3QFY2013 Result Update | Banking

February 1, 2013

Central Bank of India

Performance Highlights

Particulars (` cr) NII Pre-prov. profit PAT 3QFY13 1,410 779 180 2QFY13 1,416 816 330 % chg (qoq) (0.4) (4.6) (45.5) 3QFY12 1,179 614 113 % chg (yoy) 19.6 26.9 58.9

NEUTRAL
CMP Target Price
Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Banking 6,077 1.1 112/62 215,958 10 19,781 5,999 CBI.BO CBOI@IN

`83 -

Source: Company, Angel Research

For 3QFY2013, Central Bank of India (Central Bank) reported a healthy operating profit growth of 26.9% yoy, which was on expected lines. Profit before tax was higher by 18.6% yoy, however tax write-back of `29cr during the quarter compared to tax expenses of `14cr in 3QFY2012, aided the bank to report earnings growth of 59% yoy. Advances growth healthy; Asset quality pressures persists: During 3QFY2013, the banks advances grew by a healthy 18.9% yoy. Growth in deposits remained moderate at 12.7% yoy, partly due to the banks conscious strategy to reduce high cost bulk deposits (bulk deposits and CDs as % to overall deposits at 25.7% in 3QFY2013 compared to 31.8% in 3QFY2012). CASA ratio came off by 96bp qoq and 41bp yoy to 32%. The reported NIMs for the bank declined marginally by 4bp qoq to 2.6%. Growth in the banks non-interest income (excluding treasury) was muted at 1.6% yoy, despite a strong performance on the CEB front (up 24.3% yoy) and higher recoveries, as income from others segment nearly halved on a yoy basis. The bank continued to witness pressure on the asset quality front, as gross and net NPA levels for the bank increased sequentially by 5.1% and 2.9%, respectively. Annualized slippages ratio for the quarter stood elevated at 3.3%, though lower than 4.8% in 2QFY2013 and 4.5% in 2QFY2012. PCR improved slightly by 134bp qoq, but remains amongst the lowest in the industry at 41.2%. Out of the `8,938cr of gross NPAs, ~`5,979 are from accounts worth above `1cr (210 accounts). As per the Management, there is strong focus of the bank in recovering these accounts. The bank restructured loans worth `1,603cr during the quarter taking its outstanding restructured book to `22,182cr (14% of net advances). Outlook and valuation: At the CMP, the stock is trading at 0.7x FY2014E ABV compared to its trading range of 0.61.7x with a median of 1.2x since its listing in 2007. While the stock has corrected 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 (Standalone)
Y/E March (` cr) NII % chg Net profit % chg NIM (%) EPS (`) P/E (x) P/ABV (x) RoA (%) RoE (%)
Source: Company, Angel Research

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 79.2 10.9 2.4 7.5

Abs. (%) Sensex Central Bank

3m 6.6 17.5

1yr 14.3 (3.4)

3yr 20.9 (34.5)

FY2011 5,325 109.2 1,252 18.3 2.8 27.7 3.0 0.7 0.6 23.2

FY2012 5,169 (2.9) 533 (57.4) 2.5 5.2 15.7 1.0 0.2 5.4

FY2013E 5,699 10.3 1,117 109.6 2.4 13.1 6.3 0.9 0.4 10.3

FY2014E 6,774 18.9 1,628 45.7 2.6 20.1 4.1 0.7 0.5 14.3

Vaibhav Agrawal
022 3935 7800 Ext: 6808 vaibhav.agrawal@angelbroking.com

Sourabh Taparia
022 3935 7800 Ext: 6872 sourabh.taparia@angelbroking.com

Please refer to important disclosures at the end of this report

Central Bank of India | 3QFY2013 Result Update

Exhibit 1: 3QFY2013 performance (Standalone)

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

3QFY13 5,462 4,224 1,210 28 4,052 1,410 357 289 184 68 47 58 1,767 988 665 322 779 628 633 (7) 2 151 (29) 180 (19.0)

