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Central Bank Of India Results

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					                                                                                                4QFY2012 Result Update | Banking
                                                                                                                            May 11, 2012



    Central Bank of India                                                                     NEUTRAL
                                                                                              CMP                                     `78
    Performance Highlights                                                                    Target Price                              -
 
Particulars (` cr)        4QFY12      3QFY12       % chg (qoq)    4QFY11     % chg (yoy)      Investment Period                          -
NII                         1,264       1,179              7.2     1,429           (11.5)
Pre-prov. profit              613         614             (0.2)      331            85.1      Stock Info
PAT                          (105)        113          (192.9)       133         (179.3)      Sector                                Banking
Source: Company, Angel Research
                                                                                              Market Cap (` cr)                      5,723
Central Bank of India reported a dismal performance for 4QFY2012,
                                                                                              Beta                                      1.1
directionally in-line with our expectation, with net loss of `105cr for the
quarter as against profit of `133cr in 4QFY2011. The bank’s disappointing                     52 Week High / Low                    133/63
performance was a result of muted performance on the operating front and                      Avg. Daily Volume                 176,176
considerably higher provisioning expenses on the back of continued                            Face Value (`)                            10
deterioration in asset quality, evident from elevated slippages and ballooning
restructuring. We recommend Neutral on the stock.                                             BSE Sensex                            16,293
                                                                                              Nifty                                  4,929
Business growth remains moderate; Asset quality deteriorates considerably: The
bank’s business growth was moderate during 4QFY2012, with advances growing                    Reuters Code                          CBI.BO
by 13.7% yoy on the back of healthy growth witnessed in retail, MSME and direct               Bloomberg Code                   CBOI@IN
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             Shareholding Pattern (%)
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               Promoters                               79.2
to 7.4%. Asset quality deteriorated considerably during 4QFY2012, with gross                  MF / Banks / Indian Fls                 10.9
NPA ratio rising to 4.8% (3.7% in 3QFY2012) and net NPA ratio climbing to 3.1%                FII / NRIs / OCBs                         2.6
(2.0% in 3QFY2012). Slippages for 4QFY2012 stood at steep `3,543cr
                                                                                              Indian Public / Others                    7.3
(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                     Abs. (%)              3m       1yr        3yr
bank also restructured loans amounting to over `7,467cr during 4QFY2012,
                                                                                              Sensex               (8.2)   (12.3)     39.5
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).               Central BoI         (22.9)   (39.2)     89.8
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 0.6–1.7x 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)                        FY2011       FY2012       FY2013E       FY2014E
                                                                                             Vaibhav Agrawal
NII                                      5,325        5,169         5,521         6,462
                                                                                             022 – 3935 7800 Ext: 6808
% chg                                     109.2        (2.9)           6.8         17.1
                                                                                             vaibhav.agrawal@angelbroking.com
Net profit                               1,121          373         1,014         1,494
% chg                                      18.3       (57.4)        120.3          40.6
                                                                                             Varun Varma
NIM (%)                                     2.8         2.5           2.3           2.4
                                                                                             022 – 3935 7800 Ext: 6847
EPS (`)                                    27.7         5.1          13.8          20.3
                                                                                             varun.varma@angelbroking.com
P/E (x)                                     2.8        15.3           5.6           3.8
P/ABV (x)                                   0.6         0.9           0.8           0.7
                                                                                             Sourabh Taparia
RoA (%)                                     0.6         0.2           0.4           0.5
                                                                                             022 – 3935 7800 Ext: 6872
RoE (%)                                    23.2         5.3          10.9          14.4
                                                                                             sourabh.taparia@angelbroking.com
Source: Company, Angel Research
Please refer to important disclosures at the end of this report                                                                          1
                                              Central Bank of India | 4QFY2012 Result Update



