project hdfc & idbi bank

8/6/2019 Project Hdfc & Idbi Bank

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INDUSTRIAL REPORT ON

BANKING INDUSTRY(HDFC AND IDBI BANK)

Submitted in partial fulfillment of the Pace Programme

POST GRADUATE DIPLOMA IN INSURANCE

AND RISK MANAGEMENT

(2008-2010)

Under Supervision of: By:

Dr. D.K. Sharma Mohit Wahi

Lecturer PGDM-IRM-Ist sem

SMS Roll No. IRM/03/31


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PREFACE

It is a matter of great satisfaction and privilege for me place before

the esteemed faculty members the PACE report on any industry so

I selected banking sector and surveyed private banks.

The report incorporated the comparison between two banks i.e.

HDFC and IDBI Bankby comparing their balance sheet this

study also bring out the progress of each bank separately on the

basis of the balance sheet of five years.

Hope this study will bring out clearly what is the condition of each

bank separately and in comparison to other banks.

.

Mohit Wahi


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ACKNOWLEDGEMENT

Gratitude is hardest of emotion to express and often does not find

adequate words to mention our feeling towards other. I am grateful

to my DirectorProf. P.N. Jha, I am also thankful to my mentor

Dr. D.K. Sharma. Who gave us such a wonderful project which

will enhance our knowledge & also helps in building our

personality. My special thanks to my brotherPuneet who guided

me and motivated me to complete this report.


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CONTENT

1) INTRODUCTION

a) What is Bank

b) An overview of Banking Sector

2) ANALYSIS OF DIFFERENT PRIVATE SECTOR BANKS

A) HDFC BANK a) Balance Sheet of HDFC BANK

b) Analysis of the Balance Sheet & Ranking of HDFC

BANK

B) IDBI BANKa) Balance Sheet of IDBI BANK

b) Analysis of the Balance Sheet & Ranking of IDBI BANK

3) COMPARISON OF HDFC AND IDBI BANK

4) CONCLUSION


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INTRODUCTION

What is a bank?

Bank is an institution which deals in money and credit. It is often

described as a credit institution. It performs a large variety of

functions in the modern society. It accepts deposits from the public

and lends money. On deposits, the bank pays interest and for

lending money, it charges a higher rate of interest. The difference

between the two rates is the profit of the banks.

Acc. to Banking Regulation Act of India, 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.

Acc. to R.P. KENT, An organization whose principal

operations are concerned with the accumulation of the temporarily

idle money of the general public for the purpose of advancing to


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others for expenditure.

Acc. to CROWTHER, The bankers business is to take the debts

of other people to offer his own in exchange, and thereby create

money.

Evolution of Banks:-

The first bank called the Bank of Venice was established in

Venice in 1157 to finance the monarch during wars. The first bank

in India was the Bank of Hindustan started in 1770 by Alexander

& Co. an English agency house in Calcutta which failed in 1782

with closure of the agency house. But the first bank in the modern

sense was established in the Bengal Presidency as the Bank of

Bengal in 1806.

It was the merchant bank who first evolved the

system of banking by trading in commodities than money. Their

trading activities required the remittance of money from one place

to another.


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WHAT IS A BANKING SECTOR?

Banking sector refers to a wide industrial sector which deals in

finance for business, education, etc. Banking sector is divided into

two types:-

1. Public sector.

2. Private sector.

1. Public sector bank:-These are owned and controlled by

government that is its complete functioning is in the hands of

the government. Its directly rules and regulation of Reserve

bank of India (RBI).

2. Private sector bank:- These are owned and controlled by the

Private individual i.e. there is no role of government in these

types of sectors. They are also under the rules and regulation

of Reserve Bank of India (RBI). For dealing with the

Banking industry I am going to compare the balance sheet of

three private sector banks in order to know the condition of

an individual bank and even the comparison between the two.This will tell us about the actual position of these sector

banks.


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HDFC Bank net rises despite loss in portfolio valuation

Mumbai, July 14

DESPITE loss on valuation of investments, HDFC Bank has

registered an over 30 per cent jump in net profit for the first quarter

ended June 30, 2004, at Rs 139.97 crore, up from Rs 107.28 crore

in the same period the previous year.


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Net interest income of the bank increased over 43 per cent to Rs

398.79 crore (Rs 277.69 crore). Other income fell 18 per cent to Rs

108.04 crore (Rs 132.19 crore).

"While core banking income and fee income increased, the profiton sale and revaluation investments declined leading to fall in fee

income. This was due to the fall in prices of Government

securities. We had to provide Rs 65 crore from our profits towards

valuation losses of the portfolio," said Mr. Paresh Sukthankar,

Country Head-Risk, HDFC Bank. The Government securities

market saw a 0.7 per cent rise in yields in the first quarter and

HDFC Bank provided for the loss in valuation of its portfolio from

the profit and loss account.

Other income includes fees and commissions at Rs 144 crore (Rs

60.8 crore), foreign exchange products & derivatives at Rs 27.9

crore (Rs 29.1 crore) and profit on sale and revaluation of

investments which registered a net loss of Rs 65 crore as against a

profit of Rs 42 crore in the previous year period. Total income

increased 14 per cent to Rs 810.6 crore (Rs 709.26 crore) and total

expenditure increased 11 per cent to Rs 534.59 crore (Rs 481.33

crore).

As on June 30, 2004, total deposits were Rs 31,406 crores, an

increase of 34.6 per cent from Rs 23,340 crores in June 2003.

Total assets grew 54 per cent to Rs 18,400 crore (Rs 11,900 crore)

while retail loans (net of Rs 740 crore loans securitised out) grew

82.4 per cent on a year-on-year basis to Rs 7,871 crore (Rs 4,300

crore).

