2QFY2013 Result Update | Banking

October 26, 2012

Syndicate Bank
Performance Highlights

Particulars (` cr) NII Pre-prov. profit PAT 2QFY13 1,391 843 463 1QFY13 1,319 841 440 % chg (qoq) 5.4 0.3 5.3 2QFY12 1,313 891 323 % chg (yoy) 5.9 (5.4) 43.5

NEUTRAL
CMP Target Price
Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Banking 7,145 1.2 126/67 79,660 10 18,625 5,664 SBNK.BO SNDB@IN

`119 -

Source: Company, Angel Research

During 2QFY2013, Syndicate Bank reported a moderate operating performance, with a 5.4% yoy decline in its operating profits to `843cr. However tax write-back of `100cr as against tax expense of `61cr in 2QFY2012 aided the company to post an earnings growth of 43.5% yoy to `463cr. Business growth moderates; NIM improves; Slippages elevated, but were offset by higher recoveries/upgrades: During 2QFY2013, the business growth for the bank remained moderate, with advances and deposits growing by 12.7% and 10.5% yoy, respectively. Despite a growth of 10.9% yoy witnessed in savings deposits, the growth in CASA deposits remained moderate at 8.1% yoy due to flattish current deposits. The CASA ratio improved on a sequential basis by 173bp to 29.9%. Sequentially, an 8bp decline in the cost of deposits coupled with a 10bp higher yield on advances, led to an improvement in the reported NIM by 14bp to 3.3%. On the asset quality front, the bank witnessed stability with a marginal sequential increase of 3.3% qoq in gross NPAs and decline of 1.7% qoq in net NPAs, on an absolute basis. Though the slippages for the bank have remained elevated at `2,108cr during 1HFY2013 with an annualized slippage ratio of 3.4%, the bank has maintained its asset quality due to higher recoveries and upgrades (`1,366cr in 1HFY2013 compared to `1,052 in 2HFY2012) and higher write-offs (`746cr compared to `47cr in 2HFY2012). The provisioning coverage ratio for the bank improved 155bp sequentially and stood comfortable at 82.7%. During the quarter, the bank also restructured loans worth ~`1,100cr, which included an account from the hospitality industry amounting to ~`700cr, thereby taking its outstanding restructured book to `9,200cr (~7.3% of its overall loan book). Outlook and valuation: Syndicate Bank has a moderate CASA and fee income franchise, with the CASA ratio in the vicinity of 30% as of 2QFY2013 and fee income at 0.6% of average assets as of FY2012. Though the bank has relatively comfortable asset quality outlook than peers and was one of our top picks since the last few quarters, the stock has surged significantly in the recent times and is currently trading at 0.7x FY2014E ABV, which we believe have priced in the riskreward appropriately. Hence, we recommend a Neutral rating on the stock. Key financials (Standalone)
Y/E March (` cr) NII % chg Net profit % chg NIM (%) EPS (`) P/E (x) P/ABV (x) RoA (%) RoE (%)
Source: Company, Angel Research

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 66.2 17.8 3.6 12.4

Abs. (%) Sensex Syndicate Bank

3m 11.9 25.5

1yr 7.7 15.0

3yr 11.3 23.6

FY2011 4,383 60.0 1,048 28.8 3.0 18.3 6.5 1.0 0.7 17.6

FY2012 5,085 16.0 1,313 25.3 3.1 21.8 5.4 0.9 0.8 17.9

FY2013E 5,648 11.1 1,582 20.5 3.0 26.3 4.5 0.8 0.8 18.3

FY2014E 6,545 15.9 1,633 3.2 3.0 27.1 4.4 0.7 0.7 16.6

Vaibhav Agrawal
022 3935 7800 Ext: 6808 vaibhav.agrawal@angelbroking.com

Varun Varma
022 3935 7800 Ext: 6847 varun.varma@angelbroking.com

Sourabh Taparia
022 3935 7800 Ext: 6872 sourabh.taparia@angelbroking.com

Please refer to important disclosures at the end of this report

Syndicate Bank | 2QFY2013 Result Update

Exhibit 1: 2QFY2013 performance (Standalone)

