Banking Sector Update

Sector Update | Banking
May 27, 2013
Early signals of Recovery visible Buy Banks

Sustained moderation in inflation - a big positive
Indian nominal interest rates have remained high compared to global rates over the past two-three years because Inflation remained elevated at 8-9%, even as growth continued to falter. Recent sustained moderation in Inflation is a big positive for Indian economy and specifically for Indian Banks, as it would have a cascading impact on a lot of macro parameters. It would have a positive impact on savings and investment rates (including deposit growth and with a lag on credit growth). It would also construct a downward bias for interest rates and would eventually create a positive environment for growth and improvement in the asset quality. In our view, with sustained moderation in inflation, the mechanism for slow and gradual economic recovery is clearly underway, which in our view, makes it an opportune time to invest in banks. Cooling bond yields to result in significant treasury gains: Specifically, recent moderation in inflation has created a downward bias for bond yields, which would be sustainable, in our view, given the fact that the real interest rate differential between India and advanced economies is at a decadal high. In the first three fortnights of the fiscal year 2014, Indian Bond yields have eased considerably. Both sovereign and corporate bond yields, across various maturity buckets have reduced anywhere between 60-100bp and are expected to maintain a gradual and sustained southwards trajectory here on. In such a scenario, Indian Banks would be expected to witness significant treasury gains in FY2014. Considering AFS positioning as of March 31, 2013, amongst PSUs banks like Allahabad, Canara, Dena, Corporation and United, and within private Axis Bank, are expected to witness relatively higher treasury gains compared to others. Extent of asset quality deterioration shows diminishing signs: Asset quality stress has remained at elevated levels for banks, thereby impacting sectors performance and outlook. However, over the last two quarters, sectors overall asset quality performance, particularly incremental slippages, recoveries and upgrades, suggest a moderation in overall asset quality pressures. During FY2013, the increase in annualized slippage ratio was 26bp yoy, much lower than the increase of 38bp and 57bp yoy witnessed in 9MFY2013 and 1HFY2013, respectively, suggesting that 2HFY2013 has been better than 1HFY2013. Sustained moderation in inflation, apart from leading to faster than earlier expected downward movement in interest rates, should also ease margins pressures for corporate and SME borrowers and eventually revive growth. Overall, we believe that asset quality pressures should gradually moderate from current levels. Opportune time to buy banking stocks? Significant treasury gains owing to correction in bond yields should increase the headroom available for banks to make provisioning for bad assets and hence, in our view, the banks should prudently prefer to shore up their provisioning coverage over increasing their earnings to the extent of higher treasury gains this time around. We would prefer to maintain our Buy rating on AXSB and ICICIBK, within the private banks. Also, even after the recent increase in their prices, most PSU banks are trading near their historic low valuations. In our view, the time is right to invest more in them, before their prices starts reflecting an eventual economy turn-around, early signs of which are visible now. We would recommend investing in those PSU banks, which would stand to gain the most from an eventual turn-around, which would lead to lower re-pricing of high-cost deposits (relative benefit for low-CASA banks) and higher recoveries (relative benefit for banks that have experienced maximum asset quality pain, and importantly, also provided for it already). For PSUs, we would recommend a basket investment strategy, as we still do not rule out possibilities of a single negative surprise in asset quality affecting a banks quarterly performance. Screening for these criteria, as well as Tier-1 capital adequacy and valuations, amongst large caps we would prefer SBI, PNB and BOB and amongst midcaps, currently we recommend Buy on INDBK, CRPBK, ALBK and UTDBK.
Please refer to important disclosures at the end of this report
Vaibhav Agrawal
022 3935 7800 Ext: 6808 vaibhav.agrawal@angelbroking.com
Sourabh Taparia
022 3935 7800 Ext: 6872 sourabh.taparia@angelbroking.com
Akshay Narang
022 3935 7800 Ext: 6829 akshay.narang@angelbroking.com
Harshal Patkar
022 3935 7800 Ext: 6847 harshal.patkar@angelbroking.com
Banking | Sector Update
Cooling bond yields to result in significant treasury gains: Recent moderation in inflation has created a downward bias for bond yields, which would be sustainable, in our view, given the fact that the real interest rate differential between India and advanced economies is at a decadal high. In the first three fortnights of the fiscal year 2014, Indian Bond yields have eased considerably. Both sovereign and corporate bond yields, across various maturity buckets have reduced anywhere between 60-100bp and are expected to maintain a gradual and sustained southwards trajectory here on. In such a scenario, Indian Banks would be expected to witness significant treasury gains in FY2014. Considering AFS positioning as of March 31, 2013, amongst PSUs banks like Allahabad, Canara, Dena, Corporation and United, and within private Axis Bank, are expected to witness relatively higher treasury gains compared to others.
Exhibit 1: Indian Bond yields have eased considerably

(%) 10.0 9.5 9.0 8.5 8.0 7.5 7.0 6.5 6.0 31-Mar-13 24-May-13
Exhibit 2: Chg. in yields vs. Treasury gains as % to avg. assets

