A PROJECT REPORT

ON

“ANALYSIS OF BANKS USING CAMELS APPROACH’’

COMPANY NAME : AXIS BANK

2019-2021

Faculty Mentor Submitted By :

Dr. Kalyani Mulchandani Shubham Jain
Batch 2019-2021
(JI/2019-21/0147)

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 Declaration Certificate by Student

DECLARATION BY STUDENT

I Shubham Jain, student of PGDM batch (2019-2021) declare that the project entitled Analysis of Banks
using CAMELS Approach, is my own work conducted under the supervision of Mr. Ramanuj Vipat as a
partial fulfilment of Summer Internship Program for the course of PGDM Submitted to Dr. Kalyani
Mulchandani and Jaipuria Institute of Management Indore.

I further declare that to the best of my knowledge the project does not contain any part of any work which
has been submitted for any other project either in this institute or in any other without proper citation.

Place: Indore Signature of the Student

Date: 5 July 2020 Signature of the Faculty Mentor

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 ACKNOWLEDGEMENT

A project is never the work of an individual. It is a combination of

ideas, suggestions, reviews, contribution and work involving many
folks.

I feel an immense pleasure in expressing my hearty and profound sense

of gratitude to honorable Industry mentor Mr. Ramanuj Vipat for his
continuous encouragement and feedback.

I am also highly indebted to Dr. Kalyani Mulchandani (Faculty

Mentor) under whose benevolent guidance the practical aspects of the
study progressed.

Last but not the least I would also like to give my regards to the CMC
cell of Jaipuria Institute of Management for their continuous
supervision and guidance which helped me in the completion of my
project

Shubham Jain
JI/2019-21/0147

3
 EXECUTIVE SUMMARY

The Axis Bank which is the 3rd largest bank under the private sector it offers the huge variety
to financial products as well as services for personal & for corporate banking. Axis has 4,800
branches and 17,801 ATMs in different cities & villages, its headquarter is located in Mumbai
(Maharashtra), there are over 1,30,000 people are engaged working with axis bank. Axis major
competitors are HDFC Bank & ICICI Bank. Its market capitalization is Rs. 2.31 trillion (as on
31st march 2020).

This project entitled “ANALYSIS OF BANKS USING CAMELS APPROACH” is aimed at

evaluating the variables commonly as well as combined. There are 6 variables under CAMELS
they are capital adequacy, asset quality, management quality, earning quality, liquidity and
sensitivity. So these are the variables under which the banks/ financial institutions performance
is measured based on ranking. In this approach ranks are given to the banks based on their
performance the highest the rank the good is the performance of the bank and vice-versa

The Project was focused on the study and analysis of data collected from Prowess IQ. The data
is collected from the Nifty Fifty, there were 12 banks which are traded on nifty fifty both public
& private in the research Bandhan bank is excluded due to unavailability of relevant data and
one variable which is Sensitivity is also excluded due to unavailability of data. So after
completing the research it was identified that overall (Composite Index) performance of Punjab
National Bank & State bank of India performance is good compared to other 9 banks.

To achieve the objective, studied the Camels Approach and collected data from Prowess IQ.
also learnt some new concepts to measure the performance of the banks. In this way the
required data was collected and analysis of camels approach of banks are done.

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 TABLE OF CONTENT

1. Title Page
2. Student Declaration
3. Acknowledgement
4. Executive Summary
Chapter 1 Introduction
1.1 Problem Statement
1.2 Literature review
1.3 Rationale the problem
1.4 Scope of the Study
1.5 Limitations of the Study

Chapter 2 Details of the organization

2.1 Introduction
2.2 The Organization
2.2.1 Products/Services and Processes/ Facilities
2.2.2 Organization Structure
2.2.3 HR Practices
2.2.4 Competition Analysis
2.2.5 Industry Analysis
2.3 Other Relevant Information
2.4 Michael Porter’s Five Forces
2.5 Conclusion

Chapter 3 Methodology

Chapter 4 Data collection and analysis

4.1 Sampling Frame
4.2 Data Collection and Method
4.3 Presentation and Processing of the Data for Analysis
4.4 Conclusion

Chapter 5 Data analysis and interpretation

5.1 Choice of Data Analysis Techniques
5.2 Outcomes and Interpretation of Outcomes
5.3 Conclusion

Chapter 6 Recommendations
6.1 Brief Description of Recommendations
6.2 Details of Each Recommendation
6.3 Conclusion

Chapter 7 Concluding remarks

7.1 Summary
7.2 Gains from the project
7.3 Limitations of the Project
7.4 Conclusion

5. References

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 CHAPTER-1
INTRODUCTION

1.1 STATEMENT OF THE PROBLEM:

The financial system, especially the banks, has undergone through so many changes in the
form of legislation, regulations and standards in recent years. The performance of private
banks and Public banks on profitability determinants and financial indicators has been
analysed in many studies. Nonetheless, this analysis will use financial ratios to evaluate the
performance of the banks based on the camels approach. The camels approach will evaluate
the performance of each bank based on Capital adequacy, Asset quality, Management quality,
Earning quality, Liquidity and Sensitivity to market risk.

