Central Bank of India Result Updated

4QFY2012 Result Update | Banking
May 11, 2012
Central Bank of India

Performance Highlights
Particulars (` cr) NII Pre-prov. profit PAT 4QFY12 1,264 613 (105) 3QFY12 1,179 614 113 % chg (qoq) 7.2 (0.2) (192.9) 4QFY11 1,429 331 133 % chg (yoy) (11.5) 85.1 (179.3)
NEUTRAL
CMP Target Price
Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Banking 5,723 1.1 133/63 176,176 10 16,293 4,929 CBI.BO CBOI@IN
`78 -
Source: Company, Angel Research
Central Bank of India reported a dismal performance for 4QFY2012, directionally in-line with our expectation, with net loss of `105cr for the quarter as against profit of `133cr in 4QFY2011. The banks disappointing performance was a result of muted performance on the operating front and considerably higher provisioning expenses on the back of continued deterioration in asset quality, evident from elevated slippages and ballooning restructuring. We recommend Neutral on the stock.
Business growth remains moderate; Asset quality deteriorates considerably: The banks business growth was moderate during 4QFY2012, with advances growing by 13.7% yoy on the back of healthy growth witnessed in retail, MSME and direct agri segments. Deposits growth was also moderate at 9.4% yoy. A sharp decline in volatile current deposits by 17.8% yoy, despite better 10.4% yoy growth in saving deposits, resulted in an 189bp yoy fall in CASA ratio to 33.3% (up by 82bp qoq). Reported NIM for the bank remained flat on a qoq basis, on the back of a 32bp qoq fall in yield on advances to 11.1% and a 26bp rise in cost of deposits to 7.4%. Asset quality deteriorated considerably during 4QFY2012, with gross NPA ratio rising to 4.8% (3.7% in 3QFY2012) and net NPA ratio climbing to 3.1% (2.0% in 3QFY2012). Slippages for 4QFY2012 stood at steep `3,543cr (annualized slippage ratio of 10.9%), more than five times the average quarterly run-rate of `651cr over the past eight quarters. Management attributed 50% of the slippages to the last phase of switchover to system-driven NPA recognition, which was completed in 4QFY2012 after a late beginning post 1QFY2012. The bank also restructured loans amounting to over `7,467cr during 4QFY2012, largely pertaining to SEBs and the aviation and telecom sectors and took its outstanding restructured book to `17,347cr (an absolute increase of 75.6% qoq). Provision coverage ratio (including technical write-offs) declined by 743bp qoq and remains one of the lowest in industry at 40.6%. Outlook and valuation: At the CMP, the stock is trading at 0.7x FY2014E ABV compared to its trading range of 0.61.7x with a median of 1.2x since its listing in 2007. However, we believe this is outweighed by the substantial concerns on its asset quality. While the stock has corrected substantially over the past year, it is still trading higher than some of the other mid-size PSU banks with a better asset-quality outlook and return ratios. Hence, we recommend a Neutral rating on the stock. Key financials
Y/E March (` cr) NII % chg Net profit % chg NIM (%) EPS (`) P/E (x) P/ABV (x) RoA (%) RoE (%)
Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 79.2 10.9 2.6 7.3
Abs. (%) Sensex Central BoI
3m (8.2) (22.9)
1yr (12.3) (39.2)
3yr 39.5 89.8
FY2011 5,325 109.2 1,121 18.3 2.8 27.7 2.8 0.6 0.6 23.2
FY2012 5,169 (2.9) 373 (57.4) 2.5 5.1 15.3 0.9 0.2 5.3
FY2013E 5,521 6.8 1,014 120.3 2.3 13.8 5.6 0.8 0.4 10.9
FY2014E 6,462 17.1 1,494 40.6 2.4 20.3 3.8 0.7 0.5 14.4
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
Central Bank of India | 4QFY2012 Result Update
Exhibit 1: 4QFY2012 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 Provision for Tax PAT Effective Tax Rate (%)
4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy) 4,940 3,732 1,130 (291) 370 3,677 1,264 432 334 230 98 47 57 1,695 1,082 631 451 613 859 879 (80) 60 (246) (141) (105) 57.2 4,741 3,547 1,120 75 3,563 1,179 357 284 148 73 34 102 1,536 922 641 281 614 486 428 52 6 127 14 113 11.2 4.2 5.2 0.9 (489.0) NA 3.2 7.2 20.8 17.3 55.4 34.2 38.2 (44.7) 10.4 17.4 (1.5) 60.5 (0.2) 76.6 105.4 (253.8) 838.5 (292.9) (1,087.3) (192.9) 4603bp 4,232 3,122 971 8 131 2,804 1,429 523 357 181 166 75 101 1,951 1,620 1,320 300 331 306 196 41 69 25 (108) 133 (428.9) 16.7 19.6 16.3 (3,540.5) 183.0 31.1 (11.5) (17.5) (6.5) 27.1 (41.0) (37.3) (43.9) (13.1) (33.2) (52.2) 50.3 85.1 180.6 349.3 (293.9) (13.7) (1,080.2) 30.7 (179.3) 48611bp
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
Actual 1,264 432 1,695 1,082 613 859 (246) (141) (105)
Estimates 1,230 393 1,623 990 633 477 157 29 127
Variation (%) 2.7 9.9 4.4 9.3 (3.2) 80.2 (257.0) (581.8) (182.6)
May 11, 2012
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 Yield on investments Reported NIM Cost-to-income ratio Asset quality Gross NPAs (` cr) Gross NPAs (%) Net NPAs (` cr) Net NPAs (%) Provision Coverage Ratio (%) Slippage ratio (%) Credit cost (%)
4QFY12
3QFY12
% chg (qoq)
4QFY11 % chg (yoy) 13.7 9.4 287bp (17.8) 10.4 3.5 (189)bp 72bp 144bp 129bp 52bp (6)bp 78bp (1918)bp 203.8 301bp 437.8 244bp (2702)bp 860bp 118bp
147,513 133,317 196,173 188,226 75.2 12,680 52,595 65,275 33.3 12.4 7.8 7.4 11.1 7.8 2.6 63.9 7,273 4.8 4,557 3.1 40.6 10.9 1.6 70.8 10,076 51,004 61,080 32.5 12.9 7.8 7.1 11.4 7.2 2.5 60.0 4,922 3.7 2,669 2.0 48.1 4.5 0.8
10.6 129,725 4.2 179,356 437bp 25.8 3.1 6.9 82bp (46)bp 2bp 26bp (32)bp 65bp 6bp 382bp 47.8 114bp 70.7 105bp (743)bp 641bp 79bp 72.3 15,431 47,645 63,076 35.2 11.7 6.4 6.1 10.6 7.9 1.8 83.0 2,394 1.8 847 0.7 67.6 2.3 0.4
Business growth remains moderate; NIM remains flat qoq

