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SUMMER INTERNSHIP REPORT

ONComparative Study on Stock Position in Equity Market

between SBI &ICICI BANK.

CARRIED OUT IN

Arcadia Share & Stock Brokers Pvt. Ltd.

Raipur (C.G)

BY

HEMA

Submitted in the partial fulfilment of the requirement of the

DISHA SCHOOL OF MANAGEMENT, Raipur (C.G.)


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A

SUMMER INTERNSHIP PROJECT

ON

Submitted for partial fulfilment of requirement for the award of degree

Of

Post Graduate Diploma in Management (PGDM)Of

DISHA SCHOOL OF MANAGEMENT, Raipur (C.G.)

Session 2009-11

PROJECT GUIDE: INTERNAL GUIDE:

MR. PALASH BISHWAS PROF. S. BHATTACHARYA

Zonal Head Faculty of Management

Arcadia share & broker Pvt. Ltd. DSM, Raipur

Submitted by:

HEMA

0908015

DEPARTMENT OF MANAGEMENT

DISHA SCHOOL OF MANAGEMENT

AICTEApproved, Ministryof HRD Government ofIndia (Disha Education Society)

Satya Vihar, Vidhansabha-Chandrakhuri Marg, Mandir Hasaud, Raipur (C.G.)492007


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No good work flows without the help from Faculty Members, Industry

Professionals, Colleagues, Organization and Friends.

ACKNOWLEDGEMENT

Summer Internship is a nurturing period which is indispensable for joining anycompany. On the voyage of learning I came across many hurdles but each hurdlewas a good experience for me. At each step of my training, my mentor gave mefull support which helped me in carrying positive attitude whenever I faced anyproblem.

Firstly, I take this opportunity to thank.. who has always stoodby me and encouraged me to embark on the path of learning.

I wish to convey my special thanks to, my company projectguide Mr. Mahesh Khelwani (Branch Manager) and all employees who havehelped me directly or indirectly in my difficulties at Arcadia Share & Stock Pvt.ltd., Area Office, Durg. who have been a constant source of inspiration andencouragement to me.

I wish to express my deepest and most sincere thanks to my Faculty Guide,.and especially to and who have continuously guidedme throughout this project.

Last but not the least I would like to thank my fellow management trainees from

Disha School of Management . By interacting with them, I was able to generatemore meaningful ideas that have enabled me to further complete this projectsuccessfully.


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ABSTRACT

Banking Sector in India is one of the growing sectors with great dynamics. Thereare various factors which affect the stock position and share prices of BankingCompanies. This report is all about what was the stock position of bankingcompanies in the stock market, how various factors (Internal and External) affectthe Banking Sector Share Prices. In this report a detailed analysis of the factorsaffecting the share prices and what was the price means the fluctuatation in themarket. For analysis the researcher has taken SBI as Public Sector Company &ICICI Bank As Private Sector Company.

Here, various internal factors (Banks Profitability, Income, Expenses, and Newsabout the Bank.) and external factors (Government policies, CRR, Repo Rate,Reverse Repo Rate, Rules and Regulations.) are considered which affect the prices

of the shares of Bank. Datas are collected for all the quantifiable factors and forthe rest factors a theoretical explanation is given in detail.

And to know the which banking company has good market position in the market& why, Researcher has used technical analysis of Companies financial statement,which include ratio analysis, trend analysis, and graphical analysis etc.


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TABLE OF CONTENTS

ACKNOWLEDGEMENT .............................................................................................................

ABSTRACT..................................................................................................................................

INTRODUCTION .........................................................................................................................

STOCK MARKET IN INDIA..............................................................FACTOR AFFECTING BANKING SECTOR.

OBJECTIVE OF THE STUDY ................................................................................................

PURPOSE, AND SCOPE................................................................................

COMPANY PROFILE..STATE BANK OF INDIA..ICICI BANK.

RESEARCH METHEDOLOGY......................................................


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INTRODUCTION


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STOCK MARKET IN INDIA

The Indian security market has become one of the most dynamic and efficientsecurity markets in Asia today. The Indian market now conforms to InternationalStandards in terms of operating efficiency.

