A

Specialization Project
On
“COMPARATIVE PRE AND POST COVID
PERFORMANCE ANALYSIS OF HDFC BANK
AND ICICI BANK”
In the partial fulfillment of the Degree of
Masters in Management Studies
Under
University of Mumbai
By
[MMS Semester IV Roll No:2023]
Specialization :(FINANCE)
Batch: 2020 – 2022
Under the Guidance of
Internal Guide
Prof. Dr. Raghavendra .S. Bendigeri
(Associate Professor)

Oriental Institute of Management

Vashi, NaviMumbai-400703
2021
 DECLARATION

I hereby declare that this project Report submitted by me to the

Oriental Inst itute Of Management, Vashi, Navi Mumbai is a bonafied work

undertaken by me & it is not submitted to any other universit y or inst itution

for the award of any degree diploma/ cert ificate or published any time before.

Name: VIRAL VALLABHJI GALA

Roll no. 2023 Signature of the Student

 CERTIFICATE

This is to certify that project titled “COMPARATIVE PRE AND POST COVID
PERFORMANCE ANALYSIS OF HDFC BANK AND ICICI BANK” is
successfully completed by Mr. VIRAL VALLABHJI GALA
during the IV semester, in partial fulfillment of the Master ’s Degree in
Management Studies recognized by the University of Mumbai for the academic
Year2020-2022 through Oriental Institute of Management, Vashi, Navi Mumbai.

This project work is original & not submitted earlier for the award of any degree,
diploma or associateship of any other university/ Institution.

Name: Prof. Dr.Raghavendra.S.Bendigeri ( )

Date: 28/03/2022 Signature of the Guide

 ACKNOWLEDGEMENT

I have taken efforts in this project. However, it would not have been possible without the kind
support and help of many individuals and organizations. I would like to extend my sincere
thanks to all of them.
I am highly indebted to Prof. Dr. Raghavendra .S. Bendigeri for their guidance and constant
supervision as well as for providing necessary information regarding the project & also for their
support in completing the project. I would like to express my special gratitude and thanks to all
the respondents for giving me such attention and time to complete my Survey.
My thanks and appreciations also go to my colleague in developing the project and people
who have willingly helped me out with their abilities
 TABLE OF CONTENTS

SR.NO PARTICULAR PG.NO

1 Executive Summary IV

2 Abstract 1

3 Introduction of the Project 1-7

4 Purpose of the Project 8

5 Review of Literature 9-10

6 Objectives 11

7 Research of Methodology 12

8 Scope of Study 13

Data analysis and Interpretation

a) Company Profile
9 14-30
b) Ratio Analysis

c) Learning Experience

10 Conclusions 31

11 Suggestions 32

12 Bibliography 33-34
 EXECUTIVE SUMMARY

The main aim of this project is to do Performance analysis on HDFC Bank and ICICI
Bank and to find out the opportunities of investment in these sectors where returns can be
maximized.

Indian Economy being one of the fastest developing economies in the world, Before
Covid and After Covid There are many changes in Bank. In HDFC Bank and ICICI Bank
Have seen differences in Financial statement before Covid and After Covid.
 ABSTRACT

The Covid-19 pandemic resulted in countries announcing lockdown and quarantine

measures that sharply stalled economic activity. The Government of India initiated a
nation-wide lockdown from March 25, 2020 for three weeks which was extended to May
31, 2020. This created significant challenges for employees, customers, communities and
businesses. The lockdown measures were gradually eased from June 2020 leading to
economic activities progressively improving towards the later part of fiscal 2021.
However, a second wave of the Covid-19 pandemic emerged in India since March 2021,
where the number of new cases has increased significantly and has resulted in re-
imposition of localised/regional lockdown measures in various parts of the country.
The corona virus Disease (Covid-19) has spread to most of countries and affected
worldwide. The outbreaks of this news affect the global financial market. Due to this
Virus spread Indian financial market also react to this pandemic situation and witness the
volatility. Indian government imposed national wise lockdown to stop the spreadness of
this virus. Through the lockdown was necessary and inevitable so as to prevent the faster
spread of Novel Corona Virus (Covid-19) and to save lives of people of the country, it is
going to affect the various sectors of our economy severely. The Banking sector which is
backbone of India’s economy is not exception to the above. Banks have significance role
in the economic growth of every country. Therefore , the present study is concerned about
the impact of this COVID-19 pandemic on HDFC and ICICI bank, due to lockdown and
also low level of economical activities throughout the year which has resulted into closure
of several commercial organisations, educational institutions, public and private offices,
suspension of means of transportation, etc. The present aims is to compare the major
private bank of India (HDFC and ICICI bank) pre and post covid period. Period from 1st
April 2019 to 31st March 2020 consider as pre COVID and as Period from 1st April 2020
to 31st March 2021 is consider as Post COVID Period.
 INTRODUCTION

In recent times, a new pandemic has arisen, named SARS-Cov-2 (severe acute respiratory
syndrome corona virus 2) or COVID-19, and its first case is reported to have originated in
Wuhan. China. According to the World Health Organization (WHO), the first confirmed
case of COVID-19 was found on 8 December 2019.
Although the virus reached India later than in many other countries according to the
statement made by Ministry of Health and Family Welfare, the first case in India was
reported on 30 January of a student studying in Wuhan city in China who was visiting
Kerala. Whereas WHO declared COVID-19 as a global pandemic on 11th March India
reported its first fatality due to the virus on 12th March in Karnataka. Seeing the impact of
the virus and increase positive case on daily basis at a rapid pace. India was brought to the
state of 21 days complete lockdown from 24th March to prevent its citizens from virus and
Curb the epidemic. Lockdown was implemented by the constraining people to their house
under quarantine and shutting down all transport facility is manufacturing of non essential
products. Hospitality service, educational institution and place of worship. Lockdown was
supposed to end on 15thapril but looking at the condition of the country within the 21 days
period as a confirmed case and that was increasing, lockdown was extended for further 19
days till 3rd May 2020. With the whole economy having been shut down except the
essential services, many sectors are bound to record low production volume and revenue
for financial year 2021. So in this project we will identify the impact of COVID-19 on
HDFC bank and ICICI bank through analysis.

