2QFY2013 Result Update Banking November 13, 2012 Allahabad Bank Performance Highlights Particulars (` cr) 2QFY13 1QFY13 % chg (qoq) 2QFY12 % chg (yoy) NII 1,174 1,306 (10.1) 1318 (10.9) Pre-prov. profit 802 956 (16.0) 949 (15.5) PAT 234 514 (54.4) 488 (52.0) Allahabad Bank reported a disappointing set of numbers for 2QFY2013 with its net profit declining by 52% yoy to `234cr. The lower bottom-line was primarily due to higher interest reversals and higher provisioning expenses during the quarter. Slippages higher for 2QFY2013; NIMs decline on interest reversals: The business growth of the bank was moderate with advances growing by 15.8% and deposits growing by 14.0% yoy. The CASA ratio of the bank as of 2QFY2013 now stands at 30.2%. The bank s yield on advances declined by 90bp qoq due to interest reversals on account of higher slippages. Consequently, despite lower cost of deposits (down by 24bp qoq) the reported NIMs were down by 37bp to 2.8%. The other income of the bank remained sluggish de-growing by 2.3% yoy. The CEB income was poor de-growing by 20.2% yoy, however the treasury income reported strong gains coming in at `47cr compared to `7cr in 2QFY2012. The slippage figures for 2QFY2013 stood at `1,720cr, thrice the average quarterly run rate. Of these slippages ~`700cr were due to the difference in the opinion in the classification of these accounts between RBI and the bank. The bank had classified these accounts as standard restructured, however the RBI during the financial annual inspection adjudged these accounts as NPAs. The gross NPA increased from 1.98% as of 1QFY2013 to 2.95% for 2QFY2013, while the net NPA increased from 1.1% to 2.1% for 2QFY2013. PCR slipped by a significant 1,277bp to 60.8%. Outlook and valuation: Positives for Allahabad Bank include moderate CASA ratio of ~30%. The bank s asset quality has come under pressure recently and we remain concerned about it given that it has had one of the highest yield on advances amongst peers in the last couple of years. The stock has been underperforming its peers since the beginning of CY2012 and as a result the valuation multiple for the bank has come down sharply and is currently one of the lowest in the industry (0.6x ABV FY2014). We value the bank at 0.7x FY2014 ABV (where most the bank s peers are currently trading) and hence recommend an Accumulate rating on the stock with a target price of `152. Key financials (standalone) Y/E March (` cr) FY2011 FY2012 FY2013E FY2014E NII 4,022 5,163 5,079 5,853 % chg 51.8 28.3 (1.6) 15.2 Net profit 1,423 1,867 1,513 1,665 % chg 18.0 31.2 (19.0) 10.0 NIM (%) 3.0 3.2 2.7 2.8 EPS (`) 29.9 37.3 30.3 33.3 P/E (x) 4.8 3.8 4.7 4.3 P/ABV (x) 0.9 0.7 0.7 0.6 RoA (%) 1.0 1.1 0.8 0.8 RoE (%) 21.0 21.6 14.8 14.5 ACCUMULATE CMP `142 Target Price `152 Investment Period 