4QFY2013 Result Update | Banking

May 3, 2013

Canara Bank
Performance Highlights

Particulars (` cr) NII Pre-prov. profit PAT 4QFY13 2,091 1,698 725 3QFY13 1,988 1,516 710 % chg (qoq) 5.2 12.0 2.1 4QFY12 2,040 1,491 829 % chg (yoy) 2.5 13.9 (12.5)

BUY
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 17,485 1.1 550/306 89,857 10 19,576 5,944 CNBK.BO CBK@IN

`395 `461
12 months

Source: Company, Angel Research

Canara Bank reported a weak set of numbers for 4QFY2013, as net profit declined by 12.5% yoy. NII grew at a muted pace of around 2.5% yoy, while non-interest income grew by 30.8% yoy (aided by higher treasury gains), leading to a moderate 13.9% yoy growth in operating profit. The key takeaways from the results were sequential improvement in reported NIM (3bp qoq to 2.4%) and stability on the asset quality front (as lower slippages help contain the sequential increase in Gross and Net NPA levels to 2.8%, each). However, the restructuring during the quarter was substantially high at `2,877cr. Strong business growth qoq; Asset quality stable sequentially: During 4QFY2013, the banks advance book increased substantially by 11.0% on a qoq basis, while deposits also grew strongly at 9.8% qoq. Current deposits remained flat yoy, while saving deposits grew by 9.8% yoy. Consequently, the overall CASA deposits grew by 8.1% yoy (6.0% qoq). The calculated CASA ratio for the bank declined by 87bp sequentially to 24.2%. The banks yield on advances came in flat sequentially at 11.1%, however, a 5bp sequential decline in cost of funds to 6.9%, resulted in a marginal improvement in reported NIM by 3bp to 2.4%. Non-interest income (excluding treasury) witnessed an increase of 11.9% yoy, on back of higher recoveries from written off accounts and modest growth of 7.9% yoy in fee income. On the asset quality front, while slippages, on an absolute basis, remained elevated at `1,086cr, however, were lower sequentially considering slippages of `1,314cr in 3QFY2013 and `1,922cr in 2QFY2013. Recoveries/upgrades came in at `520cr, much higher compared to `217cr in 3QFY2013. Aided by sequentially lower slippages and higher recoveries/upgrades, the bank was able to contain the sequential increase in absolute Gross and Net NPA levels at 2.8% each. Gross and Net NPA ratios were lower by 20bp and 17bp, respectively to 2.6% and 2.2%. The PCR for the bank was stable sequentially at 61.4%. Additionally, the bank restructured advances worth `2,877cr (primarily from the infrastructure sector) during the quarter. Outlook and valuation: At the current market price, the stock trades at a cyclically moderate valuation of 0.7x FY2015E ABV vs an eight-year average of 1.1x and range of 0.7-1.4x. We value the bank at 0.8x FY2015E ABV and recommend an Buy rating on the stock with a target price of `461. 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 67.7 13.4 12.3 6.7

Abs. (%) Sensex CBK

3m

1yr

3yr 12.6 (7.8)

(1.0) 14.1 (16.4) (8.1)

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

FY2012 7,689 (0.1) 3,283 (18.5) 2.2 74.1 5.3 0.9 0.9 17.0

FY2013 7,879 2.5 2,872 (12.5) 2.1 64.8 6.1 0.8 0.7 13.2

FY2014E 8,838 12.2 3,313 15.4 2.1 74.8 5.3 0.7 0.8 13.7

FY2015E 9,979 12.9 3,808 14.9 2.2 86.0 4.6 0.7 0.8 14.2

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

Akshay Narang
022 3935 7800 Ext: 6829 akshay.narang@angelbroking.com

Harshal Patkar
022 3935 7800 Ext: 6847 harshal.patkar@angelbroking.com

Please refer to important disclosures at the end of this report

Canara Bank | 4QFY2013 Result Update

Exhibit 1: 4QFY2013 performance (Standalone)

Particulars (` cr) Interest earned - on Advances / Bills - on investments - on balance with RBI & 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

4QFY13 8,465 6,073 2,307 85 6,374 2,091 1,007 755 232 252 133 390 3,097 1,399 888 511 1,698 752 346 84 322 945 220 725 23.3

