BANKING INDUSTRY ANALYSIS

WITH HDFC BANK ltd.

Presented to-
PROF.JAYA GOPALKRISHNAN

PRESENTED BY-
THE

“INVINCIBLE”
GROUP-1
 INDUSTRY PROFILE
• Banking in India originated in the first decade of 18th
century with The General Bank of India coming into
existence in 1786
• Central banking is, the responsibility of the Reserve Bank
of India
• In 1969 the government started nationalization of bank.
• Total deposits, advances and net profit grew at CAGR of
19.6%, 27.4% and 20.2% respectively from FY03 to FY08
 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).
 Three phases of banking
system
• Early phase from 1786 to 1969 of Indian Banks
• Nationalizations of Indian Banks and up to 1991
prior to Indian banking sector Reforms 
• New phase of Indian Banking System with the
advent of Indian Financial & Banking Sector
Reforms after 1991
 Industry analysis FIVE
FORCES
• Buyer’s bargaining power
• Suppliers bargaining power
• Threats of new entrant
• Threats of substitutes
• Rivalry/exiting competitors
 Types of Banks
In terms of share holding pattern:-
• Public sector Banks
• Private sector Banks
• Co-operative Bank
• Development Bank/Financial institutions
In terms of balance sheet size:-
• Large bank (balance sheet more than Rs.24,000 crore)
• Mid-size bank ( balance sheet less than Rs.24,000 crore and more than
20 branches)

• Small banks (balance sheet less than Rs.3000 crore and less than
10 branches)
 MAJOR REFORMS
INITIATIVES
• Interest Rate Deregulation
• Government equity in banks
• New private sector banks
• New areas have been opened up
• Adoption of prudential norms
• Adoption of information technology
 MAIN COMPETITORS FOR
BANKING SECTOR
• Post offices
• Mutual fund
• Share market
• Insurance
• Money lenders
• Family and Friends
 CHALLENGES AHEAD

• Improving profitability
• Reinforcing technology
• Risk management
• Sharpening skills
• Greater customer orientation
• Corporate governance
• International standards
 Not yet out of the
woods….
• The Indian banking system did well
to survive the carnage of the global
meltdown that brought marquee
institutions down to their knees.
• But there are challenges which, if not
tackled, could derail India’s ambition
of higher economic growth.
 How the Indian banking
system has been hit by the
credit crisis…
• Corporate credit growth plunged from
28% in 2007-08 to 19% in 2008-09.
• Retail credit growth crashed from
30% in 2007-08 to 10% in 2008-09
• Many banks invest excessively on
Govt. securities.
products/services offered by
bank
• Retail banking
• Retail products such as credit cards,
debit cards etc.
• Portfolio Management: Mutual Funds
etc.
• Corporate lending and project
financing (including loans)
• Investment banking
• Foreign exchange trading
Number of bank in India till
march 2009
 HDFC Bank
• HDFC Bank was incorporated in august 1994
• Among the first in new generation
commercial bank
• Promoted by HDFC the parent company
• It has 1,412 branches and over 3,295 ATMs,
in 528 cities in India
• Over the last few years, HDFC Bank as a
whole has been growing steadily at a rate of
30 per cent
 Strategy of HDFC bank
• Increasing market share in India’s expanding banking.
• Delivering high quality customer service
• Delivering more products to more customers
• Maintaining current high standards for asset quality
through disciplined credit risk management
 Segmentation strategy
Demographic variables-
 locations (metros & divisional cities)
Occupation (business person, salaried class both
govt. & pvt.)
Age (senior citizens & minor )
Psychographic variables-
Life styles
people who belives in modern banking with
higher set of service i.e internet banking.
 Targeting strategy
Target market
Corporate banking market-this market
target the industries and fulfill their
financial needs.
Capital market-this segment is targeted on
the long term needs of the individual as
well as of industries.
Retail banking market-this segment is for
retail investors and provide them short
term financial credit for their personal,
household useeds.
 Positioning strategy
• HDFC bank has positioned itself as a bank
which give higher standard of services through
product innovation for the diverse need of
individual & corporate clients. So they want to
highlight following points in their positioning
segments-
Customer centric
Service oriented
Product innovations
 SWOT analysis
Strengths-
• Support of various promoters
• High level of services
• Knowledge of Indian market
Weakness
• Far from rural reach
 Contd…
Opportunities-
• Growing indian banking sector
• People are becoming more service
oriented
• In the global market
Threats-
• Entry of foreign banks
• Perception of customer
 BCG Matrix
Relative Market Share Position
High Medium Low
1.0 .50 0.0

High
+20 HDFC bank
Stars Question Marks
II I
Medium
0

Cash Cows Dogs

III IV
a S yrt s udnI

Low
-20

23
 Credit Ratings
• The Bank's Fixed Deposit programme has been
rated 'CARE AAA (FD)' [Triple A] by CARE, which
represents instruments considered to be "of the
best quality.
• Certificate of Deposit (CD) programme "PR 1+"
which represents "superior capacity for
repayment of short term promissory obligations
 conclusion

HDFC’s competitive strength clearly lies in

the use of technology and the ability to
deliver world-class service with rapid
response time. Over the last 14 years, the
bank has successfully gained market share in
its target customer franchises while
maintaining healthy profitability and asset
quality.