The document provides a quarterly review of the performance of Indian banks in 1QFY13. Some key points:
- Asset quality pressures continued with rising net slippages, particularly for public sector banks. Margins declined for most public banks due to higher costs of deposits and provisions.
- Private banks saw stable or improving margins and largely stable asset quality. Loan growth remained healthy led by retail loans.
- Valuations of banks are below the 10-year average due to ongoing stress on asset quality and a challenging macroeconomic environment. Performance was mixed with some private banks beating estimates while most public banks disappointed.
06_Joeri Van Speybroek_Dell_MeetupDora&Cybersecurity.pdf
Banking sector review and outlook
1. Update | August 2012
India Banking
1QFY13 Review
Pressure on asset quality continues
Pvt
PSU
Pace of restructuring moderates
Mixed performance on margins
Valuations below 10-year average
Alpesh Mehta (Alpesh.Mehta@MotilalOswal.com); + 9122 3982 5415
Sohail Halai (Sohail.Halai@MotilalOswal.com) / Umang Shah (Umang.Shah@MotilalOswal.com)
2. Contents
Summary: Stress levels continue to rise, impacting valuations ……………………………………………….………………………………….3-5
Actual performance v/s estimates…............................................................................................................................. 6
Asset quality…………………………………………………………………………………………………………………..…………………………………7-13
Business growth…………………………………………………………………………………………………………….………………………………………14-19
Key operating parameters…………………………………………………………………………………………………..…………………………………20-31
Valuations…………………………………………………………………………………………………………..…………………………………………………32
2
3. Stress levels continue to rise, impacting valuations
Financials: Valuation Matrix
55.9 Rating
CMP Mcap
(INR) (USDb)
HDFCB
Neutra l 595
25.0
ICICIBC*
Buy
962
19.8
AXSB
Buy
1,110
8.2
KMB
Neutra l 588
7.8
IIB
Buy
333
2.8
YES
Buy
360
2.3
FB
Buy
437
1.3
VYSB
Buy
392
1.1
J&KBK
Buy
925
0.8
SIB
Buy
23
0.2
Private Aggregate
69.3
SBIN (cons )*
Buy
1,896 22.8
BOB
Neutra l 636
4.7
PNB
Buy
727
4.4
BOI
Neutra l 277
2.8
CBK
Buy
358
2.8
IDBI
Neutra l 87
2.0
UNBK
Buy
164
1.6
INBK
Buy
171
1.3
OBC
Buy
233
1.2
CRPBK
Neutra l 391
1.0
IOB
Neutra l 73
1.0
ANDB
Buy
98
1.0
DBNK
Buy
91
0.6
Public Aggregate
47.3
HDFC*
Buy
712
18.8
POWF
Buy
187
4.4
IDFC
Buy
141
3.8
RECL
Buy
211
3.7
SHTF
Buy
594
2.4
LICHF
Buy
250
2.3
MMFS
Buy
783
1.4
DEWH
Buy
162
0.3
NBFC Aggregate
37.2
P/E (x)
FY13 FY14
20.8 16.7
10.8
9.0
9.7
8.4
21.6 19.2
15.6 12.0
10.1
8.4
9.2
7.9
10.9
9.7
5.0
4.5
5.2
4.3
14.8 12.4
6.5
5.4
5.6
4.9
4.7
3.9
5.1
4.3
4.8
4.3
5.5
4.8
3.9
3.4
3.9
3.6
4.8
4.2
3.5
3.3
5.0
4.4
3.7
3.4
3.4
2.9
6.0
5.2
15.8 12.3
6.4
5.8
12.7 10.5
6.1
5.1
9.9
8.4
11.0
7.7
9.9
8.4
4.3
3.2
11.8
9.9
P/BV (x)
FY13 FY14
4.0
3.4
1.7
1.5
1.8
1.5
2.9
2.6
2.9
2.4
2.2
1.8
1.2
1.1
1.4
1.2
0.9
0.8
1.1
0.9
2.3
2.0
1.0
0.9
0.9
0.8
0.8
0.7
0.7
0.7
0.7
0.6
0.6
0.5
0.6
0.5
0.7
0.6
0.6
0.5
0.6
0.5
0.5
0.5
0.6
0.6
0.6
0.5
0.9
0.8
4.8
3.8
1.1
0.9
1.5
1.3
1.2
1.1
1.9
1.6
1.9
1.6
2.3
1.9
0.9
0.7
2.1
1.9
Sluggish performance by PSBs; Private Banks shine
Asset quality – no relief in the sight
Key highlights for Private Banks: (1) NIMs largely
stable/improving QoQ, (2) Asset quality remains strong, with
GNPA% stable/ declining QoQ, (3) Healthy loan growth led by
continued traction in retail loans (4) Fall in CA float led to
pressure on CASA ratio, SA traction remains healthy. New
Private Banks gaining market share at cost of mid sized PSBs.