12 months Stock Info Sector Banking Market Cap (` cr) 7,115 Beta 1.2 52 Week High / Low 211/103 Avg. Daily Volume 220,628 Face Value (`) 10 BSE Sensex 18,619 Nifty 5,667 Reuters Code ALBK.BO Bloomberg Code ALBK@IN Shareholding Pattern (%) Promoters 55.2 MF / Banks / Indian Fls 20.3 FII / NRIs / OCBs 11.6 Indian Public / Others 12.9 Abs. (%) 3m 1yr 3yr Sensex 5.6 8.3 10.5 Allahabad Bank 12.4 (14.9) 8.0 Vaibhav Agrawal 022 3935 7800 Ext: 6808 vaibhav.agrawal@angelbroking.com Sourabh Taparia 022 3935 7800 Ext: 6872 sourabh.taparia@angelbroking.com Please refer to important disclosures at the end of this report 1
Exhibit 1: 2QFY2013 performance (standalone) Particulars (` cr) 2QFY13 1QFY13 % chg (qoq) 2QFY12 % chg (yoy) 1HFY2012 1HFY2013 % chg Interest earned 4,281 4,458 (4.0) 3,893 9.9 8,739 7,443 17.4 - on Advances / Bills 3,088 3,297 (6.3) 2,961 4.3 6,385 5,661 12.8 - on investments 1,144 1,070 6.9 907 26.1 2,214 1,741 27.2 - on balance with RBI & others 40 72 (45.1) 20 97.4 112 36 209.2 - on others 9 18 (52.8) 5 90.0 27 5 471.4 Interest Expended 3,106 3,152 (1.5) 2,575 20.6 6,259 4,949 26.4 Net Interest Income 1,174 1,306 (10.1) 1,318 (10.9) 2,480 2,494 (0.5) Other income 302 310 (2.4) 309 (2.3) 612 595 2.8 Other income excl. treasury 255 255 0.2 302 (15.6) 510 562 (9.3) - Fee Income 205 239 (14.2) 257 (20.2) 444 464 (4.3) - Treasury Income 47 55 (14.5) 7 571.4 102 33 209.1 - Others 50 16 222.2 9 478.3 66 10 565.7 Operating income 1,476 1,615 (8.6) 1,627 (9.3) 3,092 3,089 0.1 Operating expenses 674 660 2.2 678 (0.6) 1,334 1,250 6.7 - Employee expenses 442 436 1.4 467 (5.5) 877 850 3.3 - Other Opex 232 224 3.6 211 10.3 456 400 14.0 Pre-provision Profit 802 956 (16.0) 949 (15.5) 1,758 1,839 (4.4) Provisions & Contingencies 464 313 48.3 412 12.8 778 731 6.3 - Provisions for NPAs 355 270 31.5 302 17.7 625 467 33.8 - Provisions for Investments (39) (96) (59.4) 82 (147.3) (135) 195 (169.1) - Other Provisions 148 139 6.7 28 436.4 288 69 317.4 PBT 338 642 (47.4) 538 (37.2) 980 1,108 (11.5) Provision for Tax 104 128 (19.3) 50 108.8 232 201 15.2 PAT 234 514 (54.4) 488 (52.0) 748 906 (17.4) Effective Tax Rate (%) 30.7 20.0 1068bp 9.2 2144bp 23.7 18.2 548bp Exhibit 2: 2QFY2013 Actual vs estimates Particulars (` cr) Actual Estimates Var. (%) Net interest income 1,174 1,357 (13.4) Other income 302 305 (1.0) Operating income 1,476 1,662 (11.2) Operating expenses 674 701 (3.9) Pre-prov. profit 802 960 (16.5) Provisions & cont. 464 463 0.4 PBT 338 498 (32.1) Prov. for taxes 104 100 4.1 PAT 234 398 (41.2) November 13, 2012 2
