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Analysis of Profitability and Solvency of Bassein Catholic Co-Operative Bank Ltd.

Summer Internship Report submitted to the University of Mumbai in Partial Fulfillment for the award of degree of Master of Management Studies (Specialization: Finance)
(Manisha Prakash Gehlot)
(Roll No: 14)
Batch: 2017-19
For the Summer Internship at,
Bassein Catholic Co-Operative Bank

(Affiliated to the University of Mumbai, Approved by AICTE New Delhi) INDIA.
July 2018
Evaluation Report
Summer Internship 2017-19
Basic Information
Name of the Student:
Academic Year and Roll No:
Name of the Company:
Name and Designation of the Training Supervisor:
Area of Training:
Special Project, if any:
Score Card
Please rate the following attributes on a scale of 01-05.

(01=Average, 02=Good, 03=Very Good, 04=Excellent and 05=Outstanding)
Sr. No. Attributes Score
1 Attendance  
2 Punctuality  
3 Attitude  
4 Performance  
5 Initiative  
6 Interpersonal Skills  
7 Diligence Level  
8 Subject Knowledge  
9 Personal Grooming  
10 Communication Skills  
Total Score(Out of 50)  
Special remarks / Appreciation, if any :
Name & Signature of Training Supervisor Official Seal of the Company
This is to certify that the Summer Project titled “Analysis of Profitability and Solvency of Bassein Catholic Co-Operative Bank” is original work and being submitted in partial fulfillment for the award of the degree, Master of Management Studies of the University of Mumbai. This Summer Project report has not been submitted earlier either to this university, or, to any other affiliated college of this university, or, to any other university / institution for the fulfillment of the requirement of the MMS Course.

Date: ————————– ———————————
(Signature of Student)
Place: ————————————————————-
(Name of the student)
The satisfaction and contentment that accompanies the successful accomplishment would be incomplete without the humble and deep felt expression of gratitude to everyone who has made it possible.

I wish to express my sincere gratitude to Mrs. Brijdina Coutinho (CEO) for providing me the opportunity to undergo two months summer internship and project work in Bassein Catholic Co-op Bank Ltd.

I sincerely thank my mentor Prof. Prapti Naik for the guidance and encouragement in carrying out this project work.

I also wish to express my heartfelt gratitude to Mr. Algira D’silva (Branch Manager) and the Staff members of Bassein Catholic Co-op Bank Ltd Papdy Branch.

I also acknowledge with a deep sense of reverence, my gratitude toward my parents and family members, who has supported me morally as well as economically.
Any omission in this brief acknowledgement does not mean lack of gratitude.

Chapter No. Particular Page No.

Executive summary I Introduction
Chapter Contents
Company Profile
Organizational chart
Financials of the bank
Products and services 8
II Literature review ; Problem Statement
Chapter Contents
Literature review
Need for study
Objective of the study
Research methodology 12
III Process Description
Chapter Contents
Business growth of the bank
NPA’s 14
IV Project Profile
Chapter Contents
Industry overview
Introduction to profitability and solvency
Introduction to ratios
Ratios analysis of BCCB 18
V Findings and Conclusion
Chapter Contents
Future Scope
Conclusion 34
VI Learning Experience 36
VII Appendix 37
VIII Bibliography 38
Sr. No Particulars Page no.

Figure 1 Organizational Chart Figure 2 Business Growth Figure 3 Deposits Figure 4 Advances LIST OF TABLES
Sr. No Particulars Page no.

Table 1 Shareholding patterns Table 2 Financials of the bank Table 3 Deposits Table 4 Advances Table 5 NPA’s Table 6 Ratios Table 7 Business per employee LIST OF FIGURES:
Banking Sector Overview
According to the Reserve Bank of India (RBI), the banking sector in India is sound, adequately capitalized and well-regulated. The RBI is the central bank of India. All the Commercial banks, Co-operative banks and Development Banks are controlled by RBI. Indian financial and economic conditions are much better than many other countries of the world. The Indian Banking Industry is governed by the Banking Regulation Act of India, (1949) and is closely monitored by the Reserve Bank of India (RBI). The Indian banking industry is an INR. 64 trillion (US$ 1.17 trillion) market and by current growth rate it will be the third largest in the world by 2025
Market Size
The Indian banking sector is fragmented, with 46 commercial banks out of which 19 are nationalized banks. As of December 2014, there are 43 foreign banks from 26 countries operating as branches in India and 46 banks from 22 countries operating as representative offices in India. Further, there are two banks which have been categorized by RBI as “Other Public Sector Banks”. IDBI and Bhartiya Mahila Bank come under this category. State Bank of India with its around 17,000 branches and around 200 foreign offices, is India’s largest banking and financial services company by assets.