Key highlights for Public Sector Banks (PSBs): (1) Margins fell
QoQ – a negative surprise, led by sharp increase in COD and
higher slippages (2) No relief on asset quality with slippages
remaining at an elevated level and no significant improvement
on recoveries and up-gradation (3) Moderation in business
growth (4) Decline in CASA ratio continues (5) Lower
restructuring during the quarter however, pipeline remains high.
Positive surprises: (1) On margins: ICICIBC, VYSB, YES and
HDFCB (2) On asset quality: All Private Banks except FB. ICICIBC,
VYSB and YES surprised positively on core profitability. Despite
higher stress on asset quality, PNB performance on core
profitability was better than peer PSBs.
Negative surprises: (1) On margins: All PSBs surprised
negatively, despite benefit of CRR reduction and capital raising,
due to higher stress on asset quality. Among the Private Banks,
FB was a disappointment (2) On asset quality: Sharp
deterioration in asset quality across the board within PSBs.
Higher stress witnessed for SBIN, PNB, BOI, UNBK and ANDB.
3
4. Stress levels continue to rise, impacting valuations
10
11
14
OBC
INBK
0
VYSB
10
0
YES
PNB
0
-1
-7
IIB
ANDB
-10
CBK*
-14
FB
-18
-23
BoB
AXSB
-25
UNBK
-32
SBIN
BoI -59
ICICIBC
Change in bp
HDFCB
QoQ change in NIMs (BPS)
Sharp rise in net slippage ratio – a negative surprise
SBIN
PNB
CBK
BoB
BoI
UNBK
OBC
INBK
ANDB
PSBs
PSBs (Ex-SBIN)
ICICIBC
AXSB
4QFY11
3.6
1.4
2.2
0.9
1.2
0.8
2.6
1.5
0.9
2.4
1.8
N.A.
1.0
1QFY12
1.9
1.1
1.9
0.8
3.0
1.5
1.2
0.5
1.3
1.6
1.5
0.6
0.8
Net Slippage Ratio (%)
2QFY12 3QFY12 4QFY12
3.8
3.4
-0.2
0.5
2.4
3.9
1.7
0.7
1.0
0.8
1.3
1.9
5.2
0.3
-1.0
5.0
1.1
1.1
5.8
0.8
3.7
1.6
1.3
5.3
6.4
-0.6
-0.4
3.2
2.0
1.0
2.8
1.1
1.7
0.2
0.4
0.1
1.2
1.3
-0.2
1QFY13
3.9
2.1
1.6
1.7
2.2
3.2
1.1
-0.6
3.6
2.7
1.9
0.8
1.2
Divergent trends on NIMs….
PSBs surprised negatively, despite benefit of CRR fall
and capital raising, led by higher stress on asset
quality and lag impact of increase in deposit cost. On
a lower base PNB, OBC and INBK reported an
improvement in margins sequentially.
On the other hand Private Banks surprised positively
with stable/improving margins QoQ. AXSB and IIB
margin decline QoQ was on expected lines.
ICICIBC and HDFCB surprised positively with stable
margins QoQ (unlike historical trend of 1Q margin
decline of 10bp QoQ). YES and VYSB margins
performance was commendable.
… and net slippages ratio; Private Banks shine
Slippages for PSBs increased 50% QoQ (annualized
slippage ratio of 3.4%, as against 2.2% a quarter ago).
Ex-SBIN slippages increased 10% QoQ. Absolute
slippages was higher than those in 2QFY12, which was
impacted by system driven NPA recognition.
Seasonality of recoveries and up-gradation for SBIN
and partial reversal of sharp increase in slippages of
4QFY12 for PNB and INBK helped to contain GNPA.