2QFY13 5,329 4,156 1,163 8 1 3,913 1,416 352 282 206 70 71 5 1,768 952 620 331 816 427 492 (69) 4 389 59 330 15.2

% chg (qoq) 2.5 1.6 4.0 231.8 3.6 (0.4) 1.4 2.4 (10.7) (2.9) (33.8) 1,043.3 (0.1) 3.8 7.3 (2.7) (4.6) 47.0 28.7 (59.5) (61.2) (45.5) (3424)bp

3QFY12 4,741 3,547 1,120 75 3,563 1,179 357 284 148 73 34 102 1,536 922 641 281 614 486 428 52 6 127 14 113 11.2

% chg (yoy) 15.2 19.1 8.0 (62.4) 13.7 19.6 (0.1) 1.6 24.3 (6.8) 38.2 (43.5) 15.0 7.1 3.8 14.6 26.9 29.1 47.9 (73.7) 18.6 58.9 (3017)bp

9MFY13 16,093 12,548 3,496 37 12 11,890 4,203 1,031 791 563 240 146 82 5,234 2,846 1,926 920 2,388 1,408 1,507 (115) 16 980 135 846 13.7

9MFY12 14,209 10,689 3,218 303 10,304 3,905 964 742 426 222 101 215 4,869 2,667 1,875 791 2,202 1,310 1,111 234 (35) 892 254 638 28.5

% chg (yoy) 13.3 17.4 8.6 (87.7) 15.4 7.6 7.0 6.7 32.2 8.1 44.6 (61.7) 7.5 6.7 2.7 16.2 8.4 7.5 35.6 9.9 (47.0) 32.5 (1474)bp

Exhibit 2: 3QFY2013 Actual vs Angel estimates

Particulars (` cr) NII Non-Interest Income Operating Income Operating Expenses Pre-Prov. Profit Provisions & Cont. PBT Prov. for Taxes PAT
Source: Company, Angel Research

Actual 1,410 357 1,767 988 779 628 151 (29) 180

Estimates 1,465 349 1,815 984 831 384 447 98 349

Variation (%) (3.8) 2.1 (2.7) 0.4 (6.2) 63.5 (66.2) (129.2) (48.4)

February 1, 2013

Central Bank of India | 3QFY2013 Result Update

Exhibit 3: 3QFY2013 performance analysis (Standalone)

Particulars Balance sheet Advances (` cr) Deposits (` cr) Credit-to-Deposit Ratio (%) Current deposits (` cr) Saving deposits (` cr) CASA deposits (` cr) CASA ratio (%) CAR (%) Tier 1 CAR (%) Profitability Ratios (%) Cost of deposits Yield on advances Yield on investments Reported NIM Cost-to-income ratio Asset quality Gross NPAs (` cr) Gross NPAs (%) Net NPAs (` cr) Net NPAs (%) Provision Coverage Ratio (%) Slippage ratio (%) Credit cost (%)
Source: Company, Angel Research

3QFY13

1QFY12

% chg (qoq)

3QFY12 % chg (yoy) 18.9 12.7 386bp 8.2 12.0 11.3 (41)bp (211)bp (75)bp 27bp (28)bp 48bp 11bp (413)bp 81.6 195bp 119.7 175bp (685)bp (123)bp 25bp

158,494 150,069 212,201 203,538 74.7 10,898 57,101 67,999 32.0 10.8 7.0 7.4 11.2 7.6 2.6 55.9 8,938 5.6 5,864 3.8 41.2 3.3 1.0 73.7 11,061 56,119 67,180 33.0 11.5 7.5 7.4 11.1 7.5 2.7 53.8 8,507 5.5 5,696 3.8 39.9 4.8 0.8

5.6 133,317 4.3 188,226 96bp (1.5) 1.7 1.2 (96)bp (76)bp (50)bp (1)bp 7bp 14bp (4)bp 209bp 5.1 10bp 2.9 (1)bp 134bp (155)bp 20bp 70.8 10,076 51,004 61,080 32.5 12.9 7.8 7.1 11.4 7.2 2.5 60.0 4,922 3.7 2,669 2.0 48.1 4.5 0.8