Period FY2009 FY2010 10 year G-sec (chg bps) 95 (82) (16) (55) 58 treasury gains as % of average assets Mid-PSUs 0.38 0.35 0.10 0.11 0.13 Large PSUs 0.31 0.26 0.10 0.04 0.11 PSUs 0.33 0.30 0.10 0.06 0.12
8.91 7.86
9.00 8.30
8.99 8.19
8.97 8.16
7.79 7.22
7.83 7.29
7.96 7.26
7.96 7.11
FY2011 FY2012 FY2013
AAA 10 Yr
Source: Bloomberg, Angel Research
Gsec 10Yr
AAA 1 Yr
AAA 3 Yr
AAA 5 Yr
Gsec 1Yr
Gsec 3Yr
Gsec 5Yr
Exhibit 3: Treasury gains for banks, under different scenarios of correction in bond yields
Bank CANBK IOB ALLBK CENTBK* BOI BOM* CRPBK PNB DENABK SYNBK* OBC UNBK BOB ANDHBK JKBK FEDBK* INDBK SIB IDBIBK* UTDBK AXSB AFS book (` cr) 47,105 15,389 25,072 20,549 13,450 5,339 16,578 37,027 13,423 7,879 6,377 17,968 19,207 4,500 9,917 4,555 16,048 814 26,974 10,512 38,671 Mod. Duration 4.35 4.14 2.91 3.00 3.06 3.00 3.78 4.39 4.74 3.00 4.10 3.16 2.66 4.71 2.36 3.00 3.33 3.93 3.00 4.00 3.50 @50bp 1,025 319 365 308 206 80 313 813 318 118 131 284 255 106 117 68 267 16 405 210 677 Gains (` cr) @75bp 1,537 478 547 462 309 120 470 1,219 477 177 196 426 383 159 176 102 401 24 607 315 1,015 @100bp 2,049 637 730 616 412 160 627 1,625 636 236 261 568 511 212 234 137 534 32 809 420 1,353 % to FY2014E PBT @50bp @75bp @100bp 22.9 13.8 32.1 13.0 4.3 5.9 15.0 10.0 26.7 5.3 5.7 7.7 3.7 6.1 7.1 5.3 11.4 2.0 10.6 23.9 7.3 34.3 20.7 48.2 19.6 6.4 8.9 22.5 15.0 40.1 7.9 8.6 11.5 5.5 9.1 10.6 8.0 17.1 3.0 15.8 35.8 11.0 45.8 27.6 64.2 26.1 8.6 11.8 30.0 20.0 53.5 10.6 11.4 15.4 7.4 12.2 14.2 10.6 22.9 4.0 21.1 47.7 14.6 % to FY2014E Average Assets @50bp @75bp @100bp 0.24 0.12 0.17 0.11 0.04 0.07 0.15 0.16 0.27 0.05 0.06 0.08 0.04 0.07 0.15 0.09 0.15 0.03 0.12 0.18 0.18 0.36 0.18 0.26 0.16 0.06 0.10 0.23 0.24 0.41 0.08 0.09 0.13 0.07 0.10 0.23 0.13 0.23 0.04 0.18 0.26 0.27 0.48 0.25 0.34 0.22 0.08 0.13 0.31 0.32 0.55 0.10 0.12 0.17 0.09 0.14 0.31 0.18 0.31 0.06 0.24 0.35 0.36
Source: Company, Angel Research, Note: *due to unavailability of data regarding AFS duration, conservatively assumed it to be 3 years
May 27, 2013
Asset quality stress remains; but the extent of asset quality deterioration shows diminishing signs
Asset quality stress remains at elevated levels for the banking sector, thereby impacting sectors performance and outlook. However, over the last two quarters, banking sectors overall asset quality performance, particularly incremental slippages, recoveries and upgrades, suggest a moderation in overall asset quality pressures. For the past two quarters, the annualized slippage ratio for banks under our coverage (excl. HDFCBK and YESBK, due to unavailability of data), came in at 2.9%, compared to 3.4% in 2QFY2013. However, considering different disclosure practices being followed by banks, wherein some net-off any inter-quarter movement of NPAs (within the same year), while some dont, we also compare cumulative reported slippages on a yoy basis, which also corroborates our understanding that the extent of asset quality deterioration is increasingly reflecting diminishing signs. While the annualized slippage ratio was higher by 26bp yoy from 2.7% in FY2012 to 2.9% in FY2013, the increase was, however, lower than what was witnessed in 9MFY2013 and 1HFY2013, when the annualized slippage ratio increased by 38bp (3.0% from 2.6% in 9MFY2012) and 57bp yoy (3.2% from 2.6% in 1HFY2012), which suggest that 2HFY2013 has been better than 1HFY2013. Going ahead, sustained moderation in inflation, in our view, apart from leading to faster than earlier expected downward movement in interest rates, should also ease margins pressures for corporate and SME borrowers and eventually revive growth. Overall, we believe that overall asset quality pressures for the banking system should gradually moderate from current levels.
May 27, 2013
Exhibit 4: Slippages remain elevated, however show moderating signs, as the yoy increase in FY2013 is lower than in 9MFY13 and 1HFY2013
Bank ALLBK UTDBK ANDHBK IOB SIB DENABK UCOBK OBC BOI J&KBK UNBK BOM IDBI BOB PNB HDFCBK YESBK ICICIBK VIJAYA AXSB CANBK INDBK FEDBK SYNBK SBI CENTBK CRPBK Total Coverage PSU Mid PSU Large PSU Pvt. New Pvt. Old Pvt. Total Coverage 4QFY13 3QFY13 9.3 6.7 4.3 5.1 2.2 2.8 5.3 3.7 2.7 1.9 2.0 2.2 2.0 2.9 NA NA NA 1.2 1.8 0.9 1.9 5.8 3.8 2.0 2.7 1.9 NA 2.9 3.1 2.7 3.9 1.4 1.1 3.1 1.2 3.6 4.3 2.2 3.1 0.8 1.7 4.2 2.9 2.0 1.4 1.5 1.8 1.6 2.8 NA NA NA 1.3 2.1 1.3 2.3 6.3 4.5 2.9 3.8 3.3 NA 2.9 3.1 3.0 3.2 1.5 1.3 2.9 1.7 chg (bps) 572 239 208 198 140 115 111 81 73 53 45 44 43 16 NA NA NA (11) (30) (34) (39) (50) (69) (90) (106) (139) NA 5 8 (26) 68 (15) (20) 19 (40) FY2013 FY2012 5.3 3.9 3.5 4.0 1.9 2.0 4.5 2.9 3.0 1.4 2.2 2.1 1.8 2.4 2.9 NA NA 1.5 2.8 1.2 2.5 4.1 3.2 2.9 3.7 3.5 1.8 2.9 3.1 3.0 3.4 1.5 1.4 2.7 1.8 2.4 3.7 3.1 2.8 0.8 1.6 2.4 4.1 2.5 1.2 2.5 1.9 2.0 1.5 2.8 NA NA 1.4 4.2 1.3 2.2 2.5 3.7 2.7 3.5 5.3 1.4 2.7 2.8 2.7 3.0 1.5 1.4 2.6 1.5 chg (bps) 9MFY13 9MFY12 chg (bps) 1HFY13 1HFY12 292 27 46 113 109 36 205 (119) 43 17 (26) 28 (19) 88 19 NA NA 6 (146) (10) 34 159 (50) 21 15 (179) 40 26 29 23 41 1 (1) 8 26 4.0 3.0 3.3 3.6 1.9 1.7 4.2 2.6 3.1 1.2 2.3 2.1 1.8 2.2 3.5 NA NA 1.5 3.1 1.3 2.7 3.5 3.0 3.2 4.0 4.0 2.5 3.0 3.2 3.2 3.2 1.6 1.4 2.5 2.0 1.8 3.4 3.2 2.6 0.7 1.4 2.1 3.6 3.1 0.9 2.8 1.2 2.4 1.2 2.1 NA NA 1.5 4.7 1.2 2.2 1.5 3.8 2.3 3.9 3.4 1.6 2.6 2.8 2.9 2.5 1.5 1.4 2.6 1.6 216 (41) 8 103 117 27 208 (100) (9) 26 (46) 96 (61) 96 136 NA NA 6 (160) 3 54 203 (81) 93 7 62 88 38 43 26 73 4 5 (7) 37 4.2 2.4 3.8 3.9 2.4 1.7 4.2 2.4 3.6 1.1 2.7 2.3 1.8 1.9 5.0 NA NA 1.6 3.6 1.3 2.9 2.1 2.3 3.3 4.1 4.4 2.3 3.2 3.4 3.5 3.2 1.6 1.5 2.3 2.1 1.4 3.8 3.7 2.6 0.7 1.4 2.1 3.9 4.2 1.0 3.4 1.2 2.0 1.0 1.8 NA NA 1.4 4.4 1.1 2.5 1.5 3.7 2.5 3.8 2.8 1.5 2.6 2.8 2.9 2.5 1.5 1.3 2.5 1.6 chg (bps) 272 (141) 10 122 170 34 210 (150) (63) 7 (70) 113 (13) 88 319 NA NA 23 (80) 16 49 69 (139) 87 39 154 79 57 63 56 75 16 20 (18) 54
Aggregate level Slippages
Aggregate level Net Slippages (i.e. slippages minus recoveries and upgrades)
PSU
Mid PSU Large PSU Pvt. New Pvt. Old Pvt.
1.3
0.9 2.1 0.5 0.5 0.6
1.8
1.7 2.0 0.6 0.6 0.8
(44)
(76) 11 (12) (11) (19)
1.9
1.8 2.1 0.8 0.8 1.2
1.7
1.7 1.7 0.3 0.3 0.6
23
15 36 47 45 62
2.1
2.1 2.1 0.9 0.8 1.4
1.8
2.0 1.3 0.5 0.4 0.8
36
16 74 44 42 56
2.3
2.4 2.1 1.0 1.0 1.7
1.8
2.0 1.4 0.3 0.3 0.7
51
41 71 71 66 101
Source: Company, Angel Research
May 27, 2013
Opportune time to buy banking stocks? Significant treasury gains owing to correction in bond yields should increase the headroom available for banks to make provisioning for bad assets and hence, in our view, the banks should prudently prefer to shore up their provisioning coverage over increasing their earnings to the extent of higher treasury gains this time around. We would prefer to maintain our Buy rating on AXSB and ICICIBK, within the private banks. Also, even after the recent increase in their prices, most PSU banks are trading near their historic low valuations. In our view, the time is right to invest more in them, before their prices starts reflecting an eventual economy turn-around, early signs of which are visible now. We would recommend investing in those PSU banks, which would stand to gain the most from an eventual turn-around, which would lead to lower re-pricing of high-cost deposits (relative benefit for low-CASA banks) and higher recoveries (relative benefit for banks that have experienced maximum asset quality pain, and importantly, also provided for it already). For PSUs, we would recommend a basket investment strategy, as we still do not rule out possibilities of a single negative surprise in asset quality affecting one banks quarterly performance. Screening for these criteria, as well as Tier-1 capital adequacy and valuations, amongst large caps we would prefer SBI, PNB and BOB and amongst midcaps, currently we recommend Buy on INDBK, CRPBK, ALBK and UTDBK.
Exhibit 5: High correlation between chg. in WPI Inflation* and Bankex returns#
(bp) 800 600 400 Change in WPI Inflation (bp - LHS) 665 Bankex returns (% - RHS)
(%) 140
120 100
200 0 (200) (400)

(600) (800) (1000) (1200) FY2007 FY2008 FY2009 (125)
114
225
260
80 60 40 20
0 (20) (40) (60)
(165)
(967)
FY2010 FY2011 FY2012 FY2013
Source: Company, Angel Research; Note: *Calculated as change in absolute WPI figures over a year, for eg. WPI Inflation for April 06 was 4.97% and for April 07 it was 6.22%, thereby change in WPI Inflation for FY2007 amounted to 125bp, #calculated as percentage returns for that fiscal year
May 27, 2013
Exhibit 6: 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 Neutral Neutral Buy Neutral Buy Buy Accumulate Accumulate Neutral Buy Accumulate Accumulate Buy Accumulate Neutral Accumulate Buy Buy Accumulate Neutral Accumulate Buy Neutral CMP (`) 1,477 457 715 1,219 25 518 124 88 684 299 58 430 67 417 89 85 151 61 1,256 259 802 2,162 132 78 228 54 52 Tgt. price (`) 1,853 1,503 144 851 350 64 481 495 97 93 185 66 285 993 2,637 142 260 65 Upside (%) 25 23 16 24 17 10 12 19 10 9 22 8 10 24 22 8 14 21 FY2015E P/ABV (x) 1.6 1.0 3.4 1.8 0.9 2.2 0.6 0.5 0.7 0.7 0.6 0.7 0.6 0.5 0.5 0.5 0.5 0.4 1.0 0.5 0.7 1.2 0.7 0.8 0.7 0.4 0.5 FY2015E Tgt. P/ABV (x) 2.0 2.2 0.7 0.9 0.8 0.7 0.8 0.7 0.6 0.5 0.7 0.4 0.6 0.9 1.4 0.7 0.8 0.5 FY2015E P/E (x) 9.7 7.4 16.8 12.7 5.6 10.8 4.0 3.9 4.8 4.4 4.2 5.0 3.7 3.9 3.5 3.8 3.6 3.0 6.2 4.1 4.5 7.6 4.3 5.4 4.7 2.6 4.6 FY2013-15E EPS CAGR (%) 17.3 12.4 22.8 15.5 9.5 14.9 14.2 (0.3) 15.9 21.6 13.4 15.1 48.4 7.1 5.0 26.5 8.8 83.4 (3.8) 18.4 14.8 17.5 (4.4) 56.8 15.7 56.5 9.6 FY2015E RoA (%) 1.6 1.2 1.8 1.5 1.0 1.3 0.6 0.7 0.9 0.7 0.7 0.8 0.6 0.7 0.7 0.8 1.0 0.7 1.1 0.8 1.1 1.0 0.7 0.6 0.7 0.6 0.4 FY2015E RoE (%) 17.6 14.2 21.8 15.6 17.0 22.1 12.7 13.0 15.7 15.0 16.0 14.2 13.8 14.5 15.1 13.4 15.1 13.4 16.1 13.3 16.5 16.8 15.9 13.0 15.4 14.8 12.0
Source: Company, Angel Research; Note:*Target multiples=SOTP Target Price/ABV (including subsidiaries), #Without adjusting for SASF
May 27, 2013
4QFY2013 Result Review Persistent Asset quality pressures continue to affect margins
Persistent asset quality pressures continue to affect banking sectors margins quarter after quarter, as half of our coverage banks reported sequentially lower margins during 4QFY2013. Allahabad Bank (ALBK) and Dena Bank (DENABK) witnessed the highest sequential margin compression, on account of higher interest reversals on heavy slippages witnessed during the quarter (slippages for ALBK and DENABK were higher sequentially by 159.6% and 68.5%, respectively during the quarter).
Exhibit 7: Margins compressed for most banks

