore Banking Unit (OBU) in
Singapore and representative offices in Dubai and Shanghai.

 2004 : Max Money, a home loan product that offers the dual
benefit of higher eligibility and affordability to a customer,
introduced. : Mobile banking service in India launched in
association with Reliance Infocomm. : India’s first multi-branded
credit card with HPCL and Airtel launched. : Kisan Loan Card and
innovative, low-cost ATMs in rural India launched. : ICICI Bank
and CNBC TV 18 announced India’s first ever awards recognizing
the achievements of SMEs, a pioneering initiative to encourage the
contribution of Small and Medium Enterprises to the growth of
Indian economy. : ICICI Bank opened its 500th branch in India. :
ICICI Bank introduced partnership model wherein ICICI Bank

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 would forge an alliance with existing micro finance institutions
(MFIs). The MFI would undertake the promotional role of
identifying, training and promoting the micro-finance clients and
ICICI Bank would finance the clients directly on the
recommendation of the MFI. : ICICI Bank introduced 8-8 Banking
wherein all the branches of the Bank would remain open from
8a.m. to 8 p.m. from Monday to Saturday. : ICICI Bank introduced
the concept of floating rate for home loans in India. At the same
time, ICICI opened a representative office in Bangladesh to tap the
extensive trade between that country, India and South Africa.

 2005 : First rural branch and ATM launched in Uttar Pradesh at

Delpandarwa, Hardoi. ; "Free for Life" credit cards launched
wherein annual fees of all ICICI Bank Credit Cards were waived
off. ; ICICI Bank and Visa jointly launched mChq – a
revolutionary credit card on the mobile phone. ; Private Banking
Masters 2005, a nationwide Golf tournament for high networth
clients of the private banking division launched. This event is the
largest domestic invitation amateur golf event conducted in India. ;
First Indian company to make a simultaneous equity offering of
$1.8 billion in India, the United States and Japan. ; ICICI acquired
Investitsionno-Kreditny Bank (IKB), a Russia bank with about
US$4mn in assets, head office in Balabanovo in the Kaluga region,
and with a branch in Moscow. ICICI renamed the bank ICICI Bank
Eurasia. Also, ICICI established a branch in Dubai International
Financial Centre and in Hong Kong.ICICI Bank became the largest
bank in India in terms of its market capitalization. ; ICICI Bank
became the first private entity in India to offer a discount to retail
investors for its follow-up offer.

 2006 : ICICI Bank became the first Indian bank to issue hybrid
Tier-1 perpetual debt in the international markets. : ICICI Bank
subsidiary set up in Russia. ; Introduced a new product - ‘NRI
smart save Deposits’ – a unique fixed deposit scheme for
nonresident Indians. : Representative offices opened in Thailand,
Indonesia and Malaysia. ; ICICI Bank UK opened a branch in
Antwerp, in Belgium ; ICICI Bank became the largest retail player
in the market to introduce a biometric enabled smart card that
allow banking transactions to be conducted on the field. A low-
cost solution, this became an effective delivery option for ICICI
Bank’s micro finance institution partners. ; Financial counseling

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 centre Disha launched. Disha provides free credit counseling,
financial planning and debt management services. ; Bhoomi puja
conducted for a regional hub in Hyderabad, Andhra Pradesh.

 2007 : ICICI Bank‘s USD 2 billion 3-tranche international bond

offering was the largest bond offering by an Indian bank. ; ICICI
amalgamated Sangli Bank, which was headquartered in Sangli, in
Maharashtra State, and which had 158 branches in Maharashtra
and another 31 in Karnataka State. Sangli Bank had been founded
in 1916 and was particularly strong in rural areas. With respect to
the international sphere, ICICI also received permission from the
government of Qatar to open a branch in Doha. Also, ICICI Bank
Eurasia opened a second branch, this time in St. Petersburg. ;
ICICI Bank raised Rs 20,000 crore (approx $5 billion) from both
domestic and international markets through a follow-on public
offer. ; ICICI Bank’s GBP 350 million international bond offering
marked the inaugural deal in the sterling market from an Indian
issuer and also the largest deal in the sterling market from Asia. ;
Launched India’s first ever jewellery card in association with
jewelry major Gitanjali Group. ; ICICI Bank became the first bank
in India to launch a premium credit card -- The Visa Signature
Credit Card. ; Foundation stone laid for a regional hub in
Gandhinagar, Gujarat. ; Introduced SME Toolkit, an online
resource centre, to help small and medium enterprises start, finance
and grow their business. ; ICICI Bank signed a multi-tranche dual
currency US$ 1.5 billion syndication loan agreement in Singapore.
; ICICI Bank became the first private bank in India to offer both
floating and fixed rate on car loans, commercial vehicles loans,
construction equipment loans and professional equipment loans. ;
In a first of its kind, nation wide initiative to attract bright graduate
students to pursue a career in banking, ICICI Bank launched the
"Probationary Officer Programme". ;Launched Bank@home
services for all savings and current a/c customers residing inICICI
 2008 : ICICI Bank enters US The US Federal Reserve permitted
ICICI to convert its representative office in New York into a
branch.; ICICI Bank enters Germany, opens its first branch in
Frankfurt ; ICICI Bank launched iMobile, a breakthrough
innovation in banking where practically all internet banking
transactions can now be simply done on mobile phones. ; ICICI
Bank concluded India's largest ever securitization transaction of a
pool of retail loan assets aggregating to Rs. 48.96 billion
(equivalent of USD 1.21 billion) in a multi-tranche issue backed by
four different asset categories. It is also the largest deal in Asia

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 (ex-Japan) in 2008 till date and the second largest deal in Asia (ex-
Japan & Australia) since the beginning of 2007. ; ICICI Bank
launches ICICIACTIVE - Banking Interactive Service - along with
DISHTV, which will allow viewers to see information about the
Bank's products and services and contact details on their DISHTV
screens. ; ICICI Bank and British Airways launch co-branded
credit card, which is designed to earn accelerated reward points to
the card holders with every British Airways flight or by spending
on everyday purchases.

