3QFY2013 Result Update | Banking

February 1, 2013

Bank of India
Performance Highlights

Particulars (` cr) NII Pre-prov. profit PAT 3QFY13 2,308 1,856 803 2QFY13 2,196 1,854 302 % chg (qoq) 5.1 0.1 166.2 3QFY12 2,068 1,732 716 % chg (yoy) 11.6 7.2 12.2

ACCUMULATE
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 20,303 1.1 408/254 129,838 10 19,781 5,999 BOI.BO BOI@IN

`354 `380
12 months

Source: Company, Angel Research

During 3QFY2013, Bank of India reported a net profit growth of 12.2% yoy, mainly aided by lower tax expenses, while the earnings at PBT level declined by 9.5% yoy. Key highlight from the results was the moderation witnessed on the slippages front. Advance growth healthy; NIMs decline sequentially: During 3QFY2013, the overall advances for the bank registered a healthy growth by 20% yoy. Domestic advances grew by 15.7% yoy (aided by strong growth in agri segment and higher lending in segments such as corporate and retail), while international advances grew by 30.5% yoy (due to higher short term credit). Domestic CASA deposits grew at 12.0% yoy, largely aided by 13.2% growth in domestic saving deposits. The domestic reported CASA ratio for the bank improved sequentially by ~100bp to 32.8%. Domestic NIM came off by 4bp sequentially to 2.8%, while the foreign NIMs declined significantly by 10bp qoq to 1.1%. Despite, 8.6% yoy decline in income from the CEB segment, the bank witnessed a moderate 9% yoy growth in non-interest income (excluding treasury), aided by higher recoveries from written-off accounts and strong growth in income from the forex segment. During the quarter, the asset quality pressures for the bank showed early signs of abating, as the annualized slippage ratio came in much lower sequentially at 2.0%, compared to 3.6% in 1HFY2013. Recoveries/upgrades improved sequentially to `679cr compared to an average of `540cr in the last two quarters. The bank reported higher write-offs during the quarter at `811cr compared to a total of `316cr in 1HFY2013. Higher write-offs coupled with lower slippages and better recoveries/upgrades, aided the bank to maintain its gross NPA levels sequentially, on an absolute basis. The banks PCR remained largely stable sequentially at 60.7%. Of the slippages during the quarter, nearly 55% came from a single account in the steel sector. Additionally, the bank restructured advances worth ~`2,200cr during the quarter, of which almost 40% came from the textile industry. As of 3QFY2013, the standard restructured book of the bank stands at ~6.5% of the total loan book. Outlook and valuation: At CMP, the stock trades at a discount to its peers such as BOB and PNB, as its RoE (even after factoring healthy earnings CAGR of 18.2% over FY2012-14E) is expected to reach ~16% in FY2014, which is still lower than its peers. Hence, we value Bank of India at 1.0x (at 10% discount to peers) to arrive at a target price of `380, which still leaves an upside of 7.4% from the CMP; hence, we recommend an Accumulate rating on the stock.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 62.7 16.5 14.5 6.3

Abs. (%) Sensex BOI

3m 6.6 26.6

1yr 14.3 3.9

3yr 20.9 (3.2)

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

FY2011 7,811 35.7 2,489 42.9 2.6 45.5 7.8 1.2 0.8 17.3

FY2012 8,313 6.4 2,678 7.6 2.4 46.6 7.6 1.1 0.7 15.0

FY2013E 9,075 9.2 2,842 6.1 2.3 49.5 7.2 1.0 0.7 13.6

FY2014E 11,070 22.0 3,742 31.7 2.4 65.1 5.4 0.9 0.8 16.0

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

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 8,023 5,791 1,809 298 125 5,714 2,308 937 851 293 86 246 312 3,246 1,390 833 557 1,856 916 591 20 305 940 137 803 14.5

2QFY13 8,005 5,881 1,835 289 0 5,810 2,196 894 791 288 103 167 337 3,090 1,236 700 536 1,854 1,552 1,477 (66) 141 302 0 302 0.0

% chg (qoq) 0.2 (1.5) (1.4) 2.9 (1.6) 5.1 4.8 7.6 1.8 (16.7) 47.7 (7.2) 5.0 12.4 19.1 3.8 0.1 (41.0) (60.0) 116.3 211.3 166.2 1449bp