3QFY13 8,544 5,958 2,460 127 6,556 1,988 846 595 199 251 59 337 2,834 1,317 831 486 1,516 626 594 (129) 161 890 180 710 20.2

% chg (qoq) (0.9) 1.9 (6.2) (33.1) (2.8) 5.2 19.0 26.9 16.6 0.4 125.4 15.6 9.3 6.2 6.9 5.1 12.0 20.2 (41.8) (165.1) 100.3 6.2 22.2 2.1 306bp

4QFY12 8,267 6,189 1,908 170 6,227 2,040 769 674 215 95 98 361 2,809 1,319 826 493 1,491 462 390 (107) 179 1,029 200 829 19.4

% chg (yoy) 2.4 (1.9) 20.9 (49.9) 2.4 2.5 30.8 11.9 7.9 165.3 35.7 7.8 10.2 6.1 7.6 3.7 13.9 63.0 (11.3) (178.5) 80.5 (8.1) 10.0 (12.5) 384bp

FY2013 34,078 24,380 9,112 585 26,199 7,879 3,153 2,477 797 676 303 1,377 11,032 5,142 3,254 1,888 5,890 2,218 1,861 (370) 727 3,672 800 2,872 21.8

FY2012 30,851 23,443 7,053 353 23,161 7,689 2,928 2,604 798 324 363 1,443 10,617 4,674 2,973 1,701 5,943 1,860 1,294 154 413 4,083 800 3,283 19.6

% chg (yoy) 10.5 4.0 29.2 65.6 13.1 2.5 7.7 (4.9) (0.1) 108.6 (16.5) (4.6) 3.9 10.0 9.4 11.0 (0.9) 19.2 43.9 (340.6) 76.1 (10.1) (12.5) 219bp

Exhibit 2: 4QFY2013 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 2,091 1007 3,097 1,399 1,698 752 945 220 725

Estimates 2,027 781 2,807 1,367 1,441 466 975 197 778

Var (%) 3.2 28.9 10.3 2.4 17.8 61.6 (3.1) 11.5 (6.7)

May 3, 2013

Canara Bank | 4QFY2013 Result Update

Exhibit 3: 4QFY2013 performance analysis (Standalone)

Particulars Balance sheet Advances (` cr) Deposits (` cr) Credit-to-Deposit Ratio (%) Current deposits (` cr) Saving deposits (` cr) CASA deposits (` cr) Calculated CASA ratio (%) CAR (%) Tier 1 CAR (%) Profitability Ratios (%) Cost of deposits Yield on advances Yield on investments Yield on funds Cost of funds Reported NIMs Cost-to-income ratio Asset quality Gross NPAs (` cr) Gross NPAs (%) Net NPAs (` cr) Net NPAs (%) PCR incl. tech. w/offs (%) Slippage ratio (%) NPA to avg. assets (%)
Source: Company, Angel Research

4QFY13 242,177 355,856 68.1 14,893 71,168 86,061 24.2 12.4 9.8 7.7 11.1 8.1 9.1 7.0 2.4 45.2 6,260 2.6 5,278 2.2 61.4 1.9 0.3

3QFY13 218,242 323,963 67.4 12,473 68,689 81,162 25.1 12.6 9.8 7.8 11.1 8.1 9.1 7.0 2.4 46.5 6,090 2.8 5,134 2.4 61.5 2.3 0.6

%chg (qoq) 11.0 9.8 69bp 19.4 3.6 6.0 (87)bp (24)bp 1bp (9)bp 1bp 0bp (1)bp (5)bp 3bp (131)bp 2.8 (20)bp 2.8 (17)bp (15)bp (39)bp (27)bp

4QFY12 232,490 327,054 71.1 14,819 64,792 79,611 24.3 13.8 10.4 7.4 10.9 8.0 9.0 6.7 2.5 46.9 4,032 1.7 3,386 1.5 67.6 2.1 0.4

%chg (yoy) 4.2 8.8 (303)bp 0.5 9.8 8.1 (16)bp (136)bp (58)bp 37bp 20bp 17bp 13bp 26bp (11)bp (176)bp 55.3 84bp 55.9 72bp (624)bp (24)bp (7)bp