40 20 (20)
Exhibit 8: New Pvt. Banks* outperformed on NII front

30.0
25.0 20.0 % chg yoy % chg qoq
15.0
10.0
(40)
(60) (80)
ICICIBK BOM HDFCBK BOI AXSB VIJAYA CENTBK PNB CANBK UCOBK J&KBK SIB YESBK UTDBK OBC CRPBK UNBK IDBI SBI BOB INDBK IOB ANDBK SYNBK FEDBK DENABK ALLBK
25.5
0.0 (5.0)
Pvt New
Pvt Old
(4.3)
PSU Large
PSU Mid
(10.0)
Source: Company, Angel Research, Note:*Domestic NIMs for SBI, BOB and BOI
Source: Company, Angel Research, Note: *our coverage banks
Exhibit 9: Our coverage banks performance on reported margins front

Bank ICICIBK BOM HDFCBK BOI AXSB VIJAYA CENTBK PNB CANBK UCOBK J&KBK SIB YESBK UTDBK 4QFY2013 3.33 3.10 4.50 3.00 3.70 2.21 2.68 3.51 2.39 2.34 4.07 3.20 3.00 2.67 3QFY2013 3.07 2.89 4.30 2.80 3.57 2.08 2.64 3.47 2.36 2.32 4.07 3.20 3.00 2.68 Chg (bps) 26 21 20 20 13 13 4 4 3 2 (1) Bank OBC CRPBK UNBK IDBI SBI BOB INDBK IOB ANDBK SYNBK FEDBK DENABK ALLBK 4QFY2013 2.82 2.31 2.89 2.19 3.48 2.93 2.88 2.30 3.04 2.97 3.07 2.46 2.30 3QFY2013 2.84 2.35 2.95 2.30 3.63 3.08 3.07 2.51 3.35 3.29 3.47 2.88 3.02 Chg (bps) (2) (4) (6) (11) (15) (15) (19) (21) (31) (32) (40) (42) (72)
Source: Company, Angel Research, Note: *domestic margins for SBI, BOB, BOI
(0.4)
9.9
4.9
0.9
1.3
6.7
5.0
May 27, 2013
Exhibit 10: CD ratio contracts sequentially for more than half of the coverage banks
Bank BOM AXSB UCOBK SBI ALLBK PNB CENTBK UNBK INDBK CANBK VIJAYA FEDBK OBC ANDHBK CD ratio 3QFY13 CD Ratio 4QFY13 74.6 73.4 69.9 84.6 70.6 77.1 74.7 77.7 73.3 67.4 71.9 76.5 73.4 80.3 80.0 78.0 74.0 86.9 72.4 78.8 76.1 78.9 74.4 68.1 71.9 76.5 73.3 79.5 Chg (bps) 539 455 404 237 183 178 137 124 116 69 1 1 (6) (83) Bank ICICIBK J&KBK UTDBK SYNBK SIB CRPBK BOB BOI HDFCBK IDBI IOB DENABK YESBK CD ratio 3QFY13 CD Ratio 4QFY13 100.1 62.5 70.0 82.1 74.6 74.4 72.2 79.2 85.0 91.6 84.9 73.7 77.8 99.2 61.0 68.5 79.6 71.9 71.5 69.3 75.8 80.9 86.4 79.3 67.7 70.2 Chg (bps) (93) (144) (150) (244) (269) (288) (292) (341) (408) (517) (560) (601) (756)
CASA deposits saw typical year-end surge

CASA deposits saw typical year-end surge during the quarter, as savings deposits for our coverage universe grew by 15.2% yoy, while current deposits grew by 16.4% yoy. Private Banks continued to outperform their PSU peers on the savings deposits (SA) front, with a growth of 19.0% yoy. Amongst our coverage Private Banks, Yes Bank witnessed the highest SA growth of 140.8% yoy (continued to witness significant traction post the hike in savings rate to 6-7%). Within large private banks, while Axis Bank (AXSB) and HDFC Bank (HDFCBK) fared well and reported a healthy growth of 23.4% and 19.2%, yoy respectively, ICICIBK witnessed a moderate growth of 12.6% yoy. Amongst PSU banks, the top three performers on the SA front were IDBI Bank (25.0% yoy growth on account of continued traction witnessed post waiver of CASA charges during FY2012) and Bank of Maharashtra (BOM) and Jammu and Kashmir Bank (J&K Bank); with ~17.5% yoy growth respectively. On the current deposits (CA) front, UCO Bank registered a strong performance, as its CA deposits more than tripled on a yoy basis, due to substantial float being made available on opening of rupee accounts with the bank for facilitating Indo-Iran trade payments. Amongst other PSU banks, the top two performers on the CA front were Bank of Maharashtra (32.3% yoy) and Union Bank (25.2% yoy). PSU banks managed to outperform their private counterparts on the CA front this time around, with a healthy growth of 16.8% yoy, compared to a growth of 15.3% yoy for Private Banks, whose performance on the CA front was affected on account of moderate performance of ICICI Bank and Federal Bank.
May 27, 2013
Exhibit 11: CASA deposits saw typical year end surge

Bank YESBK IDBI AXSB HDFCBK BOM J&KBK PNB FEDBK CORPBK BOI IOB SBI ALLBK ANDHBK UTDBK UNIONBK BOB UCOBK SIB ICICIBK CENTBK OBC VIJBK SYNBK DENABK CANBK INDBK SA 4QFY13 6,023 23,760 63,778 88,211 27,290 18,790 123,470 12,743 20,759 77,031 40,379 414,907 44,975 24,730 30,372 57,497 84,303 29,680 6,685 85,651 59,090 31,522 15,133 38,017 21,283 71,168 32,340 SA 4QFY12 2,501 19,002 51,668 73,998 23,180 15,981 105,657 10,930 17,808 66,387 34,862 359,847 39,130 21,578 26,589 50,429 74,580 26,267 5,917 76,046 52,595 28,253 13,604 34,295 19,317 64,792 29,942 yoy growth 140.8 25.0 23.4 19.2 17.7 17.6 16.9 16.6 16.6 16.0 15.8 15.3 14.9 14.6 14.2 14.0 13.0 13.0 13.0 12.6 12.3 11.6 11.2 10.9 10.2 9.8 8.0 CA 4QFY13 6,665 33,289 48,332 52,310 11,186 6,402 29,874 2,776 15,237 16,769 13,207 110,581 9,954 7,029 9,533 24,138 35,678 25,694 1,526 36,926 14,491 11,663 5,216 13,937 6,755 14,893 6,798 CA 4QFY12 4,891 31,722 39,754 45,408 8,452 5,734 28,472 2,546 12,305 14,965 12,287 98,273 9,538 6,369 9,741 19,276 28,944 7,685 1,262 34,973 12,680 9,375 4,683 12,129 7,273 14,819 6,924 yoy growth 36.3 4.9 21.6 15.2 32.3 11.6 4.9 9.0 23.8 12.1 7.5 12.5 4.4 10.4 (2.1) 25.2 23.3 234.3 20.9 5.6 14.3 24.4 11.4 14.9 (7.1) 0.5 (1.8) CASA 4QFY13 12,688 57,049 112,110 140,521 38,476 25,191 153,344 15,519 35,996 93,800 53,586 525,488 54,929 31,759 39,905 81,635 119,981 55,374 8,211 122,577 73,581 43,185 20,349 51,954 28,038 86,061 39,138 CASA 4QFY12 7,392 50,724 91,422 119,406 31,632 21,715 134,129 13,476 30,113 81,352 47,149 458,120 48,668 27,947 36,330 69,705 103,524 33,952 7,179 111,019 65,275 37,628 18,287 46,424 26,590 79,611 36,866 yoy growth 71.6 12.5 22.6 17.7 21.6 16.0 14.3 15.2 19.5 15.3 13.7 14.7 12.9 13.6 9.8 17.1 15.9 63.1 14.4 10.4 12.7 14.8 11.3 11.9 5.4 8.1 6.2 CASA Ratio 18.9 25.1 44.4 47.4 40.8 39.2 39.2 26.9 21.7 31.9 26.5 46.5 30.7 25.7 39.6 31.0 30.4 31.9 18.6 41.9 32.6 24.6 21.0 28.0 28.8 24.2 27.6
Exhibit 12: CASA ratio and Investment-to-deposits ratio for our coverage banks as of 4QFY2013
64
70.0
60.0
CASA ratio (%)

59
Investments to Deposits - (%)
47 41 39
44
42
39 40
40
50.0 40.0
44 45
37
35
34
35
33
33
31 33
33
33
32 30
33 32
32
26 30
27 30
31 31
32
30 26
28 29
38 28 25 BOI 25 HDFCBK SYNBK
25
27
22
19
21
24
30.0 20.0 10.0
25
UNIONBK
ALLBK
OBC
CORPBK
INDBK
0.0
YESBK
VIJBK
IOB
SIB
19
28
29
DENABK
BOM
ANDHBK
ICICIBK
J&KBK
UCOBK
CANBK
CENTBK
UTDBK
FEDBK
AXSB
BOB
IDBI
PNB
May 27, 2013
SBI
29
47
Exhibit 13: Yield on advances# for banks under our coverage

