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					                                                                                              4QFY2012 Result Update | Banking
                                                                                                                           May 8, 2012



 Allahabad Bank                                                                             ACCUMULATE
                                                                                            CMP                                    `155
 Performance Highlights                                                                     Target Price                           `166
  
 Particulars (` cr)         4QFY12       3QFY12     % chg (qoq)    4QFY11    % chg (yoy)    Investment Period             12 months
 NII                           1,288      1,381            (6.7)     1151          11.9
 Pre-prov. profit                  901    1,030           (12.5)      780          15.5     Stock Info

 PAT                               400      560           (28.6)      258          55.4     Sector                                Banking
 Source: Company, Angel Research                                                            Market Cap (` cr)                       7,760
 For 4QFY2012, Allahabad Bank reported a weak set of numbers with net profit                Beta                                      1.1
 declining by 28.6% on a qoq basis (up 55.4% qoq) to `400cr. The performance                52 Week High / Low                222/114
 was disappointing on both operating (NIMs down by 50bp) and asset quality front            Avg. Daily Volume                     155,613
 (slippage ratio of 4.1%). We recommend an Accumulate rating on the stock.                  Face Value (`)                            10
 Asset quality issues lead to higher provisioning and interest rate reversals:              BSE Sensex                             16,546
 FY2012, the bank’s advances and deposits grew by a healthy 18.7% yoy (up                   Nifty                                   5,000
 10.6% qoq) and 21.0% yoy (up 9.8% qoq) respectively. Accretion in current                  Reuters Code                      ALBK.BO
 account deposit picked up during 4QFY2012 with a qoq growth of 9.4% (up
                                                                                            Bloomberg Code                    ALBK@IN
 10.2% yoy). Savings account growth was also healthy at 5.9% qoq (up 11.8%
 yoy). The asset quality of the bank took a hit during 4QFY2012 leading to
 significant amount of interest reversals. The yield on advances consequently
                                                                                            Shareholding Pattern (%)
 declined by 19bp qoq which coupled with a 54bp qoq increase in cost of deposits
                                                                                            Promoters                                55.2
 (moderation in CASA growth during FY2012) led to margins declining by a sharp
 50bp qoq during 4QFY2012. The fee income for the bank remained sluggish                    MF / Banks / Indian Fls                  21.0

 declining by 35.1% yoy to `296cr. Slippages for the quarter rose from `596cr               FII / NRIs / OCBs                        12.6
 witnessed in 3QFY2012 to `963cr in 4QFY2012 (annualized slippage ratio of                  Indian Public / Others                   11.2
 4.1%). Management attributed around 80% of the slippages to agri (`276cr) and
 SME segments (`400cr).

 Outlook and valuation: Positives for Allahabad Bank include moderate CASA                  Abs. (%)              3m       1yr        3yr

 ratio of 30.5% and healthy NIMs (3.2% even after accounting for sharp fall in              Sensex               (6.6)   (10.7)      39.3
 4QFY2012 due to one-off interest reversals). The bank’ asset quality has come              Allahabad Bank      (12.2)   (23.5)     180.4
 under pressure in 2HFY2012 and we remain concerned on the bank’s asset
 quality given it has the highest yield on advances amongst other banks. However,
 considering the low valuations (0.6x FY2014 ABV) post the recent sharp decline in
 stock price, we recommend an Accumulate rating on the stock with a target price
 of `166
 Key financials
 Y/E March (` cr)                        FY2011      FY2012        FY2013E     FY2014E
 NII                                      4,022        5,163         5,983        6,988
 % chg                                     51.8         28.3          15.9         16.8    Vaibhav Agrawal
                                                                                           022 – 3935 7800 Ext: 6808
 Net profit                               1,423        1,867         1,914        2,104
                                                                                           vaibhav.agrawal@angelbroking.com
 % chg                                     18.0         31.2           2.5         10.0
 NIM (%)                                    3.0          3.2           3.1          3.1    Varun Varma
 EPS (`)                                   29.9         37.3          38.3         42.1    022 – 3935 7800 Ext: 6847
 P/E (x)                                    5.2          4.2           4.1          3.7    varun.varma@angelbroking.com
 P/ABV (x)                                  1.0          0.8           0.7          0.6
 RoA (%)                                    1.0          1.1           1.0          0.9    Sourabh Taparia
                                                                                           022 – 3935 7800 Ext: 6872
 RoE (%)                                   21.0         21.6          18.4         17.6
                                                                                           sourabh.taparia@angelbroking.com
 Source: Company, Angel Research
Please refer to important disclosures at the end of this report                                                                        1
                                                       Allahabad Bank | 4QFY2012 Result Update