During the latter half of 19th century, shares of companies used to be floated inIndia occasionally. There were share brokers in Bombay who assisted in the

floatation of shares of companies. A small group of stock brokers in Bombayjoined together in 1875 to form an association called Native Share & StockbrokersAssociation. The association drew up codes of conduct for brokerage business and

mobilizes private funds for investment in the corporate sector. It was thisassociation which later became the Bombay Stock Exchange, Mumbai or BSE

Later on in 1894 the brokers of Ahmedabad formed the Ahmedabad StockExchange, the second stock exchange of the country. During the 1900s Kolkatabecame another major center of share trading and as a result Kolkata StockExchange was formed in 1908. Later on Chennai Stock Exchange was started in

1920. However, by 1923, it ceased to exist. Then the Madras Stock Exchange wasstarted in 1937. Three more stock exchanges were established beforeindependence, at Indore in 1930, at Hyderabad in 1943 and at Delhi in 1947.

Thus along with the increase in number of stock exchanges, the number of listedcompanies and the capital of listed companies grown tremendously after 1985which results into growth and development of stock market in India.

BSE SENSEX

Bombay Stock Exchange Sensitive Index is a value-weighted index composed of30 stocks started in 01 of January, 1986. It consists of the 30 largest and mostactively traded stocks, representative of various sectors, on the Bombay StockExchange. These companies account for around one-fifth of the market


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capitalization of the BSE. The base value of the SENSEX is 100 on April 1, 1979,and the base year of BSE-SENSEX is 1978-79.

At irregular intervals, the Bombay Stock Exchange (BSE) authorities review andmodify its composition to make sure it reflects current market conditions. Theindex is calculated based on a free-float capitalization method; a variation of the

market cap method. Instead of using a company's outstanding shares it uses itsfloat, or shares that are readily available for trading. The free-float method,therefore, does not include restricted stocks, such as those held by companyinsiders.

The index has increased by over ten times from June 1990 to the present. Using

information from April 1979 onwards, the long-run rate of return on the BSESENSEX works out to be 18.6% per annum, which translates to roughly 9% perannum after compensating for inflation. There are five major indices in BSE,thirteen sector specific indices and a BSE Dollex Index for dollar prices andmovements.

NSE & NIFTY 50

The National Stock Exchange of India Limited (NSE) is a Mumbai-based stockexchange. It is the largest stock exchange in India in terms of daily turnover andnumber of trades, for both equities and derivative trading. Though a number of

other exchanges exist, NSE and the Bombay Stock Exchange are the two mostsignificant stock exchanges in India and between them are responsible for the vastmajority of share transactions. The NSE's key index is the S&P CNX Nifty, knownas the Nifty, an index of fifty major stocks weighted by market capitalization.

NSE is mutually-owned by a set of leading financial institutions, banks, insurance

companies and other financial intermediaries in India but its ownership andmanagement operate as separate entities. There are at least 2 foreign investorsNYSE Euro next and Goldman Sachs who have taken a stake in the NSE. As of2006, the NSE VSAT terminals, 2799 in total, cover more than 1500 cities acrossIndia. In October 2007, the equity market capitalization of the companies listed onthe NSE was US$ 1.46 trillion, making it the second largest stock exchange inSouth Asia. NSE is the third largest Stock Exchange in the world in terms of the


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number of trades in equities. It is the second fastest growing stock exchange in theworld with a recorded growth of 16.6%.

The Standard & Poor's CRISIL NSE Index 50 or S&P CNX Nifty nicknamed Nifty50 or simply Nifty, is the leading index for large companies on the National StockExchange of India. The Nifty is a well diversified 50 stock index accounting for 22sectors of the economy. It is used for a variety of purposes such as benchmarking

fund portfolios, index based derivatives and index funds. There are seven majorIndices in NSE and fifteen sector specific Indices. CNX BANK INDEX or BANKNIFTY is the index which has 17 banks listed on it and is a separate index to lookupon price movements of banks share prices. A brief account of the same isgiven below.

