OUTLINE OF THE CHAPTER - Shodhgangashodhganga.inflibnet.ac.in/bitstream/10603/77951/12/12_chapter...
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Financial Performance Analysis Page | 164
OUTLINE OF THE CHAPTER
1. Introduction
2. Financial performance of ‘The Bhuj Commercial Co-operative
Bank Ltd.’ (BCCB)
3. Financial performance of ‘The Kalupur Commercial Co-
operative Bank Ltd.’ (KCCB)
4. Financial performance of ‘The Rajkot Commercial Co-
operative Bank Ltd.’ Rajkot (RCCB)
5. Financial performance of ‘The Jivan Commercial Co-
operative Bank Ltd.’ (JCCB)
6. Financial performance of ‘The Vijay Commercial Co-
operative Bank Ltd.’ (VCCB)
7. Financial performance of ‘The Commercial Co-operative
Bank Ltd. Jamnagar’ (TCCBLJ)
8. Financial performance of ‘The Market Yard Commercial Co-
operative Bank Ltd.’ (MCCB)
9. Financial performance of ‘The Chanasma Commercial Co-
operative Bank Ltd.’ (CCCB)
10. Financial performance of ‘The Srvodaya Commercial Co-
operative Bank Ltd.’ (SCCB)
11. Financial performance of ‘The Randheja Commercial Co-
operative Bank Ltd.’ (TRCCBL)
12. Financial performance of ‘The Vallabh Vidhyanagar
Commercial Co-operative Bank Ltd. (VVCC)
13. Financial performance of ‘The Junagadh Commercial Co-
operative Bank Ltd. (TJCCBL)
14. Financial performance of ‘The Porbandar Commercial Co-
operative Bank Ltd. (TPCCBL)
15. Financial performance of ‘The Baroda Commercial Co-
operative Bank Ltd. (TBCCBL)
16. Conclusion
Financial Performance Analysis Page | 165
1. INTRODUCTION:
Theoretical aspect of financial performance; its importance, limitations and various
techniques has already been discussed by the researcher in the first chapter. In this chapter
the researcher going to use the techniques of financial performance analysis to measure the
financial performance of selected commercial co-operative banks of Gujarat state. Various
techniques like ratio analysis, common size analysis, trend analysis and other statistical
techniques are included in this chapter. This chapter includes financial performance of each
selected commercial co-operative bank of Gujarat state and then after comparative analysis
of financial performance of selected CCOBs and testing of hypothesis included in 6th
chapter.
2. FINANCIAL PERFORMANCE OF ‘THE BHUJ COMMERCIAL CO-
OPERATIVE BANK LTD.’ (BCCB):
2.1 Ratio Analysis of BCCB:
Ratio means a relation between two figures present in percentage, times, proportion
etc. If such figures taken from financial statements like Profit and Loss accounts or Balance
Sheets or other parts of accounting records of business units it is known as ‘Accounting
Ratios.’ Various accounting ratios are use to measure various position of the business like
profitability, liquidity, solvency and overall efficiency. Apart from this different kinds of
ratios are to be calculated according to the requirements of business unit or types of
business. In banking businesses following Ratios are normally calculated to measure the
financial performance of a bank.
(1) Credit Deposit Ratio, (2) Capital Adequacy Ratio, (3) Interest Income Ratio, (3) Interest
income as percentage of average working capital Ratio, (4) Interest expenses against total
expenses ratio, (5) Interest expenses as percentage of average working capital, (6) Total
Profit and Average Working capital ratio, (7) Net Profit and Average Working capital Ratio,
(8) Net profit Net Assets Ratio, (10) Employees cost and Average Working Capital Ratio,
(11) Cost of Deposit, (12) Business Per Employee, (14) Total Profit Per Employee, (15)
Deposit Per Employee, (15) Advance Per Employee, (16) Earnings per share etc.
(I) Credit Deposit Ratio (CDR):
Formula:
Financial Performance Analysis Page | 166
Table 5.1
Table showing CDR of BCCB of last 10 years
Year Total Advances
(` in Lakhs)
Total Deposit
(` in Lakhs)
CDR
(%)
2003-04 1692.58 2899.79 58.37
2004-05 1510.92 2709.42 55.77
2005-06 1375.55 2496.25 55.11
2006-07 1415.81 2356.29 60.09
2007-08 1349.84 2617.64 51.57
2008-09 1469.52 2672.30 54.99
2009-10 1505.94 2948.76 51.07
2010-11 1537.98 2990.02 51.44
2011-12 1633.88 3532.62 46.25
2012-13 1903.48 3868.05 49.21
Average 53.39 (Source: Annual Reports of BCCB of last 10 Years)
From the above table it is clear that bank’s credit deposit ratio of remain between 49
to 60 percent. Highest CDR of the bank found in the year 2006-07; 60.09 percent and
lowest CDR found in the year 2011-12; 46.25 percent. Average of last 10 years CDR was
53.39 percent. It indicates BCCB uses its deposit on an average 53 percent to give advances
to its customers.
(II) Capital Adequacy Ratio (CAR)/Capital to Risk (Weighted) Assets Ratio (CRAR):
Formula:
Table 5.2
Table showing CAR of BCCB of last 10 years
Years Tier I Capital
(` in Lakhs)
Tier II Capital
(` in Lakhs)
Total TI+TII
(` in Lakhs)
RWA
(` in Lakhs)
CAR
(%)
2003-04 406.69 225.92 632.61 1713.39 36.92
2004-05 417.01 208.5 625.51 1719.19 36.38
2005-06 381.78 23.58 405.36 1886.46 21.49
2006-07 396.19 14.31 410.5 1882.89 21.80
2007-08 406.41 23.05 429.46 1844.75 23.28
2008-09 414.96 21.75 436.71 1740.48 25.09
2009-10 435.64 25.18 460.82 2014.27 22.88
2010-11 476.61 24.68 501.29 1974.18 25.39
2011-12 560.13 27.07 587.2 2166.16 27.11
2012-13 603.5 24.52 628.02 1961.61 32.02
Average 27.24
(Source: Annual Reports of BCCB of last 10 Years)
Financial Performance Analysis Page | 167
This ratio is used to protect depositor’s interest and promote the stability and
efficiency of financial systems around the world. Objectives of capital adequacy policy
safety, stability and soundness of individual banks and banking system & fair and consistent
in application to banks; competitive level playing fields for banks. According to RBI and
Basel committee report minimum CAR require for any UCB is 9 percent after 2005. Above
table shows BCCB has minimum CAR 21.49 percent and maximum 36.92 percent i.e.
BCCB has maintained its CAR more than required rate during last 10 years period of the
study. Average CAR of the banks found 27.24 percent of last 10 years. It indicates financial
soundness of the bank during last 10 years.
(III) Interest Income to Total Income Ratio:
Formula:
Table 5.3
Table showing IITIR of BCCB of last 10 years
Year Total Interest
(` in Lakhs)
Total Income
(` in Lakhs)
IITIR
(%)
2003-04 534.92 561.66 95.24
2004-05 585.98 617.81 94.85
2005-06 394.19 429.20 91.84
2006-07 355.18 384.13 92.46
2007-08 333.21 362.13 92.01
2008-09 339.68 373.12 91.04
2009-10 387.29 430.02 90.06
2010-11 373.90 415.84 89.91
2011-12 398.38 436.21 91.33
2012-13 479.66 523.41 91.64
Average 92.04
(Source: Annual Reports of BCCB of last 10 Years)
Above table shows that out of the total income of BCCB on an average 92.04
percent income was interest income during last ten years. Highest IITIR found 95.24
percent in the year 2003-04 and lowest ratio found 89.91 percent in the year 2010-11.
(IV) Interest Expenses to Total Expenses Ratio:
Formula:
Financial Performance Analysis Page | 168
Table 5.4
Table showing IETER of BCCB of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Total Expenses
(` in Lakhs)
IETER
(%)
2003-04 340.10 480.08 70.84
2004-05 307.21 566.17 54.26
2005-06 287.74 386.73 74.40
2006-07 239.94 347.60 69.03
2007-08 204.34 329.51 62.01
2008-09 193.29 338.03 57.18
2009-10 218.58 392.37 55.71
2010-11 209.63 363.79 57.63
2011-12 209.84 382.85 54.81
2012-13 261.03 452.37 57.70
Average 61.36 (Source: Annual Reports of BCCB of last 10 Years)
In the above table showing IETER highest ratio is 74.40 percent and lowest ratio is
54.26 percent in the year 2005-06 and 2004-05 respectively. Average IETER of 10 years
was found 61.36 percent i.e. on an average during last 10 years out of total expenses of bank
around 61 percent portion of total expenses was interest expense.
(V) Net Profit to Net Assets Ratio:
Formula:
Table 5.5
Table showing NPNAR of BCCB of last 10 years
Year Net Profit
(` in Lakhs)
Net Assets
(` in Lakhs)
NPNAR
(%)
2003-04 81.58 661.25 12.34
2004-05 51.64 914.77 5.64
2005-06 42.47 932.84 4.55
2006-07 36.53 975.96 3.74
2007-08 32.62 985.63 3.31
2008-09 35.09 1033.20 3.40
2009-10 37.65 1054.03 3.57
2010-11 52.05 1034.28 5.03
2011-12 53.36 1092.40 4.88
2012-13 71.03 1142.75 6.22
Average 5.27 (Source: Annual Reports of BCCB of last 10 Years)
Financial Performance Analysis Page | 169
During last 10 years maximum NPNAR was found 12.34 percent and minimum
NPNAR was 3.31 percentages. On an average bank has maintained it NPNAR 5.27
percentage during last 10 years.
(VI) Earnings per Share:
Formula:
Table 5.6
Table showing EPS of BCCB of last 10 years
Year Net Profit
(`)
No. of Equity
Share
EPS
(`)
2003-04 8158149 107613 75.81
2004-05 5163768 107614 47.98
2005-06 4247129 107614 39.47
2006-07 3653112 107614 33.95
2007-08 3262260 107614 30.31
2008-09 3508817 108234 32.42
2009-10 3764992 110077 34.20
2010-11 5204980 124668 41.75
2011-12 5336169 188130 28.36
2012-13 7103247 193773 36.66
Average 40.92 (Source: Annual Reports of BCCB of last 10 Years)
EPS of BCCB `40.92 per share on an average during last 10 years. Maximum
EPS earned by the bank in the year 2003-04 `75.81 per share and minimum EPS earned by
the bank `28.36 in the year 2011-12. It indicates good earning capacity of the bank.
(VII) Interest Income to Average Working Fund Ratio:
Formula:
Working Fund = Total assets – Bills Receivable
Financial Performance Analysis Page | 170
Table 5.7
Table showing IIAWFR of BCCB of last 10 years
Year Total Interest
(` in Lakhs)
AWF
(` in Lakhs)
IIAWFR
(%)
2003-04 534.92 3995.48 13.39
2004-05 585.98 4093.93 14.31
2005-06 394.19 3996.20 9.86
2006-07 355.18 3837.67 9.26
2007-08 333.21 3875.74 8.60
2008-09 339.68 4039.19 8.41
2009-10 387.29 4230.98 9.15
2010-11 373.90 4388.06 8.52
2011-12 398.38 4686.88 8.50
2012-13 479.66 5172.62 9.27
Average 9.93 (Source: Annual Reports of BCCB of last 10 Years)
During last 10 year shown in the above table highest interest income to average
working fund ratio was 14.31 percent and lowest ratio was found 8.41 percent in the year
2004-05 and 2008-09 respectively. On an average bank has 9.93 percent ratio of interest
income to average working fund annually.
(VIII) Interest Expenses to Average Working Fund Ratio:
Formula:
Table 5.8
Table showing IEAWFR of BCCB of last 10 years
Year Total Interest Exp.
(` in Lakhs)
AWF
(` in Lakhs)
IEAWFR
(%)
2003-04 340.10 3995.48 8.51
2004-05 307.21 4093.93 7.50
2005-06 287.74 3996.20 7.20
2006-07 239.94 3837.67 6.25
2007-08 204.34 3875.74 5.27
2008-09 193.29 4039.19 4.79
2009-10 218.58 4230.98 5.17
2010-11 209.63 4388.06 4.78
2011-12 209.84 4686.88 4.48
2012-13 261.03 5172.62 5.05
Average 5.90 (Source: Annual Reports of BCCB of last 10 Years)
Financial Performance Analysis Page | 171
During last 10 year highest interest expenses to average working fund ratio was
found 8.51 percent and lowest ratio is 4.48 percent in the year 2003-04 and 2011-12
respectively. On an average bank has 5.90 percent ratio of interest expenses to average
working fund annually. Interest income ratio average 9.93 percent against it average interest
expense ratio was 5.90 percent of last ten years of bank indicate that bank has earning gap
of interest 4.04 percent on average working fund.
(IX) Gross Profit to Average Working Fund Ratio:
Formula:
Table 5.9
Table showing GPAWFR of BCCB of last 10 years
Year Gross Profit
(` in Lakhs)
AWF
(` in Lakhs)
GPAWFR
(%)
2003-04 143.58 3995.48 3.59
2004-05 251.64 4093.93 6.15
2005-06 52.47 3996.20 1.31
2006-07 59.53 3837.67 1.55
2007-08 62.10 3875.74 1.60
2008-09 76.82 4039.19 1.90
2009-10 69.54 4230.98 1.64
2010-11 76.80 4388.06 1.75
2011-12 77.88 4686.88 1.66
2012-13 91.38 5172.62 1.77
Average 2.29 (Source: Annual Reports of BCCB of last 10 Years)
Above table show that the highest GPAWFR of the bank 6.15 percent in the year
2004-05 and lowest ratio found 1.31 percent in the year 2005-06. It was 3.59 percent in the
year 2003-04. From 2005-06 to 2012-13 GPAWFR remains on an average more than 1
percent and less than 2 percent. Average GPAWFR of the banks of last 10 years found 2.29
percent.
(X) Net Profit to Average Working Fund Ratio:
Formula:
Financial Performance Analysis Page | 172
Table 5.10
Table showing NPAWFR of BCCB of last 10 years
Year Net Profit
(` in Lakhs)
AWF
(` in Lakhs)
NPAWFR
(%)
2003-04 81.58 3995.48 2.04
2004-05 51.64 4093.93 1.26
2005-06 42.47 3996.20 1.06
2006-07 36.53 3837.67 0.95
2007-08 32.62 3875.74 0.84
2008-09 35.09 4039.19 0.87
2009-10 37.65 4230.98 0.89
2010-11 52.05 4388.06 1.19
2011-12 53.36 4686.88 1.14
2012-13 71.03 5172.62 1.37
Average 1.16 (Source: Annual Reports of BCCB of last 10 Years)
Above table shows that the highest NPAWFR of the bank is 2.04 percent in the year
2003-04, and lowest 0.84 percent in the year 2007-08. On an average 1.16 percent ratio of
NPAWF remained during last 10 years.
(XI) Employee Cost to Average Working Fund Ratio:
Formula:
Table 5.11
Table showing ECAWFR of BCCB of last 10 years
Year Employee exp.
(` in Lakhs)
AWF
(` in Lakhs)
ECAWFR
(%)
2003-04 32.57 3995.48 0.82
2004-05 31.81 4093.93 0.78
2005-06 44.65 3996.20 1.12
2006-07 40.51 3837.67 1.06
2007-08 45.50 3875.74 1.17
2008-09 48.79 4039.19 1.21
2009-10 53.57 4230.98 1.27
2010-11 74.72 4388.06 1.70
2011-12 88.74 4686.88 1.89
2012-13 84.29 5172.62 1.63
Average 1.27 (Source: Annual Reports of BCCB of last 10 Years)
Financial Performance Analysis Page | 173
From the above ratios of employee cost to average working fund of last 10 years of
the bank it is clear that average employee’s cost of the bank on average working fund was
remained 1.27 percent annually. During the last ten years period of the study highest
ECAWFR found in the year 2011-12; 1.89 percent and lowest ratio found in the year 2004-
05; 0.78 percent.
(XII) Cost of Deposit Ratio:
Formula:
Table 5.12
Table showing CoDR of BCCB of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Average Deposits
(` in Lakhs)
CoDR
(%)
2003-04 340.10 2880.18 11.81
2004-05 307.21 2818.56 10.90
2005-06 287.74 2613.45 11.01
2006-07 239.94 2436.07 9.85
2007-08 204.34 2495.29 8.19
2008-09 193.29 2692.39 7.18
2009-10 218.58 2867.50 7.62
2010-11 209.63 2996.48 7.00
2011-12 209.84 3288.08 6.38
2012-13 261.03 3727.14 7.00
Average 8.69 (Source: Annual Reports of BCCB of last 10 Years)
Above table 5.12 is showing Cost of deposit ratio of the BCCB of last 10 years from
2003-04 to 2012-12. Percentages of Interest expenses on Average deposits during last 10
years was found maximum 11.81 percent in the year 2003-04 and minimum 6.38 percent in
the year 2011-12. Average cost of deposits of last 10 years of the bank was found 8.69
percent.
Financial Performance Analysis Page | 174
(XIII) Summary of the above Ratios:
Table 5.13
A summary of all the ratios of BCCB Calculated above
Yea
rs
CD
R (%
)
CA
R (%
)
IITIR
(%)
IET
ER
(%)
NP
NA
R (%
)
EP
S (`
)
IIAW
FR
(%)
IEA
WF
R (%
)
GP
AW
FR
(%)
NP
AW
FR
(%)
EC
AW
FR
(%)
CO
DR
(%)
03-04 58.37 36.92 95.24 70.84 12.34 75.81 13.39 8.51 3.59 2.04 0.82 11.81
04-05 55.77 36.38 94.85 54.26 5.64 47.98 14.31 7.50 6.15 1.26 0.78 10.90
05-06 55.11 21.49 91.84 74.40 4.55 39.47 9.86 7.20 1.31 1.06 1.12 11.01
06-07 60.09 21.80 92.46 69.03 3.74 33.95 9.26 6.25 1.55 0.95 1.06 9.85
07-08 51.57 23.28 92.01 62.01 3.31 30.31 8.60 5.27 1.60 0.84 1.17 8.19
08-09 54.99 25.09 91.04 57.18 3.40 32.42 8.41 4.79 1.90 0.87 1.21 7.18
09-10 51.07 22.88 90.06 55.71 3.57 34.20 9.15 5.17 1.64 0.89 1.27 7.62
10-11 51.44 25.39 89.91 57.63 5.03 41.75 8.52 4.78 1.75 1.19 1.70 7.00
11-12 46.25 27.11 91.33 54.81 4.88 28.36 8.50 4.48 1.66 1.14 1.89 6.38
12-13 49.21 32.02 91.64 57.70 6.22 36.66 9.27 5.05 1.77 1.37 1.63 7.00
Avg. 53.39 27.24 92.04 61.36 5.27 40.09 9.93 5.90 2.29 1.16 1.27 8.69
2.2 NPA Management of the BCCB:
Table 5.14
Table showing NPA Management of BCCB of last 10 years
Yea
rs
Tota
l
Ad
van
ces
(` i
n L
ak
hs)
Gro
ss N
PA
(` i
n L
ak
hs)
Gro
ss N
PA
(%) Provision
Required
(`in Lakhs)
Pro
vis
ion
Du
rin
g t
he
Yea
r
(`in
Lak
hs)
Tota
l p
rovis
ion
(`in
Lak
hs)
NE
T N
PA
1 2 1/2x100
Std.
Assets NPA
Total
SA+NPA
03-04 1692.58 203.41 12.02 3.72 53.57 57.29 60.00 253.92 00
04-05 1510.92 246.08 16.28 3.16 32.86 36.02 196.00 448.50 00
05-06 1375.55 442.89 32.21 2.33 158.96 161.29 10.00 460.97 00
06-07 1415.81 447.05 31.72 3.87 213.53 270.40 0.00 461.36 00
07-08 1349.84 402.84 30.22 3.79 257.15 261.00 0.00 466.36 00
08-09 1469.52 446.47 30.38 4.09 207.56 211.65 10.00 476.38 00
09-10 1505.94 442.57 29.39 4.25 203.30 207.55 10.14 486.52 00
10-11 1537.98 415.17 26.99 2.81 294.47 297.28 00.23 486.75 00
11-12 1633.88 342.65 20.97 3.23 257.54 260.77 33.85 452.91 00
12-13 1903.48 309.69 16.27 3.98 244.66 248.62 1.41 454.32 00
Average 25.00 00
(Source: Compiled from the information available in annual reports of the Bank)
Financial Performance Analysis Page | 175
In most of the Banks Net NPA is zero because they have made sufficient provisions
against their NPA loans (Bad Debts). But only zero NPA percentage is not sufficient as it
doesn’t mean that the bank has no bad debts. So Gross NPA percentage should be lower.
Gross NPA of BCCB of last 10 years shows highest 32.21 percent in the year2005-06 and
lowest 12.02 percent in the year 2003-04. On an average bank has 25 percent ratio of Gross
NPA of last 10 year. Though Net NPA of the bank is zero there are some amount written off
as bad debts every year by the bank.
Overall NPA management of the bank found good during the period of the study.
Bank has maintained enough reserve against its NPA so Net NPA remained zero throughout
the period of the study. Apart from this Gross NPA ratio decrease continuously in the year
2005-06 gross NPA of the bank 31.21 percent highest which was decreased to 16.27 percent
in the year 2012 -13 it was a great achievement of the bank and it shows well management
of the NPA by the bank during the period of the study.
According to recent guideline of the RBI Bank should have less than 10 percent
Gross NPA and less than 5 percent Net NPA. Net NPA of the bank was found zero
throughout the period of the study. That means bank has maintained more than enough
reserve against its non-performing assets (advances). But Gross NPA ratio of the bank
found more than 10 percent throughout the years it was a matter of worry. Otherwise NPA
management of the banks was found overall good.
12
.02
16
.28
32
.21
31
.72
30
.22
30
.38
29
.39
26
.99
20
.97
16
.27
0
5
10
15
20
25
30
35
Gro
ss N
PA
%
Years
Chart 5.1: Gross NPA of BCCB
Financial Performance Analysis Page | 176
2.3 Common Size Statement and Trend Analysis:
(I) Common Size Income Statement of BCCB:
Table 5.15
`In Lakhs
Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Income:
Interest and discount 534.92 585.98 394.19 355.18 333.21 339.68 387.29 373.90 398.38 479.66
Percentage of Total Income 95.24 94.85 91.84 92.46 92.01 91.04 90.06 89.91 91.33 91.64
Commission and Exchange 22.90 17.89 14.73 15.12 16.46 18.76 17.12 16.80 13.53 10.50
Percentage of Total Income 4.08 2.90 3.43 3.94 4.54 5.03 3.98 4.04 3.10 2.01
Other Income 3.85 13.94 20.28 13.83 12.47 14.68 25.61 25.14 24.30 33.24
Percentage of Total Income 0.69 2.26 4.73 3.60 3.44 3.93 5.96 6.04 5.57 6.35
Total Income (A) 561.66 617.81 429.20 384.13 362.13 373.12 430.02 415.84 436.21 523.41
Percentage of Total Income 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Expenditures:
Interests on Deposits, Borrowings 340.10 307.21 287.74 239.94 204.34 193.29 218.58 209.63 209.84 261.03
Percentage of Total Income 60.55 49.73 67.04 62.46 56.43 51.80 50.83 50.41 48.10 49.87
Salary, Allowances, provident fund and staff welfare 32.57 31.81 44.65 40.51 45.50 48.79 53.57 74.72 88.74 84.29
Percentage of Total Income 5.80 5.15 10.40 10.55 12.56 13.08 12.46 17.97 20.34 16.10
Seating fees of Directors and meeting fees 0.06 0.06 0.08 0.15 0.06 0.10 0.06 0.17 0.07 0.08
Percentage of Total Income 0.01 0.01 0.02 0.04 0.02 0.03 0.01 0.04 0.02 0.01
Office expenses 4.19 2.91 4.45 5.01 5.42 3.86 8.81 6.71 6.60 10.48
Percentage of Total Income 0.75 0.47 1.04 1.30 1.50 1.03 2.05 1.61 1.51 2.00
Rents, Rates, Insurance, Electricity etc. 10.02 9.11 10.89 9.58 9.59 10.87 11.33 11.16 11.55 15.87
Percentage of Total Income 1.78 1.47 2.54 2.49 2.65 2.91 2.63 2.68 2.65 3.03
Financial Performance Analysis Page | 177
Legal fees 1.56 0.52 0.47 0.31 1.62 0.37 1.40 1.98 1.91 4.71
Percentage of Total Income 0.28 0.08 0.11 0.08 0.45 0.10 0.33 0.48 0.44 0.90
Postage, Telephone, etc. 1.40 1.79 2.10 1.81 2.13 1.76 1.87 1.70 1.46 1.73
Percentage of Total Income 0.25 0.29 0.49 0.47 0.59 0.47 0.44 0.41 0.33 0.33
Audit Fees, Interval Audit fees 0.58 1.30 2.09 0.95 0.89 1.25 1.37 1.71 1.75 1.82
Percentage of Total Income 0.10 0.21 0.49 0.25 0.25 0.34 0.32 0.41 0.40 0.35
Depreciation 5.97 5.31 5.19 9.96 8.46 6.66 10.31 7.36 6.81 6.39
Percentage of Total Income 1.06 0.86 1.21 2.59 2.34 1.78 2.40 1.77 1.56 1.22
Printing Stationary, Advertisement 3.94 2.19 7.79 2.23 8.10 2.61 2.79 12.58 6.00 9.02
Percentage of Total Income 0.70 0.35 1.82 0.58 2.24 0.70 0.65 3.03 1.38 1.72
Computer Maintenance 0.86 0.92 0.81 0.42 0.75 0.90 0.75 0.85 1.23 1.20
Percentage of Total Income 0.15 0.15 0.19 0.11 0.21 0.24 0.17 0.20 0.28 0.23
Travelling and Conveyance expenses 2.90 2.06 2.76 2.52 3.05 2.71 2.61 3.08 5.75 4.03
Percentage of Total Income 0.52 0.33 0.64 0.66 0.84 0.73 0.61 0.74 1.32 0.77
Sundry Expenses 1.18 0.62 0.90 0.39 0.66 0.85 0.51 0.40 0.70 0.59
Percentage of Total Income 0.21 0.10 0.21 0.10 0.18 0.23 0.12 0.10 0.16 0.11
Contingent Liability 2.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentage of Total Income 0.36 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Loss on sale of security 0.00 0.00 0.00 0.00 16.00 0.87 0.00 0.00 0.00 7.56
Percentage of Total Income 0.00 0.00 0.00 0.00 4.42 0.23 0.00 0.00 0.00 1.44
Relief 0.00 0.36 0.00 10.82 9.45 5.78 38.32 5.08 2.06 0.00
Percentage of Total Income 0.00 0.06 0.00 2.82 2.61 1.55 8.91 1.22 0.47 0.00
GOI Amortization fund and Dep. Fund 0.00 4.00 0.00 23.00 13.48 13.63 15.89 7.37 7.02 2.73
Percentage of Total Income 0.00 0.65 0.00 5.99 3.72 3.65 3.69 1.77 1.61 0.52
Member Gift expenses / Deposit Mobilization expenses 12.77 0.00 6.80 0.00 0.00 15.63 5.21 0.00 13.87 0.00
Percentage of Total Income 2.27 0.00 1.58 0.00 0.00 4.19 1.21 0.00 3.18 0.00
Financial Performance Analysis Page | 178
NPA Provision 60.00 196.00 10.00 0.00 0.00 10.00 10.00 0.00 0.00 0.00
Percentage of Total Income 10.68 31.72 2.33 0.00 0.00 2.68 2.33 0.00 0.00 0.00
PNB Principle fund Provision 0.00 0.00 0.00 0.00 0.00 18.11 9.00 0.00 0.00 0.00
Percentage of Total Income 0.00 0.00 0.00 0.00 0.00 4.85 2.09 0.00 0.00 0.00
Staff Gratuity Fund 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 10.50
Percentage of Total Income 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.01
Staff Leave Encashment Provision 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 10.00
Percentage of Total Income 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.91
Income Tax Provision 0.00 0.00 0.00 0.00 0.00 0.00 0.00 19.27 17.50 20.35
Percentage of Total Income 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4.64 4.01 3.89
Total (B) 480.08 566.17 386.73 347.60 329.51 338.03 392.37 363.79 382.85 452.37
Percentage of Total Income 85.48 91.64 90.10 90.49 90.99 90.60 91.24 87.48 87.77 86.43
Net Profit 81.58 51.64 42.47 36.53 32.62 35.09 37.65 52.05 53.36 71.03
Percentage of Total Income 14.52 8.36 9.90 9.51 9.01 9.40 8.76 12.52 12.23 13.57
Trend Percentages:
Trend Ratio of Total Operating Income 100.00 110.00 76.42 68.39 64.48 66.43 76.56 74.04 77.66 93.19
Trend Ratio of Total Operating Expenses 100.00 117.93 80.55 72.40 68.64 70.41 81.73 75.78 79.75 94.23
Trend Ratio of Net Profit 100.00 63.30 52.06 44.78 39.99 43.01 46.15 63.80 65.41 87.07
(Source: Calculated from the published annual reports of BCCB of last 10 years)
(2003-04 is base year for trend percentages)
Financial Performance Analysis Page | 179
Common size profit and loss account of BCCB ltd. presented in the above table 5.15
it shows percentage of each item of profit and loss account in common percentage with total
operating income during last ten years. The above table also includes trend percentage of
major items of profit and loss account viz. operating income, operating expenses and net
profit. The chart 5.1 shows the graphical presentation of trend percentage ratio.
The chart clearly state that net profit of the bank is having decreasing trend from
2003-04 to 2006-07 than after it having increasing trend up to the year 2012-13. In the year
2004-05 operating income is increase but on the other hand operating expense also increase
and ultimately profit goes down. Than after from 2005-06 to 2012-13 all three components
Operating income, Operating expenses and Net profit having same kind of trend.
From the above common size statement it is clear that major portion of operating
income is interest earned by the bank on loan and advances and major portion of operating
expenses is interest paid on deposit and borrowings. Other income and expenditure have no
considerable impact on total operating income and expenditure. During the period of study,
bank having average 92 percent interest incomes out of total operating income and average
55 percentage interest expenses out of the total operating expenses.
From the above analysis it also clear that portion of other operation income in total
operation income is only 8 percent average and portion of other operating expenses is only
45 percent in total expenses i.e. less than fifty percent.
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
Per
cen
tag
e
Years
Chart 5.2: Trend Analysis of P/L Accounts of BCCB
Trend Ratio of Total
Operating Income
Trend Ratio of Total
Operating Expenses
Trend Ratio of Net Profit
Financial Performance Analysis Page | 180
(II) Common size Balance sheets of BCCB:
Table 5.16
` in Lakhs
Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Liabilities: Share Capital (share of Rs.100each) 107.61 107.61 107.61 107.61 107.61 108.23 110.08 124.67 188.13 193.77
Percentages of Total Liabilities 2.62 2.62 2.75 2.85 2.70 2.63 2.51 2.82 3.78 3.59
Reserve and Surplus 553.64 807.15 825.23 868.35 878.01 924.96 943.95 909.61 904.27 948.97
Percentages of Total Liabilities 13.46 19.67 21.08 22.97 22.03 22.47 21.57 20.54 18.19 17.59
Deposits 2899.79 2709.42 2496.25 2356.29 2617.64 2672.30 2948.76 2990.02 3532.62 3868.05
Percentages of Total Liabilities 70.48 66.03 63.78 62.33 65.67 64.92 67.37 67.53 71.06 71.70
Borrowings 17.97 9.95 11.28 8.33 8.33 86.52 27.41 26.76 26.76 26.84
Percentages of Total Liabilities 0.44 0.24 0.29 0.22 0.21 2.10 0.63 0.60 0.54 0.50
Bill For collection (Contra) 17.28 12.74 12.10 6.69 7.82 16.24 15.57 13.17 12.32 8.50
Percentages of Total Liabilities 0.42 0.31 0.31 0.18 0.20 0.39 0.36 0.30 0.25 0.16
Branch Adjustments 80.09 36.36 68.68 49.70 48.49 0.40 0.32 0.00 0.00 0.00
Percentages of Total Liabilities 1.95 0.89 1.75 1.31 1.22 0.01 0.01 0.00 0.00 0.00
Interest Payable 321.28 347.79 341.50 302.77 248.25 229.04 250.27 207.59 196.52 219.02
Percentages of Total Liabilities 7.81 8.48 8.73 8.01 6.23 5.56 5.72 4.69 3.95 4.06
Other Liabilities 35.36 20.61 8.86 43.89 37.06 43.81 43.17 103.82 57.58 58.30
Percentages of Total Liabilities 0.86 0.50 0.23 1.16 0.93 1.06 0.99 2.34 1.16 1.08
Profit and Loss Account 81.58 51.64 42.47 36.53 32.62 35.09 37.65 52.05 53.36 71.03
Financial Performance Analysis Page | 181
Percentages of Total Liabilities 1.98 1.26 1.09 0.97 0.82 0.85 0.86 1.18 1.07 1.32
Total 4114.60 4103.27 3913.98 3780.15 3985.83 4116.60 4377.17 4427.69 4971.56 5394.50
Percentages of Total Liabilities 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Assets:
Cash and Bank Balance 809.82 1031.17 615.13 625.91 1157.99 1132.67 1600.69 1751.27 2196.09 2508.29
Percentages of Total Assets 19.68 25.13 15.72 16.56 29.05 27.51 36.57 39.55 44.17 46.50
Investment 1453.82 1381.68 1747.08 1565.08 1279.16 1288.21 1052.83 924.64 887.77 708.36
Percentages of Total Assets 35.33 33.67 44.64 41.40 32.09 31.29 24.05 20.88 17.86 13.13
Advances 1692.58 1510.92 1375.55 1415.81 1349.84 1469.52 1505.94 1537.98 1633.88 1903.48
Percentages of Total Assets 41.14 36.82 35.14 37.45 33.87 35.70 34.40 34.74 32.86 35.29
Interest Receivable 55.17 79.24 50.81 43.27 34.45 59.44 85.36 69.03 117.83 128.15
Percentages of Total Assets 1.34 1.93 1.30 1.14 0.86 1.44 1.95 1.56 2.37 2.38
Bills Receivables (Contra) 17.28 12.74 12.10 6.69 7.82 16.24 15.57 13.17 12.32 8.50
Percentages of Total Assets 0.42 0.31 0.31 0.18 0.20 0.39 0.36 0.30 0.25 0.16
Assets (after Depreciation) 35.16 30.74 50.03 49.17 52.07 54.29 45.59 39.68 37.00 34.04
Percentages of Total Assets 0.85 0.75 1.28 1.30 1.31 1.32 1.04 0.90 0.74 0.63
Other Assets 50.78 56.78 63.27 74.22 104.50 96.23 71.20 92.02 81.66 103.67
Percentages of Total Assets 1.23 1.38 1.62 1.96 2.62 2.34 1.63 2.08 1.64 1.92
Branch Adjustment Account 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5.00 0.00
Percentages of Total Assets 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.10 0.00
Total 4114.60 4103.27 3913.98 3780.15 3985.84 4116.60 4377.17 4427.69 4971.56 5394.50
Percentages of Total Assets 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Financial Performance Analysis Page | 182
Trend Percentages:
Trend Percentage of Capital 100.00 100.00 100.00 100.00 100.00 100.58 102.29 115.85 174.83 180.07
Trend Percentage of Reserve and Surplus 100.00 145.79 149.06 156.84 158.59 167.07 170.50 164.30 163.33 171.41
Trend Percentage of Deposits 100.00 93.43 86.08 81.26 90.27 92.15 101.69 103.11 121.82 133.39
Trend Percentage of Advances 100.00 89.27 81.27 83.65 79.75 86.82 88.97 90.87 96.53 112.46
(Source: Calculated from the published annual reports of BCCB of last 10 years)
(2003-04 is base year for trend percentages)
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
180.00
200.00
2003-042004-052005-062006-072007-082008-092009-102010-112011-122012-13
Per
cen
tag
e
Years
Chart 5.3: Trend Analysis of Balance sheets of BCCB
Trend Percentage of Capital
Trend Percentage of Reserve
and Surplus
Trend Percentage of Deposits
Trend Percentage of Advances
Trend Percentage of
Investments
Financial Performance Analysis Page | 183
Table 5.16 shows common size balance sheet of the BCCB ltd. of last 10 years from
2003-04 to 2012-13 and it also included trend percentages of major items of balance sheet
like capital, reserve and surplus, deposits, advances and investments. Chart 5.3 shows
graphical presentation of trend percentage of the same major items of balance sheet during
the period of study.
From the common size balance sheet it is clear that major portion of liabilities are
covered by reserve and surplus and deposit and major portion of assets side covered by
advances and investment. On an average 87 percent portion of liabilities side covered by
reserve and deposit and remaining items are only 13 percentages. On the other hand on
assets side average 66 percent portion of total assets covered by investment and advances.
Trend percentage indicate that capital of the bank remain constant till 2007-08 and
then after it having increasing trend in last three years from 2010-11 to 2012-13 it increased
by more than 80 percent as compare to base year 2003-04.
Trend of reserve and surplus is increasing trend in the year 2010-11 and 2011-12 it
little bit decrease but then after it again increase. It suggests financial position of the bank
made strengthen year by year.
Trend of deposit decreasing in the first five years but then after it start increasing till
the last year of the study.
Trend of advances is almost same as trend of deposit, after all advances are depends
on deposits by the depositors.
Trend of investment increase in the initial years of the study but then after it has
declining trend in the year 2012-13 it has been decrease by 51 percent as compare to2003-
04. It indicates that bank more focus on provides the loan and advances the last 10 years.
3. FINANCIAL PERFORMANCE OF ‘THE KALUPUR
COMMERCIAL CO-OPERATIVE BANK LTD.’ (KCCB):
3.1 Ratio Analysis of KCCB:
(I) Credit Deposit Ratio (CDR):
Formula:
Financial Performance Analysis Page | 184
Table 5.17
Table showing CDR of KCCB of last 10 years
Year Total Advances
(` in Lakhs)
Total Deposit
(` in Lakhs)
CDR
(%)
2003-04 47922.17 87039.56 55.06
2004-05 56660.85 93842.99 60.38
2005-06 57975.71 108344.67 53.51
2006-07 60490.69 105369.09 57.41
2007-08 73565.29 135242.11 54.40
2008-09 90448.33 161109.68 56.14
2009-10 114657.74 199208.68 57.56
2010-11 135691.10 223729.11 60.65
2011-12 188420.92 269699.32 69.86
2012-13 227075.92 327495.02 69.34
Average 59.43
(Source: Computed from Annual Reports of KCCB of last 10 Years)
From the above table it is clear that bank’s credit deposit ratio of the bank remained
between 53 to 70 percent. Average of last 10 years CDR was found 59.43 percent. It
indicates KCCB uses its deposit on an average 59 percentage to give advances to their
customers. Highest CDR of the bank found in the year 2011-12 69.86 percent and lowest
ratio found 53.51 percent in the year 2005-06.
(II) Capital Adequacy Ratio (CAR)/Capital to Risk (Weighted) Assets Ratio (CRAR):
Formula:
Table 5.18
Table showing CAR of KCCB of last 10 years
Years Tier I Capital
(` in Lakhs)
Tier II Capital
(` in Lakhs)
Total TI+TII
(` in Lakhs)
RWA
(` in Lakhs)
CAR
(%)
2003-04 13424.95 1362.63 14787.58 28870.71 51.22
2004-05 14562.43 1801.68 16364.11 30119.84 54.33
2005-06 16009.61 2113.27 18122.88 38932.07 46.55
2006-07 20127.36 3161.37 23288.73 51902.67 44.87
2007-08 22518.75 3184.15 25702.90 45355.39 56.67
2008-09 25001.25 3206.93 28208.18 80802.58 34.91
2009-10 27413.77 3229.71 30643.48 76839.22 39.88
2010-11 30801.65 3520.19 34321.84 125721.02 27.30
2011-12 34578.58 4623.88 39202.46 201038.26 19.50
2012-13 39689.84 4884.90 44574.74 226152.93 19.71
Average 39.49
(Source: Computed from Annual Reports of KCCB of last 10 Years)
Financial Performance Analysis Page | 185
According to RBI and Basel committee report minimum CAR require for any UCB
is 9 percent after 2005. Above table shows CAR of KCCB constantly decreased from 2003-
04 to 2012-13 except in the year 2007-08. Though CAR of the KCCB constantly decreases
it remains more than 9 percent. At last in the year 2012-13 CAR of the bank is 19.71
percent it is 10.71 percent more than required CAR as per Basel Committee. So it indicates
healthy financial position of the bank. Average CAR of bank of last 10 years period of the
study was found 39.49 percent. Highest CAR of the bank 54.33 percent in the year 2004-05
and lowest percent was found in the year 2011-12 which was 19.50 percent.
(III) Interest Income to Total Income Ratio:
Formula:
Table 5.19
Table showing IITIR of KCCB of last 10 years
Year Total Interest
(` in Lakhs)
Total Income
(` in Lakhs)
IITIR
(%)
2003-04 13097.78 13628.76 96.10
2004-05 9100.75 9536.22 95.43
2005-06 10161.79 10696.86 95.00
2006-07 10566.13 11170.42 94.59
2007-08 13994.30 14999.90 93.30
2008-09 17765.74 18461.14 96.23
2009-10 20339.28 21517.85 94.52
2010-11 21940.67 23529.46 93.25
2011-12 28088.14 30104.05 93.30
2012-13 35671.43 41073.08 86.85
Average 93.86 (Source: Calculated from Annual Reports of KCCB of last 10 Years)
Above table shows that out of the total income of KCCB on an average 93.86
percent income was interest income during last ten years. During the period of study highest
interest income to total income ratio remained 96.25 percent in the year 2008-09 and lowest
ratio was found 86.85 percent in the year 2012-13.
(IV) Interest Expenses to Total Expenses Ratio:
Formula:
Financial Performance Analysis Page | 186
Table 5.20
Table showing IETER of KCCB of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Total Expenses
(` in Lakhs)
IETER
(%)
2003-04 6237.04 11826.85 52.74
2004-05 5605.40 7708.98 72.71
2005-06 5430.41 8839.51 61.43
2006-07 5621.02 8941.67 62.86
2007-08 7924.65 12449.80 63.65
2008-09 10614.85 15743.68 67.42
2009-10 13037.41 18707.53 69.69
2010-11 12375.51 20079.18 61.63
2011-12 17104.52 26044.81 65.67
2012-13 22268.30 36188.56 61.53
Average 63.93
(Source: Computed from Annual Reports of KCCB of last 10 Years)
In the above table highest ratio was found 72.71 percent and lowest ratio was found
52.74 percent in the year 2004-05 and 2003-04 respectively then after till 2012-13 it
remained between 60 to 70 percent. Average of 10 years of IETER of the bank found 63.93
percent i.e. on an average during last 10 years out of total expenses of bank around 64
percent portion of total expenses was interest expense.
(V) Net Profit to Net Assets Ratio:
Formula:
Table 5.21
Table showing NPNAR of KCCB of last 10 years
Year Net Profit
(` in Lakhs)
Net Assets
(` in Lakhs)
NPNAR
(%)
2003-04 1801.90 49269.10 3.66
2004-05 1827.26 51226.01 3.57
2005-06 1857.33 54862.89 3.39
2006-07 2228.76 53845.17 4.14
2007-08 2550.11 55883.42 4.56
2008-09 2717.45 59390.47 4.58
2009-10 2810.33 62847.25 4.47
2010-11 3450.29 66581.11 5.18
2011-12 4059.27 72321.68 5.61
2012-13 4884.54 77261.42 6.32
Average 4.55
(Source: Computed from Annual Reports of KCCB of last 10 Years)
Financial Performance Analysis Page | 187
During last 10 years maximum NPNAR was 6.32 percent in the year 2012-13
and minimum NPNAR was 3.39 percent in the year 2005-06. On an average bank has
maintained it NPNAR 4.55 percent during last 10 years.
(VI) Earnings per Share:
Formula:
Table 5.22
Table showing EPS of KCCB of last 10 years
Year Net Profit
(` in Lakhs)
No. of Equity
Share (in Lakhs)
EPS
(`)
2003-04 1801.90 49.63 36.30
2004-05 1827.26 55.44 32.96
2005-06 1857.33 61.07 30.41
2006-07 2228.76 79.76 27.94
2007-08 2550.11 103.40 24.66
2008-09 2717.45 120.46 22.56
2009-10 2810.33 150.02 18.73
2010-11 3450.29 194.51 17.74
2011-12 4059.27 241.01 16.84
2012-13 4884.54 266.69 18.32
Average 24.65
(Source: Computed from Annual Reports of KCCB of last 10 Years)
EPS of KCCB `24.65 per share on an average during last 10 years. Maximum
EPS earned by the bank in the year 2003-04 `36.30 per share and minimum EPS earned by
the bank `16.84 in the year 2011-12. It indicates good earning capacity of the bank. Face
value of KCCB’s equity share `25 per share against it average `24.65 return annually i.e.
98.6 percent. It is great return earned by the bank to its equity owners.
(VII) Interest Income to Average Working Fund Ratio:
Formula:
Working Fund = Total assets – Bills Receivable
Financial Performance Analysis Page | 188
Table 5.23
Table showing IIAWFR of KCCB of last 10 years
Year Total Interest
(` in Lakhs)
AWF
(` in Lakhs)
IIAWFR
(%)
2003-04 13097.78 134978.95 9.70
2004-05 9100.75 148010.73 6.15
2005-06 10161.79 160881.43 6.32
2006-07 10566.13 173805.80 6.08
2007-08 13994.30 188376.05 7.43
2008-09 17765.74 214311.53 8.29
2009-10 20339.28 250677.30 8.11
2010-11 21940.67 290027.43 7.57
2011-12 28088.14 333662.55 8.42
2012-13 35671.43 390424.88 9.14
Average 7.72
(Source: Computed from Annual Reports of KCCB of last 10 Years)
From the above table it is clear that during last 10 year highest interest income to
average working fund ratio was 9.70 percent in the year 2003-04 and lowest ratio was 6.08
percent in the year 2006-07. On an average bank has 7.72 percent ratio of interest income to
average working fund annually during last 10 years period of study.
(VIII) Interest Expenses to Average Working Fund Ratio:
Formula:
Table 5.24
Table showing IEAWFR of KCCB of last 10 years
Year Total Interest Exp.
(` in Lakhs)
AWF
(` in Lakhs)
IEAWFR
(%)
2003-04 6237.04 134978.95 4.62
2004-05 5605.40 148010.73 3.79
2005-06 5430.41 160881.43 3.38
2006-07 5621.02 173805.80 3.23
2007-08 7924.65 188376.05 4.21
2008-09 10614.85 214311.53 4.95
2009-10 13037.41 250677.30 5.20
2010-11 12375.51 290027.43 4.27
2011-12 17104.52 333662.55 5.13
2012-13 22268.30 390424.88 5.70
Average 4.45 (Source: Computed from Annual Reports of KCCB of last 10 Years)
Financial Performance Analysis Page | 189
Above table state that during last 10 year highest interest expenses to average
working fund ratio was 5.70 percent and lowest ratio is 3.23 percent in the year 2012-13 and
2006-07 respectively. On an average bank has 4.45 percent ratio of interest expenses to
average working fund annually. Interest income ratio average 7.72 percent against it
average interest expense ratio 4.45 percent of last ten years of bank indicate that bank has
earning gap of interest 3.27 percent on average working fund.
(IX) Gross Profit to Average Working Fund Ratio:
Formula:
Table 5.25
Table showing GPAWFR of KCCB of last 10 years
Year Gross Profit
(` in Lakhs)
AWF
(` in Lakhs)
GPAWFR
(%)
2003-04 5482.86 134978.95 4.06
2004-05 2163.72 148010.73 1.46
2005-06 3458.38 160881.43 2.15
2006-07 3366.20 173805.80 1.94
2007-08 4552.28 188376.05 2.42
2008-09 4664.50 214311.53 2.18
2009-10 5005.47 250677.30 2.00
2010-11 6722.01 290027.43 2.32
2011-12 8366.64 333662.55 2.51
2012-13 10698.11 390424.88 2.74
Average 2.38
(Source: Computed from Annual Reports of KCCB of last 10 Years)
Above table shows that the highest GPAWFR of the bank is 4.06 percent in the year
2003-04 and then after it is less than 3 percent till 2012-13. Lowest ratio of the banks was
found in the year 2004-05; 1.46 percent. Average gross profit ratio with average working
capital of last 10 years was found 2.38 percent.
(X) Net Profit to Average Working Fund Ratio:
Formula:
Financial Performance Analysis Page | 190
Table 5.26
Table showing NPAWFR of KCCB of last 10 years
Year Net Profit
(` in Lakhs)
AWF
(` in Lakhs)
NPAWFR
(%)
2003-04 1801.90 134978.95 1.33
2004-05 1827.26 148010.73 1.23
2005-06 1857.33 160881.43 1.15
2006-07 2228.76 173805.80 1.28
2007-08 2550.11 188376.05 1.35
2008-09 2717.45 214311.53 1.27
2009-10 2810.33 250677.30 1.12
2010-11 3450.29 290027.43 1.19
2011-12 4059.27 333662.55 1.22
2012-13 4884.54 390424.88 1.25
Average 1.24 (Source: Computed from Annual Reports of KCCB of last 10 Years)
Above table shows that the highest NPAWFR of the bank is 1.35 percent in the year
2007-08, and lowest 1.12 percent in the year 2009-10 and average NPAWFR of the bank
1.24 percent of last 10 years.
(XI) Employee Cost to Average Working Fund Ratio:
Formula:
Table 5.27
Table showing ECAWFR of KCCB of last 10 years
Year Employee exp.
(` in Lakhs)
AWF
(` in Lakhs)
ECAWFR
(%)
2003-04 992.77 134978.95 0.74
2004-05 997.83 148010.73 0.67
2005-06 1017.15 160881.43 0.63
2006-07 1213.78 173805.80 0.70
2007-08 1289.33 188376.05 0.68
2008-09 1471.36 214311.53 0.69
2009-10 1714.78 250677.30 0.68
2010-11 2090.41 290027.43 0.72
2011-12 2624.09 333662.55 0.79
2012-13 3475.15 390424.88 0.89
Average 0.72
(Source: Computed from Annual Reports of KCCB of last 10 Years)
Financial Performance Analysis Page | 191
From the above ratios of employee cost to average working fund of last 10 years of
the bank it was clear that average employee’s cost of the bank was 0.72 percent of average
working fund of the bank per annum. Highest and lowest ratio of employee’s cost to
average working fund was found 0.89 and 0.63 percent in the year 2012-13 and 2005-06
respectively.
(XII) Cost of Deposit Ratio:
Formula:
Table 5.28
Table showing CoDR of KCCB of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Average Deposits
(` in Lakhs)
CoDR
(%)
2003-04 6237.04 84417.75 7.39
2004-05 5605.40 93112.10 6.02
2005-06 5430.41 103145.33 5.26
2006-07 5621.02 114304.38 4.92
2007-08 7924.65 126553.10 6.26
2008-09 10614.85 148175.90 7.16
2009-10 13037.41 180159.18 7.24
2010-11 12375.51 213716.64 5.79
2011-12 17104.52 248961.96 6.87
2012-13 22268.30 298597.17 7.46
Average 6.44
(Source: Calculated from Annual Reports of KCCB of last 10 Years)
From the above table the researcher can clearly observed that Maximum Percentages
of Interest on Average deposits during last 10 years was found in the year 2012-13; 7.46
percent and minimum 4.92 percent in the year 2006-07. Average cost of deposits of last 10
years period of the bank was found 6.44 percent.
Financial Performance Analysis Page | 192
(XIII) Summary of the above Ratios:
Table 5.29
A summary of all the ratios of KCCB Calculated above
Yea
rs
CD
R (%
)
CA
R (%
)
IITIR
(%)
IET
ER
(%)
NP
NA
R (%
)
EP
S (`
)
IIAW
FR
(%)
IEA
WF
R (%
)
GP
AW
FR
(%)
NP
AW
FR
(%)
EC
AW
FR
(%)
CO
DR
(%)
03-04 55.06 51.22 96.10 52.74 3.66 36.30 9.70 4.62 4.06 1.33 0.74 7.39
04-05 60.38 54.33 95.43 72.71 3.57 32.96 6.15 3.79 1.46 1.23 0.67 6.02
05-06 53.51 46.55 95.00 61.43 3.39 30.41 6.32 3.38 2.15 1.15 0.63 5.26
06-07 57.41 44.87 94.59 62.86 4.14 27.94 6.08 3.23 1.94 1.28 0.70 4.92
07-08 54.40 56.67 93.30 63.65 4.56 24.66 7.43 4.21 2.42 1.35 0.68 6.26
08-09 56.14 34.91 96.23 67.42 4.58 22.56 8.29 4.95 2.18 1.27 0.69 7.16
09-10 57.56 39.88 94.52 69.69 4.47 18.73 8.11 5.20 2.00 1.12 0.68 7.24
10-11 60.65 27.30 93.25 61.63 5.18 17.74 7.57 4.27 2.32 1.19 0.72 5.79
11-12 69.86 19.50 93.30 65.67 5.61 16.84 8.42 5.13 2.51 1.22 0.79 6.87
12-13 69.34 19.71 86.85 61.53 6.32 18.32 9.14 5.70 2.74 1.25 0.89 7.46
Avg. 59.43 39.49 93.86 63.93 4.55 24.65 7.72 4.45 2.38 1.24 0.72 6.44
3.2 NPA Management of the KCCB:
Table 5.30
Table showing NPA Management of KCCB of last 10 years
Yea
rs
Tota
l
Ad
van
ces
(` i
n L
ak
hs)
Gro
ss N
PA
(` i
n L
ak
hs)
Gro
ss N
PA
(%) Provision
Required
(`in Lakhs)
Pro
vis
ion
Du
rin
g t
he
Yea
r
(`in
Lak
hs)
Tota
l p
rovis
ion
(`in
Lak
hs)
NE
T N
PA
1 2 1/2x100 Std.
Assets NPA
Total
SA+NPA
03-04 47922.17 15733.00 32.83 80 15653 15733 1338.95 22343 00
04-05 56660.85 13556.00 23.92 18 13213 13231 162.69 22597 00
05-06 57975.71 12756.00 22.00 179 12350 12529 123.80 17816 00
06-07 60490.69 7492.00 12.39 1050 6627 7686 22.07 14541 00
07-08 73565.29 4405.00 5.99 1370 3606 4976 0.00 14146 00
08-09 90448.33 4230.00 4.68 1713 3347 5060 0.00 9213 00
09-10 114657.74 3213.00 2.80 2212 2721 4933 0.00 9820 00
10-11 135691.10 1927.00 1.42 2700 1466 4166 0.00 9489 00
11-12 188420.92 1800.00 0.96 2700 389 3089 0.00 10026 00
12-13 227075.92 2170.00 0.96 2700 620 3320 0.00 10637 00
Average 10.79
(Source: Compiled from the information available in annual reports of the Bank)
Financial Performance Analysis Page | 193
In most of the Banks Net NPA is zero because banks have made sufficient
provisions against their NPA loans (Bad Debts). But only zero NPA percentage is not
sufficient to analysis of NPA management of the banks. ZERO NPA doesn’t mean that the
bank has no bad debts. So Gross NPA percentage should be observed and it should be
minimize.
In Gross NPA of KCCB of last 10 years highest 32.83 percent in the year 2003-04
and lowest 0.96 percent in the year 2011-12 and 2012-13. Gross NPA of the Bank has
constantly decreased during last 10 years it indicate good NPA management of the bank. It
shows good lent and collection policy of the bank also. In the years 2003-05 bank has Gross
NPA 32.83 percent which was reduced to 0.96 in the year 2012-13 it indicates well NPA
management by the bank during the period of the study. Apart from this bank has made
more than enough provision against gross NPA and maintained more NPA provision than
gross NPA so Net NPA percentage found zero in all the 10 years the period of the study that
the researcher studied. From last six years bank has provided zero amounts to NPA
provision due to its good recovery policy. In last two years 2011-12 and 2012-13 the gross
NPA of the bank was only 0.96 percent it was appreciable thing, in the year 2003-04 bank
has gross NPA 32.83 percent that declined to 0.96 percent in10 years. Average Gross NPA
percentage of last 10 years period of the study was found 10.79.
32
.83
23
.92
22
.00
12
.39
5.9
9
4.6
8
2.8
0
1.4
2
0.9
6
0.9
6
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
GN
PA
%
Years
Chart 5.4: Gross NPA of KCCB
Financial Performance Analysis Page | 194
3.3 Common Size Statement and Trend Analysis:
(I) Common Size Income Statement of KCCB:
Table:5.31
`in Lakhs
Particulars 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Income: Interest and discount 13097.78 9100.75 10161.79 10566.13 13994.30 17765.74 20339.28 21940.67 28088.14 35671.43
Percentage of Total Income 96.10 95.43 95.00 94.59 93.30 96.23 94.52 93.25 93.30 86.85
Commission, Exchange & Brokerage 152.51 61.08 77.90 94.83 133.41 117.84 176.71 346.28 427.42 701.22
Percentage of Total Income 1.12 0.64 0.73 0.85 0.89 0.64 0.82 1.47 1.42 1.71
Other Receipts 378.47 374.39 457.17 509.46 872.19 577.56 1001.86 1242.51 1588.49 4700.43
Percentage of Total Income 2.78 3.93 4.27 4.56 5.81 3.13 4.66 5.28 5.28 11.44
Total (A) 13628.76 9536.22 10696.86 11170.42 14999.90 18461.14 21517.85 23529.46 30104.05 41073.08
100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Expenditures:
Interests on Deposits, Borrowings 6237.04 5605.40 5430.41 5621.02 7924.65 10614.85 13037.41 12375.51 17104.52 22268.30
Percentage of Total Income 45.76 58.78 50.77 50.32 52.83 57.50 60.59 52.60 56.82 54.22
Salary, Allowances, provident fund and staff welfare 992.77 997.83 1017.15 1213.78 1289.33 1471.36 1714.78 2090.41 2624.09 3475.15
Percentage of Total Income 7.28 10.46 9.51 10.87 8.60 7.97 7.97 8.88 8.72 8.46
Rents, Rates, Insurance, Electricity etc. 291.38 185.68 200.43 221.68 241.38 297.28 377.03 420.60 451.78 513.55
Percentage of Total Income 2.14 1.95 1.87 1.98 1.61 1.61 1.75 1.79 1.50 1.25
Legal fees 27.04 29.15 30.92 44.56 35.02 37.07 36.00 79.25 19.84 17.06
Percentage of Total Income 0.20 0.31 0.29 0.40 0.23 0.20 0.17 0.34 0.07 0.04
Financial Performance Analysis Page | 195
Postage, Telephone, etc. 39.88 36.65 30.47 29.10 36.71 60.41 54.56 61.05 67.07 77.32
Percentage of Total Income 0.29 0.38 0.28 0.26 0.24 0.33 0.25 0.26 0.22 0.19
Audit Fees, Internal Audit fees 7.23 11.75 11.46 21.37 18.22 24.95 22.85 23.29 11.06 13.20
Percentage of Total Income 0.05 0.12 0.11 0.19 0.12 0.14 0.11 0.10 0.04 0.03
Depreciation and Repairs to property 322.77 246.64 280.91 348.21 408.56 474.09 497.86 578.58 591.97 610.58
Percentage of Total Income 2.37 2.59 2.63 3.12 2.72 2.57 2.31 2.46 1.97 1.49
Printing Stationary, Advertisement 48.72 41.89 26.17 42.64 79.21 69.48 79.85 81.70 89.53 115.58
Percentage of Total Income 0.36 0.44 0.24 0.38 0.53 0.38 0.37 0.35 0.30 0.28
Other expenses 179.07 217.51 210.56 261.86 414.48 535.74 648.87 857.76 777.58 895.40
Percentage of Total Income 1.31 2.28 1.97 2.34 2.76 2.90 3.02 3.65 2.58 2.18
Leave Encashment Liability 0.00 21.31 22.46 32.14 207.46 90.36 3.79 88.64 0.00 0.00
Percentage of Total Income 0.00 0.22 0.21 0.29 1.38 0.49 0.02 0.38 0.00 0.00
Staff Gratuity fund 26.05 32.48 28.77 27.73 279.04 121.05 39.39 150.67 0.00 0.00
Percentage of Total Income 0.19 0.34 0.27 0.25 1.86 0.66 0.18 0.64 0.00 0.00
NPA provision 1338.95 162.69 123.80 22.07 0.00 0.00 0.00 0.00 0.00 0.00
Percentage of Total Income 9.82 1.71 1.16 0.20 0.00 0.00 0.00 0.00 0.00 0.00
Bad & Doubtful Debt Reserve 300.00 0.00 0.00 0.00 0.00 0.00 360.00 480.00 600.00 620.00
Percentage of Total Income 2.20 0.00 0.00 0.00 0.00 0.00 1.67 2.04 1.99 1.51
Special Bad Debts Reserve 300.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentage of Total Income 2.20 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Bad Debts Reserve 300.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentage of Total Income 2.20 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Special Building Funds 10.00 5.00 5.00 5.00 5.00 20.00 10.00 500.00 500.00 1500.00
Percentage of Total Income 0.07 0.05 0.05 0.04 0.03 0.11 0.05 2.12 1.66 3.65
General Welfare fund 10.00 5.00 5.00 5.00 5.00 20.00 10.00 100.00 8.00 300.00
Percentage of Total Income 0.07 0.05 0.05 0.04 0.03 0.11 0.05 0.42 0.03 0.73
Financial Performance Analysis Page | 196
Contingency fund 10.00 5.00 5.00 10.00 35.00 35.00 15.00 70.00 0.00 675.00
Percentage of Total Income 0.07 0.05 0.05 0.09 0.23 0.19 0.07 0.30 0.00 1.64
Provisions for other Assets 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 480.00 0.00
Percentage of Total Income 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.59 0.00
Development fund 10.00 5.00 5.00 5.00 5.00 15.00 10.00 100.00 100.00 300.00
Percentage of Total Income 0.07 0.05 0.05 0.04 0.03 0.08 0.05 0.42 0.33 0.73
Staff Welfare fund 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 100.00
Percentage of Total Income 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.24
Special Contingency Fund 0.00 0.00 420.00 50.00 25.00 25.00 10.00 100.00 0.00 0.00
Percentage of Total Income 0.00 0.00 3.93 0.45 0.17 0.14 0.05 0.42 0.00 0.00
Special Reserve 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 292.00 341.00
Percentage of Total Income 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.97 0.83
Building Fund 0.00 0.00 0.00 0.00 0.00 300.00 0.00 0.00 0.00 0.00
Percentage of Total Income 0.00 0.00 0.00 0.00 0.00 1.63 0.00 0.00 0.00 0.00
Investment Fluctuation Reserve 500.00 100.00 50.00 50.00 200.00 200.00 200.00 0.00 0.00 0.00
Percentage of Total Income 3.67 1.05 0.47 0.45 1.33 1.08 0.93 0.00 0.00 0.00
Fringe Benefit Tax 0.00 0.00 0.00 0.00 0.00 5.35 0.00 0.00 0.00 0.00
Percentage of Total Income 0.00 0.00 0.00 0.00 0.00 0.03 0.00 0.00 0.00 0.00
Income Tax Provision 0.00 0.00 0.00 800.00 1165.00 1326.69 1580.14 1921.72 2327.37 1977.58
Percentage of Total Income 0.00 0.00 0.00 7.16 7.77 7.19 7.34 8.17 7.73 4.81
Deferred tax 0.00 0.00 0.00 130.51 75.74 0.00 0.00 0.00 0.00 0.00
Percentage of Total Income 0.00 0.00 0.00 1.17 0.50 0.00 0.00 0.00 0.00 0.00
MMC deposits written off 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2388.84
Percentage of Total Income 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5.82
Investment Depreciation Reserve 875.95 0.00 936.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentage of Total Income 6.43 0.00 8.75 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Financial Performance Analysis Page | 197
Total (B) 11826.85 7708.98 8839.51 8941.67 12449.80 15743.68 18707.53 20079.18 26044.81 36188.56
Percentage of Total Income 86.78 80.84 82.64 80.05 83.00 85.28 86.94 85.34 86.52 88.11
Net Profit (A-B) 1801.91 1827.24 1857.35 2228.75 2550.10 2717.46 2810.32 3450.28 4059.24 4884.52
Percentage of Total Income 13.22 19.16 17.36 19.95 17.00 14.72 13.06 14.66 13.48 11.89
Trend Percentages:
Trend Ratio of Total Operating Income 100.00 69.97 78.49 81.96 110.06 135.46 157.89 172.65 220.89 301.37
Trend Ratio of Total Operating Expenses 100.00 65.18 74.74 75.60 105.27 133.12 158.18 169.78 220.22 305.99
Trend Ratio of Net Profit 100.00 101.41 103.08 123.69 141.52 150.81 155.96 191.48 225.27 271.07
(Source: Calculated from the published annual reports of KCCB of last 10 years)
(2003-04 is base year for trend percentages)
0.00
50.00
100.00
150.00
200.00
250.00
300.00
350.00
2003-042004-052005-062006-072007-082008-092009-102010-112011-122012-13
Percen
tag
es
Years
Chart 5.5. Trend analysis of P/L accounts of KCCB
Trend Ratio of Total Operating
Income
Trend Ratio of Total Operating
Expenses
Trend Ratio of Net Profit
Financial Performance Analysis Page | 198
Above table no. 5.31 shows common size analysis profit and loss accounts of the
KCCB ltd. for 10 years from 2003-04 to 2012-13. From the above table it is clear that
out of the total operating income of the bank major portion covered by the interest and
discount income. During the 10 years period of the study the maximum percentage of
interest and discount income on total operating income was found 96.23 percent and
minimum rate of percentage was 86.85 percent in the year 2008-09 and 2012-13
respectively. Average of 10 years interest and discount income percentage was 93.86
percent. So the researcher can conclude that average annual operating income of bank
consists, approximately 94 percent interest and discount income and 6 percent other
income.
The above table also state that out of the total operating expenses of the bank
average 54 percent of the total operating income is interest expenditure annually.
Average net profit ratio of the 10 year was 15.45 percentage i.e. percentage of other
operating expenses and provisions average 30.55 percent which includes 8 to 9 percent
of the total income as employee expenses like salary provident fund etc.