 2009: ICICI Bank Board appoints Mr K. V. Kamath as non-

executive Chairman and Ms Chanda Kochhar as Managing
Director & CEO effective May 1, 2009, while the existing non-
executive Chairman Mr N Vaghul retires after completing his term
on April 30, 2009 ; ICICI bank ties up with BSNL Cell One for
bill payments, it will facilitate bill payment for BSNL Cell One
users through www.icicibank.com across all the 27 circles of
BSNL. ; ICICI Bank Limited acting through its Hong Kong
Branch (ICICI Bank) signed an agreement on Export Credit Line
totaling up to US$100 million with the Japan Bank for
International Cooperation (JBIC) which constitutes the
international wing of Japan Finance Corporation. ; ICICI Bank
Limited acting through its Hong Kong Branch (ICICI Bank) signed
a loan agreement with the Export-Import Bank of China (China
Exim) for USD 98 million under the Two- step Buyer Credit
(Export Credit) arrangement. ICICI Bank is the first Indian Bank
to have entered into this arrangement with China Exim ; ICICI
Bank with Singapore Airlines launched “ICICI Bank Singapore
Airlines Visa Platinum Credit Card”, the Card has exclusive
privileges especially designed for the members. ; ICICI Bank
announced an association with mChek, India’s leading mobile
payment solutions provider, to facilitate mChek services to all
ICICI Bank Debit and Credit Card customers. These are electronic
cards issued to the customers with mChek application on their
mobile phone. ; Ms Chanda Kochhar took charge as the Managing
Director & CEO of ICICI Bank from May 1, 2009.

SACHIN AGARWAL 19
T.Y.B.A.F. ROLL. NO.1
 ICICI BANK TODAY
ICICI Bank (BSE: ICICI) (formerly Industrial Credit and Investment Corporation of
India) is India's largest private sector bank by market capitalisation and second largest
overall in terms of assets. Trotal assets of Rs. 3,562.28 billion (US$ 77 billion) at
December 31, 2009 and profit after tax Rs. 30.19 billion (US$ 648.8 million) for the nine
months ended December 31, 2009. The Bank also has a network of 1,640+ branches (as
on February 11, 2010) and about 4,721 ATMs in India and presence in 18 countries, as
well as some 24 million customers (at the end of July 2007). ICICI Bank offers a wide
range of banking products and financial services to corporate and retail customers
through a variety of delivery channels and specialised subsidiaries and affiliates in the
areas of investment banking, life and non-life insurance, venture capital and asset
management. (These data are dynamic.) ICICI Bank is also the largest issuer of credit
cards in India. ICICI Bank has got its equity shares listed on the stock exchanges at
Kolkata and Vadodara, Mumbai and the National Stock Exchange of India Limited,
and its ADRs on the New York Stock Exchange (NYSE). The Bank is expanding in
overseas markets and has the largest international balance sheet among Indian banks.
ICICI Bank now has wholly-owned subsidiaries, branches and representatives offices in
18 countries, including an offshore unit in Mumbai. This includes wholly owned
subsidiaries in Canada, Russia and the UK (the subsidiary through which the HiSAVE
savings brand is operated), offshore banking units in Bahrain and Singapore, an advisory
branch in Dubai, branches in Belgium, Hong Kong and Sri Lanka, and representative
offices in Bangladesh, China, Malaysia, Indonesia, South Africa, Thailand, the United
Arab Emirates and USA. Overseas, the Bank is targeting the NRI (Non-Resident Indian)
population in particular.

ICICI reported a net profit of Rs. 3,758 crore (US$ 741 million) for FY2009. The bank's
Current and savings account (CASA) ratio increased to 28.7% at March 31, 2009 from
26.1% at March 31, 2008. Increase of Rs. 5,286 crore in CASA deposits in quarter ended
March 31,2009.
ICICI Bank is one of the Big Four Banks of India with State Bank of India, Axis Bank
and HDFC Bank

ICICI Bank Group

SACHIN AGARWAL 20
T.Y.B.A.F. ROLL. NO.1
BUSINESS PROFILE
Products & Services

Personal Banking

 Deposits
 Loans
 Cards
 Investments
 Insurance “LIFE PLUS”Senior
 Demat Services Car Loan
citizens savings account
 Wealth Management

NRI Banking

 Money Transfer
 Bank Accounts
 Investments Two Wheelers Loan
 Property Solutions Saving Accounts
 Insurance
 Loans

Business Banking

 Corporate Net Banking

 Cash Management Young Stars Account
 Trade Services Credit Cards
 FXOnline
 SME Services
 Online Taxes
 Custodial Services

Head Office Family Banking Account

ICICI Bank Investments
9th Floor, South Towers
ICICI Towers
Bandra Kurla Complex
Bandra (E)
Mumbai.
Phone: 91-022-653 7914
Website: www.icicibank.com
Travel Cards
Home Loan
Capital structure

SACHIN AGARWAL 21
T.Y.B.A.F. ROLL. NO.1
The Authorized Capital of ICICI Bank is 214.75 Crores. The Issued, Subscribed and Paid Up
Capital is divided into 1113250642 equity shares @ Rs.10/- each.

BUSINESS OBJECTIVE

 Vision
To be the leading provider of financial services in India and a major global bank.

 Mission
 We will leverage our people, technology, speed and financial capital to: be the
banker of first choice for our customers by delivering high quality, world-class
service.
 Expand the frontiers of our business globally.
 Play a proactive role in the full realisation of India’s potential.
 Maintain a healthy financial profile and diversify our earnings across businesses
and geographies.
 Maintain high standards of governance and ethics.
 Contribute positively to the various countries and markets in which we operate.
 Create value for our stakeholders.

SACHIN AGARWAL 22
T.Y.B.A.F. ROLL. NO.1
  AWARDS & RECOGNITION 
For the third year in a row ICICI Bank has won The Asset Triple A Country Awards for Best Domestic Bank
in India.

ICICI Bank won the Most Admired Knowledge Enterprises (MAKE) India 2009 Award. ICICI Bank won the
first place in "Maximizing Enterprise Intellectual Capital" category, October 28, 2009.

Ms Chanda Kochhar, MD and CEO was awarded with the Indian Business Women Leadership Award at
NDTV Profit Business Leadership Awards , October 26, 2009.

ICICI Bank received two awards in CNBC Awaaz Consumer Awards; one for the most preferred auto loan
and the other for most preferred credit Card, on September 30, 2009.

Ms. Chanda Kochhar, Managing Director & CEO ranked in the top 20 of the World's 100 Most Powerful
Women list compiled by Forbes, August 2009.

Financial Express at its FE India's Best Banks Awards, honoured Mr. K.V. Kamath, Chairman with the
Lifetime Achievement Award , July 25, 2009.