1.2 LITERATURE REVIEW

Gupta Ruchi (2014) For a five-year period from 2009-13, examined the performance of Indian
public sector banks using Camel 's method All 26 public sector banks were included in the
report. Including all 26 public sector banks in the sample, work was attempting to effectively
assess the banks ' financial soundness The F-test and one way ANOVA were used for study
and interpretation by researchers. The study disclosed out that the average performance of
public sector banks is substantially different. They also concluded that the banks with the
lowest rankings need to improve their performance to meet the standards they desire

Kumar Santosh and Sharma Roopali (2014) Another research carried out to assess top
Indian bank performance through CAMEL methodology They agreed in research study to
assess the top 8 capitalized banks on the market. Kotak Mahindra Bank is on its way to
positioning itself in terms of capital adequacy. They also found that amongst their peer banks,
SBI had the highest NPA. We claim SBI and PNB earning output was top of the list. They
concluded from the analysis that their liquidity was handled most effectively by Kotak
Mahindra and the ICICI bank

Altan Mikila, Habib Yusufazari & Aykut Beduk (2014) have attempted to use camel model
to assess and analyze bank performance in Turkey They have selected three state-owned banks
and twelve private-owned banks from the Turkish banking sector, representing over 70% of

6
the total assets of the banking system. They measured turkey banks ' financial results across 23
ratios relating to the CAMEL Model. They noticed that Ziraat Bank was in the top position on
the overall results, followed by AK Bank and Vakit Bank. The study shows that the
performance of state-owned and private banks in Turkey is substantially different

Mishra Sushendra and Aspal Parvesh (2013) conducted a study to assess State Bank Group's
efficiency & financial soundness using a CAMEL approach Researchers assess and financial
results of across twenty ratios from the 2009-2011 year in this report. They found that SBBJ
and SBP were at the top position in terms of Capital Adequacy parameter, while SBI was at
the lowest level. SBBJ held the top rank on asset quality parameter while SBI held the lowest
rank. Under the criterion of Management Efficiency it was observed that SBT took top rank
and SBBJ took lowest rank. With regard to the Earning Quality parameter, SBM's capability
was ranked top while SBP was ranked lowest position. SBI needs to strengthen its position in
terms of asset quality and capital adequacy SBBJ should improve its performance in
management and SBP should improve

Kumar Ashwini Mishra and et.al (2014) worked on the financial performance of 5 banks
for 12 years period, CAMEL model was used for the analysis and the study revealed that the
private sector banks were performing better than the public sector banks in all parameters.

Makkar Anil (2014) analysed the financial performance of 37 banks- divided into public
sector banks and private sector banks. The CAMEL model was used to do such a comparison.

Chowdhury Subroto (2012) stated that the Indian banking system has been evolving and
today it has reached a global level, the reforms made in the banking system from time to time
have made a great difference to the growth. The deregulation of the Indian Banking system has
led to the innovation of the banking products and services. And this growth can be studied with
the help of the CAMEL model.

Shrivastava Urvashi et al (2015) have studied the soundness and financial strength of Axis
Bank in terms of capital adequacy and effectiveness by using financial ratios and applying
correlation and t – test. The study reveals that the said Bank has resorted to raising of non-
equity capital as a matter of its growth strategy to meet the capital adequacy requirements. The
findings further reveal that the Bank not only could meet the minimum capital requirement but

7
also made provision for business growth by adequately mapping credit, operational and market
risk to projected business growth.

Kumara Manjula et al (2013) have focused on the study of Commercial Banks across all the
Banking groups, by using DEA technique. The findings revealed that Foreign Banks
outperformed other Banking Groups in terms of cost and revenue efficiencies, though they
could not generally extend their Banking services beyond metro cities.

Kabir (2012) said that Camel is a rating system generally used by the government policy cycle,
regulating bodies regulating commercial banks, that is, central banks and nongovernmental
policy research centres for the purpose of assessing the soundness of a savings association or
a bank

Tripathi Deepti, Meghani Kishore & Mahajan Swati (2014) took the comparative study of
Axis bank & Kotak Mahindra bank using Camels approach after the reforms. The study
revealed that no bank is perfect in the all parameters of the camel model. But an overall result
concluded that comparatively Axis bank's performance is better that the performance of Kotak
Mahindra bank.

Trivedi Krupa R, (2014) had applied the Camel analysis on the scheduled co-operatives of
the Surat city and diagnosed that capital adequacy was satisfactory and they had very good
recovery system. The co-operative banks were also using their assets efficiently but return on
equity ratio was not very satisfactory. The management is efficient but overall liquidity position
is not very good.

1.3 Rationale the Problem :

After doing the study of the various Reviews by literature the result was found that some of the
researcher had done the analysis of camels approach based on private sectors or based on Public
sector banks or on both the sectors but there sample size is so smaller so, the result which the
literature found after the camels analysis of 5 banks for the 12 years’ time period which says
that private banks are performing well based on camels rating and they found that no bank
perform well in all the parameters. So in the new research 11 banks are taken in consideration
both Public as well as Private banks for 10 year time period from Nifty Fifty and done the new
research based on 11 banks to identify something productive.

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1.4 SCOPE OF THE STUDY:
The present study covers only 11 banks Public and Private sector banks which operated during
the period of 2009 to 2019. This study has used financial ratios to investigate the banking
performance based on: capital adequacy, asset quality ratios, management efficiency ratios,
earnings quality ratios and liquidity ratios. All the required data have been collected through
Prowess IQ and Money control for doing the study.

