Description
"It explains Indian Banking sector analyses structure of banking, key players, porters 5 force, BCG, SWOT etc for banks.
It also includes M&A of SBI, ICICI, PNB, Yes bank alongwith a comparision of corporate strategies."
Strategic ManagementBanking Sector
Banking Sector- Overview
?
One of the key sectors of the economy as it provides funds to others sectors.
In 1948, the Reserve Bank of India, India's central banking authority, was nationalized, and it became an institution owned by the Government of India.
?
?
In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India."
Continue…
?
In 1990 the Govt. liberalized banking sector and gave licenses to private banks such as Global Trust bank, UTI Bank, ICICI Bank, HDFC Bank It is no longer confined to only metropolitans or cosmopolitans in India; Indian banking system has reached even to the remote corners of the country. In order to survive and maintain strong presence, mergers and acquisitions has been the most common development in Banking Sector.
?
?
BANKING STRUCTURE IN INDIA
RESERVE BANK OF INDIA
SCHEDULED BANKS
COMMERCIAL BANKS
CO-OPERATIVE BANKS
PRIVATE BANKS (31)
URBAN CO-OPERATIVE (52)
OLD BANKS (23)
STATE CO-OPERATIVE (16)
NEW BANKS (8)
PUBLIC SECTOR BANKS (27)
SBI AND ASSOCIATES (8)
NATIONALIZED BANKS (19)
Key players
Andhra Bank Allahabad Bank Punjab National Bank Axis Bank Kotak Mahindra Bank Citibank State Bank of India Vijaya Bank HDFC Bank ICICI Bank ABN AMRO Standard Chartered Bank
HSBC Bank
Bank of Baroda Bank of India
State Bank of Mysore
Union Bank of India Yes Bank
Industry Structure
?
166- Scheduled commercial banks, 4- Non-scheduled commercial banks Of these 166, 27- Public sector, 86- Regional Rural banks, 31- Foreign banks & 22 other scheduled commercial banks Therefore, Competition: Intense Structure: Consolidated – Because few banks like SBI, HDFC, ICICI, AXIS, PNB, YES etc contributes to around 70% of the business Remaining 30% includes co-operative and regional rural banks
?
?
?
?
Porter 5 force
Macro-Environmental Factors
Political Environmental
•Micro to Macro •TXN to Risk Based •Banking policies •RBI norms •Govt decisions
Economic
•Inflation/Deflation •Liberalization & globalization policies
PESTL E
Legal
•DTR •SARFAESI
Social Technological
•Communication •Connectivity •Banking habit •Convenience •Individual requirements
SWOT
Strength * Policy makers have helped to driven the industry * Extensive reach * Clean asset quality
Weakness * Lack of organization in PSBs * High cost of Intermediation * Govt. refusal to dilute stake in PSU * Impediments in sectoral reforms Threats * Threat of stability * Rise in inflation figure * Increasing no of foreign banks will pose threat to the PSBs
Opportunities * New products and services * Increasing competition from foreign banks * New reach * New proposal from RBI
Banking Industry lifecycle
Indigeno us Banks (from the time of vedas)
Direct Interventi on (began in 1930s)
Liberaliza tion (1991 onwards)
Transitio n (after 1996)
Entry of Foreign Banks (after 2008 onwards)
Challenges Faced by Indian Banks
Deregulation
Better Service
Need for New Orientation
Bank
New Rules of The game
New Channels
VAS
Market Dominance
Leader- State Bank of India ? Challenger- ICICI ? Follower- Punjab National Bank ? Nicher- Yes Bank- 1st private bank to enter Direct Microfinance lending
?
Mergers and Acquisition
Banks M&A SBI
1. State Bank of Bikaner and Jaipur (SBBJ) 2. State Bank of Hyderabad (SBH) 3. State Bank of Indore (SBIr) 4. State Bank of Mysore (SBM) 5. State Bank of Patiala (SBP) 6. State Bank of Travancore (SBT) 7. State Bank of Saurashtra (SBS) 8. Mauritian bank, viz. Indian Ocean International Bank Ltd (IOIBL) 1.ICICI Ltd. 2.Bank of Madura (BOM) 3.Sangli Bank 4.Bank of Rajasthan 1. 2. 3. 4. New Bank of India Nedungadi Bank Everest Bank Ltd. DRUK PNB Bank Ltd.
