4QFY2012 Result Update | Banking

May 8, 2012

Allahabad Bank
Performance Highlights

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

Source: Company, Angel Research

ACCUMULATE
CMP Target Price
% chg (qoq) (6.7) (12.5) (28.6) 4QFY11 1151 780 258 % chg (yoy) 11.9 15.5 55.4

`155 `166
12 months

4QFY12 1,288 901 400

3QFY12 1,381 1,030 560

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 7,760 1.1 222/114 155,613 10 16,546 5,000 ALBK.BO ALBK@IN

For 4QFY2012, Allahabad Bank reported a weak set of numbers with net profit declining by 28.6% on a qoq basis (up 55.4% qoq) to `400cr. The performance was disappointing on both operating (NIMs down by 50bp) and asset quality front (slippage ratio of 4.1%). We recommend an Accumulate rating on the stock. Asset quality issues lead to higher provisioning and interest rate reversals: FY2012, the banks advances and deposits grew by a healthy 18.7% yoy (up 10.6% qoq) and 21.0% yoy (up 9.8% qoq) respectively. Accretion in current account deposit picked up during 4QFY2012 with a qoq growth of 9.4% (up 10.2% yoy). Savings account growth was also healthy at 5.9% qoq (up 11.8% yoy). The asset quality of the bank took a hit during 4QFY2012 leading to significant amount of interest reversals. The yield on advances consequently declined by 19bp qoq which coupled with a 54bp qoq increase in cost of deposits (moderation in CASA growth during FY2012) led to margins declining by a sharp 50bp qoq during 4QFY2012. The fee income for the bank remained sluggish declining by 35.1% yoy to `296cr. Slippages for the quarter rose from `596cr witnessed in 3QFY2012 to `963cr in 4QFY2012 (annualized slippage ratio of 4.1%). Management attributed around 80% of the slippages to agri (`276cr) and SME segments (`400cr). Outlook and valuation: Positives for Allahabad Bank include moderate CASA ratio of 30.5% and healthy NIMs (3.2% even after accounting for sharp fall in 4QFY2012 due to one-off interest reversals). The bank asset quality has come under pressure in 2HFY2012 and we remain concerned on the banks asset quality given it has the highest yield on advances amongst other banks. However, considering the low valuations (0.6x FY2014 ABV) post the recent sharp decline in stock price, we recommend an Accumulate rating on the stock with a target price of `166 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 55.2 21.0 12.6 11.2

Abs. (%) Sensex

Allahabad Bank

3m (6.6) (12.2)

1yr (10.7) (23.5)

3yr 39.3 180.4

FY2011 4,022 51.8 1,423 18.0 3.0 29.9 5.2 1.0 1.0 21.0

FY2012 5,163 28.3 1,867 31.2 3.2 37.3 4.2 0.8 1.1 21.6

FY2013E 5,983 15.9 1,914 2.5 3.1 38.3 4.1 0.7 1.0 18.4

FY2014E 6,988 16.8 2,104 10.0 3.1 42.1 3.7 0.6 0.9 17.6

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

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

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

Please refer to important disclosures at the end of this report

Allahabad Bank | 4QFY2012 Result Update

Exhibit 1: 4QFY2012 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

4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy) 4,168 3,076 1,040 48 4 2,880 1,288 355 296 277 59 19 0 1,644 742 495 247 901 454 411 (38) 81 447 46 400 10.4 3,912 2,927 935 38 11 2,531 1,381 348 327 213 21 98 16 1,729 699 490 209 1,030 421 306 63 52 609 48 560 7.9 6.6 5.1 11.2 26.7 (66.9) 13.8 (6.7) 1.9 (9.6) 30.0 181.0 (80.6) (99.1) (4.9) 6.2 1.1 18.3 (12.5) 7.9 34.5 (160.0) 55.7 (26.6) (3.8) (28.6) 247bp 3,119 2,349 746 22 3 1,968 1,151 469 456 300 13 154 2 1,621 841 602 238 780 466 330 90 46 315 57 258 18.1 33.6 31.0 39.4 124.1 27.5 46.3 11.9 (24.4) (35.1) (7.7) 353.8 (87.7) (93.5) 1.4 (11.7) (17.8) 3.8 15.5 (2.4) 24.5 (142.2) 78.9 42.0 (18.4) 55.4 (770)bp

Exhibit 2: 4QFY2012 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 1,288 355 1,644 742 901 454 447 46 400

