Banking ResultReview 2QFY2013

7/30/2019 Banking ResultReview 2QFY2013

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Please refer to important disclosures at the end of this report 1

Annualized slippage ratio for

banks under our coverage came in sequentially higher at 3.3%, compared to

3.1% in 1QFY2013. Our coverage mid PSU banks witnessed a surge in the

annualized slippage ratio to 3.8% compared to 2.7% in 1QFY2013, while for our

coverage large PSU banks, even though slippages declined 8% qoq, the slippage

ratio still remains elevated at 3.3% in absolute terms. Most of our coverage PSU

banks also witnessed sequentially lower recoveries & upgrades, which led to a

13.9% qoq increase in gross NPAs for them.

Private banks continued to fare relatively much better on the asset quality front.Though slippages for our coverage Private banks were higher sequentially by

30.7%, compared to 14.8% qoq increase in 1QFY2013, but higher provisioning

coupled with healthy performance on the recoveries/upgrades front restricted

increase in gross NPAs to 3.7% qoq (5.9% qoq in 1QFY2013).

Asset quality pressures also weighed on the banking sectors margins during the

quarter. Out of 27 banks under our coverage, 15 reported sequentially lower

margins, primarily due to higher interest reversals on increased slippages during

2QFY2013.

Overall, PSU banks reported a weak performance during 2QFY2013, as interest

reversals and higher provisioning led to a 1.8% yoy decline in bottom-line (ex-

SBI). Private banks continued to outperform, with an operating profit growth of

22.8% yoy. On the earnings front, new private banks reported a strong growth of

27.0% yoy, while old private banks witnessed a healthy growth of 19.7% yoy.

A decelerating

economic growth environment, policy woes in select sectors and elevated inflation

and interest rates point towards further economic stress and are not suggesting

any conclusive trigger for improvement in asset quality in the near-term. Hence,

we continue to prefer private banks, given their stronger capital adequacy and

growth prospects as well as cyclically better asset quality profile, with Yes Bank,

Axis Bank and ICICI Bank being our top picks.

In the back-drop of the near-term environment, in our view, the larger PSU banks

like BOB and SBI are better placed. While PSU bank valuations a couple of

months back offered bottom-fishing opportunities, after the 20-40% surge in

several of these stocks, further upsides in our view would have to be driven by

catalysts such as lower re-pricing of high-cost deposits (relative benefit for low-

CASA banks) and higher recoveries (relative benefit for banks that have

experienced maximum asset quality pain, and importantly, also provided for it

already). Screening for these criteria, as well as Tier 1 capital adequacy and

trailing adjusted valuations, in our view, PSU banks that would stand to gain most

from an eventual cyclical turn-around include Canara Bank and Bank of India inthe large-caps as well as Indian Bank, Allahabad Bank and United Bank amongst

the mid-caps.

Latest yoy credit growth 16.2

Latest yoy deposit growth 13.7

Latest credit-to-deposit ratio 75.5

Monthly Avg. LAF (` cr) 92,363

Monthly Avg. 1 yr G-Sec yield 8.1

Monthly Avg. 10 yr G-Sec yield 8.2

Monthly Avg. 3M CP 8.9

Monthly Avg. 12M CP 9.4Source: RBI, Bloomberg, Angel Research; Note*: Monthlyaverages are on preceding 30 day basis

Repo rate 8.0

Reverse repo rate 7.0

MSF rate 9.0

Cash reserve ratio (CRR) 4.25

Statutory liquidity ratio (SLR) 23.00

Source: RBI, Angel Research

022 3935 7800 Ext: 6808

[email protected]

022 3935 7800 Ext: 6872

[email protected]

Economic environment tough

Result Review | Banking

November 2012


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Banking | Result Review

November 2012 3

Exhibit 4:CD ratios for banks under our coverageIDBI 92.4 87.5 488 ANDHBK 78.5 80.4 (191)

YESBK 80.4 76.7 361 FEDBK 73.3 75.2 (194)BOM 73.8 71.2 257 ALLBK 68.4 70.4 (198)

HDFCBK 84.5 82.8 166 ICICIBK 97.7 100.2 (250)

VIJAYA 69.1 68.6 53 PNB 73.6 76.4 (286)

J&KBK 62.4 62.6 (15) BOB 71.6 74.7 (309)

OBC 71.8 72.0 (25) CANBK 64.1 67.4 (335)

SIB 73.2 73.6 (46) AXSB 73.1 76.9 (382)

SYNBK 81.3 82.1 (78) UTDBK 66.1 70.1 (394)

IOB 79.3 80.2 (92) UCOBK 72.6 76.9 (426)

BOI 77.0 77.9 (94) DENABK 70.4 74.8 (436)

SBI 81.8 83.1 (136) CENTBK 73.7 78.3 (458)

INDBK 72.4 73.9 (149) CRPBK 68.3 73.5 (519)

UNBK 76.5 78.3 (183)

Source: Company, Angel Research,

Growth in saving deposits remains moderate, while current

deposits grow at subdued pace

The persistent high differential between savings and term deposit rates resulted in

moderate growth of 13.7% yoy in saving deposits for our coverage banks, while

decelerating economic environment led to subdued growth of 7.0% yoy in current

deposits for our coverage banks.

Private banks outperformed their PSU peers on the savings deposits (SA) front, with

a growth of 17.3% yoy. Amongst our coverage Private banks, Yes Bank witnessed

the highest SA growth (significant traction being witnessed post the hike in savings

rate to 6-7%). Large private banks too fared well, with Axis Bank, ICICI Bank and

HDFC Bank reporting a healthy growth of 20.1%, 14.9% and 14.7%, yoy

respectively. Continued outperformance on the SA front aided Private banks to

gain market share (17.5% as of 2QFY2013, compared to 16.6% in FY2011),

which was largely at the expense of market share loss for mid and small PSU

banks (25.9% as of 2QFY2013 compared to 30% as of FY2011).

Within PSU banks, the top three performers on the SA front were IDBI Bank (30.0%

yoy growth on account of traction post waiver of CASA charges during FY2012),

J&K Bank (21.4% yoy growth considering insulation from competition in its parent

state of J&K) and United Bank (16.5% yoy growth owing to majority presence in

eastern and North-eastern states of India).


