BANKING INDUSTRY- HDFC

Submitted By-Aditya AggarwalAditya NarayananAnand ChandranAnkita KunwarKevin AbrahamPulkit KabraSaket Deepak

About HDFCHousing Development Finance Corporation Limited, more popularly known as HDFC Bank Ltd, was established in the year 1994, as a part of the liberalization of the Indian Banking Industry by Reserve Bank of India (RBI). The bank was incorporated with the name 'HDFC Bank Limited', with its registered office in Mumbai. The following year, it started its operations as a Scheduled Commercial Bank. Today, the bank boasts 2201 branches and over 7110 ATMs across India.

Capital Structure• HDFC Bank boasts of an authorized capital of Rs 550 crore (Rs5.5 billion),

of this the paid-up amount is Rs.468.26 crore (Rs.4.68 billion). In terms of equity share, the HDFC Group holds 23.20%.

• Foreign Institutional Investors (FIIs) have around 29.67% of the equity• 17.33% is held by the ADS Depository (in respect of the bank's American

Depository Shares (ADS) Issue).• The bank has about 477,291 shareholders. Its shares find a listing on the

Stock Exchange, Mumbai and National Stock Exchange, while its American Depository Shares are listed on the New York Stock Exchange (NYSE), under the symbol 'HDB‘.

As on 31st December, 2011Source: HDFC BANK website

Timeline•1994 – The Bank was Incorporated on 30th August. A new private sector Bank promoted by housing Development Corporation Ltd. (HDFC), a premier housing finance company•1995–The Bank opened its first branch in Ramon House at Churchgate, Mumbai on January 16th•1998–HDFC Bank, had tied up with BPL Ltd to offer Internet-enabled supply-chain management and business-to-consumer (B2C) e-commerce services to corporates– Hutchison Max Telecom and HDFC Bank introduced the country's first-ever mobile-banking services in the city•2002–HDFC Bank unveils Silver card in Hyderabad.– HDFC Bank opens first overseas representative office. – HDFC Bank unveils gold card

Timeline• 2007

– HDFC Bank has signed an agreement with Tata Pipes to offer credit facilities to farmers across the country.

– HDFC Bank Opens Its First Overseas Branch In Bahrain• 2009

– HDFC Bank launches ‘Meritus’ Scholarship Programme. – The Asian Banker declares HDFC Bank the Best Retail Bank

• 2010 – With a view to attract long term deposits and prevent premature

withdrawal when the interest rates peak, HDFC, the housing finance major, has decided to pay variable interest rate on recurring deposits

Net Revenues2006-07

498,471 Lakhs

2007-08751,103 Lakhs

2008-091,071,176 Lakhs

2009-101,236,953 Lakhs

2010-111,487,828 Lakhs

Revenues

Growth

FY08 FY09 FY10 FY110.00%

10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%90.00%

100.00%

50.00%42.60%

15.90% 15.80%

HDFC Bank

Growth (%)

Growth

Source: Edelweiss Research

Market Capitalization• Market Capitalization depends upon the future performance of the company to a large extent

• It is different from profit margin and profitability

• PE Ratio = Market Capitalization Profit

MC= PE Ratio* Profit After Tax

2006/07 = 26.29 * 114145 Lakhs = 3000872 Lakhs2007/08 = 28.80 * 159018 Lakhs = 4579718 Lakhs2008/09 = 18.42 * 224493 Lakhs = 4135161 Lakhs2009/10 = 28.62 * 294870 Lakhs = 8439179 Lakhs2010/11 = 27.59 * 392640 Lakhs = 10832937 Lakhs

Market Capitalization

Leading banks by market capitalization

Company Name Market Cap(Rupee Cr)

SBI 135,321.59

HDFC Bank 122,648.63

ICICI Bank 106,796.74

Axis Bank 46,093.45

Kotak Mahindra 41,331.53

Bank of Baroda 31,998.30

PNB 31,377.08

Company Name Market Cap(Rupee Cr)

Canara Bank 22,980.63

Bank of India 19,803.89

Union Bank 15,886.43

IndusInd Bank 14,760.92

Yes Bank 12,091.78

Federal Bank 6,910.32

ING Vysya Bank 5,266.06

Source: Money Control (Latest)

