Canara Bank - The Smart Investor

4QFY2012 Result Update | Banking
May 10, 2012
Canara Bank
Performance Highlights
Particulars (` cr) 4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy)
NII 2,040 1,919 6.3 1,973 3.4
Pre-prov. profit 1,491 1,577 (5.5) 1,695 (12.0)
PAT 829 876 (5.3) 899 (7.8)
Source: Company, Angel Research
Canara Bank reported a weak set of numbers for 4QFY2012, with net profit
declining by 7.8% yoy to `829cr. The company’s bottom line was dented by
subdued net interest income (in-line with our expectation), yoy decline in fee
income (higher-than-expected) and higher operating expenses. We maintain our
Buy recommendation on the stock.
Business growth remains moderate; Slippages increase sequentially: The bank’s
overall business growth remained moderate, with advances growth of 9.4% yoy,
largely aided by agriculture, infrastructure and industrials segments. Deposits
grew by 11.3% yoy. On the liabilities front, calculated CASA ratio declined by
393bp yoy to 24.3% due to a 39.5% yoy decline in current deposits despite
moderate 10.5% growth in saving deposits. Reported NIM for the bank remained
flat sequentially during 4QFY2012, as rise in yield on advances by 8bp qoq to
10.93% was completely offset by a similar rise in cost of deposits to 7.35%.
Commission and brokerage income declined during the quarter by 13.7% yoy to
`215cr. Gross and net NPA ratio for the bank remained at nearly the same levels
on a qoq basis. Provision coverage ratio for the quarter also remained flat
sequentially at 67.6%. During 4QFY2012, the bank restructured `4,504cr worth
of accounts, of which `1,475cr were on account of restructuring of Air India.
The outstanding restructured book as of 4QFY2012 stands at `7,986cr. The bank
did not restructure any SEB accounts during 4QFY2012, but expects `5,385cr of
SEB restructuring to occur in 1QFY2013, which would include discoms from
Rajasthan, Haryana, U.P. and Gujarat.
Outlook and valuation: Although a weakening domestic macro-economic
environment and consequently slower credit growth and ailing asset quality
are likely to cap near-term upsides, cyclically moderate valuations of 0.7x
FY2014E ABV vs. five-year average of 1.0x and range of 0.7-1.4x in our view
largely factor in the negatives. Hence, we recommend Buy on the stock with a
target price of `522.
Key financials
Y/E March (` cr) FY2011 FY2012 FY2013E FY2014E
NII 7,823 7,689 8,848 10,267
% chg 37.7 (1.7) 15.1 16.0
Net profit 4,026 3,283 3,680 4,106
% chg 33.2 (18.5) 12.1 11.6
NIM (%) 2.7 2.2 2.3 2.3
EPS (`) 90.9 74.1 83.1 92.7
P/E (x) 4.6 5.7 5.0 4.5
P/ABV (x) 1.0 0.9 0.8 0.7
RoA (%) 1.3 0.9 0.9 0.9
RoE (%) 26.4 17.0 16.7 16.4
Source: Company, Angel Research
BUY
CMP
`419
Target Price
`522
Investment Period 12 months
Stock Info
Sector
Banking
Market Cap (` cr) 18,553
Beta 1.0
52 Week High / Low 592/349
Avg. Daily Volume 82,491
Face Value (`) 10
BSE Sensex 16,420
Nifty 4,966
Reuters Code
CNBK.BO
Bloomberg Code
CBK@IN
Shareholding Pattern (%)
Promoters 67.7
MF / Banks / Indian Fls 11.0
FII / NRIs / OCBs 14.6
Indian Public / Others 6.7
Abs. (%) 3m 1yr 3yr
Sensex (7.5) (11.3) 38.3
Canara Bank (20.4) (27.3) 86.4
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 1

Canara Bank | 4QFY2012 Result Update
Exhibit 1: 4QFY2012 performance
