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Please refer to important disclosures at the end of this report 1
Margins improve on aggressive pass through of rate hikes
During 2QFY2012, earnings growth for the banking sector was aided by
sequential margin expansion for almost all banks, which offsetted asset-quality
pressures. The banking industry has been swift in passing on the rate hikes by the
RBI though hikes in lending rates over the last six months. Also, the lesser
aggressive stance adopted by bigger established players such as SBI and ICICI
Bank in terms of credit growth and with HDFC Bank in any case focusing on
profitable growth rather than just market share (all three have a combined market
share of ~30% of the systems credit) have given leeway to other smaller banks as
well to price their loans. Reflecting this, the reported margin for our coverage
universe improved by ~15bp qoq during 2QFY2012.
Asset quality deteriorates; some PSU banks buck the trend
While most PSU banks witnessed asset-quality stress and reported higher
slippages in 2QFY2012, primarily on account of completion of transition to
system-based NPA recognition, some banks managed to buck the trend by
maintaining or sequentially improving their asset quality. Notably, banks that had
already switched over to system-based NPA recognition before the mandated
timeline of September 30, 2011, such as BOB, BOM, J&KBK and Vijaya Bank,
witnessed an improvement in their NPA ratios in 2QFY2012 compared to
1QFY2012. Apart from slippages arising due to the switchover to system-based
NPA recognition, delinquencies from the SME and agri books further aggravated
asset-quality pressures and led to higher provisioning expenses for most banks
during 2QFY2012. With interest rates expected to remain high until the onset of
FY2013 and sectors such as infra, real estate and exports continuing to face
macro headwinds, asset-quality concerns are expected to linger. However, that
said, incremental provisioning expenses in FY2011 and FY2012 by banks on
account of switchover to system-based NPA recognition and to meet the increasein NPA prudential norms and the mandated provision coverage ratio of 70% have
led to a high base. Hence, the percentage increase in actual provisioning
expenses in the P&L is not expected to increase significantly, even though genuine
slippages are expected to increase going forward.
Outlook and valuation
In light of the macro environment, we prefer banks with a more conservative
asset-quality profile, especially amongst mid caps (for instance, relatively lower
yield on advances and moderate credit growth) this includes banks such as
Syndicate Bank and Bank of Maharashtra. Also, from a medium-term perspective,we continue to prefer large private banks with a strong structural investment case
within which we prefer Axis Bank and ICICI Bank from a valuation perspective.
Banking indicatorsParticulars (%)Latest yoy credit growth 18.4
Latest yoy deposit growth 17.5
Latest credit-to-deposit ratio 73.9
MTD avg. LAF borrowings (`cr) 82,717
MTD avg. 1-year G-Sec yield 8.7
MTD avg. 10-year G-Sec yield 8.9
MTD avg. 3-month CP rate 9.7
MTD avg. 12-month CP rate 10.1Source: RBI, Bloomberg, Angel Research;
Policy ratesParticulars (%)Repo rate 8.5
Reverse repo rate 7.5
MSF rate 9.5
Cash reserve ratio (CRR) 6.00
Statutory liquidity ratio (SLR) 24.00
Source: RBI, Angel Research
Vaibhav Agrawal022 3935 7800 Ext: 6808
Shrinivas Bhutda022 3935 7800 Ext: 6845
Varun Varma022 3935 7800 Ext: 6847
Financials2QFY2012 Result Review
Sector Update | Banking
November 24, 2011
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Sector Review | Banking
November 24, 2011 2
Margins improve on aggressive pass through of rate hikesby banks
During 2QFY2012, earnings growth for the banking sector was aided by
sequential margin expansion for almost all banks, which offsetted asset-quality
pressures. The banking industry has been swift in passing on the rate hikes by the
RBI though hikes in lending rates over the last six months. Almost all banks raised
their lending rates by 50bp within a week of a 50bp increment in the repo rate on
July 26, 2011.
Exhibit 1:Margin expansion* qoq for banks under coverage
Source: Company, Angel Research, Note: Domestic NIMs for SBI, BOB and BOI
Exhibit 2:Pvt. banks and SBI outperform on NII front yoy
Source: Company, Angel Research
The lesser aggressive stance adopted by bigger established players such as SBI
and ICICI Bank in terms of credit growth and with HDFC Bank in any casefocusing on profitable growth rather than just market share (all three have a
combined market share of ~30% of the systems credit) have given leeway to other
smaller banks as well to price their loans.
SBIs capital adequacy dropped significantly post the pension adjustments from its
reserves during 4QFY2011 (tier-I of 7.5% in 2QFY2012 compared to 9.6% in
3QFY2011). Further, with the government being strapped for cash due to its own
fiscal woes coupled with distressed market conditions, capital infusion has been
put on hold by the government, making SBI more focused on preserving capital
and generating more capital internally through higher profits. Moreover, its loan
book has witnessed continued stress over the last six months, prompting the banksmanagement, which changed post 3QFY2011 results, to adopt a more cautious
and profitability-focused lending approach. ICICI Bank has continued with its
consolidation strategy by exiting unattractive retail-based business segments and
reducing retail-based loans (35.0% share as of 2QFY2012 compared to 38.7%
share as of 4QFY2011) in favor of corporate and overseas advances.
With all three banks looking to maintain or improve their margins rather than
chasing market share gains, borrowers had to settle for higher rates, leading to
higher margin expansion for most other banks as well, creating a buffer to absorb
NPA provisioning expenses. Reflecting this, even though easing liquidity has kept
deposit rates in check in the last six months, banks have been able to increasetheir lending rates by 50bp-100bp. Consequently, the reported margin for our
coverage universe improved by ~15bp qoq during 2QFY2012.