Last portion above table and chart no.5.5 shows the trend percentages of the
major items of profit and loss account. Trend percentage of operating income and
operating expenses show the same kind of trend it decline in first 3 years in than after it
increased continuously. Expenditure always depends on income as income increase
expenditure also increases and income decrease expenditure also decreases that thing
clearly indicate in the above graph. But the good thing is percentage of increase in
expenditure is less than percentage of increase in income the result is profitability
increase. The profit line in the above trend percentage graph shows increasing trend from
the first year to the last year of the study period. In comparison of the year 2003-04 profit
percentages increased by 171.07 percent in the year 2012-13. Though average percentage
of profit with total income is 15.45 percent, profit of the bank continuously increased it is
good thing for the bank and its progress during last 10 years.
Overall by the observation of above common size income statement and trend
chart the researcher can conclude that overall profitability of the bank increased during
last ten years not only this but also operating income of the bank also increase which
makes banks financial position stronger.
Financial Performance Analysis Page | 199
(II) Common size Balance sheets of KCCB:
Table 5.32
`in Lakhs
Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Liabilities:
Share Capital (`.25each) 1240.86 1385.99 1526.72 1994.12 2585.10 3011.60 3750.60 4862.75 6025.31 6667.24
Percentages of Total Liabilities 0.78 0.82 0.80 1.03 1.21 1.24 1.30 1.48 1.57 1.49
Reserve and Surplus 48028.24 49840.02 53336.17 51851.05 53298.32 56378.87 59096.65 61718.36 66296.37 70594.18
Percentages of Total Liabilities 30.31 29.61 28.10 26.87 24.86 23.12 20.43 18.82 17.26 15.80
Deposits 87039.56 93842.99 108344.67 105369.09 135242.11 161109.68 199208.68 223729.11 269699.32 327495.02
Percentages of Total Liabilities 54.93 55.75 57.08 54.61 63.08 66.07 68.86 68.24 70.23 73.30
Borrowings 3638.66 1702.99 2400.00 12495.00 0.00 0.00 0.00 4495.48 0.00 0.00
Percentages of Total Liabilities 2.30 1.01 1.26 6.48 0.00 0.00 0.00 1.37 0.00 0.00
Bill For collection (Contra) 285.45 346.95 382.88 469.62 827.71 1146.58 2905.61 10238.62 15916.48 17384.78
Percentages of Total Liabilities 0.18 0.21 0.20 0.24 0.39 0.47 1.00 3.12 4.14 3.89
Branch Adjustments 448.61 1336.40 191.95 260.95 520.69 248.70 139.88 0.00 12.71 0.00
Percentages of Total Liabilities 0.28 0.79 0.10 0.14 0.24 0.10 0.05 0.00 0.00 0.00
Overdue Interest 13658.53 16447.37 19192.85 15098.31 14195.66 13449.66 14259.85 9679.06 8697.36 7957.37
Percentages of Total Liabilities 8.62 9.77 10.11 7.83 6.62 5.52 4.93 2.95 2.26 1.78
Interest Payable 103.72 86.61 132.00 137.82 192.15 199.65 186.61 563.49 981.14 1198.41
Percentages of Total Liabilities 0.07 0.05 0.07 0.07 0.09 0.08 0.06 0.17 0.26 0.27
Other Liabilities 2199.12 1498.52 2453.24 3032.73 4994.09 5574.53 6921.37 9121.25 12310.24 10626.01
Percentages of Total Liabilities 1.39 0.89 1.29 1.57 2.33 2.29 2.39 2.78 3.21 2.38
Profit and Loss Account 1801.90 1827.26 1857.33 2228.76 2550.11 2717.45 2810.33 3450.29 4059.27 4884.54
Percentages of Total Liabilities 1.14 1.09 0.98 1.16 1.19 1.11 0.97 1.05 1.06 1.09
Financial Performance Analysis Page | 200
Total 158444.65 168315.10 189817.81 192937.45 214405.94 243836.72 289279.58 327858.41 383998.20 446807.55
Percentages of Total Liabilities 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Assets:
Cash and Bank Balance 25918.12 22479.40 34243.18 35621.19 36328.74 53199.87 38959.72 47252.13 43231.64 64607.77
Percentages of Total Assets 16.36 13.36 18.04 18.46 16.94 21.82 13.47 14.41 11.26 14.46
Call Money 0.00 3000.00 0.00 7500.00 0.00 8500.00 0.00 0.00 0.00 0.00
Percentages of Total Assets 0.00 1.78 0.00 3.89 0.00 3.49 0.00 0.00 0.00 0.00
Investment 64553.79 62386.58 70532.64 66903.48 79395.98 65797.41 106257.65 110003.78 110130.95 112759.29
Percentages of Total Assets 40.74 37.07 37.16 34.68 37.03 26.98 36.73 33.55 28.68 25.24
Advances 47922.17 56660.85 57975.71 60490.69 73565.29 90448.33 114657.74 135691.10 188420.92 227075.92
Percentages of Total Assets 30.25 33.66 30.54 31.35 34.31 37.09 39.64 41.39 49.07 50.82
Interest Receivable 14998.23 17764.88 21651.41 16924.84 16879.98 16167.47 16818.28 13009.75 12355.09 12311.55
Percentages of Total Assets 9.47 10.55 11.41 8.77 7.87 6.63 5.81 3.97 3.22 2.76
Bills Receivables (Contra) 285.45 346.95 382.88 469.62 827.71 1146.58 2905.61 10238.62 15916.48 17384.79
Percentages of Total Assets 0.18 0.21 0.20 0.24 0.39 0.47 1.00 3.12 4.14 3.89
Assets (After Depreciation) 1410.29 1635.21 2079.70 2632.43 3222.56 3347.78 3684.91 3661.12 4389.37 4892.55
Percentages of Total Assets 0.89 0.97 1.10 1.36 1.50 1.37 1.27 1.12 1.14 1.10
Other Assets 2262.83 3222.35 2655.37 2158.47 4104.41 5147.01 5976.46 7816.80 9553.75 7774.55
Percentages of Total Assets 1.43 1.91 1.40 1.12 1.91 2.11 2.07 2.38 2.49 1.74
Branch Adjustment Account 0.00 0.00 0.00 0.00 0.00 0.00 0.00 165.75 0.00 1.13
Percentages of Total Assets 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.05 0.00 0.00
Non Banking Assets 1093.77 818.88 296.92 236.73 82.27 82.27 19.21 19.36 0.00 0.00
Percentages of Total Assets 0.69 0.49 0.16 0.12 0.04 0.03 0.01 0.01 0.00 0.00
Total 158444.65 168315.10 189817.81 192937.45 214406.94 243836.72 289279.58 327858.41 383998.20 446807.55
Percentages of Total Assets 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Financial Performance Analysis Page | 201
Trend Percentages:
Trend Percentage of Capital 100.00 111.70 123.04 160.70 208.33 242.70 302.26 391.89 485.58 537.31
Trend Percentage of Reserves 100.00 103.77 111.05 107.96 110.97 117.39 123.05 128.50 138.04 146.98
Trend Percentage of Deposits 100.00 107.82 124.48 121.06 155.38 185.10 228.87 257.04 309.86 376.26
Trend Percentage of Advances 100.00 118.24 120.98 126.23 153.51 188.74 239.26 283.15 393.18 473.84
Trend Percentage of Investments 100.00 96.64 109.26 103.64 122.99 101.93 164.60 170.41 170.60 174.67
(Source: Calculated from the published annual reports of KCCB of last 10 years)
(2003-04 is base year for trend percentages)
0.00
100.00
200.00
300.00
400.00
500.00
600.00
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Per
cen
tag
e
Years
Chart 5.6: Trend Analysis of Balance sheet of KCCB
Trend Percentage of Capital
Trend Percentage of Reserve
and SurplusTrend Percentage of Deposits
Financial Performance Analysis Page | 202
Above table 5.32 shows common size balance sheet of the KCCB ltd. of last 10
years from 2003-04 to 2012-13. It also includes the trend percentages of major items of the
balance sheet.
From the above analysis it is clear that liabilities side of the balance sheet the most
important items are reserve and surplus and deposits. Out of the total funds invested in the
bank’s assets major portion provided by reserve and deposits. During the period of study
lowest percentage of reserves found 15.80 in the year 2012-13 and highest 30.31 in the
years 2003-04. During this period highest percentage of deposits 73.30 in the year 2012-13
and lowest percentage 54.93 in the year 2003-04 it indicates during the period of study bank
has increase the proportion of deposits and decrease the proportion of reserves. Overall
average 87 percent of the total assets of the bank funded by these two components. On one
hand bank has reduced the proportion of reserves but on the other hand bank has increased
the proportion of share capital during this period so overall banks owners capital maintain in
good proportion with increased proportion of debts (deposits). Increasing trends of deposits
improves bank’s profitability because bank become more able to lent money to the
customers and increasing trends of capital improves bank’s solvency as owner’s fund
increase.
On the assets side the major item are cash & bank balance investments and
advances. Above analysis state that during the period of last 10 years proportion of cash &
bank, and investment decrease and proportion of advances were increased. Advances in the
year 2003-04 were 30.25 percent of total assets which increased to 50.82 percent of total
assets. One side deposits of banks has increased and other side banks advances has
increased it suggest bank has done good business during the 10 years period of study. Due
to this bank profitability also increased.
Chart 5.6 shows trend analysis of the major items of balance sheets of KCCB ltd. of
last 10 years. From the above chart it is clear that all components of the balance sheets
shows increasing trend. Share capital of the bank increase to 5.37 times as compare to the
year 2003-04 in the year 2012-13. Reserve increased by 47 percent as compare to first year
in the last year. Deposits, Advances and Investment were reached at 376.26, 473.84, and
174.67 percent respectively from 100 percent in the year 2003-04 to the year 2012-13. It
shows excellent performance of the bank during last 10 years of the study.
Financial Performance Analysis Page | 203
4. FINANCIAL PERFORMANCE OF ‘THE RAJKOT COMMERCIAL
CO-OPERATIVE BANK LTD.’ (RCCB):
4.1 Ratio Analysis of RCCB.
(I) Credit Deposit Ratio (CDR):
Formula:
Table 5.33
Table showing CDR of RCCB of last 10 years
Year Total Advances
(` in Lakhs)
Total Deposit
(` in Lakhs)
CDR
(%)
2003-04 10543.55 19285.39 54.67
2004-05 11014.97 18812.20 58.55
2005-06 11505.98 18690.57 61.56
2006-07 11274.43 16590.92 67.96
2007-08 9984.16 10389.77 96.10
2008-09 9243.32 11345.82 81.47
2009-10 6405.42 12909.47 49.62
2010-11 4370.82 11560.61 37.81
2011-12 4492.50 9943.43 45.18
2012-13 5408.99 10738.84 50.37
Average 60.33 (Source: Computed from Annual Reports of RCCB of last 10 Years)
From the above table it is clear that bank’s credit deposit ratio remain between 37 to
96 percent. Average of last 10 years CDR was 60.33 percent. It indicates RCCB uses its
deposit on an average 60.33 percentage to give advances to their customers during the
period of study of last 10 years from 2003-04 to 2012-13. Highest deposit used by the bank
to provide loans to its customers in the year 2007-08, which was 96.10 percent of total
deposits. Lowest ratio of CDR found in the years 2010-11 37.81 percent.
(II) Capital Adequacy Ratio (CAR)/ Capital to Risk (Weighted) Assets Ratio (CRAR):
Formula:
Financial Performance Analysis Page | 204
Table 5.34
Table showing CAR of RCCB of last 10 years
Years Tier I Capital
(` in Lakhs)
Tier II Capital
(` in Lakhs)
Total TI+TII
(` in Lakhs)
RWA
(` in Lakhs)
CAR
(%)
2003-04 1977.00 200.67 2177.67 7881.54 27.63
2004-05 2060.23 249.70 2309.93 7856.90 29.40
2005-06 2134.94 280.96 2415.90 8606.70 28.07
2006-07 1360.75 178.82 1539.57 9280.11 16.59
2007-08 1390.12 194.61 1584.73 6981.19 22.70
2008-09 1593.16 224.64 1817.80 6396.20 28.42
2009-10 1650.12 239.27 1889.39 6090.88 31.02
2010-11 1534.92 228.70 1763.62 5025.99 35.09
2011-12 1961.49 294.22 2255.71 5531.41 40.78
2012-13 3154.72 474.68 3629.40 7211.21 50.33
Average 31.00
(Source: Computed from Annual Reports of RCCB of last 10 Years)
According to RBI and Basel committee report minimum CAR require for any UCB
is 9 percent after 2005. Above table shows CAR of RCCB in all the years of the study from
2003-04 to 2012-13 more than 9 percent. It indicates that CAR of the bank is more than
required rate by RBI in all the years. Average CAR of the 10 years period is 31 percent it
shows financial soundness of the bank during the period of study. Highest CAR of the bank
found in the years 2012-13 50.33 percent and lowest CAR found in the year 2006-07 16.59
percent.
(III) Interest Income to Total Income Ratio:
Formula:
Table 5.35
Table showing IITIR of RCCB of last 10 years
Year Total Interest
(` in Lakhs)
Total Income
(` in Lakhs)
IITIR
(%)
2003-04 2498.12 2999.56 83.28
2004-05 2345.38 2464.65 95.16
2005-06 2179.14 2261.87 96.34
2006-07 1715.89 1823.12 94.12
2007-08 1678.27 1745.43 96.15
2008-09 1368.94 1545.94 88.55
2009-10 1444.21 1577.21 91.57
2010-11 1384.93 1462.93 94.67
2011-12 1339.30 1420.39 94.29
2012-13 1442.14 1539.94 93.65
Average 93.00
(Source: Calculated from Annual Reports of RCCB of last 10 Years)
Financial Performance Analysis Page | 205
Above table shows that out of the total income of RCCB on an average 93 percent is
interest income during last ten years. During the period of study highest interest income to
total income ratio was found 96.34 percent and lowest ratio was 83.28 percent in the year
2005-06 and 2003-04 respectively.
(IV) Interest Expenses to Total Expenses Ratio:
Formula:
Table 5.36
Table showing IETER of RCCB of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Total Expenses
(` in Lakhs)
IETER
(%)
2003-04 1876.69 2880.82 65.14
2004-05 1702.18 2345.19 72.58
2005-06 1530.57 2138.13 71.58
2006-07 1405.57 2631.25 53.42
2007-08 994.41 1731.74 57.42
2008-09 797.27 1342.97 59.37
2009-10 878.26 1535.58 57.19
2010-11 755.32 1583.79 47.69
2011-12 585.18 1192.47 49.07
2012-13 573.73 1207.17 47.53
Average 58.10 (Source: Computed from Annual Reports of RCCB of last 10 Years)
In the above table highest ratio is 72.58 percent and lowest ratio is 47.53 percent in
the year 2004-05 and 2012-13 respectively. Average of 10 years is 58.10 percent i.e. on an
average during last 10 years out of total expenses of the bank around 58 percent portion of
total expenses was interest expense on deposits and borrowings. Average interest income
ratio was 93 percent against it average interest expenses ratio 58 percent it mentioned that
on an average during the last 10 years 35 percent is interest margin earned by the bank.
(V) Net Profit to Net Assets Ratio:
Formula:
Financial Performance Analysis Page | 206
Table 5.37
Table showing NPNAR of RCCB of last 10 years
Year Net Profit
(` in Lakhs)
Net Assets
(` in Lakhs)
NPNAR
(%)
2003-04 118.74 8925.27 1.33
2004-05 119.46 9843.43 1.21
2005-06 123.74 11039.25 1.12
2006-07 -808.13 14346.33 -5.63
2007-08 13.69 15762.34 0.09
2008-09 202.97 17297.35 1.17
2009-10 41.63 18680.57 0.22
2010-11 -120.86 20102.79 -0.60
2011-12 227.92 22028.06 1.03
2012-13 332.77 25382.76 1.31
Average 0.13 (Source: Computed from Annual Reports of RCCB of last 10 Years)
During last 10 years maximum NPNAR was found 1.33 percent in the year 2003-
04 and minimum NPNAR was found (-5.63) percent in the year 2006-07. During these 10
years bank has negative NPNAR in two years 2006-07 and 2010-11. But on an average
during the last 10 years banks has 0.13 percent NPNAR. Bank has successfully covered its
loss incurred in 2006-07 and 2010-11.
(VI) Earnings per Share:
Formula:
Table 5.38
Table showing EPS of RCCB of last 10 years
Year Net Profit
(` in Lakhs)
No. of Equity
Share (in Lakhs)
EPS
(`)
2003-04 118.74 10.08 11.78
2004-05 119.46 10.54 11.33
2005-06 123.74 10.54 11.74
2006-07 -808.13 13.90 -58.12
2007-08 13.69 14.47 0.95
2008-09 202.97 14.41 14.09
2009-10 41.63 14.99 2.78
2010-11 -120.86 15.21 -7.94
2011-12 227.92 22.77 10.01
2012-13 332.77 23.86 13.94
Average 1.06
(Source: Computed from Annual Reports of RCCB of last 10 Years)
Financial Performance Analysis Page | 207
EPS of RCCB `1.06 per share on an average during last 10 years. Maximum EPS
earned by the bank in the year 2012-13 `13.94 per share and minimum EPS earned by the
bank `-58.12 in the year 2006-07. Though bank has negative EPS in two years, overall EPS
of the bank during the period of the study found good.
(VII) Interest Income to Average Working Fund Ratio:
Formula:
Working Fund = Total assets – Bills Receivable
Table 5.39
Table showing IIAWFR of RCCB of last 10 years
Year Total Interest
(` in Lakhs)
AWF
(` in Lakhs)
IIAWFR
(%)
2003-04 2498.12 23914.65 10.45
2004-05 2345.38 24483.85 9.58
2005-06 2179.14 23869.66 9.13
2006-07 1715.89 22823.72 7.52
2007-08 1678.27 19175.35 8.75
2008-09 1368.94 16302.02 8.40
2009-10 1444.21 18116.99 7.97
2010-11 1384.93 17445.93 7.94
2011-12 1339.30 15893.08 8.43
2012-13 1442.14 15923.96 9.06
Average 8.72 (Source: Computed from Annual Reports of RCCB of last 10 Years)
From the above table it is clear that during last 10 year highest interest income to
average working fund ratio was found 10.45 percent in the year 2003-04 and lowest ratio
was found 7.94 percent in the year 2010-11. On an average bank has 8.72 percent ratio of
interest income to average working fund annually during last 10 years from 2003-04 to
2012-13.
(VIII) Interest Expenses to Average Working Fund Ratio:
Formula:
Financial Performance Analysis Page | 208
Table 5.40
Table showing IEAWFR of RCCB of last 10 years
Year Total Interest Exp.
(` in Lakhs)
AWF
(` in Lakhs)
IEAWFR
(%)
2003-04 1876.69 23914.65 7.85
2004-05 1702.18 24483.85 6.95
2005-06 1530.57 23869.66 6.41
2006-07 1405.57 22823.72 6.16
2007-08 994.41 19175.35 5.19
2008-09 797.27 16302.02 4.89
2009-10 878.26 18116.99 4.85
2010-11 755.32 17445.93 4.33
2011-12 585.18 15893.08 3.68
2012-13 573.73 15923.96 3.60
Average 5.39
(Source: Computed from Annual Reports of RCCB of last 10 Years)
Above table shows that during last 10 year highest interest expenses to average
working fund ratio was found 7.85 percent and lowest ratio was found 3.60 percent in the
year 2003-04 and 2012-13 respectively. On an average bank has 5.39 percent ratio of
interest expenses to average working fund annually. Interest income ratio average 8.72
percent against it average interest expense ratio 5.39 percent of last ten years of bank it
states that bank has earning gap of interest 3.33 percent on average working fund.
(IX) Gross Profit to Average Working Fund Ratio:
Formula:
Table 5.41
Table showing GPAWFR of RCCB of last 10 years
Year Gross Profit
(` in Lakhs)
AWF
(` in Lakhs)
GPAWFR
(%)
2003-04 794.30 23914.65 3.32
2004-05 339.49 24483.85 1.39
2005-06 300.11 23869.66 1.26
2006-07 -54.46 22823.72 -0.24
2007-08 273.90 19175.35 1.43
2008-09 354.49 16302.02 2.17
2009-10 384.97 18116.99 2.12
2010-11 301.02 17445.93 1.73
2011-12 466.32 15893.08 2.93
2012-13 575.59 15923.96 3.61
Average 1.97
(Source: Computed from Annual Reports of RCCB of last 10 Years)
Financial Performance Analysis Page | 209
Above table shows that the highest GPAWFR of the bank is 3.61 percent in the year
2012-13 and lowest ratio is (-0.24) percent in the year 2006-07 average GPAWFR remained
1.97 of last 10 years from 2003-04 to 2012-13.
(X) Net Profit to Average Working Fund Ratio:
Formula:
Table 5.42
Table showing NPAWFR of RCCB of last 10 years
Year Net Profit
(` in Lakhs)
AWF
(` in Lakhs)
NPAWFR
(%)
2003-04 118.74 23914.65 0.50
2004-05 119.46 24483.85 0.49
2005-06 123.74 23869.66 0.52
2006-07 -808.13 22823.72 -3.54
2007-08 13.69 19175.35 0.07
2008-09 202.97 16302.02 1.25
2009-10 41.63 18116.99 0.23
2010-11 -120.86 17445.93 -0.69
2011-12 227.92 15893.08 1.43
2012-13 332.77 15923.96 2.09
Average 0.24 (Source: Computed from Annual Reports of RCCB of last 10 Years)
Above table shows that the highest NPAWFR of the bank is 2.09 percent in the year
2012-13, and lowest (-3.54) percent in the year 2006-07 and average NPAWFR of the bank
0.24 percent of last 10 years from 2003-04 to 2012-13. From the above table it also clear
that 2012-13 was good year for bank because in this year bank earned good profit as
compare to other years of the study and bank has highest net profit in this year.
(XI) Employee Cost to Average Working Fund Ratio:
Formula:
Financial Performance Analysis Page | 210
Table 5.43
Table showing ECAWFR of RCCB of last 10 years
Year Employee exp.
(` in Lakhs)
AWF
(` in Lakhs)
ECAWFR
(%)
2003-04 203.81 23914.65 0.85
2004-05 215.23 24483.85 0.88
2005-06 232.19 23869.66 0.97
2006-07 249.82 22823.72 1.09
2007-08 254.55 19175.35 1.33
2008-09 238.36 16302.02 1.46
2009-10 208.43 18116.99 1.15
2010-11 298.73 17445.93 1.71
2011-12 254.30 15893.08 1.60
2012-13 278.51 15923.96 1.75
Average 1.28 (Source: Computed from Annual Reports of RCCB of last 10 Years)
From the above table showing ratios of employee cost to average working fund of
last 10 years of the bank it is clear that average employee’s cost of the bank on average
working fund is 1.28 percent per annum. During last 10 years highest ECAWFR 1.75
percent in the year 2012-13 and lowest ratio 0.85 percent in the year 2003-04.
(XII) Cost of Deposit Ratio:
Formula:
Table 5.44
Table showing CoDR of RCCB of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Average Deposits
(` in Lakhs)
CoDR
(%)
2003-04 1876.69 18894.56 9.93
2004-05 1702.18 19048.80 8.94
2005-06 1530.57 18751.39 8.16
2006-07 1405.57 17640.75 7.97
2007-08 994.41 13490.35 7.37
2008-09 797.27 10867.80 7.34
2009-10 878.26 12127.65 7.24
2010-11 755.32 12235.04 6.17
2011-12 585.18 10752.02 5.44
2012-13 573.73 10341.14 5.55
Average 7.41 (Source: Calculated from Annual Reports of RCCB of last 10 Years)
Financial Performance Analysis Page | 211
From the above table it was found percentages of Interest on Average Deposits
during last 10 years Maximum 9.93 in the year 2003-04 and minimum 5.44 in the year
2011-12 and average cost of deposits last 10 years of the bank remained 7.41percent.
(XIII) Summary of the above Ratios:
Table 5.45
A summary of all the ratios of RCCB Calculated above
Yea
rs
CD
R (%
)
CA
R (%
)
IITIR
(%)
IET
ER
(%)
NP
NA
R (%
)
EP
S (`
)
IIAW
FR
(%)
IEA
WF
R (%
)
GP
AW
FR
(%)
NP
AW
FR
(%)
EC
AW
FR
(%)
CO
DR
(%)
03-04 54.67 27.63 83.28 65.14 1.33 11.78 10.45 7.85 3.32 0.5 0.85 9.93
04-05 58.55 29.4 95.16 72.58 1.21 11.33 9.58 6.95 1.39 0.49 0.88 8.94
05-06 61.56 28.07 96.34 71.58 1.12 11.74 9.13 6.41 1.26 0.52 0.97 8.16
06-07 67.96 16.59 94.12 53.42 -5.63 -58.12 7.52 6.16 -0.24 -3.54 1.09 7.97
07-08 96.1 22.7 96.15 57.42 0.09 0.95 8.75 5.19 1.43 0.07 1.33 7.37
08-09 81.47 28.42 88.55 59.37 1.17 14.09 8.4 4.89 2.17 1.25 1.46 7.34
09-10 49.62 31.02 91.57 57.19 0.22 2.78 7.97 4.85 2.12 0.23 1.15 7.24
10-11 37.81 35.09 94.67 47.69 -0.6 -7.94 7.94 4.33 1.73 -0.69 1.71 6.17
11-12 45.18 40.78 94.29 49.07 1.03 10.01 8.43 3.68 2.93 1.43 1.6 5.44
12-13 50.37 50.33 93.65 47.53 1.31 13.94 9.06 3.6 3.61 2.09 1.75 5.55
Avg. 60.33 31.00 92.78 58.10 0.13 1.06 8.72 5.39 1.97 0.24 1.28 7.41
4.2 NPA Management of the RCCB:
Table 5.46
Table showing NPA Management of RCCB of last 10 years
Yea
rs
Tota
l
Ad
van
ces
(` i
n L
ak
hs)
Gro
ss N
PA
(` i
n L
ak
hs)
Gro
ss N
PA
(%) Total Provision
(`in Lakhs)
NE
T N
PA
(`in
Lak
hs)
NE
T N
PA
(%)
1 2 1/2x100 Std.
Assets NPA
Total
SA+NPA
03-04 10543.55 1888.70 17.91 25 1543.76 1568.76 319.94 3.56
04-05 11014.97 1521.85 13.82 25 1724.25 1749.25 -227.4 -2.45
05-06 11505.98 777.63 6.76 50 2075.44 2125.44 -1347.81 -14.37
06-07 11274.43 3775.21 33.48 50 2828.71 2878.71 896.5 10.68
07-08 9984.16 3480.60 34.86 55 2843.71 2898.71 581.89 8.21
08-09 9243.32 3256.41 35.23 55 2870.23 2925.23 331.18 5.24
09-10 6405.42 1611.45 25.16 55 1297.87 1352.87 258.58 5.12
10-11 4370.82 1158.68 26.51 55 1239.87 1294.87 -136.19 -4.43
11-12 4492.50 663.41 14.77 55 1309.87 1364.87 -701.46 -22.43
12-13 5408.99 489.92 9.06 55 591.28 646.28 -156.36 -3.28
(Source: Compiled from the information available in annual reports of the Bank)
Financial Performance Analysis Page | 212
As per recent guidelines provided by the RBI Net NPA should be less than 5 percent
to pay dividend and Gross NPA should be less than 10 percent to avoid supervisory action
from RBI.
From the above table no. 5.46 and chart no. 5.7 it is clear that Gross NPA of RCCB
more than 10 percent in all the years except in the year 2005-06 and 2012-13. The
researcher found that NPA management of the bank was not well during the last 10 years
the period of the study. In the years 2006-07 to 2009-10 the bank has more than 5 percent
Net NPA it was matter of worry. Apart from this bank has incurred a big loss in the year
2006-07. But at the end of the year 2012-13 the management of the bank has improved and
bank has Net NPA less than zero. Not only this bank having less than 5 percent net NPA in
5 year out of 10 years. It is good thing for the bank that the bank has proved itself to
maintained good NPA position in the critical situation.
From the above table 5.46 and chart 5.7 the researcher can clearly conclude that the
bank has great challenge during 2006-07 to 2009-10. During this period bank has great
difficulty to maintain its NPA in good position due to big loss and mismanagement in the
bank and its various branches. But management of the bank has accepted the challenges
well and brought its net NPA not only at zero level but less than zero. The bank has highest
gross NPA 35.23 percent in the year 2008-09 which had gone down to 9.06 percent at the
end of the year 2012-13 and the highest net NPA 10.68 percent in the year 2006-07 also
reduced to -3.28 percent at the end of the year 2012 -13.
17
.91
13
.82
6.7
6
33
.48
34
.86
35
.23
25
.16
26
.51
14
.77
9.0
6
3.5
6
-2.4
5
-14
.37
10
.68
8.2
1
5.2
4
5.1
2
-4.4
3
-22
.43
-3.2
8
-30.00
-20.00
-10.00
0.00
10.00
20.00
30.00
40.00
20
03
-04
20
04
-05
20
05
-06
20
06
-07
20
07
-08
20
08
-09
20
09
-10
20
10
-11
20
11
-12
20
12
-13
Gro
ss a
nd
Net
NP
A (
%)
Years
Chart 5.7 Gross and Net NPA of RCCB
Gross NPA
Net NPA
Financial Performance Analysis Page | 213
4.3 Common Size Statement and Trend Analysis of RCCB:
(I) Common Size Income Statement of RCCB:
Table:5.47
`in Lakhs
Particulars Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Incomes:
Interest and discount 2498.12 2345.38 2179.14 1715.89 1678.27 1368.94 1444.21 1384.93 1339.30 1442.14
Percentage of Total Income 83.28 95.16 96.34 94.12 96.15 88.55 91.57 94.67 94.29 93.65
Commission, Exchange & Brokerage 24.27 21.46 21.18 23.70 16.03 14.24 7.98 5.59 5.27 3.69
Percentage of Total Income 0.81 0.87 0.94 1.30 0.92 0.92 0.51 0.38 0.37 0.24
Other Receipts 477.17 97.81 61.55 83.53 51.13 162.76 125.02 72.41 75.82 94.11
Percentage of Total Income 15.91 3.97 2.72 4.58 2.93 10.53 7.93 4.95 5.34 6.11
Total (A) 2999.56 2464.65 2261.87 1823.12 1745.43 1545.94 1577.21 1462.93 1420.39 1539.94
Percentage of Total Income 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Expenditures:
Interests on Deposits, Borrowings 1876.69 1702.18 1530.57 1405.57 994.41 797.27 878.26 755.32 585.18 573.73
Percentage of Total Income 62.57 69.06 67.67 77.10 56.97 51.57 55.68 51.63 41.20 37.26
Salary, Allowances, provident fund and staff welfare 203.81 215.23 232.19 249.82 254.55 238.36 208.43 298.73 254.30 278.51
Percentage of Total Income 6.79 8.73 10.27 13.70 14.58 15.42 13.22 20.42 17.90 18.09
Rents, Rates, Insurance, Electricity etc. 34.14 44.43 46.22 46.53 40.83 36.08 37.65 37.10 37.55 39.81
Percentage of Total Income 1.14 1.80 2.04 2.55 2.34 2.33 2.39 2.54 2.64 2.59
Legal fees 3.93 11.14 6.73 4.32 4.23 14.09 4.08 4.40 5.99 1.96
Percentage of Total Income 0.13 0.45 0.30 0.24 0.24 0.91 0.26 0.30 0.42 0.13
Postage, Telephone, etc. 3.38 2.97 2.99 2.67 1.62 1.32 1.29 1.35 1.88 2.50
Percentage of Total Income 0.11 0.12 0.13 0.15 0.09 0.09 0.08 0.09 0.13 0.16
Financial Performance Analysis Page | 214
Audit Fees, Internal Audit fees 0.05 0.05 2.20 4.50 2.56 3.37 4.60 4.00 2.69 3.23
Percentage of Total Income 0.00 0.00 0.10 0.25 0.15 0.22 0.29 0.27 0.19 0.21
Depreciation and Repairs to property 44.14 36.33 33.26 27.83 27.04 24.65 23.04 18.38 17.76 18.77
Percentage of Total Income 1.47 1.47 1.47 1.53 1.55 1.59 1.46 1.26 1.25 1.22
Printing Stationary, Advertisement 12.81 9.13 9.16 10.66 20.71 15.05 9.91 11.91 13.42 9.51
Percentage of Total Income 0.43 0.37 0.40 0.58 1.19 0.97 0.63 0.81 0.94 0.62
Other expenses 26.31 103.70 98.44 125.68 125.58 61.26 24.98 30.72 35.30 36.33
Percentage of Total Income 0.88 4.21 4.35 6.89 7.19 3.96 1.58 2.10 2.49 2.36
Other Provisions 675.56 220.03 176.37 753.67 260.21 151.52 343.34 421.88 0.00 0.00
Percentage of Total Income 22.52 8.93 7.80 41.34 14.91 9.80 21.77 28.84 0.00 0.00
Total Expenses (B) 2880.82 2345.19 2138.13 2631.25 1731.74 1342.97 1535.58 1583.79 1192.47 1207.17
Percentage of Total Income 96.04 95.15 94.53 144.33 99.22 86.87 97.36 108.26 83.95 78.39
Net Profit (A-B) 118.74 119.46 123.74 -808.13 13.69 202.97 41.63 -120.86 227.92 332.77
Percentage of Total Income 3.96 4.85 5.47 -44.33 0.78 13.13 2.64 -8.26 16.05 21.61
Trend Percentage: 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Trend Ratio of Total Operating Income 100.00 82.17 75.41 60.78 58.19 51.54 52.58 48.77 47.35 51.34
Trend Ratio of Total Operating Expenses 100.00 81.41 74.22 91.34 60.11 46.62 53.30 54.98 41.39 41.90
Trend Ratio of Net Profit 100.00 100.61 104.21 -680.59 11.53 170.94 35.06 -101.79 191.95 280.25
(Source: Calculated from the published annual reports of RCCB of last 10 years)
(2003-04 is base year for trend percentages)
Financial Performance Analysis Page | 215
Above table no. 5.47 shows common size analysis of Profit and Loss account of
the RCCB ltd. for 10 years from 2003-04 to 2012-13. From the above table it is clear that
out of the total operating income of the bank major portion covered by the interest and
discount income. During the 10 years period of the study the maximum percentage of
interest and discount income on total operating income was found 96.34 percent and
minimum rate of percentage was 83.28 percent. Average of 10 years interest and discount
income percentage was 92.78 percent. So the researcher can conclude that average annual
operating income of the bank consists, approximately 93 percent interest and discount
income and 7 percent other income.
The above table also state that out of the total operating expenses of the bank
average 58 percent of the total operating income is interest expenditure annually. Average
net profit ratio of the 10 year was 1.59 percentage i.e. percentage of other operating
expenses and provisions average 40.41 percent which includes approx 14 percent of the
total income as employee expenses like salary provident fund etc.
Last portion above table and chart no.5.8 shows the trend percentages of the major
items of profit and loss account. Trend percentage of operating income and operating
expenses show the same kind of trend declining trend. In comparison of 2003-04 in the
year 2012-13 Operating income reduced to 51.34 percent i.e. it reduced by 48.66 percent
-800.00
-600.00
-400.00
-200.00
0.00
200.00
400.00
20
03
-04
20
04
-05
20
05
-06
20
06
-07
20
07
-08
20
08
-09
20
09
-10
20
10
-11
20
11
-12
20
12
-13
Per
cen
tag
e
Years
Chart 5.8 Trend analysis of P/L accounts of RCCB
Trend Ratio of Total
Operating Income
Trend Ratio of Total
Operating Expenses
Trend Ratio of Net Profit
Financial Performance Analysis Page | 216
on the other hand operating expenses decreased to 41.90 percent i.e. it reduced by 58.10
percent in 10 years. Expenditure always depends on income as income increase
expenditure also increases and income decrease expenditure also decreases that thing
clearly indicate in the above graph. But the worst thing is percentage of increase in
expenditure is more than percentage of increase in income the result is profitability
decrease. The profit line in the above trend percentage graph shows fluctuating trend from
the first year to the last year of the study period. In comparison of the year 2003-04 profit
percentages increased by 180.25 percent in the year 2012-13. A great downfall has seen in
the profit trend of the bank in the year 2006-07 in comparison of 2003-04 it reduced by
780.59 percent. In the year 2010-11 it again has negative profit but this time it reduced by
101.79 percent as compare to 2003-04. But at last there was good rise in profit trend and it
increase by 180.25 percent at the end of March 2013.
Overall by the observation of above common size income statement and trend
chart the researcher can conclude that overall profitability of the bank maintained well
during last ten years.
Financial Performance Analysis Page | 217
(II) Common size Balance sheets of RCCB:
Table 5.48
`in Lakhs
Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Liabilities:
Share Capital (`.25each) 251.99 263.58 263.59 347.59 361.86 360.14 374.68 380.34 569.34 596.60
Percentages of Total Liabilities 1.02 1.08 1.11 1.57 2.22 2.06 1.94 2.16 3.50 3.38
Reserve and Surplus 3485.50 3755.79 4208.57 5056.51 5084.00 5114.99 3778.12 3720.24 3743.54 3342.47
Percentages of Total Liabilities 14.06 15.46 17.69 22.84 31.18 29.33 19.61 21.17 23.00 18.94
Deposits 19285.39 18812.20 18690.57 16590.92 10389.77 11345.82 12909.47 11560.61 9943.43 10738.84
Percentages of Total Liabilities 77.80 77.42 78.58 74.93 63.72 65.05 67.00 65.79 61.09 60.85
Borrowings 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentages of Total Liabilities 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Bill For collection (Contra) 36.66 34.40 28.09 24.49 55.15 18.72 11.08 10.11 9.04 10.78
Percentages of Total Liabilities 0.15 0.14 0.12 0.11 0.34 0.11 0.06 0.06 0.06 0.06
Branch Adjustments 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentages of Total Liabilities 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Overdue Interest 1297.48 1034.65 225.37 753.32 800.35 805.64 2355.61 2317.21 2152.72 2097.58
Percentages of Total Liabilities 5.23 4.26 0.95 3.40 4.91 4.62 12.22 13.19 13.22 11.88
Interest Payable 90.15 112.42 90.99 39.83 35.68 26.57 22.18 19.87 14.08 12.93
Percentages of Total Liabilities 0.36 0.46 0.38 0.18 0.22 0.15 0.12 0.11 0.09 0.07
Other Liabilities 220.95 166.75 154.46 138.12 374.10 361.25 367.59 234.50 278.82 517.08
Percentages of Total Liabilities 0.89 0.69 0.65 0.62 2.29 2.07 1.91 1.33 1.71 2.93
Profit and Loss Account 118.74 119.46 123.74 -808.13 -794.45 -591.48 -549.85 -670.71 -433.17 332.77
Percentages of Total Liabilities 0.48 0.49 0.52 -3.65 -4.87 -3.39 -2.85 -3.82 -2.66 1.89
Financial Performance Analysis Page | 218
Total 24786.86 24299.25 23785.38 22142.65 16306.46 17441.65 19268.88 17572.17 16277.80 17649.05
Percentages of Total Liabilities 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Assets:
Cash and Bank Balance 6899.36 7062.85 7361.43 5840.99 2731.08 4681.47 6716.90 7017.35 5473.80 6331.69
Percentages of Total Assets 27.83 29.07 30.95 26.38 16.75 26.84 34.86 39.93 33.63 35.88
Call Money 700.00 500.00 300.00 0.00 0.00 0.00 0.00 0.00 300.00 0.00
Percentages of Total Assets 2.82 2.06 1.26 0.00 0.00 0.00 0.00 0.00 1.84 0.00
Investment 5092.99 4150.06 3290.31 3493.53 1729.05 1729.12 2882.17 2882.45 2882.45 2882.45
Percentages of Total Assets 20.55 17.08 13.83 15.78 10.60 9.91 14.96 16.40 17.71 16.33
Advances 10543.55 11014.97 11505.98 11274.43 9984.16 9243.32 6405.42 4370.82 4492.50 5408.99
Percentages of Total Assets 42.54 45.33 48.37 50.92 61.23 53.00 33.24 24.87 27.60 30.65
Interest Receivable 1221.27 945.19 439.17 978.25 971.57 992.61 2475.06 2640.93 2471.73 2294.45
Percentages of Total Assets 4.93 3.89 1.85 4.42 5.96 5.69 12.84 15.03 15.18 13.00
Bills Receivables (Contra) 36.66 34.40 28.09 24.49 55.15 18.72 11.08 10.11 9.03 10.78
Percentages of Total Assets 0.15 0.14 0.12 0.11 0.34 0.11 0.06 0.06 0.06 0.06
Assets (After Depreciation) 192.50 156.60 142.78 144.68 131.62 119.36 108.23 104.55 102.15 109.38
Percentages of Total Assets 0.78 0.64 0.60 0.65 0.81 0.68 0.56 0.59 0.63 0.62
Other Assets 100.53 435.18 355.32 165.77 506.03 250.35 343.82 319.76 367.94 454.51
Percentages of Total Assets 0.41 1.79 1.49 0.75 3.10 1.44 1.78 1.82 2.26 2.58
Branch Adjustment Account 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentages of Total Assets 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Non Banking Assets 0.00 0.00 362.30 220.51 197.80 406.70 326.20 226.20 178.20 156.80
Percentages of Total Assets 0.00 0.00 1.52 1.00 1.21 2.33 1.69 1.29 1.09 0.89
Total 24786.86 24299.25 23785.38 22142.65 16306.46 17441.65 19268.88 17572.17 16277.80 17649.05
Percentages of Total Assets 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Financial Performance Analysis Page | 219
Trend Percentages:
Trend Percentage of Capital 100.00 104.60 104.60 137.94 143.60 142.92 148.69 150.93 225.94 236.76
Trend Percentage of Reserves 100.00 107.75 120.75 145.07 145.86 146.75 108.40 106.73 107.40 95.90
Trend Percentage of Deposits 100.00 97.55 96.92 86.03 53.87 58.83 66.94 59.94 51.56 55.68
Trend Percentage of Advances 100.00 104.47 109.13 106.93 94.69 87.67 60.75 41.45 42.61 51.30
Trend Percentage of Investments 100.00 81.49 64.60 68.59 33.95 33.95 56.59 56.60 56.60 56.60
(Source: Calculated from the published annual reports of RCCB of last 10 years)
(2003-04 is base year for trend percentages)
0.00
50.00
100.00
150.00
200.00
250.00
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Per
cen
tag
e
Years
Chart 5.9 Trend Analysis of Balance sheets of RCCB
Trend Percentage of Capital
Trend Percentage of Reserve and
SurplusTrend Percentage of Deposits
Trend Percentage of Advances
Financial Performance Analysis Page | 220
Above table 5.48 shows common size balance sheet of the RCCB ltd. of last 10
years from 2003-04 to 2012-13. It also includes the trend percentages of major items of
the balance sheet.
From the above analysis it is clear that liabilities side of the balance sheet the most
important items is deposits followed by reserve and surplus. Out of the total funds invested
in the bank’s assets major portion provided by Deposits and Reserve. During the period of
study lowest percentage of reserves found 14.06 in the year 2003-04 and highest 23 in the
years 2011-12. During this period highest percentage of deposits is 78.58 in the year 2005-
06 and lowest percentage 60.85 in the year 2012-13. Overall average 90.55 percent of the
total assets of the bank funded by these two components i.e. share of the other items in the
balance sheet is 10 percent average during last 10 years from 2002-03 to 2012-13. During
the last 10 years bank has no borrowing in its balance sheet. The major liabilities are only
deposits.
On the assets side the major items are as usual in other banks cash & bank balance
investments and advances. Above analysis state that during the period of last 10 years
proportion of cash & bank, investment and advances in total assets on an average 87
percent and proportion of other items in the balance sheet assets side on an average only
13 percent of the total assets during last 10 years. During the period of study highest
percentages of Cash and Bank, Investment and Advances are found 39.93, 20.55 and
61.23 in the year 2011-12, 2003-04 and 2007-08 respectively. On the other hand lowest
percentages are remained 16.75, 9.91 and 24.27 in the year 2007-08, 2008-09 and 2010-11
respectively.
Chart 5.9 shows trend analysis of the major items of balance sheets of RCCB ltd.
of last 10 years. Share capital shows increasing trend as compare to 2003-04 share capital
of the bank increased by 136.26 percent. There were no any decreases in share capital
during the period of study. Reserve and surplus have increasing trend up to 2008-09 than
after it shows decreasing trend till 2012-13. Deposit line in above chart indicate decreasing
trend it bank’s deposits are decrease by 44.32 percent as compare to 2003-04 in the year
2012-13. On the other hand advances shown increasing trend till 2005-06 than after it
shown decreasing trend till 2012-13. Generally banks uses it deposits for the purpose of
providing advances to its customers. Till the years 2005-06 the bank has increasing trend
of advances and decreasing trend of deposits. Due to this controversy bank has critical
situation in the year 2006-07. But then after position has been improved that clearly can be
Financial Performance Analysis Page | 221
seen from the above chart no.5.9. Investment also shown decreasing trend in the above
chart as compare to 2003-04 investment decreased to 56.60 percent in the year 2012-13
i.e. it decreased by 43.4 percent.
5. FINANCIAL PERFORMANCE OF ‘THE JIVAN COMMERCIAL
CO-OPERATIVE BANK LTD.’ (JCCB):
5.1 Ratio Analysis of JCCB.
(I) Credit Deposit Ratio (CDR):
Formula:
Table 5.49
Table showing CDR of JCCB of last 10 years
Year Total Advances
(` in Lakhs)
Total Deposit
(` in Lakhs)
CDR
(%)
2003-04 7351.52 10436.43 70.44
2004-05 8443.82 12078.85 69.91
2005-06 8787.69 11514.93 76.32
2006-07 8879.99 12283.95 72.29
2007-08 8544.08 13151.51 64.97
2008-09 9258.29 13744.54 67.36
2009-10 10599.59 17138.89 61.85
2010-11 12287.84 18072.42 67.99
2011-12 12543.34 19954.14 62.86
2012-13 12950.16 20343.36 63.66
Average 67.77 (Source: Computed from Annual Reports of JCCB of last 10 Years)
From the above table it is clear that bank’s credit deposit ratio remained between
61 to 77 percent. Average of last 10 years CDR is 67.77 percent. It indicates JCCB uses
its deposit on an average 67.77 percentage to give advances to their customers during the
period of study of last 10 years from 2003-04 to 2012-13. Highest deposit used by the
bank to provide loans to its customer in the year 2005-06, which was 76.32 percent of total
deposits and lowest ratio was in the year 2009-10 61.85 percent.
Financial Performance Analysis Page | 222
(II) Capital Adequacy Ratio (CAR)/ Capital to Risk (Weighted) Assets Ratio
(CRAR):
Formula:
Table 5.50
Table showing CAR of JCCB of last 10 years
Years Tier I Capital
(` in Lakhs)
Tier II Capital
(` in Lakhs)
Total TI+TII
(` in Lakhs)
RWA
(` in Lakhs)
CAR
(%)
2003-04 962.95 21.10 984.05 4352.28 22.61
2004-05 1072.09 22.30 1094.39 6366.43 17.19
2005-06 1144.87 23.40 1168.27 8565.03 13.64
2006-07 920.56 23.51 944.07 6484.00 14.56
2007-08 1267.41 24.02 1291.43 7807.92 16.54
2008-09 1350.71 25.70 1376.41 8570.42 16.06
2009-10 1446.03 25.85 1471.88 9683.42 15.20
2010-11 1574.61 30.80 1605.41 10596.77 15.15
2011-12 1712.20 30.90 1743.10 14125.61 12.34
2012-13 1733.38 40.10 1773.48 14656.86 12.10
Average 15.54
(Source: Computed from Annual Reports of JCCB of last 10 Years)
According to RBI and Basel committee report minimum CAR require for any UCB
is 9 percent after 2005. Above table shows CAR of JCCB ltd. in all the years of the study
from 2003-04 to 2012-13 more than 9 percent. It indicates that CAR of the bank is more
than required rate by RBI in all the years. Average CAR of the 10 years period is 15.54
percent it shows financial adequacy of the bank during the period of study. Highest CAR
of the bank found in the year 2003-04 22.61 percent and lowest ratio found in the year
2012-13 12.10 percent.
(III) Interest Income to Total Income Ratio:
Formula:
Financial Performance Analysis Page | 223
Table 5.51
Table showing IITIR of JCCB of last 10 years
Year Total Interest
(` in Lakhs)
Total Income
(` in Lakhs)
IITIR
(%)
2003-04 1912.48 2007.23 95.28
2004-05 1855.16 1912.75 96.99
2005-06 1682.76 1746.26 96.36
2006-07 1744.02 1812.86 96.20
2007-08 1877.94 1948.57 96.38
2008-09 2114.26 2188.54 96.61
2009-10 2294.14 2410.92 95.16
2010-11 2664.48 2804.75 95.00
2011-12 2365.23 3104.71 76.18
2012-13 2491.58 3330.86 74.80
Average 91.90 (Source: Calculated from Annual Reports of JCCB of last 10 Years)
Above table shows that out of the total income of JCCB on an average 91.90
percent is interest and discount income during last ten years. During the period of study
highest interest income to total income ratio was 96.99 percent in the year 2004-05 and
lowest ratio was found 74.80 percent in the year 2012-13.
(IV) Interest Expenses to Total Expenses Ratio:
Formula:
Table 5.52
Table showing IETER of JCCB of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Total Expenses
(` in Lakhs)
IETER
(%)
2003-04 1224.92 1875.47 65.31
2004-05 1210.19 1778.59 68.04
2005-06 1161.23 1643.51 70.66
2006-07 1164.54 1736.70 67.05
2007-08 1224.34 1865.89 65.62
2008-09 1288.75 2077.84 62.02
2009-10 1496.37 2282.76 65.55
2010-11 1709.14 2659.34 64.27
2011-12 1249.57 2936.16 42.56
2012-13 1414.92 3142.53 45.02
Average 61.61 (Source: Computed from Annual Reports of JCCB of last 10 Years)
Financial Performance Analysis Page | 224
In the above table highest ratio is 70.66 percent and lowest ratio is 42.56 percent in
the year 2005-06 and 2011-12 respectively. Average of 10 years is 61.61percent i.e. on an
average during last 10 years out of total expenses of the bank around 62 percent portion of
total expenses was interest expense on deposits and borrowings. Average interest income
ratio is 92 percent against it average interest expenses ratio 62 percent it mention that on
an average during the above 10 years 30 percent was interest margin earned by the bank.
(V) Net Profit to Net Assets Ratio:
Formula:
Table 5.53
Table showing NPNAR of JCCB of last 10 years
Year Net Profit
(` in Lakhs)
Net Assets
(` in Lakhs)
NPNAR
(%)
2003-04 131.76 1876.04 7.02
2004-05 134.16 1961.01 6.84
2005-06 102.75 2052.64 5.01
2006-07 76.16 2276.68 3.35
2007-08 82.68 2343.06 3.53
2008-09 110.70 2578.84 4.29
2009-10 128.16 2644.77 4.85
2010-11 145.41 2779.06 5.23
2011-12 168.55 2866.00 5.88
2012-13 188.33 2952.03 6.38
Average 5.24 (Source: Computed from Annual Reports of JCCB of last 10 Years)
During last 10 years maximum NPNAR was 7.02 percent in the year 2003-04
and minimum NPNAR was 3.35 percent in the year 2006-07.On an average during the last
10 years banks has 5.24 percent NPNAR. From the above table it is clear that the NPNAR
not continuously increase or continuously decrease but is remained in fluctuating position.
(VI) Earnings per Share:
Formula:
Financial Performance Analysis Page | 225
Table 5.54
Table showing EPS of JCCB of last 10 years
Year Net Profit
(` in Lakhs)
No. of Equity
Share (in Lakhs)
EPS
(`)
2003-04 131.76 10.79 12.22
2004-05 134.16 12.42 10.80
2005-06 102.75 13.39 7.67
2006-07 76.16 14.41 5.29
2007-08 82.68 14.59 5.67
2008-09 110.70 15.77 7.02
2009-10 128.16 17.51 7.32
2010-11 145.41 20.34 7.15
2011-12 168.55 20.90 8.07
2012-13 188.33 21.27 8.85
Average 8.01 (Source: Computed from Annual Reports of JCCB of last 10 Years)
EPS of the JCCB was remained `8.01 per share on an average during last 10
years. Maximum EPS earned by the bank in the year 2003-04 `12.22 per share and
minimum EPS earned by the bank `5.29 in the year 2006-07. Bank has earned average `8
per share annually against the equity share of `25 i.e. 32 percent.
(VII) Interest Income to Average Working Fund Ratio:
Formula:
Working Fund = Total assets – Bills Receivable and other contra entry
Table 5.55
Table showing IIAWFR of JCCB of last 10 years
Year Total Interest
(` in Lakhs)
AWF
(` in Lakhs)
IIAWFR
(%)
2003-04 1912.48 13326.81 14.35
2004-05 1855.16 14189.71 13.07
2005-06 1682.76 14803.99 11.37
2006-07 1744.02 14949.87 11.67
2007-08 1877.94 15829.39 11.86
2008-09 2114.26 16718.53 12.65
2009-10 2294.14 18875.01 12.15
2010-11 2664.48 21231.56 12.55
2011-12 2365.23 22930.25 10.31
2012-13 2491.58 24276.85 10.26
Average 12.02 (Source: Computed from Annual Reports of JCCB of last 10 Years)
Financial Performance Analysis Page | 226
From the above table it is clear that during last 10 year highest interest income to
average working fund ratio was 14.35 percent in the year 2003-04 and lowest ratio was
10.26 percent in the year 2012-13. On an average bank has 12.02 percent ratio of interest
income to average working fund annually during last 10 years from 2003-04 to 2012-13.
(VIII) Interest Expenses to Average Working Fund Ratio:
Formula:
Table 5.56
Table showing IEAWFR of JCCB of last 10 years
Year Total Interest Exp.
(` in Lakhs)
AWF
(` in Lakhs)
IEAWFR
(%)
2003-04 1224.92 13326.81 9.19
2004-05 1210.19 14189.71 8.53
2005-06 1161.23 14803.99 7.84
2006-07 1164.54 14949.87 7.79
2007-08 1224.34 15829.39 7.73
2008-09 1288.75 16718.53 7.71
2009-10 1496.37 18875.01 7.93
2010-11 1709.14 21231.56 8.05
2011-12 1249.57 22930.25 5.45
2012-13 1414.92 24276.85 5.83
Average 7.61 (Source: Computed from Annual Reports of JCCB of last 10 Years)
Above table shows that during last 10 year highest interest expenses to average
working fund ratio was found 9.19 percent and lowest ratio was 5.45 percent in the year
2003-04 and 2011-12 respectively. On an average bank has 7.61 percent ratio of interest
expenses to average working fund annually. Interest income ratio average 12 percent
against it average interest expense ratio 7.61 percent of last ten years of bank suggests that
bank has earning gap of interest 4.39 percent on average working fund.
(IX) Gross Profit to Average Working Fund Ratio:
Formula:
Financial Performance Analysis Page | 227
Table 5.57
Table showing GPAWFR of JCCB of last 10 years
Year Gross Profit
(` in Lakhs)
AWF
(` in Lakhs)
GPAWFR
(%)
2003-04 462.94 13326.81 3.47
2004-05 314.69 14189.71 2.22
2005-06 182.75 14803.99 1.23
2006-07 214.43 14949.87 1.43
2007-08 225.49 15829.39 1.42
2008-09 328.16 16718.53 1.96
2009-10 257.16 18875.01 1.36
2010-11 434.93 21231.56 2.05
2011-12 493.90 22930.25 2.15
2012-13 427.23 24276.85 1.76
Average 1.91 (Source: Computed from Annual Reports of JCCB of last 10 Years)
Above table shows that the highest GPAWFR of the bank is 3.47 percent in the
year 2003-04 and lowest ratio is 1.23 percent in the year 2005-06. Average GPAWFR
remained 1.91 of last 10 years from 2003-04 to 2012-13.
(X) Net Profit to Average Working Fund Ratio:
Formula:
Table 5.58
Table showing NPAWFR of JCCB of last 10 years
Year Net Profit
(` in Lakhs)
AWF
(` in Lakhs)
NPAWFR
(%)
2003-04 131.76 13326.81 0.99
2004-05 134.16 14189.71 0.95
2005-06 102.75 14803.99 0.69
2006-07 76.16 14949.87 0.51
2007-08 82.68 15829.39 0.52
2008-09 110.70 16718.53 0.66
2009-10 128.16 18875.01 0.68
2010-11 145.41 21231.56 0.68
2011-12 168.55 22930.25 0.74
2012-13 188.33 24276.85 0.78
Average 0.72 (Source: Computed from Annual Reports of JCCB of last 10 Years)
Financial Performance Analysis Page | 228
Above table shows that the highest NPAWFR of the bank is 0.99 percent in the
year 2003-04, and lowest 0.51 percent in the year 2006-07 and average NPAWFR of the
bank 0.72 percent of last 10 years from 2003-04 to 2012-13 i.e. bank has earned 0.72
percent of its average working fund as net profit during last 10 years the period of study.
(XI) Employee Cost to Average Working Fund Ratio:
Formula:
Table 5.59
Table showing ECAWFR of JCCB of last 10 years
Year Employee exp.
(` in Lakhs)
AWF
(` in Lakhs)
ECAWFR
(%)
2003-04 256.86 13326.81 1.93
2004-05 288.19 14189.71 2.03
2005-06 293.26 14803.99 1.98
2006-07 316.08 14949.87 2.11
2007-08 341.42 15829.39 2.16
2008-09 420.96 16718.53 2.52
2009-10 452.02 18875.01 2.39
2010-11 464.54 21231.56 2.19
2011-12 482.26 22930.25 2.10
2012-13 540.81 24276.85 2.23
Average 2.16 (Source: Computed from Annual Reports of JCCB of last 10 Years)
From the above table showing ratios of employee’s cost to average working fund
of last 10 years of the bank it is clear that average employee’s cost of the bank on average
working fund is 2.16 percent per annum. During last 10 years highest ECAWFR 2.52
percent in the year 2008-09 and lowest ratio 1.93 percent in the year 2003-04.
(XII) Cost of Deposit Ratio:
Formula:
Financial Performance Analysis Page | 229
Table 5.60
Table showing CoDR of JCCB of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Average Deposits
(` in Lakhs)
CoDR
(%)
2003-04 1224.92 10044.26 12.20
2004-05 1210.19 11257.64 10.75
2005-06 1161.23 11796.89 9.84
2006-07 1164.54 11899.44 9.79
2007-08 1224.34 12717.73 9.63
2008-09 1288.75 13448.03 9.58
2009-10 1496.37 15441.72 9.69
2010-11 1709.14 17605.66 9.71
2011-12 1249.57 19013.28 6.57
2012-13 1414.92 20148.75 7.02
Average 9.48 (Source: Calculated from Annual Reports of JCCB of last 10 Years)
From the above table it was found that the percentages of Interest on Average
Deposits during last 10 years maximum 12.20 percent in the year 2003-04 and minimum
6.57 percent in the year 2011-12 and average cost of deposits last 10 years of the bank
remained 9.48 percent. Apart from this the researcher can clearly observed that the cost of
deposit ratio continuously decrease from 2003-04 to 2011-12 and in the year 2012-13 was
slightly increase.
(XIII) Summary of the above Ratios of JCCB:
Table 5.61
A summary of all the ratios of JCCB Calculated above
Yea
rs
CD
R (%
)
CA
R (%
)
IITIR
(%)
IET
ER
(%)
NP
NA
R (%
)
EP
S (`
)
IIAW
FR
(%)
IEA
WF
R (%
)
GP
AW
FR
(%)
NP
AW
FR
(%)
EC
AW
FR
(%)
CO
DR
(%)
03-04 70.44 22.61 95.28 65.31 7.02 12.22 14.35 9.19 3.47 0.99 1.93 12.20
04-05 69.91 17.19 96.99 68.04 6.84 10.80 13.07 8.53 2.22 0.95 2.03 10.75
05-06 76.32 13.64 96.36 70.66 5.01 7.67 11.37 7.84 1.23 0.69 1.98 9.84
06-07 72.29 14.56 96.20 67.05 3.35 5.29 11.67 7.79 1.43 0.51 2.11 9.79
07-08 64.97 16.54 96.38 65.62 3.53 5.67 11.86 7.73 1.42 0.52 2.16 9.63
08-09 67.36 16.06 96.61 62.02 4.29 7.02 12.65 7.71 1.96 0.66 2.52 9.58
09-10 61.85 15.20 95.16 65.55 4.85 7.32 12.15 7.93 1.36 0.68 2.39 9.69
10-11 67.99 15.15 95.00 64.27 5.23 7.15 12.55 8.05 2.05 0.68 2.19 9.71
11-12 62.86 12.34 76.18 42.56 5.88 8.07 10.31 5.45 2.15 0.74 2.10 6.57
12-13 63.66 12.10 74.80 45.02 6.38 8.85 10.26 5.83 1.76 0.78 2.23 7.02
Avg. 67.77 15.54 91.90 61.61 5.24 8.01 12.02 7.61 1.91 0.72 2.16 9.48
Financial Performance Analysis Page | 230
5.2 NPA Management of the JCCB:
Table 5.62
Table showing NPA Management of JCCB of last 10 years
Yea
rs
Tota
l
Ad
van
ces
(` i
n L
ak
hs)
Gro
ss N
PA
(` i
n L
ak
hs)
Gro
ss N
PA
(%) Total Provision
(`in Lakhs)
NE
T N
PA
(`in
La
kh
s)
NE
T N
PA
(%)
1 2 1/2x100 Std.
Assets NPA
Total
SA+NPA
03-04 7351.52 2112.59 28.74 49.34 849.42 898.76 1213.83 18.81
04-05 8443.82 1360.75 16.12 50.74 790.34 841.08 519.67 6.84
05-06 8787.69 1094.91 12.46 56.74 727.37 784.11 310.80 3.88
06-07 8879.99 1201.03 13.53 63.01 775.12 838.13 362.90 4.51
07-08 8544.08 973.83 11.40 68.04 759.97 828.01 145.82 1.89
08-09 9258.29 938.52 10.14 100.00 853.29 953.29 -14.77 -0.18
09-10 10599.59 882.24 8.32 100.00 814.54 914.54 -32.30 -0.33
10-11 12287.84 808.16 6.58 100.77 641.63 742.4 65.76 0.57
11-12 12543.34 744.89 5.94 103.40 648.66 752.06 -7.17 -0.06
12-13 12950.16 704.21 5.44 103.40 645.92 749.32 -45.11 -0.37
(Calculated from the information available in annual reports of the Bank)
In the above table Net NPA in (`) and NET NPA in (%) calculated as under
28
.74
16
.12
12
.46
13
.53
11
.40
10
.14
8.3
2
6.5
8
5.9
4
5.4
4
18
.81
6.8
4
3.8
8
4.5
1
1.8
9
-0.1
8
-0.3
3
0.5
7
-0.0
6
-0.3
7
-5.00
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
Gro
ss a
nd
Net
NP
A (
%)
Years
Chart 5.10 Gross and Net NPA of JCCB
Gross NPA
Net NPA
Financial Performance Analysis Page | 231
Above table no. 5.62 and chart no.5.10 shows Gross NPA and Net NPA of
selected CCOBs of Gujarat state.
As per recent guidelines of RBI Net NPA should be less than 5 percent to pay
dividend and Gross NPA should be less than 10 percent to avoid supervisory actions from
RBI. From the above table 5.61 and chart 5.10 the researcher can observed that Gross
NPA of JCCB more than 10 percent in the year 2003-04 to 2008-09 than after it was less
than 10 percent till 2012-13 the last year of the period of the study. The researcher found
that NPA management of the bank was well during the last 10 years the period of the
study. Net NPA of the bank found more than 5 percent in the years 2003-04 and 2004-05
only than after it was found less than 5 percent. Apart from this gross NPA of the bank has
decreased continuously.
Gross NPA of the bank 28.74 percent in the year 2003-04 it was decreased to
5.44 percent in the year 2012-13. Bank has maintained sufficient reserve to overcome the
problem of NPA every year. From the above table and chart the researcher found that the
Net NPA of the bank less than zero in the year 2008-09, 2009-10, 2011-12 and 2012-13.
In the year 2010-11 it was 0.57 percent only. It was also found from the above table that
Net NPA of the bank continuously decrease in the year 2003-04 Net NPA of the bank was
18.81 percent which was decreased to -0.37 in the year 2012-13.
From the above discussion and observation of chart and table the researcher
can conclude that the NPA management of the bank found good during the period of the
study from 2003-04 to 2012-13. Bank has maintained not only enough but more than
enough provision against standard assets and non performing assets of the bank according
to the rules and regulation suggested by RBI time to time.