The banks business growth was moderate during 4QFY2012, with advances growing by 13.7% yoy and deposits growing by 9.4% yoy. Growth in advances was mainly driven by healthy growth witnessed in the retail, MSME and direct agri segments, which grew by 39.7%, 22.9% and 20.6% yoy, respectively. On the deposits side, volatile current account deposits declined sharply by 17.8% yoy. Saving account deposits growth, though moderate, was better at 10.4% yoy. Overall CASA deposit growth was rather muted at 3.5% yoy. Consequently, CASA ratio fell sharply by 189bp yoy (increased by 82bp qoq) to 33.3%. The share of high-cost bulk deposits and CDs declined by 105bp qoq and stood at 31.8% in 4QFY2012. Reported NIM for the bank remained flat on a qoq basis, on the back of a 32bp qoq fall in yield on advances to 11.1% and a 26bp rise in cost of deposits to 7.4%. Yield on investment grew by 65bp qoq to 7.8%.
May 11, 2012
Exhibit 4: Business growth remains moderate in 4QFY12

Adv. yoy chg (%) 30.0 72.3 20.0 67.8 10.0 68.1 70.8 Dep. yoy chg (%) CDR (%, RHS) 75.2 76.0 74.0 72.0 70.0 68.0
Exhibit 5: CASA deposits growth slowing down