Short -term
Reserve Bank of India
2) Co-operative Banks in India
The term Urban Co-operative Banks , though not formally defined, refers to primary cooperative banks located in urban and rural areas. These banks, till 1996, were allowed to lend money only for non-agricultural purposes. This distinction does not hold today. These banks were traditionally centered on communities, localities work place groups. They essentially lent to small borrowers and businesses. Today, their scope of operations has widened considerably.
Structure of Co-operative Banking in India
The structure of co-operative network in India can be divided into 2 broad segments-
Urban Co-operative Banks
Urban Co-operatives can be further divided into scheduled and non-scheduled. Both the categories are further divided into multi-state and single state. Majority of these banks fall in the non-scheduled and single-state category.
? Banking activities of Urban Cooperative Banks are monitored by RBI.
? Registration and Management activities are managed by Registrar of Cooperative Societies (RCS). These RCS operate in single-state and Central RCS (CRCS) operate in multiple state.
Rural Co-operatives
The rural co-operatives are further divided into short-term and long-term structures. The short-term cooperative banks are three tiered operating in different states. These are
? State Co-operative Banks – They operate at the apex level in states
? District Central Co-operative Banks-They operate at the district levels
? Primary Agricultural Credit Societies – They operate at village level.
Likewise, the long-term structures are further divided into –
? State Cooperative Agriculture and Rural Development Banks – These operate at state-level.
? Primary Co-op Agricultural and Rural Development Banks – They operate at district level.


Head Office: PAPDY NAKA, VASAI (W), VASAI – 401207.

Register No.: TNA/BNK/102/1968, 06-02-1918.

RBI License No.: U.B.D./M.H.637P.

Jurisdiction: MAHARASHTRA
The Bassein Catholic Co-operative Bank Ltd. was established as Credit Co-operative Society –by Rev. Msgr. P. J. Monis on 6th February 1918 with the help of some social activist in Vasai, which has large Christian population.

On 13th March, 1986, the Credit Society was converted into an Urban Co-operative Bank and on 1st December 1990, it was awarded the prestigious status of a Schedule Bank by the Reserve Bank of India.

Since then the Bank has grown leaps and bounds registering deposit growth from `65.58 crore in 1990 to `3484.38 crore in 2014 and advances growth of `39.58 crore to `2336.90 crore during the same period. The Bank achieved a net profit of `80.81 crore for the year ended 31stMarch 2014 and was also successful in reducing gross NPA to 3.50%% with net NPA 0%. With the net worth of `543.95 crore the Bank has maintained industry best CRAR of 21.21% as on 31.03.2014.

With the present business mix of more than `5000 crore, the Bank is looking at bigger targets of business mix of more than `10000 crore in couple of years.

The Bank has 87786 active members.

The spectacular performance of the bank, over the years has been duly acknowledged by Co-operative Banking Association/Federations by bestowing the following awards.

The Maharashtra State Co-operative Banks Association Ltd., in the year 2014-15 awarded the Bank “Late Padmabhushan Vasant Dada Patil, Best Urban Co-op. Bank” amongst all scheduled/ multi state co-operative banks in Maharashtra.

Avis Publication has awarded the Bank “BANCO PURASKAR 2014”- 1st prize for the best performance for the financial year 2013-2014 in the category of Banks having deposits of Rs. 3000 to Rs. 5000 crore.

‘Sahakar Bhushan’ Award 2013-14 by Maharashtra Government.

‘Pratibimba’ Award 2013-14 for Annual Report by Sahakar Sugandha magazine published by Sahakar Bharti.

