punjab national bank result updated

8/3/2019 Punjab National Bank Result Updated

1/12

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

Particulars (` cr) 3QFY12 2QFY12 % chg (qoq) 3QFY11 % chg (yoy)NII 3,537 3,453 2.4 3,203 10.4Pre-prov. profit 2,676 2,528 5.9 2,350 13.9

PAT 1,150 1,205 (4.6) 1,090 5.5Source: Company, Angel Research

For 3QFY2012, PNB registered a moderate set of results with net profit

growing by 5.5% yoy to `1,150cr, which was below our estimates on account

of higher provisioning expenses than estimated by us. We recommend anAccumulate rating on the stock.Chunky slippages and restructuring lead to deterioration in asset quality: Thebanks business growth momentum picked up during 3QFY2012. Advances for

the bank increased by 5.5% qoq (18.7% yoy). On a yoy basis, advances growth

was driven by loans to MSMEs and retail which grew by 18.5% and 19.7%,

respectively. Deposits growth on a qoq basis stood at 4.3% qoq (up 23.4% yoy),

however CASA deposits growth was muted at 1.6% qoq (up 11.7% yoy). Saving

account deposit growth was slightly better at 2.2% qoq (up 14.3% yoy).

Consequently, reported CASA ratio declined by 90bp qoq and 350bp yoy to

36.2%. The banks reported NIMs slipped by 7bp to 3.9% during 3QFY2012 on

back of 22bp qoq rise in the cost of deposits to 6.7%. The yield on advances was

nearly flat sequentially at 12.0%. Fee income picked up sequentially, driven by

higher forex income (up 15.8% qoq) and recoveries (up 35.3% qoq). On theasset-quality front, the bank surprised negatively with slippages rate jumping to

2.8% (1.6% in 2QFY2012). However, the management attributed this sharp jump

in slippages to primarily an aviation account which slipped during the quarter.

Consequently, the NPA levels rose sharply qoq with gross NPAs rising by 25.1%

qoq and net NPA rising by 38.9% qoq. The bank restructured `1,989cr worth of

accounts during 3QFY2012, of which `978cr was to a telecom account. The bank

also took a hit of `150cr for NPV loss on this telecom account during the quarter.

The total outstanding restructured book as of 3QFY2012 stands at `16,687cr.

Outlook and valuation: The banks valuations are currently at low 1.1x FY2013ABV compared to its five year range of 1.11.6x and median of 1.4x, due to the

asset quality concerns facing the sector. Taking into account the banks relatively

lower cost of deposits than peers and valuations at the lower end of its historical

trading range, we currently have a positive stance on the bank. Hence, werecommend an Accumulate on the stock with a target price of `1,036.Key financialsY/E March (` cr) FY2010 FY2011 FY2012E FY2013ENII 8,478 11,807 13,813 16,153% chg 20.6 39.3 17.0 16.9

Net profit 3,905 4,434 4,819 5,015% chg 26.4 13.5 8.7 4.1

NIM (%) 3.2 3.6 3.5 3.4

EPS (`) 123.9 139.9 152.1 158.3P/E (x) 7.7 6.8 6.3 6.0

P/ABV (x) 1.9 1.5 1.3 1.1

RoA (%) 1.4 1.3 1.2 1.0

RoE (%) 26.6 24.4 22.0 19.4

Source: Company, ngel Research

ACCUMULATECMP `956

Target Price `1,036

Investment Period 12 Months

Stock Info

Sector Banking

Market Cap (` cr) 30,273

Beta 0.8

52 Week High / Low 1,234/751

Avg. Daily Volume 38,103

Face Value (`

) 10BSE Sensex 17,301

Nifty 5,199

Reuters Code PNBK.BO

Bloomberg Code PNB@IN

Shareholding Pattern (%)

Promoters 58.0

MF / Banks / Indian Fls 17.9

FII / NRIs / OCBs 18.6Indian Public / Others 5.5

Abs. (%) 3m 1yr 3yr

Sensex (1.0) (4.0) 90.8

PNB (5.7) (13.1) 144.5

Vaibhav Agrawal022 3935 7800 Ext: 6808

[email protected]

