canara bank 4q fy 2013

7/30/2019 Canara Bank 4Q FY 2013

1/11

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

Particulars ( ` cr) 4QFY13 3QFY13 % chg (qoq) 4QFY12 % chg (yoy)NII 2,091 1,988 5.2 2,040 2.5Pre-prov. profit 1,698 1,516 12.0 1,491 13.9PAT 725 710 2.1 829 (12.5)

Source: Company, Angel Research

Canara Bank reported a weak set of numbers for 4QFY2013, as net profitdeclined by 12.5% yoy. NII grew at a muted pace of around 2.5% yoy, whilenon-interest income grew by 30.8% yoy (aided by higher treasury gains), leadingto a moderate 13.9% yoy growth in operating profit. The key takeaways from theresults were sequential improvement in reported NIM (3bp qoq to 2.4%) andstability on the asset quality front (as lower slippages help contain the sequentialincrease in Gross and Net NPA levels to 2.8%, each). However, the restructuringduring the quarter was substantially high at ` 2,877cr.

Strong business growth qoq; Asset quality stable sequentially: During 4QFY2013,the banks advance book increased substantially by 11.0% on a qoq basis, whiledeposits also grew strongly at 9.8% qoq. Current deposits remained flat yoy,while saving deposits grew by 9.8% yoy. Consequently, the overall CASA depositsgrew by 8.1% yoy (6.0% qoq). The calculated CASA ratio for the bank declined by 87bp sequentially to 24.2%. The banks yield on advances came in flatsequentially at 11.1%, however, a 5bp sequential decline in cost of funds to 6.9%,resulted in a marginal improvement in reported NIM by 3bp to 2.4%.

Non-interest income (excluding treasury) witnessed an increase of 11.9% yoy, onback of higher recoveries from written off accounts and modest growth of 7.9%yoy in fee income. On the asset quality front, while slippages, on an absolutebasis, remained elevated at ` 1,086cr, however, were lower sequentially considering slippages of ` 1,314cr in 3QFY2013 and ` 1,922cr in 2QFY2013.Recoveries/upgrades came in at ` 520cr, much higher compared to ` 217crin 3QFY2013. Aided by sequentially lower slippages and higherrecoveries/upgrades, the bank was able to contain the sequential increase inabsolute Gross and Net NPA levels at 2.8% each. Gross and Net NPA ratios werelower by 20bp and 17bp, respectively to 2.6% and 2.2%. The PCR for the bankwas stable sequentially at 61.4%. Additionally, the bank restructured advancesworth ` 2,877cr (primarily from the infrastructure sector) during the quarter.

Outlook and valuation: At the current market price, the stock trades at a cyclically moderate valuation of 0.7x FY2015E ABV vs an eight-year average of 1.1x andrange of 0.7-1.4x. We value the bank at 0.8x FY2015E ABV and recommend anBuy rating on the stock with a target price of ` 461 .

Key financials (Standalone)Y/E March ( ` cr) FY2012 FY2013 FY2014E FY2015ENII 7,689 7,879 8,838 9,979% chg (0.1) 2.5 12.2 12.9Net profit 3,283 2,872 3,313 3,808% chg (18.5) (12.5) 15.4 14.9NIM (%) 2.2 2.1 2.1 2.2

EPS ( ) 74.1 64.8 74.8 86.0P/E (x) 5.3 6.1 5.3 4.6P/ABV (x) 0.9 0.8 0.7 0.7RoA (%) 0.9 0.7 0.8 0.8RoE (%) 17.0 13.2 13.7 14.2


BUYCMP ` 395Target Price ` 461Investment Period 12 months

Stock Info

Sector

Bloomberg Code

Shareholding Pattern (%)

Promoters 67.7

MF / Banks / Indian Fls 13.4

FII / NRIs / OCBs 12.3

Indian Public / Others 6.7

Abs. (%) 3m 1yr 3yr

Sensex (1.0) 14.1 12.6

CBK (16.4) (8.1) (7.8)

Banking

Market Cap ( ` cr) 17,485

Beta 1.1

52 Week High / Low 550/306

Avg. Daily Volume 89,857

Face Value ( ` ) 10

BSE Sensex 19,576

Nifty 5,944

Reuters Code CNBK.BO

CBK@IN

Vaibhav Agrawal022 3935 7800 Ext: [email protected]