              Exhibit 1: 4QFY2012 performance
              Particulars (` cr)                   4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy)
              Interest earned                       4,168    3,912       6.6     3,119         33.6
              - on Advances / Bills                 3,076    2,927       5.1     2,349         31.0
              - on investments                      1,040     935       11.2          746      39.4
              - on balance with RBI & others           48      38       26.7           22    124.1
              - on others                               4      11      (66.9)          3       27.5
              Interest Expended                     2,880    2,531      13.8     1,968         46.3
              Net Interest Income                   1,288    1,381      (6.7)    1,151         11.9
              Other income                            355     348        1.9          469    (24.4)
              Other income excl. treasury             296     327       (9.6)         456    (35.1)
              - Fee Income                            277     213       30.0          300      (7.7)
              - Treasury Income                        59      21      181.0           13    353.8
              - Recoveries from written-off a/cs       19      98      (80.6)         154    (87.7)
              - Others                                  0      16      (99.1)          2     (93.5)
              Operating income                      1,644    1,729      (4.9)    1,621          1.4
              Operating expenses                      742     699        6.2          841    (11.7)
              - Employee expenses                     495     490        1.1          602    (17.8)
              - Other Opex                            247     209       18.3          238       3.8
              Pre-provision Profit                    901    1,030     (12.5)         780      15.5
              Provisions & Contingencies              454     421        7.9          466      (2.4)
              - Provisions for NPAs                   411     306       34.5          330      24.5
              - Provisions for Investments            (38)     63     (160.0)          90   (142.2)
              - Other Provisions                       81      52       55.7           46      78.9
              PBT                                     447     609      (26.6)         315      42.0
              Provision for Tax                        46      48       (3.8)          57    (18.4)
              PAT                                     400     560      (28.6)         258      55.4
              Effective Tax Rate (%)                 10.4      7.9     247bp      18.1      (770)bp
              Source: Company, Angel Research



              Exhibit 2: 4QFY2012 – Actual vs. estimates
              Particulars (` cr)                             Actual      Estimates          Var. (%)
              Net interest income                            1,288          1,442            (10.7)
              Other income                                     355              415          (14.4)
              Operating income                               1,644          1,857            (11.5)
              Operating expenses                               742              763            (2.7)
              Pre-prov. profit                                 901          1,094            (17.6)
              Provisions & cont.                               454              332            36.7
              PBT                                              447              761          (41.3)
              Prov. for taxes                                   46              196          (76.3)
              PAT                                              400              565          (29.2)
              Source: Company, Angel Research




May 8, 2012                                                                                        2
                                                      Allahabad Bank | 4QFY2012 Result Update




              Exhibit 3: 4QFY2012 performance analysis
              Particulars (` cr)                4QFY12    3QFY12 % chg (qoq)   4QFY11 % chg (yoy)
              Balance sheet
              Advances (` cr)                   111,145 100,448         10.6   93,625        18.7
              Deposits (` cr)                   159,593 145,300          9.8 131,887         21.0
              Credit-to-Deposit Ratio (%)          69.6      69.1      51bp       71.0    (135)bp
              Current deposits (` cr)             9,538    7,558        26.2    9,156         4.2
              Saving deposits (` cr)             39,130   36,936         5.9   35,000        11.8
              CASA deposits (` cr)               48,668   44,494         9.4   44,156        10.2
              CASA ratio (%)                       30.5      30.6     (13)bp      33.5    (299)bp
              CAR (%)                              12.8      12.8       8bp       13.0     (13)bp
              Tier 1 CAR (%)                        9.1       8.9      22bp        8.6      56bp
              Profitability Ratios (%)
              Cost of deposits                      7.3       6.8      54bp        6.0     133bp
              Yield on advances                    12.0      12.2     (19)bp      10.7     131bp
              Yield on investments                  7.7       7.6       9bp        7.2      47bp
              Yield on funds                       10.5      10.5      (5)bp       9.5     100bp
              Cost of funds                         7.2       6.8      46bp        6.0     123bp
              Reported NIM                          3.2       3.7     (50)bp       3.5     (26)bp
              Cost-to-income ratio                 45.2      40.4     475bp       51.9    (670)bp
              Asset quality
              Gross NPAs (` cr)                   2,059    1,887         9.1    1,648        24.9
              Gross NPAs (%)                        1.8       1.9      (3)bp       1.7       9bp
              Net NPAs (` cr)                     1,092      796        37.2      736        48.3
              Net NPAs (%)                          1.0       0.8      19bp        0.8      19bp
              Provision coverage ratio (%)         74.0      78.0    (403)bp      75.7    (167)bp
              Annualized slippage ratio (%)         4.1       2.5     157bp        4.5     (42)bp
              NPA prov. to avg. assets (%)          0.9       0.7      20bp        0.9       3bp
              Source: Company, Angel Research

