Syndicate Bank 4Q FY 2013

7/30/2019 Syndicate Bank 4Q FY 2013

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

Particulars (` cr) 4QFY13 3QFY13 % chg (qoq) 4QFY12 % chg (yoy)NII 1,344 1,400 (4.0) 1,337 0.6Pre-prov. profit 901 864 4.3 790 14.0

PAT 592 508 16.5 309 91.4Source: Company, Angel Research

For 4QFY2013, Syndicate Bank announced a moderate set of numbers on the

operating front, however reported improvement on the asset quality front. While

NII came in flat yoy at `1,344cr (despite robust advance growth at 19.4% yoy), Non

Interest income grew strongly at 33.3% yoy, leading to a moderate growth of 14.0%

yoy in operating profit. Gross and Net NPA ratios, improved sequentially by 31bp and

9bp, respectively to 2.0% and 0.8%, which aided the bank to report 32.9% yoy lowerprovisioning expenses, thereby enabling it to clock 91.4% yoy earnings growth.

NIM declines qoq; Slippages lower sequentially: During 4QFY2013, the bankwitnessed a healthy growth in its business, as advances grew by 19.4% yoy, while

growth in deposits came in at 17.4% yoy. Despite the 14.9% yoy growth witnessed

in current deposits, the growth in CASA deposits remained moderate at 11.9%

yoy, due to moderate growth of 10.9% yoy in saving deposits. CASA ratio for the

bank was lower by 145bp qoq (136bp yoy) to 28.0%. The bank shed around

`3,718cr of differential rate deposits during the quarter and hence as of

4QFY2013, the share of bulk deposits to total deposits stood reduced to 16.0%

from 17.4% in 3QFY2013. NIMs came down by 32bp sequentially at 3.0%,

primarily due to 40bp decline in yield on advances. The bank witnessed

improvement on the asset quality front during the quarter, as slippages came in

much lower at `624cr (annualized slippage ratio of 2.0%) as compared to

average quarterly run rate of around `1,000cr for the last few quarters and were

largely contributed by two chunky slippages amounting to ~`450cr. Aided by

lower slippages, Gross NPA levels, on an absolute basis, came down by 5.7%

qoq, while Net NPA levels remained flat sequentially. The banks PCR improved by

40bp sequentially to 83.4% and remains on the higher side within the PSU

segment. During the quarter, the bank restructured advances worth ~`1,000cr

(which included ~`300-400cr exposure to Tamil Nadu SEB), thereby takings its

outstanding restructured book to ~`9,216cr.

Outlook and valuation:Although the bank has a moderate CASA and fee incomefranchise, with the CASA ratio of 28.0% as of 4QFY2013 andfee income at 0.7% ofaverage assets as of FY2013, it has relatively comfortable asset quality outlook than

peers.At CMP, it is currently trading at 0.6x FY2015E ABV, which in our view, factors in

the relative comfort towards the asset quality. Hence, we remain Neutral on the stock.Key financials (Standalone)Y/E March (` cr) FY2012 FY2013 FY2014E FY2015ENII 5,085 5,454 5,963 6,791% chg 16.0 7.3 9.3 13.9

Net profit 1,313 2,004 1,630 1,830% chg 25.3 52.6 (18.7) 12.3

NIM (%) 3.1 2.8 2.6 2.6

EPS (`) 21.8 33.3 27.1 30.4P/E (x) 5.9 3.9 4.8 4.3

P/ABV (x) 1.0 0.8 0.7 0.6

RoA (%) 0.8 1.0 0.7 0.7

RoE (%) 17.9 22.8 16.0 15.9

Source: Company, Angel Research

NEUTRALCMP `129

Target Price -

Investment Period -

Stock Info

Sector Banking

Market Cap (` cr) 7,786

Beta 1.3

52 Week High / Low 145/84

Avg. Daily Volume 168,581

Face Value (`) 10

BSE Sensex 19,576

Nifty 5,944Reuters Code SBNK.BO

Bloomberg Code SNDB@IN

Shareholding Pattern (%)

Promoters 66.2

MF / Banks / Indian Fls 15.9

FII / NRIs / OCBs 6.5

Indian Public / Others 11.4

Abs. (%) 3m 1yr 3yr

Sensex (1.0) 14.1 12.6

Syndicate Bank (3.0) 25.2 39.6

Vaibhav Agrawal022 3935 7800 Ext: 6808

[email protected]

