PHASE-II

TABLE OF CONTENTS

S.no contents
1 INTRODUCTION
2 CAPITAL RATIO
3 ASSET QUALITY
4 MANAGEMENT ASSESSMENT
5 EARNINGS RATIO
6 LIQUIDITY RATIO
7 SENSITIVITY TO THE MARKET RISK
 INTODUCTION

 CAMELS MODEL:
The CAMELS model is a widely used framework for assessing the financial health and
performance of banks. It stands for Capital adequacy, Asset quality, Management quality,
Earnings, Liquidity, and Sensitivity to market risk. Each of these six components is
evaluated and given a rating, which is then used to determine the overall rating of the
bank.

Here's a brief overview of each component:

 CAPITAL ADEQUACY: This measures the bank's ability to absorb losses and
maintain a minimum level of capital. It includes ratios such as the Tier 1 capital
ratio, which compares a bank's core equity capital to its total risk-weighted
assets.

 ASSET QUALITY: This evaluates the quality of a bank's loan portfolio, including
the level of nonperforming loans and the adequacy of loan loss reserves.

 MANAGEMENT QUALITY: This assesses the effectiveness of a bank's

management and its ability to identify and manage risks.

 EARNINGS: This measures a bank's profitability, including factors such as net

interest margin and return on assets.

 LIQUIDITY: This evaluates a bank's ability to meet its short-term obligations,

including its ability to access funding in the event of a crisis.

 SENSITIVITY TO MARKET RISK: This assesses a bank's exposure to market

risks, such as interest rate risk and foreign exchange risk.

By evaluating each of these components, the CAMELS model provides a

comprehensive view of a bank's financial health and helps regulators identify
potential weaknesses or risks.

 CAMELS RATING:
The CAMELS rating is a system used by regulatory agencies to assess and
monitor the safety and soundness of banks and other financial institutions. The
rating is based on an evaluation of six key factors: Capital adequacy, Asset
quality, Management quality, Earnings, Liquidity, and Sensitivity to market risk.

Each of these six factors is assigned a rating from 1 to 5, with 1 being the best
rating and 5 being the worst. The ratings are then combined to give an overall
CAMELS rating, which ranges from 1 to 5, with 1 being the best and 5 being the
worst.

Here's how the ratings are typically assigned for each component:

Capital adequacy: A rating of 1 indicates that the bank has a strong capital
position, with sufficient capital to absorb potential losses. A rating of 5 indicates
that the bank's capital position is weak, with little cushion to absorb losses.

Asset quality: A rating of 1 indicates that the bank's loan portfolio is of high
quality, with few nonperforming loans and adequate loan loss reserves. A rating
of 5 indicates that the bank's loan portfolio is of poor quality, with a high level of
nonperforming loans and inadequate loan loss reserves.

Management quality: A rating of 1 indicates that the bank's management is

effective and capable of managing risks. A rating of 5 indicates that the bank's
management is ineffective and may not be able to identify or manage risks.

Earnings: A rating of 1 indicates that the bank is profitable and has strong
earnings potential. A rating of 5 indicates that the bank is unprofitable and may
have difficulty generating earnings.

Liquidity: A rating of 1 indicates that the bank has strong liquidity and can meet
its short-term obligations. A rating of 5 indicates that the bank has weak liquidity
and may have difficulty meeting its short-term obligations.

Sensitivity to market risk: A rating of 1 indicates that the bank has minimal
exposure to market risks and is well-positioned to manage such risks. A rating of
5 indicates that the bank has significant exposure to market risks and may be
poorly positioned to manage such risks.

Overall, a CAMELS rating of 1 or 2 indicates that a bank is considered to be in

good financial health, while a rating of 3, 4, or 5 indicates that the bank may have
weaknesses or deficiencies that require attention from regulators.
The CAMELS ratio for FEDERAL BANK & BANK OF MAHARASHTRA

is calculated and interpreted .

 CAPITAL ADEQUECY RATIO:

The Capital Adequacy Ratio (CAR) is a financial ratio used to assess a bank's
ability to absorb losses and maintain its financial stability. It measures the
amount of a bank's capital as a percentage of its risk-weighted assets (RWAs).