Particulars (` cr) Interest earned - on Advances / Bills - on investments - on balance with RBI & others - on others Interest Expended Net Interest Income Other income Other income excl. treasury - Fee Income - Treasury Income - Profit on exchange transactions - Others Operating income Operating expenses - Employee expenses - Other Opex Pre-provision Profit Provisions & Contingencies - Provisions for NPAs - Provisions for Investments - Other Provisions PBT Provision for Tax PAT Effective Tax Rate (%)
Source: Company, Angel Research

2QFY13 4,276 3,403 780 65 28 2,885 1,391 270 245 81 25 20 144 1,661 818 565 253 843 480 476 (3) 7 364 (100) 463 (27.4)

1QFY13 4,243 3,324 807 62 50 2,923 1,319 236 213 77 23 14 122 1,555 714 485 229 841 513 264 (6) 255 328 (112) 440 (34.1)

% chg (qoq) 0.8 2.4 (3.4) 4.5 (42.9) (1.3) 5.4 14.7 15.3 5.2 8.7 2.4 18.1 6.8 14.6 16.5 10.5 0.3 (6.5) 80.4 (97.3) 10.8 5.3 668bp

2QFY12 3,771 3,082 645 43 2,458 1,313 244 232 120 12 32 80 1,557 666 449 217 891 507 457 2 48 384 61 323 15.9

% chg (yoy) 13.4 10.4 20.9 48.7 17.4 5.9 10.5 5.5 (32.5) 108.3 10.4 79.3 6.6 22.7 25.9 16.2 (5.4) (5.4) 4.1 (85.4) (5.3) 43.5 (4337)bp

1HFY13 8,519 6,726 1,588 127 78 5,809 2,710 506 458 158 48 68 232 3,216 1,531 1,050 481 1,684 992 739 (9) 262 692 (212) 904 (30.6)

1HFY12 7,170 5,859 1,248 63 4,746 2,423 536 466 250 70 216 2,959 1,326 903 422 1,634 834 708 40 86 800 134 666 16.8

% chg 18.8 14.8 27.2 102.5 22.4 11.8 (5.6) (1.7) (36.8) (31.4) 7.4 8.7 15.5 16.3 13.9 3.1 19.1 4.4 206.6 (13.5) 35.7 (4738)bp

Exhibit 2: 2QFY2013 Actual vs Angel estimates

Particulars (` cr) Net interest income Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Company, Angel Research

Actual 1,391 270 1,661 818 843 480 364 (100) 463

Estimates 1,366 260 1,626 743 883 420 463 106 356

% chg 1.8 4.0 2.2 10.1 (4.5) 14.3 (21.5) (193.7) 30.0

October 26, 2012

Syndicate Bank | 2QFY2013 Result Update

Exhibit 3: 2QFY2013 performance (Standalone)

Particulars Balance sheet Advances (` cr) Deposits (` cr) Credit-to-Deposit Ratio (%) Current deposits (` cr) Saving deposits (` cr) CASA deposits (` cr) CASA ratio (%) CAR (%) Tier 1 CAR (%) Profitability Ratios (%) Cost of deposits Yield on advances Reported NIM Cost-to-income ratio Asset quality Gross NPAs (` cr) Gross NPAs (%) Net NPAs (` cr) Net NPAs (%) Provision Coverage Ratio (%) Slippage ratio (%) NPA to avg. assets (%)
Source: Company, Angel Research

2QFY13 126,781 155,854 81.3 10,428 36,125 46,553 29.9 11.3 8.4 7.0 10.8 3.3 49.2 3,179 2.5 1,164 0.9 82.3 3.9 1.0

1QFY13 129,171 157,276 82.1 9,987 34,275 44,262 28.1 11.7 8.6 7.1 10.7 3.2 45.9 3,077 2.4 1,185 0.9 80.7 4.0 0.6

% chg (qoq) (1.9) (0.9) (78)bp 4.4 5.4 5.2 173bp (39)bp (19)bp (8)bp 10bp 14bp 333bp 3.3 9bp (1.7) (1)bp 155bp (3)bp 46bp

