Share Market of Sbi

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CAPITAL MARKET OF S.B.I.

1.1-Introduction

In just 10 years, the SBI Group established a globally unique Internet-

based financial conglomerate system.In order to further our domestic growth

and to grow exponentially overseas, in 2010 we adopted a new business strategy

for the SBI Group, Pentagon Management for financial service businesses.

The Pentagon Management business strategy aggressively pursues synergistic

effects within the SBI Group by positioning securities, banking, nonlife

insurance, life insurance and payment settlement services as the five core

businesses of our financial services business. As we transform ourselves from

Japans SBI to the Worlds SBI, we will target ever stronger growth in our

businesses.

Market share can be defined as the percentage of all sales within a market

that is held by one brand / product or company. Market share can be measured

in several ways. However, the two most important measures.

Share market is an area which fascinates each and every individual who is

craving for more money. Some common phrases are If we want to earn just try

with share markets; my friend has made lot of money in that . As beginners we

should understand one thing. If we are planning to invest in share market, first

we have to categorize our self.

1.2-SCOPE & IMPORTANCE


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The scope of the study is to know the marketing strategies adopted by

SBI . Its not easy for covering all theboundaries for collecting the data. So, this

research study is covering some Important aspect. In this research study analysis

the marketing strategies of SBI.

The research project evaluation of the banking sector in India has primal

importance due to intense competition, and changing banking reforms. This

research project is very important because in today scenario there is strong

competition in public and private sector banks. Its very important for us to

know which sector is performing well and what are the marketing strategies

adopted by banks (public sector or private sector).

1-3-OBJECTIVE

Understand the strategies adopted by a market leader in the banking

industry to retain its market share

Explore the reasons how a market leader can loose its market share

significantly

Examine and analyze the key elements of the restructuring exercise

undertaken by SBI.

Study the marketing initiatives adopted by SBI to reposition itself as a

customer-oriented bank

Examine the challenges that can be faced by a market leader due to the

changes in the industry structure

Study and analyze the structure of the Indian banking industry.

1-4- METHODOLOGY


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Research means a search for knowledge or gains some new knowledge and

methodology can properly refer to the theoretical analysis of the methods

appropriate to a field of study or to the body of methods and principles

particular to a branch of knowledge. A Research methodology has a specified

framework for collecting the data in an effective manner. Research

methodology means a defining a problem, defining the research objectives,

developing the research plan, collecting the information, analyzing the

information andpresentation of finding.

1-5-Limitations of the study

It is important to critically evaluate the results and the whole study. The present

study has certain limitations that need to be taken into account when

considering the study and its contributions.

This study has focused on a phenomenon that is a very extensive and major one,

i.e. the market. Clearly, this represents a challenging task for research regardless

of the more specific interests that the study may have. In this study, this

extensive and complex phenomenon has been studied from a rather narrow

empirical perspective. The selection of the single case study design naturally

brings forth many limitations as far as the generalisation of the results of the

study is concerned.. On the other hand, this also represents the whole idea of

making a case study. By understanding something about this particular case

more in depth, we might eventually also learn something about more general

phenomena. research challenges in this topic. Multiple case study design would


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enable us to test the conceptual framework of the study further. However, as the

theme of this study has been related to emerging market, it can of course be

seen that eventually the software component market are likely to develop so that

their emergence, even through multiple case studies becomes different, i.e. the

emergence needs to be studied retrospective.

1.6 - CHAPTER PLAN :-

Chapter 1- Introduction

Chapter 2- Share market as a profile

Chapter 3- Analysis of SBI share market

Chapter 4- Conclusion


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SHARE MARKET AS A PROFILE

A Share market/stock markets is an open market for fiscal operations such as

trading of a firm's share and derivatives at a fixed cost. These securities arefurther listed on a stock exchange. A Share market does not offer any corporeal

service and is not a separately owned business entity.

It was in 1875 that the Indian Share Market first started functioning. The first

share trading association in India was known as the Native Share and Stock

Broker's Association, only to become the Bombay Stock Exchange (BSE) later

on. This trading association started off its operations with around 318 members.

2.1 - Main components of Indian share Market

Bombay stock Exchange(BSE)

Bombay Stock Exchange is known to be the oldest stock exchange in the entire

Asian region. If someone wants to know about the history of the India share

market, it becomes synonymous with the history of the Bombay Stock

Exchange. It started functioning in 1875 with the name 'The Native Share and

Stock Broker's Association'. Under the Securities Contracts (Regulation) Act,

1956, the association got its recognition as a stock exchange in 1956. When it

started, it was just an association of persons but with the recognition it got

transferred to a corporate and demutualised entity.