The CAR is typically calculated as follows:

CAR = (Tier 1 Capital + Tier 2 Capital) / Risk-Weighted Assets

where:
Tier 1 capital includes a bank's core equity capital, such as common stock and
retained earnings, which is the highest quality capital as it can absorb losses
without the bank having to stop operating.
Tier 2 capital includes other types of capital such as subordinated debt, hybrid
capital instruments, and loan loss reserves.
Risk-Weighted Assets are the bank's assets adjusted for credit, market, and
operational risk.

 DEBT EQUITY RATIO:

The Debt-to-Equity (D/E) ratio is a financial ratio that compares a company's
total debt to its shareholders' equity. It is a measure of a company's leverage and
indicates the extent to which it is relying on debt to finance its operations.

The D/E ratio is calculated as follows:

 D/E Ratio = Total Debt / Shareholders' Equity

where:
Total Debt includes all of a company's interest-bearing liabilities, such as loans,
bonds, and other forms of debt.
Shareholders' Equity represents the amount of capital that has been invested in
the company by its shareholders, including common stock, retained earnings,
and other forms of equity

 TOTAL ADVANCES TO TOTAL ASSET RATIO:

The Total Advances to Total Assets Ratio is a financial ratio that measures the
percentage of a bank's total assets that are comprised of loans and advances.
This ratio is an indicator of the extent to which a bank is relying on lending
activities to generate its income.

The Total Advances to Total Assets Ratio is calculated as follows:

Total Advances to Total Assets Ratio = Total Advances / Total Assets

where:
Total Advances include all loans and advances made by the bank to its
customers, including commercial loans, consumer loans, and mortgages.
Total Assets include all of the bank's assets, such as cash, investments, and
property and equipment.
BANK OF MAHARASTRA:

 Aboutthe Capital Adequacy Ratio, BOM recorded 17.53 percent, the highest
among PSBS, followed by Canara Bank at 16.72 percent and Indian Bank at 15.74
percent as on December 31, 2022
 In March 2021 the debt-to-equity ratio was 0.344 and from there it has risen
handsomely by 59.97 % this year to 0.551
  ASSET QUALITY

In the CAMELS model of banking, asset quality is one of the six factors used to evaluate
the overall health and performance of a financial institution.

Asset quality refers to the quality of a bank's loan portfolio and the ability of borrowers
to repay their debts.

Banks that have high-quality assets are likely to have lower levels of non-performing
loans (NPLs) and are better able to manage credit risk.

The assessment of asset quality in the CAMELS model considers the level and trend of
loan delinquencies and charge-offs, the adequacy of loan loss reserves, the quality of the
collateral securing the loans, and the overall credit risk management practices of the
bank.

A bank with strong asset quality will be less exposed to credit risk and more likely to
withstand economic downturns or other adverse events.

On the other hand, a bank with poor asset quality may struggle to remain financially
stable and may be more vulnerable to losses from loan defaults

FEDERAL BANK

Gross NPA 4136.74 4602.39 3530.83 3260.68 2795.62

Gross NPA in 3% 3% 3% 3% 3%
percentage
Net NPA 1392.62 1569.28 1607.17 1626.20 1551.96
Net NPA in 0.96% 1.19% 1.31% 1.48% 1.69%
percentage
Net NPA to 1% 1% 1% 1% 1%
advances in
percentage

INTREPRETATION – FEDERAL BANK

the constant GNPA percentage of 3% over the five periods suggests that the bank has
maintained a consistent level of credit risk in its loan portfolio.

The decreasing trend of GNPA values over the five periods suggests that the bank has
been successful in reducing its non-performing loans, which is a positive trend for the
bank's financial stability.The Net NPA to Advances percentage being constant at 1%
over the first four periods suggests that the bank has been able to maintain a low level
of non-performing loans in proportion to its loan advances. However, the increase to
2% in the fifth period suggests that the bank's loan portfolio may be facing higher credit
risks, leading to a higher proportion of non-performing loans.

In summary, the increasing trend of NNPA percentages over the five periods
suggests that the bank's asset quality is deteriorating. The constant Net NPA to
 Advances percentage of 1% over the first four periods suggests that the bank has
maintained a low level of non-performing loans in proportion to its loan
advances, but the increase to 2% in the fifth period indicates higher credit risk.
Overall, the bank should take corrective measures to mitigate credit risks and
maintain its financial stability.