Shrinivas Bhutda022 3935 7800 Ext: 6845

[email protected]

Varun Varma022 3935 7800 Ext: 6847

[email protected]

Punjab National BankPerformance Highlights

3QFY2012 Result Update | Banking

February 1, 2012


2/12

Punjab National Bank | 3QFY2012 Result Update

February 1, 2012 2

Exhibit 1:3QFY2012 performanceParticulars (` cr) 3QFY12 2QFY12 % chg (qoq) 3QFY11 % chg (yoy)Interest earned 9,481 8,952 5.9 7,119 33.2- on Advances / Bills 7,331 7,045 4.1 5,489 33.6- on investments 2,027 1,852 9.4 1,493 35.8

- on balance with RBI & others 81 48 67.1 26 216.6

- on others 42 7 538.7 112 (62.6)

Interest Expended 5,944 5,499 8.1 3,916 51.8Net Interest Income 3,537 3,453 2.4 3,203 10.4Other income 954 889 7.3 857 11.3Other income excl. treasury 859 784 9.6 753 14.1

- Fee Income 510 477 6.9 413 23.5

- Treasury Income incl. MF Div. 95 105 (9.5) 104 (8.7)

- Recov. from written off a/cs 92 68 35.3 123 (25.2)

- Others 257 239 7.6 217 18.3

Operating income 4,491 4,341 3.4 4,061 10.6Operating expenses 1,814 1,814 0.0 1,711 6.1- Employee expenses 1,264 1,240 1.9 1,224 3.3

- Other Opex 551 573 (3.9) 487 13.1

Pre-provision Profit 2,676 2,528 5.9 2,350 13.9Provisions & contingencies 946 710 33.2 714 32.5- Provisions for NPAs 579 319 81.5 555 4.3

- Other Provisions 367 391 (6.2) 159 131.0

PBT 1,730 1,817 (4.8) 1,636 5.8Provision for Tax 580 612 (5.2) 546 6.2PAT 1,150 1,205 (4.6) 1,090 5.5Effective Tax Rate (%) 33.5 33.7 (16)bp 33.4 15bp

Source: Company, Angel Research

Exhibit 2:3QFY2012 Actual vs. Angel estimatesParticulars (` cr) Actual Estimates Var. (%)Net interest income 3,537 3,607 (2.0)

Other income 954 960 (0.6)

Operating income 4,491 4,568 (1.7)Operating expenses 1,814 1,839 (1.3)

Pre-prov. profit 2,676 2,729 (1.9)Provisions & cont. 946 843 12.3

PBT 1,730 1,886 (8.2)

Prov. for taxes 580 612 (5.2)

PAT 1,150 1,274 (9.7)Source: Company, Angel Research


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February 1, 2012 3

Exhibit 3:3QFY2012 performance analysisParticulars 3QFY12 2QFY12 % chg (qoq) 3QFY11 % chg (yoy)Advances (`cr) 262,605 249,020 5.5 221,252 18.7

Deposits (`cr) 356,517 341,783 4.3 288,873 23.4Credit-to-Deposit Ratio (%) 73.7 72.9 80bp 76.6 (293)bp

