2QFY2012 Result Update | Banking

November 2, 2011

Allahabad Bank
Performance Highlights

Particulars (` cr) NII Pre-prov. profit PAT

Source: Company, Angel Research

ACCUMULATE
CMP Target Price
% chg (qoq) 12.1 6.7 16.7 2QFY11 969 782 403 % chg (yoy) 36.0 21.5 21.2

`161 `169
12 months

2QFY12 1,318 949 488

1QFY12 1,176 890 418

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 7,669 1.0 271/139 105,118 10 17,465 5,258 ALBK.BO ALBK@IN

For 2QFY2012, Allahabad Bank reported 21.2% yoy growth in its net profit to `488cr, well ahead of our estimates due to a lower-than-expected effective tax rate. On the PBT level, results were largely in-line with our estimates. NIM surprised positively despite a drop in CD ratio. Slippages rose due to the completion of switchover to system-based NPA recognition platform. We upgrade the stock to Accumulate (from Neutral) on attractive valuations. NIM surprises positively; slippages rise on switchover: After the healthy 5.5% qoq growth in advances in the seasonally lean first quarter, the banks advances came off by 3.1% qoq (up 16.6% yoy) during 2QFY2012. Deposits growth remained healthy at 6.1% qoq and 25.0% yoy. Consequently, the CD ratio dipped by 640bp qoq to 67.4%. CASA deposits growth was moderate at 10.3% yoy (with saving deposits registering relatively better growth of 15.8% yoy), leading to a sharp 409bp yoy reduction in calculated share of CASA to 30.6%. Despite the fall in CASA proportion and a lower CD ratio, the bank managed to expand its reported NIM by 28bp qoq to 3.7% on the back of a sharp 98bp qoq surge in yield on advances (partly due to faster growth in the high-yielding SME segments advances and conscious reduction in the share of short-term loans in the loan book) vis--vis just an 11bp qoq rise in cost of deposits. Slippages for the quarter rose as the bank completed the migration to system-based NPA recognition platform. The annualized slippage ratio increased to 2.2% from 0.6% registered in 1QFY2012. Management attributed around half of the slippages arising to the switchover exercise. Overall asset quality was within manageable levels with gross and net NPAs rising by 6.9% qoq and 12.8% qoq, respectively. Provision coverage ratio, including technical write-offs, was stable sequentially at 79.6%. Outlook and valuation: We had turned Neutral on the stock in our last result update on concerns over asset quality and since then the stock has fallen by 26%. Taking into account the banks reasonably healthy retail deposits base, especially in the eastern hinterland, the prospects of lower technically incremental slippages on completion of the switchover and attractive valuations (0.7x FY201E ABV), we upgrade the stock to Accumulate with a target price of `169. Key financials
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 58.0 17.3 13.0 11.7

Abs. (%) Sensex

Allahabad Bank

3m (3.6) (18.8)

1yr (14.2) (37.7)

3yr 78.4 230.7

FY2010 2,650 22.8 1,206 57.0 2.5 27.0 6.0 1.2 1.1 22.2

FY2011 4,022 51.8 1,423 18.0 3.0 29.9 5.4 1.0 1.0 21.0

FY2012E 5,192 29.1 1,752 23.1 3.3 36.8 4.4 0.9 1.1 21.0

FY2013E 5,607 8.0 1,790 2.2 3.1 37.6 4.3 0.7 1.0 18.4

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

Shrinivas Bhutda
022 3935 7800 Ext: 6845 shrinivas.bhutda@angelbroking.com

Varun Varma
022 3935 7800 Ext: 6847 varun.varma@angelbroking.com

Please refer to important disclosures at the end of this report

Allahabad Bank | 2QFY2012 Result Update

Exhibit 1: 2QFY2012 performance

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 - Recoveries 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

2QFY12 1QFY12 % chg (qoq) 2QFY11 % chg (yoy) 3,893 2,961 907 20 5 2,575 1,318 309 302 257 7 23 22 1,627 678 467 211 949 412 302 82 28 538 50 488 9.2 3,550 2,699 834 16 0 2,374 1,176 286 260 207 26 65 (12) 1,461 572 382 190 890 320 166 113 41 570 152 418 26.6 9.7 9.7 8.8 24.9 8.5 12.1 8.1 16.3 24.2 (73.1) (63.8) 11.4 18.6 22.3 11.1 6.7 28.8 82.2 (27.0) (32.8) (5.7) (67.3) 16.7 (1,741)bp 2,637 1,984 631 14 8 1,668 969 345 308 213 37 76 19 1,314 532 350 182 782 271 225 4 43 510 108 403 21.1 47.6 49.3 43.8 40.7 (41.0) 54.4 36.0 (10.3) (1.8) 20.7 (81.1) (69.1) 16.0 23.9 27.4 33.4 15.7 21.5 51.7 34.0 2,214.3 (35.4) 5.4 (53.9) 21.2 (1,185)bp

