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    Analysis of HDFC Bank

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    Milan Pateliya
    This document analyzes HDFC Bank and includes the following information: 1. It performs a duration gap analysis of HDFC Bank's assets and liabilities, finding that the duration of assets is greater than liabilities. 2. It calculates HDFC Bank's Altman "Z" score to evaluate financial stability, finding a score of 0.968 which indicates warning signs. 3. It discusses the three-fold impact of monetary policy on HDFC Bank, including changes to lending rates, priority sector lending requirements, and operational guidelines around KYC and financial inclusion programs.

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    Analysis of HDFC Bank

    Uploaded by

    Milan Pateliya
    74 views15 pages
    This document analyzes HDFC Bank and includes the following information: 1. It performs a duration gap analysis of HDFC Bank's assets and liabilities, finding that the duration of assets is greater than liabilities. 2. It calculates HDFC Bank's Altman "Z" score to evaluate financial stability, finding a score of 0.968 which indicates warning signs. 3. It discusses the three-fold impact of monetary policy on HDFC Bank, including changes to lending rates, priority sector lending requirements, and operational guidelines around KYC and financial inclusion programs.

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    Analysis of Hdfc Bank

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    This document analyzes HDFC Bank and includes the following information: 1. It performs a duration gap analysis of HDFC Bank's assets and liabilities, finding that the duration of assets is greater than liabilities. 2. It calculates HDFC Bank's Altman "Z" score to evaluate financial stability, finding a score of 0.968 which indicates warning signs. 3. It discusses the three-fold impact of monetary policy on HDFC Bank, including changes to lending rates, priority sector lending requirements, and operational guidelines around KYC and financial inclusion programs.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    74 views15 pages

    Analysis of HDFC Bank

    Uploaded by

    Milan Pateliya
    This document analyzes HDFC Bank and includes the following information: 1. It performs a duration gap analysis of HDFC Bank's assets and liabilities, finding that the duration of assets is greater than liabilities. 2. It calculates HDFC Bank's Altman "Z" score to evaluate financial stability, finding a score of 0.968 which indicates warning signs. 3. It discusses the three-fold impact of monetary policy on HDFC Bank, including changes to lending rates, priority sector lending requirements, and operational guidelines around KYC and financial inclusion programs.

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    You are on page 1of 15

    ANALYSIS OF HDFC BANK

    SUBMITTED BY:
    ARUSH JAIN
    HARDIK JOSHI
    VANDANA KABRA
    MONIKA KAR
    SUMEET KASLIWAL
    KHUSHBOO RAGHAVAN
    DURATION GAP ANALYSIS
    COUPON YEARS OF YIELD TO MARKET
    AMOUNT RATE MATURITY MATURITY VALUE

    ASSET

    Loans &
    advances 5527511 15.25% 3 15.25% 55,275,11
    Loans &
    advances 937291 15.25% 5 15.25% 9,372,91

    TOTAL   6464802        

    LIABILITIES

    Deposits 8307549 6.25% 3 11.25% 83,075,49

    Deposits 1812739 7.50% 5 11.25% 18,127,39

    TOTAL 10120288        
    LOAN & ADVANCES
     
    Coupon Cash PV Discounted No. of DCF * No. of Duration on
    Rate  Flows FACTOR Cash Flows years years assets

    3 YRS
    5527511 15.25% 842945.43 0.909 766237.3936 1 766237.3936    

        842945.00 0.826 696272.57 2 1392545.14    

        6370456.43 0.751 4784212.777 3 14352638.33    

            6246722.741   16511420.86 2.64  

    5 YRS                

    937291 15.25% 142936.88 0.909 129929.62 1 129929.62    

        142936.88 0.826 118065.86 2 236131.72    

        142936.88 0.751 107345.60 3 322036.79    

        142936.88 0.683 97625.89 4 390503.55    

        1080227.88 0.620 669741.28 5 3348706.42    

            1122708.25   4427308.10 3.94 2.83


    DEPOSITS
     
    Coupon Cash PV Discounted No. of DCF * No. of Duration on
    Rate  Flows FACTOR Cash Flows years years liabilities

    3 YRS

    8307549 6.25% 519221.81 0.909 471972.63 1 471972.63    

        934599.26 0.826 771978.99 2 1543957.98    

        8826770.81 0.751 6628904.88 3 19886714.64    

            7872856.50   21902645.25 2.78  

    5 YRS                

    1812739 7.50% 135955.43 0.909 123583.48 1 123583.48    

        203933.14 0.826 168448.77 2 336897.54    

        203933.14 0.751 153153.79 3 459461.36    

        203933.14 0.683 139286.33 4 557145.33    

        1948694.43 0.620 1208190.54 5 6040952.72    

            1792662.92   7518040.43 4.19 3.03


    TOTAL DURATION GAP = 0.74

    DURATION OF ASSETS > DURATION OF


    LIABILITIES
    ALTMAN “Z” SCORE
    (X) weight Weighted
    Ratio Formula Cal factor ratio

    Return on total
    assets EBIT/TA 0.054 3.3 0.179
    Sales to total
    assets Net sales/TA 0.090 0.999 0.090

    (capital+reserves)/
    Equity to debt debt 0.980 0.6 0.588

    Working capital
    to total assets WC/TA 0.069 1.2 0.082

    Retained
    earnings to total
    assets RE/TA 0.020 1.4 0.029

    Z Score 0.968
    KEY ELEMENTS
    Our Z-Score is: 0.9678

    Z-SCORE ABOVE 2.99-- IN GOOD SHAPE

    Z-SCORE BETWEEN 2.99 and 1.81--WARNING

    SIGNS

    Z-SCORE BELOW 1.81--BIG TROUBLE--COULD BE


    HEADING TOWARD BANKRUPTCY
    IMPACT OF MONETARY
    POLICY ON HDFC BANK
    3 FOLD IMPACT OF MONETARY POLICY
     Part one contains monetary measures like bank rate, repo rate,
    reverse repo rate, SLR and CRR.
     HDFC reduced its PLR by 25 basis points to 15.75 per cent,
    turning the loans cheaper for customers. HDFC has reduced
    benchmark lending rate by 75 basis points during last six
    months. The latest move came amid reduced fund costs in recent
    times, due to low demand across all sectors of the economy and
    not in reciprocation of the credit policy declared by RBI.
     Second part contains a credit policy measure which advises the
    bank to meet segmental targets like advances to Priority sector
    (40%), to agriculture segment (18%).
     HDFC doesn’t meet RBI’s norms for priority sector lending
    requirement as it lends to only 35% borrowers against prescribed
    40%.
    3 FOLD IMPACT OF MONETARY POLICY

     Third part of the policy prescribes operational guidelines


    like banks will have to comply with KYC norms also
    banks are required to open no deposit account for
    financial inclusion.

     HDFC provides ‘No Frills’ savings accounts through all its branches
    as a stepping stone towards financial inclusion. These accounts are
    offered only to customers who do not have any other bank account
    (are un-banked) and who are either beneficiaries of a government
    welfare scheme or have annual incomes less than a defined
    threshold (constitute the bottom of the economic pyramid).
    THANK
    YOU

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