Trading items in Bombay Stock Exchange - Equity or Shares Derivatives (Futures and Options) Debt Instruments

The main index of BSE is known as the BSE SENSEX or simply SENSEX

(Sensitivity Index). It is an index which comprises of 30 financially sound


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company scrips, with an option to be reviewed and modified from time-to-time.

The index calculation is based on the 'Free-float Market Capitalization'

methodology. Leading bourses like the Dow-Jones also follow this

methodology. Currently the Sensex is hovering around the 17,000 mark, all

expected to touch 20K by 2010. But then volatility has its important role to

spoil the entire game.

National Stock Exchange (NSE)

National Stock Exchange (NSE) is considered to be the leader in the stock

exchange scenario in terms of the total volume traded. The market capitalisation

the National Stock Exchange touched about $921.31 billion at the end of May

2009. The National Stock Exchange received the recognition of a stock

exchange in July 1993 under Securities Contracts (Regulation) Act, 1956. The

products that are traded in the National Stock Exchange are:-

Equity or Share Futures (both index and stock) Options (Call and Put) Wholesale Debt Market Retail Debt Market

NSE has a fully automated screen based trading system which is known as the

NEAT system. The transactions are carried on with speed, efficiency, and are

all transparent. The risk management system of the National Stock Exchange is

world class and can be considered as the benchmark for other bourses.

The leading index of NSE is known as Nifty 50 or just Nifty. It comprises of 50

diversified benchmark Indian company scrips and is constructed on the basis of

weighted average market capitalization method.


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2.2-Regulatory Authority of Indian Share Market

SEBI or Securities and Exchange Board of India is the market watchdog and

has the responsibility of protecting the investors' interests, develops regulatorynorms and helps in the development of the securities market in India.

2.3-Why to invest in Indian share market ?

An investor does not require a lot of money to start investing in India

share market unlike buying property and paying off a monthly mortgage.

Time of trading involved spans from small to big. One can trade for a

short period of time or even a lengthy span.

It helps you to see 'fast' cash if the market is in robust mood and helps in

fast liquidation.

2.4-Essential rules of Indian Share Market

Whenever share market is at its crest it is bound to dip at some point of

time.

If the share market is down, it will only increase if there are no external

aspects influencing it.

Unlike the common belief of investing in booming share market, it is

advisable not to block your hard earned money in already flourishing

Sensex and NIFTY. It is better to wait for market bottom trend and then

purchase shares at lower cost in order to trade it later.

The excellent time for investment is when the market is low keeping the

basics in consideration.

Seek the advice of professionals who will not only provide you tips on

best investment options but also on favorable market conditions.

Update yourself on the prevailing market conditions


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Whenever market witness an upward trend always purchase first and then

sell the securities, and when the market dips always buy later and sell

first.

2.5-Tips on investing intelligently in Indian Share Market

Consider selling the shares which you have bought long time back and

are indicating gains. Even if they are not willing to offer you considerable

gains then its time to get rid of them are invest your money in productive

schemes.

Diversify your shares buy investing in different sectors. Also consider

investing in equity funds and to stabilize your equity investments invest a

part in fixed income options like the bonds, Public Provident Fund,

National Savings Certificates and post office deposits. You can also

consider a balanced or debt fund if you have restrained budget.

Do not consider the shares based on layman's advice. Stride carefully and

invest in shares that you are comfortable investing in. Judge the firm by

its past records and assess it personally. Take the advice of the fund

manager who manages that specific fund.

If you have allocated more than half of your investments in equity, then

stick to your plan. Do not surpass that pre-decided perimeter and believe

in the performance of the market.

2.6 -Are we a long term investor ?

Are we a short term investor ? ( Daily trading).

Note:


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In share market we are 95% secured if we are ready to wait (provided company

fundamentals are good. Exclude cases like Enron, worldcom.etc) .The problem

comes when we have invested in a bank we can withdraw same amount with

interests till date for any of our emergency.

Assume our money is in form of stocks we got an emergency by today evening

7 pm of 1 lakh. We have seen our stocks worth in todays closing was our

investment 1 lakh + whatever market price added to it. We think we have more

than required and sell it tomorrow. But tomorrow fate decided the other way

market falls our stock value becomes 90 thousand. If we sell thats where the

problem comes.

It may even go up to 1.25 laks next week /next month. Can we wait? Thats the

million dollar question.

Case1short term investor (Risky)

Remember its here we play not invest.

1. Make investment break ups: If we have x Rs in our hand dont get

carried away to buy shares for all x Rs. Always we should have fifty

percent in our hand.

2. Reinvest only when profits:Make the profits what we earn on the first

trade if daily trader (if so happens) to buy extra shares. Suppose if 0urstock didnt go up after first investment wait till (may be months) till our

holding goes up.

3. Capital maintain:Always ensure that our capital is maintained with till

date interest rate of banks. Though depository participants suggests us its

always better we should have basic ideas of the company. We have lot of

information sources (net, softwares).


