4QFY2012 Result Update | Banking

May 9, 2012

South Indian Bank

Performance Highlights

NEUTRAL
CMP Target Price
% chg (qoq) 4.1 (8.9) 19.3 4QFY11 222 153 82 % chg (yoy) 28.4 6.4 49.1

`23 -

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

4QFY12 285 163 122

3QFY12 273 179 102

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

Source: Company, Angel Research

Banking 2,591 0.9 28/20 496,218 1 16,480 4,975 SIBK.BO SIB@IN

For 4QFY2012, South Indian Bank (SIB) reported healthy net profit growth of 49.1% yoy (up 19.3% qoq) to `122cr, which was higher than our estimates on account of higher non interest income and lower provisioning expenses than estimated by us. We remain Neutral on the stock Strong growth in loan book continues: For FY2012, the banks business growth remained above industry levels, with advances growing by 33.1% yoy (8.9% qoq during 4QFY2012) and deposits growing by 22.8% yoy (7.9% qoq during 4QFY2012). Growth in gold loan portfolio for the bank continued to be healthy, registering a 4.6% increase on a sequential basis. The banks low cost deposits as a % of overall deposits dropped to 19.7% on account of NRE deposit rates deregulation. The cost of deposits consequently rose by 17bp qoq, however, the yield on advances of the bank also rose by 20bp (aided by growth in high yielding gold loans), leading to marginal expansion of 5bp qoq in NIMs to 3.1%. The banks employee expenses jumped by 43.4% qoq on account of higher pension provisioning due to actuarial valuations (impact of ~`22cr). The asset quality of the bank deteriorated slightly during 4QFY2012, with slippages increasing to `66cr (annualised slippage ratio of 1.3%) from a quarterly run-rate of ~`35cr. However, the rise in slippages during 4QFY2012 can be primarily attributed to one chunky account (exposure of `50cr to Bharati shipyard). Outlook and valuation: The banks foray into gold loans has yielded positive results and has led to sustainably higher NIMs. The banks asset quality has also held up pretty well inspite of the macro headwinds which have led to higher provisioning expenses for most banks. However, current valuations at 1.1x FY2014E ABV have factored in the positives in our view and are considerably above the valuations of small and mid-sized PSU banks which have similar fundamentals, even after factoring in the robust growth witnessed due to the sharp rise in gold loans. Also, we expect the banks cost of funds to increase going ahead on account of NRE rates de-regulation which could pull down the NIMs for the bank. Hence we maintain our Neutral stance on the stock.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 7.6 49.2 43.2

Abs. (%) Sensex SIB

3m (7.6) (14.4)

1yr (11.1) 0.7

3yr 38.8 261.6

Key financials
Particulars (` cr) NII % chg Net profit % chg NIM (%) EPS (`) P/E (x) P/ABV (x) RoA (%) RoE (%)
Source: Company, Angel Research

FY2010 791 39.2 293 25.1 2.8 2.6 8.8 1.5 1.0 18.5

FY2011 1,022 29.2 402 37.3 2.9 3.5 6.6 1.3 1.1 21.6

FY2012E 1,136 11.2 408 1.6 2.6 3.5 6.5 1.1 0.9 18.7

FY2013E 1,286 13.2 439 7.5 2.5 3.8 6.1 1.0 0.8 17.5

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

South Indian Bank | 4QFY2012 Result Update

Exhibit 1: 4QFY2012 performance

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

4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy) 994 803 164 26 709 285 83 74 67 9 6 367 204 128 76 163 12 14 (10) 12 (3) 151 29 122 19.1 944 753 161 30 670 273 60 54 47 6 8 333 154 89 65 179 22 3 10 7 3 157 55 102 34.8 5.3 6.7 2.0 (11.2) 5.8 4.1 37.8 35.5 44.8 60.1 (20.2) 10.1 32.2 43.4 16.9 (8.9) (44.4) 390.4 (208.2) 64.3 (221.8) (3.9) (47.3) 19.3 (1572)bp 704 557 132 15 482 222 60 47 41 14 5 282 129 76 53 153 26 (4) 9 6 15 127 45 82 35.5 41.2 44.3 24.2 78.4 47.1 28.4 36.4 57.8 62.4 (35.5) 20.4 30.1 58.3 68.7 43.3 6.4 (53.3) (458.4) (215.7) 94.1 (120.6) 18.9 (36.1) 49.1 (1642)bp

