South Indian Bank, 1Q FY 2014

7/28/2019 South Indian Bank, 1Q FY 2014

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Please refer to important disclosures at the end of this report 1

Particulars (` cr) 1QFY14 4QFY13 % chg (qoq) 1QFY13 % chg (yoy)NII 328 334 (1.8) 297 10.4Pre-prov. profit 252 206 22.1 207 21.2

PAT 115 154 (25.3) 123 (6.7)Source: Company, Angel Research

South Indian Bank (SIB) reported a weak set of numbers for 1QFY2014; itsbottom-line declined by 6.7% yoy, primarily on account of higher provisioning (asannualized slippages surged to 2.8% and the bank increased provisioning on itsNAFED exposure of `150cr from 60% to 100%). Boosted by treasury gains, thenon-interest income grew strongly by 57% yoy, aiding a healthy 21.2% yoy growth in

pre-provisioning profits, even when the NII grew at a moderate pace of 10.4% yoy.

NIMs and Asset quality witness pressures: During 1QFY2014, the banksadvances grew at moderate pace of 14.3% yoy, while deposits grew at healthyrate of 17.3% yoy. Despite a healthy 16.1% yoy growth witnessed in currentdeposits, the growth in overall CASA deposits came in at a moderate 14.5% yoy,as savings deposits grew at 14.1% yoy. CASA ratio moderated 51bp yoy, butimproved by 203bp sequentially to 20.6%. The reported NIM for the quartercame down to 2.9%.Treasury income came in higher at`52cr for the quarter, asagainst`20cr in 1QFY2013. The bank registered a healthy performance on thenon-interest income (excl. treasury) front, with a growth of 20.0% yoy to `66cr.During the quarter, the bank continued to face asset quality pressures, as theannualized slippage ratio surged to 2.8%, as against 2.2% in 4QFY2013 and

1.3% in 1QFY2013. Recoveries/upgrades for the bank came in lower at `10cr ascompared to`47cr in 4QFY2013. Of the slippages during the quarter, a sum ofaround `120-130cr came from four chunky accounts two in the Iron & Steelindustry and one each in the Paper and Infra sectors. The Management expectsrecovery/upgradation of at least two of these accounts in 2QFY2014. There wasno fresh restructuring during the quarter. The total restructured book for the bankstands at`1,540cr. On its gold loan book, the average LTV for the bank (includingaccrued interest and post the recent correction in gold prices) stands at ~83% (ascompared to origination LTV of ~70-71%). As per the Management, none of itsgold loan book has LTV more than 95%.

Outlook and valuation:During the last two quarter, the asset quality for the bankhas witnessed pressures. Aggressive yields on the non-gold loan portfolio (~78%

of total portfolio) and significant gold price correction on gold loan book (~22%of total), could further increase provisioning expenses and hence providedownside risk to the banks RoA. The stock currently trades at 0.9x FY2015E ABV.We recommend a Neutral rating on the stock.Key financials (standalone)

Particulars (` cr) FY2012 FY2013 FY2014E FY2015ENII 1,022 1,281 1,430 1,649% chg 29.2 25.4 11.6 15.4

Net profit 402 502 497 561% chg 37.3 25.1 (1.0) 12.9

NIM (%) 2.9 2.9 2.7 2.7

EPS (`) 3.5 3.8 3.7 4.2P/E (x) 6.5 6.2 6.2 5.5

P/ABV (x) 1.3 1.1 1.0 0.9

RoA (%) 1.1 1.1 0.9 0.9

RoE (%) 21.6 20.5 16.2 16.2

Source: Company, Angel Research

NEUTRALCMP `23Target Price -

Investment Period -

Stock Info

Sector Banking

Market Cap (`cr) 3,096

Beta 1.0

52 Week High / Low 31/20

Avg. Daily Volume 390,908

Face Value (`) 1

BSE Sensex 19,958

Nifty 6,009

Reuters Code SIBK

Bloomberg Code SIB@IN

Shareholding Pattern (%)