Exhibit 3: 2QFY2013 performance analysis (standalone) Particulars (` cr) 2QFY13 1QFY13 % chg (qoq) 2QFY12 % chg (yoy) Balance sheet Advances (` cr) 110,847 110,462 0.3 95,717 15.8 Deposits (` cr) 161,957 156,867 3.2 142,043 14.0 Credit-to-Deposit Ratio (%) 68.4 70.4 (198)bp 67.4 106bp Current deposits (` cr) 8,824 7,865 12.2 7,609 16.0 Saving deposits (` cr) 40,240 38,608 4.2 35,875 12.2 CASA deposits (` cr) 49,064 46,473 5.6 43,484 12.8 CASA ratio (%) 30.3 29.6 67bp 30.6 (32)bp CAR (%) 12.2 12.9 (78)bp 13.0 (83)bp Tier 1 CAR (%) 8.9 9.3 (40)bp 8.9 (3)bp Profitability Ratios (%) Cost of deposits 7.6 7.8 (24)bp 6.0 158bp Yield on advances 11.5 12.4 (90)bp 10.7 82bp Yield on investments 7.8 7.7 16bp 7.2 61bp Yield on funds 10.2 10.8 (64)bp 9.5 73bp Cost of funds 7.4 7.7 (30)bp 6.0 137bp Reported NIM 2.8 3.2 (37)bp 3.5 (69)bp Cost-to-income ratio 45.7 40.8 482bp 41.7 399bp Asset quality Gross NPAs (` cr) 3,311 2,162 53.1 1,715 93.1 Gross NPAs (%) 3.0 2.0 97bp 1.8 118bp Net NPAs (` cr) 2,331 1,191 95.7 664 250.9 Net NPAs (%) 2.1 1.1 101bp 0.7 141bp Provision coverage ratio (%) 60.8 73.6 (1277)bp 79.6 (1878)bp Annualized slippage ratio (%) 6.2 2.5 367bp 2.2 396bp NPA prov. to avg. assets (%) 0.8 1.0 (26)bp 0.8 2bp Business growth moderate The business growth of the bank was moderate with advances growing by 15.8% and deposits growing by 14.0% yoy. The performance on the CASA front was moderate as well. Current account deposits grew by a healthy 16.0% yoy; however savings account deposits grew by a moderate 12.2% yoy. The CASA ratio of the bank as of 2QFY2013 now stands at 30.2%. Exhibit 4: Balance sheet contracts in 1QFY2013 Exhibit 5: Moderation in CASA growth continues Adv. qoq chg (%) Dep. qoq chg (%) CDR (%, RHS) CASA ratio CASA yoy growth (%, RHS) 12.5 10.0 7.5 5.0 2.5 - (2.5) (5.0) 69.1 69.6 70.4 68.4 67.4 6.1 4.9 2.3 10.6 9.8 3.2 (3.1) (0.6) (1.7) 0.3 75.0 70.0 65.0 60.0 55.0 32.0 30.0 28.0 12.8 10.3 10.6 10.2 8.4 30.6 30.6 30.5 29.6 30.3 15.0 10.0 5.0 - November 13, 2012 3
NIMs decline on higher interest reversals The bank s yield on advances declined by 90bp qoq due to interest reversals (~`165cr) on account of higher slippages. Consequently, despite lower cost of deposits (down by 24bp qoq) the reported NIMs were down by 37bp to 2.8%. Exhibit 6: YoA lower for 2QFY2013 Exhibit 7: NIMs remain stable qoq on a low base (%) (%) 13.0 12.0 11.0 12.6 12.2 12.0 12.4 11.5 4.1 3.8 3.5 3.2 2.9 3.7 3.7 3.2 3.2 2.8 10.0 2.6 2.3 9.0 2.0 Non-interest income remains sluggish The other income of the bank remained sluggish de-growing by 2.3% yoy. The CEB income was poor de-growing by 20.2% yoy, however treasury income reported strong gains coming in at `47cr compared to `7cr in 2QFY2012. Asset quality under pressure The slippage figures for 2QFY2013 stood at `1,720cr, thrice the average quarterly run rate. Of these slippages ~`700cr were due to the difference in the opinion in the classification of these accounts between RBI and the bank. The bank had classified these accounts as standard restructured, however the RBI during the financial annual inspection adjudged these accounts as NPAs. There was also a chunky account worth ~`280cr from the iron and steel sector. The gross NPAs increased from 1.98% as of 1QFY2013 to 2.95% in 2QFY2013, while the net NPAs increased from 1.1% to 2.1% for 2QFY2013. PCR slipped by a significant 1,277bp to 60.8% November 13, 2012 4