BANK OF MAHARASHTRA

Gross NPA 5,327.21 7779.68 12152.15 15324.49 18433.23

Gross NPA in 4% 7% 3% 16% 19%
percentage
Net NPA 1276.57 2544.32 4145.38 4559.33 9641.19
Net NPA in 0.97% 2.48% 4.77% 5.52% 11.24%
percentage
Net NPA TO 1% 2% 5% 6% 11%
ADVANCES in
percentage

INTERPRETATION - BANK OF MAHARASHTRA

The increasing GNPA values and percentages over the five periods suggest that the
bank's loan portfolio has a higher level of non-performing assets, indicating a higher
level of credit risk.

A GNPA percentage of 19% in the fifth period suggests that almost one-fifth of the
bank's loan portfolio is non-performing.

This trend can be a cause of concern for the bank's financial stability and may require
corrective action to mitigate the risk.

Net NPA refers to the amount of Non-Performing Assets (NPA) that a bank has after
deducting the provisions made for these assets from the Gross NPA.

It is a more conservative measure of a bank's asset quality than Gross NPA.

The lower the NNPA, the better it is for the bank's financial health.

The increasing trend of NNPA percentage over the five periods indicates a deteriorating
asset quality of the bank.

This could be due to various factors, such as economic slowdown, weak credit risk
management, or poor recovery mechanisms.

The trend of Net NPA to Advances percentage over the five periods is also increasing,
which means that the proportion of NPA to the total loan advances given by the bank is
increasing.

This indicates that the bank is facing difficulties in recovering the loan advances and
may require further provisions to mitigate the risk.
MANAGEMENT EFFICIENCY:
Management efficiency is the component which ensures the survival and growth of a
bank. The bank takes crucial decisions depending up on the risk perception.
Management efficiency is evaluated by setting vision and goals for the organization and
ensuring they are achieved. This is used to assign premiums to higher quality banks and
discounts to those that are managed poorly.

Total deposit / This indicates the ability of a bank to convert its deposits into higher
Total advances earning advances
ratio
Business per This is used to find out whether a bank is relatively over or under
employee staffed
Profit per employee This is to check the efficiency of bank in maximizing profits per
employees

The ratio of total advances to total deposits is:

Federal bank

TOTAL DEPOSITS: Federal Bank gained 1.13% to Rs 139.20 after the bank said that its
Total deposits Rs Growth
Aggregate deposits 31 Dec Rs.2,01,425 cr 14.8% (compared to the
2022 previous year)
Aggregate deposits 31 Dec Rs.1,75,432 cr
2021
Customer deposits(excluding Rs.68,984 cr 12.8%(compared to the
interbank & COD) Q3 FY23 previous year)
Customer deposits 31 Dec Rs.1,70,654 cr
2021

Total deposits in federal bank is

2022 2021 2020 2019 2018

Deposits 181,700.59 172,644.48 152,290.08 134,954.34 111,992.49

TOTAL ADVANCES:

Total advances Rs Growth

31 Dec 2022 Rs.1,71,043 cr 19.1% (compared to the
previous year)
31 Dec 2021 Rs.1,43,638 cr
As per internal classification,

Retail Credit book 19.1%

Wholesale Credit book 19.0%
Ratio of retail & wholesale 54:46
 Total advances in federal bank is

20227 2021 2020 2019 2018

Total 144,928.32 131,878.60 122,267.91 110,222.95 91,957.47
advances

Bank of Maharashtra

TOTAL DEPOSITS: Both credit and deposits are growing at a healthy pace and the bank
is progressing at this rate, which will result in a shift in its business mix.(total advance
and deposits) of Rs 5 lakh crore.

The total business for the last quarter has increased by 16%, amounting to Rs
3,65,000crore. The Credit Deposit ratio stands at 75%, which is expected to rise by 200
basis points.

Total deposits & advances Rs Growth

Total deposits 2,08,000 cr increased by 12%
Total advances 1,57,000 cr Increased by 22%
Total deposits in Bank of Maharashtra

2022 2021 2020 2019 2018

Deposits 202,294.29 174,005.62 150,066.40 140,650.09 138,981.18

TOTAL ADVANCES:
Bank of Maharashtra, a public sector lender, reported a 28.65 per cent increase in its
gross advances for the second quarter ended September 2022, amounting to Rs
1,48,246 crore.(reference by business standards)

At the close of the September quarter of the previous year, the total advances of the
bank were worth Rs 1,15,236crore. The current account savings account (CASA) ratio to
total deposits rose from 53.91% to 56.27% when compared to the second quarter of the
preceding year.
Total advances in Bank of Maharashtra
2022 2021 2020 2019 2018
Advances 131,170.44 102,405.17 86,871.65 82,666.21 85,797.28

RETURN OF EQUITY:

Formula: ROE= Net profit/ Total shareholder’s equity

For the fiscal year ending March 2022, Federal Bank reported an increase in return on
equity of 11%, up from the previous year.
 Similarly, Bank of Maharashtra reported a return on equity of 9%, also an increase from
the previous year.