Business Strategy• Increase the market share in India

• Expand the product range and the customers

• Improve the quality of customer service

• Innovate on the product and service range to attract more customers and address the existing inefficiencies

• Maintain a disciplined credit risk management

• Reduce bank’s cost of funds

• HDFC’s diverse loan portfolio along with superior lending practices de-risks its business model

• Lower operating costs along with stable margins and high asset quality ensures sustainable profitability

Business Model

Business Philosophy

Based on 4 Core Values

Operational Excellence

Customer Focus

Product Leadership

People

Porters Forces

Threat of competitors• Large number of banks• Strong exit barriers• Low switching costs

Threat of substitutes• Deposits in posts• Non Banking financial sector growing rapidly

Bargaining power of consumer• Numerous alternatives• Low switching costs• Increasing consumer awareness

Threat of new entrants• Product differentiation very difficult• Entry barriers

Bargaining power of suppliers• RBI rules and regulations

Industry Analysis

Industry Size

India’s GDP (USD Billion PPP) – 4057Share of Services (% of GDP) – 55.2Banking and Insurance Size (USD Billion) – 395.96

Source:http://www.interlinkre.com

0.18%

9.40%1.81%

2.53%2.74%

9.76%

26.94%20.61%

14.67%

11.36%

Composition of Service Sector

StorageTransportRailwaysHotels & Rest.Commu.Banking & InsuranceTradeReal EstateOther ServicesPublic Admin. & Defence

Growth

2005-06 2006-07 2007-08 2008-09 2009-100.00%

5.00%

10.00%

15.00%

20.00%

25.00%

15.90%

20.60%

16.70%

14.00%

11.30%

Annual growth in Banking and Insurance sector which forms a part of India’s services

Annual Growth

Source:http://www.interlinkre.com

Segmental AnalysisReserve Bank of India

Scheduled Commercial Bank

Non-Scheduled Commercial Bank

Local Area BankCo-operative BankCommercial Bank

Foreign24 Urban Bank State Bank

Private Sector22

Regional rural6

Public Sector26

New7 Old15SBI Group7 Nationalized19

Basis of CompetitionThe following factors have influenced the increase in competition in the banking sector

Profitability - Higher profitability compared to the past or international standards. This attracts new entrants which increases the competition in the industry Technological Changes – This enable quicker and more efficient service Product Innovations – Features such as home banking, ATMs etc are making the industry fiercely competitive Entry/Exit Norms – Though regulatory barriers have been eased, desirable barriers exist in the form of capital and other requirements Increasing consumer awareness - consumers of banking services are getting increasingly agile, enlightened, cost and quality conscious. They are already forcing the pace of competition on price, product and quality products

Critical Success Factors

Critical Success Factors

IT

New Technology

Low Employee CostManaging NPAs

Diversified Products

Demand Drivers

High Economic Growth

Increase in purchasing power

Sectors showing growth

Retail Infrastructure Telecom Rural Markets Exports/Imports

Key EventsMain mergers and acquisitions in the Indian banking sector

HDFC Bank acquires Centurion Bank of Punjab (May '08)

Standard Chartered acquires ANZ Grindlays Bank (November '00)

Bank of Baroda acquires South Gujarat Local Area Bank Ltd (June '04)

ICICI Bank acquires Bank of Madura (March '01)

Oriental Bank of Commerce acquires Global Trust Bank Ltd (August '04)

RegulationsBanks in India are governed by the Reserve Bank of India.

Banking Regulation Act, 1949As per Section 5(c) of Banking Regulation Act, 1949 a "Banking Company" means any company which transacts the business of banking in India.

Explanation: Any company which is engaged in the manufacture of goods or carries on any trade and which accepts the deposits of money from public merely for the purpose of financing its business as such manufacturer or trader shall not be deemed to transact the business of banking within the meaning of this clause.

As per Section 5(b) of Banking Regulation Act, 1949 , banking means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawal by cheque, draft, order or otherwise. Source: http://fiuindia.gov.in

Financial Analysis Deposits (Rs. Crore)

Public Sector Banks; 437298

5

Private Sector Banks; 100275

9

Foreign Banks; 240689

Source-http://www.rbi.org.in/home.aspx

Deposits0

200000

400000

600000

800000

1000000

1200000

14000001245862

225602 208586 189237

SBI & Associates ICICIHDFC AXIS

CAR0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

11.98%

19.50%16.20%

12.65%

SBI & Associates ICICIHDFC AXIS

CAR of Different Banks

DepositsDeposits

SWOT AnalysisPolicies such as strengthening prudential norms, enhancing the payments system and integrating regulations between commercial and co-operative banks

Bank lending has been a significant driver of GDP growth and employment.