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November 2012 4

Exhibit 5:CASA yearly growth rate trends

YESBK 3,877 859 351.4 5,157 4,113 25.4 9,034 4,839 86.7 17.3

IDBI 19,781 15,216 30.0 19,726 18,265 8.0 39,507 33,481 18.0 21.9

J&KBK 16,408 13,515 21.4 4,552 4,590 (0.8) 20,960 18,105 15.8 38.2

AXSB 56,189 46,786 20.1 39,349 35,354 11.3 95,538 82,140 16.3 40.5

UTDBK 28,757 24,693 16.5 8,603 6,513 32.1 37,360 31,206 19.7 40.2

OBC 29,676 25,558 16.1 9,945 8,624 15.3 39,621 34,182 15.9 24.1

CORPBK 19,276 16,645 15.8 10,786 9,660 11.7 30,062 26,306 14.3 20.9

FEDBK 11,758 10,183 15.5 2,458 1,983 23.9 14,216 12,166 16.8 28.7

ICICIBK 80,618 70,149 14.9 33,800 32,997 2.4 114,418 103,146 10.9 40.7

PNB 115,389 100,491 14.8 28,040 23,531 19.2 143,429 124,022 15.6 35.8

ANDHBK 22,219 19,355 14.8 5,937 5,338 11.2 28,156 24,693 14.0 25.9

HDFCBK 79,151 69,017 14.7 46,675 40,093 16.4 125,826 109,110 15.3 45.9

CENTBK 56,119 49,071 14.4 11,061 12,717 (13.0) 67,180 61,788 8.7 33.0

BOM 24,742 21,699 14.0 7,662 6,550 17.0 32,404 28,249 14.7 37.4

BOB 77,824 68,541 13.5 27,436 21,639 26.8 105,260 90,180 16.7 31.7

INDBK 31,546 27,804 13.5 6,448 6,813 (5.4) 37,994 34,617 9.8 29.0

SBI 396,543 352,408 12.5 79,671 82,632 (3.6) 476,214 435,040 9.5 45.0

ALLBK 40,240 35,875 12.2 8,824 7,609 16.0 49,064 43,484 12.8 30.3

DENABK 20,135 17,988 11.9 6,485 4,891 32.6 26,620 22,879 16.4 31.9

BOI 70,978 63,513 11.8 13,192 13,140 0.4 84,170 76,652 9.8 31.8

UNIONBK 53,311 47,800 11.5 15,652 14,954 4.7 68,963 62,754 9.9 30.5

SYNBK 36,126 32,578 10.9 10,419 10,497 (0.7) 46,545 43,075 8.1 29.9

IOB 37,052 33,610 10.2 10,231 11,301 (9.5) 47,283 44,912 5.3 25.0

CANBK 70,494 64,043 10.1 13,062 16,732 (21.9) 83,556 80,775 3.4 24.8

SIB 6,321 5,764 9.7 1,362 1,274 6.9 7,683 7,038 9.2 20.0

UCOBK 28,022 25,787 8.7 10,517 6,257 68.1 38,539 32,044 20.3 23.7

VIJBK 14,083 13,261 6.2 4,353 4,596 (5.3) 18,436 17,857 3.2 21.6

Source: Company, Angel Research


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November 2012 5

On the Current deposits (CA) front, UCO Bank registered a strong growth of

68.1% due to substantial float being made available on opening of rupee accounts

with the bank for facilitating Indo-Iran trade payments, as per the management.

Private banks outperformed their PSU counterparts on the CA front too and gainedmarket share (32.7% as of 2QFY2013 compared to 27.3% in FY2011), which was

at the expense of market share loss for large PSU banks (35.3% as of 2QFY2013

compared to 42% in FY2011).

Exhibit 6:CASA ratio and Investment-to-deposits ratio for our coverage PSU banks as of 2QFY2013


Exhibit 7:Yield on advances# for banks under our coverage

YESBK 12.7 12.0 68 UCOBK 11.2 11.1 12

FEDBK 12.5 12.4 14 CRPBK 11.2 10.5 70

JKBK 12.4 11.4 97 CANBK 11.0 10.5 51

SIB 12.3 12.0 36 PNB 11.0 11.1 (9)

ANDBK 12.0 12.3 (29) AXSB 11.0 10.1 82

OBC 11.8 11.1 67 BOM 10.8 10.8 0

HDFCBK 11.7 10.9 81 SYNDBK 10.7 10.7 6

DENABK 11.6 11.0 58 IOB 10.7 10.7 (2)

ALBK 11.5 12.0 (45) UNBK 10.6 10.2 41

VIJBK 11.4 11.1 36 ICICIBK 10.1 9.2 90

INDBK 11.3 11.2 5 SBI 10.0 9.8 12

IDBI 11.3 11.2 4 BOI 9.0 8.9 17

CNTBK 11.2 11.1 11 BOB 8.9 9.0 (15)

UTDBK 11.2 10.6 57

Source: Company, Angel Research, Note:*including international operations, #Calculated

22 21 2225

2

4

2

4

30

25

29

26

38

32

31 3

3

30

36

40

32

37

32

45

39

37

35 3

6

34

31

36

32 3

3

29

41

32

32

32

26

32

36

27

35

25

33

0

5

10

15

20

25

30

35

40

45

50

IDBI

CORPBK

VIJBK

CANBK

OBC

UCOBK

ALLBK

IOB

INDBK

ANDHBK

J&KBK

DENABK

UNIONBK

CENTBK

SYNBK

PNB

UTDBK

BOI

BOM

BOB

SBI

CASA ratio- (%) Investments to Deposits -(%)


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November 2012 6

Exhibit 8:Risk adjusted yield on assets# for banks under our coverageYESBK 9.7 9.2 54 CNTBK 8.3 7.9 33

SIB 9.7 9.1 68 IDBI 8.2 8.5 (23)FEDBK 9.6 8.7 89 AXSB 8.2 7.7 50

ANDBK 9.4 8.9 53 SYNDBK 8.2 7.8 35

JKBK 9.3 8.2 114 IOB 8.1 7.6 52

DENABK 9.0 8.5 49 UCOBK 8.0 7.6 46

HDFCBK 8.8 8.0 79 PNB 8.0 7.9 12

INDBK 8.7 8.4 38 BOM 7.8 7.5 27

VIJBK 8.7 8.0 67 SBI* 7.8 6.9 87

OBC 8.6 7.8 83 ICICIBK* 7.6 7.1 47

ALBK 8.5 8.5 3 UTDBK 7.4 7.0 34

CANBK 8.5 8.0 51 BOI* 6.9 6.6 35

UNBK 8.3 7.5 81 BOB* 6.7 6.9 (19)

CRPBK 8.3 7.8 52

Source: Company, Angel Research, Note:*including international operations, #Calculated

Subdued performance on the non-interest income (excluding

treasury) front, during the quarter

After registering moderate growth of 11.4% yoy on the non-interest income

(excluding treasury) front during the last quarter, our coverage banks performance

in 2QFY2013 came in much lower at 4.7% yoy, largely due to muted performance

on the fee income front. Slowed credit off-take and sanctions were amongst thereasons for sluggish performance on the fee income front for most banks.

Private banks under our coverage registered a moderate growth of 12.0% yoy on

the non-interest income (excluding treasury) front, but were able to comfortably

outperform the coverage PSUs, which saw marginal growth of 1.3% yoy. Amongst

PSUs, mid and small ones (growth of 6.8% yoy) performed much better than larger

ones (de-growth of 0.9% yoy), whose performance was dragged by yoy decline

witnessed in four of seven large PSU banks. Amongst mid PSUs, the better

performers were Andhra Bank and Oriental Bank of Commerce (witnessed

significant jump in recoveries from written-off accounts).