               Exhibit 1: 4QFY2012 performance
               Particulars (` cr)                4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy)
               Interest earned                     4,940    4,741         4.2          4,232          16.7
               - on Advances / Bills               3,732    3,547         5.2          3,122          19.6
               - on investments                    1,130    1,120         0.9           971           16.3
               - on balance with RBI & others       (291)      75     (489.0)             8      (3,540.5)
               - on others                           370         -        NA            131          183.0
               Interest Expended                   3,677    3,563         3.2          2,804          31.1
               Net Interest Income                 1,264    1,179         7.2          1,429         (11.5)
               Other income                          432      357        20.8           523          (17.5)
               Other income excl. treasury           334      284        17.3           357           (6.5)
               - Fee Income                          230      148        55.4           181           27.1
               - Treasury Income                      98       73        34.2           166          (41.0)
               - Recov. from written off a/cs         47       34        38.2            75          (37.3)
               - Others                               57      102       (44.7)          101          (43.9)
               Operating income                    1,695    1,536        10.4          1,951         (13.1)
               Operating expenses                  1,082      922        17.4          1,620         (33.2)
               - Employee expenses                   631      641        (1.5)         1,320         (52.2)
               - Other Opex                          451      281        60.5           300           50.3
               Pre-provision Profit                  613      614        (0.2)          331           85.1
               Provisions & Contingencies            859      486        76.6           306          180.6
               - Provisions for NPAs                 879      428       105.4           196          349.3
               - Provisions for Investments          (80)      52     (253.8)            41        (293.9)
               - Other Provisions                     60        6       838.5            69          (13.7)
               PBT                                  (246)     127     (292.9)            25      (1,080.2)
               Provision for Tax                    (141)      14    (1,087.3)         (108)          30.7
               PAT                                  (105)     113     (192.9)           133        (179.3)
               Effective Tax Rate (%)               57.2     11.2     4603bp       (428.9)       48611bp
               Source: Company, Angel Research


               Exhibit 2: Actual vs. Angel estimates
                Particulars (` cr)                          Actual       Estimates             Variation (%)
               NII                                          1,264           1,230                       2.7
               Non-Interest Income                            432                393                    9.9
               Operating Income                             1,695           1,623                       4.4
               Operating Expenses                           1,082                990                    9.3
               Pre-Prov. Profit                               613                633                   (3.2)
               Provisions & Cont.                             859                477                   80.2
               PBT                                          (246)                157                (257.0)
               Prov. for Taxes                              (141)                 29                (581.8)
               PAT                                          (105)                127                (182.6)
               Source: Company, Angel Research




May 11, 2012                                                                                              2
                                             Central Bank of India | 4QFY2012 Result Update



               Exhibit 3: 4QFY2012 performance analysis
               Particulars                       4QFY12    3QFY12   % chg (qoq)   4QFY11 % chg (yoy)
               Balance sheet
               Advances (` cr)                   147,513 133,317          10.6 129,725          13.7
               Deposits (` cr)                   196,173 188,226           4.2 179,356           9.4
               Credit-to-Deposit Ratio (%)          75.2     70.8       437bp        72.3     287bp
               Current deposits (` cr)            12,680   10,076         25.8    15,431       (17.8)
               Saving deposits (` cr)             52,595   51,004          3.1    47,645        10.4
               CASA deposits (` cr)               65,275   61,080          6.9    63,076         3.5
               CASA ratio (%)                       33.3     32.5         82bp       35.2    (189)bp
               CAR (%)                              12.4     12.9       (46)bp       11.7      72bp
               Tier 1 CAR (%)                        7.8      7.8          2bp        6.4     144bp
               Profitability Ratios (%)
               Cost of deposits                      7.4      7.1         26bp        6.1     129bp
               Yield on advances                    11.1     11.4       (32)bp       10.6      52bp
               Yield on investments                  7.8      7.2         65bp        7.9      (6)bp
               Reported NIM                          2.6      2.5          6bp        1.8      78bp
               Cost-to-income ratio                 63.9     60.0       382bp        83.0   (1918)bp
               Asset quality
               Gross NPAs (` cr)                   7,273    4,922         47.8     2,394       203.8
               Gross NPAs (%)                        4.8      3.7       114bp         1.8     301bp
               Net NPAs (` cr)                     4,557    2,669         70.7       847       437.8
               Net NPAs (%)                          3.1      2.0       105bp         0.7     244bp
               Provision Coverage Ratio (%)         40.6     48.1      (743)bp       67.6   (2702)bp
               Slippage ratio (%)                   10.9      4.5       641bp         2.3     860bp
               Credit cost (%)                       1.6      0.8         79bp        0.4     118bp
               Source: Company, Angel Research