Strong business growth qoq; NIM improves marginally qoq

During 4QFY2013, the banks advance book increased substantially by 11.0% on a qoq basis, while deposits also grew strongly at 9.8% qoq. Strong sequential growth in advances was driven by 15.3% qoq growth in Agri loan book and 13.5% qoq growth in SME advances. Retail loans were higher by around 8.6% qoq aided by 12.2% qoq growth in home loans. Overall, the CD ratio for the bank was higher by 69bp qoq to 68.1%. Current deposits remained flat yoy (however, higher by 19.4% qoq), while the saving deposits grew by 9.8% yoy (3.6% qoq). Consequently, the overall CASA deposits grew by 8.1% yoy (6.0% qoq). Calculated CASA ratio for the bank declined by 16bp yoy (87bp qoq) to 24.2%. The banks yield on advances came in flat sequentially at 11.1%, however, a 5bp sequential decline in cost of funds to 6.9%, resulted in a marginal improvement in reported NIM by 3bp to 2.4%. The banks cost of deposits declined sequentially by 10bp to 7.7%.

May 3, 2013

Canara Bank | 4QFY2013 Result Update

Exhibit 4: Advances increase marginally on a yoy basis

Adv. yoy chg (%) 71.1 Dep. yoy chg (%) 67.4 7.0 67.4 68.1 CDR (%, RHS) 72.0 70.0 68.0

Exhibit 5: Calculated CASA ratio declines sequentially

30.0 27.5 25.0 2.4 22.5 20.0 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 7.6 3.4 Calculated CASA ratio CASA yoy growth (%, RHS) 30.0 20.0 10.0 -

14.0

8.1

9.4 11.3

4.9 11.5

(0.5)

7.7

2.7

4.2

64.1

8.8

66.0 64.0 62.0 60.0

(1.0)

24.3

23.3

24.8

25.1

24.2

4QFY12 (7.0)

1QFY13

2QFY13

3QFY13

4QFY13

(4.2)

(10.0)

Source: Company, Angel Research

Source: Company, Angel Research

Exhibit 6: NIM improves by 3bp qoq, due to...

(%) 3.00 2.50 2.00 1.50 1.00 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13
Source: Company, Angel Research

Exhibit 7: ...5bp fall in CoF, partly on lower CoD

Cost of funds 8.00 Cost of deposits

2.50

2.40

2.53

2.36

2.39

7.50 7.00 6.50 6.00 4QFY12 1QFY13 2QFY13 3QFY13

Source: Company, Angel Research

6.72 7.35

7.12 7.89

7.13 7.83

7.03 7.81

4QFY13

Moderate growth in Non-interest income (excl. treasury) on back of higher recoveries and modest growth in fee income
During 4QFY2013, Non-interest income (excluding treasury) witnessed an increase of 11.9% yoy to `755cr, on back of higher recoveries from written off accounts and subdued growth in fee income. While the fee income for the bank witnessed a growth of 7.9% yoy to `232cr, recoveries from written-off accounts increased by a strong 35.7% yoy to `133cr. The bank reported treasury income of `252cr during the quarter compared to `95cr in 4QFY2012. Aided by substantially higher treasury income and recoveries, the overall non-interest income for the bank witnessed a strong growth of 30.8% yoy to `1,007cr.

May 3, 2013

6.98 7.72

Canara Bank | 4QFY2013 Result Update

Exhibit 8: Non-interest income increases on higher treasury gains

Particulars (` cr) Fee Income Treasury Recoveries Others Other income Other income excl. treasury
Source: Company, Angel Research

4QFY13 232 252 133 390 1,007 755

3QFY13 199 251 59 337 846 595

% chg (qoq) 16.6 0.4 125.4 15.6 19.0 26.9

4QFY12 215 95 98 361 769 674

% chg (yoy) 7.9 165.3 35.7 7.8 30.8 11.9

Asset quality stable sequentially

On the asset quality front, while slippages, on an absolute basis, remained elevated at `1,086cr (primarily came from the infrastructure sector), however, were lower sequentially considering slippages of `1,314cr in 3QFY2013 and `1,922cr in 2QFY2013. Recoveries/upgrades came in at `520cr, much higher compared to `217cr in 3QFY2013. Aided by sequentially lower slippages and higher recoveries/upgrades, the bank was able to contain the sequential increase in absolute Gross and Net NPA levels at 2.8% each. Gross and Net NPA ratios were lower by 20bp and 17bp, respectively to 2.6% and 2.2%, also due to high sequential loan book growth. PCR for the bank was stable sequentially at 61.4%. Additionally, the bank restructured advances worth `2,877cr (primarily from the infrastructure sector) during the quarter, much higher than `857cr restructured in 3QFY2013, thereby taking its outstanding restructured book to `18,113cr. As per the Management, an account restructured during the quarter was not accepted by the auditors, which led to the same account being reported twice in restructuring book as well as the NPA book.