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4. In case of IPO: Buy and sell within max 1 week of IPOS. Invest in

established stocks. If we feel trend of IPO is good come back and invest.

5. Sell well ahead of your expected need:Suppose we have a marriage and

we wanted money for that. If we feel that today our investment + return

(m-cap) is good may be 30 days ahead of marraige.sell it today. We are

secured.

The very simple formula will be if we crave for more we have more chances to

lose more.

Case 2

Long term investor

Its here we invest. We are most secured in this case because we dont consider

money invested to be used for emergency. Any company will one day have a

growth curve. Even a sick company value can be raised by psychological

factors of investors.

2.7-Stock Market Tips

The Stock Market Tips we discuss in this article are not stock buying selling

tips but general tips about the way to approach stock markets. Trading requires

practice and a rational approach. You cannot make millions overnight. The

stock market is definitely a good opportunity to make some savings but you

should put in hard work and stay realistic. Success comes to those you learn to

survive against all odds and it applies to the stock market as well. You need to

know when you have to buy and sell so that you make enough profits and do not

lose your hard earned money in seconds.

Learn to exit on time. Most traders hold on to the stock even if it has crossed

their expectation level, with the hope that it may increase further. This happens
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during a raging bull period. Be careful, as the market may come crashing down

and you will be left devastated and sad.

The stocks that you choose should move according to your expectations and sellwhen breakeven happens. This is actually the first step for good trade practice.

Never lose heart while giving commissions, it is your brokers earnings and he

does that for a living. So do not fret when you have to shell our commission

money. Your main concern while trading is to limit losses and earn profits.

Keep a part of the money earned for a rainy day. Do not put all your cash into

one basket. Have a diverse portfolio so that you are not at the receiving end

when the market is down.

Judge your instincts. See if you are successful long term or short term trader.

Specialize in one field. Are your losses bigger on short term or long term

stocks? See which market gives you better returns. Trade in the other direction

only when things are going really good for you and the economic situation call

for a good trading season.

Use the end of the day market opinions and sessions to your advantage. Know

the general sentiment of the market. You should be through on the companies

that you are going to put your money on.

Learn to learn from your mistakes. Mistakes are inevitable but certainly not

worth repeating. The stock market sees the survival of the fittest and so don be

scared of losses. Convert the bear conditions to your advantage and make

profits during the Bull Run. Be persistent in your trade and learn to use the

rational method of thinking.

2.8-Examples of share market

Market share information on the UK clothing retail market issummarized below:


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Position Brand Sales('m) Market Share(%)

Number of

Outlets1 Marks & Spencer 2,743 10.2 315

2 Next 1,708 6.3 333

3 Arcadia 1,609 5.9 1,603

4 Debenhams 1,076 4.0 975 Asda 963 3.6 215

6 Matalan 776 2.9 137

7 Tesco 710 2.6 588

8 Bhs 631 2.3 163

9 New Look 552 2.1 573

10 John Lewis 482 1.8 25

Total of Top 10 11,250 41.8

UK Market 26,911 100.0

The UK clothing market, as defined by Deutsche Bank in their recent report, isvalued at 26.9 billion. It is one of the most concentrated retail markets in

Europe, with the top ten retailers accounting for some 42% of the market.

What is market concentration? It is the proportion of market value that is owned

by the leading brands or products/companies in the market.Where the market

leaders own a large part of the overall market, the market is said to be highly

concentrated. By contrast, where the market leader has a relatively small market

share and there are many other competitors, a market is said to be "fragmented"

There has been little change in the concentration of the UK clothing retail

market in recent years. The top 10 retailers accounted for 39% of the market in

1995. However, as the table below illustrates, the composition of the top 10 has

changed quite considerably, with only six of the top ten in 2008 remaining inthe top league in 2010:

Position 2008 2009 2010

1 M&S M&S M&S

2 Arcadia Arcadia Next

3 Debenhams Debenhams Arcadia

4 C&A Next Debenhams


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5 Next C&A Asda

6 Sears Sears/Adams Matalan

7 Bhs Bhs Tesco

8 Littlewoods Asda Bhs9 John Lewis Littlewoods New Look

10 House of Fraser House of Fraser John Lewis

The table above masks the change in the format of retail businesses that have

evolved in the UK over recent years. Five years ago, the value or "discount"

retailers had a relatively small share of the clothing market, accounting for only

18% total market share. Today the market is very different. The value ordiscount retailers now have over a quarter of the market. Foreign clothing

retailers have also penetrated the market (e.g. the Gap, H&M and Zara)

although their total market share is still less than 5% .