Exhibit 2: 2QFY2012 Actual vs. estimates

Particulars (` cr) Net interest income Other income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Company, Angel Research

Actual 1,318 309 1,627 678 949 412 538 50 488

Estimates 1,175 305 1,480 594 887 368 518 155 363

Var. (%) 12.2 1.3 9.9 14.2 7.1 11.7 3.7 (68.1) 34.5

November 2, 2011

Allahabad Bank | 2QFY2012 Result Update

Exhibit 3: 2QFY2012 performance analysis

Particulars (` cr) 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 Yield on funds Cost of funds Reported NIM Cost-to-income ratio Asset quality Gross NPAs (` cr) Gross NPAs (%) Net NPAs (` cr) Net NPAs (%) Provision coverage ratio (%) Annualized slippage ratio (%) NPA prov. to avg. assets (%)
Source: Company, Angel Research

2QFY12 1QFY12 % chg (qoq) 2QFY11 % chg (yoy) 95,717 67.4 7,609 35,875 43,484 30.6 13.0 8.9 7.1 12.6 7.6 10.9 7.1 3.7 41.7 1,715 1.8 664 0.7 79.6 2.2 0.8 98,740 73.8 8,055 34,800 42,855 32.0 12.8 8.6 7.0 11.6 7.6 10.3 6.9 3.4 39.1 1,604 1.6 589 0.6 79.9 0.6 0.4 (3.1) (640)bp (5.5) 3.1 1.5 (141)bp 24bp 38bp 11bp 98bp 0bp 60bp 24bp 28bp 254bp 6.9 15bp 12.8 9bp (32)bp 158bp 33bp 82,088 72.2 8,448 30,982 39,430 34.7 13.5 8.4 5.7 10.4 6.9 9.0 5.8 3.3 40.5 1,470 1.8 457 0.6 81.0 2.5 0.7 16.6 25.0 (485)bp (9.9) 15.8 10.3 (409)bp (50)bp 52bp 138bp 221bp 64bp 182bp 133bp 34bp 115bp 16.7 0bp 45.5 13bp (144)bp (31)bp 6bp 142,043 133,818 6.1 113,633

Advances decline qoq; deposits accretion picks up

After healthy 5.5% qoq growth in advances in the seasonally lean first quarter, the banks advances came off by 3.1% qoq (up 16.6% yoy) in 2QFY2012. Sequentially, only the retail segments loans managed to post growth (up 4.9% qoq and 20.4% yoy). Given the seasonal nature of agri loans, they fell by 7.0% qoq. On a yoy basis, growth in SME advances remained healthy at over 45%.

Exhibit 4: CD ratio comes off sharply

Adv. qoq chg (%) 10.0 7.5 5.0 72.2 71.8 Dep. qoq chg (%) 73.8 71.0 CDR (%, RHS) 75.0 67.4 70.0 65.0

Exhibit 5: Deterioration of CASA ratio continues

CASA ratio 36.0 34.0 32.0 26.1 21.6 20.7 15.6 10.3 10.0 20.0 CASA yoy growth (%, RHS) 30.0

8.4 4.9

5.8 6.4

7.8 9.0

(3.1)

(2.5) (5.0)