Particulars (` cr)
4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy)
Interest earned 8,267 7,812 5.8 6,418 28.8
- on Advances / Bills 6,189 5,946 4.1 4,823 28.3
- on investments 1,908 1,810 5.4 1,521 25.4
- on balance with RBI & others 170 56 201.5 73 132.7
- on others (0) 0 (107.1) 1 (103.4)
Interest Expended 6,227 5,894 5.7 4,445 40.1
Net Interest Income 2,040 1,919 6.3 1,973 3.4
Other income 769 779 (1.3) 933 (17.5)
Other income excl. treasury 674 622 8.4 951 (29.1)
- Fee Income 215 205 4.9 249 (13.7)
- Treasury Income 95 157 (39.5) (18) NA
- Recov. from written off a/cs 98 68 44.1 327 (70.0)
- Others 361 349 3.5 375 (3.6)
Operating income 2,809 2,698 4.1 2,906 (3.3)
Operating expenses 1,319 1,121 17.7 1,211 8.9
- Employee expenses 826 713 15.9 783 5.6
- Other Opex 493 408 20.7 428 15.0
Pre-provision Profit 1,491 1,577 (5.5) 1,695 (12.0)
Provisions & Contingencies 462 501 (7.9) 546 (15.5)
- Provisions for NPAs 390 142 174.6 541 (27.9)
- Other Provisions 72 359 (80.1) 5 1,340.8
PBT 1,029 1,076 (4.3) 1,149 (10.4)
Provision for Tax 200 200 - 250 (20.0)
PAT 829 876 (5.3) 899 (7.8)
Effective Tax Rate (%) 19.4 18.6 84bp 21.8 (233)bp
Source: Company, Angel Research
Exhibit 2: 4QFY2012 Actual vs. Estimates
Particulars (` cr) Actual Estimates Var (%)
NII 2,040 2,019 1.0
Non-interest income 769 861 (10.6)
Operating income 2,809 2,880 (2.5)
Operating expenses 1,319 1,196 10.3
Pre-prov. profit 1,491 1,685 (11.5)
Provisions & cont. 462 391 18.0
PBT 1,029 1,293 (20.4)
Prov. for taxes 200 313 (36.1)
PAT 829 981 (15.4)
Source: Company, Angel Research
May 10, 2012 2

Canara Bank | 4QFY2012 Result Update
Exhibit 3: 4QFY2012 performance analysis
Particulars 4QFY12 3QFY12 %chg (qoq) 4QFY11 %chg (yoy)
Balance sheet
Advances (` cr) 232,490 219,253 6.0 212,467 9.4
Deposits (` cr) 327,054 315,456 3.7 293,973 11.3
Credit-to-Deposit Ratio (%) 71.1 69.5 158bp 72.3 (119)bp
Current deposits (` cr) 14,819 12,059 22.9 24,500 (39.5)
Saving deposits (` cr) 64,792 63,361 2.3 58,617 10.5
CASA deposits (` cr) 79,611 75,420 5.6 83,117 (4.2)
Calculated CASA ratio (%) 24.3 23.9 43bp 28.3 (393)bp
CAR (%) 13.8 13.2 54bp 15.4 (162)bp
Tier 1 CAR (%) 10.4 9.5 87bp 10.9 (52)bp
Profitability Ratios (%)
Cost of deposits 7.4 7.3 8bp 5.8 155bp
Yield on advances 10.9 10.9 8bp 9.7 120bp
Yield on investments 8.0 7.9 3bp 7.7 24bp
Yield on funds 9.0 8.8 16bp 8.1 82bp
Cost of funds 6.7 6.6 13bp 5.4 135bp
Reported NIM 2.5 2.5 (2)bp 3.1 (62)bp
Cost-to-income ratio 46.9 41.6 539bp 41.7 527bp
Asset quality
Gross NPAs (` cr) 4,032 3,999 0.8 3,089 30.5
Gross NPAs (%) 1.7 1.8 (8)bp 1.5 28bp
Net NPAs (` cr) 3,386 3,265 3.7 2,347 44.3
Net NPAs (%) 1.5 1.5 (3)bp 1.1 35bp
PCR incl. tech. w/offs (%) 67.6 67.9 (27)bp 73.0 (540)bp
Slippage ratio (%) 2.1 1.6 49bp 4.4 (224)bp
NPA to avg. assets (%) 0.4 0.2 27bp 0.7 (26)bp
Source: Company, Angel Research
Business growth remains moderate; NIM remains flat
The bank’s overall business growth remained moderate, with advances growing by
9.4% yoy and deposits growing by 11.3% yoy. Growth in advances was largely
aided by segments such as agriculture, infrastructure and industrials, which grew
by 21.4%, 16.5% and 15.4% yoy, respectively. While segments such retail and SME
witnessed a decline of 1.9% and 7.4% yoy, respectively.