Sourabh Taparia022 3935 7800 Ext: 6872

[email protected]

Akshay Narang022 3935 7800 Ext: 6829

[email protected]

Harshal Patkar022 3935 7800 Ext: 6847

[email protected]

Syndicate BankPerformance Highlights

4QFY2013 Result Update | Banking

May 3, 2013


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Syndicate Bank | 4QFY2013 Result Update

May 3, 2013 2

Exhibit 1:4QFY2013 performance (Standalone)Particulars (` cr) 4QFY13 3QFY13 % chg (qoq) 4QFY12 % chg (yoy) FY2013 FY2012 % chgInterest earned 4,381 4,221 3.8 4,125 6.2 17,121 15,268 12.1- on Advances / Bills 3,465 3,333 4.0 3,300 5.0 13,524 12,371 9.3- on investments 831 813 2.2 755 10.0 3,231 2,736 18.1

- on balance with RBI & others 85 75 14.0 70 22.5 287 151 90.4

- on others - - - - - 78 10 653.3

Interest Expended 3,037 2,821 7.7 2,788 8.9 11,667 10,183 14.6Net Interest Income 1,344 1,400 (4.0) 1,337 0.6 5,454 5,085 7.3Other income 399 269 48.3 300 33.3 1,174 1,076 9.2Other income excl. treasury 357 234 52.5 286 24.8 1,049 987 6.3

- Fee Income 172 132 30.3 159 8.3 412 466 (11.6)

- Treasury Income 42 35 20.0 13 213.0 125 88 41.4

- Profit on exchange transactions 19 28 4.0 30 5.0 150 9 1,566.7

- Others 166 74 123.8 98 70.1 487 513 (4.9)

Operating income 1,744 1,669 4.5 1,636 6.6 6,628 6,161 7.6Operating expenses 843 805 4.7 846 (0.4) 3,179 2,814 13.0- Employee expenses 579 550 5.1 594 (2.6) 2,179 1,892 15.2

- Other Opex 264 254 3.7 252 4.8 1,000 923 8.3

Pre-provision Profit 901 864 4.3 790 14.0 3,450 3,347 3.1Provisions & Contingencies 364 530 (31.4) 542 (32.9) 1,886 1,919 (1.7)- Provisions for NPAs 160 208 (23.1) 321 (50.1) 1,110 1,415 (21.6)

- Provisions for Investments (14) 6 - (12) 15.2 (18) 38 -

- Other Provisions 218 316 (31.1) 234 (6.8) 795 467 70.2

PBT 537 334 60.8 248 116.4 1,563 1,427 9.5Provision for Tax (55) (174) (68.4) (61) (10.1) (441) 114 -

PAT 592 508 16.5 309 91.4 2,004 1,313 52.6Effective Tax Rate (%) (10.2) (52.1) 4190bp (24.6) 1440bp (28.2) 8.0 -


Exhibit 2:4QFY2013 Actual vs. Angel estimatesParticulars (` cr) Actual Estimates % chgNet interest income 1,344 1,446 (7.0)

Non-interest income 399 317 26.0

Operating income 1,744 1,762 (1.1)Operating expenses 843 863 (2.4)

Pre-prov. profit 901 899 0.2Provisions & cont. 364 497 (26.7)

PBT 537 403 33.5

Prov. for taxes (55) (43) 29.2

PAT 592 445 33.1Source: Company, Angel Research


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May 3, 2013 3

Exhibit 3:4QFY2013 performance (Standalone)Particulars 4QFY13 3QFY13 % chg (qoq) 4QFY12 % chg (yoy)Balance sheetAdvances (`cr) 147,569 134,629 9.6 123,620 19.4Deposits (`cr) 185,356 164,075 13.0 157,941 17.4

Credit-to-Deposit Ratio (%) 79.6 82.1 (244)bp 78.3 134bp

Current deposits (`cr) 13,937 11,430 21.9 12,129 14.9

Saving deposits (`cr) 38,017 36,930 2.9 34,295 10.9

CASA deposits (` cr) 51,954 48,360 7.4 46,424 11.9

CASA ratio (%) 28.0 29.5 (145)bp 29.4 (136)bp

CAR (%) 12.6 11.4 121bp 12.2 35bp

Tier 1 CAR (%) 9.0 7.8 120bp 8.9 2bp

Profitability Ratios (%)Cost of deposits 6.6 6.7 (14)bp 6.9 (36)bp

Yield on advances 10.04 10.5 (42)bp 11.0 (97)bp

Reported NIM 2.97 3.29 (32)bp 3.6 (63)bp

Cost-to-income ratio 48.3 48.2 10bp 51.7 (338)bp

Asset qualityGross NPAs (` cr) 2,979 3,160 (5.7) 3,183 (6.4)