The Indian Banker magazine has given 1st rank to our Bank on the basis of Average Cost of Funds, Return on Assets, CRAR, and Business per Employees
Banking Frontiers Year 2011 Award for Excellence in Recovery & NPA Management in large Urban Co-Operative Banks Category
“The Best Performing Co-op. Bank Award 2008-09. 2ndposition from All India, 1st position from Maharashtra State and 4th highest deposits holding Co-op. Bank in India by INDIAN ACHIEVERS FORUM, New Delhi.

3rd, best Urban Co-op. Bank for the year 2007-08 having deposits above `500.00 crore by The Maharashtra Urban Banks Federation Ltd., Mumbai.

The Best Urban Co-op. Bank for the year 2004-05, 2005-06, 2006-07 and 2007-08 by The Maharashtra State Co-operative Bank’s Association Ltd., Mumbai.

The Bank has 54 Branches, 1Extension counter and 1Head office with 27 Onsite and 2 off site ATMs. All the branches operate on CBS.

The Bank is the first co-operative Bank in Vasai region who provides RTGS/NEFT services to its customers. The Bank also provides document franking services, SMS alert, E-Statement, Mobile banking, and multicity cheques facilities to its customers.

The Bank has tied-up with SIDBI for credit link Capital Subsidy (CLCSS) facility to the prospective MSME enterprises wish to avail loan for purchased of Plant and Machinery.

The Bank has sign MOU with CRISIL and SMERA for rating for Units enjoying/Proposed to enjoy credit limit of 25 lacs and above or borrowers intending to avail relaxation in rate of interest.

Through RuPay ATM Card the Bank has established access to more than 100000 ATMs of other banks all over India.

The Bank known for its best customer service enjoys trust and confidence of both its shareholders as well as customers.

The Bank has major share in establishing Cardinal Gracious Hospital, a leading hospital in Vasai and Gonsalo Garcia College in Vasai and numerous other medical, educational and social institutions.

Mission”To provide superior, proactive banking services to niche markets globally, while providing cost-effective, responsive services to others in our role as a development bank, and in so doing, meet the requirements of our shareholders &Help you to grow beyond.”
Mission Statement of the BCCB is as follows:
High quality financial services with state of the art technology
Fast Customer service
Sustainable growth strategy
Follow ethical standards in business
Steady return on shareholders’ equity
Innovative banking at competitive price
Attract and retain quality human resource
Vision”To become the bank of choice for needy, medium businesses and up market retail customers and to provide cost effective developmental banking for small business, mass market and rural markets”

Fig 1.1 Organisational Chart
The bank has 89,959 active members. The bank has authorised share capital of 1,50,00,00,000 and paid up share capital of ?91.60 Cr. The break-up of the paid up share capital has been given as follows:
Paid up share capital No. of shares Amount (Rs)
@ Rs.25 per share 3,28,10,333 82,02,58,325.00
@ Rs. 25 per share 38,34,910 9,58,72,750.00
Total paid up capital 3,66,45,243 91,61,31,075.00
Table 1: Shareholding Patterns
In the financial year 2016-17 the bank has reached business mix of Rs.9304 crore. Bank had increased its business by 17% which is better than industry average. It earned a net profit of Rs 75 crore in the financial year 2016-17. The performance for the year ended 31st March, 2017 is summarized below:

(? in Cr.)
Particulars March 31, 2017 March 31, 2016
% Growth
Capital + Reserves
758.35 628.11 Deposits 5567.46 4727.37 840.08 17.77
Advances 3467.00 2975.38 491.63 16.52
Total Business 9034.46 7702.75 1331.71 17.29
Gross profit
142.72 119.64 23.08 19.29
Net profit
75.68 71.72 3.95 5.51
Gross NPA’s
4.36%.. 4.11% – –
Net NPA’s
0.61% – –
Capital to Risk Assets Ratio (CRAR) 17.40% 18.06%
– –
Table 2: Financials of the bank