Sourabh Taparia022 3935 7800 Ext: [email protected]

Akshay Narang022 3935 7800 Ext: 6829

[email protected]

Harshal Patkar022 3935 7800 Ext: [email protected]

Canara Bank

Performance Highlights

4QFY2013 Result Update | Banking

May 3, 2013


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Canara Bank | 4QFY2013 Result Update

May 3, 2013 2

Exhibit 1: 4QFY2013 performance (Standalone)Particulars ( ` cr) 4QFY13 3QFY13 % chg (qoq) 4QFY12 % chg (yoy) FY2013 FY2012 % chg (yoy)

Interest earned 8,465 8,544 (0.9) 8,267 2.4 34,078 30,851 10.5

- on Advances / Bills 6,073 5,958 1.9 6,189 (1.9) 24,380 23,443 4.0- on investments 2,307 2,460 (6.2) 1,908 20.9 9,112 7,053 29.2

- on balance with RBI & others 85 127 (33.1) 170 (49.9) 585 353 65.6

Interest Expended 6,374 6,556 (2.8) 6,227 2.4 26,199 23,161 13.1

Net Interest Income 2,091 1,988 5.2 2,040 2.5 7,879 7,689 2.5

Other income 1,007 846 19.0 769 30.8 3,153 2,928 7.7

Other income excl. treasury 755 595 26.9 674 11.9 2,477 2,604 (4.9)

- Fee Income 232 199 16.6 215 7.9 797 798 (0.1)

- Treasury Income 252 251 0.4 95 165.3 676 324 108.6

- Recov. from written off a/cs 133 59 125.4 98 35.7 303 363 (16.5)

- Others 390 337 15.6 361 7.8 1,377 1,443 (4.6)

Operating income 3,097 2,834 9.3 2,809 10.2 11,032 10,617 3.9

Operating expenses 1,399 1,317 6.2 1,319 6.1 5,142 4,674 10.0

- Employee expenses 888 831 6.9 826 7.6 3,254 2,973 9.4

- Other Opex 511 486 5.1 493 3.7 1,888 1,701 11.0

Pre-provision Profit 1,698 1,516 12.0 1,491 13.9 5,890 5,943 (0.9)

Provisions & Contingencies 752 626 20.2 462 63.0 2,218 1,860 19.2

- Provisions for NPAs 346 594 (41.8) 390 (11.3) 1,861 1,294 43.9

- Provisions for Investments 84 (129) (165.1) (107) (178.5) (370) 154 (340.6)

- Other Provisions 322 161 100.3 179 80.5 727 413 76.1

PBT 945 890 6.2 1,029 (8.1) 3,672 4,083 (10.1)

Provision for Tax 220 180 22.2 200 10.0 800 800 -PAT 725 710 2.1 829 (12.5) 2,872 3,283 (12.5)

Effective Tax Rate (%) 23.3 20.2 306bp 19.4 384bp 21.8 19.6 219bp


Exhibit 2: 4QFY2013 Actual vs EstimatesParticulars ( ` cr) Actual Estimates Var (%)

NII 2,091 2,027 3.2

Non-interest income 1007 781 28.9

Operating income 3,097 2,807 10.3

Operating expenses 1,399 1,367 2.4Pre-prov. profit 1,698 1,441 17.8

Provisions & cont. 752 466 61.6

PBT 945 975 (3.1)

Prov. for taxes 220 197 11.5

PAT 725 778 (6.7)



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May 3, 2013 3

Exhibit 3: 4QFY2013 performance analysis (Standalone)Particulars 4QFY13 3QFY13 %chg (qoq) 4QFY12 %chg (yoy)

Balance sheet

Advances ( ` cr) 242,177 218,242 11.0 232,490 4.2Deposits ( ` cr) 355,856 323,963 9.8 327,054 8.8