BANKING SECTOR

General Information about the Banking Industry –

The banking industry handles finances in a country including cash and credit. Banks are
the institutional bodies that accept deposits and grant credit to the entities and play a major
role in maintaining the economic stature of a country. Banking is an industry that handles
cash, credit, and other financial transactions for individual consumers and businesses
alike. Banking provides the liquidity needed for families and businesses to invest in the
future, and is one of the key drivers of the economy.

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 You can use the products and services offered by a bank or credit union to protect your
money, to borrow more, and to build savings. Banking means you won't have to save up
before going to college or buying a house. Companies can use loans to start hiring
immediately to build for future demand and expansion. In short, banking provides the
means for further financial growth.
Banking consists of many activities that can be done through a number of financial
institutions that accept deposits from individuals and other entities, and then use this
money to offer loans, and to invest and earn profit. Banks can be placed into certain
categories based on the type of business they conduct. Commercial banks provide services
to private individuals and businesses. Retail banking provides credit, deposit, and money
management to individuals and families.

Community Banking

Community banks are smaller than commercial banks. They concentrate on the local
market. They provide more personalized service and build relationships with their
customers.

Internet Banking

Internet banking provides these services via the world wide web. The sector is also called
E-banking, online banking, and net banking. Most other banks now offer online services.
There are many online-only banks. Since they have no branches, they can pass cost
savings onto the consumer.
Much like online banking, many banking services can now be done completely though
your phone digital device. Banking and investing apps continue to grow in popularity, and
may mean you never have to visit a brick and mortar bank at all.

Savings and Loan Banking

Savings and loans are specialized banking entities, created to promote affordable home
ownership. Often these banks will offer a higher interest rate to depositors as they raise
money to lend for mortgages.

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Credit Unions

Credit unions are financial institutions that operate similarly to standard banks in many
ways, but with a different structure. Customers own their credit unions. This ownership
structure allows them to provide low-cost and more personalized services. You must be a
member of their field of membership to join. That could be employees of companies or
schools or residents of a geographic region

Investment Banking

Investment banking finds funding for corporations through initial public stock
offerings or bonds. They also facilitate mergers and acquisitions.

Merchant Banking

Merchant banking provides similar services for small businesses. They provide
mezzanine financing, bridge financing, and corporate credit products.

Sharia Banking

Sharia banking conforms to the Islamic prohibition against interest rates.Also, Islamic
banks don’t lend to alcohol and gambling businesses. Borrowers profit-share with the
lender instead of paying interest. Because of this, Islamic banks avoided the risky asset
classes responsible for the 2008 financial crisis.

How Banking Works

Banks are a safe place to deposit excess cash, and to manage money through products like
savings accounts, certificates of deposit, and checking accounts. The Federal Deposit
Insurance Corporation (FDIC) insures them.8 Banks also pay savers a small percent of the
deposited amount based on an interest rate.
Banks are currently not required to keep any percentage of each deposit on hand, though
the Federal Reserve can change this. That regulation is called the reserve requirement.
They make money by charging higher interest rates on their loans than they pay for
deposits.

The Central Bank

Banking wouldn't be able to supply liquidity without central banks.In recent years, banking
has become very complicated. Banks have ventured into sophisticated investment and
insurance products. This level of sophistication led to the banking credit crisis of 2007.

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Notable Happenings

Banking underwent a period of deregulation when Congress repealed the Glass-Steagall

Act. That law had prevented commercial banks from using ultra-safe deposits for risky
investments. After its repeal, the lines between investment banks and commercial banks
blurred. Some commercial banks began investing in derivatives, such as mortgage-backed
securities. When they failed, depositors panicked.
 Banking offers savings, loan, and investment products and services to individuals and
businesses.
 There are many types of banks, or financial institutions, with specialized functions
and populations they serve.
 Banking is regulated at the national level by a central bank - that works to maintain
liquidity and economic stability.
 If left unregulated, banks compete in an open market which has historically proven to
be risky and led to numerous financial crises.

As per the Reserve Bank of India (RBI), India’s banking sector is sufficiently capitalised
and well-regulated. The financial and economic conditions in the country are far superior
to any other country in the world. Credit, market and liquidity risk studies suggest that
Indian banks are generally resilient and have withstood the global downturn well.Indian
banking industry has recently witnessed the roll out of innovative banking models like
payments and small finance banks. RBI’s new measures may go a long way in helping the
restructuring of the domestic banking industry.
The digital payments system in India has evolved the most among 25 countries with
India’s Immediate Payment Service (IMPS) being the only system at level five in the
Faster Payments Innovation Index (FPII).

Market Size

The Indian banking system consists of 12 public sector banks, 22 private sector banks, 46
foreign banks, 56 regional rural banks, 1485 urban cooperative banks and 96,000 rural
cooperative banks in addition to cooperative credit institutions As of November 2020, the
total number of ATMs in India increased to 209,282.

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 Asset of public sector banks stood at Rs. 107.83 lakh crore (US$ 1.52 trillion) in FY20.
During FY16-FY20, bank credit grew at a CAGR of 3.57%. As of FY20, total credit
extended surged to US$ 1,698.97 billion. During FY16-FY20, deposits grew at a CAGR
of 13.93% and reached US$ 1.93 trillion by FY20.
According to the RBI, bank credit and deposits stood at Rs. 108.6 trillion (US$ 1.48
trillion) and Rs. 151.34 trillion (US$ 2.06 trillion), respectively, as of April 23, 2021.
Credit to non-food industries stood at Rs. 108.02 trillion (US$ 1.47 trillion), as of April
23, 2021. Non-food industries grew at 5.7% in January 2021 as against an increase of
8.5% in January 2020.

