1QFY2012 Result Update | Banking

August 1, 2011

Indian Overseas Bank

Performance Highlights

ACCUMULATE
CMP Target Price `137 `155
12 Months
1QFY11 906 464 200 % chg (yoy) 31.0 73.0 2.6

Particulars (` cr) NII Pre-prov. profit PAT

1QFY12 1,188 803 206

4QFY11 1,215 977 434

% chg (qoq) (2.3) (17.8) (52.7)

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 8,501 1.3 176/105 180,664 10 18,314 5,517 IOBK.BO IOB@IN

Source: Company, Angel Research

For 1QFY2012, Indian Overseas Bank (IOB) reported a weak set of results, registering muted growth of 2.6% yoy in its net profit to `206cr, considerably below our as well as streets estimates. Even muted profit growth was aided by a favourable base (as the bank had charged of `82cr towards exceptional items in 1QFY2011). We maintain our Accumulate view on the stock. Strong business growth; but with higher slippages and NIM compression: During 1QFY2012, the banks business growth continued to be healthy, with advances growing by healthy 6.5% qoq (up 43.6% yoy) and deposits increasing by 4.1% qoq (up 38.1% yoy). The banks profitability in 1QFY2012 was also aided by lower tax rate (20.2% vs. 27% in 1QFY2011) due to write-back of `100cr of excess provisions and the bank not charging off ~`21cr towards amortisation of the merger deficit. CASA ratio dipped by 264bp qoq to 27.6%. The reducing share of CASA deposits and the higher interest rate environment resulted in a sharp 78bp rise in cost of deposits, which was not fully compensated by the 61bp qoq increase in yield on advances, resulting in NIM compression of 31bp qoq to 2.9%. Fee income rose by healthy 29.9% yoy and recoveries picked up strongly. Slippages ratio for the quarter moderated from the high 4.3% of 4QFY2011 but remained relatively high at 1.7%. The bank is yet to migrate accounts below `50lakhs (~20% of loan book) to system-based NPA recognition platform, which is likely to keep slippages high in 2QFY2012 as well. Provision coverage ratio (including technical write-offs) improved to 73.5% during the quarter. Outlook and valuation: We maintain our positive view on the stock, considering the improvement in RoEs expected going forward. However, a flagging asset quality remains the biggest risk to the banks ability to deliver sustained performance in the future. At the CMP, the stock is trading at moderate valuations, in our view, of 0.84x FY2013E P/ABV. We maintain our Accumulate rating on the stock with a target price of `155, valuing the stock at 0.95x FY2013E ABV. Key financials
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 65.9 13.5 6.8 13.8

Abs. (%) Sensex IOB

3m
(4.3) (10.0)

1yr
2.5 20.0

3yr
27.6 62.6

FY2010 3,114 8.5 707 (46.7) 2.6 13.0 10.6 1.4 0.6 11.5

FY2011 4,208 35.1 1,073 51.7 2.8 17.3 7.9 1.1 0.7 14.8

FY2012E 4,912 16.7 1,299 21.1 2.5 21.0 6.5 1.0 0.6 15.0

FY2013E 5,515 12.3 1,608 23.8 2.4 26.0 5.3 0.8 0.7 16.4

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

Shrinivas Bhutda
022 3935 7800 Ext: 6845 shrinivas.bhutda@angelbroking.com

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

Please refer to important disclosures at the end of this report

Indian Overseas Bank | 1QFY2012 Result Update

Exhibit 1: 1QFY2012 performance

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 - Recov. from written off a/cs - Others Operating income Operating expenses - Employee expenses - Other Opex Pre-provision Profit Provisions & Contingencies - Provisions for NPAs - Provisions for Investments - Other Provisions PBT Exceptional items Provision for Tax PAT Effective Tax Rate (%)
Source: Company, Angel Research