              Balance sheet growth healthy
              For 4QFY2012, the bank witnessed strong growth in its balance sheet with
              advances and deposits growing by 10.6% qoq and 9.8% qoq, respectively. The
              sequential growth in advances was driven by lending to oil companies in
              4QFY2012. On a yoy basis too, the bank’s advances and deposits grew by a
              healthy 18.7% yoy and 21.0% yoy respectively.

              Accretion in current account deposit picked up during 4QFY2012 with a qoq
              growth of 9.4% (up 10.2% yoy). Savings account growth was also healthy at 5.9%
              qoq (up 11.8% yoy). The management aims to focus towards the retail position of
              the balance sheet going forward and have guided for similar strong growth levels
              of above 20% in FY2013 as well.

              The bank added 39 branches (101 during FY2012) in 4QFY2012 taking the total
              branch network to 2,516 branches. The bank plans to open ~250 branches in
              FY2013, which is likely to be in economically stronger states such as Gujarat,
              Maharashtra (particularly Mumbai), Haryana, Karnataka and Andhra Pradesh.
              This will also enable the bank to geographically establish a wider branch network,
              as it is hardly present in these states.




May 8, 2012                                                                                     3
                                                                                                     Allahabad Bank | 4QFY2012 Result Update




Exhibit 4: Business growth healthy in 4QFY2012                                  Exhibit 5: Moderation in CASA growth continues
          Adv. qoq chg (%)      Dep. qoq chg (%)                CDR (%, RHS)                      CASA ratio             CASA yoy growth (%, RHS)
                        73.8
  12.5                                                                75.0       34.0                                                                    30.0
             71.0                                         69.6
  10.0




                                                          10.6
                                                69.1                                       20.7




                                                          9.8
   7.5                            67.4                                70.0
                                                                                 32.0                   15.6                                             20.0
   5.0
                                                                      65.0                                                     10.6         10.2
                                                                                                                  10.3
             7.8
             9.0


                      5.5
                      1.5



                                        6.1


                                                4.9
                                                2.3
   2.5
                                                                                 30.0                                                                    10.0
    -                                                                 60.0




                                                                                           33.5



                                                                                                        32.0



                                                                                                                  30.6



                                                                                                                               30.6



                                                                                                                                            30.5
                                (3.1)




  (2.5)
  (5.0)                                                               55.0       28.0                                                                    -
           4QFY11 1QFY12 2QFY12 3QFY12 4QFY12                                           4QFY11 1QFY12 2QFY12 3QFY12 4QFY12

Source: Company, Angel Research                                                 Source: Company, Angel Research



                                                              NIM decline sequentially on interest reversals
                                                              The asset quality of the bank took a hit during 4QFY2012 leading to significant
                                                              amount of interest reversals. The yield on advances consequently declined by 19bp
                                                              qoq which coupled with a 54bp qoq increase in cost of deposits (moderation in
                                                              CASA growth during FY2012) led to margins declining by a sharp 50bp qoq
                                                              during 4QFY2012


Exhibit 6: Lower yield on advances in 4QFY2012                                  Exhibit 7: NIMs dip sharply by 50bp qoq
 (%)                                                                              (%)
 13.0                                    12.6                                     3.9
                                                                                                                                      3.7
                                                       12.2                                                          3.7
                                                                    12.0
 12.0                    11.6                                                     3.6      3.5
                                                                                                         3.4
             10.7                                                                 3.3                                                              3.2
 11.0

 10.0                                                                             3.0

  9.0                                                                             2.7
           4QFY11      1QFY12      2QFY12         3QFY12          4QFY12                4QFY11        1QFY12      2QFY12        3QFY12       4QFY12

Source: Company, Angel Research                                                 Source: Company, Angel Research


                                                              Fee income remains sluggish

                                                              The fee income for the bank remained sluggish declining by 35.1% yoy to `296cr.
                                                              The management attributed the reason for sluggishness in fee income to tough
                                                              macro conditions which have led to slower corporate activities. On a qoq basis,
                                                              forex income increased by 36.7%, however lower recoveries from written-off
                                                              accounts (only `19cr compared to `98cr in 3QFY2012 and `154cr in 4QFY2011),
                                                              dragged the fee income lower (decline of 9.6% qoq). Treasury income, however
                                                              for the bank jumped up in 4QFY2012 to `59cr as against `21cr in 3QFY2012
                                                              and `13cr in 4QFY2011.