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November 2012 7

Exhibit 9:Non-interest income (excl. treasury) performance for banks under our coverage

AXSB 1,386 1,185 16.9 1,207 14.8 1.75 1.87 (0.12)HDFCBK 1,451 1,463 (0.8) 1,213 19.6 1.63 1.60 0.03

ICICIBK 1,871 1,901 (1.6) 1,820 2.8 1.55 1.65 (0.09)

YESBK 277 288 (3.9) 214 29.3 1.44 1.25 0.20

SBI 3,117 3,278 (4.9) 3,399 (8.3) 0.92 1.10 (0.18)

OBC 355 422 (15.9) 259 37.0 0.85 0.61 0.24

IDBI 650 473 37.4 434 49.9 0.81 0.67 0.14

BOI 791 740 6.8 687 15.1 0.79 0.70 0.08

PNB 765 1,030 (25.7) 784 (2.4) 0.77 0.87 (0.09)

INDBK 333 200 66.2 321 3.7 0.73 0.82 (0.09)

IOB 375 401 (6.5) 378 (0.8) 0.69 0.77 (0.08)

CRPBK 280 285 (1.8) 275 1.6 0.69 0.75 (0.06)

UNBK 471 436 7.9 401 17.4 0.68 0.66 0.02

ANDHBK 214 211 1.4 156 37.6 0.67 0.57 0.11

FEDBK 104 98 5.6 103 0.7 0.67 0.75 (0.08)

BOM 162 155 4.6 147 10.0 0.67 0.80 (0.14)

BOB 716 689 3.9 724 (1.1) 0.61 0.69 (0.08)

CANBK 534 594 (10.1) 679 (21.4) 0.60 0.75 (0.16)

SIB 62 55 12.8 42 48.5 0.56 0.45 0.11

ALLBK 255 255 0.2 302 (15.6) 0.55 0.71 (0.16)

UTDBK 143 134 6.2 115 24.5 0.53 0.48 0.05

SYNBK 245 213 15.3 232 5.5 0.50 0.58 (0.08)

DENABK 115 110 4.6 109 4.8 0.49 0.66 (0.16)

J&KBK 65 73 (11.5) 63 3.3 0.45 0.46 (0.01)

VIJAYA 106 103 2.8 100 5.9 0.43 0.50 (0.07)

CENTBK 282 220 28.0 279 0.9 0.43 0.43 0.00

UCOBK 168 220 (23.8) 162 3.6 0.43 0.44 (0.02)


Slippages surge, recoveries/upgrades sluggish, resulting in

continued asset quality stress

The entire FY2012 was a challenging year for the banking sector, as it was

grappled with increased asset quality concerns. Even during 1HFY2013,

incremental slippages have remained high (relatively more in 2QFY2013, than in

1QFY2013), considering further deterioration in economic growth environment

and persisting burden of high interest servicing costs.

During 2QFY2013, annualized slippage ratio for banks under our coverage (excl.

HDFCBK and YESBK, due to unavailability of data), came in sequentially higher at

3.3%, compared to 3.1% in 1QFY2013. Mid PSU banks under our coverage

witnessed 37.4% sequential increase in slippages (annualized slippage ratio

surged to 3.8% compared to 2.7% in 1QFY2013). Slippages for coverage large

PSU banks, even after witnessing moderation of 8.2% qoq in 2QFY2013, still

remains elevated (annualized slippage ratio at 3.3% compared to 3.6% in the last

quarter).


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November 2012 8

Exhibit 10:Gross NPA trends (%) Private vs PSU


Exhibit 11:Net NPA trends (%) Private vs PSU


Exhibit 12:Gross NPA trend (%) for the banking industry


Exhibit 13:Net NPA trend (%) for the banking industry


Mid PSU banks such as Indian Bank (INDBK), ALBK, IOB, UCOBK and UTDBK and

large PSU banks such as Bank of India (BOI), Punjab National Bank (PNB) and

Canara Bank (CANBK), witnessed much higher level of slippages. Taken together,

slippages for these banks were higher by 74.9% qoq in 2QFY2013 compared to

marginal increase of 1.1% qoq in 1QFY2013. State Bank of India (SBI), IDBI Bank

and Union Bank of India (UNBK) amongst the large PSU banks and Bank of

Maharashtra (BOM) and Corporation Bank (CRPBK) amongst the mid PSU banks,

which had seen a sharp jump in slippages in 1QFY2013, managed to lower their

slippage levels by ~30-55% qoq.

Slippages for most of the PSU banks were higher on account of large ticket size

NPAs, mainly emanating from the mid corporate and SME segments. Sectorally, a

higher chunk of NPAs for most of the PSU banks came from infrastructure, iron

and steel, textiles and metals & mining. A large corporate group each in the

pharma and media sector were the most prominent common slippage for many

banks. Allahabad bank faced `700cr of slippages on account of classification

differences arising at the Reserve Bank of India (RBI)s annual financial inspection,as it had earlier classified the sum as standard, which the RBI contested to be an

NPA.

2.802.70

2.57

2.36 2.33

2.242.17 2.01 2.05 2.06

2.34 2.42 2.352.25

2.45

2.853.02 2.98

3.34

3.76

1.50

1.80

2.10

2.40

2.70

3.00

3.303.60

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

Pvt Banks PSU Banks

0.920.79

0.690.55 0.56 0.54 0.54 0.46 0.49 0.54

1.12 1.13 1.07 1.081.16

1.471.56 1.50

1.73

2.04

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.802.00

2.20

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

Pvt Banks PSU Banks

2.472.40

2.27

2.43

2.732.85

2.80

3.09

3.42

2.10

2.30

2.50

2.70

2.90

3.10

3.30

3.50

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

1.071.00 0.98

1.04

1.281.36

1.30

1.49

1.74

0.90

1.00

1.10

1.20

1.30

1.40

1.50

1.60

1.70

1.80

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13


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November 2012 9

Despite reportedly stepping up recoveries/upgrades efforts, most of our coverage

PSU banks witnessed sequentially lower recoveries/upgrades, which led to a 13.9%

sequential increase in gross NPA levels for our coverage PSU banks during the

quarter. Even worse, this was accompanied by significant decline in theprovisioning coverage for almost all PSU banks, with the few exceptions being

Syndicate Bank and Bank of Maharashtra (in line with our relatively positive view

on asset quality compared to peers) as well as OBC, BOI, IDBI Bank and UNBK.

Private banks continued to fare relatively much better vis--vis PSU banks on the

asset quality front. Though slippages for our coverage Private banks were higher

sequentially by 30.7% compared to a 14.8% qoq increase in 1QFY2013, higher

provisioning coupled with inspired performance on the recoveries/upgrades front

aided them to cap the increase in their gross NPA levels to 3.7% qoq as compared

to an increase of 5.9% qoq in 1QFY2013.

Going forward, considering the weakening GDP growth environment and withdownward movement in interest rates expected to be relatively much slower than

earlier estimated, the mid-corporate and SME are expected to remain vulnerable to

being NPAs going ahead as well, in our view.


