4QFY2013 Result Update | Banking

May 11, 2013

Central Bank of India

Performance Highlights
Particulars (` cr) NII Pre-prov. profit PAT 4QFY13 1,534 784 169 3QFY13 1,410 779 180 % chg (qoq) 8.8 0.7 (6.0) 4QFY12 1,264 613 -105 % chg (yoy) 21.4 27.9 -

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 7,558 1.2 96/62 163,322 10 20,122 6,107 CBI.BO CBOI@IN

`72 -

Source: Company, Angel Research

Central Bank reported healthy set of numbers for the quarter, as it posted Net profit of `169cr as against a loss of `105cr in 4QFY2012 (the bank had completely switched-over to system based NPA recognition during that quarter, resulting in substantially higher provisioning). Key takeaways from the result were healthy NII growth (21.4% yoy, in-line with expectations), strong performance on the non-interest income front (growth of 47.4% yoy) and sequential improvement in the asset quality front (after witnessing continued stress for several quarters, Gross and Net NPA levels, on an absolute basis came in lower by 5.4% and 14.9% qoq). Healthy business growth; Asset quality improves sequentially: During 4QFY2013, the banks advances grew by a healthy 16.6% yoy. Growth in deposits was also healthy at 15.2% yoy, even as the bank reduced high cost bulk deposits (share of bulk deposits inc. CDs to overall deposits at 24.4% in 4QFY2013 compared to 31.8% in 4QFY2012). CASA ratio for the bank improved by 51bp qoq to 32.6%. Reported NIMs for the bank improved marginally by 4bp qoq to 2.7%. Growth in the banks non-interest income (excluding treasury) was strong at 47.6% yoy, aided by higher recoveries which almost tripled on a yoy basis and income from others segment which more than doubled on a yoy basis. After witnessing continued stress for past several quarters, the bank witnessed improvement in the asset quality, as gross and net NPA levels for the bank reduced sequentially by 5.4% and 14.9%, respectively. Annualized slippages ratio for the quarter came in at 1.9%, much lower than 3.3% in 3QFY2013 and 4.8% in 2QFY2013. PCR improved drastically by 655bp qoq, however, still remains moderate at 47.8%. The bank restructured loans worth `1,226cr, during the quarter taking its outstanding restructured book to `22,681cr (13.2% of net advances). Outlook and valuation: At the CMP, the stock is trading at 0.6x FY2015E ABV compared to its trading range of 0.61.7x with a median of 1.2x since its listing in 2007. At CMP, the stock still trades at relatively expensive valuation than some of the other mid-size PSU banks with a better asset quality outlook and return ratios. Hence, we maintain our Neutral rating on it. 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 85.3 7.7 1.9 5.2

Abs. (%) Sensex CBOI

3m 3.4 (6.2)

1yr 23.5

3yr 17.4

(6.9) (42.3)

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

FY2012 5,169 (2.9) 533 (57.4) 2.5 5.2 13.8 0.8 0.2 5.4

FY2013 5,738 11.0 1,015 90.4 2.4 8.3 8.7 0.8 0.3 8.3

FY2014E 6,706 16.9 1,702 67.7 2.4 14.9 4.9 0.7 0.5 12.5

FY2015E 7,559 12.7 2,054 20.7 2.4 18.2 4.0 0.6 0.6 13.8

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

Central Bank of India | 4QFY2013 Result Update

Exhibit 1: 4QFY2013 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

4QFY13 5,768 4,374 1,283 41 69 4,233 1,534 636 493 253 143 136 104 2,170 1,386 965 421 784 445 423 (49) 71 339 170 169 50.2

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)

% chg (qoq) 5.6 3.6 6.1 46.6 4.5 8.8 78.2 70.7 37.5 110.3 189.4 79.9 22.9 40.3 45.0 30.6 0.7 (29.1) (33.2) 4,156.3 124.4 (6.0) -