BCCB provides different types of banking product and services to satisfy its valuable customer. Because its diverse product it becomes favorable to its customer. The products that the BCCB provide recently to its customer are described below:
Various loans (Business Loans ,Vehicle Loan, Property Loan, Education Loans Business Development, Repairs and Renovation etc)
All Branches at CBS(Core Banking Service) facilities
Free SMS alerts and mobile banking
Multicity Cheque facility
Any Branch Banking Facility
RuPay Debit Card (95,000 ATM access)
Overdraft facility
NEFT, RTGS, ECS facility
E-Tax Payment
Franking Facility
Mobile Banking
Mutual Fund Investment
Net Banking
Fixed Deposits with Double benefit scheme, with quarterly interest scheme Recurring Deposits Schemes
NRI Banking

Fig 2: Business Growth
The opportunities thrown open by the robust Indian Economy were fully exploited by your Bank. Total business of the Bank grew by 17.29% from Rs. 7702.76crore to Rs. 9034.47crore. From year 2015-16 to year 2016-17 the growth in business is quite satisfactory though bank has business in rural area.

The Outlook for 2017-2018 has been brightened considerably by numbers of factors. First, with the accelerated pace o demonetization discretionary consumer spending held back by demonetization has picked up from the last quarter of 2016-17 and will gather momentum over several quarters ahead. Secondly, various proposals in the union budget for 2017-18 such as, stepping up of capital expenditure, boosting the agriculture sector and rural economy, promotion of affordable housing are expected to be growth stimulating. Abolition of FIPB (Foreign Investment Promotion Board) is likely to attract the higher FDI (Foreign Direct Investment) in the country. Implementation of RERA (Real Estate Regulatory Act) effective from 01.05.2017 and implementation of GST (Goods and Service Tax) effective from 01.07.2017 will change the way of goods and services to consumers happen.

This was an all-time high profit recorded by the Bank. The Bank has a strong position in financing foreign trade. Over 40 branches provide all types of services. The Bank has identified specialized target groups to develop core advantage for future growth. The Bank has specialized branches comprising of Corporate Banking Branches to undertake very large credit business, all branches cater to the requirements of high net worth customers. Apart from this, the Bank also has specialized department for Asset Recovery, legal department, training department and Treasury.

To effectively meet the ever-growing challenges and competition, the Bank has made a good head-way in bringing about technological up gradation. MIS and critical functions of controlling offices have been computerized. Area migrated to Core Banking Solution. New facilities such as, Telebanking, ATM & Signature Retrieval Systems have been introduced in a progressing manner to add value to services. Telebanking facilities with Fax on Demand facility, Remote Access Terminals for Corporate Customers are now available at many branches. The Bank has installed ATMs providing an inter- and intra-city connectivity, as a part of enhancing its decision support system. And net banking & mobile banking our lot of customers are taking advantages of enjoying the freedom of access to more than 90,000 ATMs of nearly75000 branches of various banks through NFS in all over India
Bank’s deposits increased from Rs.2974.16 crore to Rs.3484.38 crore. Bank has recorded growth of 17.77% in deposits during the year and total Deposits were Rs. 5567.46 Crore as on 31.03.2017. CASA Deposits for the year ended 31st March, 2017 is 27.23% as compared to last year which was 25.09%.

Years Deposits
2012-13 2974.16
2013-14 3484.38
2014-15 4169.86
2015-16 4727.37
2016-17 5567.46
Table 3: Deposits

Figure 3: Deposits
The Bank’s net advances increased by 14.78% i.e. from Rs.2036.04 Crore to Rs.2336.90 Crore. Considering the restrictions imposed by Reserve Bank of India on lending to Housing and Real Estate Sector etc., the growth of advances is considered extremely satisfactory. The CD ratio is 67.07% for the year ended 31.03.2014 which is considered adequate and within RBI norms.