2QFY12 112,533 141,083 79.8 10,497 32,578 43,075 30.5 11.8 8.6 6.7 10.9 3.4 42.8 2,721 2.4 1,052 0.9 78.5 3.8 1.1

% chg (yoy) 12.7 10.5 158bp (0.7) 10.9 8.1 (66)bp (47)bp (15)bp 31bp (7)bp (11)bp 645bp 16.8 9bp 10.7 (1)bp 376bp 18bp (10)bp

Business growth moderates; NIM improves by 14bp qoq

During the quarter, the business growth for the bank remained moderate, with advances registering a growth of 12.7% yoy, while deposits witnessed a growth of 10.5% yoy. Despite the growth of 10.9% yoy witnessed in savings deposits, the growth in CASA deposits remained moderate at 8.1% yoy due to flattish current deposits. The CASA ratio for the bank declined by 66bp yoy to 29.9% (however on a sequential basis it improved by 173bps). The cost of deposits was lower by 8bp qoq (partly due to improved CASA ratio), which coupled with 10bp qoq higher yields on advances, led to an improvement in the reported NIM by 14bp qoq to 3.3%.

Muted growth in non-interest income (excl treasury)

During 2QFY2013, the growth in non-interest income excluding treasury was muted at 5.5% yoy, largely due to a subdued performance on the fee income front. The income from treasury doubled during the quarter at `25cr. Overall, the bank reported a moderate growth of 10.5% in its non-interest income.

October 26, 2012

Syndicate Bank | 2QFY2013 Result Update

Exhibit 4: Business growth moderates in 2QFY2013

Adv. yoy chg (%) 25.0 20.0 15.0 10.0 79.8 80.2 78.3 Dep. yoy chg (%) 82.1 81.3 CDR (%, RHS) 83.0 82.0 81.0 80.0 79.0 78.0 77.0 76.0 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13
Source: Company, Angel Research

Exhibit 5: CASA ratio improved on sequential basis

CASA ratio 32.5 CASA yoy growth (%, RHS) 15.0

30.0 6.4 27.5 6.6

10.7

7.1

8.1 7.5

18.9 21.5

14.9 14.9

15.8 16.5

16.8 18.4

30.5

30.8

29.4

28.1

25.0 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13

29.9

5.0

12.7 10.5

Source: Company, Angel Research

Exhibit 6: Sequentially, 10bp higher YoA and...

(%) 11.20 11.10 11.00 10.90 10.80 10.70 10.60 10.50 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 10.90 10.73 11.11 11.01 10.83

Exhibit 7: ... 9bp fall in CoD, aided 14bp improvement in NIM

(%) 4.00 3.50 3.00 2.50 2.00 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 3.44 3.45 3.60 3.19 3.33

Source: Company, Angel Research

Source: Company, Angel Research

Asset quality maintained despite elevated slippages due to higher write-offs and upgrades & recoveries
On the asset quality front, the bank witnessed stability with a marginal sequential increase of 3.3% qoq in gross NPAs and a decline of 1.7% qoq in net NPAs, on an absolute basis. The gross NPA ratio declined sequentially by 9bp to 2.5%, while the net NPA ratio remained stable at 0.9%. Though the slippages for the bank have remained elevated at `2,108cr during 1HFY2013 with the annualized slippage ratio of 3.4%, the bank has maintained its asset quality due to higher recoveries and upgrades (`1,366cr in 1HFY2013 compared to `1,052 in 2HFY2012) and higher write-offs (`746cr compared to `47cr in 2HFY2012). The provisioning coverage ratio for the bank improved 155bp sequentially and stood comfortable at 82.7% (on the higher side within the PSU segment). During the quarter, the bank restructured loans worth ~`1,100cr, which included an account from the hospitality industry amounting to ~`700cr, thereby taking its outstanding restructured book to `9,200cr (~7.3% of its overall loan book).

