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DISSERTATION
ON

CAPITAL STRUCTURE OF ICICI BANK

SUBMITTED TO

DEPARTMENT OF ACCOUNTANCY AND BUSINESS
STATISTICS
UNIVERSITY OF RAJASTHAN, JAIPUR
FOR THE DEGREE OF
MASTER OF ACCOUNTANCY AND BUSINESS STATISTICS

SESSION 2015-16

Supervisor

Dr. Mayur Kumar Bardia
Associate professor
Department of Accountancy and
Business Statistics
University of Rajasthan
Jaipur-302004

Submitted By:

Nayana Palsaniya
M.Com.
Semester IV
Roll No. 621
1

2

PREFACE
This project is an integral part of one academic curriculum. I feel great pleasure
in submitting the peace of work as my project.
This project deals with all the aspects of “CAPITAL STRUCTURE OF ICICI
BANK”.
The whole study is divided into 5 chapters and cover all the aspects related to
this research. As first chapter : Introduction, 2 nd Chapter : Company Profile and
Research Methodology, Chapter 3rd : Analysis and Interpretation of Data and
Findings, Chapter 4th : Suggestions and Conclusion, Bibliography.
This work is an attempt to present report on account of little practical
knowledge.

Nayana Palsaniya
Semester IV
M.Com.
Roll No. 621

3

DECLARATION
I Nayana Palsaniya study in M.Com IV Semester in the academic year
2015-16 at department of accountancy and Business Statistics, University of
Rajasthan, Jaipur here by declare that I have completed the dissertation title
“CAPITAL STRUCTURE OF ICICI BANK” as a compulsory paper of course
requirement of M.Com.
I further declare that information presented in this project report /
dissertation is true and original to the best of my knowledge.

Nayana Palsaniya
Semester IV
M.Com.
Roll No. 621

4

SUPERVISION CERTIFICATE
It is certified that Ms. Nayana Palsaniya is a student of M.Com IV Semesterhas
completed her Dissertation titled “CAPITAL STRUCTURE OF ICICI BANK”
under my supervision and guidance.
This is her own work.
Date:
Place: Jaipur

(Dr. Mayur Kumar Bardia)
Associate professor
Department of Accountancy and
Business Statistics
University of Rajasthan
Jaipur-302004

5

ACKNOWLEDGEMENT
I take this opportunity to express my acknowledgement and deep sense of
gratitude for rendering valuable assistance and guidance to me by Dr. Mayur
Kumar Bardia, Associate Professor, Department of Accountancy and
Business Statistics, University of Rajasthan, Jaipur for successful
completion of my dissertation. I am highly obliged to my supervisor for his
personal encouragement and help provided to me his completion of my
dissertation.
I once again thanks to everyone for all the necessary help to me for
completion of my dissertation.

Nayana Palsaniya
Semester IV
M.Com.
Roll No. 621

6

INDEX
S.NO.

CHAPTER

1.

CHAPTER-1

2.

INTRODUCTION
CHAPTER-2

PAGE NO.

COMPANY PROFILE AND RESEARCH
3.

METHODOLOGY
CHAPTER-3
ANANLYSIS AND INTERPRITATION OF DATA

4.

AND FINDINGS
CHAPTER-4

5.

SUGGESTIONS AND CONCLUSION
BIBLIOGRAPHY

7

Chapter-1

St

INTRODUCTION

8

INTRODUCTION
HISTORY
The history of life insurance in India dates back to 1818 when I was
conceived as a means to provide for English windows. Interestingly in
those days a higher premium was charge for Indian lies than nonIndian lives, as Indian lives were considered more risky for coverage.

The Bombay Mutual Life Insurance Society started its business in
1870. It was the first company to charge same premium for both
Indian and Non-Indian live. The oriental Assurance Company was
establishing in1880. The first general insurance company- Tital
Insurance Company Limited was established in 1850.

Insurance regulation formally began in India with the passing of the
life insurance company’s act of1912 and the provident fund act of
1912. Several frauds during 20’s and 30’s sullied insurance business
in India. By 1938 there were 176 insurance companies. The first
comprehensive legislation was introduced with the insurance Act of
that 1938 that provided strict state control over insurance business.
The government of India in 1956, brought together over 240 private
life insurance and provident societies under one nationalized
monopoly cooperation and LIC was born. Nationalization was
justified on the ground that it would create much-needed funds for
9

rapid industrialization. This was in conformity with the government’s
chosen part of state lead planning and development.
With this nearly 107 insurer were amalgamated and grouped into four
companies- National Insurance Company, New India Assurance
Company, Oriental Insurance Company and United India Insurance
Company. These were subsidiaries of the general insurance company
(GIC).
PRESENT SCENARIO OF THE
INSURANCE SECTOR
Liberalization commitments of the country to help in disciplining
future economic policies will include the insurance reforms. When the
word over, insurance, markets have been opened up, India cannot
remain in isolation. Globalization is the new economic reality, which
is here to stay heralding a new era of insurance in India. Wit the
opening of the insurance industry, India stands to gain the following
major advantages:
1. Globalization will provide improved opportunities to the
customers for better products, with more reasonable and
affordable pricing.
2. The customer will get quicker servicing.
3. It will enhance the saving rate.
4. Long-term funds for infrastructure development will be
available to the country.
10

5. It will secure for India larger inflows of foreign capital needed
to sustain our GDP growth.

WHAT IS INSURANCE?
Insurance is a legal contract that protects people from the financials
costs those results from loses of life, loss of health, lawsuits, or
property damage. Insurance provide a means for individuals & society
to cope up with some of the risks faced in every day life by
everybody.
People purchase contracts of insurance, called a policy, from various
insurance companies.
Life insurance is a contracts for payment of a sum of money to the
person assured on the happening of the event insured against .Usually
the contracts provide for the payment if an amount on the date of
maturity or at unfortunate death . The contracts also provide for
payment of premium periodically to the corporation by the assured.
OVERVIEW OF INSURANCE
Insurance business is divided into four classes:
a) Life insurance
b) Fire
c) Marine
d) Miscellaneous
11

Life insurers undertake the Life Insurance business; general
insurers handle the rest. The business of insurance essentially
means defraying risks attached to an activity (including life) and
sharing

the

risks

between

various

entities,

persons

and

organization. Insurance companies are important players in
financials markets as they collect and invest large amounts of
premium in various investment instruments.
Insurance offers the following:
a) Protection to investors
b) Accumulation of savings
c) Channeling these savings into sectors needing huge longterms investments.