Credit-to-Deposit Ratio (%) 68.1 67.4 69bp 71.1 (303)bp

Current deposits ( ` cr) 14,893 12,473 19.4 14,819 0.5

Saving deposits ( ` cr) 71,168 68,689 3.6 64,792 9.8

CASA deposits ( ` cr) 86,061 81,162 6.0 79,611 8.1

Calculated CASA ratio (%) 24.2 25.1 (87)bp 24.3 (16)bp

CAR (%) 12.4 12.6 (24)bp 13.8 (136)bp

Tier 1 CAR (%) 9.8 9.8 1bp 10.4 (58)bp

Profitability Ratios (%)

Cost of deposits 7.7 7.8 (9)bp 7.4 37bp

Yield on advances 11.1 11.1 1bp 10.9 20bp

Yield on investments 8.1 8.1 0bp 8.0 17bp

Yield on funds 9.1 9.1 (1)bp 9.0 13bp

Cost of funds 7.0 7.0 (5)bp 6.7 26bp

Reported NIMs 2.4 2.4 3bp 2.5 (11)bp

Cost-to-income ratio 45.2 46.5 (131)bp 46.9 (176)bp

Asset quality

Gross NPAs ( ` cr) 6,260 6,090 2.8 4,032 55.3

Gross NPAs (%) 2.6 2.8 (20)bp 1.7 84bp

Net NPAs ( ` cr) 5,278 5,134 2.8 3,386 55.9

Net NPAs (%) 2.2 2.4 (17)bp 1.5 72bp

PCR incl. tech. w/offs (%) 61.4 61.5 (15)bp 67.6 (624)bp

Slippage ratio (%) 1.9 2.3 (39)bp 2.1 (24)bp

NPA to avg. assets (%) 0.3 0.6 (27)bp 0.4 (7)bp


Strong business growth qoq; NIM improves marginally qoq

During 4QFY2013, the banks advance book increased substantially by 11.0% ona qoq basis, while deposits also grew strongly at 9.8% qoq. Strong sequentialgrowth in advances was driven by 15.3% qoq growth in Agri loan book and 13.5%qoq growth in SME advances. Retail loans were higher by around 8.6% qoq aidedby 12.2% qoq growth in home loans. Overall, the CD ratio for the bank washigher by 69bp qoq to 68.1%.

Current deposits remained flat yoy (however, higher by 19.4% qoq), while thesaving deposits grew by 9.8% yoy (3.6% qoq). Consequently, the overall CASA deposits grew by 8.1% yoy (6.0% qoq). Calculated CASA ratio for the bankdeclined by 16bp yoy (87bp qoq) to 24.2%.

The banks yield on advances came in flat sequentially at 11.1%, however, a 5bpsequential decline in cost of funds to 6.9%, resulted in a marginal improvement in

reported NIM by 3bp to 2.4%. The banks cost of deposits declined sequentially by 10bp to 7.7%.


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May 3, 2013 4

Exhibit 4: Advances increase marginally on a yoy basis


Exhibit 5: Calculated CASA ratio declines sequentially


Exhibit 6: NIM improves by 3bp qoq, due to...


Exhibit 7: ...5bp fall in CoF, partly on lower CoD


Moderate growth in Non-interest income (excl. treasury) on back of higher recoveries and modest growth in fee income

During 4QFY2013, Non-interest income (excluding treasury) witnessed an increaseof 11.9% yoy to ` 755cr, on back of higher recoveries from written off accountsand subdued growth in fee income.

While the fee income for the bank witnessed a growth of 7.9% yoy to ` 232cr,recoveries from written-off accounts increased by a strong 35.7% yoy to ` 133cr.The bank reported treasury income of ` 252cr during the quarter compared to ` 95cr in 4QFY2012. Aided by substantially higher treasury income and recoveries,the overall non-interest income for the bank witnessed a strong growth of 30.8%yoy to ` 1,007cr.