Private Banks (ex AXSB) asset quality remained healthy
with GNPA and NNPA being largely flattish QoQ. While
AXSB slippages were inline with expectation lower
upgrades were disappointing.
4
5. Stress levels continue to rise, impacting valuations
*C.BANKS: MOSL Coverage
Banking index witnessed significant correction
29.8
31.2
AXSB
IIB
23.3
PVT.BANKS
21.2
PNB
23.0
19.5
UNBK
22.9
19.4
C.BANKS
BoI
19.0
FB
BoB
18.9
SBIN
22.9
18.1
PSBs
VYSB
16.5
INDUSTRY
21.6
16.4
YES
21.5
16.0
OBC
HDFCB
14.4
ANDB
ICICIBC
13.8
INBK
CBK
4.9
Loan growth of Private Banks remains strong (%)
Seasonal moderation in loan growth
Retail focused banks continued to witnessed strong
growth across products. Sharp depreciation in rupee
led to strong overall growth for SBIN, BOB, BOI,
ICICIBC (as share of international loan is high).
AXSB (led by strong loan growth on a lower base) and
YES (led by Non SLR investments growth) reported
strong customer asset growth. Large corporate and
SME segment (+8% QoQ and 34% YoY) remains a key
driver of domestic loan growth for ICICIBC.
Sequential decline or moderate growth for PSBs is due
to seasonal factors and pressure on liability side to cut
bulk deposits (MOF directive of 15% by March 2013).
Asset Quality trends will remain key to valuation
Policy logjam, uncertain macroeconomic environment,
weak business sentiments and risk aversion from
bankers will keep business growth tepid in near term.
Continued comfortable liquidity, government action on
some of the key policy decisions and reduction in
interest rate could significantly alter the growth and
asset quality concerns, which would be positive.
Strong core operations and asset quality is leading to
higher preference for Private Banks, despite valuations
being attractive for PSBs. Top picks: Private Banks –
ICICIBC, PSBs – SBIN (valuations factor in negatives). In
midcap space we like YES and OBC.
5
6. Core operations healthy; NII and PAT inline with estimates
For our coverage universe (ex SBIN), NII growth was inline with our expectation. PSBs disappointed whereas, Private
Banks reported healthy margin performance. Significant negative surprise on NII came from BOI, CBK, FB and SBIN.
Muted fee income growth was witnessed across the board, putting additional pressure on Core PPP.
Pressure on core earning for private banks was contained via moderating cost growth. Higher share of trading profits
and recoveries from written off accounts helped ANDB, BOI, OBC and PNB to post better than expected non interest
income performance. Higher AS-15 related provisions led to higher opex for PNB and UNBK.
While the stress on asset quality was far higher than expected for PSBs, MTM reversals, compromise on PCR and
lower restructuring provisions, led to lower than expected provisions. Lower tax rate came as a respite in some cases.
(INR Million)
Actual
1QFY13
Coverage Banks
Coverage Banks (ex SBIN)
Private Banks
AXSB
FB
HDFCB
ICICIBC
IIB
VYSB
YES
PSBs
PSBs (Ex-SBIN)
ANDB
BoB
BoI
CBK
INBK
OBC
PNB
SBIN
UNBK
371,864
260,675
106,480
21,799
4,916
34,841
31,929
4,841
3,433
4,722
265,384
154,195
9,385
27,981
20,436
18,435
11,532
11,258
36,951