4QFY12 4,940 3,732 1,130 (291) 370 3,677 1,264 432 334 238 98 47 49 1,696 1,082 631 451 613 859 879 (80) 60 (246) (141) (105) 57.3

% chg (yoy) 16.7 17.2 13.6 (81.4) 15.1 21.4 47.2 47.6 6.3 45.9 189.4 112.4 28.0 28.0 52.9 (6.7) 27.9 (48.2) (51.9) 19.1 (713)bp

FY2013 21,861 16,923 4,779 79 81 16,123 5,738 1,667 1,284 816 383 282 186 7,405 4,232 2,892 1,341 3,173 1,853 1,930 (164) 87 1,320 305 1,015 23.1

FY2012 19,150 14,420 4,347 12 370 13,981 5,169 1,396 1,076 664 320 148 264 6,564 3,749 2,506 1,243 2,815 2,169 1,990 154 25 647 113 533 17.5

% chg (yoy) 14.2 17.4 9.9 578.4 (78.2) 15.3 11.0 19.5 19.4 22.9 19.7 90.5 (29.3) 12.8 12.9 15.4 7.9 12.7 (14.6) (3.0) 252.7 104.1 169.0 90.3 558bp

Exhibit 2: 4QFY2013 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 1,534 636 2,170 1,386 784 445 339 170 169

Estimates 1,484 386 1,870 1,090 780 470 310 85 225

Variation (%) 3.4 64.7 16.1 27.1 0.6 (5.4) 9.6 100.9 (24.8)

May 11, 2013

Central Bank of India | 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) 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

4QFY13

3QFY12

% chg (qoq)

4QFY12

% chg (yoy) 16.6 15.2 87bp 14.3 12.3 12.7 (72)bp (91)bp 30bp 2bp (3)bp 26bp 9bp 2bp 16.3 (3)bp 9.5 (19)bp 713bp (902)bp (94)bp

171,936 158,494 226,038 212,201 76.1 14,491 59,090 73,581 32.6 11.5 8.1 7.4 11.1 8.1 2.7 63.9 8,456 4.8 4,988 2.9 47.8 1.9 0.6 74.7 10,898 57,101 67,999 32.0 10.8 7.0 7.4 11.1 7.5 2.7 55.9 8,938 5.6 5,864 3.8 41.2 3.3 1.0

8.5 147,513 6.5 196,173 137bp 33.0 3.5 8.2 51bp 74bp 107bp 0bp 0bp 57bp 0bp 795bp (5.4) (84)bp (14.9) (89)bp 655bp (139)bp (37)bp 75.2 12,680 52,595 65,275 33.3 12.4 7.8 7.4 11.1 7.8 2.6 63.8 7,273 4.8 4,557 3.1 40.6 10.9 1.6

Business growth healthy; NIMs improve marginally qoq

During 4QFY2013, the banks advances grew by a healthy 16.6% yoy. Growth in deposits was also healthy at 15.2% yoy, even as the bank reduced its high cost bulk deposits (bulk deposits and CDs as a proportion of overall deposits came in at 24.4% in 4QFY2013 compared to 31.8% in 4QFY2012). Growth in savings deposits was moderate at 12.3% yoy, while current account deposits grew by 14.3% on a yoy basis. CASA ratio improved by 51bp qoq to 32.6%, in-line with the managements guidance. Going forward, the management has guided for advance growth to be ~17-18%, and deposits to grow by ~15-16% for FY2014. Guidance for CASA ratio at the end of FY2014 is ~34-35%. The reported NIMs for the bank improved marginally by 4bp qoq to 2.7%. While, yield on advances for the bank declined by 7bp qoq, yield on investments improved sequentially by 43bp to 8.1%. Cost of deposits and cost of funds remained stable sequentially at 7.4% and 7.5% respectively.