Profit per employee:

FORMULA: Business per employee = Total Income / No. of employees * 100

Profit per employee = Net profit / No. of employees * 100

Federal bank:
Per 2022 2021 2020 2019 2018
employee
ratio
Number of 12,641 12,592 12,496 12,227 12,112
employees
Interest 10,806,702.71 10,925,907.16 10,571,985.76 9,339,187.45 8,052,232.25
Income
per
employees
Net Profit 1,494,993.67 1,262,942.58 1,234,619.96 1,017,329.11 725,599.24
per
employees
Business 258,388,506.21 241,838,533.59 219,716,709.11 200,521,221.97 168,386,690.72
per
employees
Management 2022 2021 2020 2019 2018
Efficiency Ratio
Interest 6.18 6.83 7.31 7.16 7.05
Income/Total
Assets (%)
Non-Interest 0.94 0.96 1.06 0.84 0.83
Income/Total
Assets (%)
Operating -0.09 -0.17 -0.21 -0.06 -0.20
Profit/Total
Assets (%)
Operating 1.94 1.83 1.86 1.73 1.77
Expenses/Total
Assets (%)
Interest 3.48 4.08 4.73 4.54 4.46
Expenses/Total
Assets (%)

INTERPRETATION:
  The above-mentioned two indicators demonstrate that over the last five years,
the bank's income derived from interest- and non-interest-bearing sources has
increased. Compared to non-interest income, which has climbed from 0.94% to
1.06%, the ratio of interest income to total assets has gone up from 6.18% to
7.31%. This indicates that the bank is doing well in terms of income generation
and is probably going to keep performing well in the future.
 The operating income/total assets ratio displays the percentage of profit the
company generated in relation to all of its assets. A value that is low signifies that
the business has been losing money. The Operating Expenses/Total Assets ratio
shows how much the company spends in relation to its total assets. A higher
value signifies that the business is spending more relative to its overall assets.
The operating profit/total assets ratio is declining in the example above, while
the operating expense/total assets ratio is rising, which shows that the business
is spending more money than it is making. This means that the business is losing
money.
 Over the past five years, the interest expenses as a percentage of total assets
have generally climbed. From 3.48% in 2015 to 4.08% in 2016, 4.73% in 2017,
4.54% in 2018, and 4.46% in 2019, it has increased steadily. This suggests that
the business is increasing its debt load in order to fund its activities.

Per 2022 2021 2020 2019 2018

employee
ratio
Number of 12,721.00 13,128.00 12,532.00 12,913.00 12,932.00
employee
s
Interest 10,234,431.18 9,040,631.32 9,172,875.12 8,402,077.44 8,580,582.97
Income
per
employee
s
Net Profit 905,224.59 419,143.51 310,071.02 -3,704,697.90 -885,901.72
per
employee
s
Business 262,137,198.88 210,550,568.17 189,066,434.33 172,939,129.17 173,815,693.24
per
employee
s
Bank of Maharashtra:
 2022 2021 2020 2019 2018

Management
Efficiency Ratio
Interest 5.64 6.03 6.80 6.59 7.09
Income/Total
Assets (%)
Non-Interest 1.15 1.33 0.97 0.94 0.96
Income/Total
Assets (%)
Operating -0.65 -1.05 -0.74 -3.84 -1.69
Profit/Total
Assets (%)
Operating 1.66 1.81 1.82 1.87 1.72
Expenses/Total
Assets (%)
Interest 3.02 3.54 4.27 4.32 4.92
Expenses/Total
Assets (%)
INTERPRETATION:

 The two ratios offer insight into how efficiently a bank operates. In contrast to
the non-interest income ratio, which displays the amount of non-interest
revenue generated from total assets, the interest income ratio displays the
amount of interest income generated from total assets. While the non-interest
income ratio climbed from 0.96% in 2018 to 1.15% in 2022, the interest income
ratio declined over the course of the years from 7.09% in 2018 to 5.64% in 2022.
This shows that the bank's operations have improved over time because they
were able to boost non-interest income while decreasing interest income.
 The operating profit/total assets ratio gauges how effectively a business can turn
a profit off of its assets. By dividing the operational profit by the total assets, it is
determined. The aforementioned figures show that the company's ability to
profitably utilise its assets has declined over the past five years, going from -
0.65% in 2022 to -3.84% in 2019.
 The Operating Expenses/Total Assets ratio calculates how much the company
spends in comparison to its total assets. By dividing operational costs by total
assets, it is computed. The ratio of the company's expenses to its total assets has
decreased, as can be observed from the aforementioned statistics.
 The efficiency of a corporation in managing its debt is indicated by the interest
expenses to total assets ratio. A lower ratio shows that the business is more
financially responsible and capable of managing its debt. This ratio has dropped
over the last five years, from 4.92% in 2018 to 3.02% in 2022, showing that the
company has improved over time at managing its debt.
 EARNINGS
This rating evaluates whether the credit union’s current and future earnings are sufficient
to support its capital needs, taking into account its current and potential financial and
operational risks, as well as its strategic plans and potential changes in the economic
climate. Poorly managed credit risk or market risk can cause losses and affect earnings.
Depending too much on one-time gains or events can also diminish the quality of earnings.
In addition, future earnings could be negatively impacted by difficulty predicting or
controlling expenses, poorly executed business strategies, or exposure to other risks that
are not managed well.

The credit union’s earnings are based upon some of the following evaluation factors:

 The nature and sources of earnings;

 Ability to finance capital in proportion to current and future risk using retained earnings;
 Sufficiency of valuation allowances
 Sufficiency of budgeting systems, forecasting processes, and management information
systems, in general;
 Sufficient future revenues under a range of economic circumstances;
 Quality and composition of assets;
 Earnings exposure to market risk including interest rate risk; and
 Important elements that have an impact on the credit union's capacity to generate income, such
as fixed assets and other non-earning assets.

ASSESSMENT OF FEDERAL BANKS EARNINGS FOR THE FY 2022

1. Total deposits increased from Rs.1,72,644 crores in FY21 to Rs.1,81,701 crores in

FY22.
2. Net advances increased from Rs.1,31,879 crores in FY21 to Rs.1,44,928 crores in FY22.
3. Net interest income increased from Rs. 5,534 in FY 21 crores to Rs. 5,962 crores in
FY22.
4. Net total income increased from Rs. 7,492 crores in FY21 to Rs. 8,051 crores in FY22.
5. Net profit increased from Rs. 1,590 crores in FY21 to Rs. 1,890 crores in FY22.
6. Currently has a net interest margin of 3.20%.
 ASSESSMENT OF EARNINGS OF BANK OF MAHARASHTRA
 Total interest increased from Rs. 11,868.54 crores to Rs. 13,019.22 crores
 Total interest has increased from Rs. 14,493.81 crores and Rs. 15,671.70 crores
 Total operating expenses has increased from Rs. 3,565.06 crores to Rs. 3,849.01 crores
 After facing continuous loss Bank of Maharashtra has earned a profit or loss available
for of Rs.1,203.70 crores
 Company has delivered good profit growth of 23.3% CAGR over last 5 years.
 Company has low interest coverage ratio.
 The company has delivered a poor sales growth of 1.54% over past five years.
 Company has a low return on equity of 6.38% over last three years.
 Contingent liabilities of Rs.36,433 crores
 The bank has a high NPA: Average NPA of the last three years stands at 2.74%