Due to the vast networking & growing number of branches & ATMs, Indian banking system has reached even to the remote corners of the country

The public sector banks holdover 75% of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively

The cost of intermediation remains high and bank penetration is limited to only a few customer segments and geographies

The government has refused to dilute its stake in PSU banks below 51%

Structural weaknesses such as a fragmented industry structure, restrictions on capital availability and deployment, lack of institutional support infrastructure, restrictive labour laws, weak corporate governance etc.

Strengths

Weaknesses

The market is seeing discontinuous growth driven by new products and services that include opportunities in credit cards, consumer finance and wealth management on the retail side

Given the demographic shifts resulting from changes in age profile and household income, consumers will increasingly demand enhanced institutional capabilities and service levels from banks

Reserve Bank of India (RBI) has approved a proposal from the government to amend the Banking Regulation Act to permit banks to trade in commodities and commodity derivatives

Opportunities

Threat of stability of the system: failure of some weak banks has often threatened the stability of the system.

Rise in inflation figures which would lead to increase in interest rates.

Increase in the number of foreign players would pose a threat to the PSB as well as the private players.

Threats

Key Segments

Wholesale Banking Services

Retail Banking Services

Treasury

Segmental Presence of HDFC

Wholesale Banking Services• The Bank’s target market ranges from large manufacturing companies in the Indian

corporate to small & mid-sized corporate and agri-based businesses• HDFC provides a wide range of commercial and transactional banking services,

including working capital finance, trade services, transactional services, cash management, etc.

• The bank is also a leading provider to corporate customers, mutual funds, stock exchange members and banks

Corporate-

• Funded Services• Non Funded Services• Value Added Services• Internet Banking

Small and Medium Enterprises-

• Funded Services• Non Funded Services• Specialized Services• Value added services• Internet Banking

Financial Institutions and Trusts-

• BANKS- Sub-Membership ,RTGS – sub membership, Fund Transfer, ATM Tie-ups, Tax Collection Financial Institutions

• Mutual Funds• Stock Brokers• Insurance Companies• Commodities Business

Retail Services

Loan Product

• Auto Loan• Loan Against

Property• Personal loan• Credit card• Commercial

vehicles finance• Home loans• Retail business

banking• Working Capital

Finance• Health Care

Finance• Education Loan• Gold Loan

Deposit Product-

• Saving a/c• Current a/c• Fixed deposit• Demat a/c• Safe Deposit

Lockers

Investment & Insurance-

• Mutual Fund• Bonds• Insurance • Equity and

Derivatives• Mudra Gold Bar

Cards and Services-

• Credit Card• Debit Card• Prepaid Card• Bill pay• Direct Pay• Visa Money

Transfer• Online Payment of

Direct Tax• Mobile Banking• ATM• Phone Banking• Email Statements• Branch Network

Treasury

Foreign Exchange and Derivatives

To comply with statutory reserve requirements, the bank is required to hold 25% of its deposits in government securities. The Treasury business is responsible for managing the returns and market risk on this investment portfolio

FINANCIAL PERFORMANCE (in crore)

March 31, 2011 March 31, 2010

Deposits and Other Borrowings

208,586 167,404

Advances 159,982.7 125,830.6

Total Income 14,878.28 12,369.53

Profit before Depreciation and Tax

5,818.66 4,289.14

Net Profit 3,926.4 2,948.7

Financial Analysis

Non Performing Assets (%)

Year0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

1.60%

1.80%

2.00%1.74%

1.54%

0.48%

2009 2010 2011

Profit After Tax in (Rs. Crore)

Years0

500

1000

1500

2000

2500

3000

3500

4000

4500

1141

1590

2245

2949

3926

2007 2008 2009 2010 2011

DPS (Rs.)

Year0

2

4

6

8

10

12

14

16

18

78.5

10

12

16.5

2007 2008 2009 2010 2011

EPS (Rs.)