On the liabilities front, the volatile current account deposits decreased by 39.5%
yoy (up 22.3% qoq on account of 4Q phenomena), while saving account deposits
witnessed an increase of 10.5% yoy (2.3% qoq). Consequently, calculated CASA
ratio for the bank declined by 393bp yoy to 24.3% (up by 43bp sequentially).
May 10, 2012 3

Canara Bank | 4QFY2012 Result Update
Exhibit 4: Business growth remains moderate
Exhibit 5: CASA decline continues in 4QFY2012
Adv. yoy chg (%) Dep. yoy chg (%) CDR (%, RHS)
Calculated CASA ratio
CASA yoy growth (%, RHS)
28.0
21.0
14.0
7.0
72.3
25.5
25.3
71.6
23.7
25.7
69.7
23.8
25.4
69.5
15.5
19.7
71.1
9.4
11.3
74.0
72.0
70.0
30.0
27.5
25.0
22.5
21.8
28.3
9.7
25.4
12.2
25.8
(1.4)
23.9
(4.2)
24.3
30.0
20.0
10.0
-
-
4QFY11 1QFY12 2QFY12 3QFY12 4QFY12
68.0
20.0
4QFY11 1QFY12 2QFY12 3QFY12 4QFY12
(10.0)
Source: Company, Angel Research
Source: Company, Angel Research
The bank’s reported NIM remained flat sequentially during 4QFY2012, as the 8bp
qoq rise in yield on advances to 10.93% was completely offset by a similar rise in
cost of deposits to 7.35%. Management attributed the declining trend in CASA
ratio mostly to the flight of saving deposits to higher yielding term deposits and
difficulty in sustaining the current account balances due to prevalent domestic
macro headwinds.
Exhibit 6: YoA up by 8bp qoq, but similar rise in COD...
Exhibit 7: ...results in flat reported NIM
(%)
11.00
10.50
10.72 10.85 10.93
(%)
3.50
3.12
10.00
9.00
9.73
3.00
2.50
2.00
2.42
2.64
2.52 2.50
8.00
1.50
7.00
4QFY11 1QFY12 2QFY12 3QFY12 4QFY12
1.00
4QFY11 1QFY12 2QFY12 3QFY12 4QFY12
Source: Company, Angel Research
Source: Company, Angel Research
Fee income declines on a yoy basis on account of a dip in
commission and brokerage income
Commission and brokerage income declined during the quarter by 13.7% yoy to
`215cr. Recoveries from written-off accounts, which halved sequentially in the last
quarter to `68cr, picked up momentum once again as they grew by 44.1%
sequentially. Treasury income posted a healthy performance growing to `95cr in
4QFY2012 from loss of `18cr in 4QFY2011. Overall, core fee income declined by
29.1% yoy to `674cr.