Advances growth healthy; NIMs decline marginally qoq

During 3QFY2013, the banks advances grew by a healthy 18.9% yoy. Growth in deposits remained moderate at 12.7% yoy, partly due to the banks conscious strategy to reduce high cost bulk deposits (bulk deposits and CDs as % to overall deposits at 25.7% in 3QFY2013 compared to 31.8% in 3QFY2012). The growth in savings account deposits was moderate, in line with industry trends at 12.0% yoy, while current account deposits grew by 8.2% on a yoy basis. CASA ratio came off by 96bp qoq and 41bp yoy to 32.0%. The Management has guided for advance growth for FY2013 to be ~17%, and CASA ratio at the end of FY2013 at 33%. The reported NIMs for the bank declined marginally by 4bp qoq to 2.6%. The yield on advances for the bank increased by 7bp qoq, as the bank witnessed lower sequential slippages. Cost of deposits remained stable sequentially at 7.4%. As per the Management, shedding of higher costing bulk deposits should lead to lower cost of deposits, going ahead.

February 1, 2013

Central Bank of India | 3QFY2013 Result Update

Exhibit 4: Business growth trends

Adv. yoy chg (%) 30.0 75.2 20.0 70.8 10.0 73.7 Dep. yoy chg (%) 78.3 74.7 CDR (%, RHS) 80.0 78.0 76.0 74.0 72.0 70.0 68.0 66.0 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13
Source: Company, Angel Research

Exhibit 5: CASA deposits growth

CASA ratio (%) 33.5 33.0 32.5 32.0 3.5 7.3 7.0 CASA yoy growth (%, RHS) 11.3 8.7 12.0 10.0 8.0 6.0 4.0

14.6 15.4

13.7 9.4

22.4 6.0

17.0 8.1

18.9 12.7

32.5

33.3

32.9

33.0

32.0

31.5 31.0

2.0 -

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

Source: Company, Angel Research

Exhibit 6: YoA higher for 3QFY2013

(%) 11.50 11.40 11.30 11.20 11.10 11.00 10.90 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 11.12 11.16 11.09 11.16 11.44

Exhibit 7: NIM declines marginally by 4bp

(%) 3.50 3.00 2.53 2.50 2.00 1.50 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 2.59

2.64

2.68

2.64

Source: Company, Angel Research

Source: Company, Angel Research

Muted growth in non-interest income (excluding treasury)

Growth in the banks non-interest income (excluding treasury) was muted at 1.6% yoy, despite a strong performance on the CEB front (up 24.3% yoy) and higher recoveries, as income from others segment nearly halved on a yoy basis. The income from others segment came in lower at `58cr compared to `102cr in 3QFY2012. Recoveries from written-off accounts came in higher by 38.2% yoy to `47cr. Treasury income for the bank declined by 6.8% yoy to `68cr. Overall, the bank registered flat yoy performance on other income front.

Asset quality pressures persist

The bank continued to witness pressure on the asset quality front, as its gross and net NPA levels increased sequentially by 5.1% and 2.9%, respectively. Gross NPA ratio for the bank increased by 10bp sequentially to 5.6%, while Net NPA ratio remained stable sequentially at 3.8%. The annualized slippages ratio for 3QFY2013 stood elevated at 3.3%, though lower than 4.8% in 2QFY2013 and 4.5% in 2QFY2012. PCR improved slightly by 134bp qoq, but remains amongst the lowest at 41.2%. Out of the `8,938cr of gross NPAs, ~`5,979 are from accounts worth above `1cr (210 accounts). As per the Management, there is strong focus of the bank in recovering these accounts.

February 1, 2013

Central Bank of India | 3QFY2013 Result Update

The bank restructured loans worth `1,603cr during the quarter taking its outstanding restructured book to `22,182cr (14% of net advances).