2009-10 2036.04
2010-11 2336.91
2011-12 2603.31
2012-13 2975.38
2013-14 3467.01
Table 4: Advances

Figure 4: Advance
Through continuous monitoring and concerted efforts at all levels, the Bank tried its best to improve asset quality. In spite of these recovery efforts, there are occasions of an advance becoming non-performing due to external factors affecting the business of the borrower. Though Gross NPA of bank in current financial year has increased to 3.50% form 2.53% as compared to last year a care has been taken to arrest slippages and keep stricter vigil on performance of the borrower accounts. The Bank maintained its net NPA to 0%
Years Amount % of gross NPA to Gross Advances
2009-10 36.53 3.03%
2010-11 34.03 2.46%
2011-12 33.07 1.93%
2012-13 51.54 2.53%
2013-14 81.77 3.50%
Table 5: NPA’s

Capital funds of your bank have increased fromRs. 483.70 crore to Rs. 543.95 crore. As business of the bank is increasing,asset base of the bank which mainly consists of advances and investment, the risk weighted assets of the Bank have increased sizably.

According to the guidelines of Reserve Bank of India, the Scheduled Urban Co-operative Banks are required to maintain prescribed CRAR of 9%.Inspite of increased risk weighted assets, banks CRAR as on 31st march 2014 is 21.21% which reflects the banks sound financial position.

Our all Branches are in Core Banking Environment enabling customers to transact through any branch. Bank is committed to provide personalized, speedy and cost-effective services through best technology. Bank provides 24X7X365 services like BCCB-ATM and BCCB-Mobile Banking for customers. During the year, with the help of NPCI, Bank introduced Inter Bank Mobile Payment System (IMPS). Bank also implemented National Automated Clearing House (NACH) for ECS Debit and Credit. This Bank ranks 8th Co-operative Bank in India to provide Mobile Banking Service. Account Balance Enquiry, Account transaction history, Intra Bank Account Fund Transfer, Inter Bank Account Fund Transfer, ATM Card Hot Marking, Stop Payment of cheques etc. are possible through BCCB-Mobile Banking. Through NPCI, Bank is also launched RUPAY DEBIT Card.

To prevent/reduce risk in ATM transactions, Fraud Monitoring Software is also being introduced with the help of NPCI.

Anti-Money Laundering Software is being activated as per RBI guidelines. With the help of NPCI, Bank has started linking Aadhar Card based subsidy credits in customer accounts which is a Core Banking Solution, Mobile Based Payment of utility Bills like Telephone / Mobile Bill, Electricity Bill, Mobile / DTH Recharge etc. Bank promises to provide you, technology based extended delivery channels to widen the reach of the Banking.

The Bank’s HR practices aim at providing regular and equal opportunities to all while at the same time motivating the competent employees. A number of initiatives were taken by the bank towards realigning the human resource strategy with the changing business requirements. An Employee Motivation Scheme introduced last year was in force to cover a large section of the employees of the bank. In order to recognize the performance of an individual and at the same time recognize the collective performance of the team as a whole, the awards were given for individual as well as team performance. Bank is moving closer to performance driven culture.

A number of initiatives were taken by the bank in ensuring upgradation of the skills required by the staff members to take on the challenges posed by the competitors. In-house training programmes were conducted to upgrade the knowledge and skill levels of employees with special emphasis being on IT.

The Industrial Relations in the Bank are cordial and harmonious. To emphasize, not a single man day was lost on any of the issues pertaining to the Bank. The representatives of Workmen Union, Officers Association and Management have been working collectively for achieving all round growth and prosperity of the Bank. On account of cordial relations, the Bank has achieved considerable growth over the year.

The Indian economy is on an expansionary path and has moved from a phase of moderate growth to one of high growth. Real Gross Domestic Product increased by 5.5% in the advance estimates of CSO. The notable features in the current growth phase are high rate of investment, growth in the infrastructure sector, huge foreign capital inflows and reduction in fiscal deficit. Rising inflation continued to be an area of concern with an average inflation rate of 6% during the year 2013-14 Industrial activity picked up in an environment of favorable demand conditions, strong corporate profitability and business optimism. The growth impulses within the industry also spread to manufacturing sector. Strong growth in Trade, Hotels, Transport and Communications, as well as Finance, Insurance and Real Estate Sectors together boosted growth in the services sector, which grew at 15% during 20013-14as against 11% a year ago.