May 10, 2012 4

Canara Bank | 4QFY2012 Result Update
Exhibit 8: Fee income declines on a yoy basis during 4QFY2012
Particulars (` cr) 4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy)
CEB 215 205 4.9 249 (13.7)
Treasury 95 157 (39.5) (18) NA
Recoveries 98 68 44.1 327 (70.0)
Others 361 349 3.5 375 (3.6)
Other income 769 779 (1.3) 933 (17.5)
Other income excl. treasury 674 622 8.4 951 (29.1)
Source: Company, Angel Research
Slippages increase sequentially
Gross and net NPA ratio for the bank remained at nearly the same levels on a qoq
basis. As of 4QFY2012, gross NPA ratio stood at 1.73% (1.81% in 3QFY2012),
while net NPA ratio stood at 1.46% (1.49% in 3QFY2012). Provision coverage
ratio for the quarter remained flat sequentially at 67.6%. Slippages on an absolute
basis increased sequentially by ~`250cr. While recoveries/upgrades improved
sequentially by `59cr, write-offs increased by almost three times on a qoq basis,
hence limiting the increase in gross NPA to ~`33cr only. The bank’s gross
annualized slippage ratio, which was improving constantly for the past few
quarters, increased sequentially by ~50bp to 2.1%, though it still remains at much
lower levels than the highs of 4.4% witnessed in 4QFY2011.
During 4QFY2012, the bank restructured `4,504cr worth of accounts, of which
`1,475cr were on account of restructuring of Air India. NPV loss on Air India
restructuring equally amortized over eight quarters beginning 1QFY2013 amounts
to `19cr. The outstanding restructured book as of 4QFY2012 stands at `7,986cr.
The bank did not restructure any SEB accounts during 4QFY2012 but expects
`5,385cr of SEB restructuring to occur in 1QFY2013, which would include discoms
from Rajasthan, Haryana, U.P. and Gujarat. However, management also
mentioned that rest of the SEB exposure of the bank (~`6,600cr) is performing
and there would be no NPV loss on account of SEB restructuring.
Exhibit 9: Slippages increase sequentially
Exhibit 10: Sequentially stable NPA ratios
Slippages (%)
Credit cost (%, RHS)
Gross NPAs (%) Net NPAs (%) PCR (%, RHS)
5.0
0.7
0.8
2.0
80.0
4.0
3.0
2.0
1.0
4.4
0.3
2.6
0.5
2.3
0.2
1.6
0.4
2.1
0.6
0.4
0.2
1.5
1.0
0.5
73.0
1.5
1.1
69.5
1.7
1.3
68.6
1.7
1.4
67.9 67.6
1.8
1.5
1.7
1.5
75.0
70.0
65.0
-
4QFY11 1QFY12 2QFY12 3QFY12 4QFY12
-
-
4QFY11 1QFY12 2QFY12 3QFY12 4QFY12
60.0
Source: Company, Angel Research
Source: Company, Angel Research; Note: PCR including tech. write-offs
May 10, 2012 5

Canara Bank | 4QFY2012 Result Update
Exhibit 11: Strong rise in branch network
Exhibit 12: Cost ratios rise sequentially on higher opex
3,650
3,500
3,350
3,200
3,257 3,277
3,437
3,569
3,600
48.0
46.0
44.0
42.0
Cost-to-income ratio (%)
1.5
1.2
Opex to average assets (%, RHS)
2.0
1.4
1.4
1.2
1.5
1.0
3,050
40.0
41.7
45.2
42.5
41.6
46.9
0.5
2,900
4QFY11 1QFY12 2QFY12 3QFY12 4QFY12
38.0
4QFY11 1QFY12 2QFY12 3QFY12 4QFY12
-
Source: Company, Angel Research
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
24.3% as of 4QFY2012. As witnessed in 3QFY2012, overall CASA deposits again
declined by 4.2% yoy in 4QFY2012 as compared to 21.8% yoy growth witnessed
in 4QFY2011. The bank had relatively high proportion of more costly bulk
deposits and CDs at ~43% of deposits in 4QFY2012 as against ~30% in
3QFY2012, which increases the bank’s exposure to interest rate movements. Due
to tight liquidity situation prevalent in 4QFY2012, margins continued to remain
under check. Accordingly, we keep our NIM forecast for FY2013 at 2.2%.
Outlook and valuation
The bank has embarked on a relatively aggressive network expansion plan. Over
the past one year, the bank has added over 323 branches and 642 ATMs. Such a
pace of network expansion should augur well, in our view, for strengthening the
bank’s relatively weak liability franchise.