1.5 Limitation of Study

• Only 10 years of annual reports is used in the study which is taken from Prowess IQ
• Some data which is confidential which was not available could not been collected
• Used 5 variables for analysis of banks, one variable which is sensitivity was not used
due to unavailability of relevant data.
• A lot of information may not be valid at the current time because the data is old

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 CHAPTER - 2
DETAILS OF THE ORGANIZATION

2.1 INTRODUCTION :
Axis Bank 3rd Largest Leading private sector bank in the India they offers a huge variety of
financial products & services for personal as well as for corporate banking

• The Axis Head Quarter is situated in Mumbai (Maharashtra)

• Axis bank is having total 4,800 branches

• Currently Axis bank has 17,801 ATMs in different cities, they have their ATMs in
almost all the cities and villages as well.

• There are 9 International Offices of Axis bank around the world

• More than 1,30,000 people working with Axis Bank
• It offers financial services to big and medium -size corporates, SME and Retail
Business
Business Verticals of AXIS BANK-
Axis Bank offers corporate as well as investors and capital market services too. With the best
advisory services, They provide faultless execution. Axis Bank’s sector specialization Mergers
& Acquisitions activities are associated along the variety of business verticals.
Mergers & Acquisition activities are followed in the :
• IT and Education sector includes :
a. IT services
b. IT Software
c. Outsourcing/ Supply chain
d. Applications
• Axis bank includes Pharmaceuticals and Healthcare
a. Formulations
b. API
c. Fertilizers
d. Hospitals
e. Equipment of Medical
f. CRO
• Axis Bank in Industrial sector include –

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 a. Energy
b. Electronic equipment’s
c. Mining
d. Auto Ancillary
• Banking and Financial Services –
a. E-commerce
b. Insurance
c. Asset Management
d. Wealth Management
• Infrastructure include-
a. Ports
b. Highways
c. Airports and many more

2.2 The Organization

2.2.1 PRODUCT RANGE:

Axis Bank business is spited into 4 major parts -
1. Retail Banking
2. Corporate Banking
3. Treasury Banking
4. Merchant Banking

Apart from this the Axis Bank is also into many things like
❖ Investment Banking
❖ Depository Services
❖ Locker Facility (Locker rooms)
❖ Insurance Mortgage Financing services
❖ Credit Cards services

• In Retail Banking different types of loans and advances are provided as well as Deposit
Schemes are provided like-
 Personal Loans
 Housing Loans

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 Cards
 Consumer Durable Loans
 Fixed Deposits
 NSC
 SIPs

• In Personal Banking services provided by bank are

 Term deposits
 Fixed deposit
 Recurring deposit
 Saving account
 Locker facility

• In corporate banking functions such as current corporate transaction accounts and more
services such as private equity mergers & acquisitions, consultancy services, capital market
finance, e-broking and D-mat accounts

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2.2.2 Organization Structure :

13
2.2.3 HR PRACTICES :

• Axis Bank pays special attention to the training of its workers and also tells consumers
that the business is headquartered directly in the branches where the consumer
experience resides.
• Axis Bank has a well-structured performance-linked scheme for all workers, across
ranks and functions
• There is a well-established standard of work for all workers that helps to allow the most
productive use of employee activities
• The Performance Management Process was found to be straightforward as
administrators focused on taking corrective action to achieve the Company's best
results.
• Axis has a good open culture and a high profile of the young.
• The Bank also focused on recruiting and talent development and retention by aligning
with common targets For workers with corporate priorities

THERE ARE VARIOUS STEPS WHICH ARE INVOLVED IN PERFORMANCE

MANAGEMENT :

RECRUITMENT AND SELECTION PROCESS OF AXIS BANK -

Recruitment is a process of finding the candidates which suits the company for the job in the
industry. It is very important for every industry for hiring a efficient and effective person at
right time, right place and for a right position too. Every organization use to recruit new
employees every year bacause they use to promote/transfer the existing employees and for
filling those vacants they recruit new pepole for the organization.

THE RECRUITMENT AT AXIS :

• As a young and innovative business, Axis Bank is proud to treat its employees as its
biggest assets. Consequently, employee satisfaction level at the Bank is possibly among
the highest in the sector and compensation / package is not the root cause.
• Staff with different backgrounds and specialization are integrated into an extremely
homogeneous working team, catalysed by the Bank's unofficial and transparent HRD

14
 policy. In addition to a competitive pay package they have leased housing services,
medical and dental care, and loan solutions.

THE SOURCES WHICH AXIS USE FOR RECRUITMENT :

➢ The Personal data of candidates
➢ Last years data or from existing data
➢ Recruitment form Campus from different collages
➢ Various Placement agencies
➢ Reference by the existing employee

RECRUITMENT PROCESS :
1. Applicant tool
2. Viewing of Profile
3. Shortlisting the candidates
4. Screening process
5. Final Interview round

PROCESS OF SELECTION :
➢ The method of excluding people from the pool of job seekers with the requisite skills
and management skills to fill vacancies is selection. It is defined as the method of
differentiating between applicants in order to recognize and recruit those with a greater
probability of success in a profession
➢ Choices are based on probation; they take an experienced person for 6 months "'The
probation period and the fresh probation period is one year
➢ While senior postal selection is made by headquarters in Mumbai.

