VIDYASAGAR UNIVERSITY JOURNAL OF COMMERCE

Arindam Gupta, Debashis Kundu
11. Lehn, K. and Makhija, A. K. (1996); “EVA and MVA: As performance measures
and signals for strategic change”, Strategy and Leadership, pp. 34-38.
12. Gupta, Arindam and Kundu, Debashis (2005); op. cit., pp. 750-758.
13. Singh, Prakash (2005); “Indian Banks: maximizing shareholders wealth through
value creation”, Conference Vol. on Research in Finance and Accounting, Indian
Institute of Management, Lucknow, March 17-18.
14. www.nse-india.com.
Table-1: Trends in Spread, Burden and Profitability of ICICI Bank
Year Spread Burden Profitability Relative
Profitability
Amount Change in Amount Change in Amount Change in In
(Rs. bn.) percent (Rs. bn.) percent (Rs. bn.) Percent Percent
2000-01 4.04 - 2.43 - 1.61 - 0.11
2001-02 5.93 46.62 3.35 37.54 2.58 60.34 0.09
2002-03 14.24 140.14 2.18 -34.90 12.06 366.97 0.10
2003-04 18.79 31.93 2.42 10.92 16.37 35.73 0.14
2004-05 28.39 51.11 8.34 253.28 20.05 21.26 0.15
2005-06 41.87 47.48 16.47 92.90 25.40 27.95 0.14
2006-07 66.36 58.48 35.26 114.06 31.10 22.45 0.11
Table-2: Calculating EVA and MVA
Particulars 2001 2002 2003 2004 2005 2006 2007
Average cost of funds (%) 8.03 7.52 8.91 7.10 5.80 5.80 6.60
Interest yield (%) 10.91 9.68 10.21 9.00 8.10 8.00 8.30
NOPAT (Rs. bn.) 2.58 4.80 29.97 21.12 24.34 41.34 93.92
Yield spread (%) 2.88 2.16 1.30 1.90 2.30 2.50 2.3
Total capital employed (Rs. bn.)
(both Tier I and Tier II capital)
14.47 90.12 91.46 94.01 159.03 278.43 338.96
Cost of capital (Rs. bn.) 1.16 6.77 8.15 6.67 9.22 16.15 22.37
No. of shares (in bn.) 0.22 0.22 0.61 0.61 0.74 0.89 0.89
Equity share capital (Rs. bn.) 2.20 2.20 6.13 6.13 7.37 8.90 8.99
Closing market price (Rs.) 165.50 123.90 133.75 296.30 392.80 589.03 853.1
Vidyasagar University Journal of Commerce 75