Though a weakening domestic macro-economic environment and consequently
slower credit growth and ailing asset quality are likely to cap near-term upsides,
cyclically moderate valuations of 0.7x FY2014E ABV vs. five-year average of 1.0x
and range of 0.7-1.4x in our view largely factor in the negatives. Hence,
we recommend Buy on the stock with a target price of `522.
May 10, 2012 6

Canara Bank | 4QFY2012 Result Update
Exhibit 13: Key assumptions
Particulars (%)
Earlier estimates Revised estimates
FY2013 FY2014 FY2013 FY2014
Credit growth 17.0 18.0 18.0 18.0
Deposit growth 16.0 18.0 13.0 18.0
CASA ratio 25.4 24.6 24.3 23.7
NIMs 2.2 2.2 2.3 2.3
Other income growth 11.2 14.3 9.8 13.2
Growth in staff expenses 15.0 15.0 15.0 15.0
Growth in other expenses 15.0 15.0 15.0 15.0
Slippages 1.8 1.7 1.6 1.5
Coverage 69.0 70.0 67.6 68.0
Source: Angel Research
Exhibit 14: Change in estimates
FY2013
FY2014
Particulars (` cr) Earlier Revised
Earlier Revised
Var. (%)
Var. (%)
estimates estimates estimates estimates
NII 8,791 8,848 0.6 10,204 10,267 0.6
Non-interest income 3,329 3,213 (3.5) 3,805 3,639 (4.4)
Operating income 12,120 12,061 (0.5) 14,009 13,906 (0.7)
Operating expenses 5,233 5,375 2.7 6,018 6,181 2.7
Pre-prov. profit 6,887 6,686 (2.9) 7,990 7,725 (3.3)
Provisions & cont. 1,463 1,428 (2.4) 1,736 1,647 (5.2)
PBT 5,424 5,258 (3.1) 6,254 6,078 (2.8)
Prov. for taxes 1,627 1,577 (3.1) 2,029 1,972 (2.8)
PAT 3,797 3,680 (3.1) 4,225 4,106 (2.8)
Source: Angel Research
Exhibit 15: P/ABV band
1200
Price (`) 0.75x 1x 1.25x 1.5x 1.75x
1000
800
600
400
200
0
Apr-06
Oct-06
Apr-07
Oct-07
Apr-08
Oct-08
Apr-09
Oct-09
Apr-10
Oct-10
Apr-11
Oct-11
Apr-12
Oct-12
Source: Company, Angel Research
May 10, 2012 7

Canara Bank | 4QFY2012 Result Update
Exhibit 16: Recommendation summary
Company
Reco.
CMP
(`)
Tgt. price
(`)
Upside
(%)
FY2014E
P/ABV (x)
FY2014E
Tgt P/ABV (x)
FY2014E
P/E (x)
FY2012-14E
EPS CAGR (%)
FY2014E
RoA (%)
FY2014E
RoE (%)
AxisBk Buy 979 1,587 62.1 1.3 2.2 7.0 16.4 1.5 20.3
FedBk Neutral 408 - - 1.0 - 7.1 13.0 1.3 14.5
HDFCBk Accumulate 517 567 9.7 3.0 3.3 14.6 27.0 1.7 22.1
ICICIBk* Buy 813 1,201 47.8 1.3 1.9 10.0 20.4 1.5 16.0
SIB Neutral 23 - - 1.1 - 6.1 4.5 0.8 17.5
YesBk Buy 326 470 43.9 1.7 2.4 7.9 22.5 1.4 23.3
AllBk Accumulate 152 166 9.3 0.6 0.7 3.6 6.2 0.9 17.6
AndhBk Neutral 105 - - 0.6 - 4.1 3.3 0.9 16.0
BOB Buy 641 925 44.5 0.7 1.1 4.3 11.1 1.1 18.2