               Business growth remains moderate; NIM remains flat qoq
               The bank’s 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                                                                                        3
                                                                                 Central Bank of India | 4QFY2012 Result Update



Exhibit 4: Business growth remains moderate in 4QFY12                    Exhibit 5: CASA deposits growth slowing down
         Adv. yoy chg (%)         Dep. yoy chg (%)        CDR (%, RHS)                     CASA ratio (%)            CASA yoy growth (%, RHS)
                                                         75.2             35.0                                                                      30.0
  30.0                                                           76.0
                                                                 74.0                                                                               25.0
            72.3
                                                                          30.0                                                                      20.0
  20.0                                       70.8                72.0                             14.7
                                                                                   13.0
                                                                                                                                                    15.0
                                  68.1                           70.0     25.0                               6.9          7.3
                       67.8                                                                                                                         10.0
  10.0                                                           68.0                                                                3.5
                                                                          20.0                                                                      5.0
            23.1
            10.6


                      17.2
                      20.3


                                  12.7
                                  12.2


                                             14.6
                                             15.4


                                                     13.7




                                                                                    35.2



                                                                                                   32.6



                                                                                                              32.8



                                                                                                                          32.5



                                                                                                                                      33.3
                                                                 66.0


                                                     9.4
                                                                                                                                                    -
    -                                                            64.0     15.0                                                                      (5.0)
          4QFY11 1QFY12 2QFY12 3QFY12 4QFY12                                      4QFY11        1QFY12      2QFY12     3QFY12       4QFY12

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


Exhibit 6: Decline in yield on advances sequentially...                  Exhibit 7: ...coupled with rise in CoD, led to fall in NIM
   (%)                                                                     (%)
                                                                                    3.47
 12.00                                                                    3.50
                                     11.59                                                         2.99         3.00
                        11.37                    11.44                    3.00
 11.50                                                                                                                                       2.59
                                                             11.12                                                           2.53
                                                                          2.50
 11.00
            10.60                                                         2.00
 10.50
                                                                          1.50

 10.00                                                                    1.00
          4QFY11       1QFY12      2QFY12      3QFY12       4QFY12                4QFY11         1QFY12      2QFY12        3QFY12       4QFY12

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



                                                     Healthy growth in fee income, amidst declining recoveries and
                                                     fall in treasury income
                                                     Growth in the bank’s fee income was strong at 27.1% yoy at `230cr. Treasury
                                                     income for the quarter declined to `98cr vis-à-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 bank’s 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                                                                                                                                              4
                                                                                    Central Bank of India | 4QFY2012 Result Update



                                                        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                                               Exhibit 9: Asset quality deteriorates considerably
                  Slippages (%)            Credit cost (%, RHS)                       Gross NPAs (%)           Net NPAs (%)           PCR (%, RHS)
 12.0                                                        1.6     1.8               67.6
                                                                              5.0                65.2                                         70.0
                                                                     1.6                                                                      65.0
 10.0
                                                                     1.4      4.0                            56.8                             60.0
  8.0                                                                1.2
                                                                              3.0                                                             55.0
                                   0.7          0.8                  1.0                                                 48.1
  6.0                                                                                                                                         50.0
                                                                     0.8
                      0.5                                                     2.0                                                   40.6      45.0
  4.0      0.4                                                       0.6
                                                                     0.4                                                                      40.0
                                                                              1.0
                                                            10.9