Exhibit 9: Slippages remain at elevated levels

3.50 3.00 2.50 2.00 1.50 1.00 0.5 0.4 0.5 0.3 Slippages (%) Credit cost (%, RHS) 0.6 0.6 0.4 0.2 0.8

Exhibit 10: NPA levels lower sequentially

3.0 2.5 2.0 1.5 1.0 67.6 66.5 63.0 61.5 61.4 62.0 56.0 Gross NPAs (%) Net NPAs (%) PCR (%, RHS) 80.0 74.0 68.0

1.7 1.5

2.0 1.7

2.6 2.1

2.8 2.4

2.1

2.6

3.3

2.3

1.9

4QFY12 1QFY13 2QFY13 3QFY13 4QFY13

2.6 2.2
50.0

0.50

0.5

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

Source: Company, Angel Research

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

May 3, 2013

Canara Bank | 4QFY2013 Result Update

Exhibit 11: Branch expansion trends

3,800 3,650 3,500 3,350 3,200 3,050 2,900 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13
Source: Company, Angel Research

Exhibit 12: Opex.-to-avg. assets ratio higher qoq

3,681 3728 Cost-to-income ratio (%) 50.0 45.0 40.0 35.0 30.0 25.0 20.0 4QFY12 1QFY13 2QFY13 3QFY13
Source: Company, Angel Research

Opex to average assets (%, RHS) 1.3 1.4 1.4 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 -

3,600

3,609

3,655

1.4 1.2

4QFY13

Investment concerns
Weak liability franchise likely to keep NIM under pressure
The bank has a relatively weak liability profile with a calculated CASA base at 24.2% as of 4QFY2013. The bank has relatively high proportion of more costly bulk deposits, which increases the banks exposure to interest rate movements. Due to low credit-deposit ratio of 68.1% in 4QFY2013 and elevated slippages, margins continued to remain under check at under 2.4%. However going ahead, the bank is expected to significantly shed down its high-costs bulk deposits portfolio. Also, the bank has embarked on a relatively aggressive network expansion plan. Over the past two years, the bank has added ~470 branches and more than 1300 ATMs. Such a pace of network expansion should augur well, in our view, for strengthening the banks relatively weak liability franchise. Also, the bank plans to take the number of branches from 3,728 to 5,000 by March 2015 which should give a thrust to its low cost deposits.

Outlook and valuation

At the current market price, the stock trades at a cyclically moderate valuation of 0.7x FY2015E ABV vs eight-year average of 1.1x and range of 0.7-1.4x. We value the bank at 0.8x FY2015E ABV and recommend a Buy rating on the stock with a target price of `461.

May 3, 2013

45.19

46.9

45.0

50.0

46.5

Canara Bank | 4QFY2013 Result Update

Exhibit 13: Key assumptions

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

Earlier estimates FY2014E 14.0 10.0 27.4 2.2 0.0 7.5 7.5 2.0 65.0 16.0 14.0 27.7 2.3 13.8 7.5 7.5 1.6 67.5

Revised estimates 18.0 8.0 25.4 2.1 (2.0) 7.5 7.5 2.0 63.5 18.0 12.0 26.1 2.2 12.9 7.5 7.5 1.7 65.0

FY2015E FY2014E FY2015E

Exhibit 14: Change in estimates

FY2014E Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Angel Research

FY2015E Earlier estimates 9,878 3,330 13,208 5,904 7,304 1,543 5,760 1,958 3,802 Revised Var. (%) estimates 9,979 3,487 13,467 5,942 7,525 1,756 5,769 1,961 3,808 1.0 4.7 2.0 0.6 3.0 13.8 0.1 0.1 0.1