ASSESSMENT OF EARNINGS BASED ON RATIOS

Basic Earnings Per Share –

A financial indicator to evaluate the total amount of profit earned per outstanding share of
common stock – calculated by dividing the company’s net income with total number of
outstanding shares of common stock – profitability on a per share basis.
Basic EPS = (Net Income – Preferred dividends)/Average number of common shares
outstanding.
Diluted Earnings Per Share –
A financial indicator that evaluates the earnings of a company on a per-share basis, taking
into account the potential dilution of existing shares from other financial instruments like
stock options, convertible bonds, or warrants – indicates the worst case scenario of
earnings per share that could occur if all potential dilutive securities were exercised.
Cash Earnings Per Share –
A financial indicator that evaluates the company’s eps based on cash flow from operating
activities – helps to find out the ability to generate cash from core business operations
Operating ratio –
 A financial indicator used to evaluate the efficiency of a company – by calculating its
operating expenses as a percentage of its net sales revenue – helps in comparing the
company with its peers – shows the efficiency of how a company manages its cost.
Book Value Per Share –
A financial indicator used to indicate the value of a company’s common equity per
outstanding share – to find out whether a stock is undervalued or overvalued in relation
to its current market price – market price per share is below book value per share
indicates a good investment opportunity.
Dividend payout ratio to net profit –
A financial ratio used to measure the percentage of a company’s net profit that is paid out
as dividends to its shareholders – helps in evaluating a company’s dividend policy and
sustainability –higher ratio beneficial for investors.
Net interest margin –
Net interest margin reveals the amount of money that bank is earning on interests on
loans compared to the amount it is paying in interest on deposits – one of the indicator of
a bank’s profitability and growth.
FEDERAL BANK:

RATIOS MARCH 22 MARCH 21 MARCH 20

BASIC EPS 9.52 8.34 7.94
DILUTED EPS 9.44 8.31 7.88
CASH EPS 10.01 8.83 8.42
OPERATING RATIO 68.40 71.71 68.20
BOOK VALUE PER SHARE 91.56 82.65 74.36
Dividend Payout Ratio 7.09 - -
To Net Profit
Net Interest Margin 3.16%

RATIOS MARCH 22 MARCH 21 MARCH 20

BASIC EPS 1.73 0.91 0.69
DILUTED EPS 1.72 0.88 0.69
CASH EPS 2.11 1.13 1.03
OPERATING RATIO 19.34 18.09 19.74
BOOK VALUE PER SHARE 18.29 16.71 16.30
Dividend Payout Ratio 0.50 - -
To Net Profit
Net Interest Margin 3.28%
Bank of Maharashtra:
On observing the above ratios Federal Bank is in a better position when compared to bank of
Maharashtra but net interest margin is high for Bank of Maharashtra.
LIQUIDITY :
Liquidity means the ability of the bank to meet its short-term obligation and its ability
to convert its assets to cash. The liquidity ratio helps to assess a company's ability to
pay off its debt in the short term.

There are two common types of liquidity ratios:

Current Ratio:

This is the ratio of a company's current assets to its current liabilities. It is calculated by
dividing the total current assets by the total current liabilities.

Quick Ratio (also known as the Acid-Test Ratio):

This is the ratio of a company's quick assets (cash, marketable securities, and accounts
receivable) to its current liabilities. It is calculated by dividing the sum of quick assets
by total current liabilities.

Federal Bank

Mar Mar Mar Mar Mar

31,2018 31,2019 31,2020 31,2021 31,2022
Current Ratio 2.29 2.03 2.73 3.46 3.00

Current Ratio 0.05 0.05 0.06 0.07 0.08

(Inc. ST Loans)

Quick Ratio 39.96 37.04 39.87 42.98 33.63

Fixed Assets 0.08 0.08 0.08 0.07 0.07

Turnover Ratio

INTERPRETATION:

1. The current ratio measures a company's ability to pay off its short-term
liabilities with its current assets. The current ratio has increased from 2.29 in
2018 to 3.00 in 2022. This indicates that the company has improved its ability to
meet its short-term obligations with its current assets over time.
2. This ratio is the same as the current ratio, but it includes short-term loans in the
current liabilities. The ratio has remained relatively stable over the years,
ranging from 0.05 to 0.08. This suggests that the company has been consistent in
its ability to meet its short-term obligations including short-term loans.
 3. The quick ratio measures a company's ability to pay off its short-term liabilities
using its most liquid assets, such as cash, marketable securities, and accounts
receivable. The quick ratio has fluctuated between 33.63 in 2022 and 42.98 in
2021. A decreasing quick ratio may indicate that the company has become less
able to pay off its short-term liabilities without selling its inventory.
4. This ratio measures how efficiently a company is using its fixed assets to
generate sales. The ratio has remained steady over the years, ranging from 0.07
to 0.08. This suggests that the company has been using its fixed assets
consistently to generate revenue.