Estimates 1,442 415 1,857 763 1,094 332 761 196 565

Var. (%) (10.7) (14.4) (11.5) (2.7) (17.6) 36.7 (41.3) (76.3) (29.2)

May 8, 2012

Allahabad Bank | 4QFY2012 Result Update

Exhibit 3: 4QFY2012 performance analysis

Particulars (` cr) 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 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

4QFY12

3QFY12 % chg (qoq) 10.6 51bp 26.2 5.9 9.4 (13)bp 8bp 22bp 54bp (19)bp 9bp (5)bp 46bp (50)bp 475bp 9.1 (3)bp 37.2 19bp (403)bp 157bp 20bp

4QFY11 % chg (yoy) 93,625 71.0 9,156 35,000 44,156 33.5 13.0 8.6 6.0 10.7 7.2 9.5 6.0 3.5 51.9 1,648 1.7 736 0.8 75.7 4.5 0.9 18.7 21.0 (135)bp 4.2 11.8 10.2 (299)bp (13)bp 56bp 133bp 131bp 47bp 100bp 123bp (26)bp (670)bp 24.9 9bp 48.3 19bp (167)bp (42)bp 3bp

111,145 100,448 159,593 145,300 69.6 9,538 39,130 48,668 30.5 12.8 9.1 7.3 12.0 7.7 10.5 7.2 3.2 45.2 2,059 1.8 1,092 1.0 74.0 4.1 0.9 69.1 7,558 36,936 44,494 30.6 12.8 8.9 6.8 12.2 7.6 10.5 6.8 3.7 40.4 1,887 1.9 796 0.8 78.0 2.5 0.7

9.8 131,887

Balance sheet growth healthy

For 4QFY2012, the bank witnessed strong growth in its balance sheet with advances and deposits growing by 10.6% qoq and 9.8% qoq, respectively. The sequential growth in advances was driven by lending to oil companies in 4QFY2012. On a yoy basis too, the banks advances and deposits grew by a healthy 18.7% yoy and 21.0% yoy respectively. Accretion in current account deposit picked up during 4QFY2012 with a qoq growth of 9.4% (up 10.2% yoy). Savings account growth was also healthy at 5.9% qoq (up 11.8% yoy). The management aims to focus towards the retail position of the balance sheet going forward and have guided for similar strong growth levels of above 20% in FY2013 as well. The bank added 39 branches (101 during FY2012) in 4QFY2012 taking the total branch network to 2,516 branches. The bank plans to open ~250 branches in FY2013, which is likely to be 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.

May 8, 2012

Allahabad Bank | 4QFY2012 Result Update

Exhibit 4: Business growth healthy in 4QFY2012

12.5 10.0 7.5 5.0 Adv. qoq chg (%) 73.8 71.0 67.4 Dep. qoq chg (%) CDR (%, RHS) 75.0 69.1

Exhibit 5: Moderation in CASA growth continues

CASA ratio 34.0
20.7

CASA yoy growth (%, RHS) 30.0

10.6 9.8

69.6

70.0 65.0

32.0

15.6 10.3

20.0 10.6 10.2 10.0

7.8 9.0

5.5 1.5

6.1

2.5 (2.5) (5.0)

4.9 2.3

33.5

32.0

30.6

30.6

(3.1)

55.0

28.0 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12

Source: Company, Angel Research

30.5

60.0

30.0

4QFY11 1QFY12 2QFY12 3QFY12 4QFY12

Source: Company, Angel Research

NIM decline sequentially on interest reversals

The asset quality of the bank took a hit during 4QFY2012 leading to significant amount of interest reversals. The yield on advances consequently declined by 19bp qoq which coupled with a 54bp qoq increase in cost of deposits (moderation in CASA growth during FY2012) led to margins declining by a sharp 50bp qoq during 4QFY2012

Exhibit 6: Lower yield on advances in 4QFY2012

(%) 13.0 12.0 11.0 10.0 9.0 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 10.7 11.6 12.6 12.2 12.0

Exhibit 7: NIMs dip sharply by 50bp qoq

(%) 3.9 3.6 3.3 3.0 2.7 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 3.5 3.7 3.4 3.2 3.7

Source: Company, Angel Research

Source: Company, Angel Research

Fee income remains sluggish

The fee income for the bank remained sluggish declining by 35.1% yoy to `296cr. The management attributed the reason for sluggishness in fee income to tough macro conditions which have led to slower corporate activities. On a qoq basis, forex income increased by 36.7%, however lower recoveries from written-off accounts (only `19cr compared to `98cr in 3QFY2012 and `154cr in 4QFY2011), dragged the fee income lower (decline of 9.6% qoq). Treasury income, however for the bank jumped up in 4QFY2012 to `59cr as against `21cr in 3QFY2012 and `13cr in 4QFY2011.

