Professional Documents
Culture Documents
By, Lokesh .H
Company Profile
Karnataka bank limited a leading A1+ class scheduled commercial bank in India was incorporated on February 18th 1924 with a registered office at Mangalore. The bank commenced its business on 23rd may 1924 with an initial paid up capital of Rs.11.580 contributed by 113 share holders. Sri .B.R. Vyasaraya Achar was the first president of the bank. The banks memorandum of association in its objective clause states that the bank apart from carrying on the general function of banking business, would set apart and appropriate from the annual net profit towards the general, mental, moral and physical advancement of other beneficial purpose of the members of the Dravidian Brahmin community, such same as may be deemed fit. The first real recognition for the Mangalore based bank come in the year 1959 with the bank being elevated firm C class to B class. In the stride of progress of expansion, the bank got reinforced by the takeover of 3 banks namely Shringeri Sharada bank ltd an 1st April 1960, Chitradurga bank ltd on December 30 1966., In year 1971 the bank opened its first branch in the countrys financial capital the following year the bank was elevated to A class by the Reserve Bank of India.
personal touch on trust. Mission Statement: Karnataka Banks mission is to be a technological survey, customer centric progressive bank with a national presence driven by the higher standard of corporate governance and guided by sound ethical values. Towards achievement of this, the Bank is committed to the best practice s in corporate governance to protect the interest of share holders, depositors Quality policy: The quality policy of Karnataka bank limited is of providing quick and better service and their by achieving customer satisfaction.
Products/Services Profile
LOANS OR SCHEMES PRODUCT KBL APNA GHAR KBL VARTHAK LOAN KBL UDYOG MITHRA KBL CAR FINANCE VIDYA NIDHI EDUCATIONAL LOAN SCHEME KBL - KRISHIK SARATHI SCHEME DEPOSITS PRODUCTS ABHYUDYA CASH CERFIFICATE FIXED DEPOSITS READY MONEY DEPOSITS INSURANCE LINKED SAVINGS BANK DEPOSIT K-FLEXI DEPOSIT RESIDENT FOREIGN CURRENCY(DOMESTIC) ACCOUNT NRI SERVICES
Area of Operation
The Bank at present has 478 Branches, 267 ATM outlets, 9 Regional Offices, 6 Extension counters, 1 International Division, I Data centre, I customer care centre, 5 service branches, 2 currency chests, 2 central processing centers, spread across 20 states and 2 Union Territories. Further, for better ambience and improved customer service, they shifted 11 branches/offices to new premises, during the year 2010-11.
Some of the major competitions for the bank are : City Union Bank Ltd. Karur Vysya Bank Ltd. The South Indian Bank Ltd. The Vysya Bank Ltd.
Awards/Achievements
The Karnataka Bank Ltd. As awarded recently from the
RBI. For maximum usage of the information and technology in the banking business.
The Governor of the RBI, Mr. Subba Rao present the
Award to the Sri P. Jayarama Bhat (Managing Director), for the efficient usage of the financial softwares in the banking business.
Structure at branch level The Karnataka Bank has totally 478 branches on 31st march 2011. each branch is headed by a branch manager who has the responsibility of overall administration of his or her branch. Structure of regional office level The Karnataka Bank has eight regional offices spread across the country. Each regional office is headed by an assistant manager. The regional officers are responsible for controlling the branches coming under them and also for implementation of decision taken at the head office of the bank is divided into different deportments with each deportment headed by its respective departmental head who are responsible for the overall administration of their deportment and also to carry out various activities coming under their departments by taking the help of executive officers and staff of their deportments. The organization structure of the Karnataka Bank has been shown in the chart below the board of directors occupy the two most position followed by the chairman who is next in the hierarchy in the next level of organizational structure there are DGM human relations and industrial relations general manager, planning and development, GM credit. GM credit treasury GM recovery legal and GMD, and DGM inspection and audit. Board of Directors: The Board of Directors of the bank consist and of 12 directors including the chairman who is the Chief Executive Officer. The Constitution of the board confirms with the provisions of section lOB of the Banking Regulation Act, 1947. All the directors on the board are independent Directors.
System
System means formal and informal procedures that govern every day activities. The decision making systems within the organization can range from management institutions to structured computer that govern the everyday activities of the bank. The system of the Karnataka Bank includes Computer System Training System Control System
Computer system: Karnataka Bank has the first bank to realize the importance of centralized banking system and was the first to deploy core banking system a part from this the bank has computerized all activities and branches so to provide quick service to its customer.