May 11, 2013

Central Bank of India | 4QFY2013 Result Update

Exhibit 4: Business growth healthy

Adv. yoy chg (%) 78.3 30.0 Dep. yoy chg (%) CDR (%, RHS) 79.0 78.0 77.0 76.0 75.0 74.0 73.0 72.0 71.0

Exhibit 5: CASA deposits ratio improves

CASA ratio (%) 33.5 33.0 32.5 32.0 31.5 31.0 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 3.5 7.0 8.7 CASA yoy growth (%, RHS) 12.7 14.0 11.3 12.0 10.0 8.0 6.0 4.0 2.0 -

20.0

76.1 75.2 73.7 74.7

10.0

13.7 9.4

22.4 6.0

17.0 8.1

18.9 12.7

16.6 15.2

33.3

32.9

33.0

32.0

4QFY12 1QFY13 2QFY13 3QFY13 4QFY13

Source: Company, Angel Research

Source: Company, Angel Research

Exhibit 6: CoF reduce for 4QFY2013

7.65 7.60 7.55 7.50 7.45 7.40 7.35 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 7.47 7.44 7.52 7.5 7.61

Exhibit 7: NIM improves marginally by 4bp

(%) 3.50 3.00 2.59 2.50 2.00 1.50 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 2.64

2.68

32.6

2.64

2.68

Source: Company, Angel Research

Source: Company, Angel Research

Strong growth in non-interest income (excluding treasury)

Growth in the banks non-interest income (excluding treasury) was strong at 47.6% yoy, aided by higher recoveries which almost tripled on a yoy basis and income from others segment which more than doubled on a yoy basis. The recoveries from written off accounts were `136cr vis--vis `47cr in 4QFY12. The income from others segment came in at `104cr vis--vis `49cr in 4QFY2012. Treasury income for the bank increased by 45.9% yoy to `143cr. Overall, the bank registered a strong 47.2% yoy growth on the other income front at `636cr.

Asset quality improves sequentially

After witnessing continued stress for past several quarters, the bank witnessed improvement in the asset quality, as gross and net NPA levels for the bank reduced sequentially by 5.4% and 14.9%, respectively. Annualized slippages ratio for the quarter came in at 1.9%, much lower than 3.3% in 3QFY2013 and 4.8% in 2QFY2013. PCR improved drastically by 655bp qoq, however, still remains moderate at 47.8%. Out of the `8,456cr of gross NPAs, ~`5,845cr were from accounts worth more than `1cr (257 accounts). The bank restructured loans worth `1,226cr, during the quarter taking its outstanding restructured book to `22,681cr (13.2% of net advances).

May 11, 2013

Central Bank of India | 4QFY2013 Result Update

Exhibit 8: Slippages came in at lower levels

Slippages (%) 12.0 10.0 1.5 1.6 Credit cost (%, RHS) 2.0

Exhibit 9: Asset quality improves sequentially

Gross NPAs (%) 6.0 5.0 4.0 40.6 40.8 41.2 47.8 48.0 44.0 40.0 39.9 Net NPAs (%) PCR (%, RHS) 52.0

10.9

8.0 6.0 4.0

1.0 0.8 0.7 0.6 1.0 0.5

3.0 2.0

3.9

4.8

3.3

4.8 3.1

4.9 3.2

5.5 3.8

5.6 3.8

1.9

4QFY12 1QFY13 2QFY13 3QFY13

4QFY12 1QFY13 2QFY13 3QFY13 4QFY13

4.8 2.9

2.0

1.0

36.0 32.0

4QFY13

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 FY2013 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 2.1% in FY2013.

Outlook and valuation

At the CMP, the stock is trading at 0.6x FY2015E ABV compared to its trading range of 0.61.7x with a median of 1.2x since its listing in 2007. At CMP, the stock still trades at relatively expensive valuation than some of the other mid-size PSU banks with a better asset quality outlook and return ratios. Hence, we maintain our Neutral rating on it.

