The Lakshmi Vilas Bank Limited (LVB) was founded eight decades ago (in

1926) by seven people of Karur under the leadership of Shri V.S.N.

Ramalinga Chettiar, mainly to cater to the financial needs of varied
customer segments. The bank was incorporated on November 03, 1926
under the Indian Companies Act, 1913 and obtained the certificate to
commence business on November 10, 1926, The Bank obtained its license
from RBI in June 1958 and in August 1958 it became a Scheduled
Commercial Bank.




During 1961-65 LVB took over nine Banks and raised its branch network
considerably. To meet the emerging challenges in the competitive
business world, the bank started expanding its boundaries beyond Tamil
Nadu from 1974 by opening branches in the states of Andhra Pradesh,
Karnataka, Kerala, Maharashtra, Madhya Pradesh, Gujarat, West Bengal,
Uttar Pradesh, Delhi and Pondicherry. LVB bagged the Best Bank award
for electronic payment systems amongst small banks for the year 2010-
11 from IDRBT.

VISION : "To be a sound and dynamic banking entity
providing financial services of excellence with Pan India
presence."
MISSION : To develop a range of quality financial
services and products to create value for customers,
shareholders and the society; to motivate people to achieve
excellence in performance leading to sustained profitable
growth and build a vibrant organization.
No. of Offices 290
No. of Employees 2433
Business per Employee (in ` Lakh) 510.00
Profit per Employee (in ` Lakh) 2.07
Interest Income (in ` Crore) 504
Operating Expenses (in ` Crore) 152
Return on Assets 0.71
CRAR 10.09
Net NPA Ratio 1.24



































DEPOSITS

SAVINGS DEPOSIT
Savings bank, Lakshmi power, Lakshmi savings gold, Lakshmi
savings star gold, savings balance free, Savings youth free.

CURRENT DEPOSIT

FIXED RATE DEPOSIT
Flexi Deposit, Fixed Deposit, Dhanachakra, Recurring,
Lakhpathy Recurring, Lakshmi Freedom, Tax Saver

LOANS
Lakshmi Business Credit,Lakshmi Home Loan,Initial Public Offer,Lakshmi Rental
Loan,Lakshmi Personal vehicle,Lakshmi Easy Loan,Lakshmi Gold Power,Vidhya Lakshmi
Loan,Small Business Loan,Commercial Vehicle
WEALTH MANAGEMENT SERVICES
NRI SERVICES
CARDS

New products such as POS were launched, new services extended
to customers, e.g. Tax payment and Electricity payments. ATMs
increased to over 593 and 12 new branches are operational.








1. Gained knowledge on Retail & wealth management operation of the bank.
2. Analysis of the financial products in the bank and different committees that
Regulated the banking operations.
3. Compare Balance sheet figures verses actual figures for all channels like deposits,
loans and report all the major variances identified to the department heads along
with the analytical reasoning.
4. Gained knowledge on HR operations and analyse the Marketing operations of
investment products .Identification of the best selling financial products .
Analyse its competitive advantage.
5. Calculate key analytics like common size analysis, Index based analysis,
Profitability &solvency ratios.
6. Worked on advanced approaches for measuring Operational Risk Capital
using Loss Distribution Approach





















Deposits grew by 23% from 9,075.38 Cr (2011-12) to
11,149.51 Cr
Credit expanded by 29% from 6,277.57 Cr (2011-12) to
8,094.42 Cr
Net profit increased from 30.61 Cr (2009-10) to 101.14
Cr registering a three digit figure for the first time in
the history of the Bank.
Total business improved from 16,872 Cr to 22,625 Cr
growing at 34.10% Y-o-Y.Retail Deposits grew from
5,567 Cr to 8,124 Cr, registering Y-o-Y growth of
45.93%.
Gross credit expanded from 6,918 Cr to 9,344 Cr,
registering Y-o-Y growth of 35.07%.
Total income of the bank for Q3 of FY 12 was 429.49 Cr
recording a growth of 49.35% over Q3 of FY11.
The bank posted a net profit of 28.35 Cr for Q3 of FY12
compared with Rs.25.69 Cr for corresponding
quarter ended 31st Dec 2011 registering
Increase of 10.35%.
Strength
1. Focus on Strong robust financial products
2. Social inclusiveness through schemes for all sectors
3. Diversified approach towards wealth management
4. Gives employment to over 1600 people
Weakness
1. Moderate presence across India as it is predominantly
present in South India
2. Minimal marketing causes less visibility
Opportunity
1. Upcoming SME banking
2. International- banking
3. Focusing on retail banking, corporate
banking and bank assurance
Threats
1. Economic slowdown
2. Highly competitive- environment
3. Stringent Banking Regulations




































While analyzing LVBs performance for FY 2009, a few shortcomings as under have
been noticed.
a) The banks gross and net NPAs have increased from 2.71% and 1.24% respectively
in FY09 to 2.90% and 1.55% respectively in Q2 FY 10.
b) The Bank has received 154 applications amounting to Rs.240 Crores during the
Year for loan restructuring.
c) The banks low cost deposits base is a cause for concern, which has decreased to
16.77% in FY 09 from 21.67% in FY 08.
d) The banks network is very limited and concentrated largely in a single state. It
could have a bearing on its performance.











































The bank should initiate appropriate steps to lessen the impact of the above said deficiencies on its
performance and improve the quality of its assets and contain NPAs.
During Q2 FY 10, the bank has improved its profitability to Rs 22 Crore from Rs 6.92 for the same period a
year ago. Further, the bank should restructure its administrative structure recently by decentralizing the
function of administrative office in order to ensure greater bank-client interaction.
The bank should close a tier II subordinated bond issue to boost the capital adequacy to over 13 %.
The banks cost to income ratio was marginally lower than its peers average. The bank should take steps to
improve the cost to income ratio, as a result, the banks return on assets should improve 0.9 %
The rating factored the banks satisfactory capital adequacy, lower term loans
component in its assets, and concentration of its branches in semi urban and rural
areas. The rating has further factored the banks current rights issue, which would help
the bank not only to augment its capital structure and also to sustain its growth
momentum.
The rating is partially affected by increasing NPAs, higher leverage, lower profits and
non-interest income, and limited branch network. Moreover, the banks branch
concentration in a single state and lower low cost deposits are limiting factors.
The year 2011-12 was a tough year for the banking industry, particularly for the old
private sector banks in terms of increasing credit deployment, sustaining the asset
quality and provisions, improving the profitability, and controlling the asset
restructuring. RATING: A+ ,OUTLOOK :STABLE