From the balance sheets, compare the fund based and fee based income of the banks.

What do you infer?

BANK

Mar-09

Mar-10

Mar-11

Mar-12

Mar-13

% change

% change
16,821.60 3,791.10 30,059.00 21.58 54.83 19.66 20,451.90 5,869.70 35,967.20

% change
16.12 30.79 19.89 23,748.10 7,676.90 43,121.00

% change
-1.58 40.19 19.82 23,372.60 10,762.10 51,669.00

PNB YES HDFC PNB YES HDFC

Fee based Fee based Fee based

13,766.40 2,257.70 24,573.00

22.19 67.92 22.33

Fund based Fund based Fund based

205,629.50 21,981.30 173,414.20

11.66 14.77 -1.14

229,616.10 25,227.00 171,442.20

21.68 63.22 21.79

279,393.70 41,175.20 208,805.60

34.92 54.75 39.56

376,945.60 63,720.30 291,407.40

16.72 33.70 25.11

439,958.30 85,193.20 364,587.10

Rs. Million Fund based income is generated over the life of loans that have been securitized in structures requiring financing treatment (as opposed to sale treatment) for accounting purposes; loans held for investment; loans held for sale; and loans held for securitization. Bank and creditor income derived primarily
from fees. Examples of non-interest income include deposit and transaction fees, insufficient funds (NSF) fees, annual fees, monthly account service charges, inactivity fees, check and deposit slip fees, etc. Institutions charge fees that provide non-interest income as a way of generating revenue and ensuring liquidity in the event of increased default rates.

From the above table of banks Fund based & fee based income we can say that fund based income for YES bank is growing very faster than the other bank like PNB & HDFC. But actual income is very low compare to other two banks. From fund based income we can say that PNB & HDFC are very good in managing the actual income of banks. PNBs fund based income increased by near about 50% from 2009 to 2013, which means that they are managing their actual banking services very well Fee based income is revenue taken in by financial institutions from account-related charges to customers. Charges that generate fee income include non-sufficient funds fees, overdraft charges, late fees, over-the-limit fees, wire transfer fees, monthly service charges, account research fees and more. Credit unions, banks and credit card companies are types of financial institutions that earn fee income. This income is not operating income for the banks. From the three banks HDFC has highest fee based income than other two banks. Which means that HDFC is getting more income by transfer fee, monthly charges, overdraft charges etc. These are not actual operating income for the banks. From this we can also infer that YES bank and PNB are far behind than HDFC which means they are not getting much income from the fee charged on the different services.

From the downloaded balance sheets, study the investment patterns. Is there a difference? Why?