A Project Report on “Pattern Analysis in Data and Documentation with respect to banking sector” BY MIDHUN RAJ 1NH15MBA86 Submitted to DEPARTMENT OF MANAGEMENT STUDIES NEW HORIZON COLLEGE OF ENGINEERING, OUTER RING ROAD, MARATHALLI, BANGALORE In partial fulfillment of the requirements for the award of the degree of MASTER OF BUSINESS ADMINISTRATION Under the guidance of INTERNAL GUIDE EXTERNAL GUIDE NIVIYA FESTON VIJAY SRIKANTHAMURTHY Senior Assistant Professor Manager, Estimate Department NHCE Thomson Reuters 2015-2017 CERTIFICATE This is to certify that MIDHUN RAJ bearing USN 1NH15MBA86, is a bonafide student of Master of Business Administration course of the Institute (Batch), autonomous program, affiliated to Visvesvaraya Technological University, Belgaum. Project report on “Pattern Analysis in Data and Documentation with respect to banking sector on the basis of KPI measures”is prepared by him under the guidance of Ms. NIVIYA FESTON, in partial fulfillment of requirements for the award of the degree of Master of Business Administration of Visvesvaraya Technological University, Belgaum Karnataka. Signature of Internal Guide Signature of HOD Signature of Principal DECLARATION I, MIDHUN RAJ, hereby declare that the project report entitled “Pattern Analysis in Data and Documentation with respect to Banking sector” with reference to “Thomson Reuters, RMZ Infinity, Bangalore” prepared by me under the guidance of Ms.NIVIYA FESTON, faculty of M.B.A Department, New Horizon College of Engineering and external assistance by Vijay Srikanthamurthy, Manager, Estimate Department, Thomson Reuters. I also declare that this project work is towards the partial fulfillment of the university regulations for the award of the degree of Master of Business Administration by Visvesvaraya Technological University, Belgaum. I have undergone a summer project for a period of sixteen weeks. I further declare that this project is based on the original study undertaken by me and has not been submitted for the award of a degree/diploma from any other University / Institution. Signature of Student Place: Date Acknowledgment I wish to express my sincere gratitude to my project guide Ms. NIVIYA FESTON, faculty of M.B.A department for her exemplary guidance monitoring and constant encouragement throughout the course of this project. The blessing, help and guidance given by her from time to time, shall carry me a long way in the journey of life on which I am about to embark. I also thank our manager Vijay Srikantamurthy and team leader Mr.Ganjan Virappa for giving opportunity to do internship at Thomson Reuters. I also thank our H.O.D Dr.Sheelan Mishra for her encouragement and support in the form of various facilities which create a very peaceful atmosphere for our main-project. Secondly I would also like thank my parents and friends for their constant encouragement without which this project would not be possible. TABLE OF CONTENTS Chapter Title of the Chapter Page. no. No. 1 INTRODUCTION 1-5 2 INDUSTRY & COMPANY PROFILE 6-21 3 THEORETICAL BACKGROUND OF THE 22-30 STUDY 4 DATA ANALYSIS & INTERPRETATION 31-49 5 FINDINGS, SUGGESTIONS & 50-53 CONCLUSION BIBLIOGRAPHY 54-55 LIST OF TABLES Table. No. Title of the Table Page. No. 4.1 Net income interest 32 4.2 Non interest revenue 33 4.3 Fees and Commission 34 4.4 Trading income 35 4.5 Total income 36 4.6 Loan loss provision 37 4.7 Non interest expense 38 4.8 Securities 39 4.9 Loan 40 4.10 Efficiency ratio 41 4.11 Intangible book value 42 4.12 Net interest margin 43 4.13 Billed business 44 4.14 Non performing asset 45 4.15 Non performing loans 46 4.16 Risk weighted asset 47 4.17 Discount fees 48 4.18 Assets under Management 49 LIST OF GRAPH Figure Particulars Page No, No. 4.1 Net income interest 32 4.2 Non interest revenue 33 4.3 Fees and Commission 34 4.4 Trading income 35 4.5 Total income 36 4.6 Loan loss provision 37 4.7 Non interest expense 38 4.8 Securities 39 4.9 Loan 40 4.10 Efficiency ratio 41 4.11 Intangible book value 42 4.12 Net interest margin 43 4.13 Billed business 44 4.14 Non performing asset 45 4.15 Non performing loans 46 4.16 Risk weighted asset 47 4.17 Discount fees 48 4.18 Assets under Management 49 Executive summary The project titled “Pattern Analysis in Data and Documentation with respect to banking sector” for the period 2015. The study based on secondary data from financial reports and other internet sources. The project is trying to analyses the financial performance of the banking sector on the basis of key performance indicators. The key performance analysis helps to understand the strength and weakness of the banking sector. It will also provide a guideline for the future activities of the banking sector. This project report divided into five chapters. Chapter one includes the introduction part, chapter two comprises of brief overview about these industry and company profile, chapter three includes the theoretical background of the study, data analysis is