(40.0)
(30.0)
(20.0)
(10.0)
-
10.0
20.0
30.0
40.0
50.0
60.0
AXSB
VIJAYA
UCOBK
BOI
CRPBK
INDBK
DENABK
ALLBK
BOB
SYNBK
CANBK
SIB
SBI
UTDBK
PNB
ANDBK
UNBK
YESBK
BOM
CENTBK
IOB
ICICIBK
IDBI
FEDBK
HDFCBK
J&KBK
OBC
(bp)
17.5
17.9
16.6
12.3
6.8
9.8
8.1
8.4
0.0
4.0
8.0
12.0
16.0
20.0
Large Pvt Other Pvt PSU PSU (excl. SBI)
% chg (yoy) % chg (qoq)
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Exhibit 3:Yield on advances (calculated) for banks under our coverageBanks YoA - 1HFY12 YoA - 2HFY11 Diff. ALLBK 11.96 10.20
YESBK 12.01 10.55 146 ANDHBK 12.29 11.00
UCOBK 11.07 9.78 128
FEDBK 12.37 11.09 128
CORPBK 10.48 9.20 128
AXSB 10.14 8.95
IDBI 11.21 10.04 118
CENTBK 11.07 9.97 110
CANBK 10.51 9.42 109
SIB 12.06 11.03 103
VIJBK 11.07 10.06
PNB 11.09 10.11 99
SBI 9.84 8.90 94
OBC 11.09 10.21 88
SYNBK 10.69 9.81 88
IOB 10.73 9.87 87
BOM 10.76 9.96 80
DENABK 10.98 10.22 75
INDBK 11.22 10.47 75
UNIONBK 10.21 9.48 73
HDFCBK 10.91 10.22 69
ICICIBK 9.16 8.47 69
BOB 9.03 8.35 68
UTDBK 10.61 10.13 49
BOI 8.87 8.46 41
J&KBK 11.44 11.08 36
Source: Company, Angel Research
Credit growth slows on expected lines amid a weakening
economic outlook
Credit growth trends for SCBs have been on a declining trend since the beginningof CY2011. Credit growth as of November 4, 2011, dropped to its lowest level
since June 2010 (17 months) to below 19% (at 18.4%) on account of slowing
economy as well as a high base effect (22.1% yoy growth in November 2010).
Incremental credit in FY2012 YTD is lower by 21.9% yoy compared to last year
(FY2011 YTD); however, deposit accretion continued to be healthy with
incremental YTD deposits growing by 66.7% yoy.
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Exhibit 4:Deposits increase, while credit offtake slows
Source: RBI, Angel Research; Note: #Between March 26, 2010, and
November 05, 2010, * Between March 25, 2011, and November 04, 2011
Exhibit 5:Credit deposit trends
Source: Company, Angel Research
The global economy inflicted by euro-sovereign crisis is facing headwinds and the
domestic economy has also been losing steam. High inflation and interest rates
are expected to keep credit growth sluggish going into FY2013. Accordingly, we
expect credit growth to slow down to 16-17% for FY2012.
Exhibit 6:Advances growth (%)Banks-Type 2QFY12 1QFY12 % chg(qoq) 2QFY11 % chg(yoy)Large PSU 2,036,842 1,993,903 2.2 1,712,031 19.0
Mid PSU 1,144,603 1,105,949 3.5 944,775 21.2
New Pvt 665,636 623,385 6.8 543,613 22.4Old Pvt 156,091 147,794 5.6 122,748 27.2
Grand Total 4,003,173 3,871,030 3.4 3,323,167 20.5Source: Company, Angel Research
Exhibit 7:Deposits growth (%)Banks-Type 2QFY12 1QFY12 % chg(qoq) 2QFY11 % chg(yoy)Large PSU 2,625,803 2,555,820 2.7 2,220,742 18.2
Mid PSU 1,581,672 1,522,322 3.9 1,322,580 19.6
New Pvt 789,056 735,313 7.3 674,893 16.9Old Pvt 214,595 202,953 5.7 169,377 26.7
Grand Total 5,211,126 5,016,409 3.9 4,387,591 18.8Source: Company, Angel Research
Exhibit 8:CD ratio for banks under our coverage
Source: Company, Angel Research
286,002319,960
241,815
449,403
-
100,000
200,000
300,000
400,000
500,000
Credit offtake (` cr) Deposit mobilisation (` cr)
FY2011# FY2012*(`cr)
-
5.0
10.0
15.0
20.0
25.0
30.0
Oct-08
Jan-0
9
Apr-09
Jul-09
Oct-09
Jan-1
0
Apr-10
Jul-10
Oct-10
Jan-1
1
Apr-11
Jul-11
Oct-11
Credit growth (%) Depos it growth (% )
55.0
65.0
75.0
85.0
HDFCBK
SYNBK
YESBK
IOB
ANDBK
UNBK
INDBK
PNB
UCOBK
BOM
AXSB
FEDBK
OBC
CANBK
SIB
UTDBK
VIJAYA
CENTBK
CRPBK
ALLBK
DENABK
J&KBK
(%)
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Exhibit 9:CASA yearly growth rate trendsBank Saving Acc.2QFY12 Saving Acc.2QFY11 yoy (%) Current Acc.2QFY12 Current Acc.2QFY11 yoy (%) CASA2QFY12 CASA2QFY11 yoy (%)IDBI 18,265 10,925 67.2 15,216 12,621 20.6 33,481 23,546 42.2
AXSB 46,786 37,812 23.7 35,354 27,374 29.2 82,140 65,186 26.0
J&KBK 13,515 11,031 22.5 4,590 5,298 (13.4) 18,105 16,329 10.9
FEDBK 10,183 8,596 18.5 1,983 2,025 (2.1) 12,166 10,621 14.5
SIB 5,764 4,888 17.9 1,274 1,091 16.8 7,038 5,979 17.7
CANBK 64,043 54,339 17.9 16,732 17,662 (5.3) 80,775 72,001 12.2
BOI 63,513 54,153 17.3 13,140 13,915 (5.6) 76,652 68,068 12.6
HDFCBK 69,017 59,525 15.9 40,093 39,363 1.9 109,110 98,888 10.3
ALLBK 35,875 30,982 15.8 7,609 8,448 (9.9) 43,484 39,430 10.3
BOB 68,541 59,349 15.5 21,639 20,466 5.7 90,180 79,815 13.0
PNB 100,491 87,296 15.1 23,531 23,687 (0.7) 124,022 110,983 11.7
BOM 21,699 19,153 13.3 6,550 5,989 9.4 28,249 25,142 12.4UTDBK 24,693 21,834 13.1 6,513 5,578 16.8 31,206 27,412 13.8
OBC 25,558 22,660 12.8 8,624 9,261 (6.9) 34,182 31,921 7.1
IOB 33,610 29,863 12.6 11,301 9,231 22.4 44,912 39,094 14.9
VIJBK 13,261 11,800 12.4 4,596 4,306 6.7 17,857 16,106 10.9
INDBK 27,804 24,797 12.1 6,813 6,807 0.1 34,617 31,604 9.5
CORPBK 16,645 14,850 12.1 9,660 9,414 2.6 26,305 24,264 8.4
ICICIBK 70,149 63,248 10.9 32,997 34,857 (5.3) 103,146 98,105 5.1
SYNBK 32,578 29,563 10.2 10,497 10,911 (3.8) 43,075 40,474 6.4
UCOBK 25,787 23,552 9.5 6,257 5,251 19.2 32,044 28,803 11.3
ANDHBK 19,355 17,754 9.0 5,338 6,131 (12.9) 24,693 23,885 3.4
CENTBK 49,071 45,027 9.0 12,717 12,763 (0.4) 61,788 57,790 6.9
Source: Company, Angel ResearchExhibit 10:Banks with highest credit growthBank 1yr (%) 3year CAGR 5yr CAGRIOB 44.2 22.8 26.3VIJAYA 36.4 15.4 23.9SIB 29.9 25.1 26.3AXSB 26.7 33.6 44.9BOM 24.0 17.0 23.3CRPBK 17.0 30.4 29.4BOB 23.9 28.9 30.7 ANDBK 21.527.8 26.4UNBK 18.6 26.6 23.1
Source: Company, Angel Research, Note:3-year CAGR over FY08-FY11,
5-year CAGR over FY2006-11
Exhibit 11:Banks with lowest credit growthBank 1yr (%) 3year CAGR 5yr CAGRUCOBK 12.4 21.6 21.5YESBK 12.7 53.9 70.2CENTBK 12.7 21.1 28.2SBI 16.1 22.0 23.7ALLBK 16.6 23.5 26.3J&KBK 21.8 11.5 12.6 VIJAYA 36.415.4 23.9BOM 24.0 17.0 23.3SYNBK 18.9 18.6 24.0
Source: Company, Angel Research, Note:3-year CAGR over FY08-FY11,
5-year CAGR over FY2006-11
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Asset quality broadly deteriorates; some PSU banks manage tobuck the trend
Most PSU banks witnessed asset-quality stress and reported higher slippages
(11 out of 21 PSU banks reporting more than a 20% qoq increase in theirNPA ratios) in 2QFY2012, primarily on account of completion of transition to
system-based NPA recognition, however some banks managed to buck the trend
by maintaining or sequentially improving their asset quality. Notably, banks that
had already switched over to system-based NPA recognition before the mandated
timeline of September 30, 2011, such as BOB, BOM, J&KBK and Vijaya Bank,
witnessed improvement in their NPA ratios in 2QFY2012 compared to 1QFY2012.