BOI Buy 353 411 16.3 0.7 1.0 4.4 23.3 0.8 16.9
BOM Buy 48 57 18.7 0.6 0.7 3.7 45.3 0.7 17.2
CanBk Buy 419 522 24.7 0.7 0.9 4.5 11.8 0.9 16.4
CentBk Neutral 77 - - 0.7 - 3.9 45.7 0.5 13.8
CorpBk Buy 404 504 24.7 0.5 0.7 3.6 5.3 0.8 16.5
DenaBk Buy 84 118 39.8 0.5 0.7 3.3 6.2 0.9 16.9
IDBI# Buy 92 117 26.5 0.6 0.7 3.9 22.7 0.9 14.8
IndBk Buy 196 240 22.4 0.7 0.8 4.0 5.4 1.2 18.2
IOB Buy 82 101 23.7 0.5 0.6 3.8 28.3 0.6 13.9
J&KBk Neutral 854 - - 0.8 - 4.4 8.8 1.4 18.6
OBC Buy 220 285 29.6 0.5 0.6 3.4 27.7 0.8 14.3
PNB Buy 754 1,117 48.1 0.7 1.1 4.3 10.3 1.0 18.1
SBI* Buy 1,844 2,593 40.6 1.1 1.6 6.8 23.6 1.0 19.1
SynBk Buy 91 128 41.1 0.5 0.8 3.3 8.7 0.8 17.1
UcoBk Neutral 68 - - 0.8 - 4.7 7.0 0.5 13.4
UnionBk Buy 203 276 35.9 0.7 0.9 4.0 24.8 0.8 17.5
UtdBk Buy 58 85 46.3 0.4 0.6 2.7 11.4 0.7 15.9
VijBk Neutral 53 - - 0.6 - 4.3 13.5 0.5 13.7
Source: Company, Angel Research; Note:*Target multiples=SOTP Target Price/ABV (including subsidiaries), # Without adjusting for SASF
May 10, 2012 8

Canara Bank | 4QFY2012 Result Update
Income statement
Y/E March (` cr) FY09 FY10 FY11 FY12 FY13E FY14E
Net Interest Income 4,718 5,681 7,823 7,689 8,848 10,267
- YoY Growth (%) 33.4 20.4 37.7 (1.7) 15.1 16.0
Other Income 2,427 2,858 2,703 2,928 3,213 3,639
- YoY Growth (%) 5.1 17.7 (5.4) 8.3 9.8 13.2
Operating Income 7,145 8,538 10,526 10,617 12,061 13,906
- YoY Growth (%) 22.2 19.5 23.3 0.9 13.6 15.3
Operating Expenses 3,065 3,478 4,419 4,674 5,375 6,181
- YoY Growth (%) 9.8 13.5 27.1 5.8 15.0 15.0
Pre - Provision Profit 4,080 5,061 6,107 5,943 6,686 7,725
- YoY Growth (%) 33.5 24.1 20.7 (2.7) 12.5 15.5
Prov. & Cont. 1,507 1,239 1,081 1,860 1,428 1,647
- YoY Growth (%) 31.1 (17.8) (12.8) 72.1 (23.2) 15.3
Profit Before Tax 2,572 3,821 5,026 4,083 5,258 6,078
- YoY Growth (%) 35.0 48.6 31.5 (18.8) 28.8 15.6
Prov. for Taxation 500 800 1,000 800 1,577 1,972
- as a % of PBT 19.4 20.9 19.9 19.6 30.0 32.4
PAT 2,072 3,021 4,026 3,283 3,680 4,106
- YoY Growth (%) 32.4 45.8 33.2 (18.5) 12.1 11.6
Balance sheet
Y/E March (` cr) FY09 FY10 FY11 FY12 FY13E FY14E
Share Capital 410 410 443 443 443 443
Reserve & Surplus 11,798 14,262 19,597 22,247 25,129 28,334
Deposits 186,893 234,651 293,973 327,054 369,571 436,093
- Growth (%) 21.3 25.6 25.3 11.3 13.0 18.0
Borrowings 7,057 1,041 5,198 5,787 6,540 7,695
Tier 2 Capital 6,944 7,399 9,063 9,738 11,491 13,559
Other Liab. & Prov. 6,498 6,977 7,805 8,891 9,627 11,358