October 26, 2012

Syndicate Bank | 2QFY2013 Result Update

Exhibit 8: Slippages remain at elevated levels

(%) 5.0 4.0 3.0 2.0 1.0 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 1.9 4.0 3.2 3.4 3.4

Exhibit 9: Asset quality stabilizes

Gross NPAs (%) 2.5 2.0 1.5 1.0 78.5 78.5 80.1 80.7 Net NPAs (%) PCR (%, RHS) 82.3 90.0 80.0 70.0 60.0 50.0 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13
Source: Company, Angel Research; Note: PCR including tech. write-offs

2.4 0.9

2.3 0.9

2.5 1.0

2.4 0.9

Source: Company, Angel Research

Exhibit 10: Staff expenses higher by 16.5% sequentially

Staff expenses (` cr) 1,000 800 600 QoQ change (%) 60.0 50.0 40.0 30.0 20.0 10.0 (10.0) (20.0) (30.0)

Exhibit 11: Cost ratios deteriorate sequentially

Cost-to-income ratio (%) 60.0 1.9 45.0 30.0 1.7 1.6 1.6 1.8 Opex to average assets (%, RHS) 2.5 2.0 1.5 1.0

594

449

394

485

400 200 -

565

42.8

41.1

51.7

45.9

49.2

15.0 -

2.5 0.9

0.5

0.5 -

2QFY12 3QFY12 4QFY12 1QFY13 2QFY13

Source: Company, Angel Research

2QFY12 3QFY12 4QFY12 1QFY13 2QFY13

Source: Company, Angel Research

CAR on the lower side; Capital infusion from government expected

As of 2QFY2013, the banks total CAR stood at 11.3%, with the tier-1 ratio at 8.4% (excluding 1HFY2013 profits), which remains on the lower side. The bank in FY2012 had received `327cr via capital infusion from the Life Insurance Corporation of India (LIC). To ensure sufficient capital for future growth, the bank has approached the government for capital infusion and the management is confident of receiving the same during 3QFY2013. Further it has plans to raise lower tier-II bonds for `1,000cr during 3QFY2013.

Tax rate negative for 1HFY2013 on utilization of MAT credit

During 1HFY2013, the bank has written back tax provisions amounting to `212cr and witnessed an effective tax rate of negative 30.6%, which as per management is due to utilization of minimum alternate tax (MAT) credit available. The management has guided for further utilizing the balance MAT credit during the next few quarters and that it would pay taxes under MAT for FY2013. Accordingly, we have built in an effective tax rate of 2.5% for FY2013 and 30.0% for FY2014. Investment argument

October 26, 2012

Syndicate Bank | 2QFY2013 Result Update

Relatively better asset quality and moderate NIMs to aid profitability

Slippages have remained at elevated levels for the bank for the past few quarters and even going forward, they are likely to remain at above average levels. We believe asset-quality pressures are likely to be well within manageable levels for Syndicate Bank, as evident from the comfortable provisioning coverage for the bank at 82.3% as of 2QFY2013. Further, recoveries and upgrades have been encouragingly high during 1HFY2013. The banks conservative lending, visible in its low yield on advances (11.0% in FY2012) and moderate advances growth (16.9% CAGR over FY2010-12), is expected to lead to relatively better asset quality than peers. We expect slippages to be at 3.4% in FY2013 and 3.1% in FY2014. Moreover, the bank reported its NIM at healthy levels of 3.43% in FY2012. We expect the banks NIM to be at 3.0% in FY2013.

Outlook and valuation

Syndicate Bank has a modest CASA and fee income franchise, with the CASA ratio in the vicinity of 30% as of 2QFY2013 and fee income at 0.6% of average assets as of FY2012. Though the bank has relatively comfortable asset quality outlook than peers, the stock has surged significantly in recent times and is currently trading at 0.7x FY2014E ABV, which we believe has priced in the risk-reward appropriately. Hence, we recommend a Neutral rating on the stock.