1QFY12 4QFY11 % chg (qoq) 1QFY11 % chg (yoy) 3,993 3,009 893 90 2,805 1,188 339 354 178 (15) 100 77 1,527 724 502 222 803 545 436 53 56 258 52 206 20.2 3,532 2,616 823 68 25 2,317 1,215 384 354 228 30 46 80 1,600 623 363 260 977 446 305 42 100 531 97 434 18.2 13.0 15.0 8.5 33.5 (100.0) 21.1 (2.3) (11.8) 0.1 (21.8) (150.1) 116.3 (4.6) (4.6) 16.3 38.5 (14.7) (17.8) 22.2 42.9 28.1 (43.6) (51.5) (46.1) (52.7) 201bp 2,668 1,944 668 56 1,761 906 215 227 137 (12) 27 63 1,121 657 474 183 464 77 154 (98) 21 387 82 104 200 27.0 49.7 54.8 33.8 61.7 59.3 31.0 57.9 56.1 29.9 24.5 269.9 21.7 36.2 10.2 5.9 21.4 73.0 609.2 183.5 (154.7) 170.8 (33.4) (100.0) (50.1) 2.6 (678)bp

Exhibit 2: Actual vs. Angel estimates

Particulars (` cr) NII Non-Interest Income Operating Income Operating Expenses Pre-Prov. Profit Provisions & Cont. PBT Prov. for Taxes PAT
Source: Company, Angel Research

Actual 1,188 339 1,527 724 803 545 258 52 206

Estimates 1,276 329 1,605 644 961 526 435 141 294

Variation (%) (6.9) 3.1 (4.9) 12.4 (16.5) 3.6 (40.8) (63.1) (30.0)

August 1, 2011

Indian Overseas Bank | 1QFY2012 Result Update

Exhibit 3: 1QFY2012 performance

Particulars (` cr) 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 Yield on investments Yield on funds Cost of funds 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

1QFY12

4QFY11

% chg (qoq) 6.5 181bp (22.3) 1.3 (5.0) (264)bp (117)bp (64)bp 78bp 61bp 5bp 39bp 69bp (31)bp 850bp 6.5 4bp (5.3) (11)bp 305bp (259)bp 23bp

1QFY11 % chg (yoy) 82,951 75.8 7,427 28,830 36,256 33.1 14.2 8.3 5.6 9.7 7.1 8.7 5.8 2.9 58.6 3,571 4.3 1,794 2.2 57.9 1.8 0.4 43.6 38.1 303bp 23.6 12.7 14.9 (556)bp (81)bp (74)bp 113bp 76bp 20bp 92bp 103bp (9)bp (1119)bp (7.8) (154)bp (29.9) (113)bp 1565bp (2)bp 57bp

119,148 111,833 151,173 145,229 78.8 9,179 32,488 41,666 27.6 13.4 7.5 6.8 10.5 7.3 9.6 6.8 2.9 47.4 3,292 2.8 1,258 1.1 73.5 1.7 1.0 77.0 11,806 32,056 43,861 30.2 14.6 8.2 6.0 9.9 7.2 9.2 6.1 3.2 38.9 3,090 2.7 1,328 1.2 70.5 4.3 0.7

4.1 109,461

Healthy business growth continues; NIM compress 31bp qoq

During 1QFY2012, the bank managed to buck the trend of witnessing sequential moderation in business growth. Advances grew by healthy 6.5% qoq (up 43.6% yoy) and deposits increased by 4.1% qoq (up 38.1% yoy). As a consequence, the credit-to-deposit ratio expanded by 181bp qoq and 303bp to 78.8%, thereby cushioning the decline in NIM to an extent. Growth in advances was driven by retail loans (up 9.6% qoq), agricultural loans (up 7.0% qoq) and SME loans (up 30.9% yoy). On the deposits side, the widening differential between saving account interest rate and FD interest rate resulted in further moderation in CASA deposits growth. CASA deposits growth rate stood at 14.9% yoy, driven by 23.6% yoy growth in the more volatile current account deposits. Consequently, the CASA ratio, as of 1QFY2012, dipped by 264bp qoq and 556bp yoy to 27.6%. The reducing share of CASA deposits and the higher interest rate scenario across the system resulted in a sharp 78bp rise in cost of deposits to 6.8%. The qoq rise in yield on advances (61bp) could not fully offset the impact of cost of deposits, resulting in NIM compression of 31bp qoq to 2.9%. The muted 5bp qoq rise in yield on investments also partly contributed to NIM pressure.
August 1, 2011