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 FY2014E 14.0 12.0 33.1 2.6 2.3 13.5 5.0 3.0 FY2015E 14.0 14.0 32.8 2.6 13.6 7.5 5.0 2.4

Revised estimates FY2014E FY2015E 14.0 13.0 31.7 2.4 (7.4) 7.5 5.0 2.8 14.0 13.0 31.8 2.4 7.1 7.5 5.0 2.4

May 11, 2013

Central Bank of India | 4QFY2013 Result Update

Exhibit 11: 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 7,438 1,648 9,086 4,649 4,436 1,365 3,071 1,044 2,027 Revised Var. (%) estimates 7,559 1,653 9,211 4,820 4,392 1,280 3,111 1,058 2,054 1.6 0.3 1.4 3.7 (1.0) (6.2) 1.3 1.3 1.3

Earlier estimates 6,629 1,450 8,079 4,357 3,722 1,349 2,373 665 1,709

Revised Var. (%) estimates 6,706 1,543 8,249 4,516 3,733 1,369 2,364 662 1,702 1.2 6.4 2.1 3.7 0.3 1.5 (0.4) (0.4) (0.4)

Exhibit 12: P/ABV band

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

Sep-07

Sep-08

Sep-09

Sep-10

Sep-11

Sep-12

Mar-08

Mar-09

Mar-10

Mar-11

Mar-12

Mar-13

Sep-13

Source: Company, Angel Research

Mar-14

May 11, 2013

Central Bank of India | 4QFY2013 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 Neutral Neutral Buy Neutral Neutral Accumulate Neutral Buy Accumulate Neutral Accumulate Neutral Accumulate Neutral Neutral Buy Neutral Neutral Accumulate Buy Accumulate Neutral Neutral Accumulate Accumulate Neutral CMP (`) 1,473 456 702 1,168 24 512 124 92 705 339 57 424 72 410 94 88 161 63 1,359 258 773 2,306 130 74 241 60 53 Tgt. price (`) 1,714 1,357 142 815 360 461 453 186 282 945 2,572 264 64 Upside (%) 16.4 16.2 14.6 15.7 6.2 8.6 10.5 15.0 9.3 22.3 11.6 9.9 6.4 FY2014E P/ABV (x) 1.6 1.0 3.3 1.7 0.9 2.2 0.5 0.6 0.7 0.8 0.6 0.7 0.6 0.5 0.5 0.5 0.5 0.4 1.0 0.5 0.7 1.3 0.7 0.8 0.7 0.4 0.6 FY2014E Tgt. P/ABV (x) 1.9 2.0 0.6 0.9 0.8 0.8 0.6 0.6 0.6 0.9 1.4 0.8 0.4 FY2014E P/E (x) 9.7 7.7 16.5 12.1 5.4 10.7 3.4 3.9 4.9 5.0 4.3 4.9 4.0 3.9 3.5 4.7 3.8 3.1 6.8 4.1 4.4 8.2 4.5 5.1 5.0 2.9 4.9 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
Central Bank of India is a mid-size PSU bank, with a balance sheet size of ~`2.7lakh cr. The bank has one of the largest branch networks of 4,294 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).

May 11, 2013

Central Bank of India | 4QFY2013 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 (%) 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) FY13 5,738 11.0 1,667 19.5 7,405 12.8 4,232 12.9 3,173 12.7 1,853 (14.6) 1,320 104.2 305 23.1 1,015 90.4 150 865 123.7 FY14E 6,706 16.9 1,543 (7.4) 8,249 11.4 4,516 6.7 3,733 17.7 1,369 (26.1) 2,364 79.1 662 28.0 1,702 67.7 150 1,552 79.5 FY15E 7,559 12.7 1,653 7.1 9,211 11.7 4,820 6.7 4,392 17.6 1,280 (6.5) 3,111 31.6 1,058 34.0 2,054 20.7 150 1,903 22.7