Exhibit 8: NPA ratios have been increasing Gross NPAs (%) Net NPAs (%) PCR (%, RHS) 3.5 3.0 2.5 2.0 1.5 1.0 0.5 79.6 78.0 74.0 73.6 60.8 1.8 0.7 1.9 0.8 1.8 1.0 2.0 1.1 3.0 2.1 85.0 80.0 75.0 70.0 65.0 60.0-55.0 ; Note: PCR incl. technical write-offs Exhibit 9: Slippages remain elevated Slippages (%) Credit cost (%, RHS) 8.0 0.9 7.0 0.8 0.7 0.8 6.0 0.6 5.0 4.0 0.4 3.0 2.0 1.0 0.6 2.2 2.5 4.1 2.5 7.3-1QFY12 1.0 0.8 0.6 0.4 0.2 - Exhibit 10: Branch expansion modest Exhibit 11: Cost ratio trends 2,600 2,550 2,500 2,450 2,400 2,441 2,477 2,516 2,537 2,564 60.0 45.0 Cost-to-income ratio (%) Opex to average assets (%, RHS) 1.8 1.7 1.7 1.7 1.7 1.6 1.5 1.5 1.5 2,350 2,300 2QFY12 3QFY12 4QFY12 1QFY12 2QFY12 30.0 41.7 40.4 45.2 40.8 45.7 1.4 1.3 Investment arguments Healthy retail deposit base Allahabad Bank has a substantial 41% of its branches in the CASA deposit-rich rural areas, which ensure higher sustainability of the low-cost deposits reservoir (~30% CASA ratio), also reflected in the healthy 19.8% CAGR in the bank s saving account deposits over FY2009 12. Although the bank s CASA market share reduced by 25bp over FY2006 FY2012 to 2.4%, the decline in market share has been relatively lower. Also, the bank has a relatively lower share of wholesale deposits and CDs at 11.1% (as of 2QFY2013) Moderate fee income Growth in fee income (other income excluding treasury income) has been strong at 45.8% CAGR over FY2009 11 (0.9% of average assets for FY2011). However, FY2012 has been a bad year for the bank in terms of fee performance (decline of 2.0% yoy) mostly due to lower recoveries, which has led to fee income to average assets dropping to 0.7%. Going forward also, we have factored in lower growth in fee income than peers, as a large part of the bank s high fee income during FY2011 was driven by above-average recoveries from written-off accounts (0.24% of average assets for FY2011). November 13, 2012 5
Higher yielding loans could lead to higher NPAs Allahabad Bank had one of the highest reported yields on advances till 1QFY2013 (12.4%) amongst PSU banks. The bank s yield on advances had risen by ~190bp in between 3QFY2011 and 1QFY2013, highest increase within the PSU segment indicating increased risk taking in the form of higher yielding loans over the past one year. We were always wary of incremental asset quality pressures arising from such high yields on advances, which showed up in the form of higher slippages during 2QFY2013. The yields