3QFY12 7,150 5,171 1,841 182 (45) 5,083 2,068 852 781 320 71 186 275 2,920 1,188 759 429 1,732 693 333 119 241 1,039 323 716 31.1

% chg (yoy) 12.2 12.0 (1.7) 63.1 12.4 11.6 10.0 9.0 (8.6) 20.8 32.4 13.7 11.2 17.0 9.8 29.8 7.2 32.1 77.5 (83.2) 26.4 (9.5) (57.7) 12.2 (1654)bp

9MFY13 23,737 17,213 5,541 859 125 17,189 6,548 2,672 2,382 883 290 649 850 9,220 3,837 2,276 1,561 5,383 2,940 2,637 (182) 484 2,443 451 1,993 18.4

9MFY12 20,670 14,654 5,325 536 156 14,858 5,812 2,354 2,019 920 335 305 794 8,167 3,487 2,186 1,301 4,679 2,415 1,545 360 510 2,265 540 1,725 23.8

% chg (yoy) 14.8 17.5 4.1 60.3 (19.7) 15.7 12.7 13.5 18.0 (4.0) (13.6) 113.2 7.0 12.9 10.0 4.1 20.0 15.0 21.8 70.7 (5.0) 7.9 (16.6) 15.5 (540)bp

Exhibit 2: 3QFY2013 Actual vs. 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 2,308 937 3,246 1,390 1,856 916 940 137 803

Estimates 2,253 936 3,189 1,374 1,815 1072 743 186 557

Var (%) 2.5 0.1 1.8 1.2 2.3 (14.6) 26.5 (26.5) 44.2

February 1, 2013

Bank of India | 3QFY2013 Result Update

Exhibit 3: 3QFY2013 performance analysis (Standalone)

Particulars Balance sheet Advances (` cr) Deposits (` cr) Credit-to-Deposit Ratio (%) Domestic current deposits (` cr) Domestic saving deposits (` cr) Domestic CASA deposits (` cr) Global CASA ratio (%) CAR (%) Tier 1 CAR (%) Profitability Ratios (%) Dom. cost of deposits Dom. yield on advances Dom. yield on investments Dom. yield on funds Dom. cost of funds Dom. Reported NIMs Cost-to-income ratio Asset quality Gross NPAs (` cr) Gross NPAs (%) Net NPAs (` cr) Net NPAs (%) Provision Coverage Ratio (%) Slippage Ratio LLP to avg assets (%) 8,625 3.1 5,455 2.0 60.7 2.0 0.6 8,899 3.4 5,228 2.0 61.0 4.4 1.5 (3.1) (34)bp 4.3 (7)bp (22)bp (243)bp (90)bp 6,386 2.7 4,093 1.8 60.9 1.0 0.4 35.1 34bp 33.3 19bp (13)bp 99bp 21bp 7.3 11.6 7.8 9.4 6.8 2.8 42.8 7.3 11.9 8.0 9.4 6.9 2.8 40.0 (7)bp (32)bp (18)bp (1)bp (15)bp (4)bp 282bp 7.1 11.9 7.9 9.3 6.7 2.9 40.7 21bp (35)bp (8)bp 15bp 9bp (11)bp 214bp 276,486 256,148 349,117 332,695 79.2 15,972 72,000 87,972 25.2 10.6 7.6 77.0 13,192 70,978 84,170 25.3 11.1 8.1 7.9 230,355 4.9 307,252 220bp 21.1 1.4 4.5 (10)bp (51)bp (43)bp 75.0 14,965 63,606 78,571 25.6 11.2 7.7 20.0 13.6 422bp 6.7 13.2 12.0 (37)bp (59)bp (1)bp 3QFY13 2QFY13 % chg (qoq) 3QFY12 % chg (yoy)

Source: Company, Angel Research; Note: Profitability ratios excluding CIR for domestic operations