Current deposits (`cr) 23,260 23,531 (1.2) 22,945 1.4

Saving deposits (`cr) 102,705 100,491 2.2 89,860 14.3

CASA deposits (` cr) 125,965 124,022 1.6 112,805 11.7

Reported CASA ratio (%) 36.2 37.1 (90)bp 39.7 (350)bp

CAR (%) 11.5 12.2 (75)bp 11.9 (42)bp

Tier 1 CAR (%) 7.9 8.4 (52)bp 7.6 27bp

Profitability Ratios (%)Cost of deposits 6.7 6.5 22bp 5.2 154bp

Yield on advances 12.0 11.9 5bp 10.6 138bp

Yield on investments 7.9 7.8 8bp - 786bp

Yield on funds 9.2 9.0 17bp 8.3 93bp

Cost of funds 5.8 5.5 22bp 4.5 122bp

Reported NIM 3.9 4.0 (7)bp 4.1 (25)bp

Cost-to-income ratio 40.4 41.8 (137)bp 42.1 (173)bp

Asset qualityGross NPAs (` cr) 6,442 5,150 25.1 4,541 41.9

Gross NPAs (%) 2.4 2.1 37bp 2.0 39bp

Net NPAs (`cr) 2,901 2,089 38.9 1,575 84.2

Net NPAs (%) 1.1 0.8 27bp 0.7 39bp

Provision Coverage Ratio (%) 70.0 75.1 (507)bp 77.2 (717)bp

Slippage ratio (%) 2.8 1.6 114bp 2.1 69bp

Credit cost (%) 0.6 0.3 24bp 0.6 (7)bp


Business growth picks up

The banks business growth momentum picked up during 3QFY2012. Advances

for the bank increased by 5.5% qoq (18.7% yoy). On a yoy basis, advances growth

was driven by loans to MSMEs and retail which grew by 18.5% and 19.7%,

respectively. Overseas advances were up by 82.8% yoy; however the robust growth

can be mostly attributed to the rupee depreciation witnessed over the last 6

months. On a sequential basis, advances growth was primarily on the back of

lending to agri (growth of 9.2% qoq) and services sector (growth of 12.4% qoq).

The retail segments advances growth was also healthy at 5.2% qoq.

Among industrial advances, infrastructure credit continued to drive growth apart

from loans to chemical products based segment. Infra loans grew by 21.4% yoy to

`41,031cr, in which the power sectors loans increased by 46.4% yoy to

`19,757cr. As of 3QFY2012, loans to infra account for 15.6% of the total loan

portfolio. Loans to metal sector grew by 46.3% yoy to `14,751cr, of which most of

the lending is to the iron and steel sector (up 36.8% yoy)


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February 1, 2012 4

Deposits growth on a qoq basis stood at 4.3% qoq (up 23.4% yoy), however CASA

deposits growth was muted at 1.6% qoq (up 11.7% yoy). Saving account deposit

growth was slightly better at 2.2% qoq (up 14.3% yoy). Consequently, reported

CASA ratio declined by 90bp qoq and 350bp yoy to 36.2%.

Exhibit 4:MSME and agri loans show healthy traction qoqParticulars (` cr) 3QFY12 2QFY12 % chg (qoq) 3QFY11 % chg (yoy) Agri 38,306 35,0769.2 33,909 13.0

Retail 26,009 24,732 5.2 21,730 19.7

MSME 29,912 27,643 8.2 25,249 18.5

Medium & Large Corporates 88,412 90,760 (2.6) 76,545 15.5

Comm. Real Estate 10,382 10,353 0.3 9,729 6.7

Services & Others 47,660 42,415 12.4 41,280 15.5

Domestic non-food credit 240,681 230,979 4.2 208,442 15.5Food credit 5,424 4,214 28.7 4,485 20.9

Domestic credit 246,105 235,193 4.6 212,927 15.6Overseas advances 19,778 16,511 19.8 10,817 82.8

Global gross credit 265,883 251,704 5.6 223,744 18.7Source: Company, Angel Research

Exhibit 5:Business growth stronger in 3QFY2012


Exhibit 6:Moderation in CASA deposits growth continues


NIMs slip marginally during 3QFY2012The banks NIMs have been under pressure lately as moderating CASA growth

over the last one year has led to higher cost of deposits for the bank. The banks

reported NIMs slipped by 7bp to 3.9% during 3QFY2012 on back of 22bp qoq

rise in the cost of deposits to 6.7%. The yield on advances was nearly flat

sequentially at 12.0%.

6.0

9.4

0.3

2.5

5.5

5.7

8.3

3.6

5.5

4.3

76.677.4

74.9

72.973.7

70.0

72.0

74.0

76.0

78.0

-

2.0

4.0

6.0

8.0

10.0

3QFY11 4QFY11 1QFY12 2QFY12 3QFY12

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

39.1

38.5

37.4

36.3

35.3

22.018.1

16.2

11.7 11.7

-

10.0

20.0

30.0

33.0

36.0

39.0

42.0


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


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February 1, 2012 5

Exhibit 7:Yield on advances nearly flat sequentially


Exhibit 8:Reported NIM sees a marginal fall


Fee income picks up sequentially

CEB income grew by a strong 23.5% yoy (6.9% qoq), driven by robust traction

from fees generated by bills and remittances (up 43.5% yoy) and income from

ATM operations (up 46.7% yoy). The processing fees picked up during 3QFY2012;

growing by 8.1% qoq, while income from Commission on letters of credit and

bank guarantees was also healthy growing by a healthy 11.3% qoq. The banks

forex income grew by a strong 15.8% qoq, while recoveries also registered a

strong performance, growing by 35.3% qoq (down 25.2% yoy). The bank has

started selling life policies of MetLife from November and management expects

good amount of incremental fee income from the sale of these products.