Insurance companies receive a steady cash stream of premium or
contributions to pension’s plans. Their cash flows are determined on
the basis of various actuary studies and models. Since their liabilities
are long-term or contingent in nature, their investments are also longterm and they are able to maintain a healthy liquidity position. Since
they offer more than the return on saving in the shape of life cover to
the investors, the rate of return guaranteed on their insurances policies
is relatively low. Consequently, the need to seek high rates of return
on their investment is also low. Since the risk factor in the insurance
business is quite high, insurance companies usually invest in
12

relatively safer bets such as bonds of GOI, PSU’s, state governments,
local bodies’ corporate houses and mortgages of long term nature.
Lately, insurance companies have also ventured into pension schemes
and mutual funds. Life insurance constitutes the major share of
insurance business. Life insurance depends upon the laws of
mortality. Life has to end sooner or later and the claim in respect of
life is certain.


As at 30 June 2010, the Parent is India's largest bank in the
private sector with total consolidated assets of approximately US$ 88
billion and is the second largest company in India including all public
and private enterprises. ICICI Bank revenue is USD 5.79 Billion in
financial year 2008-2010.



Parent and its subsidiaries offer not only comprehensive banking
services in India~ but also life insurance, general insurance, asset
management, investment banking and private equity/venture. capital.
The Parent has a presence, through its subsidiaries, branches and
representative offices, in 18 countries in North America. The UK and
Continental Europe, the Middle-East, South Africa, South Asia and
Hong Kong.



In 2000, the Parent was the first Indian banking company and
the second bank from Asia to list on the New York Stock Exchange
and currently has a financial strength rating of C-from Monday's
Investors Service Lin1ited (Moody's) and a long-term foreign
currency credit rating of Baal froD1 Moody's and BB+ from Standard
13

& Poor's.
ICICI bank has done sales of US $ 9784.5 million with one year



growth 68.80% for fiscal yr ending March 2010.
ICICI bank revenue has 5.79 billion with net income of US $



719.2 million (income growth 37.20/0) for fiscal yr ending March
2010.


ICICl Bank now has the largest market share among all bank in
retail or consumer financing. ICICl Bank is the largest issuer of credit
card in India [citation needed]. It was the first bank to offer a wide
network of A TM's and had the largest network of A TM's tilf2009
before SBI caught up with it.



ICICI Bank has a network of about 619 branches and extension
counters and over 2,450 ATMs. ICICl Bank offers a wide range of
banking products and financial services to corporate and retail
customers through a variety of delivery channels and through its
specialized subsidiaries and affiliates in the areas of investment
banking, life and non-life insurance and venture capital.



ICICI Bank set up its international banking group in fiscal 2002
to cater to the cross border needs of clients and leverage on its
domestic banking strengths to offer products internationally. ICICI
Bank currently has subsidiaries in the United Kingdom and Canada,
branches in Singapore and Bahrain and representative offices in the
United States, China, United Arab Emirates, Bangladesh and South
14

Africa.


ICICI Bank's equity shares are listed in India on the Stock
Exchange, Mumbai and the National Stock Exchange of India
Limited and its American Depositary Receipts (ADRs) are listed on
the New York Stock Exchange (NYSE).



As required by the stock exchanges, ICICI Bank has formulated
a Code of Business Conduct and Ethics for its directors and
employees. At April 4, 2005, ICICI Bank, with free float market
capitalization of about Rs. 308.00 billion (US$ 7.00 billion) ranked
third amongst all the companies listed on the Indian stock exchanges.



ICICI Bank was originally promoted in 1994 by ICICI Limited,
an Indian financial institution, and was its wholly "'owned subsidiary.
ICICl's shareholding in ICICI Bank was reduced to 46% through a
public offering of shares in India in fiscal 1998, an equity offering in
the form of ADRs listed on the NYSE in fiscal 20GO, ICICJ Bank's
acquisition of Bank of Madura Limited in an all-stock amalgamation
in fiscal 2001, and secondary market sales by ICICI to institutional
investors in fiscal 2005 and fiscal 2006.



ICICI was formed in 1955 at the initiative of the World Bank,
the Government of India and representatives of Indian industry. The
principal objective was to create a development financial institution
for providing medium-term and long-term project financing to Indian
businesses.
15



ICICI Bank now has the largest market value of all banks in
India, and is widely seen as a sophisticated bank able to take on many
global banks in the Indian market.



In the 1990s, ICICI transformed its business from a
development financial institution offering only project finance to a
diversified financial services group offering a wide variety of
products and services, both directly and through a number of
subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the
first Indian company and the first bank or financial institution from
non-Japan Asia to be listed on the NYSE.



The bank is expanding in overseas markets. It has operations in
the UK, Hong Kong, Singapore and Canada. It acquired a small bank
in Russia recently. It has tie-ups with major banks in the US and
China. The bank is aggressively targeting the NRI (Non Resident
Indian) population for expanding its business.