5.5 1.5

2.5

6.1

34.7

33.3

33.5

32.0

55.0 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12

28.0 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12

Source: Company, Angel Research

30.6

60.0

30.0

Source: Company, Angel Research

November 2, 2011

Allahabad Bank | 2QFY2012 Result Update

On the deposits side, growth was faster at 6.1% qoq and 25.0% yoy. CASA deposits growth was moderate at 10.3% yoy (with saving deposits registering relatively better growth of 15.8% yoy), leading to a sharp 409bp yoy reduction in calculated share of CASA to 30.6%. Volatile current account deposits declined by 9.9% yoy (5.5% qoq); however, saving account deposits growth was relatively better at 15.8% yoy. Consequently, the credit-to-deposit ratio dipped by 640bp qoq and 485bp yoy to 67.4%. With the widening differential between fixed deposit interest rates and savings account interest rates, the pace of growth in CASA deposits moderated further to 15.6% yoy from 20.7% in 1QFY2012. CASA ratio came off by ~150bp qoq to 32.0% as the bank had lower flows from government-related businesses. Recently, the bank has secured a mandate from the West Bengal State Government for opening accounts for disbursal of salaries. The bank has also launched a campaign to open ~15 lakh saving accounts by 3QFY2012. These initiatives are expected to at least sustain the CASA ratio at current levels.

NIM surprises positively

Despite the decline in CASA proportion and a lower CD ratio, the bank managed to expand its reported NIM by 28bp qoq to 3.7% on the back of a sharp 98bp qoq surge in yield on advances (partly due to faster growth in the high-yielding SME segments advances and conscious reduction in share of short-term loans in the loan book) vis--vis just an 11bp qoq rise in cost of deposits.

Exhibit 6: Higher yield on advances...

(%) 13.0 12.0 11.0 10.0 9.0 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 10.6 10.7 11.6 10.4 12.6

Exhibit 7: ...leads to strong surge in reported NIM

(%) 3.9 3.6 3.3 3.3 3.0 2.7 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3.4 3.5 3.7 3.4

Source: Company, Angel Research

Source: Company, Angel Research

Slippages rise as expected; but overall asset quality well within manageable levels
Slippages for the quarter rose, in-line with expectations, as the bank completed the migration to system-based NPA recognition platform. The annualized slippage ratio increased to 2.2% from 0.6% registered in 1QFY2012. Management attributed around half of the slippages arising to the switchover exercise. The rise in gross NPAs was contained through stronger recoveries and upgrades as well as write-off of `250cr. During 1HFY2012, the bank has recovered `443cr from gross NPAs, including written-off accounts, in-line with its target of achieving recovery of `1,000cr in FY2012.

November 2, 2011

Allahabad Bank | 2QFY2012 Result Update

Overall asset quality was within manageable levels with gross and net NPAs rising by 6.9% qoq and 12.8% qoq, respectively. Gross and net NPA ratios increased marginally to 1.8% and 0.7%, respectively. Provision coverage ratio, including technical write-offs, was stable sequentially at 79.6% (81.0% in 2QFY2011). The bank restructured loans of ~`270cr during 2QFY2012, which pertained to a chunky corporate account. Cumulatively, the bank has restructured loans of `2,942cr, of which `220cr has slipped into NPAs. Going forward, management does not expect a sharp rise in restructuring.

Exhibit 8: Asset quality largely maintained

Gross NPAs (%) 2.0 1.5 1.0 0.5 81.0 80.2 75.7 Net NPAs (%) 79.9 PCR (%, RHS) 79.6 85.0 80.0 75.0 70.0

Exhibit 9: Slippages rise on switchover exercise

Slippages (%) 5.0 4.0 3.0 2.0 1.0 2.5 2.0 4.5 0.6 2.2 0.7 0.5 0.4 0.9 Credit cost (%, RHS) 1.0 0.8 0.8 0.6 0.4 0.2 -

1.8 0.6

1.8 0.6

1.7 0.8

1.6 0.6

2QFY11 3QFY11 4QFY11 1QFY12 2QFY12

1.8 0.7

65.0 60.0

2QFY11 3QFY11 4QFY11 1QFY12 2QFY12

Source: Company, Angel Research

Source: Company, Angel Research; Note: PCR incl. technical write-offs

Provisioning expenses for the quarter rose sharply by 51.7% yoy, mainly on account of provisions for MTM losses on investments of `82cr as compared to just `4cr in 2QFY2011. The bank also had to provide `302cr towards NPA provisions as compared to `166cr in 1QFY2012 and `225cr in 2QFY2011.

Opex to remain high on employee benefits-related provisions; branch expansion likely to be back-ended
Staff expenses continued the sharp rising trend, increasing by 33.4%. Even, overall operating expenses rose considerably by 27.4% yoy. Consequently, the cost-toincome ratio increased to 41.7% from 39.1% registered in 1QFY2012 and the opex-to-average assets ratio increased to 1.7% from 1.5% in 1QFY2012.