Exhibit 2: 4QFY2012 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 285 83 367 204 163 12 151 29 122

Estimates 281 69 350 168 182 26 156 46 111

% chg 1.3 19.3 4.9 21.7 (10.6) (52.4) (3.7) (37.0) 10.0

May 9, 2012

South Indian Bank | 4QFY2012 Result Update

Exhibit 3: 4QFY2012 performance analysis

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 Asset quality Gross NPAs (` cr) Gross NPAs (%) Net NPAs (` cr) Net NPAs (%) Provision Coverage Ratio (%) Slippage ratio (%) Loan loss provision to avg. assets (%) 267 1.0 77 0.3 71.4 1.3 0.1 234 0.9 58 0.2 75.2 0.7 0.0 14.1 3bp 31.6 4bp (382)bp 63bp 11bp 230 1.1 60 0.3 73.9 0.8 (0.1) 16.0 (14)bp 27.5 (1)bp (258)bp 52bp 20bp
#

4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy) 27,281 36,501 74.7 1,262 5,917 7,179 19.7 14.0 11.5 7.9 12.5 3.1 55.6 25,050 33,834 74.0 1,222 6,058 7,280 21.5 12.0 9.6 7.8 12.3 3.1 46.3 8.9 7.9 70bp 3.3 (2.3) (1.4) (185)bp 197bp 193bp 17bp 20bp 5bp 929bp 20,489 29,721 68.9 1,201 5,203 6,404 21.5 14.0 11.3 6.6 10.9 3.1 45.7 33.1 22.8 580bp 5.1 13.7 12.1 (188)bp (1)bp 27bp 137bp 160bp 4bp 989bp

Cost-to-income ratio

Source: Company, Angel Research; Note# : On a cumulative basis

Above industry growth during FY2012

For FY2012, the banks business growth remained above industry levels, with advances growing by 33.1% yoy (8.9% qoq during 4QFY2012) and deposits growing by 22.8% yoy (7.9% qoq during 4QFY2012). The effect of de-regulation of NRE deposits (SIB increased its NRE term deposit rates from ~3-4% to 9.5% effective January 01, 2012) was visible during the quarter with `483cr of NRE term deposits re-pricing upwards and NRE saving bank deposits declining by `355cr. The total high cost term deposits now currently stand at `1,035cr, which is expected to increase the total cost of funds by 15bp of average total assets during FY2013. As of 4QFY2012, the banks low cost NRE term deposits (which will be re-priced in the coming quarters) stands at `348cr, which after re-pricing is expected to increase the cost of funds by 5bp of ATA in FY2013. Also, low cost NRE savings deposits could see significant outflows going ahead as customers switchover to higher yielding term deposits (cost of 20bp of ATA considering worst case scenario). Considering erosion of low-cost advantage of these NRE deposits, we have factored in a margin compression of 25bp in FY2013 over FY2012.

May 9, 2012

South Indian Bank | 4QFY2012 Result Update

Exhibit 4: Movement in NRI deposit base sequentially

Deposit type (` cr) NRE SB NRO SB FCNR (B) RFC LOW COST TERM DEPOSIT LOW COST NRI DEPOSIT (SUB TOTAL) HIGH COST NRE TERM DEPOSIT NRO TERM DEPOSIT TOTAL NRI DEPOSIT
Source: Company, Angel Research

31-Mar-12 1,358 188 411 1 348 2,306 1,036 1,275 4,617

31-Dec-11 1,693 173 459 1 831 3,158 1,299 4,457

Growth in gold loan portfolio for the bank continued to be healthy, registering a 4.6% increase on a sequential basis. Share of gold loans in the overall loan book as of 4QFY2012 stands at c.25%. The management indicated that they would like to maintain the gold loan portfolio at 25-26% levels of the overall loan book and hence would now increase focus on corporate segment as well to drive the banks loan book growth (guidance of ~23-24% growth for FY2013) The cost of deposits of the bank rose by 17bp qoq on back of higher costs due to NRE deposit rates de-regulation. However, the yield on advances of the bank rose by 20bp (aided by growth in high yielding gold loans), leading to NIMs rising by a marginal 5bp qoq to 3.1%