Staff:
Table showing the total staff position as
Officers Clerks Sub staff Total
2138
2546
1050
5795
137
264
159
551
The Karnataka Bank has well trained developed and skilled staffs who work very hard for the success of the bank. The number of people employed by the bank stood at 5795 as on 31st march 2011. The business per employee has improved from Rs 7.27crores as on 31st march 2010 to Rs.7.71crores as on 31st march 2011. the bank during the 2010-2011 requited 137 new officers ,264 creaks and 159 sub staff.
Style
The MC Kinsey s framework considers style as move than the style of top management.
Karnataka Bank Ltd follows a top to down style of management. It also works in a participative style. The dictions are taken by the top management concerning matters related to the organization. The decisions relating to development matter are taken by the detail heads the bank follows a democratic leadership style which allows the employee to take part in the decision making process. Employees are free to give any ideas, Suggestions etc, for the betterment of the organization. This will be taken with active consultation with the employees.
Shared values
Shared values refer to the guiding concepts, values and
aspirations that unite on organization in same common purpose. They guide employees of any organization towards valued behaviors. Shared values originally called as super ordinate goals. It is the guiding concepts and principles of the organization values and aspirations The Karnataka Bank goes for the following values 1. customer satisfaction 2. quick and better service 3. loyal to the customers 4. honest in work
Skill
Skills refer to the fact that employees have the assets of the organization. Skills of the employees may be improved by giving necessary training to them. The bank believes the skillful employees contribute to the success of the bank. The bank H R D policy a guided by the Chinese proverb if you are planning for one year, grow rice of you are planning for twenty years plant trees. If u are planning for centuries, develop men, during the year 2010-11, 1599 officers,942 clerks and 90 sub staff were given training under various aspects to update improve the knowledge the officers of the bank are also accepted at banker training college Mumbai, nation teal institute of bank management Pune institute of development and research in banking technology, Hyderabad when ever specialized training was toned necessary.
Strategy:
Strategy means action a company plans in response to or in anticipation of challenges in the external environment. The Karnataka bank in order to respond to the changes has formed the following action plan with specific reference to product, pricing and people Action plans on product: 1. Introduction of internet banking. 2. expansion of bank on ATM network 3. introduction of debit cords 4. Retailing in securities. Action plans on pricing: Increasing emphasis on fee based, commission based activities collection of utility bills and other fee based services like mutual fund distribution which the bank to be more competitive.
The bank plan to train employees on marketing of products like schematic loans, insurance, money transfer etc. The bank has decided to give incentives to employees for group performance.
The successful implementation of their strategies or action plans helps the bank to gain competitive advantage ver the other banks
SWOT ANALYSIS
STRENGTHS Highly educated workforce The factors that have contributed to the success of the bank are its workforce because the bank has highly educated workforce. Young and Energetic employees within the age group of 25-45 this helps the junior employees to learn from the experience of the senior employees. Advanced technology The bank is professionally managed. The bank is one of the few banks in India which gives impotence to technology in order to serve its customers better it is one of the few banks which uses financial softwares. 1. The banks strengths lie in management capabilities, focused strategy, speedy decision making. 2. There has been expansion of branches and ATM services by the bank during the last few years. 3. The banks provides good infrastructural facilities to its staff and help their to concentrate more on their job. 4. The bank has introduced various schemes like western union money transfer.
WEAKNESS
The weaknesses of the bank includes that the bank has majority of the branches in the southern region. II. Delay in follow up on various accounts. III. KBL provided loans on lots of conditions: Lengthy procedure of sanctioning of debts.
I.
OPPORTUNITIES
The bank is planning to enable money click as
payment gateway for shopping that covers vast areas of business like hotel booking ticket booking, purchase of goods etc. The bank is also planning to introduce mobile topup through ATMs and internet banking besides continuing value additions like SMS alerts to nonmoney click customers utility bill payment and air ticket booking through ATMs . Farther bank is also planning to tie up for ensure trading in shares. The bank is planning to increase the number of its ATM to 325 by 31-3-2011.
THREATS
As the bank majority business comes from the south any
effect to the economy here would have an adverse effect to the performance of the bank. Stiff competition: The bank is relatively smaller when compared to other banks like SBI and ICICI bank and some others. Since its weights like SBI and corporation bank. The bank is always under treat of being taken over by other banks. Providing license for departments such as LIC and India Post.