Indian Overseas Bank | 1QFY2012 Result Update

Exhibit 4: Strong sequential business growth

Adv. qoq chg (%) 20.0 15.0 10.0 75.8 73.1 Dep. qoq chg (%) 80.1 77.0 CDR (%, RHS) 85.0 78.8 80.0 75.0

Exhibit 5: Stable CASA deposits growth

35.0 28.0 21.0 14.0 CASA ratio 27.6 23.0 CASA yoy growth (%, RHS) 30.0 21.7 21.7 14.9 20.0

15.9 5.9

2.7

4.1 7.9

6.5 4.1

5.0 (5.0)

11.7 16.1

70.0 65.0

10.0

33.1

33.1

31.0

30.2

(1.2)

60.0

1QFY11 2QFY11 3QFY11 4QFY11 1QFY12

Source: Company, Angel Research

27.6

7.0

1QFY11 2QFY11 3QFY11 4QFY11 1QFY12

Source: Company, Angel Research

Exhibit 6: Cost of deposits rises sharply by 78bp qoq...

(%) 7.00 5.99 5.59 6.77

Exhibit 7: ...leading to a 31bp dip in reported NIM

(%) 3.40 3.20 3.00 2.80 2.60 2.94 3.02 2.85 3.27 3.16

6.00

5.64

5.76

5.00

4.00 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12

2.40 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12

Source: Company, Angel Research

Source: Company, Angel Research

Healthy fee income growth; recoveries show strong traction

Fee income growth was healthy at 29.9% yoy to `178cr. Recoveries from written-off accounts surprised by registering a 269.9% yoy and 116.3% qoq increase to `100cr. Overall other income growth was strong at 57.8% yoy.

Exhibit 8: Break-up of non-interest income

Particulars (` cr) Fee income Treasury Recoveries from written-off a/c Others Other income Other income excl. treasury
Source: Company, Angel Research

1QFY12 4QFY11 178 (15) 100 77 339 354 228 30 46 80 385 354

% chg (qoq) 1QFY11 (21.8) 116.3 (4.6) (11.8) 0.1 137 (12) 27 63 215 227

% chg (yoy) 29.9 24.5 269.9 21.6 57.8 56.0

Slippages down from 4QFY2011 levels but remain high

On the asset quality front, gross slippages remained high, though they were lower than 4QFY2011 levels. The annualised slippage ratio for the quarter came in at 1.7%, as compared to 4.3% in 4QFY2011 and 1.8% in 1QFY2011. The bank is yet to migrate the accounts below `50lakhs (~20% of the loan book) to

August 1, 2011

Indian Overseas Bank | 1QFY2012 Result Update

system-based NPA recognition platform, which could result in substantially higher slippages in 2QFY2012, as has been witnessed in case of other banks. However, management is hopeful of strong recoveries (guidance of ~`250cr for 2QFY2012) to partly offset the expected rise in slippages. Recoveries from gross NPAs declined considerably to `102cr, as compared to `361cr in 1QFY2011 and `381cr in 4QFY2011. The provision coverage ratio (including technical write offs) improved to 73.5% from 70.5% in 4QFY2011. The banks exposure to the power sector stood at ~7% of the loan book, while exposure to state electricity boards (SEBs) stood at ~`4,800cr (~4% of advances). The bank made provisions for NPA amounting to `395cr during the quarter (`305cr in 4QFY2011). Of the NPA provisions, `145cr was required towards the recent hike in regulatory provisioning requirements. In addition, the bank provided `41cr towards the counter-cyclical provisioning buffer as mandated by the RBI. The bank will have to provide an additional sum of `290cr towards the buffer during the remaining three quarters of FY2012.

