3QFY2013 Result Update | Banking

February 8, 2013

Canara Bank
Performance Highlights

Particulars (` cr) NII Pre-prov. profit PAT 3QFY13 1,988 1,516 710 2QFY13 1,957 1,282 661 % chg (qoq) 1.6 18.3 7.5 3QFY12 1,919 1,577 876 % chg (yoy) 3.6 (3.8) (18.9)

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 19,745 1.1 566/306 85,774 10 19,485 5,904 CNBK.BO CBK@IN

`446 `517
12 months

Source: Company, Angel Research

Canara Bank reported a subdued operating performance, as its pre-provisioning profit declined by 3.8% yoy, which was in-line with our expectations. Asset quality pressures continued for the bank during the quarter, as slippages remained elevated, which resulted in 24.9% yoy increase in provisioning expenses and consequent 18.9% yoy decline in bottom-line. NIMs decline 17bp sequentially; Asset quality pressures continue: During 3QFY2013, the banks advance book remained almost flat on a yoy basis, while deposits grew at a subdued pace of 2.7% yoy. Current deposits grew by 3.4% yoy, while the saving deposits grew by 8.4% yoy. Calculated CASA ratio for the bank improved by 24bp sequentially to 25.1%. Sequentially, the banks yield on advances came in 8bp lower to 11.1%, which resulted in a 17bp sequential fall in the reported NIMs. Non-interest income (excluding treasury) witnessed a decline of 4.4% yoy, on back of lower recoveries from written off accounts and de-growth in CEB income. During 3QFY2013, the bank witnessed continued asset quality pressures, as slippages, on an absolute basis, remained elevated at `1,314cr, (though lower sequentially considering slippages of `1,922cr in 2QFY2013 and `1,497cr in 1QFY2013). Incremental slippages during the quarter were broadbased and granular in nature, except for one account each in infrastructure and education sector, amounting to more than `50cr each. However, recoveries/upgrades came in at `217cr compared to `662cr in 2QFY2013 and `657cr in 1QFY2013. Hence, gross and net NPA levels for the bank increased sequentially by 8.6% and 12.4%, respectively. As of 3QFY2013, the gross NPA ratio stood at 2.8%, higher by 19bp sequentially, while the net NPA ratio stood at 2.4%, higher sequentially by 23bp from. PCR dipped sequentially by 202bp to 61.0%. Additionally, the bank restructured `857cr worth of accounts during the quarter (of which around 50% came from 3 chunky accounts in the steel sector), which is higher than `610cr restructured in 2QFY2013, thereby taking its outstanding restructured book to `14,501cr. Outlook and valuation: At the current market price, the stock trades at cyclically moderate valuation of 0.8x FY2014E ABV vs eight-year average of 1.1x and range of 0.7-1.4x. We value the bank at 1.0x FY2014E ABV and recommend a Buy rating on the stock with a target price of `517. 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 13.2 12.8 6.2

Abs. (%) Sensex Canara Bank

3m 3.4 0.7

1yr 10.0 (15.0)

3yr 22.3 14.8

FY2011 7,699 35.5 4,026 33.2 2.6 90.9 4.9 1.1 1.3 26.4

FY2012 7,689 (0.1) 3,283 (18.5) 2.2 74.1 6.0 1.0 0.9 17.0

FY2013E 7,863 2.3 2,869 (12.6) 2.1 64.8 6.9 0.9 0.7 13.2

FY2014E 9,030 14.8 3,643 27.0 2.3 82.2 5.4 0.8 0.9 15.0

Vaibhav Agrawal
022 3935 7800 Ext: 6808 [email protected] Sourabh Taparia 022 3935 7800 Ext: 6872 [email protected]

Please refer to important disclosures at the end of this report

Canara Bank | 3QFY2013 Result Update

Exhibit 1: 3QFY2013 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

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

2QFY13 8,596 6,121 2,306 169 6,639 1,957 608 534 171 74 64 299 2,565 1,283 791 492 1,282 421 444 (120) 97 861 200 661 23.2

% chg (qoq) (0.6) (2.7) 6.7 (24.6) (1.2) 1.6 39.1 11.4 16.4 239.2 (7.8) 12.6 10.5 2.7 5.1 (1.1) 18.3 48.6 33.7 65.9 3.4 (10.0) 7.5 (302)bp