3. ANALYSIS OF SBI SHARE MARKET

State Bank of India, together with its subsidiaries, provides variousbanking products and services in India and internationally. Its personal banking

products and services include deposit schemes, such as current accounts,

savings accounts, term deposits, and recurring deposits; and loans that comprise

housing loans, car loans, educational loans, personal loans, loans for pensioners,

loans against shares and debentures, festival loans, and travel loans, as well as

mobile banking and demat services, automated teller machine (ATM) services,

gift cards and cheques, Internet banking, foreign inward remittance, safe deposit

lockers, and foreign travel cards. The company also provides corporate banking

services, which include working capital finance, project finance, deferred

payment guarantees, corporate term loans, structured finance, dealer and

channel financing, equipment leasing, loan syndication, and financing Indian

firms overseas subsidiaries or joint ventures; NRI services; agricultural/rural

services, such as agricultural banking and micro credit; and banking products


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and services for small and medium enterprises. In addition, it offers

international banking products and services consisting of trade finance,

correspondent banking, merchant banking, project export finance, exporter gold

cards, treasury, and offshore banking services; and life insurance, merchant

banking, mutual funds, credit cards, factoring, security trading, pension fund

management, and primary dealership in the money market. As of March 31,

2010, it operated approximately 12,496 branches; and 21,485 ATMs of which

16,294 ATMs were owned by the company. The company was founded in 1806

and is based in Mumbai, India.

State Bank of India

State Bank of India

Type Public (NSE:SBIN,BSE:500112,LSE:SBID)

IndustryBanking

Financial services

Founded 1 July 1955

Headquarters Mumbai,Maharashtra,India

Key peopleO. P. Bhatt

(Chairman)
http://en.wikipedia.org/wiki/Types_of_business_entityhttp://en.wikipedia.org/wiki/Public_companyhttp://en.wikipedia.org/wiki/National_Stock_Exchange_of_Indiahttp://www.nseindia.com/marketinfo/companyinfo/companysearch.jsp?cons=SBIN&section=7http://en.wikipedia.org/wiki/Bombay_Stock_Exchangehttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500112http://en.wikipedia.org/wiki/London_Stock_Exchangehttp://www.londonstockexchange.com/exchange/prices-and-news/stocks/prices-search/stock-prices-search.html?nameCode=SBIDhttp://en.wikipedia.org/wiki/Industryhttp://en.wikipedia.org/wiki/Bankinghttp://en.wikipedia.org/wiki/Financial_servicehttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Maharashtrahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/O._P._Bhatthttp://en.wikipedia.org/wiki/Chairmanhttp://en.wikipedia.org/wiki/File:SBI-logo.svghttp://en.wikipedia.org/wiki/Chairmanhttp://en.wikipedia.org/wiki/O._P._Bhatthttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Maharashtrahttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Financial_servicehttp://en.wikipedia.org/wiki/Bankinghttp://en.wikipedia.org/wiki/Industryhttp://www.londonstockexchange.com/exchange/prices-and-news/stocks/prices-search/stock-prices-search.html?nameCode=SBIDhttp://en.wikipedia.org/wiki/London_Stock_Exchangehttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500112http://en.wikipedia.org/wiki/Bombay_Stock_Exchangehttp://www.nseindia.com/marketinfo/companyinfo/companysearch.jsp?cons=SBIN&section=7http://en.wikipedia.org/wiki/National_Stock_Exchange_of_Indiahttp://en.wikipedia.org/wiki/Public_companyhttp://en.wikipedia.org/wiki/Types_of_business_entity


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Products

Investment Banking

Consumer Banking

Commercial Banking

Retail Banking

Private Banking

Asset Management

Pensions

Mortgages

Credit Cards

Revenue 133,851crore (US$29.05 billion) (2010)[1]

Profit 11,733crore (US$2.55 billion) (2010)[1]

Total assets US$ 323.0 billion (2010)

Total equity US$ 18.5 billion (2010)

Owner(s) Government of India

Employees 200,299 (2010)

Website Statebankofindia.com

State Bank of India is an India-based bank. In addition tobanking, the

Company, through its subsidiaries, provides a range of financial services, which

include life insurance, merchant banking, mutual funds, credit card, factoring,

security trading, pensionfund management and primary dealership in the

money market. It operates in four business segments: Treasury,

Corporate/Wholesale Banking, Retail Banking and Other Banking Business.