Financial Performance Analysis Page | 232
5.3 Common Size Statement and Trend Analysis of JCCB:
(I) Common Size Income Statement of JCCB:
Table:5.63
`in Lakhs
Particulars Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Incomes:
Interest and discount 1912.48 1855.16 1682.76 1744.02 1877.94 2114.26 2294.14 2664.48 2365.23 2491.58
Percentage of Total Income 95.28 96.99 96.36 96.20 96.38 96.61 95.16 95.00 76.18 74.80
Commission, Exchange & Brokerage 15.00 12.07 13.63 17.82 18.24 12.83 6.35 7.53 7.25 10.96
Percentage of Total Income 0.75 0.63 0.78 0.98 0.94 0.59 0.26 0.27 0.23 0.33
Other Receipts 79.75 45.52 49.87 51.02 52.39 61.45 110.43 132.74 732.23 828.32
Percentage of Total Income 3.97 2.38 2.86 2.81 2.69 2.81 4.58 4.73 23.58 24.87
Total (A) 2007.23 1912.75 1746.26 1812.86 1948.57 2188.54 2410.92 2804.75 3104.71 3330.86
Percentage of Total Income 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Expenditures:
Interests on Deposits, Borrowings 1224.92 1210.19 1161.23 1164.54 1224.34 1288.75 1496.37 1709.14 1249.57 1414.92
Percentage of Total Income 61.03 63.27 66.50 64.24 62.83 58.89 62.07 60.94 40.25 42.48
Salary, Allowances, provident fund and staff welfare 256.86 288.19 293.26 316.08 341.42 420.96 452.02 464.54 482.26 540.81
Percentage of Total Income 12.80 15.07 16.79 17.44 17.52 19.23 18.75 16.56 15.53 16.24
Seating fees of Directors and meeting fees 0.02 0.04 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.02
Percentage of Total Income 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Rents, Rates, Insurance, Electricity etc. 16.42 20.46 30.94 27.23 35.17 42.22 52.47 51.95 56.91 61.18
Percentage of Total Income 0.82 1.07 1.77 1.50 1.80 1.93 2.18 1.85 1.83 1.84
Legal fees 3.64 3.27 1.74 1.55 6.68 4.27 2.52 2.33 5.49 3.62
Percentage of Total Income 0.18 0.17 0.10 0.09 0.34 0.20 0.10 0.08 0.18 0.11
Financial Performance Analysis Page | 233
Postage, Telephone, etc. 3.45 3.83 4.01 3.30 2.94 2.38 2.27 2.66 2.56 2.84
Percentage of Total Income 0.17 0.20 0.23 0.18 0.15 0.11 0.09 0.09 0.08 0.09
Audit Fees, Internal Audit fees 1.15 1.32 2.17 2.62 2.66 2.31 2.36 4.72 5.06 6.99
Percentage of Total Income 0.06 0.07 0.12 0.14 0.14 0.11 0.10 0.17 0.16 0.21
Depreciation and Repairs to property 13.22 14.33 36.25 34.98 39.72 34.79 23.44 23.91 24.31 23.56
Percentage of Total Income 0.66 0.75 2.08 1.93 2.04 1.59 0.97 0.85 0.78 0.71
Printing Stationary, Advertisement 10.48 10.68 6.02 8.14 7.60 9.29 10.45 10.91 8.34 11.99
Percentage of Total Income 0.52 0.56 0.34 0.45 0.39 0.42 0.43 0.39 0.27 0.36
Other expenses 14.13 45.75 27.86 39.96 62.52 55.38 111.83 99.63 776.28 837.70
Percentage of Total Income 0.70 2.39 1.60 2.20 3.21 2.53 4.64 3.55 25.00 25.15
Other Provisions 331.18 180.53 80.00 138.27 142.81 217.46 129.00 289.52 325.35 238.90
Percentage of Total Income 16.50 9.44 4.58 7.63 7.33 9.94 5.35 10.32 10.48 7.17
Total Expenses (B) 1875.47 1778.59 1643.51 1736.70 1865.89 2077.84 2282.76 2659.34 2936.16 3142.53
Percentage of Total Income 93.44 92.99 94.12 95.80 95.76 94.94 94.68 94.82 94.57 94.35
Net Profit (A-B) 131.76 134.16 102.75 76.16 82.68 110.70 128.16 145.41 168.55 188.33
Percentage of Total Income 6.56 7.01 5.88 4.20 4.24 5.06 5.32 5.18 5.43 5.65
Trend Percentage: 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Trend Ratio of Total Operating Income 100.00 95.29 87.00 90.32 97.08 109.03 120.11 139.73 154.68 165.94
Trend Ratio of Total Operating Expenses 100.00 94.83 87.63 92.60 99.49 110.79 121.72 141.80 156.56 167.56
Trend Ratio of Net Profit 100.00 101.82 77.98 57.80 62.75 84.02 97.27 110.36 127.92 142.93
(Source: Calculated from the published annual reports of JCCB Ltd. Rajkot of last 10 years)
(2003-04 is base year for trend percentages)
Financial Performance Analysis Page | 234
Above table 5.63 shows Common Size Analysis of Income Statement (profit and
loss account) of Jivan Commercial Co-operative Bank Ltd. Rajkot for 10 years from 2003-
04 to 2013-14 and it also shows Trend Analysis of Total Operating Income, Total
Operating Expenses and Net Profit of JCCB ltd. Rajkot for the same period mentioned
above. Chart 5.11 shows graphical presentation of trend analysis as shown in the table
no.5.63.
From the above Common Size Analysis of bank’s profit and loss account the
researcher observed that out of the total operating income of the bank the major income is
interest and discount income. During the last 10 years average interest income was
remained 91.9 percent of the total operating income. Highest percentage interest and
discount income with total operating income was found during the period of study 96.99
percent in the year 2004-05 and lowest percentage found 74.80. Share of other income in
total operating income was found during the period of study on an average 8.1 percent.
Interest and discount income of the bank remained more than 95 percent from 2003-04 to
2010-11 only in last two years of the period of study in 2011-12 and 2012-13 it was 76.1
and 74.80 respectively.
Average percentage of total operating expenses including various provisions on
total operating income was found 94.54 percent during the period of study. And therefore
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
180.00P
erce
nta
ge
Years
Chart 5.11 Trend analysis of P/L accounts of JCCB
Trend Ratio of Total
Operating Income
Trend Ratio of Total
Operating Expenses
Trend Ratio of Net Profit
Financial Performance Analysis Page | 235
average net profit during the period of study was found 5.45 percent of the total operating
income. Major expenses of the bank were interest on deposit and borrowing and
employee’s related expenses like salary, provident fund etc. Average interest expenses
during the period of study were 58. 25 percent of the total income and average employee
related expenses were 16.59 percent of the total income. With the help of this statistic the
researcher can conclude that overall 75 percent of the total income was interest expenses
and salary and other expenses while 25 percent of the total operating income includes
other operating expenditure and provisions in the bank.
From the above table 5.63 the researcher also seen that average percentage of net
profit during the period of study was remained 5.46 percent of total operating income of
the bank. The highest net profit to total operating income percentage was found during last
10 years was 7.01 percent in the year 2004-05 and lowest percentage was found in the year
2006-07 4.20 percent.
From the trend analysis of the bank’s profit and loss account shown in the above
table and chart the researcher can conclude that all the three items total operating income,
total operating expenses and net profit shown decreasing trend from 2003-04 to 2007-08
and then after it shown increasing trend till 2012-13. From the above chart 5.11 it is clear
that expenses and profit increase with increase in income and vice versa. The difference
between Operating income and Operating expenses is profit to increases the profit bank
should control the operating expenses and try to increase the operating income so
automatically profit margin increases.
There is a positive correlation between Operating income and Operating expenses
and Operating income and Net profit of the bank. Correlation coefficient between
operating income and operating expenses determined 0.99 and correlation coefficient
between operating income and net profit determined 0.87. So the researcher can conclude
that net profit and expenses are correlated with operating income and also depend on
operating income.
Financial Performance Analysis Page | 236
(II) Common size Balance sheets of JCCB:
Table 5.64
`in Lakhs
Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Liabilities:
Share Capital (`25each) 269.65 310.48 334.87 360.21 364.86 394.33 437.83 508.59 522.45 531.80
Percentages of Total Liabilities 2.02 2.05 2.30 2.34 2.23 2.30 2.12 2.08 1.95 1.91
Reserve and Surplus 1606.39 1650.53 1717.77 1916.47 1978.20 2184.51 2206.94 2270.47 2343.55 2420.23
Percentages of Total Liabilities 12.03 10.90 11.79 12.44 12.11 12.72 10.70 9.29 8.73 8.71
Deposits 10436.43 12078.85 11514.93 12283.95 13151.51 13744.54 17138.89 18072.42 19954.14 20343.36
Percentages of Total Liabilities 78.17 79.74 79.04 79.73 80.49 80.03 83.09 73.95 74.32 73.21
Borrowings 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentages of Total Liabilities 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Bill For collection (Contra) 47.44 71.80 36.23 38.80 48.49 26.83 22.39 22.64 23.40 11.61
Percentages of Total Liabilities 0.36 0.47 0.25 0.25 0.30 0.16 0.11 0.09 0.09 0.04
Branch Adjustments 58.02 3.73 4.70 5.81 11.56 12.60 0.00 4.69 0.00 2.70
Percentages of Total Liabilities 0.43 0.02 0.03 0.04 0.07 0.07 0.00 0.02 0.00 0.01
Overdue Interest Prov. 691.80 747.76 706.70 616.93 597.24 596.74 585.60 3099.99 3411.76 3776.14
Percentages of Total Liabilities 5.18 4.94 4.85 4.00 3.66 3.47 2.84 12.69 12.71 13.59
Interest Payable 3.16 3.51 3.54 3.09 2.14 0.89 2.03 30.04 29.09 26.70
Percentages of Total Liabilities 0.02 0.02 0.02 0.02 0.01 0.01 0.01 0.12 0.11 0.10
Other Liabilities 105.87 147.32 146.37 105.48 102.48 102.08 104.18 283.37 394.55 486.33
Percentages of Total Liabilities 0.79 0.97 1.00 0.68 0.63 0.59 0.51 1.16 1.47 1.75
Profit and Loss Account 131.76 134.16 102.75 76.16 82.68 110.70 128.16 145.41 168.55 188.33
Percentages of Total Liabilities 0.99 0.89 0.71 0.49 0.51 0.64 0.62 0.60 0.63 0.68
Financial Performance Analysis Page | 237
Total 13350.52 15148.14 14567.86 15406.90 16339.16 17173.22 20626.02 24437.62 26847.49 27787.20
Percentages of Total Liabilities 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Assets:
Cash and Bank Balance 2812.20 2610.80 1993.45 2779.96 4075.04 4271.27 5911.35 4120.26 5513.14 5318.73
Percentages of Total Assets 21.06 17.24 13.68 18.04 24.94 24.87 28.66 16.86 20.54 19.14
Call Money 400.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentages of Total Assets 3.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Investment 2183.48 2936.62 2664.12 2664.12 2644.12 2644.13 3096.98 4485.59 4879.86 5129.03
Percentages of Total Assets 16.36 19.39 18.29 17.29 16.18 15.40 15.01 18.36 18.18 18.46
Advances 7351.52 8443.82 8787.69 8879.99 8544.08 9258.29 10599.59 12287.84 12543.34 12950.16
Percentages of Total Assets 55.07 55.74 60.32 57.64 52.29 53.91 51.39 50.28 46.72 46.60
Interest Receivable 62.58 61.64 36.17 53.68 60.27 76.76 78.21 2619.75 2967.23 3368.47
Percentages of Total Assets 0.47 0.41 0.25 0.35 0.37 0.45 0.38 10.72 11.05 12.12
Bills Receivables (Contra) 47.44 71.80 36.23 38.80 48.49 26.83 22.39 22.64 23.40 11.61
Percentages of Total Assets 0.36 0.47 0.25 0.25 0.30 0.16 0.11 0.09 0.09 0.04
Assets (After Depreciation) 261.71 252.75 526.69 523.12 519.70 514.41 549.38 550.11 563.34 540.82
Percentages of Total Assets 1.96 1.67 3.62 3.40 3.18 3.00 2.66 2.25 2.10 1.95
Other Assets 135.38 255.43 28.15 55.33 58.92 60.95 85.96 82.34 122.80 218.25
Percentages of Total Assets 1.01 1.69 0.19 0.36 0.36 0.35 0.42 0.34 0.46 0.79
Branch Adjustment Account 0.00 0.00 0.00 0.00 0.00 0.00 6.32 0.00 0.00 0.00
Percentages of Total Assets 0.00 0.00 0.00 0.00 0.00 0.00 0.03 0.00 0.00 0.00
Non Banking Assets 96.21 515.28 495.36 411.90 388.54 320.58 275.84 269.09 261.38 250.13
Percentages of Total Assets 0.72 3.40 3.40 2.67 2.38 1.87 1.34 1.10 0.97 0.90
Total 13350.52 15148.14 14567.86 15406.90 16339.16 17173.22 20626.02 24437.62 26847.49 27787.20
Percentages of Total Assets 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.10 100.00
Financial Performance Analysis Page | 238
Trend Percentages:
Trend Percentage of Capital 100.00 115.14 124.19 133.58 135.31 146.24 162.37 188.61 193.75 197.22
Trend Percentage of Reserves 100.00 102.75 106.93 119.30 123.15 135.99 137.39 141.34 145.89 150.66
Trend Percentage of Deposits 100.00 115.74 110.33 117.70 126.02 131.70 164.22 173.17 191.20 194.93
Trend Percentage of Advances 100.00 114.86 119.54 120.79 116.22 125.94 144.18 167.15 170.62 176.16
Trend Percentage of Investments 100.00 134.49 122.01 122.01 121.10 121.10 141.84 205.43 223.49 234.90
(Source: Calculated from the published annual reports of JCCB ltd. Rajkot of last 10 years)
(2003-04 is base year for trend percentages)
0.00
50.00
100.00
150.00
200.00
250.00
Per
cen
tag
e
Years
Chart 5.12 Trend Analysis of Balance sheets of JCCB
Trend Percentage of Capital
Trend Percentage of Reserve and Surplus
Trend Percentage of Deposits
Trend Percentage of Advances
Trend Percentage of Investments
Financial Performance Analysis Page | 239
Above table 5.64 shows common size Balance sheet of The Jivan Commercial
Cooperative Bank Ltd. Rajkot of last 10 years from 2003-04 to 2012-13. It also includes
the trend percentages of major items of the balance sheet. Chart 5.12 shows graphical
presentation of the trend percentage shown in the table 5.64.
From the above Common Size Analysis it is clear that liabilities side of the
balance sheet the most important items is deposits followed by reserve and surplus. Out
of the total funds invested in the bank’s assets major portion provided by Deposits and
Reserve. During the period of study lowest percentage of reserves found 8.71 in the year
2012-13 and highest 12.72 percent in the years 2008-09. During this period highest
percentage of deposits was 83.09 in the year 2009-10 and lowest percentage 73.21 in the
year 2012-13. Overall average 89.12 percent of the total assets of the bank funded by
these two components i.e. share of the other items in the balance sheet was 10.88 percent
average during last 10 years from 2002-03 to 2012-13. During the last 10 years bank has
no borrowing in its balance sheet. The major liabilities in the bank were only deposits.
On the assets side the major items are as usual in other banks cash & bank
balance investments and advances. Above Common size analysis of the balance sheet of
the JCCB Ltd. Rajkot state that during the period of last 10 years proportion of cash &
bank, investment and advances in total assets on an average 91 percent and proportion of
other items in the balance sheet assets side on an average only 9 percent of the total
assets during last 10 years. During the period of study highest percentages of Cash and
Bank, Investment and Advances are found 28.66, 19.39 and 60.32 in the year 2009-10,
2004-05 and 2005-06 respectively. On the other hand lowest percentages are remained
13.68, 15.01 and 46.60 in the year 2005-06, 2009-10 and 2012-13 respectively.
Chart 5.12 shows trend analysis of the major items of balance sheets of JCCB ltd.
Rajkot of last 10 years. Share capital shows continuous increasing trend as compare to
2003-04 share capital of the bank increased by 97.22 percent in the year 2012-13. There
were no any decreases in share capital during the period of study. Reserve and surplus
also have continuous increasing trend as compare to 2003-04 reserves and surplus of the
bank increased by 50.56 percent in the year 2012-13. Deposit line in above chart no. 5.12
indicate increasing trend, bank’s deposits were increased by 94.93 percent as compare to
2003-04 in the year 2012-13. In the year 2005-06 deposits were slightly decreased but
overall it was upward trend. On the other hand advances of the bank also shown
increasing trend till 2012-13. As compare to the year 2003-04 advances of the bank
Financial Performance Analysis Page | 240
increased by 76.16 percent in the year 2012-13. Generally banks uses it deposits for the
purpose of providing advances to its customers. In this bank advances and deposits both
showing increasing trend it indicate as deposits of the banks increase bank use it to
provide advances to its customers i.e. banks uses its deposits well to provides loan to its
customer it increase its profitability positively. Investments of the bank shown mixed
trend during the period of the study. As compare to the year 2003-04 it increase in the
year 2004-05 by 34.49 percent then after in the year 2005-06 it decrease and it remained
stable till the year 2008-09. From the year 2009-10 it start increasing till the year 2012-
13 it increased by 134.90 percent at the end of the year 2012-13.
6. FINANCIAL PERFORMANCE OF ‘THE VIJAY COMMERCIAL
CO-OPERATIVE BANK LTD.’ (VCCB):
6.1 Ratio Analysis of VCCB.
(I) Credit Deposit Ratio (CDR):
Formula:
Table 5.65
Table showing CDR of VCCB of last 10 years
Year Total Advances
(` in Lakhs)
Total Deposit
(` in Lakhs)
CDR
(%)
2003-04 3107.51 4613.71 67.35
2004-05 3220.91 4826.86 66.73
2005-06 3637.11 5753.73 63.21
2006-07 4192.97 6607.73 63.46
2007-08 4451.29 7140.00 62.34
2008-09 4755.43 7355.45 64.65
2009-10 4759.68 8307.95 57.29
2010-11 4043.64 7649.71 52.86
2011-12 4115.82 7439.67 55.32
2012-13 4152.48 7498.34 55.38
Average 60.86 (Source: Computed from Annual Reports of VCCB of last 10 Years)
From the above table it is clear that bank’s credit deposit ratio remain between
52.86 to 67.35 percent. Average percentage of last 10 years CDR was 60.86. It indicates
Financial Performance Analysis Page | 241
VCCB uses its deposits on an average 61 percentage to give advances to their customers
during the period of study of last 10 years from 2003-04 to 2012-13. Highest deposit
used by the bank to provide loans to its customer in the year 2003-04, which was 67.35
percent of total deposits and lowest ratio was in the year 2010-11, 52.86 percent.
(II) Capital Adequacy Ratio (CAR)/ Capital to Risk (Weighted) Assets Ratio
(CRAR):
Formula:
Table 5.66
Table showing CAR of VCCB of last 10 years
Years Tier I Capital
(` in Lakhs)
Tier II Capital
(` in Lakhs)
Total TI+TII
(` in Lakhs)
RWA
(` in Lakhs)
CAR
(%)
2003-04 507.69 22.56 530.25 4429.82 11.97
2004-05 560.84 23.12 583.96 4736.09 12.33
2005-06 517.09 23.41 540.50 4310.21 12.54
2006-07 515.69 20.51 536.20 3797.45 14.12
2007-08 548.92 24.87 573.79 3772.45 15.21
2008-09 551.74 25.47 577.21 3820.05 15.11
2009-10 571.71 26.11 597.82 3358.54 17.80
2010-11 578.66 30.21 608.87 3303.69 18.43
2011-12 604.27 31.46 635.73 3153.42 20.16
2012-13 749.51 40.22 789.73 3240.58 24.37
Average 16.20
(Source: Computed from Annual Reports of VCCB of last 10 Years)
According to RBI and Basel committee report minimum CAR require for any
Urban Co-operative Bank is 9 percent after 2005. Above table shows CAR of VCCB ltd.
Rajkot in all the years of the period of study from 2003-04 to 2012-13 more than 9
percent. It indicates that CAR of the bank was more than required rate by RBI in all the
years. Average CAR of the 10 years period was 16.20 percent it shows good financial
adequacy of the bank during the period of study. From the above table 5.66 the
researcher can clearly observed that CAR of the bank continuously increase in the year
2003-04 it was 11.97 percent and it increased to 24.37 percent in the year 2012-13.
(III) Interest Income to Total Income Ratio:
Formula:
Financial Performance Analysis Page | 242
Table 5.67
Table showing IITIR of VCCB of last 10 years
Year Total Interest
(` in Lakhs)
Total Income
(` in Lakhs)
IITIR
(%)
2003-04 481.06 504.18 95.41
2004-05 529.85 565.48 93.70
2005-06 618.31 640.77 96.49
2006-07 721.20 750.76 96.06
2007-08 807.90 837.93 96.42
2008-09 821.25 860.98 95.39
2009-10 845.40 896.26 94.33
2010-11 826.94 873.01 94.72
2011-12 947.01 997.45 94.94
2012-13 1001.69 1040.75 96.25
Average 95.37 (Source: Calculated from Annual Reports of VCCB of last 10 Years)
Above table shows that out of the total income of VCCB Ltd. Rajkot on an
average 95.37 percent income was interest and discount income during last ten years
from 2003-04 to 2012-13. During the period of the study highest interest income to total
income ratio was 96.49 percent in the year 2005-06 and lowest ratio was 93.70 percent in
the year 2004-05.
(IV) Interest Expenses to Total Expenses Ratio:
Formula:
Table 5.68
Table showing IETER of VCCB of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Total Expenses
(` in Lakhs)
IETER
(%)
2003-04 300.21 424.46 70.73
2004-05 325.47 474.24 68.63
2005-06 421.2 600.45 70.15
2006-07 523.11 727.24 71.93
2007-08 583.2 798.55 73.03
2008-09 633.5 845.05 74.97
2009-10 645.33 866.02 74.52
2010-11 613.17 852.51 71.93
2011-12 568.96 964.96 58.96
2012-13 597.76 981.12 60.93
Average 69.58 (Source: Computed from Annual Reports of VCCB of last 10 Years)
Financial Performance Analysis Page | 243
In the above table the highest ratio is 74.97 percent and lowest ratio is 58.96
percent in the year 2008-09 and 2011-12 respectively. Average of 10 years ratio was
69.58 percent i.e. on an average during last 10 years out of total expenses of the bank
around 70 percent portion of total expenses was interest expense on deposits and
borrowings. Average interest income ratio is 95 percent against it average interest
expenses ratio 70 percent it mention that on an average during the above 10 years 20
percent was interest margin earned by the bank.
(V) Net Profit to Net Assets Ratio:
Formula:
Table 5.69
Table showing NPNAR of VCCB of last 10 years
Year Net Profit
(` in Lakhs)
Net Assets
(` in Lakhs)
NPNAR
(%)
2003-04 79.72 964.40 8.27
2004-05 91.24 1057.56 8.63
2005-06 40.32 1048.02 3.85
2006-07 23.52 1055.19 2.23
2007-08 39.38 1066.24 3.69
2008-09 15.93 1073.18 1.48
2009-10 30.24 1067.07 2.83
2010-11 20.50 1091.81 1.88
2011-12 32.49 1086.70 2.99
2012-13 59.63 1120.71 5.32
Average 4.12 (Source: Computed from Annual Reports of VCCB of last 10 Years)
During last 10 years maximum NPNAR was 8.63 percent in the year 2004-05
and minimum NPNAR was 1.48 percent in the year 2008-09. On an average during the
last 10 years banks has 4.12 percent NPNAR. From the above table it is clear that the
NPNAR of the bank, neither increase nor decrease continuously but it remained in
fluctuating position during last ten years the period of the study.
(VI) Earnings per Share:
Formula:
Financial Performance Analysis Page | 244
Table 5.70
Table showing EPS of VCCB of last 10 years
Year Net Profit
(` in Lakhs)
No. of Equity
Share (in Lakhs)
EPS
(`)
2003-04 79.72 1.14 69.67
2004-05 91.24 1.22 74.55
2005-06 40.32 1.26 32.04
2006-07 23.52 1.34 17.59
2007-08 39.38 1.44 27.34
2008-09 15.93 1.48 10.73
2009-10 30.24 1.37 22.00
2010-11 20.50 1.37 14.95
2011-12 32.49 1.37 23.72
2012-13 59.63 1.39 42.94
Average 33.55
(Source: Computed from Annual Reports of VCCB of last 10 Years)
EPS of The VCCB Ltd. Rajkot found `33.55 per share on an average during
last 10 years. Maximum EPS earned by the bank in the year 2004-05 `74.55 per share
and minimum EPS earned by the bank `10.73 in the year 2008-09. Bank has earned
average `33.55 per share annually against the equity share of `100 i.e. 33.55 percent.
(VII) Interest Income to Average Working Fund Ratio:
Formula:
Working Fund = Total assets – Bills Receivable and other contra entries
Table 5.71
Table showing IIAWFR of VCCB of last 10 years
Year Total Interest
(` in Lakhs)
AWF
(` in Lakhs)
IIAWFR
(%)
2003-04 481.06 5750.60 8.37
2004-05 529.85 5908.93 8.97
2005-06 618.31 6503.36 9.51
2006-07 721.20 7357.02 9.80
2007-08 807.90 8057.83 10.03
2008-09 821.25 8440.48 9.73
2009-10 845.40 9023.10 9.37
2010-11 826.94 9342.17 8.85
2011-12 947.01 8476.75 11.17
2012-13 1001.69 8342.02 12.01
Average 9.78
(Source: Computed from Annual Reports of VCCB of last 10 Years)
Financial Performance Analysis Page | 245
From the above table it is clear that during last 10 year highest interest income to
average working fund ratio is 12.01 percent in the year 2012-13 and lowest ratio is 8.37
percent in the year 2003-04. On an average bank has 9.78 percent ratio of interest income
to average working fund annually during last 10 years from 2003-04 to 2012-13.
(VIII) Interest Expenses to Average Working Fund Ratio:
Formula:
Table 5.72
Table showing IEAWFR of VCCB of last 10 years
Year Total Interest Exp.
(` in Lakhs)
AWF
(` in Lakhs)
IEAWFR
(%)
2003-04 300.21 5750.60 5.22
2004-05 325.47 5908.93 5.51
2005-06 421.20 6503.36 6.48
2006-07 523.11 7357.02 7.11
2007-08 583.20 8057.83 7.24
2008-09 633.50 8440.48 7.51
2009-10 645.33 9023.10 7.15
2010-11 613.17 9342.17 6.56
2011-12 568.96 8476.75 6.71
2012-13 597.76 8342.02 7.17
Average 6.67 (Source: Computed from Annual Reports of VCCB of last 10 Years)
Above table shows that during last 10 year highest interest expenses to average
working fund ratio is found 7.51 percent and lowest ratio is 5.22 percent in the year
2008-09 and 2003-04 respectively. On an average bank has 6.67 percent ratio of interest
expenses to average working fund annually. Interest income ratio average 9.78 percent
against it average interest expense ratio 6.67 percent of last ten years of bank suggests
that bank has earning gap of interest 3.11 percent on average working fund.
(IX) Gross Profit to Average Working Fund Ratio:
Formula:
Financial Performance Analysis Page | 246
Table 5.73
Table showing GPAWFR of VCCB of last 10 years
Year Gross Profit
(` in Lakhs)
AWF
(` in Lakhs)
GPAWFR
(%)
2003-04 99.52 5750.60 1.73
2004-05 111.25 5908.93 1.88
2005-06 61.32 6503.36 0.94
2006-07 45.08 7357.02 0.61
2007-08 62.88 8057.83 0.78
2008-09 26.25 8440.48 0.31
2009-10 56.25 9023.10 0.62
2010-11 44.96 9342.17 0.48
2011-12 45.36 8476.75 0.54
2012-13 93.63 8342.02 1.12
Average 0.90 (Source: Computed from Annual Reports of VCCB of last 10 Years)
Above table shows that the highest GPAWFR of the bank was 1.88 percent in the
year 2004-05 and lowest ratio was 0.31 percent in the year 2008-09. Average GPAWFR
of the bank remained 0.90 of last 10 years from 2003-04 to 2012-13.
(X) Net Profit to Average Working Fund Ratio:
Formula:
Table 5.74
Table showing NPAWFR of VCCB of last 10 years
Year Net Profit
(` in Lakhs)
AWF
(` in Lakhs)
NPAWFR
(%)
2003-04 79.72 5750.60 1.39
2004-05 91.24 5908.93 1.54
2005-06 40.32 6503.36 0.62
2006-07 23.52 7357.02 0.32
2007-08 39.38 8057.83 0.49
2008-09 15.93 8440.48 0.19
2009-10 30.24 9023.10 0.34
2010-11 20.50 9342.17 0.22
2011-12 32.49 8476.75 0.38
2012-13 59.63 8342.02 0.71
Average 0.62 (Source: Computed from Annual Reports of VCCB of last 10 Years)
Financial Performance Analysis Page | 247
Above table shows that the highest NPAWFR of the bank is 1.54 percent in the
year 2004-05, and lowest 0.19 percent in the year 2008-09 and average NPAWFR of the
bank 0.62 percent of last 10 years from 2003-04 to 2012-13 i.e. bank has earned average
0.62 percent of its average working fund as net profit during last 10 years the period of
study.
(XI) Employee Cost to Average Working Fund Ratio:
Formula:
Table 5.75
Table showing ECAWFR of VCCB of last 10 years
Year Employee exp.
(` in Lakhs)
AWF
(` in Lakhs)
ECAWFR
(%)
2003-04 69.23 5750.60 1.20
2004-05 75.40 5908.93 1.28
2005-06 87.12 6503.36 1.34
2006-07 98.05 7357.02 1.33
2007-08 99.04 8057.83 1.23
2008-09 105.70 8440.48 1.25
2009-10 102.30 9023.10 1.13
2010-11 125.02 9342.17 1.34
2011-12 135.63 8476.75 1.60
2012-13 131.31 8342.02 1.57
Average 1.33 (Source: Computed from Annual Reports of VCCB of last 10 Years)
From the above table, showing ratios of employee cost to average working fund
of last 10 years of the bank it is clear that average employee cost of the bank on average
working fund is 1.33 percent per annum. During last 10 years highest ECAWFR 1.60
percent in the year 2011-12 and lowest ratio 1.13 percent in the year 2009-10.
(XII) Cost of Deposit Ratio:
Formula:
Financial Performance Analysis Page | 248
Table 5.76
Table showing CoDR of VCCB of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Average Deposits
(` in Lakhs)
CoDR
(%)
2003-04 300.21 4613.71 6.51
2004-05 325.47 4720.29 6.90
2005-06 421.20 5290.30 7.96
2006-07 523.11 6180.73 8.46
2007-08 583.20 6873.87 8.48
2008-09 633.50 7247.73 8.74
2009-10 645.33 7831.70 8.24
2010-11 613.17 7978.83 7.68
2011-12 568.96 7544.69 7.54
2012-13 597.76 7469.01 8.00
Average 7.85 (Source: Calculated from Annual Reports of VCCB of last 10 Years)
From the above table it was found that the percentages of Interest on Average
Deposits during last 10 years Maximum 8.74 percent in the year 2008-09 and minimum
6.51 percent in the year 2003-04 and average cost of deposits last 10 years of the bank
remained 7.85 percent.
(XIII) Summary of the above Ratios of VCCB:
Table 5.77
A summary of all the ratios of VCCB Calculated above Y
ears
CD
R (%
)
CA
R (%
)
IITIR
(%)
IET
ER
(%)
NP
NA
R (%
)
EP
S (`
)
IIAW
FR
(%)
IEA
WF
R (%
)
GP
AW
FR
(%)
NP
AW
FR
(%)
EC
AW
FR
(%)
CO
DR
(%)
03-04 67.35 11.97 95.41 70.73 8.27 69.67 8.37 5.22 1.73 1.39 1.20 6.51
04-05 66.73 12.33 93.70 68.63 8.63 74.55 8.97 5.51 1.88 1.54 1.28 6.90
05-06 63.21 12.54 96.49 70.15 3.85 32.04 9.51 6.48 0.94 0.62 1.34 7.96
06-07 63.46 14.12 96.06 71.93 2.23 17.59 9.80 7.11 0.61 0.32 1.33 8.46
07-08 62.34 15.21 96.42 73.03 3.69 27.34 10.03 7.24 0.78 0.49 1.23 8.48
08-09 64.65 15.11 95.39 74.97 1.48 10.73 9.73 7.51 0.31 0.19 1.25 8.74
09-10 57.29 17.80 94.33 74.52 2.83 22.00 9.37 7.15 0.62 0.34 1.13 8.24
10-11 52.86 18.43 94.72 71.93 1.88 14.95 8.85 6.56 0.48 0.22 1.34 7.68
11-12 55.32 20.16 94.94 58.96 2.99 23.72 11.17 6.71 0.54 0.38 1.60 7.54
12-13 55.38 24.37 96.25 60.93 5.32 42.94 12.01 7.17 1.12 0.71 1.57 8.00
Avg. 60.86 16.20 95.37 69.58 4.12 33.55 9.78 6.67 0.90 0.62 1.33 7.85
Financial Performance Analysis Page | 249
6.2 NPA Management of the VCCB:
Table 5.78
Table showing NPA Management of VCCB of last 10 years
Yea
rs
Tota
l
Ad
van
ces
(` i
n L
ak
hs)
Gro
ss N
PA
(` i
n L
ak
hs)
Gro
ss N
PA
(%) Total Provision
(`in Lakhs)
NE
T N
PA
(`in
La
kh
s)
NE
T N
PA
(%)
1 2 1/2x100 Std.
Assets NPA
Total
SA+NPA
03-04 3107.51 612.54 19.71 8.57 234.5 243.07 369.47 12.90
04-05 3220.91 721.80 22.41 9.02 252.3 261.32 460.48 15.56
05-06 3637.11 740.18 20.35 9.52 295.56 305.08 435.10 13.06
06-07 4192.97 810.32 19.33 10.11 310.44 320.55 489.77 12.65
07-08 4451.29 690.15 15.50 10.38 345.84 356.22 333.93 8.15
08-09 4755.43 598.14 12.58 11.40 360.74 372.14 226.00 5.16
09-10 4759.68 561.58 11.80 12.33 414.78 427.11 134.47 3.10
10-11 4043.64 418.46 10.35 14.13 464.94 479.07 -60.61 -1.70
11-12 4115.82 336.81 8.18 19.13 464.94 484.07 -147.26 -4.05
12-13 4152.48 257.89 6.21 24.13 364.94 389.07 -131.18 -3.49
(Calculated from the information available in annual reports of the Bank)
In the above table Net NPA in (`) and NET NPA in (%) calculated as under
19
.71 22
.41
20
.35
19
.33
15
.50
12
.58
11
.80
10
.35
8.1
8
6.2
1
12
.90 15
.56
13
.06
12
.65
8.1
5
5.1
6
3.1
0
-1.7
0
-4.0
5
-3.4
9
-10.00
-5.00
0.00
5.00
10.00
15.00
20.00
25.00
Gro
ss a
nd
Net
NP
A (
%)
Years
Chart 5.13 Gross and Net NPA of VCCB
Gross NPA
Net NPA
Financial Performance Analysis Page | 250
Above table no. 5.78 and chart no. 5.13 shows the Non Performing Assets
management of the bank during the period of the study from the year 2003-04 to 2012-
13. It shows Gross NPA, Net NPA in amount and in percentage. It also shown provision
maintain by the bank against NPA.
As per recent guidelines from RBI Net NPA should be less than 5 percent to
pay dividend and Gross NPA should be less than 10% to avoid supervisory action from
RBI. From the above table 5.78 and chart 5.13 the researcher can observed that Gross
NPA of VCCB more than 10 percent in the year 2003-04 to 2010-11 than after it was
less than 10 percent till 2012-13 the last year of the period of the study. The researcher
found that NPA management of the bank was well during the last 10 years the period of
the study. Net NPA of the bank found more than 5 percent in the years 2003-04 to 2008-
09 than after it was found less than 5 percent.
Apart from this gross NPA of the bank has decreased continuously that thing
shows good NPA management of the bank. Gross NPA of the bank highest 22.41 percent
in the year 2004-05 has decreased to 6.21 percent in the year 2012-13 that was the
appreciable thing of the bank regarding NPA management. Bank has maintained
sufficient reserve to overcome the problem of NPA every year. From the above table and
chart the researcher found that the Net NPA of the bank less than zero in the year 2010-
11, 2011-12, and 2012-13 i.e. Zero NPA. In the year 2004-05 the bank has highest NPA
15.56 percent which decreased to -3.49 percent in the year 2012-13.
From the above discussion and observation of chart and table the researcher
can conclude that the NPA management of the bank found good during the period of the
study from 2003-04 to 2012-13. Bank has maintained not only enough but more than
enough provision against non performing assets of the bank according to the rules and
regulation suggested by RBI time to time. Apart from this bank has tried well to maintain
its NPA Zero and bank got success in this matter in last three continuous years.
Financial Performance Analysis Page | 251
6.3 Common Size Statement and Trend Analysis of VCCB:
(I) Common Size Income Statement of VCCB:
Table:5.79
`in Lakhs
Particulars Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Incomes:
Interest and discount 481.06 529.85 618.31 721.20 807.90 821.25 845.40 826.94 947.01 1001.69
Percentage of Total Income 95.41 93.70 96.49 96.06 96.42 95.39 94.33 94.72 94.94 96.25
Commission, Exchange & Brokerage 3.11 3.21 3.42 3.96 4.01 5.20 6.13 8.36 5.92 4.22
Percentage of Total Income 0.62 0.57 0.53 0.53 0.48 0.60 0.68 0.96 0.59 0.41
Other Receipts 20.01 32.42 19.04 25.60 26.02 34.53 44.73 37.71 44.52 34.84
Percentage of Total Income 3.97 5.73 2.97 3.41 3.11 4.01 4.99 4.32 4.46 3.35
Total (A) 504.18 565.48 640.77 750.76 837.93 860.98 896.26 873.01 997.45 1040.75
Percentage of Total Income 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Expenditures:
Interests on Deposits, Borrowings 300.21 325.47 421.2 523.11 583.2 633.5 645.33 613.17 568.96 597.76
Percentage of Total Income 59.54 57.56 65.73 69.68 69.60 73.58 72.00 70.24 57.04 57.44
Salary, Allowances, provident fund and staff welfare 69.23 75.40 87.12 98.05 99.04 105.70 102.30 125.02 135.63 131.31
Percentage of Total Income 13.73 13.33 13.60 13.06 11.82 12.28 11.41 14.32 13.60 12.62
Seating fees of Directors and meeting fees 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentage of Total Income 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Rents, Rates, Insurance, Electricity etc. 12.80 14.90 20.20 21.80 22.00 23.40 24.29 20.29 24.84 23.63
Percentage of Total Income 2.54 2.63 3.15 2.90 2.63 2.72 2.71 2.32 2.49 2.27
Legal fees 2.00 2.60 1.08 4.50 2.92 0.87 0.00 0.78 5.85 1.33
Percentage of Total Income 0.40 0.46 0.17 0.60 0.35 0.10 0.00 0.09 0.59 0.13
Financial Performance Analysis Page | 252
Postage, Telephone, etc. 1.23 1.27 1.31 1.54 1.60 1.62 1.68 1.63 1.92 2.27
Percentage of Total Income 0.24 0.22 0.20 0.21 0.19 0.19 0.19 0.19 0.19 0.22
Audit Fees, Internal Audit fees 1.11 0.90 1.02 1.20 1.24 1.36 1.33 1.70 1.54 1.71
Percentage of Total Income 0.22 0.16 0.16 0.16 0.15 0.16 0.15 0.19 0.15 0.16
Depreciation and Repairs to property 5.48 9.56 9.90 10.68 12.54 13.75 14.88 13.60 19.04 23.12
Percentage of Total Income 1.09 1.69 1.55 1.42 1.50 1.60 1.66 1.56 1.91 2.22
Printing Stationary, Advertisement 1.40 4.01 2.12 2.05 4.30 3.65 2.27 2.89 6.35 9.11
Percentage of Total Income 0.28 0.71 0.33 0.27 0.51 0.42 0.25 0.33 0.64 0.88
Other expenses 11.20 20.12 35.50 42.75 48.21 50.88 47.93 48.97 187.96 156.88
Percentage of Total Income 2.22 3.56 5.54 5.69 5.75 5.91 5.35 5.61 18.84 15.07
Other Provisions 19.80 20.01 21.00 21.56 23.50 10.32 26.01 24.46 12.87 34.00
Percentage of Total Income 3.93 3.54 3.28 2.87 2.80 1.20 2.90 2.80 1.29 3.27
Total Expenses (B) 424.46 474.24 600.45 727.24 798.55 845.05 866.02 852.51 964.96 981.12
Percentage of Total Income 84.19 83.87 93.71 96.87 95.30 98.15 96.63 97.65 96.74 94.27
Net Profit (A-B) 79.72 91.24 40.32 23.52 39.38 15.93 30.24 20.50 32.49 59.63
Percentage of Total Income 15.81 16.13 6.29 3.13 4.70 1.85 3.37 2.35 3.26 5.73
Trend Percentage: 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Trend Ratio of Total Operating Income 100.00 112.16 127.09 148.91 166.20 170.77 177.77 173.15 197.84 206.42
Trend Ratio of Total Operating Expenses 100.00 111.73 141.46 171.33 188.13 199.09 204.03 200.85 227.34 231.15
Trend Ratio of Net Profit 100.00 114.45 50.58 29.50 49.40 19.98 37.93 25.72 40.76 74.80
(Source: Calculated from the published annual reports of VCCB Ltd. Rajkot of last 10 years)
(2003-04 is base year for trend percentages)
Financial Performance Analysis Page | 253
Above table 5.79 shows Common Size Analysis of Income Statement (profit and
loss account) of Vijay Commercial Co-operative Bank Ltd. Rajkot for 10 years from
2003-04 to 2013-14 and it also shows Trend Analysis of Total Operating Income, Total
Operating Expenses and Net Profit of VCCB ltd. Rajkot for the same period mentioned
above. Chart 5.14 shows graphical presentation of trend analysis as shown in the table
no.5.79.
From the above Common Size Analysis of bank’s profit and loss account the
researcher observed that out of the total operating income of the bank the major income is
interest and discount income. During the last 10 years average interest income was
remained 95.37 percent of the total operating income. Highest percentage interest and
discount income with total operating income was found during the period of study 96.49
percent in the year 2005-06 and lowest percentage found 94.33 in 2009-10. Share of other
income in total operating income was found during the period of study on an average 4.63
percent. Interest and discount income of the bank remained more than 93 and less than 97
percent from 2003-04 to 2012-13 in the period of study.
Average percentage of total operating expenses including various provisions on
total operating income was found 93.74 percent during the period of study. And therefore
average net profit during the period of study was found 6.26 percent of the total operating
income. Major expenses of the bank were interest on deposits and borrowing and
employee’s related expenses like salary, provident fund etc. Average interest expenses
during the period of study were 65.24 percent of the total income and average employee
0.00
50.00
100.00
150.00
200.00
250.00P
erce
nta
ge
Years
Chart 5.14 Trend analysis of P/L accounts of VCCB
Trend Ratio of Total
Operating Income
Trend Ratio of Total
Operating Expenses
Trend Ratio of Net Profit
Financial Performance Analysis Page | 254
related expenses were 12.98 percent of the total income. With the help of this statistic the
researcher can conclude that overall 78 percent of the total income was interest expenses
and salary and other expenses while 22 percent of the total operating income includes
other operating expenditure and provisions of the bank.
From the above table 5.79 the researcher also seen that average percentage of net
profit during the period of study was remained 6.26 percent of total operating income of
the bank. The highest net profit to total operating income percentage was found during last
10 years was16.13 percent in the year 2004-05 and lowest percentage was found in the
year 2008-09 1.85 percent. Seating fees of directors and meeting expenses were remained
zero during the period of the study.
From the trend analysis of the bank’s profit and loss account shown in the above
table and chart the researcher can conclude that the total operating income, total operating
expenses shown parallel and increasing trend from 2003-04 to 2012-13 except the year
2010-11. From the above chart 5.14 it is clear that operating expenses increase with
increase in operating income and vice versa. There is a positive correlation between
Operating income and Operating expenses and Operating income of the bank. Correlation
coefficient between operating income and operating expenses determined 0.99. So the
researcher can conclude operating expenses are correlated with operating income and also
depend on operating income.
Trend percentage Net profit shown fluctuating trend during the period of study. It
also found negatively correlated with operating income and operating expenses of the
bank. Correlation coefficient between operating income and operating expenses with net
profit determined (-0.57) and (-0.66) respectively. It might be due to heavy NPA. Zigzag
shape of profit trend percentage line indicate that net profit of the bank increase and
decrease during the period of the study as compare to 2003-04. Finally at the end of the
March 2013 net profit of the bank has decreased by 25.20 percent as compare to base year
2003-04.
Financial Performance Analysis Page | 255
(II) Common size Balance sheets of VCCB:
Table 5.80
`in Lakhs
Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Liabilities:
Share Capital (`100 each) 114.43 122.38 125.86 133.68 144.04 148.45 137.44 137.11 136.99 138.87
Percentages of Total Liabilities 1.99 2.02 1.81 1.72 1.73 1.74 1.45 1.49 1.52 1.46
Reserve and Surplus 849.97 935.18 922.16 921.51 922.20 924.73 929.63 954.70 949.71 981.84
Percentages of Total Liabilities 14.77 15.41 13.28 11.85 11.05 10.83 9.78 10.38 10.53 10.31
Deposits 4613.71 4826.86 5753.73 6607.73 7140.00 7355.45 8307.95 7649.71 7439.67 7498.34
Percentages of Total Liabilities 80.20 79.52 82.87 84.96 85.57 86.11 87.39 83.19 82.47 78.71
Borrowings 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentages of Total Liabilities 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Bill For collection (Contra) 2.21 2.36 3.51 2.98 3.01 2.05 0.00 2.87 3.02 5.09
Percentages of Total Liabilities 0.04 0.04 0.05 0.04 0.04 0.02 0.00 0.03 0.03 0.05
Branch Adjustments 0.05 0.00 0.00 0.45 0.00 0.00 0.26 0.00 0.00 0.00
Percentages of Total Liabilities 0.00 0.00 0.00 0.01 0.00 0.00 0.00 0.00 0.00 0.00
Overdue Interest Prov. 20.20 22.70 21.08 19.80 25.40 32.30 31.37 13.47 4.39 613.83
Percentages of Total Liabilities 0.35 0.37 0.30 0.25 0.30 0.38 0.33 0.15 0.05 6.44
Interest Payable 40.40 30.10 35.60 24.70 28.40 12.23 0.00 357.30 365.11 52.17
Percentages of Total Liabilities 0.70 0.50 0.51 0.32 0.34 0.14 0.00 3.89 4.05 0.55
Other Liabilities 32.12 38.80 40.70 43.20 41.65 50.80 69.41 59.34 90.00 176.63
Percentages of Total Liabilities 0.56 0.64 0.59 0.56 0.50 0.59 0.73 0.65 1.00 1.85
Profit and Loss Account 79.72 91.24 40.32 23.52 39.38 15.93 30.24 20.50 32.49 59.63
Percentages of Total Liabilities 1.39 1.50 0.58 0.30 0.47 0.19 0.32 0.22 0.36 0.63
Financial Performance Analysis Page | 256
Total 5752.81 6069.62 6942.96 7777.57 8344.08 8541.94 9506.30 9195.00 9021.38 9526.40
Percentages of Total Liabilities 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Assets:
Cash and Bank Balance 495.96 485.23 820.92 524.69 598.70 516.22 2772.00 2764.53 2638.47 2434.56
Percentages of Total Assets 8.62 7.99 11.82 6.75 7.18 6.04 29.16 30.07 29.25 25.56
Principle/Subs.S P F Investments 0.00 0.00 0.00 0.00 0.00 0.00 12.25 12.25 12.25 0.00
Percentages of Total Assets 0.00 0.00 0.00 0.00 0.00 0.00 0.13 0.13 0.14 0.00
Investment 1813.21 2026.31 2074.17 2732.81 2972.45 2957.56 1625.70 2066.51 1931.89 1919.22
Percentages of Total Assets 31.52 33.38 29.87 35.14 35.62 34.62 17.10 22.47 21.41 20.15
Advances 3107.51 3220.91 3637.11 4192.97 4451.29 4755.43 4759.68 4043.64 4115.82 4152.48
Percentages of Total Assets 54.02 53.07 52.39 53.91 53.35 55.67 50.07 43.98 45.62 43.59
Interest Receivable 10.12 12.46 13.76 11.43 20.70 25.80 19.44 8.97 4.39 706.39
Percentages of Total Assets 0.18 0.21 0.20 0.15 0.25 0.30 0.20 0.10 0.05 7.42
Bills Receivables (Contra) 2.21 2.36 3.51 2.98 3.01 2.05 0.00 2.87 3.02 5.09
Percentages of Total Assets 0.04 0.04 0.05 0.04 0.04 0.02 0.00 0.03 0.03 0.05
Assets (After Depreciation) 213.39 207.91 198.35 188.45 177.77 165.23 151.48 143.71 153.19 219.87
Percentages of Total Assets 3.71 3.43 2.86 2.42 2.13 1.93 1.59 1.56 1.70 2.31
Other Assets 110.41 114.44 195.14 124.24 120.16 119.65 154.36 139.23 147.75 88.79
Percentages of Total Assets 1.92 1.89 2.81 1.60 1.44 1.40 1.62 1.51 1.64 0.93
Branch Adjustment Account 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.31 0.00
Percentages of Total Assets 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.00
Non Banking Assets 0.00 0.00 0.00 0.00 0.00 0.00 11.39 13.29 13.29 0.00
Percentages of Total Assets 0.00 0.00 0.00 0.00 0.00 0.00 0.12 0.14 0.15 0.00
Total 5752.81 6069.62 6942.96 7777.57 8344.08 8541.94 9506.30 9195.00 9021.38 9526.40
Percentages of Total Assets 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Financial Performance Analysis Page | 257
Trend Percentages:
Trend Percentage of Capital 100.00 106.95 109.99 116.82 125.88 129.73 120.11 119.82 119.72 121.36
Trend Percentage of Reserves 100.00 110.03 108.49 108.42 108.50 108.80 109.37 112.32 111.73 115.51
Trend Percentage of Deposits 100.00 104.62 124.71 143.22 154.76 159.43 180.07 165.80 161.25 162.52
Trend Percentage of Advances 100.00 103.65 117.04 134.93 143.24 153.03 153.17 130.12 132.45 133.63
Trend Percentage of Investments 100.00 111.75 114.39 150.72 163.93 163.11 89.66 113.97 106.55 105.85
(Source: Calculated from the published annual reports of VCCB ltd. Rajkot of last 10 years)
(2003-04 is base year for trend percentages)
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
180.00
200.00
2003-042004-052005-062006-072007-082008-092009-102010-112011-122012-13
Per
cen
tag
e
Years
Chart 5.15 Trend Analysis of Balance sheets of VCCB
Trend Percentage of Capital
Trend Percentage of Reserve and Surplus
Trend Percentage of Deposits
Trend Percentage of Advances
Trend Percentage of Investments
Financial Performance Analysis Page | 258
Above table 5.80 shows Common Size Balance sheet of The Vijay Commercial
Cooperative Bank Ltd. Rajkot of last 10 years from 2003-04 to 2012-13. It also includes
the trend percentages of major items of the balance sheet. Chart 5.15 shows graphical
presentation of the trend percentage shown in the table 5.80.
From the above Common Size Analysis it is clear that liabilities side of the
balance sheet the most important items is deposits followed by reserve and surplus. Out
of the total funds invested in the bank’s assets major portion provided by Deposits and
Reserve. During the period of study lowest percentage of reserves found 9.78 in the year
2009-10 and highest 15.41 percent in the years 2004-05. During this period highest
percentage of deposits was 87.39 in the year 2009-10 and lowest percentage 78.71 in the
year 2012-13. Overall average 94.92 percent of the total assets of the bank funded by
these two components i.e. share of the other items in the balance sheet was 5.08 percent
average during last 10 years from 2003-04 to 2012-13. During the last 10 years bank has
no borrowing in its balance sheet. The major liabilities in the bank were only deposits.
Percentage of share capital in balance sheet average of 10 years remained 1.69 only.
On the assets side the major items are as usual in other banks cash & bank
balance investments and advances. Above Common size analysis of the balance sheet of
the VCCB Ltd. Rajkot state that during the period of last 10 years proportion of cash &
bank, investment and advances in total assets on an average 95 percent and proportion of
other items in the balance sheet assets side on an average only 5 percent of the total
assets during last 10 years. During the period of study highest percentages of Cash and
Bank, Investment and Advances are found 30.07, 35.62 and 55.67 in the year 2010-11,
2007-08 and 2008-09 respectively. On the other hand lowest percentages are remained
6.04, 17.10 and 43.59 in the year 2008-09, 2009-10 and 2012-13 respectively.
Chart 5.15 shows trend analysis of the major items of balance sheets of VCCB
ltd. Rajkot of last 10 years. Share capital shows continuous increasing trend till 2008-09
as compare to 2003-04 share capital of the bank increased by 29.73 in the year 2008-09
than after it decrease continuously in three years again it increased and reach at 121.36
percent in the year 2012-13 i.e. finally it increased by 21.36 percent as compare to base
year. Reserve and surplus shows mixed trend of increasing and decreasing. The
researcher clearly observed that changes in reserve and surplus of the bank very slow. As
compare to the base year 2003-04 reserves and surplus of the bank has increased by
15.51 percent in the year 2012-13 finally. Deposit line in above chart no. 5.15 indicate
increasing trend of the bank’s deposits till the year 2009-10. Deposits of the bank were
Financial Performance Analysis Page | 259
increased by 80.07 percent as compare to 2003-04 in the year 2009-10. In the year 2010-
11 and 2011-12 deposits of the bank showing decrease and in the year 2012-13 it was
increase finally it reach at 162.52 percent. On the other hand advances of the bank also
shown increasing trend till 2009-10 than after it decrease and finally it increase i.e. it
shows same kind of trend as deposits. Generally banks uses it deposits for the purpose of
providing advances to its customers. In this bank advances and deposits both showing
parallel trend it indicate that as deposits of the banks increase bank use it to provide
advances to its customers i.e. banks uses its deposits well to provides loan to its
customers it increase its profitability positively. Investments of the bank shown mixed
trend during the period of the study. As compare to the year 2003-04 it increase in the
year 2007-08 by 63.93 percent then after in the year 2009-10 it decrease by 10.34
percent. Finally in the year 2012-13 investment of the bank showing 5.85 percent
increase as compare to base year.
7. FINANCIAL PERFORMANCE OF ‘THE COMMERCIAL CO-
OPERATIVE BANK LTD. JAMNAGAR’ (TCCBLJ):
7.1 Ratio Analysis of TCCBLJ:
(I) Credit Deposit Ratio (CDR):
Formula:
Table 5.81
Table showing CDR of TCCBLJ of last 10 years
Year Total Advances
(` in Lakhs)
Total Deposit
(` in Lakhs)
CDR
(%)
2003-04 3780.02 8298.16 45.55
2004-05 3663.88 7736.48 47.36
2005-06 3721.96 6516.67 57.11
2006-07 3251.31 8530.05 38.12
2007-08 3436.03 4714.67 72.88
2008-09 3730.61 10070.37 37.05
2009-10 3876.39 11747.94 33.00
2010-11 4593.18 11742.92 39.11
2011-12 5766.51 12021.09 47.97
2012-13 7073.56 12791.28 55.30
Average 47.45 (Source: Computed from Annual Reports of TCCBLJ of last 10 Years)
Financial Performance Analysis Page | 260
From the above table no. 5.81 it is clear that bank’s credit deposit ratio remained
between 33 to 73 percent. Average percentage of last 10 years CDR was 47.35. It
indicates TCCBLJ uses its deposits on an average 47.35 percentage to give advances to
their customers during the period of study of last 10 years from 2003-04 to 2012-13.
Highest deposit used by the bank to provide loans to its customer in the year 2007-08,
which was 72.88 percent of total deposits and lowest ratio was in the year 2009-10, 33
percent.
(II) Capital Adequacy Ratio (CAR)/ Capital to Risk (Weighted) Assets Ratio
(CRAR):
Formula:
Table 5.82
Table showing CAR of TCCBLJ of last 10 years
Years Tier I Capital
(` in Lakhs)
Tier II Capital
(` in Lakhs)
Total TI+TII
(` in Lakhs)
RWA
(` in Lakhs)
CAR
(%)
2003-04 1047.59 21.57 1069.16 11774.89 9.08
2004-05 1021.09 24.56 1045.65 11328.82 9.23
2005-06 1183.15 24.90 1208.05 11560.29 10.45
2006-07 1225.48 23.80 1249.28 12093.71 10.33
2007-08 1275.85 26.70 1302.55 11038.56 11.80
2008-09 1332.84 25.67 1358.51 11098.94 12.24
2009-10 1395.45 26.89 1422.34 10496.97 13.55
2010-11 1445.17 30.34 1475.51 11654.90 12.66
2011-12 1975.75 32.18 2007.93 13687.32 14.67
2012-13 2070.21 36.80 2107.01 12715.81 16.57
Average 12.06
(Source: Computed from Annual Reports of TCCBLJ of last 10 Years)
According to RBI and Basel committee report minimum CAR require for any
Urban Co-operative Bank is 9 percent after 2005. Above table shows CAR of TCCBL
Jamnagar in all the years of the period of study from 2003-04 to 2012-13 more than 9
percent. It indicates that CAR of the bank is more than required rate by RBI in all the
years. Average CAR of the 10 years period was 12.06 percent it shows good financial
adequacy of the bank during the period of study. From the above table 5.82 the
researcher can clearly observed that CAR of the bank continuously increase in the year
2003-04 it was 9.08 percent which was lowest CAR and it increased to 16.57 percent in
Financial Performance Analysis Page | 261
the year 2012-13 which was the highest CAR during the period of the study. Only in the
year 2011-12 CAR of the bank slightly decreased otherwise it increased continuously.
(III) Interest Income to Total Income Ratio:
Formula:
Table 5.83
Table showing IITIR of TCCBLJ of last 10 years
Year Total Interest
(` in Lakhs)
Total Income
(` in Lakhs)
IITIR
(%)
2003-04 1163.19 1238.23 93.94
2004-05 1033.71 1144.65 90.31
2005-06 1042.15 1089.91 95.62
2006-07 1007.91 1064.48 94.69
2007-08 996.45 1067.49 93.35
2008-09 1181.88 1250.75 94.49
2009-10 1264.04 1337.70 94.49
2010-11 1173.13 1264.88 92.75
2011-12 1366.45 1474.22 92.69
2012-13 1479.42 1559.12 94.89
Average 93.72 (Source: Calculated from Annual Reports of TCCBLJ of last 10 Years)
Above table shows that out of the total income of TCCB Ltd. Jamnagar on an
average 93.72 percent income was interest and discount income during last ten years
from 2003-04 to 2012-13. During the period of the study highest interest income to total
income ratio was 95.62 percent in the year 2005-06 and lowest ratio was 90.31 percent in
the year 2004-05. From the above table the researcher can conclude that the IITIR of the
TCCBLJ was remained between 90 to 96 percent during the period of the study.
(IV) Interest Expenses to Total Expenses Ratio:
Formula:
Financial Performance Analysis Page | 262
Table 5.84
Table showing IETER of TCCBLJ of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Total Expenses
(` in Lakhs)
IETER
(%)
2003-04 621.19 1134.64 54.75
2004-05 523.18 1074.48 48.69
2005-06 410.56 1004.32 40.88
2006-07 452.09 963.46 46.92
2007-08 282.88 942.41 30.02
2008-09 523.66 1111.10 47.13
2009-10 580.66 1257.13 46.19
2010-11 537.51 1204.41 44.63
2011-12 581.53 1304.82 44.57
2012-13 692.86 1387.91 49.92
Average 45.37 (Source: Computed from Annual Reports of TCCBLJ of last 10 Years)
In the above table the highest ratio is 54.75 percent and lowest ratio is 30.02
percent in the year 2003-04 and 2007-08 respectively. Average of 10 years ratio is 45.37
percent i.e. on an average during last 10 years out of total expenses of the bank around
45 percent portion of total expenses was interest expense on deposits and borrowings i.e.
ratio of other operating expenses with total expenses average 55 percent.
(V) Net Profit to Net Assets Ratio:
Formula:
Table 5.85
Table showing NPNAR of TCCBLJ of last 10 years
Year Net Profit
(` in Lakhs)
Net Assets
(` in Lakhs)
NPNAR
(%)
2003-04 103.59 1828.74 5.66
2004-05 70.17 2030.10 3.46
2005-06 85.59 2186.10 3.92
2006-07 101.01 2230.37 4.53
2007-08 125.08 2367.58 5.28
2008-09 139.65 2452.52 5.69
2009-10 80.57 2585.72 3.12
2010-11 60.47 2676.52 2.26
2011-12 169.39 2722.53 6.22
2012-13 171.21 2849.31 6.01
Average 4.62 (Source: Computed from Annual Reports of TCCBLJ of last 10 Years)
Financial Performance Analysis Page | 263
During last 10 years maximum NPNAR of the bank was 6.22 percent in the
year 2011-12 and minimum NPNAR was 2.26 percent in the year 2010-11. On an
average during the last 10 years banks has 4.62 percent NPNAR. From the above table it
is clear that the NPNAR of the bank, neither increase nor decrease continuously but it
remained in fluctuating position during last ten years the period of the study.
(VI) Earnings per Share:
Formula:
Table 5.86
Table showing EPS of TCCBLJ of last 10 years
Year Net Profit
(` in Lakhs)
No. of Equity
Share (in Lakhs)
EPS
(`)
2003-04 103.59 1.63 63.42
2004-05 70.17 1.68 41.71
2005-06 85.59 1.65 51.79
2006-07 101.01 1.62 62.27
2007-08 125.08 1.66 75.49
2008-09 139.65 1.55 89.90
2009-10 80.57 1.61 50.03
2010-11 60.47 1.87 32.38
2011-12 169.39 1.81 93.84
2012-13 171.21 1.82 94.15
Average 65.50 (Source: Computed from Annual Reports of TCCBLJ of last 10 Years)
EPS of The TCCB Ltd. Jamnagar found `65.50 per share on an average
during last 10 years. Maximum EPS earned by the bank in the year 2012-13 `94.15 per
share and minimum EPS earned by the bank `32.38 in the year 2010-11. Bank has
earned average `65.50 per share annually against the equity share of `100 i.e. 65.50
percent.
(VII) Interest Income to Average Working Fund Ratio:
Formula:
Working Fund = Total assets – Bills Receivable and other contra entries
Financial Performance Analysis Page | 264
Table 5.87
Table showing IIAWFR of TCCBLJ of last 10 years
Year Total Interest
(` in Lakhs)
AWF
(` in Lakhs)
IIAWFR
(%)
2003-04 1163.19 10466.17 11.11
2004-05 1033.71 10215.02 10.12
2005-06 1042.15 9425.24 11.06
2006-07 1007.91 9911.19 10.17
2007-08 996.45 9118.82 10.93
2008-09 1181.88 10021.66 11.79
2009-10 1264.04 13671.68 9.25
2010-11 1173.13 14604.11 8.03
2011-12 1366.45 14814.65 9.22
2012-13 1479.42 15469.41 9.56
Average 10.13 (Source: Computed from Annual Reports of TCCBLJ of last 10 Years)
From the above table it is clear that during last 10 year highest interest income to
average working fund ratio is 11.79 percent in the year 2008-09 and lowest ratio is 8.03
percent in the year 2010-11. On an average bank has 10.13 percent ratio of interest
income to average working fund annually during last 10 years from 2003-04 to 2012-13.
(VIII) Interest Expenses to Average Working Fund Ratio:
Formula:
Table 5.88
Table showing IEAWFR of TCCBLJ of last 10 years
Year Total Interest Exp.
(` in Lakhs)
AWF
(` in Lakhs)
IEAWFR
(%)
2003-04 621.19 10466.17 5.94
2004-05 523.18 10215.02 5.12
2005-06 410.56 9425.24 4.36
2006-07 452.09 9911.19 4.56
2007-08 282.88 9118.82 3.10
2008-09 523.66 10021.66 5.23
2009-10 580.66 13671.68 4.25
2010-11 537.51 14604.11 3.68
2011-12 581.53 14814.65 3.93
2012-13 692.86 15469.41 4.48
Average 4.46 (Source: Computed from Annual Reports of TCCBLJ of last 10 Years)
Financial Performance Analysis Page | 265
Above table 5.88 shows that during last 10 year highest interest expenses to
average working fund ratio is found 5.94 percent and lowest ratio is 3.10 percent in the
year 2003-04 and 2007-08 respectively. On an average bank has 4.46 percent ratio of
interest expenses to average working fund annually. Interest income ratio average 10.13
percent against it average interest expense ratio 4.46 percent of last ten years of bank it
suggests that bank has earning gap of interest 5.67 percent on average working fund.
(IX) Gross Profit to Average Working Fund Ratio:
Formula:
Table 5.89
Table showing GPAWFR of TCCBLJ of last 10 years
Year Gross Profit
(` in Lakhs)
AWF
(` in Lakhs)
GPAWFR
(%)
2003-04 263.54 10466.17 2.52
2004-05 260.81 10215.02 2.55
2005-06 316.77 9425.24 3.36
2006-07 236.86 9911.19 2.39
2007-08 335.18 9118.82 3.68
2008-09 249.17 10021.66 2.49
2009-10 148.72 13671.68 1.09
2010-11 106.47 14604.11 0.73
2011-12 286.93 14814.65 1.94
2012-13 254.21 15469.41 1.64
Average 2.24 (Source: Computed from Annual Reports of TCCBLJ of last 10 Years)
Above table shows that the highest GPAWFR of the bank during the period of
the study was 3.68 percent in the year 2007-08 and lowest ratio was 0.73 percent in the
year 2010-11. Average GPAWFR remained 2.24 percent of last 10 years from 2003-04
to 2012-13.
(X) Net Profit to Average Working Fund Ratio:
Formula:
Financial Performance Analysis Page | 266
Table 5.90
Table showing NPAWFR of TCCBLJ of last 10 years
Year Net Profit
(` in Lakhs)
AWF
(` in Lakhs)
NPAWFR
(%)
2003-04 103.59 10466.17 0.99
2004-05 70.17 10215.02 0.69
2005-06 85.59 9425.24 0.91
2006-07 101.01 9911.19 1.02
2007-08 125.08 9118.82 1.37
2008-09 139.65 10021.66 1.39
2009-10 80.57 13671.68 0.59
2010-11 60.47 14604.11 0.41
2011-12 169.39 14814.65 1.14
2012-13 171.21 15469.41 1.11
Average 0.96
(Source: Computed from Annual Reports of TCCBLJ of last 10 Years)
Above table shows that the highest NPAWFR of the bank was found 1.39 percent
in the year 2008-09, and lowest 0.41 percent in the year 2010-11 and average NPAWFR
of the bank found 0.96 percent of last 10 years from 2003-04 to 2012-13 i.e. bank has
earned average 0.96 percent of its average working fund as net profit during last 10 years
the period of study.
(XI) Employee Cost to Average Working Fund Ratio:
Formula:
Table 5.91
Table showing ECAWFR of TCCBLJ of last 10 years
Year Employee exp.
(` in Lakhs)
AWF
(` in Lakhs)
ECAWFR
(%)
2003-04 261.74 10466.17 2.50
2004-05 266.03 10215.02 2.60
2005-06 270.40 9425.24 2.87
2006-07 280.32 9911.19 2.83
2007-08 315.34 9118.82 3.46
2008-09 350.45 10021.66 3.50
2009-10 363.20 13671.68 2.66
2010-11 429.99 14604.11 2.94
2011-12 432.26 14814.65 2.92
2012-13 464.91 15469.41 3.01
Average 2.93
(Source: Computed from Annual Reports of TCCBLJ of last 10 Years)
Financial Performance Analysis Page | 267
From the above table 5.91, showing ratios of employee cost to average working
fund of last 10 years of the bank it is clear that average employee cost of the bank on
average working fund was 2.93 percent per annum. During last 10 years highest
ECAWFR found 3.50 percent in the year 2008-09 and lowest ratio was 2.50 percent in
the year 2003-04.