Advance growth healthy; Global NIM declines sequentially

During 3QFY2013, the overall advances for the bank registered a healthy growth by 20.0% yoy. Domestic gross advances for the bank grew by 15.7% yoy (aided by strong growth of 20.1% in agri segment and higher lending in segments such as corporate and retail), while growth in international advances was 30.5% yoy (due to higher short term credit). Overall deposits for the bank grew at a moderate pace of 13.6% yoy. Domestic CASA deposits grew at 12.0% yoy, largely aided by 13.2% growth in domestic saving deposits. Domestic reported CASA ratio for the bank improved sequentially by ~100bp to 32.8%. Domestic NIM for the bank came off slightly by 4bp sequentially to 2.8% as domestic yield on advances declined by 32bp, much higher than the 7bp qoq fall in domestic costs of deposits. Domestic yield on advances moderated by 32bp qoq as interest reversal on slipped advances was higher during 3QFY2013. Foreign NIM for the bank declined by 10bp sequentially to 1.1%, as 35bp qoq fall in foreign yield on funds more than offset the 23bp fall in foreign costs of funds.
February 1, 2013

Bank of India | 3QFY2013 Result Update

Sharp fall of 35bp in foreign yield on funds was on account of higher short-term lending by the bank, taking advantage of excess liquidity. The overall NIM came off sequentially by 6bp to 2.36% (adjusting for interest on income tax refund, it would have been 2.34%). Going forward during 4QFY2013, the Management has guided for domestic NIM to be in the range of 2.95-3.0%, and global NIM to be 2.6%, as they target higher domestic lending and also due to expectation of no interest reversals.

Exhibit 4: Loan growth remains healthy

Adv. yoy chg (%) 25.0 20.0 15.0 10.0 5.0 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13
Source: Company, Angel Research

Exhibit 5: Domestic CASA ratio improves sequentially

CDR (%, RHS) 79.2 80.0 78.0 76.0 33.0 32.5 32.0 31.5 31.0 Domestic CASA ratio (%) 13.4 11.2 CASA yoy growth (%, RHS) 16.0 14.0 12.0 12.0 10.0 8.0 6.0 4.0 2.0 3QFY13

Dep. yoy chg (%) 77.9 77.0

78.2

12.2 9.8

75.0

19.5 21.7

16.8 6.5

22.9 15.7

19.5 11.2

20.0 13.6

32.4

32.8

31.2

31.8

30.5 30.0

72.0

3QFY12

4QFY12

1QFY13

2QFY13

Source: Company, Angel Research

Exhibit 6: Strong Gr. in Agri and higher corporate loans aide Domestic loan Gr.
Particulars (` cr) Agricultural SME Corporates Retail Domestic advances International Global advances 3QFY13 24,949 32,561 20,914 87,506 2QFY13 % chg (qoq) 23,034 31,459 20,280 73,622 8.3 3.5 2.6 3.1 18.9 3QFY12 % chg (yoy) 20,780 31,150 93,391 18,004 67,030 20.1 4.5 18.4 16.2 15.7 30.5 20.0 % to total 9.0 11.8 40.0 7.6 68.4 31.6 100.0

110,556 107,753 188,980 182,526 276,486 256,148

3.5 163,325 7.9 230,355

Source: Company, Angel Research

Exhibit 7: Trend in yield and cost ratios (Global)

Particulars (%) Cost of deposits Yield on advances Yield on investments Yield on funds Cost of funds Reported NIM
Source: Company, Angel Research

3QFY13 6.0 8.9 7.7 7.9 5.6 2.4

2QFY13 6.1 9.2 7.9 8.0 5.8 2.4

% chg (qoq) (10)bp (32)bp (17)bp (13)bp (21)bp (6)bp

3QFY12 6.0 9.5 7.7 8.0 5.7 2.6

32.8

74.0

% chg (yoy) 4bp (58)bp (6)bp (8)bp (5)bp (19)bp

February 1, 2013

Bank of India | 3QFY2013 Result Update

Exhibit 8: Domestic YoA lower by 32bp

(%) 12.5 12.0 11.5 11.0 10.5 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 11.93 12.26 11.9 11.58 11.25

Exhibit 9: Domestic NIM decline by 4bp qoq

(%) 3.50 3.00 2.50 2.00 1.50 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 2.91 2.56 3.29 2.84 2.80

Source: Company, Angel Research

Source: Company, Angel Research

Moderate growth in non-interest income (excluding treasury) aided by higher recoveries/forex income
Despite an 8.6% yoy decline in the income from commission, exchange and brokerage (CEB) segment, the bank witnessed moderate performance on the noninterest income (excluding treasury) front, with a growth of 9.0% yoy, aided by higher recoveries from written-off accounts and strong growth in income from forex segment. Recoveries from written-off accounts grew by 32.4% yoy to `246cr, while income from forex segment grew at a strong pace of 46.2% yoy to `181cr. Income from treasury grew by 20.8% yoy to `86cr. Overall, non-interest income for the bank grew by 10% yoy.