The Treasury segment includes theinvestment portfolio and trading in foreign

exchange contracts and derivative contracts. The Corporate/Wholesale Banking

segment comprises the lending activities of Corporate Accounts Group, Mid

CorporateAccounts Group and Stressed Assets Management Group. The Retail
http://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Investment_Bankinghttp://en.wikipedia.org/wiki/Consumer_Bankinghttp://en.wikipedia.org/wiki/Commercial_Bankinghttp://en.wikipedia.org/wiki/Retail_Bankinghttp://en.wikipedia.org/wiki/Private_Bankinghttp://en.wikipedia.org/wiki/Asset_Managementhttp://en.wikipedia.org/wiki/Pensionshttp://en.wikipedia.org/wiki/Mortgageshttp://en.wikipedia.org/wiki/Credit_Cardshttp://en.wikipedia.org/wiki/Revenuehttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/State_Bank_of_India#cite_note-rediff1-0http://en.wikipedia.org/wiki/State_Bank_of_India#cite_note-rediff1-0http://en.wikipedia.org/wiki/State_Bank_of_India#cite_note-rediff1-0http://en.wikipedia.org/wiki/Net_incomehttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/State_Bank_of_India#cite_note-rediff1-0http://en.wikipedia.org/wiki/State_Bank_of_India#cite_note-rediff1-0http://en.wikipedia.org/wiki/State_Bank_of_India#cite_note-rediff1-0http://en.wikipedia.org/wiki/Assethttp://en.wikipedia.org/wiki/Assethttp://en.wikipedia.org/wiki/US$http://en.wikipedia.org/wiki/Equity_(finance)http://en.wikipedia.org/wiki/US$http://en.wikipedia.org/wiki/Ownershiphttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Employmenthttp://en.wikipedia.org/wiki/Websitehttp://www.statebankofindia.com/http://f/sbi%20123456/sbi%201.htmhttp://f/sbi%20123456/sbi%201.htmhttp://f/sbi%20123456/sbi%201.htmhttp://f/sbi%20123456/sbi%201.htmhttp://en.wikipedia.org/wiki/Indian_rupeehttp://en.wikipedia.org/wiki/Indian_rupeehttp://en.wikipedia.org/wiki/Indian_rupeehttp://en.wikipedia.org/wiki/Indian_rupeehttp://en.wikipedia.org/wiki/Indian_rupeehttp://en.wikipedia.org/wiki/Indian_rupeehttp://en.wikipedia.org/wiki/Indian_rupeehttp://en.wikipedia.org/wiki/Indian_rupeehttp://en.wikipedia.org/wiki/Indian_rupeehttp://en.wikipedia.org/wiki/Indian_rupeehttp://en.wikipedia.org/wiki/Indian_rupeehttp://en.wikipedia.org/wiki/Indian_rupeehttp://f/sbi%20123456/sbi%201.htmhttp://f/sbi%20123456/sbi%201.htmhttp://f/sbi%20123456/sbi%201.htmhttp://f/sbi%20123456/sbi%201.htmhttp://www.statebankofindia.com/http://en.wikipedia.org/wiki/Websitehttp://en.wikipedia.org/wiki/Employmenthttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Ownershiphttp://en.wikipedia.org/wiki/US$http://en.wikipedia.org/wiki/Equity_(finance)http://en.wikipedia.org/wiki/US$http://en.wikipedia.org/wiki/Assethttp://en.wikipedia.org/wiki/State_Bank_of_India#cite_note-rediff1-0http://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/Net_incomehttp://en.wikipedia.org/wiki/State_Bank_of_India#cite_note-rediff1-0http://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/Revenuehttp://en.wikipedia.org/wiki/Credit_Cardshttp://en.wikipedia.org/wiki/Mortgageshttp://en.wikipedia.org/wiki/Pensionshttp://en.wikipedia.org/wiki/Asset_Managementhttp://en.wikipedia.org/wiki/Private_Bankinghttp://en.wikipedia.org/wiki/Retail_Bankinghttp://en.wikipedia.org/wiki/Commercial_Bankinghttp://en.wikipedia.org/wiki/Consumer_Bankinghttp://en.wikipedia.org/wiki/Investment_Bankinghttp://en.wikipedia.org/wiki/Product_(business)


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Banking segment consists of branches in National Banking Group, which

primarily includes personal banking activities, includinglending activities to

corporate customers having banking relations with branches in the National

Banking Group.

MUMBAI: The SBI group has seen its market share in bank deposits fall 100

basis points to 23.4% for the quarter ending December 2009 over the same

period a year ago as a result of its efforts to reduce high-cost deposits. However,

the group's market share in credit rose marginally during the same period.

Data from RBI's quarterly statistics on deposits and credit of scheduled

commercial banks show that the SBI group now accounts for 23.8% of all bank
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lending, against 23.4% on December 2008. The market share of government-

owned banks rose from 49% to 50.6%.

Public sector banks have grabbed credit market share of private banks, whichnow account for only 17.8% of bank lending compared with 20.3% in

December 2006 and 18.7% in December 2008. The sharp fall is largely because

of ICICI Bank's conscious decision to shrink its balance sheet. The bank has not

been lending as aggressively since the global meltdown. The market share of

foreign banks and regional rural banks as on December 2009 stood at 5.3%

(6.6%) and 2.5% (2.3%), respectively.