Earlier estimates 8,745 2,928 11,673 5,493 6,180 1,700 4,480 1,165 3,316

Revised Var. (%) estimates 8,838 3,090 11,928 5,528 6,400 1,923 4,478 1,164 3,313 1.1 5.5 2.2 0.6 3.6 13.1 (0.1) (0.1) (0.1)

Exhibit 15: P/ABV band

1200 1000 800 600 400 200 0 Price (`) 0.75x 1x 1.25x 1.5x 1.75x

Oct-08

Feb-07

Nov-10

Sep-06

Feb-12

Sep-11

May-08

May-13

Dec-07

Aug-09

Dec-12

Oct-13

Jan-10

Jun-10

Apr-06

Apr-11

Jul-07

Jul-12

Source: Company, Angel Research

May 3, 2013

Mar-09

Mar-14

Canara Bank | 4QFY2013 Result Update

Exhibit 16: 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 Neutral Neutral Buy Neutral Neutral Buy Neutral Buy Accumulate Neutral Buy Neutral Buy Accumulate Neutral Buy Accumulate Neutral Accumulate Buy Buy Neutral Reduce Accumulate Accumulate Accumulate CMP (`) 1,474 447 681 1,130 24 498 132 92 699 327 57 395 70 376 91 89 163 62 1,327 256 746 2,217 129 72 240 60 52 Tgt. price (`) 1,737 1,352 155 815 360 461 453 101 193 70 282 889 2,567 68 264 68 55 Upside (%) 17.9 19.7 17.6 16.6 10.1 16.7 20.4 11.4 18.2 12.3 10.4 19.2 15.8 (5.7) 10.1 13.2 5.9 FY2014E P/ABV (x) 1.6 1.0 3.2 1.6 0.9 2.1 0.5 0.6 0.7 0.7 0.6 0.6 0.6 0.5 0.5 0.5 0.5 0.4 1.0 0.5 0.7 1.2 0.6 0.7 0.7 0.4 0.6 FY2014E Tgt. P/ABV (x) 1.9 1.9 0.6 0.9 0.8 0.8 0.6 0.6 0.7 0.5 0.6 0.8 1.4 0.7 0.8 0.5 0.6 FY2014E P/E (x) 9.7 7.5 16.0 11.7 5.3 10.4 3.7 3.9 4.8 4.8 4.3 4.6 3.9 3.6 3.4 4.8 3.9 3.1 6.6 4.0 4.2 7.9 4.5 5.0 5.0 2.9 4.7 FY2012-14E EPS CAGR (%) 17.3 10.0 22.8 15.5 11.4 14.9 12.6 4.2 17.0 21.8 14.8 14.0 42.8 8.3 4.3 15.2 6.5 53.3 (5.2) 17.5 12.4 16.4 (3.5) 36.9 21.2 40.4 21.2 FY2014E RoA (%) 1.6 1.2 1.8 1.5 1.0 1.3 0.8 0.8 1.0 0.8 0.6 0.8 0.6 0.8 0.8 0.7 1.0 0.7 1.2 0.8 1.0 1.0 0.7 0.6 0.8 0.7 0.5 FY2014E RoE (%) 17.6 13.7 21.8 15.6 17.1 22.1 14.2 13.4 16.0 15.1 15.6 14.1 13.3 14.4 15.3 11.3 14.9 13.1 16.0 13.1 16.3 17.0 15.2 12.6 15.3 14.7 11.7

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

Company Background
Canara Bank is the largest south India -based PSU bank (overall fifth largest bank in India), with a balance sheet size of around `4.1lakh cr. The bank has a reasonably large pan-India presence; with about 45% of its 3,700+ branches outside South India (the bank also has 3,500+ ATMs).