After consideration of various corporate structuring alternatives
in the context of the emerging competitive scenario in the Indian
banking industry, and the move towards universal banking, the
managements of ICICI and ICICI Bank formed the view that the
merger of ICICI with I~ICI Bank would be the optimal strategic
alternative for bath entities, and would create the optimal legal
structure for the ICICI group's universal banking strategy. The· merger
16

would enhance value for ICICI shareholders through the merged
entity's access to low-cost deposits, greater opportunities for earning
fee-based income and the ability to participate in the payments system
and provide transaction banking services. The merger would enhance
value for ICICI Bank shareholders through a large capital base and
scale of operations, seamless access to ICICI's strong corporate
relationships ·built up over five decades, entry into new business
segments, higher market share in various business segments,
particularly fee-based services, and access to the vast talent pool of
ICJCI and its subsidiaries. In October 2001, the Boards of Directors
of IClCI 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. The merger was approved by shareholders of ICICI and ICICl
Bank in January 2002, by the High Court of Gujarat at Ahmedabad in
March 2002, and by the High Court of Judicature at Mumbai and the
Reserve Ban-k of India in April 2002.


The World Bank, the Government of India and representatives
of Indian industry form ICICI Limited as a development finance
institution to provide medium-term and long-term project financing to
Indian businesses 1955.



1994 ICICI establishes ICICI Bank as a subsidiary.



1999 ICICI becomes the first Indian con1pany and the first bank
or financial institution fron1 non-Japan Asia to list on the NYSE.
17



2001 ICICI acquired Bank of Madurai (est. 1943) in a rescue
mandated by RBI. Bank of Madurai was a Chettiar bank, and had
acquired Chettinad Mercantile Bank (est. 1933) and Illanji Bank (est.
1904) in the 1960s.



2002 The Boards of Directors of ICICl and ICICI Bank approve
the merger of IClCI, ICICI Personal Financial Services Limited and
ICICI Capital Services Limited, with ICICI Bank. After receiving all
necessary regulatory approvals, ICICI integrates the group's financing
and banking operations; both wholesale and retail, into a single entity.
Also, ICICI Bank brought the Shimla and Darjeeling branches that
Standard Chartered Bank had inherited when it acquired Grind lays
Bank.



2004 ICICI establishes representative offices In NY--and
London



2005 ICICI opens subsidiaries in Canada and the United
Kingdom, and in the UK it establishes alliance with Lloyds Bank
TSB. It also opens an Offshore Banking Unit (OBU) in Singapore and
representative offices in Dubai and Shanghai.



2006 ICICI is planning on opening offices in Bangladesh to tap
the extensive trade between that country and India, Sri Lanka, and
South Africa. It has received Reserve Bank of India approval for the
Bangladesh and South African offices, and for a subsidiary in Russia.



2006 ICICI acquires Investitsionno-Kreditiny Bank (IKB), a
18

Russia bank with about US$4MN in asset, head office in balabanovo
in the Kaluga region, and with a branch in Moscow. ICICI bank offers
a high interest (5.4% gross)
 Indian Company.
 European Company.
 Sponsor or owner.
 Private equity house based in Europe.
Company
Are you an Indian Corporate looking at expanding your horizons,
beyond India? Or are you looking at expanding your global
footprints. We offer a comprehensive set of services including:
 Advisory services on overseas mergers and acquisitions.
 Financing and structuring acquisition debt for acquiring
overseas target.
 Underwriting and Syndication of overseas debt.
 Transactional banking services to overseas subsidiaries of Indian
companies.
Product and Services to European Company
We offer services to assist local companies in their operation as well
19

as provide advisory services to enable entry into India and other Asian
markets. Our services include:


Advisory services on acquisitions of targets specifically those
located in India.



Debt syndication specifically for entities based in Eastern
Europe and Russia.



Transactional banking services to companies based in United
Kingdom.



Advisory services to companies looking at entering India.
Product and Services to a Sponsor or an Owner
We offer services to assist sponsors raise capital by leveraging the
existing value of their share-holdings in a listed or an unlisted
company based in India or overseas. Our services include:



Sponsor finance transactions.



Equity warehousing.

20

Products and Services to a Private Equity House based in Europe.
Are you a private equity house looking at investing in India? We offer
services to finance acquisition of Indian companies by Private Equity
players, tailoring our lending to take into account different investment
objectives and horizons. Our familiarity with vil1ually all Indian
companies enable us to take a higher degree of comfort on the
underlying cash flows and enables faster decision making.
ABOUT SAVING ACCOUNT
What is saving Account?
 The ICICI Bank Savings Account is designed to ensure that
you earn better returns on your money. On your request we can
transfer the excess money from your current account into your
savings account for better interest on your savings
 A saving account supporting limited withdrawals and unlimited
deposits.
 A saving account is meant for convenience and save money.
Who can open a Saving Account?
 Any individual, resident in India, above the age of 18 years and
less then 60 years.
 Salaried or self employed (business men) or any non-working
21

member.
 Professional group like doctors, lawyers, chartered accountants,
professors, etc.
Documents required for saving Account
 Completed AOF (Account Opening Form) With Customer's
Photograph and Signature.
 Know Your Customer (KYC) Document
 Identity Proof
 Address Proof
 PAN Card /Form 60/61
Benefits of Saving Account
 Unlimited Saving
 Attractive Interest Rates on your Funds
 Easy Liquidity Option
 Annual Interest Certificate
 Option of a Joint Account
 Demand Drafts & Pay orders
 Funds Transfer (Local or Anywhere)
 Collection of Cheques/Drafts
22

 Statements, Advices, Daily statement bye-mail
 Cash withdrawal and Deposits
 Call center
 Internet Banking

On the other hand, in case of general insurance. Every asset has a
value and the business of general insurance is related to the protection
of economic value of assets. Assets would have been created through
the efforts of owner, which can be in the form of building, vehicles,
machinery and other tangible properties. Since tangible property has a
physical shape and consistency, it is subject to many risks ranging
from fire, allied perils to theft and robbery.