SBI's market share in deposits rose from 22.4% in the quarter ending December

2006 to 24.4% in December 2008.

However, after mopping up huge deposits in 2008-09, the bank found few

takers for loan as the credit market slumped world over. As a result, SBI

decided to go slow on deposit mobilisation. Its deposits rose 3.8% in the first

nine months of 2009-10. The market share of banks owned by government

banks (other than SBI) rose to 50.9% as on December 2009 from 48.3% a year

ago. The market share of private banks also rose to 18.6% from 17.1% while the

market share of foreign bank and rural regional banks stood at 5.5% and 3%,

almost flat.

Other data in the same reports shows that there is progress in penetration of

banking services. The smaller centres now account for an increased share of

bank business. Top hundred centres, arranged according to the size of deposits

accounted for 68.9% of the total deposits and the top hundred centres arranged

according to the size of bank credit accounted for 77.5% of total bank credit.

In December 2008, the corresponding share of top hundred centres in aggregate

deposits and gross bank credit was 69.2% and 78.6%, respectively. Aggregate


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deposits of top hundred centres increased by 17.5% in December 2009 over

December 2008 compared with a growth of 20.2 % recorded a year ago. The

growth rate of gross bank credit of top hundred centres at 10.6% in December

2009 was substantially lower compared with 25.3% growth recorded in

December 2008.

Ratios Dec 08 Mar 09 Sep 09 Dec 09

Market Price

(Rs)

1288 1067 2196 2235

Book Value

(Rs)

949 981 964 1003

Market

capitalization

(in Rs crore)

81788 67713 139409 141896

EPS

(Annualised)

(Rs)

134.09 143.77 151.85 153.30

Price to book

value

1.36 1.09 2.28 2.23

P/E ratio 9.61 8.06 13.72 14.58

ROA 1.02 1.04 0.95 0.94

ROE 14.12 15.73 15.75 15.29


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3.1-State Bank of India

SBI is the largest bank in India with deposits of Rs 3,67,000 crore as on

March 31, 2005. It dominates the Indian banking sector with a market share of

around 20% in terms of total banking sector deposits. The increasing focus on

upgrading the technology back-bone of the bank will enable it to leverage its

reach better, improve service levels, provide new delivery platforms, and

improve operating efficiency to counter the threat of competition effectively.

Once the core banking solution (CBS) is fully implemented, it will cover over

10,000 branches and ATMs of the State Bank group, and emerge as the

strongest technology enabled distribution network in India. The increasing

integration of SBI with its associate banks (associates) and subsidiaries will

further strengthen its dominant position in the banking sector and position it as

the countrys largest universal bank.

3.2-Resource-raising capabilities

SBIs funding profile is strong, underpinned by its strong retail depositbase. The bank is facing increasing competition in its metropolitan and urban

franchise. SBIs strong franchise gives it access to a steady source of stable

retail funds, which constitute around 59% of the total resources as on March 31,

2005 (56% as at March 31, 2004).

Savings deposits have shown a strong three-year growth of 19%. Thus,

despite a reduction in the proportion of current account deposits, low-cost


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deposits have continued to constitute over 40% of total deposits as at March 31,

2005. The banks cost of deposits (excluding IMD) has significantly reduced to

4.70% for the 2004-05 (refers to financial year from April 1 to March 31),

compared with 5.48% in 2003-04. The banks liquidity position is very strong

due to healthy accretion to deposits, large limits in the call market, and

significant surplus SLR investments. SBI will maintain its strong funding

profile and a low cost resource position in view of its strong retail base and

wide geographical reach.

3.3-Earnings profile to remain goodSBI will maintain a good earnings profile in the medium term despite high

pressure on yields due to the increasing competition in the banking sector. SBIs

earning profile is characterised by consistency in the return on assets

(PAT/Average Assets), at around 1% per annum for the past three years, and

diverse income streams. To maintain yields and pursue credit growth, the bank

is aggressively targeting retail finance and small and medium enterprises(SMEs). The banks core fee income of 1% of average funds deployed bolsters

its revenue profile. However, with the opening of government business like tax

collection to other banks and increased competition, the growth in fee income is

expected to slow down. The banks operating expense at 2.44% of average

funds deployed in 2004-05 is in line with other public sector banks. The banks

cost structure is rigid as fixed employee cost accounted for 74% of the operating

expenditure in 2004-05. Thus, despite good asset growth and technology

efficiency gains, the banks operating costs will remain high in the medium

term. To be able to reap the full benefits of technology implementation, the

bank will have to reduce or redeploy work force; since this is a sensitive issue, it

is expected to happen gradually.