CNX Bank Index

The Indian banking Industry has been undergoing major changes, reflecting anumber of underlying developments. Advancement in communication andinformation technology has facilitated growth in internet-banking, ATM Network,

Electronic transfer of funds and quick dissemination of information. Structuralreforms in the banking sector have improved the health of the banking sector. Thereforms recently introduced include the enactment of the Securitization Act to stepup loan recoveries, establishment of asset reconstruction companies, initiatives onimproving recoveries from Non-performing Assets (NPAs) and change in the basisof income recognition has raised transparency and efficiency in the bankingsystem. Spurt in treasury income and improvement in loan recoveries has helpedIndian Banks to record better profitability. In order to have a good benchmark ofthe Indian banking sector, India Index Service and Product Limited (IISL) hasdeveloped the CNX Bank Index.

CNX Bank Index is an index comprised of the most liquid and large capitalizedIndian Banking stocks. It provides investors and market intermediaries with a

benchmark that captures the capital market performance of Indian Banks. Theindex will have 12 stocks from the banking sector which trade on the NationalStock Exchange. The average total traded value for the last six months of CNXBank Index stocks is approximately 95.85% of the traded value of the bankingsector. CNX Bank Index stocks represent about 86.06% of the total marketcapitalization of the banking sector as on January 30, 2009. The average totaltraded value for the last six months of all the CNX Bank Index constituents is


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approximately 14.86% of the traded value of all stocks on the NSE. CNX BankIndex constituents represent about 8.63% of the total market capitalization onJanuary 30, 2009.

Companies raise funds by issuing equity shares to the public. We have a welldeveloped equity market in our country for secondary dealing in various securitiesof various denominations. We basically have BSE and NSE to see the dealings andthe price fluctuations of these securities. There are several factors like interestrates, companys internal factors, profitability of company, any news aboutcompany, major events of the company, country scenario, political factors,economical factors, social factors, international events, trends in internationalmarket, investors own mentality, predictions and approach etc.. which affect the

market price of these securities. Thus, my project basically revolves around howall these factors affect the equity market. The project is based on a descriptivestudy of various factors that affect the Indian equity market in various aspects.FACTORS AFFECTING BANKING SECTOR

Starting off with the project, in the initial phase of SIP, I learnt the basics of thestock market. As I had to work here in this market for 3.5 months this was thebasic necessity. In that phase I had a nice exposure of how to deal with clients,how to handle the queries of the investors, it was a practical exposure to learn theworking of the market, how the market moves and all about the corporate culture.Also I had learnt what factors basically affect the equity market. Then I decided tolimit my project to just Banking Sector, because it is one of the most dynamic

sector and also availability of time was not permitting me to go beyond this. Thereare N number of factors which affect the share prices. They can be broadlyclassified into two:

y INTERNAL FACTORS

y

EXTERNAL FACTORS

INTERNAL FACTORS:


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As the name suggests, Internal Factors are those which affect the share pricesinternally, i.e. they are internal to the company or more specifically bank. Some ofthe major internal factors that affect the share prices of a bank are as follows:

EARNINGS OF THE COMPANY:

How much Profit a company earns acts as a significant factor in price movements.

If the quarterly results are good for a bank, then the price goes up, and if the resultsare not good, the investors show no interest in such banks share and thus pricefalls. Investors invest money in the companies who earn well and in turn give goodreturn on investment. Thus, a wealthy and a profitable company have goodinvestors and thus have positive price movements. Price/Earnings Ratio also givesus idea about the same.

MARKET CAPITALIZATION:

Generally we commit one mistake that we guess the companys worth from theprice of its stock. It is the market capitalization of the company, rather than the

stock price, that is more important when it comes to determining the worth of thecompany. We need to multiply the stock price with the total number of outstandingstocks in the market to get the market capitalization of a company and that is theworth of the company. Thus, a company or bank with high Market Capitalizationturns out to be more popular among investors. For example, HDFC BANK, ICICIBANK and SBI are more popular among investors than other banks because theyhave huge market share and market capitalization. As market capitalizationincreases, the share price tends to increase and as market capitalization decreases,the share price tends to decrease.

PRICE/EARNINGS RATIO:

Price/Earnings ratio or the P/E ratio gives us a fair idea of how a company's shareprice compares to its earnings. If the price of the share is too much lower than theearning of the company, the stock is undervalued and it has the potential to rise inthe near future. On the other hand, if the price is way too much higher than theactual earning of the company and then the stock is said to overvalued and theprice can fall at any point. The earnings also have a direct relation with price whichis already explained above.