ICICI Bank won Asset Triple A Investment Awards for the Best Derivative House, India. In addition ICICI
Bank were Highly commended , Local Currency Structured product, India for 1.5 year ADR GDR linked
Range Accrual Note., July 2009.

ICICI bank won in three categories at World finance Banking awards on June 16, 2009
   • Best NRI Services bank
   • Excellence in Private Banking, APAC Region
   • Excellence in Remittance Business, APAC Region.

ICICI Bank Mobile Banking was adjudged "Best Bank Award for Initiatives in Mobile Payments and
Banking" by IDRBT, on May 18, 2009 in Hyderabad.

ICICI Bank's b2 branchfree banking was adjudged "Best E-Banking Project Implementation Award 2008" by
The Asian Banker, on May 11, 2009 at the China World Hotel in Beijing.

SACHIN AGARWAL 23
T.Y.B.A.F. ROLL. NO.1
ICICI Bank bags the “Best bank in SME financing (Private Sector)” at the Dun & Bradstreet Banking awards
2009.
ICICI Bank NRI services wins the “Excellence in Business Model Innovation Award” in the eighth Asian
Banker Excellence in Retail Financial Services Awards Programme.

ICICI Bank's Rural Micro Banking and Agri-Business Group wins WOW Event & Experiential Marketing
Award in two categories - “Rural Marketing programme of the year” and “Small Budget On Ground
Promotion of the Year”. These awards were given for Cattle Loan 'Kamdhenu Campaign' and 'Talkies on the
move campaign' respectively.

ICICI Bank's Germany Branch has been certified by “Stiftung Warrentest”. ICICI Bank is ranked 2nd amongst
57 savings products across 19 banks

ICICI Bank Germany won the yearly banking test of the investor magazine €uro in the “call money”category.

The ICICI Bank was awarded the runner's up position in Gartner Business Intelligence and Excellence Award
for Asia Pacific for its Business Intelligence functions.

ICICI Bank's Organisational Excellence Group was recently awarded ISO 9001:2008 certification by TUV
Nord. The scope of certification comprised processes around consulting and capability building on methods of
quality & improvements.

ICICI Bank has been awarded the following titles under The Asset Triple A Country Awards for 2009:
   • Best Transaction Bank in India
   • Best Trade Finance Bank in India
   • Best Cash Management Bank in India
   • Best Domestic Custodian in India

ICICI Bank has bagged the Best Cash Management Bank in India award for the second year in a row. The
other awards have been bagged for the third year in a row.

ICICI Bank Canada received the prestigious Canadian Helen Keller Award at the Canadian Helen Keller
Centre's Fifth Annual Luncheon in Toronto. The award was given to ICICI Bank its long-standing support to
this unique training centre for people who are deaf-blind.

SACHIN AGARWAL 24
T.Y.B.A.F. ROLL. NO.1
 RATIO ANALYSIS

SACHIN AGARWAL 25
T.Y.B.A.F. ROLL. NO.1
 Ratio Analysis:

Meaning :

Absolute figures expressed in financial statements by themselves are meaningfulness.

These figures often do not convey much meaning unless expressed in relation to other
figures. Thus, it can be say that the relationship between two figures, expressed in
arithmetical terms is called a ratio.

“According to R.N. Anthony.”

“A ratio is simply one number expressed in terms of
another. It is found by dividing one number into the other.”

TYPES OF RATIOS

1. Proportion or Pure Ratio or Simple ratio.

2. Rate or so many Times.
3. Percentage
4. Fraction.

OBJECTS AND ADVANTAGES OR USES OF RATIO

ANALYSIS

1. Helpful in analysis of financial statements.

2. Simplification of accounting data.
3. Helpful in comparative study.
4. Helpful in locating the weak spots of the business.
5. Helpful in forecasting
6. Estimate about the trend of the business
7. Fixation of ideal standards
8. Effective control
9. Study of financial soundness.

SACHIN AGARWAL 26
T.Y.B.A.F. ROLL. NO.1
LIMITATION OF RATIO ANALYSIS
1. False accounting data gives false ratios
2. Comparisons not possible of different firms adopt different
3. accounting policies.
4. Ratio analysis becomes less effective due to price level
5. change
6. Ratios may be misleading in the absence of absolute data.
7. Limited use of a single Ratio.
8. Window-Dressing
9. Lack of proper standards.
10. Ratio alone are not adequate for proper conclusions
11. Effect of personal ability and bias of the analyst.

CLASSIFICATION OF RATIOS
In view of the financial management or according to the tests satisfied,
various ratios have been classifieds as below:

Liquidity Ratios : These are the ratios which measure the short-term solvency or
financial position of a firm. These ratios are calculated to comment upon the short-term
paying capacity of a concern or the firm’s ability to meet its current obligations.
Long –Term Solvency and Leverage Ratios : Long-term solvency ratios convey a
firm’s ability to meet the interest cost and repayment schedules of its long-term
obligation e.g. Debit Equity Ratio and Interest Coverage Ration. Leverage Ratios.

Activity Ratios: Activity ratios are calculated to measure the efficiency with which the
resource of a firm have been employed. These ratios are also called turnover ratios
because they indicate the speed with which assets are being turned over into sales e.g.
debtors turnover ratio.

Profitablity Ratios: These ratios measure the results of business operations or overall
performance and effective of the firm e.g. gross profit ratio, operating ratio or capital
employed. Generally, two types of profitability ratios are calculated.
(a) In relation to Sales, and
(b)In relation in Investment

SACHIN AGARWAL 27
T.Y.B.A.F. ROLL. NO.1
FUNCTIONAL CLASSIFICATION IN VIEW OF
FINANCIAL MANAGEMENT OR CLASSIFICATION
ACCORDING TO TESTS

 Liquidity Long-term Activity Ratios Profitability Ratios

Ratios Solvency and
Leverage Ratios
Financial Operating In Relation to Sales.
Composite Gross Profit Ratio.
 Current Ratio  InventoryTurnove Operating Ratio.
 Liquid Ratio  Debt- Equity r Ratio. Operating Profit
(Acid) Test or Ratio  Debtors Turnover Ratio.
Quick Ratio.  Debt to Total Ratio Net Profit Ratio.
 Absolute liquid Capital Ratio  Fixed Assets Expenses Ratio
or Cash Ratio.  Interest Turnover Ratio
 Debtors Coverage  Total Asset In relation to
Turnover Ratio Ratio Turnover Ratio investments
 Creditors  Capital  Working Capital Return on Investments.
Turnover Ratio Gearing Turnover Ratio. Return on capital.
 Inventory Ratio  Payables Turnover Return on Equity Capital.
Turnover ratio Ratio Return on total Resources
Earning per share.
 Capital Employed
Price Earning Ratio.
Turnover Ratio