May 8, 2012

Allahabad Bank | 4QFY2012 Result Update

Slippages jump sharply; restructuring also higher

Slippages for the quarter rose from `596cr witnessed in 3QFY2012 to `963cr in 4QFY2012 (annualized slippage ratio of 4.1%). Management attributed around 80% of the slippages to agri (`276cr) and SME segments (`400cr). The management stated the reason for higher NPAs from the agri segment as a consequence of late payments from sugar companies on account of UP election that took place during the quarter. The bank also classified a hydropower project as NPA (exposure of `90cr) during the quarter. On the back of aggressive write-offs of `500cr during the quarter, the rise in gross NPAs was contained at 9.1% qoq. Net NPA levels on an absolute basis rose by a much higher 37.2% qoq as the bank lowered its provisioning coverage ratio by ~403bp to 74.0%. The bank restructured loans worth ~`2,640cr during 4QFY2012 taking the outstanding restructured book to `6,353cr (up 66.2% qoq. The majority of the restructuring done during the quarter was attributable to SEBs (`619cr for Uttar Haryana and `400cr for Rajasthan SEB) and Air India (`500cr on which the bank took a NPV loss of `4cr during 4QFY2012). The rest of the restructuring was on account of private borrowers such as 3I Infotech (`300cr) and other smaller accounts from the steel and textile sector. The banks restructuring pipeline going ahead consists of UP discom (`~2,100cr) and Bharti shipyard (`200cr) The effective tax rate for the bank remained low in 4QFY2012 on account of tax benefits on higher write-offs (`500cr) and concessions on rural and infra loans. The management indicated that they have paid extra tax amounting to `425cr during the last 1-2 years and that should help keep the effective tax rate to ~20% for FY2013

Exhibit 8: PCR declines by 400bps qoq

Gross NPAs (%) 2.0 79.9 1.5 1.0 0.5 75.7 79.6 78.0 74.0 Net NPAs (%) PCR (%, RHS) 85.0 80.0 75.0 70.0

Exhibit 9: Slippages remain elevated

Slippages (%) 5.0 4.0 3.0 2.0 0.4 0.9 0.8 0.7 Credit cost (%, RHS) 0.9 1.0 0.8 0.6 0.4 4.5 4QFY11 0.6 1QFY12 2.2 2QFY12 2.5 3QFY12 4.1 4QFY12 0.2 -

1.7 0.8

1.6 0.6

1.8 0.7

1.9 0.8

4QFY11 1QFY12 2QFY12 3QFY12 4QFY12

1.8 1.0

1.0 -

65.0

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

Source: Company, Angel Research

May 8, 2012

Allahabad Bank | 4QFY2012 Result Update

Exhibit 10: Branch expansion modest

2,550 2,500 2,450 2,400 2,350 2,300 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 2,441 2,415 2,416 2,477 2,516

Exhibit 11: Cost ratios remain steady

Cost-to-income ratio (%) 60.0 45.0 30.0 2.3 1.7 1.7 1.7 Opex to average assets (%, RHS) 2.5 1.5 2.0 1.5 1.0

51.9

39.1

41.7

40.4

4QFY11 1QFY12 2QFY12 3QFY12 4QFY12

Source: Company, Angel Research

45.2

15.0

0.5 -

Source: Company, Angel Research

Investment arguments
Healthy retail deposit base
Allahabad Bank has a substantial 41% of its branches in the CASA deposit-rich rural areas, which ensure higher sustainability of the low-cost deposits reservoir, also reflected in the healthy 19.8% CAGR in the banks saving account deposits over FY200912. Although the banks CASA market share reduced by 25bp over FY20061HFY2012 to 2.4%, the decline in market share has been one of the lowest in its peer group. Recently, the bank had secured a mandate from the West Bengal State Government for opening accounts for disbursal of salaries. These initiatives are expected to at least sustain the CASA ratio at current levels. Also, the bank has a relatively lower share of wholesale deposits and CDs at 12.2%. 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 better CASA ratio, of ~30% 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.