Exhibit 5: Advances growth remains above system

Advances qoq growth (%,) 12.0 10.0 8.0 6.0 4.0 Deposits qoq growth (%)

Exhibit 6: CASA ratio drops further

(%) 24.0 21.5 21.0 18.0 21.5 21.3 21.5 19.7

6.8

8.1

6.4

5.4

4.5

7.3

2.4

8.9

7.9

2.0 -

10.1

15.0 12.0

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

Source: Company, Angel Research

Source: Company, Angel Research

May 9, 2012

South Indian Bank | 4QFY2012 Result Update

Exhibit 7: Reported NIM rises by 5bp qoq....

(%) 3.3 3.1 2.9 2.7 2.5 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 3.1 3.0 2.8 3.1 3.1

Exhibit 8: ...due to rise in yield on advances

(%) 13.5 12.5 11.5 10.5 9.5 8.5 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 10.9 11.8 12.1 12.3 12.5

Source: Company, Angel Research; Note: Cumulative reported numbers

Source: Company, Angel Research; Note: Cumulative reported numbers

Non-interest income growth driven by higher fee income

The fee income of the bank reported a strong growth of 57.8% yoy during 4QFY2012. The management attributed the healthy performance on the fee income front to successful launch of gold loan products, traction from ATM business and pick up in insurance business during FY2012. We have accordingly factored in a healthy fee income growth of 20% yoy each in FY2013 and FY2014.

Exhibit 9: Break-up of non-interest income

Particulars (` cr) Fee income Treasury gains Profit on exchange transactions Non-interest income Excluding treasury
Source: Company, Angel Research

4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy) 67 9 6 83 74 47 6 8 60 54 44.8 60.1 (20.5) 37.8 35.5 41 14 5 60 47 62.4 (35.5) 13.7 36.4 57.8

Asset quality remains healthy despite higher slippages

The asset quality of the bank deteriorated slightly during 4QFY2012, with slippages increasing to `66cr (annualised slippage ratio of 1.3%) from a quarterly run-rate of ~`35cr. However, the rise in slippages during 4QFY2012 can be primarily attributed to one chunky account (exposure of `50cr to Bharti shipyard). Consequently, the gross and net NPA levels of the bank increased by 14.1% and 31.6% qoq, respectively. The provision coverage ratio decreased by `380bp during 4QFY2012 to 71.4% from 75.2% in 3QFY2012. The bank restructured ~`400cr worth of accounts (mostly towards Jodhpur and Jaipur discoms) during 4QFY2012, taking the total restructured book to `1,021cr. The management indicated that the Bharti shipyard account would be reversed from NPA book to restructured book in 1QFY2013 as it will be restructured through the CDR route. The bank does not have any major restructuring n pipeline currently.

May 9, 2012

South Indian Bank | 4QFY2012 Result Update

Exhibit 10: NPA coverage drops sequentially

Gross NPAs (` cr) 300 73.9 225 150 73.1 Net NPA (` cr) 74.7 75.2 71.4 PCR (%, RHS) 80.0 75.0 70.0 65.0

Exhibit 11: Slippages up for 4QFY2012

(%) 1.5 1.2 0.9 0.6 0.3 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 0.8 0.8 0.5 0.7 1.3

230 60

236 63

231 58

234 58

4QFY11 1QFY12 2QFY12 3QFY12 4QFY12

267 77

75

60.0 55.0

Source: Company, Angel Research

Source: Company, Angel Research

Exhibit 12: Opex to average asset trends

(%) 2.5 2.0 1.5 1.0 0.5 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1.6 1.3 1.6 1.6 2.1

Exhibit 13: Cost to income ratio trends

(%) 58.0 54.0 50.0 46.0 42.0 38.0 34.0 30.0 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 45.7 44.2 46.7 46.3 55.6

Source: Company, Angel Research

Source: Company, Angel Research

Healthy capital adequacy

The banks capital adequacy ratio (CAR) stood at 14.0% as of 4QFY2012, with tier-I ratio at 11.5%. The banks risk weighted assets have come down due on a qoq basis due to reduction in the risk weightings being assigned to gold loans (The bank is assigning near zero risk weighting to its gold loans as compared to 25bp before after prior approval from RBI). Due to healthy growth in profit and benefits of near zero risk weightings on gold loans, the bank is planning to now raise only `400cr during FY2013 (as against the previously planned `1,000cr via QIP). The mode of capital raising will be decided at a later date by the management.

