SUBMITTED TO: SUBMITTED BY:

Ms.Shegorika Lalchandani Jaya sarpal

Priyanka dutta
Shaily
bhardwaj

Shivangi gupta

Shivani tomar
Shweta rai

Surajit roy

INDEX
BANKING SECTOR IN INDIA……………………………………………………………3

1
STATE BANK OF INDIA…………………………………………………………………..4

HSBC BANK-OVERVIEW…………………………………………………………………9

HDFC OVERVIEW…………………………………………………………………………12

BANKING SECTOR IN INDIA

The last decade has seen many positive developments in the Indian banking sector. The policy
makers, which comprise the Reserve Bank of India (RBI), Ministry of Finance and related

2
government and financial sector regulatory entities, have made several notable efforts to
improve regulation in the sector. The sector now compares favorably with banking sectors in the
region on metrics like growth, profitability and non-performing assets (NPAs). A few banks
have established an outstanding track record of innovation, growth and value creation. This is
reflected in their market valuation. However, improved regulations, innovation, growth and
value creation in the sector remain limited to a small part of it. The cost of banking
intermediation in India is higher and bank penetration is far lower than in other markets. India’s
banking industry must strengthen itself significantly if it has to support the modern and vibrant
economy which India aspires to be.

The banking sector in India is broadly divided into two groups:

commercial banks and co-operative banks.

On the basis of ownership mold, commercial banks are grouped into three categories –

 state owned or public sector banks (PSBs),

 private banks under Indian ownership

 foreign banks.

There are 27 PSBs, which all account for 80 per cent of commercial banking asset.

Today, in the deregulated market, banks decide on their lending and borrowing rates. In the
competitive money and capital markets, the inability to offer competitive market rates adds to
the disadvantage of marketing and building new business. In the face of the deregulated banking
industry, an ideal competitive working will be reached when the banks are able to earn adequate
amount of non-interest income to cover their entire operating expenses.

STATE BANK OF INDIA

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SBI is the largest bank in India.The bank traces its ancestry to British India, through the Imperial
Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial
bank in the Indian Subcontinent. The Government of India nationalised the Imperial Bank of
India in 1955, with the Reserve Bank of India taking a 60% stake, and renamed it the State Bank
of India. In 2008, the Government took over the stake held 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 the largest branch network in
India. With an asset base of $250 billion and $195 billion in deposits, it is a regional
banking giant.
 It has a market share among Indian commercial banks of about 20% in deposits and
advances, and SBI accounts for almost one-fifth of the nation’s loans.

 The State bank of India is the 29th most reputed company in the world according to
Forbes.
 State Bank of India is one of the Big Four Banks of India with ICICI Bank, Axis Bank
and HDFC Bank.
 The bank has 141 overseas offices spread over 32 countries as on 31st Dec 2009. It has
branches of 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 has offshore banking units in the Bahamas, Bahrain, and
Singapore, and representative offices in Bhutan and Cape Town.
 SBI operates several foreign subsidiaries. In 1990 it established an offshore bank, State
Bank of India (Mauritius).