Reasons
Strategic Acquisition
ICICI Bank PNB
Strategic Acquisition
Restructuring Strategy and Network cooperative Strategy Strategic Alliance
YES Bank
1.Collaboration with ACCION International, USA.
Porters’ generic model
Competitive Advantage COST UNIQUENESS
Broad target Competi tive Scope Narrow target
Cost leadership SBI
Differentiation ICICI
Focused cost leadership HSBC
Focused Differentiation Citi bank
BCG model
Star Problem child
Cash Cow
Dog
Value Chain Analysis
Resources and Capabilities
SBI
Resources •Tangible – 12,486 branches, 21,485 ATMs •IntangibleBrand equity, Govt support
ICICI
•Tangible- 2035 branches, 5518ATMs •IntangibleBrand equity, services, competent human resources NPA- 1.87%
PNB
•Tangible-5000+ branches, 3500+,ATMs •Intangible-
Capabilities
Reach anywhere in India, NPA1.72%
NPA- 0.35%
Core Competencies
Core Competencies: Valuable Rare Costly to imitate Nonsubstitutable Competitive Advantage Lowest cost of fund V-lowest cost of funds R- Net worth I- Branch and ATM network U- Business from the govt R-increasing customer convenience through IT I-----R----V-robust leadership and talent pool V-faith of public due to nationalization
I---U-------
U---CRM initiatives ---------------
State Bank of India
ICICI Bank
Punjab National Bank
Corporate Allied Sectors Allied Sectors Allied Sectors Level Strategy Diversification Low Dominant Low Dominant Low Dominant Business Business Business
Business Pure Banking Level Strategy for the masses through cost leadership International Strategy Subsidiary, Alliances & JVs
Banking with the focus on Value Added Services and treasury operations Subsidiary, Alliances & JVs
Pure Banking for the masses
Subsidiary & JVs
References
?
?
Annual Reports
www.iba.org
Thank you
Net Worth Comparison
Net Worth
659,492,000,000. 00 700,000,000,000.00 600,000,000,000.00 500,000,000,000.00 400,000,000,000.00 300,000,000,000.00 200,000,000,000.00 100,000,000,000.00 0.00
SBI ICICI PNB
Net Worth
516,183,659.00 177,229,185.00
Allied Sectors
SBI SBI General Insurance Company Ltd. Capital Markets Limited (SBICAP) SBICAP Securities Limited (SSL) SBICAPS Ventures Limited (SVL) ICICI ICICI Prudential Life Insurance Company ICICI Lombard General Insurance Company ICICI Prudential Asset Management Company ICICI Venture Funds Management Company Limited PNB Principal PNB AMC PNB Investment Services Ltd Merchant Banking Service
SBI Life Insurance ICICI Securities Limited and Company Limited (SBILIFE) ICICI Securities Primary Dealership Limited SBI Funds Management (P) Ltd. (SBIFMPL)
International Strategy
SBI The offices comprised 42 branches, 8 Representative Offices, 2 marketing offices, 2 sub offices, 2 extension counters ICICI Subsidiaries in the United Kingdom, Russia and Canada Branches in Singapore, Bahrain, Hong Kong, Sri Lanka, Dubai International Finance Centre, Qatar Financial Centre and the United States PNB PNB International Ltd. (UK)
82 offices of the six foreign banking subsidiaries,
Representative offices in the United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia.
An associate (Bank of Bhutan), equity investments in a foreign bank (Sterling Bank, Nigeria) and 2 managed exchange companies
ICICI Bank Income Break-up
Interest on Advances
Income on investments Interest on balances with Reserve Bank of India and other interbank funds Others
Commission, exchange and brokerage
doc_520532414.ppt
"It explains Indian Banking sector analyses structure of banking, key players, porters 5 force, BCG, SWOT etc for banks.