Investments/Developments

Key investments and developments in India’s banking industry include:

 In December 2020, in response to the RBI’s cautionary message, the Digital Lenders’
Association issued a revised code of conduct for digital lending.
 As of February 27, 2021, the number of bank accounts opened under the
government’s flagship financial inclusion drive ‘Pradhan Mantri Jan Dhan Yojana
(PMJDY)’ reached 41.93 crore and deposits in Jan Dhan bank accounts stood at
more than Rs. 1.70 lakh crore (US$ 23.07 billion).
 On November 6, 2020, WhatsApp started UPI payments service in India on receiving
the National Payments Corporation of India (NPCI) approval to ‘Go Live’ on UPI in
a graded manner.
 In October 2020, HDFC Bank and Apollo Hospitals partnered to launch the
‘HealthyLife Programme’, a holistic healthcare solution that makes healthy living
accessible and affordable on Apollo’s digital platform.
 In 2019, banking and financial services witnessed 32 M&A (merger and acquisition)
activities worth US$ 1.72 billion.
 In March 2020, State Bank of India (SBI), India’s largest lender, raised US$ 100
million in green bonds through private placement.
 In February 2020, the Cabinet Committee on Economic Affairs gave its approval for
continuation of the process of recapitalization of Regional Rural Banks (RRBs) by
providing minimum regulatory capital to RRBs for another year beyond 2019-20 -
till 2020-21 to those RRBs which are unable to maintain minimum Capital to Risk
weighted Assets Ratio (CRAR) of 9% as per the regulatory norms prescribed by RBI.

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  The NPAs (Non-Performing Assets) of commercial banks recorded a recovery of Rs.
400,000 crore (US$ 57.23 billion) in the last four years including record recovery of
Rs. 156,746 crore (US$ 22.42 billion) in FY19.

Government Initiatives

 As per Union Budget 2021-22, the government will disinvest IDBI Bank and
privatise two public sector banks.
 As per Union Budget 2019-20, the Government proposed fully automated GST
refund module and an electronic invoice system that will eliminate the need for a
separate e-way bill.
 Government smoothly carried out consolidation, reducing the number of Public
Sector Banks by eight.
 As of September 2018, the Government of India made Pradhan Mantri Jan Dhan
Yojana (PMJDY) scheme an open-ended scheme and added more incentives.
 The Government of India planned to inject Rs. 42,000 crore (US$ 5.99 billion) in
public sector banks by March.

Achievements

Following are the achievements of the Government:

 In April 2021, Unified Payments Interface (UPI) recorded 2.73 billion transactions
worth Rs. 4.93 lakh crore (US$ 67.31 billion).
 According to the RBI, India’s foreign exchange reserves reached US$ 582.41 billion,
as of April 16, 2021
 To improve infrastructure in villages, 204,000 point of sale (PoS) terminals have
been sanctioned from the Financial Inclusion Fund by National Bank for Agriculture
& Rural Development (NABARD).
 The number of transactions through immediate payment service (IMPS) increased to
322.96 million (by volume) and amounted to Rs. 2.99 trillion (US$ 40.85 billion) by
value in April 2021.

6
Indian economy basically depends on the three sectors namely primary sector, secondary
sector, and tertiary sector and all the three sectors are being majorly supported by banking
sector. Banking sector is providing the financial support to all these sectors by disbursing
loans, advances, short term credits, issuing letter of credit, bank guarantees etc as its
traditional work. Apart from it the new phase of Indian Banking resembles in work like
providing Forex support, digital banking, e-commerce, tele-banking, e-kiosk and many
more. You cannot imagine rapid growing economy without banking support. If banking
sector get impacted by any obstacle its consequences will definitely be borne by all these
three sectors which are pillar of the Indian economy.
Among the various financial institutions, banks are the fundamental component and the
most active players in the financial system especially financial markets. It provides capital
for innovation, infrastructure and job creation and over all prosperity. It has become the
integral part of our society, both industries as well as individual consumers. A bank is an
institution which has a primary function to accept deposits and lend money to needful
individuals, businesses, and governments. Banks are considered to be trustworthy around
the world. When any individual deposits money in the bank, doesn’t matter what is the
amount, the individual knows that the money will be safe in the bank as compared to
anywhere else. Besides this, banks provide numerous services such as loan facilities, fixed
deposit schemes, debit & credit card facilities, etc. The Indian banking industry which is
nearly 200 years old has been expanding and modernizing since the initiation of reforms in
1991. Now, this industry has evolved into the current size of INR 81 trillion. The Indian
Banking sector is heading towards becoming the fifth-largest banking industry in the
world in year 2020 and third-largest by 2025.Efficiency and profitability of the banking
sector in India has assumed primal important for stable economy. By improving
Efficiency they raise living standard of the society. Due to intense COVID-19 crisis
affected all the part of economy very harshly .In this paper I will find the impact of
COVID-19 on return of HDFC bank and ICICI bank. For this purpose I took two major
private bank of India for study.

7
 PURPOSE OF STUDY

The Main Purpose of Finance Research is to provide detail Financial Analysis and
Recommendations on HDFC Bank and ICICI Bank by providing timely high quality
information and analysis.

The main work in Finance research is producing annual reports.

Working in Finance research can be compared to what it’s like to be a university

student. There are lots of “assignments” or “papers” due with fairly regular deadlines, such as
when a company releases qualterly results or announces something.