contained in chapter four, chapter five includes the findings, suggestions and conclusion. CHAPTER 1 INTRODUCTION 1 1.1 TITLE OF THE STUDY “Analyze the Banking sector on the basis of KPI measures” A key performance indicator (KPI) is a measurable value that how effectively a company is achieving key business objectives. Organizations use KPI at multiple levels to evaluate their success at reaching targets. The Indian banking sector is broadly classified into scheduled banks and non- scheduled banks. All banks included in the Second Schedule to the Reserve Bank of India Act, 1934 are Scheduled Banks. Banking in India is fairly mature in terms of supply, product range and reach-even though reach in rural India and to the poor still remains a challenge. 1.2 STATEMENT OF PROBLEM Statement of the problem is to analyse the banking sector on the basis of KPI measures and also give suggestions according their performance. 1.3 NEED FOR STUDY This key performance analysis helps to understand the strength and weakness of the banking sector. It will also provide a guideline for the future activities of the banking sector . 1.4 OBJECTIVES OF THE STUDY • To study about KPI measures used in banking sector. • To study the performance of the banking sector on the basis of KPI measures. • To analyse the performance of the banking sector based on KPI measures 1.5 SOURCES OF DATA COLLECTION Analyse the banking sector on the basis of KPI (key performance indicator) measures based on secondary data that collected from annual report of the respective companies and other publications. Internet is the main sources of collecting annual report. 1.6 SAMPLING DESIGN • Data –secondary data • Population -banking sector 2 1.7 ANALYTICAL TOOLS Net interest income, Fees & commission income, Trading income, Discount fees, Total revenues net of interest expense, Total income, Total non-interest revenues, Non-interest expense, Loan loss provisions, Assets under management, Net gains/losses, Non-recurring items, Total deposits, Customer deposits under total deposits, Loans, Risk-weighted assets, Securities, Non-performing assets, Non- performing loans, OREO expenses, Intangible book value, Tangible book value, Net new money/assets, Core tier 1 capital, Tier 1 capital ratio, Billed business, Net charge-offs/average loans, Net interest margin, Net interest spread, Return on net operating assets, Efficiency ratio . 1.8 LITERATURE REVIEW 1. Edward Zaik,John Walter, Gabriela Retting, Christopher James Annual reports, especially the profit/loss account and balance‐sheet of the banks concerned for the relevant years, were used to obtain the data. A review is conducted of the international literature on intellectual capital with specific reference to literature that reviews measurement techniques and tools, and the VAIC method is applied in order to analyze the data of Indian banks for the five‐year period. The intellectual or human capital (HC) and physical capital (CA) of the Indian banking sector is analysed and their impact on the banks' value‐based performance is discussed. 2. Lawrence Livermore National Laboratory. Financial Electronic Data Interchange Pilot Project. Lawrence Livermore National Laboratory, Finance Department, UCRL-AR-124103, (May 1, 1996). RAROC systems allocate capital for two basic reasons: (1) risk management and (2) performance evaluation. For risk management purposes, the overriding goal of allocating capital to individual business units is to determine the bank's optimal capital structure–the proportion of equity to assets that minimizes the bank's overall cost of funding. This process involves estimating how much the risk (or volatility) of each business unit contributes to the total risk of the bank, and hence to the bank's overall capital requirements. For performance evaluation purposes, RAROC systems assign capital to business units as part of a process of determining the risk-adjusted rate of return and, ultimately, the “economic profit” of each business unit. The objective in this case is to measure a business unit's contribution to shareholder value, and thus to provide a basis for effective planning, capital budgeting, and incentive compensation at the business unit level. 3 3.Hutt, A.E., Bosworth, S., and Hoyt, D.B. Computer Security Handbook. (Third Ed.). Wiley, NY, 1995: Concerns about capital adequacy, along with the Basel risk-based capital requirements, have played some role in the growth of RAROC among commercial banks. But the most powerful impetus to bankers' use of more systematic risk measures is coming from increasingly activist institutional investors. Besides giving senior management an economic basis for evaluating the bank as a portfolio of businesses and for making resource allocation decisions that improve the bank's risk/reward profile, RAROC systems are also expected to produce better performance by holding managers accountable for the amount of investor capital they are putting at risk.