SACHIN AGARWAL 28
T.Y.B.A.F. ROLL. NO.1
BALANCE SHEET OF ICICI BANK LTD. As On Mar
2005,Mar 2006,Mar 2007,Mar2008,Mar2009. (Rs. In crores)
2005 2006 2007 2008 2009
CAPITAL AND
LIABILITIES:
Total Share 1086.75 1239.83 1249.34 1462.68 1463.29
Capital
Equity Share 736.75 889.83 899.34 1112.68 1113.29
Capital
Share 0.02 0.00 0.00 0.00 0.00
Application
Money
Preference Share 350.00 350.00 350.00 350.00 350.00
Capital
Reserves 11813.20 21316.16 23413.92 45357.53 48419.73
Revaluation 0.00 0.00 0.00 0.00 0.00
Reserves
Net Worth 12899.97 22555.99 24663.26 46820.21 49883.02
Deposits 99818.78 165083.17 230510.19 244431.05 218347.82
Borrowings 33544.50 38521.91 51256.03 65648.43 67323.69
Total Debt 146263.25 226161.17 306429.48 356899.69 335554.53
Other Liabilities 21396.17 25227.88 38228.64 42895.39 43746.43
And Provisions
Total Liabilities 167659.42 251388.95 344658.12 399795.08 379300.96

ASSETS:
Cash And 6344.90 8934.37 18706.88 29377.53 17536.33
Balances With
RBI
Balances With 6585.07 8105.85 18414.45 8663.60 12430.23
Banks,Money At
Call
Advances 91405.15 146163.11 195865.60 225616.08 218310.85
Investments 50487.35 71547.39 91257.84 111454.34 103058.31
Gross Block 5525.65 5968.57 6298.56 7036.00 7443.71
Accumulated 1487.61 1987.85 2375.14 2927.11 3642.09
Depreciation
Net Fixed Assets 4038.04 3980.72 3923.42 4108.89 3801.62
Capital Work In 96.30 147.94 189.66 0.00 0.00
Progress
Other Assets 8702.59 12509.57 16300.26 20574.63 24163.62
Total Assets 167659.40 251388.95 344658.11 399795.07 379300.96

SACHIN AGARWAL 29
T.Y.B.A.F. ROLL. NO.1
 Contingent 97507.79 119895.78 177054.18 371737.36 803991.92
liabilities
Bills for 9803.67 15025.21 22717.23 29377.55 36678.71
collection
Book 170.35 249.55 270.37 417.64 445.17
value(Rs.)
EPS 27.22 28.55 34.59 37.37 33.78
No. of 736716094 889823901 899266672 1112687495 1113250642
equity shares

PROFIT AND LOSS ACCOUNT OF ICICI BANK LTD.

For The Year Ended Mar2005,Mar2006,Mar2007,Mar2008,Mar2009 (Rs. In Crores)

SACHIN AGARWAL 30
T.Y.B.A.F. ROLL. NO.1
 2005 2006 2007 2008 2009
INCOME:
Interest Earned 9409.90 13784.49 22994.29 30788.34 31092.55
Other Income 3416.14 4983.14 5929.17 8810.77 7603.72
Total Income 12826.04 18767.63 28923.46 39599.11 38696.27
EXPENDITURE:
Interest Expended 6570.89 9597.45 16358.50 23484.24 22725.93
Operating 3299.15 4479.51 6690.56 8154.18 7045.11
Expenses
Total Expenses 9870.04 14076.96 23049.06 31638.42 29771.04
Operating Profit 2956 4690.67 5874.40 7960.69 8925.23
Other Provision 428.80 1594.07 2226.36 2904.59 3808.26
And Contigencies
Provision For Tax 522 556.53 537.82 898.37 1358.84
Net Profit 2005.20 2540.07 3110.22 4157.73 3758.13
Extraordinary 0.00 0.00 0.00 0.00 (0.58)
Items
Profit B/F 53.09 188.22 293.44 998.27 2436.32

Total 2058.29 2728.29 3403.66 5156.00 6193.87

Preference 0.00 0.00 0.00 0.00 0.00
Dividend
Equity Dividend 632.96 759.33 901.17 1227.70 1224.58
Corporate 90.10 106.50 153.10 149.67 151.21
Dividend Tax
Pershare Data
Eps(Rs.) 27.22 28.55 34.59 37.37 33.78
Equity 85.00 85.00 100.00 110.00 110.00
Dividend(%)
Book Value(Rs) 170.35 249.55 270.37 417.64 445.17
Appropriations
Transfer To 547.00 248.69 1351.12 1342.31 2008.42
Statutory Reserve
Transfer To Other 600.01 1320.34 0.00 0.01 0.01
Reserve
Proposed 723.06 865.83 1054.27 1377.37 1375.79
Dividend/Transfer
To Govt
Balance C/F To 188.22 293.44 998.27 2436.32 2809.65
Balance Sheet
Total 2058.29 2728.30 3403.66 5156.01 6193.87

RATIO ANALYSIS
SACHIN AGARWAL 31
T.Y.B.A.F. ROLL. NO.1
1.CURRENT RATIO:
An indication of a company's ability to meet short-term debt obligations; the
higher the ratio, the more liquid the company is. 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. If current liabilities exceed current assets, then the company may have
problems meeting its short-term obligations.

CURRENT RATIO = CURRENT ASSETS / CURRENT LIABILITY

Current Ratio of ICICI Bank for the period of

2005-2009

1.6
1.39 1.36
1.4
1.23
1.17
1.2
1.01
1
Ratio

0.8 Current Ratio

0.6
0.4
0.2
0
2005 2006 2007 2008 2009
Years

Year Current Assets Current Liabilities Current Ratio

(Rs. In crores) (Rs. In crores)
2005 21632.56 21396.16 1.01
2006 29549.79 25227.88 1.17
2007 53421.59 38228.64 1.39
2008 58615.76 42895.38 1.36
2009 54130.18 43746.43 1.23
Interpretation:
An ideal solvency ratio is 2. The ratio of 2 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.
But here the current ratio is less than 2 and more than 1 which shows that the bank have current
assets just equal to the current liabilities which is not satisfactory as the safety margin is very less
or zero. Therefore the bank should keep more current assets so that it can maintain a satisfactory
safety margin.