Exhibit 10: Higher recoveries & Strong forex income gr. aides non-int. inc. Gr.
Particulars (` cr) CEB Treasury Forex Recoveries Others Other income Other income excl. treasury
Source: Company, Angel Research

3QFY13 2QFY13 293 86 181 246 131 937 851 288 103 184 167 153 894 791

% chg (qoq) 3QFY12 1.8 (16.7) (1.5) 47.7 (14.1) 4.8 7.6 320 71 124 186 151 852 781

% chg (yoy) (8.6) 20.8 46.2 32.4 (13.0) 10.0 9.0

Asset quality pressures show signs of abating, as slippages came in moderate

During the quarter, the asset quality pressures for the bank showed early signs of abating, as annualized slippage ratio for the bank came in much lower sequentially at 2.0%, compared to 3.6% in 1HFY2013. Recoveries/upgrades during the quarter came in higher sequentially at `679cr compared to an average of `540cr in last two quarters. The bank reported higher write-offs during the quarter at `811cr compared to a total of `316cr in 1HFY2013. Higher write-offs coupled with lower slippages and better recoveries/upgrades, aided the bank to maintain its gross NPA levels sequentially, on an absolute basis. The banks PCR remained largely stable sequentially at 60.7%. Gross and net NPA ratio came off by 34bp and 7bp, sequentially to 3.1% and 2.0%, respectively.
February 1, 2013

Bank of India | 3QFY2013 Result Update

Of the slippages during the quarter, nearly 55% came from a single account in the steel sector. Additionally, the bank restructured advances worth ~`2,200cr during the quarter, compared to ~`4,800cr in 1HFY2013. Almost 40% of the restructuring during the quarter came in the textile industry. As of 3QFY2013, the standard restructured book of the bank stood at ~`18,136cr, ~6.5% of the loan book. Going forward, as per the Management, no major advances are in the restructuring pipeline.

Exhibit 11: Slippages moderated in 3QFY2013

Slippages (%) 3.5 2.8 2.1 1.4 0.7 (0.0) 1.0 3QFY12 0.4 0.7 4QFY12 0.5 2.8 1QFY13 0.6 4.4 2QFY13 2.0 3QFY13 0.6 1.5 Credit cost (%, RHS) 1.8 1.5 1.2 0.9 0.6 0.3 -

Exhibit 12: NPA ratios improve sequentially

Gross NPAs (%) 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 64.2 60.9 60.9 61.0 60.7 63.0 Net NPAs (%) PCR (%, RHS) 67.0

59.0

2.7 1.8

2.3 1.5

2.6 1.7

3.4 2.0

3.1 2.0
55.0

3QFY12 4QFY12 1QFY13 2QFY13 3QFY13

Source: Company, Angel Research

Source: Company, Angel Research

Exhibit 13: Trend in other income excluding treasury

OIET to avg assets (%) 1.0 0.8 0.6 0.4 0.2 32.6 0.9 1.0 0.8 34.5 28.3 15.1 9.0 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13
Source: Company, Angel Research

Exhibit 14: Cost ratios deteriorate sequentially

Cost-to-income ratio (%) 44.0 43.0 42.0 41.0 40.0 1.3 1.6 1.2 1.2 1.4 Opex to average assets (%, RHS) 2.0 1.5 1.0

OIET yoy chg (%, RHS) 0.8 50.0 40.0 30.0 20.0 10.0 -

0.8

40.7

41.9

42.0

40.0

39.0 38.0

42.8

0.5 -

3QFY12 4QFY12 1QFY13 2QFY13 3QFY13

Source: Company, Angel Research

February 1, 2013

Bank of India | 3QFY2013 Result Update

Investment arguments
Reasonably high fee income with a moderate funding mix
The banks international operations contribute a substantial ~29% (30.5% yoy growth in 3QFY2013 primarily due to rupee depreciation) to the banks advances. International operations enable a wider spectrum of fee-based services to the banks domestic corporate and retail customers; foreign currency fund-based services to Indian corporates; and savings products to the banks PIO clients abroad. The bank has a moderate funding mix, with domestic reported CASA ratio at 33.8% as of 3QFY2013.