May 9, 2012

South Indian Bank | 4QFY2012 Result Update

Exhibit 14: Trends in CAR

(%)
16.0 12.0 8.0 11.3 4.0 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 10.9 10.8 9.6 11.5 14.0 2.7 Tier-I CAR 13.5 2.7 Tier-II CAR 13.5 12.0 2.7 2.4 14.0 2.5

Source: Company, Angel Research

Investment arguments
Strong business growth
The bank grew its advances and deposits at a strong rate of 33.1% and 22.8% yoy, respectively, in FY2012. Gold loan portfolio of the bank has increased at an 60% CAGR over FY200912. The gold loan portfolio (`6,800cr as of 4QFY2012) now constitutes c.25% of the overall loan book. The management indicated that they would like to maintain the gold loan portfolio at 25-26% levels of the overall loan book and hence would now increase focus on corporate segment as well to drive the banks loan book growth (guidance of ~23% growth for FY2013) The banks tier-1 ratio stands at a healthy 11.5% (healthy profit growth and benefits of near zero risk weighting on gold loans) as of 4QFY2012. The bank is planning to raise ~`400cr of equity capital during FY2013, which would further increase the banks tier-I ratio, enabling the bank to achieve its growth targets.

NIMs likely to have peaked out

SIBs NIMs have been healthy despite its relatively lower CASA deposits due to increasing share of high-yielding gold loans. However, increasing competition in the gold loan space and entry of several players is likely to reduce the so-far above-average profitability of this segment going forward. Also, the RBIs recent move of deregulating interest rates on NRE deposits has diminished the competitive cost advantage of these deposits, in our view. The costs of funds for the bank are expected to increase going ahead on account of NRE deposit rates de-regulation. Already upwardly re-priced NRE term deposits of `1,036cr (cost of 15bp), low cost NRE term deposits of `348cr which will be repriced in the coming few quarters (cost of 5bp) and outflow of NRE savings of `1,358cr into higher yielding term NRE deposits (cost of 20bp assuming worst case scenario) are expected to increase the total cost of funds by 40bp of ATA in FY2013.

May 9, 2012

South Indian Bank | 4QFY2012 Result Update

In this quarter the bank managed the NIM impact by increasing its yield on advances, however continuing to rely on this strategy going forward is likely to have asset quality implications. Eventually, either on account of decline in NIMs or increase in asset quality pressures, we expect downside risks to the banks ROAs.

Outlook and valuation

The banks foray into gold loans has yielded positive results and has led to sustainably higher NIMs. The banks asset quality has also held up pretty well inspite of the macro headwinds which have led to higher provisioning expenses for most banks. However, current valuations at 1.1x FY2014E ABV have factored in the positives in our view and are considerably above the valuations of small and mid-sized PSU banks which have similar fundamentals, even after factoring in the robust growth witnessed due to the sharp rise in gold loans. Also, we expect the banks cost of funds to increase going ahead on account of NRE rates deregulation which could pull down the NIMs for the bank. Hence we maintain our Neutral stance on the stock.

Exhibit 15: 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: Company, Angel Research

Earlier estimates FY2013 18.0 17.0 21.3 2.8 4.5 13.0 13.0 1.4 75.1 FY2014 18.0 18.0 20.4 2.7 14.6 13.0 13.0 1.5 76.4

Revised estimates FY2013 20.0 21.0 18.7 2.6 6.6 13.0 13.0 1.1 71.0 FY2014 20.0 20.0 17.6 2.5 17.6 13.0 13.0 1.3 69.2

Exhibit 16: 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
1,124 244 1,368 656 711 98 613 199 414

FY2013 FY2014 Revised Earlier Revised Var. (%) Var. (%) estimates estimates estimates
1,136 263 1,399 698 701 97 604 196 408 1.1 7.9 2.3 6.3 (1.4) (1.2) (1.4) (1.4) (1.4) 1,277 280 1,557 742 815 156 658 214 445 1,286 310 1,596 788 807 158 649 211 439 0.7 10.7 2.5 6.3 (0.9) 1.2 (1.4) (1.4) (1.4)