Research Methodology
STATEMENT OF THE PROBLEM:
performance of Bank. LIMITATIONS OF THE STUDY The study is limited to the extent to the data given by KBL.. An in depth study cannot be done because of time constraint. Based on the limited information it is not possible to arrive at proper conclusion
RESEARCH DESIGN
It involves finding out best tool, process and procedure for getting financial information required for the project work A study on financial performance of Karnataka Bank Limited. The type of research used for the collection & analysis of the data is Historical Research Method. The main source of data for this study is the past records prepared by the bank. The focus of the study is to determine the non-performing assets of the bank s & to identify the ways in which the performance especially the non-performing assets of the KBL can be improved
Primary data was collected from the branch manager through discussions in branch of KBL( B.H.ROAD)
Secondary data: Company website Company report Management report Journals Financial statements
The balance sheet and other relevant data, which was published in the 2006-2007,2007-2008,20082009,2009-2010 and 2010-2011 annual reports were collected and studied. An attempt has been made to analyze the data of KBL keeping in view of the limitation. Guidance was taken from the officials of the banks to analyze the financial performance i.e. profitability, productivity, efficiency and to analyze how the level of Non-Performing Assets affects the performance of the bank.
Interpretation: The graph shows that the Capital Adequacy Ratio has been fluctuating over the past 5 years i.e. 11.03%.,12.17%,13.48%, 12.37% and 13.33% for years 2006-07,2007-08,02008-09,2009-10 and 2010-11 respectively for 5 years.
2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 9552067 10841.97 11810.04 14435.68 17348.07 16222.52
58.88
19339.82
56.06
22857.81 51.66
27035.16
53.39
31693.01
54.47
Interpretation:
The loans and Advances to Total assets has been 58.88% in 2006-07, after that decreasing to 56.06% in 2007-08, 51.66% in 2008-09; 23.39% in 200910 and increase to 54.47% in 2010-11. This shows that bank is unsuccessful in bringing the level of Loans and advances to Total assets which becomes nonperforming assets year by year which in turn would affect the profitability of the bank.
Net Worth
%
1238.62
14.29
1379.60
17.52
1567.02
17.01
1832.75
9.11
2429.09
8.42
Interpretation: From the above it is clear that the return on Net worth is 14.23% for 2006-07, 17.52% for 2007-08, 17.01% for 2008-09, 9.11% for 2009-10 and 8.42% for 2010-11. It can be analysed that the return on net worth increased to a little extent and then in the 2009 financial year the return on net worth has come down to a greater extent.
2006-2007 14458.18
16222.52 0.89
2007-2008 17158.39
19339.82 0.88
2008-2009 20337.26
22857.81 0.88
2009-2010 24072.29
27035.16 0.89
2010-2011 28422.78
31693.01 0.89
%
0.895 0.89 0.885 0.88 0.875 2006-07
Percantage
2007-08
2008-09
2009-10
2010-11
Interpretation: The above table shows the Total Debt ratio of the bank which has 0.89% in 2006-07 to 0.88% in 2007-08 and again same in 0.88% in 2008-09, then onwards increase to 0.89% and 0.89% in 2009-10 and 2010-11 respectively.
Crores(Rs.)
Interpretation: The Deposits per Employee has been at Rs.3.15 in 2006-07, after that increasing to Rs.3.63 in 2007-08, Rs.4.11 in 2008-09; Rs.4.52 in 2009-10 and Rs 4.71 in 2010-11.
Interpretation: The above graph shows that Deposit per Branch was at Rs 34.23 and slightly increase to Rs.39.48 and then increasing at a higher rate over 3 years i.e. Rs.45.48 in 2008-09, Rs.51.14 in 2009-10 and Rs.57.18 in 201011.
7. Asset Utilization:
= Total Income/ Total Asset*100
YEAR Total Income Total Asset % 2006-2007 1430.52 16222.52 8.81 2007-2008 1797.89 19339.82 9.29 2008-2009 2270.55 22857.81 9.93 2009-2010 2354.68 27035.16 8.70 2010-2011 2662.60 31693.01 8.40
Asset Utilization
10.5 10 9.5 9 8.5 8 7.5
2006-07 2007-08 2008-09 2009-10 2010-11
Percentage
Interpretation: The above graph shows that Assets Utilization was 8.81% in 200607, then increases to 9.29% in 2007-08, 9.93% in 2008-09, 8.70% in 2009-10 and 8.40% in 2010-11. .
Interpretation: From the above it shows thatthe Earning per Share are 14.59% for 2006-07, 19.92% for 2007-08, 21.96% for 2008-09, 13.50% for 2009-10 and 15.20% for 2010-11.
Interpretation: The above graph shows that the Profit per Employee was Rs.3.97 lakhs in 2006-07, then increases to Rs.5.16 lakhs in 2007-08, Rs.5.39 lakhs in 2008-09, Rs.3.10 lakhs in 2009-10 and Rs.3.50 lakhs in 2010-11.
%
5 4 3 2 1 0 2006-07
3.73
3.60
Operating Profit Ratio
4.06
1.80
2.04
Percentage
2007-08
2008-09
2009-10
2010-11
Interpretation: From the above it is clear thatthe Operating profit ratio is 3.73% for 2006-07, 3.60% for 2007-08, 4.06% for 2008-09, 1.80% for 2009-10 and 2.04% for 2010-11. It can be analysed that the operating profit ratio had decreased to a little extent and then in the next financial year the profit percentage has come upward to a greater extent, and come down in 2010 and 2011.