Also, few PSU banks particularly Dena Bank and PNB, though made substantial
switchover (`50lakhs and below for Dena, `10lakhs and below for PNB) during
2QFY2012, managed to surprise positively on the asset-quality front by reporting
lower-than-expected slippages. Also, in cases of Allahabad Bank, Andhra Bank,
Vijaya Bank and Central Bank, we were expecting a higher pressure on earnings
from asset-quality deterioration, which did not happen in 2Q, though we would
remain cautious regarding the same in the coming quarters.
Exhibit 12:Broadly asset quality weakened for most banks under our coverageBank Slippage ratio2QFY12 (%) Slippage ratio1QFY12 (%) change(bps) Qoq changeNNPA (%) PCR2QFY12 (%) PCR1QFY12 (%) change(ppt) Switchover in2QFY12 ANDHBK 6.1 1.4 478 222.1 61.7 82.0 (20.3)`25lakhs and below
OBC 6.3 1.6 469 86.8 63.8 75.1 (11.3) `10lakhs and below
UNBK 4.8 2.0 279 56.3 60.5 68.2 (7.7) `5lakhs and below
SYNBK 3.6 1.3 233 3.3 78.5 78.4 0.1 `25lakhs and below
BOI 5.3 3.2 214 57.8 59.1 66.8 (7.6) `5lakhs and below
CENTBK 3.8 1.8 199 62.2 56.8 65.2 (8.4) Above `10lakh
IOB 3.6 1.7 182 19.6 71.8 73.5 (1.7) `50lakhs and below
UTDBK 4.6 2.9 171 36.9 65.0 70.2 (5.2) `5lakhs and below
CRPBK 2.4 0.7 164 81.0 84.7 74.9 9.8 Fully done
ALLBK 2.2 0.6 158 12.8 79.6 79.9 (0.3)`50lakhs and below
INDBK 2.0 0.9 114 42.1 79.4 84.1 (4.8) Fully done
IDBI 2.4 1.6 77 26.4 70.1 74.0 (3.9) Fully done
SBI 4.2 3.9 33 29.6 63.5 67.3 (3.8) Fully done
DENABK 1.4 1.3 7 7.2 77.1 77.9 (0.8) `50lakhs and below
UCOBK 2.1 2.1 2 (0.8) 52.0 51.6 0.4`
50lakhs and belowBOB 1.0 1.0 (0) (0.7) 82.0 82.5 (0.5) Fully done
CANBK 2.3 2.6 (26) 8.6 68.6 69.5 (0.9) `2lakhs and below
PNB 1.6 1.9 (30) (0.1) 75.1 74.3 0.8 `10lakhs and below
J&KBK 0.8 1.3 (56) 6.3 92.0 92.5 (0.5) Fully done
BOM 0.8 1.6 (81) (46.5) 86.0 73.2 12.8 Fully done
VIJAYA 3.7 5.0 (129) (8.6) 66.1 63.4 2.7 Fully do
Source: Company, Angel Research
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Apart from slippages arising due to the switchover to system-based NPA
recognition, delinquencies from the SME and agri books further aggravated
asset-quality pressures and led to higher provisioning expenses for most banks
during 2QFY2012. While broadly asset quality deteriorated for PSU banks, privatebanks on the contrary, which have sharply improved their asset quality over the
past two years, remained comfortable on the asset-quality front. Apart from some
concerns from the MFI segment, which led to higher restructuring during
2QFY2012 for ICICI Bank (~`740cr), Axis bank (~`230cr), Yes Bank (~`90cr)
and South Indian Bank (`81cr), overall slippages remained contained for private
banks under our coverage.
Exhibit 13:Gross NPA trends (%) Pvt vs. PSU
Source: Company, Angel Research
Exhibit 14:Net NPA trends (%) Pvt vs. PSU
Source: Company, Angel Research
Exhibit 15:Gross NPA trend (%) for the banking industry
Source: Company, Angel Research
Exhibit 16:Net NPA trend (%) for the banking industry
Source: Company, Angel Research
2.963.19
3.123.20
3.06 2.892.65
2.552.45
2.322.53 2.56
2.64 2.58 2.59 2.61
2.712.96
1.50
1.80
2.10
2.40
2.70
3.00
3.30
3.60
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
2QFY12
Pvt Banks PSU Banks
1.311.39
1.15
1.05
0.900.78
0.62 0.62 0.59
1.04
1.22 1.26
1.27 1.21 1.18 1.26 1.28
1.53
0.30
0.50
0.70
0.90
1.10
1.301.50
1.70
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
2QFY12
Pvt Banks PSU Banks
2.37
2.46
2.36
2.432.47
2.40
2.27
2.43
2.73
2.10
2.20
2.30
2.40
2.50
2.60
2.70
2.80
2QF
Y10
3QF
Y10
4QF
Y10
1QF
Y11
2QF
Y11
3QF
Y11
4QF
Y11
1QF
Y12
2QF
Y12
1.06
1.16
1.09 1.08 1.07
1.00 0.98
1.04
1.28
0.90
1.00
1.10
1.20
1.30
1.40
2QF
Y10
3QF
Y10
4QF
Y10
1QF
Y11
2QF
Y11
3QF
Y11
4QF
Y11
1QF
Y12
2QF
Y12
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The incremental increase in base rates by banks, trailing the hikes in repo rates by
the RBI over the past year (average increase of 250300bp in base rates), coupled
with the slowdown in economic activity over the same period (more than 100bp
drop in GDP) is likely to have made debt servicing more challenging forborrowers. With interest rates expected to remain high until the onset of FY2013
and sectors such as infra, real estates and exports continuing to face macro
headwinds, asset-quality concerns are expected to linger. However, that said,
incremental provisioning expenses in the current fiscal by banks on account of
switchover to system-based NPA recognition and to meet the increase in NPA
prudential norms and the mandated provision coverage ratio of 70% have led to a
high base. Hence, the percentage increase in actual provisioning expenses in the
P&L is not expected to increase significantly, even though genuine slippages are
expected to increase going forward.