(XII) Cost of Deposit Ratio:
Formula:
Table 5.92
Table showing CoDR of TCCBLJ of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Average Deposits
(` in Lakhs)
CoDR
(%)
2003-04 621.19 8342.23 7.45
2004-05 523.18 8072.02 6.48
2005-06 410.56 7142.25 5.75
2006-07 452.09 7528.41 6.01
2007-08 282.88 6622.36 4.27
2008-09 523.66 7392.52 7.08
2009-10 580.66 10909.16 5.32
2010-11 537.51 11745.43 4.58
2011-12 581.53 11882.01 4.89
2012-13 692.86 12406.19 5.58
Average 5.74 (Source: Calculated from Annual Reports of TCCBLJ of last 10 Years)
From the above table it was found that the percentages of Interest on Average
Deposits during last 10 years Maximum 7.45 percent in the year 2003-04 and minimum
4.27 percent in the year 2007-08 and average cost of deposits last 10 years of the bank
remained 5.74 percent.
Financial Performance Analysis Page | 268
(XIII) Summary of the above Ratios of TCCBLJ:
Table 5.93
A summary of all the ratios of TCCBLJ Calculated above
Yea
rs
CD
R (%
)
CA
R (%
)
IITIR
(%)
IET
ER
(%)
NP
NA
R (%
)
EP
S (`
)
IIAW
FR
(%)
IEA
WF
R (%
)
GP
AW
FR
(%)
NP
AW
FR
(%)
EC
AW
FR
(%)
CO
DR
(%)
03-04 45.55 9.08 93.94 54.75 5.66 63.42 11.11 5.94 2.52 0.99 2.50 7.45
04-05 47.36 9.23 90.31 48.69 3.46 41.71 10.12 5.12 2.55 0.69 2.60 6.48
05-06 57.11 10.45 95.62 40.88 3.92 51.79 11.06 4.36 3.36 0.91 2.87 5.75
06-07 38.12 10.33 94.69 46.92 4.53 62.27 10.17 4.56 2.39 1.02 2.83 6.01
07-08 72.88 11.80 93.35 30.02 5.28 75.49 10.93 3.10 3.68 1.37 3.46 4.27
08-09 37.05 12.24 94.49 47.13 5.69 89.90 11.79 5.23 2.49 1.39 3.50 7.08
09-10 33.00 13.55 94.49 46.19 3.12 50.03 9.25 4.25 1.09 0.59 2.66 5.32
10-11 39.11 12.66 92.75 44.63 2.26 32.38 8.03 3.68 0.73 0.41 2.94 4.58
11-12 47.97 14.67 92.69 44.57 6.22 93.84 9.22 3.93 1.94 1.14 2.92 4.89
12-13 55.30 16.57 94.89 49.92 6.01 94.15 9.56 4.48 1.64 1.11 3.01 5.58
Avg. 47.35 12.06 93.72 45.37 4.62 65.50 10.12 4.47 2.24 0.96 2.93 5.74
7.2 NPA Management of the TCCBLJ:
Table 5.94
Table showing NPA Management of TCCBLJ of last 10 years
Yea
rs
Tota
l
Ad
van
ces
(` i
n L
ak
hs)
Gro
ss N
PA
(` i
n L
ak
hs)
Gro
ss N
PA
(%) Total Provision
(`in Lakhs)
NE
T N
PA
(`in
Lak
hs)
NE
T N
PA
(%)
1 2 1/2x100 Std.
Assets NPA
Total
SA+NPA
03-04 3780.02 867.23 22.94 10.00 607.72 617.72 249.51 7.89
04-05 3663.88 886.22 24.19 10.00 677.72 687.72 198.50 6.67
05-06 3721.96 848.43 22.80 10.00 682.32 692.32 156.11 5.15
06-07 3251.31 777.58 23.92 10.50 700.24 710.74 66.84 2.63
07-08 3436.03 695.80 20.25 11.00 720.25 731.25 -35.45 -1.31
08-09 3730.61 372.90 10.00 20.00 760.45 780.45 -407.55 -13.81
09-10 3876.39 386.29 9.97 39.00 795.61 834.61 -448.32 -14.74
10-11 4593.18 196.59 4.28 46.00 807.69 853.69 -657.10 -17.57
11-12 5766.51 98.61 1.71 57.00 416.76 473.76 -375.15 -7.09
12-13 7073.56 53.05 0.75 57.00 442.17 499.17 -446.12 -6.79
(Calculated from the information available in annual reports of the Bank)
In the above table Net NPA in (`) and NET NPA in (%) calculated as under
Financial Performance Analysis Page | 269
Above table no. 5.94 and chart no. 5.16 shows the Non Performing Assets
management of the bank during the period of the study from the year 2003-04 to 2012-
13. It shows Gross NPA, Net NPA in amount and in percentage. It also shown provision
maintain by the bank against NPA.
As per recent guidelines from RBI Net NPA should be less than 5 percent to
pay dividend and Gross NPA should be less than 10% to avoid supervisory action from
RBI. From the above table 5.94 and chart 5.15 the researcher can observed that Gross
NPA of TCCBL Jamnagar more than 10 percent in the year 2003-04 to 2007-08 than
after it was 10 percent and less than 10 percent till 2012-13 the last year of the period of
the study. In the year 2012-13 Gross NPA of the bank was only 0.75 percent. It was a
great achievement for the bank that its GNPA reach at 0.75 percent which was 23.92
percent in the year 2006-07. The researcher found that good NPA management of the
bank during the last 10 years the period of the study. Net NPA of the bank found more
than 5 percent in the years 2003-04 to 2005-06 than after it was found less than 5
percent. Not only this but the bank success to made it Net NPA Zero from 2008-09 to
2012-13.
22
.94
24
.19
22
.80
23
.92
20
.25
10
.00
9.9
7
4.2
8
1.7
1
0.7
5
7.8
9
6.6
7
5.1
5
2.6
3
-1.3
1
-13
.81
-14
.74
-17
.57
-7.0
9 -6.7
9
-20.00
-15.00
-10.00
-5.00
0.00
5.00
10.00
15.00
20.00
25.00
30.00G
ross
an
d N
et N
PA
(%
)
Years
Chart 5.16 Gross and Net NPA of TCCBLJ
Gross NPA
Net NPA
Financial Performance Analysis Page | 270
Apart from this gross NPA of the bank has decreased continuously that thing
shows good NPA management of the bank. Gross NPA of the bank highest 23.92 percent
in the year 2006-07 has decreased to 0.75 percent in the year 2012-13 that was the
achievement in NPA management of the bank. Bank has maintained sufficient reserve to
overcome the problem of NPA every year. From the above table and chart the researcher
found that the Net NPA of the bank less than zero in the years 2008-09 to 2012-13
From the above discussion and observation of chart 5.16 and table 5.94 the
researcher can conclude that the NPA management of the bank found good during the
period of the study from 2003-04 to 2012-13. Bank has maintained not only enough but
more than enough provision against non performing assets of the bank according to the
rules and regulation suggested by RBI time to time. Apart from this bank has tried well
to maintain its NPA Zero and bank got success in this matter in last five continuous
years.
Financial Performance Analysis Page | 271
7.3 Common Size Statement and Trend Analysis of TCCBL Jamnagar:
(I) Common Size Income Statement of TCCBLJ:
Table: 5.95
`in Lakhs
Particulars Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Incomes:
Interest and discount 1163.19 1033.71 1042.15 1007.91 996.45 1181.88 1264.04 1173.13 1366.45 1479.42
Percentage of Total Income 93.94 90.31 95.62 94.69 93.35 94.49 94.49 92.75 92.69 94.89
Commission, Exchange & Brokerage 34.28 20.35 22.14 26.13 30.12 28.40 25.52 24.69 13.83 12.21
Percentage of Total Income 2.77 1.78 2.03 2.45 2.82 2.27 1.91 1.95 0.94 0.78
Other Receipts 40.76 90.59 25.62 30.44 40.92 40.47 48.14 67.06 93.94 67.49
Percentage of Total Income 3.29 7.91 2.35 2.86 3.83 3.24 3.60 5.30 6.37 4.33
Total (A) 1238.23 1144.65 1089.91 1064.48 1067.49 1250.75 1337.70 1264.88 1474.22 1559.12
Percentage of Total Income 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Expenditures:
Interests on Deposits, Borrowings 621.19 523.18 410.56 452.09 282.88 523.66 580.66 537.51 581.53 692.86
Percentage of Total Income 50.17 45.71 37.67 42.47 26.50 41.87 43.41 42.49 39.45 44.44
Salary, Allowances, provident fund and staff welfare 261.74 266.03 270.40 280.32 315.34 350.45 363.20 429.99 432.26 464.91
Percentage of Total Income 21.14 23.24 24.81 26.33 29.54 28.02 27.15 33.99 29.32 29.82
Seating fees of Directors and meeting fees 0.70 0.65 0.64 0.72 0.65 0.67 0.75 0.62 0.60 0.92
Percentage of Total Income 0.06 0.06 0.06 0.07 0.06 0.05 0.06 0.05 0.04 0.06
Rents, Rates, Insurance, Electricity etc. 19.73 20.59 21.71 22.90 25.46 30.35 35.31 35.61 34.72 37.80
Percentage of Total Income 1.59 1.80 1.99 2.15 2.39 2.43 2.64 2.82 2.36 2.42
Legal fees 4.68 4.69 4.81 4.96 5.02 5.08 5.12 4.13 5.26 5.84
Percentage of Total Income 0.38 0.41 0.44 0.47 0.47 0.41 0.38 0.33 0.36 0.37
Financial Performance Analysis Page | 272
Postage, Telephone, etc. 4.39 4.74 4.64 3.92 3.80 3.75 2.70 3.19 2.89 4.16
Percentage of Total Income 0.35 0.41 0.43 0.37 0.36 0.30 0.20 0.25 0.20 0.27
Audit Fees, Internal Audit fees 1.10 1.31 1.23 1.15 0.93 0.86 0.84 0.71 0.82 2.26
Percentage of Total Income 0.09 0.11 0.11 0.11 0.09 0.07 0.06 0.06 0.06 0.14
Depreciation and Repairs to property 17.96 20.60 20.32 22.21 21.54 25.53 32.86 27.68 29.04 42.88
Percentage of Total Income 1.45 1.80 1.86 2.09 2.02 2.04 2.46 2.19 1.97 2.75
Printing Stationary, Advertisement 6.81 5.18 5.26 5.49 4.35 4.02 1.95 1.69 0.65 2.14
Percentage of Total Income 0.55 0.45 0.48 0.52 0.41 0.32 0.15 0.13 0.04 0.14
Other expenses 36.32 36.77 33.55 33.82 72.34 57.20 165.58 117.28 99.51 51.01
Percentage of Total Income 2.93 3.21 3.08 3.18 6.78 4.57 12.38 9.27 6.75 3.27
Other Provisions 159.95 190.64 231.18 135.85 210.10 109.52 68.15 46.00 117.54 83.00
Percentage of Total Income 12.92 16.65 21.21 12.76 19.68 8.76 5.09 3.64 7.97 5.32
Total Expenses (B) 1134.64 1074.48 1004.32 963.46 942.41 1111.10 1257.13 1204.41 1304.82 1387.91
Percentage of Total Income 91.63 93.87 92.15 90.51 88.28 88.83 93.98 95.22 88.51 89.02
Net Profit (A-B) 103.59 70.17 85.59 101.01 125.08 139.65 80.57 60.47 169.39 171.21
Percentage of Total Income 8.37 6.13 7.85 9.49 11.72 11.17 6.02 4.78 11.49 10.98
Trend Percentage: 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Trend Ratio of Total Operating Income 100.00 92.44 88.02 85.97 86.21 101.01 108.03 102.15 119.06 125.92
Trend Ratio of Total Operating Expenses 100.00 94.70 88.51 84.91 83.06 97.93 110.80 106.15 115.00 122.32
Trend Ratio of Net Profit 100.00 67.74 82.62 97.51 120.74 134.81 77.78 58.37 163.52 165.28
(Source: Calculated from the published annual reports of TCCB Ltd. Jamnagar of last 10 years)
(2003-04 is base year for trend percentages)
Financial Performance Analysis Page | 273
Above table 5.95 shows Common Size Analysis of Income Statement (profit and
loss account) of The Commercial Co-operative Bank Ltd. Jamnagar for 10 years from
2003-04 to 2013-14 and it also shows Trend Analysis of Total Operating Income, Total
Operating Expenses and Net Profit of TCCB ltd. Jamnagar for the same period mentioned
above. Chart 5.17 shows graphical presentation of trend analysis as shown in the table
no.5.95.
From the above Common Size Analysis of bank’s profit and loss account the
researcher observed that out of the total operating income of the bank the major income is
interest and discount income. During the last 10 years average interest income was
remained 93.72 percent of the total operating income. Highest percentage interest and
discount income with total operating income was found during the period of study 94.89
percent in the year 2012-13 and lowest percentage found 90.31 in the year 2004-05. Share
of other income in total operating income was found during the period of study on an
average 6.28 percent. Interest and discount income of the bank remained more than 90 and
less than 95 percent from 2003-04 to 2012-13 in the period of study.
On the other hand average percentage of total operating expenses including various
provisions on total operating income was found 91.2 percent during the period of study.
And therefore average net profit during the period of study was found 8.8 percent of the
total operating income. Major expenses of the bank were found interest on deposits and
borrowing employee’s related expenses like salary, provident fund etc. and depreciation
and repairing of assets Average interest expenses during the period of study were 41.42
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
180.00
Per
cen
tag
e
Years
Chart 5.17 Trend analysis of P/L accounts of TCCBLJ
Trend Ratio of Total
Operating Income
Trend Ratio of Total
Operating Expenses
Trend Ratio of Net Profit
Financial Performance Analysis Page | 274
percent of the total income, average employee related expenses were 27.34 percent of the
total income and average depreciation expenses was 26 percent of the total operating
expenses. With the help of this statistic the researcher can conclude that overall 95 percent
of the total income was interest expenses, salary and other expenses and depreciation
while 5 percent of the total operating income includes other operating expenditure and
provisions of the bank.
From the above table 5.95 the researcher also seen that average percentage of net
profit during the period of study was remained 8.8 percent of total operating income of the
bank. The highest net profit to total operating income percentage was found during last 10
years was 11.72 percent in the year 2007-08 and lowest percentage was found in the year
2010-11 4.78 percent.
From the trend analysis of the bank’s profit and loss account shown in the above
table and chart the researcher can conclude that the total operating income, total operating
expenses shown parallel and mixed trend of increasing and decreasing from 2003-04 to
2012-13. From the above chart 5.17 it is clear that operating expenses increase with
increase in operating income and vice versa. There is a positive correlation between
Operating income and Operating expenses and Operating income of the bank. Correlation
coefficient between operating income and operating expenses determined 0.98. So the
researcher can conclude operating expenses are correlated with operating income and also
depend on operating income.
Trend percentage Net profit shown fluctuating trend during the period of study. It
also found positively correlated with operating income and operating expenses of the
bank. Correlation coefficient between operating income and operating expenses with net
profit determined 0.60 and 0.42 respectively. Zigzag shape of profit trend percentage line
indicate that net profit of the bank increase and decrease during the period of the study as
compare to 2003-04. It also indicate that net profit is not completely depend on operating
income and operating expenses of the bank but other factors also affect on net profit of the
bank. Finally at the end of the March 2013 net profit of the bank has increased by 65.28
percent as compare to base year 2003-04. Out of ten years net profit of the bank 6 times
decreased and 4 times increased as compare to base year 2003-04.
Financial Performance Analysis Page | 275
(II) Common size Balance sheets of TCCBL Jamnagar:
Table 5.96
`in Lakhs
Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Liabilities:
Share Capital (`100 each) 163.33 168.25 165.25 162.22 165.69 155.34 161.04 186.74 180.51 181.84
Percentages of Total Liabilities 1.56 1.68 1.85 1.48 2.26 1.22 1.10 1.16 1.11 1.07
Reserve and Surplus 1665.41 1861.85 2020.85 2068.15 2201.89 2297.18 2424.68 2489.78 2542.02 2667.47
Percentages of Total Liabilities 15.86 18.63 22.66 18.86 30.05 18.00 16.59 15.45 15.58 15.66
Deposits 8298.16 7736.48 6516.67 8530.05 4714.67 10070.37 11747.94 11742.92 12021.09 12791.28
Percentages of Total Liabilities 79.04 77.39 73.08 77.80 64.34 78.91 80.38 72.87 73.66 75.11
Borrowings 88.14 21.25 10.10 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentages of Total Liabilities 0.84 0.21 0.11 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Bill For collection (Contra) 32.02 32.24 30.11 28.20 25.63 20.45 13.65 6.48 4.11 19.31
Percentages of Total Liabilities 0.31 0.32 0.34 0.26 0.35 0.16 0.09 0.04 0.03 0.11
O/S in on NPA acc.(Contra) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1502.84 1293.64 1094.26
Percentages of Total Liabilities 0.00 0.00 0.00 0.00 0.00 0.00 0.00 9.33 7.93 6.43
Branch Adjustments 2.41 0.47 0.00 0.67 23.00 0.00 1.43 0.00 1.47 0.00
Percentages of Total Liabilities 0.02 0.00 0.00 0.01 0.31 0.00 0.01 0.00 0.01 0.00
Overdue Interest Prov. 99.95 60.64 40.21 20.30 15.16 11.54 9.84 8.30 11.40 2.03
Percentages of Total Liabilities 0.95 0.61 0.45 0.19 0.21 0.09 0.07 0.05 0.07 0.01
Interest Payable 8.77 6.63 7.81 8.24 4.29 6.03 5.28 4.65 4.89 23.26
Percentages of Total Liabilities 0.08 0.07 0.09 0.08 0.06 0.05 0.04 0.03 0.03 0.14
Other Liabilities 36.41 38.12 40.14 45.12 52.09 61.34 171.13 113.44 92.23 78.72
Percentages of Total Liabilities 0.35 0.38 0.45 0.41 0.71 0.48 1.17 0.70 0.57 0.46
Financial Performance Analysis Page | 276
Profit and Loss Account 103.59 70.17 85.59 101.01 125.08 139.65 80.57 60.47 169.39 171.21
Percentages of Total Liabilities 0.99 0.70 0.96 0.92 1.71 1.09 0.55 0.38 1.04 1.01
Total 10498.19 9996.10 8916.73 10963.96 7327.50 12761.90 14615.56 16115.62 16320.75 17029.38
Percentages of Total Liabilities 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Assets:
Cash and Bank Balance 4040.85 4254.23 3612.55 4349.13 2184.55 5602.26 7117.27 5595.05 5268.93 4933.69
Percentages of Total Assets 38.49 42.56 40.51 39.67 29.81 43.90 48.70 34.72 32.28 28.97
Investments 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 100.00 0.00
Percentages of Total Assets 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.61 0.00
Advances 2214.79 1764.79 1240.27 2879.90 1406.39 3011.21 3180.58 4061.05 3544.15 3494.43
Percentages of Total Assets 21.10 17.65 13.91 26.27 19.19 23.60 21.76 25.20 21.72 20.52
Interest Receivable 3780.02 3663.88 3721.96 3251.31 3436.03 3730.61 3876.39 4593.18 5766.51 7073.56
Percentages of Total Assets 36.01 36.65 41.74 29.65 46.89 29.23 26.52 28.50 35.33 41.54
Bills Receivables (Contra) 249.92 145.36 197.64 201.80 100.27 211.24 218.18 205.69 204.62 250.38
Percentages of Total Assets 2.38 1.45 2.22 1.84 1.37 1.66 1.49 1.28 1.25 1.47
Int. Receivable on NPA (Contra) 32.02 32.24 30.11 28.20 25.63 20.45 13.65 6.48 4.11 19.31
Percentages of Total Assets 0.31 0.32 0.34 0.26 0.35 0.16 0.09 0.04 0.03 0.11
Assets (After Depreciation) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1502.84 1293.64 1094.26
Percentages of Total Assets 0.00 0.00 0.00 0.00 0.00 0.00 0.00 9.33 7.93 6.43
Other Assets 90.76 90.67 90.58 160.43 152.41 144.79 143.24 141.20 119.90 137.70
Percentages of Total Assets 0.86 0.91 1.02 1.46 2.08 1.13 0.98 0.88 0.73 0.81
Branch Adjustment Account 89.83 44.93 23.62 93.19 22.22 41.34 66.25 10.13 18.89 26.05
Percentages of Total Assets 0.86 0.45 0.26 0.85 0.30 0.32 0.45 0.06 0.12 0.15
Non Banking Assets 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentages of Total Assets 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Financial Performance Analysis Page | 277
Total 10498.19 9996.10 8916.73 10963.96 7327.50 12761.90 14615.56 16115.62 16320.75 17029.38
Percentages of Total Assets 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Trend Percentages:
Trend Percentage of Capital 100.00 103.01 101.18 99.32 101.44 95.11 98.60 114.33 110.52 111.33
Trend Percentage of Reserves 100.00 111.80 121.34 124.18 132.21 137.93 145.59 149.50 152.64 160.17
Trend Percentage of Deposits 100.00 93.23 78.53 102.79 56.82 121.36 141.57 141.51 144.86 154.15
Trend Percentage of Advances 100.00 96.93 98.46 86.01 90.90 98.69 102.55 121.51 152.55 187.13
Trend Percentage of Investments 100.00 79.68 56.00 130.03 63.50 135.96 143.61 183.36 160.02 157.78
(Source: Calculated from the published annual reports of TCCB ltd. Jamnagar of last 10 years)
(2003-04 is base year for trend percentages)
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
180.00
200.00
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Per
cen
tag
e
Years
Chart 5.18 Trend Analysis of Balance sheet of TCCBLJ
Trend Percentage of Capital
Trend Percentage of Reserve and Surplus
Trend Percentage of Deposits
Trend Percentage of Advances
Trend Percentage of Investments
Financial Performance Analysis Page | 278
Above table 5.96 shows Common Size Balance sheet of The Commercial
Cooperative Bank Ltd. Jamnagar of last 10 years from 2003-04 to 2012-13. It also
includes the trend percentages of major items of the balance sheet. Chart 5.18 shows
graphical presentation of the trend percentage shown in the table 5.96.
From the above Common Size Analysis it is clear that liabilities side of the balance
sheet the most important items is deposits followed by reserve and surplus. Out of the total
funds invested in the bank’s assets major portion provided by Deposits and Reserve.
During the period of study lowest percentage of reserves found 15.45 in the year 2010-11
and highest 30.05 percent in the years 2007-08. During this period highest percentage of
deposits was 80.38 in the year 2009-10 and lowest percentage 64.34 in the year 2007-08.
Overall average 94 percent of the total assets of the bank financed by these two
components i.e. share of the other items in the balance sheet was 6 percent average during
last 10 years from 2003-04 to 2012-13. During the last 10 years bank has borrowing in the
year 2003-04 to 2005-06 than after there were no borrowing in banks balance sheet. The
major liabilities in the bank were only deposits. Percentage of share capital in total of the
balance sheet average of 10 years remained 1.45 only.
On the assets side the major items are as usual in other banks cash & bank balance
investments and advances. Above Common size analysis of the balance sheet of the TCCB
Ltd. Jamnagar state that during the period of last 10 years proportion of cash & bank,
investment and advances in total assets on an average 94 percent and proportion of other
items in the balance sheet assets side on an average only 6 percent of the total assets
during last 10 years. During the period of study highest percentages of Cash and Bank,
Investment and Advances are found 48.70, 26.27 and 41.74 in the year 2009-10, 2006-07
and 2005-06 respectively. On the other hand lowest percentages are remained 28.97, 13.91
and 26.52 in the year 2012-13, 2005-06 and 2009-10 respectively. From the above
analysis the researcher can conclude that Deposits, Reserves, Advances, Cash & Bank and
Investment play an important role in balance sheet of the bank.
Chart 5.18 shows trend analysis of the major items of balance sheets of
TCCB ltd. Jamnagar of last 10 years. Share capital shows mixed trend of increasing and
decreasing trend as compare to 2003-04 share capital of the bank increased by 14.33 in the
year 2010-11this was the highest increase shown in trend line of share capital during 10
years period of the study. As compare to base year 2003-04 Share capital shown
increasing trend in 6 years 2004-05, 2005-06 and 2010-11 to 2012-13. In other years share
Financial Performance Analysis Page | 279
capital of the bank has been decreasing trend. Reserve and surplus shows continuous
increasing trend. As compare to the base year 2003-04 reserves and surplus of the bank
has increased by 60.17 percent in the year 2012-13. Continuous increase in reserve makes
bank’s financial position sound. Deposit line in above chart no. 5.18 indicates continuous
increasing trend in last five years of the study from 2008-09 to 2012-13. In first five years
of the study from 2003-04 to 2007-08 deposit line of the bank shows mixed trend of
increasing and decreasing. Deposits of the bank were increased by 54.15 percent as
compare to 2003-04 in the year 2012-13 and in the year 2007-08 it has been decreased by
43.18 percent as compare to base year. On the other hand advances of the bank also
shown increasing trend in last six years of the study from 2007-08 to 2012-13. In the year
2012-13 advances of the bank has been increased by 87.13 percent as compare to base
year 2003-04. Generally banks uses it deposits for the purpose of providing advances to its
customers. In this bank advances and deposits both showing parallel trend it indicate that
as deposits of the banks increase bank use it to provide advances to its customers i.e.
banks uses its deposits well to provides loan to its customers it increase its profitability
positively. Co-relation co-efficient determined between deposits and advances of the bank
0.71 indicate that there is good positive co-relation in deposits accepted by band and
advances given by bank. Investments of the bank shown mixed trend during the period of
the study. As compare to the year 2003-04 it increase in the year 2010-11 by 83.36 percent
and it was the highest increase during the period of the study. Zigzag shape of the
investment trend percentage line indicate continuous mixed trend of increasing and
decreasing during the period of study.
Financial Performance Analysis Page | 280
8. FINANCIAL PERFORMANCE OF ‘THE MARKET YARD
COMMERCIAL CO-OPERATIVE BANK LTD. UNJHA’ (MCCB):
8.1 Ratio Analysis of MCCB:
(I) Credit Deposit Ratio (CDR):
Formula:
Table 5.97
Table showing CDR of MCCB of last 10 years
Year Total Advances
(` in Lakhs)
Total Deposit
(` in Lakhs)
CDR
(%)
2003-04 3039.69 4579.16 66.38
2004-05 2927.54 4256.29 68.78
2005-06 2093.20 3945.36 53.05
2006-07 2550.19 3832.05 66.55
2007-08 1773.59 4383.84 40.46
2008-09 2745.20 4555.39 60.26
2009-10 2555.27 5314.11 48.08
2010-11 2404.00 5526.57 43.50
2011-12 3068.65 6187.88 49.59
2012-13 4176.20 7419.91 56.28
Average 55.00 (Source: Computed from Annual Reports of MCCB of last 10 Years)
From the above table it is clear that bank’s credit deposit ratio remain between 43
to 69 percent. Average percentage of last 10 years CDR was 55.29. It indicates MCCB
uses its deposits on an average 55 percentage to give advances to their customers during
the period of study of last 10 years from 2003-04 to 2012-13. Highest deposit used by the
bank to provide loans to its customer in the year 2004-05, which was 68.78 percent of total
deposits and lowest ratio was in the year 2010-11, 43.50 percent.
(II) Capital Adequacy Ratio (CAR)/ Capital to Risk (Weighted) Assets Ratio
(CRAR):
Formula:
Financial Performance Analysis Page | 281
Table 5.98
Table showing CAR of MCCB of last 10 years
Years Tier I Capital
(` in Lakhs)
Tier II Capital
(` in Lakhs)
Total TI+TII
(` in Lakhs)
RWA
(` in Lakhs)
CAR
(%)
2003-04 1031.80 24.34 1056.14 13805.75 7.65
2004-05 1057.81 24.40 1082.21 13874.49 7.80
2005-06 1075.06 26.38 1101.44 13598.02 8.10
2006-07 1093.08 30.80 1123.88 13491.96 8.33
2007-08 1148.74 31.40 1180.14 12827.61 9.20
2008-09 1219.21 32.40 1251.61 13258.58 9.44
2009-10 1260.69 31.80 1292.49 13987.99 9.24
2010-11 1291.28 30.21 1321.49 12420.02 10.64
2011-12 1345.87 30.40 1376.27 13599.51 10.12
2012-13 1407.61 31.40 1439.01 13324.17 10.80
Average 9.13
(Source: Computed from Annual Reports of MCCB of last 10 Years)
According to RBI and Basel committee report minimum CAR require for any
Urban Co-operative Bank is 9 percent after 2005. Above table shows CAR of MCCB Ltd.
Unjha in all the years after 2007-08 more than 9 percent. It indicates that CAR of the bank
was more than required rate by RBI in all the years after 2007-08. Average CAR of the 10
years period was 9.13 percent it also more than 9 percent it shows good financial adequacy
of the bank during the period of study. From the above table 5.98 the researcher can
clearly observed that CAR of the bank continuously increase in the year 2003-04 it was
7.65 percent and it increased to 10.80 percent in the year 2012-13.
(III) Interest Income to Total Income Ratio:
Formula:
Table 5.99
Table showing IITIR of MCCB of last 10 years
Year Total Interest
(` in Lakhs)
Total Income
(` in Lakhs)
IITIR
(%)
2003-04 1039.46 1132.70 91.77
2004-05 726.05 737.72 98.42
2005-06 624.01 634.43 98.36
2006-07 592.55 599.38 98.86
2007-08 635.28 642.21 98.92
2008-09 621.15 631.30 98.39
2009-10 677.97 692.49 97.90
2010-11 720.38 730.51 98.61
2011-12 933.10 943.30 98.92
2012-13 1073.62 1083.62 99.08
Average 98.00
(Source: Calculated from Annual Reports of MCCB of last 10 Years)
Financial Performance Analysis Page | 282
Above table 5.99 shows that out of the total income of MCCB Ltd. Unjha on an
average 98 percent income was interest and discount income during last ten years from
2003-04 to 2012-13. During the period of the study highest interest income to total income
ratio was found 99.08 percent in the year 2012-13 and lowest ratio was 91.77 percent in
the year 2003-04. So the researcher can conclude from the above table that average
interest and discount income of the bank remained 98 of the total income of the bank
during the period of the study.
(IV) Interest Expenses to Total Expenses Ratio:
Formula:
Table 5.100
Table showing IETER of MCCB of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Total Expenses
(` in Lakhs)
IETER
(%)
2003-04 890.87 1093.06 81.50
2004-05 589.06 704.82 83.58
2005-06 512.31 619.20 82.74
2006-07 441.06 583.06 75.65
2007-08 455.46 617.19 73.80
2008-09 436.94 598.10 73.05
2009-10 522.96 668.31 78.25
2010-11 532.27 699.89 76.05
2011-12 694.8 892.31 77.87
2012-13 790.96 1019.02 77.62
Average 78.00 (Source: Computed from Annual Reports of MCCB of last 10 Years)
In the above table the highest ratio is 83.58 percent and lowest ratio is 73.05
percent in the year 2004-05 and 2008-09 respectively. Average of 10 years ratio is 78
percent i.e. on an average during last 10 years out of total expenses of the bank around 78
percent portion of total expenses was interest expense on deposits and borrowings i.e. ratio
of other operating expenses with total expenses average 22 percent.
(V) Net Profit to Net Assets Ratio:
Formula:
Financial Performance Analysis Page | 283
Table 5.101
Table showing NPNAR of MCCB of last 10 years
Year Net Profit
(` in Lakhs)
Net Assets
(` in Lakhs)
NPNAR
(%)
2003-04 39.64 865.11 4.58
2004-05 32.90 892.99 3.68
2005-06 15.23 923.85 1.65
2006-07 16.32 939.31 1.74
2007-08 25.02 984.42 2.54
2008-09 33.20 1044.66 3.18
2009-10 24.18 1092.39 2.21
2010-11 30.62 1115.90 2.74
2011-12 50.99 1149.14 4.44
2012-13 64.60 1194.72 5.41
Average 3.22 (Source: Computed from Annual Reports of MCCB of last 10 Years)
During last 10 years maximum NPNAR was 5.41 percent in the year 2012-13
and minimum NPNAR was 1.65 percent in the year 2005-06. On an average during the
last 10 years banks has 3.22 percent NPNAR. From the above table it is clear that the
NPNAR of the bank, neither increase nor decrease continuously but it remained in
fluctuating position during last ten years the period of the study.
(VI) Earnings per Share:
Formula:
Table 5.102
Table showing EPS of MCCB of last 10 years
Year Net Profit
(` in Lakhs)
No. of Equity
Share (in Lakhs)
EPS
(`)
2003-04 39.64 1.20 33.03
2004-05 32.90 1.20 27.42
2005-06 15.23 1.20 12.69
2006-07 16.32 1.30 12.51
2007-08 25.02 2.60 9.61
2008-09 33.20 4.10 8.09
2009-10 24.18 4.95 4.89
2010-11 30.62 5.47 5.60
2011-12 50.99 5.07 10.05
2012-13 64.60 4.99 12.95
Average 13.68 (Source: Computed from Annual Reports of MCCB of last 10 Years)
Financial Performance Analysis Page | 284
EPS of The MCCB Ltd. Unjha found `13.68 per share on an average during last
10 years. Maximum EPS earned by the bank in the year 2003-04 `33.03 per share and
minimum EPS earned by the bank `4.89 in the year 2009-10. Bank has earned average
`13.68 per share annually against the equity share of `25 i.e. 54.72 percent.
(VII) Interest Income to Average Working Fund Ratio:
Formula:
Working Fund = Total assets – Bills Receivable and other contra entries
Table 5.103
Table showing IIAWFR of MCCB of last 10 years
Year Total Interest
(` in Lakhs)
AWF
(` in Lakhs)
IIAWFR
(%)
2003-04 1039.46 7069.11 14.70
2004-05 726.05 6244.42 11.63
2005-06 624.01 5895.93 10.58
2006-07 592.55 5641.50 10.50
2007-08 635.28 5761.86 11.03
2008-09 621.15 6027.51 10.31
2009-10 677.97 6483.87 10.46
2010-11 720.38 7189.04 10.02
2011-12 933.10 7708.56 12.10
2012-13 1073.62 8744.29 12.28
Average 11.36 (Source: Computed from Annual Reports of MCCB of last 10 Years)
From the above table it is clear that during last 10 year highest interest income to
average working fund ratio was 14.70 percent in the year 2003-04 and lowest ratio is
10.02 percent in the year 2010-11. On an average bank has 11.36 percent ratio of interest
income to average working fund annually during last 10 years from 2003-04 to 2012-13.
(VIII) Interest Expenses to Average Working Fund Ratio:
Formula:
Financial Performance Analysis Page | 285
Table 5.104
Table showing IEAWFR of MCCB of last 10 years
Year Total Interest Exp.
(` in Lakhs)
AWF
(` in Lakhs)
IEAWFR
(%)
2003-04 890.87 7069.11 12.60
2004-05 589.06 6244.42 9.43
2005-06 512.31 5895.93 8.69
2006-07 441.06 5641.50 7.82
2007-08 455.46 5761.86 7.90
2008-09 436.94 6027.51 7.25
2009-10 522.96 6483.87 8.07
2010-11 532.27 7189.04 7.40
2011-12 694.8 7708.56 9.01
2012-13 790.96 8744.29 9.05
Average 8.72 (Source: Computed from Annual Reports of MCCB of last 10 Years)
Above table shows that during last 10 year highest interest expenses to average
working fund ratio is found 12.60 percent and lowest ratio is 7.25 percent in the year
2003-04 and 2008-09 respectively. On an average bank has 8.72 percent ratio of interest
expenses to average working fund annually. Interest income ratio average 11.36 percent
against it average interest expense ratio 8.72 percent of last ten years of bank it suggests
that bank has earning gap of interest 2.64 percent on average working fund.
(IX) Gross Profit to Average Working Fund Ratio:
Formula:
Table 5.105
Table showing GPAWFR of MCCB of last 10 years
Year Gross Profit
(` in Lakhs)
AWF
(` in Lakhs)
GPAWFR
(%)
2003-04 103.43 7069.11 1.46
2004-05 37.38 6244.42 0.60
2005-06 19.45 5895.93 0.33
2006-07 21.57 5641.50 0.38
2007-08 31.82 5761.86 0.55
2008-09 43.98 6027.51 0.73
2009-10 34.96 6483.87 0.54
2010-11 44.62 7189.04 0.62
2011-12 69.92 7708.56 0.91
2012-13 98.64 8744.29 1.13
Average 0.73
(Source: Computed from Annual Reports of MCCB of last 10 Years)
Financial Performance Analysis Page | 286
Above table 5.105 shows that the highest GPAWFR of the bank was 1.46 percent
in the year 2003-04 and lowest ratio was 0.33 percent in the year 2005-06. Average
GPAWFR remained 0.73 percent of last 10 years from 2003-04 to 2012-13.
(X) Net Profit to Average Working Fund Ratio:
Formula:
Table 5.106
Table showing NPAWFR of MCCB of last 10 years
Year Net Profit
(` in Lakhs)
AWF
(` in Lakhs)
NPAWFR
(%)
2003-04 39.64 7069.11 0.56
2004-05 32.90 6244.42 0.53
2005-06 15.23 5895.93 0.26
2006-07 16.31 5641.50 0.29
2007-08 25.02 5761.86 0.43
2008-09 33.20 6027.51 0.55
2009-10 24.18 6483.87 0.37
2010-11 30.62 7189.04 0.43
2011-12 50.99 7708.56 0.66
2012-13 64.60 8744.29 0.74
Average 0.48 (Source: Computed from Annual Reports of MCCB of last 10 Years)
Above table shows that the highest NPAWFR of the bank is 0.74 percent in the
year 2012-13, and lowest 0.26 percent in the year 2005-06 and average NPAWFR of the
bank 0.48 percent of last 10 years from 2003-04 to 2012-13 i.e. bank has earned 0.48
percent of its average working fund as net profit during last 10 years the period of study.
(XI) Employee Cost to Average Working Fund Ratio:
Formula:
Financial Performance Analysis Page | 287
Table 5.107
Table showing ECAWFR of MCCB of last 10 years
Year Employee exp.
(` in Lakhs)
AWF
(` in Lakhs)
ECAWFR
(%)
2003-04 91.09 7069.11 1.29
2004-05 85.81 6244.42 1.37
2005-06 89.35 5895.93 1.52
2006-07 97.40 5641.50 1.73
2007-08 109.68 5761.86 1.90
2008-09 106.35 6027.51 1.76
2009-10 108.74 6483.87 1.68
2010-11 118.50 7189.04 1.65
2011-12 120.04 7708.56 1.56
2012-13 120.27 8744.29 1.38
Average 1.58 (Source: Computed from Annual Reports of MCCB of last 10 Years)
From the above table, showing ratios of employee cost to average working fund of
last 10 years of the bank it is clear that average employee cost of the bank on average
working fund is 1.58 percent per annum. During last 10 years highest ECAWFR 1.90
percent in the year 2007-08 and lowest ratio 1.29 percent in the year 2003-04.
(XII) Cost of Deposit Ratio:
Formula:
Table 5.108
Table showing CoDR of MCCB of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Average Deposits
(` in Lakhs)
CoDR
(%)
2003-04 890.87 5141.71 17.33
2004-05 589.06 4417.73 13.33
2005-06 512.31 4100.83 12.49
2006-07 441.06 3889.37 11.34
2007-08 455.46 4108.61 11.09
2008-09 436.94 4469.62 9.78
2009-10 522.96 4934.75 10.60
2010-11 532.27 5420.34 9.82
2011-12 694.80 5857.23 11.86
2012-13 790.96 6853.90 11.54
Average 11.92 (Source: Calculated from Annual Reports of MCCB of last 10 Years)
Financial Performance Analysis Page | 288
From the above table 108 it was found that the percentages of Interest on Average
Deposits ratio (CoDR) during last 10 years highest 17.33 percent in the year 2003-04 and
lowest 9.78 percent in the year 2008-09 and average cost of deposits ratio last 10 years of
the bank remained 11.92 percent.
(XIII) Summary of the above Ratios of MCCB Unjha:
Table 5.109
A summary of all the ratios of MCCB Calculated above
Yea
rs
CD
R (%
)
CA
R (%
)
IITIR
(%)
IET
ER
(%)
NP
NA
R (%
)
EP
S (`
)
IIAW
FR
(%)
IEA
WF
R (%
)
GP
AW
FR
(%)
NP
AW
FR
(%)
EC
AW
FR
(%)
CO
DR
(%)
03-04 66.38 7.65 91.77 81.50 4.58 33.03 14.70 12.60 1.46 0.56 1.29 17.33
04-05 68.78 7.80 98.42 83.58 3.68 27.42 11.63 9.43 0.60 0.53 1.37 13.33
05-06 53.05 8.10 98.36 82.74 1.65 12.69 10.58 8.69 0.33 0.26 1.52 12.49
06-07 66.55 8.33 98.86 75.65 1.74 12.51 10.50 7.82 0.38 0.29 1.73 11.34
07-08 40.46 9.20 98.92 73.80 2.54 9.61 11.03 7.90 0.55 0.43 1.90 11.09
08-09 60.26 9.44 98.39 73.05 3.18 8.09 10.31 7.25 0.73 0.55 1.76 9.78
09-10 48.08 9.24 97.90 78.25 2.21 4.89 10.46 8.07 0.54 0.37 1.68 10.60
10-11 43.50 10.64 98.61 76.05 2.74 5.60 10.02 7.40 0.62 0.43 1.65 9.82
11-12 49.59 10.12 98.92 77.87 4.44 10.05 12.10 9.01 0.91 0.66 1.56 11.86
12-13 56.28 10.80 99.08 77.62 5.41 12.95 12.28 9.05 1.13 0.74 1.38 11.54
Avg. 55.29 9.13 97.92 78.01 3.22 13.68 11.36 8.72 0.73 0.48 1.58 11.92
8.2 NPA Management of the MCCB Unjha:
Table 5.110
Table showing NPA Management of MCCB Unjha of last 10 years
Yea
rs
Tota
l
Ad
van
ces
(` i
n L
ak
hs)
Gro
ss N
PA
(` i
n L
ak
hs)
Gro
ss N
PA
(%) Total Provision
(`in Lakhs)
NE
T N
PA
(`in
Lak
hs)
NE
T N
PA
(%)
1 2 1/2x100 Std.
Assets NPA
Total
SA+NPA
03-04 3039.69 482.70 15.88 10.00 371.33 381.33 101.37 3.81
04-05 2927.54 442.70 15.12 10.00 395.06 405.06 37.64 1.49
05-06 2093.20 305.51 14.60 10.00 399.12 409.12 -103.61 -6.15
06-07 2550.19 313.67 12.30 10.00 400.6 410.60 -96.93 -4.53
07-08 1773.59 186.90 10.54 10.00 177.44 187.44 -0.54 -0.03
08-09 2745.20 179.80 6.55 10.00 179.49 189.49 -9.69 -0.38
09-10 2555.27 151.72 5.94 10.00 182.26 192.26 -40.54 -1.72
10-11 2404.00 140.50 5.84 10.00 182.9 192.90 -52.40 -2.37
11-12 3068.65 120.30 3.92 10.00 209.28 219.28 -98.98 -3.47
12-13 4176.20 108.40 2.60 10.00 221.82 231.82 -123.42 -3.13
Financial Performance Analysis Page | 289
(Calculated from the information available in annual reports of the Bank)
In the above table Net NPA in (`) and NET NPA in (%) calculated as under
Above table no. 5.110 and chart no. 5.19 shows the Non Performing Assets
management of the Market Yard Commercial Co-operative Bank Ltd. Unjha during the
period of the study from the year 2003-04 to 2012-13. It shows Gross NPA, Net NPA in
amount and in percentage also. It also shown provision maintain by the bank against non
performing assets.
As per recent guidelines from RBI Net NPA should be less than 5 percent to
pay dividend and Gross NPA should be less than 10% to avoid supervisory action from
RBI. From the above table 5.110 and chart 5.19 the researcher can observed that Gross
NPA of MCCB Unjha is more than 10 percent in the year 2003-04 to 2007-08 than after it
was 10 less than 10 percent till 2012-13 the last year of the period of the study. In the year
2012-13 Gross NPA of the bank was only 2.60 percent. It was a great achievement for the
bank that its GNPA reach at 2.60 percent which was 15.88 percent in the year 2003-04.
15
.88
15
.12
14
.60
12
.30
10
.54
6.5
5
5.9
4
5.8
4
3.9
2
2.6
03.8
1
1.4
9
-6.1
5
-4.5
3
-0.0
3
-0.3
8
-1.7
2
-2.3
7
-3.4
7
-3.1
3-10.00
-5.00
0.00
5.00
10.00
15.00
20.00
Gro
ss a
nd
Net
NP
A (
%)
Years
Chart 5.19 Gross and Net NPA of MCCB Unjha
Gross NPA
Net NPA
Financial Performance Analysis Page | 290
The researcher found that good NPA management of the bank during the last 10 years the
period of the study because gross NPA of the bank continuously decrease.
Net NPA of the bank found less than 5 percent during all the years the period
of the study from 2003-04 to 2012-13. From 2005-06 to 2012-13 the bank has maintained
more provision against non performing assets of the bank therefore Net NPA percentage
found Zero in all the years after 2004-05.
Apart from this gross NPA of the bank has decreased continuously that thing
shows good NPA management of the bank. Gross NPA of the bank highest 15.88 percent
in the year 2003-04 has decreased to 2.60 percent in the year 2012-13 that was the great
achievement in NPA management of the bank. Bank has maintained sufficient reserve to
overcome the problem of NPA every year. From the above table and chart the researcher
found that the Net NPA of the bank less than zero in the years 2005-06 to 2012-13.
From the above discussion and observation of chart and table the researcher
can conclude that the NPA management of the bank found good during the period of the
study from 2003-04 to 2012-13. Bank has maintained not only enough but more than
enough provision against non performing assets of the bank according to the rules and
regulation suggested by RBI time to time. Apart from this bank has tried well to maintain
its NPA Zero and bank got success in this matter in last eight continuous years.
Financial Performance Analysis Page | 291
8.3 Common Size Statement and Trend Analysis of MCCB Ltd. Unjha:
(I) Common Size Income Statement of MCCB:
Table: 5.111
`in Lakhs
Particulars Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Incomes:
Interest and discount 1039.46 726.05 624.01 592.55 635.28 621.15 677.97 720.38 933.10 1073.62
Percentage of Total Income 91.77 98.42 98.36 98.86 98.92 98.39 97.90 98.61 98.92 99.08
Commission, Exchange & Brokerage 1.47 1.32 2.15 1.92 2.49 1.04 0.87 0.87 0.57 0.35
Percentage of Total Income 0.13 0.18 0.34 0.32 0.39 0.16 0.13 0.12 0.06 0.03
Other Receipts 91.77 10.35 8.27 4.91 4.44 9.11 13.65 9.26 9.63 9.65
Percentage of Total Income 8.10 1.40 1.30 0.82 0.69 1.44 1.97 1.27 1.02 0.89
Total (A) 1132.70 737.72 634.43 599.38 642.21 631.30 692.49 730.51 943.30 1083.62
Percentage of Total Income 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Expenditures:
Interests on Deposits, Borrowings 890.87 589.06 512.31 441.06 455.46 436.94 522.96 532.27 694.8 790.96
Percentage of Total Income 78.65 79.85 80.75 73.59 70.92 69.21 75.52 72.86 73.66 72.99
Salary, Allowances, provident fund and staff welfare 91.09 85.81 89.35 97.40 109.68 106.35 108.74 118.50 120.04 120.27
Percentage of Total Income 8.04 11.63 14.08 16.25 17.08 16.85 15.70 16.22 12.73 11.10
Seating fees of Directors and meeting fees 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentage of Total Income 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Rents, Rates, Insurance, Electricity etc. 2.51 2.66 2.52 2.40 5.61 2.16 2.80 3.51 3.14 1.03
Percentage of Total Income 0.22 0.36 0.40 0.40 0.87 0.34 0.40 0.48 0.33 0.10
Legal fees 0.87 0.64 0.19 0.62 0.79 0.01 0.19 0.45 0.32 0.28
Percentage of Total Income 0.08 0.09 0.03 0.10 0.12 0.00 0.03 0.06 0.03 0.03
Financial Performance Analysis Page | 292
Postage, Telephone, etc. 0.82 0.75 0.60 0.53 0.51 0.81 1.06 0.68 0.81 0.62
Percentage of Total Income 0.07 0.10 0.09 0.09 0.08 0.13 0.15 0.09 0.09 0.06
Audit Fees, Internal Audit fees 0.10 0.31 0.44 0.65 0.89 1.35 0.63 1.24 2.12 1.79
Percentage of Total Income 0.01 0.04 0.07 0.11 0.14 0.21 0.09 0.17 0.22 0.17
Depreciation and Repairs to property 3.45 2.08 1.47 1.16 0.64 7.94 2.84 1.79 1.44 1.03
Percentage of Total Income 0.30 0.28 0.23 0.19 0.10 1.26 0.41 0.25 0.15 0.10
Printing Stationary, Advertisement 1.42 0.90 0.58 1.08 1.27 1.46 1.15 3.32 2.75 4.68
Percentage of Total Income 0.13 0.12 0.09 0.18 0.20 0.23 0.17 0.45 0.29 0.43
Other expenses 101.93 22.61 11.74 38.16 42.34 41.08 27.94 38.13 66.89 98.36
Percentage of Total Income 9.00 3.07 1.85 6.37 6.59 6.51 4.03 5.22 7.09 9.08
Total Expenses (B) 1093.06 704.82 619.20 583.06 617.19 598.10 668.31 699.89 892.31 1019.02
Percentage of Total Income 96.50 95.54 97.60 97.28 96.10 94.74 96.51 95.81 94.59 94.04
Net Profit (A-B) 39.64 32.90 15.23 16.32 25.02 33.20 24.18 30.62 50.99 64.60
Percentage of Total Income 3.50 4.46 2.40 2.72 3.90 5.26 3.49 4.19 5.41 5.96
Trend Percentage: 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Trend Ratio of Total Operating Income 100.00 65.13 56.01 52.92 56.70 55.73 61.14 64.49 83.28 95.67
Trend Ratio of Total Operating Expenses 100.00 64.48 56.65 53.34 56.46 54.72 61.14 64.03 81.63 93.23
Trend Ratio of Net Profit 100.00 82.99 38.42 41.18 63.12 83.75 61.00 77.25 128.63 162.97
(Source: Calculated from the published annual reports of MCCB Ltd. Unjha of last 10 years)
(2003-04 is base year for trend percentages)
Financial Performance Analysis Page | 293
Above table 5.111 shows Common Size Analysis of Income Statement (profit and
loss account) of The Market Yard Commercial Co-operative Bank Ltd. Unjha for 10 years
from 2003-04 to 2013-14 and it also shows Trend Analysis of Total Operating Income,
Total Operating Expenses and Net Profit of MCCB ltd. Unjha for the same period
mentioned above. Chart 5.20 shows graphical presentation of trend analysis as shown in
the table no.5.111.
From the above Common Size Analysis of bank’s profit and loss account the
researcher found that out of the total operating income of the bank the major income is
interest and discount income. During the last 10 years average interest income was
remained 97.92 percent of the total operating income. Highest percentage of interest and
discount income with total operating income was found during the period of study 99.08
percent in the year 2012-13 and lowest percentage found 91.77 in the year 2003-04. Share
of other income in total operating income was found during the period of study on an
average 2.08 percent.
On the other hand average percentage of total operating expenses including various
provisions on total operating income was found 95.87 percent during the period of study.
And therefore average net profit during the period of study was found 4.13 percent of the
total operating income. Major expenses of the bank were found interest on deposits and
borrowing and employee’s related expenses like salary, provident fund etc. Average
interest expenses during the period of study were 74.8 percent of the total income and
average employee related expenses were 13.97 percent of the total income. With the help
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
180.00
Per
cen
tag
e
Years
Chart 5.20 Trend analysis of P/L accounts of MCCB Unjha
Trend Ratio of Total
Operating Income
Trend Ratio of Total
Operating Expenses
Trend Ratio of Net Profit
Financial Performance Analysis Page | 294
of this statistic the researcher can conclude that overall 89 percent of the total income was
interest expenses and employee’s expenses while 11 percent of the total operating income
includes other operating expenditure and provisions of the bank.
From the above table 5.111 the researcher also seen that average percentage of net
profit during the period of study was remained 4.13 percent of total operating income of
the bank. The highest net profit to total operating income percentage was found during last
10 years was 5.96 percent in the year 2012-13 and lowest percentage was found 2.40 in
the year 2005-06.
From the trend analysis of the bank’s profit and loss account shown in the above
table and chart the researcher can conclude that the total operating income, total operating
expenses shown parallel and mixed trend of increasing and decreasing from 2003-04 to
2012-13. From the above chart 5.20 it is clear that operating expenses increase with
increase in operating income and vice versa. There is a positive correlation between
Operating income and Operating expenses of the bank. Correlation coefficient between
operating income and operating expenses determined 0.9998. So the researcher can
conclude operating expenses are strongly correlated with operating income and also
depend on operating income.
Trend percentage Net profit shown fluctuating trend during the period of study. It
also found positively correlated with operating income and operating expenses of the
bank. Correlation coefficient between operating income and operating expenses with net
profit determined 0.83 and 0.80 respectively. Zigzag shape of profit trend percentage line
indicate that net profit of the bank increase and decrease during the period of the study as
compare to 2003-04. It also indicate that net profit is not completely depend on operating
income and operating expenses of the bank but other factors also affect on net profit of the
bank. Finally at the end of the March 2013 net profit of the bank has increased by 62.97
percent as compare to base year 2003-04. Overall whatever the operating income and
operating expenditure trend but overall profitability of the bank has increased as compare
to base year. During ten years trend percentage line showing profit has been decreased
three times and increased seven times.
Financial Performance Analysis Page | 295
(II) Common size Balance sheets of MCCB Ltd. Unjha:
Table 5.112
`in Lakhs
Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Liabilities:
Share Capital (`25 each) 30.00 30.00 30.00 32.62 65.10 102.61 123.74 136.71 126.78 124.74
Percentages of Total Liabilities 0.46 0.50 0.52 0.59 1.07 1.70 1.78 1.84 1.59 1.31
Reserve and Surplus 835.11 862.99 893.85 906.69 919.32 942.05 968.65 979.19 1022.36 1069.98
Percentages of Total Liabilities 12.85 14.31 15.44 16.48 15.16 15.63 13.95 13.16 12.81 11.25
Deposits 4579.16 4256.29 3945.36 3832.05 4383.84 4555.39 5314.11 5526.57 6187.88 7419.91
Percentages of Total Liabilities 70.46 70.59 68.15 69.63 72.31 75.56 76.52 74.28 77.54 78.02
Borrowings 0.00 0.00 0.00 1.33 0.00 0.00 0.00 0.00 0.00 100.00
Percentages of Total Liabilities 0.00 0.00 0.00 0.02 0.00 0.00 0.00 0.00 0.00 1.05
Bill For collection (Contra) 15.36 24.60 2.81 6.77 35.23 0.99 4.48 2.22 1.12 0.51
Percentages of Total Liabilities 0.24 0.41 0.05 0.12 0.58 0.02 0.06 0.03 0.01 0.01
Branch Adjustments 0.31 0.96 0.00 0.00 0.24 0.00 0.00 0.00 0.00 0.00
Percentages of Total Liabilities 0.00 0.02 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Overdue Interest Prov. 21.37 21.74 21.64 21.31 22.11 25.40 25.40 25.40 0.00 16.38
Percentages of Total Liabilities 0.33 0.36 0.37 0.39 0.36 0.42 0.37 0.34 0.00 0.17
Interest Payable 918.30 758.05 837.92 682.08 605.59 352.96 475.88 523.82 577.69 655.97
Percentages of Total Liabilities 14.13 12.57 14.47 12.39 9.99 5.85 6.85 7.04 7.24 6.90
Other Liabilities 59.58 42.43 42.49 4.12 5.98 16.20 7.97 215.83 13.27 58.03
Percentages of Total Liabilities 0.92 0.70 0.73 0.07 0.10 0.27 0.11 2.90 0.17 0.61
Profit and Loss Account 39.64 32.90 15.23 16.31 25.02 33.20 24.18 30.62 50.99 64.60
Percentages of Total Liabilities 0.61 0.55 0.26 0.30 0.41 0.55 0.35 0.41 0.64 0.68
Financial Performance Analysis Page | 296
Total 6498.83 6029.96 5789.30 5503.28 6062.43 6028.80 6944.41 7440.36 7980.09 9510.12
Percentages of Total Liabilities 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Assets:
Cash and Bank Balance 907.23 265.40 262.21 745.83 323.27 1046.18 1708.79 3244.30 3115.01 3192.85
Percentages of Total Assets 13.96 4.40 4.53 13.55 5.33 17.35 24.61 43.60 39.03 33.57
Call Money 700.00 900.00 1520.00 388.82 2163.51 507.36 0.00 0.00 0.00 0.00
Percentages of Total Assets 10.77 14.93 26.26 7.07 35.69 8.42 0.00 0.00 0.00 0.00
Investments 0.00 0.00 0.00 0.00 0.00 0.00 936.88 0.00 0.00 0.00
Percentages of Total Assets 0.00 0.00 0.00 0.00 0.00 0.00 13.49 0.00 0.00 0.00
Advances 1811.74 1891.73 1891.73 1792.74 1739.83 1692.20 1695.71 1695.71 1743.96 2062.01
Percentages of Total Assets 27.88 31.37 32.68 32.58 28.70 28.07 24.42 22.79 21.85 21.68
Interest Receivable 3039.69 2927.54 2093.20 2550.19 1773.59 2745.20 2555.27 2404.00 3068.65 4176.20
Percentages of Total Assets 46.77 48.55 36.16 46.34 29.26 45.53 36.80 32.31 38.45 43.91
Bills Receivables (Contra) 1.52 11.18 12.27 13.58 20.84 18.78 21.34 78.54 41.40 50.01
Percentages of Total Assets 0.02 0.19 0.21 0.25 0.34 0.31 0.31 1.06 0.52 0.53
Int. Receivable on NPA (Contra) 15.36 24.60 2.81 6.77 35.23 0.99 4.48 2.22 1.12 0.51
Percentages of Total Assets 0.24 0.41 0.05 0.12 0.58 0.02 0.06 0.03 0.01 0.01
Assets (After Depreciation) 4.57 4.34 2.90 2.01 1.94 7.12 6.91 5.46 4.64 3.87
Percentages of Total Assets 0.07 0.07 0.05 0.04 0.03 0.12 0.10 0.07 0.06 0.04
Other Assets 18.72 5.17 4.18 3.34 4.22 10.97 15.03 10.13 5.31 24.67
Percentages of Total Assets 0.29 0.09 0.07 0.06 0.07 0.18 0.22 0.14 0.07 0.26
Total 6498.83 6029.96 5789.30 5503.28 6062.43 6028.80 6944.41 7440.36 7980.09 9510.12
Percentages of Total Assets 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Trend Percentages:
Financial Performance Analysis Page | 297
Trend Percentage of Capital 100.00 100.00 100.00 108.73 217.00 342.03 412.47 455.70 422.60 415.80
Trend Percentage of Reserves 100.00 103.34 107.03 108.57 110.08 112.81 115.99 117.25 122.42 128.12
Trend Percentage of Deposits 100.00 92.95 86.16 83.68 95.73 99.48 116.05 120.69 135.13 162.04
Trend Percentage of Advances 100.00 96.31 68.86 83.90 58.35 90.31 84.06 79.09 100.95 137.39
Trend Percentage of Investments 100.00 104.42 104.42 98.95 96.03 93.40 93.60 93.60 96.26 113.81
(Source: Calculated from the published annual reports of MCCB ltd. Unjha of last 10 years)
(2003-04 is base year for trend percentages)
0.00
50.00
100.00
150.00
200.00
250.00
300.00
350.00
400.00
450.00
500.00
2003-042004-052005-062006-072007-082008-092009-102010-112011-122012-13
Per
cen
tag
e
Years
Chart 5.21 Trend Analysis of Balance sheet of MCCB Unjha
Trend Percentage of Capital
Trend Percentage of Reserve and Surplus
Trend Percentage of Deposits
Trend Percentage of Advances
Trend Percentage of Investments
Financial Performance Analysis Page | 298
Above table 5.112 shows Common Size Balance sheet of The Market Yard
Commercial Cooperative Bank Ltd. Unjha of last 10 years from 2003-04 to 2012-13. It
also includes the trend percentages of major items of the balance sheet. Chart 5.21 shows
graphical presentation of the trend percentage shown in the table 5.112.
From the above Common Size Analysis it is clear that liabilities side of the balance
sheet the most important items is deposits followed by reserve and surplus. Out of the total
funds invested in the bank’s assets major portion provided by Deposits and Reserve.
During the period of study lowest percentage of reserves found 11.25 in the year 2012-13
and highest 16.48 percent in the years 2006-07. During this period highest percentage of
deposits was 78.02 in the year 2012-13 and lowest percentage 68.15 in the year 2005-06.
Overall average 87 percent of the total assets of the bank financed by these two
components i.e. share of the other items in the balance sheet was 13 percent average
during last 10 years from 2003-04 to 2012-13. This 13 percent include 9.74 percent
interest payable i.e. share of other items in balance sheet was only 3.26 percent. During the
last 10 years bank has borrowing in the year 2006-07 and 2012-13 only. The major
liabilities in the bank were only deposits. Percentage of share capital in total of the
balance sheet average of 10 years remained 1.14 only.
On the assets side of the balance sheet the major items are as usual in other banks
cash & bank balance investments and advances. Apart from this Call Money is also an
important component. Above Common size analysis of the balance sheet of the MCCB
Ltd. Unjha state that during the period of last 10 years proportion of cash & bank,
investment, advances and call money in total assets on an average 97 percent and
proportion of other items in the balance sheet assets side on an average only 3 percent of
the total assets during last 10 years. During the period of study highest percentages of
Cash and Bank, Investment and Advances with total assets are found 43.60, 32.68, 48.55
and 35.69 in the year 2010-11, 2005-06, 2004-05 and 2007-08 respectively. On the other
hand lowest percentages are remained 4.40, 21.68 and 29.26 in the year 2004-05, 2012-13
and 2007-08 respectively. Highest percentage of call money in total assets was found in
the year 2007-08, 35.69 percent. Bank did not have call money from the year 2008-09 to
2012-13. From the above analysis the researcher can conclude that Deposits, Reserves,
Advances, Cash & Bank, Call Money and Investment play an important role in balance
sheet of the bank.
Financial Performance Analysis Page | 299
Chart 5.21 shows trend analysis of the major items of balance sheets of
MCCB ltd. Unjha of last 10 years. Trend percentage line of share capital of the bank
shows that share capital of the bank remained constant in the years 2003-04 to 2005-06.
Than share capital start increasing and reach at 455.70. It state that share capital of the
bank increase by 355.70 percent as compare to base year 2003-04. At the end of the year
2012-13 trend percentage line of the bank shows 415.80 percent i.e. finally share capital of
the bank increased by 315.80 percent at the end of the year 2012-13. From the year 2006-
07 to 2012-13 good increasing trend of the share capital indicate that financial position of
the bank become strong. Reserve and surplus shows continuous increasing trend. As
compare to the base year 2003-04 reserves and surplus of the bank has increased by 28.12
percent in the year 2012-13. Continuous increase in reserve makes bank’s financial
position sound.
Deposit line in above chart no. 5.21 indicates that deposit of the bank
decreased continuously till 2006-07 than it start increasing continuously and finally stop at
162.04. It state that finally deposits of the bans has increased by 62.04 percent as compare
to base years at the end of the year 2012-13. On the other hand advances of the bank
shows mixed trend of increasing and decreasing during the period of the study. But over
all advances of the bank has increased by 37.39 percent in the year 2012-13 as compare to
base year 2003-04. Generally banks uses it deposits for the purpose of providing advances
to its customers. The bank uses its deposits well to provide advances to its customers. Co-
relation co-efficient determined between deposits and advances of the bank 0.73 indicate
that there is good positive co-relation between deposits accepted by bank and advances
provided by bank to its customers.
Investments of the bank shown mixed trend during the period of the study.
As compare to the year 2003-04 it increased in the year 2004-05, 2005-06 and 2012-13. It
shows decreasing trend in remaining years of the study. Finally at the end of the year
2012-13 investment of the bank increased by 13.81 percent as compare to base year.
Financial Performance Analysis Page | 300
9. FINANCIAL PERFORMANCE OF ‘‘THE CHANASMA
COMMERCIAL CO-OPERATIVE BANK LTD.’ (CCCB):
9.1 Ratio Analysis of CCCB Ltd. Chanasma:
(I) Credit Deposit Ratio (CDR):
Formula:
Table 5.113
Table showing CDR of CCCB of last 10 years
Year Total Advances
(` in Lakhs)
Total Deposit
(` in Lakhs)
CDR
(%)
2003-04 1006.80 1696.40 59.35
2004-05 1094.41 1383.88 79.08
2005-06 902.25 1217.80 74.09
2006-07 860.24 1076.81 79.89
2007-08 834.65 1205.40 69.24
2008-09 874.30 1373.79 63.64
2009-10 1082.19 1601.61 67.57
2010-11 1259.78 1846.77 68.22
2011-12 1269.03 2119.22 59.88
2012-13 1427.35 2374.21 60.12
Average 68.11 (Source: Computed from Annual Reports of CCCB of last 10 Years)
The above table 5.113 shows credit deposit ratio of The CCCB Ltd. Chanasma for
10 years from 2003-04 to 2012-13. From the table it is clear that bank’s credit deposit ratio
remain between 58 to 80 percent. Average percentage of last 10 years CDR was 68.11. It
indicates CCCB uses its deposits on an average 68 percentage to give advances to their
customers during the period of study of last 10 years from 2003-04 to 2012-13. Highest
deposit used by the bank to provide loans to its customer in the year 2006-07, which was
79.89 percent of total deposits and lowest ratio was in the year 2003-04, 59.35 percent.