9 . 4

4 . 9

( 1 . 0

)

( 0 . 5

)

4 . 2 1

1 . 3

1 1

. 5

7 . 7

2 . 7

8 . 8

71.1

67.4

64.1

67.468.1

60.0

62.0

64.0

66.0

68.0

70.0

72.0

(7.0)

-

7.0

14.0

4QFY12 1QFY13 2QFY13 3QFY13 4QFY13

Adv. yoy chg (%) Dep. yoy chg (%) CDR (%, RHS)

2 4

. 3

2 3

. 3

2 4

. 8

2 5

. 1

2 4

. 2(4.2)

2.4 3.47.6

8.1

(10.0)

-

10.0

20.0

30.0

20.0

22.5

25.0

27.5

30.0


Calculated CASA rat io CASA yoy growth (%, RHS)

2.502.40

2.532.36 2.39

1.00

1.50

2.00

2.50

3.00


(%)

6 . 7

2

7 . 1

2

7 . 1

3

7 . 0

3

6 . 9

8 7

. 3 5

7 . 8

9

7 . 8

3

7 . 8

1

7 . 7

2

6.00

6.50

7.00

7.50

8.00


Cost of funds Cost of deposits


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May 3, 2013 5

Exhibit 8: Non-interest income increases on higher treasury gains Particulars ( ` cr) 4QFY13 3QFY13 % chg (qoq) 4QFY12 % chg (yoy)

Fee Income 232 199 16.6 215 7.9

Treasury 252 251 0.4 95 165.3Recoveries 133 59 125.4 98 35.7

Others 390 337 15.6 361 7.8

Other income 1,007 846 19.0 769 30.8

Other income excl. treasury 755 595 26.9 674 11.9


Asset quality stable sequentially

On the asset quality front, while slippages, on an absolute basis, remainedelevated at ` 1,086cr (primarily came from the infrastructure sector), however, werelower sequentially considering slippages of ` 1,314cr in 3QFY2013 and ` 1,922crin 2QFY2013. Recoveries/upgrades came in at ` 520cr, much higher compared to ` 217cr in 3QFY2013. Aided by sequentially lower slippages and higherrecoveries/upgrades, the bank was able to contain the sequential increase inabsolute Gross and Net NPA levels at 2.8% each. Gross and Net NPA ratios werelower by 20bp and 17bp, respectively to 2.6% and 2.2%, also due to highsequential loan book growth. PCR for the bank was stable sequentially at 61.4%.

Additionally, the bank restructured advances worth ` 2,877cr (primarily from theinfrastructure sector) during the quarter, much higher than ` 857cr restructured in3QFY2013, thereby taking its outstanding restructured book to ` 18,113cr. As per

the Management, an account restructured during the quarter was not accepted by the auditors, which led to the same account being reported twice in restructuringbook as well as the NPA book.

Exhibit 9: Slippages remain at elevated levels


Exhibit 10: NPA levels lower sequentially

Source: Company, Angel Research; Note: PCR including tech. write-offs

2 . 1

2 . 6

3 . 3

2 . 3

1 . 9

0.40.5

0.5

0.6

0.3

-

0.2

0.4

0.6

0.8

-

0.50

1.00

1.50

2.00

2.50

3.00

3.50


Slippages (%) Credit cost (%, RHS)

1 . 7

2 . 0

2 . 6

2 . 8

2 . 6

1 . 5

1 . 7

2 . 1

2 . 4

2 . 2

67.6 66.5

63.061.5

61.4

50.0

56.0

62.0

68.0

74.0

80.0

-

0.5

1.01.5

2.0

2.5

3.0


Gross NPAs (%) Net NPAs (%) PCR (%, RHS)


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May 3, 2013 6

Exhibit 11: Branch expansion trends


Exhibit 12: Opex.-to-avg. assets ratio higher qoq


Investment concerns

Weak liability franchise likely to keep NIM under pressure

The bank has a relatively weak liability profile with a calculated CASA base at24.2% as of 4QFY2013. The bank has relatively high proportion of more costly bulk deposits, which increases the banks exposure to interest rate movements.Due to low credit-deposit ratio of 68.1% in 4QFY2013 and elevated slippages,margins continued to remain under check at under 2.4%. However going ahead,the bank is expected to significantly shed down its high-costs bulk depositsportfolio. Also, the bank has embarked on a relatively aggressive networkexpansion plan. Over the past two years, the bank has added ~470 branches andmore than 1300 ATMs. Such a pace of network expansion should augur well, inour view, for strengthening the banks relatively weak liability franchise. Also, thebank plans to take the number of branches from 3,728 to 5,000 by March 2015which should give a thrust to its low cost deposits.