111,189
18,217
QoQ (%)
YoY (%)
Net Interest Income
-0.9
17.2
0.4
18.4
2.8
26.0
1.6
26.4
0.1
6.9
2.8
22.3
2.8
32.4
4.2
24.1
7.5
31.0
5.3
33.3
-2.4
14.0
-1.1
13.6
2.7
3.1
0.0
21.8
-18.3
11.0
-9.6
4.2
6.5
12.0
5.4
10.6
11.6
18.6
-4.1
14.6
-2.9
14.6
Var (%)
Actual
1QFY13
-2.7
-1.5
2.2
2.4
-5.7
1.4
3.9
0.8
7.1
3.4
-4.6
-3.9
-4.7
-2.8
-12.9
-11.1
0.1
-3.8
2.6
-5.5
-1.1
289,544
207,778
89,216
19,637
3,465
25,809
29,493
4,040
2,175
4,596
200,329
118,562
7,034
22,407
16,736
13,938
8,402
8,965
28,409
81,767
12,671
QoQ (%)
YoY (%)
Operating Profit
-6.2
17.6
-2.3
19.6
-0.5
28.1
-3.6
26.0
-7.0
-2.1
7.0
26.9
-5.2
32.0
6.6
29.6
-1.3
48.1
6.8
41.4
-8.5
13.5
-3.6
13.9
6.4
0.5
9.8
23.2
-16.9
19.9
-6.5
9.7
5.4
7.6
18.9
11.9
-3.2
14.8
-14.8
12.9
-20.7
8.7
Var (%)
Actual
1QFY13
-3.8
-2.6
1.0
-0.4
-14.7
1.2
2.4
6.8
2.9
5.0
-5.8
-5.1
0.5
-9.0
-6.2
-14.3
-4.8
2.9
4.0
-6.7
-11.6
147,582
110,066
52,328
11,535
1,904
14,174
18,151
2,363
1,301
2,901
95,254
57,738
3,618
11,389
8,875
7,752
4,617
3,914
12,457
37,516
5,116
QoQ (%)
YoY (%)
Profit After Tax
-7.7
39.6
-7.8
22.4
-4.7
31.0
-9.7
22.4
-19.9
30.2
-2.5
30.6
-4.6
36.3
5.8
31.1
2.1
38.4
6.7
34.3
-9.3
44.8
-10.4
15.6
6.5
-6.2
-25.0
10.3
-6.9
71.5
-6.5
6.8
33.7
13.5
47.8
10.4
-12.5
12.7
-7.4
136.9
-33.8
10.2
Var (%)
5.3
5.8
3.8
3.2
-0.1
0.4
6.5
3.5
13.5
5.4
6.2
7.7
4.8
-1.4
43.3
-4.0
12.3
24.3
9.4
3.9
-10.5
6
7. Asset quality: Pvt banks showing an Impressive performance
Slippages for PSBs increased 50% QoQ (annualized
slippage ratio of 3.4% v/s significantly higher than
2.2% a quarter ago), absolute slippages was higher
than 2QFY12 levels (which was impacted by system
driven NPA recognition) in some cases.
Among PSBs higher stress was seen for SBIN, PNB,
BOI, UNBK, CBK and ANDB. SBIN quarterly slippages
were higher than whole of FY10 slippages.
Seasonality of recoveries and up-gradation for SBIN
and partial reversal of higher slippages of 4QFY12 for
PNB and INBK led to lower GNPA increase.
SBIN
PNB
CBK
BoB
BoI
UNBK
OBC
INBK
ANDB
PSBs (Ex-SBIN)
PSBs
ICICIBC
HDFCB
AXSB
YES
IIB
VYSB
FB
Private Banks
Coverage Banks
INRb
472
100
45
53
68
65
34
16
24
380
852
99
21
21
1
4
6
14
169
1,021
Gross NPA
QoQ %
YoY %
18.9
69.9
14.5
104.1
11.5
24.7
19.1
55.3
14.6
16.6
20.0
74.7
-5.7
66.0
-16.0
92.8
31.2
100.5
11.9
56.5
15.7
63.7
3.6
-1.5
4.3
13.8
15.8
33.0
30.6
95.7
5.2
18.1
4.5
12.9
8.3
8.4
5.8
6.1
13.9
50.2
GNPA %
5.0
3.3
2.0
1.8
2.6
3.8
3.0
1.7
2.7
3.1
1.0
1.1
0.3
1.0
2.0
3.6
INRb
203
49
38
18
44
37
23
10
13
219
423
19
4
6
0.2
1
1
2
35
457
Private Banks (ex AXSB) asset quality remained healthy
with GNPA and NNPA being largely flattish QoQ. While
AXSB slippages were inline with expectation lower
upgrades disappointed.
Going forward restructuring is expected to increase
led by restructuring of some large-mid corporate
accounts under CDR. Private Banks asset quality is
expected to remain healthy due to lower restructured
loans, lesser proportion of direct agricultural loans and
better risk management.
Net NPA
QoQ Gr %
YoY Gr %
28.5
63.4
10.4
135.2
10.9
30.8
19.5
80.1
20.7
64.1
23.9
97.9
-6.2
117.7
-19.5
129.6
71.1
283.2
6.6
76.1
16.1
69.8
2.5
-17.4
12.4
24.3
28.0
30.8
35.9
N.A.