Bank YESBK HDFCBK SIB JKBK OBC ANDBK FEDBK DENABK BOM INDBK VIJBK CNTBK ALBK PNB FY2013 12.7 12.2 12.1 11.9 11.4 11.3 11.3 11.1 11.1 10.8 10.7 10.6 10.6 10.6 FY2012 12.2 11.7 12.0 11.5 11.6 12.0 12.0 10.2 10.7 11.4 11.3 10.4 11.4 10.6 Chg (bps) 46 53 9 50 (20) (62) (69) 97 43 (56) (68) 19 (80) (4) Bank IOB UCOBK UTDBK AXSB CRPBK IDBI CANBK ICICIBK* SYNDBK UNBK SBI* BOI* BOB* FY2013 10.6 10.5 10.5 10.5 10.4 10.4 10.3 10.1 10.0 9.9 9.5 8.6 8.4 FY2012 10.8 10.6 10.4 9.9 10.2 10.6 10.5 9.4 10.7 9.7 10.0 8.8 8.7 Chg (bps) (19) (6) 10 60 24 (27) (26) 64 (76) 17 (52) (16) (27)
Source: Company, Angel Research, Note:*includes significant overseas operations, #Calculated
Exhibit 14: Risk adjusted yield on assets# for banks under our coverage
Bank YESBK SIB HDFCBK ANDBK FEDBK JKBK BOM INDBK OBC VIJBK DENABK CANBK ALBK CNTBK FY2013 9.4 9.3 9.0 8.7 8.7 8.6 8.5 8.2 8.1 8.1 8.0 7.9 7.9 7.9 FY2012 Chg (bps) 9.4 9.5 8.5 8.7 9.2 8.4 7.7 8.3 8.2 8.2 7.8 8.1 8.3 7.6 (2) (18) 48 (8) (52) 28 74 (12) (9) (12) 17 (14) (33) 30 Bank AXSB PNB UNBK CRPBK SYNDBK IOB ICICIBK* SBI* UCOBK IDBI UTDBK BOI* BOB* FY2013 7.9 7.9 7.7 7.7 7.6 7.5 7.5 7.4 7.3 7.1 6.5 6.5 6.1 FY2012 7.8 7.7 7.3 7.6 7.8 7.8 7.3 7.2 7.4 8.0 7.0 6.8 6.6 Chg (bps) 13 13 44 9 (22) (31) 21 17 (10) (90) (55) (33) (47)
Source: Company, Angel Research, Note:*includes significant overseas operations, #Calculated
Moderate performance on the non-interest income (excluding treasury) front