Exhibit 17:Movement in yields* PSU banksBank Yield onAssets(%)
Prov. Cost toassets(%)Risk-adjustedyields(%)
Slippageratio(%)PCR(%)
CASAratio(%)Fee inc. toassets(%)
FY2013EP/ABV(x)FY11-13E EPSCAGR(%)
FY2013ERoE(%)PNB 8.8 0.8 8.0 1.6 75.1 37.1 0.87 1.00 9.9 20.6
CANBK 8.5 0.5 8.1 2.3 68.6 25.8 0.74 0.82 (3.0) 17.2
UNBK 8.4 0.9 7.7 4.8 60.5 32.1 0.65 0.78 5.2 17.0
J&KBK 8.5 0.3 8.3 0.8 92.0 38.2 0.46 0.78 12.0 17.8
INDBK 9.1 0.6 8.6 2.0 79.4 29.8 0.82 0.75 7.4 19.4
UCOBK 8.7 1.0 7.9 2.1 52.0 26.3 0.44 0.68 15.9 16.7
ALLBK 9.4 0.9 8.6 2.2 79.6 30.6 0.71 0.67 12.2 18.4
ANDHBK 9.8 0.8 9.2 6.1 61.7 26.1 0.57 0.66 (1.0) 15.6
SYNBK 8.9 1.0 8.0 3.6 78.5 30.5 0.58 0.64 11.8 16.3
OBC 8.9 1.0 8.0 6.3 63.8 22.9 0.61 0.64 5.1 14.1
CENTBK 8.8 0.8 8.2 3.8 56.8 32.8 0.43 0.63 (16.1) 13.9
VIJAYA 8.9 0.8 8.3 3.7 66.1 23.0 0.50 0.63 3.6 11.7
BOM 8.9 1.3 7.6 0.8 86.0 40.7 0.80 0.63 26.8 15.6
CRPBK 8.5 0.5 8.2 2.4 84.7 21.8 0.75 0.59 1.5 16.6
IDBI 9.1 0.6 8.5 2.4 70.1 19.2 0.67 0.59 12.3 14.0
IOB 8.9 1.2 7.6 3.6 71.8 27.5 0.77 0.57 20.0 15.9
UBI 8.4 1.1 7.5 4.6 65.0 39.9 0.48 0.51 12.4 14.0
DENABK 8.9 0.4 8.5 1.4 77.1 35.6 0.66 0.45 7.5 16.4
Source: Company, Angel Research; Note*: Yield on assets, Prov. cost to assets, Risk-adjusted yields to assets and fee income to assets as of 1HFY2012 for
all banks. Tier-I ratio, CASA ratio, slippage ratio, PCR for all banks as of 2QFY2012, #FY2013 P/ABV without adjusting for SASF. Closing prices as of
November 24, 2011
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Exhibit 18:Most banks comfortable on the capital adequacy frontBank Tier-I (%) Tier-II (%) CAR (%)FEDBK 14.0 1.0 15.1
ICICIBK 13.1 5.9 19.0HDFCBK 11.4 5.1 16.5
J&KBK 11.3 2.3 13.6
SIB 10.8 2.7 13.5
OBC 9.9 2.7 12.6
INDBK 9.9 2.3 12.2
YESBK 9.4 6.6 16.0
DENABK 9.3 3.3 12.6
VIJAYA 9.2 3.5
CANBK 9.2 3.6 12.8
UTDBK 8.9 4.0 13.0
ALLBK 8.9 4.1
BOB 8.8 3.9 12.7
UCOBK 8.6 5.0 13.6
SYNBK 8.6 3.3 11.9
ANDBK 8.5 4.0
UNBK 8.5 4.0 12.5
AXSB 8.5 2.9
PNB 8.4 3.9 12.2
BOI 8.3 3.7 12.0
CRPBK 8.2 5.4 13.6
CENTBK 7.9 4.9 12.8
IDBI 7.8 5.6 13.3
SBI 7.5 3.9 11.4
BOM 7.1 4.8 11.9
IOB 7.0 5.4 12.4
Source: Company, Angel Research
Fee income growth for banks moderates during 1HFY2012
Fee income performance of banks under our coverage was moderate in
1HFY2012, registering growth of 8.7% qoq and 13.4% yoy. Compared to FY2011,most banks witnessed a decline in fee income to average assets in 1HFY2012
(average of ~10bp for our coverage universe), in-line with the drop in credit
growth over the last six months. Some of the mid-sized banks who revised their fee
charges such as BOM and UBI outperformed in terms of change in their fees as %
of average total assets. On the other hand, IOBs high fee growth was attributable
to unsustainably high credit growth, while others like Indian and Central Bank had
non core elements (income tax refund in case of Indian Bank and strong recoveries
for Central Bank of India). Otherwise, generally several banks including large Pvt
and PSU Banks saw modest fee income performance.
