Hello all,
The govt has announced that it wants 8-10 large banks (size > SBI) in order to finance the future growth on the country. This was also referred to by OP Bhatt, chairman of SBI, in an earlier interview.
The simplest way to build large banks is to acquire smaller banks. An efficient bank would want to acquire a smaller inefficient bank at a good price and fix its operations. Other considerations could be geographical synergies, existing branch network, CASA ratio etc.
I plan to build a table with the following information for various mid cap banks in order to find the ones that deserve better pricing or are good take over targets. I use a simple metric "net profit/total debt" as a single parameter that captures the quality of deposits, the quality of advances and efficiency of operations. Please mention if there are any other parameters that could be added to this table and where one can find the relevant information.
Market Cap
P/Bv
P/E
Div Yield
total branches
total debt = total deposits + total borrowings
net profit
net profit / total debt
Q1 profit 09-10 (YoY change)
Q2 profit 09-10 (Yoy change)
Remarks
The banks I would start with are UCO bank, IOB, IDBI bank. Will also add one private lender to contrast the numbers.
It would be great if anybody is willing to help with the data collection.
Thx
Jambu
The govt has announced that it wants 8-10 large banks (size > SBI) in order to finance the future growth on the country. This was also referred to by OP Bhatt, chairman of SBI, in an earlier interview.
The simplest way to build large banks is to acquire smaller banks. An efficient bank would want to acquire a smaller inefficient bank at a good price and fix its operations. Other considerations could be geographical synergies, existing branch network, CASA ratio etc.
I plan to build a table with the following information for various mid cap banks in order to find the ones that deserve better pricing or are good take over targets. I use a simple metric "net profit/total debt" as a single parameter that captures the quality of deposits, the quality of advances and efficiency of operations. Please mention if there are any other parameters that could be added to this table and where one can find the relevant information.
Market Cap
P/Bv
P/E
Div Yield
total branches
total debt = total deposits + total borrowings
net profit
net profit / total debt
Q1 profit 09-10 (YoY change)
Q2 profit 09-10 (Yoy change)
Remarks
The banks I would start with are UCO bank, IOB, IDBI bank. Will also add one private lender to contrast the numbers.
It would be great if anybody is willing to help with the data collection.
Thx
Jambu
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