3QFY12 7,812 5,946 1,810 56 5,894 1,919 779 622 205 157 68 349 2,698 1,121 713 408 1,577 501 142 185 174 1,076 200 876 18.6

% chg (yoy) 9.4 0.2 35.9 126.0 11.2 3.6 8.6 (4.4) (2.9) 59.9 (13.2) (3.5) 5.0 17.5 16.6 19.1 (3.8) 24.9 318.3 (7.6) (17.2) (10.0) (18.9) 162bp

9MFY13 25,613 18,307 6,806 500 19,825 5,788 2,146 1,723 565 424 170 988 7,935 3,743 2,365 1,377 4,192 1,466 1,515 (454) 404 2,727 580 2,147 21.3

9MFY12 22,583 17,254 5,145 183 16,934 5,649 2,158 1,929 583 229 265 1,082 7,807 3,355 2,147 1,208 4,452 1,399 904 261 234 3,054 600 2,454 19.6

% chg (yoy) 13.4 6.1 32.3 172.6 17.1 2.5 (0.5) (10.7) (3.0) 85.1 (35.8) (8.7) 1.6 11.6 10.2 14.0 (5.8) 4.8 67.7 72.7 (10.7) (3.3) (12.5) 162bp

Exhibit 2: 3QFY2013 Actual vs Estimates

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

Actual 1,988 846 2,834 1,317 1,516 626 890 180 710

Estimates 2,004 826 2,830 1,299 1,531 647 884 200 684

Var (%) (0.8) 2.4 0.1 1.5 (1.0) (3.3) 0.7 (10.0) 3.9

February 8, 2013

Canara Bank | 3QFY2013 Result Update

Exhibit 3: 3QFY2013 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

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 61.0 2.3 0.6

2QFY13 215,751 336,762 64.1 13,062 70,494 83,556 24.8 13.1 10.1 7.8 11.2 8.1 9.2 7.1 2.5 50.0 5,610 2.6 4,569 2.1 63.0 3.3 0.5

%chg (qoq) 1.2 (3.8) 330bp (4.5) (2.6) (2.9) 24bp (43)bp (33)bp (2)bp (8)bp 0bp (8)bp (10)bp (17)bp (352)bp 8.6 19bp 12.4 23bp (202)bp (105)bp 15bp

3QFY12 219,253 315,456 69.5 12,059 63,361 75,420 23.9 13.2 9.5 7.3 10.9 7.9 8.8 6.6 2.5 41.6 3,999 1.8 3,265 1.5 67.9 1.6 0.2

%chg (yoy) (0.5) 2.7 (214)bp 3.4 8.4 7.6 114bp (58)bp 28bp 54bp 27bp 20bp 30bp 44bp (16)bp 494bp 52.3 96bp 57.2 86bp (686)bp 64bp 46bp

Advances remain flat; NIM declines 17bp sequentially

During 3QFY2013, the banks advance book remained almost flat on a yoy basis, while deposits grew at a subdued pace of 2.7% yoy. Within advances, the agri loan book grew by 13.4% yoy, while retail advances came off by 14.8% yoy. While growth in current deposits remained subdued at 3.4% yoy, saving deposits registered a relatively higher growth of 8.4% yoy. Consequently, overall CASA deposits grew by 7.6% yoy, much higher than the modest growth registered in overall deposits (due to shedding of differential rate deposits). Consequently, the calculated CASA ratio for the bank improved by 114bp yoy (higher by 24bp sequentially) to 25.1%. The bank still has relatively higher proportion of differential rate deposits to total deposits (~29% as of 3QFY2013). Going ahead, the bank can be expected to significantly shed down these deposits. Sequentially, the banks yield on advances came in lower by 8bp to 11.1%, which resulted in a 17bp sequential fall in the reported NIM. Yield on investments for the bank remained flat sequentially at 8.2%. The banks cost of deposits also remained largely flat sequentially at 7.8%.