May 8, 2012                                                                                                                                                     4
                                                                                             Allahabad Bank | 4QFY2012 Result Update




                                                       Slippages jump sharply; restructuring also higher

                                                       Slippages for the quarter rose from `596cr witnessed in 3QFY2012 to `963cr in
                                                       4QFY2012 (annualized slippage ratio of 4.1%). Management attributed around
                                                       80% of the slippages to agri (`276cr) and SME segments (`400cr). The
                                                       management stated the reason for higher NPAs from the agri segment as a
                                                       consequence of late payments from sugar companies on account of UP election
                                                       that took place during the quarter. The bank also classified a hydropower project
                                                       as NPA (exposure of `90cr) during the quarter.

                                                       On the back of aggressive write-offs of `500cr during the quarter, the rise in gross
                                                       NPAs was contained at 9.1% qoq. Net NPA levels on an absolute basis rose by a
                                                       much higher 37.2% qoq as the bank lowered its provisioning coverage ratio by
                                                       ~403bp to 74.0%.

                                                       The bank restructured loans worth ~`2,640cr during 4QFY2012 taking the
                                                       outstanding restructured book to `6,353cr (up 66.2% qoq. The majority of the
                                                       restructuring done during the quarter was attributable to SEBs (`619cr for Uttar
                                                       Haryana and `400cr for Rajasthan SEB) and Air India (`500cr on which the bank
                                                       took a NPV loss of `4cr during 4QFY2012). The rest of the restructuring was on
                                                       account of private borrowers such as 3I Infotech (`300cr) and other smaller
                                                       accounts from the steel and textile sector. The bank’s restructuring pipeline going
                                                       ahead consists of UP discom (`~2,100cr) and Bharti shipyard (`200cr)

                                                       The effective tax rate for the bank remained low in 4QFY2012 on account of tax
                                                       benefits on higher write-offs (`500cr) and concessions on rural and infra loans.
                                                       The management indicated that they have paid extra tax amounting to `425cr
                                                       during the last 1-2 years and that should help keep the effective tax rate to ~20%
                                                       for FY2013

Exhibit 8: PCR declines by 400bps qoq                                    Exhibit 9: Slippages remain elevated
         Gross NPAs (%)            Net NPAs (%)          PCR (%, RHS)                       Slippages (%)         Credit cost (%, RHS)
  2.0                                                            85.0               0.9                                          0.9
                                                                           5.0                                                           1.0
                      79.9       79.6                                                                       0.8      0.7
  1.5                                       78.0                 80.0      4.0                                                           0.8
           75.7
                                                       74.0                3.0                 0.4                                       0.6
  1.0                                                            75.0
                                                                           2.0                                                           0.4
  0.5                                                            70.0
                                                                           1.0                                                           0.2
           1.7
           0.8


                      1.6
                      0.6


                                1.8
                                0.7


                                           1.9
                                           0.8


                                                      1.8
                                                      1.0




                                                                                    4.5        0.6          2.2      2.5         4.1
   -                                                             65.0       -                                                            -
         4QFY11 1QFY12 2QFY12 3QFY12 4QFY12                                      4QFY11     1QFY12     2QFY12     3QFY12      4QFY12

Source: Company, Angel Research; Note: PCR incl. technical write-offs     Source: Company, Angel Research




May 8, 2012                                                                                                                                    5
                                                                                       Allahabad Bank | 4QFY2012 Result Update




Exhibit 10: Branch expansion modest                              Exhibit 11: Cost ratios remain steady
  2,550                                                                    Cost-to-income ratio (%)          Opex to average assets (%, RHS)
                                                     2,516                      2.3
                                                                    60.0                                                              2.5
  2,500                                    2,477
                                                                                                      1.7          1.7       1.7      2.0
                                  2,441                             45.0                   1.5
  2,450
             2,415      2,416                                                                                                         1.5
  2,400                                                             30.0
                                                                                                                                      1.0
  2,350                                                             15.0
                                                                                                                                      0.5