Exhibit 9: Slippage ratio of 4.3% in 1QFY2012

Slippages (%) 5.0 4.0 3.0 2.0 1.0 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 0.4 0.7 0.8 0.7 Credit cost (%, RHS) 1.0 1.2 0.9 0.6 0.3

Exhibit 10: Higher deductions leading to lower NPA ratios

Gross NPAs (%) 4.5 3.6 2.7 1.8 57.9 60.0 60.0 50.0 70.5 65.4 Net NPAs (%) PCR (%, RHS) 73.5 80.0 70.0

1.8

3.8

0.9

4.3

1.7

4.3 2.2

3.8 2.0

3.3 1.5

2.7 1.2

1QFY11 2QFY11 3QFY11 4QFY11 1QFY12

Source: Company, Angel Research

2.8 1.1
40.0

0.9

Source: Company, Angel Research

Opex rises on higher employee benefit-related provisions

Operating expenses increased substantially by 16.3% qoq due to a 38.5% qoq increase in employee expenses. However, in 4QFY2011, the bank had written back some of the accelerated provisions, which had aided in keeping the employee costs lower. On a yoy basis, operating expenses rose moderately by 10.2% to `724cr. Consequently, the cost-to-income ratio rose to 47.4% in 1QFY2012 from 38.9% in 4QFY2011. The bank had opened ~200 branches in FY2011 to 2,184 and plans to open 400 more branches each in FY2012 and FY2013. The bank also plans to open 2,000 ATMs and hire ~3,500 people in FY2012.

Weak capital adequacy

The banks capital adequacy profile, especially tier-I CAR, looks weak. Total CAR of the bank stood at 13.4%, with tier-I CAR of 7.5% as of 1QFY2012. The bank has already taken approvals from shareholders for raising capital. However, the mode of capital raising and the amount are still being contemplated. Management does not see an immediate need for capital raising, given the moderating credit demand.
August 1, 2011

Indian Overseas Bank | 1QFY2012 Result Update

Investment arguments
Pace in business, but with its share of pain
The pace of business growth picked up in 2HFY2011 and even continued in the usually lean first quarter (1QFY2012). Going by managements indication, growth momentum is likely to continue in FY2012 as well. The double-digit sequential growth witnessed in advances as well as deposits in 4QFY2011 was marred by high slippages. Even in 1QFY2012, though slippages rate moderated, it remained relatively high at 1.7%. Slippage ratio for the entire FY2011 stood at 2.7%. Based on the rate at which the bank is looking to grow, we expect similar levels of slippages in FY2012 (2.6%) and FY2013 (2.4%). The migration of accounts below `50lakhs (~20% of loan book) to system-based NPA recognition platform is also expected to keep slippages high.

Outlook and valuation

The bank had faced substantial asset quality issues in FY2010 due to which RoEs were depressed to 11.5%. From this low base, we expect improvement in RoE to drive 22.4% CAGR in earnings over FY2011-13E. That said, in the near-term, further asset quality pressures due to migration to system-based NPA recognition platform cannot be ruled out. At the CMP, the stock is trading at moderate valuations, in our view, of 0.84x FY2013E P/ABV. Hence, we maintain our Accumulate rating on the stock with a target price of `155, valuing the stock at 0.95x FY2013E ABV.

Exhibit 11: Key assumptions

Particulars (%) Credit growth Deposit growth CASA ratio NIMs Other income growth Growth in staff expenses Growth in other expenses Slippages Treasury gain/(loss) (% of investments)
Source: Angel Research

Earlier estimates FY2012 20.0 23.0 27.7 2.7 14.3 2.5 15.0 2.6 0.1 FY2013 17.0 17.0 26.3 2.4 14.7 15.0 15.0 2.4 0.1

Revised estimates FY2012 22.0 24.0 27.5 2.5 12.1 15.0 15.0 2.6 0.1 FY2013 17.0 18.0 25.9 2.4 19.9 15.0 15.0 2.4 0.1

August 1, 2011

Indian Overseas Bank | 1QFY2012 Result Update

Exhibit 12: Change in estimates

FY2012 Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Angel Research

FY2013 Earlier estimates 5,426 1,605 7,031 3,152 3,879 1,458 2,421 786 1,636 Revised Var. (%) estimates 5,515 1,647 7,161 3,402 3,759 1,379 2,380 772 1,608 1.6 2.6 1.9 7.9 (3.1) (5.4) (1.7) (1.7) (1.7)

