The task of identifying a suitable company which will give maximum return on shareholder’s fund has been a major motivation for researching into State Bank of India (SIB). Analysis was carried out to give a detailed understanding of the company’s current performances and future potentials. Results have been discussed under three main sub-headings which Include: the company’s profile, SOOT analysis and Management performance analysis.
The final decision on the viability of Investing in SIB Is provided In the recommendations and conclusion. State sank of India (SABA) Is Indian’s largest bank, having a total number of branches of about 16,000 located both within and outside the country. The Bank has a long standing history which dates back to 1 955 when It was originally commissioned as community service banking. Trends have changed over the years however under the two mall operations of the Bank I. E. The Banking and Treasury Operations. See Table 1.
The Bank now caters to a range of banking needs Vela Its Banking operations which include: retail, international, corporate and national banking arms. Also its activities in treasury operations have seen it participating in the money market, force and reassure management. Furthermore SIB under the group name -SIB Group, has since been enjoying economies of scale by operating alongside other subsidiary companies of the group. These include; six associated banks, four foreign subsidiaries, four non Banking subsidiaries and two joint ventures.
See Table 2. Presently the Bank’s Balance Sheet size is worth about khaki core rupees (dollar equivalent) , also with revenue and profit quoted at INNERS,768. Million and INNER,643. Million respectively. SOOT Analysis Performing a SOOT analysis summaries Sis’s strengths and competitive position within the Market it functions in. The table below shows the details of the SOOT. Management Performance Analysis Provided below are the key performance indicators of the company calculated from its reported four years financial .
The details of the calculations are explained in the appendix. ROAR Between the periods of 2005-2007, the Bank’s Return on Asset (ROAR) witnessed a downward trend. This sharp decline was initially thought of as arising from the continued growing loan (advances) portfolio of the Bank. This opinion was however found to be far from what is represented in its asset base. The Total asset grew simultaneously also within the period. Hence scrutinizing into the asset structure indicated that the Bank’s Investment was also on the decline within this period.