It also includes M&A of SBI, ICICI, PNB, Yes bank alongwith a comparision of corporate strategies."
Strategic ManagementBanking Sector
Banking Sector- Overview
?
One of the key sectors of the economy as it provides funds to others sectors.
In 1948, the Reserve Bank of India, India's central banking authority, was nationalized, and it became an institution owned by the Government of India.
?
?
In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India."
Continue…
?
In 1990 the Govt. liberalized banking sector and gave licenses to private banks such as Global Trust bank, UTI Bank, ICICI Bank, HDFC Bank It is no longer confined to only metropolitans or cosmopolitans in India; Indian banking system has reached even to the remote corners of the country. In order to survive and maintain strong presence, mergers and acquisitions has been the most common development in Banking Sector.
?
?
BANKING STRUCTURE IN INDIA
RESERVE BANK OF INDIA
SCHEDULED BANKS
COMMERCIAL BANKS
CO-OPERATIVE BANKS
PRIVATE BANKS (31)
URBAN CO-OPERATIVE (52)
OLD BANKS (23)
STATE CO-OPERATIVE (16)
NEW BANKS (8)
PUBLIC SECTOR BANKS (27)
SBI AND ASSOCIATES (8)
NATIONALIZED BANKS (19)
Key players
Andhra Bank Allahabad Bank Punjab National Bank Axis Bank Kotak Mahindra Bank Citibank State Bank of India Vijaya Bank HDFC Bank ICICI Bank ABN AMRO Standard Chartered Bank
HSBC Bank
Bank of Baroda Bank of India
State Bank of Mysore
Union Bank of India Yes Bank
Industry Structure
?
166- Scheduled commercial banks, 4- Non-scheduled commercial banks Of these 166, 27- Public sector, 86- Regional Rural banks, 31- Foreign banks & 22 other scheduled commercial banks Therefore, Competition: Intense Structure: Consolidated – Because few banks like SBI, HDFC, ICICI, AXIS, PNB, YES etc contributes to around 70% of the business Remaining 30% includes co-operative and regional rural banks
?
?
?
?
Porter 5 force
Macro-Environmental Factors
Political Environmental
•Micro to Macro •TXN to Risk Based •Banking policies •RBI norms •Govt decisions
Economic
•Inflation/Deflation •Liberalization & globalization policies
PESTL E
Legal
•DTR •SARFAESI
Social Technological
•Communication •Connectivity •Banking habit •Convenience •Individual requirements
SWOT
Strength * Policy makers have helped to driven the industry * Extensive reach * Clean asset quality
Weakness * Lack of organization in PSBs * High cost of Intermediation * Govt. refusal to dilute stake in PSU * Impediments in sectoral reforms Threats * Threat of stability * Rise in inflation figure * Increasing no of foreign banks will pose threat to the PSBs
Opportunities * New products and services * Increasing competition from foreign banks * New reach * New proposal from RBI
Banking Industry lifecycle
Indigeno us Banks (from the time of vedas)
Direct Interventi on (began in 1930s)
Liberaliza tion (1991 onwards)
Transitio n (after 1996)
Entry of Foreign Banks (after 2008 onwards)
Challenges Faced by Indian Banks
Deregulation
Better Service
Need for New Orientation
Bank
New Rules of The game
New Channels
VAS
Market Dominance
Leader- State Bank of India ? Challenger- ICICI ? Follower- Punjab National Bank ? Nicher- Yes Bank- 1st private bank to enter Direct Microfinance lending
?
Mergers and Acquisition
Banks M&A SBI
1. State Bank of Bikaner and Jaipur (SBBJ) 2. State Bank of Hyderabad (SBH) 3. State Bank of Indore (SBIr) 4. State Bank of Mysore (SBM) 5. State Bank of Patiala (SBP) 6. State Bank of Travancore (SBT) 7. State Bank of Saurashtra (SBS) 8. Mauritian bank, viz. Indian Ocean International Bank Ltd (IOIBL) 1.ICICI Ltd. 2.Bank of Madura (BOM) 3.Sangli Bank 4.Bank of Rajasthan 1. 2. 3. 4. New Bank of India Nedungadi Bank Everest Bank Ltd. DRUK PNB Bank Ltd.