Exhibit 8: Slippages remain at elevated levels

Slippages (%) 12.0 10.0 8.0 6.0 4.0 2.0 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 0.8 0.7 0.8 1.6 1.0 Credit cost (%, RHS) 2.0 1.5 1.0 0.5

Exhibit 9: Asset quality deteriorates sequentially

Gross NPAs (%) 6.0 5.0 4.0 3.0 2.0 48.1 40.6 40.8 39.9 41.2 Net NPAs (%) PCR (%, RHS) 60.0 50.0 40.0 30.0 20.0

4.5

10.9

3.7 2.0

4.8 3.1

4.9 3.2

5.5 3.8

3.9

4.8

3.3

5.6 3.8

1.0 -

10.0 -

3QFY12 4QFY12 1QFY13 2QFY13 3QFY13

Source: Company, Angel Research; Note: PCR including tech. write-offs

Source: Company, Angel Research

CAR on the lower side; Capital infusion from GoI expected

As of 3QFY2013, the banks total CAR stood at 10.8%, with the tier-1 ratio at 7.0% (excluding 9MFY2013 profits), which remains on the lower side. The bank in FY2012 had received `945cr via capital infusion from the Government of India (GoI) and the Life Insurance Corporation of India (LIC). To ensure sufficient capital for future growth, the bank has requested GoI for an equity infusion of ~ `2,400cr, which can be expected in 4QFY2013.

Investment concerns
Low branch productivity and structurally higher opex structure
The bank suffers from low branch and employee productivity in terms of business per branch as well as business per employee. Business per branch for FY2012 was lower than most peer banks. Due to this, the bank suffers from higher operating expenses, as reflected in opex-to-average assets ratio of 2.0% in FY2012.

Outlook and valuation

At the CMP, the stock is trading at 0.7x FY2014E ABV compared to its trading range of 0.61.7x with a median of 1.2x since its listing in 2007. While the stock has corrected over the past year, it is still trading at levels 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.

February 1, 2013

Central Bank of India | 3QFY2013 Result Update

Exhibit 10: Key assumptions

Particulars (%) Credit growth Deposit growth CASA ratio NIMs Other income growth Growth in staff expenses Growth in other expenses Slippages
Source: Angel Research

Earlier estimates FY2013 11.0 11.0 32.4 2.5 4.4 5.0 5.0 4.0 FY2014 11.0 11.0 32.2 2.6 (0.9) 13.5 5.0 3.0

Revised estimates FY2013 14.0 12.0 33.0 2.4 4.6 5.0 5.0 4.0 FY2014 12.0 12.0 32.5 2.6 (1.1) 13.5 5.0 3.0

Exhibit 11: Change in estimates

FY2013 Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Angel Research

FY2014 Earlier estimates 6,793 1,442 8,236 4,357 3,879 1,323 2,556 829 1,726 Revised Var. (%) estimates 6,774 1,443 8,217 4,357 3,860 1,451 2,409 782 1,628 (0.3) 0.0 (0.2) (0.5) 9.7 (5.7) (5.7) (5.7)

Earlier estimates 5,796 1,456 7,252 3,936 3,316 1,536 1,780 392 1,388

Revised Var. (%) estimates 5,699 1,459 7,158 3,936 3,222 1,876 1,346 229 1,117 (1.7) 0.2 (1.3) (2.8) 22.1 (24.4) (41.6) (19.5)