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The banks fund based and fee income earnings are diversified across industries,

regions, asset classes, and customer segments.

Strong diversification in income streams will ensure that the banks earningsremain relatively stable, despite the decline in profitability in some segments.

Comfortable capital position

SBI is adequately capitalised with a tier I capital adequacy ratio of 8.04% and a

large capital base of Rs 240.72 billion as at March 31, 2005. The bank has

considerably improved its net worth coverage for net NPAs to 4.4 times as at

March 31, 2005 due to lower slippages reflecting an improving asset quality,

witnessed across the entire banking sector. The capitalisation levels of SBI are

adequate to address the asset side risks and support the business growth in the

medium term.

Management strategies

In retail finance, the bank has leveraged its corporate relationships, pursued

business growth selectively, and has not competed based on interest rate. The

bank has taken initiatives like on-line tax returns filing and faster transfer of

funds to protect its dominant position in the government business. The bank

also has a clear technology strategy that will enable it to compete with the new

generation private sector banks in customer service and operational efficiency.

Asset quality to remain at average levels

The bank continues to have a high level of gross NPAs at 5.95% of gross

advances as at March 31, 2005, compared with 4.9% for all scheduled

commercial banks (SCBs) taken together. The bank is facing challenges to

improve the quality of assets originated, as can be seen in the consistently

higher levels of slippages (additions to NPAs) at 2.71% in 2004-05.


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To contain NPAs and ensure credit growth, the bank has decided to focus on

financing the retail (personal) segment as well as SMEs. The share of retail

advances has increased to 24.73% (Rs 522.08 billion) of total advances as at

September 30 2005. In the retail loan segment, SBI is targeting primarily the

housing loans segment, which constitutes Rs. 283.41 billion (54.3%) of total

retail loans. The NPAs in retail finance are low currently; however they are

steadily increasing (especially in the housing finance portfolio) and have started

showing signs of stress. SBIs retail portfolio has grown at over 37% CAGR in

the last two years and hence a significant portion of the portfolio is largely

unseasoned. The housing finance portfolio has a 12-month, lagged gross NPA

of 4.34% as at March 31, 2005.The bank will face significant challenges in the

medium term to develop effective credit appraisal and collection systems in

order to contain NPAs in retail finance. SBIs asset quality is expected to

remain at average levels, as the banks large and diverse asset portfolio reflects

of the asset quality of the banking system.

3.4-Business description

SBI along with its associate banks offer a wide range of banking products and

services across its different client markets. The bank has entered the market of

term lending to corporates and infrastructure financing, traditionally the domain

of the financial institutions. It has increased its thrust in retail assets in the last

two years, and has built a strong market position in housing loans.

SBI, through its non-banking subsidiaries, offers a host of financial services,

viz., merchant banking, fund management, factoring, primary dealership,

broking, investment banking and credit cards. SBI has commenced its life

insurance business by setting up a subsidiary, SBI Life Insurance Company

Limited, which is a joint venture with Cardiff S.A., one of the largest insurance

companies in France. SBI currently holds 74% equity in the joint venture.


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Industry prospects

To leverage benefits such as access to low cost resources and the facility to

provide a larger gamut of services, a number of finance companies such as

Kotak Mahindra Finance Limited and HDFC Limited have promoted banks.

Simultaneously, yet another emerging trend is that of foreign banks promoting

NBFCs to benefit from regulatory flexibility available to such entities in areas

like absence of statutory liquidity ratio and cash reserve ratio requirements,

priority sector requirements, and corporate exposure limits.

New private sector banks capture market share With technological edge and a

strong marketing thrust, private sector banks have been stealing market share in

retail deposits and the corporate fee business from public sector banks. Together

with some foreign banks, these private banks have also aggressively entered the

retail asset financing space, hitherto the domain of non-banking finance

companies.

Given their focus on cross selling and optimising their customer base, they now

offer the entire range of products and services on the asset and liability side to

retail and wholesale customers

Asset quality to improve

Banks have not yet fully resolved the stress in the asset quality of their legacy

corporate loan portfolios, however. Though slippages to NPAs and provisioning

were high for some banks in FY2004, as they moved to the 90-day norm for

recognising and provisioning for NPAs, the treasury gains enabled significant

provisioning to be made with the result that net NPAs for most public sector

banks are now less than 3%.


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Going forward, steady growth in gross domestic product should help improve

the banks asset quality and increase corporate lending. The securitisation and

reconstruction of financial assets and enforcement of security interest (Sarfaesi)

Act should also help banks in limiting slippages and improving NPA recoveries.

Better capitalisation levels

Banks have demonstrated a fair amount of flexibility in raising fresh equity

capital through public issues in recent years, thereby improving their

capitalisation levels. The steady accruals to net worth and falling non-

performing asset levels have resulted in an improvement in the capitalisation

position of banks in recent years.