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Exhibit 19:Other income (excl. treasury) performance for banks under our coverageBank Fee income2QFY12 Fee income1QFY12 % chg (qoq) Fee income2QFY11 % chg (yoy) Fee inc toassets (%) FY2011 Fee inc toassets (%) 1HFY2012 Diff.BOM 1,470 1,644 (10.6) 1,088 35.0 0.63 0.80 0.17
IOB 3,781 3,544 6.7 2,598 45.5 0.72 0.77 0.05
OBC 2,591 2,522 2.8 2,133 21.5 0.59 0.61 0.02
SYNBK 2,324 2,334 (0.4) 2,295 1.3 0.60 0.58 (0.01)
BOI 6,874 5,504 24.9 5,485 25.3 0.74 0.70 (0.04)
UTDBK 1,147 1,032 11.1 1,004 14.3 0.53 0.48 (0.04)
VIJAYA 997 1,144(12.9) 937 6.4 0.55 0.50 (0.04)
BOB 7,242 5,669 27.8 5,712 26.8 0.74 0.69 (0.05)
CENTBK 2,794 1,779 57.1 2,025 38.0 0.49 0.43 (0.06)
CANBK 6,793 6,038 12.5 4,980 36.4 0.82 0.74 (0.08)
UNBK 4,009 3,710 8.1 3,786 5.9 0.73 0.65 (0.08)
SIB 42 37 13.8 39 8.0 0.54 0.45 (0.09)ICICIBK 1,820 1,668 9.1 1,722 5.7 1.74 1.65 (0.10)
INDBK 3,213 2,023 58.8 2,637 21.9 0.93 0.82 (0.11)
UCOBK 1,618 1,904 (15.0) 2,143 (24.5) 0.55 0.44 (0.11)
PNB 7,839 9,097 (13.8) 6,583 19.1 0.98 0.87 (0.11)
J&KBK 627 569 10.3 563 11.4 0.59 0.46 (0.13)
CRPBK 2,755 2,554 7.9 2,217 24.3 0.87 0.75 (0.13)
IDBI 4,331 4,079 6.2 5,292 (18.2) 0.81 0.67 (0.14)
DENABK 1,094 1,230 (11.0) 1,190 (8.1) 0.79 0.66 (0.14)
AXSB 1,207 1,09810.0 925 30.5 2.02 1.87 (0.15)
HDFCBK 1,213 1,161 4.4 1,013 19.8 1.77 1.60 (0.17)
ALLBK 3,022 2,59916.3 3,077 (1.8) 0.89 0.71 (0.17)
SBI 3,399 3,365 1.0 3,813 (10.8) 1.28 1.10 (0.19)
ANDHBK 1,557 1,576(1.2) 1,731 (10.1) 0.76 0.57 (0.19)
FEDBK 103 101 2.0 130 (20.8) 0.99 0.75 (0.24)
Source: Company, Angel Research
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November 24, 2011 11
Outlook and valuation
The broad lending and deposit rates seem to have settled down. Further, with the
RBI indicating a pause in monetary tightening at least for the next policy review, we
expect margins of banks to remain at relatively similar levels for the next twoquarters, as witnessed in 2QFY2012. However, leftover upward deposit re-pricing
coupled with increased saving deposit rates in cases of some banks could result in
marginal NIM contraction.
With interest rates having been at the higher-end for quite some time now and
macro headwinds continuing to hit sectors such as power, textile and real estate
where banks have significant exposures material asset-quality concerns have
started to emerge. While NPA ratios of most PSU banks were expected to
deteriorate during 2QFY2012 on account of switchover to system-based NPA
recognition, fresh slippages from agri-based and SME segments and
uncharacteristically higher NPAs from metals and exports-oriented sectors resultedin higher-than-estimated provisioning expenses for most banks under our
coverage.
Accordingly, we prefer banks with a more conservative asset-quality profile,
especially amongst mid caps (for instance, relatively lower yield on advances and
moderate credit growth) this includes banks such as Syndicate Bank and Bank of
Maharashtra. Also, from a medium-term perspective, we continue to prefer large
private banks with a strong structural investment case within which we prefer Axis
Bank and ICICI Bank from a valuation perspective.
Exhibit 20:PSU banks price band (P/ABV)*
Source: C-line, Angel Research, Note:* For PSU banks , excl. SBI and IDBI
Exhibit 21:Large Pvt. banks price band (P/ABV)
Source: Company, Angel Research
-
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
Apr-01
Nov-0
1
Jun-0
2
Jan-0
3
Aug-0
3
Mar-04
Oct-04
May-0
5
Dec-0
5
Jul-06
Feb-0
7
Sep-0
7
Apr-08
Nov-0
8
Jun-0
9
Jan-1
0
Aug-1
0
Mar-11
Oct-11
-
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
Apr-01
Nov-0
1
Jun-0
2
Jan-0
3
Aug-0
3
Mar-04
Oct-04
May-0
5
Dec-0
5
Jul-06
Feb-0
7
Sep-0
7
Apr-08
Nov-0
8
Jun-0
9
Jan-1
0
Aug-1
0
Mar-11
Oct-11
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Sector-wise performance
Exhibit 22:Large PSUs P&LParameter 2QFY12 1QFY12 % chg(qoq) 2QFY11 % chg(yoy)NII 23,090 21,489 7.5 19,539 18.2
Other Income 7,701 7,361 4.6 7,565 1.8
Operating Profit 30,791 28,849 6.7 27,103 13.6
Operating Expenses 13,293 12,452 6.8 12,038 10.4
Pre provision profit 17,497 16,398 6.7 15,065 16.1
Provisions &Contingencies
7,230 7,207 0.3 5,049 43.2
PBT 10,267 9,190 11.7 10,017 2.5
Tax 2,874 3,426 (16.1) 3,064 (6.2)
Net Profit 7,393 5,764 28.3 6,952 6.3
Source: Company, Angel Research
Exhibit 23:Mid PSUs P&LParameter 2QFY12 1QFY12 % chg(qoq) 2QFY11 % chg(yoy)NII 13,200 12,097 9.1 11,620 13.6
Other Income 3,406 3,350 1.7 2,978 14.4
Operating Profit 16,606 15,447 7.5 14,598 13.8
Operating Expenses 7,235 6,801 6.4 6,547 10.5
Pre provision profit 9,370 8,646 8.4 8,051 16.4
Provisions &Contingencies
4,351 3,580 21.5 3,144 38.4
PBT 5,019 5,066 (0.9) 4,908 2.3
Tax 1,202 1,286 (6.5) 1,356 (11.3)
Net Profit 3,817 3,780 1.0 3,552 7.5
Source: Company, Angel Research
Exhibit 24:New Pvt. P&LParameter 2QFY12 1QFY12 % chg(qoq) 2QFY11 % chg(yoy)NII 8,868 8,295 6.9 7,501 18.2