  2.0
           2.3




                       1.8




                                    3.8




                                                4.5




                                                                                       1.8
                                                                                       0.7


                                                                                                  2.3
                                                                                                  0.9


                                                                                                             2.9
                                                                                                             1.4


                                                                                                                        3.7
                                                                                                                        2.0


                                                                                                                                   4.8
                                                                                                                                   3.1
                                                                     0.2                                                                      35.0
   -                                                                 -          -                                                             30.0
         4QFY11     1QFY12        2QFY12     3QFY12      4QFY12                      4QFY11 1QFY12 2QFY12 3QFY12 4QFY12

Source: Company, Angel Research                                             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 0.6–1.7x 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                                                                                                                                         5
                                            Central Bank of India | 4QFY2012 Result Update



               Exhibit 10: Key assumptions
                                                                  Earlier estimates       Revised estimates
               Particulars (%)
                                                                 FY2013       FY2014      FY2013     FY2014
               Credit growth                                        13.5          14.0       13.0       14.0
               Deposit growth                                       14.0          14.0       14.0       14.0
               CASA ratio                                           34.0          33.7       32.4       32.1
               NIMs                                                   2.4          2.4        2.3        2.4
               Other income growth                                    0.1         11.1       (5.6)      10.1
               Growth in staff expenses                               5.0         15.0        5.0       13.0
               Growth in other expenses                               5.0         15.0        5.0       13.0
               Slippages                                              3.2          2.7        3.2        2.5
               Source: Angel Research


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




May 11, 2012                                                                                                  6
                                                                                                         Central Bank of India | 4QFY2012 Result Update



                                                        Exhibit 12: P/ABV band

                                                                         Price (`)                       0.3x                     0.6x                       0.9x                        1.2x                  1.5x
                                                          250


                                                          200


                                                          150


                                                          100


                                                           50


                                                            0
                                                                          Dec-07




                                                                                                     Dec-08




                                                                                                                                 Dec-09




                                                                                                                                                             Dec-10




                                                                                                                                                                                          Dec-11




                                                                                                                                                                                                                     Dec-12
                                                                                   Apr-08




                                                                                                              Apr-09




                                                                                                                                           Apr-10




                                                                                                                                                                      Apr-11




                                                                                                                                                                                                   Apr-12
                                                                Aug-07




                                                                                            Aug-08




                                                                                                                       Aug-09




                                                                                                                                                    Aug-10




                                                                                                                                                                                Aug-11




                                                                                                                                                                                                            Aug-12
                                                        Source: Company, Angel Research