Year0

10

20

30

40

50

60

70

80

90

36.3

46.252.9

67.6

85

2007 2008 2009 2010 2011

Balance Sheet Size (Rs. Crore)

Year0

50000100000150000200000250000300000

183271222459

277353

2009 2010 2011

Advances (Rs. Crore)

Years0

50000100000150000200000

98883125831

159983

2009 2010 2011

Deposits (Rs. Crore)

Year0

50000100000150000200000250000

142812167404

208586

2009 2010 2011

Savings Deposits (Rs. Crore)

Year0

20000

40000

60000

80000

3491549877

63448

2009 2010 2011

Retail Assets (Rs. Crore)

Year0

20000400006000080000

100000

53548 6316180113

2009 2010 2011

Net Interest Margin (%) (Denotes Core NIM)

Year4

4.14.24.34.44.5

4.2

4.4

4.2

2009 2010 2011

Capital Adequacy (%)

Year14.5

1515.5

1616.5

1717.5

18

15.7

17.4

16.2

2009 2010 2011

Return on Capital (%)

Year15.8

1616.216.416.616.8

17

16.2

16.816.5

2009 2010 2011

ATMs (Nos.)

Year0

100020003000400050006000

32954232

5471

2009 2010 2011

Cities (Nos.)

Year0

200400600800

10001200

200920102011

Debit Cards (Nos. in Lacs)

Year0

40

80

12090.8 98.3

115.5

2009 2010 2011

Credit Cards (Nos. in Lacs)

Year40

45

50

55

43.9 44.5

50.5

2009 2010 2011

Rupee Earned in 2010-11

62.18%19.05%

14.82%

3.24%0.71%

Interest from Advances = 62.18%Interest from Investments = 19.05%Commision, Exchange & Brokerage = 14.82%FX & Derivative Income = 3.24%Other Interest Income = 0.71%

Rupee Spent in 2010-11

41.48%

31.62%

8.43%

8.36%

6.15%3.96%

Rupee Spent

Interest Expense = 41.48%Operating Expense = 31.62%Provisions = 8.43%Tax = 8.36%Transfer to Reserve = 6.15%Dividend & Tax on Div-idend = 3.96%

Financial Analysis• HDFC Bank has a consistent high CAR Ratio, which signifies the solid position

of the bank.• NPAs of HDFC Bank are very low. This shows the banks good relations with

its customer.• Deposits are increasing continuously which shows the good services

provided by the bank.• NIM for the bank is also good which further solidifies its position in the

market.• Profit margins are increasing year by year.

List of Products and Services• No-limit Credit Cards• Forexplus Platinum Card• Mobile Bank Account with Vodafone • Product called “Mirevenue”• Dual Rate Loans• Move-In Home Loans• Quickremit• Tie-up with International Bank of Qatar• SWIFT - Personal Loan• Debt Fund for Cancer Cure

Products and Services

Competitive Analysis• India’s banks have grown at a rapid pace over the past 2 decades after the

financial liberalization

• This growth has still lacked in meeting the massive demand in the need of financial intermediation. It has led to the growth on non-banking financing companies (NBFCs) and microfinance companies

• Major banks in India are either state owned or previous government owned institutions which have been fully privatized like ICICI and HDFC Bank

Competitive Analysis

Competitive AnalysisState Bank of India (SBI) SBI is India’s Largest Bank which is majority owned by the government. The

Company has a number of Subsidiaries and has been a market outperformer in recent times. Revenues of $22 billion. The SBI has 7 subsidiaries of which 2 have been merged and 5 are remaining– State Bank Bikaner Jaipur– State Bank of Hyderabad– State Bank of Mysore– State Bank of Patiala– State Bank of Travancore

Punjab National Bank Punjab National Bank (PNB) , is the second largest PSU bank with about

5000 branches across 764 cities The Bank like BOB and SBI has shown good growth while at the same time

managed to control bad debt

Competitive AnalysisICICI Bank This is the largest Indian Private Bank with operations in all Financial

Services Sectors. The Company has faced a bad time during the Lehman downturn but has recovered well

Revenues of $12.5 billion. ICICI Bank is strong in almost all sectors of the financial industry with one of the best management teams in the country

The company which overextended itself in the 2007-2008 boom has now reduced the size of its risky segments and is again back on the growth trajectory

Axis Bank Axis Bank has been the best performing private bank along with HDFC

Bank showing excellent growth in top line and bottom line The Bank has been expanding into insurance and investment banking