(II) Capital Adequacy Ratio (CAR)/ Capital to Risk (Weighted) Assets Ratio
(CRAR):
Formula:
Financial Performance Analysis Page | 301
Table 5.114
Table showing CAR of CCCB of last 10 years
Years Tier I Capital
(` in Lakhs)
Tier II Capital
(` in Lakhs)
Total TI+TII
(` in Lakhs)
RWA
(` in Lakhs)
CAR
(%)
2003-04 948.61 22.51 971.12 4800.40 20.23
2004-05 963.99 25.40 989.39 4407.08 22.45
2005-06 998.83 25.50 1024.33 4696.61 21.81
2006-07 997.25 23.80 1021.05 4313.69 23.67
2007-08 1014.46 26.70 1041.16 4094.22 25.43
2008-09 1042.16 28.25 1070.41 3886.75 27.54
2009-10 307.05 30.40 337.45 1139.65 29.61
2010-11 297.25 35.41 332.66 1218.53 27.30
2011-12 310.67 34.50 345.17 1221.84 28.25
2012-13 326.18 36.60 362.78 1417.66 25.59
Average 25.19
(Source: Computed from Annual Reports of CCCB of last 10 Years)
According to RBI and Basel committee report minimum CAR require for any
Urban Co-operative Bank is 9 percent after 2005. Above table 5.114 shows CAR of
CCCB Ltd. Chanasma in all the years of the period of study from 2003-04 to 2012-13
found more than 9 percent i.e. more than required rate as per RBI. Average CAR of the 10
years period was 25.19 percent it also more than 9 percent it shows good financial
adequacy of the bank during the period of study. From the above table 5.114 the
researcher can clearly observed that CAR of the bank continuously increase in the year
2003-04 it was 20.23 percent and it increased to 25.59 percent in the year 2012-13.
(III) Interest Income to Total Income Ratio:
Formula:
Table 5.115
Table showing IITIR of CCCB of last 10 years
Year Total Interest
(` in Lakhs)
Total Income
(` in Lakhs)
IITIR
(%)
2003-04 201.36 203.16 99.11
2004-05 170.94 172.23 99.25
2005-06 153.38 155.96 98.35
2006-07 162.05 163.81 98.93
2007-08 175.28 177.20 98.92
2008-09 174.45 175.80 99.23
2009-10 196.35 199.03 98.65
2010-11 215.16 216.95 99.17
2011-12 256.62 258.01 99.46
2012-13 300.82 302.43 99.47
Average 99.00
(Source: Calculated from Annual Reports of CCCB of last 10 Years)
Financial Performance Analysis Page | 302
Above table5.115 shows that out of the total income of CCCB Ltd. Chanasma on
an average 99 percent income was interest and discount income during last ten years from
2003-04 to 2012-13. During the period of the study highest interest income to total income
ratio was found 99.47 percent in the year 2012-13 and lowest ratio was 98.35 percent in
the year 2005-06. So the researcher can conclude from the above table that average
interest and discount income of the bank average 99 of the total income of the bank.
(IV) Interest Expenses to Total Expenses Ratio:
Formula:
Table 5.116
Table showing IETER of CCCB of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Total Expenses
(` in Lakhs)
IETER
(%)
2003-04 118.75 167.16 71.04
2004-05 96.87 152.23 63.63
2005-06 85.25 134.96 63.17
2006-07 86.38 152.81 56.53
2007-08 92.38 163.95 56.35
2008-09 99.28 159.40 62.28
2009-10 112.08 178.53 62.78
2010-11 121.94 194.58 62.67
2011-12 150.47 231.89 64.89
2012-13 176.35 274.33 64.28
Average 62.76 (Source: Computed from Annual Reports of CCCB of last 10 Years)
In the above table showing interest expenses to total expenses ratio the highest
ratio was found 71.04 percent and lowest ratio was 56.35 percent in the year 2004-05 and
2007-08 respectively. Average of 10 years ratio was 62.76 percent i.e. on an average
during last 10 years out of total expenses of the bank around 63 percent portion of total
expenses was interest expense on deposits and borrowings i.e. ratio of other operating
expenses with total expenses average 37 percent.
(V) Net Profit to Net Assets Ratio:
Formula:
Financial Performance Analysis Page | 303
Table 5.117
Table showing NPNAR of CCCB of last 10 years
Year Net Profit
(` in Lakhs)
Net Assets
(` in Lakhs)
NPNAR
(%)
2003-04 36.00 212.05 16.98
2004-05 20.00 234.02 8.55
2005-06 21.00 245.21 8.56
2006-07 11.00 241.21 4.56
2007-08 13.25 261.42 5.07
2008-09 16.40 267.04 6.14
2009-10 20.50 278.80 7.35
2010-11 22.37 296.35 7.55
2011-12 26.12 308.40 8.47
2012-13 28.10 325.61 8.63
Average 8.19 (Source: Computed from Annual Reports of CCCB of last 10 Years)
During last 10 years maximum NPNAR was 16.98 percent in the year 2003-04
and minimum NPNAR was 4.56 percent in the year 2006-07. On an average during the
last 10 years banks has 8.19 percent NPNAR. From the above table it is clear that the
NPNAR of the bank remained in fluctuating position during last ten years the period of the
study.
(VI) Earnings per Share:
Formula:
Table 5.118
Table showing EPS of CCCB of last 10 years
Year Net Profit
(` in Lakhs)
No. of Equity
Share (in Lakhs)
EPS
(`)
2003-04 36.00 0.68 52.71
2004-05 20.00 0.71 28.09
2005-06 21.00 0.74 28.46
2006-07 11.00 0.69 15.95
2007-08 13.25 0.71 18.72
2008-09 16.40 0.72 22.77
2009-10 20.50 0.78 26.34
2010-11 22.37 0.87 25.70
2011-12 26.12 0.90 29.01
2012-13 28.10 0.95 29.45
Average 27.72
(Source: Computed from Annual Reports of CCCB of last 10 Years)
Financial Performance Analysis Page | 304
EPS of The CCCB Ltd. Chanasma found `27.72 per share on an average during
last 10 years. Maximum EPS earned by the bank in the year 2003-04 `52.71 per share and
minimum EPS earned by the bank `15.95 in the year 2006-07. Bank has earned average
`27.72 per share annually against the equity share of `100 i.e. 27.72 percent.
(VII) Interest Income to Average Working Fund Ratio:
Formula:
Working Fund = Total assets – Bills Receivable and other contra entries
Table 5.119
Table showing IIAWFR of CCCB of last 10 years
Year Total Interest
(` in Lakhs)
AWF
(` in Lakhs)
IIAWFR
(%)
2003-04 201.36 2179.67 9.24
2004-05 170.94 2090.14 8.18
2005-06 153.38 1874.35 8.18
2006-07 162.05 1661.99 9.75
2007-08 175.28 1652.96 10.60
2008-09 174.45 1788.64 9.75
2009-10 196.35 2001.96 9.81
2010-11 215.16 2262.09 9.51
2011-12 256.62 2547.08 10.08
2012-13 300.82 2843.49 10.58
Average 9.57 (Source: Computed from Annual Reports of CCCB of last 10 Years)
From the above table it is clear that during last 10 year highest interest income to
average working fund ratio was 10.60 percent in the year 2007-08 and lowest ratio was
8.18 percent in the years 2004-05 and 2005-06. Average IIAWFR of the bank is 9.57
percent of last 10 years from 2003-04 to 2012-13 the period of the study.
(VIII) Interest Expenses to Average Working Fund Ratio:
Formula:
Financial Performance Analysis Page | 305
Table 5.120
Table showing IEAWFR of CCCB of last 10 years
Year Total Interest Exp.
(` in Lakhs)
AWF
(` in Lakhs)
IEAWFR
(%)
2003-04 118.75 2179.67 5.45
2004-05 96.87 2090.14 4.63
2005-06 85.25 1874.35 4.55
2006-07 86.38 1661.99 5.20
2007-08 92.38 1652.96 5.59
2008-09 99.28 1788.64 5.55
2009-10 112.08 2001.96 5.60
2010-11 121.94 2262.09 5.39
2011-12 150.47 2547.08 5.91
2012-13 176.35 2843.49 6.20
Average 5.41 (Source: Computed from Annual Reports of CCCB of last 10 Years)
Above table shows that during last 10 year highest interest expenses to average
working fund ratio is found 6.20 percent and lowest ratio is 4.55 percent in the year 2012-
13 and 2005-06 respectively. On an average bank has 5.41 percent ratio of interest
expenses to average working fund annually. Interest income ratio average 9.57 percent
against it average interest expense ratio 5.41 percent of last ten years of bank i.e. the bank
has earning gap of interest 4.16 percent on average working fund.
(IX) Gross Profit to Average Working Fund Ratio:
Formula:
Table 5.121
Table showing GPAWFR of CCCB of last 10 years
Year Gross Profit
(` in Lakhs)
AWF
(` in Lakhs)
GPAWFR
(%)
2003-04 41.45 2179.67 1.90
2004-05 24.63 2090.14 1.18
2005-06 25.55 1874.35 1.36
2006-07 16.20 1661.99 0.97
2007-08 18.84 1652.96 1.14
2008-09 21.95 1788.64 1.23
2009-10 26.10 2001.96 1.30
2010-11 27.76 2262.09 1.23
2011-12 32.03 2547.08 1.26
2012-13 34.30 2843.49 1.21
Average 1.28
(Source: Computed from Annual Reports of CCCB of last 10 Years)
Financial Performance Analysis Page | 306
Above table 1.121 shows that the highest GPAWFR of the bank is 1.90 percent in
the year 2003-04 and lowest ratio is 0.97 percent in the year 2006-07. Average GPAWFR
remained 1.28 percent of last 10 years from 2003-04 to 2012-13.
(X) Net Profit to Average Working Fund Ratio:
Formula:
Table 5.122
Table showing NPAWFR of CCCB of last 10 years
Year Net Profit
(` in Lakhs)
AWF
(` in Lakhs)
NPAWFR
(%)
2003-04 36.00 2179.67 1.65
2004-05 20.00 2090.14 0.96
2005-06 21.00 1874.35 1.12
2006-07 11.00 1661.99 0.66
2007-08 13.25 1652.96 0.80
2008-09 16.40 1788.64 0.92
2009-10 20.50 2001.96 1.02
2010-11 22.37 2262.09 0.99
2011-12 26.12 2547.08 1.03
2012-13 28.10 2843.49 0.99
Average 1.01 (Source: Computed from Annual Reports of CCCB of last 10 Years)
Above table shows that the highest NPAWFR of the bank is 1.65 percent in the
year 2003-04, and lowest 0.66 percent in the year 2006-07 and average NPAWFR of the
bank 1.01 percent of last 10 years from 2003-04 to 2012-13 i.e. bank has earned 1.01
percent of its average working fund as net profit during last 10 years the period of study.
(XI) Employee Cost to Average Working Fund Ratio:
Formula:
Financial Performance Analysis Page | 307
Table 5.123
Table showing ECAWFR of CCCB of last 10
years
Year Employee exp.
(` in Lakhs)
AWF
(` in Lakhs)
ECAWFR
(%)
2003-04 32.10 2179.67 1.47
2004-05 32.50 2090.14 1.55
2005-06 34.12 1874.35 1.82
2006-07 34.56 1661.99 2.08
2007-08 35.20 1652.96 2.13
2008-09 36.12 1788.64 2.02
2009-10 39.07 2001.96 1.95
2010-11 44.79 2262.09 1.98
2011-12 44.12 2547.08 1.73
2012-13 54.67 2843.49 1.92
Average 1.87
(Source: Computed from Annual Reports of CCCB of last 10 Years)
From the above table, showing ratios of employee cost to average working fund of
last 10 years of the bank it is clear that average employee cost of the bank on average
working fund is 1.87 percent per annum. During last 10 years highest ECAWFR of the
bank found 2.13 percent in the year 2007-08 and lowest ratio was found 1.47 percent in
the year 2003-04.
(XII) Cost of Deposit Ratio:
Formula:
Table 5.124
Table showing CoDR of CCCB of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Average Deposits
(` in Lakhs)
CoDR
(%)
2003-04 118.75 1735.81 6.84
2004-05 96.87 1540.14 6.29
2005-06 85.25 1300.84 6.55
2006-07 86.38 1147.97 7.52
2007-08 92.38 1141.77 8.09
2008-09 99.28 1289.60 7.70
2009-10 112.08 1487.70 7.53
2010-11 121.94 1724.19 7.07
2011-12 150.47 1983.00 7.59
2012-13 176.35 2296.72 7.68
Average 7.29
(Source: Calculated from Annual Reports of CCCB of last 10 Years)
Financial Performance Analysis Page | 308
From the above table showing cost of deposit ratio it was found that the
percentages of Interest on Average Deposits during last 10 years highest 8.09 percent in
the year 2007-08 and lowest 6.29 percent in the year 2004-05 and average cost of deposits
last 10 years of the bank remained 7.79 percent.
(XIII) Summary of the above Ratios of CCCB Chanasma:
Table 5.125
A summary of all the ratios of CCCB Calculated above
Yea
rs
CD
R (%
)
CA
R (%
)
IITIR
(%)
IET
ER
(%)
NP
NA
R (%
)
EP
S (`
)
IIAW
FR
(%)
IEA
WF
R (%
)
GP
AW
FR
(%)
NP
AW
FR
(%)
EC
AW
FR
(%)
CO
DR
(%)
03-04 59.35 20.23 99.11 71.04 16.98 52.71 9.24 5.45 1.90 1.65 1.47 6.84
04-05 79.08 22.45 99.25 63.63 8.55 28.09 8.18 4.63 1.18 0.96 1.55 6.29
05-06 74.09 21.81 98.35 63.17 8.56 28.46 8.18 4.55 1.36 1.12 1.82 6.55
06-07 79.89 23.67 98.93 56.53 4.56 15.95 9.75 5.20 0.97 0.66 2.08 7.52
07-08 69.24 25.43 98.92 56.35 5.07 18.72 10.60 5.59 1.14 0.80 2.13 8.09
08-09 63.64 27.54 99.23 62.28 6.14 22.77 9.75 5.55 1.23 0.92 2.02 7.70
09-10 67.57 29.61 98.65 62.78 7.35 26.34 9.81 5.60 1.30 1.02 1.95 7.53
10-11 68.22 27.30 99.17 62.67 7.55 25.70 9.51 5.39 1.23 0.99 1.98 7.07
11-12 59.88 28.25 99.46 64.89 8.47 29.01 10.08 5.91 1.26 1.03 1.73 7.59
12-13 60.12 25.59 99.47 64.28 8.63 29.45 10.58 6.20 1.21 0.99 1.92 7.68
Avg. 68.11 25.19 99.05 62.76 8.19 27.72 9.57 5.41 1.28 1.01 1.87 7.29
Financial Performance Analysis Page | 309
9.2 NPA Management of the CCCB Chanasma:
Table 5.126
Table showing NPA Management of CCCB Chanasma of last 10 years
Yea
rs
Tota
l
Ad
van
ces
(` i
n L
ak
hs)
Gro
ss N
PA
(` i
n L
ak
hs)
Gro
ss N
PA
(%) Total Provision
(`in Lakhs)
NE
T N
PA
(`in
La
kh
s)
NE
T N
PA
(%)
1 2 1/2x100 Std.
Assets NPA
Total
SA+NPA
03-04 1006.80 81.72 8.12 3.41 121.4 124.81 -43.09 -4.89
04-05 1094.41 80.90 7.39 3.90 130.45 134.35 -53.45 -5.57
05-06 902.25 80.65 8.94 4.21 135.5 139.71 -59.06 -7.75
06-07 860.24 74.45 8.65 4.55 140.8 145.35 -70.90 -9.92
07-08 834.65 75.80 9.08 4.44 135.55 139.99 -64.19 -9.24
08-09 874.30 74.26 8.49 4.16 139.65 143.81 -69.55 -9.52
09-10 1082.19 70.45 6.51 5.16 145.96 151.12 -80.67 -8.66
10-11 1259.78 65.27 5.18 5.03 149.40 154.43 -89.16 -8.07
11-12 1269.03 64.30 5.07 5.50 154.43 159.93 -95.63 -8.62
12-13 1427.35 64.78 4.54 6.00 118.22 124.22 -59.44 -4.56
(Calculated from the information available in annual reports of the Bank)
In the above table Net NPA in (`) and NET NPA in (%) calculated as under
8.1
2
7.3
9 8.9
4
8.6
5
9.0
8
8.4
9
6.5
1
5.1
8
5.0
7
4.5
4
-4.8
9
-5.5
7
-7.7
5
-9.9
2
-9.2
4
-9.5
2
-8.6
6
-8.0
7
-8.6
2
-4.5
6
-15.00
-10.00
-5.00
0.00
5.00
10.00
15.00
Gro
ss a
nd
Net
NP
A (
%)
Years
Chart 5.22 Gross and Net NPA of CCCB Chanasma
Gross NPA
Net NPA
Financial Performance Analysis Page | 310
Above table no. 5.126 and chart no. 5.22 shows the Non Performing Assets
management of The Chanasma Commercial Co-operative Bank Ltd. during the period of
the study from the year 2003-04 to 2012-13. It shows Gross NPA, Net NPA in amount and
in percentage also. It also shown provision maintain by the bank against non performing
assets.
As per recent guidelines from RBI Net NPA should be less than 5 percent to
pay dividend and Gross NPA should be less than 10% to avoid supervisory action from
RBI. From the above table 5.126 and chart 5.22 the researcher can observed that Gross
NPA of The CCCB Chanasma is Less than 10 percent in all the year of the study 2003-04
to 2012-13it indicates that NPA management of the bank too good during the period of the
study. It was a great achievement for the bank that bank has maintained its GNPA less
than 10 percent. During the period of the study the highest GNPA found 9.08 percent in
the year 2007-08 and lowest percentage of GNPA found 4.54 in the year 2012-13.
Net NPA of the bank should be less than 5 percent as per RBI rule. During all
the years, the period of the study from 2003-04 to 2012-13 the researcher found that the
Net NPA of the bank in negative percentage i.e. not only less than 5 percent but less than
zero. Bank has maintained its Net NPA zero throughout the period of the study it was a
great achievement for the bank.
From the above discussion and observation of chart and table the researcher
can conclude that the NPA management of the bank found too good during the period of
the study from 2003-04 to 2012-13. Bank has maintained not only enough but more than
enough provision against non performing assets of the bank according to the rules and
regulation suggested by RBI time to time. Apart from this bank has tried well to maintain
its NPA Zero and bank got success in this matter in all the ten continuous years the period
of the study from 2003-04 to 2012-13.
Financial Performance Analysis Page | 311
9.3 Common Size Statement and Trend Analysis of CCCB Ltd. Chanasma:
(I) Common Size Income Statement of ‘The CCCB Ltd.’:
Table: 5.127
`in Lakhs
Particulars Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Incomes:
Interest and discount 201.36 170.94 153.38 162.05 175.28 174.45 196.35 215.16 256.62 300.82
Percentage of Total Income 99.11 99.25 98.35 98.93 98.92 99.23 98.65 99.17 99.46 99.47
Commission, Exchange & Brokerage 0.60 0.44 0.36 0.26 0.25 0.55 0.46 0.56 0.42 0.43
Percentage of Total Income 0.30 0.26 0.23 0.16 0.14 0.31 0.23 0.26 0.16 0.14
Other Receipts 1.20 0.85 2.22 1.50 1.67 0.80 2.22 1.23 0.97 1.18
Percentage of Total Income 0.59 0.49 1.42 0.92 0.94 0.46 1.12 0.57 0.38 0.39
Total (A) 203.16 172.23 155.96 163.81 177.20 175.80 199.03 216.95 258.01 302.43
Percentage of Total Income 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Expenditures:
Interests on Deposits, Borrowings 118.75 96.87 85.25 86.38 92.38 99.28 112.08 121.94 150.47 176.35
Percentage of Total Income 58.45 56.25 54.66 52.73 52.13 56.47 56.31 56.21 58.32 58.31
Salary, Allowances, provident fund and staff welfare 32.10 32.50 34.12 34.56 35.20 36.12 39.07 44.79 44.12 54.67
Percentage of Total Income 15.80 18.87 21.88 21.10 19.86 20.55 19.63 20.65 17.10 18.08
Seating fees of Directors and meeting fees 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentage of Total Income 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Rents, Rates, Insurance, Electricity etc. 4.25 4.38 3.50 4.10 4.37 4.57 3.70 4.33 4.47 6.01
Percentage of Total Income 2.09 2.54 2.24 2.50 2.47 2.60 1.86 2.00 1.73 1.99
Legal fees 0.51 0.45 0.25 0.33 0.62 1.15 0.64 0.21 0.47 0.80
Percentage of Total Income 0.25 0.26 0.16 0.20 0.35 0.65 0.32 0.10 0.18 0.26
Financial Performance Analysis Page | 312
Postage, Telephone, etc. 0.25 0.31 0.36 0.44 0.34 0.39 0.42 0.39 0.37 0.43
Percentage of Total Income 0.12 0.18 0.23 0.27 0.19 0.22 0.21 0.18 0.14 0.14
Audit Fees, Internal Audit fees 0.98 0.87 0.55 0.34 0.65 0.96 0.56 0.62 0.84 0.81
Percentage of Total Income 0.48 0.51 0.35 0.21 0.37 0.55 0.28 0.29 0.33 0.27
Depreciation and Repairs to property 0.82 0.95 1.02 1.32 1.41 1.65 1.19 1.36 3.15 1.54
Percentage of Total Income 0.40 0.55 0.65 0.81 0.80 0.94 0.60 0.63 1.22 0.51
Printing Stationary, Advertisement 0.52 0.54 0.77 0.91 0.78 0.55 0.42 0.54 0.91 0.77
Percentage of Total Income 0.26 0.31 0.49 0.56 0.44 0.31 0.21 0.25 0.35 0.25
Other expenses and IT Provisions 9.80 16.31 10.16 25.75 29.61 14.73 20.45 20.40 27.09 32.95
Percentage of Total Income 4.82 9.47 6.51 15.72 16.71 8.38 10.27 9.40 10.50 10.90
Total Expenses (B) 167.16 152.23 134.96 152.81 163.95 159.40 178.53 194.58 231.89 274.33
Percentage of Total Income 82.28 88.39 86.53 93.28 92.52 90.67 89.70 89.69 89.88 90.71
Net Profit (A-B) 36.00 20.00 21.00 11.00 13.25 16.40 20.50 22.37 26.12 28.10
Percentage of Total Income 17.72 11.61 13.47 6.72 7.48 9.33 10.30 10.31 10.12 9.29
Trend Percentage: 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Trend Ratio of Total Operating Income 100.00 84.78 76.77 80.63 87.22 86.53 97.97 106.79 127.00 148.86
Trend Ratio of Total Operating Expenses 100.00 91.07 80.73 91.42 98.08 95.36 106.80 116.40 138.72 164.11
Trend Ratio of Net Profit 100.00 55.55 58.34 30.56 36.81 45.56 56.94 62.14 72.56 78.05
(Source: Calculated from the published annual reports of CCCB Ltd. Chanasma of last 10 years)
(2003-04 is base year for trend percentages)
Financial Performance Analysis Page | 313
Above table 5.127 shows Common Size Analysis of Income Statement (profit and
loss account) of The Chanasma Commercial Co-operative Bank Ltd. Chanasma for 10
years from 2003-04 to 2012-13 and it also shows Trend Analysis of Total Operating
Income, Total Operating Expenses and Net Profit of CCCB ltd. Chanasma for the same
period mentioned above. Chart 5.23 shows graphical presentation of trend analysis as
shown in the table no.5.127.
From the above Common Size Analysis of bank’s profit and loss account the
researcher found that out of the total operating income of the bank the major income is
interest and discount income. During the last 10 years average interest income was
remained 99.05 percent of the total operating income. Highest percentage of interest and
discount income with total operating income was found during the period of study 99.47
percent in the year 2012-13 and lowest percentage found 98.35 in the year 2005-06. Share
of other income in total operating income was found during the period of study on an
average 1 percent only.
On the other hand average percentage of total operating expenses including various
provisions on total operating income was found 89.37 percent during the period of study.
And therefore average net profit during the period of study was found 10.63 percent of the
total operating income. Major expenses of the bank were found interest on deposits and
borrowing and employee’s related expenses like salary, provident fund etc. Average
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
180.00P
erce
nta
ge
Years
Chart 5.23 Trend analysis of P/L accounts of CCCB
Trend Ratio of Total
Operating Income
Trend Ratio of Total
Operating Expenses
Trend Ratio of Net Profit
Financial Performance Analysis Page | 314
interest expenses during the period of study were 55.98 percent of the total income and
average employee related expenses were 19.35 percent of the total income. With the help
of this statistic the researcher can conclude that overall 75 percent of the total income was
interest expenses and employee’s expenses while 25 percent of the total operating income
was other operating expenditure and provisions included in total operating expenses of the
bank.
From the above table 5.111 the researcher also seen that average percentage of net
profit during the period of study was remained 10.64 percent of total operating income of
the bank. The highest net profit to total operating income percentage was found during last
10 years was 17.22 percent in the year 2003-04 and lowest percentage was found 6.72 in
the year 2006-07.
From the trend analysis of the bank’s profit and loss account shown in the above
table and chart the researcher can conclude that the total operating income, total operating
expenses shown parallel and mixed trend of increasing and decreasing from 2003-04 to
2012-13. From the above chart 5.23 it is clear that operating expenses increase with
increase in operating income and vice versa. There is a positive correlation between
Operating income and Operating expenses of the bank. Correlation coefficient between
operating income and operating expenses determined 0.9899. So the researcher can
conclude operating expenses are strongly correlated with operating income and also
depend on operating income.
Trend percentage Net profit shown fluctuating trend during the period of study. It
also found positively correlated with operating income and operating expenses of the
bank. Correlation coefficient between operating income and operating expenses with net
profit determined 0.577 and 0.457 respectively. Zigzag shape of profit trend percentage
line indicate that net profit of the bank increase and decrease during the period of the study
as compare to 2003-04. It also indicate that net profit is not completely depend on
operating income and operating expenses of the bank but other factors also affect on net
profit of the bank. Finally at the end of the March 2013 net profit of the bank has
decreased by 22 percent as compare to base year 2003-04. During ten years trend
percentage line of net profit showing profit has been decreased two times and increased
eight times.
Financial Performance Analysis Page | 315
(II) Common size Balance sheets of CCCB Ltd. Chanasma:
Table 5.128
`in Lakhs
Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Liabilities:
Share Capital (`100 each) 68.30 71.20 73.78 68.96 70.79 72.01 77.83 87.05 90.03 95.43
Percentages of Total Liabilities 3.17 3.50 4.29 4.28 4.16 3.82 3.66 3.63 3.33 3.19
Reserve and Surplus 143.75 162.82 171.43 172.25 190.63 195.03 200.97 209.30 218.37 230.18
Percentages of Total Liabilities 6.67 8.01 9.96 10.70 11.19 10.36 9.44 8.72 8.08 7.69
Deposits 1696.40 1383.88 1217.80 1076.81 1205.40 1373.79 1601.61 1846.77 2119.22 2374.21
Percentages of Total Liabilities 78.73 68.10 70.73 66.89 70.76 72.96 75.23 76.92 78.44 79.31
Borrowings 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentages of Total Liabilities 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Bill For collection (Contra) 4.71 1.69 3.38 4.19 3.29 5.89 1.88 3.56 4.94 3.65
Percentages of Total Liabilities 0.22 0.08 0.20 0.26 0.19 0.31 0.09 0.15 0.18 0.12
Branch Adjustments 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentages of Total Liabilities 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Overdue Interest Prov. 27.46 22.81 19.60 17.67 19.58 22.00 20.50 24.75 29.50 30.25
Percentages of Total Liabilities 1.27 1.12 1.14 1.10 1.15 1.17 0.96 1.03 1.09 1.01
Interest Payable 1.51 7.48 3.32 8.52 10.46 1.67 4.16 3.20 7.04 12.08
Percentages of Total Liabilities 0.07 0.37 0.19 0.53 0.61 0.09 0.20 0.13 0.26 0.40
Other Liabilities 68.30 71.20 73.78 68.96 70.79 72.01 77.83 87.05 90.03 95.43
Percentages of Total Liabilities 3.17 3.50 4.29 4.28 4.16 3.82 3.66 3.63 3.33 3.19
Other Funds Staff Related 17.68 34.29 24.39 17.14 18.32 19.64 19.07 23.51 14.14 21.17
Percentages of Total Liabilities 0.82 1.69 1.42 1.06 1.08 1.04 0.90 0.98 0.52 0.71
Financial Performance Analysis Page | 316
Provisions 158.85 327.84 187.05 233.25 171.89 176.42 182.32 180.27 192.52 198.61
Percentages of Total Liabilities 7.37 16.13 10.86 14.49 10.09 9.37 8.56 7.51 7.13 6.63
Profit and Loss Account 36.00 20.00 21.00 11.00 13.25 16.40 20.50 22.37 26.12 28.10
Percentages of Total Liabilities 1.67 0.98 1.22 0.68 0.78 0.87 0.96 0.93 0.97 0.94
Total 2154.66 2032.01 1721.75 1609.79 1703.61 1882.85 2128.84 2400.78 2701.88 2993.68
Percentages of Total Liabilities 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Assets:
Cash and Bank Balance 220.77 216.92 153.60 137.14 71.91 74.55 65.14 88.30 113.75 135.21
Percentages of Total Assets 10.25 10.68 8.92 8.52 4.22 3.96 3.06 3.68 4.21 4.52
Call Money 200.00 100.00 50.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentages of Total Assets 9.28 4.92 2.90 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Investments 669.80 572.85 575.18 577.78 767.36 903.00 964.85 1029.63 1297.38 1409.41
Percentages of Total Assets 31.09 28.19 33.41 35.89 45.04 47.96 45.32 42.89 48.02 47.08
Advances 1006.80 1094.41 902.25 860.24 834.65 874.30 1082.19 1259.78 1269.03 1427.35
Percentages of Total Assets 46.73 53.86 52.40 53.44 48.99 46.43 50.83 52.47 46.97 47.68
Interest Receivable 20.12 18.15 15.20 12.40 13.10 15.59 4.93 8.37 5.70 7.90
Percentages of Total Assets 0.93 0.89 0.88 0.77 0.77 0.83 0.23 0.35 0.21 0.26
Bills Receivables (Contra) 4.71 1.69 3.38 4.19 3.29 5.89 1.88 3.56 4.94 3.65
Percentages of Total Assets 0.22 0.08 0.20 0.26 0.19 0.31 0.09 0.15 0.18 0.12
Assets (After Depreciation) 27.93 23.74 18.99 15.19 12.15 8.60 7.82 8.99 9.10 7.63
Percentages of Total Assets 1.30 1.17 1.10 0.94 0.71 0.46 0.37 0.37 0.34 0.25
Other Assets 4.53 4.25 3.15 2.85 1.15 0.92 2.03 2.15 1.98 2.53
Percentages of Total Assets 0.21 0.21 0.18 0.18 0.07 0.05 0.10 0.09 0.07 0.08
Total 2154.66 2032.01 1721.75 1609.79 1703.61 1882.85 2128.84 2400.78 2701.88 2993.68
Percentages of Total Assets 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Financial Performance Analysis Page | 317
Trend Percentages:
Trend Percentage of Capital 100.00 104.25 108.02 100.97 103.65 105.43 113.95 127.45 131.82 139.72
Trend Percentage of Reserves 100.00 113.27 119.26 119.83 132.61 135.67 139.81 145.60 151.91 160.13
Trend Percentage of Deposits 100.00 81.58 71.79 63.48 71.06 80.98 94.41 108.86 124.92 139.96
Trend Percentage of Advances 100.00 108.70 89.62 85.44 82.90 86.84 107.49 125.13 126.05 141.77
Trend Percentage of Investments 100.00 85.53 85.87 86.26 114.57 134.82 144.05 153.72 193.70 210.42
(Source: Calculated from the published annual reports of CCCB ltd. Chanasma of last 10 years)
(2003-04 is base year for trend percentages)
0.00
50.00
100.00
150.00
200.00
250.00
2003-042004-052005-062006-072007-082008-092009-102010-112011-122012-13
Per
cen
tag
e
Years
Chart 5.24 Trend Analysis of Balance sheet of CCCB Chanasma
Trend Percentage of Capital
Trend Percentage of Reserve and Surplus
Trend Percentage of Deposits
Trend Percentage of Advances
Trend Percentage of Investments
Financial Performance Analysis Page | 318
Above table 5.128 shows Common Size Balance sheet of The Chanasma
Commercial Cooperative Bank Ltd. Chanasma of last 10 years from 2003-04 to 2012-13.
It also shows the trend percentage analysis of major items of the balance sheet. Chart 5.24
shows graphical presentation of the trend percentage analysis shown in the table no. 5.128.
From the above Common Size Analysis of the balance sheet it is clear that
liabilities side of the balance sheet the most important items are deposits and reserve &
surplus. Out of the total funds invested in the bank’s assets major portion provided by
Deposits and Reserves. During this period highest percentage of deposits with total asset
was 79.31 in the year 2012-13 and lowest percentage was found 66.89 in the year 2006-
07. During the period of study lowest percentage of reserves found 6.67 in the year 2003-
04 and highest 11.19 percent in the years 2007-08. Overall average 84 percent of the total
assets of the bank financed by these two components i.e. share of the other items in the
balance sheet was 16 percent average during last 10 years from 2003-04 to 2012-13.
During the last 10 years borrowings of the bank remained zero. The major liabilities in the
bank were found deposits only. Average Percentage of share capital in total of the balance
sheet of 10 years remained 3.70 only.
On the assets side of the balance sheet of the main items are investments and
advances. Above Common size analysis of the balance sheet of the CCCB Ltd. Chanasma
state that during the period of last 10 years proportion of investment and advances in total
assets on an average 90 percent and proportion of other items in the balance sheet on an
average only 10 percent of the total assets during last 10 years. During the period of study
highest percentages of Investment and Advances with total assets are found 47.96, and
53.86 in the year 2008-09 and 2004-05 respectively. On the other hand lowest percentages
are remained 28.19 and 46.43 in the year 2004-05 and 2008-09 respectively. The bank has
call money in the years 2003-04, 2004-05 and 2005-06 `200 lakhs, `100 Lakhs and `50
lakhs. Bank did not have call money from the year 2006-07 to 2012-13. Average
percentage of cash and bank balance of the bank of last 10 years was remained 6.20.
Chart 5.24 shows trend analysis of the major items of balance sheets of
CCCB ltd. Chanasma of last 10 years. Trend percentage line of share capital of the bank
shows that share capital of the bank increased continuously during the period of the study
in the years 2003-04 it was `68.30 which increased to `95.43 in the year 2012-13. Share
capital of the bank increased by 39.72 percent as compare to base year 2003-04.
Increasing trend of the share capital indicate that financial position of the bank become
Financial Performance Analysis Page | 319
strong. Reserve and surplus shows continuous increasing trend. As compare to the base
year 2003-04 reserves and surplus of the bank has increased by 60.13 percent in the year
2012-13. Continuous increase in reserves makes bank’s financial position more strong.
Deposit line in above chart no. 5.24 indicates that deposit of the bank decreased
continuously till 2006-07 than it start increasing continuously and finally stop at 139.96. It
state that finally deposits of the bank has increased by 39.96 percent as compare to base
year 2003-04 at the end of the year 2012-13. On the other hand advances of the bank
shows mixed trend of increasing and decreasing during the period of the study. But over
all advances of the bank has increased by 41.77 percent in the year 2012-13 as compare to
base year 2003-04. Normally banks uses it deposits for the purpose of providing advances
to its customers. The bank uses its deposits well to provide advances to its customers. To
know that the researcher has calculated Co-relation co-efficient determined between
deposits which was 0.9357. It indicates that there is good positive co-relation between
deposits accepted by bank and advances provided by bank to its customers. The
researcher can conclude here that advances of the bank depend on deposits of the bank.
Investments of the bank shown mixed trend during the period of the study. As
compare to the year 2003-04 it increased by 110.42 percent in the year 2012-13. It shows
decreasing trend in the years 2004-05 to 2006-07 than after it shows increasing trend of
investment of the bank.
Financial Performance Analysis Page | 320
10. FINANCIAL PERFORMANCE OF ‘‘THE SARVODAYA
COMMERCIAL CO-OPERATIVE BANK LTD. MEHSANA’ (SCCB):
10.1 Ratio Analysis of SCCB Ltd. Mehsana:
(I) Credit Deposit Ratio (CDR):
Formula:
Table 5.129
Table showing CDR of SCCB of last 10 years
Year Total Advances
(` in Lakhs)
Total Deposit
(` in Lakhs)
CDR
(%)
2003-04 5919.19 9997.77 59.21
2004-05 5123.93 9832.44 52.11
2005-06 4455.16 9735.68 45.76
2006-07 4696.65 9626.84 48.79
2007-08 4672.42 11894.36 39.28
2008-09 8778.94 13901.67 63.15
2009-10 11060.75 15285.33 72.36
2010-11 14523.00 19503.49 74.46
2011-12 17852.90 24281.73 73.52
2012-13 24303.32 33755.00 72.00
Average 60.00 (Source: Computed from Annual Reports of SCCB of last 10 Years)
Table no. 5.129 shows credit deposit ratio of The SCCB Ltd. Mehsana for 10
years from 2003-04 to 2012-13. From above the table it is clear that bank’s credit deposit
ratio remained between 45 to 75 percent. Average percentage of last 10 years CDR was
60. It indicates SCCB uses its deposits on an average 60 percentage to give advances to
their customers during the period of study of last 10 years from 2003-04 to 2012-13.
Highest CDR found 74.46 percent in the year 2010-11 and lowest percentage of CDR
found 45.76 percent in the year 2005-06.
(II) Capital Adequacy Ratio (CAR)/ Capital to Risk (Weighted) Assets Ratio
(CRAR):
Formula:
Financial Performance Analysis Page | 321
Table 5.130
Table showing CAR of SCCB of last 10 years
Years Tier I Capital
(` in Lakhs)
Tier II Capital
(` in Lakhs)
Total TI+TII
(` in Lakhs)
RWA
(` in Lakhs)
CAR
(%)
2003-04 1917.37 40.21 1957.58 13660.71 14.33
2004-05 1964.17 60.55 2024.72 10956.28 18.48
2005-06 2156.53 65.88 2222.41 10414.29 21.34
2006-07 2226.64 75.56 2302.20 11586.31 19.87
2007-08 2414.98 80.88 2495.86 11009.53 22.67
2008-09 2435.39 88.09 2523.48 12504.86 20.18
2009-10 2660.67 97.45 2758.12 12474.54 22.11
2010-11 2777.06 127.28 2904.34 14010.32 20.73
2011-12 2969.69 244.50 3214.19 15437.99 20.82
2012-13 3355.13 295.19 3650.32 22380.87 16.31
Average 19.68
(Source: Computed from Annual Reports of SCCB of last 10 Years)
Minimum CAR required for any Urban Co-operative Bank is 9 percent after 2005
according to RBI and Basel committee report. Above table 5.130 shows CAR of SCCB
Ltd. Mehsana in all the years of the period of study from 2003-04 to 2012-13 found more
than 9 percent i.e. more than required rate as per RBI. Average CAR of the 10 years
period was 19.68 percent it also more than 9 percent it shows good financial adequacy of
the bank during the period of study. From the above table 5.130 the researcher can clearly
observed that CAR of the bank neither continuously increase nor decrease. In the year
2003-04 it was 14.33 percent and it increased to 22.67 percent in the year 2007-08 and in
the year 2012-13 it was 16.31 percent. During the period of the study highest CAR of the
bank found in the year 2009-10; 22.67 percent and lowest ratio 14.33 percent found in the
year 2003-04.
(III) Interest Income to Total Income Ratio:
Formula:
Financial Performance Analysis Page | 322
Table 5.131
Table showing IITIR of SCCB of last 10 years
Year Total Interest
(` in Lakhs)
Total Income
(` in Lakhs)
IITIR
(%)
2003-04 1466.36 1486.44 98.65
2004-05 1386.85 1405.08 98.70
2005-06 1406.26 1428.84 98.42
2006-07 1397.46 1428.72 97.81
2007-08 1427.98 1455.72 98.09
2008-09 1439.95 1472.05 97.82
2009-10 1690.46 1725.21 97.99
2010-11 2014.60 2087.31 96.52
2011-12 2549.82 2617.04 97.43
2012-13 3465.23 3543.32 97.80
Average 97.92
(Source: Calculated from Annual Reports of SCCB of last 10 Years)
Above table shows that out of the total income of The SCCB Ltd. Mehsana on an
average 97.92 percent income was interest and discount income during last ten years from
2003-04 to 2012-13. During the period of the study highest interest income to total income
ratio was found 98.70 percent in the year 2004-05 and lowest ratio was 96.52 percent in
the year 2010-11. So the researcher can conclude on the basis of above table that average
interest and discount income of the bank was found more than 98 of the total income of
the bank.
(IV) Interest Expenses to Total Expenses Ratio:
Formula:
Table 5.132
Table showing IETER of SCCB of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Total Expenses
(` in Lakhs)
IETER
(%)
2003-04 845.35 1346.44 62.78
2004-05 839.69 1300.08 64.59
2005-06 765.38 1228.43 62.31
2006-07 729.71 1189.78 61.33
2007-08 656.66 1145.71 57.31
2008-09 670.75 1211.55 55.36
2009-10 751.55 1406.50 53.43
2010-11 946.16 1765.47 53.59
2011-12 1358.65 2295.00 59.20
2012-13 2146.79 3167.47 67.78
Average 59.77
Financial Performance Analysis Page | 323
(Source: Computed from Annual Reports of SCCB of last 10 Years)
In the above table no.5.132 showing interest expenses to total expenses ratio the
highest ratio was found 67.78 percent and lowest ratio was 53.43 percent in the year 2012-
13 and 2009-10 respectively. Average of 10 years ratio was 59.77 percent i.e. on an
average during last 10 years out of total expenses of the bank around 60 percent portion of
total expenses was interest expense on deposits and borrowings i.e. ratio of other operating
expenses with total expenses was average 40 percent.
(V) Net Profit to Net Assets Ratio:
Formula:
Table 5.133
Table showing NPNAR of SCCB of last 10 years
Year Net Profit
(` in Lakhs)
Net Assets
(` in Lakhs)
NPNAR
(%)
2003-04 140.00 2251.89 6.22
2004-05 105.00 2464.27 4.26
2005-06 200.41 2605.23 7.69
2006-07 238.94 2450.67 9.75
2007-08 310.02 2600.25 11.92
2008-09 260.50 2955.72 8.81
2009-10 318.71 3324.80 9.59
2010-11 321.84 3823.64 8.42
2011-12 322.04 4724.66 6.82
2012-13 375.85 5061.42 7.43
Average 8.09 (Source: Computed from Annual Reports of SCCB of last 10 Years)
During last 10 years maximum NPNAR was 11.92 percent in the year 2007-08
and minimum NPNAR was 4.26 percent in the year 2004-05. On an average during the
last 10 years banks has 8.09 percent NPNAR. From the above table 5.133 it is clear that
the NPNAR of the bank remained in fluctuating position during last ten years the period of
the study.
(VI) Earnings per Share:
Formula:
Financial Performance Analysis Page | 324
Table 5.134
Table showing EPS of SCCB of last 10 years
Year Net Profit
(` in Lakhs)
No. of Equity
Share (in Lakhs)
EPS
(`)
2003-04 140.00 4.35 32.15
2004-05 105.00 4.34 24.17
2005-06 200.41 4.47 44.81
2006-07 238.94 4.58 52.13
2007-08 310.02 4.79 64.72
2008-09 260.50 5.06 51.51
2009-10 318.71 9.72 32.80
2010-11 321.84 14.39 22.36
2011-12 322.04 19.05 16.90
2012-13 375.85 20.98 17.91
Average 35.95
(Source: Computed from Annual Reports of SCCB of last 10 Years)
EPS of The SCCB Ltd. Mehsana found `35.95 per share on an average during
last 10 years. Maximum EPS earned by the bank in the year 2007-08 `64.72 per share and
minimum EPS earned by the bank `16.90 in the year 2011-12. Bank has earned average
`35.95 per share annually against the share of `25 each i.e. 143.8 percent.
(VII) Interest Income to Average Working Fund Ratio:
Formula:
Working Fund = Total assets – Bills Receivable and other contra entries
Table 5.135
Table showing IIAWFR of SCCB of last 10 years
Year Total Interest
(` in Lakhs)
AWF
(` in Lakhs)
IIAWFR
(%)
2003-04 1466.36 13687.90 10.71
2004-05 1386.85 13433.57 10.32
2005-06 1406.26 13207.65 10.65
2006-07 1397.46 13250.32 10.55
2007-08 1427.98 14468.99 9.87
2008-09 1439.95 16688.94 8.63
2009-10 1690.46 18722.71 9.03
2010-11 2014.60 21919.43 9.19
2011-12 2549.82 27108.16 9.41
2012-13 3465.23 35056.86 9.88
Average 9.82
(Source: Computed from Annual Reports of SCCB of last 10 Years)
Financial Performance Analysis Page | 325
From the above table 5.135 it is clear that during last 10 year highest interest
income to average working fund ratio is 10.71 percent in the year 2003-04 and lowest ratio
is 8.63 percent in the years 2008-09. Average IIAWFR of the bank is 9.82 percent of last
10 years from 2003-04 to 2012-13 the period of the study.
(VIII) Interest Expenses to Average Working Fund Ratio:
Formula:
Table 5.136
Table showing IEAWFR of SCCB of last 10 years
Year Total Interest Exp.
(` in Lakhs)
AWF
(` in Lakhs)
IEAWFR
(%)
2003-04 845.35 13687.90 6.18
2004-05 839.69 13433.57 6.25
2005-06 765.38 13207.65 5.79
2006-07 729.71 13250.32 5.51
2007-08 656.66 14468.99 4.54
2008-09 670.75 16688.94 4.02
2009-10 751.55 18722.71 4.01
2010-11 946.16 21919.43 4.32
2011-12 1358.65 27108.16 5.01
2012-13 2146.79 35056.86 6.12
Average 5.18 (Source: Computed from Annual Reports of SCCB of last 10 Years)
Above table shows that during last 10 year highest interest expenses to average
working fund ratio is found 6.25 percent and lowest ratio is 4.01 percent in the year 2004-
05 and 2009-10 respectively. On an average bank has 5.18 percent ratio of interest
expenses to average working fund annually. Interest income ratio average 9.82 percent
against it average interest expense ratio 5.18 percent of last ten years of bank i.e. the bank
has average earning gap of interest 4.64 percent on average working fund.
(IX) Gross Profit to Average Working Fund Ratio:
Formula:
Financial Performance Analysis Page | 326
Table 5.137
Table showing GPAWFR of SCCB of last 10 years
Year Gross Profit
(` in Lakhs)
AWF
(` in Lakhs)
GPAWFR
(%)
2003-04 234.49 13687.90 1.71
2004-05 165.65 13433.57 1.23
2005-06 255.95 13207.65 1.94
2006-07 280.15 13250.32 2.11
2007-08 342.43 14468.99 2.37
2008-09 306.15 16688.94 1.83
2009-10 349.49 18722.71 1.87
2010-11 344.59 21919.43 1.57
2011-12 366.29 27108.16 1.35
2012-13 445.91 35056.86 1.27
Average 1.73 (Source: Computed from Annual Reports of SCCB of last 10 Years)
Above table shows that the highest GPAWFR of the bank is 2.37 percent in the
year 2007-08 and lowest ratio is 1.23 percent in the year 2004-05. Average GPAWFR
remained 1.73 percent of last 10 years from 2003-04 to 2012-13.
(X) Net Profit to Average Working Fund Ratio:
Formula:
Table 5.138
Table showing NPAWFR of SCCB of last 10 years
Year Net Profit
(` in Lakhs)
AWF
(` in Lakhs)
NPAWFR
(%)
2003-04 140.00 13687.90 1.02
2004-05 105.00 13433.57 0.78
2005-06 200.41 13207.65 1.52
2006-07 238.94 13250.32 1.80
2007-08 310.02 14468.99 2.14
2008-09 260.50 16688.94 1.56
2009-10 318.71 18722.71 1.70
2010-11 321.84 21919.43 1.47
2011-12 322.04 27108.16 1.19
2012-13 375.85 35056.86 1.07
Average 1.43 (Source: Computed from Annual Reports of SCCB of last 10 Years)
Financial Performance Analysis Page | 327
Above table 5.138 shows that the highest NPAWFR of the bank is 2.14 percent in
the year 2007-08, and lowest 1.02 percent in the year 2003-04 and average NPAWFR of
the bank 1.43 percent of last 10 years from 2003-04 to 2012-13 i.e. bank has earned 1.43
percent of its average working fund as net profit during last 10 years the period of study on
an average.
(XI) Employee Cost to Average Working Fund Ratio:
Formula:
Table 5.139
Table showing ECAWFR of SCCB of last 10 years
Year Employee exp.
(` in Lakhs)
AWF
(` in Lakhs)
ECAWFR
(%)
2003-04 329.76 13687.90 2.41
2004-05 330.46 13433.57 2.46
2005-06 331.41 13207.65 2.51
2006-07 333.47 13250.32 2.52
2007-08 338.57 14468.99 2.34
2008-09 340.42 16688.94 2.04
2009-10 405.64 18722.71 2.17
2010-11 425.91 21919.43 1.94
2011-12 472.02 27108.16 1.74
2012-13 517.38 35056.86 1.48
Average 2.16 (Source: Computed from Annual Reports of SCCB of last 10 Years)
From the above table, showing ratios of employee cost to average working fund of
last 10 years of the bank it is clear that average employee cost of the bank on average
working fund is 2.16 percent per annum. During last 10 years highest ECAWFR 2.52
percent in the year 2006-07 and lowest ratio 1.48 percent in the year 2012-13.
(XII) Cost of Deposit Ratio:
Formula:
Financial Performance Analysis Page | 328
Table 5.140
Table showing CoDR of SCCB of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Average Deposits
(` in Lakhs)
CoDR
(%)
2003-04 845.35 10093.12 8.38
2004-05 839.69 9935.16 8.45
2005-06 765.38 9806.92 7.80
2006-07 729.71 9839.06 7.42
2007-08 656.66 11020.60 5.96
2008-09 670.75 13058.02 5.14
2009-10 751.55 14658.50 5.13
2010-11 946.16 17429.43 5.43
2011-12 1358.65 21917.64 6.20
2012-13 2146.79 29169.90 7.36
Average 6.73 (Source: Calculated from Annual Reports of SCCB of last 10 Years)
From the above table showing cost of deposit ratio it was found that the
percentages of Interest on Average Deposits during last 10 years highest 8.45 percent in
the year 2004-05 and lowest 5.13 percent in the year 2009-10 and average cost of deposits
last 10 years of the bank remained 6.73 percent.
(XIII) Summary of the above Ratios of SCCB Mehsana:
Table 5.141
A summary of all the ratios of SCCB Calculated above Y
ears
CD
R (%
)
CA
R (%
)
IITIR
(%)
IET
ER
(%)
NP
NA
R (%
)
EP
S (`
)
IIAW
FR
(%)
IEA
WF
R (%
)
GP
AW
FR
(%)
NP
AW
FR
(%)
EC
AW
FR
(%)
CO
DR
(%)
03-04 59.21 14.33 98.65 62.78 6.22 32.15 10.71 6.18 1.71 1.02 2.41 8.38
04-05 52.11 18.48 98.70 64.59 4.26 24.17 10.32 6.25 1.23 0.78 2.46 8.45
05-06 45.76 21.34 98.42 62.31 7.69 44.81 10.65 5.79 1.94 1.52 2.51 7.80
06-07 48.79 19.87 97.81 61.33 9.75 52.13 10.55 5.51 2.11 1.80 2.52 7.42
07-08 39.28 22.67 98.09 57.31 11.92 64.72 9.87 4.54 2.37 2.14 2.34 5.96
08-09 63.15 20.18 97.82 55.36 8.81 51.51 8.63 4.02 1.83 1.56 2.04 5.14
09-10 72.36 22.11 97.99 53.43 9.59 32.80 9.03 4.01 1.87 1.70 2.17 5.13
10-11 74.46 20.73 96.52 53.59 8.42 22.36 9.19 4.32 1.57 1.47 1.94 5.43
11-12 73.52 20.82 97.43 59.20 6.82 16.90 9.41 5.01 1.35 1.19 1.74 6.20
12-13 72.00 16.31 97.80 67.78 7.43 17.91 9.88 6.12 1.27 1.07 1.48 7.36
Avg. 60.06 19.68 97.92 59.77 8.09 35.95 9.82 5.18 1.73 1.43 2.16 6.73
Financial Performance Analysis Page | 329
10.2 NPA Management of the SCCB Mehsana:
Table 5.142
Table showing NPA Management of SCCB Mehsana of last 10 years
Yea
rs
Tota
l
Ad
van
ces
(` i
n L
ak
hs)
Gro
ss N
PA
(` i
n L
ak
hs)
Gro
ss N
PA
(%) Total Provision
(`in Lakhs)
NE
T N
PA
(`in
La
kh
s)
NE
T N
PA
(%)
1 2 1/2x100 Std.
Assets NPA
Total
SA+NPA
03-04 5919.19 1482.30 25.04 23.69 433.12 456.81 1025.49 18.77
04-05 5123.93 1380.00 26.93 22.50 456.80 479.30 900.70 19.39
05-06 4455.16 922.00 20.70 22.50 470.67 493.17 428.83 10.82
06-07 4696.65 470.00 10.01 23.50 489.56 513.06 -43.06 -1.03
07-08 4672.42 270.00 5.78 23.50 510.44 533.94 -263.94 -6.38
08-09 8778.94 152.00 1.73 35.12 535.65 570.77 -418.77 -5.10
09-10 11060.75 124.00 1.12 44.24 545.96 590.20 -466.20 -4.45
10-11 14523.00 88.00 0.61 58.09 637.94 696.03 -608.03 -4.40
11-12 17852.90 118.00 0.66 71.42 695.01 766.43 -648.43 -3.79
12-13 24303.32 59.00 0.24 97.22 584.58 681.80 -622.80 -2.64
(Calculated from the information available in annual reports of the Bank)
In the above table Net NPA in (`) and NET NPA in (%) calculated as under
25
.04
26
.93
20
.70
10
.01
5.7
8
1.7
3
1.1
2
0.6
1
0.6
6
0.2
4
18
.77
19
.39
10
.82
-1.0
3
-6.3
8
-5.1
0
-4.4
5
-4.4
0
-3.7
9
-2.6
4
-10.00
-5.00
0.00
5.00
10.00
15.00
20.00
25.00
30.00
Gro
ss a
nd
Net
NP
A (
%)
Years
Chart 5.25 Gross and Net NPA of SCCB Mehsana
Gross NPA
Net NPA
Financial Performance Analysis Page | 330
Above table no. 5.142 and chart no. 5.25 shows the Non Performing Assets
management of The Sarvodaya Commercial Co-operative Bank Ltd. Mehsana during the
period of the study from the year 2003-04 to 2012-13. It shows Gross NPA, Net NPA in
amount and in percentage also. It also shown provision maintain by the bank against non
performing assets.
As per recent guidelines from RBI Net NPA should be less than 5 percent to
pay dividend and Gross NPA should be less than 10% to avoid supervisory action from
RBI. From the above table 5.142 and chart 5.25 the researcher can observed that Gross
NPA of The SCCB Mehsana is Less than 10 percent in the year 2007-08 to 2012-13. It
was a great achievement for the bank that bank has maintained its GNPA less than 10
percent in continuous last six years. During the period of the study the highest GNPA
found 26.93 percent in the year 2004-05 and lowest percentage of GNPA found 0.24 in
the year 2012-13. From the above statistic the researcher can conclude that recovery and
collection policy of the bank improved too good during the period of the study.
Therefore bank got success to minimize its GNPA from 26.93 percent to 0.24 percent
only.
Net NPA of the bank should be less than 5 percent as per RBI rules. During
the period of the study from 2003-04 to 2012-13 the researcher found that the Net NPA
of the bank was in negative percentage i.e. not only less than 5 percent but less than zero
from 2006-07 to 2012-13. Bank has maintained its Net NPA zero continuously from last
7 years it was a great achievement for the bank.
From the above discussion and observation of chart and table the researcher
can said that the NPA management of the bank found very good during the period of the
study from 2003-04 to 2012-13. Bank has maintained not only enough but more than
enough provision against non performing assets of the bank according to the rules and
regulation suggested by RBI time to time. Therefore Net NPA of the bank found zero
from last 7 continuous years and Gross NPA less than 10 percent from last 6 continuous
years. Apart from this the researcher found that GNPA of the bank reduced constantly
and it reaches at 0.24 percent in the year 2012-13.
Financial Performance Analysis Page | 331
10.3 Common Size Statement and Trend Analysis of SCCB Ltd. Mehsana:
(I) Common Size Income Statement of ‘The SCCB Ltd.’:
Table: 5.143
`in Lakhs
Particulars Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Incomes:
Interest and discount 1466.36 1386.85 1406.26 1397.46 1427.98 1439.95 1690.46 2014.60 2549.82 3465.23
Percentage of Total Income 98.65 98.70 98.42 97.81 98.09 97.82 97.99 96.52 97.43 97.80
Commission, Exchange & Brokerage 11.76 10.81 12.10 11.11 11.86 13.42 12.35 13.12 9.95 11.88
Percentage of Total Income 0.79 0.77 0.85 0.78 0.81 0.91 0.72 0.63 0.38 0.34
Other Receipts 8.32 7.42 10.48 20.15 15.88 18.68 22.40 59.59 57.27 66.21
Percentage of Total Income 0.56 0.53 0.73 1.41 1.09 1.27 1.30 2.85 2.19 1.87
Total (A) 1486.44 1405.08 1428.84 1428.72 1455.72 1472.05 1725.21 2087.31 2617.04 3543.32
Percentage of Total Income 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Expenditures:
Interests on Deposits, Borrowings 845.35 839.69 765.38 729.71 656.66 670.75 751.55 946.16 1358.65 2146.79
Percentage of Total Income 56.87 59.76 53.57 51.07 45.11 45.57 43.56 45.33 51.92 60.59
Salary, Allowances, provident fund and staff welfare 329.76 330.46 331.41 333.47 338.57 340.42 405.64 425.91 472.02 517.38
Percentage of Total Income 22.18 23.52 23.19 23.34 23.26 23.13 23.51 20.40 18.04 14.60
Seating fees of Directors and meeting fees 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentage of Total Income 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Rents, Rates, Insurance, Electricity etc. 20.02 20.02 21.20 21.45 23.45 25.70 32.80 38.38 46.38 54.13
Percentage of Total Income 1.35 1.42 1.48 1.50 1.61 1.75 1.90 1.84 1.77 1.53
Legal fees 0.51 0.55 0.32 0.45 0.55 0.65 0.70 0.74 1.85 0.96
Percentage of Total Income 0.03 0.04 0.02 0.03 0.04 0.04 0.04 0.04 0.07 0.03
Financial Performance Analysis Page | 332
Postage, Telephone, etc. 1.23 1.30 1.28 1.55 1.60 1.62 2.50 2.97 3.34 4.31
Percentage of Total Income 0.08 0.09 0.09 0.11 0.11 0.11 0.14 0.14 0.13 0.12
Audit Fees, Internal Audit fees 1.56 1.62 1.71 1.81 1.94 2.05 3.05 4.09 3.34 3.08
Percentage of Total Income 0.10 0.12 0.12 0.13 0.13 0.14 0.18 0.20 0.13 0.09
Depreciation and Repairs to property 30.80 27.34 31.23 35.21 33.22 35.45 35.55 40.54 62.09 71.87
Percentage of Total Income 2.07 1.95 2.19 2.46 2.28 2.41 2.06 1.94 2.37 2.03
Printing Stationary, Advertisement 2.28 1.89 1.93 3.40 6.50 8.41 9.51 11.38 8.05 8.48
Percentage of Total Income 0.15 0.13 0.14 0.24 0.45 0.57 0.55 0.55 0.31 0.24
Provisions 94.49 60.65 55.54 41.21 32.42 45.65 30.78 22.75 44.25 70.06
Percentage of Total Income 6.36 4.32 3.89 2.88 2.23 3.10 1.78 1.09 1.69 1.98
Other expenses 20.44 16.56 18.43 21.52 50.80 80.85 134.42 272.55 295.03 290.41
Percentage of Total Income 1.38 1.18 1.29 1.51 3.49 5.49 7.79 13.06 11.27 8.20
Total Expenses (B) 1346.44 1300.08 1228.43 1189.78 1145.71 1211.55 1406.5 1765.47 2295 3167.47
Percentage of Total Income 90.58 92.53 85.97 83.28 78.70 82.30 81.53 84.58 87.69 89.39
Net Profit (A-B) 140 105 200.41 238.94 310.01 260.5 318.71 321.84 322.04 375.85
Percentage of Total Income 9.42 7.47 14.03 16.72 21.30 17.70 18.47 15.42 12.31 10.61
Trend Percentage: Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Trend Ratio of Total Operating Income 100.00 94.53 96.12 96.12 97.93 99.03 116.06 140.42 176.06 238.38
Trend Ratio of Total Operating Expenses 100.00 96.56 91.24 88.36 85.09 89.98 104.46 131.12 170.45 235.25
Trend Ratio of Net Profit 100.00 75.00 143.15 170.67 221.44 186.07 227.65 229.89 230.03 268.46
(Source: Calculated from the published annual reports of SCCB Ltd. Mehsana of last 10 years)
(2003-04 is base year for trend percentages)
Financial Performance Analysis Page | 333
Above table 5.143 shows Common Size Analysis of Income Statement (profit and
loss account) of The Sarvodaya Commercial Co-operative Bank Ltd. Mehsana for 10 years
from 2003-04 to 2012-13 and it also shows Trend Analysis of Total Operating Income,
Total Operating Expenses and Net Profit of SCCB ltd. Mehsana for the same period
mentioned above. Chart 5.26 shows graphical presentation of trend analysis as shown in
the table no.5.143.
From the above Common Size Analysis of bank’s profit and loss account the
researcher found that out of the total operating income of the bank the major income is
interest and discount income. During the last 10 years average interest income was
remained 97.92 percent of the total operating income. Highest percentage of interest and
discount income with total operating income was found during the period of study 98.70
percent in the year 2004-05 and lowest percentage found 96.52 in the year 2008-09. Share
of other income in total operating income was found during the period of study on an
average 2.08 percent only.
On the other hand average percentage of total operating expenses including various
provisions on total operating income was found 85.66 percent during the period of study.
And therefore average net profit during the period of study was found 14.34 percent of the
total operating income. Major expenses of the bank were found interest on deposits and
borrowing and employee’s related expenses like salary, provident fund etc. Average
interest expenses during the period of study were 51.33 percent of the total income and
average employee related expenses were 21.52 percent of the total income. With the help
0.00
50.00
100.00
150.00
200.00
250.00
300.00
Per
cen
tag
e
Years
Chart 5.26 Trend analysis of P/L accounts of SCCB
Trend Ratio of Total
Operating Income
Trend Ratio of Total
Operating Expenses
Trend Ratio of Net Profit
Financial Performance Analysis Page | 334
of above figures the researcher can conclude that overall 73 percent of the total income
was interest expenses and employee’s expenses while 13 percent of the total operating
income was other operating expenditure and provisions included in total operating
expenses of the bank.
From the above table 5.143 the researcher also seen that average percentage of net
profit during the period of study was remained 10.34 percent of total operating income of
the bank. The highest net profit to total operating income percentage was found during last
10 years was 21.30 percent in the year 2007-08 and lowest percentage was found 7.47 in
the year 2004-05.
From the trend analysis of the bank’s profit and loss account shown in the above
table and chart the researcher can make conclusion that the total operating income, total
operating expenses shown parallel and increasing trend from 2005-06 to 2012-13. From
the above chart 5.26 it is clear that operating expenses increase with increase in operating
income and vice versa. There is a strong positive correlation between Operating income
and Operating expenses of the bank. Correlation coefficient between operating income and
operating expenses determined 0.9899. So the researcher can conclude operating expenses
are strongly correlated with operating income and also depend on operating income.
Trend percentage Net profit shown fluctuating trend during the period of study. It
also found positively correlated with operating income and operating expenses of the
bank. Correlation coefficient between operating income and operating expenses with net
profit determined 0.578 and 0.457 respectively. It indicates that net profit of the bank was
not completely depend on operating income and operating expenses of the bank but other
factors also affect on net profit of the bank. Zigzag shape of profit trend percentage line
indicates that net profit of the bank increase and decrease during the period of the study as
compare to 2003-04. Finally at the end of the March 2013 net profit of the bank has
increased by 168.46 percent as compare to base year 2003-04. During ten years trend
percentage line of net profit showing profit has been decreased two times and increased
eight times. So overall it was an increasing trend of profitability of the bank during the
period of the study.