Outlook and valuation

At the current market price, the stock trades at a cyclically moderate valuation of0.7x FY2015E ABV vs eight-year average of 1.1x and range of 0.7-1.4x. We valuethe bank at 0.8x FY2015E ABV and recommend a Buy rating on the stock with a

target price of ` 461.

3,600 3,6093,655 3,681

3728

2,900

3,050

3,200

3,350

3,500

3,650

3,800


4 6

. 9

4 5

. 0

5 0

. 0

4 6

. 5

4 5

. 1 9

1.4

1.21.3 1.4 1.4

-

0.2

0.4

0.6

0.8

1.0

1.21.4

1.6

20.0

25.0

30.0

35.0

40.0

45.0

50.0


Cost-to-income ratio (%) Opex to average assets (%, RHS)


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May 3, 2013 7

Exhibit 13: Key assumptions

Particulars (%)Earlier estimates Revised estimates

FY2014E FY2015E FY2014E FY2015E

Credit growth 14.0 16.0 18.0 18.0Deposit growth 10.0 14.0 8.0 12.0

CASA ratio 27.4 27.7 25.4 26.1

NIMs 2.2 2.3 2.1 2.2

Other income growth 0.0 13.8 (2.0) 12.9

Growth in staff expenses 7.5 7.5 7.5 7.5

Growth in other expenses 7.5 7.5 7.5 7.5

Slippages 2.0 1.6 2.0 1.7

Coverage 65.0 67.5 63.5 65.0

Source: Angel Research

Exhibit 14: Change in estimates

Particulars ( ` cr)FY2014E FY2015E

Earlierestimates

Revisedestimates Var. (%)

Earlierestimates

Revisedestimates Var. (%)

NII 8,745 8,838 1.1 9,878 9,979 1.0

Non-interest income 2,928 3,090 5.5 3,330 3,487 4.7

Operating income 11,673 11,928 2.2 13,208 13,467 2.0

Operating expenses 5,493 5,528 0.6 5,904 5,942 0.6

Pre-prov. profit 6,180 6,400 3.6 7,304 7,525 3.0

Provisions & cont. 1,700 1,923 13.1 1,543 1,756 13.8

PBT 4,480 4,478 (0.1) 5,760 5,769 0.1

Prov. for taxes 1,165 1,164 (0.1) 1,958 1,961 0.1

PAT 3,316 3,313 (0.1) 3,802 3,808 0.1

Source: Angel Research

Exhibit 15: P/ABV band


0

200

400

600

800

1000

1200

A p r -

0 6

S e p - 0

6

F e

b - 0

7

J u l - 0 7

D e c -

0 7

M a y -

0 8

O c t - 0

8

M a r -

0 9

A u g - 0

9

J a n - 1

0

J u n - 1

0

N o v -

1 0

A p r -

1 1

S e p - 1

1

F e

b - 1

2

J u l - 1 2

D e c -

1 2

M a y -

1 3

O c t - 1

3

M a r -

1 4

Price (`) 0.75x 1x 1.25x 1.5x 1.75x


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May 3, 2013 8

Exhibit 16: Recommendation summary

Company Reco. CMP(` )Tgt. price

(` )Upside

(%)FY2014EP/ABV (x)

FY2014ETgt. P/ABV (x)

FY2014EP/E (x)

FY2012-14EEPS CAGR (%)

FY2014ERoA (%)

FY2014ERoE (%)

AxisBk Buy 1,474 1,737 17.9 1.6 1.9 9.7 17.3 1.6 17.6

FedBk Neutral 447 - - 1.0 - 7.5 10.0 1.2 13.7

HDFCBk Neutral 681 - - 3.2 - 16.0 22.8 1.8 21.8

ICICIBk* Buy 1,130 1,352 19.7 1.6 1.9 11.7 15.5 1.5 15.6

SIB Neutral 24 - - 0.9 - 5.3 11.4 1.0 17.1YesBk Neutral 498 - - 2.1 - 10.4 14.9 1.3 22.1