(acquired Enam) The Bank was promoted jointly by UTI, LIC and other state owned general

insurers

Direct Comparison – HDFC Bank Vs Axis Bank - Q2 FY2010

1. Interest on Advances 13. Basic EPS 2. Interest Earned 14. Percentage of Gross/Net NPA3. Total Income 15. Market Price and PE Ratio4. Interest Expended5. Employees Cost6. Other Operating Expenses7. Operating Profit8. Provisions9. Tax Expense10. Net Profit11. Paid-up Equity12. Capital Adequacy Ratio

SWOT - HDFCSTRENGTHSLeader in home loan segment Right strategy for productsBrand imageHigh degree of customer satisfactionRobust Risk control FrameworkLarge network, Distribution structure

OPPORTUNITIES

Untapped rural market

Fast growing insurance business

WEAKNESSESStrict policy of fundingNot very aggressive on M&A Low international presenceControversies like job cuts, racism and data loss have affected image

THREATSRisk of fraud and NPAMajor private playersRBI policiesIncrease in funding costEconomic instability and global crisis

SWOT for HDFC and competitors

SWOT - ICICISTRENGTHSGlobal player in International Banking operations in 18 countriesPioneer in usage of Internet services for Online Banking Advanced infrastructure with sound IT base

OPPORTUNITIESRise in upper and middle class population due to increase in GDP, therefore could introduce economical version of their servicesLargely unexplored market in regions where only PSBs operate

WEAKNESSESHigh Bank Service ChargesLess Credit Period

THREATSTight local and international competition ICICI levies higher service charges- transactions expensiveICICI Bank provides all services through electronic computerized machines. This creates problems to the less educated people

SWOT - AXISSTRENGTHSSound technological platform Current Account deposits grew by 24%yoyRetail Banking: Savings Bank Deposits by 29% YOY

OPPORTUNITIESLarge retail and corporate marketWide scope in rural IndiaOther Activity (Non Banking Activity)People are become more service oriented

WEAKNESSESMarket capitalization is very lowNot having Image - UTI (fraud)Higher costCustomer service

THREATSGovernment Rules And RegulationVery high competition with Private sector (ICICI Bank, HDFC bank) or public sector (BOB, PNB)banksCapital Market slow-downRising Rates

SWOT - YESSTRENGTHSHigh Quality, Customer Centric, Service DrivenAdopted International Best Practices, the highest standard of service, quality and operational excellenceCredible And Transparent Performance Management Process

OPPORTUNITIESVery wide marketOther activity(insurance, stock broking, mutual fund)Wide scope in rural area

WEAKNESSESLess wide networkNot in every stateLess promotional activityUnknown brand

THREATSVery high competition Private bank market (ICICI Bank, HDFC bank), In public sector (BOB, PNB)Government PolicyOther better Saving, investment option available

SWOT - SBISTRENGTHSStrong domestic market position, sustaining reach and customer confidenceWide Distribution NetworkGovernment owns 60% stake in SBI-customer securityOffers very low transition costs

OPPORTUNITIESHighest beneficiary from increasing adoption of E-transactionsInformation technology - decrease transaction costMerger with associate banks Addition of more branches and ATMs

WEAKNESSESThe existing hierarchical management structure - barrier to changeHas the highest non performing assets Susceptible to political interventionLags in terms of modernization of its processes, infrastructure, centralization

THREATSLarge numbers of MNC banks mushroomingPrivate banks venturing into the rural and semi-urban sector, which used to be the bastion of the State Bank and other PSU banks

Key Focus

• Understanding of customers’ financial needs and providing banking solutions• Wide range of products and services to cater both retail and wholesale customer segments• Market Leaders in various products of retail banking such as Credit Cards and Auto Loans• Providing financial services to the under banked and rural sector• Helping Farmers with products like Tractor Loan, Kissan Gold Card, Loan against Warehousing Receipts etc• In line with growth strategy today 30% of the branches are located in rural and under banked areas

Strategic Decisions

Merger with CBoPAbout Centurion Bank of Punjab

Was one of the leading private sector bank in India

Strong nationwide presence with 394 Branches and 452 ATMs in 180 Cities

Employee base of more than 7500

Was listed in major stock exchanges

Strong player in FOREX services, personal loans, mortgages and agricultural loans