IMPORTANCE OF INSURACE
If there is some one who would suffer economic hardship if you died,
then the answer is yes….. You need life insurance! Families with
young children have a clear need of life insurance. If both spouses
work, the loss of one income will cause the family immediate
economic hardship and make it harder for them to realize future goals,
such as paying for the children’s educations. But even if one spouse
works ‘inside the home’ and doesn’t bring in a formal income, his or
her death will require the surviving spouses to hire child care,
23

housekeepers and other professional to help run the household and
that can be significant new expense.
If you are married without children or single, then you may need life
insurance to protect your partner or surviving family members against
the costs associated with your death. Funeral expenses, probate and
administrative fees, outstanding debts, special obligations to charities,
and federal and state taxes are costs that all of us must consider. And,
they can add up quickly. Unless you already have sufficient financial
resources, your survivors will probably need life insurance to cover
these expenses. Along with your savings and investments strategy, life
insurance should be a part of your long term financial planning. You
may not like to think about it, but your death can be costly to your
loved ones. At the very least, there will be funeral and burial costs.
There may also be estate taxes and outstanding debts to pay, such as
medical expenses not covered by health insurance. If you have
dependents, they will have to cope up with these costs while no longer
having your income to rely on. The proceeds from a life insurance
policy can be of tremendous value at this time.

ADVATAGES OF LIFE INSURANCE
1. It is superior to an ordinary saving plan: Unlike other saving
plans, if affords full protection against risk of death, the full sum
assured is made available under a life assurance policy; whereas
24

under saving scheme the total accumulated saving alone ,if death
occurs during early.
2. Easy settlement & protection against creditors: The life assured
can name person(s) called Nominee to whom the policy money
would be payable in the events of his death. The proceeds against
the claim of creditor’s life assured by effecting a valid assignment
of the policy.
3. Ready marketability &suitability for quick borrowing: After an
initial period, if the policyholder finds him unable to continue
payment of premiums, he can surrender the policy for a cash sum.
Alternatives, he can tide over a temporary difficulty by taking loan
on the sole security of the policy without delay.

- 25 -Further,

a life insurance policy is sometimes acceptable as security for a
commercial loan.
Tax Relief: The Indian Income- Tax allows deduction of certain
portion of the taxable income, which is diverted to payment of life
insurance premiums from the total income tax liabilities. When this
tax relief is taken into account, it will be found that the assured is in
effect paying a lower premium for his insurance.

25

Chapter-2

nd

COMPANY PROFILE AND
RESEARCH METHODOLOGY

26

COMPANY PROFILE
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.
Bank has total assets of Rs. 3,793.01 billion (US$ 75 billion) at March
31, 2009 and profit after tax Rs. 37.58 billion for the year ended
March 31, 2009.[1]. The Bank also has a network of 1,449 branches
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.[2]. 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[3] is operated), offshore banking units in
27

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 1.15% rise in net profit to Rs. 1,014.21 crore on a
1.29% increase in total income to Rs. 9,712.31 crore in Q2 September
2008 over Q2 September 2007. The bank's current and savings
account (CASA) ratio increased to 30% in 2008 from 25% in 2007.
ICICI Life Insurance Company is a joint venture between ICICI
Bank, a premier financial powerhouse, and prudential plc, a leading
international financial services group headquartered in the United
Kingdom. ICICI Prudential was amongst the first private sector
Insurance companies to begin operations in December 2000 after
receiving

approval

from

Insurance

Regulatory

Development

Authority (IRDA).
ICICI Prudential’s capital stands at Rs.18.15 billion with ICICI Bank
and Prudential plc holding 74% and 26% stake respectively. For the
period April- December 2006, the company garnered new business
weighted premium of over of Rs.2, 302 crore and wrote over 1.1
million policies. The company has assets held to the tune of over
Rs.13000 crore.
ICICI Prudential is also the only private life insurer in India to receive
a National Insurer Financial strength rating of AAA (Ind) from Fitch
ratings. The AAA (Ind) rating is the highest rating, and is a clear
28

assurance of ICICI Prudential’s ability to meet its obligations to
customers at the time of maturity or claims.
For the past six years, ICICI Prudential has retained its position as the
No.1 private life insurer in the country, with a wide range of flexible
products that meet the needs of the Indian customer at every step in
life.
DISTRIBUTION
ICICI Prudential has one of the largest distribution networks amongst
private life insurers in India. As of December 31, 2006 it had
commenced operations in over 360 cities and towns in India,
stretching from Bhuj in the west to Guwahati in the east, and Jammu
in the north to Trivandrum in the south, and had over 175,000
advisors.
The company has 18 bancassurance partners, having tie-ups with
ICICI Bank, Bank of India, Federal Bank, South Indian Bank, Lord
Krishna Bank, all regional rural banks sponsored by Bank of India, as
well as some co-operative banks. It has also tied-up with NGO’s,
MFIs and corporates for the distribution of rural policies.
PROMOTERS
ICICI Bank

29

ICICI Bank is India’s second largest bank and largest private sector
bank with assets of Rs.2823.72 billion as on September 30, 2006.
ICICI Bank provides a broad spectrum of financial services to
individuals and companies. This includes mortgages, car and personal
loans, credit and debit cards, corporate and agricultural finance. The
bank services a growing customer base through a multi-channel
access network which includes over 635 branches and extension
counters, 2325 ATMs, call centers and internet banking.
PRUDENTIAL Plc
Established in London 1848, Prudential Plc, through its businesses in
the UK and Europe, the US and Asia, provides retail financial services
products and services to more than 21 million customers, policyholder
and unitholders worldwide. Prudential has brought to market an
integrated range of financial services products that now includes life
assurance, pensions, mutual funds, banking, investment management
and general insurance. IN Asia, Prudential is the leading European life
insurance company with a vast network of 23 life and mutual fund
operations in 12 countries- China, Hong Kong, India, Indonesia,
Japan, Korea, Malaysia, The Philippines, Singapore, Taiwan, Thailand
and Vietnam.