Other Income 4,852 4,540 6.9 4,049 19.8
Operating Profit 13,720 12,835 6.9 11,550 18.8
Operating Expenses 6,366 5,986 6.3 5,174 23.0
Pre provision profit 7,354 6,849 7.4 6,375 15.4
Provisions &Contingencies
1,173 1,142 2.7 1,594 (26.4)
PBT 6,181 5,707 8.3 4,781 29.3
Tax 1,870 1,699 10.1 1,394 34.2
Net Profit 4,311 4,008 7.6 3,388 27.3
Source: Company, Angel Research
Exhibit 25:Old Pvt. P&LParameter 2QFY12 1QFY12 % chg(qoq) 2QFY11 % chg(yoy)NII 1,779 1,614 10.2 1,493 19.1
Other Income 636 624 1.9 674 (5.8)
Operating Profit 2,414 2,238 7.9 2,168 11.4
Operating Expenses 1,238 1,114 11.1 1,053 17.6
Pre provision profit 1,176 1,124 4.7 1,115 5.5
Provisions &
Contingencies
210 336 (37.3) 404 (48.0)
PBT 966 788 22.5 711 35.8
Tax 286 204 40.2 195 46.3
Net Profit 680 584 16.4 516 31.8
Source: Company, Angel ResearchExhibit 26:DuPont analysis 1HFY2012 vs. FY2011
Large PSU Mid PSU New Pvt Old Pvt Grand TotalParameter FY2011 1HFY2012 FY2011 1HFY2012 FY2011 1HFY2012 FY2011 1HFY2012 FY2011 1HFY2012NII 2.8 2.8 2.8 2.7 3.1 3.0 2.9 2.8 2.8 2.8
(-) Prov. Exp. 0.7 0.9 0.7 0.8 0.6 0.4 0.6 0.4 0.7 0.8 Adj NII 2.1 1.9 2.1 1.9 2.5 2.6 2.3 2.3 2.2 2.0
Other Inc. 1.1 1.0 0.8 0.7 1.8 1.7 1.2 1.0 1.1 1.0
Op. Inc. 3.2 2.8 2.9 2.6 4.3 4.3 3.5 3.4 3.3 3.0
Opex 1.8 1.6 1.7 1.5 2.2 2.2 2.0 1.9 1.8 1.7
PBT 1.4 1.2 1.2 1.1 2.1 2.1 1.5 1.4 1.5 1.3
Taxes 0.5 0.4 0.3 0.3 0.6 0.6 0.4 0.4 0.5 0.4
RoA 0.9 0.8 0.9 0.8 1.5 1.5 1.0 1.0 1.0 0.9Leverage 19.6 19.2 21.0 19.6 10.5 10.7 13.4 13.3 17.2 16.8
RoE 18.7 15.9 18.4 15.9 15.7 15.8 13.9 13.8 17.6 15.8Source: Company, Angel Research
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Banking indicators watchExhibit 27:Credit and deposit growth trends
Source: RBI, Angel Research
Exhibit 28:Investment-deposit ratio
Source: RBI, Angel Research
Exhibit 29:LAF borrowings high over the last fortnight
Source: RBI, Angel Research
Exhibit 30:Wholesale rates remain steady
Source: Bloomberg, Angel Research
Exhibit 31:Forex reserves
Source: RBI, Angel Research
Exhibit 32:ECB demand picks up on rate differential
Source: RBI, Angel Research
-
5.0
10.0
15.0
20.0
25.0
30.0
Oct-08
Jan-0
9
Apr-09
Jul-09
Oct-09
Jan-1
0
Apr-10
Jul-10
Oct-10
Jan-1
1
Apr-11
Jul-11
Oct-11
Credit growth (%) Depos it growth (% )
27.0
28.0
29.0
30.0
31.0
32.0
70.0
72.0
74.0
76.0
78.0
Nov-1
0
Dec-1
0
Jan-1
1
Feb-1
1
Mar-11
Apr-11
May-1
1
Jun-1
1
Jul-11
Aug-1
1
Sep-1
1
Oct-11
Credit-to-Deposit ratio (%) Inv-to-Dep ratio (% , RHS)
(2,000)
(1,500)
(1,000)
(500)
-
500
1,000
Dec-1
0
Jan-1
1
Feb-1
1
Mar-11
Apr-11
May-1
1
Jun-1
1
Jul-11
Aug-1
1
Sep-1
1
Oct-11
Nov-1
1
(` bn)
6.0
7.0
8.0
9.0
10.0
11.0
12.0
Nov-1
0
Dec-1
0
Jan-1
1
Feb-1
1
Mar-11
Apr-11
May-1
1
Jun-1
1
Jul-11
Aug-1
1
Sep-1
1
Oct-11
Nov-1
1
CP 3M CP 12M
-
80
160
240
320
400
Sep-1
0
Oct-10
Nov-1
0
Dec-1
0
Jan-1
1
Feb-1
1
Mar-11
Apr-11
May-1
1
Jun-1
1
Jul-11
Aug-1
1
Sep-1
1
Oct-11
Nov-1
1
(US$ Bn)
1.1
3.1
0.81.1
3.4
2.7
1.4
5.6
2.1 2.7
3.3
4.23.7
-
1.0
2.0
3.0
4.0
5.0
6.0
Aug-1
0
Sep-1
0
Oct-10
Nov-1
0
Dec-1
0
Jan-1
1
Feb-1
1
Mar-11
Apr-11
May-1
1
Jun-1
1
Jul-11
Aug-1
1
(US$ bn)
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Exhibit 33:Corporate and government bond yields
Source: Bloomberg, Angel Research
Exhibit 34:G-sec yields indicating close to cyclical peak
Source: Bloomberg, Angel Research
Lending and deposit rates
Exhibit 35:Lending (average base rate) watchBank Current (%) 3m ch. (bp) 6m ch. (bp) 1yr ch. (bp) AXSB 10.00 19 102 240
BOB 10.00 19 95 250
BOI 10.00 19 85 225
CANBK 10.00 4 56 225
HDFCBK 10.75 - 81 225
ICICIBK 10.75 - 83 225
IDBI 10.75 - 83 225
PNB 10.75 - 81 225
SBI 10.75 11 85 225
UNBK 10.75 - 81 225
Source: Company, Angel Research
Exhibit 36:Peak retail FD rate in 1-3 years maturityBank Current (%) over 2QFY12 over 1QFY12 over 2QFY11 AXSB 9.25 - -
BOB 9.35 - 35 210
BOI 9.25 - - 150
CANBK 9.25 - - 200
HDFCBK 9.25 - - 175
ICICIBK 9.25 - - 150
IDBI 9.50 - - 175
PNB 9.40 - 25 215
SBI 9.25 - - 200
UNBK 9.25 - - 200
Source: Company, Angel Research; Note: all changes in bp
Sectoral distribution of credit
Exhibit 37:Credit growth driven by industry and services sectorSector Sep 2010 Sep 2011(` cr) % of total (` cr) % of total % chg (yoy) Agriculture 401,93312.6 433,791 11.4 7.9
Industry 1,417,200 44.3 1,742,163 45.9 22.9
- Micro & Small 213,741 6.7 242,991 6.4 13.7
- Medium 148,768 4.7 195,666 5.2 31.5
- Large 1,054,691 33.0 1,303,507 34.3 23.6
Services 764,823 23.9 912,413 24.0 19.3
Personal Loans 615,195 19.2 708,526 18.7 15.2
- Housing 317,150 9.9 366,889 9.7 15.7
- Vehicle 70,374 2.2 83,981 2.2 19.3
Non-food Credit 3,199,151 100 3,796,893 100 18.7Source: RBI, Angel Research
9.6
6
9.6
0
9.6
6
9.7
4
8.7
0
8.8
4
8.8
7
8.8
8
9.8
3
9.7
4
9.7
2
9.7
4
8.2
9
8.4
9
8.4
8
8.4
1
7.0
7.5
8.0
8.5
9.0
9.5
10.0
AAA 1 YrAAA 3 YrAAA 5 YrAAA 10 YrGsec 1YrGsec 5YrGsec 7YrGsec 10Yr
31-Oct-11 31-May-11(%)
4.5
5.5
6.5
7.5
8.5
9.5
(1.0)
-
1.0
2.0
3.0
4.0
Jun-0
5
Jan-0
6
Aug-0
6
Mar-07
Oct-07
May-0