Exhibit 12: Key assumptions

Particulars (%) Credit growth Deposit growth CASA ratio NIMs Other income growth Growth in staff expenses Growth in other expenses Slippages Coverage ratio
Source: Angel Research

Earlier estimates FY2013 15.0 15.0 28.0 2.9 2.8 10.0 10.0 3.2 80.0 FY2014 14.0 15.0 26.7 3.0 11.6 15.0 15.0 2.9 75.0

Revised estimates FY2013 14.0 14.0 28.2 3.0 3.0 13.0 10.0 3.4 80.0 FY2014 14.0 15.0 27.0 3.0 11.7 13.0 15.0 3.1 75.0

Exhibit 13: Change in estimates

Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Angel Research

Earlier estimates 5,617 1,106 6,722 3,096 3,627 1,908 1,719 258 1,461

FY2013 Revised estimates 5,648 1,108 6,756 3,152 3,603 1,981 1,623 41 1,582

Var. (%) 0.6 0.2 0.5 1.8 (0.6) 3.8 (5.6) (84.3) 8.3

Earlier estimates 6,484 1,234 7,719 3,560 4,159 1,731 2,427 788 1,640

FY2014 Revised estimates 6,545 1,237 7,783 3,582 4,200 1,868 2,333 700 1,633

Var. (%) 0.9 0.3 0.8 0.6 1.0 7.9 (3.9) (11.1) (0.4)

October 26, 2012

Syndicate Bank | 2QFY2013 Result Update

Exhibit 14: P/ABV band

Price (`) 240 200 160 120 80 40 0
Apr-04 Apr-05 Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Oct-04 Oct-05 Oct-06 Oct-07 Oct-08 Oct-09 Oct-10 Oct-11 Apr-12 Oct-12

0.5x

0.7x

0.9x

1.1x

1.3x

Source: Company, Angel Research

Exhibit 15: Recommendation summary

Company AxisBk FedBk HDFCBk ICICIBk* SIB YesBk AllBk AndhBk BOB BOI BOM CanBk CentBk CorpBk DenaBk IDBI# IndBk IOB J&KBk OBC PNB SBI* SynBk UcoBk UnionBk UtdBk VijBk Reco. Buy Neutral Neutral Buy Accumulate Buy Neutral Reduce Accumulate Accumulate Neutral Accumulate Neutral Accumulate Neutral Accumulate Neutral Neutral Neutral Neutral Accumulate Accumulate Neutral Neutral Accumulate Buy Neutral CMP (`) 1,231 488 637 1,078 22 413 135 108 761 287 53 424 71 405 106 96 178 75 1,149 309 749 2,173 119 76 206 65 55 Tgt. price (`) 1,439 1,245 25 483 97 860 330 449 447 108 842 2,353 226 78 Upside (%) 16.9 15.5 12.8 16.8 (9.5) 13.0 14.9 5.9 10.4 13.2 12.4 8.3 9.9 19.4 FY2014E P/ABV (x) 1.7 1.2 3.6 1.7 0.9 2.1 0.5 0.7 0.9 0.7 0.7 0.8 0.7 0.7 0.7 0.6 0.6 0.5 1.0 0.7 0.8 1.4 0.7 0.8 0.7 0.5 0.7 FY2014E Tgt. P/ABV (x) 2.0 2.0 1.1 2.5 0.6 1.0 0.8 0.8 0.7 0.7 0.9 1.5 0.8 0.55 FY2014E P/E (x) 8.9 9.4 17.7 13.1 5.7 9.8 3.6 4.4 5.5 4.2 4.6 5.0 3.4 4.0 4.4 4.2 4.3 3.5 6.1 4.7 4.5 8.4 4.4 4.6 4.4 2.9 4.8
#