ANALYSIS OF THE STOCK PRICES OF SBI

FROM 22 FEBRUARY TO 31 MARCH

4
DATE OPENING CLOSING HIGH LOW RETURNS

22 feb 1920 1916.35 1935 1910.5 -0.232

23 feb 1914.9 1911.9 1934.5 1906.6 0.489
24 feb 1906 1921.25 1930 1900 -0.396
25 feb 1925 1913.65 1930 1903.4 3.169
26 feb 1925 1974.3 2032 1915 0.626
2 march 1990.55 1986.65 2011 1974.2 1.800
3 march 1989.1 2022.4 2025.9 1989.1 0.509
4 march 2023 2032.7 2044.7 2012 0.713
5 march 2045 2047.2 2059 2021.1 0.916
8 march 2060 2065.95 2112.5 2033.1 -1.033
9 march 2032.55 2044.6 2078 2032.55 -0.359
10 march 2050.2 2037.25 2050.2 2026.4 0.417
11 march 2040 2045.75 2052.8 2018.3 0.105
12 march 2042 2047.9 2052.8 2038.65 -1.602
15 march 2039.5 2015.1 2044.75 2011.1 0.037
16 march 2017.05 2015.85 2025 1997.6 0.568
17 march 2020.05 2027.3 2042 2015.65 0.116
18 march 2030 2029.65 2050.5 2010.5 1.419
19 march 2040 2058.45 2065.85 2033.3 -0.850
22 march 2025.15 2040.95 2053.8 2010 0.372
23 march 2042 2048.55 2056.65 2018.6 0.049
25 march 2044.65 2049.55 2061.6 2025.2 1.137
26 march 2054.85 2072.85 2078 2045.05 1.071
29 march 2075 2095.05 2105 2073 -0.597
30 march 2095.05 2082.55 2121.95 2075 -0.209
31 march 2085 2078.2 2098.9 2073.35

4.000

3.000

2.000  The
prices
have
1.000
shown
a little
0.000

-1.000
5

-2.000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
 fluctuation whereas there has been a constant increase in the share prices of SBI. The
opening price was 1920 on 22nd February and the opening price on 31st march was 2085.
 The maximum percentage change (Returns) has been:

3.169% on 25th February

-1.602% on 12th March

 No major fluctuations have taken places.

 The highest share price of SBI has gone upto 2121.95 on 30th March.
 The lowest has been 1903.4 on 25th February.

REASONS FOR THE FLUCTUATIONS IN

THE SHARE PRICES OF SBI
 Wednesday, 24 Feb 2010

State Bank of India plans to raise up to $4.3 billion through a rights equity issue in
2010/11. The bank is required to raise Rs 400 billion ($8.6 billion) to Rs 500 billion to
fulfill the demand of the loans in the economy.

On 25 February the percentage return was 3.169%, the highest from 22 nd February to 31st
March. The news has turned out to have a positive impact on the share prices of SBI
because of the reason that the people trusts the brand and also because it is a government
bank.

 Thursday, 25 Feb 2010.

According to the budget 2010: Additional banks licenses to private players and Non
banking financial companies will be provided .More bank branches, more ATM s, better
services will be provided. Indian stock market made a very strong positive reaction after
the union budget speech of Pranab Mukherjee. The sensex shot up over 391 points as the
Finance minister announced huge public investments along with a reduction in surcharge
for corporates in his budget speech.

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 The return was 3.169%, which was the highest because of such a positive news which
floated in the market.

 Wednesday, 10 Mar 2010

State Bank of India plans to raise Rs 500 million to Rs 1 billion through a retail bond
issue in the next fiscal year. The funds will be raised through a 10-year retail bond issue.
State Bank of India's next fiscal year begins April 1.

The return became positive from -0.359% to 0.417%.

 On 26 March 2010

The board of State Bank of India (SBI) in its meeting on 26 March 2010 has approved
the issuance of 1,16,052 shares of face value of Rs. 10 each to the minority shareholders
of State Bank of Indore. The issued capital of State Bank of India has increased from Rs.
634.97 crore to Rs. 635.08 crore..

This showed a positive change with the share price reaching to 2078 and the return was
1.071%.

 Monday, 29 Mar 2010

State Bank of India and Societe Generale Securities Services have jointly launched SBI
Custodial Services Pvt. Ltd. to offer securities services to institutional investors. The
partners expect the joint venture to do business of about $10 billion in its first year of
operation. The bank by assets holds 65% of the joint venture, while French group Societe
Generale holds the remaining stake.

The share prices on 30th march reached highest for the month which was 2121.95.

 SBI decided to extend its 8 per cent special home loan scheme, popularly known as
teaser rates, till April 30.

This news has been a positive news for the customers of SBI and therefore this news has
led to the increase in the share prices of SBI leading to all month high 2121.95 on 30th
march.