Gross NPAs (%) 2.0 2.3 (32)bp 2.5 (54)bp

Net NPAs (`cr) 1,125 1,141 (1.4) 1,185 (5.1)

Net NPAs (%) 0.8 0.9 (9)bp 1.0 (20)bp

Provision Coverage Ratio (%) 83.4 83.0 40bp 80.1 335bp

Slippage ratio (%) 2.0 2.9 (90)bp 4.0 (195)bp

NPA to avg. assets (%) 0.3 0.4 (13)bp 0.7 (42)bp


Business growth healthy; Global NIM decline 32bp sequentially to

3.0%

During 4QFY2013, the bank witnessed healthy growth in its business, as advances

grew by 19.4% yoy, while growth in deposits came in at 17.4% yoy.Despite the

14.9% yoy growth witnessed in current deposits, the growth in CASA deposits

remained moderate at 11.9% yoy, due to moderate growth of 10.9% yoy in saving

deposits. CASA ratio for the bank was lower by 145bp qoq (136bp yoy) to 28.0%.

Continuing its strategy of lowering dependence on bulk deposits, the bank shed

around `3,718cr of bulk deposits in 4QFY2013 compared to `3,300cr in

3QFY2013. Thus the share of bulk deposits to total deposits (differential rate

deposits and Certificate of deposits) stands reduced to 16.0% from 17.4% as of

3QFY2013.

During the quarter, the bank witnessed a 40bp sequential decline in its yield on

advances to 10.0%, while cost of deposits for the bank came off by 14bp qoq

(largely due to shedding of high cost bulk deposits). Hence, the NIM for the bank

declined by 32bp sequentially to 3.0%.


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May 3, 2013 4

Exhibit 4:Business growth healthy


Exhibit 5:CASA ratio declined sequentially


Exhibit 6:14bp qoq fall in CoD, was fully offset by...


Exhibit 7:...45bp fall in YoA, resulting in decrease inNIMs


Strong performance on non-interest income front

During 4QFY2013, the non-interest income (excluding treasury) for the bank grew

strongly by 24.8% yoy to `357cr, largely due to a strong growth of 70.1% yoy in

others segment (possibly due to higher recoveries), even as growth in the fee

income remained moderate at 8.3% yoy.Treasury income for the bank came in at

`42cr, much higher compared to `13cr in 4QFY2012. Overall, the bank reported

a strong growth of 33.3% yoy in its non-interest income.

Sequential lower slippages aiding improvement in asset quality

The bank witnessed improvement on the asset quality front during the quarter, as

slippages came in much lower at `624cr (annualized slippage ratio of 2.0%) as

compared to average quarterly run rate of around `1,000cr for the last few

quarters and were largely contributed by two chunky slippages (one account each

from textiles and shipping) amounting to ~`450cr. Recoveries at `260cr in

4QFY2013, were in-line with the recovery performance seen in the previous two

quarters. Aided by lower slippages, Gross NPA levels, on an absolute basis, came

down by 5.7% qoq, while Net NPA levels remained flat sequentially. Gross and net

NPA ratios were lower sequentially by 31bp and 9bp, respectively to 2.0% and

0.8%. The provisioning coverage ratio for the bank improved 40bp sequentially

and stood comfortable at 83.4% (on the higher side within the PSU segment).

15.8

16.8

12.7

17.3

19.4

16.5

18.4

10.5

14.6

17.4

78.3

82.1

81.3

82.1

79.6

76.0

77.0

78.0

79.0

80.0

81.0

82.0

83.0

-

5.0

10.0

15.0

20.0

25.0

4QFY12 1QFY13 2QFY13 3QFY13 4QFY13

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

29.4

28.1

29.9

29.5

28.0

10.7

7.1

8.1

9.9

11.9

-

7.5

15.0

25.0

27.5

30.0

32.5


CASA ratio CASA yoy growth (%, RHS)

6.927.08 7.00

6.706.56

5.00

7.00


3.60

3.193.33 3.29

2.97

2.00

2.50

3.00

3.50

4.00


Reported NIM(%)


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May 3, 2013 5

During the quarter, the bank restructured advances worth ~`1,000cr during

the quarter (which included ~`300-400cr exposure to Tamil Nadu SEB),

thereby takings its outstanding restructured book to `9,216cr (6.1% of its

overall loan book).