30

VISION
To make ICICI Prudential the dominant life and Pensions player built
on trust by world-class people and service.
This can be achieved by:•

Understanding the needs of customers and offering them

superior products and service.


Leveraging technology to service customers quickly, efficiently

and conveniently.


Developing and implementing superior risk management and

investment strategies to offer sustainable and stable returns to our
policyholders.


Providing an enabling environment to foster growth and

learning for our employees.
VALUES
Every member of ICICI Prudential team is committed to 5 core
values: - Integrity, Customer First, Boundaryless, Ownership, and
Passion. These values shine forth in all they do, and have become the
keystones of their success.
BOARD OF DIRECTORS
The ICICI Prudential Life Insurance Company limited board
comprises reputed people from the finance industry both from India
and Abroad.
31

Mr. K.V.Kamath, Chairman
Mr. Barry Stowe
Mrs. Kalpana Morparia
Ms. Shikha Sharma, Managing Director
Mr. N.S.Kannan, Executive Director
Mr. Bhargav Dasgupta, Executive Director
PRODUCTS OF ICICI PRUDENTIAL
ICICI Prudential Life Insurance offers a range of innovative,
customer-centric products that meet the needs of customers at every
life stage. Its products can be enhanced with upto 4 riders, to create a
customized solution for each policyholder.
SAVINGS & WEALTH CREATION PRODUCTS
1.

Cash Bak

2.

Save ‘n’ Protect

3.

Life Time Super & Life Time Plus

4.

Life Link Super

5.

Premier Life Gold

CHILD PLANS
Education Insurance under Smart kid

32

RETIREMENT SOLUTIONS
1.

Forever Life

2.

Lifetime Super Pension

3.

LifeLink Super Pension

4.

Immediate Annuity
HEALTH SOLUTIONS

1.

Health Assure and Health Assure Plus

2.

Cancer Care

3.

Diabetes Care

GROUP INSURANCE SOLUTIONS
1.

Group Gratuity Plan

2.

Group Superannuation Plan

3.

Group Immediate Annuities

4.

Group Term Plan

FLEXIBLE RIDER OPTIONS
1.

Accident & Disability Benefit

2.

Critical Illness Benefit

3.

Income Benefit

4.

Waiver of Premium
33

Reliance Life Insurance Company Limited is a part of Reliance
Capital Ltd. of the Reliance - Anil Dhirubhai Ambani Group. Reliance
Capital is one of India’s leading private sector financial services
companies, and ranks among the top 3 private sector financial
services and banking companies, in terms of net worth. Reliance
Capital has interests in asset management and mutual funds, stock
broking, life and general insurance, proprietary investments, private
equity and other activities in financial services.
Reliance Capital sees immense potential in the rapidly growing
financial services sector in India and aims to become a dominant
player in this industry and offer fully integrated financial services.
Reliance Life Insurance is another step forward for Reliance Capital
Limited to offer need based Life Insurance solutions to individuals
and Corporates.

34

BOARD OF DIRECTORS
Chief Executive Officer - Mr. P Nandagopal
Chief Financial Officer - Mr. Rajesh Bahl
Chief Marketing Officer - Mr. Rohit Gaurav Mull
Chief Operating Officer - Mr. K.V. Srinivasan
Chief Investment Officer - Mr. R Rangarajan
Appointed Actuary - Ms. Pournima Gupte
Head-HR - Ms. Maneesha Thakur
INSURANCE PLANS OF RELIANCE LIFE


Reliance automatic investment plan



Reliance money guarantee plan



Reliance endowment plan



Reliance special endowment plan



Reliance cash flow plan



Reliance child plan



Reliance term plan



Reliance whole life plan



Reliance market return plan



Reliance golden years plan



Reliance golden years plan value



Reliance golden years plan plus



Reliance simple term plan



Reliance special term plan



Reliance credit guardian plan
35



Reliance special credit guardian plan



Reliance connect 2 life plan

ING Vysya Life Insurance Company Limited (the Company) entered
the private life insurance industry in India in September 2001, and in
a span of 5 years has established itself as a distinctive life insurance
brand with an innovative, attractive and customer friendly product
portfolio and a professional advisor sales force.
It has a dedicated and committed advisor sales force of over 21,000
people, working from 140 branches located in 74 major cities across
the country and over 3,000 employees. It also distributes products in
close cooperation with the ING Vysya Bank network. The Company
has a customer base of over 4, 50,000 & is headquartered at
Bangalore. In 2005, ING Vysya Life earned a total income in excess
of Rs. 400 crore and also has a share capital of Rs. 440 crore.
The Company aims to make customers look at life insurance afresh,
not just as a tax saving device but as a means to add protection to life.
The one thing we hold in highest esteem is 'life' itself. We believe in
enhancing the very quality of life, in addition to safeguarding an
individual's security. Our core values are therefore defined as
Professional, Entrepreneurial, Trustworthy, Approachable and Caring.
The Company’s portfolio offers products that cater to every financial
requirement, at any life stage. We believe in continuously developing

36

customer-driven products and services and value being accessible and
responsive to the needs of our customers.
CORPORATE OBJECTIVE
At ING Vysya Life, we strongly believe that as life is different at
every stage, life insurance must offer flexibility and choice to go with
that stage. We are fully prepared and committed to guide you on
insurance products and services through our well-trained advisors,
backed by competent marketing and customer services, in the best
possible way. It is our aim to become one of the top private life
insurance companies in India and to become a cornerstone of ING’s
integrated financial services business in India.