CASA ratio (%) 35.0 30.0 13.0 25.0 CASA yoy growth (%, RHS) 30.0 25.0 14.7 6.9 7.3 3.5 20.0 15.0 10.0 5.0 (5.0) 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12
23.1 10.6
17.2 20.3
12.7 12.2
14.6 15.4
13.7 9.4
35.2
32.6
32.8
32.5
66.0 64.0
4QFY11 1QFY12 2QFY12 3QFY12 4QFY12

15.0
Exhibit 6: Decline in yield on advances sequentially...

(%) 12.00 11.59 11.50 11.00 10.60 10.50 10.00 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 11.37 11.44 11.12
Exhibit 7: ...coupled with rise in CoD, led to fall in NIM

(%) 3.50 3.00 2.50 2.00 1.50 1.00 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 3.47 2.99 3.00 2.53 2.59
Healthy growth in fee income, amidst declining recoveries and fall in treasury income
Growth in the banks fee income was strong at 27.1% yoy at `230cr. Treasury income for the quarter declined to `98cr vis--vis `166cr in 3QFY2012. Recoveries from written-off accounts were sluggish, declining by 37.3% yoy to `47cr. Overall, other income excl. treasury declined by 6.5% yoy to `334cr.
Asset quality deteriorates considerably in 4QFY2012

The banks asset quality deteriorated considerably during 4QFY2012, as we had anticipated in our previous quarter result update, with gross NPA ratio rising to 4.8% (3.7% in 3QFY2012) and net NPA ratio climbing to 3.1% (2.0% in 3QFY2012). Slippages for 4QFY2012 stood at steep `3,543cr (annualized slippage ratio of 10.9%) compared to `1,464cr of slippage and annualized slippage ratio of 4.5% in 3QFY2012. Slippages for the quarter were more than five times the average quarterly run-rate of `651cr over the past eight quarters. A late starter in CBS implementation, the bank commenced the phased switchover to NPA-based recognition system only post 1QFY2012, which was completed only in 4QFY2012. Management attributed 50% of the slippages on account of the switchover exercise. Management also sounded confident of achieving normalized levels of NPAs in FY2013.
May 11, 2012
33.3
20.0
Apart from the elevated level of slippages, the bank also restructured loans amounting to over `7,467cr during 4QFY2012, taking its outstanding restructured book to `17,347cr (an absolute increase of 75.6% qoq). Management indicated that these accounts largely pertained to SEBs and the aviation and telecom sectors. Going ahead, management guided for no major advance to be in the restructuring pipeline. As a result of elevated slippages and sharply higher restructuring, the bank had to accelerate the provisioning significantly, which resulted in provisioning expenses rising steeply by almost 3.5 times on a yoy basis to `879cr. Despite this, provision coverage ratio (including technical write-offs) declined by 743bp and remains one of the lowest in the industry at 40.6%.
Exhibit 8: Slippages shoot up

Slippages (%) 12.0 10.0 8.0 6.0 4.0 2.0 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 0.4 0.5 0.7 0.8 Credit cost (%, RHS) 1.6 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 -
Exhibit 9: Asset quality deteriorates considerably

5.0 4.0 3.0 2.0 Gross NPAs (%) 67.6 65.2 Net NPAs (%) PCR (%, RHS) 70.0 65.0 60.0 55.0 50.0 45.0 40.0 35.0 30.0
56.8 48.1 40.6
2.3
1.8
3.8
4.5
10.9
1.8 0.7
2.3 0.9
2.9 1.4
3.7 2.0
4QFY11 1QFY12 2QFY12 3QFY12 4QFY12
Source: Company, Angel Research; Note: PCR including tech. write-offs
Investment concerns
Low branch productivity and structurally higher opex structure
The bank suffers from low branch and employee productivity in terms of business per branch as well as business per employee. Business per branch for FY2012 was lower than most peer banks. Due to this, the bank suffers from higher operating expenses, as reflected in opex-to-average assets ratio of 2.0% in FY2012.
Outlook and valuation

At the CMP, the stock is trading at 0.7x FY2014E ABV compared to its trading range of 0.61.7x with a median of 1.2x since its listing in 2007. However, we believe this is outweighed by the substantial concerns on the asset quality. While the stock has corrected substantially over the past year, it is still trading higher than some of the other mid-size PSU banks with a better asset-quality outlook and return ratios. Hence, we recommend a Neutral rating on the stock.
May 11, 2012
4.8 3.1
1.0
Exhibit 10: Key assumptions