Exhibit 8:Slippages reducing slowly


Exhibit 9:NPA ratios improve sequentially

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

Exhibit 10:Network expansion at steady pace


Exhibit 11:Cost ratios remain elevated


CAR on the lower side; Capital raising via Equity in current fiscal

As of 4QFY2013, the banks total CAR stood at 12.6%, with the tier-1 ratio at8.96%, which remains on the lower side. In FY2012 the bank had received `327cr

capital infusion from the Life Insurance Corporation of India. In FY2013, the bank

raised ~`1,000cr of capital in form of Tier-II bonds. To propel its further growth

plans, the bank has plans to raise equity capital in the current fiscal.

Tax rate negative for FY2013

During FY2013, the bank has written back tax provisions amounting to `441cr,

primarily due to utilization of MAT credit of `574cr and Deferred Tax of `231cr.

Going ahead in FY2014, the Management has further MAT credit, which it plans

to utilize in the current fiscal. However, at the same time, the Management hasguided at an overall tax expense rate of around 25%.

4.0

3.4 3.32.9

2.0

-

1.0

2.0

3.0

4.0

5.0


(%)

2.5

2.4

2.5

2.3

2.0

1.0

0.9

0.9

0.9

0.8

80.1 80.782.3

83.0 83.4

50.0

60.0

70.0

80.0

90.0

-

0.5

1.0

1.5

2.0

2.5


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

2,7

00

2,7

07

2,7

38

2,7

61

2,9

34

2,000

2,100

2,200

2,300

2,400

2,5002,600

2,700

2,800

2,900

3,000


51.7

45.9

49.2

48.2

48.3

1.9

1.61.8 1.7 1.6

-

0.5

1.0

1.5

2.0

2.5

30.0

45.0

60.0


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


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May 3, 2013 6

Investment arguments

Relatively better asset quality and moderate NIM to aid

profitability

Slippages remained high for the last four quarters but have started to cool down.

Slippages for 4QFY2013 were at `624cr, of which two accounts from the textiles

and shipping accounted for ~`450cr. We believe asset-quality pressures are likely

to be well within manageable limits for the bank, as evident from the comfortable

provisioning coverage for the bank at 83.4% as of 4QFY2013 and also

improvement in gross as well as net NPA levels.Further, recoveries and upgrades

have been encouragingly high during FY2013. The banks conservative lending,

visible in its low yield on advances (reported at 10.5% in FY2013 and 11.0% in

FY2012), and moderate advances growth (16.3% CAGR over FY2010-13), are

expected to lead to a relatively better asset quality than peer banks. We expect

slippages to be at 3.0% in FY2014 and 2.5% in FY2015.

Outlook and valuation

Although, the bank has a moderate CASA and fee income franchise, with a CASA

ratio of 28.0% as of 4QFY2013 andfee income at 0.7% of average assets as of

FY2013, it has relatively comfortable asset quality outlook than peers.At CMP, it is

currently trading at 0.6x FY2015E ABV, factoring-in the relative comfort towards

the asset quality, leaving scope for limited upside from here on. Hence, we remainNeutral on the stock.Exhibit 12:KeyassumptionsParticulars (%) Earlier estimates Revised estimatesFY2014 FY2015 FY2014 FY2015Credit growth 15.0 15.0 15.0 15.0

Deposit growth 15.0 16.0 15.0 15.0

CASA ratio 27.7 26.9 26.8 26.3

NIMs 2.9 2.8 2.6 2.6

Other income growth 10.3 15.1 8.5 14.4

Growth in staff expenses 10.0 10.0 10.0 10.0

Growth in other expenses 7.5 7.5 7.5 7.5

Slippages 2.5 2.5 2.4 2.3

Coverage ratio 78.5 75.0 80.0 75.0

Source: Angel Research


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May 3, 2013 7

Exhibit 13:Change in estimatesParticulars (` cr) FY2013 FY2014Earlierestimates Revisedestimates Var. (%) Earlierestimates Revisedestimates Var. (%)NII 6,135 5,963 (2.8) 6,825 6,791 (0.5)

Non-interest income 1,205 1,274 5.8 1,386 1,458 5.2

Operating income 7,340 7,238 (1.4) 8,212 8,249 0.5Operating expenses 3,494 3,472 (0.6) 3,816 3,792 (0.6)