Fiscal deficit was lower than the budget estimates at 3.7%. Faster growth in imports and a relative slowdown in exports contributed to the Country’s adverse trade balance. Money supply grew at an accelerated pace. The year on year growth during 2013-14 was 21.21% driven mainly by higher deployment of credit by commercial banks.

Deposits mobilized by scheduled commercial banks marked a year on year growth of 17.15% during 2013-14. The growth in deposits has been lagging behind credit growth since the beginning of the year. The ongoing boom in the economy has kept the demand for credit buoyant.

At the end of March 2013, growth in Credit as well as Deposits was below the targets set by RBI for banking sector. Due to pressure of growth and maintaining assets quality, on one hand and better returns offered by alternative sectors of bullion, real-estate on the other hand, banks were forced to offer high rates of interest to attract the depositors.

While offering higher rates, banks has also to ensure that significant low cost deposits ratio (CASA) is preserved. It was challenge in the face of reality. Pressure to maintain assets quality was ever present. Year 2013-2014 is also not seen to be difficult than financial year 2012-2013 in terms of growth with continuous stress on assets quality and margins. Against above mentioned exceptionally adverse conditions, it was a good year for Catholic Bank. Notwithstanding the challenging conditions, your Bank has proved again, its ability to generate satisfactory results during F.Y.2013-14.

Risk Management
The Bank has adopted an integrated approach to risk management. Risk Management is a Board driven function in the Bank. At the apex level, there is a Board level Risk Management Committee. At the operational level, a full-fledged Risk Management Department headed by a General Manager has been put in place. The Bank also has Committees of top executives for managing various risks viz. – Asset Liability Management Committee (ALCO) for management of market risk. Credit Risk Management Committee (CRMC) for management of credit risk, Committee for Operational Risk Management (CORM) for management of operational risk.

All major policies for Enterprise wide risk management, Credit risk management, Operational risk management, Market risk management, ALM and Dealing room operations are put in place. Based on the recommendations of the Risk Management Consultants IMACS (ICRA Management Consulting Services), systems and tools including introduction of new rating models having greater granularity in ratings are in the process of implementation. In tandem with rolling out revised credit rating models, the bank has geared up support functions in upgrading technology and MIS. CBS has been implemented in 32 branches. Data warehousing project is at an advanced stage of implementation to provide comprehensive information for analysis. Risk Profile of the Bank is updated quarterly. The Bank has been undertaking parallel run for computation of capital adequacy under New Capital Adequacy Framework (Basel II) based on Standardised Approach for Credit and Market Risk and Basic Indicator Approach for Operational Risk and is geared up to align with RBI’s draft guidelines for undertaking computation of capital charge and migration to Basel II effective 31.03.2008.

Going forward the Bank is preparing for migration to more sophisticated approaches. A roadmap for enhancing the effectiveness and robustness of risk management systems has been prepared by the Bank.

Well defined Audit policies duly approved by Audit Committee of Board of Directors and Manual of Instructions are in place for various types of audit. Consequent upon bringing more and more branches under Core Banking Solution, a well-defined Information Systems, Audit policy has also been put in place.

Concurrent Audit has been further strengthened covering 81.27% of Advances and 66.84% of Deposits of the Bank as against the RBI stipulated level of 50% of each. Information Systems Audit of 34 Branches and other Offices has been carried out as per schedule during the year. In line with the objectives of Risk based supervision of Banks propounded by the Reserve Bank of India, all the branches have been brought under Risk based Internal Audit system for the 4th year in succession.