February 8, 2013

Canara Bank | 3QFY2013 Result Update

Exhibit 4: Advances remained flat on a yoy basis

Adv. yoy chg (%) 71.1 69.5 14.0 7.0 3QFY12 (7.0)
Source: Company, Angel Research

Exhibit 5: Calculated CASA ratio improves sequentially

Calculated CASA ratio 30.0 27.5 25.0 22.5 20.0 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 (1.4) (4.2) CASA yoy growth (%, RHS) 30.0 20.0 10.0 (10.0)

Dep. yoy chg (%)

CDR (%, RHS) 72.0 70.0

21.0

67.4 64.1

67.4

68.0 66.0 2.4 3.4

7.6

15.5 19.7

9.4 11.3

4.9 11.5

(1.0)

7.7

(0.5)

2.7

64.0 62.0 60.0

23.9

24.3

23.3

24.8

4QFY12

1QFY13

2QFY13

3QFY13

Source: Company, Angel Research

Exhibit 6: NIM declines by 17bp qoq, due to...

(%) 3.00 2.52 2.50 2.00 1.50 1.00 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13
Source: Company, Angel Research

Exhibit 7: ...8bp fall in YoF, partly on higher slippages

(%) 9.20 9.17 9.10 8.95 8.79 9.09

2.50

2.40

2.53

9.10 2.36 9.00 8.90 8.80 8.70 8.60 3QFY12 4QFY12

1QFY13

2QFY13

25.1

3QFY13

Source: Company, Angel Research

Non-interest income (excluding treasury) declines on lower recoveries and de-growth in fee income
During 3QFY2013, the bank witnessed subdued performance on the non-interest income (excluding treasury) front, which declined by 4.4% yoy to `595cr, on back of lower recoveries from written off accounts and de-growth in CEB (Commission, exchange and brokerage) income. While the CEB income for the bank witnessed de-growth of 2.9% yoy to `199cr, recoveries from written-off accounts declined by 13.2% yoy to `59cr. During the quarter, the bank booked profit on stake sale in CARE (~`160cr) and reported substantial treasury income of `251cr during the quarter compared to `157cr in 3QFY2012. Aided by substantially higher treasury income, the overall non-interest income for the bank witnessed moderate growth of 8.6% yoy to `846cr.

February 8, 2013

Canara Bank | 3QFY2013 Result Update

Exhibit 8: Non-interest income declines on lower recoveries and fee income de-growth
Particulars (` cr) CEB Treasury Recoveries Others Other income Other income excl. treasury
Source: Company, Angel Research

3QFY13 199 251 59 337 846 595

2QFY13 171 74 64 299 608 534

% chg (qoq) 16.4 239.2 (7.8) 12.6 39.1 11.4

3QFY12 205 157 68 349 779 622

% chg (yoy) (2.9) 59.9 (13.2) (3.5) 8.6 (4.4)

Asset quality pressures continue

During 3QFY2013, the bank witnessed continued asset quality pressures, as slippages, on an absolute basis, remained elevated at `1,314cr, (though lower sequentially considering slippages of `1,922cr in 2QFY2013 and `1,497cr in 1QFY2013). Incremental slippages during the quarter were broad-based and granular in nature, except for one account each in infrastructure and education sector, amounting to more than `50cr each. Going ahead, the management has guided caution on the asset quality outlook. However, recoveries/upgrades came in at `217cr compared to `662cr in 2QFY2013 and `657cr in 1QFY2013. Hence, gross and net NPA levels for the bank witnessed a sequential increase of 8.6% and 12.4%, respectively. As of 3QFY2013, the gross NPA ratio stood at 2.8%, higher by 19bp sequentially from 2.6% in 2QFY2013, while the net NPA ratio stood at 2.4%, higher sequentially by 23bp from 2.1% in 2QFY2013. PCR dipped sequentially by 202bp to 61.0%. Additionally, the bank restructured `857cr worth of accounts during the quarter (of which around 50% came from 3 chunky accounts in the steel sector), which was higher than `610cr restructured in 2QFY2013, thereby taking its outstanding restructured book to `14,501cr.

Exhibit 9: Slippages remain at elevated levels...