FY2012-14E EPS CAGR (%) 16.0 6.7 27.9 20.9 4.2 23.5 (0.4) 1.0 6.4 20.8 35.5 7.2 100.1 (2.2) 3.1 20.1 2.8 27.1 6.5 29.0 7.4 21.7 11.5 7.9 19.8 20.7 12.1

FY2014E RoA (%) 1.6 1.1 1.9 1.4 0.9 1.5 0.9 0.9 1.0 0.8 0.7 0.9 0.6 0.8 0.8 0.9 1.1 0.6 1.3 0.9 1.0 1.0 0.7 0.6 0.8 0.7 0.5

FY2014E RoE (%) 20.2 13.3 22.0 15.5 16.9 23.5 15.7 15.3 17.0 16.3 15.5 15.3 14.7 15.1 15.9 14.4 16.3 13.6 17.7 14.4 17.3 17.7 16.6 14.4 16.3 16.2 13.0

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

October 26, 2012

Syndicate Bank | 2QFY2013 Result Update

Company Background
Syndicate Bank is a south-based mid-sized PSU bank, with an asset base in excess of `1.8lakh cr. The bank has 2,700+ branches, with a more spread out network than other regional banks, having 53% branches in the south and the remaining spread across several states of the country (23% of branches in the northern region). The bank also has a reasonable presence overseas, which accounts for ~10% of its total loans.

October 26, 2012

Syndicate Bank | 2QFY2013 Result Update

Income statement (Standalone)

Y/E March (` cr) Net Interest Income - YoY Growth (%) Other Income - YoY Growth (%) Operating Income - YoY Growth (%) Operating Expenses - YoY Growth (%) Pre - Provision Profit - YoY Growth (%) Prov. & Cont. - YoY Growth (%) Profit Before Tax - YoY Growth (%) Prov. for Taxation - as a % of PBT PAT - YoY Growth (%) FY08 2,073 (3.6) 940 44.3 3,012 7.5 1,495 7.5 1,518 7.6 512 (25.5) 1,006 39.0 157 15.7 848 18.4 FY09 2,548 22.9 915 (2.7) 3,462 14.9 1,791 19.8 1,671 10.1 635 24.0 1,036 3.1 124 11.9 913 7.6 FY10 2,740 7.5 1,167 27.6 3,907 12.8 2,034 13.5 1,874 12.1 700 10.2 1,174 13.3 361 30.7 813 (10.9) FY11 4,383 60.0 915 (21.6) 5,298 35.6 2,548 25.3 2,750 46.8 1,464 109.3 1,286 9.5 238 18.5 1,048 28.8 FY12 5,085 16.0 1,076 17.6 6,161 16.3 2,814 10.4 3,347 21.7 1,919 31.1 1,427 11.0 114 8.0 1,313 25.3 FY13E 5,648 11.1 1,108 3.0 6,756 9.7 3,152 12.0 3,603 7.7 1,981 3.2 1,623 13.7 41 2.5 1,582 20.5 FY14E 6,545 15.9 1,237 11.7 7,783 15.2 3,582 13.6 4,200 16.6 1,868 (5.7) 2,333 43.7 700 30.0 1,633 3.2

Balance sheet (Standalone)

Y/E March (` cr) Share Capital Reserve & Surplus Deposits - Growth (%) Borrowings Tier 2 Capital Other Liab. & Prov. Total Liabilities Cash Balances Bank Balances Investments Advances - Growth (%) Fixed Assets Other Assets Total Assets - Growth (%) FY08 522 3,769 21.0 1,306 2,585 3,779 10,375 1,282 28,076 64,051 24.0 770 2,579 20.0 FY09 522 4,488 21.8 2,190 3,224 3,946 12,543 1,861 30,537 81,532 27.3 742 3,040 21.6 FY10 522 5,105 1.0 8,555 3,618 4,225 7,189 5,545 33,011 10.9 701 2,198 6.8 FY11 573 6,478 15.9 6,010 3,518 4,364 10,443 1,523 35,068 18.1 693 2,031 12.6 FY12 602 8,439 16.5 7,072 3,518 4,896 8,809 5,076 40,815 15.8 1,352 2,797 16.6 FY13E 602 9,637 14.0 8,031 3,430 5,444 8,102 4,144 49,357 14.0 1,489 3,176 13.6 FY14E 602 10,885 15.0 9,203 3,344 6,360 8,282 4,749 58,472 14.0 1,655 3,640 14.6