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INTERNAL AFFAIRS OF THE COMPANY:

Any happening inside the company or any internal news does affect its share price.For example any key person moving out of the company, acquisition or takeover ormerger news, share split, employee strike and any other thing internal to the affairsof the bank affects the share price. A positive note from the internal affairs takesthe price to new highs and a negative does vice versa.

INTERST RATES:

Interest rates play a major role in determining stock market trends. Bull markets(those in an upward market) are usually associated with low interest rates and highCapital Gains, and bear markets (those in a downward trend) with high interest

rates and low Capital gains. Interest rates are determined by the demand for capital pushes them up and normally indicates that the economy is thriving and thatshares probably expensive. Low interest indicate low demand for capital, thusliquidity builds up on the economy, driving share price down. Other interest rateslike that of on Deposits and Borrowings also have impact on share prices.

OTHER FACTORS:

Other factors like Growth of the company, figures of deposits, advances, balancesheet, Profit and Loss Account, etc.. also affect the share prices drastically. Adiscussion for the same is done in later part of the report

EXTERNAL FACTORS:

After studying the internal factors, lets take a look at some External Factors whichaffect the Share Prices.

SENTIMENTS:

Investor sentiment is almost impossible to predict and can be infuriating if, forexample, you have bought shares in a company that you think is a good buy butthe price remains flat. Investor sentiment is influenced by a wide variety of factors.Share prices can, for example, be flat during the summer simply because so many


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major investors are on holiday or attending major sporting events such as RoyalAscot and Wimbledon, hence the adage sell in May and go away. Investorsentiment can lead to irrational buying or selling of shares and result in bull andbear markets. A bull market is when share prices rise while a bear market is whenthey fall. In the technology boom of the late 1990s, for example, investors paidextremely high prices for shares and ignored traditional valuation measures, suchas P/E ratios. This carried on until 2000 when investors belatedly realized these

shares has risen too far and resulted in a three year bear market in shares. Thus,Sentiments of investors affect the share prices a lot and this is somethingunpredictable and immeasurable factor, but still the most important one.

COMPANY NEWS and OTHER NEWS:

The way investors interpret news coming out of companies is also a majorinfluence on share prices. If, for example, a company puts out a warning thatbusiness conditions are tough, shares will often drop in value. If, however, adirector buys shares in the firm, it may be a signal that the companys prospectsare improving.

Companies put out a great deal of news and most of the major announcements arecovered by the financial press. But some announcements not regarded as soimportant and sometimes, particularly among smaller firms that are monitored lessby investors and financial journalists, indicators of the companys health can bemissed. Takeovers or even rumors of takeovers also have a big influence on prices.This is because investors expect the bidder to pay a premium to shareholders. Alsoany other news or speculation about factors like change in Repo Rate, CashReserve Ratio, Reverse Repo Rate, any change or likely change in the policies ofgovernment or RBI or SEBI, any new guidelines issued by the concernedauthority, etc. affect the price of the share.A positive news in any of these respects leads to a rise in price and a negative

takes it to the other side. Thus, news in any respect is undoubtedly a huge factorwhen it comes to stock price. Positive news about a company can increase buying

interest in the market while a negative press release can ruin the prospect of astock. Having said that, we must always remember that often times, despiteamazingly good news, a stock can show least movement. It is the overallperformance of the company that matters more than news. It is always wise to takea wait and watch policy in a volatile market or when there is mixed reaction abouta particular stock.


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DEMAND AND SUPPLY:

This fundamental rule of economics holds good for the equity market as well. Theprice is directly affected by the trend of stock market trading. When more peopleare buying a certain stock, the price of that stock increases and when more people

are selling the stock, the price of that particular stock falls. Now it is difficult topredict the trend. Thus, we should be very careful while dealing in stocks asbuying or selling pressure may lead to steep rise or fall in price of the shares.

ANALYSTS REPORTS:

Reports produced by independent analysts also influence share prices. If an

analyst changes their recommendation from sell to buy, for example, theshares will often rise in value. Analysts reports are produced primarily byinvestment banks for professional investors, although some stockbrokers will maketheir research available to private investors. We may find summaries of somereports published on financial news websites or in newspapers and magazines.Some investment banks also publish their reports on their websites for free. We

should remember that the recommendation an analyst puts on a company willaffect its share price very quickly and can become irrelevant within hours. This isbecause the analyst will usually say a stock is a buy within a particular pricerange. If the price moves above their targets the improvements the analyst expectsmay be priced in and so the shares are not worth buyingBut analysts reports are always worth reading, even if the recommendation is outof date. The reports usually contain a great deal of useful information on thecompany and how its business is developing. They also often look at how thecompany rates against its competitors.