Earlier estimates 5,096 1,400 6,496 2,741 3,755 1,697 2,058 668 1,391

Revised Var. (%) estimates 4,912 1,373 6,285 2,958 3,326 1,523 1,804 505 1,299 (3.6) (1.9) (3.2) 7.9 (11.4) (10.3) (12.4) (24.4) (6.6)

Exhibit 13: P/ABV band

300 250 200 150 100 50 0 Price (`) 0.4x 0.8x 1.2x 1.6x 2x

Oct-09

Nov-06

May-10

Aug-08

Dec-10

Source: Company; Angel Research

August 1, 2011

Mar-09

Feb-12

Jun-07

Apr-06

Jan-08

Jul-11

Indian Overseas Bank | 1QFY2012 Result Update

Exhibit 14: Recommendation summary

Company AxisBk FedBk HDFCBk ICICIBk* SIB YesBk AllBk AndhBk BOB BOI CanBk CentBk CorpBk DenaBk IDBI# IndBk IOB J&KBk OBC PNB SBI* SynBk UcoBk UnionBk UtdBk VijBk Reco. Buy Buy Accumulate Buy Accumulate Accumulate Neutral Accumulate Buy Accumulate Accumulate Neutral Buy Accumulate Neutral Accumulate Accumulate Neutral Accumulate Accumulate Buy Buy Neutral Accumulate Buy Neutral CMP (`) 1,352 420 488 1,044 24 317 202 138 877 383 453 116 496 85 129 223 137 887 350 1,119 2,344 120 84 285 93 64 Tgt. price (`) 1,648 483 519 1,324 26 353 145 1,018 434 516 608 96 255 155 383 1,217 2,845 139 327 107 Upside (%) 21.9 15.0 6.4 26.9 10.7 11.3 5.2 16.1 13.3 13.9 22.5 12.8 14.2 12.8 9.4 8.8 21.4 15.9 14.9 15.0 FY2013E P/ABV (x) 2.2 1.1 3.3 1.9 1.2 2.0 1.0 0.9 1.2 1.1 0.9 0.8 0.8 0.6 0.8 0.9 0.8 0.9 0.8 1.3 1.8 0.8 1.0 1.0 0.8 0.8 FY2013E Tgt P/ABV (x) 2.7 1.3 3.5 2.4 1.4 2.3 1.0 1.4 1.2 1.0 1.0 0.7 1.0 1.0 0.9 1.4 2.1 0.9 1.2 0.9 FY2013E P/E (x) 11.2 8.5 17.0 14.8 7.3 10.7 5.7 5.7 6.6 6.0 5.2 5.3 4.6 4.2 5.9 4.7 5.3 5.9 5.9 6.9 8.7 5.0 4.9 6.0 6.2 6.2
#

FY2011-13E EPS CAGR (%) 20.9 20.2 30.5 25.8 11.6 19.1 9.2 3.1 10.8 18.7 (2.4) (10.9) 6.1 5.1 14.3 10.4 22.4 8.8 7.5 7.4 44.2 14.6 16.5 20.0 6.1 8.6

FY2013E RoA (%) 1.5 1.3 1.7 1.5 0.9 1.2 0.9 1.0 1.1 0.8 0.9 0.5 0.9 0.8 0.7 1.4 0.7 1.2 0.9 1.0 1.1 0.7 0.6 0.8 0.5 0.5

FY2013E RoE (%) 21.0 14.1 20.9 16.0 17.2 20.6 17.8 16.8 19.6 18.0 17.2 15.1 17.9 15.7 14.5 20.4 16.4 17.0 14.4 20.0 22.6 17.0 17.1 17.9 12.5 12.8