Pre-prov. profit 3,846 3,766 (2.1) 4,395 4,457 1.4Provisions & cont. 1,572 1,533 (2.5) 1,778 1,684 (5.2)

PBT 2,273 2,233 (1.8) 2,618 2,773 5.9

Prov. for taxes 682 603 (11.6) 890 942 5.9

PAT 1,591 1,630 2.4 1,728 1,830 5.9Source: Angel Research

Exhibit 14:P/ABV band


0

50

100

150

200

250

300

Apr-04

Oct-04

Apr-05

Oct-05

Apr-06

Oct-06

Apr-07

Oct-07

Apr-08

Oct-08

Apr-09

Oct-09

Apr-10

Oct-10

Apr-11

Oct-11

Apr-12

Oct-12

Apr-13

Oct-13

Price (`) 0.5x 0.7x 0.9x 1.1x 1.3x


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May 3, 2013 8

Exhibit 15:Recommendation summaryCompany Reco. CMP(`) Tgt. price(`) Upside(%) FY2015EP/ABV (x) FY2015ETgt. P/ABV (x) FY2015EP/E (x) FY2013-15EEPS CAGR (%) FY2015ERoA (%) FY2015ERoE (%)AxisBk Buy 1,474 1,737 17.9 1.6 1.9 9.7 17.3 1.6 17.6

FedBk Neutral - - 2.3 1.0 - 7.5 10.0 1.2 13.7

HDFCBk Neutral - - 1.4 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 - - 3.4 0.9 - 5.3 11.4 1.0 17.1

YesBk Neutral - - (0.4) 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 - - 3.7 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 - - 2.6 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 - - 1.9 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 - - 2.1 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 - - (0.3) 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 - - 0.4 0.6 - 4.5 (3.5) 0.7 15.2UcoBk 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

Syndicate Bank is a south-based mid-sized PSU bank, with an asset base in excess

of `3.1lakh cr. The bank has 2,900+ branches, with a more spread out network

than other regional banks, having 52% branches in the south and the remaining

spread across several states of the country (12% of branches in the northern

region). The bank also has a reasonable presence overseas, which accounts for

~17% of its total advances.


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May 3, 2013 9

Income statement (Standalone)

Y/E March (` cr) FY09 FY10 FY11 FY12 FY13E FY14E FY15ENet Interest Income 2,548 2,740 4,383 5,085 5,454 5,963 6,791- YoY Growth (%) 22.9 7.5 60.0 16.0 7.3 9.3 13.9Other Income 915 1,167 915 1,076 1,174 1,274 1,458- YoY Growth (%) (2.7) 27.6 (21.6) 17.6 9.2 8.5 14.4

Operating Income 3,462 3,907 5,298 6,161 6,628 7,238 8,249- YoY Growth (%) 14.9 12.8 35.6 16.3 7.6 9.2 14.0

Operating Expenses 1,791 2,034 2,548 2,814 3,179 3,472 3,792- YoY Growth (%) 19.8 13.5 25.3 10.4 13.0 9.2 9.2

Pre - Provision Profit 1,671 1,874 2,750 3,347 3,450 3,766 4,457- YoY Growth (%) 10.1 12.1 46.8 21.7 3.1 9.2 18.4

Prov. & Cont. 635 700 1,464 1,919 1,886 1,533 1,684- YoY Growth (%) 24.0 10.2 109.3 31.1 (1.7) (18.7) 9.9

Profit Before Tax 1,036 1,174 1,286 1,427 1,563 2,233 2,773- YoY Growth (%) 3.1 13.3 9.5 11.0 9.5 42.8 24.2

Prov. for Taxation 124 361 238 114 (441) 603 942- as a % of PBT 11.9 30.7 18.5 8.0 (28.2) 27.0 34.0

PAT 913 813 1,048 1,313 2,004 1,630 1,830- YoY Growth (%) 7.6 (10.9) 28.8 25.3 52.6 (18.7) 12.3