THE ECONOMY:

The health of the global economy has a fundamental influence on share prices

because it is ultimately responsible for driving company profits. Broadly speaking,if the economy is growing, company profits improve and shares will become morehighly valued. If the economy is weakening, company profits will fall and shareprices will go down. Investors look at a vast amount of data to try and work outwhat is going to happen to the economy and shift their portfolios before the eventsoccur. This is why we will often see markets move well ahead of an actual eventoccurring. For example, we could get little reaction from the stock market when


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interest rates rise. This is because investors have already anticipated the shiftmonths in advance and adjusted their portfolios beforehand. We can usuallyassume that the stock market will anticipate moves in the economy by around sixto nine months. So if we want to stay ahead of the game we need to followeconomic data as closely as the professionals. The kind of information we need toplay close attention to is: employment data, the reports put out by the MonetaryPolicy Committee (to get an idea where interest rates are headed), trade with other

countries, retail sales and manufacturing. Sentiment surveys produced by tradebodies such as the Confederation of British Industry are also important indicatorsof where the economy is heading.It is not only news about the US and UK economy that will impact on share prices.The signals coming out of other major economies, particularly the US and UKsmajor trading partners, such as the Europe and Asia will also affect US and UKshares as what happens in these economies will have an impact on our own. When

looking at economic data, we need to think not only how the wider economy willbe affected but whether certain areas will be more affected than others. A rise ininterest rates is, for example, often bad news for house builders as people feel lessconfident about taking on debt. Retailers are often badly affected too as peoplespend less. Pharmaceutical companies are, however, usually unaffected aspeoples demand for drugs is not influenced by the state of the economy.

Companies whose profits are closely tied to the health of the economy are knownas cyclical stocks. Those businesses that arent too affected by the economy arecalled defensive stocks. If economic conditions deteriorate you will often seeinvestors shift from cyclical stocks to defensives. Thus, the economic health of anEconomy affects the Share Prices.

PRESS and BROKING HOUSE RECOMMENDATIONS:

The financial pages of most national newspapers and investment magazinesusually contain share tips. Like analysts reports these tips can have a majorinfluence on share prices. If a journalist recommends a share, the price will usuallyrise and if they write a negative story the price will fall. These moves usuallyhappen very quickly so if we follow the recommendation it often makes sense to

do so as soon as possible. The Broking House also recommends BUY or SELL forparticular shares based on their own research analysis. They display theserecommendations in leading media such as Television and News Papers. Thus,these recommendations affect the price of shares and lead the market in thedirection these recommendations take.


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TECHNICAL INFLUENCES:

Share prices can rise and fall for a variety of technical reasons that may havenothing to do with the actual outlook for an individual company or the outlook forthe market. It is, for example, a common occurrence for share prices to drop back

after a strong rally. This happens because investors take profits on some of theshares that have risen in value, protecting their gains just in case the shares start toslip back. Investors often refer to this as market consolidation. Another technicalreason for share prices to rise or fall is the quarterly adjustment in the FTSE 100index. Shares that are expected to enter the FTSE 100 may experience a sharperrise than one would expect in the weeks beforehand while shares that leave theindex can fall more sharply. This happens because funds that simply track the

index have to match the composition of the index. Some professional fundmanagers who hold the affected stocks also adjust their portfolios as they do notwant their holding to be too far above or below the companys weighting in theindex. Share prices can also be affected by investors who use technical analysis todrive their investment techniques. Technical analysis, also known as Chartism, issimply the study of past share price movements and stock market index trends,

which are then used to forecast how shares and stock markets will behave in future.Market makers can also influence prices. If they, for example, do not own enoughshares to balance their books they will have to buy more. Market makers alsoinfluence prices if the market is looking flat, reducing prices to attract buyers.Thus, technical reasons can also be a cause for the rise or fall in the prices ofshares.