2.2.4 COMPETITIORS ANALYSIS :

If looking at the top 5 competitions of Axis bank then the HDCF takes the leads in it because
it’s market capital, net interest income, net profits and total assets are higher the than axis bank.
After Studying I find that -
NAME OF MARKET Net Interest Net profit Total Assets
BANKS CAPITAL (Rs. Income
Cr.)
HDFC 499,834.04 114,812.65 26,257.32 1,244,540.69

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KOTAK
236,901.10 23,943.21 4,865.33 312,172.10
MAHINDRA
ICICI BANK 214,202.23 63,401.19 3,363.30 964,459.14

AXIS BANK 109,773.06 62,635.16 1,627.22 800,996.52

BANDHAN
38,042.49 6,644.05 1,951.50 56,441.70
BANK
YES BANK
33,384.26 29,624.75 1,720.27 380,826.16

• There is a huge difference in Axis bank and HDFC bank as we can see above that
market capital of HDFC is 499,834.04 cr. where axis has only 109,773.06 cr.
• Net profits of HDFC are 26,257.32 cr. Where axis bank has only 800,996.52
• Kotak Mahindra and ICICI bank are also taking the lead because there market capital,
net interest income, net profits and total assets are higher than the axis bank.

2.2.5 SWOT ANALYSIS OF AXIS BANK-

STRENGTHS WEAKNESS

• It is increasing its revenue every • Foreign Branches constitute total

quarter from the last 4 quarters.
• Axis bank has made its good reputation
among the urban people.
• Axis bank book value per share is
improving from past 2 years.
• Good online services is being provided
by the bank like net banking, mobile
application and many more.
• Axis grow at the rate of 20% per year
which gives the positive symbol for the
bank
assets of 8% only
• Axis bank has very less International
branches.
• Axis has limited branches if we
compare it with its direct competitors.
• Axis bank price if the share is not
stable.
• It has the limited share in the
market and owing to immense
competition in the segment of
banking.

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 OPPORTUNITIES
• The axis bank can expand their
business in rural areas for the growth
• Axis can go to the foreign markets and
explore new economies.
• Axis can go for growing online in the
sector of Indian banking by doing the
promotion of their application.
• No. of e-transactions increased from
0.7 million to around 2 million
• The assets in
their international operations are
growing at a very faster pace with a
growth rate of 9%.
THREATS
• The new banks which enters in the
banking sector.
• Hard Competition of Foreign banks.
• Foreign banks who are entering in
India can be a biggest threat for axis.
• Increasing popularity of QIPs due to
ease in fund raising
• Government schemes are most often
serviced only by govern banks
like SBI ,Indian Banks, Punjab
National Bank etc.
• HDFC Bank and ICICI Bank are the
strongest threats in terms of
expansion of axis in customer base by
their marketing strategies.

2.3 OTHER RELAVANT INFORMATION

The Ownership Structure of AXIS BANK

Shareholding Pattern - Axis Bank Ltd.

• Axis bank has total 2821677934 shares which are issued in the market to the different
institutions, public, public and many more
• The promoters has 15.69% shares of axis bank which means it has 442776936 shares
of axis bank.
• Foreign Institutions has 1258582536 shares which is 44.6% of total shares of axis
bank, foreign institutions has the highest shares of axis bank
• 8.39% of shares which is 236813151 are owned by others.
• N banks mutual funds has 567541277 shares which is 20.11% of the total shares of
axis bank.

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 • General public has 138490652 shares of axis bank which is 4.91% of total shares of
axis bank.
• GDR owns the least share of axis bank which is only 1.94% and numbers of share are
54868145
• Financial Institutions owns 4.35% of shares of axis bank which is 122605237 shares.

2.4. Michael Porter’s Five Forces Model-

Bargaining Power of Suppliers:

• Major resource is capital
• The power is largely based on the market, hence it is medium to high

Threat of New Entrants:

• Capital requirement is high
• Regulations are strict
• Customers don’t trust easily a new bank
• Making it a weaker force

Rivalry Among Competitors:

• The industry is considered highly competitive
• Major banks are tend to acquire the minor ones to increase their customer base and
many other reasons
• The race is about which bank can offer best and fastest service in the industry

Bargaining Power of Buyers:

• The no. of buyers in the industry are very huge
• Switching Cost is very high (loans)
• Thus, making it a weaker force

Threat of Substitutes:
• Huge number of players
• Offering similar products with a point of differentiation
• Hence, making it a stronger force

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2.5 CONCLUSION :

Gone through the Axis bank profile where come to know about the branches of bank, head
quarter, there market capitalization, employees engaged working with them and many more.
Axis mergers & acquisition activities in different sectors like IT & Education, Pharmaceuticals
& Healthcare, Industrial sector, banking & financial sector and many more.

Gone through the ownership structure and shareholding pattern of axis bank and Organization
structure in which the bank manage their management.

Done the SWOT Analysis of the bank and Michael Porter’s Five Forces Model as well of the
Axis bank. So after doing all the study related to the industry and the axis bank where come to
know so many new things about axis bank.