MISSION
“To set the standard in helping our customers manage their financial
future”.
MANAGEMENT TEAM
BOARD OF DIRECTORS
Mr. Rajan Raheja : Chairman
Mr. Kshitij Jain :

Managing Director & Chief Executive Officer

Mr. N.N. Joshi :

Director

37

SENIOR MANAGEMENT TEAM
Kshitij Jain :

MD & CEO

T K Uthappa : VP, Sales - Tied Agency
Rahul Agarwal: VP - Customer Services
Amit Gupta:

VP & Head - Marketing

INSURANCE PLANS OF ING VYSYA


Rewarding Life Investment Plan



Powering Life Investment Plan



ING Life Plus Plan



Platinum Life Investment Plan



New Future Perfect Retirement Plan



High Life Plus Plan



Best Years Retirement Plan

OBJECTIVES OF THE STUDY


To know how to face the problem of corporate world.



To face original market situations and to gain real marketing

experience.


To enhance the knowledge and skills by working in particular

company.


To apply the theoretical knowledge in corporate sector.

38



To collect information of other life Insurance Companies.



To face the problem of corporate world and tackle them in polite

way.


To educate the customers about facilities provided by ICICI

Prudential.


To get suspect convinced and convert into Prospect.

LITERATURE REVIEW
The literature review includes the academic books, journals, internet
access, magazines etc.

ICFAI reader-October 2006 (Page no. 58-60) It guided me to
know about the growth of the Insurance sector over the last few years.

“Gupta S.P. ”. The information regarding the statistical tools and
their limitations in different fields the research is given in this section.
This section explains why to use correlation and what are the
situations in which correlation can be used, and what does correlation
means.

Schaums:Statistical Methods- Sultan Chand Publication The
information regarding the statistical tools and their limitations in
different fields the research is given in this section. This section
explains why to use trend analysis and what are the situations in
which correlation can be used, and what does correlation means.

39


Beri G.C.- Marketing Research 3rd edition : This book helped in
understanding the different research designs and analytical tools used
here.

“Kothari C.R.” The information regarding the basics of research
and research methodology , what are the different types of research
designs, what is problem statement, what are the sources of data
collection and what are the methods of data collection is given in this
section

NaliniProna Tripathy:Insurance Theory & – Introduction of
Insurance , their advantages, disadvantages and various types have
been taken from it.

What’s the need of Life insurance, I read it from The Mc-Graw
Hill Investors Desk Reference,Mc-Graw Hill Publications, Ellie
Williams Clinton

40

RESEARCH METHODOLOGY
The procedure adopted for conducting the research requires a lot of attention as
it has direct bearing on accuracy, reliability and adequacy of results obtained. It
is due to this reason that research methodology, which we used at the time of
conducting the research, needs to be elaborated upon. It may be understood as a
science of studying how research is done scientifically. So, the research
methodology not only talks about the research methods but also considers the
logic behind the method used in the context of the research study. Research
Methodology is a way to systematically study and solve the research problems.
If a researcher wants to claim his study as a good study, he must clearly state the
methodology adapted in conducting the research the research so that it way be
judged by the reader whether the methodology of work done is sound or not.
The Research Methodology here includes: Objective of study
 Meaning of Research.
 Research Problem.
 Research Design.
 Data Collection method.
 Analysis and interpretation of Data
 Limitation of study
41

OBJECTIVE OF THE STUDY
Objectives are the ends that states specifically how goal be achieved. Every
study must have an objective for which all the efforts have been done. Without
objective no research can be conducted and no result can be obtained. On the
basis of objective all the research process is followed. Objectives are the main
aspect of every study. The objective of the study
gives direction to go through the research problem. It guides the researcher and
keeps him on track. I have two objectives regarding my research project. These
are shown below :1. Primary objective
2. Secondary objective
1. Primary objective :1) To study the software used in ICICI Bank.
2) To analyse the financial statements of the corporation to assess it’s
true financial position by the use of ratios.
2. Secondary objective :1) To find out the shortcomings in ICICI Bank.
2) To see whether ICICI Bank is going well or not in different areas.

IMPORTANCE OF THE STUDY
42

 By “FINANCIAL PERFORMANCE ANALYSIS OF ICICI Bank” we
would be able to get a fair picture of the financial position of ICICI Bank.
 By showing the financial performance to various lenders and creditors it
is possible to get credit in easy terms if good financial condition is
maintained in the company with assets outweighing the liabilities.
 Protecting the property of the business.
 Compliances with legal requirement.
Meaning of Research:
Research is defined as “a scientific and systematic search for pertinent
information on a specific topic”. Research is an art of scientific investigation.
Research is a systematized effort to gain now knowledge. It is a careful
investigation or inquiry especially through search for new facts in any branch of
knowledge. Research is an academic activity and this term should be used in a
technical sense. Research comprises defining and redefining problems,
formulating hypothesis or suggested solutions. Making deductions and reaching
conclusions to determine whether they if the formulating hypothesis. Research
is thus, an original contribution to the existing stock of knowledge making for
its advancement. The search for knowledge through objective and systematic
method of finding solutions to a problem is research.