Exhibit 13: Recommendation summary
                                  CMP     Tgt. price    Upside           FY2014E                    FY2014E                     FY2014E                  FY2012-14E                       FY2014E               FY2014E
Company      Reco.
                                   (`)            (`)      (%)           P/ABV (x)             Tgt. P/ABV (x)                     P/E (x)               EPS CAGR (%)                       RoA (%)               RoE (%)
AxisBk       Buy                 1,001        1,587       58.5                     1.4                            2.2                      7.2                           16.4                      1.5                 20.3
FedBk        Neutral               415             -            -                  1.0                                 -                   7.3                           13.0                      1.3                 14.5
HDFCBk       Accumulate            511          567       10.9                     2.9                            3.3                     14.4                           27.0                      1.7                 22.1
ICICIBk*     Buy                   813        1,201       47.8                     1.3                            1.9                     10.0                           20.4                      1.5                 16.0
SIB          Neutral                22             -            -                  1.0                                 -                   5.8                                 4.5                 0.8                 17.5
YesBk        Buy                   329          470       42.6                     1.7                            2.4                      7.9                           22.5                      1.4                 23.3
AllBk        Accumulate            148          166       12.3                     0.6                            0.7                      3.5                                 6.2                 0.9                 17.6
AndhBk       Neutral               105             -            -                  0.6                                 -                   4.1                                 3.3                 0.9                 16.0
BOB          Buy                   649          925       42.6                     0.7                            1.1                      4.3                           11.1                      1.1                 18.2
BOI          Buy                   353          411       16.3                     0.7                            1.0                      4.5                           23.3                      0.8                 16.9
BOM          Accumulate             48           55       14.4                     0.6                            0.7                      3.7                           45.3                      0.7                 17.2
CanBk        Buy                   419          522       24.6                     0.7                            0.9                      4.5                           11.8                      0.9                 16.4
CentBk       Neutral                78             -            -                  0.7                                 -                   3.8                        100.1                        0.5                 14.4
CorpBk       Buy                   405          504       24.4                     0.5                            0.7                      3.6                                 5.3                 0.8                 16.5
DenaBk       Buy                    85          111       30.7                     0.5                            0.7                      3.2                                 6.6                 0.9                 17.0
IDBI#        Buy                    92          117       27.0                     0.6                            0.7                      3.8                           22.7                      0.9                 14.8
IndBk        Buy                   180          218       21.6                     0.6                            0.8                      3.7                                 5.4                 1.2                 18.2
IOB          Buy                    82           96       18.0                     0.5                            0.6                      3.8                           28.3                      0.6                 13.9
J&KBk        Neutral               846             -            -                  0.7                                 -                   4.3                                 8.8                 1.4                 18.6
OBC          Buy                   219          274       25.1                     0.5                            0.6                      3.4                           27.7                      0.8                 14.3
PNB          Buy                   746        1,066       43.0                     0.7                            1.1                      4.3                           10.3                      1.0                 18.1
SBI*         Buy                 1,852        2,511       35.6                     1.2                            1.6                      6.9                           23.6                      1.0                 19.1
SynBk        Buy                    91          131       43.9                     0.5                            0.7                      3.0                           17.3                      0.8                 17.1
UcoBk        Neutral                68             -            -                  0.7                                 -                   3.8                           13.0                      0.6                 15.4
UnionBk      Buy                   206          276       34.3                     0.7                            0.9                      4.1                           24.8                      0.8                 17.5
UtdBk        Buy                    58           78       33.6                     0.4                            0.6                      2.6                           22.5                      0.7                 16.5
VijBk        Neutral                53             -            -                  0.6                                 -                   4.3                           13.5                      0.5                 13.7
                                                                                                                                            #
Source: Company, Angel Research; Note:*Target multiples=SOTP Target Price/ABV (including subsidiaries), Without adjusting for SASF




May 11, 2012                                                                                                                                                                                                                  7
                                           Central Bank of India | 4QFY2012 Result Update



               Income statement
                Y/E March (` cr)              FY09         FY10      FY11       FY12      FY13E      FY14E
                Net Interest Income          2,228        2,545      5,325      5,169      5,521      6,462
                - YoY Growth (%)                0.2        14.2      109.2       (2.9)       6.8       17.1
                Other Income                 1,070        1,735      1,265      1,395      1,317      1,450
                - YoY Growth (%)               18.6        62.2      (27.1)      10.3       (5.6)      10.1
                Operating Income             3,298        4,281      6,590      6,564      6,838      7,912
                - YoY Growth (%)                5.5        29.8       54.0       (0.4)       4.2       15.7
                Operating Expenses           1,862        2,222      3,999      3,749      3,936      4,448
                - YoY Growth (%)                6.6        19.4       80.0       (6.3)       5.0       13.0
                Pre - Provision Profit       1,437        2,059      2,591      2,815      2,902      3,464
                - YoY Growth (%)                4.1        43.3       25.9        8.6        3.1       19.4
                Prov. & Cont.                  512         509        932       2,169      1,164      1,020
                - YoY Growth (%)              (3.0)        (0.5)      83.2      132.6      (46.3)     (12.3)
                Profit Before Tax              925        1,550      1,659       646       1,738      2,444
                - YoY Growth (%)                8.6        67.5        7.1      (61.0)     168.9       40.6
                Prov. for Taxation             354         491        407        113        564        793
                - as a % of PBT                38.2        31.7       24.5       17.5       32.4       32.4
                PAT                            571        1,058      1,252       533       1,174      1,651
                - YoY Growth (%)                3.8        85.3       18.3      (57.4)     120.3       40.6
                Preference Dividend                78        61       131        160        160        157
                PAT avl. to Eq. SH             494         998       1,121       373       1,014      1,494
                - YoY Growth (%)                5.0       102.1       12.4      (66.7)     171.7       47.3