5.5
19.2
7.4
-32.7
18.7
0.2
9.3
-4.1
15.6
60.5
NNPA %
2.2
1.7
1.7
0.7
1.7
2.2
2.1
1.0
1.5
0.6
0.2
0.3
0.1
0.3
0.2
0.6
Calculated Prov. Cov %
1QFY12
4QFY12
1QFY13
55.2
60.1
56.9
57.3
48.9
50.8
20.4
16.0
16.5
70.1
65.4
65.3
53.6
38.0
34.6
49.4
44.5
42.7
47.9
31.3
31.7
47.9
35.3
38.0
71.3
58.0
45.2
48.7
39.4
42.3
52.2
50.6
50.4
76.6
80.2
80.4
82.6
82.4
81.0
70.6
73.8
71.1
95.2
79.2
78.3
72.9
72.7
72.6
83.9
90.7
90.4
81.9
84.7
83.2
77.3
80.2
79.5
PCR (%)
Incl W/off
64.3
62.8
66.5
79.0
60.9
58.9
64.4
75.1
60.4
80.4
81.0
79.0
78.3
72.6
90.4
83.2
7
11. Pace of restructuring moderated (INR b)
SBIN
PNB
CBK
BoB
BoI
UNBK
OBC
INBK
ANDB
OSRL
295
255
130
180
176
84
110
99
68
% of Loa n
3.2
8.7
5.7
6.3
6.6
4.8
9.6
10.6
7.8
AI and SEB
13
93
70
44
58
30
57
30
21
% of Loa n
0.1
3.1
3.1
1.5
2.2
1.7
5.0
3.2
2.4
13
23
15
24
30
16
8
6
55
20
29
41
22
15
Of which
Ai r Indi a
-
SEB
-
70
OSRL (ex-AI and SEB)
283
163
60
136
117
54
52
69
47
% of Loa n
3.1
5.5
2.6
4.8
4.4
3.1
4.6
7.3
5.4
Restructured in FY12
93
153
45
89
92
75
66
34
39
Res tructured i n 4QFY12
51
86
28
53
38
34
34
33
23
6
12
60
8
41
16
20
15
8
0.1
0.4
2.7
0.3
1.5
0.9
1.8
1.6
0.9
6
12
5
8
9
4
8
4
8
0.1
0.4
0.2
0.3
0.4
0.3
0.7
0.5
0.9
Restructured in 1QFY13
% of Loan
Restructured in 1QFY13 Ex- AI and SEB
% of Loan
30
OSRL is Outstanding Standard Restructured Loans
CBK and UNBK report restructured loans facility wise and rest of the banks report borrower wise
11
12. Net Stress Loans lowest for SBIN; OBC’s inflated led by SEBs
NSL (including AI and SEB) for SBIN flat – an exception v/s increase of 40-220bp (%)
NNPA
OSRL
9.8
9.4
8.4
6.9
6.5
5.4
5.4
6.9
6.7
11.4
11.7
11.2
9.3
8.3
6.9
8.2
7.9
11.8
10.7
6.2
5.2
9.7
8.5
9.9
9.9
10.6
8.4
6.0
3.6
3.2
1.8
2.2
1.5
1.7
4QFY12
1QFY13
4QFY12
1QFY13
SBIN
6.3
5.4
0.5
4QFY12
0.6
1.5
1.7
1.7
2.2
2.2
2.1
1.3
1.0
0.9
1.5
1QFY13
4QFY12
1QFY13
4QFY12
1QFY13
4QFY12
1QFY13
4QFY12
1QFY13
4QFY12
1QFY13
PNB
BoB
BoI
UNBK
OBC
INBK
ANDB
NSL (excluding AI and SEB) declines QoQ for INBK, flat for SBIN; others report an increase (%)
OSRL (ex-AI and SEB)
NNPA
7.5
7.0
5.3
5.3
9.1
5.4
5.0
5.8
5.5
3.4
3.1
1.8
2.2
1.5
1.7
4QFY12
1QFY13
4QFY12
1QFY13
5.8
6.2
4.3
4.5
6.6
4.2
6.7
4.4
5.9
4.5
4.6
SBIN
PNB
4.8
0.5
0.6
1.5
1.7
1.7
2.2
2.2
2.1
4QFY12
1QFY13
4QFY12
1QFY13
4QFY12
1QFY13
4QFY12
1QFY13
BoB
BoI
UNBK
6.8
6.7
4.4
OBC
9.0
8.5
7.8
7.5
7.4
5.8
1.3
1.0
0.9
1.5
4QFY12
1QFY13
4QFY12
1QFY13
INBK
ANDB
OSRL is Outstanding Standard Restructured Loans