Exhibit 9:Fee income witnesses healthy sequential tractionParticulars (` cr) 3QFY12 2QFY12 % chg (qoq) 3QFY11 % chg (yoy)CEB 510 477 6.9 413 23.5

Treasury incl. MF Dividend 95 105 (9.5) 104 (8.7)

Forex 154 133 15.8 125 23.2

Recoveries 92 68 35.3 123 (25.2)

Others 103 107 (3.7) 92 12.0

Other income 954 890 7.2 857 11.3Other income excl. treasury 859 785 9.4 753 14.1


Chunky slippages and restructuring lead to deterioration in asset

quality

On the asset-quality front, the bank surprised negatively with slippages rate

jumping to 2.8% (1.6% in 2QFY2012). However, the management attributed this

sharp jump in slippages to primarily an aviation account which slipped during the

quarter. Consequently, the NPA levels rose sharply qoq with gross NPAs rising by

25.1% qoq and net NPA rising by 38.9% qoq.As of 3QFY2012 gross NPA ratio

stands at 2.4% (2.1% in 2QFY2012), while net NPA ratio stands at 1.1% (0.8%

in 2QFY2012). Provision coverage ratio (including technical write-offs) declinedby ~500bp to 70.0% (75.1% in 2QFY2011).

The bank restructured `1,989cr worth of accounts during 3QFY2012, of which

`978cr was to a telecom account. The bank also took a hit of `150cr for NPV loss

10.5910.83

11.38

11.92 11.97

9.00

9.50

10.00

10.50

11.00

11.50

12.00


(%)

4.13

3.913.84

3.953.88

3.40

3.60

3.80

4.00

4.20


(%)


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February 1, 2012 6

on this telecom account during the quarter. The total outstanding restructured book

as of 3QFY2012stands at `16,687cr. According to the management, Rajasthan

SEB has been restructured recently by the bank, the effect of which is expected to

show in 4QFY2012. The bank is also expecting further restructuring on loanspertaining to Haryana and UP electricity boards to happen over the next two

quarters.

Exhibit 10:Slippages rate up again for 3QFY2012


Exhibit 11:NPA ratios rise sequentially

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

Exhibit 12:Network expansion at steady pace


Exhibit 13:Cost ratios remain stable sequentially


2.1

2.7

1.9

1.6

2.8

0.60.6 0.6

0.3

0.6

-

0.2

0.4

0.6

0.8

-

0.5

1.0

1.5

2.0

2.5

3.0


Slippages (%) Credit cost (%, RHS)

1.8

1.9

2.0

1.8

2.0

0.7

0.7

0.7

0.9

0.9

77.677.1 77.2

73.2

74.3

70.0

72.0

74.0

76.0

78.0

-

0.5

1.0

1.5

2.0

2.5


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

4,9

87

5,1

61

5,2

64

5,3

15

5,3

93

4,4005,050 5,375

5,619 5,793

-

1,500

3,000

4,500

6,000

7,500

4,600

4,800

5,000

5,200

5,400


Branches ATMs (RHS)

42.

1

39.

9

41.

1

41.

8

40.

4

1.9

1.8 1.81.8

1.8

1.3

1.4

1.5

1.6

1.7

1.8

1.9

2.0

36.0

38.0

40.0

42.0

44.0


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


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February 1, 2012 7

Investment arguments

Strong CASA legacy, but losing market share

PNB has a structural advantage of having relatively better CASA ratio of 37.1%,which is driven by strong rural and semi-urban presence, especially in North India

(total of 5,393 branches and 5,793 ATMs). This should act as a strong cushion in

the current higher interest rate environment, and we have accordingly factored in a

relatively lower decline (~20bp) in calculated NIM in FY2012E to 3.4% from 3.6%

in FY2011. That said, the bank is losing its market share like most other public

sector banks on account of slow branch expansion and competition from private

banks savings market share declined by 50bp to 7.4% during FY200811.