May 9, 2012

South Indian Bank | 4QFY2012 Result Update

Exhibit 17: P/ABV band

Price (`) 40 35 30 25 20 15 10 5 0
Dec-07 Aug-09 Mar-09 Nov-10 May-08 Dec-12 Apr-06 Apr-11 Jul-07 Feb-07 Oct-08 Sep-06 Sep-11 Feb-12 Jan-10 Jun-10 Jul-12

0.5x

0.8x

1.1x

1.4x

1.7x

Source: Company, Angel Research

May 9, 2012

South Indian Bank | 4QFY2012 Result Update

Exhibit 18: 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 Accumulate Buy Neutral Buy Accumulate Accumulate Buy Buy Buy Buy Neutral Buy Buy Buy Buy Buy Accumulate Buy Buy Buy Buy Neutral Buy Buy Neutral CMP (`) 963 406 512 822 23 320 150 110 641 353 48 407 78 400 85 92 194 82 856 218 768 1,888 92 67 203 59 54 Tgt. price (`) 1,587 567 1,201 470 166 120 969 411 60 532 504 118 117 240 101 932 285 1,138 2,593 128 266 88 Upside (%) 64.8 10.6 46.2 46.7 10.8 9.1 51.1 16.3 24.0 30.7 25.9 39.2 27.3 23.7 23.1 8.9 31.0 48.1 37.4 40.3 31.2 48.4 FY2014E P/ABV (x) 1.3 1.0 2.9 1.3 1.1 1.6 0.6 0.7 0.7 0.7 0.6 0.7 0.7 0.5 0.5 0.5 0.7 0.5 0.8 0.5 0.7 1.2 0.5 0.7 0.7 0.4 0.6 FY2014E Tgt P/ABV (x) 2.2 3.3 1.9 2.4 0.7 0.7 1.1 1.0 0.7 0.9 0.7 0.7 0.7 0.8 0.6 0.8 0.6 1.1 1.6 0.8 0.9 0.7 FY2014E P/E (x) 6.9 7.1 14.4 10.1 6.1 7.7 3.6 4.3 4.3 4.4 3.6 4.3 3.9 3.6 3.3 3.8 4.0 3.8 4.4 3.4 4.3 7.0 3.3 4.7 4.1 2.7 4.4 FY2012-14E EPS CAGR (%) 16.4 13.0 27.0 20.4 4.5 22.5 6.2 3.3 11.1 23.3 26.8 10.9 45.7 5.3 6.2 22.7 5.4 28.3 8.8 27.7 8.8 23.6 8.7 7.0 27.2 11.4 13.5 FY2014E RoA (%) 1.5 1.3 1.7 1.5 0.8 1.4 0.9 0.9 1.1 0.8 0.9 0.9 0.5 0.8 0.9 0.9 1.2 0.6 1.4 0.8 1.1 1.0 0.8 0.5 0.8 0.7 0.5 FY2014E RoE (%) 20.3 14.5 22.1 16.0 17.5 23.3 17.6 16.0 18.2 16.9 17.5 16.7 13.8 16.5 16.9 14.8 18.2 13.9 18.6 14.3 18.5 19.1 17.1 13.4 17.4 15.9 13.7

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

May 9, 2012

10

South Indian Bank | 4QFY2012 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. and Cont. - YoY Growth (%) Profit Before Tax - YoY Growth (%) Prov. for Taxation - as a % of PBT PAT - YoY Growth (%) FY08 394 7.2 143 17.3 537 9.7 248 13.4 289 6.8 57 (54.0) 232 58.3 80 34.6 152 45.6 FY09 523 32.7 164 15.2 687 28.0 328 32.4 359 24.3 57 0.7 301 30.0 107 35.4 195 28.4 FY10 568 8.7 208 26.9 777 13.0 366 11.5 411 14.5 43 (24.5) 367 21.9 134 36.4 234 20.0 FY11 791 39.2 197 (5.6) 988 27.2 463 26.3 525 27.9 80 84.4 446 21.3 153 34.3 293 25.1 FY12E 1,022 29.2 247 25.6 1,269 28.5 617 33.5 652 24.0 79 (0.7) 572 28.5 171 29.8 402 37.3 FY13E 1,136 11.2 263 6.6 1,399 10.3 698 13.0 701 7.7 97 22.8 604 5.6 196 32.4 408 1.6 FY14E 1,286 13.2 310 17.6 1,596 14.1 788 13.0 807 15.1 158 62.6 649 7.5 211 32.4 439 7.5