For both charts, ANDB and UNBK facility wise reported nos. adjusted to borrower wise for like to like comparison
12
13. SBIN – only bank to report fall in OSRL
Addition of net stress (Net slippages + Net additions to Addition of net stress loan (ex-AI and SEB) as a %age of
OSRL) as % age of loan during the quarter
loans during the quarter
FY12
FY13
FY12
FY13
(bp)
2Q
3Q
4Q
1Q
(bp)
2Q
3Q
4Q
1Q
SBIN
66
76
55
65
SBIN
66
76
40
65
PNB
104
119
336
78
PNB
104
53
157
78
BOB
42
95
229
64
BOB
42
95
76
64
BOI
96
91
117
202
BOI
96
91
8
84
UNBK
102
154
272
138
UNBK
102
154
171
68
OBC
164
196
385
153
OBC
164
196
-13
39
INBK
19
78
479
96
INBK
19
78
275
-19
ANDB
145
143
344
253
ANDB
145
109
125
253
Incremental OSRL in the year as a %age of loans (bp)
Incremental OSRL in the quarter as a %age of loans
Change in OSRL (in bp)
Others
AI and SEB
AI and SEB
Others
85
32
33
113
115
8
15
36
109
221
238
PNB
-37
70
20
118
BOI
110
154
77
14
-40
154
509
230
313
381
245
175
ANDB
OBC
INBK
UNBK
BOB
SBIN
ANDB
BOI
OBC
UNBK
INBK
BOB
PNB
SBIN
-43
OSRL is Outstanding Standard Restructured Loans
13
14. Loans: Healthy growth in retail; Corporate growth slowing down
Retail focused banks continued to witnessed strong
growth across products. While HDFCB retail loan
growth was healthy at 4% QoQ and 33% YoY, short
term lending opportunities led to strong growth (15%
QoQ) in corporate segment. HDFCB reported robust
growth (~55%) in CV loans. Credit card and PL grew
35% +. AXSB retail loans growth was also strong at 8%
QoQ and 50% YoY led by secured products.
Sharp depreciation in currency led to strong loan
growth for SBIN, BOB, BOI, ICICIBC (higher
international loan share). International loan growth for
these banks stood at 21% QoQ and 48% YoY, 5% QoQ
and 41% YoY, 10% QoQ and 51% YoY and 8% QoQ and
35% YoY respectively. Domestic loan growth for the all
above mentioned banks stood at 15-17% YoY.
AXSB and YES reported strong customer asset growth
of 3% QoQ and 31% YoY and 7% QoQ and 32% YoY.
Robust growth in vehicle finance portfolio (8% QoQ,
~45% YoY) is led to strong loan growth for IIB.
Large corporate and SME segment (+8% QoQ and 34%
YoY) remains a key driver of domestic loan growth for
ICICIBC. ~80% of the incremental growth in TTM was
driven by corporate in domestic segments.
Sequential decline or moderate growth for PSBs is due
to seasonal factors and pressure on liability side to cut
bulk deposits (MOF directive of 15% by March 13).
