India Banking Industry Report - 2014

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India Banking Industry Report - 2014

This report profiles India’s banking industry, discussing market trends through 2013 and outlook for 2014 and beyond. The report also highlights leading players in the sector including State Bank of India, HDFC Bank, and ICICI Bank.

The Indian banking industry has witnessed a period of consistent growth during the last decade, with banks along with their customers embracing robust systems and processes. The industry saw a consistent rise in the number of reporting offices in the last few years. With Reserve Bank of India (RBI) stressing the policy of financial inclusion, there has been a renewed emphasis on rural expansion.

Industrial slowdown and sticky consumer price inflation created a hostile environment for the country’s banking sector in 2013. The consumer price inflation was in the double-digit range during the course of the year. As a result, RBI had to raise benchmark policy rates by 75bps between May 2013 and January 2014. Although private banks were not much affected, most banks in the public sector felt the heat. The cost of servicing debt went up, resulting in an increase in bad loans in the rate-sensitive sectors. As a result, the profitability of nationalized players also suffered.

However, the outlook for the Indian banking sector is stable, backed by the considerably sound financial position of its banks. Rising per capita income, growing urbanization, and consistent economic growth will drive growth in this sector in the years to come.

Key Points:

• The report includes company profiles with detailed financial information for three leading firms in the sector: State Bank of India (SBI), HDFC Bank, and ICICI Bank. There is also a comparative matrix of key indicators for these firms.

• During 2007–2013, the total assets of scheduled commercial banks grew at a CAGR of 18.4%. Public-sector banks led by State Bank of India and its associates dominated the Indian banking system in terms of asset size, accounting for 73% of total assets.

• Total credit disbursed by scheduled commercial banks grew at a CAGR of 23% during 2003–2013, while total deposits of scheduled commercial banks grew at a CAGR of 19% during 2003–2013.

• The asset quality of scheduled commercial banks, particularly public sector banks, has deteriorated during the last two years. A steep rise in interest rates together with industrial contraction led to a sharp increase in non-performing assets. Net NPA ratio of SCBs grew from 0.97% in FY11 to 1.68% in FY13.

• In order to curb inflation, RBI increased the policy rate (repo rate) 13 times between March 2010 and October 2011. RBI raised industry hopes by cutting the repo rate by 50 basis points between January 2013 and May 2013, but had to gradually raise it again due to sticky inflation.

Table of Contents

1. Industry Profile
1.1 Sector overview
1.2 Sector size
1.3 Asset profile
1.3.1 Loans and advances
1.3.2 Investments
1.4 Liability profile
1.4.1 Deposits
1.4.2 Borrowings
1.5 Competitive landscape
1.6 Environmental scanning

2. Market Trends and Outlook
2.1 Key economic indicators-India
2.2 Monetary policy
2.3 Credit growth
2.4 Deposit growth
2.5 Capital adequacy
2.6 Asset quality
2.7 Profitability
2.8 Market Outlook

3. Leading Players and Comparative Matrix
3.1 Leading Players
3.1.1 State Bank of India (SBI)
3.1.2 HDFC Bank Ltd (HDFC Bank)
3.1.3 ICICI Bank Ltd (ICICI Bank)
3.2 Comparative matrix
3.3 SWOT analysis

4. Tables and Charts

Table 1: List of major scheduled commercial banks operating in India
Table 2: Key features of the guidelines on licensing of new banks
Table 3: Priority sector lending targets and sub-targets
Table 4: Basel III implementation draft guidelines issued by RBI
Table 5: Key financial ratios of the leading players
Table 6: Market multiples

Chart 1: Number of reporting offices-All commercial banks
Chart 2: Reporting offices by location
Chart 3: Number of commercial banks in India
Chart 4: Reporting offices by type of banks
Chart 5: Total assets of the scheduled commercial banks
Chart 6: Asset share by type of banks
Chart 7: Breakup of assets of Scheduled Commercial Banks
Chart 8: Total loans and advances disbursed by the SCBs
Chart 9: Advances approved by sectors
Chart 10: Segment wise breakup of industrial loans
Chart 11: Segment wise breakup of service sector loans
Chart 12: Segment wise breakup of personal loans
Chart 13: Total investments done by SCBs
Chart 14: Breakup of investments done by SCBs
Chart 15: Breakup of liabilities of Scheduled Commercial Banks
Chart 16: Total deposits in SCBs
Chart 17: Type of deposits of SCBs
Chart 18: Ratio of savings deposit and term deposits to total deposits
Chart 19: Total borrowings done by the SCBs
Chart 20: Breakup of borrowings done by SCBs
Chart 21: India's top ten banks in terms of loans/advances
Chart 22: Current account deficit and fiscal deficit
Chart 23: Population served per office
Chart 24: Segment wise breakup of priority sector loans
Chart 25: Quarterly GDP growth rate-India
Chart 26: Average Monthly USD to INR Exchange Rate
Chart 27: Inflation during FY14-India
Chart 28: Repo rate
Chart 29: Cash reserve ratio
Chart 30: MSF rate
Chart 31: Y/Y growth in credit-Sector wise
Chart 32: Y/Y growth in credit-Segment wise
Chart 33: Deposits during last five years
Chart 34: Y/Y growth in deposits
Chart 35: Capital adequacy ratios of Indian banks during last five years
Chart 36: Net NPA ratio of Indian banks
Chart 37: Gross NPA ratio of major public sector banks
Chart 38: Net interest margins of Indian banks
Chart 39: Return on assets of Indian banks
Chart 40: Loans disbursed by SBI-Annual
Chart 41: Net interest margin of SBI
Chart 42: Asset quality of SBI
Chart 43: Loans disbursed by HDFC Bank-Annual
Chart 44: Net interest margin of HDFC Bank
Chart 45: Asset quality of HDFC Bank
Chart 46: Loans disbursed by ICICI Bank-Annual
Chart 47: Net interest margin of ICICI Bank
Chart 48: Asset quality of ICICI Bank

Number of pages: 39
Release Date: Fri, 21 Mar 2014