8
Dec-0
8
Jul-09
Feb-1
0
Sep-1
0
Apr-11
Nov-1
1
G-Sec 1Yr and 10Yr Spread (%) Repo Rate (%, RHS)
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Industry-wise distribution of credit
Exhibit 38:Strong growth being witnessed in metalsIndustry
Sep 2010 Sep 2011(` cr) % of total (` cr) % of total % chg (yoy)
Infrastructure 469,621 33.1 564,958 32.4 20.3
Metals 176,306 12.4 230,161 13.2 30.5
Textiles 123,764 8.7 145,482 8.4 17.5
Engineering 82,987 5.9 101,632 5.8 22.5
Chemicals 88,348 6.2 96,670 5.5 9.4
Food Processing 68,153 4.8 85,516 4.9 25.5
Oil and Gas 57,098 4.0 64,062 3.7 12.2
Construction 42,661 3.0 50,977 2.9 19.5
Vehicles 40,9152.9 50,097 2.9 22.4
Gems & Jewellery 33,962 2.4 46,786 2.7 37.8
Other Industries 233,384 16.5 305,823 17.6 31.0
Total 1,417,199 100 1,742,164 100 22.9Source: RBI, Angel Research
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Valuation watch
Exhibit 39:Private banks P/ABV trends*
Source: Company, Angel Research; Note: Private banks under our coverage
Exhibit 40:Public sector banks P/ABV trends
Source: Company, Angel Research
Exhibit 41:Large private banks P/ABV trends
Source: Company, Angel Research
Exhibit 42:Large public sector banks P/ABV trends
Source: Company, Angel Research
Exhibit 43:Small private banks P/ABV trends*
Source: Company, Angel Research; Note: Small pvt. banks under our coverage
Exhibit 44:Mid-cap* public sector banks P/ABV trends
Source: Company, Angel Research, Note*:Mid and small PSU banks
0.60
1.00
1.40
1.80
2.20
2.60
3.00
3.40
Mar-05
Sep-0
5
Mar-06
Sep-0
6
Mar-07
Sep-0
7
Mar-08
Sep-0
8
Mar-09
Sep-0
9
Mar-10
Sep-1
0
Mar-11
Sep-1
1
P/ABV Median 15th percentile 85th percentile
0.50
0.80
1.10
1.40
1.70
2.00
Mar-05
Aug-0
5
Jan-0
6
Jun-0
6
Nov-0
6
Apr-07
Sep-0
7
Feb-0
8
Jul-08
Dec-0
8
May-0
9
Oct-09
Mar-10
Aug-1
0
Jan-1
1
Jun-1
1
P/ABV Median 15th percentile 85th percentile
0.60
1.00
1.40
1.80
2.20
2.60
3.00
3.40
Mar-05
Sep-0
5
Mar-06
Sep-0
6
Mar-07
Sep-0
7
Mar-08
Sep-0
8
Mar-09
Sep-0
9
Mar-10
Sep-1
0
Mar-11
Sep-1
1
P/ABV Median 15th percentile 85th percentile
0.70
1.00
1.30
1.60
1.90
2.20
Mar-05
Aug-0
5
Jan-0
6
Jun-0
6
Nov-0
6
Apr-07
Sep-0
7
Feb-0
8
Jul-08
Dec-0
8
May-0
9
Oct-09
Mar-10
Aug-1
0
Jan-1
1
Jun-1
1
P/ABV Median 15th percentile 85th percentile
0.30
0.70
1.10
1.50
1.90
2.30
Mar-05
Sep-0
5
Mar-06
Sep-0
6
Mar-07
Sep-0
7
Mar-08
Sep-0
8
Mar-09
Sep-0
9
Mar-10
Sep-1
0
Mar-11
Sep-1
1
P/ABV Median 15th percentile 85th percentile
0.30
0.60
0.90
1.20
1.50
Mar-05
Aug-0
5
Jan-0
6
Jun-0
6
Nov-0
6
Apr-07
Sep-0
7
Feb-0
8
Jul-08
Dec-0
8
May-0
9
Oct-09
Mar-10
Aug-1
0
Jan-1
1
Jun-1
1
P/ABV Median 15th percentile 85th percentile
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Economy watch
Exhibit 45:Quarterly GDP trends
Source: CSO, Angel Research
Exhibit 46:IIP trends
Source: MOSPI, Angel Research
Exhibit 47:Monthly WPI inflation trends
Source: MOSPI, Angel Research
Exhibit 48:Manufacturing and services PMI
Source: Markit, Angel Research
Exhibit 49:Exports and imports growth trends
Source: Bloomberg, Angel Research
Exhibit 50:Eight core industry growth rates for September
Source: Bloomberg, Angel Research
7.5
6.15.8
6.3
8.6
7.3
9.4
8.8 8.9
8.37.8 7.7
5.0
6.0
7.0
8.0
9.0
10.0
2QFY09
3QFY09
4QFY09
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
(%) 11.4
6.4
8.17.5
6.7
9.4
5.36.2
9.5
3.8 3.6
1.9
-
2.0
4.0
6.0
8.0
10.0
12.0
Oct-10
Nov-1
0
Dec-1
0
Jan-1
1
Feb-1
1
Mar-11
Apr-11
May-1
1
Jun-1
1
Jul-11
Aug-1
1
Sep-1
1
(%)
8.2
9.5 9.5 9.59.7 9.7
9.6 9.59.4
9.8 9.7 9.7
7.0
7.5
8.0
8.5
9.0
9.5
10.0
Nov-1
0
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
(%)
48.0
50.0
52.0
54.0
56.0
58.0
60.0
62.0
Oct-10
Nov-1
0
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Mfg. PMI Services PMI
(15.0)
-
15.0
30.0
45.0
60.0
75.0
90.0
Oct-10
Nov-1
0
Dec-1
0
Jan-1
1
Feb-1
1
Mar-11
Apr-11
May-1
1
Jun-1
1
Jul-11
Aug-1
1
Sep-1
1
Exports growth Imports growth(%
2.3
-17.8
0.1
-6.4
4.4
-2.1
6.6
0.9
8.9
-20
-15
-10
-5
0
5
10
OverallIndex
Coal
Crude
Oil
NaturalGas
Refinery
Products
Fertilizers
Steel
Cement
Electricity
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Exhibit 51:Recommendation summaryCompany Reco. CMP(`) Tgt. price(`) Upside(%) FY2013EP/ABV (x) FY2013ETgt P/ABV (x) FY2013EP/E (x) FY2011-13EEPS CAGR (%) FY2013ERoA (%) FY2013ERoE (%) AxisBk Buy 937 1,32241.1 1.52 2.2 8.2 17.7 1.5 20.0
FedBk Buy 340 407 19.7 0.92 1.1 6.9 19.5 1.2 14.0
HDFCBk Accumulate 427 489 14.7 2.88 3.3 14.9 30.5 1.7 20.9
ICICIBk* Buy 727 1,027 41.3 1.33 1.9 10.7 23.3 1.4 15.4
SIB Accumulate 21 22 9.5 1.00 1.1 5.9 15.6 1.0 18.2
YesBk Buy 264 316 19.4 1.67 2.0 8.8 19.9 1.3 20.8
AllBk Neutral 147 -- 0.67 - 3.9 12.2 1.0 18.4
AndhBk Neutral 96 -- 0.66 - 4.3 (1.0) 0.9 15.6
BOB Buy 696 845 21.3 0.95 1.2 4.9 14.2 1.2 20.7
BOI Neutral 325 - - 0.96 - 5.6 13.4 0.7 16.9
BOM Buy 45 54 19.5 0.63 0.8 4.6 26.8 0.6 15.6
CanBk Buy 418 510 22.0 0.82 1.0 4.9 (3.0) 0.9 17.2CentBk Neutral 87 - - 0.63 - 4.4 (16.1) 0.5 13.9
