Overview of Banking Industry Outlook   Preface | Foreword | Executive Summary | Methodolgy | Industry Report | Industry Insights | Award Winners | Company Listing | Launch Event | Editorial Team| Sponsors Alphabetical Listing Total Income Net Profit Total Assets Growth in Advances Growth in Deposit Total Employees Branches Listing ATM Wise Listing

The Indian banking industry has remained largely unaffected and has been an island of calm amidst the turmoil that the global financial sector has seen in the recent past. The Reserve Bank of India, India’s central bank, has introduced and implemented a variety of prudent monetary initiatives that have helped domestic banking & financial industry cope with the uncertainty that has plagued the banking sector worldwide. ‘India’s Top Banks 2009’ captures the development of banking in the country during FY08 and evaluates the scheduled commercial banks (SCBs), consisting of 27 Public Sector Banks (PSBs), 22 Private Sector Banks and 28 Foreign Banks. The 77 SCBs reported strong performance during this period. These banks together reported 23.1% growth in deposits, while advances and assets grew by 25% each. Highlights of the performance of these banks during FY08 have been summarised below: During FY08, the total asset base of 77 SCBs was equivalent to 91.8% of India’s GDP at current market prices. Close to 80% of the total assets of SCBs was dominated by 22 large sized banks with a balance sheet size of more than Rs 600 bn each. These comprise of 16 PSBs, three Private Sector Banks and three Foreign Banks.

• Deposits of Private Sector Banks have outperformed all other SCBs on the back of some aggressive expansion over the last couple of years by leading Private Sector Banks. Deposits of Private Sector Banks grew at a CAGR of 26% during FY04 – FY08, as against an overall CAGR of 20.5% by all SCBs.

• PSBs dominated the SCBs, accounting for more than 66% share of the combined total income comprising of interest income and non-interest income of all SCBs. Interest income, a major constituent of the total income of banks grew at a CAGR of 21% over the past four years. Fee based income, a constituent of non interest income increased sharply, growing at a CAGR of 27% between FY04 – FY08 - outperforming other segments of income including interest income. Over the last couple of years, fee based services have been an area of focus for private banks, who have looked to increase their presence in areas like investment banking and M&A deals – services that were especially lucrative in a high growth economy like India. Fee based income of Private Sector Banks grew at a CAGR of 45% between FY04 – FY08, outperforming its foreign and public sector peers whose fee based income grew at a CAGR of 35% and 18% respectively for the same period.

• Off balance sheet exposure of SCBs, increased by a sharp 88.4% in FY08, indicating the sharpest rise in recent years. Within this, the exposure to forward exchange contracts rose by 94.6%, driven by the frequent and sometimes severe fluctuations in the currency market.

• Retail banking generated high business volumes for both PSBs and private sector banks, constituting the majority of their revenue. Retail banking held a 41% share of the total revenue generated by PSBs while it was 36% for private sector banks. For Foreign Banks that have exposure to retail banking, the share was approximately 36%.

In the background of the current economic slowdown, even though India has been largely insulated against the effects of the downturn in the global banking sector, Indian banking could go through a period of muted growth in terms of business and profitability in FY09. D&B will continue to track this sector and enhance the utility of this publication as an authentic and highly reliable guide.

Kaushal Sampat
Chief Operating Officer
Dun & Bradstreet India