Moderate fee income

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, FY2012 has been a bad year for the bank in terms of fee performance (decline of 2.0% yoy) mostly due to lower recoveries, which has led to fee income to average assets dropping to 0.7%. Going forward also, we have factored in lower growth in fee income than peers, as a large part of the banks high fee income during FY2011 was driven by above-average recoveries from written-off accounts (0.24% of average assets for FY2011).

May 8, 2012

Allahabad Bank | 4QFY2012 Result Update

Higher yielding loans could lead to higher NPAs

Allahabad Bank had one of the highest reported yield on advances for 4QFY2012 (12.0% even after accounting for significant interest reversals) amongst all PSU banks. The banks yield on advances has risen by ~170bp in the last 18 months, the highest increase within the PSU segment, indicating increased risk taking in the form of higher yielding loans over the past one year. While the banks provisioning costs are on the higher side (1.0% for FY2012 compared to average of ~0.8% for PSUs), risk-adjusted yields are still well above sector average, indicating the possibility of any negative surprises on the asset-quality front. As a result, with no additional room for expansion in yields, and asset quality expected to further see deterioration due to higher risk taking, higher-than-peer average return ratios for the bank could come under pressure.

Outlook and valuation

Positives for Allahabad Bank include moderate CASA ratio of 30.5% and healthy NIMs (3.2% even after accounting for sharp fall in 4QFY2012 due to one-off interest reversals). The bank asset quality has come under pressure in 2HFY2012 and we remain concerned on the banks asset quality given it has the highest yield on advances amongst other banks. However, considering the low valuations (0.6x FY2014 ABV) post the recent sharp decline in stock price, we recommend an Accumulate rating on the stock with a target price of `166

May 8, 2012

Allahabad Bank | 4QFY2012 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 FY2013 17.5 17.0 31.2 3.4 6.9 13.0 15.0 2.7 17.5 FY2014 18.0 17.0 30.2 3.3 13.4 15.0 15.0 2.9 18.0

Revised estimates FY2013 18.0 16.0 29.2 3.1 8.5 13.0 15.0 2.6 18.0 FY2014 18.0 16.0 28.4 3.1 10.3 15.0 15.0 2.7 18.0

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
6,248 1,452 7,700 3,082 4,618 1,584 3,034 984 2,050

FY2013 FY2014 Revised Revised Earlier Var. (%) Var. (%) estimates estimates estimates
5,983 1,409 7,392 3,058 4,333 1,599 2,734 820 1,914 (4.2) (3.0) (4.0) (0.8) (6.2) 0.9 (9.9) (16.7) (6.6) 7,030 1,647 8,677 3,544 5,133 1,816 3,317 1,076 2,241 6,988 1,554 8,542 3,517 5,024 1,909 3,115 1,011 2,104 (0.6) (5.7) (1.6) (0.8) (2.1) 5.2 (6.1) (6.1) (6.1)