2.42
2.31
2.38
2.75
2.99
0
2006-07 2007-08 2008-09 2009-10 2010-11
Interpretation: The graph shows that the Business Per employees has been fluctuating over the past 5 years i.e. 2.42%., 2.31%, 2.38%, 2.75% and 2.99% for years 2006-07,2007-08,02008-09,2009-10 and 2010-11 respectively for 5 years.
20
15 10 5 0 2006-07 2007-08 2008-09 2009-10 2010-11 Gross Profit Ratio
Interpretation: The Gross Profit ratio has been at 14.97% in 2006-07, after that increasing to 16.58% in 2007-08, 19.22% in 2008-09; 16.31% in 2009-10 and 15.34% in 2010-11.
3
2 1
0
2006-07 2007-08 2008-09 2009-10 2010-11
Interpretation:
16222.52 5.09
19339.82 7.66
22857.81 5.97
27035.16 6.44
31693.01 6.12
Interpretation: The above graph shows that the Cash and bank balance to total working fund was 5.09% in 2006-07, then increases to 7.66% in 2007-08 and decreasing at a higher rate in the 3 years i.e. 5.97% in 2008-09, 6.44% in 2009-10 and 6.12% in 2010-11.
1256.25
1430.52 87.81
1570.81
1797.89 87.36
1917.40
2270.55 84.44
2043.42
2354.68 86.78
2370.85
2662.61 89.04
Interpretation: The above graph shows that the Interest Earned to Total Income was 87.81% in 2006-07, then decreases to 87.36% in 2007-08, 84.44% in 2008-09, 86.78% in 2009-10 and Increase to89.04% in 2010-11.
836.39
14037.44 5.95
1101.71
17016.11 6.47
1443.83
2033.28 7.10
1707379
23730.64 7.19
1758.36
27336.44 6.43
Interpretation: The above graph shows that the Interest Expenses to Total Deposit is 5.95% in 2006-07 and slightly increase to 6.47% in 2007-08 and then increasing when compared to the increase to 7.10% in 2008-09, 7.19% in 2009-10 and again decrease 6.43% in 2010-11.
Interpretation: The Cash And Bank Balance to Total Deposit has been 5.89% in 200607 then increases to 8.70% in 2007-08, from here afterwards it decreases to 6.71%, 7.34% and 7.09%, 2008-09,2009-10, and 2010-11 respectively.
Interpretation: The above table shows the Interest Income to Total Loans And Advances which has been 13.15% in 2006-07, 14.48% in 2007-08 and again increases to 16.23% in 2008-09, then onwards decreases to 14.15% and 13.66% in 2009-10 and 2010-11 respectively.
Interpretation: The Credit Deposit ratio has been at 68.05% in 2006-07, after that increasing to 93.71% in 2007-08,and decreasing at a higher rate in the next 3 years i.e. 58.08% in 2008-09; 60.83% in 2009-10 and 63.46% in 2010-11.
Interpretation: The above graph shows that the Total Assets to Sales was 1.69% in 2006-07, then increases to 1.78% in 2007-08 andis increasing at a higher rate 1.93% in 2008-09, 1.87% in 2009-10 and 1.82% in 2010-11.
%
1.4 1.2 1 0.8 0.6 0.4 0.2 0
1.09
1.24
1.16
Return On Total Assets
0.64
0.64
2006-07
2007-08
2008-09
2009-10
2010-11
Interpretation: The above graph shows that Return on Total Assets is1.09% for 200607, 1.24% for 2007-08, 1.16% in 2008-09, 0.64% in 2009-10 and 0.64% for 201011.
Findings:
As the number of branches has increases, the assets of the bank have also increased. Credit deposit ratio is increasing comparatively.
Capital Adequacy ratio is been well maintained above 9% as per RBI rules.
Return on Net worth of the bank has come down from 14.2 (2006-07) to 8.4 (2010-2011). Total debt ratio has been consistently maintained well at the rate of 0.89. Deposits per branch have been increasing proportionately. Asset utilization has come down from 8.8 (2006-07) to 8.40 (2010-2011). Earnings per share have increased compared to the previous year. Even thought the total profits are fluctuating, the others incomes are
consistently increasing.
are many technological changes happening like internet banking, Anywhere Anytime Anyhow, mobile banking. The bank should increase its efficiency in using its assets in order to increase the asset utilization ratio. The bank must increase its profits in order to increase the Returns on net worth.
Conclusion