Investment concerns

Persistent asset-quality pressures

During FY2011, slippage ratio for the bank was the highest in the last four years at

2.3%. Provisions for NPAs had also more than doubled to `2,004cr (from `994cr

in FY2010) to compensate for high slippages witnessed in FY2011. Even in

1HFY2012, though the slippage rate moderated, it was relatively higher than its

peers at 1.8%.

Going forward, the completion of migration to the system-based NPA recognition

platform is likely to reduce incremental slippages. Management expects the strong

performance on the recoveries and up-gradations front seen in 1HFY2012 tocontinue in 2HFY2012 as well.

However taking into account the aggressive restructuring carried out in 9MY2012,

the banks relatively higher exposure to risky sectors and the overall weak macro-

economic environment, we remain cautious on the incremental asset quality

pressures.

Outlook and valuation

The banks valuations are currently at low 1.1x FY2013 ABV compared to its five

year range of 1.11.6x and median of 1.4x, due to the asset quality concerns

facing the sector. Taking into account the banks relatively lower cost of deposits

than peers and valuations at the lower end of its historical trading range, we

currently have a positive stance on the bank. Hence, we recommend anAccumulate on the stock with a target price of `1,036.


8/12


February 1, 2012 8

Exhibit 14:Key assumptionsParticulars (%) Earlier estimates Revised estimatesFY2012 FY2013 FY2012 FY2013Credit growth 15.0 16.0 15.0 16.0Deposit growth 21.0 17.0 21.0 17.0

CASA ratio 36.6 36.0 36.6 36.0

NIMs 3.5 3.4 3.5 3.4

Other income growth 10.8 5.8 10.6 5.1

Growth in staff expenses 12.0 15.0 12.0 15.0

Growth in other expenses 19.0 15.0 18.0 15.0

Slippages 2.2 2.8 2.6 2.8

Coverage 75.0 75.0 70.0 72.5

Source: Angel Research

Exhibit 15:Change in estimatesParticulars (` cr)

FY2012 FY2013Earlierestimates Revisedestimates Var. (%) Earlierestimates Revisedestimates Var. (%)

NII 13,976 13,813 (1.2) 16,474 16,153 (1.9)

Non-interest income 4,001 3,996 (0.1) 4,231 4,199 (0.8)

Operating income 17,977 17,809 (0.9) 20,705 20,352 (1.7)Operating expenses 7,261 7,242 (0.3) 8,350 8,328 (0.3)

Pre-prov. profit 10,715 10,566 (1.4) 12,355 12,024 (2.7)Provisions & cont. 3,371 3,432 1.8 4,795 4,601 (4.0)

PBT 7,345 7,134 (2.9) 7,560 7,423 (1.8)

Prov. for taxes 2,383 2,315 (2.9) 2,453 2,408 (1.8)

PAT 4,962 4,819 (2.9) 5,107 5,015 (1.8)Source: Angel Research

Exhibit 16:P/ABV band


0

400

800

1,200

1,600

2,000

Apr-06

Nov-06

Jun-07

Jan-08

Aug-08

Mar-09

Oct-09

May-10

Dec-10

Jul-11

Feb-12

Price (`) 0.5x 0.9x 1.3x 1.7x 2.1x


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February 1, 2012 9

Exhibit 17:Recommendation summaryCompany Reco. CMP(`) Tgt. price(`) Upside(%) FY2013EP/ABV (x) FY2013ETgt P/ABV (x) FY2013EP/E (x) FY2011-13EEPS CAGR (%) FY2013ERoA (%) FY2013ERoE (%) AxisBk Buy 1,088 1,36125.2 1.8 2.2 9.4 18.2 1.5 20.2