Exhibit 12: P/ABV band

Price (`) 250 200 150 100 50 0 0.3x 0.6x 0.9x 1.2x 1.5x

Aug-07

Dec-10

Apr-09

Nov-08

May-11

Mar-12

Aug-12

Jul-10

Feb-10

Sep-09

Oct-11

Jan-08

Jun-08

Source: Company, Angel Research

February 1, 2013

Jan-13

Central Bank of India | 3QFY2013 Result Update

Exhibit 13: Recommendation summary

Company AxisBk FedBk HDFCBk ICICIBk* SIB YesBk AllBk AndhBk BOB BOI BOM CanBk CentBk CorpBk DenaBk IDBI# IndBk IOB J&KBk OBC PNB SBI* SynBk UcoBk UnionBk UtdBk VijBk Reco. Buy Accumulate Neutral Buy Buy Accumulate Buy Neutral Neutral Accumulate Neutral Accumulate Neutral Buy Buy Buy Buy Accumulate Neutral Neutral Buy Accumulate Buy Neutral Accumulate Buy Accumulate CMP (`) 1,508 511 640 1,171 28 532 160 111 867 354 59 472 83 428 108 106 203 80 1,377 322 899 2,410 133 75 249 74 58 Tgt. price (`) 1,753 557 1,404 34 576 188 380 516 517 132 122 245 88 1,053 2,600 157 286 87 62 Upside (%) 16.2 8.9 19.9 21.9 8.4 18.0 7.4 9.2 20.7 22.6 15.1 20.9 10.2 17.1 7.9 17.5 14.9 17.5 6.8 FY2014E P/ABV (x) 2.0 1.2 3.6 1.9 1.1 2.7 0.7 0.8 1.0 0.9 0.7 0.9 0.7 0.7 0.7 0.7 0.7 0.5 1.2 0.7 0.9 1.6 0.7 0.8 0.8 0.5 0.7 FY2014E Tgt. P/ABV (x) 2.4 1.4 2.2 1.4 2.9 0.8 1.0 1.0 0.8 0.8 0.8 0.9 0.6 1.1 1.7 0.9 1.0 0.6 0.7 FY2014E P/E (x) 10.8 9.9 17.7 13.8 6.8 12.5 4.8 5.1 6.3 5.4 4.5 5.9 4.1 4.3 4.4 4.7 4.7 4.0 7.0 5.4 5.4 9.4 4.8 5.0 5.3 3.4 5.3 FY2012-14E EPS CAGR (%) 16.4 6.4 28.1 22.8 6.9 24.1 (5.2) (4.6) 6.5 18.2 44.3 4.1 95.5 (3.1) 3.5 18.4 4.4 23.9 9.2 23.2 8.0 21.5 12.4 2.6 20.7 19.6 9.7 FY2014E RoA (%) 1.6 1.2 1.8 1.5 1.0 1.5 0.8 0.8 1.0 0.8 0.6 0.8 0.5 0.8 0.8 0.9 1.1 0.6 1.4 0.8 1.0 1.0 0.7 0.5 0.8 0.7 0.5 FY2014E RoE (%) 20.1 13.1 22.1 15.9 17.7 23.6 14.7 13.8 17.1 16.0 16.9 14.7 14.3 14.8 15.9 14.1 16.8 13.4 18.0 13.5 17.5 17.7 16.4 13.5 16.6 16.1 12.6

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

Company Background
Central Bank of India is a mid-size PSU bank, with a balance sheet size of ~`2.5lakh cr. The bank has one of the largest branch networks of 4,238 branches, which are well spread across several major states of India. The bank also has the second highest proportion of rural and semi-urban branches (64% of total branches). In the past, the bank's focus on low-yielding bulk corporate loans was contributing to lower profitability, but slowly the bank is trying to increase its retail lending (still low at about 12% of loans).

February 1, 2013

Central Bank of India | 3QFY2013 Result Update

Income statement
Y/E March (` cr) Net Interest Income - YoY Growth (%) Other Income - YoY Growth (%) Operating Income - YoY Growth (%) Operating Expenses - YoY Growth (%) Pre - Provision Profit - YoY Growth (%) Prov. & Cont. - YoY Growth (%) Profit Before Tax - YoY Growth (%) Prov. for Taxation - as a % of PBT PAT - YoY Growth (%) Preference Dividend PAT avl. to Eq. Sh - YoY Growth (%) FY09 2,228 0.2 1,070 18.6 3,298 5.5 1,862 6.6 1,437 4.1 512 (3.0) 925 8.6 354 38.2 571 3.8 78 494 5.0 FY10 2,545 14.2 1,735 62.2 4,281 29.8 2,222 19.4 2,059 43.3 509 (0.5) 1,550 67.5 491 31.7 1,058 85.3 61 998 102.1 FY11 5,325 109.2 1,265 (27.1) 6,590 54.0 3,999 80.0 2,591 25.9 932 83.2 1,659 7.1 407 24.5 1,252 18.3 131 1,121 12.4 FY12 5,169 (2.9) 1,395 10.3 6,564 (0.4) 3,749 (6.3) 2,815 8.6 2,169 132.6 646 (61.0) 113 17.5 533 (57.4) 147 386 (65.5) FY13E 5,699 10.3 1,459 4.6 7,158 9.1 3,936 5.0 3,222 14.5 1,876 (13.5) 1,736 108.3 229 17.0 1,117 109.6 150 967 150.2 FY14E 6,774 18.9 1,443 (1.1) 8,217 14.8 4,357 10.7 3,860 19.8 1,451 (22.7) 2,409 79.0 782 32.4 1,628 45.7 150 1,477 52.8