AllBk Buy 132 155 17.6 0.5 0.6 3.7 12.6 0.8 14.2

AndhBk Neutral 92 - - 0.6 - 3.9 4.2 0.8 13.4

BOB Buy 699 815 16.6 0.7 0.9 4.8 17.0 1.0 16.0

BOI Accumulate 327 360 10.1 0.7 0.8 4.8 21.8 0.8 15.1

BOM Neutral 57 - - 0.6 - 4.3 14.8 0.6 15.6

CanBk Buy 395 461 16.7 0.6 0.8 4.6 14.0 0.8 14.1CentBk Neutral 70 - - 0.6 - 3.9 42.8 0.6 13.3

CorpBk Buy 376 453 20.4 0.5 0.6 3.6 8.3 0.8 14.4

DenaBk Accumulate 91 101 11.4 0.5 0.6 3.4 4.3 0.8 15.3

IDBI# Neutral 89 - - 0.5 - 4.8 15.2 0.7 11.3

IndBk Buy 163 193 18.2 0.5 0.7 3.9 6.5 1.0 14.9

IOB Accumulate 62 70 12.3 0.4 0.5 3.1 53.3 0.7 13.1

J&KBk Neutral 1,327 - - 1.0 - 6.6 (5.2) 1.2 16.0

OBC Accumulate 256 282 10.4 0.5 0.6 4.0 17.5 0.8 13.1

PNB Buy 746 889 19.2 0.7 0.8 4.2 12.4 1.0 16.3

SBI* Buy 2,217 2,567 15.8 1.2 1.4 7.9 16.4 1.0 17.0

SynBk Neutral 129 - - 0.6 - 4.5 (3.5) 0.7 15.2

UcoBk Reduce 72 68 (5.7) 0.7 0.7 5.0 36.9 0.6 12.6

UnionBk Accumulate 240 264 10.1 0.7 0.8 5.0 21.2 0.8 15.3

UtdBk Accumulate 60 68 13.2 0.4 0.5 2.9 40.4 0.7 14.7

VijBk Accumulate 52 55 5.9 0.6 0.6 4.7 21.2 0.5 11.7

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

Company Background

Canara Bank is the largest south India -based PSU bank (overall fifth largest bankin India), with a balance sheet size of around `4.1 lakh cr. The bank has areasonably large pan-India presence; with about 45% of its 3,700+ branchesoutside South India (the bank also has 3,500+ ATMs).


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May 3, 2013 9

Income statement (Standalone)Y/E March ( ` cr) FY10 FY11 FY12E FY13E FY14E FY15E

Net Interest Income 5,681 7,699 7,689 7,879 8,838 9,979

- YoY Growth (%) 20.4 35.5 (0.1) 2.5 12.2 12.9Other Income 2,858 2,811 2,928 3,153 3,090 3,487

- YoY Growth (%) 17.7 (1.6) 4.1 7.7 (2.0) 12.9

Operating Income 8,538 10,511 10,617 11,032 11,928 13,467

- YoY Growth (%) 19.5 23.1 1.0 3.9 8.1 12.9

Operating Expenses 3,478 4,419 4,674 5,142 5,528 5,942

- YoY Growth (%) 13.5 27.1 5.8 10.0 7.5 7.5

Pre - Provision Profit 5,061 6,091 5,943 5,890 6,400 7,525

- YoY Growth (%) 24.1 20.4 (2.4) (0.9) 8.7 17.6

Prov. & Cont. 1,239 1,066 1,860 2,218 1,923 1,756

- YoY Growth (%) (17.8) (14.0) 74.6 19.2 (13.3) (8.7)

Profit Before Tax 3,821 5,026 4,083 3,672 4,478 5,769

- YoY Growth (%) 48.6 31.5 (18.8) (10.1) 21.9 28.8

Prov. for Taxation 800 1,000 800 800 1,164 1,961

- as a % of PBT 20.9 19.9 19.6 21.8 26.0 34.0

PAT 3,021 4,026 3,283 2,872 3,313 3,808

- YoY Growth (%) 45.8 33.2 (18.5) (12.5) 15.4 14.9

Balance sheet (Standalone) Y/E March ( ` cr) FY10 FY11 FY12E FY13E FY14E FY15E

Share Capital 410 443 443 443 443 443Reserve & Surplus 14,262 19,597 22,247 24,435 27,027 30,012