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 (%) 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 FY13 2,662 1,045 1,617 12,651 226,038 15.2 12,353 5,953 8,473 268,130 13,560 532 72,604 171,936 16.6 2,685 6,813 268,130 16.7 FY14E 2,662 1,045 1,617 13,900 255,423 13.0 13,877 5,804 9,542 301,207 11,494 4,518 78,609 196,007 14.0 2,925 7,653 301,207 12.3 FY15E 2,662 1,045 1,617 15,378 288,628 13.0 15,607 5,659 10,832 338,766 12,988 5,081 85,449 223,448 14.0 3,192 8,608 338,766 12.5

May 11, 2013

Central Bank of India | 4QFY2013 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 1.5 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 0.7 1.6 0.2 1.7 0.5 2.2 1.7 0.5 0.1 0.4 0.1 0.3 24.0 8.3 2.4 0.5 1.9 0.1 1.9 0.5 2.4 1.6 0.8 0.2 0.6 0.1 0.5 22.9 12.5 2.4 0.4 2.0 0.0 2.0 0.5 2.5 1.5 1.0 0.3 0.6 0.0 0.6 23.2 13.8 2.9 0.7 3.0 2.6 0.6 4.7 13.8 0.8 2.8 8.7 0.8 3.5 4.9 0.7 3.5 4.0 0.6 4.8 24.7 105.2 2.2 27.7 126.4 3.4 5.2 85.6 2.0 8.3 88.1 2.5 14.9 101.6 2.5 18.2 115.7 3.5 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 4.8 2.9 3.4 0.7 47.8 4.9 2.6 2.8 0.4 52.5 5.0 2.5 2.4 0.3 55.0 34.4 65.0 12.2 6.8 35.2 72.3 11.6 6.3 33.3 75.2 12.4 7.8 32.6 76.1 12.0 8.4 31.7 76.7 11.3 8.2 31.8 77.4 10.8 8.0 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 57.2 0.3 8.3 2.4 54.7 0.5 12.5 2.4 52.3 0.6 13.8 FY10 FY11 FY12 FY13 FY14E FY15E

May 11, 2013

Central Bank of India | 4QFY2013 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 trading volume, as opposed to focusing on a company's Particulars (` fundamentals cr) 4QFY12 and, as such, 3QFY12 may not%match chg (qoq) with a 3QFY11 report on a%company's chg (yoy) fundamentals. NII 1,179 1,396 (15.6) 1,432 (17.7)
Pre-prov. 614 (24.7) The information in this document has been printed on profit the basis of publicly available797 information, (22.9) internal data815 and other reliable sources believed to be true, but we do not represent that it is accurate or 113 complete and be relied 404 on as such, (71.9) as this PAT 244 it should not (53.6) 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 3QFY2012, Central Bank of India disappointing results a Angel Broking Limited has not independently verified all the information contained within thisreported document. Accordingly, we cannotwith testify, nor make any representation or warranty, express 53.6% or implied, qoq and to the 71.9% accuracy, yoy dip contents in its or net data profit, contained due towithin disappointing this document. operating While Angel Broking Limited endeavours to update onperformance a reasonable basis the information discussed in this material, Even there may be regulatory, as well as higher provisioning expenses. the sluggish PAT compliance, or other reasons that prevent us from doing so. was aided by reversal of earlier years tax provision of `112cr. Disappointment

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 in providing corporate investment banking or moderate during 3QFY2012, advances growingfinance, by 4.0% qoq (up 14.6% yoy) 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 and deposits almost flat sequentially (up 15.4% yoy). Overall 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. Note: Please refer to the important `Stock Holding Disclosure' the Angel website (Research Section). Also, please refer to the switchover toreport the on system-based NPA recognition platform, which partly latest update on respective stocks for the disclosure status in the respect Angel Broking Limited and its affiliates may exacerbated fall of in those NIM. stocks. Asset quality deteriorated during 3QFY2012 as have well, investment positions in the stocks recommended in this report.

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

with gross NPA ratio rising to 3.7% (2.9% in 3QFY12) and net NPA ratio climbing 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%)

May 11, 2013

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