8
 LITERATURE REVIEW

(Murad & Albkour, 2018) This study was based on secondary data of five year from 31st
March, 2012 to 31st March, 2016 had been taken for analysis. In this study independent sample
used for the hypotheses testing . In order to measure the financial performance of banking
sector in India, two banks i.e. SBI and ICICI are taken into consideration and the comparative
study of these two bank done. The current ratio of SBI and ICICI was not recorded according to
standard norms of CR i.e.2:1. On the other hand in the case of SBI and ICICI, liquid ratio was
recorded very high. The liquidity position of SBI and ICICI is not recorded in as sound manner.
The Solvency position of SBI and ICICI is recorded in a sound condition. Result of test showed
that there is significant difference between current ratio, net profit ratio, debt equity ratio ant
interest coverage ratio of SBI and ICICI.

(Sharma & Sharma, 2017) The objective of this particular research paper was to study the
profitability ratios and compare this ratio of top three private sectors bank viz. HDFC bank,
ICICI bank and AXIS bank. Study was based on secondary data and period of study was 5 year
from 2011.12 to 2015.16. Result of study showed that on the basis of net profit margin and
return on assets there is insignificant difference among above three banks. And on the basis of
cost to income and return on net worth there is significant difference among above three banks.

Christopher Wood, Global Head of Equity Strategy at Jefferies (ET- April 24, 2020) said,
''Lockdown in countries like India is more disastrous both for human welfare and economies. It
is because in India neither there is any help for small enterprises nor unemployment benefits
for the people. He further added, countries such as India, with young demographics, such a
lockdown causes more human suffering that Covid-19 itself. Due to ongoing lockdown India is
likely to see a change in consumer lending cycle. On his portfolio strategy, Wood said it does
not make sense to own Indian banks in such a macro environment. Wood never saw a negative
consumer credit cycle since the inception of his portfolio in 2002, in India, however, probably it
is going to happen very soon now.

Ambrish Kumar Mishra, Archana Patel and Sarika Jain (Feb, 2021) carried out a research
study titled“Impact of Covid-19 Outbreak on Performance of Indian Banking Sector”
demonstrates repercussions of the Covid-19 in the performance of the Indian banking sector by
creating and evaluating the largest comprehensive knowledge base called ontology (Covid19-
IBO) in order to get semantic information, in continuation of the same they address few
important research questions with respect to Indian economy.

Dr. Jitender Singh and Dr. B. S. Bodla (2020) carried out a research study titled “Covid-19
Pandemic and Lockdown Impact on India's Banking Sector: A Systemic Literature Review”
demonstrates the impact of this pandemic on Banks and NBFCs due to lockdown which has
resulted into closure of all commercial organisations, educational institutions, public and private
offices, suspension of means of transportation, etc. by considering views expressed by several
groups including economists, financial institutions like IMF, World Bank and consulting firms.

9
Ashly Lynn Joseph and Dr. M. Prakash (Jul, 2014) carried out a research study titled “A
Study on Analyzing the Trend of NPA Level in Private Sector Banks and Public Sector Banks”
demonstratestrends of NPA in banking industry, the factors that mainly contribute to NPA
raising in the banking industry and also provides some suggestions how to overcome this
burden of NPA on banking industry.

Nilam Panchal, (2021) Related studies highlighted the situations and provide the back up of
this study, Covid-19 Pandemic adversely hampered the Indian banking operations and severely
affected all the industries across the world economy.

Tammana Muzawar,(2020), points out that due to covid-19 pandemic and nationwide closure
people believe that visiting branches and availing banking services is not safe and secure .As
the banks have modernized they have encouraged their bank customers to avail benefit of
online, internet and mobile banking services. The study resulted that most of the people are
using mobile banking services as it is clear that since Time saving, cost effective, reliable and
easy to use than Conventional Banking.

Daniel,Gardan,Claudia, (2020), The degree of mobile/internet banking services usage of the

respondents has increased during the pandemic in comparison with the period before the
pandemic their survey indicate the need to increase the efforts of banks to offer financial
education courses to all categories of bank customers.

Patil ., Anu Alex,(2020) Governmental intervention is required to take decisions and actions to
lessen uncertainty and financial stress in the economy and continuous measures should be taken
to enable the smooth functioning of both money and capital markets, Banking system in India
has implemented various measures due to COVID-19 Pandemic to make banking operation
more smooth and effective Based on the study they found that, most of the Indian Banks were
facing the problem of NPA, Non recovery of loan, customer issues, Bad Loans during Covid-
19 situations and resultant shut down.

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 OBJECTIVES

 To Understand Pre Covid performance of HDFC Bank and ICICI Bank.

 To Understand Post Covid performance of HDFC Bank and ICICI Bank.
 To Perform comparative analysis of both HDFC Bank and ICICI Bank with respect
to Pre and Post Covid Performance.

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 RESEARCH OF METHODOLOGY

The Research Design used in this paper is Descriptive and Analytical in nature and the paper is
based on Secondary data . The Survey method is used to complete the study.

SOURCES OF DATA
SECONDARY SOURCE

The Data were collected from the published annual reports of the selected banks taken from
their websites, magazines and journals on finance have also been used a sources of data.

12
 SCOPE OF THE STUDY

The research Project covers two important private sector banks Housing Development Financial
Corporation (HDFC) and Industrial Credit Investment Corporation of India (ICICI) Bank only.

13
 DATA ANALYSIS AND INTERPRETATION

COMPANY PROFILE

ICICI Bank

ICICI bank is an Indian Multinational banking and financial services company headquartered
in Mumbai Maharashtra India. As on 2014 it is the second largest bank in India in term of
assets and market capitalization. It offers a wide range of banking products and financial
services for corporate and retail customer through a variety of delivery channels and
specialized subsidiaries in the areas of investment banking life, non- life insurance, venture
capital and assets management. The Bank has a network of 3880 branches and 12269 ATMs in
India and has a presence in 19 countries.
ICICI was formed in 1955 at the initiative of the World Bank, the Government of India and
representatives of Indian industry. The principal objective was to create a development
financial institution for providing medium-term and long-term project financing to Indian
businesses. Until the late 1980s, ICICI primarily focused its activities on project finance,
providing long-term funds to a variety of industrial projects. With the liberalization of the
financial sector in India in the 1990s, ICICI transformed its business from a development
financial institution offering only project finance to a diversified financial services provider
that, along with its subsidiaries and other group companies, offered a wide variety of products
and services.
As India’s economy became more market-oriented and integrated with the world economy,
ICICI capitalized on the new opportunities to provide a wider range of financial products and
services to a broader spectrum of clients. ICICI Bank was incorporated in 1994 as a part of the
ICICI group. In 1999, ICICI became the first Indian company and the first bank or financial
institution from non-Japan Asia to be listed on the New York Stock Exchange.