Challenges ahead

Competition from new private sector and foreign banks remains a key challenge

for public sector banks. They need to reorient their staff and effectively utilise

technology platforms to retain customers and reduce costs. They also need tofortify their credit risk management systems to mitigate the risks arising from

small-ticket lending to the retail, small and medium enterprises, and services

segments.

Consolidation and emergence of universal banking groups

The cap on foreign ownership of banks has already been raised from 49% to

74%. The competition in the sector could get further intensified if the 10% cap

on voting rights is also relaxed. New private sector banks are expanding their

geographical coverage and making inroads into government business. The new

private and foreign banks will continue to gain market share from public sector

banks because of their efficient cost structures, technological edge, focused

marketing approach and operational freedom. However, the emergence of newer

players would be restricted if the private ownership of banks is capped at low


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levels.Mergers among PSBs would create banks with even larger balance sheets

and customer base. However, the integration process in such mergers is

expected to be complex and time long drawn. These would also be driven by

GoI due to provisions of Banking Companies (Acquisition and Transfer of

Undertakings) Act 1969, and hence political scenario will impact the timing and

permutations possible. Strategic alliances between banks and other financial

sector players such as insurance companies and mutual funds are also likely as

banks attempt to enhance their product range, leverage on economies of scale

and reduce costs.

3.5-Brokerage and investment banking business

Financial result of financial year 2009 -10

The Brokerage & Investment Banking Business in FY2008 was comprised of

two businesses, the securities business and the commodity futures business. The

securities business involves the brokerage of securities transactions, the

underwriting and selling of IPOs and the placement and distribution of

securities.

During the Initial Offer Period, Shares will be offered to the investors at the

Initial Issue Price.

After a period of six months from the closure of the Initial Offer Period i.e.

from 29th September 2006, Shares may be subscribed on any Valuation Day

twice every week at an Issue Price per Share based on the prevailing Net Asset

Value of the Fund (US Dollar Fund (Retail and Institutional Plans) and the Euro

Fund (Retail and Institutional Plans) ) per Share plus the applicable Sales

Charge.

Redemptions of Shares

After a period of six months from the date of closure of the Initial Offer Period

i.e. from 29th September 2006, an investor shall be entitled to redeem the

Shares on any Valuation Day at a Redemption Price per Share based on Net


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Asset Value of the Fund per Share (i.e. US Dollar Fund (Retail and Institutional

Plans) and the Euro Fund (Retail and Institutional Plans)).

Investment Objectives and Policies

The Fund shall invest all or substantially all of its assets into the units of the

Scheme. The investment objective of the Fund is similar to that of the Scheme,

i.e., to provide investors with opportunities for long-term growth in capital

through well-researched investments in a diversified basket of stocks of Indian

Companies.

Investment conditions applicable to the Fund

In accordance with the SEBI in-principle approval, the Fund shall be required to

interalia comply with the following conditions:

(i) The Fund to be sponsored by the Scheme Asset Manager;

(ii) SBI MF to launch a scheme for investment in India and the units issued by

the scheme shall be subscribed for by the Fund only;

(iii) The Scheme Asset Manager to certify to the SEBI that it has obtained thenecessary approvals for the Fund in the overseas jurisdictions. Any financial

obligation arising out of the operations of the Fund shall be met separately,

without affecting the interests of the unit holders in other domestic mutual fund

schemes managed by the Scheme Asset Manager;

(iv) The Trustee shall monitor the activities of the Fund and shall confirm to

SEBI in their half-yearly reports that there is no conflict of interests between themanagement of the Fund by the Scheme Asset Manager and its management of

the Scheme.

(v) The conditions of the Fund being broad based shall be built into the tripartite

agreement between the

Investment Manager of the Fund, the Trustees of the domestic mutual fund and

the Scheme Asset Manager;


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(vi) The Investment Manager of the Fund shall ensure that the Fund complies

with the Know Your Client (KYC) and anti-money laundering requirements for

their overseas investors; and

(vii) The Fund shall also comply with any other requirement as stipulated by the

SEBI from time to time.

Findings

All of SBI Customer are satisfied with the services provided by the ban

Most of the customers prefer to invest in SBI share

A response form customer care is so clear & good

Many customer shifted from other place to SBI.

Reason for Interest of people

1. Quick processing

2. Transparency

3. Attractive growth rate

4. Stability

5. Simple & fast processing


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4.2-Suggestion & Recommendation

Awareness programme is required

If these are any hidden data that must be disclosed

SBI should take some steps so that more people can get benefit

Better service should be provided

Investment benefits

High Growth rate in the share price i.e., better return on investment.

Dividend paid is also high which creates confidence among the investor.


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Share Market of Sbi

Documents

Transcript of Share Market of Sbi