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 CHAPTER - 3

METHODOLOGY

The data is collected for the study is the secondary data which is have collected from-

➢ Prowess IQ

➢ Money Control

DATA COLLECTED-

❑ Collected the data of Private & Public sector banks which are traded on Nifty 50.

❑ Collected Past 10 years data from the year 2009-2019 of 11 banks with all the variables
related to CAMEL of each bank which are traded on Nifty 50.

❑ Excluded one Variable Sensitivity due to unavailability of some data related to my

research so completed the research on five variables which are capital adequacy, asset
quality, management quality, earning quality and liquidity.

❑ Excluded one bank also which is Bandhan Bank due to unavailability of data related to
CAMEL

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 CHAPTER - 4

DATA COLLECTION AND ANALYSIS

4.1 Sampling Frame -

In the research 10 years data has been collected from the time period of 2009-2019
and the data of 11 banks has been collected the banks are of both the sectors public
as well as private. So the sample of these banks were taken in the research-
1. Axis Bank
2. Bank of Baroda
3. Federal Bank Ltd.
4. HDFC Bank
5. ICICI Bank
6. IDBI Bank
7. Indusind Bank Ltd.
8. Kotak Mahindra Bank Ltd.
9. Punjab National Bank
10. RBL Bank Ltd.
11. State Bank of India

The data was collected related to all the variables to determine the CAMEL Approach. So 19
different variables were collected for ranking each bank based on the CAMEL Approach. Some
of the variables were-

Total Assets, Capital adequacy ratio ,P/L Per employee, NPA, NNPA to net advance, Cash on
net worth, Net Profit, Total income, Interest Income, Debt to equity ratio, Quick ratio and many
more ratios were find out for doing the analysis of banks using CAMEL Approach.

4.2 Data collection method-

The data which is collected for the research is the secondary data and that is
collected from Prowess IQ and from Money control as well.
The data is collected from Nifty Public sector bank and nifty private sector bank.
4.3 Presentation and Processing of the Data for Analysis
So the raw data which was collected from Prowess IQ and Money Control that data
is converted into the useful data to fit in the each variable of CAMEL and by doing
that Camel rating can be done.

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 Capital Adequacy

Bank Name Capital Adequacy Rank Debt- Equity Ratio Rank Average
Ratio (%)
Axis Bank Ltd. 16.36 4 1.676363636 7 5.5
Bank Of Baroda 12.50428571 8 1.059090909 3 5.5
Federal Bank 15.944 5 0.589090909 1 3
Ltd.
H D F C Bank 15.702 6 0.824545455 2 4
Ltd.
I C I C I Bank 17.17 3 1.94 10 6.5
Ltd.
I D B I Bank Ltd. 9.858333333 11 3.600909091 11 11
IndusInd Bank 13.37333333 7 1.69 9 8
Ltd.
Kotak Mahindra 17.662 2 1.274545455 4 3
Bank Ltd.
Punjab National 12.238 9 1.341818182 5 7
Bank
R B L Bank Ltd. 35.882 1 1.469090909 6 3.5
State Bank Of 11.786 10 1.760909091 8 9
India

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 Asset Quality

Bank Name NPA/Total Rank NPA/Total Advances Rank Average

Assets
Axis Bank Ltd. 0.009876958 6 0.016124166 6 6

Bank Of 0.018853719 9 0.03198586 9 9

Baroda
Federal Bank 0.011842137 7 0.019132945 7 7
Ltd.
H D F C Bank 0.005274116 4 0.008813026 4 4
Ltd.
I C I C I Bank 0.018627778 8 0.03279295 10 9
Ltd.
I D B I Bank 0.00122842 1 0.001103449 1 1
Ltd.
Indusind Bank 0.0041149 3 0.0066804 2 2.5
Ltd.
Kotak 0.007789248 5 0.01290634 5 5
Mahindra Bank
Ltd.
Punjab 0.02252503 10 0.037517581 11 10.5
National Bank
R B L Bank 0.00398396 2 0.007098399 3 2.5
Ltd.
State Bank Of 0.768166753 11 0.02868176 8 9.5
India

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 Management Quality

Bank Name Return on Rank Profit/Loss per Employee Rank Average

Net worth
Axis Bank Ltd. 25.86545455 6 1.182727273 2 4
Bank of Baroda 30.16909091 2 0.549090909 7 4.5
Federal Bank Ltd. 19.43454545 9 0.538181818 8 8.5

H D F C Bank Ltd. 26.27727273 5 1.196363636 1 3

I C I C I Bank Ltd. 19.66727273 8 1.118181818 3 5.5
I D B I Bank Ltd. 26.49727273 4 -1.071818182 11 7.5
Indusind Bank Ltd. 25.27545455 7 0.925454545 4 5.5
Kotak Mahindra 18.15545455 10 0.909090909 5 7.5
Bank Ltd.
Punjab National 37.15272727 1 0.107272727 10 5.5
Bank
R B L Bank Ltd. 12.55272727 11 0.654545455 6 8.5
State Bank Of India 29.19454545 3 0.394545455 9 6