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

August 1, 2011

Indian Overseas Bank | 1QFY2012 Result Update

Income statement
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 2,679 4.6 1,075 24.7 3,755 9.7 1,485 7.0 2,270 11.5 615 (7.2) 1,655 20.5 452 27.3 1,202 19.2 FY09 2,870 7.1 1,713 59.3 4,583 22.0 1,942 30.7 2,641 16.4 687 11.7 1,954 18.1 629 32.2 1,326 10.3 FY10 3,114 8.5 1,197 (30.2) 4,311 (5.9) 2,466 27.0 1,845 (30.2) 866 26.1 979 (49.9) 272 27.8 707 (46.7) FY11 4,208 35.1 1,225 2.4 5,433 26.0 2,573 4.3 2,861 55.1 1,268 46.5 1,592 62.7 520 32.6 1,073 51.7 FY12E 4,912 16.7 1,373 12.1 6,285 15.7 2,958 15.0 3,326 16.3 1,523 20.0 1,804 13.3 505 28.0 1,299 21.1 FY13E 5,515 12.3 1,647 19.9 7,161 13.9 3,402 15.0 3,759 13.0 1,379 (9.4) 2,380 31.9 772 32.4 1,608 23.8

Balance sheet
Y/E March (` cr) Share Capital Reserves & 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 545 4,312 22.7 6,354 2,837 3,487 9,124 1,217 28,475 60,424 28.4 559 2,061 23.8 FY09 545 6,606 18.7 6,548 3,946 3,312 5,940 4,981 31,215 74,885 23.9 1,710 2,341 18.9 FY10 545 6,980 110,795 10.7 4,111 4,871 3,795 131,097 7,666 2,158 37,651 79,004 5.5 1,700 2,918 131,097 8.3 FY11 619 8,706 145,229 31.1 12,517 6,838 4,875 178,784 10,011 2,008 48,610 111,833 41.6 1,681 4,641 178,784 36.4 FY12E 619 9,717 180,084 24.0 15,474 8,343 6,776 221,012 11,705 4,420 60,697 136,436 22.0 2,016 5,737 221,012 23.6 FY13E 619 10,965 212,499 18.0 18,203 9,761 7,950 259,997 13,812 5,200 72,304 159,630 17.0 2,300 6,749 259,997 17.6

84,326 100,116

101,860 121,073

101,860 121,073

August 1, 2011

Indian Overseas Bank | 1QFY2012 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 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 (x) RoE 2.9 0.7 2.2 0.2 2.5 0.9 3.4 1.6 1.8 0.5 1.3 21.4 27.9 2.6 0.6 2.0 0.6 2.5 1.0 3.5 1.7 1.8 0.6 1.2 20.9 24.8 2.5 0.7 1.8 0.2 2.0 0.7 2.7 2.0 0.8 0.2 0.6 20.5 11.5 2.7 0.8 1.9 0.1 2.0 0.7 2.7 1.7 1.0 0.3 0.7 21.4 14.8 2.5 0.8 1.7 (0.0) 1.7 0.7 2.4 1.5 0.9 0.3 0.6 23.1 15.0 2.3 0.6 1.7 0.0 1.8 0.7 2.4 1.4 1.0 0.3 0.7 24.5 16.4 6.2 1.6 2.3 5.6 1.4 3.3 10.6 1.4 2.6 7.9 1.1 3.6 6.5 1.0 2.9 5.3 0.8 3.6 22.1 85.0 3.2 24.3 99.5 4.5 13.0 96.5 3.5 17.3 123.0 5.0 21.0 144.1 4.0 26.0 163.2 5.0 1.6 0.6 1.4 0.1 63.6 2.5 1.3 3.7 0.3 48.0 4.5 2.5 4.1 0.7 54.0 2.7 1.2 2.7 0.7 70.5 3.5 1.4 2.6 0.6 71.0 4.1 1.5 2.4 0.5 71.0 33.5 71.7 12.0 7.9 30.3 74.8 11.8 7.0 32.5 71.3 13.6 8.0 30.2 77.0 13.5 7.6 27.5 75.8 14.0 7.6 25.9 75.1 13.7 7.2 3.0 39.6 1.3 27.9 2.7 42.4 1.2 24.8 2.6 57.2 0.6 11.5 2.8 47.3 0.7 14.8 2.5 47.1 0.6 15.0 2.4 47.5 0.7 16.4 FY08 FY09 FY10 FY11 FY12E FY13E

August 1, 2011

10

Indian Overseas Bank | 1QFY2012 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

Indian Overseas 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%)

August 1, 2011

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