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November 2012 10

Exhibit 14:Asset quality witnessed higher sequential deterioration during 2QFY2013

ALLBK 6.2 2.1 407 3,311 2,162 53.1 2,331 1,191 95.7 60.8 73.6 (1,277)IOB 5.3 2.5 281 5,930 4,410 34.5 3,378 2,152 57.0 58.5 67.1 (858)

PNB 6.2 3.8 242 14,024 9,988 40.4 7,883 4,917 60.3 54.3 62.8 (850)

UCOBK 5.3 3.0 235 5,888 4,624 27.3 3,468 2,614 32.7 49.1 52.7 (359)

INDBK 3.3 1.0 222 1,980 1,554 27.4 1,260 963 30.8 71.0 75.1 (411)

SIB 3.4 1.3 211 496 295 68.2 242 95 154.2 51.2 67.7 (1,650)

BOI 4.4 2.8 159 8,899 6,752 31.8 5,228 4,413 18.5 61.0 60.9 10

UTDBK 2.8 1.9 96 2,418 2,210 9.4 1,188 1,106 7.4 69.2 69.3 (17)

CENTBK 4.8 3.9 91 8,507 7,510 13.3 5,696 4,853 17.4 39.9 40.8 (90)

CANBK 3.3 2.6 73 5,610 4,498 24.7 4,569 3,756 21.6 63.0 66.5 (351)

DENABK 2.0 1.4 68 1,171 1,076 8.8 721 597 20.7 72.5 75.6 (315)

ICICIBK 1.9 1.4 55 10,036 9,817 2.2 2,134 1,905 12.0 78.7 80.6 (186)

VIJAYA 3.8 3.3 52 1,897 1,693 12.0 1,116 979 14.1 61.8 64.1 (232)

AXSB 1.5 1.1 41 2,191 2,092 4.7 654 605 8.2 70.1 71.1 (94)

J&KBK 1.2 1.0 15 552 541 2.0 55 48 14.9 93.3 94.1 (79)

BOB 2.0 1.8 15 5,879 5,319 10.5 2,385 1,845 29.3 75.7 79.0 (330)

YESBK NA NA NA 103 110 (6.1) 20 24 (15.1) 78.4 79.2 (82)

HDFCBK NA NA NA 2,133 2,086 2.3 387 396 (2.3) 81.9 81.0 85

SYNBK 3.3 3.4 (16) 3,179 3,077 3.3 1,164 1,185 (1.7) 82.3 80.7 155

OBC 2.3 2.5 (20) 3,466 3,378 2.6 2,393 2,306 3.8 64.5 64.4 5

ANDHBK 3.7 4.0 (29) 3,014 2,358 27.8 1,831 1,293 41.6 53.2 60.4 (723)

IDBI 1.4 2.3 (93) 5,848 5,496 6.4 3,395 3,478 (2.4) 65.8 65.5 31

CRPBK 1.8 2.9 (110) 1,949 1,689 15.4 1,351 1,185 14.0 60.4 61.0 (58)

FEDBK 1.5 3.1 (154) 1,435 1,409 1.9 245 236 3.8 82.9 83.2 (31)

BOM 1.5 3.1 (165) 1,292 1,294 (0.2) 559 549 1.7 80.1 79.3 80

SBI 3.3 5.0 (172) 49,202 47,156 4.3 22,615 20,324 11.3 62.8 64.3 (151)

UNBK 1.8 3.7 (189) 6,470 6,541 (1.1) 3,559 3,747 (5.0) 61.5 59.0 245


Exhibit 15:Aggregate gross NPA levelsPrivate Banks

Pvt. New 15,613 15,154 14,670 6.4 3.0

Pvt. Old 4,719 4,255 3,706 27.4 10.9


Exhibit 16:Aggregate gross NPA levels PSU Banks

PSU Large 95,931 85,749 61,866 55.1 11.9

PSU Med 45,622 38,400 29,148 56.5 18.8


Exhibit 17:Aggregate net NPA levels Private BanksPvt. New 3,651 3,370 3,405 7.2 8.3

Pvt. Old 1,695 1,300 1,010 67.9 30.3


Exhibit 18:Aggregate net NPA levels PSU BanksPSU Large 49,634 42,480 32,091 54.7 16.8

PSU Med 27,285 21,605 14,503 88.1 26.3



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November 2012 11

Lower accretion to the restructuring book

During 2QFY2013, the accretion to the restructuring book was lower compared to

what was witnessed in the last two quarters (where discoms restructuring

constituted a major chuck). Amongst our coverage PSU banks, Andhra bank,

Allahabad bank and Vijaya bank witnessed the highest sequential increase in their

restructuring book during the quarter. The total restructured book as a percentage

to total advances, remains the highest for mid-PSU banks such as Central Bank

(14.1%), Allahabad Bank (11.5%) and Indian Bank (10.9%), while for new private

banks, it remains low in the range of 0-2.5%.

Going ahead, the restructuring pipeline remains substantial for PSU banks such as

OBC (~`2,500cr, Punjab SEB accounting for `1,200cr) and Andhra bank

(~`1,200cr, out of which ~`450cr to be accounted by Tamil Nadu SEB), as

guided by their respective managements. Though many banks have stated that

they expect no major restructuring to be in the pipeline, however fresh approvals

through the CDR route (`18,925cr in 2QFY2013 vs `17,957cr in 1QFY2013) are

likely to keep the restructuring pipeline for most banks active.

75bp increase in provisioning for standard restructured advances

to impact mid PSU banks the most

As per RBIs recent 75bp increase in provisioning requirement for standard

restructured advances, mid-sized PSU banks would be impacted the most, as

standard restructured advances for them as a percentage to total advances as of

2QFY2013, stand at a high of 8.8%. Within mid-PSU banks, Central Bank and

IOB would be the worst affected, as for them standard restructured advancesconstitute 12.9% and 9.5%, respectively of their total advances. Meanwhile, the

least affected amongst the PSU banks would be SBI and BOB, while there would

be negligible impact on new private banks and moderate impact in case of old

private banks. The RBI can be expected to soon clarify regarding upgrading of

restructured advances once the account performs satisfactorily over a stipulated

period to enable banks to write-back provisions on those advances and offset the

same for higher provisioning on other advances.


12/24


November 2012 12

Exhibit 19:Restructuring book as of 2QFY2013

CENTBK 21,199 20,686 2.48 14.1 19,296 12.9ALLBK 12,748 10,727 18.84 11.5 11,781 10.6

INDBK 10,349 9,918 4.34 10.9 NA NA

ANDHBK 9,077 6,769 34.09 10.6 NA NA

IOB 14,775 13,368 10.53 9.8 14,257 9.5

OBC 11,483 10,954 4.83 9.7 NA NA

PNB 27,852 25,519 9.14 9.4 25,895 8.8

CRPBK 8,867 8,352 6.17 9.0 7,667 7.8

UNBK 14,360 13,521 6.21 8.3 8,321 4.8

BOI 20,786 20,589 0.95 8.1 17,786 6.9

DENABK 4,500 4,255 5.76 7.6 4,375 7.4

IDBI 12,534 10,886 15.14 7.5 10,237 6.2

SYNBK 9,263 8,302 11.58 7.3 8,700 6.9

UCOBK NA 9,200 NA NA 7,310 6.2

VIJAYA 4,294 3,629 18.32 7.3 NA NA

FEDBK 2,538 2,238 13.40 7.0 1,956 5.4

CANBK 14,895 14,056 5.97 6.9 NA NA

UTDBK 4,214 4,093 2.96 6.9 3,200 5.2

BOB 16,680 15,745 5.94 5.7 15,180 5.2

SIB 1,293 1,195 8.20 4.6 NA NA

SBI 40,454 36,904 9.62 4.4 32,796 3.5

AXSB 4,068 3,827 6.30 2.4 NA NA

ICICIBK 4,158 4,172 (0.34) 1.5 NA NA

YESBK 192 197 (2.19) 0.5 NA NA

HDFCBK 695 640 8.58 0.3 NA NA

Source: Company, Angel Research; Note: Total and standard restructured advances in some casesmight not be comparable bank-wise on account of limitation of available information regardingreporting of restructured advances (account-wise/borrower-wise, sanctioned basis/disbursed basis).