Private Banks continue to outpace PSBs
PSBs grapple with asset quality issues
Loans
1QFY13
(INR b)
1QFY13 (Gr %)
4QFY12 (Gr %)
1QFY12 (Gr %)
QoQ
YoY
QoQ
YoY
QoQ
YoY
SBIN
9,168
5.7
18.9
2.5
14.7
1.9
18.0
PNB
2,945
0.2
21.2
11.9
21.3
0.3
23.4
CBK
2,256
-3.0
4.9
6.0
10.0
1.8
23.7
BoB*
2,858
-0.5
23.0
10.2
25.7
1.6
25.2
BoI*
2,642
5.0
22.9
7.9
16.3
-0.6
21.6
UNBK
1,739
-3.9
19.5
15.9
18.3
-4.9
16.7
OBC
1,139
0.7
16.0
2.1
16.7
1.4
14.1
INBK
939
3.0
13.8
3.6
20.4
9.0
21.3
ANDB
866
2.3
14.4
7.0
17.4
4.9
32.5
PSBs (Ex-SBIN)
15,383
0.2
17.7
8.9
18.5
0.9
22.3
PSBs
24,552
2.2
18.1
6.5
17.1
1.2
20.7
ICICIBC*
2,684
5.8
21.6
3.1
17.3
2.0
19.7
HDFCB
2,133
9.2
21.5
0.6
22.2
9.7
20.0
AXSB
1,711
0.8
29.8
14.1
19.2
-7.4
21.4
YES
385
1.4
16.4
5.9
10.5
-3.7
26.1
IIB
372
6.2
31.2
8.1
34.0
8.5
31.4
VYSB
293
1.9
22.9
9.3
21.8
0.9
25.5
FB
380
0.8
19.0
13.7
18.2
0.1
17.8
Private Banks
7,960
5.0
23.3
5.8
19.5
1.7
21.0
Coverage Banks
32,512
2.8
19.4
6.3
17.6
1.3
20.7
Industry
47,608
1.2
16.5
7.8
19.5
3.7
20.1
14
15. Deposits: Restriction on bulk deposit to act as a constraint
In a stressed liquidity and muted deposits growth
environment, borrowings remained one of the key
source of funding. In TTM, banks have actively used
RBI refinance window i.e., refinancing of some of the
Priority sector loans etc.
Borrowings remain one of the key source of funding
Private Banks continue to outpace PSBs
1QFY13 (Gr %)
4QFY12 (Gr %)
1QFY12 (Gr %)
QoQ
YoY
QoQ
YoY
QoQ
YoY
11,029
5.7
16.1
4.3
11.7
1.7
16.5
PNB
3,854
1.5
18.9
6.5
21.3
3.6
26.9
CBK
3,346
2.3
11.5
3.7
11.5
2.3
25.7
BoB
3,827
-0.6
22.3
10.2
26.0
2.5
22.9
Domestic deposit growth remained moderate for PSBs
(ex BOI and INBK), which in our view, to an extent was
triggered by GOI directive to reduce the bulk deposits
proportion to less than 15% by end March 2013.
BoI
3,390
6.5
15.7
3.6
6.5
-1.9
25.4
UNBK
2,221
-0.3
11.5
8.5
10.1
-1.6
16.4
OBC
1,582
1.4
9.4
-0.1
12.2
4.0
17.5
INBK
1,270
5.1
15.0
1.5
14.2
4.4
21.3
Large PSBs like PNB, BOB and CBK has shed at-least
200bp of bulk deposits. CBK and OBC continued its
strategy to moderate the balance sheet growth to
improve balance sheet profile.
ANDB
1,077
1.7
18.5
7.3
14.9
-1.4
21.7
PSBs (Ex-SBIN)
20,567
2.1
15.8
5.6
15.1
1.4
23.1
PSBs
31,596
3.3
15.9
5.2
14.0
1.5
20.7
ICICIBC
2,678
4.8
16.1
-2.0
13.3
2.2
14.8
HDFCB
2,575
4.4
22.0
6.1
18.3
1.2
15.4
AXSB
2,226
1.1
21.3
5.5
16.3
-3.0
24.5
YES
502
2.1
15.2
4.7
7.0
-5.1
44.1
IIB
451
6.4
27.8
4.4
23.3
2.6
28.8
VYSB
359
1.9
14.6
11.2
16.6
3.7
29.4
FB
506
3.3
17.8
4.7
13.8
-0.2
22.7
Private Banks
9,297
3.5
19.4
3.5
15.6
0.2
20.1
Coverage Banks
40,893
3.3
16.7
4.8
14.3
1.2
20.6
Industry
62,292
1.9
13.5
5.4
17.4
5.5
18.5
Banks under our coverage grew faster than industry.
Private Banks continue to outpace industry deposit
growth on a QoQ basis, led by strong loan growth.
BOI post period of consolidation grew aggressively
with domestic deposits growing 7% QoQ though
growth on a YoY basis remains moderate at 9%.
Within Private Banks strong deposits growth was
witnessed for ICICIBC and IIB. FB built up excess
liquidity, as CD ratio declined ~200bp QoQ.
Deposits
1QFY13
(INR b)
SBIN
15
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