Balance sheet
Y/E March (` cr) Share Capital - Equity - Preference Reserve & Surplus Deposits - Growth (%) Borrowings Tier 2 Capital Other Liab. & Prov. Total Liabilities Cash Balances Bank Balances Investments Advances - Growth (%) Fixed Assets Other Assets Total Assets - Growth (%) FY09 1,321 404 917 5,091 131,272 19.0 804 3,854 5,313 147,655 11,037 1,214 43,061 85,483 17.1 2,278 4,582 147,655 19.1 FY10 1,771 404 1,367 5,921 162,107 23.5 2,751 4,575 5,545 182,672 17,012 2,205 50,563 105,383 23.3 2,343 5,165 182,672 23.7 FY11 2,021 404 1,617 6,827 179,356 10.6 7,283 5,605 8,666 209,757 14,082 1,201 54,504 129,725 23.1 2,425 7,819 209,757 14.8 FY12 2,353 736 1,617 10,098 196,173 9.4 6,814 6,105 8,255 229,800 13,114 1,012 59,243 147,513 13.7 2,474 6,443 229,800 9.6 FY13E 2,353 736 1,617 10,937 219,714 12.0 9,005 5,953 9,315 257,276 9,887 3,859 63,674 168,165 14.0 2,687 9,005 257,276 12.0 FY14E 2,353 736 1,617 12,115 246,080 12.0 10,050 5,804 10,739 287,141 9,843 4,307 71,688 188,344 12.0 2,909 10,050 287,141 11.6

February 1, 2013

Central Bank of India | 3QFY2013 Result Update

Ratio analysis
Y/E March Profitability ratios (%) NIMs Cost to Income Ratio RoA RoE B/S ratios (%) CASA Ratio Credit/Deposit Ratio CAR - Tier I Asset Quality (%) Gross NPAs Net NPAs Slippages Loan Loss Prov. /Avg. Assets Provision Coverage Ratio Per Share Data (`) EPS ABVPS (75% cover.) DPS Valuation Ratios PER (x) P/ABVPS (x) Dividend Yield DuPont Analysis NII (-) Prov. Exp. Adj. NII Treasury Int. Sens. Inc. Other Inc. Op. Inc. Opex PBT Taxes RoA Pref. Div. RoA post Pref Div Leverage RoE 1.6 0.4 1.3 0.3 1.6 0.5 2.1 1.4 0.7 0.3 0.4 0.1 0.4 41.2 15.0 1.5 0.3 1.2 0.5 1.7 0.6 2.3 1.3 0.9 0.3 0.6 0.0 0.6 42.1 25.4 2.7 0.5 2.2 0.2 2.4 0.5 2.9 2.0 0.8 0.2 0.6 0.1 0.6 40.6 23.2 2.4 1.0 1.4 0.1 1.5 0.5 2.0 1.7 0.3 0.1 0.2 0.1 0.2 30.9 5.4 2.3 0.8 1.6 0.1 1.7 0.5 2.2 1.6 0.6 0.1 0.5 0.1 0.4 26.0 10.3 2.5 0.5 2.0 0.0 2.0 0.5 2.5 1.6 0.9 0.3 0.6 0.1 0.5 26.3 14.3 6.8 1.1 2.4 3.3 0.8 2.7 3.0 0.7 4.1 15.7 1.0 2.4 6.3 0.9 1.8 4.1 0.7 4.2 12.2 74.3 2.0 24.7 105.2 2.2 27.7 126.4 3.4 5.2 85.6 2.0 13.1 89.3 1.5 20.1 110.3 3.5 2.7 1.2 1.2 0.2 54.1 2.3 0.7 1.2 0.2 70.4 1.8 0.7 1.3 0.3 67.6 4.8 3.1 5.2 0.9 40.6 5.6 3.5 4.0 0.7 45.0 5.7 3.1 3.0 0.4 51.0 33.4 65.1 13.1 7.0 34.4 65.0 12.2 6.8 35.2 72.3 11.6 6.3 33.3 75.2 12.4 7.8 33.0 76.5 11.2 7.5 32.5 76.5 10.7 7.4 1.7 56.4 0.4 15.0 1.6 51.9 0.6 25.4 2.8 60.7 0.6 23.2 2.5 57.1 0.2 5.4 2.4 55.0 0.4 10.3 2.6 53.0 0.5 14.3 FY09 FY10 FY11 FY12 FY13E FY14E