Exhibit 20:CDR Snapshot

FY2010 31 20,175 31 17,763

FY2011 49 22,614 27 6,615

1QFY12 18 4,595 10 8,141

2QFY12 18 21,095 7 2,095

3QFY12 23 19,187 17 21,364

4QFY12 28 23,012 16 8,001

FY2012 87 67,889 50 39,601

1QFY13 41 20,528 17 17,957

2QFY13 33 18,907 18 18,925

1HFY13 74 39,435 35 36,882



13/24


November 2012 13

Private banks continue to outperform their PSU counterparts on

earnings front

PSU banks reported weak performance during 2QFY2013, primarily marred by

asset quality pressures, as interest reversals and higher provisioning led their

bottom-lines to decline by 1.8% yoy for PSU banks (excluding SBI).

On the operating front, large PSU banks (excluding SBI) registered a moderate

growth of 7.6% yoy (including SBI, growth was even lower at 5.7% yoy), while the

growth in the mid PSU banks segment was muted at 3.7% yoy.

However, higher increase in operating expenses (growth of 11.8% and 8.6% yoy,

respectively for large PSU banks excluding SBI and mid PSU banks) resulted in the

operating profit growing at a subdued pace of 4.7% yoy for large PSU banks

(excluding SBI), while remaining flattish for mid PSU banks.

Exhibit 21:Large PSU banks P&L (excl. SBI)

NII 13,764 13,473 2.2 12,668 8.6

Other Income 4,464 4,478 (0.3) 4,273 4.5

Operating Expenses 7,737 7,406 4.5 6,918 11.8

Provisions 4,675 3,842 21.7 3,844 21.6

PBT 5,816 6,703 (13.2) 6,179 (5.9)

Tax 1,448 1,717 (15.6) 1,596 (9.2)


Exhibit 22:Mid- PSU banks P&L

NII 13,538 13,707 (1.2) 13,200 2.6

Other Income 3,680 3,509 4.9 3,406 8.0


Provisions 4,380 3,987 9.9 4,352 0.7

PBT 4,982 5,635 (11.6) 5,018 (0.7)

Tax 1,102 1,230 (10.4) 1,202 (8.3)

Source: Company, Angel ResearchProvisioning expenses for most of the PSU banks increased during 2QFY2012,

partly on account of switchover to system based NPAs recognition (for SBI; due to

the cleanup done in 1QFY2012). However, despite having a high base, continued

asset quality pressures (evident in 55.1% and 56.5% yoy increase in gross NPA

levels for large PSU banks and mid-sized PSU banks respectively), led to

provisioning expenses growing by 21.6% yoy for large PSU banks excluding SBI

(for SBI, provisioning expenses declined by 46.1% yoy), and remaining flattish formid-PSU banks (as many of them resorted to lowering their PCR).

Higher provisioning expenses resulted in PBT declining by 5.9% yoy for large PSU

banks excluding SBI, while it remained flattish for mid-sized PSU banks. Tax

expenses declined by 9.2% and 8.3% yoy, respectively for large PSU banks and

mid-sized PSU banks, primarily on account of higher provisioning expenses, which

limited the bottom-line decline to 4.7% yoy in case of large PSU banks (excl SBI),

and aided mid-sized PSU banks to post a muted bottom-line growth of 1.7%.


14/24


November 2012 14

Exhibit 23:New Private banks P&L

NII 11,222 10,534 6.5 8,868 26.5

Other Income 5,829 5,593 4.2 4,852 20.1


Provisions 1,462 1,330 9.9 1,173 24.6

PBT 7,868 7,476 5.2 6,181 27.3

Tax 2,392 2,281 4.8 1,870 27.9


Exhibit 24:Old Private banks P&L

NII 2,056 1,968 4.4 1,779 15.6

Other Income 714 719 (0.7) 636 12.4


Provisions 153 207 (26.1) 210 (27.3)

PBT 1,165 1,113 4.7 966 20.6

Tax 351 334 5.0 286 22.8


Private banks continued to outperform their PSU counterparts and reportedimpressive performance during 2QFY2013, with operating profit growth of 22.8%

yoy. They were however not sparred from asset quality pressures either (though

they faced relatively much lower asset quality pressures than their PSU peers, with

sequential increase in gross NPAs limited to 4.8% for private banks compared to

increase of 14.0% for PSU banks).

Hence, provisioning expenses for the new private banks was higher by 24.6% yoy,

however the older private banks reported a 27.3% yoy decline in provisioning

expenses (despite a 27.4% yoy increase in their gross NPA levels, lower

provisioning lead to net NPA levels increasing by 67.9% yoy). On the overall

earnings front, new private banks reported a strong growth of 27.0% yoy, whileold private banks witnessed a healthy growth of 19.7% yoy.

Exhibit 25:Advances growth (%)Large PSU 2,362,139 2,357,536 0.2 2,036,400 16.0

Mid PSU 1,397,964 1,374,589 1.7 1,187,813 17.7

New Pvt. 805,746 771,011 4.5 665,636 21.0

Old Pvt. 162,680 159,180 2.2 137,479 18.3

Source: Company, Angel Research; Note:*excluding DHB and LVB

Exhibit 26:Deposits growth (%)

Large PSU 3,018,180 2,958,479 2.0 2,625,803 14.9

Mid PSU 1,890,139 1,831,198 3.2 1,644,839 14.9

New Pvt. 936,706 884,872 5.9 789,056 18.7

Old Pvt. 216,415 212,980 1.6 187,967 15.1

Source: Company, Angel Research; Note:*excluding DHB and LVB


15/24


November 2012 15

Tier I CAR, low for many PSU banks

As of 2QFY2013, amongst our coverage, Bank of Maharashtra, Central Bank and

Indian Overseas Bank had the lowest tier-I CAR at 7.1%, 7.5% and 7.6%,

respectively (excluding 1HFY2013 profits). Finance Ministry has recently reiterated

the need of capital infusion in PSU banks, and can be expected to finalize the

amount of capital infusion in PSU banks in the coming few weeks. They have

budgetary earmark funds to the tune of `15,888cr for capital requirement of PSBs,

RRBs, NABARD and other financial institutions. However, capital infusion is

expected to be book-dilutive for most of these banks, as they trade much below

their book.