An empirical approach has become very popular during the recent years. The reason for the growing popularity of the subject is that it primarily concerns with the concept and techniques of the analysis of profitability which can be advantage only used by managers, creditors, owners.
Analytical and critical assessment of the various aspects of financial principles helps judicious application of assets and enables to take right decision at right time. A comprehensive idea is gained to run day to day business in proper perspective.
The significance of production/operation, marketing, finance and personnel management is being increasingly realized in modern-corporate world both in India and abroad.
This realization has come into light because of increasing complexities of the task of managers and administrators. These branches of management help the managers to reach the objectives of an organization.
A study of these management activities enables the people, engaged in either small size unit or a large core industry, to understand their objectives and the way how to achieve them successfully.
Profit & Profitability
1.       Concepts of Profit:
Profit plays an important role in every business organization and its determination is really a tough one. Profit is not only concern with the proprietors but also income-tax authorities, managers, directors etc. because all of them are get a profit. Even the accountants are not unanimous on this matter.
   Now question arises, “What is Profit?”
   Law and even the accountants have not defined the word “Profit”. Generally speaking “The Profit of Business during a given period is the excess of income over expenditure for the period.” It may arise from other sources.
   Maximization of profit has ever been one of the important goals of every business enterprises. The existence, continuance and expansion of business depend, to large extent, on its capacity to earn a good amount of profit every year.
   The efficiency of a business is measured by the amount of profit earned. A company should earn profits to serving and grow over a long, period of time. The adequacy of profits says Koran and Boyd. “Underlies the entire financial structure of a firm. Only if a company to earn profit will it survive in the long run.
   Profits are essential, but it would be wrong to assume that every action initiated by the management of the company should be aimed at maximization of profits, irrespective of social consequences. “It is unfortunate that the word profit is looked upon as a term of abuse since some firms always act to maximize profits at the cost of employee’s customers and society.”
Key performance indicators (KPIs) for banks
External factors that affect the performance of financial institutions include:
Technology changes
Government policies (fiscal and monetary policy)
Bank management cannot control these factors. The best they can do is tried to anticipate future changes and position the institution to best take advantage of these changes. Managers of banks, can however, control many internal factors. The KPIs will, therefore, focus on these controllable factors, some of which are:
Operating efficiency
Expense control
Tax management
Efficiency and expense control ratios.

These ratios describe how well the financial institution controls expenses relative to producing revenues, and how productive employees are in terms of generating income, managing assets, and handling accounts.

It is mandatory that banks meet investors’ demands for liquidity. However, there is a trade-off since more liquid assets generally yield lower returns.

Financial institutions face many risks including losses on loans and losses on investments. Financial institution managers must limit these risks in order to avoid failure of the institution (bankruptcy).

The bank expects the borrowing firm to conduct its business prudently, mitigate risks, be cost effective and thus generate enough profits to cover long-term debt obligation; taxes and other statutory payments; pay reasonable dividends to equity holders; and thereafter leave a surplus for plough back onto reserves or invest in high yielding projects.
Financial analysis:
Financial analysis is done with the help of calculating financial ratios to show weather the firm’s position is improving or not.

Leverage or solvency ratio:
The leverage and solvency ratios tells how efficiently the firm is managing its assets
Net profit ratio (NP ratio):
 It is a popular profitability ratio that shows relationship between net profit after tax and net sales. It is computed by dividing the net profit (after tax) by net sales.

Net Profit ratio = Net profit after tax (NPAT)/Net sales
For the purpose of this ratio, net profit is equal to gross profit minus operating expenses and income tax.  All non-operating revenues and expenses are not taken into account because the purpose of this ratio is to evaluate the profitability of the business from its primary operations. The relationship between net profit and net sales may also be expressed in percentage form. When it is shown in percentage form, it is known as net profit margin. 
Return on Capital Employed (ROCE)
A financial ratio that measures a company’s profitability and the efficiency with which its capital is employed. Return on Capital Employed (ROCE) is calculated as: ROCE = Earnings before Interest and Tax (EBIT)/Capital Employed
Instead of using capital employed at an arbitrary point in time, analysts and investors often calculate ROCE based on “Average Capital Employed,” which takes the average of opening and closing capital employed for the time period.A higher ROCE indicates more efficient use of capital. ROCE should be higher than the company’s capital cost; otherwise it indicates that the company is not employing its capital effectively and is not generating shareholder value.

Return on shareholders fund:
It is useful for comparing the profitability of a company to that of other firms in the same industry. Investors wishing to see the return on common equity may modify the formula above by subtracting preferred dividends from net income and subtracting preferred equity from shareholders’ equity, giving the following:
Return on shareholders fund = NPAT/ Shareholders fund*100
Earnings per share:
Earnings per share are generally considered to be the single most important variable in determining a share’s price. It is also a major component used to calculate the price-to-earnings valuation ratio.