Promoters -

MF / Banks / Indian Fls 12.3

FII / NRIs / OCBs 46.2

Indian Public / Others 41.5

Abs. (%) 3m 1yr 3yr

Sensex 9.4 15.8 11.3

SIB 1.5 (5.5) 24.2

Vaibhav Agrawal022 3935 7800 Ext: 6808

[email protected]

Sourabh Taparia022 3935 7800 Ext: 6872

[email protected]

Harshal Patkar022 3935 7800 Ext: 6847

[email protected]

South Indian BankPerformance Highlights

1QFY2014 Result Update | Banking

July 12, 2013


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South Indian Bank | 1QFY2014 Result Update

July 12, 2013 2

Exhibit 1:1QFY2014 performance (standalone)Particulars (` cr) 1QFY14 4QFY13 % chg (qoq) 1QFY13 % chg (yoy) FY2013 FY2012 % chg (yoy)Interest earned 1,225 1,165 5.1 1,069 14.6 4,434 3,583 23.7- on Advances / Bills 966 943 2.4 858 12.6 3,576 2,868 24.7- on investments 219 197 11.3 181 21.0 746 621 20.2

- on balance with RBI & others 39 25 56.8 30 31.4 112 94 18.8

Interest Expended 898 832 7.9 773 16.2 3,153 2,562 23.1Net Interest Income 328 334 (1.8) 297 10.4 1,281 1,022 25.4Other income 118 121 (2.7) 75 57.0 335 247 35.6- Other Income excl. treasury 66 107 (38.5) 55 20.0 277 206 34.4

- Treasury 52 14 276.9 20 159.0 58 41 41.6

Operating income 445 455 (2.1) 372 19.8 1,616 1,269 27.3Operating expenses 194 249 (22.1) 164 17.9 767 617 24.3- Employee expenses 117 163 (28.0) 100 17.0 473 374 26.3

- Other Opex 77 86 (10.8) 64 19.5 295 243 21.2

Pre-provision Profit 252 206 22.1 207 21.2 849 652 30.2Provisions & Contingencies 105 66 59.9 25 314.9 193 79 143.4- Provisions for NPAs 110 42 161.7 20 461.4 142 25 468.7- Provisions for Investments (2) 10 (120.6) - NA 11 14 (20.2)- Provisions for Standard Assets (3) 15 (118.1) 2 (219.7) 33 40 (18.1)- Other Provisions 0 (1) (103.6) 3 (98.5) 6 0 1,928.1

PBT 146 140 4.3 182 (19.7) 656 572 14.6Provision for Tax 31 (14) (330.3) 59 (46.9) 154 171 (10.0)

PAT 115 154 (25.3) 123 (6.7) 502 402 25.1Effective Tax Rate (%) 21.5 (9.7) 3117bp 32.4 (1098)bp 23.4 29.8 (641)bp


Exhibit 2:1QFY2014 Actual vs. Angel estimatesParticulars (` cr) Actual Estimates % chgNet interest income 328 349 (6.2)

Non-interest income 118 70 68.9

Operating income 445 419 6.3Operating expenses 194 197 (1.6)

Pre-prov. profit 252 222 13.2Provisions & cont. 105 39 168.0

PBT 146 183 (20.0)

Prov. for taxes 31 55 (42.8)

PAT 115 128 (10.3)Source: Company, Angel Research


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July 12, 2013 3

Exhibit 3:1QFY2014 performance analysis (standalone)Particulars 1QFY14 4QFY13 % chg (qoq) 1QFY13 % chg (yoy)Balance sheetAdvances (`cr) 31,203 31,816 (1.9) 27,349 14.1Deposits (`cr) 43,584 44,262 (1.5) 37,153 17.3