14
It offers a wide range of banking products and financial services for corporate and retail
customers through a variety of delivery channels and specialized subsidiaries in the areas of
investment banking, life, non-life insurance, venture capital and asset management.
The bank has a network of 5,275 branches and 15,589 ATMs across India and has a presence
in 17 countries
The World Bank took the initiative to form ICICI bank in 1955. The main objective of this
bank was to create a development financial institution for giving mid-term and long-term
financing to the Indian Businesses. ICICI focused on financing projects until late 1980. The
registered office of the ICICI bank is in Vadodara, Gujarat and its corporate office is in
Mumbai, Maharashtra.
This bank provides various services and banking products to its customer and it is present in
more than 17 countries. On the other hand, there are 5275 ICICI branches in India and more
than 15000 ATMs across the nation.

15
HDFC Bank

HDFC bank Limited is one of India’s leading private banks and was among the first to receive
approval from the reserve bank of India ( RBI) to set up a private sector bank in 1994. HDFC
bank’s headquartered is in Mumbai, Maharashtra. It offers a diverse range of financial
products and banking services to customers through a growing branches and ATM network
and digital channel such as net banking, Phone banking and Mobile banking. HDFC bank is
India’s largest private sector bank by assets and by market capitalisation as of April 2021. The
bank has a network of 5608 branches and 14897 ATMs in 2902 cities/ town.
About 74% of shareholders in HDFC Ltd. Are Foreign investors. HDFC Ltd’s market
capitalisation as on March 31, 2019 stood at approximately US$ 49 billion. Over the years, the
HDFC Group has emerged as a leading Financial conglomerate in India with a presence in
banking, Life and general insurance, asset management, venture Capital and education finance
segments. Standard Life Aberdeen Plc is a leading global investment And a FTSE 100
Company listed on the London Stock Exchange.
Headquartered in Scotland, it has offices In 54 locations worldwide and employs around 6,000
People.
The Standard Life Aberdeen Group was formed By the merger of Standard Life Plc and
Aberdeen Asset Management Plc on August 14, 2017. Its expertise and resources enable it to
offer a wide range of investment Solutions and services designed to meet its clients’ Needs
today, tomorrow and for the long-term. It manages And administers over £550 billion of assets
worldwide (as on December 31, 2018).
The Company strives to make A positive long-term impact while operating ethically,
Encouraging good practices among companies it invests In, and providing support and
expertise for the benefit of The communities in which it operates.

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 Ratio Analysis

The following table sets forth, for the periods indicated, the operating results data.
Annual report of icici bank of 2019-20 AND 2020-21 pre and post Covid
ratiosOPERATING RESULTS DATA

17
 KEY RATIOS
The following table sets forth, for the periods indicated, the key financial ratios.

•PRE-COVID PERFORMANCE OF ICICI-

India’s top performing bank stock is getting more love from analysts even after its strong run
of gains in 2019. ICICI Bank Ltd., with a 45% climb this year that’s the most among a gauge
of the nation’s financial stocks, has a recommendation consensus of 4.87 on a Bloomberg
scale where 5 is a unanimous buy.
That’s close to its highest reading in at least a decade. The lender remains a buy for all but one
of the
57 brokerages compiled by Bloomberg.
“The stock has done well, yet we think the scope for meaningful re-rating over the next 12-18
months is high,” Anil Agarwal, an analyst with Morgan Stanley, wrote in a note on Tuesday,
after attending the bank’s first analyst day in more than a decade.
The view comes amid a deteriorating economic environment where growth has slipped to the
slowest pace in six years and the financial system continues to recover from a prolonged
period of loan losses and a crisis at shadow banks
ICICI Bank has also had its share of upheavals. Just over a year ago, Sandeep Bakhshi took
over as chief executive officer after Chanda Kochhar resigned following allegations of
corporate governance violations.
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Here’s a roundup of brokerage views on why they think ICICI shares are a buy One bank, one
RoE target well entrenched; expect ROE of 16%-17% in next 12-18 months compared with
bank’s guidance of 15% by 1QFY21 Bank can continue to grow in most types of retail loans
as market share is only 8% of system’s assets in category.
Bank is picking up business from better-rated companies Emphasis on shorter and medium-
term loans Reduced chances of big loans turning bad, diverse range of products to allow it to
grow balance sheet Share price offers a reasonable risk-return trade-off; business offers
meaningful upside in medium terms loans ICICI Bank is top sector pick; Price target raised to
₹600 from ₹510.40
ICICI Bank Limited has sought To adopt the principles of the International Integrated
Reporting Framework as developed by the International Integrated Reporting Council (IIRC).
Through this report, The Bank aims to provide its stakeholders a comprehensive View of the
organisation’s financial and non-financial Resources and its strategy to create long-term value.
The Report provides insights into the Bank’s primary activities, Its strategic priorities, risks
and mitigants, governance Structure, and the manner in which it has leveraged the Six capitals,
namely Financial, Manufactured, Intellectual, Human, Social and Relationship, and Natural.
Details on the Various capitals are covered in the chapters: ICICI Bank’s Business Model,
Management’s Discussion & Analysis Strategic Focus Areas for Business, Human Capital.