Exhibit 10: Branch expansion picks up a bit

2,500 2,450 2,400 2,350 2,300 2,250 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 2,402 2,364 2,441 2,415 2,416

Exhibit 11: Cost ratios rise but remain well under control
Cost-to-income ratio (%) 60.0 45.0 30.0 1.7 1.5 2.3 1.7 Opex to average assets (%, RHS) 2.5 1.5 2.0 1.5 1.0

40.5

39.8

51.9

39.1

41.7

15.0 -

0.5 -

2QFY11 3QFY11 4QFY11 1QFY12 2QFY12

Source: Company, Angel Research

Source: Company, Angel Research

November 2, 2011

Allahabad Bank | 2QFY2012 Result Update

The bank added 25 branches in 2QFY2012. The bank plans to open 155 branches in FY2012, which is likely to be back-ended, in economically stronger states such as Gujarat, Maharashtra (particularly Mumbai), Haryana, Karnataka and Andhra Pradesh. This will also enable the bank to geographically establish a wider branch network, as it is hardly present in these states.

Investment arguments
Healthy retail deposit base and moderate fee income
Allahabad Bank has strong 41% of its branches in the CASA deposit-rich rural areas, which ensure relatively higher sustainability of the low-cost deposits reservoir, also reflected in the strong 24.0% CAGR in its saving account deposits over FY200911. Although the banks CASA market share reduced by 16bp over FY200610 to 2.4%, the decline in market share has been one of the lowest in its peer group. Also, the bank has a relatively lower share of wholesale deposits and CDs at 12.1%. Recently, the bank has secured a mandate from the West Bengal State Government for opening accounts for disbursal of salaries. The bank has also launched a campaign to open ~15 lakh saving accounts by 3QFY2012. These initiatives are expected to at least sustain the CASA ratio at current levels. The bank is now planning to diversify its branch network by expanding in the economically vibrant states of Gujarat, Maharashtra (particularly Mumbai), Haryana, Karnataka and Andhra Pradesh. The banks relatively better CASA ratio, of 3233%, is also likely to help in moderating the expected NIM pressures. As compared to peers such as IOB, OBC, Corporation Bank and UCO Bank, the bank has a higher structural CASA share. Also, growth in fee income (other income excluding treasury income) has been strong at a 45.8% CAGR over FY200911 (0.9% of average assets for FY2011). However, we have factored in lower growth in fee income than peers, as a large part of the banks high fee income was driven by above-average recoveries from written-off accounts (0.24% of average assets for FY2011), which could decline going forward.

Outlook and valuation

Management indicated that it had paid ~`300cr extra for income tax in FY2011, which is likely to be refunded in 2HFY2012. The effective tax rate for FY2012 is expected to be on the lower side at 21-22% on account of taking benefits of various exemptions. We had turned Neutral on the stock in our last result update on concerns over asset quality and since then the stock has fallen by 26%. Taking into account the banks reasonably healthy retail deposits base, especially in the eastern hinterland, the prospects of lower technically incremental slippages on completion of the switchover and attractive valuations (0.7x FY201E ABV), we upgrade the stock to Accumulate with a target price of `169.

November 2, 2011

Allahabad Bank | 2QFY2012 Result Update

Exhibit 12: Key assumptions

Particulars (%) Credit growth Deposit growth CASA ratio NIMs Other income growth Growth in staff expenses Growth in other expenses Slippages Treasury gain/(loss) (% of investments)
Source: Angel Research

Earlier estimates FY2012 21.0 19.0 32.6 2.9 (1.0) 14.0 2.4 0.1 FY2013 19.0 17.0 32.2 2.6 14.2 15.0 15.0 2.4 0.1

Revised estimates FY2012 16.0 12.0 34.7 3.3 (4.3) 12.0 15.0 2.5 0.1 FY2013 18.0 18.0 34.0 3.1 13.5 10.0 12.0 2.9 0.1

Exhibit 13: Change in estimates

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

Earlier estimates
4,656 1,357 6,013 2,448 3,566 1,316 2,250 675 1,575

FY2012 FY2013 Revised Revised Earlier Var. (%) Var. (%) estimates estimates estimates
5,192 1,311 6,503 2,642 3,861 1,460 2,401 648 1,752 11.5 (3.4) 8.1 8.0 8.3 11.0 6.7 (4.0) 11.3 5,019 1,550 6,569 2,815 3,754 1,258 2,497 810 1,687 5,607 1,488 7,095 2,925 4,171 1,521 2,650 860 1,790 11.7 (4.0) 8.0 3.9 11.1 20.9 6.2 6.2 6.2

