Consolidation in Indian Banking Industry
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A snapshot of the Indian Banking Industry by a student at We School.
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Consolidation in Indian Banking Industry
- 1. Consolidation in Indian Banking Industry The M&A way
- 2. The Flow 10/08/2010
- 3. 10/08/2010 1.13 Billion People 168 Commercial Banks 84,000 Branches So are we Under-Banked or Under-Served??? Source: World Bank, World Development Indicators & RBI
- 4. The Indian Banking Industry 10/08/2010 Source: RBI (In Rs. Cr) Growth between 2004-2010 Business of SCBs 23.7% Business of other SCBs (private banks) 24.5 per cent Business of Nationalised banks 24.6 per cent Particulars ( As per FY 10) Nationalized SBI & Associates Private Foreign Aggregate Deposits 2583716 1108086 822801 237853 4752456 Advances 1843102 858198 632494 163260 3497054 Cost of Funds 5.35 5.32 4.83 2.82 5.09 Yield on Assets 1.00 0.91 1.28 1.26 1.05 Net NPA Ratio 0.91 1.50 1.03 1.82 1.12
- 6. 10/08/2010 - P. Chidambaram
- 8. Objectives Of The Proposed Merger 10/08/2010
- 9. Parameters For Selecting Target Bank 10/08/2010
- 12. Cultural Issues & HR Practices 10/08/2010
- 22. Projection – Dena Bank 10/08/2010
- 23. Projection – Dena Bank 10/08/2010
- 24. Projection - Bank Of India 10/08/2010
- 25. Projection - Bank Of India 10/08/2010
- 33. Consolidated Balance Sheet 10/08/2010
- 34. 10/08/2010
- 37. Technology 10/08/2010 Lower Management & Operational Costs Introduce New Techno-centric Products Micro ATM Facility RTGS/NEFT Enabled
- 41. Macro Economic Impact of the Deal 10/08/2010
- 42. 10/08/2010 Not the End…. But a New Beginning
- 43. 10/08/2010 10/08/2010 Comparison Table Of Leading Public Sector Banks Particulars Bank of India (Post Merger) Punjab National Bank Bank of Baroda State Bank of India Branches 4,430 4997 3,148 12,496 ATM’s 1,216 3700 1,315 16,369 Employees 50,201 56,928 38,071 2,00,299 Deposits (Rs. Cr) 3,39,869 3,04,183 2,94,074 9,81,022 Advances (Rs. Cr) 2,47,050 2,27,653 2,13,543 7,70,935 Total Business (Rs. Cr) 5,86,919 5,31,836 5,07,617 17,51,957 Major PSBs In the PSB Group(%) In the Indian Banking Sector(%) SBI - 23.84 Punjab National Bank 9.85 5.28 Bank Of Baroda 9.40 5.04 Bank Of India 9.00 4.83 Dena Bank 1.96 1.05 Bank Of India Post Merger 10.87 5.83
- 46. 10/08/2010 Report Thank You ….
Editor's Notes
- Rbi guidelines…carry a laser pointer…make table from profile of indian banks… Basel 1 2 3 norms, Components of capital Technology Rates and significance SWIFT/ NEFT/ RTGS ASSOCHAM Treasury activities of bank NPA S
- I actually don’t knw the answer of this…Ask sir!!...underbanked population of India??
- What is cost of funds??? For speech: The business of all SCBs grew at a CAGR of 23.7 per cent between 2003-04 and 2009-10. During the same period, the business of other scheduled commercial banks (OSCBs) (private banks) grew at a CAGR of 24.5 per cent, while nationalised banks showed the highest CAGR amongst all the bank groups at 24.6 per cent. Foreign banks witnessed the lowest growth of 22.3 per cent in terms of advances between 2003-04 and 2009-10, while SBI and associates saw the lowest increase in total deposits at 18.4 per cent during the same period. The share of nationalised banks in the total business has increased slightly to 51 per cent from 50 per cent, since 2003-04.
- Still needs to b worked on….
- Secondary Objective Strengthen The Capital Base Developing new product and service mixes
- Do not put why BOI, but remember it at the back of ur mind… we only need to show justification for dena bank
- Prefrential equity(600)
- FinacleFinacle (cost adv) –Integration of database (cost adv) –Integration of database
- cultures could become a liability for an organization by creating barriers to change, barriers to diversity or barriers to mergers and acquisitions PSB & PSB would have an upper hand as far as culture and working culture. ( interview with BOI )
- reducing overlap in operations, right-sizing and redeploying surplus staff either by retraining.. Psb low profit per employee n private high..s common prob hence common soln.. Profit per employee of psb 5.34lakh in3009-10 n private 7.19lakh..foreign is 17.19lakhs
- NIM, NII, CAR, INTERSET SPREAD
- Why DCF?...CHANGE POINTS AFTER DECIDING N DISCUSSING ABT VALUATION…MENTION ABOUT CONSTANT GROWTH MODEL…Discounted at respective WACC taken a constant rate of 5% for the Continuity Value and discounted it to arrive at the Final Value
- HIGHLIGHTED OPERATING EXPENSES INSTEAD OF EQUITY DIV
- DON’T HIGHLIGHT PREF SC-UNIFORMITY ..SO HIGLIGHT DEPOSITS N ADVANCES
- New issue of equity…286 db eq SC/3.17 Assumption of preference (govt infusion ) being in merged entity
- Mention about restructuring being an advantage for BOI
- lead banks and RRBs,
- Talk of win win situtation as dena’s obj of goin Intl achieved an d also helpful for BOI
- Basel 2, risk weghted assets, difference bewteen CAR and CRAR
- Write abt needs of indian banking what sir explained…HR reskillin n retraining…succession…infra neeed…retail bankin…first step towards long term vision of having only 5-6 large banks