Particulars (%) Credit growth Deposit growth CASA ratio NIMs Other income growth Growth in staff expenses Growth in other expenses Slippages
Source: Angel Research
Earlier estimates FY2013 13.5 14.0 34.0 2.4 0.1 5.0 5.0 3.2 FY2014 14.0 14.0 33.7 2.4 11.1 15.0 15.0 2.7
Revised estimates FY2013 13.0 14.0 32.4 2.3 (5.6) 5.0 5.0 3.2 FY2014 14.0 14.0 32.1 2.4 10.1 13.0 13.0 2.5
Exhibit 11: Change in estimates

FY2013 Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Angel Research
FY2014 Earlier estimates 6,425 1,509 7,934 4,415 3,519 1,103 2,416 784 1,632 Revised Var. (%) estimates 6,462 1,450 7,912 4,448 3,464 1,020 2,444 793 1,651 0.6 (3.9) (0.3) 0.7 (1.6) (7.5) 1.2 1.2 1.2
Earlier estimates 5,502 1,358 6,860 3,839 3,021 1,346 1,675 544 1,132
Revised Var. (%) estimates 5,521 1,317 6,838 3,936 2,902 1,164 1,738 564 1,174 0.3 (3.0) (0.3) 2.5 (4.0) (13.6) 3.8 3.8 3.8
May 11, 2012
Exhibit 12: P/ABV band