Merger with CBoPReasons of Merger

HDFC wanted to add scale, geography and experienced staff to its franchise

CBoP was the right fit in terms of culture, strategic intent and approach to business

Merger was Win-Win situation for both the banks

Combined entity became even more strong in the banking market

Merger with CBoPDetails of Merger

Finalised on 26th Feb., 2008

Swap Ratio of 1:29 (1 share of HDFC Bank for every 29 shares of CBoP Bank)

Acquisition came for Rs.9510 Crores, one of the largest merger in banking history of India

Merger was EPS Dilutive for HDFC Bank in the interim

Strong Deposit Base of Rs. 120000 Crores and Net Advances of around Rs. 85000 Crores

Current Business Strategy• Develop innovative products and services that attract its targeted

customers and address inefficiencies in the Indian financial sector• Leverage its technology platform and open scalable systems to deliver

more products to more customers and to control operating costs• Focus on healthy earnings growth with low volatility• To increase the market share in the growing banking industry by following

a disciplined growth strategy, focusing on quality and not on quantity and delivering high customer service

• To maintain the current high standards for asset quality through disciplined credit risk

• To develop innovative products and services that attract the targeted customers

• To continue developing products and services that reduce the cost of funds.

Current Strategies

State Bank of India• State Bank of India (SBI) is the largest nationalized commercial bank in

India in terms of assets, number of branches, deposits, profits and workforce. With the liberalization of the Indian banking industry in the mid-1990s, SBI faced stiff competition from the private sector and foreign banks which resulted in significant loss of its market share.

Strategies adopted by Key Competitors

ICICI Bank• ICICI Bank Second largest bank in India

• Strong diversified financial services franchise in India

• ICICI Bank has taken up specific initiatives to ramp up financial literacy as well as intermediation to the underserved and under-banked segments in both rural and urban areas

• ICICI Bank offers a complete suite of products and services to meet the individual financial requirements of customer segments. Savings, investments and insurance products are made available to its rural and agri customer base

• The Bank also offers microfinance services to low-income households and crop loans, farm equipment loans, commodity based loans to farmers.

Axis Bank• 3rd largest private sector bank

• Aggressive branch and ATM expansion to 1021 branches and 371 ATMs to be upcoming in tier II and Tier III cities.

• Expanding global reach by way of setting up 3 branch offices in Singapore , Dubai and Hong Kong and 2 representative offices in Shanghai and Dubai recently

• Axis Bank offers a vast spectrum of services encompassing Large and Mid-Corporate Banking, SME Banking, Agri-Business Banking, Retail Banking and International Banking.

Axis Bank• Axis Bank's network of over 1,200 branches and 4,900 ATMs is spread

across more than 680 cities and towns across the country

• Instead of piecemeal efforts of promoting their debit card, the bank has launched what it calls the first ever filmi Platinum debit and credit card across 25 cities in India. The objective — to offer movie deals on movie tickets through one exclusive card. The bank therefore hopes to carve out a niche in a space not fully explored by competition

Successful Strategies• Focusing on the expansion of retail and rural banking

• Increasingly customer - centric in their approach

• Mergers and acquisitions

• Strong national network

• Mission is to be "a World Class Indian Bank", benchmarking themselves against international standards.

Critical Analysis

Successful Strategies• Best practices in terms of product offerings, technology, service levels, risk

management and audit & compliance

• Develop new product and technology is the main business strategy

• Increase market share in India’s expanding banking and financial services industry by following a disciplined growth strategy focusing on quality and not on quantity and delivering high quality customer service.

• Leverage our technology platform and open scalable systems to deliver more products to more customers and to control operating costs

• Develop innovative products and services that attract the targeted customers that reduce bank’s cost of funds

• Focus on high earnings growth with low volatility

Successful Strategies

Where Did They Go Wrong?• FOCUS ONLY ON HIGH END CUSTOMERS: The bank targets only the top

bracket of clients and does not cater to the needs of small customers. Due to this reason the bank may sometimes loose good clients

• Not Equal to International Standard

• Highly depended on individuals loans

• Major Stake held by American financial group which are under stress in economic slow down

Where Did They Go Wrong?• Managerial international presence

• No next line of leadership

• Lack of infrastructure in rural area

• Minimum balance to open a account is very high

• Extension overseas holds lots of risk

• Credit card department is not active

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