B U S I N E S S & CO R P O R

AT E F I N A N C E

Banking Industry
By G r o up 16 -

Kartik Chugh(220101056)
Shubham garg(220101194)
 JP Morgan
Business of JP Morgan Value Creation Model of JP Morgan
JP morgan is a leading global financial services firm with assets of $2.6 JPMorgan provides financial services to consumers, small businesses, large
trillion. corporations, governments, and other clients.
It is a leader in investment banking, financial services for consumers, small Its Consumer & Community Banking segment is the largest source of
business, commercial banking, financial transactions processing and asset revenue.
management. The Corporate & Investment Bank segment is the largest source of net
Account access and management income.
Moving money, Security JPMorgan has agreed to acquire a stake in European cloud-based payments
Wealth management & investing fintech company Viva Wallet.
Business banking, Corporate & investment banking
Home & Auto, Financial health
Small businesses, Credit card, Commercial banking
Travel, shopping & entertainment
 JP Morgan
Return and Risk of JP Morgan Board of directors of JP Morgan
Risk of JPM = 29.58%
JP Morgan
1 day return= 0.76% annual equivalent return= -35.6%
1 week return= 2.56% annual equivalent rate=-24.46%
1 month return= 1.0284% annual equivalent return=11.982%
6 month return=21.8855% annual equivalent return=47.1525%
1 year return= -16.0412% annual equivalent return= -16.0412%
3 year return= 7.5084% annual equivalent return= 2.4381%
5 year return= 44.0495% annual equivalent return=7.5685%
 JP Morgan
Beta and Cost of capital Relative valuation

Beta= 1.13 JP Goldman Morgan

WACC = 0.142   Industry Morgan sachs stanley

EV/Sales 3.1 3.3 2.7 2.9

EV/EBITDA 7.9 8 7.1 7.3

P/E 7.8 11.6 10.5 14.1

Price/Cash
Flow 5.6 8.7 2.4 11.7

Price/Book 1 1.6 1.1 1.6

Dividend Yield 4.10% 3.00% 2.60% 3.50%

 JP Morgan
Capital structure of JP Morgan Dividend Policy
Weighted Cost of debt:- 0.016 The Board of Directors of JPMorgan Chase & Co.
(NYSE: JPM) (“JPMorgan Chase” or the “Firm”)
Weighted Cost of equity:- 0.126 declared a quarterly dividend of $1.00 per share
WACC = 0.142 on the outstanding shares of the common stock of
JPMorgan Chase. The dividend is payable on
October 31, 2022, to stockholders of record at the
close of business on October 6, 2022.
 JP Morgan
Capital Expenditure Policy of JP Morgan ESG of JP Morgan