Earnings per share (EPS) =NPAT-PRF DIV/NO OF SHARES
When calculating, it is more accurate to use a weighted average number of shares outstanding over the reporting term, because the number of shares outstanding can change over time. However, data sources sometimes simplify the calculation by using the number of shares outstanding at the end of the period.

Proprietary ratio:
The proprietary ratio (also known as net worth ratio or equity ratio) is used to evaluate the soundness of the capital structure of a company. It is computed by dividing the stockholders’ equity by total assets.

Proprietary ratio = Shareholders fund / Total asset * 100
The proprietary ratio shows the contribution of stockholders’ in total capital of the company. A high proprietary ratio, therefore, indicates a strong financial position of the company and greater security for creditors. A low ratio indicates that the company is already heavily depending on debts for its operations. A large portion of debts in the total capital may reduce creditor’s interest, increase interest expenses and also the risk of bankruptcy.

Debt to equity ratio:
A measure of a company’s financial leverage calculated by dividing its total liabilities by stockholders’ equity. It indicates what proportion of equity and debt the company is using to finance its assets.

Debt to equity ratio = Total liabilities / Shareholders Funds
A high debt/equity ratio generally means that a company has been aggressive in financing its growth with debt. This can result in volatile earnings as a result of the additional interest expense.

If a lot of debt is used to finance increased operations (high debt to equity), the company could potentially generate more earnings than it would have without this outside financing. If this were to increase earnings by a greater amount than the debt cost (interest), then the shareholders benefit as more earnings are being spread among the same amount of shareholders. However, the cost of this debt financing may outweigh the return that the company generates on the debt through investment and business activities and become too much for the company to handle. This can lead to bankruptcy, which would leave shareholders with nothing.

RATIOS 2010 2011 2012 2013 2014
=NPAT /NET SALES *100 14.8% 19.4% 19.2% 17.7% 18.8%
=EBIT/CAPITAL EMPL*100 13.3% 17.9% 14.4% 17.4% 18.3%
=NPAT/SHR HLDFUND*100 10.6% 15.4% 14.8% 13.3% 14.8%
=NPAT-PRF DIV/NO OF SHR 14.11 20.47 20.55 20.94 24.5
=SHR HLD FUND/TOTAL ASSET*100 10.6% 12.4% 12.6% 13.2% 12.5%
=BORRWD FUND/SHARE HLD FUND 0.20 0.14 0.07 0.12 0.04
=BORWD FUND+PREF CAP/ EQUITY CAP+R/S 0.20 0.14 0.07 0.12 0.04
=NPAT-PRF DIV/EQ CAP +R/S 10.6% 15.4% 14.8% 13.3% 12%
Table 6: Ratios
Particular 2010-11 2011-12 2012-13 2013-14
Business per employees 7.65cr 9.03cr 10.41cr 12.13cr
Profit per employee in lacs (net)
7.75 lacs 9.58 lacs 13.66 lacs 16.84 lacs
Table 7: Business per employee
From this analysis we came to know that the GrossNPAwhich showsthat there is a slight increase that is from 2.53% to 3.50% at the end of the year. But still the bank continues to maintain its zero level of Net NPA.

We also come to know that the business per employee has grown from Rs. 10.41 crore to Rs. 12.13 crore and the net profit per employee has grown from Rs. 13.66 lacs to Rs. 16.84 lacs.

In the overall performance we can see that the Bassein Catholic bank is also performing well in Cooperative sector. But the core reason for better improvement is good public relation.

Continuous inflow of foreign capital is going to makehigh economic growth by throwing up new opportunities for banks.

The bank has taken various business & I.T. initiatives during the year to ensure that emerging challenges and competition can be faced successfully.

Taking into account the changing requirements of customers, new products are being launched by the Bank.

Bassein Catholic Co-operative bank continues to be among the top banks in Co-operative Banking sector.

Bassein Catholic Co-operative bank should introduce new type of technology like net banking for better consumer satisfaction.

Bassein Catholic Co-operative Bank Magazine (2013)
Bassein Catholic Co-operative Bank annual report 2013-2014
Bank Website: –

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