               Balance sheet
                Y/E March (` cr)           FY09          FY10         FY11      FY12      FY13E      FY14E
                Share Capital              1,321         1,771       2,021      2,353      2,353      2,353
                - Equity                    404           404          404        736        736       736
                - Preference                917          1,367       1,617      1,617      1,617      1,617
                Reserve & Surplus          5,091         5,921       6,827     10,098     10,985     12,180
                Deposits                 131,272    162,107        179,356    196,173    223,638    254,947
                - Growth (%)                19.0          23.5        10.6        9.4       14.0       14.0
                Borrowings                  804          2,751       7,283      7,979      9,037     10,267
                Tier 2 Capital             3,854         4,575       5,605      4,941      5,583      6,365
                Other Liab. & Prov.        5,313         5,545       8,666      8,255      8,699      9,592
                Total Liabilities        147,655    182,672        209,757    229,800    260,295    295,703
                Cash Balances             11,037        17,012      14,082     13,114      8,946     10,198
                Bank Balances              1,214         2,205       1,201      1,012      1,147      1,303
                Investments               43,061        50,563      54,504     59,243     73,497     82,891
                Advances                  85,483    105,383        129,725    147,513    166,690    190,026
                - Growth (%)                17.1          23.3        23.1       13.7       13.0       14.0
                Fixed Assets               2,278         2,343       2,425      2,474      2,718      2,995
                Other Assets               4,582         5,165       7,819      6,443      7,298      8,291
                Total Assets             147,655    182,672        209,757    229,800    260,295    295,703
                - Growth (%)                19.1          23.7        14.8        9.6       13.3       13.6
               Note: * including Share Application Money of `2,026cr




May 11, 2012                                                                                              8
                                          Central Bank of India | 4QFY2012 Result Update



               Ratio analysis
               Y/E March                          FY09   FY10    FY11    FY12   FY13E   FY14E
               Profitability ratios (%)
               NIMs                                1.7     1.6     2.8    2.5     2.3     2.4
               Cost to Income Ratio               56.4    51.9    60.7   57.1    57.6    56.2
               RoA                                 0.4     0.6     0.6    0.2     0.4     0.5
               RoE                                15.0    25.4    23.2    5.3    10.9    14.4
               B/S ratios (%)
               CASA Ratio                         33.4    34.4    35.2   33.3    32.4    32.1
               Credit/Deposit Ratio               65.1    65.0    72.3   75.2    74.5    74.5
               CAR                                13.1    12.2    11.6   12.5    12.2    12.0
               - Tier I                            7.0     6.8     6.3    8.6     8.2     7.9
               Asset Quality (%)
               Gross NPAs                          2.7     2.3     1.8    4.8     5.2     5.2
               Net NPAs                            1.2     0.7     0.7    3.1     3.0     2.9
               Slippages                           1.2     1.2     1.3    5.2     3.2     2.5
               Loan Loss Prov. /Avg. Assets        0.2     0.2     0.3    0.9     0.4     0.3
               Provision Coverage Ratio           54.1    70.4    67.6   40.6    45.0    47.5
               Per Share Data (`)
               EPS                                12.2    24.7    27.7    5.1    13.8    20.3
               ABVPS (75% cover.)                 74.3   105.2   126.4   85.2    95.6   110.1
               DPS                                 2.0     2.2     3.4    2.0     1.5     3.5
               Valuation Ratios
               PER (x)                             6.4     3.1     2.8   15.3     5.6     3.8
               P/ABVPS (x)                         1.0     0.7     0.6    0.9     0.8     0.7
               Dividend Yield                      2.6     2.8     4.4    2.6     1.9     4.5
               DuPont Analysis
               NII                                 1.6     1.5     2.7    2.4     2.3     2.3
               (-) Prov. Exp.                      0.4     0.3     0.5    1.0     0.5     0.4
               Adj. NII                            1.3     1.2     2.2    1.4     1.8     2.0
               Treasury                            0.3     0.5     0.2    0.1     0.0     0.0
               Int. Sens. Inc.                     1.6     1.7     2.4    1.5     1.8     2.0
               Other Inc.                          0.5     0.6     0.5    0.5     0.5     0.5
               Op. Inc.                            2.1     2.3     2.9    2.0     2.3     2.5
               Opex                                1.4     1.3     2.0    1.7     1.6     1.6
               PBT                                 0.7     0.9     0.8    0.3     0.7     0.9
               Taxes                               0.3     0.3     0.2    0.1     0.2     0.3
               RoA                                 0.4     0.6     0.6    0.2     0.5     0.6
               Pref. Div.                          0.1     0.0     0.1    0.1     0.1     0.1
               RoA post Pref Div                   0.4     0.6     0.6    0.2     0.4     0.5
               Leverage                           41.2    42.1    40.6   30.9    26.2    26.8
               RoE                                15.0    25.4    23.2    5.3    10.9    14.4