also dropped to 11.4% as of 2QFY2013 on account of interest reversals. Outlook and valuation Positives for Allahabad Bank include moderate CASA ratio of ~30%. The bank s asset quality has come under pressure recently and we remain concerned about it given that it has had one of the highest yield on advances amongst peers in the last couple of years. The stock has been underperforming its peers since the beginning of CY2012 and as a result the valuation multiple for the bank has come down sharply and is currently one of the lowest in the industry (0.6x ABV FY2014). We value the bank at 0.7x FY2014 ABV (where most of the bank s peers are currently trading) and hence recommend an Accumulate rating on the stock with a target price of `152. Exhibit 12: Key assumptions Particulars (%) Earlier estimates Revised estimates FY2013 FY2014 FY2013 FY2014 Credit growth 12.0 15.0 12.0 15.0 Deposit growth 9.0 11.0 9.0 11.0 CASA ratio 30.4 30.2 30.4 30.2 NIMs 3.0 3.1 2.7 2.8 Other income growth 2.1 8.0 1.1 5.5 Growth in staff expenses 7.0 12.0 2.0 12.0 Growth in other expenses 12.0 12.0 13.0 12.0 Slippages 2.8 2.8 3.3 2.8 Coverage Ratio 74.0 73.5 74.0 67.5 Source: Angel Research November 13, 2012 6
Exhibit 13: Change in estimates Particulars (` cr) Earlier estimates FY2013 Revised Earlier Var. (%) estimates estimates FY2014 Revised Var. (%) estimates NII 5,617 5,079 (9.6) 6,452 5,853 (9.3) Non-interest income 1,327 1,313 (1.0) 1,433 1,385 (3.3) Operating income 6,944 6,392 (7.9) 7,884 7,238 (8.2) Operating expenses 2,923 2,839 (2.8) 3,273 3,180 (2.8) Pre-prov. profit 4,021 3,553 (11.6) 4,611 4,058 (12.0) Provisions & cont. 1,713 1,600 (6.6) 1,967 1,680 (14.6) PBT 2,307 1,952 (15.4) 2,644 2,378 (10.0) Prov. for taxes 531 439 (17.2) 793 713 (10.0) PAT 1,777 1,513 (14.8) 1,851 1,665 (10.0) Source: Angel Research Exhibit 14: P/ABV band 400 350 300 250 200 150 100 50 0 Price (`) 0.3x 0.6x 0.9x 1.2x 1.5x 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 November 13, 2012 7
Exhibit 15: Recommendation summary Company Reco. CMP (`) Tgt. price (`) Upside (%) FY2014E P/ABV (x) FY2014E Tgt. P/ABV (x) FY2014E P/E (x) FY2012-14E EPS CAGR (%) FY2014E RoA (%) FY2014E RoE (%) AxisBk Buy 1,224 1,476 20.6 1.7 2.0 8.9 16.0 1.6 20.2 FedBk Neutral 470 - - 1.1-9.1 6.7 1.1 13.3 HDFCBk Neutral 647 - - 3.6-18.0 27.9 1.9 22.0 ICICIBk* Buy 1,059 1,270 20.0 1.7 2.0 12.7 21.7 1.5 15.7 SIB Accumulate 23 25 5.8 1.0 1.1 6.1 4.2 0.9 16.9 YesBk Buy 422 492 16.6 2.1 2.5 10.0 23.5 1.5 23.5 AllBk Accumulate 142 152 6.8 0.6 0.7 4.3 (5.6) 0.8 14.5 AndhBk Neutral 105 - - 0.7-4.8 (4.8) 0.8 13.8 BOB Accumulate 756 817 8.1 0.9 1.0 5.5 6.4 1.0 17.0 BOI Neutral 282 - - 0.7-4.4 16.9 0.8 15.8 BOM Accumulate 53 56 5.6 0.7 0.7 4.4 38.9 0.7 16.1 CanBk Accumulate 436 463 6.2 0.8 0.9 5.4 4.0 0.8 14.6 CentBk Neutral 75 - - 0.6-3.5 