                                                                                51.9



                                                                                           39.1



                                                                                                      41.7



                                                                                                                   40.4



                                                                                                                             45.2
  2,300                                                               -                                                               -
           4QFY11      1QFY12     2QFY12   3QFY12   4QFY12                   4QFY11 1QFY12 2QFY12 3QFY12 4QFY12

Source: Company, Angel Research                                   Source: Company, Angel Research


                                              Investment arguments
                                              Healthy retail deposit base

                                              Allahabad Bank has a substantial 41% of its branches in the CASA deposit-rich
                                              rural areas, which ensure higher sustainability of the low-cost deposits reservoir,
                                              also reflected in the healthy 19.8% CAGR in the bank’s saving account deposits
                                              over FY2009–12. Although the bank’s CASA market share reduced by 25bp over
                                              FY2006–1HFY2012 to 2.4%, the decline in market share has been one of the
                                              lowest in its peer group. Recently, the bank had secured a mandate from the West
                                              Bengal State Government for opening accounts for disbursal of salaries. These
                                              initiatives are expected to at least sustain the CASA ratio at current levels. Also, the
                                              bank has a relatively lower share of wholesale deposits and CDs at 12.2%.

                                              The bank is now planning to diversify its branch network by expanding in the
                                              economically vibrant states of Gujarat, Maharashtra (particularly Mumbai),
                                              Haryana, Karnataka and Andhra Pradesh. The bank’s better CASA ratio, of
                                              ~30% is also likely to help in moderating the expected NIM pressures.
                                              As compared to peers such as IOB, OBC, Corporation Bank and UCO Bank, the
                                              bank has a higher structural CASA share.

                                              Moderate fee income

                                              Growth in fee income (other income excluding treasury income) has been strong at
                                              a 45.8% CAGR over FY2009–11 (0.9% of average assets for FY2011). However,
                                              FY2012 has been a bad year for the bank in terms of fee performance (decline of
                                              2.0% yoy) mostly due to lower recoveries, which has led to fee income to average
                                              assets dropping to 0.7%. Going forward also, we have factored in lower growth in
                                              fee income than peers, as a large part of the bank’s high fee income during
                                              FY2011 was driven by above-average recoveries from written-off accounts (0.24%
                                              of average assets for FY2011).




May 8, 2012                                                                                                                                    6
                                                   Allahabad Bank | 4QFY2012 Result Update




              Higher yielding loans could lead to higher NPAs
              Allahabad Bank had one of the highest reported yield on advances for 4QFY2012
              (12.0% even after accounting for significant interest reversals) amongst all PSU
              banks. The bank’s yield on advances has risen by ~170bp in the last 18 months,
              the highest increase within the PSU segment, indicating increased risk taking in the
              form of higher yielding loans over the past one year. While the bank’s
              provisioning costs are on the higher side (1.0% for FY2012 compared to average
              of ~0.8% for PSUs), risk-adjusted yields are still well above sector average,
              indicating the possibility of any negative surprises on the asset-quality front. As a
              result, with no additional room for expansion in yields, and asset quality expected
              to further see deterioration due to higher risk taking, higher-than-peer average
              return ratios for the bank could come under pressure.

              Outlook and valuation
              Positives for Allahabad Bank include moderate CASA ratio of 30.5% and healthy
              NIMs (3.2% even after accounting for sharp fall in 4QFY2012 due to one-off
              interest reversals). The bank’ asset quality has come under pressure in 2HFY2012
              and we remain concerned on the bank’s asset quality given it has the highest yield
              on advances amongst other banks. However, considering the low valuations (0.6x
              FY2014 ABV) post the recent sharp decline in stock price, we recommend an
              Accumulate rating on the stock with a target price of `166




May 8, 2012                                                                                      7
                                                                               Allahabad Bank | 4QFY2012 Result Update




              Exhibit 12: Key assumptions
                                                                                        Earlier estimates                             Revised estimates
              Particulars (%)
                                                                                    FY2013                   FY2014                 FY2013                FY2014
              Credit growth                                                              17.5                   18.0                       18.0               18.0
              Deposit growth                                                             17.0                   17.0                       16.0               16.0
              CASA ratio                                                                 31.2                   30.2                       29.2               28.4
              NIMs                                                                        3.4                      3.3                      3.1                 3.1
              Other income growth                                                         6.9                   13.4                        8.5               10.3
              Growth in staff expenses                                                   13.0                   15.0                       13.0               15.0
              Growth in other expenses                                                   15.0                   15.0                       15.0               15.0
              Slippages                                                                   2.7                      2.9                      2.6                 2.7
              Treasury gain/(loss) (% of investments)                                    17.5                   18.0                       18.0               18.0
              Source: Angel Research