February 1, 2013

Central Bank of India | 3QFY2013 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 4QFY12 3QFY12 % chg (qoq) chg (yoy) trading volume, as opposed to focusing on a company's(` cr) report fundamentals. NII 1,179 1,396 (15.6) 1,432 (17.7)
Pre-prov. the 614 (24.7) The information in this document has been printed on profitbasis of publicly available797 information, (22.9) internal data815 other reliable and sources believed to be true, but we do not represent that it is accurate or 113 complete and it should not be relied 404as such, as this on PAT 244 (53.6) (71.9) document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way Source: Company, Angel Research responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. For all the information contained within this document. Accordingly, we cannot testify, Angel Broking Limited has not independently verified3QFY2012, Central Bank of India reported disappointing results with a 53.6% qoq and 71.9% yoy contents net profit, due to disappointing operating nor make any representation or warranty, express or implied, to the accuracy,dip in its or data contained within this document. While Angel Broking Limited endeavours to update onperformance basis the information provisioning expenses. Even may sluggish PAT a reasonable as well as higher discussed in this material, there the be regulatory, compliance, or other reasons that prevent us from doing so.by reversal of earlier years tax provision of `112cr. Disappointment was aided

This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, restructuring. We recommend Reduce on the stock. redistributed or passed on, directly or indirectly.

on the asset-quality front continued with elevated slippages and ballooning

NIM dips; Asset quality remains under stress: The banks business growth was

Angel Broking Limited and its affiliates may seek to provide or have engaged with advances growingfinance, investment 14.6% yoy) moderate during 3QFY2012, in providing corporate by 4.0% qoq (up banking or other advisory services in a merger or specific transaction to the companies referred to(upthis report, as Overalldate of this report or in and deposits almost flat sequentially in 15.4% yoy). on the CASA deposit growth the past. was rather slow at 7.3% yoy, leading to a sharp 244bp yoy fall in CASA ratio to Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in back of a 15bp qoq fall in yield on advances and a 9bp rise in cost of deposits. connection with the use of this information.

32.5%. The banks reported NIM fell by a rather steep 47bp qoq to 2.53% on the

The bank had to reverse interest income of `110cr on NPAs recognized on

Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer partly switchover to the system-based NPA recognition platform, which to the latest update on respective stocks for the disclosure status in the fall of those stocks. quality Broking Limited and its affiliates may have exacerbated respect in NIM. Asset Angel deteriorated during 3QFY2012 as well, investment positions in the stocks recommended in this report. ratio rising to 3.7% (2.9% in 3QFY12) and net NPA ratio climbing with gross NPA

to over 2.0% (1.4% in 3QFY12). Slippages for 3QFY2012 stood at a steep `1,464cr (annualized slippage ratio of 4.5%) compared to an average quarterly run-rate of `540cr over the past six quarters. A late starter in CBS implementation,

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

Central Bank of India No No No No

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

Ratings (Returns):

Buy (> 15%) Reduce (-5% to -15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

February 1, 2013

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