102.4 0.6 14.9 CorpBk Accumulate 402 445 10.7 0.7 0.7 4.1 (3.4) 0.7 14.7 DenaBk Accumulate 112 123 9.7 0.7 0.8 4.7 2.5 0.8 15.6 IDBI# Neutral 106 - - 0.7-4.8 17.5 0.9 13.9 IndBk Accumulate 176 195 10.8 0.6 0.7 4.2 2.8 1.1 16.3 IOB Neutral 76 - - 0.5-3.8 23.0 0.6 13.1 J&KBk Neutral 1,379 - - 1.2-7.1 7.9 1.3 17.7 OBC Accumulate 318 347 9.2 0.7 0.8 4.9 29.0 0.9 14.4 PNB Accumulate 767 843 9.8 0.8 0.9 4.7 6.8 1.0 17.3 SBI* Accumulate 2,172 2,437 12.2 1.4 1.6 8.4 21.5 1.0 17.7 SynBk Accumulate 123 131 6.5 0.7 0.8 4.5 11.5 0.7 16.6 UcoBk Neutral 73 - - 0.8-4.4 7.9 0.6 14.4 UnionBk Accumulate 229 250 9.2 0.8 0.9 4.9 20.3 0.8 16.4 UtdBk Accumulate 66 74 11.7 0.5 0.5 3.1 18.4 0.7 15.7 VijBk Neutral 55 - - 0.7-4.9 12.1 0.5 13.0 ; Note:*Target multiples=sotp Target Price/ABV (including subsidiaries), # Without adjusting for SASF Company background Allahabad Bank is a mid-size public sector bank, with a branch network of over 2,500 branches and balance sheet of ~`1.8lakh cr. The bank's branches are mostly concentrated in the northern (~40%) and eastern (~40%) states of India. November 13, 2012 8
Income statement (standalone) Y/E March (` cr) FY08 FY09 FY10 FY11 FY12 FY13E FY14E Net Interest Income 1,672 2,159 2,650 4,022 5,163 5,079 5,853 - YoY Growth (%) (4.5) 29.1 22.8 51.8 28.3 (1.6) 15.2 Other Income 965 1,142 1,516 1,370 1,299 1,313 1,385 - YoY Growth (%) 156.3 18.4 32.7 (9.6) (5.2) 1.1 5.5 Operating Income 2,637 3,301 4,166 5,393 6,461 6,392 7,238 - YoY Growth (%) 24.0 25.2 26.2 29.4 19.8 (1.1) 13.2 Operating Expenses 1,158 1,399 1,618 2,338 2,691 2,839 3,180 - YoY Growth (%) 12.7 20.9 15.6 44.5 15.1 5.5 12.0 Pre - Provision Profit 1,480 1,901 2,549 3,055 3,770 3,553 4,058 - YoY Growth (%) 34.5 28.5 34.1 19.9 23.4 (5.8) 14.2 Prov. & Cont. 357 825 777 1,124 1,607 1,600 1,680 - YoY Growth (%) 35.1 131.0 (5.9) 44.7 43.0 (0.4) 5.0 Profit Before Tax 1,122 1,076 1,772 1,931 2,163 1,952 2,378 - YoY Growth (%) 34.3 (4.1) 64.7 9.0 12.0 (9.7) 21.8 Prov. for Taxation 147 307 565 508 296 439 713 - as a % of PBT 13.1 28.6 31.9 26.3 13.7 22.5 30.0 PAT 975 769 1,206 1,423 1,867 1,513 1,665 - YoY Growth (%) 29.9 (21.1) 57.0 18.0 31.2 (19.0) 10.0 Balance sheet (standalone) Y/E March (` cr) FY08 FY09 FY10 FY11 FY12 FY13E FY14E Share Capital 447 447 447 476 500 500 500 Reserves & Surplus 4,774 5,405 6,306 8,031 10,007 11,200 12,487 Deposits 71,616 84,972 106,056 131,887 159,593 173,956 193,092 - Growth (%) 20.3 18.6 24.8 24.4 21.0 9.0 11.0 Borrowings 1,792 937 1,424 3,006 5,183 5,648 6,259 Tier 2 Capital 1,862 2,912 4,012 3,912 3,912 3,814 3,719 Other Liab. & Prov. 2,448 2,975 3,455 3,974 3,740 4,258 4,872 Total Liabilities 82,939 97,648 121,699 151,286 182,935 199,377 220,929 Cash Balances 6,289 5,115 7,184 7,901 8,712 7,828 7,724 Bank Balances 753 1,521 1,984 3,126 5,313 3,988 4,419 Investments 23,400 29,651 38,429 43,247 54,283 59,324 61,513 Advances 49,720 58,802 71,605 93,625 111,145 124,483 143,155 - Growth (%) 20.4 18.3 21.8 30.8 18.7 12.0 15.0 Fixed Assets 1,071 1,110 1,118 1,148 1,198 1,266 1,361 Other Assets 1,705 1,449 1,379 2,239 2,283 2,489 2,758 Total Assets 82,939 97,648 121,699 151,286 182,935 199,377 220,929 - Growth (%) 22.6 17.7 24.6 24.3 20.9 9.0 10.8 November 13, 2012 9