Price (`) 250 200 150 100 50 0 0.3x 0.6x 0.9x 1.2x 1.5x
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
Aug-07
Aug-08
Aug-09
Aug-10
Aug-11
Exhibit 13: 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 Neutral Buy Buy Accumulate Buy Neutral Buy Buy Buy Buy Buy Neutral Buy Buy Buy Buy Neutral Buy Buy Neutral CMP (`) 1,001 415 511 813 22 329 148 105 649 353 48 419 78 405 85 92 180 82 846 219 746 1,852 91 68 206 58 53 Tgt. price (`) 1,587 567 1,201 470 166 925 411 55 522 504 111 117 218 96 274 1,066 2,511 131 276 78 Upside (%) 58.5 10.9 47.8 42.6 12.3 42.6 16.3 14.4 24.6 24.4 30.7 27.0 21.6 18.0 25.1 43.0 35.6 43.9 34.3 33.6 FY2014E P/ABV (x) 1.4 1.0 2.9 1.3 1.0 1.7 0.6 0.6 0.7 0.7 0.6 0.7 0.7 0.5 0.5 0.6 0.6 0.5 0.7 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 1.1 1.0 0.7 0.9 0.7 0.7 0.7 0.8 0.6 0.6 1.1 1.6 0.7 0.9 0.6 FY2014E P/E (x) 7.2 7.3 14.4 10.0 5.8 7.9 3.5 4.1 4.3 4.5 3.7 4.5 3.8 3.6 3.2 3.8 3.7 3.8 4.3 3.4 4.3 6.9 3.0 3.8 4.1 2.6 4.3
#
FY2012-14E EPS CAGR (%) 16.4 13.0 27.0 20.4 4.5 22.5 6.2 3.3 11.1 23.3 45.3 11.8 100.1 5.3 6.6 22.7 5.4 28.3 8.8 27.7 10.3 23.6 17.3 13.0 24.8 22.5 13.5
FY2014E RoA (%) 1.5 1.3 1.7 1.5 0.8 1.4 0.9 0.9 1.1 0.8 0.7 0.9 0.5 0.8 0.9 0.9 1.2 0.6 1.4 0.8 1.0 1.0 0.8 0.6 0.8 0.7 0.5
Aug-12
FY2014E RoE (%) 20.3 14.5 22.1 16.0 17.5 23.3 17.6 16.0 18.2 16.9 17.2 16.4 14.4 16.5 17.0 14.8 18.2 13.9 18.6 14.3 18.1 19.1 17.1 15.4 17.5 16.5 13.7
Source: Company, Angel Research; Note:*Target multiples=SOTP Target Price/ABV (including subsidiaries), Without adjusting for SASF
May 11, 2012
Dec-12
Apr-08
Apr-09
Apr-10
Apr-11
Apr-12
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 (%) Preference Dividend PAT avl. to Eq. SH - YoY Growth (%) FY09 2,228 0.2 1,070 18.6 3,298 5.5 1,862 6.6 1,437 4.1 512 (3.0) 925 8.6 354 38.2 571 3.8 78 494 5.0 FY10 2,545 14.2 1,735 62.2 4,281 29.8 2,222 19.4 2,059 43.3 509 (0.5) 1,550 67.5 491 31.7 1,058 85.3 61 998 102.1 FY11 5,325 109.2 1,265 (27.1) 6,590 54.0 3,999 80.0 2,591 25.9 932 83.2 1,659 7.1 407 24.5 1,252 18.3 131 1,121 12.4 FY12 5,169 (2.9) 1,395 10.3 6,564 (0.4) 3,749 (6.3) 2,815 8.6 2,169 132.6 646 (61.0) 113 17.5 533 (57.4) 160 373 (66.7) FY13E 5,521 6.8 1,317 (5.6) 6,838 4.2 3,936 5.0 2,902 3.1 1,164 (46.3) 1,738 168.9 564 32.4 1,174 120.3 160 1,014 171.7 FY14E 6,462 17.1 1,450 10.1 7,912 15.7 4,448 13.0 3,464 19.4 1,020 (12.3) 2,444 40.6 793 32.4 1,651 40.6 157 1,494 47.3
Balance sheet
Y/E March (` cr) Share Capital - Equity - Preference 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 (%) FY09 1,321 404 917 5,091 131,272 19.0 804 3,854 5,313 147,655 11,037 1,214 43,061 85,483 17.1 2,278 4,582 147,655 19.1 FY10 1,771 404 1,367 5,921 162,107 23.5 2,751 4,575 5,545 182,672 17,012 2,205 50,563 105,383 23.3 2,343 5,165 182,672 23.7 FY11 2,021 404 1,617 6,827 179,356 10.6 7,283 5,605 8,666 209,757 14,082 1,201 54,504 129,725 23.1 2,425 7,819 209,757 14.8 FY12 2,353 736 1,617 10,098 196,173 9.4 7,979 4,941 8,255 229,800 13,114 1,012 59,243 147,513 13.7 2,474 6,443 229,800 9.6 FY13E 2,353 736 1,617 10,985 223,638 14.0 9,037 5,583 8,699 260,295 8,946 1,147 73,497 166,690 13.0 2,718 7,298 260,295 13.3 FY14E 2,353 736 1,617 12,180 254,947 14.0 10,267 6,365 9,592 295,703 10,198 1,303 82,891 190,026 14.0 2,995 8,291 295,703 13.6
Note: * including Share Application Money of `2,026cr
May 11, 2012
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 Ratio 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 Pref. Div. RoA post Pref Div Leverage RoE 1.6 0.4 1.3 0.3 1.6 0.5 2.1 1.4 0.7 0.3 0.4 0.1 0.4 41.2 15.0 1.5 0.3 1.2 0.5 1.7 0.6 2.3 1.3 0.9 0.3 0.6 0.0 0.6 42.1 25.4 2.7 0.5 2.2 0.2 2.4 0.5 2.9 2.0 0.8 0.2 0.6 0.1 0.6 40.6 23.2 2.4 1.0 1.4 0.1 1.5 0.5 2.0 1.7 0.3 0.1 0.2 0.1 0.2 30.9 5.3 2.3 0.5 1.8 0.0 1.8 0.5 2.3 1.6 0.7 0.2 0.5 0.1 0.4 26.2 10.9 2.3 0.4 2.0 0.0 2.0 0.5 2.5 1.6 0.9 0.3 0.6 0.1 0.5 26.8 14.4 6.4 1.0 2.6 3.1 0.7 2.8 2.8 0.6 4.4 15.3 0.9 2.6 5.6 0.8 1.9 3.8 0.7 4.5 12.2 74.3 2.0 24.7 105.2 2.2 27.7 126.4 3.4 5.1 85.2 2.0 13.8 95.6 1.5 20.3 110.1 3.5 2.7 1.2 1.2 0.2 54.1 2.3 0.7 1.2 0.2 70.4 1.8 0.7 1.3 0.3 67.6 4.8 3.1 5.2 0.9 40.6 5.2 3.0 3.2 0.4 45.0 5.2 2.9 2.5 0.3 47.5 33.4 65.1 13.1 7.0 34.4 65.0 12.2 6.8 35.2 72.3 11.6 6.3 33.3 75.2 12.5 8.6 32.4 74.5 12.2 8.2 32.1 74.5 12.0 7.9 1.7 56.4 0.4 15.0 1.6 51.9 0.6 25.4 2.8 60.7 0.6 23.2 2.5 57.1 0.2 5.3 2.3 57.6 0.4 10.9 2.4 56.2 0.5 14.4 FY09 FY10 FY11 FY12 FY13E FY14E
May 11, 2012
Research Team Tel: 022 - 39357800
E-mail: research@angelbroking.com
Website: www.angelbroking.com
DISCLAIMER
3QFY2012 Result Update | Banking
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment February 1, 2012 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.
Central Bank of India