SACHIN AGARWAL 32
T.Y.B.A.F. ROLL. NO.1
2.LIQUID RATIO:

Liquid ratio is also known as ‘Quick’ or ‘Acid Test ‘Ratio. Liquid assets refer to
assets which are quickly convertible into cash. Current Assets other stock and prepaid expenses
are considered as quick assets.

Quick Ratio = Total Quick Assets

Total Current Liabilities

Quick Assets = Total Current Assets – Inventory

Liquid Ratio of ICICI Bank for the period of 2005-2009

1.2

1 0.97
0.88

0.8
0.67 0.68
R atio

0.6
0.6 Liquid Ratio

0.4

0.2

0
2005 2006 2007 2008 2009
Years

Year Quick Assets Quick Liabilities Liquid Ratio

(Rs. In crores) (Rs. In crores)
2005 12929.97 21396.16 0.60
2006 17040.22 25227.88 0.67
2007 37121.33 38228.64 0.97
2008 38041.13 42895.38 0.88
2009 29966.56 43746.43 0.68
Interpretation:
A quick ratio of 1:1 is considered favourable because for every rupee of current liability,there is
atleast one rupee of liquid assets. A higher value of ratio is considered favourable. Here this ratio
is less than 1 in 2005,2006 & 2009 but in 2007 & 2008 it is close to 1 which is not satisfactory.
This means the bank has not managed its funds properly in this particular period.Therefore bank
should rationally utilise its funds to maintain an ideal liquid ratio.

SACHIN AGARWAL 33
T.Y.B.A.F. ROLL. NO.1
3.EARNING PER SHARE:
In order to avoid confusion on account of the varied meanings of the term capital
employed, the overall profitability can also be judged by calculating earning per share
with the help of the following formula:
Earning Per Equity Share = Net Profit after Tax –Prefrence Dividend
No. of Equity shares
The earning per share of the company helps in determining the market price of the
equity shares of the company. A comparison of earning per share of the company with
another will also help in deciding whether the equity share capital is being effectively
used or not. It also helps in estimating the company’s capacity to pay dividend to its
equity shareholders.
Earnings
EarningsPer
PerShare
ShareRatio
RatioofofICICI
ICICIBank
Bankfor
forthe
the
period of 2005-2009
period of 2005-2009
40 37.37
40 34.59 37.37
34.59 33.78
35 33.78
35
30 27.22 28.55
30 27.22 28.55
25
25
Ratio
Ratio

20 Earnings Per Share

20 Earnings Per Share
15
15
10
10
5
5
0
0
2005 2006 2007 2008 2009
2005 2006 2007 2008 2009
Years
Years

Year Net Income Available No. Of Equity EPS

For Shareholders Shares
(Rs. In crores) (Rs. In crores)
2005 2005.2 73.6716 27.22
2006 2540.07 88.9823 28.55
2007 3110.22 89.9266 34.59
2008 4157.73 111.2687 37.37
2009 3758.13 111.325 33.78
Interpretation: Earning Per Share is the most commonly used data which reflects the
performance and prospects of the company.It affects the market price of shares.
Here the Earning Per Share is shows a persistent increase till the year 2008 after that in the year
2009 Earning Per share is followed by a downfall due to decline in profits.

DIVIDEND PER SHARE :

SACHIN AGARWAL 34
T.Y.B.A.F. ROLL. NO.1
It is expressed by dividing dividend paid to equity shareholders by no. of equity shares.this shows
the per share dividend given to equity shareholders.It is very helpful for potential investors to
know the dividend paying capacity of the company.It affects the market value of the company.
Dividend Per Share = Dividend Paid To Equity Shareholders
No. Of Equity Shares

Dividend Per Share Ratio of ICICI Bank for the

period of 2005-2009

12 11.03 11
10.02
10
8.59 8.53
8 Dividend Per Share
Ratio

Ratio
6

0
2005 2006 2007 2008 2009
Years

Year Dividend Paid No. Of Equity DPS

Shares
(Rs. In crores) (Rs. In crores)
2005 632.96 73.6716 8.59
2006 759.33 88.9823 8.53
2007 901.17 89.9266 10.02
2008 1227.7 111.2687 11.03
2009 1224.58 111.325 11
Interpretation:
Here the Dividend Per Share is increasing year after year except a little decline in 2009.otherwise
the dividend per share ratio of the bank is quite satisfactory which shows the bank has a good
dividend paying capacity.

4.NET PROFIT RATIO:

SACHIN AGARWAL 35
T.Y.B.A.F. ROLL. NO.1
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. An increase in the ratio over the previous period indicates
improvement in the operational efficiency of the business. The ratio is thus on effective
measure to check the profitability of business.

Net Profit Ratio of ICICI Bank for the period of 2005-2009

25
21.3
20 18.42

15 13.52 13.5
Ratio(%)

12.08
Net Profit Ratio
10

0
2005 2006 2007 2008 2009
Years

Year Net Profit Sales Net Profit Ratio

(Rs. In crores) (Rs. In crores) (in %)
2005 2005.2 9409.9 21.3
2006 2540.07 13784.49 18.42
2007 3110.22 22994.29 13.52
2008 4157.73 30788.34 13.5
2009 3758.13 31092.55 12.08

 Interpretation:
Although both the sales and net profit have increased during the above period but
the Net Profit Ratio of the bank is declining continuously. This is because of the
reason that net profits have not increased in the same proportion as of the sales.

SACHIN AGARWAL 36
T.Y.B.A.F. ROLL. NO.1
5.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 incomes. If we deduct
this ratio from 100,the result will be operating ratio. Higher operating profit ratio enable the
organization to recoup non-operating expenses out of operating profits and provide reasonable
return.

Operating Profit Ratio of ICICI Bank for the period

of 2005-2009

40

35 34.02
31.41
30 28.7
25.54 25.85
25
R a tio

20 Operating Profit Ratio

15

10

0
2005 2006 2007 2008 2009
Years

Year Operating Profit Sales Operating Profit

(Rs. In crores) (Rs. In crores) Ratio (in %)
2005 2956 9409.9 31.41
2006 4690.67 13784.49 34.02
2007 5874.4 22994.29 25.54
2008 7960.69 30788.34 25.85
2009 8925.23 31092.55 28.7
Interpretation:
In the year 2005 & 2006 the operating profit is 31.41% & 34.02% respectively. After that it has
been consistently declined from the year 2007 till 2008 and again gaining momentum in 2009.
This may be due to the reason that operating expenses have been increased more as compared to
sales during the above period consequently reducing the operating profits.Therefore the bank
should check on unnecessary operating expenses to correct this situation and to provide a
sufficient return.