Ratio analysis (standalone) Y/E March FY08 FY09 FY10 FY11 FY12 FY13E FY14E Profitability ratios (%) NIMs 2.3 2.5 2.5 3.0 3.2 2.7 2.8 Cost to Income Ratio 43.9 42.4 38.8 43.4 41.7 44.4 43.9 RoA 1.3 0.9 1.1 1.0 1.1 0.8 0.8 RoE 24.6 16.5 22.2 21.0 21.6 14.8 14.5 B/S ratios (%) CASA Ratio 36.0 34.6 34.5 33.5 30.5 30.4 30.2 Credit/Deposit Ratio 69.4 69.2 67.5 71.0 69.6 71.6 74.1 CAR 12.0 13.1 13.6 13.0 12.8 12.7 12.5 - Tier I 7.7 8.0 8.1 8.6 9.1 9.4 9.5 Asset Quality (%) Gross NPAs 2.0 1.8 1.7 1.7 1.8 3.3 4.3 Net NPAs 0.8 0.7 0.7 0.8 1.0 1.8 1.8 Slippages 1.5 1.7 2.1 2.4 2.4 3.3 2.8 Loan Loss Prov./Avg. Assets 0.4 0.3 0.8 0.6 0.7 0.8 0.7 Provision Coverage 60.4 60.9 78.9 75.7 74.0 67.5 70.0 Per Share Data (`) EPS 21.8 17.2 27.0 29.9 37.3 30.3 33.3 ABVPS 93.9 108.0 131.7 160.5 192.1 206.6 233.8 DPS 3.5 2.5 5.5 6.0 6.0 5.5 6.5 Valuation Ratios PER (x) 6.5 8.3 5.3 4.8 3.8 4.7 4.3 P/ABVPS (x) 1.5 1.3 1.1 0.9 0.7 0.7 0.6 Dividend Yield 2.5 1.8 3.9 4.2 4.2 3.9 4.6 DuPont Analysis (%) NII 2.2 2.4 2.4 2.9 3.1 2.7 2.8 (-) Prov. Exp. 0.5 0.9 0.7 0.8 1.0 0.8 0.8 Adj. NII 1.7 1.5 1.7 2.1 2.1 1.8 2.0 Treasury 0.6 0.6 0.5 0.1 0.1 0.1 0.0 Int. Sens. Inc. 2.4 2.1 2.2 2.2 2.2 1.9 2.0 Other Inc. 0.7 0.6 0.9 0.9 0.7 0.6 0.6 Op. Inc. 3.0 2.7 3.1 3.1 2.9 2.5 2.6 Opex 1.5 1.5 1.5 1.7 1.6 1.5 1.5 PBT 1.5 1.2 1.6 1.4 1.3 1.0 1.1 Taxes 0.2 0.3 0.5 0.4 0.2 0.2 0.3 RoA 1.3 0.9 1.1 1.0 1.1 0.8 0.8 Leverage (x) 19.0 19.4 20.2 20.2 19.3 18.7 18.3 RoE 24.6 16.5 22.2 21.0 21.6 14.8 14.5 November 13, 2012 10
Research Team Tel: 022-39357800 E-mail: research@angelbroking.com Website: www.angelbroking.com DISCLAIMER This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. 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 reliable sources 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 this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible 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. While Angel 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. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report. Disclosure of Interest Statement Allahabad Bank 1. Analyst ownership of the stock No 2. Angel and its Group companies ownership of the stock No 3. Angel and its Group companies' Directors ownership of the stock No 4. Broking relationship with company covered No Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%) Reduce (-5% to 15%) Sell (< -15%) November 13, 2012 11