Performance Highlights
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 Particulars fundamentals and, as such, may not match with a 3QFY11on a%company's 3QFY12 2QFY12 % chg (qoq) chg (yoy) trading volume, as opposed to focusing on a company's(` cr) report fundamentals. NII 1,179 1,396 (15.6) 1,432 (17.7)
Pre-prov. the 614 (24.7) The information in this document has been printed on profitbasis of publicly available797 information, (22.9) internal data815 other reliable and sources believed to be true, but we do not represent that it is accurate or 113 complete and it should not be relied 404as such, as this on PAT 244 (53.6) (71.9) document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way Source: Company, Angel Research responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. For all the information contained within this document. Accordingly, we cannot testify, Angel Broking Limited has not independently verified3QFY2012, Central Bank of India reported disappointing results with a 53.6% qoq and 71.9% yoy contents net profit, due to disappointing operating nor make any representation or warranty, express or implied, to the accuracy,dip in its or data contained within this document. While Angel Broking Limited endeavours to update onperformance basis the information provisioning expenses. Even may sluggish PAT a reasonable as well as higher discussed in this material, there the be regulatory, compliance, or other reasons that prevent us from doing so.by reversal of earlier years tax provision of `112cr. Disappointment was aided
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, restructuring. We recommend Reduce on the stock. redistributed or passed on, directly or indirectly.
on the asset-quality front continued with elevated slippages and ballooning
Angel Broking Limited and its affiliates may seek to provide or have engaged with advances growingfinance, investment 14.6% yoy) moderate during 3QFY2012, in providing corporate by 4.0% qoq (up banking or other advisory services in a merger or specific transaction to the companies referred to(upthis report, as Overalldate of this report or in and deposits almost flat sequentially in 15.4% yoy). on the CASA deposit growth the past. was rather slow at 7.3% yoy, leading to a sharp 244bp yoy fall in CASA ratio to Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in back of a 15bp qoq fall in yield on advances and a 9bp rise in cost of deposits. connection with the use of this information.
NIM dips; Asset quality remains under stress: The banks business growth was
32.5%. The banks reported NIM fell by a rather steep 47bp qoq to 2.53% on the
The bank had to reverse interest income of `110cr on NPAs recognized on
Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer partly switchover to the system-based NPA recognition platform, which to the latest update on respective stocks for the disclosure status in the fall of those stocks. quality Broking Limited and its affiliates may have exacerbated respect in NIM. Asset Angel deteriorated during 3QFY2012 as well, investment positions in the stocks recommended in this report. ratio rising to 3.7% (2.9% in 2QFY12) and net NPA ratio climbing with gross NPA
to over 2.0% (1.4% in 2QFY12). Slippages for 3QFY2012 stood at a steep `1,464cr (annualized slippage ratio of 4.5%) compared to an average quarterly run-rate of `540cr over the past six quarters. A late starter in CBS implementation,
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
Central Bank of India 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 11, 2012
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Central Bank of India Result Updated

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Central Bank of India Result Updated

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4QFY2012 Result Update | Banking

May 11, 2012