FedBk Neutral 401 - - 1.1 - 8.7 16.2 1.2 13.2

HDFCBk Neutral 497 - - 3.4 3.5 17.3 30.4 1.8 21.0

ICICIBk* Buy 888 1,061 19.5 1.6 2.0 13.9 19.5 1.4 14.5

SIB Neutral 23 - - 1.1 - 6.9 13.5 0.9 17.5

YesBk Accumulate 335 367 9.3 2.1 2.3 11.1 20.1 1.4 20.6

AllBk Neutral 164 -- 0.7 - 4.6 9.1 0.9 17.3

AndhBk Neutral 102 -- 0.8 - 5.0 (4.8) 0.8 14.6

BOB Buy 755 907 20.1 1.0 1.3 5.8 9.8 1.1 19.3

BOI Neutral 341 - - 1.1 - 7.2 2.3 0.6 13.7

BOM Accumulate 48 53 11.4 0.7 0.8 4.9 26.3 0.7 16.9

CanBk Accumulate 472 528 11.9 0.9 1.1 6.0 (7.4) 0.8 15.8CentBk Reduce 85 79 (7.4) 0.8 0.8 5.5 (25.1) 0.4 11.4

CorpBk Accumulate 416 450 8.1 0.7 0.8 4.5 (1.8) 0.8 15.5

DenaBk Neutral 69 - - 0.5 - 3.6 2.4 0.8 14.9

IDBI# Accumulate 100 107 7.2 0.7 0.7 4.9 9.9 0.7 13.4

IndBk Neutral 227 - - 0.9 - 5.4 3.8 1.2 18.4

IOB Neutral 88 - - 0.6 - 4.6 5.3 0.5 12.8

J&KBk Accumulate 811 877 8.1 0.8 0.9 4.7 16.7 1.4 19.0

OBC Neutral 269 - - 0.7 - 5.9 (5.9) 0.7 11.3

PNB Accumulate 956 1,036 8.4 1.1 1.2 6.0 6.4 1.0 19.4SBI* Accumulate 2,077 2,359 13.6 1.7 1.9 10.1 26.0 0.8 17.9

SynBk Accumulate 98 106 8.5 0.6 0.7 4.1 13.7 0.7 16.5

UcoBk Neutral 71 - - 0.9 - 4.6 10.9 0.6 15.4

UnionBk Reduce 234 217 (7.3) 1.0 0.9 5.9 0.1 0.7 15.8

UtdBk Accumulate 70 75 7.7 0.7 0.7 4.8 4.3 0.6 12.1

VijBk Reduce 56 52(8.2) 0.8 0.7 6.4 0.7 0.4 11.1

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


10/12


February 1, 2012 10

Income statement

Y/E March (` cr) FY08 FY09 FY10 FY11 FY12E FY13ENet Interest Income 5,534 7,031 8,478 11,807 13,813 16,153- YoY Growth (%) 0.4 27.0 20.6 39.3 17.0 16.9Other Income 1,998 2,920 3,610 3,613 3,996 4,199- YoY Growth (%) 15.4 46.2 23.6 0.1 10.6 5.1

Operating Income 7,532 9,951 12,088 15,420 17,809 20,352- YoY Growth (%) 4.0 32.1 21.5 27.6 15.5 14.3

Operating Expenses 3,525 4,206 4,762 6,364 7,242 8,328- YoY Growth (%) 6.0 19.3 13.2 33.6 13.8 15.0

Pre - Provision Profit 4,006 5,744 7,326 9,056 10,566 12,024- YoY Growth (%) 2.2 43.4 27.5 23.6 16.7 13.8

Prov. & Cont. 710 981 1,422 2,492 3,432 4,601- YoY Growth (%) (59.4) 38.1 44.9 75.3 37.7 34.0

Profit Before Tax 3,296 4,763 5,905 6,564 7,134 7,423- YoY Growth (%) 52.0 44.5 24.0 11.2 8.7 4.1

Prov. for Taxation 1,247 1,673 1,999 2,130 2,315 2,408- as a % of PBT 37.8 35.1 33.9 32.5 32.4 32.4

PAT 2,049 3,091 3,905 4,434 4,819 5,015- YoY Growth (%) 33.0 50.9 26.4 13.5 8.7 4.1

Balance sheetY/E March (` cr) FY08 FY09 FY10 FY11 FY12E FY13EShare Capital 315 315 315 317 317 317Reserve & Surplus 12,003 14,338 17,408 21,192 24,999 28,927