Investment concerns Asset quality still remains on the radar

Asset quality pressures, which had moderated in FY2011 post the severe stress witnessed in FY2010, had again re-surfaced for the bank in FY2012 (slippages at 2.5% in FY2012, compared to 2.9% in FY2010 and 1.7% in FY2011). These pressures had continued in 1HFY2013 as well, with annualized slippages coming in at 3.6%. Though, in 3QFY2013, the annualized slippage ratio has moderated to 2.0%. We would remain watchful of the asset quality trends for the bank, for the next few quarters.

Outlook and valuation

At CMP, the stock trades at a discount to its peers such as BOB and PNB, as its RoE (even after factoring healthy earnings CAGR of 18.2% over FY2012-14E) is expected to reach ~16% in FY2014E, which is still lower than peers. Hence, we value Bank of India at 1.0x (at 10% discount to peers) to arrive at a target price of `380, which still leaves an upside of 7.4% from the CMP; hence, we recommend an Accumulate rating on the stock.

February 1, 2013

Bank of India | 3QFY2013 Result Update

Exhibit 15: Key assumptions

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

Earlier estimates FY2013 18.0 17.0 25.6 2.2 10.5 6.0 14.0 3.9 60.5 FY2014 15.0 15.0 25.4 2.4 2.4 15.0 10.0 2.8 65.0

Revised estimates FY2013 17.0 15.0 26.0 2.3 12.0 4.0 15.0 3.0 63.5 FY2014 17.0 15.0 25.8 2.4 0.9 15.0 10.0 2.6 65.0

Exhibit 16: Change in estimates

FY2013 Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT Earlier estimates 8,898 3,670 12,568 5,388 7,180 4,075 3,105 714 2,391 Revised estimates 9,075 3,719 12,793 5,346 7,447 3,756 3,691 849 2,842 % chg 2.0 1.3 1.8 (0.8) 3.7 (7.8) 18.9 18.9 18.9 Earlier estimates 11,000 3,758 14,758 6,089 8,669 3,223 5,447 1,767 3,680 FY2014 Revised estimates 11,070 3,753 14,823 6,039 8,784 3,244 5,539 1,797 3,742 % chg 0.6 (0.1) 0.4 (0.8) 1.3 0.7 1.7 1.7 1.7

Source: Company, Angel Research

Exhibit 17: P/ABV band

Price (`) 1000 800 600 400 200 0
Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Sep-02 Sep-03 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12

0.8x

1.1x

1.4x

1.7x

2x

Source: Company, Angel Research

February 1, 2013

Bank of India | 3QFY2013 Result Update

Exhibit 18: 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 1,397 34 576 188 380 60 516 517 132 122 245 88 1,053 2,600 157 286 87 62 Upside (%) 16.2 8.9 19.3 21.9 8.4 18.0 7.4 1.9 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 0.7 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 14.1 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 FY2011-14E EPS CAGR (%) 16.4 6.4 28.1 21.6 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 15.6 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
Bank of India (BoI) is amongst the five largest banks in India, with a balance sheet size of over `4lakh cr. The bank has a pan-India network of around 4,150 branches, of which ~64% are located in rural and semi-urban areas. The bank also has considerable presence overseas, which accounts for ~29% of its total loans (amongst the highest in the Indian banking industry).