              Exhibit 13: Change in estimates
                                                                      FY2013                         FY2014
              Particulars (` cr)                      Earlier            Revised             Earlier   Revised
                                                                                 Var. (%)                      Var. (%)
                                                   estimates           estimates          estimates estimates
              NII                                           6,248              5,983               (4.2)                7,030              6,988              (0.6)
              Non-interest income                           1,452              1,409               (3.0)                1,647              1,554              (5.7)
              Operating income                              7,700              7,392               (4.0)                8,677              8,542              (1.6)
              Operating expenses                            3,082              3,058               (0.8)                3,544              3,517              (0.8)
              Pre-prov. profit                              4,618              4,333               (6.2)                5,133              5,024              (2.1)
              Provisions & cont.                            1,584              1,599                0.9                 1,816              1,909               5.2
              PBT                                           3,034              2,734               (9.9)                3,317              3,115              (6.1)
              Prov. for taxes                                984                  820             (16.7)                1,076              1,011              (6.1)
              PAT                                           2,050              1,914               (6.6)                2,241              2,104              (6.1)
              Source: Angel Research



              Exhibit 14: P/ABV band

                                   Price (`)                 0.3x                  0.6x                      0.9x                 1.2x                1.5x

               450
               400
               350
               300
               250
               200
               150
               100
                50
                    0
                                 Oct-06




                                                   Oct-07




                                                                      Oct-08




                                                                                         Oct-09




                                                                                                               Oct-10




                                                                                                                                  Oct-11




                                                                                                                                                     Oct-12
                        Apr-06




                                          Apr-07




                                                             Apr-08




                                                                               Apr-09




                                                                                                    Apr-10




                                                                                                                         Apr-11




                                                                                                                                            Apr-12




              Source: Company, Angel Research




May 8, 2012                                                                                                                                                      8
                                                                                                 Allahabad Bank | 4QFY2012 Result Update




Exhibit 15: Recommendation summary
                                  CMP      Tgt. price    Upside   FY2014E           FY2014E     FY2014E       FY2012E-14E       FY2014E     FY2014E
Company      Reco.
                                   (`)             (`)      (%)   P/ABV (x)     Tgt P/ABV (x)     P/E (x)     EPS CAGR (%)       RoA (%)     RoE (%)
AxisBk       Buy                   983        1,587       61.4          1.3               2.2         7.1               16.4          1.5      20.3
FedBk        Neutral               407              -         -         1.0                 -         7.1               13.0          1.3      14.5
HDFCBk       Accumulate            515           567        9.9         3.0               3.3        14.5               27.0          1.7      22.1
ICICIBk*     Buy                   830        1,201       44.7          1.3               1.9        10.2               20.4          1.5      16.0
SIB          Neutral                23              -         -         1.0                 -         5.9                 6.7         0.9      17.7
YesBk        Buy                   329           470      42.6          1.7               2.4         7.9               22.5          1.4      23.3
AllBk        Accumulate            155           166        7.1         0.6               0.7         3.7                 6.2         0.9      17.6
AndhBk       Neutral               117              -         -         0.7                 -         4.3                 6.5         1.0      16.7
BOB          Buy                   659           969      47.2          0.7               1.1         4.4               11.1          1.1      18.2
BOI          Buy                   353           411      16.3          0.8               1.0         4.7               23.3          0.8      16.9
BOM          Buy                    50            60      20.6          0.6               0.7         3.7               26.8          0.9      17.5
CanBk        Buy                   425           532      25.1          0.7               0.9         4.5               10.9          0.9      16.7
CentBk       Neutral                78              -         -         0.7                 -         3.9               45.7          0.5      13.8
CorpBk       Buy                   404           504      24.8          0.5               0.7         3.6                 5.3         0.8      16.5
DenaBk       Buy                    85           118      38.5          0.5               0.7         3.3                 6.2         0.9      16.9
IDBI#        Buy                    95           117      23.0          0.6               0.7         4.0               22.7          0.9      14.8
IndBk        Buy                   200           240      19.9          0.7               0.8         4.1                 5.4         1.2      18.2
IOB          Buy                    82           101      23.3          0.5               0.6         3.8               28.3          0.6      13.9
J&KBk        Accumulate            866           932        7.6         0.8               0.8         4.4                 8.8         1.4      18.6
OBC          Buy                   223           285      27.7          0.5               0.6         3.5               27.7          0.8      14.3
PNB          Buy                   784        1,138       45.2          0.8               1.1         4.4                 8.8         1.1      18.5
SBI*         Buy                 1,959        2,593       32.4          1.2               1.6         7.3               23.6          1.0      19.1
SynBk        Buy                    95           128      35.5          0.6               0.8         3.4                 8.7         0.8      17.1
UcoBk        Neutral                69              -         -         0.8                 -         4.8                 7.0         0.5      13.4
UnionBk      Buy                   211           266      25.9          0.7               0.9         4.3               27.2          0.8      17.4
UtdBk        Buy                    61            88      43.6          0.5               0.7         2.8               11.4          0.7      15.9
VijBk        Neutral                55              -         -         0.6                 -         4.5               13.5          0.5      13.7
Source: Company, Angel Research; Note:*Target multiples=SOTP Target Price/ABV (including subsidiaries), #Without adjusting for SASF