SACHIN AGARWAL 37
T.Y.B.A.F. ROLL. NO.1
6.RETURN ON NET WORTH:

It measures the profitability of the business in view of the shareholders. It judges the earning
capacity of the company and the adequacy of return on proprietor’s funds.Shareholders and
potential investors are interested in this ratio.It is calculated as below:

Return On Net Worth = Net Profit After Interest And Tax x 100
Shareholder’s Funds

Return On Net Worth Ratio of ICICI Bank for the

period of 2005-2009

18
15.54
16
14 12.61
12 11.26
10 8.88
Ratio

7.53 Return On Net Worth

8
6
4
2
0
2005 2006 2007 2008 2009
Years

Year Net Profit After Shareholder's Fund Return On Net

Interest And Tax Worth (in %)
(Rs. In crores) (Rs. In crores)
2005 2005.2 12899.97 15.54
2006 2540.07 22555.99 11.26
2007 3110.22 24663.26 12.61
2008 4157.73 46820.21 8.88
2009 3758.13 49883.02 7.53
Interpretation:
The net profit after interest and tax have increased slowly till the year 2008 followed by a
downfall due to high interest payments,operating expenses and taxation liability.consequently the
networth ratio has declined considerably and has reduced to more than half in the year 2009 than
it was in 2005.

7.RETURN ON CAPITAL EMPLOYED:

SACHIN AGARWAL 38
T.Y.B.A.F. ROLL. NO.1
It establishes relationship between profit before interest and tax and capital employed. It indicates
the percentage of return on the total capital employed in the business.This ratio is also known as
Return On Investment. It measures the overall efficiency and profitabilityof the business in
relation to investment made in business. It also shows how efficiently the resources are used in
the business.comparison of one unit with that of the other or performance in one year with that of
the same unit is possible. It is calculated as below:

Return On Capital Employed of ICICI Bank for the

period of 2005-2009

9
8.29
7.99
8

7 6.52
6.22
6 5.61

5
Ratio

Return On Capital Employed

4

0
2005 2006 2007 2008 2009
Years

Year Net Profit Before Capital Employed Return On Capital

Interest And Tax Employed (in %)
(Rs. In crores) (Rs. In crores)
2005 9098.09 146263.25 6.22
2006 12694.05 226161.17 5.61
2007 20006.54 306429.48 6.52
2008 28540.34 356899.69 7.99
2009 27842.9 335554.53 8.29

 Interpretation: The above table exhibit the return on capital employed ratio of the
bank for last five years.This ratio measures the earning of the net assets of the business.
The ratio was 6.22% in year 2005. After that it rised to the tune of 5.61%,6.52%,7.99%
and 8.29% in year 2006, 2007, 2008 and year 2009 respectively. It lead to the conclusion
bank rising but very little proportion of return on capital employed.

9.DEBT- EQUITY RATIO:

SACHIN AGARWAL 39
T.Y.B.A.F. ROLL. NO.1
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.
It helps to assess the soundness of long-term financial policies of a business.It also helps to
determine the relative stakes of outsiders and shareholders.Long-term creditors can assess the
security of their funds in a business.it indicates to what extent a firm depends upon lenders to
meet its long-term financial requirements.A low Debt-Equity ratio is considered better from the
point of view of creditors.

Debt Equity ratio of ICICI Bank for the period of

2005-2009

14 12.97
11.99
12
10.14
10
7.53
8
Ratio

6.6
Debt Equity Ratio
6

0
2005 2006 2007 2008 2009
Years

Year Debt Equity Debt Equity Ratio

(Rs. In crores) (Rs. In crores)
2005 154759.45 12899.97 11.99
2006 228832.96 22555.99 10.14
2007 319994.86 24663.26 12.97
2008 352974.87 46820.21 7.53
2009 329417.94 49883.02 6.6
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.Here the Debt-Equity ratio for the above period is
always high.this shows that the bank is more relying on outside funds as compared to internal
sources of capital,in its capital structure. From the long-term lenders point of view this ratio is not
satisfactory.

10.PROPRIETORY RATIO:

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T.Y.B.A.F. ROLL. NO.1
It is also called shareholders equity to total equity ratio or net worth to total assets ratio or equity
ratio.It compares the shareholder’s funds to total assets.It is calculated by dividing shareholder’s
funds by total assets.

Proprietory Ratio = Shareholder’s Fund

Total Assets

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.Thus,this ratio is of great importance to the
creditors.

Proprietory Ratio of ICICI Bank for the period of

2005-2009

0.14 0.13
0.12
0.12
0.1
0.08
Ratio

0.08 0.07 0.07

Proprietory Ratio
0.06
0.04
0.02
0
2005 2006 2007 2008 2009
Years

Years Shareholder's Funds Total Assets Proprietory Ratio

(Rs. In crores) (Rs. In crores)
2005 12899.97 167659.4 0.07
2006 22555.99 251388.95 0.08
2007 24663.26 344658.11 0.07
2008 46820.21 399795.07 0.12
2009 49883.02 379300.96 0.13
Interpretation: Above table exhibits the proprietary ratio of the bank for last five years . It
was 7% in 2005,After that was 8% in year 2006. Similarly it was once again reduced to 7 % in
the year 2007. After 2007 it registered increase and was 12% and 13% in the year 2008 and 2009
respectively. Hence it leads to the conclusion owners have less than 13% stake in the total assets
of the bank. It is not a good sign as far the long term solvency is concerned.

11.FIXED ASSETS TURNOVER RATIO:

SACHIN AGARWAL 41
T.Y.B.A.F. ROLL. NO.1
It is also called as Sales to Fixed Assets Ratio.It measures the efficient use of fixed assets.This
ratio is a measure of efficient use of fixed assets.it is calculated as:
Fixed Assets Turnover Ratio = Cost of goods sold or Sales
Net Fixed Assets
It measures the efficiency and profit earning capacity of the business.Higher the ratio,greater is
the intensive utilization of fixed assets and a lower ratio shows under utilization of the fixed
assets.This ratio has a special importance for manufacturing concerns where investment in fixed
assets,is vey high and the profitability is significantly dependent on the utilization of these assets .

