Industry Analysis (8/10)
Banking Industry:
Banks are not mere lenders in the economy, they have the ability to control the liquidity in the market, in a way they shape how the economy turns out by deciding the credit available for the people. Let’s delve deep to understand how this.
🌟 Cyclicity: This industry is highly cyclical, and monetary policy changes affect
banks’ lending capacity.
🌟 Value Chain:
➡️ Acquiring capital- Deposits, Debenture issues
➡️ Marketing- High competition among NBFCs
➡️ Sales- loans, securitization
➡️ After sales support- platform for high volume transactions.
🌟 Revenue Drivers
➡️ Interest from loans
➡️ Transaction fees
➡️ Investment (Bank’s own)
🌟 Cost Drivers
➡️ Fixed- Property (bank infrastructure), Digital platform
➡️ Variable- Interest on Deposits, NPA provisions
➡️ Employees’ salaries, Operational costs
🌟 Growth Drivers
➡️ Economic conditions
➡️ Fiscal and monetary policy changes
➡️ Digital penetration
🌟 Key Market Players
➡️ #KOTAKBANK