Deposits 234,651 293,437 327,054 355,856 384,324 430,443

- Growth (%) 25.6 25.1 11.5 8.8 8.0 12.0

Borrowings 1,041 5,198 6,558 11,540 12,449 13,895

Tier 2 Capital 7,399 9,063 8,967 8,743 8,524 8,311

Other Liab. & Prov. 6,977 8,207 8,891 11,325 12,051 13,370

Total Liabilities 264,741 335,945 374,160 412,343 444,820 496,475

Cash Balances 15,719 22,015 17,795 15,406 17,295 19,370

Bank Balances 3,934 8,693 10,384 19,309 14,157 13,319

Investments 69,677 83,636 102,057 121,133 112,246 109,543

Advances 169,335 211,268 232,490 242,177 285,768 337,207

- Growth (%) 22.5 24.8 10.0 4.2 18.0 18.0

Fixed Assets 2,859 2,844 2,858 2,863 2,996 3,243

Other Assets 3,217 7,488 8,576 11,456 12,358 13,793

Total Assets 264,741 335,945 374,160 412,343 444,820 496,475

- Growth (%) 20.6 26.9 11.4 10.2 7.9 11.6


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May 3, 2013 10

Ratio analysis (Standalone)Y/E March FY10 FY11 FY12E FY13E FY14E FY15E

Profitability ratios (%)

NIMs 2.4 2.6 2.2 2.1 2.1 2.2Cost to Income Ratio 40.7 42.0 44.0 46.6 46.3 44.1

RoA 1.2 1.3 0.9 0.7 0.8 0.8

RoE 26.8 26.4 17.0 13.2 13.7 14.2

B/S ratios (%)

CASA Ratio 29.1 28.3 24.3 24.2 25.4 26.1

Credit/Deposit Ratio 72.2 72.0 71.1 68.1 74.4 78.3

CAR 13.4 15.4 13.8 13.4 13.5 13.2

- Tier I 8.5 10.9 10.4 10.3 10.6 10.6

Asset Quality (%)

Gross NPAs 1.5 1.5 1.7 2.6 3.0 3.1

Net NPAs 1.1 1.1 1.5 2.2 2.0 1.8

Slippages 2.4 2.1 2.2 2.5 2.0 1.7

Loan Loss Prov. /Avg. Assets 0.6 0.3 0.4 0.5 0.4 0.3

Provision Coverage 77.7 73.0 67.6 61.4 63.5 65.0

Per Share Data ( ` )

EPS 73.7 90.9 74.1 64.8 74.8 86.0

ABVPS (75% cover.) 305.8 401.1 448.1 472.9 532.9 601.6

DPS 10.0 11.0 11.0 13.0 14.0 16.0

Valuation Ratios

PER (x) 5.4 4.3 5.3 6.1 5.3 4.6

P/ABVPS (x) 1.3 1.0 0.9 0.8 0.7 0.7Dividend Yield 2.5 2.8 2.8 3.3 3.5 4.1

DuPont Analysis

NII 2.3 2.6 2.2 2.0 2.1 2.1

(-) Prov. Exp. 0.5 0.4 0.5 0.6 0.4 0.4

Adj. NII 1.8 2.2 1.6 1.4 1.6 1.7

Treasury 0.4 0.1 0.1 0.2 0.1 0.0

Int. Sens. Inc. 2.2 2.3 1.7 1.6 1.7 1.8

Other Inc. 0.8 0.9 0.7 0.6 0.7 0.7

Op. Inc. 3.0 3.1 2.5 2.2 2.3 2.5

Opex 1.4 1.5 1.3 1.3 1.3 1.3PBT 1.6 1.7 1.1 0.9 1.0 1.2

Taxes 0.3 0.3 0.2 0.2 0.3 0.4

RoA 1.2 1.3 0.9 0.7 0.8 0.8

Leverage 21.5 19.7 18.4 18.1 17.8 17.5

RoE 26.8 26.4 17.0 13.2 13.7 14.2


11/11


May 3, 2013 11

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

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Disclosure of Interest Statement Canara Bank

1. Analyst ownership of the stock No

2. Angel and its Group companies ownership of the stock No

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

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canara bank 4q fy 2013

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