Earning Quality

Bank Name Increase in Rank Interest Income/ Total Rank Average

Net Profit Income
Axis Bank Ltd. 64525.73636 4 0.790919643 10 7

Bank Of Baroda 26080.29091 6 0.87147805 2 4

Federal Bank Ltd. 13023.11818 8 0.885446627 1 4.5

H D F C Bank Ltd. 144045.4455 1 0.825586302 8 4.5

I C I C I Bank Ltd. 92633.49091 3 0.783117672 11 7

I D B I Bank Ltd. -33106.5272 11 0.865228702 3 7

Indusind Bank Ltd. 25033.66364 7 0.809009723 9 8

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Kotak Mahindra 29980.05455 5 0.839741512 6 5.5
Bank Ltd.
Punjab National 722.5454545 10 0.837744428 7 8.5
Bank
R B L Bank Ltd. 3732.9 9 0.854682768 4 6.5

State Bank Of India 119719.5364 2 0.8455805 5 3.5

Liquidity Ratio

Bank Name Liquid Assets/ Rank Liquid Assets/Total Rank Average

Total Deposits Assets
Axis Bank 0.071883852 9 0.053516429 9 9
Ltd.
Bank Of 0.053802081 10 0.045827015 10 10
Baroda
Federal 0.434816677 5 0.358779684 4 4.5
Bank Ltd.
H D F C 0.081532247 8 0.06112062 7 7.5
Bank Ltd.
I C I C I 0.097299667 7 0.05605655 8 7.5
Bank Ltd.
I D B I Bank 0.939332954 4 0.146774311 5 4.5
Ltd.
Indusind 0.967556916 3 0.724555566 2 2.5
Bank Ltd.
Kotak 1.068246872 2 0.666814745 3 2.5
Mahindra
Bank Ltd.
Punjab 0.153712221 6 0.129696724 6 6
National
Bank

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 R B L Bank 12.83707116 1 9.308918346 1 1
Ltd.
State Bank 0.04639961 11 0.035752747 11 11
Of India

Composite Index

Bank Name Capital Assets Management Earning Liquidity Composite Rank

adequacy quality quality quality ratio index
ratio
Axis Bank Ltd. 5.5 6 4 7 9 6.3 5

Bank Of Baroda 5.5 9 4.5 4 10 6.6 4

Federal Bank 3 7 8.5 4.5 4 5.4 7

Ltd.
H D F C Bank 4 4 3 4.5 7 4.5 10
Ltd.
I C I C I Bank 6.5 9 5.5 7 8 7.2 3
Ltd.
I D B I Bank 11 1 7.5 7 5 6.3 5
Ltd.
Indusind Bank 8 2.5 5.5 8 2 5.2 8
Ltd.
Kotak Mahindra 3 5 7.5 5.5 3 4.8 9
Bank Ltd.
Punjab National 47 10.5 5.5 8.5 6 15.5 1
Bank
R B L Bank Ltd. 3.5 2.5 8.5 6.5 1 4.4 11

State Bank Of 9 9.5 6 3.5 11 7.8 2

India

26
 4.4 Conclusion
All the data is collected from prowess IQ and converted raw data into useful data, the data was
converted to find all the variables of CAMEL Approach, for fitting the data as per the CAMEL
approach many formulas were used for getting the relevant information about all the variables.
After doing all this the ranking were given to the banks as per there performance based on each
variable of CAMEL approach. The rating will help in finding which bank is performing good
and bad based on individual variable and based on overall performance as well.

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 CHAPTER - 5
DATA ANALYSIS AND INTERPRETATION

5.1 Choice of Data Analysis Techniques -

For the topic Analysis of banks using CAMEL Approach only the ranking is given to each
bank based on their performance through which it can be identified that which bank perform
good and which bank perform bad. so basically in this research no tools were applied for doing
the research, some of the excel functions were required for doing the research like sort & filters,
multiplication, division, addition, percentage, ranking these type of functions of excel were
used to Complete the research. As my topic was based on CAMEL so it is based on ranking
the financial institutions so these basic functions of excel were sufficient to Complete the
research.

5.2 Outcomes and Interpretation of Outcomes -

CAPITAL ADEQUACY
• Based on CAR, RBL Bank Lmt. enjoys the 1st rank with the highest Capital adequacy
ratio which is 35.882 followed by Kotak Mahindra Bank Ltd. (17.662) and ICICI Bank
(17.17). If we see least rank as per CAR, then the IDBI Bank is at the 11 th rank i.e.
(9.8583)
• Based on Debt-Equity Ratio, Federal Bank secures the 1st position with Ratio (0.5890)
followed by HDFC Bank (0.8245) and Bank of Baroda with ratio (1.0590). The lower
will be the D/E Ratio, the better is the company’s financial positions. So here IDBI
Bank financial position is least as compared to other 10 Banks.
➢ The CAR of IDBI Bank and State Bank of India are in declining trend but for the RBL
Bank and Kotak Mahindra Banks are in increasing trend.
➢ The total debt expressed as a percentage of equity of IDBI Bank, ICICI Bank, IndusInd
Bank are in Declining trend, but for the Federal Bank and HDFC Bank are in increasing
trend.
➢ So Federal Bank and Kotak Mahindra Bank are highly rated as per the CAR & Debt.
Equity ratio. So these banks are performing well in terms of –
❖ Protection of depositors & investors
❖ Control risk