February 1, 2013

Bank of India | 3QFY2013 Result Update

Income statement (Standalone)

Y/E March (` cr) NII - 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 (%) FY09 5,499 30.0 3,052 44.2 8,551 34.7 3,094 17.0 5,457 47.4 1,292 27.1 4,164 55.1 1,157 27.8 3,007 49.7 FY10 5,756 4.7 2,617 (14.3) 8,373 (2.1) 3,668 18.5 4,705 (13.8) 2,211 71.1 2,494 (40.1) 753 30.2 1,741 (42.1) FY11 7,811 35.7 2,642 1.0 10,452 24.8 5,068 38.2 5,384 14.4 1,889 (14.6) 3,495 40.2 1,007 28.8 2,489 42.9 FY12 8,313 6.4 3,321 25.7 11,635 11.3 4,941 (2.5) 6,694 24.3 3,116 65.0 3,578 2.3 900 25.2 2,678 7.6 FY13E 9,075 9.2 3,719 12.0 12,793 10.0 5,346 8.2 7,447 11.3 3,756 20.5 3,691 3.2 849 23.0 2,842 6.1 FY14E 11,070 22.0 3,753 0.9 14,823 15.9 6,039 13.0 8,784 17.9 3,244 (13.6) 5,539 50.1 1,797 32.4 3,742 31.7

Balance sheet (Standalone)

Y/E March (` cr) Share Capital Reserves & 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 526 12,969 189,708 26.5 9,487 6,186 6,625 225,502 8,915 12,846 52,607 142,909 25.9 2,532 5,692 225,502 26.1 FY10 526 13,704 229,762 21.1 14,079 8,320 8,590 274,982 15,603 15,628 67,080 168,491 17.9 2,352 5,829 274,982 21.9 FY11 547 16,743 298,886 30.1 12,862 9,160 12,975 351,173 21,782 15,528 85,872 213,096 26.5 2,481 12,413 351,173 27.7 FY12 575 20,387 318,216 6.5 22,749 9,366 13,243 384,535 14,987 19,725 86,754 248,833 16.8 2,772 11,466 384,535 9.5 FY13E 575 22,628 365,948 15.0 25,958 9,131 14,546 438,787 16,468 22,507 92,526 291,135 17.0 3,068 13,083 438,787 14.1 FY14E 575 25,569 420,841 15.0 29,709 8,903 16,600 502,197 16,834 25,760 100,595 340,628 17.0 3,406 14,974 502,197 14.5

February 1, 2013

10

Bank of India | 3QFY2013 Result Update

Ratio analysis
Y/E March 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 Per Share Data (`) EPS ABVPS 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 Leverage (x) RoE 2.7 0.6 2.1 0.4 2.4 1.1 3.6 1.5 2.1 0.6 1.5 19.6 29.2 2.3 0.9 1.4 0.2 1.7 0.8 2.5 1.5 1.0 0.3 0.7 20.4 14.2 2.5 0.6 1.9 0.1 2.0 0.7 2.7 1.6 1.1 0.3 0.8 21.8 17.3 2.3 0.8 1.4 0.1 1.5 0.8 2.3 1.3 1.0 0.2 0.7 20.6 15.0 2.2 0.9 1.3 0.1 1.4 0.8 2.2 1.3 0.9 0.2 0.7 19.7 13.6 2.4 0.7 1.7 0.0 1.7 0.8 2.5 1.3 1.2 0.4 0.8 20.1 16.0 6.2 1.6 2.3 10.7 1.5 2.0 7.8 1.2 2.0 7.6 1.1 2.0 7.2 1.0 2.5 5.4 0.9 3.4 57.2 223.9 8.0 33.1 231.9 7.0 45.5 288.3 7.0 46.6 324.1 7.0 49.5 351.8 9.0 65.1 400.2 12.0 1.7 0.4 1.8 0.3 74.6 2.9 1.3 2.9 0.7 65.5 2.2 0.9 1.7 0.3 72.2 2.3 1.5 2.5 0.6 64.2 3.4 1.9 3.0 0.8 63.5 4.1 2.0 2.6 0.6 65.0 26.8 75.3 13.0 8.9 27.8 73.3 12.9 8.5 25.4 71.3 12.2 8.3 26.7 78.2 12.0 8.6 26.0 79.6 11.3 8.3 25.8 80.9 10.8 8.2 FY09 2.8 36.2 1.5 29.2 FY10 2.4 43.8 0.7 14.2 FY11 2.6 48.5 0.8 17.3 FY12 2.4 42.5 0.7 15.0 FY13E 2.3 41.8 0.7 13.6 FY14E 2.4 40.7 0.8 16.0

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Bank of India | 3QFY2013 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
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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

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%)

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