May 3, 2013

Canara Bank | 4QFY2013 Result Update

Income statement (Standalone)

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 (%) FY10 5,681 20.4 2,858 17.7 8,538 19.5 3,478 13.5 5,061 24.1 1,239 (17.8) 3,821 48.6 800 20.9 3,021 45.8 FY11 7,699 35.5 2,811 (1.6) 10,511 23.1 4,419 27.1 6,091 20.4 1,066 (14.0) 5,026 31.5 1,000 19.9 4,026 33.2 FY12E 7,689 (0.1) 2,928 4.1 10,617 1.0 4,674 5.8 5,943 (2.4) 1,860 74.6 4,083 (18.8) 800 19.6 3,283 (18.5) FY13E 7,879 2.5 3,153 7.7 11,032 3.9 5,142 10.0 5,890 (0.9) 2,218 19.2 3,672 (10.1) 800 21.8 2,872 (12.5) FY14E 8,838 12.2 3,090 (2.0) 11,928 8.1 5,528 7.5 6,400 8.7 1,923 (13.3) 4,478 21.9 1,164 26.0 3,313 15.4 FY15E 9,979 12.9 3,487 12.9 13,467 12.9 5,942 7.5 7,525 17.6 1,756 (8.7) 5,769 28.8 1,961 34.0 3,808 14.9

Balance sheet (Standalone)

Y/E March (` cr) Share Capital 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 (%) FY10 410 14,262 234,651 25.6 1,041 7,399 6,977 264,741 15,719 3,934 69,677 169,335 22.5 2,859 3,217 264,741 20.6 FY11 443 19,597 293,437 25.1 5,198 9,063 8,207 335,945 22,015 8,693 83,636 211,268 24.8 2,844 7,488 335,945 26.9 FY12E 443 22,247 327,054 11.5 6,558 8,967 8,891 374,160 17,795 10,384 102,057 232,490 10.0 2,858 8,576 374,160 11.4 FY13E 443 24,435 355,856 8.8 11,540 8,743 11,325 412,343 15,406 19,309 121,133 242,177 4.2 2,863 11,456 412,343 10.2 FY14E 443 27,027 384,324 8.0 12,449 8,524 12,051 444,820 17,295 14,157 112,246 285,768 18.0 2,996 12,358 444,820 7.9 FY15E 443 30,012 430,443 12.0 13,895 8,311 13,370 496,475 19,370 13,319 109,543 337,207 18.0 3,243 13,793 496,475 11.6

May 3, 2013

Canara Bank | 4QFY2013 Result Update

Ratio analysis (Standalone)

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 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 Leverage RoE 2.3 0.5 1.8 0.4 2.2 0.8 3.0 1.4 1.6 0.3 1.2 21.5 26.8 2.6 0.4 2.2 0.1 2.3 0.9 3.1 1.5 1.7 0.3 1.3 19.7 26.4 2.2 0.5 1.6 0.1 1.7 0.7 2.5 1.3 1.1 0.2 0.9 18.4 17.0 2.0 0.6 1.4 0.2 1.6 0.6 2.2 1.3 0.9 0.2 0.7 18.1 13.2 2.1 0.4 1.6 0.1 1.7 0.7 2.3 1.3 1.0 0.3 0.8 17.8 13.7 2.1 0.4 1.7 0.0 1.8 0.7 2.5 1.3 1.2 0.4 0.8 17.5 14.2 5.4 1.3 2.5 4.3 1.0 2.8 5.3 0.9 2.8 6.1 0.8 3.3 5.3 0.7 3.5 4.6 0.7 4.1 73.7 305.8 10.0 90.9 401.1 11.0 74.1 448.1 11.0 64.8 472.9 13.0 74.8 532.9 14.0 86.0 601.6 16.0 1.5 1.1 2.4 0.6 77.7 1.5 1.1 2.1 0.3 73.0 1.7 1.5 2.2 0.4 67.6 2.6 2.2 2.5 0.5 61.4 3.0 2.0 2.0 0.4 63.5 3.1 1.8 1.7 0.3 65.0 29.1 72.2 13.4 8.5 28.3 72.0 15.4 10.9 24.3 71.1 13.8 10.4 24.2 68.1 13.4 10.3 25.4 74.4 13.5 10.6 26.1 78.3 13.2 10.6 2.4 40.7 1.2 26.8 2.6 42.0 1.3 26.4 2.2 44.0 0.9 17.0 2.1 46.6 0.7 13.2 2.1 46.3 0.8 13.7 2.2 44.1 0.8 14.2 FY10 FY11 FY12E FY13E FY14E FY15E

May 3, 2013

10

Canara Bank | 4QFY2013 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment 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. 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 trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. 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. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

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

Canara Bank 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%)

May 3, 2013

11