OTHER FACTORS:

Some other factors which influence share prices are as follows

Change in Rates by RBI:

Looking at the changing scenario, RBI keeps on changing rates like Repo Rate,Reverse Repo Rate and Cash Reserve Ratio. These rates have a direct relation withthe Banks performance and in turn the share prices are linked with BanksPerformance. Thus, a change in these rates or even a speculation of change in theserates affects share prices.


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Global Changes:

Any change in the global economy or in other words global changes also affectsIndian economy. Thus, the performance of an economy and its banks is affected by

these global changes. For example: The recession was first observed in the USAand later on it caught its lead in other countries too. When it entered India, theshare market crashed literally. So, a careful and logical investor always keeps thisin mind that what global changes affect the market and thus leads to rise or fall inshare prices.

Change in Government Policies:

Keeping in mind the progress and well wishes about the country, the governmenttakes desired steps and keeps on reviewing its policies, rules and regulations andprocedures. A change in FDI and FII inflow restrictions, entry exit barriers forforeign banks in India, EXIM regulations, change in Basel Norms, etc form part ofimportant government policies. Thus, a change in these policies affects the market

scenario. For example: if government allows entry of foreign Banks in India, thenthe competition would rise and it might happen that those foreign Banks mayoutperform and leave our own banks far behind. Then in this case, the investorswould be interested in investing in those foreign Banks and a government wouldnever like that the funds are invested in some foreign banks rather than our ownbanks. Thus, some restriction would follow and this will definitely affect the shareprices.


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OBJECTIVE OF STUDY


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OBJECTIVE OF STUDY

The objective of the project is to identify, understand and analyze the BANKINGSECTOR and its stock position in the Indian Equity Market. The main focus willbe on understanding, analyzing and providing a valid explanation boththeoretically and technically, that what is the current market position of publicsector bank and private sector bank and there share price in the equity market.

By undertaking this study Researcher would like to keep her first step in the fieldof research. This project will help her in enhancing her analytical skills and will

give her a better understanding of how things move on and are to be studied. At thesame time with this study Researcher will be providing the organization a list offactors that affect the market, so that they can keep a watch on the same and usethe same for the benefit of clients and company and also increase their accuracyand profits. This will be my contribution to this huge company.

PURPOSEThe PURPOSE of the report is to analyze how they retain with good marketposition in stock market .To identify the banks stock position in the market it isvery essential to know the how The share prices are highly affected by variousinternal and external factors. It is of great importance to understand, learn andanalyze the same. Thus, this report is a move in path of understanding those factorsand analyzing the impact of the same.

Banks are a major part of any economic system. They provide a strong base toIndian economy too. Even in share markets, the performance of bank shares is ofgreat importance. This is justified by the proof that in both BSE and NSE we haveseparate index for Banking Sector Shares. But for our study we have taken onlyBank Nifty which is a part of NSE. Thus, the performance of share market, the rise


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and the fall of market is greatly affected by the performance of Banking SectorShares and this report revolves around all those factors, their understanding and atheoretical and technical analysis of the same.

SCOPE OF STUDY

y It gave an opportunity to study the banking sector in a detailed manner.

y Researcher got knowledge of prevailing Market Scenario.

y It helped to researcher in learning the market dynamics, study the movementof share prices and to give a proper justification for the same, theoretically

and technically.

y It helped to researcher in understanding and learning the corporate culture

y And above all, the concerned organization can get some valuablerecommendations, which can definitely improve the performance of theorganization.


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COMPANY PROFILE


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State Bank of India

State Bank of India is the largest banking and financial services company in India, by almostevery parameter - revenues, profits, assets, market capitalization etc. The bank traces its ancestryto British India, through the Imperial Bank of India, to the founding in 1806 of the Bank ofCalcutta, making it the oldest commercial bank in the Indian Subcontinent. The Government ofIndia nationalized the Imperial Bank of India in 1955, with the Reserve Bank of India taking a60% stake, and renamed it the State Bank of India. In 2008, the Government took over the stakeheld by the Reserve Bank of India.

SBI provides a range of banking products through its vast network in India and overseas,including products aimed at NRIs. The State Bank Group, with over 16000 branches, has thelargest branch network in India. With an asset base of $260 billion and $195 billion in deposits,it is a regional banking behemoth. It has a market share among Indian commercial banks ofabout 20% in deposits and advances, and SBI accounts for almost one-fifth of the nation's loans.