43

 Research Problem
The first step while conducting research is careful definition of Research
Problem. “To ERR IS THE HUMAN” is a proverb which indicates that no one
is perfect in this world. Every researcher has to face many problemswhich
conducting any research that’s why problem statement is defined to know which
type of problems a researcher has to face while conducting any
study. It is said that,
“Problem well defined is problem half solved.”
Basically, a problem statement refers to some difficulty, which researcher
experiences in the context of either a theoretical or practical situation and
wants to obtain the solution for the same.
The problem statement here is:“TO MAKE A FINANCIAL ANALYSIS OF FINANCIAL STATEMENTS
OF ICICI BANK”

 Research Design
44

A research designs is the arrangement of conditions for collection and analysis
data in a manner that aims to combine relevance to the research purpose with
economy in procedure. Research Design is the conceptual structure with in
which research in conducted. It constitutes the blueprint for the collection
measurement and analysis of data. Research Design includes and outline of
what the researcher will do form writing the hypothesis and it operational
implication to the final analysis of data. A research design is a framework for
the study and is used as guide in collection and analyzing the data. It is a
strategy specifying which approach will be used for gathering and analyzing the
data. It also include the time and cost budget since most studies are done under
these two cost budget since most studies are done under theses tow constraints.
The design is such studies must be rigid and not flexible and most focus
attention on the following: What is the study about?
 Why is the study being made?
 Where will the study be carried out?
 What type of data is required?
 Where can be required data be found?
 What period of time will the study include?
 What will be sample design?
 What techniques of data collection will be used?
 How will the data be analyzed?
 In what style will the report be prepared?

45

TYPES OF RESEARCH DESIGN :
 EXPERIMENTAL RESEARCH DESIGN
 EXPLORATORY RESEARCH DESIGN
 DESCRIPTIVE& DIAGNOSTIC RESEARCH
Exploratory Research Design: This research design is preferred when
researcher has a vague idea about the problem the researcher has to explore the
subject.
Experimental Research Design – The research design is used to provide a
strong basis for the existence of casual relationship between two or more
variables.
Descriptive Research Design – It seeks to determine the answers to who, what,
where, when and how questions. It is based on some previous understanding of
the matter.
Diagnostic Research Design It determines the frequency with which something
occurs or its association with something else.
RESEARCH DESIGN USED IN THE STUDY:
Descriptive research design is used in this study because it will ensure the
minimization of bias and maximization of reliability of data collected.
Descriptive study is based on some previous understanding of the topic.
Research has got a very specific objective and clear cut data requirements The
researcher had to use fact and information already available through financial
46

statements of earlier years and analyse these to make critical evaluation of the
available material. Hence by making the type of the research conducted to be
both Descriptive and Analytical in nature. From the study, the type of data to
be collected and the procedure to be used for this purpose were decided.
 Data Collection Method
The process of data collection begins after a research problem has been
defined and research design ahs been chalked out. There are two types of
data –
PRIMARY DATA It is first hand data, which is collected by researcher itself. Primary data is
collected by various approaches so as to get a precise, accurate, realistic and
relevant data. The main tool in gathering primary data was investigation and
observation. It was achieved by a direct approach and observation from the
officials of the company.
SECONDARY DATA - it is the data which is already collected by someone
else. Researcher has to analyze the data and interprets the results. It has always
been important for the completion of any report. It provides reliable, suitable,
adequate and specific knowledge.
TYPE OF DATA USED IN THE STUDY
The required data for the study are basically secondary in nature and the data
are collected from
 The audited reports of the company.
47

 INTERNET – which includes required financial data collected form
ICICI Bank’s official website i.e www.icici.com and some other websites
on the internet for the purpose of getting all the required financial data of
the bank and to get detailed knowledge about ICICI Bank for the
convenience of study.
 Brouchers of ICICI Bank.
 The valuable cooperation extended by staff members and the branch
manager of ICICI bank,dharmshala contributed a lot to fulfill the
requirements in the collection of data in order to complete the project.
 Methods of data analysis
The data collected were edited, classified and tabulated for analysis. The
analytical tools used in this study are:
ANALYTICAL TOOLS APPLIED:
The study employs the following analytical tools:
1. Comparative statement.
2. Trend Percentage.
3. Ratio Analysis.
4. Cash Flow Statement.
 Limitations of study



Difficulty in data collection.



Limited knowledge about the bank in the initial stages.

48

Branch manager was reluctant for giving financial data of


the bank.

The analysis and interpretation are based on secondary data



contained in the published annual reports of ICICI Bank for the study period.
Due to the limited time available at the disposable , the



study has been confined for a period of 5 years (2005-2009).
Ratio itself will not completely show the company’s good



or bad financial position.
Inter firm comparison was not possible due to the non



availability of competitors data.
The study of financial performance can be only a means to



know about the financial condition of the company and cannot show a through
picture of the activities of the company
.

49

CHAPTER-3rd
ANANLYSIS AND INTERPRITATION OF
DATA AND FINDINGS

50

ANANLYSIS AND INTERPRITATION OF DATA AND
FINDINGS
1. TREND ANALYSIS
Trend Percentage Of ICICI Bank From 2004-2005 To 2008-2009
(base year 2004 -05)

Percentage(%) figures

Particular
s

2005

2006

2007

2008

2009

Deposits

100

165

231

245

219

Advances

100

160

214

247

239

Net profit

100

127

155

207

187

Interpretation:
 There is a continous increase in the deposits till the year ending 2008
followed by a downfall in the year ending 2009 due to repayment od
deposits in this year.
 Similarly advances also shows as increasing trend till the year ending
2008 followed by a slight downfall in the year ending 2009.
 There has been a substantial increase in net profit till the year year ending
2008.In four years it has been more than double.
51

The overall performance of the bank is satisfactory.
2. RATIO ANALYSIS
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

Year

Current Assets
(Rs. In crores)

Current
Liabilities

Current Ratio

(Rs. In crores)
2005

21632.56

21396.16

1.01

2006

29549.79

25227.88

1.17

2007

53421.59

38228.64

1.39
52

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.
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
53

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.

54

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.

55

Year

Net Income
Available For
Shareholders

No. Of Equity
Shares

EPS

(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 :

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

56

Year

Dividend Paid

(Rs. In crores)

No. Of Equity
Shares

DPS

(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.

NET PROFIT RATIO:
57

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.

Year

2005

Net Profit

Sales

Net Profit Ratio

(Rs. In crores)

(Rs. In crores)

(in %)

2005.2

9409.9

21.3
58

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.

