Submitted to:
Prof. Manohar Singh
Course-In-Charge
Financial Instruments and Markets
Submitted by:
Alok Kumar
Ankur Vashishtha
Rahul Srivastava
RaviKiran S
Rohin Agrawal
(P301413CMG293)
(P301413CMG389)
(P301413CMG337)
(P301413CMG343)
(P301413CMG347)
Table of Contents
Management Discussion Analysis
Financial Results
Circular Schedules & Reasoning
7
8
11
Country
India
Industry
Banking
NSE/BSE Listing
Mumbai 400018
Tel:-+91(22) 1669 9990
420, Niti-Nyay Complex,
Website
www.seybankindia.com
SEY Bank is the pseudo bank which began its operation with start of April, 2013. The bank
received a wonderful response from public through its services in General and Commercial
Banking. SEY Bank is a private bank and has a branch network of over 50 branches across
30 cities with 99 ATMs and two mega state of art operating centres at Mumbai and Noida.
The excellence in IT infrastructure, payment solutions and Human Resourcing has gained it
recognition as one of the fastest growing bank by prestigious Global Advisory firms.
SEY Bank mainly operates in
Treasury,
Corporate/wholesale Banking,
The portfolio contains numerous banking and financial solutions. The risk management and
financial solutions have proven to be beneficial for various large Corporate, MNC, and
public sector companies.
The companys corporate finance services include advisory and credit linked products for
the infrastructure sector clients; structured and project finance solutions for noninfrastructure clients; and specialized advisory services on financial restructuring.
The retail banking services provided are such as wealth management and global Indian
banking services; and retail products comprising savings and current accounts, fixed
deposits, and retail loans.
Sey Bank is steadily building corporate and institutional banking, financial markets,
investment banking, corporate finance, business (Small &Medium Enterprises) and
transaction banking, international banking, retail banking and wealth management
business lines across the country. The Banks constant endeavour is to provide a delightful
banking experience expressed with simplicity, empathy, and totality.
Bank has been able to create multiple robust relationships and teams are oriented with
core values of client servicing. These are facilitated through SEY Banks Leadership
delivering the best in financial needs market.
5
The GDP in India grew by 4.6% during FY2014. Growth was moderate due to
slowdown in industrial and service sector.
RBI while focusing on elevated inflation levels, reduced MSF from 10.25% to 8.75%
during September 2013. At the same time the repo rate increased to 8.0% on
January 2014.
Risk weights for individual housing loans upto Rs. 7.5 million is 50.0% with standard
asset provisioning of 0.4%.
Total number of branched opened in the Tier 1 centres during a year cannot
exceed the total number of branches opened in Tier 2 to Tier 6 centres in a year.
Also, at least 25.0% of total new branches opened in a year should be unbanked
rural Tier 5 and Tier 6 centres.
RBI issued draft on CCCB- Counter cyclical capital buffer would range from 0% to
2.5% of RWA of the bank.
Banks have to carry out stress test for credit risk and market risk.
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Value
CASA
CAR
ROE
SLR
Priority Sector Lending
Net Interest Margin
Cost to Income
Yield on Advances
Cost of Borrowing
CRR
22.03%
17.15%
22.72%
30.23%
41.00%
4.88%
77.03%
11.76%
7.42%
5.81%
Financial Results
Balance Sheet
Liabilities
2014
(mn)
Assets
Share Capital
Capital 1
51.76
Reserves and
surplus 2
Deposits 3
Borrowings 4
Other liabilities
and provisions 5
Total
13.57
680.56
195.52
58.59
Advances 9
Fixed assets 10
Other assets 11
1,000.00
Total
2014
(mn)
41.66
12.38
375.64
510.32
2.69
57.31
1,000.00
2014 ('mn)
91.56
15.79
107.35
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II.
EXPENDITURE
Interest Expenses 15
Operating expenses 16
Provisions and contingencies 17
Total
66.64
16.05
9.82
92.51
III.
PROFIT
Net profit for the year
Profit brought forward
TOTAL
14.84
14.84
2014
(mn)
51.76
1.52
0.02
12.03
-
Disclosed Reserves
General Reserves
Total Tier I Capital
65.32
Tier II Capital
Revaluation Reserves
(Discounted at 55%)
General Provisions and Loss Reserves
(1.25% of RWA or actual -lower)
Hybrid Debt Capital Instruments
2014 ('mn)
27.52
100%
Subordinated Debt
(Cannot be more than 50% of tier I capital)
Innovative Perpetual Debt Instruments
Total Tier II Capital
Particulars
27.52
32.66
7.07
62.11
2014 ('mn)
41.66
12.38
short notice 7
Investments 8
Advances 9
Fixed assets 10
Other assets 11
Total
375.64
510.32
2.69
57.31
1,000.00
100%
100%
100%
510.32
2.69
57.31
205.74
0.86
94.62
0.16
74.26
0%
125%
100%
100%
100%
1.07
94.62
0.16
74.26
95.99
100%
95.99
742.91
Investments in India in
Government securities
Shares
Debentures and bonds
Subsidiaries / joint ventures
Others (units, CDs / CPs, PTCs, security
receipts and NABARD deposits)
Off Balance sheet Items
Total RWA
Particular
2014
(mn)
65.32
62.11
127.44
742.91
17.15%
Tier 1 Capital
Tier 2 Capital
Tier 1 and 2 Capital
RWA
CAR
Parameter
RBI Guideline
Paid up
capital
requirement
for new bank
Limit on BG
Min paid up
voting equity
capital shall be
` 5.00 billion
Max of 10% of
paid up
capital+
reserve +
deposits
Min 40% of
Total advances
Loans and
advances to
priority
sector
Unsecured
guarantees
Max 15% of
Total
Bank
maintained
value for
FY2014
` 51.6
million
9.38%
41%
31.76%
Justification/Comment
5
6
7
8
and
unsecured
advances
SLR
requirement
CAR as per
BASEL II
outstanding
advances
CRR
Requirement
Board of
Directors
Min 4% of NDTL
Reserves
10
Base Rate
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BASEL II
Norms
Min of 22% of
NDTL
Min of 9%
Full time
directors age
limit max 70
years and
Number of
independent
directors
should be at
least 50%
Bank should
create a
reserve fund
not less than
25% of profit
before
dividend
declared.
As per the
calculations
mentioned by
RBI
Subordinated
debts should
not be more
than 50% of
Tier I capital
30.23%
17.15%
4%
Below 30
years
12.74%
At 10% as Int
charged=
11.74%; Int
given=
7.607%
42.13%
New Entrant into the market; would overcome this shortcoming through aggressive
marketing.
Possibility of losses in the future: Plans established to prevent the same from
happening; plans flexible to entertain the same.
Branch network building would determine the growth: If branch growth does not
work out as anticipated, projected financials can drop to a great extent.
10
NPAs: Rural penetration means greater chances of NPAs as well; Securities will be
ensured to mitigate the same.
12%
Corporate Finance
SMEs
18%
14%
Mortgages
15%
Commercial
12%
Automotive
8% 13%
Personal
8%
Housing
Infrastructure Finance
Rural Penetration will provide greater deposits as the SB a/c from rural markets
are in general terms greater than Urban Areas.
A greater emphasis will move towards housing, personal and commercial vehicle
loans as these will be in greater demand in the rural areas
Infrastructure finance, currently the bread and butter should move to a lesser
percentage as the risks associated with the same are very high with respect to
options that would be available.
Mortgages would also play a major role even in the future as risk to return ratios
are higher.
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