Banking&finance

1. Banking and Finance Aditya Priyadarshan Vikas Munjal

2. Banking and Finance - Overview Financial Services Commercial Bank Investment Services Insurance Advisory Services • Private banking • Investment Banks • Bank cards • Credit card machine services and networks • Asset Management • Hedge Fund Managers • Custody services • Insurance Brokerage • Insurance Underwriting • Reinsurance • Stock brokers (private client services) and discount brokers

3. Evolution of Industry • Flexible exchange rates • Further trade liberalization in goods and services • Increases in the level of FDI • Trade liberalization in financial services • Deregulation of financial markets both in developed and in a number of emerging countries • Securitization • Macroeconomic coordination and global financial stability • Consolidation of financial institutions • Increased mergers and acquisitions   • The gradual integration of stock markets around the world • Internalization of the securities markets • An increase in the role of corporate governance in national and international investment strategies • Regional integration such as those experienced in Europe, Asia and America • The Asian currency crisis and the call for a New International Financial Architecture • Coordination amongst the central banks through the BIS and financial globalization are amongst some of the developments

4. Global JP Morgan Chase Bank of America HSBC Citigroup Deutsche Bank Goldman Sachs Morgan Stanley Merrill Lynch BNP Paribas Indian SBI ICICI PNB HDFC Bank of Baroda Corporation Bank IDBI UTI Major Players

5. Market Share Top ten banking groups in the world ranked by tier 1 capital

6. Citibank ABN Amro High Stan C HSBC ICICI Bank HDFC IndusInd Bank Vysya Bank Karur Vysya Service Quality State Bank of India Bank of Baroda Bank of India PNB Andhra Bank Canara Bank Co-operative Banks Rural Banks Low Rural Urban Regional India - Strategic Map Geographical Spread

7. Global Finance Industry • Increased Fee Revenue is the Goal as One-Stop Shopping is Offered by Financial Services Firms, including Banks plus Traditional and Discount Brokerages - Meanwhile, Financial Planning and Private Banking are Targeted • Branch Banking Booms • Property and Casualty Underwriters Recover from a Disastrous 2001 • Insurance Sells Well on the Internet

8. The India Scenario - A Comparison • Only one Indian Bank in the top 100 Banks in the world • India's best and brightest, the SBI, is roughly one-tenth the size of the world's biggest bank - Citigroup • Six Chinese banks feature among the top 25 Asian banks while India has only two representatives - SBI and ICICI Bank. • Similarly, SBI's consolidated pre-tax profit is $1.9 billion against Citigroup's $29 billion, Bank of America's $25 billion and HSBC's $21 billion • The one area where Indian banks are able to compete with their global peers is their return on assets (RoA). Among big Indian banks, ICICI Bank, PNB, Canara Bank and HDFC Bank have a return on assets of over 1 per cent return, while SBI's return on assets is 0.89 per cent. Among Indian banks, HDFC Bank has the highest return on assets -- 1.71 per cent. • This is lower than that of Citigroup (1.97 per cent) but much better than the RoA of HSBC (1.40 per cent). Our banks are small but efficient. However, if the economy has to grow at over 8 per cent, they must build the scale. India Inc has already announced over Rs 650,000 crore (Rs 6,500 billion) of investment plans. Without the scale, local banks can't possibly support this growth story

9. Key Success Factors • Consolidation: Achieving Strategic Balance • Retail Renaissance: Bonding with Customers • The Offshoring Decision • Transforming the Finance Function • Monitoring Credit Quality • Achieving Comprehensive Governance of Risk Management • Corporate Governance