May 8, 2012                                                                                                                                       9
                                                            Allahabad Bank | 4QFY2012 Result Update




              Income statement
               Y/E March (` cr)           FY08      FY09       FY10      FY11     FY12      FY13E    FY14E
               Net Interest Income       1,672     2,159      2,650     4,022     5,163     5,983     6,988
               - YoY Growth (%)           (4.5)     29.1       22.8      51.8      28.3       15.9     16.8
               Other Income                965     1,142      1,516     1,370     1,299     1,409     1,554
               - YoY Growth (%)          156.3      18.4       32.7      (9.6)     (5.2)       8.5     10.3
               Operating Income          2,637     3,301      4,166     5,393     6,461     7,392     8,542
               - YoY Growth (%)           24.0      25.2       26.2      29.4      19.8       14.4     15.6
               Operating Expenses        1,158     1,399      1,618     2,338     2,691     3,058     3,517
               - YoY Growth (%)           12.7      20.9       15.6      44.5      15.1       13.6     15.0
               Pre - Provision Profit    1,480     1,901      2,549     3,055     3,770     4,333     5,024
               - YoY Growth (%)           34.5      28.5       34.1      19.9      23.4       14.9     16.0
               Prov. & Cont.               357      825         777     1,124     1,607     1,599     1,909
               - YoY Growth (%)           35.1     131.0       (5.9)     44.7      43.0      (0.5)     19.4
               Profit Before Tax         1,122     1,076      1,772     1,931     2,163     2,734     3,115
               - YoY Growth (%)           34.3      (4.1)      64.7       9.0      12.0       26.4     13.9
               Prov. for Taxation          147      307         565       508      296        820     1,011
               - as a % of PBT            13.1      28.6       31.9      26.3      13.7       30.0     32.4
               PAT                         975      769       1,206     1,423     1,867     1,914     2,104
               - YoY Growth (%)           29.9     (21.1)      57.0      18.0      31.2        2.5     10.0



              Balance sheet
              Y/E March (` cr)           FY08     FY09        FY10      FY11      FY12      FY13E    FY14E
              Share Capital               447      447         447       476       500        500      500
              Reserves & Surplus         4,774    5,405      6,306      8,031    10,007     11,514   13,153
              Deposits                  71,616 84,972 106,056 131,887 159,593              185,128 214,748
              - Growth (%)                20.3     18.6       24.8       24.4      21.0       16.0     16.0
              Borrowings                 1,792     937       1,424      3,006     3,635      4,217    4,886
              Tier 2 Capital             1,862    2,912      4,012      3,912     5,459      6,442    7,602
                Other Liab. & Prov.      2,448    2,975      3,455      3,974     3,740      4,404    4,986
              Total Liabilities         82,939 97,648 121,699 151,286 182,935              212,204 245,875
              Cash Balances              6,289    5,115      7,184      7,901     8,712      7,405    8,590
              Bank Balances               753     1,521      1,984      3,126     5,313      6,163    7,141
              Investments               23,400 29,651       38,429     43,247    54,283     63,489   70,803
              Advances                  49,720 58,802       71,605     93,625 111,145      131,151 154,758
              - Growth (%)                20.4     18.3       21.8       30.8      18.7       18.0     18.0
              Fixed Assets               1,071    1,110      1,118      1,148     1,198      1,348    1,515
              Other Assets               1,705    1,449      1,379      2,239     2,283      2,648    3,069
              Total Assets              82,939 97,648 121,699 151,286 182,935              212,204 245,875
              - Growth (%)                22.6     17.7       24.6       24.3      20.9       16.0     15.9