 Tuesday, 30 Mar 2010

Business Standard reported that State Bank of India has decided to issue 34 of its shares
for every 100 shares of State Bank of Indore to its minority shareholders. The central
board of State Bank of India on March 26 approved a proposal to issue 1.16 lakh shares
7
 (of INR10 each) to minority shareholders of the Indore-based associate bank, State Bank
of India informed the Bombay Stock Exchange.

The share prices reached an all time high to 2121.95.

HSBC BANK-OVERVIEW

HSBC Holdings plc is a United Kingdom based public limited company incorporated in
England in 1990, and headquartered London since 1993.As of 2009, it is both the world's
largest banking group and the world's 6th largest company according to a composite
measure by Forbes magazine.Hong-Kong served as the bank's headquarters until 1992
when it was forced to move to London as a condition of completing the acquisition of
Midland Bank.Today, whilst no single geographical area dominates the group's earnings,
Hong Kong still continues to be a significant source of its income. Recent acquisitions
and expansion in China are returning HSBC to part of its roots.SBC has an enormous
operational base in Asia and significant lending,investment and insurance activities
around the world. The company has a global reach and financial fundamentals matched
by few other banking or financial multinationals.

HSBC is listed on the London, New York, Hong kong,Paris and Bermuda stock
exchange,in India (National Stock Exchange) and is a constituent of the FTSE 100 Index
and the Hang Seng Index

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In February 2008, HSBC was named the world's most valuable banking brand by The
Banker magazine

HSBC India. In 1959 HSBC acquired The Mercentile Bank of India,London,China

established in October 1853 in Bombay. HSBC is now one of the fastest growing foreign
banks in India, both in domestic banking and support operations for worldwide
operations.

Diagram
We have made a line diagram in the excel sheet to show the various returns(prev close-
today close)of HSBC Bank from 2nd of march to 31st march .
High Low Last Close
Prev.close Open Price price Price Price Price Return
230.15 225 234.85 209.5 234 234 -3.85
234 230.6 233.95 230.05 231 230.95 3.05
230.95 273.5 273.5 221.5 230 229 1.95
229 221 234.4 215.6 229 228.8 0.2
228.8 218.7 230.4 218.7 226.5 225.85 2.95
225.85 229 229 223.85 225 224.1 1.75
224.1 221 227 220.55 222 222.05 2.05
222.05 217.5 223.95 217.5 223.4 223.15 -1.1
223.15 222.5 224.5 217 224.5 223.55 -0.4
223.55 225.05 227.8 223.6 227.8 225.15 -1.6
225.15 227.05 230 225 228.95 227.3 -2.15
227.3 225 234 225 227.15 227.45 -0.15
227.45 227.5 229.45 225 229.45 227.05 0.4
227.05 225 242.5 225 238.05 238.25 -11.2

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 238.25 238 242.85 237.1 240 238.85 -0.6
238.85 233.3 241 232 234 235 3.85
235 243.8 243.8 235 239.95 239.8 -4.8
239.8 234.15 240.1 234.15 235.1 235.95 3.85
235.95 235.1 243 232 236 237.75 -1.8
237.75 236.1 237 234 237 234.3 3.45
234.3 236.9 237 233.25 234 234 0.3
6

-2

-4

-6 Return

-8

-10

-12
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

Reasons for Highs’

1. The surplus liquidity in excess of one lakh crore on daily basis for the whole last year
promoted banks to discourage inflow of money. As a result, banks offering lower interest
rate. Due to this, landing by the banks rises and their balance sheet looked good. As a
result, their share price rises.

2. In the budget, the government told that government will increase the expenditure on
infrastructure.In the mean time, government urges to the RBI to make loans related to
infrastructure to secured loan. As a result, there were rise in the demand for the share of
HDFC

Reason for Lows:

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1.Effect of Inflation – The return is sharply negative with inflation well above the banks
deposited rate.As a result, sale in CASA decreases which de-motivate the investor to
invest in HSBC share.