Our coverage banks performance on the non-interest income (excluding treasury) front in 4QFY2013, was moderate at 9.0% yoy, better than the modest growth of 5.9% yoy during the last quarter, largely due to higher recoveries on written off accounts and improved performance on the fee income front. Private banks performance on the non-interest income (excluding treasury) front was moderate at 10.1% yoy, but they were marginally better than the coverage PSU banks, which too saw a moderate growth of 8.6% yoy. Amongst PSU banks, a yoy decline was witnessed in two of seven banks (PNB and UNBK), however, a 37.9% yoy growth in IDBIBK, aided the larger PSU banks pack to register a
May 27, 2013
10
marginal growth of 2.6% yoy. Mid-PSU banks witnessed a strong growth of 25.9% yoy, which was majorly on the back of a robust performance on the recoveries front. Within Mid-PSUs, the performance was led by a 66.7% yoy growth in Bank of Maharashtra (BOM), a 40% plus growth in VIJBK, CNTBK and ALBK; and a 30% plus growth in CRPBK and OBC. Within mid-PSUs, the worst performers were DENABK and UTDBK.
Exhibit 15: Moderate Non-interest income (excl. treasury) performance for banks under our coverage
Bank AXSB HDFCBK ICICIBK YESBK SBI IDBI BOI OBC BOM PNB IOB CRPBK UNBK INDBK FEDBK ANDHBK ALLBK CANBK SIB BOB UTDBK SYNBK CENTBK J&KBK DENABK VIJAYA UCOBK 4QFY2013 1,769 1,739 2,115 379 5,318 1,004 937 394 295 853 498 443 640 334 139 249 427 755 107 903 177 357 493 125 152 171 246 3QFY2013 1,456 1,792 1,964 313 3,230 662 851 316 156 848 455 320 528 206 118 209 288 595 53 705 145 234 289 72 121 115 177 % chg (qoq) 21.5 (3.0) 7.7 21.1 64.6 51.7 10.1 24.6 88.9 0.7 9.6 38.5 21.4 62.0 18.3 19.0 48.3 26.9 102.5 28.1 22.5 52.5 70.7 73.6 25.5 48.0 39.1 4QFY2012 1,442 1,700 2,070 266 5,290 728 894 301 177 1,111 437 327 684 280 124 207 296 674 74 761 180 286 334 114 191 114 219 % chg (yoy) 22.7 2.3 2.2 42.4 0.5 37.9 4.8 30.8 66.7 (23.2) 14.1 35.3 (6.4) 19.4 12.1 20.3 44.0 11.9 45.8 18.7 (1.2) 24.8 47.6 9.5 (20.2) 49.4 12.2 As % to avg. assets FY2013 1.85 1.75 1.55 1.46 1.03 0.91 0.79 0.78 0.75 0.75 0.75 0.74 0.72 0.71 0.70 0.65 0.63 0.63 0.61 0.61 0.55 0.53 0.52 0.51 0.50 0.48 0.43 FY2012 1.91 1.81 1.71 1.29 1.19 0.72 0.79 0.63 0.76 0.88 0.78 0.77 0.78 0.81 0.80 0.63 0.71 0.73 0.56 0.70 0.54 0.58 0.49 0.54 0.69 0.48 0.45 Chg (bps) (6) (7) (15) 16 (16) 19 0 15 (1) (13) (3) (3) (6) (10) (11) 2 (8) (10) 5 (9) 2 (5) 3 (3) (20) (1) (2)
May 27, 2013
11
Asset quality stress continues; but the extent of asset quality deterioration shows diminishing signs
Asset quality concerns have made the last couple of years really challenging for the banking sector (specifically for the PSU banks). Weak economic growth environment, inflation persisting at stubborn levels (though has started moderating now), and burden of high interest servicing costs, have resulted in elevated slippages. Incremental slippages still remain much above comfort levels, however, the extent of asset quality deterioration (particularly slippages) has increasingly shown signs of moderation. For the past two quarters, the annualized slippage ratio for banks under our coverage (excl. HDFCBK and YESBK, due to unavailability of data), came in at 2.9%, compared to 3.4% in 2QFY2013. However, considering different disclosure practices being followed by banks, wherein some net-off any inter-quarter movement of NPAs (within the same year), while some dont, we also compare cumulative reported slippages on a yoy basis, which also corroborates our understanding that the extent of asset quality deterioration is increasingly reflecting diminishing signs. While the annualized slippage ratio was higher by 26bp yoy from 2.7% in FY2012 to 2.9% in FY2013, the increase was, however, lower than what was witnessed in 9MFY2013 and 1HFY2013, when the annualized slippage ratio increased by 38bp (3.0% from 2.6% in 9MFY2012) and 57bp yoy (3.2% from 2.6% in 1HFY2012).
Exhibit 16: Gross NPA trend (%) for the banking* industry
3.70
3.50 3.30 3.10 2.90 2.73 2.40 2.43 2.28 2.85 2.80 3.09 3.42 3.49 3.32
Exhibit 17: Net NPA trend (%) for the banking* industry
1.90 1.80 1.70 1.60 1.50 1.40 1.30 1.20 1.10 1.00 0.90 1.74
1.49 1.28 1.36 1.30 1.80
1.72
2.70
2.50 2.30 2.10
1.00
0.99
1.04
3QFY11
4QFY11
1QFY12
3QFY13
4QFY13
4QFY11
1QFY12
3QFY12
4QFY12
1QFY13
2QFY13
Source: Company, Angel Research, Note: *all listed banks except LVB
Exhibit 18: Gross NPA trends (%) Private vs. PSU banks*
4.00 3.50 3.00 3.76
Exhibit 19: Net NPA trends (%) Private vs. PSU banks*
2.50 2.00 1.47 1.50 2.04 2.12 2.01
3.87
3.67
3.34
3.02
2.70
2.85 2.57
2.98
1.56
1.73 1.50
2.50 2.00
1.50 2.42 2.35
2.36
1.13
2.33
2.45 2.24 1.88
1.07
1.09
1.16
1.00 2.17
3QFY12
2.05
2.27
2.01
4QFY12
2.06
0.50
0.00
0.79
2.00
0.69
0.56
4QFY11
0.56
0.54
2QFY12
0.54
3QFY12
0.46
4QFY12
0.49
0.54
0.55
3QFY13
0.51
2QFY11
3QFY11
1QFY12
1QFY13
2QFY13
3QFY13
4QFY13
2QFY11
3QFY11
1QFY12
1QFY13
2QFY13
Pvt Banks
PSU Banks
Pvt Banks
PSU Banks
May 27, 2013
4QFY13
4QFY11
2QFY12
4QFY13
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
3QFY11
2QFY12
3QFY13
12
Exhibit 20: Slippages remain elevated, however show moderating signs, as the yoy increase in FY2013 is lower than in 9MFY13 and 1HFY2013
Bank ALLBK UTDBK ANDHBK IOB SIB DENABK UCOBK OBC BOI J&KBK UNBK BOM IDBI BOB PNB HDFCBK YESBK ICICIBK VIJAYA AXSB CANBK INDBK FEDBK SYNBK SBI CENTBK CRPBK Total Coverage PSU Mid PSU Large PSU Pvt. New Pvt. Old Pvt. Total Coverage 4QFY13 3QFY13 9.3 6.7 4.3 5.1 2.2 2.8 5.3 3.7 2.7 1.9 2.0 2.2 2.0 2.9 NA NA NA 1.2 1.8 0.9 1.9 5.8 3.8 2.0 2.7 1.9 NA 2.9 3.1 2.7 3.9 1.4 1.1 3.1 1.2 3.6 4.3 2.2 3.1 0.8 1.7 4.2 2.9 2.0 1.4 1.5 1.8 1.6 2.8 NA NA NA 1.3 2.1 1.3 2.3 6.3 4.5 2.9 3.8 3.3 NA 2.9 3.1 3.0 3.2 1.5 1.3 2.9 1.7 chg (bps) 572 239 208 198 140 115 111 81 73 53 45 44 43 16 NA NA NA (11) (30) (34) (39) (50) (69) (90) (106) (139) NA 5 8 (26) 68 (15) (20) 19 (40) FY2013 FY2012 5.3 3.9 3.5 4.0 1.9 2.0 4.5 2.9 3.0 1.4 2.2 2.1 1.8 2.4 2.9 NA NA 1.5 2.8 1.2 2.5 4.1 3.2 2.9 3.7 3.5 1.8 2.9 3.1 3.0 3.4 1.5 1.4 2.7 1.8 2.4 3.7 3.1 2.8 0.8 1.6 2.4 4.1 2.5 1.2 2.5 1.9 2.0 1.5 2.8 NA NA 1.4 4.2 1.3 2.2 2.5 3.7 2.7 3.5 5.3 1.4 2.7 2.8 2.7 3.0 1.5 1.4 2.6 1.5 chg (bps) 9MFY13 9MFY12 chg (bps) 1HFY13 1HFY12 292 27 46 113 109 36 205 (119) 43 17 (26) 28 (19) 88 19 NA NA 6 (146) (10) 34 159 (50) 21 15 (179) 40 26 29 23 41 1 (1) 8 26 4.0 3.0 3.3 3.6 1.9 1.7 4.2 2.6 3.1 1.2 2.3 2.1 1.8 2.2 3.5 NA NA 1.5 3.1 1.3 2.7 3.5 3.0 3.2 4.0 4.0 2.5 3.0 3.2 3.2 3.2 1.6 1.4 2.5 2.0 1.8 3.4 3.2 2.6 0.7 1.4 2.1 3.6 3.1 0.9 2.8 1.2 2.4 1.2 2.1 NA NA 1.5 4.7 1.2 2.2 1.5 3.8 2.3 3.9 3.4 1.6 2.6 2.8 2.9 2.5 1.5 1.4 2.6 1.6 216 (41) 8 103 117 27 208 (100) (9) 26 (46) 96 (61) 96 136 NA NA 6 (160) 3 54 203 (81) 93 7 62 88 38 43 26 73 4 5 (7) 37 4.2 2.4 3.8 3.9 2.4 1.7 4.2 2.4 3.6 1.1 2.7 2.3 1.8 1.9 5.0 NA NA 1.6 3.6 1.3 2.9 2.1 2.3 3.3 4.1 4.4 2.3 3.2 3.4 3.5 3.2 1.6 1.5 2.3 2.1 1.4 3.8 3.7 2.6 0.7 1.4 2.1 3.9 4.2 1.0 3.4 1.2 2.0 1.0 1.8 NA NA 1.4 4.4 1.1 2.5 1.5 3.7 2.5 3.8 2.8 1.5 2.6 2.8 2.9 2.5 1.5 1.3 2.5 1.6 chg (bps) 272 (141) 10 122 170 34 210 (150) (63) 7 (70) 113 (13) 88 319 NA NA 23 (80) 16 49 69 (139) 87 39 154 79 57 63 56 75 16 20 (18) 54
Aggregate level Slippages
Aggregate level Net Slippages (i.e. slippages minus recoveries and upgrades)
PSU
Mid PSU Large PSU Pvt. New Pvt. Old Pvt.
1.3
0.9 2.1 0.5 0.5 0.6
1.8
1.7 2.0 0.6 0.6 0.8
(44)
(76) 11 (12) (11) (19)
1.9
1.8 2.1 0.8 0.8 1.2
1.7
1.7 1.7 0.3 0.3 0.6
23
15 36 47 45 62
2.1
2.1 2.1 0.9 0.8 1.4
1.8
2.0 1.3 0.5 0.4 0.8
36
16 74 44 42 56
2.3
2.4 2.1 1.0 1.0 1.7
1.8
2.0 1.4 0.3 0.3 0.7
51
41 71 71 66 101
May 27, 2013
13
Amongst large PSU banks, while CANBK and SBI, witnessed a sequential reduction in their quarterly slippage ratios (SBI, which has witnessed elevated level of slippages for last three quarters till 3QFY2013, managed to lower its slippages this time around), quarterly slippage ratio came in higher sequentially for BOI, UNBK and IDBIBK. Large PSU banks, as a segment, witnessed slight moderation in the extent of asset quality deterioration, as the increase in annualized slippage ratio during FY2013 came in at 23bp yoy to 3.0% (from 2.7% in FY2012) compared to an increase of 26bp in 9MFY2013 (to 3.2% from 2.9% in 9MFY2012) and 56bp yoy in 1HFY2013 (to 3.5% from 2.9% in 1HFY2012). Amongst the mid-PSU banks, CNTBK and SYNDBK, managed to lower their annualized slippage ratio by ~90-140bp. Banks such as ALBK, UTDBK, ANDBK, IOB and DENABK witnessed a sharp increase in slippages. Overall mid-PSU segment witnessed moderation in the pace of asset quality deterioration as the increase in annualized slippage ratio during FY2013 came in at 41bp yoy (though remain on a higher side compared to sectors average) , compared to an increase of around 73-75bp yoy witnessed in 9MFY2013 and 1HFY2013. Increased efforts on recoveries/upgrades front have started to bear fruits, as most PSU banks reported a healthy performance on the recoveries/upgrades front. Gross NPA levels for our coverage PSU banks remained flat sequentially during the quarter (while mid PSU banks witnessed an increase of 4.9% qoq, as against a 1.8% qoq decline for larger ones). During the quarter, most of the banks registered strong treasury gains and hence, many of them chose to shore up their provisioning coverage (nearly half of our coverage banks witnessed an increase in their provisioning coverage rate). Banks like, SBI and PNB - within the large PSUs and CNTBK, VIJBK, CRPBK and UCOBK within the mid PSUs, witnessed much higher increase in their provisioning coverage ratio compared to others. Flat GNPA levels and improved coverage (for nearly half of our coverage banks) resulted in sequentially flat net NPA levels for PSU banks during the quarter. On the other hand, Private banks continued to perform relatively much better vis-vis PSU banks on the asset quality front, as they not only reported sequentially lower slippages, but also posted healthy recoveries and upgrades performances and as a result their Gross NPA levels declined by 1.0% sequentially, as compared to an increase of 1.2% qoq in 3QFY2013 and 3.7% qoq in 2QFY2013. Going ahead, sustained moderation in inflation, in our view, apart from leading to faster than earlier expected downward movement in interest rates, should also ease margins pressures for corporate and SME borrowers. Overall, mechanism for slow and gradual economic recovery is clearly underway, which gives us enough reason to believe that overall asset quality pressures for the banking system should gradually moderate from current levels.
May 27, 2013
14
Exhibit 21: Aggregate Gross and Net NPA levels remain flat sequentially
GNPA(` cr) Bank ALLBK YESBK OBC ANDHBK INDBK J&KBK DENABK BOB UCOBK AXSB CANBK UTDBK BOI IOB IDBI FEDBK UNBK ICICIBK PNB HDFCBK SBI CENTBK SYNBK SIB CRPBK BOM VIJAYA 4QFY13 5,137 94 4,184 3,714 3,565 644 1,452 7,983 7,130 2,393 6,260 2,964 8,765 6,608 6,450 1,554 6,314 9,608 13,466 2,335 51,189 8,456 2,979 434 2,048 1,138 1,533 3QFY13 3,532 76 3,690 3,302 3,180 582 1,317 7,321 6,711 2,275 6,090 2,902 8,625 6,516 6,401 1,564 6,384 9,763 13,998 2,432 53,458 8,938 3,160 475 2,284 1,284 1,889 qoq (%) 45.5 23.7 13.4 12.5 12.1 10.7 10.3 9.0 6.2 5.2 2.8 2.1 1.6 1.4 0.8 (0.6) (1.1) (1.6) (3.8) (4.0) (4.2) (5.4) (5.7) (8.6) (10.3) (11.4) (18.8) 4QFY13 4,127 7 2,903 2,409 2,384 55 917 4,192 4,069 704 5,278 1,970 5,947 4,027 3,100 432 3,353 2,231 7,237 469 21,956 4,988 1,125 250 1,411 393 910 NNPA(` cr) 3QFY13 2,478 16 2,611 2,023 2,142 50 817 3,363 3,927 679 5,134 1,416 5,455 3,595 3,302 362 3,169 2,182 7,586 496 25,370 5,864 1,141 197 1,698 487 1,098 qoq (%) 66.6 (55.1) 11.2 19.1 11.3 11.6 12.3 24.6 3.6 3.7 2.8 39.1 9.0 12.0 (6.1) 19.3 5.8 2.2 (4.6) (5.4) (13.5) (14.9) (1.4) 26.9 (16.9) (19.3) (17.2) 4QFY13 50.0 92.6 63.0 49.6 60.1 94.0 69.6 68.2 52.1 70.6 61.4 62.5 60.9 58.9 70.8 72.2 65.2 76.8 58.8 79.9 66.6 47.8 83.4 42.5 62.1 83.7 68.3 PCR (%) 3QFY13 61.0 79.6 63.6 52.4 61.2 94.2 70.6 70.9 48.9 70.2 61.5 67.3 60.7 59.0 69.2 76.9 66.2 77.7 56.0 79.6 61.5 41.2 83.0 58.6 58.0 82.8 63.0 chg (bps) (1,097) 1,301 (55) (287) (109) (20) (99) (264) 320 41 (15) (475) 18 (11) 163 (465) (100) (87) 286 30 509 655 40 (1,608) 404 85 534
Exhibit 22: Aggregate gross NPA levelsPrivate Banks*

