Analysis of Banks by Using Ratios Essay Sample
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Analysis of Banks by Using Ratios Essay Sample
This is one of the leading banks in Indian banking sector. It is having 1622 branches and it is having more than 9924 ATMs it spread across 1050 centers over the India. In the credit more than 75 percent loans for the home loans. The growth in total deposits around 33%. Source : Axis bank annual report
Yes bank one of the private banks in Indian banking Industry it is having around 403 branches and 951 ATMs in India. Loan amount around 46999 corer rupees deposits are 66955 crore rupees. Source : Yes bank annual report
Net income of AXIS bank is 219,946.50 crore rupees and for the YES bank is 63,073.50 crore rupees AXIS bank was established in the year 1994 but YES bank was established in 2003- 2004 but it was started operations in 2009. Compared to Yes bank Axis bank is operating well. Asset utilization ratio:
If we look at asset utilization ratio Yes bank is doing well compared to the Axis bank. For AXIS it is 10.38% and for the YES bank it is 10.81% that means that Yes bank is using each and every asset very usefully compared to the AXIS . They are getting more profits on each asset. Burden:
This is very very important factor of any bank if Axis bank had burden of 196,233.10 crore rupees that means that they are having more other income compared to operating expense Axis bank is very good at para banking that they are good at selling mutual funds and Insurance etc simply we can say that say they are doing non banking operations well. But in the case of yes bank it is reverse burden is in negative that means that it is having more operating expenses less other income the burden figure is around -918 crores this indicates that yes bank should more concentrate on para banking in insurance and some other forms. CASA ratio
Both AXIS and Yes banks are having almost same CASA ratio i.e 18.96 and 18.9 both banks are good at maintaining mix current accounts and savings account this CASA is nothing but the working funds for the company this CASA mix should be high it low cost deposits so that we can achieve good profits. Leverage ratio
RBI is implementing BASEL 3 norms that leads to higher safety leverage ratio currently AXIS 12.6% Yes have 17.06% the net worth of yes bank is less compare to AXIS from this ratio we came to know that Axis bank is having more equity capital compared to Yes bank. And also average total assets also more in the case of AXIS bank. ROA
This is the ration of PAT and average total assets for Axis it is 1.61% and for YES bank it is 1.33% it tells how much income it is generating from each single asset it also tells that the efficiency of a management Axis bank is managing assets well compared to the Yes bank this is highly depends on the industry it is a good measure to compare the companies in a industry. Interest paid
Axis bank paid more interest because it is having more loans this could be they need more money to lend others 139769 crore rupees but Yes paid 46917 crore may be this bank does not have that many lendings compared to the AXIS. One more AXIS is a very aggressive player in th industry that also one reason for that. ROE
For Yes bank it is 20.89% and for Axis it is 16.21 % simply we can say that how much money is generating from the share holders equity Yes bank is generating more money compare to Axis Axis bank is having more borrowings compare to Yes bank that can be one reason may it is more depending on the borrowings compared to equity. Net interest margin
NIM for Axis 8.3 % and for Yes it is 2.44 % only this tells us how management effectively taking the investment decisions in the case of debt. Axis bank having a very good ratio that means that the management of Axis bank is taking very good investment decision regarding debt. We can say that Axis bank perfectly utilizing their debt. But in the case of Yes bank management is not taking that much effective investment decisions regarding debt.
From the ratios we can say that Axis bank is doing well compared the reason may Axis bank is very aggressive player and one more reason is Axis bank is older than Yes bank this is also one reason Yes bank lagging compared to Axis bank. From the annual report of Yes bank we came to know that credit growth rate is increased year on year and they gave more loans to the industries it is growing more than 20% annually after that agriculture sector it is growing more than 15%. But in the case of Axis bank credit growth rate is 17% but the industry growth is 15% is doing better than industry.