JP Morgan has a total score of

46.97 (ESG Score 83.31 85.22-
environment pillar, 84.27- social
pillar, 81.23- governance pillar,
ESG controversies score – 10.62)
 HDFC Bank
Business of HDFC Bank Value Creation Model of HDFC Bank
On the wholesale side, HDFC Bank offers commercial and investment The six capitals—financial, manufactured, intellectual, human, social and interpersonal, and natural
banking, while on the retail side it offers transactional and branch banking. capital—are all used by HDFC Bank to create value.
The bank operates in three main business sectors: Financial Capital: By earning profits and making money, the company in quantitative way creates
Wholesale banking: The majority of the large, blue-chip manufacturing value which can be used to run the workers and the owners’ households.
organizations in the Indian corporate sector, as well as several smaller and Manufactured capital: The physical infrastructure of the Bank is represented by its manufactured
mid-sized corporations and agri-based businesses, are the Bank's target capital, which also comprises its digital infrastructure and conventional brick-and-mortar customer
clientele. The Bank offers a vast array of commercial and transactional contact sites, cars, IT equipment, and furnishings. Total Banking Outlets and branches: 21,683 and
banking services to these customers, such as working capital loans, trade 6,342 respectively Cities/towns covered: 3,188. ATM + cash withdrawal/ deposit machine: 18,130.
services, transactional services, cash management, etc. The bank is a top Total Business Correspondents: 15,341
supplier of structured solutions, which integrate vendor and distributor Human Capital: Instead of money and tangible assets, human capital refers to knowledge,
financing with cash management services to provide improved supply chain experience, skills, and related soft assets. Customer capital, structural capital, and human capital are
management for its corporate clients. the three elements involved. Net Addition of employees: 21,486. Women in workforce: 21.7%
  Intellectual capital: Intellectual capital is described as the intangible assets that positively affect a
Treasury: The bank's three primary product divisions within this sector are company's performance but are not expressly shown on its balance sheets. This helps to highlight the
Equities, Local Currency Money Market & Debt Securities, and Foreign connections between workers, ideas, and information and measures what cannot be quantified.
Exchange and Derivatives. Brand Value: $ 35.60 Billion. Strengthening of core and creation of digital stack. Attracted market-
  leading skills in areas such as data analytics, IT, equities and advisory solutions.
Retail Banking: A broad variety of financial products and banking services Social and Relationship capital: Utilizing connections with customers, investors, regulators, suppliers,
are what the retail bank aims to offer to its target market clients, offering and the community, value is produced. CSR Beneficiaries: 9.6 Cr+, Customer Additions: 92 Lakh+.
them a one-stop shop for all their banking needs. Customers may receive the Natural Capital: The term "natural capital" aims to more accurately represent the genuine worth of
goods through the expanding branch network, as well as through alternate nature. It is easier to understand how the environment is made up of limited stocks that can either be
delivery methods including ATMs, phone banking, online banking, and invested in to create value or deteriorated to destroy value by treating natural resources as capital.
mobile banking, all of which are supported by first-rate customer care. Loan proposals screened and approved through the SEMS framework: 861.
 HDFC Bank
Return and Risk of HDFC Bank Board of directors of HDFC Bank
HDFC BANK
Sr. No. Name of Director Designation
1-day return= -0.75% annual equivalent return= -273.75%
1 week return= -2.36% annual equivalent rate=-122.72% 1 Mr. Atanu Chakraborty Part-Time Chairman and Independent Director
1 month return= -1.05% annual equivalent return= -12.6%
6 month return= 14.11% annual equivalent return= 28.22% 2 Mr. Malay Patel Independent Director
1 year return= 3.6% annual equivalent return= 3.6%
3 year return= 26.88% annual equivalent return= 8.26% 3 Mr. Umesh Chandra Sarangi Independent Director
5 year return= 71.04% annual equivalent return= 11.33%
4 Mrs. Renu Karnad Non-Executive Director
Risk of HDFC BANK= 13.64
5 Mr. Sanjiv Sachar Independent Director

6 Mr. Sandeep Parekh Independent Director

7 Mr. MD Ranganath Independent Director

8 Dr. (Mrs). Sunita Maheshwari Independent Director

9 Mrs. Lily Vadera Independent Director

10 Mr. Sashidhar Jagdishan Managing Director & Chief Executive Officer

11 Mr. Kaizad Bharucha Executive Director

 HDFC Bank
Beta and Cost of capital Relative valuation

Beta= 0.838 P/E HDFC BANK= 21.45

WACC = 6.73
 HDFC Bank
Capital structure of JP Morgan Dividend Policy
Debt ratio= Total Debt/Total assets= 11.31 For the year ending March 2022 HDFC Bank has
D/E ratio= total debt/ shareholder equity= 34.14 declared an equity dividend of 1550.00% amounting
PE= 2.84 to Rs 15.5 per share. At the current share price of Rs
PD=97.15 1600.65 this results in a dividend yield of 0.97%
Cost of Equity= 25.07
Tax Rate= 30%
Cost of debt, Kd=8.85%
WACC= Pd*Kd*(1-t) + Ke*Pe = 6.73
 HDFC Bank
Capital Expenditure Policy of JP Morgan ESG of JP Morgan

HDFC BANK has S&P ESG Global

Rank of 77. It has a total score of
63.08 (40.08- environment risk,
56.71- social risk, 92.35-
governance risk)
Thank y o u !