Bank (` cr) Pvt. New Pvt. Old Total 4QFY13 15,646 4,251 19,897 3QFY13 15,709 4,469 20,178 4QFY12 14,326 3,606 17,932 %yoy 9.2 17.9 11.0 %qoq (0.4) (4.9) (1.4)
Exhibit 23: Aggregate gross NPA levels PSU Banks

Bank (` cr) PSU Large PSU Mid Total 4QFY13 100,427 53,089 153,516 3QFY13 102,277 50,586 152,863 4QFY12 72,788 36,453 109,241 %yoy 38.0 45.6 40.5 %qoq (1.8) 4.9 0.4
Source: Company, Angel Research, Note: *all listed except LVB
Exhibit 24: Aggregate net NPA levels Private Banks*

Bank (` cr) Pvt. New Pvt. Old Total 4QFY13 3,859 1,584 5,442 3QFY13 3,820 1,539 5,358 4QFY12 3,035 984 4,020 %yoy 27.1 60.9 35.4 %qoq 1.0 2.9 1.6
Exhibit 25: Aggregate net NPA levels PSU Banks

Bank (` cr) PSU Large PSU Mid Total 4QFY13 51,064 32,798 83,862 3QFY13 53,380 30,283 83,664 4QFY12 34,795 19,998 54,794 %yoy 46.8 64.0 53.1 %qoq (4.3) 8.3 0.2
Source: Company, Angel Research, Note: *all listed except LVB
May 27, 2013
15
Higher addition to the restructuring book during the quarter

During 4QFY2013, the fresh addition to the restructuring book for banks remained high. Sectors like Power, Textiles, Iron & Steel and Engineering contributed a larger chunk of incremental restructuring during the quarter. Amongst our coverage, PSU banks like SBI, CANBK, BOB, PNB, UNBK, UTDBK, SYNDBK, CRPBK witnessed higher restructuring during the quarter, compared to the last quarter. In 1QFY2014, many banks would have to provide for increase in the provisioning on standard restructured book (after upgrading satisfactorily performing accounts) from 2.75% currently to 3.75%, apart from providing for freshly restructured accounts at the rate of 5%. Though many banks have stated that they expect no major restructuring to be in the pipeline, however, as indicated by their Managements, restructuring pipeline appears sizable for banks like SBI (~`6,000cr), BOB (~`2,500cr excl. SEBs), UNBK (~`2,200cr), INDBK (~`1,100cr), DENABK (~`800cr) and ALBK (~`600cr). Even, the pending cases under the CDR route amounting to `32,083cr are likely to keep the restructuring pipeline for most banks active.
Exhibit 26: CDR Snapshot

Year (` cr) FY10 FY11 1QFY12 2QFY12 3QFY12 4QFY12 FY12 1QFY13 2QFY13 3QFY13 4QFY13 FY13 Total
Source: CDR India, Angel Research
Referred No. of cases 31 49 18 18 23 28 87 41 33 25 31 130 522 Additions 20,175 22,614 4,595 21,095 19,187 23,012 67,889 20,528 18,907 20,957 31,256 91,648 298,141
Approved No. of cases 31 27 10 7 17 16 50 17 18 35 39 109 401 Additions 17,763 6,615 8,141 2,095 21,364 8,001 39,601 17,957 18,925 24,581 17,035 78,498 229,013
May 27, 2013
16
Exhibit 27: Restructuring book as of 4QFY2013

Restructured book (` cr) Bank CENTBK ALLBK IOB PNB ANDHBK INDBK IDBI DENABK UNBK OBC CANBK UCOBK BOB VIJAYA UTDBK CRPBK SYNBK BOM BOI SIB FEDBK SBI JKBK AXSB ICICIBK YESBK HDFCBK 4QFY2013 22,681 14,875 18,050 32,143 9,692 9,707 16,243 5,423 16,965 9,935 18,113 NA 22,617 4,636 4,555 7,676 9,126 4,632 16,356 1,641 2,050 43,111 1,490 4,368 5,315 144 479 3QFY2013 22,182 13,069 15,608 30,329 10,382 10,650 15,133 4,700 15,565 10,992 14,501 8,333 22,993 4,352 4,557 8,895 9,800 5,266 18,136 1,348 2,670 34,783 1,978 4,257 4,169 189 724 Ch.qoq (%) 2.2 13.8 15.6 6.0 (6.6) (8.9) 7.3 15.4 9.0 (9.6) 24.9 NA (1.6) 6.5 (0.0) (13.7) (6.9) (12.0) (9.8) 21.7 (23.2) 23.9 (24.6) 2.6 27.5 (23.7) (33.8)
#
Restructured book disclosure % to total adv# 13.2 11.5 11.3 10.4 9.9 9.2 8.3 8.2 8.2 7.7 7.5 7.0 6.9 6.6 6.6 6.5 6.2 6.1 5.7 5.2 4.6 4.1 3.8 2.2 1.8 0.3 0.2 Total$ Total Total Total
$
Total/standard outstanding Total Total Total Total Total Total Total Total Total Standard Total Standard Total Total Total Total Total Total Standard Total Total
Borrower-wise/ facility-wise
Revised as per RBI norms
Borrower-wise Borrower-wise Borrower-wise Revised* Revised*
Revised*
Borrower-wise
Revised*
Revised* Revised* Revised
Borrower-wise Revised*
Source: Company, Angel Research, Note:*revised only for 4QFY2013, as of 4QFY2013 except for UCOBK where it is as of 3QFY2013, on cumulative basis
May 27, 2013
17
On earnings front, Private Banks shine yet again, while performance of PSU banks remains weak, dented by persistent asset quality pressures in absolute terms and slower growth
During 4QFY2013, PSU banks reported a weak performance, primarily dented by persistent asset quality pressures (in absolute terms) and slower growth. Overall, PSU banks posted a bottom-line decline of 17.3% yoy (within which the decline was higher for large PSUs at 19.7%, as against 10.5% for mid-PSUs). On the NII front, the performance of large PSU banks was flat yoy (vs. advance growth of 12.8% yoy), whereas the mid-PSU banks reported a modest growth of 6.6% yoy (vs. advance growth of 15.1% yoy), primarily on account of persistent asset quality pressures (denoted by slippages and incremental restructuring). Robust performance on the treasury front for most banks and healthy recoveries performance for many others, aided the operating income for large PSU and mid PSU banks to grow by 4.3% and 15.5%, yoy respectively. Almost all PSU banks provided for impending wage revision during the quarter (SBI made provisions for five months, as against three month provisioning for most others) and hence, operating expenses grew by 17.1% and 15.5% yoy, respectively for large PSUs and mid-PSU banks. Consequently, operating profit de-grew by 5.1% yoy for large PSUs, while grew at healthy pace of 15.4% yoy for mid-PSU ones.
Exhibit 28: Large PSU banks P&L

Parameter (` cr) NII Other Income Operating Income Operating Expenses Pre provision profit Provisions PBT Tax Net Profit 4QFY13 3QFY13 % chg (qoq) 4QFY12 % chg (yoy)
Exhibit 29: Mid-PSU* banks P&L

Parameter (` cr)
4QFY13 3QFY13 14,362 5,985 20,347 9,747 10,600 7,418 3,182 (128) 3,311 14,432 3,810 18,242 8,280 9,962 5,858 4,104
% chg 4QFY12 (qoq)
% chg (yoy)
25,657 12,034 37,692 17,883 19,809 11,045 8,764 479 8,285
25,330 8,752 34,082 15,082 18,999 7,861 11,138 3,192 7,946
1.3 37.5 10.6 18.6 4.3 40.5 (21.3) (85.0) 4.3
25,440 10,707 36,146 15,275 20,872 6,966
0.9 12.4 4.3 17.1 (5.1) 58.6
NII Other Income Operating Income Operating Expenses Pre provision profit Provisions PBT Tax
(0.5) 57.1 11.5 17.7 6.4 26.6 (22.5)
13,470 4,153 17,623 8,439 9,184 5,357 3,826
6.6 44.1 15.5 15.5 15.4 38.5 (16.8)
13,906 (37.0) 3,588 (86.6) 10,318 (19.7)
736 (117.4) 3,368 (1.7)
125 (202.3) 3,701 (10.5)
Net Profit
Source: Company, Angel Research; Note:* all excl. SBI associate banks
Persistent asset quality stress (evident in 40.5% yoy increase in gross NPA levels PSU banks) and higher write-offs - so as to avail maximum possible tax benefits under Sec 36(1)(viia) provisions which was prospectively amended by Budget 2013-14, resulted in 49.8% yoy increase in provisioning expenses for PSU banks and hence, earnings at PBT level for these banks declined by 32.6% yoy. As a result, the PSU banks reported lower effective tax rate during the quarter at 2.9%, compared to 25.8% in 3QFY2013 and 20.9% in 4QFY2012. Overall, they posted a bottom-line decline of 17.3% yoy (within which the decline was higher for large PSUs at 19.7%, as against 10.5% for mid-PSUs).
May 27, 2013
18
Exhibit 30: New Private banks P&L

Parameter (` cr) NII Other Income Operating Income Operating Expenses Pre provision profit Provisions PBT Tax Net Profit % chg % chg 4QFY13 3QFY13 4QFY12 (qoq) (yoy)
Exhibit 31: Old Private banks* P&L