CorpBk Buy 357 438 22.7 0.59 0.7 3.6 1.5 0.8 16.6
DenaBk Neutral 62 - - 0.45 - 2.9 7.5 0.8 16.4
IDBI# Neutral 91 - - 0.59 - 4.3 12.3 0.7 14.0
IndBk Accumulate 189 208 10.4 0.75 0.8 4.2 7.4 1.3 19.4
IOB Accumulate 91 103 14.0 0.57 0.7 3.6 20.0 0.6 15.9
J&KBk Neutral 742 - - 0.78 - 4.7 12.0 1.3 17.8
OBC Accumulate 266 291 9.4 0.64 0.7 4.7 5.1 0.8 14.1
PNB Accumulate 885 1,017 15.0 1.00 1.2 5.2 9.9 1.1 20.6
SBI* Buy 1,654 2,12728.6
1.30 1.7 7.1 33.9 0.9 20.0SynBk Buy 96 119 24.2 0.64 0.8 4.2 11.8 0.7 16.3
UcoBk Neutral 58 - - 0.68 - 3.5 15.9 0.7 16.7
UnionBk Buy 206 238 15.5 0.78 0.9 4.7 5.2 0.8 17.0
UtdBk Buy 57 70 22.3 0.51 0.6 3.4 12.4 0.6 14.0
VijBk Neutral 50 -- 0.63 - 5.3 3.6 0.4 11.7
Source: Company, Angel Research; Note:*Target multiples=SOTP Target Price/ABV (including subsidiaries), #Without adjusting for SASF, CMP as of 24th Nov
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Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
DISCLAIMERThis document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investmentdecision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make
such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies
referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and
risks of such an investment.
Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make
investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this
document are those of the analyst, and the company may or may not subscribe to all the views expressed within.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals.
The information in this document has been printed on the basis of publicly available information, internal data and other reliablesources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as thisdocument is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any wayresponsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report .Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify,nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. WhileAngel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory,compliance, or other reasons that prevent us from doing so.
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Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to thelatest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may haveinvestment positions in the stocks recommended in this report.
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Ratings (Returns): 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
Analyst ownership Angel and its Group companies Angel and its Group companies' Broking relationshipof the stock ownership of the stock Directors ownership of the stock with company covered
Axis Bank No Yes Yes NFedral Bank No No No No
HDFC Bank No No No No
ICICI Bank No No No No
SIB No No No No
Yes Bank No No No No
Allahabad Bank No No No No
Andhra Bank No No No N
Bank of Baroda No No No No
Bank of India No No No No
Bank of Maharashtra No No No No
Canara Bank No No No NoCentral Bank No No No No
Corporation Bank No No No No
Dena Bank No No No No
IDBI No No No No
Indian Bank No No No No
IOB No No No No
J&K Bank No No No No
OBC No No No No
PNB No No No No
SBI No No Yes No
Syndicate Bank No No No No
UCO Bank No No No No
Union Bank No No No No
United Bank of India No No No No
Vijaya Bank No No No N
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6th Floor, Ackruti Star, Central Road, MIDC, Andheri (E), Mumbai- 400 093. Tel: (022) 39357800Research Team
Fundamental:
Sarabjit Kour Nangra VP-Research, Pharmaceutical [email protected]
Vaibhav Agrawal VP-Research, Banking [email protected]
Shailesh Kanani Infrastructure [email protected]
Srishti Anand IT, Telecom [email protected]
Bhavesh Chauhan Metals & Mining [email protected]
Sharan Lillaney Mid-cap [email protected]
V Srinivasan Research Associate (Cement, Power) [email protected]
Yaresh Kothari Research Associate (Automobile) [email protected]
Shrinivas Bhutda Research Associate (Banking) [email protected]
Sreekanth P.V.S Research Associate (FMCG, Media) [email protected]
Hemang Thaker Research Associate (Capital Goods) [email protected]
Nitin Arora Research Associate (Infra, Real Estate) [email protected]
Ankita Somani Research Associate (IT, Telecom) [email protected]
Varun Varma Research Associate (Banking) [email protected]
Saurabh Taparia Research Associate (Cement, Power) [email protected]
Technicals:
Shardul Kulkarni Sr. Technical Analyst [email protected]
Sameet Chavan Technical Analyst [email protected]
Derivatives:
Siddarth Bhamre Head - Derivatives [email protected]
Institutional Sales Team:
Mayuresh Joshi VP - Institutional Sales [email protected]
Hiten Sampat Sr. AVP - Institutional Sales [email protected]
Meenakshi Chavan Dealer [email protected]
Gaurang Tisani Dealer [email protected]
Akshay Shah Dealer [email protected]
Production Team:
Simran Kaur Research Editor [email protected]
Dilip Patel Production [email protected]