Financial Performance Analysis Page | 335
(II) Common size Balance sheets of SCCB Ltd. Mehsana:
Table 5.144
`in Lakhs
Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Liabilities:
Share Capital (`25 each) 108.85 108.61 111.82 114.59 119.76 126.44 242.95 359.80 476.28 524.55
Percentages of Total Liabilities 0.80 0.81 0.85 0.85 0.77 0.70 1.23 1.48 1.58 1.30
Reserve and Surplus 2143.04 2355.66 2493.41 2336.08 2480.49 2829.28 3081.85 3463.84 4248.38 4536.87
Percentages of Total Liabilities 15.80 17.57 19.00 17.29 15.91 15.74 15.66 14.20 14.13 11.26
Deposits 9997.77 9832.44 9735.68 9626.84 11894.36 13901.67 15285.33 19503.49 24281.73 33755.00
Percentages of Total Liabilities 73.69 73.34 74.18 71.26 76.28 77.34 77.69 79.98 80.78 83.76
Borrowings 0.00 40.11 5.60 310.00 210.00 110.00 20.00 50.04 0.02 303.04
Percentages of Total Liabilities 0.00 0.30 0.04 2.29 1.35 0.61 0.10 0.21 0.00 0.75
Bill For collection (Contra) 31.82 35.40 40.20 50.40 62.33 66.60 70.04 78.02 72.03 87.57
Percentages of Total Liabilities 0.23 0.26 0.31 0.37 0.40 0.37 0.36 0.32 0.24 0.22
Branch Adjustments 100.00 0.00 0.00 149.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentages of Total Liabilities 0.74 0.00 0.00 1.10 0.00 0.00 0.00 0.00 0.00 0.00
Provision for Interest due (Contra) 20.10 29.28 20.95 21.88 28.44 46.70 35.41 37.93 39.75 42.57
Percentages of Total Liabilities 0.15 0.22 0.16 0.16 0.18 0.26 0.18 0.16 0.13 0.11
Interest Payable 260.30 240.32 145.80 251.43 126.24 167.11 180.70 112.14 129.73 151.96
Percentages of Total Liabilities 1.92 1.79 1.11 1.86 0.81 0.93 0.92 0.46 0.43 0.38
Other Liabilities 765.84 660.41 371.24 409.80 360.42 466.40 439.29 458.88 488.11 520.16
Percentages of Total Liabilities 5.64 4.93 2.83 3.03 2.31 2.59 2.23 1.88 1.62 1.29
Profit and Loss Account 140.00 105.00 200.41 238.94 310.02 260.50 318.71 321.84 322.04 375.85
Percentages of Total Liabilities 1.03 0.78 1.53 1.77 1.99 1.45 1.62 1.32 1.07 0.93
Financial Performance Analysis Page | 336
Total 13567.72 13407.23 13125.11 13508.96 15592.06 17974.70 19674.28 24385.98 30058.07 40297.57
Percentages of Total Liabilities 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Assets:
Cash and Bank Balance 905.91 1141.71 1396.76 1097.73 1711.17 1164.08 1088.57 677.92 1107.23 1355.58
Percentages of Total Assets 6.68 8.52 10.64 8.13 10.97 6.48 5.53 2.78 3.68 3.36
Call Money 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentages of Total Assets 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Investments 5352.58 6002.91 6166.17 6529.00 7706.12 7090.42 6540.10 8224.47 9588.63 12991.47
Percentages of Total Assets 39.45 44.77 46.98 48.33 49.42 39.45 33.24 33.73 31.90 32.24
Advances 5919.19 5123.93 4455.16 4696.65 4672.42 8778.94 11060.75 14523.00 17852.90 24303.32
Percentages of Total Assets 43.63 38.22 33.94 34.77 29.97 48.84 56.22 59.55 59.39 60.31
Interest Receivable 221.41 118.20 115.41 122.60 127.90 130.11 130.70 136.72 131.93 207.34
Percentages of Total Assets 1.63 0.88 0.88 0.91 0.82 0.72 0.66 0.56 0.44 0.51
Bills Receivables (Contra) 31.82 35.40 40.20 50.40 62.33 66.60 70.04 78.02 72.03 87.57
Percentages of Total Assets 0.23 0.26 0.31 0.37 0.40 0.37 0.36 0.32 0.24 0.22
Provision for interest due (Contra) 20.10 29.28 20.95 21.88 28.44 46.70 35.41 37.93 39.75 42.57
Percentages of Total Assets 0.15 0.22 0.16 0.16 0.18 0.26 0.18 0.16 0.13 0.11
Assets (After Depreciation) 760.50 694.45 640.00 659.00 603.10 542.79 407.51 446.05 1021.91 1032.29
Percentages of Total Assets 5.61 5.18 4.88 4.88 3.87 3.02 2.07 1.83 3.40 2.56
Other Assets 356.21 261.35 241.46 231.70 351.90 155.06 211.20 131.97 118.69 132.43
Percentages of Total Assets 2.63 1.95 1.84 1.72 2.26 0.86 1.07 0.54 0.39 0.33
Branch Adjustments 0.00 0.00 49.00 0.00 148.68 0.00 0.00 9.90 0.00 0.00
Percentages of Total Assets 0.00 0.00 0.37 0.00 0.95 0.00 0.00 0.04 0.00 0.00
Advanced Income Tax 0.00 0.00 0.00 100.00 180.00 0.00 130.00 120.00 125.00 145.00
Percentages of Total Assets 0.00 0.00 0.00 0.74 1.15 0.00 0.66 0.49 0.42 0.36
Financial Performance Analysis Page | 337
Total 13567.72 13407.23 13125.11 13508.96 15592.06 17974.70 19674.28 24385.98 30058.07 40297.57
Percentages of Total Assets 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Trend Percentage:
Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Trend Percentage of Capital 100.00 99.78 102.73 105.27 110.02 116.16 223.20 330.55 437.56 481.90
Trend Percentage of Reserves 100.00 109.92 116.35 109.01 115.75 132.02 143.81 161.63 198.24 211.70
Trend Percentage of Deposits 100.00 98.33 97.36 96.27 118.95 139.02 152.86 195.04 242.82 337.56
Trend Percentage of Advances 100.00 86.56 75.27 79.35 78.94 148.31 186.86 245.35 301.61 410.59
Trend Percentage of Investments 100.00 112.15 115.20 121.98 143.97 132.47 122.19 153.65 179.14 242.71
(Source: Calculated from the published annual reports of SCCB ltd. Mehsana of last 10 years)
(2003-04 is base year for trend percentages)
0.00
100.00
200.00
300.00
400.00
500.00
600.00
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Per
cen
tag
e
Years
Chart 5.27 Trend Analysis of Balance sheet of SCCB Mehsana
Trend Percentage of Capital
Trend Percentage of Reserve and Surplus
Trend Percentage of Deposits
Trend Percentage of Advances
Trend Percentage of Investments
Financial Performance Analysis Page | 338
Above table 5.144 shows Common Size Balance sheet of The Sarvodaya
Commercial Cooperative Bank Ltd. Mehsana of last 10 years from 2003-04 to 2012-13.
It also shows the trend percentage analysis of major items of the balance sheet. Chart
5.27 shows graphical presentation of the trend percentage analysis shown in the table no.
5.144.
From the above Common Size Analysis of the balance sheet it is clear that
liabilities side of the balance sheet the most important items are deposits and reserve &
surplus. Out of the total funds invested in the bank’s assets major portion provided by
Deposits and Reserves. During this period highest percentage of deposits with total asset
was 83.76 in the year 2012-13 and lowest percentage was found 71.26 in the year 2006-
07. During the period of study lowest percentage of reserves found 11.26 in the year
2012-13 and highest 19 percent in the years 2005-06. Average Percentage of 10 years in
case of Reserves of the bank remained 15.66 percent and in case of deposits it remained
76.83 percent. Overall average 93 percent of the total assets of the bank financed by
these two components i.e. share of the other items in the balance sheet was 7 percent
average during last 10 years from 2003-04 to 2012-13. During the last 10 years
borrowings of the bank remained average 0.57 percent of the total assets of the bank.
Therefore the major liabilities in the bank were found deposits only. Average Percentage
of share capital in total of the balance sheet of 10 years remained 1.04 only.
On the assets side of the balance sheet of the major items are as usual in other
banks of the study, investments and advances. Above Common size analysis of the
balance sheet of the SCCB Ltd. Mehsana state that during the period of last 10 years
share of investment and advances in total assets of the bank remained on an average
86.43 percent and share of other items in the balance sheet on an average only 13.57
percent of the total assets during last 10 years. This 13.57 percent include 6.68 percent
share of cash and bank balance i.e. share of other items are only 6.89 percent only.
During the period of study highest percentages of Investment and Advances with total
assets were found 49.42, and 60.31 in the year 2007-08 and 2012-13 respectively. On the
other hand lowest percentages were found 31.90 and 29.97 in the year 2011-12 and
2007-08 respectively. The bank has zero amount of call money during the period of the
study.
Financial Performance Analysis Page | 339
Chart 5.27 shows trend analysis of the main items of balance sheets of SCCB ltd.
Mehsana of last 10 years. Trend percentage line of share capital of the bank shows
continuous increasing trend of share capital of the bank. In the year 2012-13 share capital
of the bank becomes 4.82 times of the capital in the year 2003-04. Increasing trend of the
share capital indicate that financial position of the bank become strong during the period
of the study. Major increased in share capital has done in last four years of the study
period from 2009-10 to 2012-13. Reserve and surplus also shows continuous increasing
trend. As compare to the base year 2003-04 reserves and surplus of the bank has
increased by 111.70 percent in the year 2012-13. Continuous increase in reserves makes
bank’s solvency position more strong and powerful.
Deposit line in above chart no. 5.27 indicates that deposit of the bank decreased
continuously till 2006-07 than it start increasing continuously and finally stop at 337.56.
It state that finally deposits of the bank has increased by 227.56 percent as compare to
base year 2003-04 at the end of the year 2012-13. During the period of the study the
researcher found that deposits of the bank shows less decreasing and more increasing
trend. It indicates increase in faith of depositors in bank during the period of the study.
On the other hand advances of the bank shows mixed trend of increasing and decreasing
during the period of the study. But over all advances of the bank has increased by 310.59
percent in the year 2012-13 as compare to base year 2003-04. Normally banks uses it
deposits for the purpose of providing advances to its customers. The SCCB uses its
deposits well to provide advances to its customers. The researcher can conclude like that
because the advances trend of the bank same as like deposit. To know that the researcher
has calculated Co-relation co-efficient between deposits advances which was 0.9975. It
indicates that there is strong positive co-relation between deposits accepted by bank and
advances provided by bank to its customers. The researcher can conclude here that
advances of the bank have depended on deposits of the bank.
Investments of the bank shown mixed trend during the period of the study. As
compare to the year 2003-04 it has increased by 142.71 percent in the year 2012-13.
Trend percentage line of Investment shows decreasing trend in the years 2008-09 and
2009-10 only, otherwise it shown increasing trend in all the years of period of the study.
Financial Performance Analysis Page | 340
11. FINANCIAL PERFORMANCE OF ‘‘THE RANDHEJA
COMMERCIAL CO-OPERATIVE BANK LTD.’ (TRCCB):
11.1 Ratio Analysis of TRCCB Ltd. Randheja:
(I) Credit Deposit Ratio (CDR):
Formula:
Table 5.145
Table showing CDR of TRCCBL of last 10 years
Year Total Advances
(` in Lakhs)
Total Deposit
(` in Lakhs)
CDR
(%)
2003-04 294.41 531.12 55.43
2004-05 321.00 528.33 60.76
2005-06 302.06 570.20 52.97
2006-07 320.44 533.54 60.06
2007-08 316.98 470.00 67.44
2008-09 376.28 551.89 68.18
2009-10 441.69 634.89 69.57
2010-11 492.27 724.76 67.92
2011-12 447.99 726.89 61.63
2012-13 408.43 736.83 55.43
Average 61.94 (Source: Computed from Annual Reports of TRCCBL of last 10 Years)
Table no. 5.145 shows credit deposit ratio of TRCCBL Ltd. Randheja for 10
years from 2003-04 to 2012-13. From above the table it is clear that bank’s credit deposit
ratio remained between 51 to 70 percent. Average percentage of last 10 years CDR was
61.94. It indicates TRCCBL uses its deposits on an average 62 percentage to give
advances to their customers during the period of study of last 10 years from 2003-04 to
2012-13. Highest CDR found 69.57 percent in the year 2009-10 and lowest percentage
found 52.97 percent in the year 2005-06.
(II) Capital Adequacy Ratio (CAR)/ Capital to Risk (Weighted) Assets Ratio
(CRAR):
Formula:
Financial Performance Analysis Page | 341
Table 5.146
Table showing CAR of TRCCBL of last 10 years
Years Tier I Capital
(` in Lakhs)
Tier II Capital
(` in Lakhs)
Total TI+TII
(` in Lakhs)
RWA
(` in Lakhs)
CAR
(%)
2003-04 78.87 5.81 84.68 388.62 21.79
2004-05 78.80 5.85 84.65 371.27 22.80
2005-06 80.20 6.20 86.40 371.61 23.25
2006-07 78.56 6.26 84.82 344.10 24.65
2007-08 83.52 7.03 90.55 352.61 25.68
2008-09 89.28 7.35 96.63 365.88 26.41
2009-10 100.43 7.89 108.32 420.50 25.76
2010-11 109.79 8.01 117.80 468.02 25.17
2011-12 124.08 8.55 132.63 535.23 24.78
2012-13 115.71 9.22 124.93 432.73 28.87
Average 24.91
(Source: Computed from Annual Reports of TRCCBL of last 10 Years)
Table 5.146 shows Capital adequacy ratio of TRCCBL for 10 years from 2003-04
to 2012-13. Minimum CAR required for any Urban Co-operative Bank is 9 percent after
2005 according to RBI and Basel committee report. In above table the researcher can
observed that CAR of the bank found more than 9 percent i.e. more than required rate as
per RBI in all the years. Average CAR of the 10 years period was 24.91 percent it also
more than 9 percent it shows good financial adequacy of the bank during the period of
study. From the above table the researcher can clearly observed that CAR of the bank
neither continuously increase nor decrease. But bank has maintained more that 20
percent CAR during the period of the study. During the period of the study highest CAR
of the bank found in the year 2012-13 and lowest ratio of the bank found in the year
2003-04 that was 28.87 percent and 21.79 percent respectively.
(III) Interest Income to Total Income Ratio:
Formula:
Financial Performance Analysis Page | 342
Table 5.147
Table showing IITIR of TRCCBL of last 10 years
Year Total Interest
(` in Lakhs)
Total Income
(` in Lakhs)
IITIR
(%)
2003-04 119.68 129.47 92.44
2004-05 65.71 66.88 98.25
2005-06 63.86 65.16 98.00
2006-07 65.12 66.78 97.51
2007-08 63.45 65.87 96.32
2008-09 67.85 69.32 97.88
2009-10 78.88 80.54 97.94
2010-11 90.63 92.06 98.45
2011-12 95.37 96.49 98.84
2012-13 93.82 94.83 98.93
Average 97.45
(Source: Calculated from Annual Reports of TRCCBL of last 10 Years)
Above table shows that out of the total income of TRCCBL Ltd. Randheja on an
average 97.45 percent income was interest and discount income during last ten years
from 2003-04 to 2012-13. During the period of the study highest interest income to total
income ratio was found 98.93 percent in the year 2012-13 and lowest ratio was 92.44
percent in the year 2003-04. So the researcher can conclude on the basis of above table
that average interest and discount income of the bank was average 97.45 percent of the
total income of the bank and other income of were only 2 percent of the total income of
the bank.
(IV) Interest Expenses to Total Expenses Ratio:
Formula:
Table 5.148
Table showing IETER of TRCCBL of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Total Expenses
(` in Lakhs)
IETER
(%)
2003-04 109.51 121.14 90.40
2004-05 53.12 63.08 84.21
2005-06 48.20 61.30 78.63
2006-07 46.96 65.59 71.60
2007-08 40.39 61.46 65.72
2008-09 46.35 63.58 72.90
2009-10 54.98 72.59 75.75
2010-11 61.43 82.92 74.08
2011-12 60.13 83.55 71.97
2012-13 65.21 84.83 76.88
Average 76.21
(Source: Computed from Annual Reports of TRCCBL of last 10 Years)
Financial Performance Analysis Page | 343
The above table no.5.148 showing interest expenses to total expenses ratio the
highest ratio was found 90.40 percent and lowest ratio was 65.72 percent in the year
2003-04 and 2007-08 respectively. Average of 10 years ratio was 76.21 percent i.e. on an
average during last 10 years out of total expenses of the bank around 76 percent portion
of total expenses was interest expenses on deposits and borrowings i.e. ratio of other
operating expenses with total expenses was average 24 percent.
(V) Net Profit to Net Assets Ratio:
Formula:
Table 5.149
Table showing NPNAR of TRCCBL of last 10 years
Year Net Profit
(` in Lakhs)
Net Assets
(` in Lakhs)
NPNAR
(%)
2003-04 8.33 103.03 8.08
2004-05 3.80 108.67 3.50
2005-06 3.86 106.30 3.63
2006-07 1.19 114.37 1.04
2007-08 4.42 113.43 3.89
2008-09 5.74 121.89 4.71
2009-10 7.95 134.86 5.90
2010-11 9.14 146.18 6.25
2011-12 12.94 155.69 8.31
2012-13 10.01 163.23 6.13
Average 5.15 (Source: Computed from Annual Reports of TRCCBL of last 10 Years)
During last 10 years maximum NPNAR was 8.31 percent in the year 2011-12
and minimum NPNAR was 1.04 percent in the year 2006-07. On an average during the
last 10 years banks has 5.15 percent NPNAR. From the above table 5.149 it is clear that
the NPNAR of the bank remained in fluctuating position during last ten years the period
of the study
(VI) Earnings per Share:
Formula:
Financial Performance Analysis Page | 344
Table 5.150
Table showing EPS of TRCCBL of last 10 years
Year Net Profit
(` in Lakhs)
No. of Equity
Share (in Lakhs)
EPS
(`)
2003-04 8.33 1.23 6.80
2004-05 3.80 1.31 2.90
2005-06 3.86 1.32 2.93
2006-07 1.19 1.31 0.91
2007-08 4.42 1.35 3.26
2008-09 5.74 1.46 3.93
2009-10 7.95 1.72 4.63
2010-11 9.14 1.92 4.76
2011-12 12.94 1.97 6.56
2012-13 10.01 1.97 5.08
Average 4.18
(Source: Computed from Annual Reports of TRCCBL of last 10 Years)
Earning per share of TRCCBL Ltd. Randheja found `4.18 per share on an
average during last 10 years. During the period of the study maximum EPS earned by the
bank in the year 2003-04 `6.80 per share and minimum EPS earned by the bank `0.91 in
the year 2005-06. Bank has earned average `4.18 per share annually against the share of
`25 each i.e. 16.72 percent.
(VII) Interest Income to Average Working Fund Ratio:
Formula:
Working Fund = Total assets – Bills Receivable and other contra entries
Table 5.151
Table showing IIAWFR of TRCCBL of last 10 years
Year Total Interest
(` in Lakhs)
AWF
(` in Lakhs)
IIAWFR
(%)
2003-04 119.68 647.87 18.47
2004-05 65.71 675.94 9.72
2005-06 63.86 696.12 9.17
2006-07 65.12 694.44 9.38
2007-08 63.45 653.67 9.71
2008-09 67.85 676.32 10.03
2009-10 78.88 765.09 10.31
2010-11 90.63 861.33 10.52
2011-12 95.37 929.74 10.26
2012-13 93.82 947.86 9.90
Average 10.75
Financial Performance Analysis Page | 345
(Source: Computed from Annual Reports of TRCCBL of last 10 Years)
From the above table 5.151 it is clear that during last 10 year the highest interest
income to average working fund ratio is 18.47 percent in the year 2003-04 and lowest
ratio is 9.17 percent in the years 2005-06. Average IIAWFR of the bank of last ten years
was remained10.75 percent from 2003-04 to 2012-13 the period of the study.
(VIII) Interest Expenses to Average Working Fund Ratio:
Formula:
Table 5.152
Table showing IEAWFR of TRCCBL of last 10 years
Year Total Interest Exp.
(` in Lakhs)
AWF
(` in Lakhs)
IEAWFR
(%)
2003-04 109.51 647.87 16.90
2004-05 53.12 675.94 7.86
2005-06 48.20 696.12 6.92
2006-07 46.96 694.44 6.76
2007-08 40.39 653.67 6.18
2008-09 46.35 676.32 6.85
2009-10 54.98 765.09 7.19
2010-11 61.43 861.33 7.13
2011-12 60.13 929.74 6.47
2012-13 65.21 947.86 6.88
Average 7.92 (Source: Computed from Annual Reports of TRCCBL of last 10 Years)
Above table shows that during last 10 year the highest interest expenses to
average working fund ratio is found 16.90 percent and lowest ratio is 6.18 percent in the
year 2003-04 and 2007-08 respectively. On an average bank has 7.92 percent ratio of
interest expenses to average working fund annually. Interest income ratio average 10.75
percent against it average interest expense ratio 7.92 percent of last ten years i.e. the bank
has average earning gap of interest income 2.83 percent of average working fund.
(IX) Gross Profit to Average Working Fund Ratio:
Formula:
Financial Performance Analysis Page | 346
Table 5.153
Table showing GPAWFR of TRCCBL of last 10 years
Year Gross Profit
(` in Lakhs)
AWF
(` in Lakhs)
GPAWFR
(%)
2003-04 8.33 647.87 1.29
2004-05 3.80 675.94 0.56
2005-06 3.86 696.12 0.55
2006-07 1.19 694.44 0.17
2007-08 4.42 653.67 0.68
2008-09 5.74 676.32 0.85
2009-10 7.95 765.09 1.04
2010-11 9.14 861.33 1.06
2011-12 12.94 929.74 1.39
2012-13 10.01 947.86 1.06
Average 0.87 (Source: Computed from Annual Reports of TRCCBL of last 10 Years)
Above table shows that the highest GPAWFR of the bank is 1.29 percent in the
year 2003-04 and lowest ratio is 0.17 percent in the year 2006-07. Average GPAWFR
remained 0.87 percent of last 10 years from 2003-04 to 2012-13.
(X) Net Profit to Average Working Fund Ratio:
Formula:
Table 5.154
Table showing NPAWFR of TRCCBL of last 10 years
Year Net Profit
(` in Lakhs)
AWF
(` in Lakhs)
NPAWFR
(%)
2003-04 8.33 647.87 1.29
2004-05 3.80 675.94 0.56
2005-06 3.86 696.12 0.55
2006-07 1.19 694.44 0.17
2007-08 4.42 653.67 0.68
2008-09 5.74 676.32 0.85
2009-10 7.95 765.09 1.04
2010-11 9.14 861.33 1.06
2011-12 12.94 929.74 1.39
2012-13 10.01 947.86 1.06
Average 0.87 (Source: Computed from Annual Reports of TRCCBL of last 10 Years)
Financial Performance Analysis Page | 347
Above table shows that the highest NPAWFR of the bank is 1.29 percent in the
year 2003-04, and lowest 0.17 percent in the year 2006-07 and average NPAWFR of the
bank 0.87 percent of last 10 years from 2003-04 to 2012-13 i.e. bank has earned 0.87
percent of its average working fund as net profit during last 10 years the period of study
on an average. Here net profit and gross profit of the bank were equal because there was
no any provision made by the bank.
(XI) Employee Cost to Average Working Fund Ratio:
Formula:
Table 5.155
Table showing ECAWFR of TRCCBL of last 10 years
Year Employee exp.
(` in Lakhs)
AWF
(` in Lakhs)
ECAWFR
(%)
2003-04 6.21 647.87 0.96
2004-05 6.08 675.94 0.90
2005-06 6.62 696.12 0.95
2006-07 6.48 694.44 0.93
2007-08 7.56 653.67 1.16
2008-09 4.92 676.32 0.73
2009-10 5.78 765.09 0.76
2010-11 6.86 861.33 0.80
2011-12 7.26 929.74 0.78
2012-13 8.35 947.86 0.88
Average 0.88 (Source: Computed from Annual Reports of TRCCBL of last 10 Years)
From the above table, showing ratios of employee cost to average working fund
of last 10 years of the bank it is clear that average employee cost of the bank on average
working fund is 0.88 percent per annum. During last 10 years highest ECAWFR 1.16
percent in the year 2007-08 and lowest ratio 0.73 percent in the year 2012-13 was found.
(XII) Cost of Deposit Ratio:
Formula:
Financial Performance Analysis Page | 348
Table 5.156
Table showing CoDR of TRCCBL of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Average Deposits
(` in Lakhs)
CoDR
(%)
2003-04 109.51 505.05 21.68
2004-05 53.12 538.73 9.86
2005-06 48.20 558.27 8.63
2006-07 46.96 556.37 8.44
2007-08 40.39 513.95 7.86
2008-09 46.35 527.85 8.78
2009-10 54.98 602.61 9.12
2010-11 61.43 679.83 9.04
2011-12 60.13 725.83 8.28
2012-13 65.21 731.86 8.91
Average 10.06 (Source: Calculated from Annual Reports of TRCCBL of last 10 Years)
From the above table showing cost of deposit ratios of the bank the researcher
was found that the percentages of Interest on Average Deposits during last 10 years
highest 21.68 percent in the year 2003-04 and lowest 7.86 percent in the year 2007-08
and average cost of deposits last 10 years of the bank remained 10.06 percent.
(XIII) Summary of the above Ratios of TRCCBL Randheja:
Table 5.157
A summary of all the ratios of TRCCBL Calculated above Y
ears
CD
R (%
)
CA
R (%
)
IITIR
(%)
IET
ER
(%)
NP
NA
R (%
)
EP
S (`
)
IIAW
FR
(%)
IEA
WF
R (%
)
GP
AW
FR
(%)
NP
AW
FR
(%)
EC
AW
FR
(%)
CO
DR
(%)
03-04 55.43 21.79 92.44 90.40 8.08 6.80 18.47 16.90 1.29 1.29 0.96 21.68
04-05 60.76 22.80 98.25 84.21 3.50 2.90 9.72 7.86 0.56 0.56 0.90 9.86
05-06 52.97 23.25 98.00 78.63 3.63 2.93 9.17 6.92 0.55 0.55 0.95 8.63
06-07 60.06 24.65 97.51 71.60 1.04 0.91 9.38 6.76 0.17 0.17 0.93 8.44
07-08 67.44 25.68 96.32 65.72 3.89 3.26 9.71 6.18 0.68 0.68 1.16 7.86
08-09 68.18 26.41 97.88 72.90 4.71 3.93 10.03 6.85 0.85 0.85 0.73 8.78
09-10 69.57 25.76 97.94 75.75 5.90 4.63 10.31 7.19 1.04 1.04 0.76 9.12
10-11 67.92 25.17 98.45 74.08 6.25 4.76 10.52 7.13 1.06 1.06 0.80 9.04
11-12 61.63 24.78 98.84 71.97 8.31 6.56 10.26 6.47 1.39 1.39 0.78 8.28
12-13 55.43 28.87 98.93 76.88 6.13 5.08 9.90 6.88 1.06 1.06 0.88 8.91
Avg. 61.94 24.92 97.46 76.21 5.14 4.18 10.75 7.91 0.87 0.87 0.89 10.06
Financial Performance Analysis Page | 349
11.2 NPA Management of the TRCCBL Randheja:
Table 5.158
Table showing NPA Management of TRCCBL Randheja of last 10 years
Yea
rs
Tota
l
Ad
van
ces
(` i
n L
ak
hs)
Gro
ss N
PA
(` i
n L
ak
hs)
Gro
ss N
PA
(%) Total Provision
(`in Lakhs)
NE
T N
PA
(`in
La
kh
s)
NE
T N
PA
(%)
1 2 1/2x100 Std.
Assets NPA
Total
SA+NPA
03-04 294.41 1.21 0.41 1.25 6.79 8.04 -6.83 -2.39
04-05 321.00 1.28 0.40 1.25 6.98 8.23 -6.95 -2.22
05-06 302.06 2.44 0.81 1.25 7.16 8.41 -5.97 -2.03
06-07 320.44 5.34 1.67 1.25 2.19 3.44 1.90 0.60
07-08 316.98 13.53 4.27 1.25 5.37 6.62 6.91 2.23
08-09 376.28 6.07 1.61 1.25 6.92 8.17 -2.10 -0.57
09-10 441.69 5.58 1.26 1.25 9.26 10.51 -4.93 -1.14
10-11 492.27 5.17 1.05 1.50 9.66 11.16 -5.99 -1.25
11-12 447.99 0.57 0.13 1.50 11.00 12.50 -11.93 -2.74
12-13 408.43 25.08 6.14 1.50 13.1 14.60 10.48 2.66
(Calculated from the information available in annual reports of the Bank)
In the above table Net NPA in (`) and NET NPA in (%) calculated as under
0.4
1
0.4
0
0.8
1 1.6
7
4.2
7
1.6
1
1.2
6
1.0
5
0.1
3
6.1
4
-2.3
9
-2.2
2
-2.0
3
0.6
0
2.2
3
-0.5
7
-1.1
4
-1.2
5
-2.7
4
2.6
6
-4.00
-3.00
-2.00
-1.00
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
Gro
ss a
nd
Net
NP
A (
%)
Years
Chart 5.28 Gross and Net NPA of TRCCBL Randheja
Gross NPA
Net NPA
Financial Performance Analysis Page | 350
Above table no. 5.158 and chart no. 5.28 shows the Non Performing Assets
management of The Randheja Commercial Co-operative Bank Ltd. for the period of the
study from the year 2003-04 to 2012-13. It shows Gross NPA and Net NPA of the bank
in amount and in percentage. It also shown provision maintained by the bank against non
performing assets of the bank during the period of the study.
As per recent guidelines from RBI Net NPA should be less than 5 percent to
pay dividend and Gross NPA should be less than 10% to avoid supervisory action from
RBI. From the above table 5.158 and chart 5.28 the researcher found that Gross NPA of
TRCCBL Randheja was remained less than 10 percent in all the years of the study 2003-
04 to 2012-13. It was a great achievement for the bank that bank has maintained its
GNPA less than 10 percent in continuous 10 years the period of the study. During the
period of the study the highest GNPA found 6.14 percent in the year 2012-13 and lowest
percentage of GNPA found 0.13 in the year 2011-12. The Average GNPA of the bank of
ten years from 2002-03 to 2012-13 was 1.78 percent. From the above statistic the
researcher can conclude that recovery and collection policy of the bank is too good
during the period of the study. Therefore bank got success to maintain its GNPA less
than 7 percent throughout the period of the study.
Net NPA of the bank should be less than 5 percent as per RBI rules. During
the period of the study from 2003-04 to 2012-13 the researcher found that the Net NPA
of the bank was remained less than 5 percent in all the years of the study. Not only this
but also Net NPA of the bank remained less than zero in 8 years out of 10 years the
period of the study. Bank has maintained its Net NPA zero continuously from last 10
years from 2003-04 to 2012-13 except in years 2006-07 and 2007-08. It was a great
achievement for the bank.
From the above discussion and observation of chart and table the researcher
can said that the NPA management of the bank found too good during the period of the
study from 2003-04 to 2012-13. Bank has maintained not only enough but more than
enough provision against non performing assets of the bank according to the rules and
regulation recommended by RBI time to time. Therefore Net NPA of the bank found
zero in 8 years out of 10 years and Gross NPA less than 10 percent throughout the period
of the study.
Financial Performance Analysis Page | 351
11.3 Common Size Statement and Trend Analysis of TRCCB Ltd. Randheja:
(I) Common Size Income Statement of TRCCBL Randheja.:
Table: 5.159
`in Lakhs
Particulars Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Incomes:
Interest and discount 119.68 65.71 63.86 65.12 63.45 67.85 78.88 90.63 95.37 93.82
Percentage of Total Income 92.44 98.25 98.00 97.51 96.32 97.88 97.94 98.45 98.84 98.93
Commission, Exchange & Brokerage 0.55 0.65 0.89 1.06 0.91 0.90 0.92 0.79 0.58 0.42
Percentage of Total Income 0.42 0.97 1.37 1.59 1.38 1.30 1.14 0.86 0.60 0.44
Other Receipts 9.24 0.52 0.41 0.60 1.51 0.57 0.74 0.64 0.54 0.59
Percentage of Total Income 7.14 0.78 0.63 0.90 2.29 0.82 0.92 0.70 0.56 0.62
Total (A) 129.47 66.88 65.16 66.78 65.87 69.32 80.54 92.06 96.49 94.83
Percentage of Total Income 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Expenditures:
Interests on Deposits, Borrowings 109.51 53.12 48.20 46.96 40.39 46.35 54.98 61.43 60.13 65.21
Percentage of Total Income 84.58 79.43 73.97 70.32 61.32 66.86 68.26 66.73 62.32 68.77
Salary, Allowances, provident fund and staff welfare 6.21 6.08 6.62 6.48 7.56 4.92 5.78 6.86 7.26 8.35
Percentage of Total Income 4.80 9.09 10.16 9.70 11.48 7.10 7.18 7.45 7.52 8.81
Seating fees of Directors and meeting fees 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.00
Percentage of Total Income 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.00
Rents, Rates, Insurance, Electricity etc. 0.57 0.86 0.91 0.99 0.93 0.96 1.03 1.17 1.22 1.28
Percentage of Total Income 0.44 1.29 1.40 1.48 1.41 1.38 1.28 1.27 1.26 1.35
Legal fees 0.00 0.00 0.00 0.00 0.00 0.00 0.13 0.08 0.02 0.03
Percentage of Total Income 0.00 0.00 0.00 0.00 0.00 0.00 0.16 0.09 0.02 0.03
Financial Performance Analysis Page | 352
Postage, Telephone, etc. 0.10 0.07 0.10 0.10 0.10 0.13 0.11 0.13 0.19 0.14
Percentage of Total Income 0.08 0.10 0.15 0.14 0.14 0.19 0.14 0.14 0.20 0.15
Audit Fees, Internal Audit fees 0.01 0.19 0.21 0.40 0.74 0.31 0.37 0.65 0.64 0.60
Percentage of Total Income 0.01 0.28 0.32 0.60 1.12 0.45 0.46 0.71 0.66 0.63
Depreciation and Repairs to property 0.89 0.64 1.02 0.98 0.40 0.27 0.16 0.33 0.98 1.11
Percentage of Total Income 0.69 0.96 1.57 1.47 0.61 0.39 0.20 0.36 1.02 1.17
Printing Stationary, Advertisement 0.39 0.23 0.29 0.33 0.28 0.38 0.35 0.43 0.45 0.35
Percentage of Total Income 0.30 0.34 0.45 0.49 0.43 0.55 0.43 0.47 0.47 0.37
Provisions 0.00 0.31 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentage of Total Income 0.00 0.46 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Other expenses 3.46 1.58 3.95 9.35 11.06 10.26 9.67 11.84 12.66 7.76
Percentage of Total Income 2.67 2.36 6.06 14.00 16.79 14.80 12.01 12.86 13.12 8.18
Total Expenses (B) 121.14 63.08 61.30 65.59 61.46 63.58 72.59 82.92 83.55 84.83
Percentage of Total Income 93.57 94.32 94.07 98.21 93.30 91.72 90.12 90.07 86.59 89.45
Net Profit (A-B) 8.33 3.80 3.86 1.19 4.42 5.74 7.95 9.14 12.94 10.01
Percentage of Total Income 6.43 5.68 5.93 1.79 6.70 8.28 9.88 9.93 13.41 10.55
Trend Percentage: Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Trend Ratio of Total Operating Income 100.00 51.66 50.33 51.58 50.88 53.54 62.21 71.11 74.53 73.24
Trend Ratio of Total Operating Expenses 100.00 52.07 50.60 54.14 50.73 52.48 59.92 68.45 68.97 70.02
Trend Ratio of Net Profit 100.00 45.62 46.36 14.33 53.01 68.91 95.50 109.72 155.34 120.11
(Source: Calculated from the published annual reports of TRCCB Ltd. Randheja of last 10 years)
(2003-04 is base year for trend percentages)
Financial Performance Analysis Page | 353
Above table 5.159 shows Common Size Analysis of Income Statement (profit and
loss account) of The Randheja Commercial Co-operative Bank Ltd. Randheja for 10 years
from 2003-04 to 2012-13 and it also shows Trend Analysis of Total Operating Income,
Total Operating Expenses and Net Profit of TRCCB ltd. Randheja for the same period
mentioned above. Chart 5.29 shows graphical presentation of trend analysis as shown in
the table no.5.159.
From the above Common Size Analysis of TRCCBL profit and loss account the
researcher found that out of the total operating income of the bank the major income is
interest and discount income. During the last 10 years average interest income was
remained 97.46 percent of the total operating income. Highest percentage of interest and
discount income with total operating income was found during the period of study 98.93
percent in the year 2012-13 and lowest percentage found 92.44 in the year 2003-04. Share
of other income in total operating income was found during the period of study on an
average 2.54 percent only.
On the other hand average percentage of total operating expenses including various
provisions on total operating income was found 92.14 percent during the period of study.
And therefore average net profit during the period of study was found 7.86 percent of the
total operating income. Major expenses of the bank were found interest on deposits and
borrowing and employee’s related expenses like salary, provident fund etc. Average
interest expenses during the period of study were 70.26 percent of the total income and
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
180.00P
erce
nta
ge
Years
Chart 5.29 Trend analysis of P/L accounts of TRCCBL Randheja
Trend Ratio of Total
Operating Income
Trend Ratio of Total
Operating Expenses
Trend Ratio of Net Profit
Financial Performance Analysis Page | 354
average employee related expenses were 8.33 percent of the total income. With the help of
above figures the researcher can conclude that overall 78.59 percent of the total income
was interest expenses and employee’s expenses while 21.41 percent of the total operating
income was other operating expenditure and provisions included in total operating
expenses of the bank.
From the above table 5.159 the researcher also seen that average percentage of net
profit during the period of study was remained 7.86 percent of total operating income of
the bank. The highest net profit to total operating income percentage was found during last
10 years was 13.41 percent in the year 2011-12 and lowest percentage was found 1.79 in
the year 2006-07.
From the trend analysis of the bank’s profit and loss account shown in the above
table and chart the researcher can conclude that the total operating income, total operating
expenses shown parallel and decreasing trend from 2004-05 to 2012-13. From the above
chart 5.29 it is clear that operating expenses increase with increase in operating income
and vice versa. There is a strong positive correlation between Operating income and
Operating expenses of the bank. Correlation coefficient between operating income and
operating expenses determined 0.99. So the researcher can conclude operating expenses
are strongly correlated with operating income and also depend on operating income.
Trend percentage Net profit shown fluctuating trend during the period of study. It
also found positively correlated with operating income and operating expenses of the
bank. Correlation coefficient between operating income and operating expenses with net
profit determined 0.69 and 0.58 respectively. It indicates that net profit of the bank was
not completely depend on operating income and operating expenses of the bank but other
factors also affect on net profit of the bank. Zigzag shape of profit trend percentage line
indicates that net profit of the bank increase and decrease during the period of the study as
compare to 2003-04. Finally at the end of the March 2013 net profit of the bank has
increased by 20.11 percent as compare to base year 2003-04. During ten years trend
percentage line of net profit showing profit has been decreased during the year 2004-05 to
2006-07 and then start increasing and continue till the last year of the study 2012-13.
Trend analysis shown though income shows decreasing trend but overall bank has increase
its profitability during the period of the study it indicate that ban has maintained good
control on its operating expenses.
Financial Performance Analysis Page | 355
(II) Common size Balance sheets of TRCCB Ltd. Randheja:
Table 5.160
`in Lakhs
Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Liabilities:
Share Capital (`25 each) 30.63 32.75 32.91 32.76 33.84 36.49 42.97 47.96 49.35 49.23
Percentages of Total Liabilities 4.57 4.81 4.63 4.83 5.36 5.05 5.32 5.24 5.23 5.17
Reserve and Surplus 72.40 75.92 73.39 81.61 79.59 85.40 91.89 98.22 106.34 114.00
Percentages of Total Liabilities 10.79 11.15 10.32 12.04 12.60 11.81 11.39 10.73 11.27 11.98
Deposits 531.12 528.33 570.20 533.54 470.00 551.89 634.89 724.76 726.89 736.83
Percentages of Total Liabilities 79.19 77.56 80.19 78.71 74.42 76.32 78.67 79.16 77.01 77.41
Borrowings 0.00 18.00 0.00 9.00 15.36 18.44 0.00 0.00 0.00 0.00
Percentages of Total Liabilities 0.00 2.64 0.00 1.33 2.43 2.55 0.00 0.00 0.00 0.00
Bill For collection (Contra) 0.00 0.00 0.00 0.00 2.04 0.00 0.00 0.00 0.00 0.00
Percentages of Total Liabilities 0.00 0.00 0.00 0.00 0.32 0.00 0.00 0.00 0.00 0.00
Branch Adjustments 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentages of Total Liabilities 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Provision for Interest due 4.02 0.47 0.53 0.32 1.45 0.81 0.58 0.50 0.04 4.16
Percentages of Total Liabilities 0.60 0.07 0.07 0.05 0.23 0.11 0.07 0.05 0.00 0.44
Interest Payable 11.61 7.14 7.00 4.81 9.88 3.66 4.35 5.08 22.61 12.83
Percentages of Total Liabilities 1.73 1.05 0.98 0.71 1.56 0.51 0.54 0.55 2.40 1.35
Other Liabilities 12.58 14.78 23.15 14.60 14.97 20.70 24.42 29.95 25.70 24.79
Percentages of Total Liabilities 1.88 2.17 3.26 2.15 2.37 2.86 3.03 3.27 2.72 2.60
Profit and Loss Account 8.33 3.80 3.86 1.19 4.42 5.74 7.95 9.14 12.94 10.01
Percentages of Total Liabilities 1.24 0.56 0.54 0.18 0.70 0.79 0.99 1.00 1.37 1.05
Financial Performance Analysis Page | 356
Total 670.69 681.19 711.04 677.83 631.55 723.13 807.05 915.61 943.87 951.85
Percentages of Total Liabilities 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Assets:
Cash and Bank Balance 99.52 90.85 141.14 95.57 101.01 133.89 149.18 204.63 279.41 293.81
Percentages of Total Assets 14.84 13.34 19.85 14.10 15.99 18.52 18.48 22.35 29.60 30.87
Call Money 8.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentages of Total Assets 1.19 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Investments 259.63 261.15 261.60 255.00 204.33 206.45 208.56 210.96 205.82 232.37
Percentages of Total Assets 38.71 38.34 36.79 37.62 32.35 28.55 25.84 23.04 21.81 24.41
Advances 294.41 321.00 302.06 320.44 316.98 376.28 441.69 492.27 447.99 408.43
Percentages of Total Assets 43.90 47.12 42.48 47.27 50.19 52.03 54.73 53.76 47.46 42.91
Interest Receivable 4.56 4.23 4.35 4.18 5.93 3.49 3.49 3.55 3.57 9.30
Percentages of Total Assets 0.68 0.62 0.61 0.62 0.94 0.48 0.43 0.39 0.38 0.98
Bills Receivables (Contra) 0.00 0.00 0.00 0.00 2.04 0.00 0.00 0.00 0.00 0.00
Percentages of Total Assets 0.00 0.00 0.00 0.00 0.32 0.00 0.00 0.00 0.00 0.00
Assets (After Depreciation) 4.21 3.58 1.61 0.74 0.33 0.25 0.39 0.48 1.93 1.52
Percentages of Total Assets 0.63 0.53 0.23 0.11 0.05 0.03 0.05 0.05 0.20 0.16
Other Assets 0.36 0.38 0.28 0.40 0.40 0.33 0.30 0.27 0.21 0.24
Percentages of Total Assets 0.05 0.06 0.04 0.06 0.06 0.05 0.04 0.03 0.02 0.03
Advanced Income Tax 0.00 0.00 0.00 1.50 0.53 2.44 3.44 3.45 4.94 6.18
Percentages of Total Assets 0.00 0.00 0.00 0.22 0.08 0.34 0.43 0.38 0.52 0.65
Total 670.69 681.19 711.04 677.83 631.55 723.13 807.05 915.61 943.87 951.85
Percentages of Total Assets 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Financial Performance Analysis Page | 357
Trend Percentage:
Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Trend Percentage of Capital 100.00 106.92 107.44 106.95 110.48 119.13 140.29 156.58 161.12 160.72
Trend Percentage of Reserves 100.00 104.86 101.37 112.72 109.93 117.96 126.92 135.66 146.88 157.46
Trend Percentage of Deposits 100.00 99.47 107.36 100.46 88.49 103.91 119.54 136.46 136.86 138.73
Trend Percentage of Advances 100.00 109.03 102.60 108.84 107.67 127.81 150.03 167.21 152.17 138.73
Trend Percentage of Investments 100.00 100.59 100.76 98.22 78.70 79.52 80.33 81.25 79.27 89.50
(Source: Calculated from the published annual reports of TRCCB ltd. Randheja of last 10 years)
(2003-04 is base year for trend percentages)
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
180.00
2003-042004-052005-062006-072007-082008-092009-102010-112011-122012-13
Per
cen
tag
e
Chart 5.30 Trend Analysis of Balance sheet of TRCCB Ltd. Randheja
Trend Percentage of Capital
Trend Percentage of Reserve and Surplus
Trend Percentage of Deposits
Trend Percentage of Advances
Trend Percentage of Investments
Financial Performance Analysis Page | 358
Above table 5.160 shows Common Size Balance sheet of The Randheja
Commercial Cooperative Bank Ltd. Randheja of last 10 years from 2003-04 to 2012-13.
It also shows the trend percentage analysis of major items of the balance sheet. Chart
5.30 shows graphical presentation of the trend percentage analysis shown in the table no.
5.160.
From the above Common Size Analysis of the balance sheet of the bank it is clear
that liabilities side of the balance sheet the most important items are deposits and reserve
& surplus. Out of the total funds invested in the bank’s assets major portion provided by
Deposits and Reserves. During this period highest percentage of deposits with total asset
was 80.19 in the year 2005-06 and lowest percentage was found 74.42 in the year 2007-
08. During the period of study highest and lowest percentage of reserves and surplus
with total assets was found 12.60 percent and 10.32 in the year 2007-08 and 2005-06.
Average Percentage of 10 years in case of Reserves of the bank remained 11.41 percent
and in case of deposits it remained 77.86 percent. Overall average 89 percent of the total
assets of the bank financed by these two components i.e. share of the other items in the
balance sheet was 11 percent average during last 10 years from 2003-04 to 2012-13.
During the last 10 years borrowings of the bank remained average 0.9 percent of the total
assets of the bank. From the above balance sheet the researcher clearly seen that bank has
paid its borrowings as early as possible. Out of the ten years period of the study the
borrowing was found in four years only. Therefore the major liabilities in the bank were
found deposits only. Average Percentage of share capital in total of the balance sheet of
10 years remained 5.02 percent.
On the assets side of the balance sheet of the major items are as usual in other
banks of the study, Cash & Bank Balances, Investments and Advances. Above Common
size analysis of the balance sheet of the TRCCB Ltd. Randheja state that during the
period of last 10 years share of Cash & Bank Balances, Investments and Advances in
total assets of the bank remained on an average 98.73 percent and share of other items in
the balance sheet on an average only 1.27 percent of the total assets during last 10 years.
During the period of study highest percentages of Cash & Bank Balances, Investments
and Advances with total assets were found 30.87, 38.71 and 53.76 in the year 2012-13,
2003-04 and 2010-11 respectively. On the other hand lowest percentages were found
14.10, 21.81 and 42.48 in the year 2006-07, 2011-12 and 2005-06 respectively. The bank
Financial Performance Analysis Page | 359
has zero amount of call money during the period of the study except in the year 20003-
04 it was `8,00,000.
Chart 5.30 shows trend analysis of the main items of balance sheets of TRCCB
ltd. Randheja of last 10 years. Trend percentage line of share capital of the bank shows
increasing trend of share capital of the bank. In the year 2012-13 share capital of the
bank increased by 60.72 percent as compare to base year 2003-04. Increasing trend of the
share capital point out that solvency position of the bank become strong during the
period of the study. Major increased in share capital has done in last four years of the
study period from 2007-08 to 2011-12. Reserve and surplus also shows increasing trend.
As compare to the base year 2003-04 reserves and surplus of the bank has increased by
57.46 percent in the year 2012-13. Continuous increase in reserves and surplus makes
bank’s solvency position more strong and powerful.
Deposit line in above chart no. 5.30 indicates that deposit of the bank
neither continuously increased nor decrease. It shows mixed trend of increasing and
decreasing during the period of the study. It state that deposits of the bank has increased
by 38.73 percent as compare to base year 2003-04 at the end of the year 2012-13. During
the period of the study the researcher found that deposits of the bank shows less
decreasing and more increasing trend. It indicates increase in faith of depositors in bank
during the period of the study. On the other hand advances of the bank also shows mixed
trend of increasing and decreasing during the period of the study. But over all advances
of the bank has increased by 38.73 percent in the year 2012-13 as compare to base year
2003-04. Normally banks uses it deposits for the purpose of providing advances to its
customers. The TRCCB uses its deposits well to provide advances to its customers. The
researcher can conclude like that because the advances trend of the bank same as like
deposit. To know that the researcher has calculated Co-relation co-efficient between
deposits advances which was 0.85. It indicates that there is strong positive co-relation
between deposits accepted by bank and advances provided by bank to its customers. The
researcher can conclude here that advances of the bank have depended on deposits of the
bank 85 percent and on other funds 15 percent.
Investments of the bank shown mixed trend during the period of the study.
As compare to the year 2003-04 the investment of the bank has decreased by 10.50
percent in the year 2012-13.
Financial Performance Analysis Page | 360
12. FINANCIAL PERFORMANCE OF ‘‘THE VALLABH
VIDYANAGAR COMMERCIAL CO-OPERATIVE BANK LTD.’
(VVCC):
12.1 Ratio Analysis of ‘The VVCC Bank Ltd.’:
(I) Credit Deposit Ratio (CDR):
Formula:
Table 5.161
Table showing CDR of VVCC of last 10 years
Year Total Advances
(` in Lakhs)
Total Deposit
(` in Lakhs)
CDR
(%)
2003-04 2710.42 5100.00 53.15
2004-05 2887.58 5205.44 55.47
2005-06 2446.99 5124.77 47.75
2006-07 2416.45 5220.14 46.29
2007-08 2176.34 5544.86 39.25
2008-09 1857.88 6218.14 29.88
2009-10 2047.99 7335.71 27.92
2010-11 2389.82 7711.14 30.99
2011-12 3080.05 8287.73 37.16
2012-13 4000.51 9068.93 44.11
Average 41.20
(Source: Computed from Annual Reports of VVCC Bank Ltd. of last 10 Years)
Table no. 5.161 shows credit deposit ratio of The VVCC Bank Ltd. for 10 years
from 2003-04 to 2012-13. From above the table it is clear that bank’s credit deposit ratio
remained between 27 to 56 percent. Average percentage of last 10 years CDR was
41.20. It indicates VVCC bank uses its deposits on an average 41 percentage to give
advances to their customers during the period of study of last 10 years from 2003-04 to
2012-13. Highest CDR found 55.47 percent in the year 2004-05 and lowest percentage
found 27.92 percent in the year 2009-10.
(II) Capital Adequacy Ratio (CAR)/ Capital to Risk (Weighted) Assets Ratio
(CRAR):
Formula:
Financial Performance Analysis Page | 361
Table 5.162
Table showing CAR of VVCC of last 10 years
Years Tier I Capital
(` in Lakhs)
Tier II Capital
(` in Lakhs)
Total TI+TII
(` in Lakhs)
RWA
(` in Lakhs)
CAR
(%)
2003-04 401.12 40.10 441.22 1935.18 22.80
2004-05 423.86 44.50 468.36 2172.34 21.56
2005-06 482.85 47.81 530.66 2262.92 23.45
2006-07 514.59 53.70 568.29 2215.57 25.65
2007-08 527.68 52.78 580.46 2333.99 24.87
2008-09 597.70 60.76 658.46 2151.82 30.60
2009-10 614.82 62.11 676.93 2342.30 28.90
2010-11 643.47 64.45 707.92 2546.47 27.80
2011-12 693.28 70.20 763.48 2415.31 31.61
2012-13 777.33 76.43 853.76 2866.89 29.78
Average 26.70 (Source: Computed from Annual Reports of VVCC Bank Ltd. of last 10 Years)
Table 5.162 shows Capital adequacy ratio of The VVCC bank ltd. for 10 years
from 2003-04 to 2012-13. Minimum CAR required for any Urban Co-operative Bank is
9 percent after 2005 according to RBI and Basel committee report. In above table the
researcher can observed that CAR of the bank found more than 9 percent i.e. more than
required rate as per RBI in all the years. Average CAR of the 10 years period was 26.70
percent it also more than 9 percent it shows good financial adequacy of the bank during
the period of study. From the above table the researcher can clearly observed that CAR
of the bank neither continuously increase nor decrease. The highest CAR of the bank
found 31.61 percent and the lowest CAR found 21.56 percent in the year 2011-12 and
2005-06 respectively.
(III) Interest Income to Total Income Ratio:
Formula:
Financial Performance Analysis Page | 362
Table 5.163
Table showing IITIR of VVCC of last 10 years
Year Total Interest
(` in Lakhs)
Total Income
(` in Lakhs)
IITIR
(%)
2003-04 483.45 495.14 97.64
2004-05 531.90 545.70 97.47
2005-06 580.67 596.33 97.37
2006-07 570.43 586.23 97.30
2007-08 582.26 604.49 96.32
2008-09 663.15 762.63 86.96
2009-10 667.29 698.48 95.53
2010-11 707.15 720.83 98.10
2011-12 818.92 826.83 99.04
2012-13 923.42 959.13 96.28
Average 96.20
(Source: Calculated from Annual Reports of VVCC Bank Ltd. of last 10 Years)
Above table shows that out of the total income of The VVCC Ltd. on an average
96.20 percent income was interest and discount income during last ten years from 2003-
04 to 2012-13. During the period of the study highest interest income to total income
ratio was found 99.04 percent in the year 2011-12 and lowest ratio was 95.53 percent in
the year 2009-10. The researcher can conclude on the basis of above table that average
interest and discount income of the bank was remained 96 percent of the total income of
the bank and other income of the bank were only average 4 percent of the total income of
the bank.
(IV) Interest Expenses to Total Expenses Ratio:
Formula:
Table 5.164
Table showing IETER of VVCC of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Total Expenses
(` in Lakhs)
IETER
(%)
2003-04 325.70 466.80 69.77
2004-05 342.35 512.48 66.80
2005-06 357.42 555.65 64.32
2006-07 376.80 543.67 69.31
2007-08 389.79 568.66 68.55
2008-09 442.84 677.82 65.33
2009-10 453.66 633.45 71.62
2010-11 477.92 660.89 72.31
2011-12 508.93 759.83 66.98
2012-13 577.35 884.13 65.30
Average 68.03
(Source: Computed from Annual Reports of VVCC Bank Ltd. of last 10 Years)
Financial Performance Analysis Page | 363
The above table no.5.164 showing interest expenses to total expenses ratio the
highest ratio was found 72.31 percent and lowest ratio was 64.32 percent in the year
2010-11 and 2005-06 respectively. Average of 10 years ratio was 68.03 percent i.e. on an
average during last 10 years out of total expenses of the bank around 68 percent portion
of total expenses was interest expenses on deposits and borrowings i.e. ratio of other
operating expenses with total expenses was average 32 percent.
(V) Net Profit to Net Assets Ratio:
Formula:
Table 5.165
Table showing NPNAR of VVCC of last 10 years
Year Net Profit
(` in Lakhs)
Net Assets
(` in Lakhs)
NPNAR
(%)
2003-04 28.34 1288.71 2.20
2004-05 33.22 1383.82 2.40
2005-06 40.68 1534.51 2.65
2006-07 42.56 1584.66 2.69
2007-08 35.83 1617.20 2.22
2008-09 84.81 1656.27 5.12
2009-10 65.03 1738.50 3.74
2010-11 59.94 1800.95 3.33
2011-12 67.00 1847.17 3.63
2012-13 75.00 1967.44 3.81
Average 3.18 (Source: Computed from Annual Reports of VVCC Bank Ltd. of last 10 Years)
During last 10 years maximum NPNAR was 5.12 percent in the year 2008-09
and minimum NPNAR was 2.20 percent in the year 2003-04. On an average during the
last 10 years banks has 3.18 percent NPNAR. From the above table 5.165 it is clear that
the NPNAR of the bank remained in fluctuating position during last ten years the period
of the study.
(VI) Earnings per Share:
Formula:
Financial Performance Analysis Page | 364
Table 5.166
Table showing EPS of VVCC of last 10 years
Year Net Profit
(` in Lakhs)
No. of Equity
Share (in Lakhs)
EPS
(`)
2003-04 28.34 0.28 100.14
2004-05 33.22 0.29 113.39
2005-06 40.68 0.61 66.61
2006-07 42.56 0.69 61.38
2007-08 35.83 0.69 51.89
2008-09 84.81 0.67 125.83
2009-10 65.03 0.72 90.00
2010-11 59.94 0.84 71.54
2011-12 67.00 1.07 62.37
2012-13 75.00 1.46 51.37
Average 79.45
(Source: Computed from Annual Reports of VVCC Bank Ltd. of last 10 Years)
Earning per share of The VVCC Bank Ltd. found `79.45 per share on an
average during last 10 years. During the period of the study maximum EPS earned by the
bank in the year 2008-09 `125.83 per share and minimum EPS earned by the bank
`51.37 in the year 2012-13. Bank has earned average `79.45 per share annually against
the share of `100 each i.e. 79.45 percent.
(VII) Interest Income to Average Working Fund Ratio:
Formula:
Working Fund = Total assets – Bills Receivable and other contra entries
Table 5.167
Table showing IIAWFR of VVCC of last 10 years
Year Total Interest
(` in Lakhs)
AWF
(` in Lakhs)
IIAWFR
(%)
2003-04 483.45 6909.01 7.00
2004-05 531.90 7693.89 6.91
2005-06 580.67 7844.66 7.40
2006-07 570.43 7915.27 7.21
2007-08 582.26 8125.57 7.17
2008-09 663.15 9084.73 7.30
2009-10 667.29 9970.69 6.69
2010-11 707.15 10257.58 6.89
2011-12 818.92 10708.28 7.65
2012-13 923.42 11397.46 8.10
Average 7.23
(Source: Computed from Annual Reports of VVCC Bank Ltd. of last 10 Years)
Financial Performance Analysis Page | 365
From the above table 5.167 it is clear that during last 10 year the highest interest
income to average working fund ratio was 8.10 percent in the year 2012-13 and lowest
ratio was 7 percent in the years 2003-04. Average IIAWFR of the bank of last ten years
was 7.23 percent from 2003-04 to 2012-13 the period of the study.
(VIII) Interest Expenses to Average Working Fund Ratio:
Formula:
Table 5.168
Table showing IEAWFR of VVCC of last 10 years
Year Total Interest Exp.
(` in Lakhs)
AWF
(` in Lakhs)
IEAWFR
(%)
2003-04 325.70 6909.01 4.71
2004-05 342.35 7693.89 4.45
2005-06 357.42 7844.66 4.56
2006-07 376.80 7915.27 4.76
2007-08 389.79 8125.57 4.80
2008-09 442.84 9084.73 4.87
2009-10 453.66 9970.69 4.55
2010-11 477.92 10257.58 4.66
2011-12 508.93 10708.28 4.75
2012-13 577.35 11397.46 5.07
Average 4.72 (Source: Computed from Annual Reports of VVCC Bank Ltd. of last 10 Years)
Above table shows that during last 10 year the highest interest expenses to
average working fund ratio is found 5.07 percent and lowest ratio is 4.45 percent in the
year 2012-13 and 2004-05 respectively. On an average bank has 4.72 percent ratio of
interest expenses to average working fund annually. Interest income ratio average 7.23
percent against it average interest expense ratio 4.72 percent of last ten years i.e. the bank
has average earning gap of interest income 2.51 percent of average working fund.
(IX) Gross Profit to Average Working Fund Ratio:
Formula:
Financial Performance Analysis Page | 366
Table 5.169
Table showing GPAWFR of VVCC of last 10 years
Year Gross Profit
(` in Lakhs)
AWF
(` in Lakhs)
GPAWFR
(%)
2003-04 48.26 6909.01 0.70
2004-05 71.75 7693.89 0.93
2005-06 88.47 7844.66 1.13
2006-07 69.07 7915.27 0.87
2007-08 57.08 8125.57 0.70
2008-09 114.99 9084.73 1.27
2009-10 86.23 9970.69 0.86
2010-11 79.94 10257.58 0.78
2011-12 98.00 10708.28 0.92
2012-13 140.04 11397.46 1.23
Average 0.94 (Source: Computed from Annual Reports of VVCC Bank Ltd. of last 10 Years)
Above table shows that the highest GPAWFR of the bank was 1.27 percent in the
year 2008-09 and lowest ratio was 0.70 percent in the year 2003-04 and 2007-08.
Average GPAWFR remained 0.94 percent of last 10 years from 2003-04 to 2012-13.
(X) Net Profit to Average Working Fund Ratio:
Formula:
Table 5.170
Table showing NPAWFR of VVCC of last 10 years
Year Net Profit
(` in Lakhs)
AWF
(` in Lakhs)
NPAWFR
(%)
2003-04 28.34 6909.01 0.41
2004-05 33.22 7693.89 0.43
2005-06 40.68 7844.66 0.52
2006-07 42.56 7915.27 0.54
2007-08 35.83 8125.57 0.44
2008-09 84.81 9084.73 0.93
2009-10 65.03 9970.69 0.65
2010-11 59.94 10257.58 0.58
2011-12 67.00 10708.28 0.63
2012-13 75.00 11397.46 0.66
Average 0.58 (Source: Computed from Annual Reports of VVCC Bank Ltd. of last 10 Years)
Financial Performance Analysis Page | 367
Above table shows that the highest NPAWFR of the bank is 0.93 percent in the
year 2008-09, and lowest 0.41 percent in the year 2003-04 and average NPAWFR of the
bank 0.58 percent of last 10 years from 2003-04 to 2012-13 i.e. bank has earned 0.58
percent of its average working fund as net profit during last 10 years the period of study
on an average.
(XI) Employee Cost to Average Working Fund Ratio:
Formula:
Table 5.171
Table showing ECAWFR of VVCC of last 10 years
Year Employee exp.
(` in Lakhs)
AWF
(` in Lakhs)
ECAWFR
(%)
2003-04 51.22 6909.01 0.74
2004-05 55.26 7693.89 0.72
2005-06 62.03 7844.66 0.79
2006-07 65.00 7915.27 0.82
2007-08 66.60 8125.57 0.82
2008-09 96.97 9084.73 1.07
2009-10 93.77 9970.69 0.94
2010-11 96.02 10257.58 0.94
2011-12 111.23 10708.28 1.04
2012-13 114.26 11397.46 1.00
Average 0.89 (Source: Computed from Annual Reports of VVCC Bank Ltd. of last 10 Years)
From the above table, showing ratios of employee cost to average working fund
of last 10 years of the bank it is clear that average employee cost of the bank on average
working fund is 0.89 percent per annum. During last 10 years highest ECAWFR was
remained 1.07 percent in the year 2008-09 and lowest ratio was remained 0.72 percent in
the year 2004-05.
(XII) Cost of Deposit Ratio:
Formula:
Financial Performance Analysis Page | 368
Table 5.172
Table showing CoDR of VVCC of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Average Deposits
(` in Lakhs)
CoDR
(%)
2003-04 325.70 4994.90 6.52
2004-05 342.35 5152.72 6.64
2005-06 357.42 5165.11 6.92
2006-07 376.80 5172.46 7.28
2007-08 389.79 5382.50 7.24
2008-09 442.84 6256.93 7.08
2009-10 453.66 7152.38 6.34
2010-11 477.92 7523.45 6.35
2011-12 508.93 7999.44 6.36
2012-13 577.35 8694.64 6.64
Average 6.74 (Source: Calculated from Annual Reports of VVCC Bank Ltd. of last 10 Years)
From the above table; showing cost of deposit ratio the researcher was found
that the percentages of Interest on Average Deposits during last 10 years highest 7.28
percent in the year 2006-07 and lowest 6.34 percent in the year 2009-10 and average cost
of deposits last 10 years of the bank remained 6.74 percent.
(XIII) Summary of the above Ratios of ‘The VVCC Bank Ltd.’:
Table 5.173
A summary of all the ratios of The VVCC Bank Ltd. Calculated above Y
ears
CD
R (%
)
CA
R (%
)
IITIR
(%)
IET
ER
(%)
NP
NA
R (%
)
EP
S (`
)
IIAW
FR
(%)
IEA
WF
R (%
)
GP
AW
FR
(%)
NP
AW
FR
(%)
EC
AW
FR
(%)
CO
DR
(%)
03-04 53.15 22.80 97.64 69.77 2.20 100.14 7.00 4.71 0.70 0.41 0.74 6.52
04-05 55.47 21.56 97.47 66.80 2.40 113.39 6.91 4.45 0.93 0.43 0.72 6.64
05-06 47.75 23.45 97.37 64.32 2.65 66.61 7.40 4.56 1.13 0.52 0.79 6.92
06-07 46.29 25.65 97.30 69.31 2.69 61.38 7.21 4.76 0.87 0.54 0.82 7.28
07-08 39.25 24.87 96.32 68.55 2.22 51.89 7.17 4.80 0.70 0.44 0.82 7.24
08-09 29.88 30.60 86.96 65.33 5.12 125.83 7.30 4.87 1.27 0.93 1.07 7.08
09-10 27.92 28.90 95.53 71.62 3.74 90.00 6.69 4.55 0.86 0.65 0.94 6.34
10-11 30.99 27.80 98.10 72.31 3.33 71.54 6.89 4.66 0.78 0.58 0.94 6.35
11-12 37.16 31.61 99.04 66.98 3.63 62.37 7.65 4.75 0.92 0.63 1.04 6.36
12-13 44.11 29.78 96.28 65.30 3.81 51.37 8.10 5.07 1.23 0.66 1.00 6.64
Avg. 41.20 26.70 96.20 68.03 3.18 79.45 7.23 4.72 0.94 0.58 0.89 6.74
Financial Performance Analysis Page | 369
12.2 NPA Management of ‘The VVCC Bank Ltd.’:
Table 5.174
Table showing NPA Management of The VVCC Bank Ltd. of last 10 years
Yea
rs
Tota
l
Ad
van
ces
(` i
n L
ak
hs)
Gro
ss N
PA
(` i
n L
ak
hs)
Gro
ss N
PA
(%)
Total Provision
(` in Lakhs)
NE
T N
PA
(`in
La
kh
s)
NE
T N
PA
(%)
1 2 1/2x100
03-04 2710.42 652.21 24.06 610.42 41.79 1.99
04-05 2887.58 631.12 21.86 620.92 10.20 0.45
05-06 2446.99 610.34 24.94 643.89 -33.55 -1.86
06-07 2416.45 596.65 24.69 656.09 -59.44 -3.38
07-08 2176.34 584.42 26.85 668.86 -84.44 -5.60
08-09 1857.88 502.02 27.02 698.64 -196.62 -16.96
09-10 2047.99 493.61 24.10 709.92 -216.31 -16.17
10-11 2389.82 395.68 16.56 718.91 -323.23 -19.34
11-12 3080.05 322.73 10.48 728.96 -406.23 -17.28
12-13 4000.51 278.19 6.95 740.21 -462.02 -14.17
(Calculated from the information available in annual reports of the Bank)
In the above table Net NPA in (`) and NET NPA in (%) calculated as under
24
.06
21
.86
24
.94
24
.69
26
.85
27
.02
24
.10
16
.56
10
.48
6.9
5
1.9
9
0.4
5
-1.8
6
-3.3
8
-5.6
0
-16
.96
-16
.17
-19
.34
-17
.28
-14
.17
-30.00
-20.00
-10.00
0.00
10.00
20.00
30.00
Gro
ss a
nd
Net
NP
A (
%)
Years
Chart 5.31 Gross and Net NPA of The VVCC Bank Ltd.
Gross NPA
Net NPA
Financial Performance Analysis Page | 370
Above table no. 5.174 and chart no. 5.31 shows the Non Performing Assets
management of The Vallabh Vidyanagar Commercial Co-operative Bank Ltd. for the
period of the study from the year 2003-04 to 2012-13. It shows Gross NPA and Net NPA
of the bank in amount and in percentage. It also shown provision maintained by the bank
against non performing assets of the bank during the period of the study.
As per recent guidelines from RBI Net NPA should be less than 5 percent to
pay dividend and Gross NPA should be less than 10% to avoid supervisory action from
RBI. From the above table 5.174 and chart 5.31 the researcher found that Gross NPA of
The VVCC Bank was remained more than 10 percent in all the years of the study 2003-
04 to 2011-12 except in the year 2012-13 it was 6.95 percent. It was a achievement for
the bank that bank has successful to reduced its Gross NPA to 6.95 percent which was
highest 27.02 percent in the year 2008-09.