Exhibit 27:Capital adequacy across PSU banks, as of 2QFY2013

BOM 10.8 7.1 NA ANDHBK 12.4 8.5 8.3

CENTBK 11.5 7.5 6.1 PNB 11.7 8.7 8.1

IOB 12.1 7.6 7.1 ALLBK 12.2 8.9 8.6

IDBI 13.9 8.1 7.3 SBI 12.6 9.0 8.5

BOI 11.1 8.1 7.3 VIJBK 12.7 9.5 7.3

DENABK 12.1 8.1 7.7 BOB 12.9 9.6 9.0

UCOBK 12.3 8.1 6.0 OBC 12.1 9.7 9.0

UNIONBK 11.4 8.2 7.5 CANBK 13.1 10.1 9.4

CORPBK 13.1 8.4 7.8 INDBK 13.0 10.7 10.3

SYNBK 11.3 8.4 7.8 J&KBK 13.7 11.6 11.6

UTDBK 12.1 8.5 7.2

Source: Company, Angel Research, Note: *as of 2QFY2013, adjusting for non-core equity tier-I as of FY2012

Exhibit 28:DuPont analysis*

NII 3.1 3.1 3.2 3.3 2.8 2.8 2.7 2.8 2.8 2.7 2.5 2.7

(-) Prov. Exp. 0.6 0.4 0.4 0.4 0.7 0.8 0.8 0.7 0.8 0.9 0.8 0.7

Adj NII 2.5 2.7 2.8 2.9 2.1 2.0 1.9 2.1 2.1 1.7 1.8 1.9

Treasury 0.0 (0.0) 0.0 0.0 0.1 0.0 0.1 0.0 0.1 0.1 0.1 0.0

Int. Sens. Inc. 2.5 2.7 2.9 3.0 2.2 2.0 2.0 2.1 2.2 1.8 1.8 2.0

Other Inc. 1.8 1.7 1.6 1.6 1.0 0.9 0.9 0.9 0.7 0.6 0.6 0.6

Op. Inc. 4.3 4.4 4.5 4.6 3.2 2.9 2.9 3.0 2.8 2.5 2.5 2.6

Opex 2.2 2.2 2.2 2.2 1.8 1.6 1.6 1.6 1.7 1.5 1.5 1.5

PBT 2.1 2.2 2.3 2.4 1.4 1.3 1.3 1.4 1.2 1.0 1.0 1.1

Taxes 0.6 0.7 0.7 0.8 0.5 0.4 0.4 0.4 0.3 0.2 0.2 0.3

Leverage 10.4 10.9 11.3 11.8 18.0 18.6 17.6 17.7 21.4 21.0 20.4 20.3

Source: Company, Angel Research, Note: *our coverage universe only


16/24


November 2012 16

Outlook and valuation

The decelerating economic growth environment, policy woes in select sectors and

elevated inflation and interest rates are pointing towards further economic stress

and are not suggesting any conclusive trigger for improvement in asset quality inthe near-term. Hence, we continue to prefer private banks, given their stronger

capital adequacy and growth prospects as well as cyclically better asset quality

profile, with Yes Bank, Axis Bank and ICICI Bank being our top picks.

In the back-drop of the near-term environment, in our view larger PSU banks like

BOB and SBI are better placed. While PSU bank valuations a couple of months

back offered bottom-fishing opportunities, after the 20-40% surge in several of

these stocks, further upsides in our view would have to be driven by catalysts such

as lower re-pricing of high-cost deposits (relative benefit for low-CASA banks) and

higher recoveries (relative benefit for banks that have experienced maximum asset

quality pain, and importantly, also provided for it already). Screening for these

criteria, as well as Tier 1 capital adequacy and trailing adjusted valuations, in ourview, PSU banks that would stand to gain most from an eventual cyclical turn-

around include Canara Bank and BOI in the large-caps space and Indian Bank,

Allahabad Bank and United Bank amongst the mid-caps.

Exhibit 29:Dashboard for our coverage PSU banks

BOI 1.8 60.2 31.8 27.1 8.1 0.81 0.69 15.0 12.0

CANBK 1.9 52.3 24.8 36.0 10.1 0.94 0.80 17.0 13.5

IDBI 2.1 48.9 21.9 38.6 8.1 0.97 0.64 13.4 11.3

BOB 1.4 55.5 31.7 24.9 9.6 1.00 0.85 20.6 17.6

UNBK 1.9 52.5 30.5 31.8 8.2 1.01 0.82 14.8 16.3

PNB 1.8 61.7 35.8 32.2 8.7 1.02 0.81 21.1 17.7

SBI 2.5 43.3 45.0 32.8 9.0 1.68 1.36 16.5 18.8

UTDBK 2.4 44.6 40.2 36.5 8.5 0.58 0.48 16.4 14.1

IOB 1.9 43.9 25.0 31.6 7.6 0.61 0.51 11.1 7.9

CRPBK 1.1 45.7 20.9 37.2 8.4 0.71 0.59 20.4 17.9

ALLBK 1.8 46.0 30.3 35.8 8.9 0.71 0.58 21.6 15.3

VIJAYA 1.8 54.8 21.6 34.7 9.5 0.76 0.68 12.6 12.1BOM 2.2 48.5 37.4 35.4 7.1 0.78 0.69 12.9 15.8

SYNBK 2.6 55.7 29.9 26.4 8.4 0.78 0.70 17.9 22.6

INDBK 1.9 64.0 29.0 33.5 10.7 0.78 0.65 20.4 19.4

DENABK 1.9 35.9 31.9 32.4 8.1 0.80 0.65 20.7 21.8

ANDHBK 1.5 57.7 25.9 29.5 8.5 0.80 0.70 19.2 17.6

CENTBK 1.5 64.8 33.0 31.8 7.5 0.87 0.63 5.4 16.3

OBC 2.2 64.6 24.1 33.7 9.7 0.90 0.69 10.7 12.8

UCOBK 1.7 NA 23.7 30.5 8.1 0.95 0.82 19.4 14.5

JKBK 1.1 32.4 38.2 41.0 11.6 1.37 1.16 21.2 23.8

Source: Company, Angel Research, Note: *Cumulative provisions including technically written-off, as of 2QFY2013, #substandard GNPA assets, as ofFY2012, as % to total FY2012 GNPA (including technically written-off), wherein technically written-off considered as part of loss assets), ^Equity Net worth

calculated on a trailing basis (i.e) including 1HFY2013 profits and adjusting for 75% PCR (incl. technical write-off)