3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.2 0.5 0.4 0.5 Slippages (%) Credit cost (%, RHS) 0.6 0.6 0.4 0.2 0.8

Exhibit 10: ...Hence, NPA levels higher sequentially

Gross NPAs (%) 3.0 2.5 2.0 1.5 1.0 67.9 67.6 66.5 63.0 61.0 62.0 Net NPAs (%) PCR (%, RHS) 80.0 74.0 68.0

1.8 1.5

1.7 1.5

2.0 1.7

2.6 2.1

1.6

2.1

2.6

3.3

2.3

3QFY12 4QFY12 1QFY13 2QFY13 3QFY13

2.8 2.4

0.5

56.0 50.0

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

Source: Company, Angel Research

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

February 8, 2013

Canara Bank | 3QFY2013 Result Update

Exhibit 11: Branch expansion trends

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

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

Cost-to-income ratio (%) Opex to average assets (%, RHS) 1.2 1.3 1.4 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 3,655 3,681 50.0 45.0 40.0 35.0 30.0 1.2 1.4

3,569

3,600

3,609

41.6

46.9

45.0

50.0

25.0 20.0

Source: Company, Angel Research

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 25.1% as of 3QFY2013. 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 67.4% in 3QFY2013 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 eighteen months, the bank has added over 400 branches and 772 ATMs. Such a pace of network expansion should augur well, in our view, for strengthening the banks relatively weak liability franchise.

Outlook and valuation

At the current market price, the stock trades at a cyclically moderate valuation of 0.8x FY2014E ABV vs eight-year average of 1.1x and range of 0.7-1.4x. We value the bank at 1.0x FY2014E ABV and recommend a Buy rating on the stock with a target price of `517.

February 8, 2013

46.5

Canara Bank | 3QFY2013 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 FY2013 8.0 7.0 25.3 2.1 0.7 11.0 7.5 2.9 64.0 FY2014 15.0 11.0 25.6 2.2 (1.0) 11.0 7.5 2.2 65.0

Revised estimates FY2013 6.0 4.0 25.8 2.1 (0.3) 7.5 12.5 2.7 63.0 FY2014 15.0 10.0 26.3 2.3 1.7 7.5 5.0 2.0 65.0

Exhibit 14: Change in estimates

FY2013 Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Angel Research

FY2014 Earlier estimates 9,086 2,919 12,005 5,628 6,377 1,630 4,747 1,187 3,560 Revised Var. (%) estimates 9,030 2,970 12,000 5,445 6,555 1,698 4,857 1,214 3,643 (0.6) 1.7 (0.0) (3.3) 2.8 4.2 2.3 2.3 2.3

Earlier estimates 7,879 2,949 10,828 5,128 5,700 2,023 3,677 809 2,868

Revised Var. (%) estimates 7,863 2,920 10,783 5,109 5,674 2,043 3,631 763 2,869 (0.2) (1.0) (0.4) (0.4) (0.5) 1.0 (1.2) (5.7) 0.0

Exhibit 15: P/ABV band

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

Feb-07

Oct-08

Nov-10

May-08

Dec-07

Feb-12

Sep-06

Sep-11

Jan-10

Jun-10

Aug-09

Source: Company, Angel Research

February 8, 2013

Mar-09

Dec-12

Apr-06

Apr-11

Jul-07

Jul-12

Canara Bank | 3QFY2013 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 Accumulate Neutral Buy Buy Accumulate Buy Neutral Buy Accumulate Neutral Buy Neutral Buy Buy Buy Buy Buy Accumulate Accumulate Buy Accumulate Buy Neutral Buy Buy Accumulate CMP (`) 1,453 516 650 1,130 27 510 148 103 768 341 55 446 76 408 103 100 183 76 1,318 303 864 2,286 127 67 233 67 55 Tgt. price (`) 1,753 557 1,404 34 576 183 935 380 517 517 124 122 221 88 1,406 336 1,053 2,600 153 286 83 58 Upside (%) 20.6 7.9 24.2 26.0 13.1 23.7 21.7 11.4 16.0 26.7 19.6 22.1 20.8 16.7 6.7 10.9 21.9 13.7 19.9 22.8 22.8 5.7 FY2014E P/ABV (x) 1.95 1.25 3.66 1.81 1.11 2.56 0.65 0.71 0.90 0.85 0.67 0.82 0.69 0.63 0.63 0.61 0.68 0.51 1.12 0.68 0.90 1.48 0.71 0.80 0.77 0.49 0.64 FY2014E Tgt. P/ABV (x) 2.4 1.4 2.2 1.4 2.9 0.8 1.1 1.0 1.0 0.8 0.8 0.8 0.8 0.6 1.2 0.8 1.1 1.7 0.9 1.0 0.6 0.7 FY2014E P/E (x) 10.5 10.0 18.0 13.4 6.6 11.9 4.4 4.7 5.7 5.2 4.3 5.4 3.8 4.1 4.2 4.5 4.5 3.7 6.6 5.1 5.1 8.9 4.6 4.5 5.0 3.1 5.0 FY2012-14E EPS CAGR (%) 16.4 6.4 28.1 22.8 6.9 24.1 (5.2) (4.6) 5.0 18.2 44.3 5.3 95.5 (3.1) 3.5 18.4 1.9 23.9 9.8 23.2 8.0 21.5 13.1 2.5 20.7 20.0 9.7 FY2014E RoA (%) 1.6 1.2 1.8 1.5 1.0 1.5 0.8 0.8 1.0 0.8 0.6 0.9 0.5 0.8 0.8 0.9 1.1 0.6 1.4 0.8 1.0 1.0 0.8 0.5 0.8 0.7 0.5 FY2014E RoE (%) 20.1 13.1 22.1 15.9 17.7 23.6 14.7 13.8 16.7 16.0 16.9 15.0 14.3 14.9 15.9 14.1 16.2 13.4 18.2 13.5 17.5 17.7 16.5 13.8 16.6 16.3 12.6