Fixed assets Turnover Ratio of ICICI Bank for the

period of 2005-2009

9 8.17
8 7.49
7
5.86
6
5
Ratio

Fixed assets Turnover

4 3.46 Ratio
3 2.33
2
1
0
2005 2006 2007 2008 2009
Years

Year Sales Net Fixed Assets Fixed Assets

(Rs. In crores) (Rs. In crores) Turnover Ratio
2005 9409.9 4038.04 2.33
2006 13784.49 3980.72 3.46
2007 22994.29 3923.42 5.86
2008 30788.34 4108.89 7.49
2009 31092.55 3801.62 8.17

 Interpretation:
Here the fixed assets employed in the business shows a decreasing trend except in the
year 2008 where fixed assets have again increased.This may be due to increase in rate of
depreciation in subsequent years. Neverthless,the fixed assets turnover ratio has been
consistently increasing.It indicates that fixed assets have been effectively used in the
business without much additional investment in the period of study and also the capital is
not blocked in fixed assets

12.CREDIT-DEPOSIT RATIO:

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T.Y.B.A.F. ROLL. NO.1
This ratio is very important to assess the credit performance of the bank. The ratio shows the
relationship between the amount of deposit generated by the bank has well as their deployment
towards disbursement of loan and advances. Higher credit deposit ratio shows overall good
efficiency and performance of any banking institution.
Credits
Credit Deposit Ratio= ×100
Deposits
Credit means disbursement of advances
Deposit mean sum of fixed deposit,
Saving deposit and current deposit.

Credit Deposit ratio of ICICI bank for the period of

2005-2009

1.05
0.99
1

0.95 0.92
0.91
Ratio

0.9 0.88 Credit Deposit ratio

0.85 0.84

0.8

0.75
2005 2006 2007 2008 2009
Years

Year Advances Deposits Credit Deposit Ratio

(Rs. In crores) (Rs. In crores) (in%)
2005 91405.15 99818.78 91
2006 146163.11 165083.17 88
2007 195865.6 230510.19 84
2008 225616.08 244431.05 92
2009 218310.85 218347.82 99
 Interpretation:
Above table exhibits credit deposit ratio of the bank during last 5 years. In the year 2005 ratio
was 91% and it declined to 88% and 84%in the year 2006 and 2007 respectively. In the year
2008 and 2009 ratio was increased to 92% and 99% respectively. it leads to conclusion that credit
performance of the bank is very good.
CASH FLOW STATEMENT OF ICICI BANK

SACHIN AGARWAL 43
T.Y.B.A.F. ROLL. NO.1
PARTICULARS 2005 2006 2007 2008 2009

Profit before tax 2,527.20 3,096.61 3,648.04 5,056.10 5,116.97

Net cash flow-operating 9,131.72 4,652.93 23,061.95 11,631.15 -14,188.149

activity

Net cash used in investing -3,445.24 -7,893.98 18,362.67 17,561.11 3,857.88

activity

Net cash used in fin. -1,227.13 7,350.90 15,414.58 29,964.82 1,625.36

activity

Net inc/dec in cash and 4,459.34 4,110.25 20,081.10 683.55 -8,074.57

equivalent

Cash and equivalent begin 8,470.63 12,929.97 17,040.22 37,357.58 38,041.13

of year

Cash and equivalent end of 12,929.97 17,040.22 37,121.32 38,041.13 29,966.56

year

SACHIN AGARWAL 44
T.Y.B.A.F. ROLL. NO.1
FINDINGS,SUGGESTIONS &
CONCLUSION

Findings
 Profit before tax for the year ended March 31, 2009 (FY2009) was Rs. 5,117
crore (US$ 1,009 million), compared to Rs. 5,056 crore (US$ 997 million) for the
year ended March 31, 2008 (FY2008).


Profit after tax for FY2009 was Rs. 3,758 crore (US$ 741 million) compared to
Rs. 4,158 crore (US$ 820 million) for FY2008 due to the higher effective tax rate
on account of lower proportion of income taxable as dividends and capital gains.


Net interest income increased 15% from Rs. 7,304 crore (US$ 1,440 million) for
FY2008 to Rs. 8,367 crore (US$ 1,650 million) for FY2009. While the advances
declined marginally year-on-year, the net interest income increased due to
improvement in net interest margin from 2.2% in FY2008 to 2.4% in FY2009.


Operating expenses (including direct marketing agency expenses) decreased 14%
to Rs. 6,835 crore (US$ 1,348 million) in FY2009 from Rs. 7,972 crore (US$
1,572 million) in FY2008. The cost/average asset ratio for FY2009 was 1.8%
compared to 2.2% for FY2008.

SACHIN AGARWAL 45
T.Y.B.A.F. ROLL. NO.1
 During the year, the Bank has pursued a strategy of prioritizing capital
conservation, liquidity management and risk containment given the challenging
economic environment. This is reflected in the Bank’s strong capital adequacy
and its focus on reducing its wholesale term deposit base and increasing its CASA
ratio. The Bank is maintaining excess liquidity on an ongoing basis. The Bank has
also placed strong emphasis on efficiency improvement and cost rationalization.
The Bank continues to invest in expansion of its branch network to enhance its
deposit franchise and create an integrated distribution network for both asset and
liability products.

In line with the above strategy, the total deposits of the Bank were Rs. 218,348 crore
(US$ 43.0 billion) at March 31, 2009, compared to Rs. 244,431 crore (US$ 48.2 billion)
at March 31, 2008. The reduction in term deposits by Rs. 24,970 crore (US$ 4.9 billion)
was primarily due to the Bank’s conscious strategy of paying off wholesale deposits.
During Q4-2009, total deposits increased by Rs. 9,283 crore (US$ 1.8 billion), of which
Rs. 5,286 crore (US$ 1.0 billion), or about 57%, was in the form of CASA deposits. The
CASA ratio improved to 28.7% of total deposits at March 31, 2009 from 26.1% at March
31, 2008.

 The branch network of the Bank has increased from 755 branches at March 31,
2007 to 1,438 branches at April 24, 2009. The Bank is also in the process of
opening 580 new branches which would expand the branch network to about
2,000 branches, giving the Bank a wide distribution reach in the country.