Credit-to-Deposit Ratio (%) 71.6 71.9 (29)bp 73.6 (202)bp

Current deposits (`cr) 1,678 1,526 10.0 1,445 16.1

Saving deposits (`cr) 7,290 6,685 9.1 6,390 14.1

CASA deposits (`cr) 8,968 8,211 9.2 7,835 14.5

CASA ratio (%) 20.6 18.6 203bp 21.1 (51)bp

CAR (%) 13.7 13.9 (25)bp 13.2 50bp

Tier 1 CAR (%) 11.9 12.1 (20)bp 10.9 95bp

Profitability Ratios (%)Cost of deposits# 8.2 8.3 (10)bp 8.4 (21)bp

Yield on advances# 12.4 12.7 (30)bp 13.0 (61)bp

Reported NIM# 2.9 3.2 (27)bp 3.2 (22)bp

Cost-to-income ratio 43.5 54.7 (1116)bp 44.2 (68)bp

Asset qualityGross NPAs (`cr) 493 434 13.5 295 67.2

Gross NPAs (%) 1.6 1.4 24bp 1.1 52bp

Net NPAs (`cr) 348 250 39.6 95 266.2

Net NPAs (%) 1.1 0.8 34bp 0.4 77bp

Provision Coverage Ratio (%) 57.9 53.2 470bp 67.7 (981)bp

Slippage ratio (%) 2.8 2.2 58bp 1.3 142bp

Loan loss provision to avg.assets (%)

0.9 0.4 53bp 0.2 70bp

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

Moderate business growth; NIMs decline on high slippages

During 1QFY2014, the banks advances grew at moderate pace of 14.3% yoy,

while deposits grew at healthy rate of 17.3% yoy. Despite a healthy 16.1% yoy

growth witnessed in current deposits, the growth in overall CASA deposits came in

moderate at 14.5% yoy, due to a relatively lower 14.1% yoy growth on the savings

deposits front. CASA ratio moderated 51bp yoy, but improved by 203bp

sequentially to 20.6%. Going forward, the Management ambitiously plans to growits loan book at 25% yoy.

The NRE-SB deposits for the bank grew at a healthy pace of 15.0% yoy during

1QFY2014 (23.8% qoq). High cost NRE term deposit grew by 90.1% yoy and now

comprises ~60% of the total NRI deposit portfolio.

The reported NIMs for 1QFY2014 came down to 2.9%. The Management targets

NIM of around 3% over the next few quarters. Cost of deposits for 1QFY2014 was

down by 10bp to 8.2%, while the yield on advances for 1QFY2014 reduced by

30bp to 12.4%.


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July 12, 2013 4

Exhibit 4:NRI Deposit breakupDeposit type (` cr) 1QFY14 4QFY13 3QFY13 2QFY13 1QFY13NRE SB 1,766 1,427 1,465 1,372 1,536

NRO SB 235 225 219 207 200FCNR (B) +RFC 341 348 321 333 400

LOW COST TERM DEPOSIT 48 64 80 128 100

LOW COST NRI DEPOSIT (SUB TOTAL) 2,390 2,064 2,086 2,040 2,236HIGH COST NRE TERM DEPOSIT 4,244 3,904 3,346 2,978 2,232

NRO TERM DEPOSIT 495 554 563 661 932

TOTAL NRI DEPOSIT 7,129 6,522 5,994 5,680 5,400


The banks overall priority sector lending stands at ~30.0%, which the

Management targets to take it to ~36% by the year end. The banks gold loan

portfolio accounts for ~22% of the overall loan book, of which non-PSL now

stands at ~`6,100cr, whereas the Agri/PSL stands at ~`900cr. On its gold loan

book, the average LTV (including accrued interest and post the recent correction in

gold prices) stands at ~83% (as compared to origination LTV of ~70-71%). As per

the Management, none of its gold loan book has a LTV of more than 95%.

Exhibit 5:Advances growth in line with industrys


Exhibit 6:CASA ratio* improves sequentially

Source: Company, Angel Research; Note* : Excluding FCNR, RFC

Exhibit 7:NIM trend*

Source: Company, Angel Research; Note* On cumulative basis

Exhibit 8:Trend in yield on advances*

Source: Company, Angel Research; Note* On cumulative basis

23.5

20.6

17.5

16.6

14.1

17.5

16.5

15.1

21.3

17.3

-

5.0

10.0

15.0

20.0

25.0

1QFY13 2QFY13 3QFY13 4QFY13 1QFY14

Advances yoy growth (%,) Deposits yoy growth (%)

21.1

20.020.5

18.6

20.6

12.0

15.0

18.0

21.0

24.0


(%)