2. The news in the market that RBI will increase the interest rate. As HDFC is the highest
lender in the real estate sector. The real estate sector will badly affect if interest rate
rises.So, it indirectly affect the balance sheet of the HSBC bank. So, the price of the
HSBC bank share came down.

3.As the amount of NPA increased day by day, and affecting the health of the balance
sheet of the company.As a result, there is less demand for the HSBC shares.

HDFC OVERVIEW
HDFC Bank began operations in 1995 with a simple mission: to be a"World-class
Indian Bank". They realised that only a single-minded focus on product quality and
service excellence would help them get there. Today, they are proud to say that they are
well on there way towards that goal.

It is extremely gratifying that there efforts towards providing customer convenience have
been appreciated both nationally and internationally.

2010
Euro money1) Best Local Bank in India (second year in a row)  2) Best Private
Private Banking Services overall (moved up from No. 2 last year)
Banking and
Wealth
Management
Poll 2010

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Financial Innovation in Branch Operations - Server Consolidation Project
Insights
Innovation
Awards 2010
Global FinanceBest Trade Finance Provider in India for 2010
Award
2 Banking1) Best Risk Management Initiative and 2) Best Use of Business
Technology Intelligence.
Awards 2009
SPJIMR 2nd Prize
Marketing
Impact Awards
(SMIA) 2010
Business TodayListed in top 10 Best Employers in the country
Best Employer
Survey

They are aware that all these awards are mere milestones in the continuing, never-ending
journey of providing excellent service to there customers. They are confident, however,
that with our feedback and support, they will be able to maintain and improve our
services. 

Diagram
We have made a line diagram in the excel sheet to show the various returns(prev close-
today close)of HDFC Bank from 2nd of march to 31st march .
RETURN
DATE Open High Low Close S
2495.4
2/3/2010 2515.3 2572 5 2560.3 2.399712
2604.6
3/3/2010 2555 2610 2545.4 5 1.732219
4/3/2010 2594 2612.4 2580 2596.2 -0.32442
2627.7 2588.3
5/3/2010 2606 5 2575 5 -0.30236
2611.2
8/3/2010 2602 2624 2585 5 0.884734
9/3/2010 2607 2665 2586.6 2659.2 1.8382

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 5
10/3/201 2705.7
0 2664 2712 2651.1 5 1.748613
11/3/201 2701.5
0 2701 2715 2682.5 5 -0.15522
12/3/201 2702.5
0 5 2720 2671.4 2715.7 0.523773
15/3/201 2675.2
0 2705 2715.7 2667 5 -1.48949
16/3/201 2688.8
0 2680 2703.6 2653 5 0.508364
17/3/201 2734.7 2726.7
0 2705 5 2693 5 1.409525
18/3/201 2737.9
0 2735 2759.5 2720.3 5 0.410745
19/3/201 2694.4
0 2740 2745 2678.1 5 -1.58878
22/3/201 2684.9 2624.8
0 2682 5 2601 5 -2.58309
23/3/201 2621.5
0 2643.8 2643.8 2610.1 5 -0.12572
25/3/201 2586.1
0 2610 2623.9 2561.7 5 -1.35035
26/3/201
0 2597.6 2640 2592.1 2613 1.038223
29/3/201
0 2624.7 2685 2615.1 2661.1 1.840796
30/3/201
0 2670.1 2689.7 2631 2661.1 0
31/3/201
0 2668 2733.7 2616 2638.7 -0.84176

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
-1

-2

-3

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Reasons for high

1. Government has decided to increase the investment in the infrastructure project as

HDFC bank is the top company in financing and providing loans. So, this the good news
for investors.

Reasons for low

1.Inflation: As inflation is constantly going up so there is a sharply negative return for the
people’s as the returns is comparatively low compared to the expenditure being done.
Therefore CASA is decreasing which is not good for the banks so investors loosing hope
as a result price of shares is decreasing.

2. Bond market is not performing well as the yield for the bond is going up and as a
result value of the bond is also coming down. So the liquidity is the matter of concern for
the bank.

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15