17/24


November 2012 17

Exhibit 30:Growth in Networth* for Large PSU banks

Source: Company, Angel Research, Note:*after adjusting for capital infusion,

equity dividend payout and minimum 75% PCR including technical write-offs

Exhibit 31:Growth in Networth* for Mid PSU banks

Source: Company, Angel Research, Note:*after adjusting for capital infusion,

equity dividend payout and minimum 75% PCR including technical write-offs

Exhibit 32:Recommendation summary

AxisBk Buy 1,290 1,550 20.1 1.7 2.1 9.3 16.0 1.6 20.2

FedBk Accumulate 461 491 6.5 1.1 1.2 8.9 6.7 1.1 13.3

HDFCBk Neutral 680 - - 3.8 - 18.9 27.9 1.9 22.0

ICICIBk* Buy 1,034 1,270 22.8 1.7 2.0 12.4 21.7 1.5 15.7

SIB Accumulate 23 25 6.7 1.0 1.1 6.0 4.2 0.9 16.9

YesBk Buy 435 512 17.8 2.2 2.6 10.3 23.5 1.5 23.5

AllBk Buy 136 158 16.0 0.6 0.7 4.1 (5.6) 0.8 14.5

AndhBk Neutral 105 - - 0.7 - 4.8 (4.8) 0.8 13.8

BOB Accumulate 729 817 12.0 0.8 1.0 5.3 6.4 1.0 17.0

BOI Accumulate 273 294 8.0 0.7 0.8 4.3 16.9 0.8 15.8

BOM Neutral 55 - - 0.7 - 4.6 38.9 0.7 16.1

CanBk Accumulate 437 463 5.9 0.8 0.9 5.5 4.0 0.8 14.6

CentBk Neutral 74 - - 0.6 - 3.5 102.4 0.6 14.9

CorpBk Accumulate 407 445 9.3 0.7 0.7 4.1 (3.4) 0.7 14.7

DenaBk Buy 107 123 15.0 0.7 0.8 4.4 2.5 0.8 15.6

IDBI#

Neutral 102 - - 0.6 - 4.6 17.5 0.9 13.9IndBk Accumulate 182 209 14.9 0.7 0.8 4.4 2.8 1.1 16.3

IOB Neutral 76 - - 0.5 - 3.8 23.0 0.6 13.1

J&KBk Neutral 1,347 - - 1.2 - 7.0 7.9 1.3 17.7

OBC Accumulate 319 347 8.9 0.7 0.8 4.9 29.0 0.9 14.4

PNB Accumulate 754 843 11.8 0.8 0.9 4.6 6.8 1.0 17.3

SBI* Buy 2,112 2,437 15.4 1.4 1.6 8.2 21.5 1.0 17.7

SynBk Accumulate 121 131 7.8 0.7 0.8 4.5 11.5 0.7 16.6

UcoBk Neutral 72 - - 0.8 - 4.9 2.0 0.5 13.4

UnionBk Accumulate 234 250 6.6 0.8 0.9 5.0 20.3 0.8 16.4

UtdBk Accumulate 68 77 14.2 0.48 0.6 3.2 18.4 0.7 15.7

VijBk Neutral 56 - - 0.7 - 5.4 6.1 0.5 11.9

Source: Company, Angel Research; Note:*Target multiples=SOTP Target Price/ABV (including subsidiaries), #Without adjusting for SASF,

CMP as of 27th November, 2012.

90,000

110,000

130,000

150,000

170,000

190,000

210,000

FY2011 FY2012 1HFY13

(`cr)

50,000

60,000

70,000

80,000

90,000

100,000

FY2011 FY2012 1HFY13

(`cr)


18/24


November 2012 18

Exhibit 33:Credit and deposit growth trends


Exhibit 34:Investment-Deposit ratio


Exhibit 35:CP rates have eased considerably...


Exhibit 36:...similar to CD rates

Source: Bloomberg, Angel Research

Exhibit 37:LAF borrowings


Exhibit 38:Forex reserves trends


10.0

12.0

14.0

16.0

18.0

20.0

22.0

24.0

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-12

Aug-12

Sep-12

Oct-12

Credit growth (%) Deposit growth (%)

27.0

28.0

29.0

30.0

31.0

32.0

68.0

70.0

72.0

74.0

76.0

78.0

80.0

82.0

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-12

Aug-12

Sep-12

Oct-12

Nov-12

C re dit/D eposit (%) Investme nt/D eposit (%)

6.0

7.0

8.0

9.0

10.0

11.0

12.0

13.0

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-12

Aug-12

Sep-12

Oct-12

Nov-12

(%) CP 3M CP 12M

6.0

7.0

8.0

9.0

10.0

11.0

12.0

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-12

Aug-12

Sep-12

Oct-12

Nov-12

(%) CD 3M CD 12M

(2,500)

(2,000)

(1,500)

(1,000)

(500)

-

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-12

Aug-12

Sep-12

Oct-12

Nov-12

(`bn)

240

260

280

300

320

340

Dec-11

Dec-11

Jan-12

Feb-12

Mar-12

Mar-12

Apr-12

May-12

May-12

Jun-12

Jul-12

Jul-12

Aug-12

Sep-12

Sep-12

Oct-12

Nov-12

US$ Bn


19/24


November 2012 19

Exhibit 39:Corporate and government bond yields

Source: Bloomberg, Angel Research;

Exhibit 40:G-Sec yields spread vs. Repo rate


Sectoral and Industry-wise distribution of credit

Exhibit 41:Credit growth driven by industry and personal loans segment

Agriculture 433,791 11.4 526,204 12.0 21.3

Industry 1,742,163 45.9 2,013,412 45.8 15.6

- Micro & Small 242,991 6.4 260,030 5.9 7.0

- Medium 195,666 5.2 196,781 4.5 0.6

- Large 1,303,507 34.3 1,556,601 35.4 19.4

Services 912,413 24.0 1,040,772 23.7 14.1Personal Loans 708,526 18.7 818,835 18.6 15.6

- Housing 366,889 9.7 421,336 9.6 14.8

- Vehicle 83,981 2.2 102,663 2.3 22.2


Exhibit 42:Strong growth being witnessed in Chemicals & Engineering

Infrastructure 564,958 32.4 650,072 32.3 15.1

Metals 230,161 13.2 272,939 13.6 18.6

Textiles 145,482 8.4 157,769 7.8 8.4

Engineering 101,632 5.8 122,960 6.1 21.0

Chemicals 96,670 5.5 117,738 5.8 21.8

Food Processing 85,516 4.9 102,255 5.1 19.6

Oil and Gas 64,062 3.7 65,044 3.2 1.5

Construction 50,977 2.9 59,484 3.0 16.7

Vehicles 50,097 2.9 60,095 3.0 20.0

Gems & Jewellery 46,786 2.7 54,099 2.7 15.6

Other Industries 305,823 17.6 350,957 17.4 14.8


9.41

9.45

9.47

9.45

8.09

8.00

8.18

8.19

8.93

9.03

9.07

9.01

8.10

7.99

8.19

8.20

7.0

7.5

8.0

8.5

9.0

9.5

10.0

AAA 1 Yr AAA 3 Yr AAA 5 Yr AAA 10Yr

Gsec 1Yr Gsec 3Yr Gsec 5Yr Gsec10Yr

27-Aug-12 26-Nov-12(%)

4.5

5.5

6.5

7.5

8.5

9.5

(1.0)