•POST-COVID PERFORMANCE OF ICICI-

Despite the challenging environment, the Bank’s financial position remained strong and we
continued
to make progress on our strategic objectives.
We continued to focus on risk-calibrated growth in core operating profit; which grew by
16.9% year- on-year to ₹313.51 billion.
We continued to strengthen our deposit franchise; average current account deposits increased
by 25.5% and average savings account deposits by 16.7% during fiscal 2021. Total deposits
grew by 21%.

19
We grew our loan portfolio with a focus on diversification and granularity; the proportion of
retail loans to total loans, including non-fund outstanding, was 55% at March 31, 2021.
Our focus on leveraging digital across our businesses saw significant results. The ICICI
STACK, our upgraded mobile banking app iMobile Pay and our InstaBIZ platform for small
business customers saw significant adoption and contributed to the growth in our business.
We focussed on protecting the balance sheet from potential risks. We were proactive in
provisioning and also made the provisioning policy more conservative in fiscal 2021. Our
provisioning coverage ratio on NPAs was 77.7% at March 31, 2021. This excludes the Covid-
19 related provisions of about 1% of loans, held by the Bank.
We maintained a strong capital position and our capital adequacy ratios were well above the
minimum regulatory requirements. We raised ₹150.00 billion of capital through Qualified
Institutions Placement with the objective of further strengthening our capital adequacy and
improving our competitive position.
The private lender said the impact of Covid-19 pandemic is highly uncertain and will depend
on the virus spread, the effectiveness of steps taken by the government and RBI to mitigate its
economic impact. “The bank’s capital and liquidity position remains strong and would
continue to be the focus area during this period,” the bank said For the June quarter, the bank
made an additional Covid-19 related provision of Rs 5,550 crore. Adding March quarter, the
Covid-19 related provisions totalled Rs 8,275 crore. One must note that the provisions were
over and above regular bad loan budgeting done for the quarter Treasury income boosts Q1
net: A 36 per cent surge in the bank's profit was the result of a spike in treasury income which
rose more than 21 times to Rs 3,763 crore in the June quarter from Rs 179 crore in the year-
ago period. The bank sold a 4 per cent stake in ICICI Lombard General Insurance and 1.5 per
cent shareholding in ICICI Prudential Life Insurance, aggregating Rs 3,036 crore. This aided
the June quarter profit, which came in at Rs 2,559 crore.
Fee income falls on weak customer activity: Lower business volumes and customer activity
during the lockdown-hit quarter weighed heavy on the lender’s fee income that tanked 30.76
per cent to Rs 2,104 crore in the June quarter from Rs 3,039 crore in the year-ago period.
Retail fees, the bank said, accounted for 70 per cent of total fees
Growth in credit declines sequentially: ICICI Bank said its domestic advances rose 10 per cent
for the quarter compared with 13 per cent in the March quarter.
Retail loan portfolio grew 11 per cent and accounted for 54.4 per cent of the total portfolio as
of June 30, the private lender said. In the March quarter, retail advances stood at 16 per cent.
20
Growth in the domestic corporate portfolio was 8 per cent year-on-year. Total advances
increased 7 per cent YoY to Rs 6,31,215 crore from Rs 5,92,415 crore in the comparable
period last year.
“Loan growth was impacted by lower credit demand while fee income declined due to lower
borrowing and investment activity by customers and lower consumer spends. The slowdown in
the economy is expected to result in higher additions to non-performing loans, increase in
provisions, lower loan growth and fee income,” the bank said Deposits grew 21 per cent YoY
to Rs 8,01,622 crore, up 18 per cent YoY in the March quarter. Recoveries at Rs 757 crore:
Overall, recoveries and upgrades, excluding write-offs from non-performing loans stood at Rs
757 crore. Gross additions to NPAs stood at Rs 1,160 crore. Overall, gross non-performing
assets (NPAs) for the quarter came in at
5.46 per cent, which was lower than 5.53 per cent reported for the March quarter and 6.69 per
cent in the year-ago quarter.
The provision coverage on non-performing loans, excluding cumulative technical write-offs,
rose to
78.6 per cent from 75.7 per cent sequentially.

Analyst take

Lalitabh Srivastava, AVP research at Sharekhan said, operationally the number were better-
than- expected. “While the provisioning was higher, because of the asset sales the bank did the
prudent thing to make additional provision. Asset quality-wise performance was good.
Morarotium update suggests investors availing moratorium fell to 17.5 per cent in June quarter
from 30 per cent in March quarter. On face of it, it looks a decent number,” he said, ahead of
the bank’s Concall.
“The bank prudently utilized large gains on partial stake sale in insurance subsidiaries. The
portfolio under moratorium as of june 30 at 17.5 per cent was much lower that around 30
percent as of April end. Capital levels remain healthy and the planned equity raise would
further bolster it. Expect a strong positive stock reaction on Monday,” Mehta said.

21
FINANCIAL HIGHLIGHTS OF HDFC BANK
The financial performance for fiscal 2019-2020 is summarised in the following table:

22
23
•PRE-COVID PERFORMANCE OF HDFC-

HDFC Bank’s consolidated net profit for the June quarter increased 14% to ₹7,922 crore, but
the largest private sector lender reported reverses because of the second wave of the pandemic
which compressed its growth.When compared with the preceding March quarter’s ₹8,434
crore, there was a decline in the consolidated profit. On a standalone basis, the bank reported a
post-tax profit of ₹7,730 crore as against ₹6,659 crore in the year-ago period and ₹8,187 crore
in the January-March period.
Its core net interest income grew 8.57% to ₹17,009 crore on advances growth of 14.4% and the
net interest margin coming at 4.1%, while the other income grew 54.3% to ₹4,075 crore.
It can be noted that the year-ago quarter had a deep impact of the national lockdown and the
ensuing impact in economic activity, whereas the reporting quarter had an impact due to
localised lockdowns.
“These disruptions led to a decrease in retail loan originations, sale of third party products,
card spends and efficiency in collection efforts. The lower business volumes, coupled with
higher slippages, resulted in lower revenues, as well as an enhanced level of provisioning,” the
bank said in a statement.
The specific loan loss provisions jumped 54% to ₹4,219 crore, while the overall provisions,
including
₹600 crore set aside as contingency provisions, stood at ₹4,830.8 crore as against ₹3,891.5
crore.
The total credit cost ratio came at 1.67%, as compared to 1.64% for the quarter ending March
and 1.54% for the quarter ending June 30, 2020.HDFC Bank also said that the disruptions may
lead to a continued rise in the “number of customer defaults and consequently an increase in
provisions thereagainst”.
The bank, which is the first to report numbers for the quarter, said the gross non-performing
assets ratio increased to 1.47% as of June 30, up from the 1.32% in March and 1.36% in the
year-ago period.
It reported a 14.4% increase in assets for the reporting quarter when compared to the year-ago
period but the overall advances declined marginally when compared with March. When
compared to last year, retail loans grew 9.3%, commercial and rural banking loans grew 25.1%
and wholesale loans grew 10.2%.

24
Its deposit growth was 13.2% during the quarter and the share of the low-cost current and
savings accounts balances in the overall base stood at 45.5%.
Its total Capital Adequacy Ratio (CAR) was at 19.1% as on June 30 with the core Tier-1 CAR
at 17.9%.
The total number of employees increased to 1,23,473 at the end of the June quarter, as against
1,15,822 in the year-ago period. It had a network of 5,653 branches and 16,291 ATMs as of
June.
Among the subsidiaries, HDB Financial Services reported a decline in June quarter net profit
at ₹130.6 crore as against ₹232.7 crore on the back of a spike in dud assets to 7.75%.

POST-COVID PERFORMANCE OF HDFC-

HDFC Bank Ltd.’s quarterly profit rose 18%, buoyed by strong loan growth, as the
coronavirus
pandemic’s economic fallout waned.
Net income for the quarter ended September stood at 88.3 billion rupees ($1.17 billion),
compared to
75.1 billion rupees a year ago, according to an exchange filing on Saturday. That beat the
average estimate of 86.50 billion rupees by analysts in a Bloomberg survey.
The Mumbai-based lender is the country’s first bank to report second-quarter earnings, setting
thepace for a slew of results that may provide clues on the recovery path following the worst
of the coronavirus pandemic. HDFC Bank is looking to boost its retail lending portfolio in
contrast to the conservative approach over the past year when the pandemic had hit businesses
and curbed borrowers’ ability to repay loans.
The bank’s loans grew 15.5% from a year ago, about three times the banking sector’s rate. Its
gross bad loan ratio narrowed to 1.35% at the end of September, from 1.47% in the prior
quarter. It set aside 39.2 billion rupees toward provisioning in the September quarter, down
from 48.3 billion rupees three months before.
The bank’s retail push also coincides with a recent removal of a ban by the Reserve Bank of
India on issuing new credit cards. However, the central bank has retained its curb on launching
new online products by the bank after repeated technology glitches.
Despite disruptions and prevailing uncertainties, the global economic outlook continued to
improve. After a global economic contraction of 3.3% in calendar year 2020, the IMF is
projecting global growth to recover to 6% in calendar year 2021.

25
This is based on continued fiscal stimulus measures, accommodative monetary policies and a
wider coverage of a vaccinated population. The stronger than anticipated recovery is also
attributed to resilience and quick adaptation to life during a pandemic.
Communication and technology tools have enabled several businesses to ensure business
continuity, despite extant challenges. Yet, divergent recovery paths have resulted in widening
inequalities, particularly for contact-intensive sectors, the marginalised and low skilled
workers.
During the second quarter of FY21, as lockdown restrictions gradually eased, high frequency
indicators such as goods and services tax collections, e-tolls, auto sales, railway freight,
electricity consumption, amongst several others began exhibiting signs of recovery. The
economy recuperated with GDP growth contracting by 7.3% in the second quarter and
recording a positive growth rate of 0.4% in the third quarter of FY21.
As per advance estimates by the National Statistical Office, India’s GDP is expected to
contract by 8.0% in FY21. Notwithstanding uncertainties on the extent of recurrent waves of
infections, the Indian economy is expected to be on a recovery trend. In April 2021, the
Reserve Bank of India (RBI) had projected GDP growth for FY22 at 10.5%.
Other macro fundamentals of the Indian economy continued to remain strong. Total foreign
portfolio investment inflows in debt and equity stood at USD 37 billion in FY21. Foreign
exchange reserves stood at USD 577 billion as at March 31, 2021. India now holds the fourth
largest foreign exchange reserves in the world.
As at March 31, 2021, year-on-year bank deposit growth grew by 11.4%, however, bank credit
growth remained subdued at 5.6% despite sharp reductions in interest rates, reflecting a
continued risk averse environment.
In April 2021, India witnessed an eruption of a second wave of infections. This resurgence has
placed immense strain on the healthcare infrastructure of the country. Yet, India holds 60% of
the global vaccine manufacturing capacity and there remains hope of a speedy roll-out of
vaccinating its vast population. As of date, unlike in the previous wave of infections, there is
no national lockdown stipulated by the central government. Instead, the strategy of micro-
containment zones has been adopted and various state governments have announced
lockdowns or restrictions of varying degrees. At this juncture, there remains a great deal of
uncertainty on the impact the second wave would have on the Indian economy.

26
Housing and Real Estate Markets

The demand for housing remained strong during the year. Low interest rates, softer or stable
property prices, improved affordability, continued support of fiscal incentives on a home loan
and concessional stamp duty rates offered by certain states were factors that encouraged more
homebuyers. The housing market was buoyant with an increased number of first-time
homebuyers and buyers opting for larger homes or acquiring homes in another location. Given
the low mortgage to GDP penetration at 10% in India and the continued shortage of housing, it
is evident that the demand for housing is structural and not pent up demand.