59

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.

Year

Operating
Profit

Sales
(Rs. In crores)

(Rs. In crores)

Operating
Profit 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
60

 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.
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

61

Year

Net Profit After
Interest And Tax

Shareholder's
Fund

(Rs. In crores)

Return On
Net Worth (in
%)

(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.
62

RETURN ON CAPITAL EMPLOYED:

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:

Year

Net Profit Before
Interest And Tax
(Rs. In crores)

Capital Employed

Return On Capital
Employed (in %)

(Rs. In crores)

2005

9098.09

146263.25

6.22

2006

12694.05

226161.17

5.61
63

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.
DEBT- EQUITY RATIO:

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.Longterm 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.

64

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:
65

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 DebtEquity 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.
PROPRIETORY RATIO:

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.

66

Years

Shareholder's
Funds

Total Assets
(Rs. In crores)

Proprietory
Ratio

(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.
FIXED ASSETS TURNOVER RATIO:
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.

67

Year

Sales
(Rs. In crores)

Net Fixed Assets Fixed Assets
Turnover Ratio
(Rs. In crores)

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.

CREDIT-DEPOSIT RATIO:
68

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.

Credit means disbursement of advances
Deposit mean sum of fixed deposit,
Saving deposit and current deposit.

Year

Advances

Deposits

Credit Deposit Ratio
69

(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.

70

CHAPTER-4th
SUGGESTIONS AND CONCLUSION

71

SUGGESTIONS

AFTER

GOING THROUGH THE ABOVE TABLE REGARDING MARKET SHARE OF VARIOUS

COMPANIES IN THE FINANCIAL YEAR

2015-16

THERE IS NO REASON WHY

ICICI BANK

SHOULD REJOICE OF BEING THE NUMBER ONE COMPANY IN THE COUNTRY.

THE

GROWTH THAT COMPANIES LIKE

BIRLA SUNLIFE SBI-LIFE INSURANCE TATA-

AIG, BAJAJALLIANZ, OM KOTAK MAHINDRA, AVIVA, ING VYASA METLIFE &
AMP SANMAR

HAVE PRODUCED THAT CAN BE QUITE A BIG UNSEEN THREAT FOR THE

COMPANY IN THE COMING YER.
WANT FROM THE MARKET

SO THE

COMPANY SHOULD START THINKING OF WHAT THEY

& WHERE THEY WANT TO SEE THEMSELVES AFTER A SPAN OF 10

YEARS BECAUSE OF THE POPULARITY OF THESE COMPANIES CONTINUES THEN ONE DAY
THEY

WILL

BECOME

GOOD

COMPETITORS

OF

ICICI PRUDENTIAL &

THEN

THE

CONSEQUENCES CAN BE QUITE DISTURBING FOR THE COMPANY.

72

CONCLUSION
The balance-sheet along with the income statement is an important tools for
investors and many other parties who are interested in it to gain insight into a
company and its operation. The balance sheet is a snapshot at a single point of
time of the company’s accounts- covering its assets, liabilities and shareholder’s
equity. The purpose of the balance-sheet is to give users an idea of the
company’s financial position along with displaying what the company owns and
owes. It is important that all investors know how to use, analyze and read
balance-sheet. P & L account tells the net profit and net loss of a company and
its appropriation.

In the case of ICICI Bank, during fiscal 2008, the bank continued to grow and
diversify its assets base and revenue streams. Bank maintained its leadership in
all main areas such as retail credit, wholesale business, international operation,
insurance, mutual fund, rural banking etc. Continuous increase in the number of
branches, ATM and electronic channels shows the growth take place in bank.

Trend analysis of profit & loss account and balance sheet shows the % change
in items of p & l a/c and balance sheet i.e. % change in 2006 from 2005 and %
change in 2007 from 2006. It shows that all items are increased mostly but
increase in this year is less than as compared to increase in previous year. In p &
l a/c, all items like interest income, non-interest income, interest expenses,
operating expenses, operating profit, profit before tax and after tax is increased
but in mostly cases it is less than from previous year but in some items like
interest income, interest expenses, provision % increase is more. Some items
like tax, depreciation, lease income is decreased. Similarly in balance sheet all
items like advances, cash, liabilities, deposits is increased except borrowings
73

which is decreased. % increase in some item is more than previous year and in
some items it is less.

Ratio analysis of financial statement shows that bank’s current ratio is better
than the quick ratio and fixed/worth ratio. It means bank has invested more in
current assets than the fixed assets and liquid assets. Bank have given more
advances to its customer and they have less cash in their hand. Profitability
ratio of bank is lower than as compared to previous year. Return on equity is
better than the return on assets.

The cash flow statement shows that net increase in cash generated from
operating and financing activities is much more than the previous year but cash
generated from investing activities is negative in both year. There is increase of
159,708,479 thousand RS. in Increase in cash & cash equivalents from previous
year. Therefore analysis of cash flow statement shows that cash inflow is more
than the cash outflow in ICICI Bank.

Thus, the ratio analysis and trend analysis and analysis of cash flow statement
shows that ICICI Bank’s financial position is good. Bank’s profitability is
increasing but not at high rate. Bank’s liquidity position is fair but not good
because bank invest more in current assets than the liquid assets. As we all
know that ICICI Bank is on the first position among all the private sector bank
of India in all areas but it should pay attention on its profitability and liquidity.
Bank’s position is stable.

74

BIBLIOGRAHY

BOOKS REFERED
 RAM

SWAMI

& NAMAKUMARI: MARKETING MANAGEMENT, 2005

MACMILLAN, NEW DELHI
 SAMADHI: MARKETING RESEARCH
PUB.

AND

CONSUMER BEHAVIOR, VICES

HOUSE, PG 250-268

Web Sites
www.icicirulife.com
www.ipruuniverse.com
www.icici.com

75

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