95,171 115,885 117,026 135,596 157,941 180,053 207,061

107,132 130,256 139,051 156,539 182,468 207,195 237,455

90,406 106,782 123,620 140,927 160,657

107,132 130,256 139,051 156,539 182,468 207,195 237,455

October 26, 2012

Syndicate Bank | 2QFY2013 Result Update

Ratio analysis
Y/E March Profitability ratios (%) NIMs Cost to Income Ratio RoA RoE B/S ratios (%) CASA Ratio Credit/Deposit Ratio CAR - Tier I Asset Quality (%) Gross NPAs Net NPAs Slippages Loan Loss Prov. /Avg. Assets Provision Coverage Per Share Data (`) EPS ABVPS (75% cover.) DPS Valuation Ratios PER (x) P/ABVPS (x) Dividend Yield DuPont Analysis NII (-) Prov. Exp. Adj. NII Treasury Int. Sens. Inc. Other Inc. Op. Inc. Opex PBT Taxes RoA Leverage RoE 2.1 0.5 1.6 0.3 1.9 0.6 2.5 1.5 1.0 0.2 0.9 27.8 24.0 2.1 0.5 1.6 0.2 1.8 0.6 2.4 1.5 0.9 0.1 0.8 28.1 21.6 2.0 0.5 1.5 0.3 1.8 0.6 2.4 1.5 0.9 0.3 0.6 27.4 16.6 3.0 1.0 2.0 0.0 2.0 0.6 2.6 1.7 0.9 0.2 0.7 24.9 17.6 3.0 1.1 1.9 0.1 1.9 0.6 2.5 1.7 0.8 0.1 0.8 23.1 17.9 2.9 1.0 1.9 0.0 1.9 0.5 2.5 1.6 0.8 0.0 0.8 22.6 18.3 2.9 0.8 2.1 0.0 2.1 0.5 2.7 1.6 1.0 0.3 0.7 22.6 16.6 7.3 1.7 2.4 6.8 1.4 2.6 7.6 1.2 2.5 6.5 1.0 3.1 5.4 0.9 3.2 4.5 0.8 4.6 4.4 0.7 4.6 16.2 70.6 2.8 17.5 83.6 3.0 15.6 98.9 3.0 18.3 116.1 3.7 21.8 133.5 3.8 26.3 153.4 5.5 27.1 174.1 5.5 2.7 1.0 2.4 0.4 64.8 1.9 0.8 1.5 0.3 60.4 2.2 1.1 1.8 0.4 73.3 2.4 1.0 1.7 0.6 77.2 2.5 1.0 2.9 0.9 80.1 3.3 2.4 3.4 0.9 80.0 4.7 3.2 3.1 0.8 75.0 30.9 67.3 11.2 6.6 27.6 70.4 12.7 7.9 31.2 77.3 12.7 8.2 30.9 78.8 13.0 9.3 29.5 78.3 12.2 8.9 28.2 78.3 11.8 9.0 27.0 77.6 11.3 8.8 2.2 49.6 0.9 24.0 2.2 51.7 0.8 21.6 2.1 52.0 0.6 16.6 3.0 48.1 0.7 17.6 3.1 45.7 0.8 17.9 3.0 46.7 0.8 18.3 3.0 46.0 0.7 16.6 FY08 FY09 FY10 FY11 FY12 FY13E FY14E

October 26, 2012

10

Syndicate Bank | 2QFY2013 Result Update

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 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

Syndicate Bank No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

October 26, 2012

11