Balance sheet
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 90 1,071 23.8 28 155 590 974 729 4,572 32.0 113 249 25.2 FY09 113 1,191 19.4 257 155 571 998 1,038 6,075 13.3 136 284 19.2 FY10 113 1,372 27.2 1 330 706 1,391 597 7,156 33.6 153 415 25.3 FY11 113 1,734 29.2 25 265 962 1,828 638 8,924 29.5 357 585 28.5 FY12E 116 2,054 22.8 31 557 1,111 1,572 1,069 9,400 33.1 378 671 23.0 FY13E 116 2,374 44,166 21.0 38 674 1,318 48,686 1,767 1,289 11,629 32,737 20.0 455 810 48,686 20.6 FY14E 116 2,719 52,999 20.0 45 809 1,608 58,295 2,120 1,543 13,833 39,284 20.0 545 970 58,295 19.7

15,156 18,092 23,012 29,721 36,501

17,090 20,379 25,534 32,820 40,370

10,454 11,848 15,823 20,489 27,281

17,090 20,379 25,534 32,820 40,370

May 9, 2012

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South Indian Bank | 4QFY2012 Result Update

Ratio Analysis
Y/E March Profitability ratios (%) NIMs Cost to Income ratio RoA RoE B/S ratios (%) CASA ratio Credit/Deposit ratio Net worth/ Assets CAR - Tier I Asset Quality (%) Gross NPAs Net NPAs Slippages NPA 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 2.6 0.4 2.2 0.2 2.4 0.7 3.1 1.6 1.5 0.5 1.0 16.6 16.4 2.8 0.3 2.5 0.2 2.7 0.7 3.4 1.8 1.6 0.6 1.0 15.4 16.0 2.5 0.2 2.3 0.3 2.6 0.6 3.2 1.6 1.6 0.6 1.0 16.7 17.0 2.7 0.3 2.4 0.1 2.6 0.5 3.1 1.6 1.5 0.5 1.0 18.4 18.5 2.8 0.2 2.6 0.1 2.7 0.6 3.3 1.7 1.6 0.5 1.1 19.7 21.6 2.6 0.2 2.3 0.0 2.4 0.6 2.9 1.6 1.4 0.4 0.9 20.4 18.7 2.4 0.3 2.1 0.0 2.1 0.6 2.7 1.5 1.2 0.4 0.8 21.3 17.5 13.9 1.8 1.3 13.5 2.2 1.3 11.3 1.8 1.7 9.0 1.6 2.1 6.8 1.4 2.6 6.7 1.2 2.8 6.2 1.1 3.0 1.7 12.6 0.3 1.7 10.8 0.3 2.1 12.9 0.4 2.6 15.0 0.5 3.5 17.3 0.6 3.5 20.0 0.7 3.8 21.5 0.7 1.8 0.3 0.7 0.1 82.0 2.2 1.1 1.6 0.1 48.4 1.3 0.4 1.5 0.2 70.8 1.1 0.3 0.7 0.1 73.9 1.0 0.3 0.8 0.1 71.4 0.8 0.2 1.1 0.1 71.0 0.8 0.3 1.3 0.2 69.2 24.1 69.0 16.6 13.8 12.1 23.8 65.5 15.4 14.8 13.2 23.1 68.8 16.7 15.4 12.4 21.5 68.9 18.4 14.0 11.3 19.7 74.7 19.7 13.0 10.1 18.7 74.1 20.4 12.5 9.7 17.6 74.1 21.3 12.0 9.3 2.6 46.2 1.0 16.4 2.9 47.8 1.0 16.0 2.5 47.1 1.0 17.0 2.8 46.8 1.0 18.5 2.9 48.6 1.1 21.6 2.6 49.9 0.9 18.7 2.5 49.4 0.8 17.5 FY08 FY09 FY10 FY11 FY12E FY13E FY14E

May 9, 2012

12

South Indian Bank | 4QFY2012 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

South Indian 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%)

May 9, 2012

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