Total Liabilities 219,599 264,741 336,079 374,160 422,801 497,482
Cash Balances 10,037 15,719 22,015 17,795 14,783 17,444
Bank Balances 6,623 3,934 8,693 10,384 11,734 13,807
Investments 57,777 69,677 83,700 102,057 109,123 127,535
Advances 138,219 169,335 212,467 232,490 274,338 323,719
- Growth (%) 28.9 22.5 25.5 9.4 18.0 18.0
Fixed Assets 2,929 2,859 2,844 2,858 3,132 3,575
Other Assets 4,014 3,217 6,359 8,576 9,691 11,403
Total Assets 219,599 264,741 336,079 374,160 422,801 497,482
- Growth (%) 21.7 20.6 26.9 11.3 13.0 17.7
May 10, 2012 9

Canara Bank | 4QFY2012 Result Update
Ratio analysis
Y/E March FY09 FY10 FY11 FY12 FY13E FY14E
Profitability ratios (%)
NIMs 2.4 2.4 2.7 2.2 2.3 2.3
Cost to Income Ratio 42.9 40.7 42.0 44.0 44.6 44.4
RoA 1.0 1.2 1.3 0.9 0.9 0.9
RoE 22.6 26.8 26.4 17.0 16.7 16.4
B/S ratios (%)
CASA Ratio 30.1 29.1 28.3 24.3 24.3 23.7
Credit/Deposit Ratio 74.0 72.2 72.3 71.1 74.2 74.2
CAR 14.1 13.4 15.4 15.6 16.0 15.7
- Tier I 8.0 8.5 10.9 11.2 11.2 10.7
Asset Quality (%)
Gross NPAs 1.6 1.5 1.4 1.7 2.2 2.5
Net NPAs 1.1 1.1 0.8 1.5 1.4 1.4
Slippages 2.2 2.4 2.1 2.1 1.6 1.5
Loan Loss Prov. /Avg. Assets 0.5 0.6 0.3 0.4 0.3 0.3
Provision Coverage 30.5 77.7 73.0 67.6 67.6 68.0
Per Share Data (`)
EPS 50.5 73.7 90.9 74.1 83.1 92.7
ABVPS (75% cover.) 221.3 305.8 401.1 447.3 509.6 580.1
DPS 8.0 10.0 11.0 11.0 15.5 17.5
Valuation Ratios
PER (x) 8.3 5.7 4.6 5.7 5.0 4.5
P/ABVPS (x) 1.9 1.4 1.0 0.9 0.8 0.7
Dividend Yield 1.9 2.4 2.6 2.6 3.7 4.2
DuPont Analysis
NII 2.4 2.3 2.6 2.2 2.2 2.2
(-) Prov. Exp. 0.8 0.5 0.4 0.5 0.4 0.4
Adj. NII 1.6 1.8 2.2 1.6 1.9 1.9
Treasury 0.3 0.4 0.1 0.1 0.1 0.0
Int. Sens. Inc. 1.9 2.2 2.3 1.7 1.9 1.9
Other Inc. 0.9 0.8 0.8 0.7 0.8 0.8
Op. Inc. 2.8 3.0 3.1 2.5 2.7 2.7
Opex 1.5 1.4 1.5 1.3 1.3 1.3
PBT 1.3 1.6 1.7 1.1 1.3 1.3
Taxes 0.3 0.3 0.3 0.2 0.4 0.4
RoA 1.0 1.2 1.3 0.9 0.9 0.9
Leverage 21.8 21.5 19.7 18.4 18.1 18.3
RoE 22.6 26.8 26.4 17.0 16.7 16.4
May 10, 2012 10

Canara Bank | 4QFY2012 Result Update
Research Team Tel: 022 - 39357800 E-mail: research@angelbroking.com Website: www.angelbroking.com
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Disclosure of Interest Statement
Canara Bank
1. Analyst ownership of the stock No
2. Angel and its Group companies ownership of the stock No
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Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
Reduce (-5% to 15%) Sell (< -15%)
May 10, 2012 11