3.23.1

3.2 3.2

2.9

2.5

2.7

2.9

3.1

3.3

1QFY13 1HFY13 9MFY13 4QFY13 1QFY14

(%)

13.012.8 12.8 12.7

12.4

8.5

9.5

10.5

11.5

12.5

13.5

1QFY13 1HFY13 9MFY13 4QFY13 1QFY14

(%)


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July 12, 2013 5

Healthy performance on non-interest income (excl. treasury)

During 1QFY2014, the bank registered a healthy performance on the non-interest

income (excl. treasury) front, with a growth of 20.0% yoy to `66cr. The treasury

income for the bank came in higher at`52cr in 1QFY2014, as against`20cr in

1QFY2013. Overall, the non-interest income grew strongly by 57.0% yoy to

`118cr.

Asset quality pressures prevail

During the quarter, the bank continued to face asset quality pressures, as

slippages came in at `219cr (annualized slippage ratio of 2.8%), as against

`148cr in 4QFY2013 (annualized slippage ratio of 2.2%) and`91cr in 1QFY2013

(annualized slippage ratio of 1.3%). Recoveries/upgrades for the bank came in

lower at`10cr as compared to`47cr in 4QFY2013. Of the slippages during the

quarter, around`

120-130cr came from four chunky accounts two in the Iron &Steel industry and one each in the Paper and Infra sectors. The Management

expects recovery/upgradation of at least two of these accounts in 2QFY2014.

Overall, Gross NPA levels increased sequentially by 13.5%. The PCR (incl.

technical write-offs) for the bank increased sharply by 470bp qoq to 57.9%. The

Net NPA levels jumped up by 39.6% qoq.

On the NAFED exposure, the bank had provided for 60% in FY2013 and chose to

increase it to upto 100% in 1QFY2014 itself (as against guidance of increasing it

to 100% proportionately over the entire FY2014).There was no fresh restructuring

during the quarter. The banks total restructured book as of 1QFY2014 stands at

`1,540cr.

Exhibit 9:Asset quality under pressure


Exhibit 10:...as Slippages rise


295

496

475

434

493

95

242

197

250

348

67.7

51.2

58.653.2

57.9

39.0

44.0

49.0

54.0

59.0

64.0

69.0

74.0

-

75

150

225

300

375

450

525


Gross NPAs (` cr) Net NPA (` cr) PCR (%, RHS)

1.3

3.4

0.8

2.2

2.8

-

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0


Slippage ratio (%)(%)


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July 12, 2013 6

Exhibit 11:Opex. to average asset trends


Exhibit 12:Cost to income ratio trends


Exhibit 13:Capitaladequacy ratio trends


1.6 1.6 1.7

2.1

1.6

-

0.5

1.0

1.5

2.0

2.5


(%)

44.246.1

43.8

54.7

43.5

30.0

36.0

42.0

48.0

54.0


(%)

10.912.3 11.8 12.1 11.9

2.3

2.12.1 1.9 1.8

13.214.4

13.9 13.9 13.7

-

4.0

8.0

12.0

16.0


Tier-I CAR Tier-II CAR (%)


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July 12, 2013 7

Investment arguments

Moderating business growth

The bank grew its advances and deposits at a moderate rate of 14.1% and 17.3%yoy, respectively, in 1QFY2014. The gold loan portfolio of the bank has increased

at a CAGR of 50.3% over FY200913 and now constitutes 22% of the overall loan

book. The Management indicated that future loan book growth would be from the

retail segment.

The banks tier-1 ratio, post the capital raising (`440cr via QIP during 2QFY2013)

stands at a healthy 11.9%, thereby giving enough headroom for the bank to grow

at a moderate pace going ahead.

NIMs start declining

Until 1QFY2014, SIBs NIMs have been consistently healthy at above 3%, despiteits relatively lower CASA deposits (20.6% as of 1QFY2014), primarily due to high

share of gold loans (22% as of 1QFY2014) and also due to aggressive yields on

the non-gold portfolio. 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. And on its non-gold portfolio, the bank

has witnessed asset quality pressures over the last few quarters and hence the

yields in this portfolio (on a risk adjusted basis) have also started trending

downwards.