28
 ❖ growth plans

ASSET QUALITY
• The best performing bank as per the NPA/Total Assets is IDBI Bank which secures 1 st
position with (0.0012) followed by RBL Bank (0.0039) and Indusind Bank (0.0041).
• Now based on NPA/Total Advances IDBI Bank again secured the 1 st position with
(0.0011). The Second and the Third position is occupied by Indusind Bank (0.0066)
and RBL Bank (0.0070).
➢ NPA to Total Assets of IDBI Bank and RBL Bank are in increasing trend but for the
PNB and SBI are in declining trend.
➢ NPA to Total Advances of Punjab National Bank is in declining trend whereas IDBI
Bank and Indusind Bank are in increasing trend.
➢ So IDBI Bank, Indusind Bank & RBL Bank are highly rated as per the NPA to Total
Asset and NPA to Total Advances. So these banks are having good quality of Assets in
terms of -
❖ Current / Fixed loans
❖ Investments
❖ Cash the banks holds
MANAGEMENT QUALITY
• In terms of Return on net worth Punjab National Bank takes the benefit of first position
(37.152727) followed by Bank of Baroda (30.169090) and State Bank of India
(29.194545)
• HDFC Bank earns the maximum profit per employee which is (1.196363) followed by
Axis Bank (1.827272) and ICICI Bank (1.118181).
➢ Profit per employee are in increasing trend for HDFC Bank and for Axis Bank but
Punjab National bank and IDBI bank are in declining trend.
➢ The Return on Net Worth is in increasing trend for Punjab National Bank and Bank of
Baroda but the Kotak Mahindra Bank and RBL Bank are in declining trend.
➢ So both the variables return on investment and Businesses per employee then HDFC
Bank and Axis Bank are performing well in terms of -
❖ Delegation of duties and responsibilities
❖ Identify, measure and control the risk
❖ Response to change market conditions

29
EARNINGS QUALITY
• The HDFC Bank has the highest increase in Net profit it enjoys the 1 st position with
(144045.4455) followed by State Bank of India (119719.53) and by ICICI Bank
(92633.49)
• Based on interest income to total income ratio, Federal Bank holds the 1 st position
(0.885466) followed by Bank of Baroda (0.871478) and IDBI Bank (0.865228)
➢ Net profit of HDFC Bank and State Bank of India are in increasing trend but if we see
the IDBI Bank and Punjab National Bank then they are in declining trend.
➢ Interest income to Total income of Federal Bank and Bank of Baroda in increasing
trend but for the ICICI Bank and Axis Bank are in declining trend.
➢ So both the variables Interest income to Total income and Net profit then State Bank
of India and Bank of Baroda are performing well in terms of -
❖ Income from all operations
❖ High return on assets
❖ Less assets » More income (efficient)

LIQUIDITY
• The RBL Bank has the highest liquid asset to total deposits as it is enjoying the 1 st
position with (12.83707) followed by Kotak Mahindra Bank (1.06824) and Indusind
Bank (0.96755).
• If we go through the Liquid assets to total assets, then RBL Banks holds the 1st position
(9.30891) followed by Indusind Bank (0.724555) and Kotak Mahindra Bank (0.66681).
➢ The liquid assets to total deposits of RBL Bank and Kotak Mahindra bank are in
increasing trend and here also SBI and Bank of Baroda are in decreasing trend.
➢ The liquid assets to total assets of RBL Bank and Indusind bank are in increasing trend
but when we look at SBI and Bank of Baroda they are in declining trend.
➢ So both the variables Liquid asset to total asset and Liquid asset to total deposits then
RBL Bank, Kotak Mahindra Bank and Indusind Bank are performing well in terms of
❖ Convert Assets into Cash (Easily & Quickly)
❖ Meet the withdrawal demand of customers
5.3 Conclusion-
• Based on research related to CAMEL approach have gone through all the variables of
CAMEL approach and the conclusion is-

30
❖ Looking at (Composite Index) following are the findings-
➢ IDBI Bank opt the 1st position in terms of average of all the variables
➢ Indusind Bank secures the 2nd position
➢ The worst performance is by SBI & RBL Bank which secures 10th & 11th position.

31
 CHAPTER- 6
RECOMMENDATIONS

6.1 Brief Description of Recommendations -

As Axis bank is the 3rd largest bank in the private sector in India they are lacking behind in
some of the areas if we compare it with their direct competitors like HDFC Bank and ICICI
Bank.
1. Axis should target increase there or open there more branches in India
2. Open more branches in foreign market
3. The Axis should open more ATMs so that it becomes more convenient for people
especially in rural areas.
4. Increase more business in all the possible areas in Rural areas.
5. Axis should work on their liquidity because there liquidity position is so less as
compared to other banks. Over all based on CAMEL Approach axis banks secures 5 th
position out of 11