Segments of the real estate sector continued to face stress. Construction activity came to a
complete halt in March 2020 with the announcement of the nationwide lockdown. Though by
June 2020, restrictions were gradually lifted, construction activities did not resume especially
in the major metro cities as there remained a paucity of labour. Following the end of the
monsoon season, from September 2020 onwards, activity on construction sites resumed.

Developers who were overleveraged in the pre-pandemic period were more severely impacted
by the pandemic. Given the prevailing conditions, many developers were willing to negotiate
in order to swiftly close out property deals. This helped reduce unsold inventories and improve
overall cash flows. Some developers increased their equity, entered into joint development
agreements, availed of last mile funding or monetised their non-core assets to improve their
financial positions.

The demand for data centres and warehousing increased, while sectors like retail and malls
were impacted by the pandemic.
During the year, the government announced various measures to help the real estate sector.
Some of these were:
COVID-19 was treated as ‘force majeure’ under the Real Estate (Regulation and Development
Act) 2016 and registration and completion timelines were extended by 6 to 9 months where the
expiry dates were on or after March 25, 2020.

The Credit Linked Subsidy Scheme for the middle-income groups (income levels of above ` 6
lac up to ` 18 lac) was extended by a year up to March 31, 2021

27
An additional ` 18,000 crore was provided under the Prime Minister’s Awas Yojana (Urban)
through extra budgetary resources.In July 2020, the Ministry of Housing and Urban Affairs
launched a scheme, Affordable Rental Housing Complexes for urban migrants/poor.In
November 2020, the government increased the differential rate between the circle rate and the
agreement value from 10% to 20%, for primary sales of residential units of value up to ` 2
crore. This is applicable till June 30, 2021. With effect from August 25, 2020, the state of
Maharashtra reduced the stamp duty on properties from 5% to 2% up to December 31, 2020
and to 3% from January 1, 2021 to March 31, 2021. Madhya Pradesh and Karnataka also
reduced stamp duty charges during the year. In January 2021, the Maharashtra government
reduced the premium charged by civic authorities on real estate development by 50% up to
December 31, 2021.

INTEREST RATES AND LIQUIDITY SCENARIO

In the initial months of the financial year, liquidity remained extremely tight. Given the
uncertainties due to COVID-19, credit markets turned very risk averse. However, with the
steady interventions by RBI through large infusions of liquidity, interest rates steadily
declined. In March 2020, RBI reduced the repo rate by 75 basis points (bps) and in May 2020
it reduced the rate by another 40 bps, thus aggregating an overall reduction of 115 bps.

Market rates began to inch up in the fourth quarter of FY21 against the backdrop of concerns
on rising infections, sharp rise in US treasury yields and due to the announcement of the
government’s large borrowing programme for FY22, estimated at ` 12 lac crore. RBI once
again intervened through various monetary tools and reiterated its commitment towards an
accommodative monetary policy stance to support growth and ensure an orderly evolution of
the yield curve. This helped to quell market concerns.

28
Overall, the total liquidity support announced by RBI since February 6, 2020 up to March 31,
2021, amounted to ` 13.6 lac crore. This entailed a combination of open market operations,
variable rate repos, long-term repo operations, targeted long-term repo operations (TLTRO 1.0
and 2.0), reduction in the cash reserve ratio and statutory liquidity ratio of banks, special
liquidity facility for mutual funds, refinance lines to NABARD, SIDBI, NHB and Exim Bank
and simultaneous purchase and sale of securities under special open market operations to
better manage the yield curve. The banking system remained in surplus throughout FY21 and
the surplus ranged between ` 2.1 lac crore and ` 6.7 lac crore.
During the year, there was a significant improvement in monetary transmission to deposit and
lending rates of banks. According to RBI, the weighted average lending rate on fresh rupee
loans declined by 107 bps since March 2020, in response to the reduction of 115 bps in the
policy repo rate.

29
 Learning Experience

As a student and doing research project, lot of things leaned from self-learning project that is
using Microsoft word very accurate manner.

In the General management research project, I leaned various Marketing strategy and some
getting knowledge about vast market

From this huge market I learn about Management to help understand company position in
market.

30
 Conclusion

This paper studies how the outbreak of COVID-19 impacts the Profitability of top two private
bank of India. Although net profit given us an idea of how well a bank is doing, but it does not
adjust for the bank’s size so consider this Performance analysis. Result of study showsthat-
Net profit analysis shows rapid growth in net profit of both bank which is 104% growth rate in
ICICI bank and 18% in HDFC bank in post Covid period.
ICICI Bank reported 8261.87 crore increase in its net profit for the financial year ended
March 31, 2021, at Rs 16,192.68 crore. The private lender had posted a net profit of Rs
7,930.81 crore in the financial year ended March 31, 2020
HDFC Bank reported 4859.87 crore increase in net profit. In financial year ended march 31,
2021, it was 26257 crore and in financial year march 312021 net profit is 31116.53.
Study shows that the HDFC bank and ICICI bank’s ROA also increase during post covid
period. ROE of ICICI bank increase in post Covid period but HDFC bank‘s ROE slightly
decline during post Covid period.
As result shown by this study that global COVID-19 crisis does not have the negative impact
on ICICI Bank and HDFC Bank. Both bank shows positive return during post covid period.
Study result also shows that ICICI bank growth rates of different return are comparatively
higher than HDFC bank’s.
Result of this study also indicate stability and soundness of both leading private sector Bank of
India as most of other sector growth declined during post covid period but these two private
sector bank shows positive during post covid period.

31
 Suggestions & Recommendations

In my study I have found some limitations. For thatI can suggest both companies following
suggestions or areas of improvement:-

 ICICI bank should try to provide better returns to its investors as compare to HDFC.
 Companies should try to make people initiative towards risk.
 There is a lot of differences in ratios.

32
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