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-based PSU bank (overall fifth largest bank in India), with a balance sheet size of around `3.8lakh cr. The bank has a reasonably large pan-India presence, with about 45% of its 3,600+ branches outside South India (the bank also has 3,200+ ATMs).

February 8, 2013

Canara Bank | 3QFY2013 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 (%) FY09 4,718 33.4 2,427 5.1 7,145 22.2 3,065 9.8 4,080 33.5 1,507 31.1 2,572 35.0 500 19.4 2,072 32.4 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 FY12 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 7,863 2.3 2,920 (0.3) 10,783 1.6 5,109 9.3 5,674 (4.5) 2,043 9.8 3,631 (11.1) 763 21.0 2,869 (12.6) FY14E 9,030 14.8 2,970 1.7 12,000 11.3 5,445 6.6 6,555 15.5 1,698 (16.9) 4,857 33.8 1,214 25.0 3,643 27.0

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 (%) FY09 410 11,798 186,893 21.3 7,057 6,944 6,498 219,599 10,037 6,623 57,777 138,219 28.9 2,929 4,014 219,599 21.7 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 FY12 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 24,498 340,136 4.0 9,831 8,743 9,571 393,221 15,306 9,831 109,719 246,439 6.0 2,913 9,013 393,221 5.1 FY14E 443 27,342 374,149 10.0 10,789 8,524 10,297 431,545 14,966 10,789 109,393 283,405 15.0 3,101 9,891 431,545 9.7

February 8, 2013

Canara Bank | 3QFY2013 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 2.4 0.8 1.6 0.3 1.9 0.9 2.8 1.5 1.3 0.3 1.0 21.8 22.6 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 0.5 1.5 0.1 1.6 0.6 2.3 1.3 0.9 0.2 0.7 17.6 13.2 2.2 0.4 1.8 0.0 1.8 0.7 2.5 1.3 1.2 0.3 0.9 17.0 15.0 8.8 2.0 1.8 6.0 1.5 2.2 4.9 1.1 2.5 6.0 1.0 2.5 6.9 0.9 2.7 5.4 0.8 3.5 50.5 221.3 8.0 73.7 305.8 10.0 90.9 401.1 11.0 74.1 448.1 11.0 64.8 477.2 12.0 82.2 544.2 15.5 1.6 1.1 2.2 0.5 30.5 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 3.0 2.2 2.7 0.5 63.0 3.3 2.0 2.0 0.3 65.0 30.1 74.0 14.1 8.0 29.1 72.2 13.4 8.5 28.3 72.0 15.4 10.9 24.3 71.1 13.8 10.4 25.8 72.5 14.0 10.9 26.3 75.7 13.9 11.1 2.4 42.9 1.0 22.6 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 47.4 0.7 13.2 2.3 45.4 0.9 15.0 FY09 FY10 FY11 FY12 FY13E FY14E

February 8, 2013

10

Canara Bank | 3QFY2013 Result Update

Research Team Tel: 022 - 39357800

E-mail: [email protected]

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%)

February 8, 2013

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