Exhibit 14: P/ABV band

Price (`) 350 300 250 200 150 100 50 0 0.3x 0.6x 0.9x 1.2x 1.5x

Dec-10

Apr-06

Aug-08

Mar-09

Oct-09

Jul-11

Nov-06

Source: Company, Angel Research

November 2, 2011

May-10

Feb-12

Jun-07

Jan-08

Allahabad Bank | 2QFY2012 Result Update

Exhibit 15: Recommendation summary

Company AxisBk FedBk HDFCBk ICICIBk* SIB YesBk AllBk AndhBk BOB BOI BOM CanBk CentBk CorpBk DenaBk IDBI IOB J&KBk OBC PNB SBI* SynBk UcoBk UnionBk UtdBk VijBk
#

Reco. Buy Accumulate Neutral Buy Neutral Buy Accumulate Neutral Accumulate Accumulate Accumulate Accumulate Neutral Buy Neutral Neutral Neutral Accumulate Neutral Accumulate Accumulate Buy Buy Neutral Accumulate Buy Neutral

CMP (`) 1,128 412 483 887 23 308 161 118 800 333 50 482 101 428 82 115 215 100 823 286 979 1,909 107 74 225 71 60

Tgt. price (`) 1,414 444 1,114 355 169 881 362 55 510 498 107 301 1,106 2,239 123 238 82 -

Upside (%) 25.4 7.9 25.6 15.4 5.2 10.1 8.7 10.9 5.9 16.3 7.3 5.3 13.0 17.3 15.3 5.8 15.2 -

FY2013E P/ABV (x) 1.8 1.1 3.3 1.6 1.1 1.9 0.7 0.8 1.1 0.9 0.7 0.9 0.7 0.7 0.6 0.7 0.9 0.6 0.9 0.7 1.1 1.4 0.7 0.9 0.9 0.6 0.8

FY2013E Tgt P/ABV (x) 2.3 1.2 2.0 2.3 0.8 1.2 1.0 0.7 1.0 0.8 0.7 0.7 1.3 1.7 0.8 0.9 0.7 -

FY2013E P/E (x) 9.9 8.4 16.8 13.0 6.8 10.2 4.3 5.3 5.7 5.5 4.3 5.6 5.2 4.4 3.9 5.4 5.5 4.0 5.2 5.0 5.8 7.3 4.7 4.4 5.1 4.2 7.3

FY2011-13E EPS CAGR (%) 17.7 19.5 30.5 23.3 15.6 19.9 12.2 (0.9) 14.2 15.2 38.1 (3.0) (16.1) 1.5 7.5 12.3 0.2 20.0 12.0 5.1 9.9 41.4 11.8 15.9 5.2 13.4 (3.2)

FY2013E RoA (%) 1.5 1.2 1.7 1.4 1.0 1.3 1.0 0.9 1.2 0.7 0.6 0.9 0.5 0.8 0.8 0.7 1.1 0.6 1.3 0.8 1.1 1.0 0.7 0.7 0.8 0.6 0.4

FY2013E RoE (%) 20.0 14.0 20.9 15.4 18.2 20.8 18.4 15.8 20.7 17.1 16.5 17.2 13.9 16.6 16.4 14.0 17.4 15.9 17.8 14.1 20.6 21.9 16.3 16.7 17.0 14.1 10.5

IndBk

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

November 2, 2011

Allahabad Bank | 2QFY2012 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 (%) FY07 1,751 11.0 376 (22.0) 2,127 3.3 1,027 (0.8) 1,100 7.4 265 (17.2) 835 18.5 85 10.2 750 6.2 FY08 1,672 (4.5) 965 156.3 2,637 24.0 1,158 12.7 1,480 34.5 357 35.1 1,122 34.3 147 13.1 975 29.9 FY09 2,159 29.1 1,142 18.4 3,301 25.2 1,399 20.9 1,901 28.5 825 131.0 1,076 (4.1) 307 28.6 769 (21.1) FY10 2,650 22.8 1,516 32.7 4,166 26.2 1,618 15.6 2,549 34.1 777 (5.9) 1,772 64.7 565 31.9 1,206 57.0 FY11 4,022 51.8 1,370 (9.6) 5,393 29.4 2,338 44.5 3,055 19.9 1,124 44.7 1,931 9.0 508 26.3 1,423 18.0 FY12E 5,192 29.1 1,311 (4.3) 6,503 20.6 2,642 13.0 3,861 26.4 1,460 29.9 2,401 24.3 648 27.0 1,752 23.1 FY13E 5,607 8.0 1,488 13.5 7,095 9.1 2,925 10.7 4,171 8.0 1,521 4.1 2,650 10.4 860 32.4 1,790 2.2