In line with the strategy of prioritizing capital conservation and risk containment, the loan
book of the Bank decreased marginally to Rs. 218,311 crore (US$ 43.0 billion) at March
31, 2009 from Rs. 225,616 crore (US$ 44.5 billion) at March 31, 2008.

SACHIN AGARWAL 46
T.Y.B.A.F. ROLL. NO.1
  Liquidity position

The liquid ratio of the bank in the year 2005,2006 and 2009 is 0.60,0.67and 0.68
respectively and the year 2007 and 2008 liquid ratio is 0.97 and 0.88 respectively
which is close to 1.Though it is not equal to the ideal liquid ratio of 1:1 but still its
under control. So in nut shell, it can be concluded that the liquidity position of the
bank is quite satisfactory.

 Capital adequacy and return on capital employed

The Bank’s capital adequacy at March 31, 2009 as per Reserve Bank of India’s
revised guidelines on Basel II norms was 15.5% and Tier-1 capital adequacy was
11.8%, well above RBI’s requirement of total capital adequacy of 9.0% and Tier-1
capital adequacy of 6.0%. The above capital adequacy takes into account the impact
of dividend recommended by the Board.

Also the capital is being effectively utilized in the bank as it shows better return on
capital employed over years.

 Asset quality

At March 31, 2009, the Bank’s net non-performing asset ratio was 1.96%. During the
year the Bank restructured loans aggregating to Rs. 1,115 crore (US$ 220 million).

 Dividend on equity shares

Since the dividend per share has shown a promising increase for the period under
study.It shows that the bank is following a sound dividend policy and is capable of
distributing higher dividends.in this way the investors will feel investing in capital of
the bank a much beneficial option and will be reluctant to withdraw capital for a long
time.

 Earnings per share

The earnings per share for the period under study also shows a promising increase.it
suggests that bank has better profitability position and in future it can be a better or
attractive channel of investment for shareholders.

 Higher trends of credit deposit ratio – A positive sign

High trends of credit deposit ratio reveals that bank has performed satisfactorily as regard
to granting loans and advances to generate income. It suggests that credit performance is

SACHIN AGARWAL 47
T.Y.B.A.F. ROLL. NO.1
good and the bank is doing its business good by fulfilling its major objective as regards to
granting loans and accepting deposits.

Conclusion
On the basis of various techniques applied for the financial analysis of ICICI Bank we
can arrive at a conclusion that the financial position and overall performance of the bank
is satisfactory. Though the income of the bank has increased over the period but not in
the same pace as of expenses. But the bank has succeeded in maintaining a reasonable
profitability position.

The bank has succeeded in increasing its share capital also which has increased around
50% in the last 5 years. Individuals are the major shareholders. The major achievement of
the bank has been a tremendous increase in its deposits, which has always been its main
objective. Fixed and current deposits have also shown an increasing trend.

Equity shareholders are also enjoying an increasing trend in the return on their capital.
Though current assets and liabilities (current liquidity) of the bank is not so satisfactory
but bank has succeeded in maintaining a stable solvency position over the years. As far as
the ratio of external and internal equity is concerned, it is clear that bank has been using
more amount of external equity in the form of loans and borrowings than owner’s equity.
Bank’s investments are also showing an increasing trend. Due to increase in advances,
the interest received by the bank from such advances is proving to be the major source of
income for the bank.

Suggestions
 Although the short term liquidity position is quite satisfactory as per revealed by
liquid ratio but the current ratio is below the ideal ratio of 2:1.So the bank should
make efforts to increase its current assets to maintain a safety margin and to
maintain a better liquidity position.

 The profitability of the bank for the period under study is not satisfactory. Profits
are increasing but not with same pace as of the expenditure due to higher reliance
on debt capital in the form of borrowings and loans for financing capital structure.
So in order to improve profitability, the bank should reduce its dependence on
external equities for meeting capital requirements. Consequently, the interest
expenses will decline and profits will increase which is good for the bank.
Similarly non productive expenses should be curtailed to improve profitability.

SACHIN AGARWAL 48
T.Y.B.A.F. ROLL. NO.1
  Higher trend of credit deposit ratio reveals that the bank has performed
satisfactorily as regard to granting loans and advances to generate income. It
suggests that the credit performance of bank is good and it is performing its
business well by fulfilling the major objective of granting credit and accepting
deposit. So in order to have more creditability in the market the bank should
maintain its credit deposit ratio.

 Though the bank has been successful in increasing it’s deposits but to further
improve upon such situation it can introduce some new and attractive schemes for
public. Such schemes can be in the form of higher rate of interest and shorter
maturity period for FD’s etc.

 Bank should try to finance more and more projects. Financing will help it to earn
higher amount of profits.

 The bank is having a greater reliance on debt capital. The increasing reliance on
external equities may prove hazardous in the long run. So in order to remedy this
situation bank should increase its focus on internal equities and other sources of
internal financing.

 Bank can also think for improving it’s day-to -day service to its clients. Such
service can be improved by providing prompt service and showing an attitude of
co-operation to its clients. It will help to give a kind of confidence to the public
and build a better public image.

 To achieve the objective of Rural development it should open more and more
branches in different rural areas of the country. It will facilitate in providing help
to rural poor farmers and other living below the poverty line. Bank can appoint
commission agents for different area who can encourage general public to invest
in the capital of the bank and make more deposits in ICICI Bank.

 The bank should simplify the procedure of advances for quick disbursement.

 To achieve organizational success a proper independent working atmosphere

should be developed to achieve desired objective more effectively.

 Last but not least, bank should adopt branch automation experiment to control the
operational cost.

SACHIN AGARWAL 49
T.Y.B.A.F. ROLL. NO.1
 BIBLIOGRAPHY

Books Reffered:

 Accountancy. R.K. Mittal,A.K.Jain.

 Financial Management- Theory and Practice. Shashi.K.Gupta , R.K. Sharma.

 Essentials of Corporate Finance 2nd edition ,Irwin /McGraw-Hill.Ross, S.A.,R.W.

Westerfield and B.D. Jordan.

 Basic Financial Management ,8th edition ,Prentice -Hall,Inc. Scott, D.F., J.D
Martin, J.W. Petty and A.Keown.

Internet websites:

 Www.Icicibank.Com

 Www.Moneycontrol.Com

 WWW.Money.Rediff.Com

 Www.Wikipedia.Org

 Www.Google.Com

 Www.Scribd.Com

 Www.Managementparadise.Com

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T.Y.B.A.F. ROLL. NO.1