May 8, 2012                                                                                             10
                                                    Allahabad Bank | 4QFY2012 Result Update




              Ratio analysis
               Y/E March                     FY08   FY09    FY10    FY11    FY12    FY13E   FY14E
               Profitability ratios (%)
               NIMs                           2.3     2.5     2.5     3.0     3.2     3.1     3.1
               Cost to Income Ratio          43.9    42.4    38.8    43.4    41.7    41.4    41.2
               RoA                            1.3     0.9     1.1     1.0     1.1     1.0     0.9
               RoE                           24.6    16.5    22.2    21.0    21.6    18.4    17.6
               B/S ratios (%)
               CASA Ratio                    36.0    34.6    34.5    33.5    30.5    29.2    28.4
               Credit/Deposit Ratio          69.4    69.2    67.5    71.0    69.6    70.8    72.1
               CAR                           12.0    13.1    13.6    13.0    14.0    14.1    14.1
               - Tier I                       7.7     8.0     8.1     8.6     8.9     8.8     8.7
               Asset Quality (%)
               Gross NPAs                     2.0     1.8     1.7     1.7     1.8     3.2     4.2
               Net NPAs                       0.8     0.7     0.7     0.8     1.0     1.2     1.4
               Slippages                      1.5     1.7     2.1     2.4     2.4     2.6     2.7
               Loan Loss Prov./Avg. Assets    0.4     0.3     0.8     0.6     0.7     0.7     0.8
               Provision Coverage            58.6    59.5    79.0    74.1    74.0    74.0    75.0
               Per Share Data (`)
               EPS                           21.8    17.2    27.0    29.9    37.3    38.3    42.1
               ABVPS                         93.5   107.7   131.7   159.9   192.0   221.7   255.8
               DPS                            3.5     2.5     5.5     6.0     6.0     7.0     8.0
               Valuation Ratios
               PER (x)                        7.1     9.0     5.7     5.2     4.2     4.1     3.7
               P/ABVPS (x)                    1.7     1.4     1.2     1.0     0.8     0.7     0.6
               Dividend Yield                 2.3     1.6     3.5     3.9     3.9     4.5     5.2
               DuPont Analysis (%)
               NII                            2.2     2.4     2.4     2.9     3.1     3.0     3.1
               (-) Prov. Exp.                 0.5     0.9     0.7     0.8     1.0     0.8     0.8
               Adj. NII                       1.7     1.5     1.7     2.1     2.1     2.2     2.2
               Treasury                       0.6     0.6     0.5     0.1     0.1     0.0     0.0
               Int. Sens. Inc.                2.4     2.1     2.2     2.2     2.2     2.3     2.2
               Other Inc.                     0.7     0.6     0.9     0.9     0.7     0.7     0.7
               Op. Inc.                       3.0     2.7     3.1     3.1     2.9     2.9     2.9
               Opex                           1.5     1.5     1.5     1.7     1.6     1.5     1.5
               PBT                            1.5     1.2     1.6     1.4     1.3     1.4     1.4
               Taxes                          0.2     0.3     0.5     0.4     0.2     0.4     0.4
               RoA                            1.3     0.9     1.1     1.0     1.1     1.0     0.9
               Leverage (x)                  19.0    19.4    20.2    20.2    19.3    19.0    19.1
               RoE                           24.6    16.5    22.2    21.0    21.6    18.4    17.6




May 8, 2012                                                                                  11
                                                                                           Allahabad Bank | 4QFY2012 Result Update




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 Disclosure of Interest Statement                                             Allahabad Bank
 1. Analyst ownership of the stock                                                   No
 2. Angel and its Group companies ownership of the stock                             No
 3. Angel and its Group companies' Directors ownership of the stock                  No
 4. Broking relationship with company covered                                        No

  Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors


 Ratings (Returns):              Buy (> 15%)                             Accumulate (5% to 15%)                    Neutral (-5 to 5%)
                                 Reduce (-5% to 15%)                     Sell (< -15%)


May 8, 2012                                                                                                                                12