Balance sheet (Standalone)Y/E March (` cr) FY09 FY10 FY11 FY12 FY13E FY14E FY15E

Share Capital 522 522 573 602 602 602 602

Reserve & Surplus 4,488 5,105 6,478 8,439 9,939 11,184 12,595

Deposits 115,885 117,026 135,596 157,941 185,356 213,159 245,133

- Growth (%) 21.8 1.0 15.9 16.5 17.4 15.0 15.0

Borrowings 2,190 8,555 6,010 7,072 9,384 10,750 12,334

Tier 2 Capital 3,224 3,618 3,518 3,518 3,430 3,344 3,260

Other Liab. & Prov. 3,946 4,225 4,364 4,896 6,401 7,387 8,813

Total Liabilities 130,256 139,051 156,539 182,468 215,112 246,427 282,737Cash Balances 12,543 7,189 10,443 8,809 8,095 9,592 11,031

Bank Balances 1,861 5,545 1,523 5,076 8,489 6,161 7,068

Investments 30,537 33,011 35,068 40,815 45,638 54,924 62,596Advances 81,532 90,406 106,782 123,620 147,569 169,704 195,160

- Growth (%) 27.3 10.9 18.1 15.8 19.4 15.0 15.0

Fixed Assets 742 701 693 1,352 1,434 1,593 1,773

Other Assets 3,040 2,198 2,031 2,797 3,887 4,453 5,109

Total Assets 130,256 139,051 156,539 182,468 215,112 246,427 282,737- Growth (%) 21.6 6.8 12.6 16.6 17.9 14.6 14.7


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May 3, 2013 10

Ratio analysis

Y/E March FY09 FY10 FY11 FY12 FY13E FY14E FY15EProfitability ratios (%)NIMs 2.2 2.1 3.0 3.1 2.8 2.6 2.6Cost to Income Ratio 51.7 52.0 48.1 45.7 48.0 48.0 46.0

RoA 0.8 0.6 0.7 0.8 1.0 0.7 0.7

RoE 21.6 16.6 17.6 17.9 22.8 16.0 15.9

B/S ratios (%)CASA Ratio 27.6 31.2 30.9 29.5 28.0 26.8 26.3

Credit/Deposit Ratio 70.4 77.3 78.8 78.3 79.6 79.6 79.6

CAR 12.7 12.7 13.0 12.2 12.6 12.0 11.4

- Tier I 7.9 8.2 9.3 8.9 9.0 8.8 8.6

Asset Quality (%)Gross NPAs 1.9 2.2 2.4 2.5 2.0 2.8 3.7

Net NPAs 0.8 1.1 1.0 1.0 0.8 1.0 1.4

Slippages 1.5 1.8 1.7 2.9 2.9 2.4 2.3

Loan Loss Prov. /Avg. Assets 0.3 0.4 0.6 0.9 0.7 0.5 0.5

Provision Coverage 60.4 73.3 77.2 80.1 83.4 80.0 75.0

Per Share Data (`)EPS 17.5 15.6 18.3 21.8 33.3 27.1 30.4

ABVPS (75% cover.) 83.6 98.9 116.1 133.5 158.4 179.1 202.5

DPS 3.0 3.0 3.7 3.8 6.7 5.5 6.0

Valuation RatiosPER (x) 7.4 8.3 7.1 5.9 3.9 4.8 4.3

P/ABVPS (x) 1.5 1.3 1.1 1.0 0.8 0.7 0.6

Dividend Yield 2.3 2.3 2.9 2.9 5.2 4.3 4.6

DuPont AnalysisNII 2.1 2.0 3.0 3.0 2.7 2.6 2.6

(-) Prov. Exp. 0.5 0.5 1.0 1.1 0.9 0.7 0.6

Adj. NII 1.6 1.5 2.0 1.9 1.8 1.9 1.9

Treasury 0.2 0.3 0.0 0.1 0.1 0.0 0.0

Int. Sens. Inc. 1.8 1.8 2.0 1.9 1.9 2.0 2.0

Other Inc. 0.6 0.6 0.6 0.6 0.5 0.5 0.5

Op. Inc. 2.4 2.4 2.6 2.5 2.4 2.5 2.5

Opex 1.5 1.5 1.7 1.7 1.6 1.5 1.4PBT 0.9 0.9 0.9 0.8 0.8 1.0 1.0

Taxes 0.1 0.3 0.2 0.1 (0.2) 0.3 0.4

RoA 0.8 0.6 0.7 0.8 1.0 0.7 0.7Leverage 28.1 27.4 24.9 23.1 22.6 22.7 23.0

RoE 21.6 16.6 17.6 17.9 22.8 16.0 15.9


11/11


May 3, 2013 11

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

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1. Analyst 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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Syndicate Bank 4Q FY 2013

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