Overall, the bank has till now managed the NIM impact by increasing its yield on

advances; however continuing to rely on this strategy going forward would likelyhave further asset quality implications. Eventually, either on account of decline in

NIM or increase in asset quality pressures, we expect downside risks to banks RoA.

Outlook and valuation

During the last two quarter, the asset quality for the bank has witnessed pressures.

Aggressive yields on the non-gold loan portfolio (~78% of total portfolio) and

significant gold price correction on gold loan book (~22% of total), could further

increase provisioning expenses and hence provide downside risk to the banks

RoA. The stock currently trades at 0.9x FY2015E ABV. We recommend a Neutralrating on the stock.


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July 12, 2013 8

Exhibit 14:Key assumptionsParticulars (%) Earlier estimates Revised estimatesFY2014E FY2015E FY2014E FY2015ECredit growth 20.0 20.0 18.0 20.0Deposit growth 16.0 16.0 15.0 16.0

CASA ratio 17.7 17.3 17.9 17.4

NIMs 2.8 2.8 2.7 2.7

Other income growth (3.2) 14.1 10.4 1.1

Growth in staff expenses 15.0 14.0 15.0 12.5

Growth in other expenses 12.5 12.5 12.5 12.5

Slippages 1.5 1.4 2.0 1.6

Coverage ratio 54.5 57.9 58.0 58.4


Exhibit 15:Change in estimatesParticulars (` cr)

FY2014 FY2015Earlierestimates Revisedestimates Var. (%) Earlierestimates Revisedestimates Var. (%)

NII 1,471 1,430 (2.8) 1,684 1,649 (2.0)Non-interestincome

324 370 14.0 370 374 1.1

Operating income 1,795 1,800 0.2 2,054 2,023 (1.5)Operatingexpenses

875 875 - 992 984 (0.8)

Pre-prov. profit 920 925 0.5 1,061 1,039 (2.1)Provisions & cont. 164 214 30.9 186 189 1.3

PBT 756 710 (6.1) 875 851 (2.8)

Prov. for taxes 227 213 (6.1) 297 289 (2.8)

PAT 530 497 (6.1) 578 561 (2.8)Source: Angel Research

Exhibit 16:P/ABV band


0

5

10

15

20

25

30

35

40

45

Apr-

06

Sep-0

6

Fe

b-0

7

Jul-07

Dec-0

7

May-0

8

Oct-08

Mar-

09

Aug-0

9

Jan-1

0

Jun-1

0

Nov-1

0

Apr-

11

Sep-1

1

Fe

b-1

2

Jul-12

Dec-1

2

May-1

3

Oct-13

Price (`) 0.5x 0.8x 1.1x 1.4x 1.7x


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July 12, 2013 9

Exhibit 17:Recommendation summaryCompany Reco. CMP(`) Tgt. price(`) Upside(%)

FY2015EP/ABV(x)FY2015ETgt. P/ABV(x)

FY2015EP/E (x) FY2013-15EEPS CAGR (%) FY2015ERoA (%) FY2015ERoE (%)AxisBk Buy 1,290 1,778 38 1.4 1.9 8.0 20.8 1.6 18.5FedBk Accumulate 397 455 15 0.9 1.0 7.0 7.5 1.1 13.1

HDFCBk Accumulate 694 752 8 3.2 3.5 15.4 26.3 1.9 22.8

ICICIBk* Buy 1,062 1,454 37 1.5 2.1 10.7 17.4 1.6 16.2

SIB Neutral 23 - - 0.9 - 5.5 5.7 0.9 16.2YesBk Neutral 490 - - 2.1 - 9.8 17.1 1.3 22.8

AllBk Buy 90 123 36 0.4 0.6 2.7 18.3 0.7 13.6

AndhBk Accumulate 81 85 5 0.5 0.5 3.5 1.0 0.7 13.3

BOB Buy 569 761 34 0.6 0.8 3.9 16.8 0.9 16.0

BOI Buy 227 270 19 0.5 0.6 3.3 21.6 0.7 15.1

BOM Buy 50 61 22 0.6 0.7 3.9 10.0 0.6 15.3CanBk Buy 354 423 19 0.6 0.7 4.1 15.4 0.8 14.2