Net NPA of the bank should be less than 5 percent as per RBI rules. During
the period of the study from 2003-04 to 2012-13 the researcher found that the Net NPA
of the bank was remained less than 5 percent in all the years of the study. Not only this
but also Net NPA of the bank remained less than zero in 8 years out of 10 years the
period of the study. Bank has maintained its Net NPA zero continuously from last 8
years from 2005-06 to 2012-13. It shows good NPA management of the bank. Bank
always maintained reserve more than its Gross NPA therefore Net NPA of the bank
remained Zero. But a high ratio of Gross NPA during the last 10 years is a matter of
worry for the bank it increased possibilities of bad debts.
From the above discussion and observation of chart and table the researcher
can said that the NPA management of the bank found good during the period of the study
from 2003-04 to 2012-13. Bank has maintained not only enough but more than enough
provision against non performing assets of the bank according to the rules and regulation
recommended by RBI time to time. Therefore Net NPA of the bank found zero in 8 years
out of 10 years. But Gross NPA of the bank found more than 10 percent in 9 years out 10
years the period of the study create a question mark against a good NPA management of
the bank but the good thing is bank got success to reduced its Gross NPA in last two
years and it will be continue in future. Bank has Gross NPA `652.21 lakhs in the years
2003-04 that reduced to `278.19 lakhs in the year 2012-13.
Financial Performance Analysis Page | 371
12.3 Common Size Statement and Trend Analysis of ‘The VVCC Bank Ltd.’:
(I) Common Size Income Statement of ‘The VVCC Bank Ltd.’:
Table: 5.175
`in Lakhs
Particulars Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Incomes:
Interest and discount 483.45 531.90 580.67 570.43 582.26 663.15 667.29 707.15 818.92 923.42
Percentage of Total Income 97.64 97.47 97.37 97.30 96.32 86.96 95.53 98.10 99.04 96.28
Commission, Exchange & Brokerage 2.33 3.68 3.51 4.02 6.35 5.29 4.76 3.39 4.71 5.32
Percentage of Total Income 0.47 0.67 0.59 0.69 1.05 0.69 0.68 0.47 0.57 0.55
Other Receipts 9.36 10.12 12.15 11.78 15.88 94.19 26.43 10.29 3.20 30.39
Percentage of Total Income 1.89 1.85 2.04 2.01 2.63 12.35 3.78 1.43 0.39 3.17
Total (A) 495.14 545.70 596.33 586.23 604.49 762.63 698.48 720.83 826.83 959.13
Percentage of Total Income 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Expenditures:
Interests on Deposits, Borrowings 325.70 342.35 357.42 376.80 389.79 442.84 453.66 477.92 508.93 577.35
Percentage of Total Income 65.78 62.74 59.94 64.28 64.48 58.07 64.95 66.30 61.55 60.20
Salary, Allowances, provident fund and staff welfare 51.22 55.26 62.03 65.00 66.60 96.97 93.77 96.02 111.23 114.26
Percentage of Total Income 10.34 10.13 10.40 11.09 11.02 12.72 13.42 13.32 13.45 11.91
Seating fees of Directors and meeting fees 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.00
Percentage of Total Income 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Rents, Rates, Insurance, Electricity etc. 1.27 1.64 2.46 2.53 2.39 2.59 2.65 2.54 2.48 2.72
Percentage of Total Income 0.26 0.30 0.41 0.43 0.40 0.34 0.38 0.35 0.30 0.28
Legal fees 0.31 0.00 1.02 1.49 0.90 1.37 1.84 2.01 0.68 7.34
Percentage of Total Income 0.06 0.00 0.17 0.25 0.15 0.18 0.26 0.28 0.08 0.77
Financial Performance Analysis Page | 372
Postage, Telephone, etc. 1.34 1.43 1.55 1.38 1.36 1.73 1.71 1.77 1.57 1.55
Percentage of Total Income 0.27 0.26 0.26 0.24 0.22 0.23 0.24 0.25 0.19 0.16
Audit Fees, Internal Audit fees 1.20 1.24 1.30 1.35 1.50 1.31 1.26 1.38 1.36 1.48
Percentage of Total Income 0.24 0.23 0.22 0.23 0.25 0.17 0.18 0.19 0.16 0.15
Depreciation and Repairs to property 8.90 7.24 8.56 10.11 11.78 13.74 7.19 8.28 6.90 54.80
Percentage of Total Income 1.80 1.33 1.44 1.72 1.95 1.80 1.03 1.15 0.83 5.71
Printing Stationary, Advertisement 2.44 2.58 2.62 2.90 3.21 2.37 3.89 2.40 3.38 2.67
Percentage of Total Income 0.49 0.47 0.44 0.49 0.53 0.31 0.56 0.33 0.41 0.28
Provisions 19.92 38.53 47.79 26.51 21.25 30.18 21.20 20.00 31.00 65.04
Percentage of Total Income 4.02 7.06 8.01 4.52 3.52 3.96 3.04 2.77 3.75 6.78
Other expenses 54.50 62.21 70.90 55.60 69.88 84.72 46.28 48.57 92.30 56.92
Percentage of Total Income 11.01 11.40 11.89 9.48 11.56 11.11 6.63 6.74 11.16 5.93
Total Expenses (B) 466.80 512.48 555.65 543.67 568.66 677.82 633.45 660.89 759.83 884.13
Percentage of Total Income 94.28 93.91 93.18 92.74 94.07 88.88 90.69 91.68 91.90 92.18
Net Profit (A-B) 28.34 33.22 40.68 42.56 35.83 84.81 65.03 59.94 67.00 75.00
Percentage of Total Income 5.72 6.09 6.82 7.26 5.93 11.12 9.31 8.32 8.10 7.82
Trend Percentage: Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Trend Ratio of Total Operating Income 100.00 110.21 120.44 118.40 122.08 154.02 141.07 145.58 166.99 193.71
Trend Ratio of Total Operating Expenses 100.00 109.79 119.03 116.47 121.82 145.21 135.70 141.58 162.77 189.40
Trend Ratio of Net Profit 100.00 117.22 143.54 150.18 126.43 299.26 229.46 211.50 236.41 264.64
(Source: Calculated from the published annual reports of The VVCC Bank Ltd. of last 10 years)
(2003-04 is base year for trend percentages)
Financial Performance Analysis Page | 373
Above table 5.175 shows Common Size Analysis of Income Statement (profit
and loss account) of The Vallabh Vidyanagar Commercial Co-operative Bank Ltd. for 10
years from 2003-04 to 2012-13 and it also shows Trend Analysis of Total Operating
Income, Total Operating Expenses and Net Profit of VVCC Bank ltd. for the same
period stated above. Chart 5.32 shows graphical presentation of trend analysis as shown
in the table no.5.175.
From the above Common Size Analysis of VVCC Bank Ltd. profit and loss
account the researcher found that out of the total operating income of the bank the major
income is interest and discount income. During the last 10 years average interest income
was remained 96.20 percent of the total operating income. Highest percentage of interest
and discount income with total operating income was found during the period of study
99.04 percent in the year 2010-11 and lowest percentage found 86.96 in the year 2008-
09. Share of other income in total operating income was found during the period of study
on an average 3.8 percent only.
On the other side average percentage of total operating expenses including
various provisions on total operating income was found 92.35 percent during the period
of study. And therefore average net profit during the period of study was found 7.65
percent of the total operating income. Major expenses of the bank were found interest on
deposits and borrowing and employee’s related expenses like salary, provident fund etc.
Average interest expenses during the period of study were 62.83 percent of the total
income and average employee related expenses were 11.78 percent of the total income.
With the help of above figures the researcher can conclude that overall 74.61 percent of
0.00
50.00
100.00
150.00
200.00
250.00
300.00
350.00
Per
cen
tag
e
Years
Chart 5.32 Trend analysis of P/L accounts of The VVCC Bank
Ltd.
Trend Ratio of Total
Operating Income
Trend Ratio of Total
Operating Expenses
Trend Ratio of Net Profit
Financial Performance Analysis Page | 374
the total income was interest expenses and employee’s expenses while 25.39 percent of
the total operating income was other operating expenditure and provisions included in
total operating expenses of the bank.
From the above table 5.175 the researcher also seen that average percentage of
net profit during the period of study was remained 7.65 percent of total operating income
of the bank. The highest net profit to total operating income percentage was found during
last 10 years was 11.12 percent in the year 2008-09 and lowest percentage was found
5.72 in the year 2003-04.
From the trend analysis of the bank’s profit and loss account shown in the above
table and chart the researcher can conclude that the total operating income, total
operating expenses shown parallel and increasing trend from 2003-04 to 2012-13 the
whole period of the study. From the above chart 5.32 it is clear that operating expenses
increase with increase in operating income and vice versa. There is a strong positive
correlation between Operating income and Operating expenses of the bank. Correlation
coefficient between operating income and operating expenses determined 0.9971. So the
researcher can conclude operating expenses are strongly correlated with operating
income and also depend on operating income.
Trend percentage Net profit shown fluctuating trend during the period of study. It
also found positively correlated with operating income and operating expenses of the
bank. Correlation coefficient between operating income and operating expenses with net
profit determined 0.87 and 0.83 respectively. It indicates that net profit of the bank was
depend on operating income and operating expenses of the bank but other factors also
affect on net profit of the bank. Zigzag shape of profit trend percentage line indicates that
net profit of the bank increase and decrease during the period of the study as compare to
2003-04. Finally at the end of the March 2013 net profit of the bank has increased by
93.71 percent as compare to base year 2003-04. During ten years trend percentage line
of net profit showing profit has been increased every year during the period of the study.
In the year 2008-09 profit of the bank increased by 199.26 percent as compare to base
year it was highest increase during the period of the study.
Financial Performance Analysis Page | 375
(II) Common size Balance sheets of The VVCC Bank Ltd.:
Table 5.176
`in Lakhs
Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Liabilities:
Share Capital (share of Rs.100 each) 28.30 29.30 61.08 69.34 69.05 67.40 72.26 83.79 107.43 146.01
Percentages of Total Liabilities 0.37 0.37 0.78 0.87 0.83 0.68 0.72 0.80 0.98 1.23
Reserve and Surplus 1260.41 1354.52 1473.44 1515.32 1548.15 1588.87 1666.24 1717.16 1739.74 1821.43
Percentages of Total Liabilities 16.66 17.32 18.72 19.03 18.68 16.08 16.56 16.43 15.87 15.39
Deposits 5100.00 5205.44 5124.77 5220.14 5544.86 6218.14 7335.71 7711.14 8287.73 9068.93
Percentages of Total Liabilities 67.39 66.56 65.12 65.57 66.89 62.94 72.91 73.77 75.60 76.65
Borrowings 0.00 0.00 0.00 0.00 0.00 750.86 0.05 0.00 0.00 32.61
Percentages of Total Liabilities 0.00 0.00 0.00 0.00 0.00 7.60 0.00 0.00 0.00 0.28
Other Liabilities 1150.56 1197.68 1169.20 1114.03 1091.85 1169.63 922.38 881.46 761.16 687.87
Percentages of Total Liabilities 15.20 15.32 14.86 13.99 13.17 11.84 9.17 8.43 6.94 5.81
Profit and Loss Account 28.34 33.22 40.68 42.56 35.83 84.81 65.03 59.94 67.00 75.00
Percentages of Total Liabilities 0.37 0.42 0.52 0.53 0.43 0.86 0.65 0.57 0.61 0.63
Total 7567.61 7820.16 7869.16 7961.39 8289.74 9879.71 10061.67 10453.49 10963.06 11831.85
Percentages of Total Liabilities 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Assets:
Cash and Bank Balance 31.74 35.81 50.36 51.58 55.20 38.15 45.66 55.10 45.20 46.37
Percentages of Total Assets 0.42 0.46 0.64 0.65 0.67 0.39 0.45 0.53 0.41 0.39
Call Money 282.70 372.98 411.57 431.54 943.95 1415.55 1049.98 1259.14 1866.97 1844.24
Percentages of Total Assets 3.74 4.77 5.23 5.42 11.39 14.33 10.44 12.05 17.03 15.59
Financial Performance Analysis Page | 376
Investment 3105.32 3204.32 3668.45 3648.63 3937.26 5306.98 5862.02 5715.00 5166.31 5160.36
Percentages of Total Assets 41.03 40.98 46.62 45.83 47.50 53.72 58.26 54.67 47.12 43.61
Advances 2710.42 2887.58 2446.99 2416.45 2176.34 1857.88 2047.99 2389.82 3080.05 4000.51
Percentages of Total Assets 35.82 36.92 31.10 30.35 26.25 18.81 20.35 22.86 28.09 33.81
Assets (after Depreciation) 96.66 86.99 81.71 76.23 71.40 69.64 66.27 75.55 77.58 114.52
Percentages of Total Assets 1.28 1.11 1.04 0.96 0.86 0.70 0.66 0.72 0.71 0.97
Other Assets 1340.77 1232.48 1210.08 1336.97 1105.60 1191.50 989.75 958.88 726.95 665.85
Percentages of Total Assets 17.72 15.76 15.38 16.79 13.34 12.06 9.84 9.17 6.63 5.63
Total 7567.61 7820.16 7869.16 7961.39 8289.74 9879.71 10061.67 10453.49 10963.06 11831.85
Percentages of Total Assets 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Trend Percentage:
Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Trend Percentage of Capital 100.00 103.52 215.81 245.03 244.01 238.16 255.32 296.08 379.61 515.94
Trend Percentage of Reserves 100.00 107.47 116.90 120.22 122.83 126.06 132.20 136.24 138.03 144.51
Trend Percentage of Deposits 100.00 102.07 100.49 102.36 108.72 121.92 143.84 151.20 162.50 177.82
Trend Percentage of Advances 100.00 106.54 831.15 820.78 739.22 631.05 695.63 811.73 1046.18 1358.82
Trend Percentage of Investments 100.00 103.19 118.13 117.50 126.79 170.90 188.77 184.04 166.37 166.18
(Source: Calculated from the published annual reports of The VVCC Bank ltd. of last 10 years)
(2003-04 is base year for trend percentages)
Financial Performance Analysis Page | 377
Above table 5.176 shows Common Size Balance sheet of The Vallabh Vidyanagar
Commercial Cooperative Bank Ltd. of last 10 years from 2003-04 to 2012-13. It also
shows the trend percentage analysis of major items of the balance sheet. Chart 5.33 shows
graphical presentation of the trend percentage analysis shown in the table no. 5.176.
From the above Common Size Analysis of the balance sheet of the bank it is clear
that liabilities side of the balance sheet the most important items are deposits and reserve
& surplus. Out of the total funds invested in the bank’s assets major portion provided by
Deposits and Reserves. During this period highest percentage of deposits with total asset
was 76.65 in the year 2012-13 and lowest percentage was found 62.94 in the year 2008-
09. During the period of study highest and lowest percentage of reserves and surplus with
total assets was found 19.03 percent and 15.39 in the year 2006-07 and 2012-13. Average
Percentage of 10 years in case of Reserves of the bank remained 17.1 percent and in case
of deposits it remained 69.34 percent. Overall average 86.44 percent of the total assets of
the bank financed by these two components i.e. share of the other items in the balance
sheet was 13.56 percent average during last 10 years from 2003-04 to 2012-13. During the
last 10 years borrowings of the bank remained average 0.79 percent of the total assets of
the bank. From the above balance sheet the researcher clearly seen that bank has paid its
borrowings as early as possible. Out of the ten years period of the study the borrowing was
found in two years only. Therefore the major liabilities in the bank were found deposits
only. Average Percentage of share capital in total of the balance sheet of 10 years
remained 0.76 percent only.
0.00
100.00
200.00
300.00
400.00
500.00
600.00
Per
cen
tag
e
Years
Chart 5.33 Trend Analysis of Balance sheet of The VVCC Bank
Ltd.
Trend Percentage of
Capital
Trend Percentage of
Reserve and Surplus
Trend Percentage of
Deposits
Trend Percentage of
Advances
Trend Percentage of
Investments
Financial Performance Analysis Page | 378
On the assets side of the balance sheet of the major items are Call Money,
Investments and Advances. Above Common size analysis of the balance sheet of The
VVCC Bank Ltd. state that during the period of last 10 years share of Call Money,
Investments and Advances in total assets of the bank remained on an average 86.34
percent and share of other items in the balance sheet on an average only 13.66 percent of
the total assets during last 10 years. During the period of study highest percentages of Call
Money, Investments and Advances with total assets were found 14.33, 58.26 and 36.92 in
the year 2008-09, 2009-10 and 2004-05 respectively. On the other hand lowest
percentages were found 3.74, 40.98 and 18.81 in the year 2003-04, 2004-05 and 2008-09
respectively.
Chart 5.33 shows trend analysis of the main items of balance sheets of VVCCB ltd.
of last 10 years. Trend percentage line of share capital of the bank shows a continuous
increasing trend of share capital of the bank. In the year 2012-13 share capital of the bank
increased by 415.94 percent as compare to base year 2003-04. Increasing trend of the
share capital point out that solvency position of the bank become strong during the period
of the study. Reserve and surplus also shows continuous increasing trend. As compare to
the base year 2003-04 reserves and surplus of the bank has increased by 44.51 percent in
the year 2012-13. Continuous increase in reserves and surplus makes bank’s solvency
position more strong and powerful.
Deposit line in above chart no. 5.33 indicates that deposit of the bank
continuously increased from the year 2006-07 to 2012-13 as compare to base year deposits
of the banks increased by 77.82 percent in the year 2012-13. It shows mixed trend of
increasing and decreasing during the period of the study. During the period of the study
the researcher found that deposits of the bank shows increasing trend. It indicates increase
in faith of depositors in bank during the period of the study. On the other hand advances of
the bank shows mixed trend of increasing and decreasing during the period of the study.
But over all advances of the bank has increased by 47.60 percent in the year 2012-13 as
compare to base year 2003-04. Advances of the banks shows decreasing trend from 2005-
06 to 2008-09 and in remaining period of the study the advances trend of the bank was
found increasing trend. Normally banks uses it deposits for the purpose of providing
advances to its customers. The researcher has calculated Co-relation co-efficient between
deposits and advances 0.51. It indicates that there is positive co-relation between deposits
accepted by bank and advances provided by bank to its customers. The researcher can
Financial Performance Analysis Page | 379
conclude here that advances of the bank have depended on deposits of the bank 51 percent
and on other funds 49 percent.
Investments of the bank have shown a continuous increasing trend during the
2003-04 to 2010-11. In the year 2011-12 and 2012-13 it shows decreasing trend. As
compare to the year 2003-04 the investment of the bank has increased by 66.18 percent in
the year 2012-13. Continuous increase in investment shows that bank has increased its
investment in outside securities it might be a reason for decreasing in advances in that
particular period of time.
13. FINANCIAL PERFORMANCE OF ‘‘THE JUNAGADH
COMMERCIAL CO-OPERATIVE BANK LTD.’ (TJCCBL):
13.1 Ratio Analysis of ‘TJCCBL’:
(I) Credit Deposit Ratio (CDR):
Formula:
Table 5.177
Table showing CDR of TJCCBL of last 10 years
Year Total Advances
(` in Lakhs)
Total Deposit
(` in Lakhs)
CDR
(%)
2003-04 2175.78 5124.12 42.46
2004-05 2813.64 5210.44 54.00
2005-06 2614.22 5023.78 52.04
2006-07 2970.23 5120.14 58.01
2007-08 2176.34 5647.67 38.54
2008-09 3671.55 6018.15 61.01
2009-10 3544.90 7433.33 47.69
2010-11 4051.56 7812.14 51.86
2011-12 4821.38 7006.22 68.82
2012-13 5344.91 8114.68 65.87
Average 54.29 (Source: Computed from Annual Reports of TJCC Bank Ltd. of last 10 Years)
Table no. 5.177 shows credit deposit ratio of TJCC Bank Ltd. Junagadh for 10
years from 2003-04 to 2012-13. From above the table it is clear that bank’s credit deposit
ratio remained between 38 to 69 percent. Average percentage of last 10 years CDR was
54.29. It indicates TJCCBL uses its deposits on an average 54 percentage to give advances
to their customers during the period of study of last 10 years from 2003-04 to 2012-13.
Financial Performance Analysis Page | 380
Highest CDR found 68.82 percent in the year 2011-12 and lowest percentage found 38.54
percent in the year 2007-08.
(II) Capital Adequacy Ratio (CAR)/ Capital to Risk (Weighted) Assets Ratio
(CRAR):
Formula:
Table 5.178
Table showing CAR of TJCCBL of last 10 years
Years Tier I Capital
(` in Lakhs)
Tier II Capital
(` in Lakhs)
Total TI+TII
(` in Lakhs)
RWA
(` in Lakhs)
CAR
(%)
2003-04 363.32 45.10 408.42 1937.50 21.08
2004-05 441.38 49.50 490.88 2393.39 20.51
2005-06 539.83 52.81 592.64 2563.30 23.12
2006-07 541.75 58.70 600.45 2260.72 26.56
2007-08 532.20 57.78 589.98 3034.86 19.44
2008-09 804.90 65.76 870.66 3948.58 22.05
2009-10 732.55 67.11 799.66 3277.30 24.40
2010-11 754.81 69.45 824.26 3238.74 25.45
2011-12 542.77 75.20 617.97 2792.47 22.13
2012-13 665.71 81.43 747.14 2980.21 25.07
Average 22.98
(Source: Computed from Annual Reports of TJCC Bank Ltd. of last 10 Years)
Table 5.178 shows Capital adequacy ratio of TJCC bank ltd. for 10 years from
2003-04 to 2012-13.Minimum CAR required for any Urban Co-operative Bank is 9
percent after 2005 according to RBI and Basel committee report. In above table the
researcher can observed that CAR of the bank found more than 9 percent i.e. more than
required rate as per RBI in all the years. Average CAR of the 10 years period was 22.98
percent it also more than 9 percent it shows good financial adequacy of the bank during
the period of study. From the above table the researcher can clearly observed that CAR of
the bank neither continuously increase nor decrease. The highest CAR of the bank found
26.56 percent and the lowest CAR found 19.44 percent in the year 2006-07 and 2007-08
respectively.
(III) Interest Income to Total Income Ratio:
Formula:
Financial Performance Analysis Page | 381
Table 5.179
Table showing IITIR of TJCCBL of last 10 years
Year Total Interest
(` in Lakhs)
Total Income
(` in Lakhs)
IITIR
(%)
2003-04 486.23 538.36 90.32
2004-05 553.67 609.25 90.88
2005-06 545.65 612.53 89.08
2006-07 570.34 639.12 89.24
2007-08 580.88 669.03 86.82
2008-09 670.21 848.70 78.97
2009-10 720.55 863.14 83.48
2010-11 831.36 895.70 92.82
2011-12 892.39 1061.22 84.09
2012-13 989.98 1071.16 92.42
Average 87.08
(Source: Calculated from Annual Reports of TJCC Bank Ltd. of last 10 Years)
Above table shows that out of the total income of TJCCL on an average 87.8
percent income was interest and discount income during last ten years from 2003-04 to
2012-13. During the period of the study highest interest income to total income ratio was
found 92.82 percent in the year 2010-11 and lowest ratio was 78.97 percent in the year
2009-10. The researcher can conclude on the basis of above table that average interest and
discount income of the bank was 88 percent of the total income of the bank and other
income were 12 percent of the total income of the bank.
(IV) Interest Expenses to Total Expenses Ratio:
Formula:
Table 5.180
Table showing IETER of TJCCBL of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Total Expenses
(` in Lakhs)
IETER
(%)
2003-04 326.70 488.90 66.82
2004-05 352.35 543.72 64.80
2005-06 341.21 568.99 59.97
2006-07 374.54 608.23 61.58
2007-08 390.78 641.63 60.90
2008-09 424.56 759.27 55.92
2009-10 435.67 798.72 54.55
2010-11 467.92 870.14 53.78
2011-12 447.34 1037.88 43.10
2012-13 539.44 945.73 57.04
Average 57.85
(Source: Computed from Annual Reports of TJCC Bank Ltd. of last 10 Years)
Financial Performance Analysis Page | 382
The above table no.5.180 showing interest expenses to total expenses ratio the
highest ratio was found 66.82 percent and lowest ratio was 43.10 percent in the year 2003-
04 and 2011-12 respectively. Average of 10 years ratio was 57.85 percent i.e. on an
average during last 10 years out of total expenses of the bank around 58 percent portion of
total expenses was interest expenses on deposits and borrowings i.e. ratio of other
operating expenses with total expenses was average 42 percent.
(V) Net Profit to Net Assets Ratio:
Formula:
Table 5.181
Table showing NPNAR of TJCCBL of last 10 years
Year Net Profit
(` in Lakhs)
Net Assets
(` in Lakhs)
NPNAR
(%)
2003-04 49.46 632.78 7.82
2004-05 65.53 730.62 8.97
2005-06 43.54 1025.08 4.25
2006-07 30.89 904.57 3.41
2007-08 27.40 847.28 3.23
2008-09 89.43 1150.61 7.77
2009-10 64.42 1132.24 5.69
2010-11 25.56 1236.59 2.07
2011-12 23.34 1221.56 1.91
2012-13 125.43 1390.01 9.02
Average 5.41 (Source: Computed from Annual Reports of TJCC Bank Ltd. of last 10 Years)
During last 10 years the period of the study maximum NPNAR was found 9.02
percent in the year 2012-13 and minimum NPNAR was 1.91 percent in the year 2011-12.
On an average during the last 10 years banks has 5.41 percent NPNAR. From the above
table 5.181 it is clear that the NPNAR of the bank remained in fluctuating position during
last ten years the period of the study.
(VI) Earnings per Share:
Formula:
Financial Performance Analysis Page | 383
Table 5.182
Table showing EPS of TJCCBL of last 10 years
Year Net Profit
(` in Lakhs)
No. of Equity
Share (in Lakhs)
EPS
(`)
2003-04 49.46 1.10 44.88
2004-05 65.53 1.30 50.25
2005-06 43.54 1.35 32.14
2006-07 30.89 1.50 20.55
2007-08 27.40 1.78 15.40
2008-09 89.43 1.81 49.44
2009-10 64.42 1.87 34.49
2010-11 25.56 2.03 12.56
2011-12 23.34 2.14 10.88
2012-13 125.43 2.19 57.33
Average 32.79
(Source: Computed from Annual Reports of TJCC Bank Ltd. of last 10 Years)
Earning per share of TJCCBL found `32.79 per share on an average during last
10 years. During the period of the study maximum EPS earned by the bank in the year
2012-13 `57.33 per share and minimum EPS earned by the bank `10.88 in the year 2011-
12. Bank has earned average `32.79 per share annually against the share of `100 each i.e.
32.79 percent.
(VII) Interest Income to Average Working Fund Ratio:
Formula:
Working Fund = Total assets – Bills Receivable and other contra entries
Table 5.183
Table showing IIAWFR of TJCCBL of last 10 years
Year Total Interest
(` in Lakhs)
AWF
(` in Lakhs)
IIAWFR
(%)
2003-04 486.23 5985.48 8.12
2004-05 553.67 6190.35 8.94
2005-06 545.65 6308.01 8.65
2006-07 570.34 6244.94 9.13
2007-08 580.88 6460.65 8.99
2008-09 670.21 7049.24 9.51
2009-10 720.55 8001.84 9.00
2010-11 831.36 8840.38 9.40
2011-12 892.39 8799.49 10.14
2012-13 989.98 9167.73 10.80
Average 9.27
(Source: Computed from Annual Reports of TJCC Bank Ltd. of last 10 Years)
Financial Performance Analysis Page | 384
From the above table 5.183 it is clear that during last 10 year the highest interest
income to average working fund ratio was found 10.80 percent in the year 2012-13 and
lowest ratio is 8.12 percent in the years 2003-04. Average IIAWFR of the bank of last ten
years is 9.27 percent from 2003-04 to 2012-13 the period of the study.
(VIII) Interest Expenses to Average Working Fund Ratio:
Formula:
Table 5.184
Table showing IEAWFR of TJCCL of last 10 years
Year Total Interest Exp.
(` in Lakhs)
AWF
(` in Lakhs)
IEAWFR
(%)
2003-04 326.70 5985.48 5.46
2004-05 352.35 6190.35 5.69
2005-06 341.21 6308.01 5.41
2006-07 374.54 6244.94 6.00
2007-08 390.78 6460.65 6.05
2008-09 424.56 7049.24 6.02
2009-10 435.67 8001.84 5.44
2010-11 467.92 8840.38 5.29
2011-12 447.34 8799.49 5.08
2012-13 539.44 9167.73 5.88
Average 5.63 (Source: Computed from Annual Reports of TJCC Bank Ltd. of last 10 Years)
Above table shows that during last 10 year the highest interest expenses to average
working fund ratio is found 6.05 percent and lowest ratio is 5.08 percent in the year 2007-
08 and 2011-12 respectively. On an average bank has 5.63 percent ratio of interest
expenses to average working fund annually. Interest income ratio average 9.27 percent
against it average interest expense ratio 5.63 percent of last ten years i.e. the bank has
average earning gap of interest income 3.64 percent of average working fund.
(IX) Gross Profit to Average Working Fund Ratio:
Formula:
Financial Performance Analysis Page | 385
Table 5.185
Table showing GPAWFR of TJCCBL of last 10 years
Year Gross Profit
(` in Lakhs)
AWF
(` in Lakhs)
GPAWFR
(%)
2003-04 59.33 5985.48 0.99
2004-05 75.65 6190.35 1.22
2005-06 74.33 6308.01 1.18
2006-07 81.34 6244.94 1.30
2007-08 87.64 6460.65 1.36
2008-09 171.33 7049.24 2.43
2009-10 162.85 8001.84 2.04
2010-11 134.42 8840.38 1.52
2011-12 301.43 8799.49 3.43
2012-13 218.24 9167.73 2.38
Average 1.78 (Source: Computed from Annual Reports of TJCC Bank Ltd. of last 10 Years)
Above table shows that the highest GPAWFR of the bank is 3.43 percent in the
year 2011-12 and lowest ratio is 0.99 percent in the year 2003-04. Average GPAWFR
remained 1.78 percent of last 10 years from 2003-04 to 2012-13.
(X) Net Profit to Average Working Fund Ratio:
Formula:
Table 5.186
Table showing NPAWFR of TJCCBL of last 10 years
Year Net Profit
(` in Lakhs)
AWF
(` in Lakhs)
NPAWFR
(%)
2003-04 49.46 5985.48 0.83
2004-05 65.53 6190.35 1.06
2005-06 43.54 6308.01 0.69
2006-07 30.89 6244.94 0.49
2007-08 27.40 6460.65 0.42
2008-09 89.43 7049.24 1.27
2009-10 64.42 8001.84 0.81
2010-11 25.56 8840.38 0.29
2011-12 23.34 8799.49 0.27
2012-13 125.43 9167.73 1.37
Average 0.75 (Source: Computed from Annual Reports of TJCC Bank Ltd. of last 10 Years)
Financial Performance Analysis Page | 386
Above table shows that the highest NPAWFR of the bank was 1.37 percent in the
year 2012-13, and lowest 0.27 percent in the year 2011-12 and average NPAWFR of the
bank 0.75 percent of last 10 years from 2003-04 to 2012-13 i.e. bank has earned 0.75
percent of its average working fund as net profit during last 10 years the period of study on
an average.
(XI) Employee Cost to Average Working Fund Ratio:
Formula:
Table 5.187
Table showing ECAWFR of TJCCBL of last 10 years
Year Employee exp.
(` in Lakhs)
AWF
(` in Lakhs)
ECAWFR
(%)
2003-04 65.22 5985.48 1.09
2004-05 69.26 6190.35 1.12
2005-06 76.03 6308.01 1.21
2006-07 79.00 6244.94 1.27
2007-08 80.60 6460.65 1.25
2008-09 110.97 7049.24 1.57
2009-10 154.67 8001.84 1.93
2010-11 190.02 8840.38 2.15
2011-12 203.29 8799.49 2.31
2012-13 214.43 9167.73 2.34
Average 1.62 (Source: Computed from Annual Reports of TJCC Bank Ltd. of last 10 Years)
From the above table, showing ratios of employee’s cost to average working fund
of last 10 years of the bank it is clear that average employee cost of the bank on average
working fund is 1.62 percent per annum. During last 10 years highest ECAWFR 2.34
percent in the year 2012-13 and lowest ratio 1.09 percent in the year 2003-04.
(XII) Cost of Deposit Ratio:
Formula:
Financial Performance Analysis Page | 387
Table 5.188
Table showing CoDR of TJCCBL of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Average Deposits
(` in Lakhs)
CoDR
(%)
2003-04 326.70 5062.06 6.45
2004-05 352.35 5167.28 6.82
2005-06 341.21 5117.11 6.67
2006-07 374.54 5071.96 7.38
2007-08 390.78 5383.91 7.26
2008-09 424.56 5832.91 7.28
2009-10 435.67 6725.74 6.48
2010-11 467.92 7622.74 6.14
2011-12 447.34 7409.18 6.04
2012-13 539.44 7560.45 7.14
Average 6.77 (Source: Calculated from Annual Reports of TJCC Bank Ltd. of last 10 Years)
From the above table; showing cost of deposit ratio the researcher was found
that the percentages of Interest on Average Deposits during last 10 years highest 7.38
percent in the year 2006-07 and lowest 6.04 percent in the year 2011-12 and average cost
of deposits last 10 years of the bank remained 6.77 percent.
(XIII) Summary of the above Ratios of ‘TJCC Bank Ltd.’:
Table 5.189
A summary of all the ratios of TJCC Bank Ltd. Calculated above Y
ears
CD
R (%
)
CA
R (%
)
IITIR
(%)
IET
ER
(%)
NP
NA
R (%
)
EP
S (`
)
IIAW
FR
(%)
IEA
WF
R (%
)
GP
AW
FR
(%)
NP
AW
FR
(%)
EC
AW
FR
(%)
CO
DR
(%)
03-04 42.46 21.08 90.32 66.82 7.82 44.88 8.12 5.46 0.99 0.83 1.09 6.45
04-05 54.00 20.51 90.88 64.80 8.97 50.25 8.94 5.69 1.22 1.06 1.12 6.82
05-06 52.04 23.12 89.08 59.97 4.25 32.14 8.65 5.41 1.18 0.69 1.21 6.67
06-07 58.01 26.56 89.24 61.58 3.41 20.55 9.13 6.00 1.30 0.49 1.27 7.38
07-08 38.54 19.44 86.82 60.90 3.23 15.40 8.99 6.05 1.36 0.42 1.25 7.26
08-09 61.01 22.05 78.97 55.92 7.77 49.44 9.51 6.02 2.43 1.27 1.57 7.28
09-10 47.69 24.40 83.48 54.55 5.69 34.49 9.00 5.44 2.04 0.81 1.93 6.48
10-11 51.86 25.45 92.82 53.78 2.07 12.56 9.40 5.29 1.52 0.29 2.15 6.14
11-12 68.82 22.13 84.09 43.10 1.91 10.88 10.14 5.08 3.43 0.27 2.31 6.04
12-13 65.87 25.07 92.42 57.04 9.02 57.33 10.80 5.88 2.38 1.37 2.34 7.14
Avg. 54.03 22.98 87.81 57.85 5.41 32.79 9.27 5.63 1.79 0.75 1.62 6.77
Financial Performance Analysis Page | 388
13.2 NPA Management of ‘TJCC Bank Ltd.’:
Table 5.190
Table showing NPA Management of TJCC Bank Ltd. of last 10 years
Yea
rs
Tota
l
Ad
van
ces
(` i
n L
ak
hs)
Gro
ss N
PA
(` i
n L
ak
hs)
Gro
ss N
PA
(%)
Total Provision
(` in Lakhs)
NE
T N
PA
(`in
La
kh
s)
NE
T N
PA
(%)
1 2 1/2x100
03-04 2175.78 452.21 20.78 235.63 216.58 11.16
04-05 2813.64 431.12 15.32 243.54 187.58 7.30
05-06 2614.22 310.34 11.87 256.78 53.56 2.27
06-07 2970.23 396.65 13.35 262.32 134.33 4.96
07-08 2176.34 284.42 13.07 245.56 38.86 2.01
08-09 3671.55 268.82 7.32 259.15 9.67 0.28
09-10 3544.90 489.16 13.80 295.77 193.39 5.95
10-11 4051.56 207.45 5.12 290.80 -83.35 -2.22
11-12 4821.38 228.96 4.75 390.85 -161.89 -3.65
12-13 5344.91 206.80 3.87 392.96 -186.16 -3.76
(Calculated from the information available in annual reports of the Bank)
In the above table Net NPA in (`) and NET NPA in (%) calculated as under
20
.78
15
.32
11
.87
13
.35
13
.07
7.3
2
13
.80
5.1
2
4.7
5
3.8
7
11
.16
7.3
0
2.2
7
4.9
6
2.0
1
0.2
8
5.9
5
-2.2
2
-3.6
5
-3.7
6
-5.00
0.00
5.00
10.00
15.00
20.00
25.00
Gro
ss a
nd
Net
NP
A (
%)
Years
Chart 5.34 Gross and Net NPA of TJCC Bank Ltd.
Gross NPA
Net NPA
Financial Performance Analysis Page | 389
Above table no. 5.190 and chart no. 5.34 shows the Non Performing Assets
management of The Junagadh Commercial Co-operative Bank Ltd. for the period of the
study from the year 2003-04 to 2012-13. It shows Gross NPA and Net NPA of the bank in
amount and in percentage. It also shown provision maintained by the bank against non
performing assets of the bank during the period of the study.
As per recent guidelines from RBI Net NPA should be less than 5 percent to
pay dividend and Gross NPA should be less than 10 percent to avoid supervisory action
from RBI. From the above table 5.190 and chart 5.34 the researcher found that Gross NPA
of TJCC Bank was remained more than 10 percent in the years 2003-04 to 2007-08 and
2009-10. In remaining years of the period of the study it was found less than 5 percent. It
was a achievement for the bank that bank has successfully reduced its Gross NPA to 3.87
percent in the year 2012-13 which was highest 20.78 percent in the year 2003-04.
Net NPA of the bank should be less than 5 percent as per RBI rules. During the
period of the study from 2003-04 to 2012-13 the researcher found that the Net NPA of the
bank was remained less than 5 percent in 7 years out of 10 years the period of the study.
Not only this but also Net NPA of the bank remained less than zero in last 3 years of the
period of the study i.e. years 2010-11 to 2012-13. NPA management of the bank was
found good Bank always maintained reserve more than its Gross NPA therefore Net NPA
of the bank remained Zero. Average Gross NPA ratio was found 10.92 percent and Net
NPA was found 2.43 percent.
From the above discussion and observation of chart and table the researcher
can said that the NPA management of the bank found good during the period of the study
from 2003-04 to 2012-13. Bank has maintained not only enough but more than enough
provision against non performing assets of the bank according to the rules and regulation
recommended by RBI time to time. Therefore Net NPA of the bank found zero in last 3
years. But Gross NPA of the bank found more than 10 percent in 7 years out 10 years the
period of the study create a question mark against a good NPA management of the bank
but the good thing is bank got success to reduced its Gross NPA in last 3 years and it will
be continue in future. Bank has Gross NPA `452.21 lakhs in the years 2003-04 that
reduced to ` 206.8 lakhs in the year 2012-13.
Financial Performance Analysis Page | 390
13.3 Common Size Statement and Trend Analysis of ‘TJCC Bank Ltd.’:
(I) Common Size Income Statement of ‘TJCC Bank Ltd.’:
Table: 5.191
`in Lakhs
Particulars Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Incomes:
Interest and discount 486.23 553.67 545.65 570.34 580.88 670.21 720.55 831.36 892.39 989.98
Percentage of Total Income 90.32 90.88 89.08 89.24 86.82 78.97 83.48 92.82 84.09 92.42
Commission, Exchange & Brokerage 5.33 4.98 6.13 7.88 8.75 7.54 10.44 12.89 13.45 13.32
Percentage of Total Income 0.99 0.82 1.00 1.23 1.31 0.89 1.21 1.44 1.27 1.24
Other Receipts 46.80 50.60 60.75 60.90 79.40 170.95 132.15 51.45 155.38 67.87
Percentage of Total Income 8.69 8.31 9.92 9.53 11.87 20.14 15.31 5.74 14.64 6.34
Total (A) 538.36 609.25 612.53 639.12 669.03 848.70 863.14 895.70 1061.22 1071.16
Percentage of Total Income 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Expenditures:
Interests on Deposits, Borrowings 326.70 352.35 341.21 374.54 390.78 424.56 435.67 467.92 447.34 539.44
Percentage of Total Income 60.68 57.83 55.71 58.60 58.41 50.02 50.48 52.24 42.15 50.36
Salary, Allowances, provident fund and staff welfare 65.22 69.26 76.03 79.00 80.60 110.97 154.67 190.02 203.29 214.43
Percentage of Total Income 12.11 11.37 12.41 12.36 12.05 13.08 17.92 21.21 19.16 20.02
Seating fees of Directors and meeting fees 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentage of Total Income 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Rents, Rates, Insurance, Electricity etc. 1.27 1.64 2.46 2.53 2.39 2.59 2.65 2.54 2.48 2.72
Percentage of Total Income 0.24 0.27 0.40 0.40 0.36 0.31 0.31 0.28 0.23 0.25
Legal fees 0.31 0.11 1.04 1.50 0.98 1.47 1.48 2.12 2.90 3.00
Financial Performance Analysis Page | 391
Percentage of Total Income 0.06 0.02 0.17 0.23 0.15 0.17 0.17 0.24 0.27 0.28
Postage, Telephone, etc. 4.02 4.29 4.65 4.14 4.08 5.19 5.13 5.31 7.55 8.54
Percentage of Total Income 0.75 0.70 0.76 0.65 0.61 0.61 0.59 0.59 0.71 0.80
Audit Fees, Internal Audit fees 1.19 1.25 1.31 1.34 1.48 1.31 1.27 1.39 2.13 2.10
Percentage of Total Income 0.22 0.21 0.21 0.21 0.22 0.15 0.15 0.16 0.20 0.20
Depreciation and Repairs to property 8.89 7.35 8.14 10.13 11.67 13.55 14.97 15.85 20.67 17.73
Percentage of Total Income 1.65 1.21 1.33 1.58 1.74 1.60 1.73 1.77 1.95 1.66
Printing Stationary, Advertisement 7.32 7.74 7.86 8.70 9.63 7.11 11.67 7.20 6.17 5.95
Percentage of Total Income 1.36 1.27 1.28 1.36 1.44 0.84 1.35 0.80 0.58 0.56
Provisions 9.87 10.12 30.79 50.45 60.24 81.90 98.43 108.86 278.09 92.81
Percentage of Total Income 1.83 1.66 5.03 7.89 9.00 9.65 11.40 12.15 26.20 8.66
Other expenses 51.41 73.21 70.90 50.60 55.88 84.72 46.28 43.53 40.88 36.06
Percentage of Total Income 9.55 12.02 11.57 7.92 8.35 9.98 5.36 4.86 3.85 3.37
Total Expenses (B) 488.90 543.72 568.99 608.23 641.63 759.27 798.72 870.14 1037.88 945.73
Percentage of Total Income 90.81 89.24 92.89 95.17 95.90 89.46 92.54 97.15 97.80 88.29
Net Profit (A-B) 49.46 65.53 43.54 30.89 27.40 89.43 64.42 25.56 23.34 125.43
Percentage of Total Income 9.19 10.76 7.11 4.83 4.10 10.54 7.46 2.85 2.20 11.71
Trend Percentage: Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Trend Ratio of Total Operating Income 100.00 113.17 113.78 118.72 124.27 157.65 160.33 166.38 197.12 198.97
Trend Ratio of Total Operating Expenses 100.00 111.21 116.38 124.41 131.24 155.30 163.37 177.98 212.29 193.44
Trend Ratio of Net Profit 100.00 132.49 88.03 62.45 55.40 180.81 130.25 51.68 47.18 253.61
(Source: Calculated from the published annual reports of TJCC Bank Ltd. of last 10 years)
(2003-04 is base year for trend percentages)
Financial Performance Analysis Page | 392
Above table 5.191 shows Common Size Analysis of Income Statement (profit
and loss account) of The Junagadh Commercial Co-operative Bank Ltd. for 10 years
from 2003-04 to 2012-13 and it also shows Trend Analysis of Total Operating Income,
Total Operating Expenses and Net Profit of TJCC Bank ltd. for the same period stated
above. Chart 5.35 shows graphical presentation of trend analysis as shown in the table
no.5.191.
From the above Common Size Analysis of TJCC Bank Ltd. of profit and loss
account the researcher found that out of the total operating income of the bank the major
income is interest and discount income. During the last 10 years average interest income
was found 87.81 percent of the total operating income. Highest percentage of interest and
discount income with total operating income was found during the period of study 92.82
percent in the year 2010-11 and lowest percentage found 78.97 in the year 2008-09.
Share of other income in total operating income was found during the period of study on
an average 12.19 percent.
On the other hand average percentage of total operating expenses (including
various provisions) on total operating income was found 92.93 percent during the period
of study therefore average net profit during the period of study was found 7.07 percent of
the total operating income. Major expenses of the bank were found interest on deposits
and borrowing and employee’s related expenses like salary, provident fund etc. Average
interest expenses during the period of study were 53.65 percent of the total income and
average employee related expenses were 15.17 percent of the total income. With the help
0.00
50.00
100.00
150.00
200.00
250.00
300.00
Per
cen
tag
e
Years
Chart 5.35 Trend analysis of P/L accounts of TJCC
Bank Ltd.
Trend Ratio of Total
Operating Income
Trend Ratio of Total
Operating Expenses
Trend Ratio of Net Profit
Financial Performance Analysis Page | 393
of above figures the researcher can conclude that out of the total operating expenditure of
the bank interest expenses and employees related expenses was average 68.82 percent of
the total operating income while other expenses (including provisions) was 31.18 percent
of the total operating income of the bank.
From the above table 5.191 the researcher also seen that average percentage of
net profit during the period of study was found 7.07 percent of total operating income of
the bank. The highest net profit to total operating income percentage was found during
last 10 years was 11.71 percent in the year 2012-13 and lowest percentage was found
2.20 in the year 2011-12.
From the trend analysis of the bank’s profit and loss account shown in the above
table and chart the researcher can conclude that the total operating income, total
operating expenses shown parallel and increasing trend from 2003-04 to 2012-13 the
whole period of the study. From the above chart 5.35 it is clear that operating expenses
increase with increase in operating income and vice versa. There is a strong positive
correlation between Operating income and Operating expenses of the bank. Correlation
coefficient between operating income and operating expenses determined 0.9895. So the
researcher can conclude operating expenses are strongly correlated with operating
income and also depend on operating income.
Trend percentage Net profit shown fluctuating trend during the period of study. It
also found positively correlated with operating income and operating expenses of the
bank. Correlation coefficient between operating income and operating expenses with net
profit determined 0.85 and 0.81 respectively. It indicates that net profit of the bank was
depend on operating income and operating expenses of the bank but other factors also
affect on net profit of the bank. Zigzag shape of profit trend percentage line indicates that
net profit of the bank increase and decrease during the period of the study as compare to
2003-04. Finally at the end of the March 2013 net profit of the bank has increased by
153.61 percent as compare to base year 2003-04. It was the highest increase in profit
during ten years the period of the study. Lowest downfall in profit was found in the year
2011-12 in this year profit of the bank decreased by 42.82 percent as compare to base
year 2003-04.
Financial Performance Analysis Page | 394
(II) Common size Balance sheets of TJCC Bank Ltd.:
Table 5.192
`in Lakhs
Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Liabilities:
Share Capital (share of Rs.100 each) 110.21 130.40 135.45 150.34 177.90 180.90 186.78 203.44 214.41 218.78
Percentages of Total Liabilities 1.82 2.06 2.16 2.42 2.65 2.45 2.17 2.24 2.51 2.23
Reserve and Surplus 473.11 534.69 683.23 541.43 490.23 612.87 620.31 733.45 983.81 1045.80
Percentages of Total Liabilities 7.83 8.43 10.89 8.71 7.31 8.29 7.20 8.09 11.53 10.67
Deposits 5124.12 5210.44 5023.78 5120.14 5647.67 6018.15 7433.33 7812.14 7006.22 8114.68
Percentages of Total Liabilities 84.83 82.18 80.05 82.39 84.20 81.42 86.31 86.15 82.13 82.76
Borrowings 0.00 0.00 0.00 0.00 0.00 750.86 0.05 0.00 0.00 0.00
Percentages of Total Liabilities 0.00 0.00 0.00 0.00 0.00 10.16 0.00 0.00 0.00 0.00
Other Liabilities 283.52 399.23 389.73 371.34 363.95 489.97 307.46 293.82 302.79 300.21
Percentages of Total Liabilities 4.69 6.30 6.21 5.98 5.43 6.63 3.57 3.24 3.55 3.06
Profit and Loss Account 49.46 65.53 43.54 30.89 27.40 89.43 64.42 25.56 23.34 125.43
Percentages of Total Liabilities 0.82 1.03 0.69 0.50 0.41 1.21 0.75 0.28 0.27 1.28
Total 6040.42 6340.29 6275.73 6214.14 6707.15 7391.32 8612.35 9068.41 8530.57 9804.90
Percentages of Total Liabilities 100.00 100.00 100.00 100.00 100.00 110.16 100.00 100.00 100.00 100.00
Assets:
Cash and Bank Balance 113.74 153.81 105.36 115.68 155.20 138.15 145.66 155.10 160.38 390.67
Percentages of Total Assets 1.88 2.43 1.68 1.86 2.31 1.87 1.69 1.71 1.88 3.98
Call Money 270.82 379.88 415.41 435.34 945.39 1210.54 1049.98 1259.14 1257.75 1444.51
Percentages of Total Assets 4.48 5.99 6.62 7.01 14.10 16.38 12.19 13.88 14.74 14.73
Financial Performance Analysis Page | 395
Investment 1242.13 1281.73 1467.38 1459.45 1574.90 1955.48 2344.81 2286.00 1976.29 2317.97
Percentages of Total Assets 20.56 20.22 23.38 23.49 23.48 26.46 27.23 25.21 23.17 23.64
Advances 2175.78 2813.64 2614.22 2970.23 2176.34 3671.55 3544.90 4051.56 4821.38 5344.91
Percentages of Total Assets 36.02 44.38 41.66 47.80 32.45 49.67 41.16 44.68 56.52 54.51
Assets (after Depreciation) 143.32 173.97 163.42 152.46 142.80 139.28 132.54 151.10 125.69 108.40
Percentages of Total Assets 2.37 2.74 2.60 2.45 2.13 1.88 1.54 1.67 1.47 1.11
Other Assets 2094.63 1537.26 1509.94 1080.98 1712.52 276.33 1394.46 1165.51 189.09 198.43
Percentages of Total Assets 34.68 24.25 24.06 17.40 25.53 3.74 16.19 12.85 2.22 2.02
Total 6040.42 6340.29 6275.73 6214.14 6707.15 7391.32 8612.35 9068.41 8530.57 9804.90
Percentages of Total Assets 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Trend Percentage:
Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Trend Percentage of Capital 100.00 118.32 122.90 136.41 161.42 164.14 169.48 184.59 194.55 198.51
Trend Percentage of Reserves 100.00 113.02 144.41 114.44 103.62 129.54 131.11 155.03 207.95 221.05
Trend Percentage of Deposits 100.00 101.68 98.04 99.92 110.22 117.45 145.07 152.46 136.73 158.36
Trend Percentage of Advances 100.00 129.32 120.15 136.51 100.03 168.75 162.93 186.21 221.59 245.65
Trend Percentage of Investments 100.00 103.27 118.23 117.59 126.89 157.56 188.93 184.19 159.23 186.76
(Source: Calculated from the published annual reports of TJCC Bank ltd. of last 10 years)
(2003-04 is base year for trend percentages)
Financial Performance Analysis Page | 396
Above table 5.192 shows Common Size Balance sheet of The Junagadh
Commercial Co-operative Bank Ltd. of last 10 years from 2003-04 to 2012-13. It also
shows the trend percentage analysis of major items of the balance sheet viz. Capital,
Reserve, Deposits Advances, and Investments. Chart 5.36 shows graphical presentation
of the trend percentage analysis shown in the table no. 5.192
From the above Common Size Analysis of the balance sheet of the bank it is clear
that liabilities side of the balance sheet the most important items are deposits and reserve
& surplus. Out of the total funds invested in the bank’s assets major portion provided by
Deposits and Reserves. During this period highest percentage of deposits with total asset
was 86.31 in the year 2009-10 and lowest percentage was found 80.05 in the year 2005-
06 i.e. during the period of the study the percentage of deposits of the bank with total
assets was found more than 80 percent. During the period of study highest and lowest
percentage of reserves and surplus with total assets was found 11.53 and 7.20 in the year
2011-12 and 2009-10. Average Percentage of 10 years in case of Reserves of the bank
remained 8.90 percent and in case of deposits it remained 83.24 percent. Overall average
92.14 percent of the total assets of the bank financed by these two components i.e. share
of the other items in the balance sheet was 7.86 percent average during last 10 years from
2003-04 to 2012-13. During the last 10 years borrowings of the bank remained average
zero percent of the total assets of the bank. From the above balance sheet the researcher
clearly seen that bank has not used borrowings. Therefore the major liabilities in the
0.00
50.00
100.00
150.00
200.00
250.00
300.00
Per
cen
tag
e
Years
Chart 5.36 Trend Analysis of Balance sheet of TJCC
Bank Ltd.
Trend Percentage of
Capital
Trend Percentage of
Reserve and Surplus
Trend Percentage of
Deposits
Trend Percentage of
Advances
Trend Percentage of
Investments
Financial Performance Analysis Page | 397
bank were found deposits only. Average Percentage of share capital in total of the
balance sheet of 10 years remained 2.27 percent only.
On the assets side of the balance sheet of the major items are Call Money,
Investments and Advances. Above Common size analysis of the balance sheet of TJCC
Bank Ltd. state that during the period of last 10 years share of Call Money, Investments
and Advances in total assets of the bank remained on an average 80 percent and share of
other items in the balance sheet on an average only 20 percent of the total assets during
last 10 years. During the period of study highest percentages of Call Money,
Investments and Advances with total assets were found 16.38, 27.23 and 56.52 in the
year 2008-09, 2009-10 and 2011-12 respectively. On the other hand lowest percentages
were found 4.48, 20.22 and 36.02 in the year 2003-04, 2004-05 and 2003-04
respectively.
Chart 5.36 shows trend analysis of the main items of balance sheets of TJCCB
ltd. of last 10 years. Trend percentage line of share capital of the bank shows a
continuous increasing trend of share capital of the bank. In the year 2012-13 share capital
of the bank increased by 98.51 percent as compare to base year 2003-04. Increasing trend
of the share capital point out that solvency position of the bank become strong during the
period of the study. Reserve and surplus also shows continuous increasing trend except
in the year 2006-07 and 2007-08. As compare to the base year 2003-04 reserves and
surplus of the bank has increased by 121.05 percent in the year 2012-13. Continuous
increase in reserves and surplus makes bank’s solvency position more strong and helthy.
Deposit line in above chart no. 5.36 indicates that deposit of the bank
continuously increased during the year 2003-04 to 2012-13 except 2005-06 and 2011-12.
As compare to base year deposits of the banks increased by 58.36 percent in the year
2012-13. It shows mixed trend of increasing and decreasing during the period of the
study. On the other hand advances of the bank also shows mixed trend of increasing and
decreasing during the period of the study. But over all advances of the bank has
increased by 145.65 percent in the year 2012-13 as compare to base year 2003-04.
Advances of the banks shows decreasing trend in the year 2005-06 and 2007-08 and in
remaining period of the study the advances trend of the bank was found increasing trend.
Normally banks uses it deposits for the purpose of providing advances to its customers.
The researcher has calculated Co-relation co-efficient between deposits and advances
Financial Performance Analysis Page | 398
0.84. It indicates that there is strong positive co-relation between deposits accepted by
bank and advances provided by bank to its customers. The researcher can conclude here
that advances of the bank have depended on deposits of the bank 84 percent and on other
funds 16 percent.
Investments of the bank have shown a continuous increasing trend during the
2003-04 to 2010-11. In the year 2011-12 it shows declining trend but then after in the
year 2012-13 it shows increasing trend. As compare to the year 2003-04 the investment
of the bank has increased by 86.76 percent in the year 2012-13. Continuous increase in
investment shows that bank has increased its investment in outside securities it might be
a reason for decreasing in advances in that particular period of time.
14. FINANCIAL PERFORMANCE OF ‘‘THE PORBANDAR
COMMERCIAL CO-OPERATIVE BANK LTD.’ (TPCCBL):
14.1 Ratio Analysis of ‘TPCCBL’:
(I) Credit Deposit Ratio (CDR):
Formula:
Table 5.193
Table showing CDR of TPCCBL of last 10 years
Year Total Advances
(` in Lakhs)
Total Deposit
(` in Lakhs)
CDR
(%)
2003-04 3076.90 8231.33 37.38
2004-05 3281.46 8461.18 38.78
2005-06 3725.23 7933.06 46.96
2006-07 4076.26 7822.28 52.11
2007-08 4932.35 8249.11 59.79
2008-09 5202.54 9448.09 55.06
2009-10 5989.52 11513.34 52.02
2010-11 7081.27 12376.13 57.22
2011-12 8101.85 12947.89 62.57
2012-13 9103.92 14649.47 62.15
Average 52.41 (Source: Computed from Annual Reports of TPCC Bank Ltd. of last 10 Years)
Table no. 5.193 shows credit deposit ratio of TPCC Bank Ltd. for 10 years from
2003-04 to 2012-13. From above the table it is clear that bank’s credit deposit ratio
Financial Performance Analysis Page | 399
remained between 37 to 63 percent during the period of the study. Average percentage
of last 10 years CDR was 52.41. It indicates TPCCBL uses its deposits on an average 52
percentage to give advances to their customers during the period of study of last 10 years
from 2003-04 to 2012-13. Highest CDR found 62.57 percent in the year 2011-12 and
lowest percentage found 37.38 percent in the year 2003-04.
(II) Capital Adequacy Ratio (CAR)/ Capital to Risk (Weighted) Assets Ratio
(CRAR):
Formula:
Table 5.194
Table showing CAR of TPCCBL of last 10 years
Years Tier I Capital
(` in Lakhs)
Tier II Capital
(` in Lakhs)
Total TI+TII
(` in Lakhs)
RWA
(` in Lakhs)
CAR
(%)
2003-04 536.90 55.10 592.00 4983.16 11.88
2004-05 556.42 57.78 614.20 4981.35 12.33
2005-06 575.31 58.70 634.01 4637.97 13.67
2006-07 585.73 60.64 646.37 4690.64 13.78
2007-08 637.70 64.45 702.15 5590.37 12.56
2008-09 700.99 65.78 766.77 6827.87 11.23
2009-10 798.13 66.11 864.24 6936.12 12.46
2010-11 856.56 68.34 924.90 7452.86 12.41
2011-12 1005.40 70.20 1075.60 8653.26 12.43
2012-13 1133.25 75.43 1208.68 9638.60 12.54
Average 12.53
(Source: Computed from Annual Reports of TPCC Bank Ltd. of last 10 Years)
Table 5.194 shows Capital adequacy ratio of TPCC Bank ltd. for 10 years from
2003-04 to 2012-13.Minimum CAR required for any Urban Co-operative Bank is 9
percent after 2005 according to RBI and Basel committee report. In above table the
researcher can observed that CAR of the bank found more than 9 percent i.e. more than
required rate as per RBI in all the years. Average CAR of the 10 years period was 12.53
percent it also more than 9 percent it shows good financial adequacy of the bank during
the period of study. From the above table the researcher can clearly observed that CAR
of the bank neither continuously increase nor decrease. The highest CAR of the bank
found 12.56 percent and the lowest CAR found 11.23 percent in the year 2007-08 and
2008-09 respectively.
Financial Performance Analysis Page | 400
(III) Interest Income to Total Income Ratio:
Formula:
Table 5.195
Table showing IITIR of TPCCBL of last 10 years
Year Total Interest
(` in Lakhs)
Total Income
(` in Lakhs)
IITIR
(%)
2003-04 447.50 458.14 97.68
2004-05 600.22 617.35 97.23
2005-06 531.53 544.22 97.67
2006-07 584.09 602.31 96.97
2007-08 749.97 773.37 96.97
2008-09 638.34 650.33 98.16
2009-10 1265.54 1295.75 97.67
2010-11 1195.54 1227.26 97.42
2011-12 1441.24 1472.14 97.90
2012-13 1636.78 1667.51 98.16
Average 97.58 (Source: Calculated from Annual Reports of TPCC Bank Ltd. of last 10 Years)
Above table shows that out of the total income of TPCCL on an average 97.58
percent income was interest and discount income during last ten years from 2003-04 to
2012-13. During the period of the study highest interest income to total income ratio was
found 98.16 percent in the year 2008-09 and 2012-13 and lowest ratio was 96.97 percent
in the year 2006-07 and 2007-08. The researcher can conclude on the basis of above
table that average interest and discount income of the bank was 98 percent of the total
income of the bank and other income were 2 percent only of the total income of the bank.
(IV) Interest Expenses to Total Expenses Ratio:
Formula:
Financial Performance Analysis Page | 401
Table 5.196
Table showing IETER of TPCCBL of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Total Expenses
(` in Lakhs)
IETER
(%)
2003-04 312.90 429.69 72.82
2004-05 393.46 585.87 67.16
2005-06 371.66 510.66 72.78
2006-07 412.80 574.38 71.87
2007-08 530.04 739.52 71.67
2008-09 363.19 598.73 60.66
2009-10 884.90 1215.30 72.81
2010-11 728.63 1168.98 62.33
2011-12 830.60 1356.71 61.22
2012-13 931.26 1535.67 60.64
Average 67.40
(Source: Computed from Annual Reports of TPCC Bank Ltd. of last 10 Years)
The above table no.5.196 showing interest expenses to total expenses ratio the
highest ratio was found 72.82 percent and lowest ratio was 60.64 percent in the year
2003-04 and 2012-13 respectively. Average of 10 years ratio was 67.40 percent i.e. on an
average during last 10 years out of total expenses of the bank around 67 percent portion
of total expenses was interest expenses on deposits and borrowings i.e. ratio of other
operating expenses with total expenses was average 33 percent.
(V) Net Profit to Net Assets Ratio:
Formula:
Table 5.197
Table showing NPNAR of TPCCBL of last 10 years
Year Net Profit
(` in Lakhs)
Net Assets
(` in Lakhs)
NPNAR
(%)
2003-04 28.45 1411.61 2.02
2004-05 31.47 1455.17 2.16
2005-06 33.55 1490.65 2.25
2006-07 27.93 1524.05 1.83
2007-08 33.85 1518.20 2.23
2008-09 51.60 1629.43 3.17
2009-10 80.45 1557.05 5.17
2010-11 58.28 1876.68 3.11
2011-12 115.43 2035.33 5.67
2012-13 131.84 2187.97 6.03
Average 3.36
(Source: Computed from Annual Reports of TPCC Bank Ltd. of last 10 Years)
Financial Performance Analysis Page | 402
During last 10 years the period of the study highest NPNAR was found 6.03
percent in the year 2012-13 and lowest NPNAR was 1.83 percent in the year 2006-07.
On an average during the last 10 years banks has 3.36 percent NPNAR. From the above
table 5.197 it is clear that the NPNAR of the bank remained in fluctuating position
during last ten years the period of the study.
(VI) Earnings per Share:
Formula:
Table 5.198
Table showing EPS of TPCCBL of last 10 years
Year Net Profit
(` in Lakhs)
No. of Equity
Share (in Lakhs)
EPS
(`)
2003-04 28.45 1.46 19.51
2004-05 31.47 1.55 20.33
2005-06 33.55 1.67 20.13
2006-07 27.93 1.76 15.90
2007-08 33.85 2.13 15.91
2008-09 51.60 2.50 20.62
2009-10 80.45 2.94 27.41
2010-11 58.28 3.54 16.46
2011-12 115.43 4.11 28.11
2012-13 131.84 4.75 27.76
Average 21.21 (Source: Computed from Annual Reports of TPCC Bank Ltd. of last 10 Years)
Average Earning per share (EPS) of TPCCBL found `21.21 per share during
last 10 years. During the period of the study highest EPS earned by the bank in the year
2011-12 `28.11 per share and minimum EPS earned by the bank `15.90 in the year
2006-07. Bank has earned average `21.21 per share annually against the share of `100
each i.e. 21 percent.
(VII) Interest Income to Average Working Fund Ratio:
Formula:
Working Fund = Total assets – Bills Receivable and other contra entries
Financial Performance Analysis Page | 403
Table 5.199
Table showing IIAWFR of TPCCBL of last 10 years
Year Total Interest
(` in Lakhs)
AWF
(` in Lakhs)
IIAWFR
(%)
2003-04 447.50 10375.66 4.31
2004-05 600.22 10731.80 5.59
2005-06 531.53 10598.04 5.02
2006-07 584.09 9991.92 5.85
2007-08 749.97 9822.22 7.64
2008-09 638.34 10772.90 5.93
2009-10 1265.54 12805.37 9.88
2010-11 1195.54 14626.93 8.17
2011-12 1441.24 15818.46 9.11
2012-13 1636.78 17287.26 9.47
Average 7.10
(Source: Computed from Annual Reports of TPCC Bank Ltd. of last 10 Years)
From the above table 5.199 it is clear that during last 10 year the highest interest
income to average working fund ratio was found 9.88 percent in the year 2009-10 and
lowest ratio is 4.31 percent in the years 2003-04. Average IIAWFR of the bank of last
ten years was 7.10 percent from 2003-04 to 2012-13 the period of the study.
(VIII) Interest Expenses to Average Working Fund Ratio:
Formula:
Table 5.200
Table showing IEAWFR of TPCCBL of last 10 years
Year Total Interest Exp.
(` in Lakhs)
AWF
(` in Lakhs)
IEAWFR
(%)
2003-04 312.90 10375.66 3.02
2004-05 393.46 10731.80 3.67
2005-06 371.66 10598.04 3.51
2006-07 412.80 9991.92 4.13
2007-08 530.04 9822.22 5.40
2008-09 363.19 10772.90 3.37
2009-10 884.90 12805.37 6.91
2010-11 728.63 14626.93 4.98
2011-12 830.60 15818.46 5.25
2012-13 931.26 17287.26 5.39
Average 4.56
(Source: Computed from Annual Reports of TPCC Bank Ltd. of last 10 Years)
Financial Performance Analysis Page | 404
Above table shows that during last 10 year the highest interest expenses to
average working fund ratio was found 6.91 percent and lowest ratio was 3.02 percent in
the year 2009-10 and 2003-04 respectively. On an average bank has 4.56 percent ratio of
interest expenses to average working fund annually. Interest income ratio average 7.10
percent against it average interest expense ratio 4.56 percent of last ten years i.e. the bank
has average earning gap of interest income 2.54 percent of average working fund.
