How we ranked them
The data used was based on published annual reports of banks and Reserve Bank of India's Profile of Banks, 2010/2011. Data taken was for the period 2003/04 to 2010/11. The ranking covers 63 scheduled commercial banks that provided their annual reports at the time of conducting the study. For foreign banks having zero non-performing assets, or NPAs, the coverage was graded at 100 per cent, according them the highest rank in this category.
Three broad parameters were divided into 27 subparameters.
Growth: Over 2009/10 in deposits, loans and advances, fee income (commissions, exchange, brokerage + miscellaneous income), operating profit, absolute market share of deposits, absolute market share of current account savings account, or CASA; three-year compound annual growth rate, or CAGR, of total deposits, loans and advances, fee income, and operating profit.
Size: Total deposits, operating profit and balance sheet size for financial year 2010/11.
Quality of Assets: Total NPA growth ratio: Additions to NPAs during the year expressed as a percentage of the average net advances; NPA coverage: provisions for NPA expressed as a percentage of gross NPA closing balance; Net NPAs/Net Advances: Gross NPAs net of provisions expressed as a percentage of net advances.
Productivity and efficiency: Cost to Income Ratio: Operating expenditure expressed as a percentage of operating income; Cost to Average Asset Ratio: Operating expenditure expressed as a percentage of average assets; Operating Profit per Employee: Operating profit divided by total employees; Absolute Increase in Return on Assets: Basis points increase in return on assets (net profit over total assets) from FY 2009/10 to FY 2010/11; Percentage increase in ratio of operating profit to total income from FY 2009/10 to FY 2010/11.
Quality of earnings: Return on assets: ratio of net profit to total assets for FY 2010/11; Fee income as a percentage of total income; Return on Capital Employed: Reported net profit divided by average net worth; net interest income as a percentage of average working funds.
Capital adequacy: Capital adequacy ratio: Capital-to-risk weighted assets ratio for FY 2010/11; Tier-I Capital: Total of equity capital and disclosed reserves.
The process: Banks were grouped into four sets.
Set A: 36 banks with balance sheet size greater than Rs 50,000 crore;
Set B: 14 banks with balance sheet size less than Rs 50,000 crore, and more than 10 branches;
Set C1: Seven banks with balance sheet size more than Rs 3,000 crore and 10 or less branches;
Set C2: Six banks with balance sheet size less than Rs 3,000 crore and less than 10 branches.
To compute a bank's total score, it was assigned a score for each of the 27 parameters, based on its ranks on the parameters. The score under each parameter was multiplied by the parameter's weightage. The results were aggregated to arrive at the total score.
The KPMG Team that conducted the survey: Abizer Diwanji, Par tner, Corporate Finance & Head of Financial Services, KPMG India; Ravi Trivedy, Partner, KPMG Advisory Services; Akeel Master, Partner, BSR & Co; KPMG India Partners Naresh Makhijani, Manoj Kumar Vijai and Venkataramanan Vishwanath; Natasha Wig, Manager, Financial Services, KPMG India; Kunal Jain, Assistant Manager, Financial Services, KPMG India; Neha Balani, Analyst, Financial Services, KPMG India; Rishi Malhotra, Assistant Manager, Financial Services, KPMG Global Services; Manisha Arora, Analyst, Financial Services, KPMG Global Services; Sameer Mota, Senior Manager, BSR & Co; Rayomand Gandhi, Assistant Manager, BSR & Co; Pritesh Shroff, Executive, BSR & Co; Deepashri Boga, Senior, BSR & Co; Forum Mehta, Senior, BSR & Co; and Rewa Pednekar, Staff Accountant, BSR & Associates
Copyright©2021 Living Media India Limited. For reprint rights: Syndications Today