CentBk Accumulate 63 69 8 0.6 0.6 3.4 52.3 0.6 14.3

CorpBk Buy 345 436 27 0.4 0.6 3.3 5.7 0.7 14.2

DenaBk Accumulate 69 79 15 0.4 0.5 2.8 3.7 0.7 14.7

IDBI# Accumulate 73 80 10 0.4 0.5 3.2 27.1 0.8 13.5

IndBk Buy 107 141 32 0.4 0.5 2.6 7.0 0.9 14.7

IOB Accumulate 49 53 8 0.3 0.4 2.5 78.9 0.6 13.0

J&KBk Accumulate 1,239 1,315 6 0.9 1.0 5.9 (1.7) 1.2 16.8

OBC Buy 197 239 22 0.4 0.5 3.2 17.0 0.8 12.9

PNB Buy 633 883 40 0.6 0.8 3.6 14.5 1.1 16.5

SBI* Buy 1,893 2,518 33 1.1 1.4 6.6 17.5 1.0 17.0

SynBk Buy 115 136 18 0.6 0.7 4.1 (8.5) 0.6 14.6

UcoBk Reduce 67 63 (6) 0.7 0.7 4.3 67.5 0.6 13.6UnionBk Buy 175 243 39 0.5 0.8 3.7 14.7 0.7 15.2

UtdBk Buy 47 58 23 0.3 0.4 2.3 54.6 0.6 14.7

VijBk Accumulate 46 49 7 0.5 0.5 4.3 9.5 0.4 11.5

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

Company BackgroundSouth Indian Bank (SIB) is a small old generation private sector bank with ~85% ofits branches in southern India (large base in Kerala). Like Federal Bank, SIB also

has a large NRI customer base (approx. 16% of total deposits).Of late, the bank

has aggressively started focusing on the gold loan portfolio - a highly profitable

and secured loan segment. Gold loans accounted for ~22% of the bank's loan

book as of 1QFY2014.


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July 12, 2013 10

Income statement (standalone)

Y/E March (` cr) FY09 FY10 FY11 FY12 FY13E FY14E FY15ENet Interest Income 523 568 791 1,022 1,281 1,430 1,649- YoY Growth (%) 32.7 8.7 39.2 29.2 25.4 11.6 15.4

Other Income 164 208 197 247 335 370 374- YoY Growth (%) 15.2 26.9 (5.6) 25.6 35.5 10.4 1.1

Operating Income 687 777 988 1,269 1,616 1,800 2,023- YoY Growth (%) 28.0 13.0 27.2 28.4 27.3 11.4 12.4

Operating Expenses 328 366 463 617 767 875 984- YoY Growth (%) 32.4 11.5 26.3 33.5 24.3 14.0 12.5

Pre - Provision Profit 359 411 525 652 849 925 1,039- YoY Growth (%) 24.3 14.5 27.9 24.0 30.2 9.0 12.4

Prov. and Cont. 57 43 80 79 193 214 189- YoY Growth (%) 0.7 (24.5) 84.4 (0.7) 143.3 11.3 (12.1)

Profit Before Tax 301 367 446 572 656 710 851- YoY Growth (%) 30.0 21.9 21.3 28.5 14.6 8.3 19.8

Prov. for Taxation 107 134 153 171 154 213 289- as a % of PBT 35.4 36.4 34.3 29.8 23.4 30.0 34.0

PAT 195 234 293 402 502 497 561- YoY Growth (%) 28.4 20.0 25.1 37.3 25.1 (1.0) 12.9

Balance sheet (standalone)

Y/E March (` cr) FY09 FY10 FY11 FY12 FY13E FY14E FY15EShare Capital 113 113 113 113 134 134 134

Reserve & Surplus 1,191 1,372 1,734 2,057 2,873 3,261 3,698

Deposits 18,092 23,012 29,721 36,501 44,262 50,902 59,046

- Growth (%) 19.4 27.2 29.2 22.8 21.3 15.0 16.0

Borrowings 257 1 25 323 1,020 1,170 1,354

Tier 2 Capital 155 330 265 265 265 258 252

Other Liab. & Prov. 571 706 962 1,111 1,242 1,404 1,638

Total Liabilities 20,379 25,534 32,820 40,370 49,795 57,129 66,121Cash balances 998 1,391 1,828 1,572 1,697 2,291 2,657