6.2 Details of Each Recommendation -

• Axis has 4800 branches only and if looking to there direct competitors like HDFC Bank
& ICICI Bank they have more branches then the Axis Bank. HDFC which secures 1 st
position in the market they have 5,314 total branches across 2,768 cities and looking to
the ICICI Bank they have 5275 branches. So Axis bank is lacking behind in the total
number of branches they have so they should expand there more branches like HDFC
& ICICI Bank. Approx. 500 branches difference is there between axis and there
competitors, so if they expand their branches there performance will also increase and
can rank 2nd or 1st.
• Axis bank has only 9 foreign branches which is very less in number and foreign
branches of axis bank constitute only 8% of total asset so this weakness can be
converted to their strengths if they expand their business in foreign market.
• Axis bank can open more ATMs so that it becomes more convenient to the people for
depositing the money and for Withdrawal, as their direct competitors has more ATMs
then the Axis bank so they should open more ATMs especially in rural areas.
• Axis can increase their business in rural areas like they can provide more loans to the
rural people and they should connect them online on axis bank mobile application

32
 services by giving them the small demo for using the mobile application. They can
explain the rural people to invest in mutual funds as they have less knowledge about
the mutual funds so they can explain them about mutual funds.
• Axis bank should increase their liquidity position because as per the research based on
camels approach axis bank secures 5th position in liquidity out of 11. So if they increase
their liquidity position then they will enjoy-
❖ Convert Assets into Cash (Easily & Quickly)
❖ Meet the withdrawal demand of customers
6.3 Conclusion -
By doing some of the changes by Axis Bank there performance will increase in terms of all the
aspects. Axis direct competitors HDFC Bank & ICICI Bank are performing well in the banking
sector because they have large market capitalization, large number of branches, large number
of foreign branches, huge amount of ATMs and have good liquidity position if we compare it
with Axis bank if axis start working on these areas then axis performance will definitely
increase.

33
 CHAPTER -7
CONCLUDING REMARKS
7.1 Summary -
• Based on research related to CAMEL approach have gone through all the variables of
CAMEL approach and the conclusion is -
❖ After Looking at (Composite Index) which is the overall result of the CAMEL
Approach the average of all the variable so following are the findings from the research-
➢ Punjab National Bank opt the 1st position in terms of average of all the variables
➢ State Bank of India secures the 2nd position
➢ The worst performance is by HDFC & RBL Bank which secures 10th & 11th position.

7.2 Gains from the Project -

• Extracting Data with the help of Prowess.
• Rating the Financial Institutions with the use to CAMEL Approach.
• No bank is perfect in the all parameters of the CAMEL Approach.
• Understood the performance of banks of all the variables which comes under CAMEL
Approach.
• Learnt new functions of excel and analysis of data.

7.3 Limitations of the Project -

• Only 10 years of annual reports is used in the study which is taken from Prowess IQ
• Some data which is confidential which was not available could not been collected
• Used 5 variables for analysis of banks, one variable which is sensitivity was not used
due to unavailability of relevant data.
• A lot of information may not be valid at the current time because the data is old

7.4 Conclusion -
Based on CAMELS Approach the rating can be done based on different variables. The rating
can identify which bank is performing well in which variable so that the bank can work on
those variables in which they are lacking behind. As per the research the overall performance
of Punjab National Bank and State Bank of India is amazing comparing them with other 9

34
banks. As these two banks are also lacking behind in some of the variables, so this problem is
identified in the research and the banks can work on those variables in which they are lacking
behind. There are some limitations as well of the research like the study is done based on 10
years of data and one variable which is sensitivity is not taken in the research because the
relevant data was not available.

35
 REFERENCES

• Altan Mikila, Habib Yusufazari & Aykut Beduk (2014), A CAMELS Analysis of the
Indian Banking Industry, Social Science Research Network paper no. 1666900.
• Gupta Ruchi (2014), Health Check-up of Commercial Banks in the Framework of
CAMEL: A Case Study of Joint Venture Banks in Nepal, The Journal of Nepalese
Business Studies, 2(1), pp.41-55.
• https://businessjargons.com/camels-rating.html
• https://www.axisbank.com/
• https://www.frbsf.org/economic-research/publications/economic-
letter/1999/june/using-camels-ratings-to-monitor-bank-conditions/
• https://www.investopedia.com/terms/c/camelrating.asp
• https://www.jagranjosh.com/general-knowledge/list-of-all-public-and-private-
sector-banks-in-india-1582542534-1
• https://www.stlouisfed.org/on-the-economy/2018/july/abcs-camels
• Kabir (2012), Bank Risk, Capitalization and Operating Efficiency, Journal of Financial
Services Research, 12(2/3), pp.117-131.
• Kumar Ashwini Mishra and et.al (2014), Analysis of Banks in India- A CAMEL
Approach, Global Business Review, 11, pp.257- 280.
• Kumar Santosh and Sharma Rupali (2014) , Evaluating Performance of Banks through
CAMEL Model: A Case Study of SBI and ICICI, The ICFAI Journal of Bank Management,
5(3), pp.49-63.
• Mishra Sushendra and Aspal Parvesh (2013), A CAMEL Model Analysis of Private
Sector Banks in India, Journal of Gyan Management, 2(1), pp.3-8.
• Tripathi Deepti, Meghani Kishore & Mahajan Swati (2014), Performance Snapshot
2013-14, Chartered Financial Analyst, 10(11), pp. 6-13.
• Trivedi Krupa R, (2014), Relative Performance of Commercial Banks in India using
CAMEL Approach, Research Journal of Economic and Business Studies, 1(4), p.1 -10.

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