Parameter (` cr) NII Other Income Operating Income Operating Expenses Pre provision profit Provisions PBT Tax Net Profit
4QFY13 3QFY13 2,093 962 3,055 1,574 1,482 426 1,055 138 917 2,099 771 2,870 1,434 1,436 293 1,143 332 811
% chg 4QFY12 (qoq)
% chg (yoy)
12,966 7,130 20,096 8,899 11,197 1,573 9,625 2,770 6,855
11,778 6,603 18,380 7,935 10,446 1,241 9,205 2,778 6,428
10.1 8.0 9.3 12.2 7.2 26.8 4.6 (0.3) 6.6
10,240 6,121 16,360 7,543 8,817 986 7,831 2,407 5,424
26.6 16.5 22.8 18.0 27.0 59.5 22.9 15.1 26.4
(0.3) 24.8 6.5 9.8 3.2 45.5 (7.7) (58.4) 13.1
1,824 748 2,571 1,359 1,213 215 998 278 720
14.8 28.7 18.8 15.8 22.2 98.2 5.8 (50.3) 27.5
Source: Company, Angel Research,*all listed excluding LVB
Private banks shined yet again and reported impressive earnings performance, clearly outperforming their PSU counterparts on all major profit & loss line item. Private Banks reported operating profit growth of 26.4% yoy. On the asset quality front, they never were unscathed from pressures; however, they have faced relatively much lower asset quality pressures than their PSU peers till now, evident in lower levels of slippages and incremental restructuring. During the quarter, private banks too witnessed a higher 66.4% yoy increased in provisioning expenses (primarily as some of them availed benefits u/s 36(1)(viia) and also as some of them shored up their relatively strong provisioning coverage). Overall on earnings front, private banks reported a strong growth of 26.5% yoy.
Exhibit 32: Advances* growth (%)

Banks-Type Large PSU Mid PSU New Pvt. Old Pvt. 4QFY13 3QFY13 % chg (qoq) 4QFY12 % chg (yoy)
Exhibit 33: Deposits* growth (%)

Banks-Type Large PSU Mid PSU New Pvt. Old Pvt. Grand Total 4QFY13 3QFY13 % chg (qoq) 4QFY12 % chg (yoy)
2,618,480 2,465,295 1,559,887 1,466,608 866,725 184,204 844,291 171,329
6.2 2,320,938 6.4 1,354,885 2.7 7.5 731,040 157,070
12.8 15.1 18.6 17.3 14.6
3,296,757 2,097,456 1,013,575 246,589 6,654,377
3,056,267 1,949,912 974,061 224,954 6,205,194
7.9 2,886,738 7.6 1,807,245 4.1 9.6 852,361 207,028
14.2 16.1 18.9 19.1 15.7
Grand Total 5,229,296 4,947,523
5.7 4,563,933
7.2 5,753,372
Source: Company, Angel Research; Note:* all listed excl. LVB, DHB, SBI assoc.
Source: Company, Angel Research; Note:* all listed excl. LVB, DHB, SBI assoc.
May 27, 2013
19
Exhibit 34: DuPont analysis for our coverage universe

Pvt. New Parameter NII (-) Prov. Exp. Adj. NII Treasury Int. Sens. Inc. Other Inc. Op. Inc. Opex PBT Taxes ROA Leverage ROE FY12 3.1 0.4 2.7 (0.0) 2.7 1.7 4.4 2.2 2.2 0.7 1.5 10.9 16.5 FY13 3.3 0.4 2.9 0.1 3.0 1.6 4.6 2.3 2.4 0.7 1.6 10.8 17.6 FY14E 3.4 0.4 3.0 0.1 3.1 1.6 4.7 2.3 2.4 0.8 1.7 10.8 17.8 FY15E 3.4 0.4 3.0 0.1 3.1 1.7 4.7 2.3 2.4 0.8 1.6 11.2 18.3 FY12 2.8 0.8 2.0 0.0 2.0 0.9 2.9 1.6 1.3 0.4 0.9 18.6 17.2 PSU Large FY13 2.6 0.8 1.8 0.1 1.9 0.8 2.7 1.6 1.1 0.3 0.9 17.4 14.9 FY14E 2.6 0.6 2.0 0.0 2.1 0.8 2.9 1.6 1.3 0.4 0.9 17.4 15.3 FY15E 2.6 0.5 2.1 0.0 2.1 0.8 2.9 1.6 1.4 0.5 0.9 17.6 15.9 FY12 2.7 0.9 1.7 0.1 1.8 0.6 2.5 1.5 1.0 0.2 0.8 21.0 16.0 PSU Mid FY13 2.5 1.0 1.5 0.1 1.6 0.6 2.3 1.5 0.8 0.1 0.6 20.5 13.3 FY14E 2.5 0.7 1.8 0.0 1.9 0.6 2.4 1.4 1.0 0.3 0.7 20.5 14.0 FY15E 2.5 0.6 1.9 0.0 1.9 0.6 2.5 1.4 1.1 0.4 0.7 20.6 14.2
May 27, 2013
20
Banking indicators watch

Exhibit 35: Credit and deposit growth trends
30.0 Credit growth (%) Deposit growth (%)
Exhibit 36: Investment-Deposit ratio

Credit/Deposit (%) 80.0
78.0 76.0
Investment/Deposit (%) - RHS 32.0

31.0 30.0
25.0
20.0 15.0
74.0 72.0
70.0
29.0 28.0
27.0
10.0
5.0
Dec-12
Dec-11
Jun-12
Mar-12
Aug-12
Jan-13
Jan-12
Mar-13
Apr-12
Nov-11
Oct-12
Nov-12
Feb-12
Jan-10
Jan-11
Apr-09
Apr-10
Apr-12
Jan-13
Jan-12
Oct-09
Oct-10
Oct-11
Oct-12
Apr-13
Apr-11
Source: RBI, Angel Research
Exhibit 37: CP rates have eased considerably...

(%) 11.0 10.0 9.0 8.0 7.0 CP 3M CP 12M
Exhibit 38: ...similar to CD rates

(%) 11.0 10.0 9.0 8.0 7.0 6.0 CD 3M CD 12M
6.0
Dec-12
Jun-12
Aug-12
Jan-13
Mar-13
Oct-12
Nov-12
May-12
Sep-12
Feb-13
Apr-13
Jul-12
May-13
May-12
Jul-09
Jul-11
Jul-12
Jul-10
Sep-12
May-12
Sep-12
Feb-13
Jul-12
Feb-13
Apr-13 May-13 Apr-13 May-13 Apr-13
Jul-12
Dec-12
Jun-12
Aug-12
Jan-13
Exhibit 39: LAF borrowings trends

( ` bn) 500 (500) (1,000)
Exhibit 40: Forex reserves trends

US$ Bn
340
320 300
280
260 240
(1,500)
(2,000)
Sep-12
Feb-13
Nov-12
Sep-12
Dec-12
Aug-12
Aug-12
Feb-13
Jun-12
Jun-12
Jul-12
Jan-13
Jan-13
Mar-13
Mar-13
Oct-12
Nov-12
Jul-12
May-13
Dec-12
Jun-12
Aug-12
Jan-13
Mar-13
Oct-12
Nov-12
Apr-13
Nov-12
Mar-13
Oct-12
May 27, 2013
21
Exhibit 41: Bond yields have eased considerably

(%) 10.0 9.5 9.0
Exhibit 42: G-Sec yields spread vs. Repo rate

4.00 G sec 1yr and 10yr yield spread (%) Repo Rate (%) - RHS 10
31-Mar-13
24-May-13
3.00
2.00 1.00 -
8
6 4 2
8.5
8.0 7.5
7.0
9.00 8.30 8.99 8.19 8.97 8.16 8.91 7.86
7.79 7.22
7.83 7.29
7.96 7.26
6.5 6.0
7.96 7.11
(1.00)
Dec-07 Mar-09
Aug-09
0
Nov-05 Nov-10 May-08 Dec-12 Apr-06 Jan-10 Jun-10
Jun-05
Feb-07
Oct-08
Apr-11
Sep-06
Sep-11
Feb-12
Jul-07
Jul-12
AAA 1 Yr AAA 3 Yr AAA 5 Yr AAA 10 Gsec 1Yr Gsec 3Yr Gsec 5Yr Yr
Gsec 10Yr
Source: Bloomberg, Angel Research;
Sectoral and Industry-wise distribution of credit

Exhibit 43: Large industry and Personal loans aids credit growth
Sector Agriculture Industry - Micro & Small - Medium - Large Services Personal Loans - Housing - Vehicle Non-food Credit March 2012 (` cr) 522,623 1,965,874 259,191 205,642 1,501,041 1,032,992 768,256 388,017 94,904 4,289,744
rd
March 2013 (` cr) 592,166 2,244,831 285,741 124,169 1,834,922 1,157,852 904,541 462,236 111,459 4,899,390
nd
% of total 12.2 45.8 6.0 4.8 35.0 24.1 17.9 9.0 2.2 100.0
% of total 12.1 45.8 5.8 2.5 37.5 23.6 18.5 9.4 2.3 100.0
% chg (yoy) 13.3 14.2 10.2 (39.6) 22.2 12.1 17.7 19.1 17.4 14.2
Source: RBI, Angel Research; Note: as of 23 March 2012 and 22
March 2013 respectively.
Exhibit 44: Chemicals, Metals & Infra segments witnesses strong growth
Industry Infrastructure Metals Textiles Engineering Chemicals Food Processing Oil and Gas Construction Vehicles Gems & Jewelry Other Industries Total March 2012 (` cr) 619,086 255,630 159,850 113,567 112,503 102,411 70,055 56,604 51,610 50,366 374,193 1,965,875
rd
March 2013 (` cr) 735,156 316,734 185,732 127,909 160,785 119,720 61,088 52,473 59,777 60,868 364,587 2,244,829
nd
% of total 31.5 13.0 8.1 5.8 5.7 5.2 3.6 2.9 2.6 2.6 19.0 100.0
% of total 32.7 14.1 8.3 5.7 7.2 5.3 2.7 2.3 2.7 2.7 16.2 100.0
% chg (yoy) 18.7 23.9 16.2 12.6 42.9 16.9 (12.8) (7.3) 15.8 20.9 (2.6) 14.2
Source: RBI, Angel Research; Note: as of 23 March 2012 and 22
March 2013 respectively.
May-13
May 27, 2013
22
Valuation watch
Exhibit 45: Private banks* P/ABV trend
4.00 3.50 3.00 2.50 1.60
Exhibit 46: Public sector banks P/ABV trend