Reasons
Strategic Acquisition
ICICI Bank PNB
Strategic Acquisition
Restructuring Strategy and Network cooperative Strategy Strategic Alliance
YES Bank
1.Collaboration with ACCION International, USA.
Porters’ generic model
Competitive Advantage COST UNIQUENESS
Broad target Competi tive Scope Narrow target
Cost leadership SBI
Differentiation ICICI
Focused cost leadership HSBC
Focused Differentiation Citi bank
BCG model
Star Problem child
Cash Cow
Dog
Value Chain Analysis
Resources and Capabilities
SBI
Resources •Tangible – 12,486 branches, 21,485 ATMs •IntangibleBrand equity, Govt support
ICICI
•Tangible- 2035 branches, 5518ATMs •IntangibleBrand equity, services, competent human resources NPA- 1.87%
PNB
•Tangible-5000+ branches, 3500+,ATMs •Intangible-
Capabilities
Reach anywhere in India, NPA1.72%
NPA- 0.35%
Core Competencies
Core Competencies: Valuable Rare Costly to imitate Nonsubstitutable Competitive Advantage Lowest cost of fund V-lowest cost of funds R- Net worth I- Branch and ATM network U- Business from the govt R-increasing customer convenience through IT I-----R----V-robust leadership and talent pool V-faith of public due to nationalization
I---U-------
U---CRM initiatives ---------------
State Bank of India
ICICI Bank
Punjab National Bank
Corporate Allied Sectors Allied Sectors Allied Sectors Level Strategy Diversification Low Dominant Low Dominant Low Dominant Business Business Business
Business Pure Banking Level Strategy for the masses through cost leadership International Strategy Subsidiary, Alliances & JVs
Banking with the focus on Value Added Services and treasury operations Subsidiary, Alliances & JVs
Pure Banking for the masses
Subsidiary & JVs
References
?
?
Annual Reports
www.iba.org
Thank you
Net Worth Comparison
Net Worth
659,492,000,000. 00 700,000,000,000.00 600,000,000,000.00 500,000,000,000.00 400,000,000,000.00 300,000,000,000.00 200,000,000,000.00 100,000,000,000.00 0.00
SBI ICICI PNB
Net Worth
516,183,659.00 177,229,185.00
Allied Sectors
SBI SBI General Insurance Company Ltd. Capital Markets Limited (SBICAP) SBICAP Securities Limited (SSL) SBICAPS Ventures Limited (SVL) ICICI ICICI Prudential Life Insurance Company ICICI Lombard General Insurance Company ICICI Prudential Asset Management Company ICICI Venture Funds Management Company Limited PNB Principal PNB AMC PNB Investment Services Ltd Merchant Banking Service
SBI Life Insurance ICICI Securities Limited and Company Limited (SBILIFE) ICICI Securities Primary Dealership Limited SBI Funds Management (P) Ltd. (SBIFMPL)
International Strategy
SBI The offices comprised 42 branches, 8 Representative Offices, 2 marketing offices, 2 sub offices, 2 extension counters ICICI Subsidiaries in the United Kingdom, Russia and Canada Branches in Singapore, Bahrain, Hong Kong, Sri Lanka, Dubai International Finance Centre, Qatar Financial Centre and the United States PNB PNB International Ltd. (UK)
82 offices of the six foreign banking subsidiaries,
Representative offices in the United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia.
An associate (Bank of Bhutan), equity investments in a foreign bank (Sterling Bank, Nigeria) and 2 managed exchange companies
ICICI Bank Income Break-up
Interest on Advances
Income on investments Interest on balances with Reserve Bank of India and other interbank funds Others
Commission, exchange and brokerage
doc_520532414.ppt