Industry Profile: The banking industry is different from other industries. No other industries come into direct contact with the general public. Banking is a business where the Raw material and Final product are the Same. Money. The assets in banking are far different from other businesses. No other business is as essential as banking in the Economy. That is why they called it the equivalent of the Economy. The health of the Economy is often analyzed from the health of Banking. As Banking comes into contact with the general public and industrial customers, it is essential for Govt also. No other businesses hold this level of importance. Naturally, it attracts the highest amount of regulation.
Banking is a Good industry where you can earn money. But for that, you need to do the right things. The reason is that Banking is not Manufacturing, where you buy Raw material, process it, and then manufacture something else. Banking is simply the process of earning money from the money you have. If you do it right, you are a winner. The essential thing in this is pretty simple. Make successful Formula and keep repeating it until you succeed. In the language of Saurabh Mukherjee, Ambit Capital, The word repeatedly mentioned in the context of HDFC BANK is execution. For Axis Bank, you may realize that it is Consumer satisfaction and Technology.
As India is emerging economy, the healthy banking is more and more important for Indian economy.
Running a bank is as tricky as analyzing a BANK and its Fundamentals. Many Small, Check and Uncheck, many small things, Many parameters to check. But there is a reason that Bank business comes into contact with Public money, which makes it an essential role player in the Country’s Economy. If handled by the wrong person, you are inviting disaster. So for running the Bank, Management and how they run it is crucial. The parent Institution is also critical for the bank as it can use a brand name or develop one. If they are strong, the bank will eventually follow it.
Company Profile: The bank was founded in 1916 and is based in Karur, India.
It provides various banking and financial services in India for personal and corporate customers. It operates through Treasury, Corporate and Wholesale Banking, Retail Banking, and Other Banking Operations segments. The company offers savings and current accounts, non-resident external savings and current accounts, ordinary non-resident accounts, and fixed deposits; personal, home, vehicle, business, educational, and mortgage loans to individuals or proprietorship firms, as well as loans for working professionals; and micro, small, and medium enterprises loans. It also provides working capital finance and short-term credit for agriculturists in rural, semi-urban, and urban areas; working capital finances, term loans, trade finances, and foreign exchange services for traders/corporates. In addition, the company offers general insurance products, such as business, burglary, money, directors and officers liability, fidelity guarantee, workers’ compensation, product liability, marine, critical illness, personal accident, health, travel, household, motor vehicles dealer, shopkeepers package, car, and two-wheeler, and fire and other risks insurance services; and life insurance services. Further, it provides debit, gift, travel, and credit cards; mutual fund investments; locker facilities; remittance services; Internet and mobile banking, utility bill payment, rail/air ticket booking, and online and offline share trading services.
Shareholding pattern: BSE Filings
Financials and ratios: [table id=207 /]
Future prospectus: This is one excellent bank. However, the financials are not looking that good like large banks, mainly for many other reasons, including NPA. On the other hand, the big plus is capital adequacy. So this bank can perform better in upcoming years.