Bank balances 1,038 597 638 1,069 2,639 3,028 3,504

Investments 6,075 7,156 8,924 9,400 12,524 12,983 13,421

Advances 11,848 15,823 20,489 27,281 31,816 37,542 45,051

- Growth (%) 13.3 33.6 29.5 33.1 16.6 18.0 20.0

Fixed Assets 136 153 357 378 396 454 526

Other Assets 284 415 585 671 724 831 962

Total Assets 20,379 25,534 32,820 40,370 49,795 57,129 66,121- Growth (%) 19.2 25.3 28.5 23.0 23.3 14.7 15.7


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July 12, 2013 11

Ratio Analysis (standalone)

Y/E March FY09 FY10 FY11 FY12 FY13E FY14E FY15EProfitability ratios (%)NIMs 2.9 2.5 2.8 2.9 2.9 2.7 2.7

Cost to Income ratio 47.8 47.1 46.8 48.7 47.5 48.6 48.6

RoA 1.0 1.0 1.0 1.1 1.1 0.9 0.9

RoE 16.0 17.0 18.5 21.6 20.5 16.2 16.2

B/S ratios (%)CASA ratio 23.8 23.1 21.5 19.7 18.6 17.9 17.4

Credit/Deposit ratio 65.5 68.8 68.9 74.7 71.9 73.8 76.3

Net worth/ Assets 15.4 16.7 18.4 19.7 18.4 17.5 17.7

CAR 14.8 15.4 14.0 14.0 11.5 11.3 11.0

- Tier I 13.2 12.4 11.3 11.5 9.9 9.9 9.7

Asset Quality (%)Gross NPAs 2.2 1.3 1.1 1.0 1.4 1.3 1.4

Net NPAs 1.1 0.4 0.3 0.3 0.8 0.5 0.6

Slippages 1.6 1.5 0.7 0.8 1.9 2.0 1.6

NPA prov / avg.assets

0.1 0.2 0.1 0.1 0.3 0.3 0.2

Provision Coverage 48.4 70.8 73.9 71.4 42.5 58.0 58.4

Per Share Data (`)EPS 1.7 2.1 2.6 3.5 3.8 3.7 4.2

ABVPS (75% cover) 10.8 12.9 15.0 17.8 20.4 23.7 26.8

DPS 0.3 0.4 0.5 0.6 0.7 0.7 0.8

Valuation RatiosPER (x) 13.4 11.2 8.9 6.5 6.2 6.2 5.5

P/ABVPS (x) 2.1 1.8 1.5 1.3 1.1 1.0 0.9

Dividend Yield 1.3 1.7 2.2 2.6 3.0 3.0 3.5

DuPont AnalysisNII 2.8 2.5 2.7 2.8 2.8 2.7 2.7

(-) Prov. Exp. 0.3 0.2 0.3 0.2 0.4 0.4 0.3

Adj NII 2.5 2.3 2.4 2.6 2.4 2.3 2.4

Treasury 0.2 0.3 0.1 0.1 0.1 0.1 0.0

Int. Sens. Inc. 2.7 2.6 2.6 2.7 2.5 2.4 2.4

Other Inc. 0.7 0.6 0.5 0.6 0.6 0.6 0.6

Op. Inc. 3.4 3.2 3.1 3.3 3.2 3.0 3.0Opex 1.8 1.6 1.6 1.7 1.7 1.6 1.6

PBT 1.6 1.6 1.5 1.6 1.5 1.3 1.4

Taxes 0.6 0.6 0.5 0.5 0.3 0.4 0.5

RoA 1.0 1.0 1.0 1.1 1.1 0.9 0.9Leverage 15.4 16.7 18.4 19.7 18.4 17.5 17.7

RoE 16.0 17.0 18.5 21.6 20.5 16.2 16.2


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Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com

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Disclosure of Interest Statement South Indian Bank

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South Indian Bank, 1Q FY 2014

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