SBI has tried to reduce over-staffing by computerizing operations and "golden handshake"schemes that led to a flight of its best and brightest managers. These managers took theretirement allowances and then went on to become senior managers in new private sector banks.

The State bank of India is the 29th most reputed company in the world according to Forbes.

State Bank of India is the largest of the Big Four Banks of India, along with ICICI Bank, AxisBank and HDFC Bank its main competitors.

International presence

The bank has 131 overseas offices spread over 32 countries as on 31st Dec 2009. It has branchesof the parent in Colombo, Dhaka, Frankfurt, Hong Kong, Johannesburg, London and environs,Los Angeles, Male in the Maldives, Muscat, New York, Osaka, Sydney, and Tokyo. It hasoffshore banking units in the Bahamas, Bahrain, and Singapore, and representative offices inBhutan and Cape Town.

SBI operates several foreign subsidiaries or affiliates. In 1990 it established an offshore bank,State Bank of India (Mauritius).


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In 1982, the bank established a subsidiary, State Bank of India (California), which now has eightbranches - seven branches in the state of California and one in Washington DC that it opened on23 November 2009. The seven branches in California are located in Los Angeles, Artesia, SanJose, Canoga Park, Fresno, San Diego and Bakersfield.

The Canadian subsidiary, State Bank of India (Canada) too dates to 1982. It has seven branches,four in the greater Toronto area and three in British Columbia.

In Nigeria SBI operates as INMB Bank. This bank began in 1981 as the Indo-Nigerian MerchantBank and received permission in 2002 to commence retail banking. It now has five branches inNigeria.

In Nepal, SBI owns 50% of Nepal SBI Bank, which has branches throughout the country. InMoscow SBI owns 60% of Commercial Bank of India, with Canara Bank owning the rest. InIndonesia it owns 76% of PT Bank Indo Monex.

State Bank of India already has a branch in Shanghai and plans to open one up in Tianjin.

Associate banks

y State Bank of Indorey State Bank of Bikaner & Jaipury State Bank of Hyderabady State Bank of Mysorey State Bank of Patialay State Bank of Travancore

Group companies

y SBI Capital Markets Ltdy SBI Mutual Fund (A Trust)y SBI Factors and Commercial Services Ltdy SBI DFHI Ltdy SBI Cards and Payment Services Pvt Ltdy SBI Life Insurance Co. Ltd - Bancassurance (Life Insurance)y SBI Funds Management Pvt Ltdy SBI Canada

Branches of SBI

y SBI has 21000 ATMs.y SBI has 26500 branches, inclusive of branches that belong to its Associate banks.y SBI alone has 18500 branches.y SBI is the only bank consisting 26% participation in public sector banks and 39%

participation in commercial banks in India.


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ICICI Bank

ICICI Bank (Industrial Credit and Investment Corporation of India) is a major banking andfinancial services organization in India. It is the 4th largest bank in India and the largest privatesector bank in India by market capitalization. The bank also has a network of 1,700+ branches(as on 31 March 2010) and about 4,721 ATMs in India and presence in 19 countries, as well assome 24 million customers (at the end of July 2007). ICICI Bank offers a wide range of bankingproducts and financial services to corporate and retail customers through a variety of deliverychannels and specialization subsidiaries and affiliates in the areas of investment banking, life andnon-life insurance, venture capital and asset management. (These data are dynamic.) ICICI Bankis also the largest issuer of credit cards in India. ICICI Bank's shares are listed on the stockexchanges at Kolkata and Vadodara, Mumbai and the National Stock Exchange of India Limited;its ADRs trade on the New York Stock Exchange (NYSE).

The Bank is expanding in overseas markets and has the largest international balance sheet amongIndian banks. ICICI Bank now has wholly-owned subsidiaries, branches and representativesoffices in 19 countries, including an offshore unit in Mumbai. This includes wholly ownedsubsidiaries in Canada, Russia and the UK (the subsidiary through which the HiSAVE savingsbrand is operated), offshore banking units in Bahrain and Singapore, an advisory branch inDubai, branches in Belgium, Hong Kong and Sri Lanka, and representative offices inBangladesh, China, Malaysia, Indonesia, South Africa, Thailand, the United Arab Emirates andUSA. Overseas, the Bank is targeting the NRI (Non-Resident Indian) population in particular.