Balance sheet
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 (%) FY07 447 4,030 22.8 257 1,582 1,804 4,068 874 FY08 447 4,774 20.3 1,792 1,862 2,448 6,289 753 FY09 447 5,405 18.6 937 2,912 2,975 5,115 1,521 29,651 58,802 18.3 1,110 1,449 17.7 FY10 447 6,306 24.8 1,424 4,012 3,455 7,184 1,984 38,429 71,605 21.8 1,118 1,379 24.6 FY11 476 8,031 24.4 3,006 3,912 3,974 7,901 3,126 43,247 93,625 30.8 1,148 2,239 24.3 FY12E 476 9,396 12.0 3,378 4,538 4,480 9,601 3,400 44,608 16.0 1,251 2,515 12.4 FY13E 476 10,799 18.0 3,979 5,355 5,321 11,330 4,005 52,351 18.0 1,430 2,963 17.8

59,544 71,616

84,972 106,056 131,887

147,714 174,302

67,664 82,939

97,648 121,699 151,286

169,981 200,232

18,746 23,400 41,290 49,720 41.7 1,056 1,629 22.4 20.4 1,071 1,705 22.6

108,605 128,154

67,664 82,939

97,648 121,699 151,286

169,981 200,232

November 2, 2011

Allahabad Bank | 2QFY2012 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 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

FY07 3.0 48.3 1.2 22.6 38.0 69.3 12.5 8.1 2.6 1.1 1.9 0.1 57.0 16.8 76.0 3.0 9.6 2.1 1.9 2.8 0.4 2.4 (0.1) 2.4 0.7 3.0 1.7 1.4 0.1 1.2 18.5 22.6

FY08 2.3 43.9 1.3 24.6 36.0 69.4 12.0 7.7 2.0 0.8 1.5 0.4 58.6 21.8 93.5 3.5 7.4 1.7 2.2 2.2 0.5 1.7 0.6 2.4 0.7 3.0 1.5 1.5 0.2 1.3 19.0 24.6

FY09 2.5 42.4 0.9 16.5 34.6 69.2 12.2 7.5 1.8 0.7 1.7 0.3 59.5 17.2 107.7 2.5 9.4 1.5 1.6 2.4 0.9 1.5 0.6 2.1 0.6 2.7 1.5 1.2 0.3 0.9 19.4 16.5

FY10 2.5 38.8 1.1 22.2 34.5 67.5 12.7 7.6 1.7 0.7 2.1 0.8 61.5 27.0 131.7 5.5 6.0 1.2 3.4 2.4 0.7 1.7 0.5 2.2 0.9 3.1 1.5 1.6 0.5 1.1 20.2 22.2

FY11 3.0 43.4 1.0 21.0 33.5 71.0 12.0 8.0 1.7 0.8 2.4 0.6 52.4 29.9 160.5 6.0 5.4 1.0 3.7 2.9 0.8 2.1 0.1 2.2 0.9 3.1 1.7 1.4 0.4 1.0 20.2 21.0

FY12E 3.3 40.6 1.1 21.0 34.7 73.5 12.4 8.2 2.9 0.9 2.5 0.8 80.0 36.8 189.2 7.0 4.4 0.9 4.3 3.2 0.9 2.3 0.0 2.3 0.8 3.1 1.6 1.5 0.4 1.1 19.3 21.0

FY13E 3.1 41.2 1.0 18.4 34.0 73.5 12.3 8.1 4.2 1.3 2.9 0.7 75.0 37.6 218.6 7.0 4.3 0.7 4.3 3.0 0.8 2.2 0.0 2.2 0.8 3.0 1.6 1.4 0.5 1.0 19.1 18.4

November 2, 2011

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Allahabad Bank | 2QFY2012 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

Allahabad 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%)

November 2, 2011

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