Portfolio quality as on June 30, 2004 remained healthy with net

non-performing assets at 0.2 per cent of advances and the capital

adequacy ratio was at 11 per cent, said a press note from the bank.


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HDFC Bank's share price fell marginally by 0.05 per cent on BSE

to Rs 365.00 and by 0.07 per cent on NSE to Rs 365.05.

This Weeks Hot Stock: HDFC

Submitted by TheIndiaStreet on September 22, 2007 - 11:21am.

28 thumbs up

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Introduction:

Housing Development Finance Corporation (HDFC) was founded

by Hasmukhbhai T. Parekh, who was a General Manager at

Industrial Credit and Investment Corporation of India (ICICI).

HDFC was incorporated in 1977 with the primary objective of

providing long term home loans. Now HDFC has diversified into

banking, general/life insurance, mutual funds etc.

Business Overview:

HDFC provides loans for resident Indians and NRIs for purchase

of house, flat or bungalow from developers as well as for self

constructed houses. Several options are available to the customers,

including:

Maximum amount (up to 85% of cost of property) Maximum term (20 years)

Fixed interest rate / adjustable interest rates

For repayment of loans, HDFC provides following options:

Flexible loan installment plans

Trench based EMI (i.e. customers can fix the installments

they wish to pay till the time the property is ready for

possession)

Accelerated Repayment Scheme (i.e. increasing the EMI and

replaying faster)

HDFC also provides home improvement loans for external repairs,

tiles fixing/flooring, painting, plumbing, waterproofing etc. For


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adding space or additional rooms, it provides home extension

loans. Other type of loans include short term bridging loan (selling

old property to buy a new/bigger home), land purchase loan, loans

to professionals for non residential purpose (such as clinic, office

etc.) and mortgage loans for marriage/education/medical expenses.

HDFC offers two kinds of deposits, at fixed and variable interest

rates and it has been awarded AAA rating for its deposits from

both CRISIL and ICRA for the twelfth consecutive year,

representing highest safety as regards timely payment of principal

and interest. Several plans are available, including monthly/annual

income, cumulative/non-cumulative and senior citizen deposits.

HDFC Realty, the real estate property division of HDFC, helps

customers in finding opportunities for

buying/selling/leasing/renting of residential property and

commercial plot/land across various cities in India. HDFC Realty

is managed by Home Loan Services India Private Limited, a

wholly owned subsidiary of HDFC.

HDFC has promoted HDFC Bank, which offers personal,

corporate and forex banking solutions.

HDFC Mutual Fund has wide range of schemes to suit the

investors equity funds, debt funds, balanced funds and liquid

funds.

HDFC Standard Life Insurance meets the insurance needs of

individuals as well as corporate and offers insurance, gratuity,

leave encashment and superannuation products.

HDFC has joined hands with Barclays of UK to promote Intel net,

a BPO company that provides IT solutions to banking, finance,

retail, telecom etc.

Financial Performance:


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HDFC has registered consistent growth in net profits and EPS in

the last five financial years. Its net profits have more than doubled

between 2002 and 2007 from Rs.690 crores to Rs.1482 crores and

EPS has surged from 28.3 to 69.5.

Stock Market Performance:

HDFC is a constituent of Sensex (Scrip Code: 500010, Free floatmarket capitalization: Rs.57,269 crores; weightage: 5.23%) and

Nifty (Ticker: HDFC, FFMC: Rs.53,050 crores; weightage:

2.27%). HDFC Bank, promoted by HDFC, is listed at New York

Stock Exchange (NYSE) and traded on ticker HDB.

Foreign Institutional Investors (FIIs) have a huge stake in HDFC

(68.31%). Foreign Financial Institutions have 10.4% stake in the

company.

The face value of the stock was split in the year 1999 (from Rs.100

to Rs.10) and HDFC issued 1:1 bonus in 2002. At NSE, it is also

traded in Futures & Options segment with a lot size of 150 shares.

Let us now discuss the short / medium / and long term outlook for

the stock.
http://docs.google.com/File?id=d4mb8f3_1231gzrhkncw


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Short term outlook:

The daily chart of the stock is displayed above. Its short term

resistance at 2100 was broken on September 6. It has gained about

12% after the breakout. But, it has made a high of 2424 from a lowof 1786 or about 36% without any significant correction. Short

term investors need to take note of this and consider 2100 as a

support for entering the stock. It is also close to 50% ret cement

level at 2106. 2031 may be considered as another major support.

So, short term investors may wait for corrective declines.


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Medium term outlook:

There are no major reversal signs in the weekly chart of the stock.

Medium term investors may continue to hold the stock. When

calculated from a low of 962 the technical target for the stock

works out to 2519. Support exists at 1828. Since the stock has

already touched a high of 2424, it may not be wise to enter at this

stage; however, if a sharp correction occurs, entry may be

considered at support levels.


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Long term outlook:

We dont see any reversal signs in the monthly chart either. After

adjusting for split/bonus, the stock has appreciated 12.72 times

between September 1997 and now. Long term investors may book

partial profits. But entry may be avoided at the current levels.

Conclusion:

Short term investors may enter the stock on declines at

support levels Medium term investors may consider booking profits

Long term investors may continue to hold/book partial profits


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CONCLUSION

HDFC Bank is much better and reliable in comparison to IDBI

Bank as we can see from the above table that the net current assets

of the HDFC Bank is greater than that of IDBI Bank. We can

further see that the goodwill and the long term investment of

HDFC Bank are also greater than that of IDBI Bank. As the assets

are more liabilities are also much more. The current liabilities of

the HDFC Bank is greater than that of IDBI Bank. In the same way

long term Debts, common stock, retained earning, capital surplus

and net tangible assets are also more than that of IDBI Bank.

project hdfc & idbi bank

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