Exhibit 14: P/ABV band

Price (`) 450 400 350 300 250 200 150 100 50 0 0.3x 0.6x 0.9x 1.2x 1.5x

Oct-06

Oct-07

Oct-08

Oct-09

Oct-10

Oct-11

Source: Company, Angel Research

May 8, 2012

Oct-12

Apr-06

Apr-07

Apr-08

Apr-09

Apr-10

Apr-11

Apr-12

Allahabad Bank | 4QFY2012 Result Update

Exhibit 15: 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 Accumulate Buy Neutral Buy Accumulate Neutral Buy Buy Buy Buy Neutral Buy Buy Buy Buy Buy Accumulate Buy Buy Buy Buy Neutral Buy Buy Neutral CMP (`) 983 407 515 830 23 329 155 117 659 353 50 425 78 404 85 95 200 82 866 223 784 1,959 95 69 211 61 55 Tgt. price (`) 1,587 567 1,201 470 166 969 411 60 532 504 118 117 240 101 932 285 1,138 2,593 128 266 88 Upside (%) 61.4 9.9 44.7 42.6 7.1 47.2 16.3 20.6 25.1 24.8 38.5 23.0 19.9 23.3 7.6 27.7 45.2 32.4 35.5 25.9 43.6 FY2014E P/ABV (x) 1.3 1.0 3.0 1.3 1.0 1.7 0.6 0.7 0.7 0.8 0.6 0.7 0.7 0.5 0.5 0.6 0.7 0.5 0.8 0.5 0.8 1.2 0.6 0.8 0.7 0.5 0.6 FY2014E Tgt P/ABV (x) 2.2 3.3 1.9 2.4 0.7 1.1 1.0 0.7 0.9 0.7 0.7 0.7 0.8 0.6 0.8 0.6 1.1 1.6 0.8 0.9 0.7 FY2014E P/E (x) 7.1 7.1 14.5 10.2 5.9 7.9 3.7 4.3 4.4 4.7 3.7 4.5 3.9 3.6 3.3 4.0 4.1 3.8 4.4 3.5 4.4 7.3 3.4 4.8 4.3 2.8 4.5 FY2012E-14E EPS CAGR (%) 16.4 13.0 27.0 20.4 6.7 22.5 6.2 6.5 11.1 23.3 26.8 10.9 45.7 5.3 6.2 22.7 5.4 28.3 8.8 27.7 8.8 23.6 8.7 7.0 27.2 11.4 13.5 FY2014E RoA (%) 1.5 1.3 1.7 1.5 0.9 1.4 0.9 1.0 1.1 0.8 0.9 0.9 0.5 0.8 0.9 0.9 1.2 0.6 1.4 0.8 1.1 1.0 0.8 0.5 0.8 0.7 0.5 FY2014E RoE (%) 20.3 14.5 22.1 16.0 17.7 23.3 17.6 16.7 18.2 16.9 17.5 16.7 13.8 16.5 16.9 14.8 18.2 13.9 18.6 14.3 18.5 19.1 17.1 13.4 17.4 15.9 13.7

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

May 8, 2012

Allahabad Bank | 4QFY2012 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 (%) 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 FY12 5,163 28.3 1,299 (5.2) 6,461 19.8 2,691 15.1 3,770 23.4 1,607 43.0 2,163 12.0 296 13.7 1,867 31.2 FY13E 5,983 15.9 1,409 8.5 7,392 14.4 3,058 13.6 4,333 14.9 1,599 (0.5) 2,734 26.4 820 30.0 1,914 2.5 FY14E 6,988 16.8 1,554 10.3 8,542 15.6 3,517 15.0 5,024 16.0 1,909 19.4 3,115 13.9 1,011 32.4 2,104 10.0

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 (%) 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 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 30.8 1,148 2,239 24.3 FY12 500 10,007 21.0 3,635 5,459 3,740 8,712 5,313 54,283 18.7 1,198 2,283 20.9 FY13E 500 11,514 16.0 4,217 6,442 4,404 7,405 6,163 63,489 18.0 1,348 2,648 16.0 FY14E 500 13,153 16.0 4,886 7,602 4,986 8,590 7,141 70,803 18.0 1,515 3,069 15.9

71,616 84,972 106,056 131,887 159,593

185,128 214,748

82,939 97,648 121,699 151,286 182,935

212,204 245,875

23,400 29,651 49,720 58,802 20.4 1,071 1,705 22.6 18.3 1,110 1,449 17.7

93,625 111,145

131,151 154,758

82,939 97,648 121,699 151,286 182,935

212,204 245,875

May 8, 2012

10

Allahabad Bank | 4QFY2012 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

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 7.1 1.7 2.3 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 13.1 8.0 1.8 0.7 1.7 0.3 59.5 17.2 107.7 2.5 9.0 1.4 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 13.6 8.1 1.7 0.7 2.1 0.8 79.0 27.0 131.7 5.5 5.7 1.2 3.5 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 13.0 8.6 1.7 0.8 2.4 0.6 74.1 29.9 159.9 6.0 5.2 1.0 3.9 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

FY12 3.2 41.7 1.1 21.6 30.5 69.6 14.0 8.9 1.8 1.0 2.4 0.7 74.0 37.3 192.0 6.0 4.2 0.8 3.9 3.1 1.0 2.1 0.1 2.2 0.7 2.9 1.6 1.3 0.2 1.1 19.3 21.6

FY13E 3.1 41.4 1.0 18.4 29.2 70.8 14.1 8.8 3.2 1.2 2.6 0.7 74.0 38.3 221.7 7.0 4.1 0.7 4.5 3.0 0.8 2.2 0.0 2.3 0.7 2.9 1.5 1.4 0.4 1.0 19.0 18.4

FY14E 3.1 41.2 0.9 17.6 28.4 72.1 14.1 8.7 4.2 1.4 2.7 0.8 75.0 42.1 255.8 8.0 3.7 0.6 5.2 3.1 0.8 2.2 0.0 2.2 0.7 2.9 1.5 1.4 0.4 0.9 19.1 17.6

May 8, 2012

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Allahabad Bank | 4QFY2012 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%)

May 8, 2012

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