May 11, 2012                                                                               9
                                                                                Central Bank of India | 4QFY2012 Result Update




 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
 trading volume, as opposed to focusing on a company's(` cr)           3QFY12      2QFY12       % chg (qoq)   report       chg (yoy)
 fundamentals.                                NII                        1,179       1,396           (15.6)     1,432         (17.7)
                                                 Pre-prov. the                614
 The information in this document has been printed on profitbasis of publicly available797              internal data815 other reliable
                                                                                          information, (22.9)         and        (24.7)
                                                                               complete and it should not be relied 404as such, as this
 sources believed to be true, but we do not represent that it is accurate or 113
                                                 PAT                                     244           (53.6)        on          (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
                                                  a reasonable as well as higher discussed in this material, there the be regulatory,
 Angel Broking Limited endeavours to update onperformance basis the information provisioning expenses. Even may sluggish PAT
 compliance, or other reasons that prevent us from doing so.by reversal of earlier year’s tax provision of `112cr. Disappointment
                                                 was aided
                                                   on the asset-quality front continued with elevated slippages and ballooning
 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.
                                                   NIM dips; Asset quality remains under stress: The bank’s business growth was
                                                   moderate during 3QFY2012, in providing corporate by 4.0% qoq (up banking or
 Angel Broking Limited and its affiliates may seek to provide or have engaged with advances growingfinance, investment 14.6% yoy)
                                                   and deposits almost flat sequentially in 15.4% yoy). on the CASA deposit growth
 other advisory services in a merger or specific transaction to the companies referred to(upthis report, as Overalldate of this report or in
 the past.                                         was rather slow at 7.3% yoy, leading to a sharp 244bp yoy fall in CASA ratio to
                                                   32.5%. The bank’s reported NIM fell by a rather steep 47bp qoq to 2.53% on the
 Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in
 connection with the use of this information.     back of a 15bp qoq fall in yield on advances and a 9bp rise in cost of deposits.
                                                   The bank had to reverse interest income of `110cr on NPAs recognized on
                                                   switchover to the system-based NPA recognition platform, which to the
  Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer partly
                                                   exacerbated respect in NIM. Asset Angel deteriorated during 3QFY2012 as well,
  latest update on respective stocks for the disclosure status in the fall of those stocks. quality Broking Limited and its affiliates may have
  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                                         Central Bank of India
  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 11, 2012                                                                                                                               10