Overall, the trend of the current ratio and the fixed assets turnover ratio suggests that
the company has been improving its financial health, while the quick ratio may indicate
some potential concerns about the company's ability to meet its short-term obligations
without relying on inventory sales. It is important to note that these ratios should be
analysed alongside other financial metrics to get a complete picture of the company's
financial health.

Bank of Maharashtra

Mar Mar Mar Mar Mar

31,2018 31,2019 31,2020 31,2021 31,2022
Current Ratio 2.85 1.41 2.77 1.83 1.30

Current Ratio 0.07 0.08 0.08 0.06 0.04

(Inc. ST Loans)

Quick Ratio 33.27 12.73 24.99 20.17 23.87

Fixed Assets 0.07 0.07 0.07 0.07 0.06

Turnover Ratio
INTERPRETATION:

1. The current ratio measures a company's ability to pay off its short-term
liabilities with its current assets. The current ratio has fluctuated over the years,
ranging from 1.30 in 2022 to 2.85 in 2018. A decreasing current ratio may
indicate that the company has become less able to meet its short-term
obligations with its current assets over time.
2. This ratio is the same as the current ratio, but it includes short-term loans in the
current liabilities. The ratio has fluctuated over the years, ranging from 0.04 in
2022 to 0.08 in 2019 and 2020. This suggests that the company has not been
consistent in its ability to meet its short-term obligations, including short-term
loans.
3. The quick ratio measures a company's ability to pay off its short-term liabilities
using its most liquid assets, such as cash, marketable securities, and accounts
receivable. The quick ratio has also fluctuated over the years, ranging from 12.73
in 2019 to 33.27 in 2018. A decreasing quick ratio may indicate that the company
has become less able to pay off its short-term liabilities without relying on
inventory sales.
4. This ratio measures how efficiently a company is using its fixed assets to
generate sales. The ratio has remained relatively steady over the years, ranging
from 0.06 to 0.07. This suggests that the company has been using its fixed assets
consistently to generate revenue.
Overall, the fluctuations in the current ratio, the current ratio (including short-term
loans), and the quick ratio may indicate potential concerns about the company's ability
to meet its short-term obligations, while the fixed assets turnover ratio suggests that the
company has been using its fixed assets consistently to generate revenue. It is important
to note that these ratios should be analyzed alongside other financial metrics to get a
complete picture of the company's financial health.
SECURITY ANALYSIS:
Sensitivity to market risk is the term used to describe the possible effects of
shifting market factors, such as interest rates, commodity prices, and exchange rates, on
the institution's financial performance. The sensitivity rating evaluates the institution's
capacity to control market risk as well as the potential consequences for the
institution's financial health. On a scale of one to five, where one represents the best
rating and five the worst, ratings are given.

INTEREST SPREAD RATIO:

Interest spread ratio = (spread/working capital)*100

Spread=interest received – interest paid

YEARS 2022 2021 2020 2019 2018

FEDERAL BANK 5.64 5.99 5.62 5.34 5.65

BANK OF 6.60 7.68 8.54 8.41 7.55

MAHARASHTRA

INTERPRETATION:

The interest spread ratio calculates a bank's profitability by subtracting the average
interest paid on deposits from the average interest gained on loans and advances. The
Federal Bank has kept its interest spread ratio consistent over the past five years, with a
most recent figure of 5.64 in March 2022 and a range from 5.34 in March 2019 to 5.99
in March 2021. In contrast, the Bank of Maharashtra's interest spread ratio has
fluctuated considerably, reaching a peak of 8.54 in March 2020 and a low of 6.60 in
March 2022. This metric can be used by investors to compare the performance of banks,
but it should also be taken into account in conjunction with other elements including
asset quality, liquidity, and capital adequacy.
BIBLIOGRAPHY:
 https://www.google.com/search?
q=federal+bank+moneycontrol&oq=FEDERA&aqs=chrome.0.69i59j69i57j46i13
1i199i433i465i512j69i60l5.2367j0j7&sourceid=chrome&ie=UTF-8
 https://www.federalbank.co.in/
 https://www.screener.in/company/FEDERALBNK/consolidated/
 https://www.screener.in/company/MAHABANK/consolidated/
 https://www.moneycontrol.com/financials/bankofmaharashtra/balance-
sheetVI/BM05
 Read more at: https://www.bqprime.com/business/bank-of-maharashtra-aims-
for-total-business-of-rs-5-lakh-crore-in-two-years