Deposits 166,457 209,761 249,330 312,899 378,607 442,971

- Growth (%) 19.0 26.0 18.9 25.5 21.0 17.0

Borrowings 5,447 4,374 8,572 20,399 16,861 19,715

Tier 2 Capital 6,165 8,085 10,690 11,190 12,869 14,928

Other Liab. & Prov. 8,633 10,045 10,318 12,328 15,967 18,884

Total Liabilities 199,020 246,919 296,633 378,325 449,619 525,742Cash Balances 15,258 17,058 18,328 23,777 24,609 28,793

Bank Balances 3,573 4,355 5,146 5,914 8,992 10,515

Investments 53,992 63,385 77,724 95,162 121,650 144,945

Advances 119,502 154,703 186,601 242,107 278,423 322,970

- Growth (%) 23.7 29.5 20.6 29.7 15.0 16.0

Fixed Assets 2,316 2,397 2,513 3,106 3,580 4,061

Other Assets 4,381 5,020 6,320 8,259 12,365 14,458

Total Assets 199,020 246,919 296,633 378,325 449,619 525,742- Growth (%) 22.5 24.1 20.1 27.5 18.8 16.9


11/12


February 1, 2012 11

Ratio analysis

Y/E March FY08 FY09 FY10 FY11 FY12E FY13EProfitability ratios (%)NIMs 3.2 3.3 3.2 3.6 3.45 3.43Cost to Income Ratio 46.8 42.3 39.4 41.3 40.7 40.9

RoA 1.1 1.4 1.4 1.3 1.2 1.0

RoE 19.6 25.8 26.6 24.4 22.0 19.4

B/S ratios (%)CASA Ratio 43.0 38.8 40.8 38.5 36.6 36.0

Credit/Deposit Ratio 71.8 73.8 74.8 77.4 73.5 72.9

CAR 13.0 12.6 14.2 12.4 12.5 12.5

- Tier I 8.5 8.1 9.1 8.4 8.5 8.4

Asset Quality (%)Gross NPAs 2.7 1.6 1.7 1.8 3.0 4.3

Net NPAs 0.6 0.2 0.5 0.8 1.3 1.5

Slippages 2.0 1.4 1.8 2.3 2.6 2.8

Loan Loss Prov. /Avg. Assets 0.2 0.4 0.4 0.6 0.6 0.9

Provision Coverage 77.3 89.5 81.2 73.2 70.0 72.5

Per Share Data (`)EPS 65.0 98.0 123.9 139.9 152.1 158.3

ABVPS (75% cover.) 342.0 416.7 514.8 628.1 734.1 863.1

DPS 13.0 20.0 22.0 22.0 27.5 29.5

Valuation RatiosPER (x) 14.7 9.7 7.7 6.8 6.3 6.0

P/ABVPS (x) 2.8 2.3 1.9 1.5 1.3 1.1

Dividend Yield 1.4 2.1 2.3 2.3 2.9 3.1

DuPont AnalysisNII 3.1 3.2 3.1 3.5 3.3 3.3

(-) Prov. Exp. 0.4 0.4 0.5 0.7 0.8 0.9

Adj. NII 2.7 2.7 2.6 2.8 2.5 2.4

Treasury 0.2 0.3 0.3 0.1 0.1 0.1

Int. Sens. Inc. 2.9 3.0 2.9 2.8 2.6 2.4

Other Inc. 0.9 1.0 1.0 1.0 0.9 0.8

Op. Inc. 3.8 4.0 3.9 3.8 3.5 3.2

Opex 2.0 1.9 1.8 1.9 1.7 1.7PBT 1.8 2.1 2.2 1.9 1.7 1.5

Taxes 0.7 0.8 0.7 0.6 0.6 0.5

RoA 1.1 1.4 1.4 1.3 1.2 1.0Leverage 17.3 18.6 18.5 18.6 18.9 18.9

RoE 19.6 25.8 26.6 24.4 22.0 19.4


12/12


February 1 2012 12

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

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Disclosure of Interest Statement Punjab National Bank

1. Analyst ownership of the stock No

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

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