-

1.0

2.0

3.0

4.0

Jun-05

Feb-06

Oct-06

Jun-07

Feb-08

Oct-08

Jun-09

Feb-10

Oct-10

Jun-11

Feb-12

Oct-12

G-Sec 1Yr and 10Yr Spread (%) Repo Rate (%, RHS)


20/24


November 2012 20

Valuation watch

Exhibit 43:Private banks* P/ABV trend

Source: Company, Angel Research; Note: *pvt. banks under our coverage

Exhibit 44:Public sector banks P/ABV trend


Exhibit 45:New private banks P/ABV trend


Exhibit 46:Large public sector banks P/ABV trend


Exhibit 47:Old private* banks P/ABV trend

Source: Company, Angel Research; Note: *Old pvt. banks under our coverage

Exhibit 48:Mid-cap* public sector banks P/ABV trend

Source: Company, Angel Research, Note:*Mid and small PSU banks

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

Apr-04

Oct-04

Apr-05

Oct-05

Apr-06

Oct-06

Apr-07

Oct-07

Apr-08

Oct-08

Apr-09

Oct-09

Apr-10

Oct-10

Apr-11

Oct-11

Apr-12

Oct-12

P/ABV Median 15th percentile 85th percentile

0.30

0.60

0.90

1.20

1.50

1.80

Apr-04

Oct-04

Apr-05

Oct-05

Apr-06

Oct-06

Apr-07

Oct-07

Apr-08

Oct-08

Apr-09

Oct-09

Apr-10

Oct-10

Apr-11

Oct-11

Apr-12

Oct-12


0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

Apr-04

Oct-04

Apr-05

Oct-05

Apr-06

Oct-06

Apr-07

Oct-07

Apr-08

Oct-08

Apr-09

Oct-09

Apr-10

Oct-10

Apr-11

Oct-11

Apr-12

Oct-12


0.60

0.90

1.20

1.50

1.80

2.10

Apr-04

Oct-04

Apr-05

Oct-05

Apr-06

Oct-06

Apr-07

Oct-07

Apr-08

Oct-08

Apr-09

Oct-09

Apr-10

Oct-10

Apr-11

Oct-11

Apr-12

Oct-12


0.30

0.60

0.90

1.20

1.50

1.80

Apr-04

Oct-04

Apr-05

Oct-05

Apr-06

Oct-06

Apr-07

Oct-07

Apr-08

Oct-08

Apr-09

Oct-09

Apr-10

Oct-10

Apr-11

Oct-11

Apr-12

Oct-12


0.30

0.60

0.90

1.20

1.50

1.80

Apr-04

Oct-04

Apr-05

Oct-05

Apr-06

Oct-06

Apr-07

Oct-07

Apr-08

Oct-08

Apr-09

Oct-09

Apr-10

Oct-10

Apr-11

Oct-11

Apr-12

Oct-12



21/24


November 2012 21

Economy watch

Exhibit 49:Quarterly GDP trend

Source: CSO, Angel Research

Exhibit 50:IIP trend

Source: MOSPI, Angel Research

Exhibit 51:Monthly WPI inflation trend

Source: MOSPI, Angel Research

Exhibit 52:Manufacturing and services PMI

Source: Markit, Angel Research

Exhibit 53:Exports and imports growth trends


Exhibit 54:Policy rates - RBI

Source: Office of the Economic Adviser, Angel Research

3.5

5.7

9.0

7.5

11.2

8.5

7.68.2

9.2

8.0

6.76.1

5.3 5.5

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

12.0

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

(%)

(5.0)

6.0

2.7

1.0

4.3

(2.8) (1.3)

2.5

(2.0)(0.2)

2.3

(0.4)

(6.0)

(4.0)

(2.0)

-

2.0

4.0

6.0

8.0

Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-12

Aug-12

Sep-12

(%)

9.5

7.76.9

7.4 7.7 7.5 7.6 7.6 7.58.0 7.8 7.5

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-12

Aug-12

Sep-12

Oct-12

(%)

48.0

50.0

52.0

54.0

56.0

58.0

60.0

Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-12

Aug-12

Sep-12

Oct-12

Mfg. PMI Services PMI

(30.0)

(15.0)

0.0

15.0

30.0

45.0

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-12

Aug-12

Sep-12

Oct-12

Exports yoy growth Imports yoy growth(%)

8.00

7.00

4.25

4.00

5.00

6.00

7.00

8.00

9.00

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-12

Aug-12

Sep-12

Oct-12

Nov-12

Repo rate Reverse Repo rate CRR (%)


22/24


November 2012 22

Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com

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23/24


November 2012 23

Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)Reduce (-5% to -15%) Sell (< -15%)

Note: We have not considered any Exposure below `1 lakh for Angel, its Group companies and Directors

Disclosure of Interest Statement

AxisBk No No No No

FedBk No No No No

HDFCBk No No No No

ICICIBk No No No No

SIB No No No No

YesBk No No No No

AllBk No No No No

AndhBk No No No No

BOB No No No No

BOI No No No No

BOM No No No No

CanBk No No No No

CentBk No No No No

CorpBk No No No No

DenaBk No No No No

IDBI No No No No

IndBk No No No No

IOB No No No No

J&KBk No No No No

OBC No No No No

PNB No No No No

SBI No No Yes No

SynBk No No No No

UcoBk No No No No

UnionBk No No No No

UtdBk No No No No

VijBk No No No No


24/24


6th Floor, Ackruti Star, Central Road, MIDC, Andheri (E), Mumbai- 400 093. Tel: (022) 39357800

Research Team

Fundamental:Sarabjit Kour Nangra VP-Research, Pharmaceutical [email protected]

Vaibhav Agrawal VP-Research, Banking [email protected]

Bhavesh Chauhan Sr. Analyst (Metals & Mining) [email protected]

Viral Shah Sr. Analyst (Infrastructure) [email protected]

Sharan Lillaney Analyst (Mid-cap) [email protected]

V Srinivasan Analyst (Cement, FMCG) [email protected]

Yaresh Kothari Analyst (Automobile) [email protected]

Ankita Somani Analyst (IT, Telecom) [email protected]

Sourabh Taparia Analyst (Banking) [email protected]

Bhupali Gursale Economist [email protected]

Vinay Rachh Research Associate [email protected]

Amit Patil Research Associate [email protected]

Shareen Batatawala Research Associate [email protected]

Twinkle Gosar Research Associate [email protected]

Tejashwini Kumari Research Associate [email protected]

Technicals:

Shardul Kulkarni Sr. Technical Analyst [email protected]

Sameet Chavan Technical Analyst [email protected]

Sacchitanand Uttekar Technical Analyst [email protected]

Derivatives:

Siddarth Bhamre Head - Derivatives [email protected]

Institutional Sales Team:

Mayuresh Joshi VP - Institutional Sales [email protected]

Hiten Sampat Sr. A.V.P- Institution sales [email protected]

Meenakshi Chavan Dealer [email protected]

Gaurang Tisani Dealer [email protected]

Akshay Shah Sr. Executive [email protected]

Production Team:

Tejas Vahalia Research Editor [email protected]

Dilip Patel Production [email protected]

Banking ResultReview 2QFY2013

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