(IX) Gross Profit to Average Working Fund Ratio:
Formula:
Table 5.201
Table showing GPAWFR of TPCCBL of last 10 years
Year Gross Profit
(` in Lakhs)
AWF
(` in Lakhs)
GPAWFR
(%)
2003-04 42.17 10375.66 0.41
2004-05 53.07 10731.80 0.49
2005-06 49.90 10598.04 0.47
2006-07 44.25 9991.92 0.44
2007-08 54.80 9822.22 0.56
2008-09 106.02 10772.90 0.98
2009-10 119.37 12805.37 0.93
2010-11 98.28 14626.93 0.67
2011-12 212.43 15818.46 1.34
2012-13 271.84 17287.26 1.57
Average 0.79 (Source: Computed from Annual Reports of TPCC Bank Ltd. of last 10 Years)
Above table shows that the highest GPAWFR of the bank was 1.57 percent in the
year 2012-13 and lowest ratio is 0.41 percent in the year 2003-04. Average GPAWFR
remained 0.79 percent of last 10 years from 2003-04 to 2012-13.
(X) Net Profit to Average Working Fund Ratio:
Formula:
Financial Performance Analysis Page | 405
Table 5.202
Table showing NPAWFR of TPCCBL of last 10 years
Year Net Profit
(` in Lakhs)
AWF
(` in Lakhs)
NPAWFR
(%)
2003-04 28.45 10375.66 0.27
2004-05 31.47 10731.80 0.29
2005-06 33.55 10598.04 0.32
2006-07 27.93 9991.92 0.28
2007-08 33.85 9822.22 0.34
2008-09 51.60 10772.90 0.48
2009-10 80.45 12805.37 0.63
2010-11 58.28 14626.93 0.40
2011-12 115.43 15818.46 0.73
2012-13 131.84 17287.26 0.76
Average 0.45 (Source: Computed from Annual Reports of TPCC Bank Ltd. of last 10 Years)
Above table shows that the highest NPAWFR of the bank is 0.76 percent in the
year 2012-13, and lowest 0.27 percent in the year 2003-04 and average NPAWFR of the
bank 0.45 percent of last 10 years from 2003-04 to 2012-13 i.e. bank has earned 0.45
percent of its average working fund as net profit during last 10 years the period of study
on an average.
(XI) Employee Cost to Average Working Fund Ratio:
Formula:
Table 5.203
Table showing ECAWFR of TPCCBL of last 10 years
Year Employee exp.
(` in Lakhs)
AWF
(` in Lakhs)
ECAWFR
(%)
2003-04 63.23 10375.66 0.61
2004-05 71.80 10731.80 0.67
2005-06 75.11 10598.04 0.71
2006-07 80.23 9991.92 0.80
2007-08 103.02 9822.22 1.05
2008-09 106.49 10772.90 0.99
2009-10 178.83 12805.37 1.40
2010-11 201.48 14626.93 1.38
2011-12 244.16 15818.46 1.54
2012-13 273.06 17287.26 1.58
Average 1.07 (Source: Computed from Annual Reports of TPCC Bank Ltd. of last 10 Years)
Financial Performance Analysis Page | 406
From the above table, showing ratios of employee’s cost to average working fund
of last 10 years of the bank it is clear that average employee cost of the bank on average
working fund was found 1.07 percent per annum. During last 10 years highest ECAWFR
1.58 percent in the year 2012-13 and lowest ratio 0.61 percent in the year 2003-04.
(XII) Cost of Deposit Ratio:
Formula:
Table 5.204
Table showing CoDR of TPCCBL of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Average Deposits
(` in Lakhs)
CoDR
(%)
2003-04 312.90 8115.67 3.86
2004-05 393.46 8346.26 4.71
2005-06 371.66 8197.12 4.53
2006-07 412.80 7877.67 5.24
2007-08 530.04 8035.70 6.60
2008-09 363.19 8848.60 4.10
2009-10 884.90 10480.72 8.44
2010-11 728.63 11944.74 6.10
2011-12 830.60 12662.01 6.56
2012-13 931.26 13798.68 6.75
Average 5.69 (Source: Calculated from Annual Reports of TPCC Bank Ltd. of last 10 Years)
From the above table; showing cost of deposit ratio the researcher was found
that the percentages of Interest on Average Deposits during last 10 years highest 8.44
percent in the year 2009-10 and lowest 3.86 percent in the year 2003-04 and average cost
of deposits last of 10 years of the bank remained 5.69 percent.
Financial Performance Analysis Page | 407
(XIII) Summary of the above Ratios of ‘TPCC Bank Ltd.’:
Table 5.205
A summary of all the ratios of TPCC Bank Ltd. Calculated above
Yea
rs
CD
R (%
)
CA
R (%
)
IITIR
(%)
IET
ER
(%)
NP
NA
R (%
)
EP
S (`
)
IIAW
FR
(%)
IEA
WF
R (%
)
GP
AW
FR
(%)
NP
AW
FR
(%)
EC
AW
FR
(%)
CO
DR
(%)
03-04 37.38 11.88 97.68 72.82 2.02 19.51 4.31 3.02 0.41 0.27 0.61 3.86
04-05 38.78 12.33 97.23 67.16 2.16 20.33 5.59 3.67 0.49 0.29 0.67 4.71
05-06 46.96 13.67 97.67 72.78 2.25 20.13 5.02 3.51 0.47 0.32 0.71 4.53
06-07 52.11 13.78 96.97 71.87 1.83 15.90 5.85 4.13 0.44 0.28 0.80 5.24
07-08 59.79 12.56 96.97 71.67 2.23 15.91 7.64 5.40 0.56 0.34 1.05 6.60
08-09 55.06 11.23 98.16 60.66 3.17 20.62 5.93 3.37 0.98 0.48 0.99 4.10
09-10 52.02 12.46 97.67 72.81 5.17 27.41 9.88 6.91 0.93 0.63 1.40 8.44
10-11 57.22 12.41 97.42 62.33 3.11 16.46 8.17 4.98 0.67 0.40 1.38 6.10
11-12 62.57 12.43 97.90 61.22 5.67 28.11 9.11 5.25 1.34 0.73 1.54 6.56
12-13 62.15 12.54 98.16 60.64 6.03 27.76 9.47 5.39 1.57 0.76 1.58 6.75
Avg. 52.40 12.53 97.58 67.40 3.36 21.21 7.10 4.56 0.79 0.45 1.07 5.69
14.2 NPA Management of ‘TPCC Bank Ltd.’:
Table 5.206
Table showing NPA Management of TPCC Bank Ltd. of last 10 years
Yea
rs
Tota
l
Ad
van
ces
(` i
n L
ak
hs)
Gro
ss N
PA
(` i
n L
ak
hs)
Gro
ss N
PA
(%)
Total Provision
(` in Lakhs)
NE
T N
PA
(`in
Lak
hs)
NE
T N
PA
(%)
1 2 1/2x100
03-04 3076.90 472.22 15.35 504.32 -32.10 -1.25
04-05 3281.46 451.26 13.75 542.64 -91.38 -3.34
05-06 3725.23 322.34 8.65 556.78 -234.44 -7.40
06-07 4076.26 377.80 9.27 550.72 -172.92 -4.90
07-08 4932.35 285.42 5.79 556.24 -270.82 -6.19
08-09 5202.54 278.82 5.36 259.15 19.67 0.40
09-10 5989.52 289.18 4.83 295.77 -6.59 -0.12
10-11 7081.27 207.45 2.93 287.16 -79.71 -1.17
11-12 8101.85 307.87 3.80 308.70 -0.83 -0.01
12-13 9103.92 309.53 3.40 361.88 -52.35 -0.60
(Calculated from the information available in annual reports of the Bank)
In the above table Net NPA in (`) and NET NPA in (%) calculated as under
Financial Performance Analysis Page | 408
Above table no. 5.206 and chart no. 5.37 shows the Non Performing Assets
(NPA) management of The Porbandar Commercial Co-operative Bank Ltd. for the
period of the study from the year 2003-04 to 2012-13. It shows Gross NPA and Net NPA
of the bank in amount and in percentage. It also shown provision maintained by the bank
against non performing assets of the bank during the period of the study.
As per recent guidelines from RBI Net NPA should be less than 5 percent to
pay dividend and Gross NPA should be less than 10 percent to avoid supervisory action
from RBI. From the above table 5.206 and chart 5.37 the researcher found that Gross
NPA of TPCC Bank Ltd. was found more than 10 percent in the years 2003-04 to 2004-
05 and then after it found less than 10 percent throughout the period of the study. It was a
achievement for the bank that bank has successfully reduced its Gross NPA to 3.40
percent in the year 2012-13 which was highest 15.35 percent in the year 2003-04.
Net NPA of the bank should be less than 5 percent as per RBI rules. During
the period of the study from 2003-04 to 2012-13 the researcher found that the Net NPA
of the bank was remained not only less than 5 percent but less than Zero throughout the
period of the study. NPA management of the bank was found too good Bank always
maintained reserve more than its Gross NPA therefore Net NPA of the bank remained
15
.35
13
.75
8.6
5
9.2
7
5.7
9
5.3
6
4.8
3
2.9
3
3.8
0
3.4
0
-1.2
5
-3.3
4
-7.4
0
-4.9
0
-6.1
9
0.4
0
-0.1
2
-1.1
7 -0.0
1
-0.6
0
-10.00
-5.00
0.00
5.00
10.00
15.00
20.00
Gro
ss a
nd
Net
NP
A (
%)
Years
Chart 5.37 Gross and Net NPA of TPCC Bank Ltd.
Gross NPA
Net NPA
Financial Performance Analysis Page | 409
Zero. Average Gross NPA ratio was found 7.31 percent and Net NPA was found (-2.46)
percent that means Zero (0).
From the above discussion and observation of chart and table the researcher
can said that the NPA management of the bank found good during the period of the study
from 2003-04 to 2012-13. Bank has maintained not only enough but more than enough
provision against non performing assets of the bank according to the rules and regulation
recommended by RBI time to time. Therefore Net NPA of the bank found zero
constantly from last ten years.
Financial Performance Analysis Page | 410
14.3 Common Size Statement and Trend Analysis of ‘TPCC Bank Ltd.’:
(I) Common Size Income Statement of ‘TPCC Bank Ltd.’:
Table: 5.207
`in Lakhs
Particulars Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Incomes:
Interest and discount 447.5 600.22 531.527 584.09 749.972 638.344 1265.54 1195.54 1441.24 1636.78
Percentage of Total Income 97.68 97.23 97.67 96.97 96.97 98.16 97.67 97.42 97.90 98.16
Commission, Exchange & Brokerage 8.47 12.906 10.1598 14.44 18.541 8.7126 24.19 23.9 24.42 22.34
Percentage of Total Income 1.85 2.09 1.87 2.40 2.40 1.34 1.87 1.95 1.66 1.34
Other Receipts 2.17 4.2228 2.5284 3.78 4.85352 3.2721 6.02 7.82 6.48 8.39
Percentage of Total Income 0.47 0.68 0.46 0.63 0.63 0.50 0.46 0.64 0.44 0.50
Total (A) 458.14 617.3488 544.215 602.31 773.366 650.329 1295.75 1227.26 1472.14 1667.51
Percentage of Total Income 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Expenditures:
Interests on Deposits, Borrowings 312.901 393.4602 371.658 412.8 530.036 363.191 884.9 728.63 830.6 931.26
Percentage of Total Income 68.30 63.73 68.29 68.54 68.54 55.85 68.29 59.37 56.42 55.85
Salary, Allowances, provident fund and staff welfare 63.23 71.80 75.11 80.23 103.02 106.49 178.83 201.48 244.16 273.06
Percentage of Total Income 13.80 11.63 13.80 13.32 13.32 16.38 13.80 16.42 16.59 16.38
Seating fees of Directors and meeting fees 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentage of Total Income 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Rents, Rates, Insurance, Electricity etc. 13.27 22.90 15.77 20.21 25.95 20.77 37.54 42.41 58.52 53.25
Percentage of Total Income 2.90 3.71 2.90 3.36 3.36 3.19 2.90 3.46 3.98 3.19
NPA provisions 3.18 38.32 3.78 4.30 5.52 5.85 9.00 70.96 25.00 15.00
Percentage of Total Income 0.69 6.21 0.69 0.71 0.71 0.90 0.69 5.78 1.70 0.90
Financial Performance Analysis Page | 411
Postage, Telephone, etc. 0.64 0.89 0.76 0.90 1.16 0.80 1.80 1.65 2.04 2.06
Percentage of Total Income 0.14 0.14 0.14 0.15 0.15 0.12 0.14 0.13 0.14 0.12
Audit Fees, Internal Audit fees 1.00 1.63 1.18 1.84 2.36 1.44 2.82 3.02 3.18 3.69
Percentage of Total Income 0.22 0.26 0.22 0.31 0.31 0.22 0.22 0.25 0.22 0.22
Depreciation and Repairs to property 3.62 3.72 4.31 4.55 5.84 15.68 10.25 22.40 27.68 40.21
Percentage of Total Income 0.79 0.60 0.79 0.76 0.76 2.41 0.79 1.83 1.88 2.41
Printing Stationary, Advertisement 1.25 2.52 1.49 1.56 2.00 2.29 3.54 4.67 4.83 5.86
Percentage of Total Income 0.27 0.41 0.27 0.26 0.26 0.35 0.27 0.38 0.33 0.35
Income Tax Provisions 1.20 1.10 1.47 3.37 4.33 27.12 3.51 0.00 40.00 70.00
Percentage of Total Income 0.26 0.18 0.27 0.56 0.56 4.17 0.27 0.00 2.72 4.20
Other Provisions 12.52 20.50 14.87 12.95 16.63 27.30 35.41 40.00 57.00 70.00
Percentage of Total Income 2.73 3.32 2.73 2.15 2.15 4.20 2.73 3.26 3.87 4.20
Other expenses 16.87 29.03 20.27 31.67 42.68 27.80 47.70 53.76 63.70 71.28
Percentage of Total Income 3.68 4.70 3.72 5.26 5.52 4.27 3.68 4.38 4.33 4.27
Total Expenses (B) 429.69 585.87 510.66 574.38 739.52 598.73 1215.30 1168.98 1356.71 1535.67
Percentage of Total Income 93.79 94.90 93.83 95.36 95.62 92.07 93.79 95.25 92.16 92.09
Net Profit (A-B) 28.45 31.47 33.55 27.93 33.85 51.60 80.45 58.28 115.43 131.84 Percentage of Total Income 6.21 5.10 6.17 4.64 4.38 7.93 6.21 4.75 7.84 7.91
Trend Percentage: Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Trend Ratio of Total Operating Income 100.00 134.75 118.79 131.47 168.81 141.95 282.83 267.88 321.33 363.97
Trend Ratio of Total Operating Expenses 100.00 136.35 118.84 133.67 172.11 139.34 282.83 272.05 315.74 357.39
Trend Ratio of Net Profit 100.00 110.63 117.94 98.17 118.96 181.36 282.78 204.85 405.73 463.41
(Source: Calculated from the published annual reports of TPCC Bank Ltd. of last 10 years)
(2003-04 is base year for trend percentages)
Financial Performance Analysis Page | 412
Above table 5.207 shows Common Size Analysis of Income Statement (profit
and loss account) of The Porbandar Commercial Co-operative Bank Ltd. for 10 years
from 2003-04 to 2012-13 and it also shows Trend Analysis of Total Operating Income,
Total Operating Expenses and Net Profit of TPCC Bank ltd. for the same period stated
above. Chart 5.38 shows graphical presentation of trend analysis as shown in the table
no.5.207.
From the above Common Size Analysis of TPCC Bank Ltd. of profit and loss
account the researcher found that out of the total operating income of the bank the major
income is interest and discount income. During the last 10 years average interest income
was found 97.58 percent of the total operating income. Highest percentage of interest and
discount income with total operating income was found during the period of study 98.16
percent in the year 2012-13 and lowest percentage found 97.23 in the year 2004-05.
Share of other income in total operating income was found during the period of study on
an average 2.42 percent only.
On the other hand average percentage of total operating expenses (including
various provisions) on total operating income was found 93.88 percent during the period
of study therefore average net profit during the period of study was found 6.12 percent of
the total operating income. Major expenses of the bank were found interest on deposits
and employee’s related expenses like salary, provident fund etc. Average interest
expenses during the period of study were 63.32 percent of the total income and average
employee related expenses were 14.54 percent of the total income. With the help of
0.00
50.00
100.00
150.00
200.00
250.00
300.00
350.00
400.00
450.00
500.00
Per
cen
tag
e
Years
Chart 5.38 Trend analysis of P/L accounts of TPCC
Bank Ltd.
Trend Ratio of Total
Operating Income
Trend Ratio of Total
Operating Expenses
Trend Ratio of Net Profit
Financial Performance Analysis Page | 413
above figures the researcher can conclude that out of the total operating expenditure of
the bank interest expenses and employees related expenses was average 77.86 percent of
the total operating income while other expenses (including provisions) was 22.14 percent
of the total operating income of the bank.
From the above table 5.207 the researcher also seen that average percentage of
net profit during the period of study was found 6.12 percent of total operating income of
the bank. The highest net profit to total operating income percentage was found during
last 10 years was 7.93 percent in the year 2008-09 and lowest percentage was found 4.38
in the year 2007-08.
From the trend analysis of the bank’s profit and loss account shown in the above
table and chart the researcher can conclude that the total operating income, total
operating expenses shown parallel and fluctuating trend from 2003-04 to 2012-13 the
whole period of the study. From the above chart 5.38 it is clear that operating expenses
increase with increase in operating income and vice versa. There is a strong positive
correlation between Operating income and Operating expenses of the bank. Correlation
coefficient between operating income and operating expenses determined 0.9995. So the
researcher can conclude operating expenses are strongly correlated with operating
income and also depend on operating income.
Trend percentage Net profit shown fluctuating trend during the period of study. It
also found positively correlated with operating income and operating expenses of the
bank. Correlation coefficient between operating income and operating expenses with net
profit determined 0.94 and 0.93 respectively. It indicates that net profit of the bank was
depend on operating income and operating expenses of the bank but other factors also
affect on net profit of the bank. Zigzag shape of profit trend percentage line indicates that
net profit of the bank increase and decrease during the period of the study as compare to
2003-04. Finally at the end of the March 2013 net profit of the bank has increased by
363.41 percent as compare to base year 2003-04 i.e. as compare to base year profit of the
bank became 4 time. It was the highest increase in profit during ten years the period of
the study. Lowest downfall in profit was found in the year 2006-07 in this year profit of
the bank decreased by 1.83 percent as compare to base year 2003-04 otherwise profit of
the bank shown increasing trend as compare to base year in all the years of the period of
the study.
Financial Performance Analysis Page | 414
(II) Common size Balance sheets of TPCC Bank Ltd.:
Table 5.208
`in Lakhs
Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Liabilities:
Share Capital (share of Rs.100 each) 145.85 154.85 166.66 175.66 212.75 250.19 293.5 354.05 410.65 474.94
Percentages of Total Liabilities 1.38 1.39 1.61 1.78 2.13 2.12 2.07 2.28 2.47 2.57
Reserve and Surplus 1265.76 1300.32 1323.99 1348.39 1305.45 1379.24 1263.55 1522.63 1624.68 1713.03
Percentages of Total Liabilities 11.98 11.71 12.83 13.70 13.07 11.71 8.91 9.81 9.78 9.25
Deposits 8231.33 8461.18 7933.06 7822.28 8249.11 9448.09 11513.3 12376.1 12947.9 14649.5
Percentages of Total Liabilities 77.90 76.18 76.87 79.45 82.59 80.20 81.16 79.77 77.92 79.12
Bills for Collection (as per contra) 35.32 53.4 42.2 48.44 63.23 60.66 60.31 37.89 60.39 61.66
Percentages of Total Liabilities 0.33 0.48 0.41 0.49 0.63 0.51 0.43 0.24 0.36 0.33
Provision for Interest due 31.11 89.28 45.95 44.88 32.44 66.74 167.52 180.33 215.42 220.42
Percentages of Total Liabilities 0.29 0.80 0.45 0.46 0.32 0.57 1.18 1.16 1.30 1.19
Interest Payable 162.30 241.45 145.8 151.44 26.24 176.11 564.36 675.59 882.79 878.46
Percentages of Total Liabilities 1.54 2.17 1.41 1.54 0.26 1.49 3.98 4.35 5.31 4.74
Other Liabilities 665.84 774.81 628.93 226.14 65.19 347.97 242.34 309.64 359.16 386.17
Percentages of Total Liabilities 6.30 6.98 6.09 2.30 0.65 2.95 1.71 2.00 2.16 2.09
Profit and Loss Account 28.45 31.47 33.55 27.93 33.85 51.6 80.45 58.28 115.43 131.84
Percentages of Total Liabilities 0.27 0.28 0.33 0.28 0.34 0.44 0.57 0.38 0.69 0.71
Total 10565.96 11106.76 10320.1 9845.16 9988.26 11780.6 14185.4 15514.5 16616.4 18516
Percentages of Total Liabilities 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Assets:
Cash and Bank Balance 3717.73 3825.13 4188.09 3224.63 3087.74 3610.41 5444.28 4590.39 4297.23 4873.65
Financial Performance Analysis Page | 415
Percentages of Total Assets 35.19 34.44 40.58 32.75 30.91 30.65 38.38 29.59 25.86 26.32
Call Money 158.17 100.00 0.00 0.00 0.00 0.00 200.00 0.00 105.02 50.00
Percentages of Total Assets 1.50 0.90 0.00 0.00 0.00 0.00 1.41 0.00 0.63 0.27
Investment 2884.19 3400.97 2055.39 2176.33 1568.71 2363.47 2050.10 3167.28 3386.35 3766.30
Percentages of Total Assets 27.30 30.62 19.92 22.11 15.71 20.06 14.45 20.41 20.38 20.34
Advances 3076.90 3281.46 3725.23 4076.26 4932.35 5202.54 5989.52 7081.27 8101.85 9103.92
Percentages of Total Assets 29.12 29.54 36.10 41.40 49.38 44.16 42.22 45.64 48.76 49.17
Interest Receivable 321.41 127.20 115.41 122.60 127.90 130.11 71.64 274.62 345.28 363.37
Percentages of Total Assets 3.04 1.15 1.12 1.25 1.28 1.10 0.51 1.77 2.08 1.96
Bills Receivables (As per contra) 35.32 53.40 42.20 48.44 63.23 60.66 60.31 37.89 60.39 61.66
Percentages of Total Assets 0.33 0.48 0.41 0.49 0.63 0.51 0.43 0.24 0.36 0.33
Assets (after Depreciation) 253.50 231.48 113.33 119.67 101.03 180.93 303.34 285.33 273.66 244.44
Percentages of Total Assets 2.40 2.08 1.10 1.22 1.01 1.54 2.14 1.84 1.65 1.32
Other Assets 118.74 87.12 80.49 77.23 107.30 232.48 66.18 77.76 46.63 52.65
Percentages of Total Assets 1.12 0.78 0.78 0.78 1.07 1.97 0.47 0.50 0.28 0.28
Total 10565.96 11106.76 10320.1 9845.16 9988.26 11780.6 14185.4 15514.5 16616.4 18516
Percentages of Total Assets 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Trend Percentage:
Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Trend Percentage of Capital 100.00 106.17 114.27 120.44 145.87 171.54 201.23 242.75 281.56 325.64
Trend Percentage of Reserves 100.00 102.73 104.60 106.53 103.14 108.97 99.83 120.29 128.36 135.34
Trend Percentage of Deposits 100.00 102.79 96.38 95.03 100.22 114.78 139.87 150.35 157.30 177.97
Trend Percentage of Advances 100.00 106.65 121.07 132.48 160.30 169.08 194.66 230.14 263.31 295.88
Trend Percentage of Investments 100.00 117.92 71.26 75.46 54.39 81.95 71.08 109.82 117.41 130.58
(Source: Calculated from the published annual reports of TPCC Bank ltd. of last 10 years)
(2003-04 is base year for trend percentages)
Financial Performance Analysis Page | 416
Above table 5.208 shows Common Size Balance sheet of The Porbandar
Commercial Co-operative Bank Ltd. of last 10 years from 2003-04 to 2012-13. It also
shows the trend percentage analysis of main items of the balance sheet viz. Capital,
Reserve, Deposits Advances, and Investments. Chart 5.39 shows graphical presentation of
the trend percentage analysis shown in the table no. 5.208.
From the above Common Size Analysis of the balance sheet of The PCCB Ltd. it
is clear that liabilities side of the balance sheet the most important items are deposits and
reserve & surplus. Out of the total funds invested in the bank’s assets major portion
provided by Deposits and Reserves. During this period highest percentage of deposits with
total asset was 82.59 in the year 2007-08 and lowest percentage was found 76.18 in the
year 2004-05 i.e. during the period of the study the percentage of deposits of the bank with
total assets was found more than 75 percent in all the years. During the period of study
highest and lowest percentage of reserves and surplus with total assets was found 113.70
and 9.25 in the year 2006-07 and 2012-13. Average Percentage of 10 years in case of
Reserves of the bank found 11.24 percent and in case of deposits it remained 79.12
percent. Overall average 90.36 percent of the total assets of the bank financed by these
two components i.e. share of the other items in the balance sheet was 9.64 percent average
during last 10 years from 2003-04 to 2012-13. During the last 10 years borrowings of the
bank remained average zero percent of the total assets of the bank. From the above
balance sheet the researcher clearly seen that bank has not used borrowings in its capital
0.00
50.00
100.00
150.00
200.00
250.00
300.00
350.00P
erce
nta
ge
Years
Chart 5.39 Trend Analysis of Balance sheet of TPCC
Bank Ltd.
Trend Percentage of
Capital
Trend Percentage of
Reserve and Surplus
Trend Percentage of
Deposits
Trend Percentage of
Advances
Trend Percentage of
Investments
Financial Performance Analysis Page | 417
structure. Therefore the major liabilities in the bank were found deposits only. Average
Percentage of share capital in total of the balance sheet of 10 years remained 1.98 percent
only.
On the assets side of the balance sheet of the major items are Cash on hand,
Investments and Advances. Above Common size analysis of the balance sheet of TPCC
Bank Ltd. state that during the period of last 10 years share of Cash on hand, Investments
and Advances in total assets of the bank remained on an average 94 percent and share of
other items in the balance sheet on an average only 4 percent of the total assets during last
10 years. During the period of study highest percentages of cash on hand, Investments and
Advances with total assets were found 40.58, 27.30 and 49.38 in the year 2005-06, 2003-
04 and 2007-08 respectively. On the other hand lowest percentages were found 25.86,
14.45 and 29.12 in the year 2011-12, 2009-10 and 2003-04 respectively.
Chart 5.39 shows trend analysis of the main items of balance sheets of TPCCB ltd.
of last 10 years. Trend percentage line of share capital of the bank shows a continuous
increasing trend of share capital of the bank. In the year 2012-13 share capital of the bank
increased by 125.64 percent as compare to base year 2003-04. Increasing trend of the
share capital point out that solvency position of the bank become strong during the period
of the study. Reserve and surplus also shows continuous increasing trend except in the
year 2007-08 and 2009-10. As compare to the base year 2003-04 reserves and surplus of
the bank has increased by 35.34 percent in the year 2012-13. Continuous increase in
reserves and surplus makes bank’s solvency position more strong and healthy.
Deposit line in above chart no. 5.39 indicates that deposit of the bank continuously
increased during the year 2007-08 to 2012-13. It shows decreasing trend in the year 2004-
05 and 2005-06. As compare to base year deposits of the banks increased by 77.97
percent in the year 2012-13. On the other hand advances of the bank also show continuous
increasing during the period of the study. Overall advances of the bank has increased by
195.88 percent in the year 2012-13 as compare to base year 2003-04. Normally banks uses
it deposits for the purpose of providing advances to its customers. The researcher has
calculated Co-relation co-efficient between deposits and advances 0.9577. It indicates that
there is strong and positive co-relation between deposits accepted by bank and advances
provided by bank to its customers. The researcher can conclude here that advances of the
bank have depended on deposits of the bank 96 percent and on other funds 4 percent.
Financial Performance Analysis Page | 418
Investments of the bank have shown a continuous increasing and decreasing
(fluctuating) trend during the 2003-04 to 2012-13. It shows declining trend during 2005-06
to2009-10 but then after till the year 2012-13 it shows increasing trend. As compare to the
year 2003-04 the investment of the bank has increased by 30.58 percent in the year 2012-
13.
15. FINANCIAL PERFORMANCE OF ‘‘THE BARODA
COMMERCIAL CO-OPERATIVE BANK LTD.’ (TBCCBL):
15.1 Ratio Analysis of ‘TBCCBL’:
(I) Credit Deposit Ratio (CDR):
Formula:
Table 5.209
Table showing CDR of TBCCBL of last 10 years
Year Total Advances
(` in Lakhs)
Total Deposit
(` in Lakhs)
CDR
(%)
2003-04 4165.63 7650.00 54.45
2004-05 4481.37 7808.16 57.39
2005-06 3870.49 7687.16 50.35
2006-07 3864.67 7830.21 49.36
2007-08 4074.50 8317.29 48.99
2008-09 3786.82 10453.49 36.23
2009-10 3671.99 11003.64 33.37
2010-11 4384.73 11566.71 37.91
2011-12 6120.08 12431.60 49.23
2012-13 7000.77 13652.31 51.28
Average 46.86 (Source: Computed from Annual Reports of TBCC Bank Ltd. of last 10 Years)
Table no. 5.209 shows credit deposit ratio of TBCC Bank Ltd. for 10 years from
2003-04 to 2012-13. From above the table it is clear that bank’s credit deposit ratio
remained between 33 to 58 percent during the period of the study. Average percentage of
last 10 years CDR was 46.86. It indicates TBCCBL uses its deposits on an average 47
percentage to give advances to their customers during the period of study of last 10 years
from 2003-04 to 2012-13. Highest CDR found 57.39 percent in the year 2004-05 and
lowest percentage found 33.37 percent in the year 2009-10.
Financial Performance Analysis Page | 419
(II) Capital Adequacy Ratio (CAR)/ Capital to Risk (Weighted) Assets Ratio
(CRAR):
Formula:
Table 5.210
Table showing CAR of TBCCBL of last 10 years
Years Tier I Capital
(` in Lakhs)
Tier II Capital
(` in Lakhs)
Total TI+TII
(` in Lakhs)
RWA
(` in Lakhs)
CAR
(%)
2003-04 606.69 80.20 686.89 4516.01 15.21
2004-05 641.78 89.00 730.78 4383.81 16.67
2005-06 727.06 95.62 822.68 5190.43 15.85
2006-07 774.89 107.40 882.29 4813.37 18.33
2007-08 793.53 105.56 899.09 4407.28 20.40
2008-09 840.55 121.52 962.07 4851.60 19.83
2009-10 906.22 124.22 1030.45 4881.33 21.11
2010-11 968.91 128.90 1097.81 5429.30 20.22
2011-12 1041.72 140.40 1182.12 5320.07 22.22
2012-13 1154.00 152.86 1306.86 5601.63 23.33
Average 19.32
(Source: Computed from Annual Reports of TBCC Bank Ltd. of last 10 Years)
Table 5.210 shows Capital adequacy ratio of TBCC Bank ltd. for 10 years from
2003-04 to 2012-13.Minimum CAR required for any Urban Co-operative Bank is 9
percent after 2005 according to RBI and Basel committee report. In above table the
researcher can observed that CAR of the bank found more than 9 percent i.e. more than
required rate as per RBI in all the years. Average CAR of the 10 years period was 19.32
percent it also more than 9 percent it shows good financial adequacy of the bank during
the period of study. From the above table the researcher can clearly observed that CAR of
the bank neither continuously increase nor decrease. The highest CAR of the bank found
23.33 percent and the lowest CAR found 15.21 percent in the year 2012-13 and 2003-04
respectively.
(III) Interest Income to Total Income Ratio:
Formula:
Financial Performance Analysis Page | 420
Table 5.211
Table showing IITIR of TBCCBL of last 10 years
Year Total Interest
(` in Lakhs)
Total Income
(` in Lakhs)
IITIR
(%)
2003-04 775.18 792.72 97.79
2004-05 842.85 863.55 97.60
2005-06 923.01 946.50 97.52
2006-07 908.65 932.35 97.46
2007-08 936.39 969.74 96.56
2008-09 1036.73 1185.95 87.42
2009-10 1049.94 1096.72 95.73
2010-11 1115.73 1136.25 98.19
2011-12 1285.38 1297.25 99.09
2012-13 1445.13 1498.70 96.43
Average 96.38
(Source: Calculated from Annual Reports of TBCC Bank Ltd. of last 10 Years)
Above table 5.211 shows that out of the total income of TBCCL on an average
96.38 percent income was interest and discount income during last ten years from 2003-04
to 2012-13. During the period of the study highest interest income to total income ratio
was found 99.09 percent in the year 2011-12 and lowest ratio was 87.42 percent in the
year 2008-09. The researcher can conclude on the basis of above table that average interest
and discount income of the bank was 96 percent of the total income of the bank and other
income were 4 percent only of the total income of the bank.
(IV) Interest Expenses to Total Expenses Ratio:
Formula:
Table 5.212
Table showing IETER of TBCCBL of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Total Expenses
(` in Lakhs)
IETER
(%)
2003-04 533.55 745.20 71.60
2004-05 552.53 807.73 68.41
2005-06 585.34 882.69 66.31
2006-07 615.20 865.51 71.08
2007-08 645.69 913.99 70.64
2008-09 702.26 1054.73 66.58
2009-10 725.49 995.18 72.90
2010-11 768.18 1042.64 73.68
2011-12 818.60 1194.95 68.50
2012-13 924.03 1384.20 66.76
Average 69.65
(Source: Computed from Annual Reports of TBCC Bank Ltd. of last 10 Years)
Financial Performance Analysis Page | 421
The above table no.5.212 showing interest expenses to total expenses ratio the
highest ratio was found 73.68 percent and lowest ratio was 66.31 percent in the year 2010-
11 and 2005-06 respectively. Average of 10 years ratio was 69.65 percent i.e. on an
average during last 10 years out of total expenses of the bank around 70 percent portion of
total expenses was interest expenses on deposits and borrowings i.e. ratio of other
operating expenses with total expenses was average 30 percent.
(V) Net Profit to Net Assets Ratio:
Formula:
Table 5.213
Table showing NPNAR of TBCCBL of last 10 years
Year Net Profit
(` in Lakhs)
Net Assets
(` in Lakhs)
NPNAR
(%)
2003-04 47.52 1933.07 2.46
2004-05 55.82 2075.73 2.69
2005-06 63.81 2301.77 2.77
2006-07 66.84 2376.99 2.81
2007-08 55.75 2425.81 2.30
2008-09 71.22 2484.40 2.87
2009-10 81.55 2607.75 3.13
2010-11 93.61 2701.43 3.47
2011-12 102.30 2770.76 3.69
2012-13 114.50 2937.17 3.90
Average 3.08
(Source: Computed from Annual Reports of TBCC Bank Ltd. of last 10 Years)
Table no. 5.213 shows Net profit to Net Assets Ratios from the above table the
researcher can observed that during last 10 years the period of the study highest NPNAR
was found 3.90 percent in the year 2012-13 and lowest NPNAR was 2.30 percent in the
year 2007-08. The average NPNAR of the bank of the last 10 years was found 3.08
percent. From the above table it is clear that the NPNAR of the bank remained in
fluctuating position during last ten years the period of the study.
(VI) Earnings per Share:
Formula:
Financial Performance Analysis Page | 422
Table 5.214
Table showing EPS of TBCCBL of last 10 years
Year Net Profit
(` in Lakhs)
No. of Equity
Share (in Lakhs)
EPS
(`)
2003-04 47.52 0.42 111.93
2004-05 55.82 0.44 127.03
2005-06 63.81 0.92 69.66
2006-07 66.84 1.04 64.26
2007-08 55.75 1.04 53.82
2008-09 71.22 1.01 70.45
2009-10 81.55 1.08 75.24
2010-11 93.61 1.26 74.48
2011-12 102.30 1.61 63.48
2012-13 114.50 2.05 55.85
Average 76.60
(Source: Computed from Annual Reports of TBCC Bank Ltd. of last 10 Years)
Average Earning per share (EPS) of TBCCBL found `76.6 per share of last 10
years. During the period of the study highest EPS earned by the bank in the year 2004-05
`127.03 per share and minimum EPS earned by the bank `53.82 in the year 2007-08.
Bank has earned average `76.6 per share annually against the share of `100 each i.e. 76.6
percent.
(VII) Interest Income to Average Working Fund Ratio:
Formula:
Working Fund = Total assets – Bills Receivable and other contra entries
Table 5.215
Table showing IIAWFR of TBCCBL of last 10 years
Year Total Interest
(` in Lakhs)
AWF
(` in Lakhs)
IIAWFR
(%)
2003-04 775.18 10854.94 7.14
2004-05 842.85 11546.33 7.30
2005-06 923.01 11771.39 7.84
2006-07 908.65 11875.81 7.65
2007-08 936.39 12190.85 7.68
2008-09 976.73 13600.09 7.18
2009-10 1029.94 14920.03 6.90
2010-11 1115.73 15380.22 7.25
2011-12 1285.38 16065.16 8.00
2012-13 1445.13 17091.09 8.46
Average 7.54
Financial Performance Analysis Page | 423
(Source: Computed from Annual Reports of TBCC Bank Ltd. of last 10 Years)
From the above table 5.215 it is clear that during last 10 year the highest interest
income to average working fund ratio was found 8.46 percent in the year 2012-13 and
lowest ratio was 6.90 percent in the years 2009-10. Average IIAWFR of the bank of last
ten years was 7.54 percent from 2003-04 to 2012-13 the period of the study.
(VIII) Interest Expenses to Average Working Fund Ratio:
Formula:
Table 5.216
Table showing IEAWFR of TBCCBL of last 10 years
Year Total Interest Exp.
(` in Lakhs)
AWF
(` in Lakhs)
IEAWFR
(%)
2003-04 533.55 10854.94 4.92
2004-05 552.53 11546.33 4.79
2005-06 585.34 11771.39 4.97
2006-07 615.20 11875.81 5.18
2007-08 645.69 12190.85 5.30
2008-09 702.26 13600.09 5.16
2009-10 725.49 14920.03 4.86
2010-11 768.18 15380.22 4.99
2011-12 818.60 16065.16 5.10
2012-13 924.03 17091.09 5.41
Average 5.07
(Source: Computed from Annual Reports of TBCC Bank Ltd. of last 10 Years)
Above table shows that during last 10 year the highest interest expenses to average
working fund ratio was found 5.41 percent and lowest ratio was 4.79 percent in the year
2012-13 and 2004-05 respectively. On an average bank has 5.07 percent ratio of interest
expenses to average working fund annually. Interest income ratio average 7.54 percent
against it average interest expense ratio 5.07 percent of last ten years i.e. the bank has
average earning gap of interest income 2.47 percent of average working fund.
(IX) Gross Profit to Average Working Fund Ratio:
Formula:
Financial Performance Analysis Page | 424
Table 5.217
Table showing GPAWFR of TBCCBL of last 10 years
Year Gross Profit
(` in Lakhs)
AWF
(` in Lakhs)
GPAWFR
(%)
2003-04 77.40 10854.94 0.71
2004-05 113.62 11546.33 0.98
2005-06 135.50 11771.39 1.15
2006-07 106.61 11875.81 0.90
2007-08 87.62 12190.85 0.72
2008-09 116.49 13600.09 0.86
2009-10 113.35 14920.03 0.76
2010-11 123.61 15380.22 0.80
2011-12 148.80 16065.16 0.93
2012-13 212.06 17091.09 1.24
Average 0.91 (Source: Computed from Annual Reports of TBCC Bank Ltd. of last 10 Years)
Above table 5.217 shows that the highest GPAWFR of the bank was 1.24 percent
in the year 2012-13 and lowest ratio is 0.71 percent in the year 2003-04. Average
GPAWFR remained 0.91 percent of last 10 years from 2003-04 to 2012-13.
(X) Net Profit to Average Working Fund Ratio:
Formula:
Table 5.218
Table showing NPAWFR of TPCCBL of last 10 years
Year Net Profit
(` in Lakhs)
AWF
(` in Lakhs)
NPAWFR
(%)
2003-04 47.52 10854.94 0.44
2004-05 55.82 11546.33 0.48
2005-06 63.81 11771.39 0.54
2006-07 66.84 11875.81 0.56
2007-08 55.75 12190.85 0.46
2008-09 71.22 13600.09 0.52
2009-10 81.55 14920.03 0.55
2010-11 93.61 15380.22 0.61
2011-12 102.30 16065.16 0.64
2012-13 114.50 17091.09 0.67
Average 0.55
(Source: Computed from Annual Reports of TBCC Bank Ltd. of last 10 Years)
Financial Performance Analysis Page | 425
Above table shows that the highest NPAWFR of the bank was 0.67 percent in the
year 2012-13, and lowest 0.44 percent in the year 2003-04 and average NPAWFR of the
bank 0.55 percent of last 10 years from 2003-04 to 2012-13 i.e. bank has earned 0.55
percent of its average working fund as net profit during last 10 years the period of study on
an average.
(XI) Employee Cost to Average Working Fund Ratio:
Formula:
Table 5.219
Table showing ECAWFR of TBCCBL of last 10 years
Year Employee exp.
(` in Lakhs)
AWF
(` in Lakhs)
ECAWFR
(%)
2003-04 76.83 10854.94 0.71
2004-05 82.89 11546.33 0.72
2005-06 93.05 11771.39 0.79
2006-07 97.50 11875.81 0.82
2007-08 99.90 12190.85 0.82
2008-09 145.46 13600.09 1.07
2009-10 140.66 14920.03 0.94
2010-11 144.03 15380.22 0.94
2011-12 166.85 16065.16 1.04
2012-13 171.39 17091.09 1.00
Average 0.89
(Source: Computed from Annual Reports of TBCC Bank Ltd. of last 10 Years)
From the above table, showing ratios of employee’s cost to average working fund
of last 10 years of the bank it is clear that average employee cost of the bank on average
working fund was found 0.89 percent per annum. During last 10 years highest ECAWFR
found 1.07 percent in the year 2008-09 and lowest ratio 0.71 percent in the year 2003-04.
(XII) Cost of Deposit Ratio:
Formula:
Financial Performance Analysis Page | 426
Table 5.220
Table showing CoDR of TBCCBL of last 10 years
Year Total Interest Exp.
(` in Lakhs)
Average Deposits
(` in Lakhs)
CoDR
(%)
2003-04 533.55 7100.35 7.51
2004-05 552.53 7729.08 7.15
2005-06 585.34 7747.66 7.56
2006-07 615.20 7758.68 7.93
2007-08 645.69 8073.75 8.00
2008-09 702.26 9385.39 7.48
2009-10 725.49 10728.57 6.76
2010-11 768.18 11285.18 6.81
2011-12 818.60 11999.15 6.82
2012-13 924.03 13041.95 7.09
Average 7.31 (Source: Calculated from Annual Reports of TBCC Bank Ltd. of last 10 Years)
From the above table; showing cost of deposit ratio the researcher was found
that the percentages of Interest on Average Deposits during last 10 years highest 8.00
percent in the year 2007-08 and lowest 6.76 percent in the year 2009-10 and average cost
of deposits last of 10 years of the bank was remained 7.31 percent.
(XIII) Summary of the above Ratios of ‘TBCC Bank Ltd.’:
Table 5.221
A summary of all the ratios of TBCC Bank Ltd. Calculated above Y
ears
CD
R (%
)
CA
R (%
)
IITIR
(%)
IET
ER
(%)
NP
NA
R (%
)
EP
S (`
)
IIAW
FR
(%)
IEA
WF
R (%
)
GP
AW
FR
(%)
NP
AW
FR
(%)
EC
AW
FR
(%)
CO
DR
(%)
03-04 54.45 15.21 97.79 71.60 2.46 111.93 7.14 4.92 0.71 0.44 0.71 7.51
04-05 57.39 16.67 97.60 68.41 2.69 127.03 7.30 4.79 0.98 0.48 0.72 7.15
05-06 50.35 15.85 97.52 66.31 2.77 69.66 7.84 4.97 1.15 0.54 0.79 7.56
06-07 49.36 18.33 97.46 71.08 2.81 64.26 7.65 5.18 0.90 0.56 0.82 7.93
07-08 48.99 20.40 96.56 70.64 2.30 53.82 7.68 5.30 0.72 0.46 0.82 8.00
08-09 36.23 19.83 87.42 66.58 2.87 70.45 7.18 5.16 0.86 0.52 1.07 7.48
09-10 33.37 21.11 95.73 72.90 3.13 75.24 6.90 4.86 0.76 0.55 0.94 6.76
10-11 37.91 20.22 98.19 73.68 3.47 74.48 7.25 4.99 0.80 0.61 0.94 6.81
11-12 49.23 22.22 99.09 68.50 3.69 63.48 8.00 5.10 0.93 0.64 1.04 6.82
12-13 51.28 23.33 96.43 66.76 3.90 55.85 8.46 5.41 1.24 0.67 1.00 7.09
Avg. 46.86 19.32 96.38 69.65 3.01 76.62 7.54 5.07 0.91 0.55 0.89 7.31
Financial Performance Analysis Page | 427
15.2 NPA Management of ‘TBCC Bank Ltd.’:
Table 5.222
Table showing NPA Management of TBCC Bank Ltd. of last 10 years
Yea
rs
Tota
l
Ad
van
ces
(` i
n L
ak
hs)
Gro
ss N
PA
(` i
n L
ak
hs)
Gro
ss N
PA
(%)
Total Provision
(` in Lakhs)
NE
T N
PA
(`in
Lak
hs)
NE
T N
PA
(%)
1 2 1/2x100
03-04 4165.63 549.15 13.18 390.42 158.73 4.20
04-05 4481.37 445.22 9.93 410.45 34.77 0.85
05-06 3870.49 422.10 10.91 420.89 1.21 0.04
06-07 3864.67 396.55 10.26 456.09 -59.54 -1.75
07-08 4074.50 365.45 8.97 468.86 -103.41 -2.87
08-09 3786.82 340.25 8.99 498.64 -158.39 -4.82
09-10 3671.99 310.18 8.45 509.92 -199.74 -6.32
10-11 4384.73 270.10 6.16 518.91 -248.81 -6.44
11-12 6120.08 246.90 4.03 528.96 -282.06 -5.04
12-13 7000.77 250.70 3.58 540.21 -289.51 -4.48
Average 8.45 -2.66
(Calculated from the information available in annual reports of the Bank)
In the above table Net NPA in (`) and NET NPA in (%) calculated as under
13
.18
9.9
3 10
.91
10
.26
8.9
7
8.9
9
8.4
5
6.1
6
4.0
3
3.5
8
4.2
0
0.8
5
0.0
4
-1.7
5
-2.8
7
-4.8
2
-6.3
2
-6.4
4
-5.0
4
-4.4
8
-10.00
-5.00
0.00
5.00
10.00
15.00
Gro
ss a
nd
Net
NP
A (
%)
Years
Chart 5.40 Gross and Net NPA of TBCC Bank Ltd.
Gross NPA
Net NPA
Financial Performance Analysis Page | 428
Above table no. 5.222 and chart no. 5.40 shows the Non Performing Assets
(NPA) management of The Baroda Commercial Co-operative Bank Ltd. for the period of
the study from the year 2003-04 to 2012-13. It shows Gross NPA and Net NPA of the
bank in amount and in percentage. It also shown provision maintained by the bank against
non performing assets of the bank during the period of the study.
As per present guidelines from RBI Net NPA should be less than 5 percent to
pay dividend and Gross NPA should be less than 10 percent to avoid supervisory action
from RBI. From the above table 5.222 and chart 5.40 the researcher found that Gross NPA
of TBCC Bank Ltd. was found more than 10 percent in the years 2003-04 to 2004-05 and
2006-07 in remaining years it was found less than 10 percent during the period of the
study. It was a great achievement for the bank that bank has successfully reduced its Gross
NPA to 3.58 percent in the year 2012-13 which was highest 13.18 percent in the year
2003-04.
Net NPA of the bank should be less than 5 percent as per RBI rules. During the
period of the study from 2003-04 to 2012-13 the researcher found that the Net NPA of the
bank was remained not only less than 5 percent but less than Zero during the period of the
study. NPA management of the bank was found good Bank always maintained reserve
more than its Gross NPA therefore Net NPA of the bank remained Zero. Average Gross
NPA ratio was found 8.45 percent and Net NPA was found (-2.66) percent that means
Zero (0). Bank has Net NPA Zero continuously from last 7 years 2006-07 to 2012-13.
From the above discussion and observation of chart and table the researcher
can said that the NPA management of the bank found too good during the period of the
study from 2003-04 to 2012-13. Bank has maintained not only enough but more than
enough provision against non performing assets of the bank according to the rules and
regulation recommended by RBI time to time. Therefore Net NPA of the bank found zero
constantly from last seven years.
Financial Performance Analysis Page | 429
15.3 Common Size Statement and Trend Analysis of ‘TBCC Bank Ltd.’:
(I) Common Size Income Statement of ‘TBCC Bank Ltd.’:
Table: 5.223
`in Lakhs
Particulars Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Incomes:
Interest and discount 775.18 842.85 923.01 908.65 936.39 976.73 1029.94 1115.73 1285.38 1445.13
Percentage of Total Income 97.79 97.60 97.52 97.46 96.56 86.75 95.65 98.19 99.09 96.43
Commission, Exchange & Brokerage 3.50 5.52 5.27 6.03 9.53 7.94 7.14 5.09 7.07 7.98
Percentage of Total Income 0.44 0.64 0.56 0.65 0.98 0.70 0.66 0.45 0.54 0.53
Other Receipts 14.04 15.18 18.23 17.67 23.82 141.29 39.65 15.44 4.80 45.59
Percentage of Total Income 1.77 1.76 1.93 1.90 2.46 12.55 3.68 1.36 0.37 3.04
Total (A) 792.72 863.55 946.50 932.35 969.74 1125.95 1076.73 1136.25 1297.25 1498.70
Percentage of Total Income 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Expenditures:
Interests on Deposits, Borrowings 533.55 552.53 585.34 615.20 645.69 702.26 725.49 768.18 818.60 924.03
Percentage of Total Income 67.31 63.98 61.84 65.98 66.58 59.22 66.15 67.61 63.10 61.66
Salary, Allowances, provident fund and staff welfare 76.83 82.89 93.05 97.50 99.90 145.46 140.66 144.03 166.85 171.39
Percentage of Total Income 9.69 9.60 9.83 10.46 10.30 12.26 12.83 12.68 12.86 11.44
Seating fees of Directors and meeting fees 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentage of Total Income 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Rents, Rates, Insurance, Electricity etc. 1.91 2.46 3.69 3.80 3.59 3.89 3.98 3.81 3.72 4.08
Percentage of Total Income 0.24 0.28 0.39 0.41 0.37 0.33 0.36 0.34 0.29 0.27
Legal fees 0.47 0.00 1.53 2.24 1.35 2.06 2.76 3.02 1.02 11.01
Percentage of Total Income 0.06 0.00 0.16 0.24 0.14 0.17 0.25 0.27 0.08 0.73
Financial Performance Analysis Page | 430
Postage, Telephone, etc. 2.01 2.15 2.33 2.07 2.04 2.60 2.57 2.66 2.36 2.33
Percentage of Total Income 0.25 0.25 0.25 0.22 0.21 0.22 0.23 0.23 0.18 0.16
Audit Fees, Internal Audit fees 1.80 1.86 1.95 2.03 2.25 1.97 1.89 2.07 2.04 2.22
Percentage of Total Income 0.23 0.22 0.21 0.22 0.23 0.17 0.17 0.18 0.16 0.15
Depreciation and Repairs to property 13.35 10.86 12.84 15.17 17.67 20.61 10.79 12.42 10.35 82.20
Percentage of Total Income 1.68 1.26 1.36 1.63 1.82 1.74 0.98 1.09 0.80 5.48
Printing Stationary, Advertisement 3.66 3.87 3.93 4.35 4.82 3.56 5.84 3.60 5.07 4.01
Percentage of Total Income 0.46 0.45 0.42 0.47 0.50 0.30 0.53 0.32 0.39 0.27
Provisions 29.88 57.80 71.69 39.77 31.88 45.27 31.80 30.00 46.50 97.56
Percentage of Total Income 3.77 6.69 7.57 4.27 3.29 3.82 2.90 2.64 3.58 6.51
Other expenses 81.75 93.32 106.35 83.40 104.82 127.08 69.42 72.86 138.45 85.38
Percentage of Total Income 10.31 10.81 11.24 8.95 10.81 10.72 6.33 6.41 10.67 5.70
Total Expenses (B) 745.20 807.73 882.69 865.51 913.99 1054.73 995.18 1042.64 1194.95 1384.20
Percentage of Total Income 94.01 93.54 93.26 92.83 94.25 88.94 90.74 91.76 92.11 92.36
Net Profit (A-B) 47.52 55.82 63.81 66.84 55.75 71.22 81.55 93.61 102.30 114.50
Percentage of Total Income 5.99 6.46 6.74 7.17 5.75 11.06 9.26 8.24 7.89 7.64
Trend Percentage: Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Trend Ratio of Total Operating Income 100.00 108.94 119.40 117.61 122.33 142.04 135.83 143.33 163.64 189.06
Trend Ratio of Total Operating Expenses 100.00 112.15 122.56 120.18 126.91 146.45 138.18 144.77 165.92 192.20
Trend Ratio of Net Profit 100.00 117.48 134.29 140.66 117.31 149.87 171.61 196.99 215.28 240.95
(Source: Calculated from the published annual reports of TBCC Bank Ltd. of last 10 years)
(2003-04 is base year for trend percentages)
Financial Performance Analysis Page | 431
Above table 5.223 shows Common Size Analysis of Income Statement (profit
and loss account) of The Baroda Commercial Co-operative Bank Ltd. for 10 years from
2003-04 to 2012-13 and it also shows Trend Analysis of Total Operating Income, Total
Operating Expenses and Net Profit of TBCC Bank ltd. for the same period stated above.
Chart 5.41 shows graphical presentation of trend analysis as shown in the table no.5.223.
From the above Common Size Analysis of TBCC Bank Ltd. of profit and loss
account the researcher found that out of the total operating income of the bank the major
income is interest and discount income. During the last 10 years average interest income
was remained 96.30 percent of the total operating income. Highest percentage of interest
and discount income with total operating income was found during the period of study
99.09 percent in the year 2011-12 and lowest percentage found 86.75 in the year 2008-
09. Share of other income in total operating income was found during the period of study
on an average 3.7 percent only.
On the other side average percentage of total operating expenses including
various provisions on total operating income was found 93.02 percent during the period
of study. And therefore average net profit during the period of study was found 6.98
percent of the total operating income. Major expenses of the bank were found interest on
deposits and borrowing and employee’s related expenses like salary, provident fund etc.
Average interest expenses during the period of study were 64.78 percent of the total
income and average employee related expenses were 11.28 percent of the total income.
With the help of above figures the researcher can conclude that overall 76.06 percent of
0.00
50.00
100.00
150.00
200.00
250.00
300.00
Per
cen
tag
e
Years
Chart 5.41 Trend analysis of P/L accounts of TBCC
Bank Ltd.
Trend Ratio of Total
Operating Income
Trend Ratio of Total
Operating Expenses
Trend Ratio of Net Profit
Financial Performance Analysis Page | 432
the total income was interest expenses and employee’s expenses while 23.94 percent of
the total operating income was other operating expenditure and provisions included in
total operating expenses of the bank.
From the above table 5.223 the researcher also seen that average percentage of
net profit during the period of study was remained 6.98 percent of total operating income
of the bank. The highest net profit to total operating income percentage was found during
last 10 years was 8.24 percent in the year 2010-11 and lowest percentage was found 5.99
in the year 2003-04.
From the trend analysis of the bank’s profit and loss account shown in the above
table and chart the researcher can conclude that the total operating income, total
operating expenses shown parallel and increasing trend from 2003-04 to 2012-13 the
whole period of the study. From the above chart 5.41 it is clear that operating expenses
increase with increase in operating income and decrease with decrease in operating
income of the bank. There is a strong positive correlation between Operating income and
Operating expenses of the bank. Correlation coefficient between operating income and
operating expenses determined 0.99. So the researcher can conclude operating expenses
are strongly correlated with operating income and also depend on operating income. As
compare to the base year 2003-04, total operating incomes and total operating expenses
of the bank increased by 89.06 and 92.20 percent respectively in the year 2012-13.
Trend percentage line of the Net Profit shown increasing trend during the period
of the study. Net Profit of the bank also found positively correlated with operating
income and operating expenses of the bank. Correlation coefficient between operating
income and operating expenses with net profit determined 0.95 and 0.94 respectively. It
indicates that net profit of the bank was depend on operating income and operating
expenses of the bank but other factors also affect on net profit of the bank. As compare
to base year net profit of the bank increase every year during the period of the study.
Finally at the end of the March 2013 net profit of the bank has increased by 140.95
percent as compare to base year 2003-04. During ten years trend percentage line of net
profit shown profit of the bank has been increased every year during the period of the
study.
Financial Performance Analysis Page | 433
(II) Common size Balance sheets of TBCC Bank Ltd.:
Table 5.224
`in Lakhs
Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Liabilities:
Share Capital (share of Rs.100 each) 42.45 43.95 91.61 104.02 103.58 101.10 108.38 125.69 161.15 205.02
Percentages of Total Liabilities 0.37 0.37 0.78 0.87 0.83 0.68 0.72 0.80 0.98 1.16
Reserve and Surplus 1890.62 2031.78 2210.16 2272.98 2322.22 2383.31 2499.37 2575.74 2609.61 2732.15
Percentages of Total Liabilities 16.65 17.31 18.72 19.03 18.67 16.14 16.58 16.42 15.87 15.40
Deposits 7650.00 7808.16 7687.16 7830.21 8317.29 10453.49 11003.64 11566.71 12431.60 13652.31
Percentages of Total Liabilities 67.36 66.53 65.11 65.55 66.88 70.81 72.99 73.75 75.59 76.98
Borrowings 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Percentages of Total Liabilities 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Other Liabilities 1725.84 1796.52 1753.79 1671.04 1637.78 1754.45 1383.57 1322.19 1141.74 1031.81
Percentages of Total Liabilities 15.20 15.31 14.85 13.99 13.17 11.88 9.18 8.43 6.94 5.82
Profit and Loss Account 47.52 55.82 63.81 66.84 55.75 71.22 81.55 93.61 102.30 114.50
Percentages of Total Liabilities 0.42 0.48 0.54 0.56 0.45 0.48 0.54 0.60 0.62 0.65
Total 11356.42 11736.24 11806.54 11945.08 12436.62 14763.56 15076.51 15683.94 16446.39 17735.78
Percentages of Total Liabilities 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Assets:
Cash and Bank Balance 52.61 59.71 78.34 80.37 84.80 61.23 72.49 86.35 69.60 71.56
Percentages of Total Assets 0.46 0.51 0.66 0.67 0.68 0.41 0.48 0.55 0.42 0.40
Call Money 224.05 309.47 317.35 307.30 5.92 463.33 354.97 488.71 700.46 1152.36
Percentages of Total Assets 1.97 2.64 2.69 2.57 0.05 3.14 2.35 3.12 4.26 6.50
Financial Performance Analysis Page | 434
Investment 4757.98 4906.48 5602.67 5572.94 6505.89 8560.47 9393.03 9172.50 8349.47 8340.54
Percentages of Total Assets 41.90 41.81 47.45 46.65 52.31 57.98 62.30 58.48 50.77 47.03
Advances 4165.63 4481.37 3870.49 3864.67 4074.50 3786.82 3671.99 4384.73 6120.08 7000.77
Percentages of Total Assets 36.68 38.18 32.78 32.35 32.76 25.65 24.36 27.96 37.21 39.47
Assets (after Depreciation) 144.99 130.48 122.56 114.35 107.10 104.46 99.40 113.33 116.37 171.78
Percentages of Total Assets 1.28 1.11 1.04 0.96 0.86 0.71 0.66 0.72 0.71 0.97
Other Assets 2011.16 1848.72 1815.12 2005.45 1658.40 1787.25 1484.62 1438.32 1090.43 998.78
Percentages of Total Assets 17.71 15.75 15.37 16.79 13.33 12.11 9.85 9.17 6.63 5.63
Total 11356.42 11736.24 11806.54 11945.08 12436.62 14763.56 15076.51 15683.94 16446.39 17735.78
Percentages of Total Assets 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Trend Percentage:
Years 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Trend Percentage of Capital 100.00 103.52 215.81 245.03 244.01 238.16 255.32 296.08 379.61 515.94
Trend Percentage of Reserves 100.00 107.47 116.90 120.22 122.83 126.06 132.20 136.24 138.03 144.51
Trend Percentage of Deposits 100.00 102.07 100.49 102.36 108.72 121.92 143.84 151.20 162.50 177.82
Trend Percentage of Advances 100.00 107.58 92.91 92.78 97.81 90.91 88.15 105.26 146.92 168.06
Trend Percentage of Investments 100.00 103.12 117.75 117.13 136.74 179.92 197.42 192.78 175.48 175.30
(Source: Calculated from the published annual reports of TBCC Bank ltd. of last 10 years)
(2003-04 is base year for trend percentages)
Financial Performance Analysis Page | 435
Above table 5.224 shows Common Size Balance sheet of The Baroda
Commercial Cooperative Bank Ltd. (TBCCBL) of last 10 years from 2003-04 to 2012-
13. It also shows the trend percentage analysis of key items of the balance sheet. Chart
5.42 shows graphical presentation of the trend percentage analysis shown in the table no.
5.224.
From the above Common Size Analysis of the balance sheet of the bank it is clear
that liabilities side of the balance sheet the most important items are deposits and reserve
& surplus. Out of the total funds invested in the bank’s assets major portion provided by
Deposits and Reserves. During this period highest percentage of deposits with total asset
was found 76.98 in the year 2012-13 and lowest percentage was found 65.11 in the year
2005-06. During the period of study highest and lowest percentage of reserves and
surplus with total assets was found 19.03 percent and 15.40 in the year 2006-07 and
2012-13. Average Percentage of 10 years in case of Reserves of the bank remained 17.08
percent and in case of deposits it remained 70.15 percent. Overall average 85.55 percent
of the total assets of the bank financed by these two components i.e. share of the other
items in the balance sheet was 14.45 percent average during last 10 years from 2003-04
to 2012-13. During the last 10 years borrowings of the bank remained Zero. From the
above balance sheet the researcher clearly seen that bank has not used borrowings in its
capital structure during the period of the study. Therefore the major liabilities of the
0.00
100.00
200.00
300.00
400.00
500.00
600.00
Per
cen
tag
e
Years
Chart 5.42 Trend Analysis of Balance sheet of TBCC
Bank Ltd.
Trend Percentage of
Capital
Trend Percentage of
Reserve and Surplus
Trend Percentage of
Deposits
Trend Percentage of
Advances
Trend Percentage of
Investments
Financial Performance Analysis Page | 436
bank were found deposits only. Average Percentage of share capital in total of the
balance sheet of 10 years remained 0.75 percent only.
On the assets side of the balance sheet of the major items are Investments and
Advances. Above Common size analysis of the balance sheet of TBCC Bank Ltd. state
that during the period of last 10 years share of Investments and Advances in total assets
of the bank remained on an average 83.41 percent and share of other items in the balance
sheet on an average only 16.59 percent of the total assets during last 10 years. During
the period of study highest percentages of Investments and Advances with total assets
were found 62.30 and 39.47 in the year 2009-10 and 2012-13 respectively. On the other
hand lowest percentages were found 41.81 and 24.36 in the year 2004-05 and 2009-10
respectively.
Chart 5.42 shows trend analysis of the main items of balance sheets of TBCCB
ltd. of last 10 years. Trend percentage line of share capital of the bank shows a
continuous increasing trend of share capital of the bank. In the year 2012-13 share capital
of the bank increased by 382.97 percent as compare to base year 2003-04. Increasing
trend of the share capital indicate that solvency position of the bank become strong
during the period of the study. Reserve and surplus also shows continuous increasing
trend. As compare to the base year 2003-04 reserves and surplus of the bank has
increased by 44.51 percent in the year 2012-13. Continuous increase in reserves and
surplus makes bank’s solvency position more strong and powerful.
Deposit line in above chart no. 5.42 indicates that deposit of the bank
continuously increased from the year 2006-07 to 2012-13 as compare to base year
deposits of the banks increased by 78.46 percent in the year 2012-13. During the period
of the study the researcher found that deposits of the bank shows increasing trend. It
indicates increase faith of depositors in the bank during the period of the study. On the
other hand advances of the bank shows mixed trend of increasing and decreasing during
the period of the study. But over all advances of the bank has increased by 68.06 percent
in the year 2012-13 as compare to base year 2003-04. Normally banks uses it deposits
for the purpose of providing advances to its customers. The researcher has calculated Co-
relation co-efficient between deposits and advances 0.71. It indicates that there is
positive co-relation between deposits accepted by bank and advances provided by bank
Financial Performance Analysis Page | 437
to its customers. The researcher can conclude here that advances of the bank have
depended on deposits of the bank 71 percent and on other funds 29 percent.
Investments of the bank have shown a continuous increasing trend during the
2003-04 to 2010-11. In the year 2011-12 and 2012-13 it shows slightly decreasing trend.
As compare to the year 2003-04 the investment of the bank has increased by 75.30
percent in the year 2012-13. Continuous increase in investment shows that bank has
increased its investment in outside securities it might be a reason for decreasing in
advances in that particular period of time. Here the researcher can be said that bank has
more focus on investment as compare to advances.
16. CONCLUSION:
In this chapter the researcher has analyzed the financial data of the selected
commercial co-operative banks of Gujarat State. The researcher has made analysis by
applying Ratio analysis, Common size Analysis and NPA analysis of each bank. The
researcher has analyzed financial performance of total 14 selected commercial co-
operative banks of Gujarat State. Next chapter of the study deals with comparative
financial performance analysis of the selected commercial co-operative bank and
hypothesis testing.