ICICI reported a 1.15% rise in net profit to Rs. 1,014.21 crore on a 1.29% increase in total

income to Rs. 9,712.31 crore in Q2 September 2008 over Q2 September 2007. The bank's CASAratio increased to 30% in 2008 from 25% in 2007

ICICI Bank is one of the Big Four Banks of India, along with State Bank of India, Axis Bankand HDFC Bank its main competitors.

Acquisition of Bank of Rajashthan

On 23 May ICICI Bank announced merger with Bank of Rajasthan with it through share-swap ina non-cash deal that values the Bank of Rajasthan at about Rs 3,000 crore. Each 118 shares ofBank of Rajasthan will be converted into 25 shares of ICICI. It is said that this merger will alsoexpand ICICI Bank's branch network by 25%.


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AN OVERVIEW:-

State bank of india Icici bankIndustry Banking, financial service Banking, financial service

Founded 1806 (culcutta) 1955

Headquarters Mumbai, Maharashtra, India Mumbai, Maharashtra, India

Key people o. p. Bhatt K.V.Kamath, Chanda Kochar, N.S.

Kannan

product Investment Banking, Consumer

Banking,Commercial Banking

Retail Banking, Private Banking

Asset Management, PensionsMortgages, Credit Cards

Investment Banking,Commercial

Banking, Retail Banking, Private

Banking, Asset Management

Mortgages, Credit Cards

Revenue Rs 113,535.99 crore (US$ 24.18billion) (2009)

Rs 59,599.77 crore (US$ 12.69billion) (2009)

Profit Rs 10,998 crore (US$ 2.34 billion)(2009)

Rs 4,843.41 crore (US$ 1.03billion) (2009)

Research Methodology

To study, the first and the foremost requirement was to decide the boundaries ofstudy. As in this short time period a full fledged Analysis of whole market was notpossible so I chose to limit my project to certain boundaries.

Firstly, I decided on the sector to be studied and for that I chose BANKINGSECTOR. The reason being that the Bank stocks have out-performed the Sensexand Nifty in this fiscal year. This out-performance can be attributed to favorablemacroeconomic conditions and banking sector specific development like quarterly

results and passing of the SBI Amendment Bill that paved the way for itssubsidiaries to list in stock markets.

Bank credits have grown at an average of 30 percent in the past three years led byhousing and retail sectors. Thus, on thus basis I chose Banking Sector*.


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For a proper, detailed and valid study, I have chosen SBI as Public Sector Bank &ICICI Bank as Private Bank. The reason behind choosing these 2 banks is theirhuge turnover in the stock market, they have been given the highest weightage andthey serve as top leading banks in the sector. A small report of MarketCapitalization for 31st March, 2009 is also shown here.

Index/Exchange Company

Name

Close Price Mkt.Cap. in Rs

Mn

Weightage

CNX BANK

INDEX

Axis Bank Ltd. 414.95 148969.17 6.65

CNX BANK

INDEX

Bank of Baroda 234.35 85365.83 3.81

CNX BANK

INDEX

Bank ofIndia 219.4 115222.91 5.14

CNX BANK

INDEX

Canara Bank 165.7 67937 3.03

CNX BANK

INDEX

HDFC Bank

Ltd.

973.4 414062.52 18.47

CNX BANK

INDEX

ICICI Bank Ltd. 332.8 370343.67 16.52

CNX BANK

INDEX

IDBI Bank Ltd. 45.4 32902.6 1.47

CNX BANK

INDEX

Kotak

Mahindra Bank

Ltd.

282.2 97547.75 4.35

CNX BANK

INDEX

Oriental Bank

ofCommerce

110.1 27584.42 1.23

CNX BANK

INDEX

Punjab

National Bank

411.45 129731.21 5.79

CNX BANK

INDEX

State Bank of

India

1067.1 677480.68 30.23

CNX BANK

INDEX

Union Bank of

India

146.85 74176.56 3.31

TOTAL 2241324.34 100


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*sourceofdata:- www.rbi.org.in

*Sourceofdata:- nseindia.com

sip repoort 02

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