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HDFC Bank

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HDFC Bank Analysis.

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HDFC Bank

  1. 1. Analysis<br />1<br />
  2. 2. Overview of HDFC Bank<br /><ul><li>Housing Development Finance Cooperation Ltd.
  3. 3. 1st – Bank to receive an “in principle approval” from RBI.
  4. 4. Incorporated in August 1994,in the name of “HDFC Bank Ltd.”
  5. 5. 1st – Registered Office in Mumbai
  6. 6. HDFC Bank commenced operations as a Scheduled</li></ul> Commercial Bank in January 1995.<br />2<br />
  7. 7. Business Focus<br />MISSION :<br /> “World Class Indian Bank”. <br />- OBJECTIVE : <br /> Maintain Ethical Standards, Professional Integrity &<br /> Cooperate Governence.<br /><ul><li>Business Philosophy : Based on 4 Core Values - </li></ul> a) Operational Excellence<br /> b) Customer Focus<br /> c) Product Leadership <br /> d) People<br />3<br />
  8. 8. Capital Structure and Shareholding Pattern<br /><ul><li> The authorized capital of HDFC Bank is Rs550 crore( Rs 5.5bn) Paid-up capital is Rs 424.6 crore (Rs 4.2 bn).
  9. 9. The HDFC Group holds 19.4% of the bank's equity.
  10. 10. 28% of the equity is held by FIIs.
  11. 11. 11.86% is held by the General Public.
  12. 12. The Bank has about 570,000 shareholders.
  13. 13. The shares are listed on the BSE & NSE.
  14. 14. The bank's American Depository Shares are listed on the New York Stock Exchange (NYSE) under the symbol ‘HDB’.</li></ul>4<br />
  15. 15. Strong Vast Network<br />5<br />
  16. 16. Wide Range of Products<br />6<br />RETAIL BANKING<br /><ul><li>Loan Products: Depository Products </li></ul> - Auto Loans - Savings<br /> - Loans against Securities - Current<br /> -Personal Loans - Fixed Deposits<br /> - Credit Cards<br /> - 2-Wheeler Loans<br /> - Home Loans<br /> - Commercial Vehicles Finance <br />Other Products / Services: -- POS Terminals<br />- Debit Cards<br />- Depository Accounts<br />- Mutual Fund Sales<br />- Insurance Sales<br />- NRI Services<br />- Bill Payment Services<br />V<br />Commercial Banking:<br /> - Working Capital<br /> - Credit Substitutes<br /> - Term Loans<br /> - Bill Collection<br /> - Forex & Derivatives<br /> - Wholesale Deposits<br /> -Letters of Credit<br /> - Guarantees<br />Transactional Banking:<br /> - Cash Management<br /> - Custodial Services<br /> - Clearing Bank Services<br /> - Correspondent Banking<br /> - Tax Collections<br /> - Banker to public issues<br />Key Segments:<br /> - Large corporate<br /> - Supply Chain<br /> - Emerging Coop<br /> - Financial Inst<br /> - Government<br />Wholesale Banking<br />Products: Other Functions:<br /> - Foreign Exchange - Asset Liability Management<br /><ul><li> Debt Securities - Statutory Reserve Management
  17. 17. - Derivatives
  18. 18. - Equity</li></ul>Treasury<br />One – Stop Shop to meet Diverse Customer Needs<br />
  19. 19. 7<br />
  20. 20. 8<br />
  21. 21. 9<br />
  22. 22. 10<br />
  23. 23. Business Model<br />HDFC BANK<br />RETAIL<br />WHOLESALE<br />TREASURY<br />REVENUE<br /> INTEREST REVENUE <br />NON- INTEREST<br />Less:<br /> INTEREST & NON-INTEREST EXPENSES<br />NET INTEREST INCOME<br />NON INTEREST INCOME<br />
  24. 24. Income Statement<br />12<br />
  25. 25. Deposits<br />13<br />In Crores<br />
  26. 26. Net Worth of HDFC Bank<br />14<br />
  27. 27. 15<br />
  28. 28. 16<br />
  29. 29. Implications of important terms<br />CRR – 7.5% -- Affects Liquidity<br />SLR – Min. 25% -- Affects Liquidity and secure insolvency<br />REPO RATE – 9% -- Affects Lending rates and Liquidity<br />REVERSE REPO RATE – 6% -- Affects Liquidity<br />17<br />
  30. 30. Key Financial Ratios<br />
  31. 31. MERGER OF CBOP WITH HDFC BANK<br />
  32. 32. CBoP = HDFC <br /><ul><li> On May 23, 2008, the amalgamation of Centurion Bank of Punjab with HDFC Bank was formally approved by RBI.
  33. 33. Shareholders of CBoP received 1 share of HDFC Bank for every 29 shares of CBoP, valuing CBoP at INR 95bn.
  34. 34. The balance sheet size of the combined entity would be over Rs. 1,63,000 crore.</li></ul>20<br />
  35. 35. Future Expected EarningsPost Merger *estimates provided by Indiabulls Research<br />21<br />
  36. 36. Camel’s Approach<br />
  37. 37. Camel’s Approach<br />It is a method for evaluating bank performance and healthy position of the bank since it considers all areas of banking operations.<br />Camel Means<br /><ul><li>C = “Capital Adequacy Ratio”
  38. 38. A= “Asset quality”
  39. 39. M= “Management quality”
  40. 40. E= “Earnings quality”
  41. 41. L= “Liquidity”</li></li></ul><li>Capital Adequacy Ratio <br /><ul><li> HDFC BANK has maintained Capital Adequacy ratio of more than 13% which is above the RBI norms of 9%.
  42. 42. Maintaining higher CAR will ensure high expansion possibilities as and when opportunity arises for HDFC bank.</li></li></ul><li>Asset Quality<br />Non Performing Asset means an asset or account of borrower, which has been classified by a bank or financial institution as sub-standard, doubtful or loss asset.<br />
  43. 43. Management Quality<br />
  44. 44. Earnings quality<br />Net Interest Margin difference between interest income and interest expenses, usually expressed as a percentage of average earning assets.<br />
  45. 45. Earnings quality<br />
  46. 46. Liquidity<br />
  47. 47. HDFC v/s SENSEX – 1 year<br />30<br />
  48. 48. 31<br />
  49. 49. “Thank You”<br />32<br />
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HDFC Bank Analysis.

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