85th percentile
2.00 P/ABV Median 15th percentile 85th percentile
P/ABV
Median
15th percentile
2.00 1.50
1.00 0.50
1.20
0.80
Feb-08
May-06
Sep-08
Jul-07
0.40
May-13 Jun-10
Jan-11 Aug-11
Aug-04
Mar-05
Dec-06
Nov-09
Mar-12
Oct-05
Apr-09
Oct-12
Dec-07
Aug-04
Mar-09
Aug-09
Nov-05
Nov-10
Dec-12 Dec-12 Dec-12
Apr-06
Jan-10
Jan-05
Jun-10
Jun-05
Feb-07
Oct-08
Apr-11
Sep-06
Sep-11
Feb-12
Jul-07
Jul-12 Jul-12 Jul-12
Source: Company, Angel Research; Note: *Pvt. banks under our coverage
Exhibit 47: New private* banks P/ABV trend

4.00 3.50 3.00 2.50
Exhibit 48: Large public sector banks P/ABV trend

P/ABV 2.10 Median 15th percentile 85th percentile
P/ABV
Median
15th percentile
85th percentile
1.80 1.50 1.20 0.90 0.60

May-13 Jun-10
Jan-11 Aug-11
2.00 1.50
1.00 0.50
Feb-08
May-06
Aug-04
Mar-05
Dec-06
Sep-08
Jul-07
Nov-09
Mar-12
Oct-05
Apr-09
Oct-12
Dec-07
Aug-04
Mar-09
Aug-09
Apr-06
Jan-10
Jan-05
Jun-10
Jun-05
Nov-05
Oct-08
Nov-10
Feb-07
Apr-11
Sep-06
Sep-11
Feb-12
Jul-07
Source: Company, Angel Research; Note: *New Pvt. banks under our coverage
Exhibit 49: Old private* banks P/ABV trend

1.80 1.50 1.20 0.90 0.60 0.30
Exhibit 50: Mid-cap* public sector banks P/ABV trend

85th percentile
1.80 P/ABV Median 15th percentile 85th percentile
P/ABV
Median
15th percentile
1.50 1.20 0.90 0.60 0.30

May-13 Jun-10
Jan-11 Aug-11
Feb-08
May-06
Aug-04
Mar-05
Dec-06
Sep-08
Jul-07
Nov-09
Mar-12
Oct-05
Apr-09
Oct-12
Dec-07
Aug-04
Mar-09
Aug-09
Apr-06
Jan-10
Jan-05
Jun-10
Jun-05
Nov-05
Oct-08
Nov-10
Feb-07
Apr-11
Sep-06
Sep-11
Feb-12
Jul-07
Source: Company, Angel Research; Note: *Old Pvt. banks under our coverage
Source: Company, Angel Research, Note:*Mid and small PSU banks
May 27, 2013
23
May-13
May-08
May-13
May-08
May-13
May-08
Economy watch
Exhibit 51: Quarterly GDP trend
(%)
Exhibit 52: IIP trend

(%) 10.0 8.4
12.0 11.0 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0
11.2 9.0 9.2 7.6 8.2
8.0 6.0
8.5
7.5 5.7
7.5 6.5
6.0 5.3 5.5 5.3
4.0 2.0
4.5 (2.0)
2.5
2.0
2.4
2.5 0.5
(0.1) (1.3)
(0.7)
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
3QFY13
(4.0)
(2.0)
(1.0) (0.6)
May-12
Sep-12
Dec-12
Aug-12
Feb-13
CRR
Mar-13
Jun-12
Jul-12
Jan-13
Source: CSO, Angel Research
Source: MOSPI, Angel Research
Exhibit 53: Monthly WPI inflation trend

(%) 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0
Exhibit 54: Manufacturing and services PMI

58.0 Mfg. PMI Services PMI
7.6
7.6
7.5
8.0
8.1
7.3
7.2
7.3
7.3
6.8 6.0 4.9
56.0
54.0 52.0 50.0 48.0
May-12
Oct-12
Nov-12
Jan-13
Jul-12
Aug-12
Sep-12
Dec-12
Feb-13
Mar-13
Apr-13
Jun-12
Nov-12
Dec-12
Jun-12
Mar-12
Aug-12
Apr-12
Jan-13
Nov-12
Oct-12
Source: MOSPI, Angel Research
Source: Markit, Angel Research
Exhibit 55: Exports and imports growth trends

(%) 15.0 Exports yoy growth Imports yoy growth
Exhibit 56: Policy rates - RBI

(%) 9.00 8.00 7.00 6.00 Repo rate Reverse Repo rate
May-12
Sep-12
Feb-13
Feb-12
7.25 6.25
0.0 Nov-12 Aug-12 Sep-12 Dec-12 Feb-13 May-12 Mar-13 Oct-12 Apr-13 Jun-12 Jan-13 Jul-12
5.00 4.00 3.00

May-12 Sep-12 Feb-13 Jul-12
4.00
(15.0)
Source: Office of the Economic Adviser, Angel Research
May 27, 2013
May-13
Dec-12
Jun-12
Aug-12
Jan-13
Mar-13
Oct-12
Nov-12
Apr-13
Apr-13
Jul-12
Mar-13
Apr-12
Oct-12
24
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.
May 27, 2013
25
Disclosure of Interest Statement

Analyst ownership of the stock 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 No No No No No No No No No No No No No No No No No No No No No No No No No No No Angel and its Group companies ownership of the stock No No No No No No No No No No No No No No No No No No No No No No No No No No No Angel and its Group companies' Directors ownership of the stock Yes No No No No No No No No No No No No No No No No No No No No Yes No No No No No Broking relationship with company covered No No No No No No No No No No No No No No No No No No No No No No No 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%)
May 27, 2013
26

6th Floor, Ackruti Star, Central Road, MIDC, Andheri (E), Mumbai- 400 093. Tel: (022) 39357800
Research Team Fundamental: Sarabjit Kour Nangra Vaibhav Agrawal Bhavesh Chauhan Viral Shah Sharan Lillaney V Srinivasan Yaresh Kothari Ankita Somani Sourabh Taparia Bhupali Gursale Vinay Rachh Amit Patil Shareen Batatawala Twinkle Gosar Tejashwini Kumari Akshay Narang Harshal Patkar Technicals: Shardul Kulkarni Sameet Chavan Sacchitanand Uttekar Derivatives: Siddarth Bhamre Institutional Sales Team: Mayuresh Joshi Hiten Sampat Meenakshi Chavan Gaurang Tisani Akshay Shah Production Team: Tejas Vahalia Dilip Patel Research Editor Production Incharge tejas.vahalia@angelbroking.com dilipm.patel@angelbroking.com VP - Institutional Sales Sr. A.V.P- Institution sales Dealer Dealer Sr. Executive mayuresh.joshi@angelbroking.com hiten.sampat@angelbroking.com meenakshis.chavan@angelbroking.com gaurangp.tisani@angelbroking.com akshayr.shah@angelbroking.com Head - Derivatives siddarth.bhamre@angelbroking.com Sr. Technical Analyst Technical Analyst Technical Analyst shardul.kulkarni@angelbroking.com sameet.chavan@angelbroking.com sacchitanand.uttekar@angelbroking.com VP-Research, Pharmaceutical VP-Research, Banking Sr. Analyst (Metals & Mining) Sr. Analyst (Infrastructure) Analyst (Mid-cap) Analyst (Cement, FMCG) Analyst (Automobile) Analyst (IT, Telecom) Analyst (Banking) Economist Research Associate Research Associate Research Associate Research Associate Research Associate Research Associate Research Associate sarabjit@angelbroking.com vaibhav.agrawal@angelbroking.com bhaveshu.chauhan@angelbroking.com viralk.shah@angelbroking.com sharanb.lillaney@angelbroking.com v.srinivasan@angelbroking.com yareshb.kothari@angelbroking.com ankita.somani@angelbroking.com sourabh.taparia@angelbroking.com bhupali.gursale@angelbroking.com vinay.rachh@angelbroking.com amit.patil@angelbroking.com shareen.batatawala@angelbroking.com gosar.twinkle@angelbroking.com tejashwini.kumari@angelbroking.com akshay.narang@angelbroking.com harshal.patkar@angelbroking.com
CSO & Registered Office: G-1, Ackruti Trade Centre, Road No. 7, MIDC, Andheri (E), Mumbai - 93. Tel: (022) 3083 7700. Angel Broking Pvt. Ltd: BSE Cash: INB010996539 / BSE F&O: INF010996539, CDSL Regn. No.: IN - DP - CDSL - 234 2004, PMS Regn. Code: PM/INP000001546, NSE Cash: INB231279838 / NSE F&O: INF231279838 / NSE Currency: INE231279838, MCX Stock Exchange Ltd: INE261279838 / Member ID: 10500. Angel Commodities Broking (P) Ltd.: MCX Member ID: 12685 / FMC Regn. No.: MCX / TCM / CORP / 0037 NCDEX: Member ID 00220 / FMC Regn. No.: NCDEX / TCM / CORP / 0302.
May 27, 2013
27

Banking Sector Update

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Sector Update | Banking

May 27, 2013

Early signals of Recovery visible Buy Banks