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.

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

8. Slippages: Sharp rise QoQ for PSBs
4QFY11
Slippages (INR m)
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
4QFY11
Slippage Ratio (%)
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
SBIN
56,450
61,220
82,700
81,610
43,830
108,440
3.6
3.7
4.9
4.5
2.3
5.6
PNB
12,490
11,770
9,930
16,830
28,190
27,690
2.7
2.4
1.9
3.0
4.7
4.6
CBK
18,424
13,730
12,360
8,620
11,210
14,970
4.4
3.2
2.8
1.8
2.1
2.8
BoB
6,665
5,848
5,825
9,527
13,233
12,567
1.5
1.3
1.2
1.8
2.3
2.2
BoI
9,993
16,837
28,217
8,696
8,000
17,470
2.3
3.8
6.1
1.8
1.5
3.3
UNBK
4,060
7,660
18,210
5,660
6,070
16,310
1.3
2.5
5.8
1.7
1.6
4.5
OBC
6,490
3,780
15,033
6,988
13,174
7,069
3.1
1.8
6.9
3.1
5.4
2.9
INBK
2,790
1,660
3,790
2,943
10,397
2,310
1.8
1.0
2.2
1.6
5.5
1.1
Andhra
1,924
2,466
11,593
3,809
4,017
8,331
1.4
1.7
7.6
2.3
2.2
4.4
60,912
61,285
93,365
59,264
90,274
98,385
1.9
1.9
2.8
1.7
2.4
2.6
117,362
122,505
176,065
140,874
134,104
206,825
2.3
2.4
3.3
2.5
2.2
3.4
N.A.
7,500
7,900
8,770
6,350
8,680
N.A.
1.6
1.6
1.7
1.2
1.6
2,480
2,960
4,960
5,350
5,140
4,560
1.0
1.1
1.8
1.7
1.4
1.4
IIB
550
730
1,310
680
840
1,090
1.1
1.4
2.2
1.1
1.3
1.5
VYSB
400
160
400
700
468
1,000
0.9
0.3
0.8
1.3
0.8
1.7
2,880
3,440
2,650
3,300
2,700
2,890
4.3
5.1
3.8
4.7
3.4
3.6
PSBs (Ex-SBIN)
PSBs
ICICIBC
AXSB
FB
8

9. Recoveries and up gradations disappointed
Recoveries and up-gradation: Performance not very strong
Recoveries & Upgradation (INR b)
Some banks resorting to write offs to keep GNPA (%) lower
Write-offs (INR b)
As a % of Opening GNPA (ann.)
SBIN
FY12
FY13
1Q 2Q 3Q 4Q 1Q
1Q
30.8 17.7 19.7 47.2 32.8 48.6
FY12
2Q 3Q
25.5 23.2
6.5
7.2
3.6
4.8
14.7 59.6
58.8
27.9
29.5
67.3
CBK
5.7
5.0
5.5
6.1
6.6
73.7
55.2
57.7
61.4
65.2
BoB
2.0
1.9
3.0
2.3
2.6
25.0
21.9
35.8
23.3
23.2
BoI
3.6
4.4
7.5
13.2
5.5
29.7
30.7
45.7
82.7
37.6
UNBK
3.0
2.3
2.1
2.0
4.6
33.6
24.8
16.0
15.1
33.8
INBK
0.8
1.0
0.6
0.4
3.5
44.9
48.6
22.8
12.9
OBC
1.2
2.4
5.1
4.3
4.3
25.3
47.4
66.1
53.0
ANDB
0.6
1.9
4.8
4.8
1.4
34.8
ICICIBC
4.8
6.7
7.0
5.8
4.0
AXSB
0.9
1.6
1.2
5.9
0.6
FY13
FY12
FY13
4Q
1Q
47.1 33.1
PNB
As a % to Op GNPA (ann.)
FY13
FY12
1Q
2Q
3Q
4Q
1Q
1Q
2Q
3Q
4Q
1Q
SBIN
6.0
3.2
0.4
0.8
0.8
9.5
4.6
0.5
0.8
0.8
PNB
0.1
0.2
0.3
0.7
0.3
1.0
1.5
2.4
4.1
1.6
CBK
2.9
5.4
1.1
5.2
3.8
37.2 60.2 11.5 51.8 37.3
BoB
1.1
4.2
1.6
5.3
2.0
14.6 48.9 18.3 54.1 17.5
BoI
1.5
16.0
2.6
2.1
3.1
12.5 110.2 16.1 13.3 20.8
UNBK
INBK
3.4
2.0
2.9
1.7
0.8
37.5 21.1 22.5 12.9
76.1
0.2
0.4
0.9
3.4
1.8
9.4
48.0
OBC
1.4
1.9
0.6
5.4
4.8
29.7 36.5
8.2
67.0 53.6
93.8 184.3 161.6 30.8
ANDB
0.0
1.6
0.0
0.1
1.3
0.8
79.3
0.5
2.4
28.1
19.4
26.2
27.2
ICICIBC
3.2
0.8
4.8
3.1
1.2
12.7
3.2
18.7 12.2
4.8
27.4
47.9
32.6 148.3 15.8
AXSB
2.3
1.6
2.4
0.3
1.1
68.6 47.6 65.5
22.7
15.9
5.8
19.6 35.0 114.6 38.0
7.5
27.5
Credit cost (annualized) remains high (%)
SBIN
PNB
CBK
BoB
BoI
UNBK
OBC
INBK
ANDB
ICICIBC
AXSB
1QFY10
0.9
0.4
0.6
0.9
0.5
1.0
0.6
0.1
0.3
2QFY10
0.7
0.1
0.7
0.5
1.3
0.4
0.2
0.3
0.4
3QFY10
0.3
0.8
1.0
0.6
1.2
0.2
0.2
0.2
0.4
4QFY10
1.4
1.0
1.5
0.6
1.6
1.1
1.7
2.2
1.3
1QFY11
1.1
1.1
0.3
0.6
0.7
0.3
0.7
2.5
0.1
2QFY11
1.3
0.7
0.5
0.3
0.6
2.0
1.0
0.6
0.6
3QFY11
0.9
1.0
0.3
0.4
0.3
1.1
0.8
0.2
1.0
4QFY11
1.8
0.9
1.1
0.8
0.7
0.3
1.7
0.9
1.2
1QFY12
0.6
0.9
0.5
0.2
0.7
1.0
0.6
0.6
0.6
2QFY12
1.2
0.5
0.9
0.5
1.5
1.4
1.3
0.5
1.2
3QFY12
1.5
0.9
0.3
0.8
0.6
1.1
0.4
0.5
0.2
4QFY12
1.3
1.4
0.7
1.4
0.8
0.5
1.8
2.1
0.5
1QFY13
1.3
1.2
0.8
1.1
0.9
1.0
1.5
0.4
0.7
2.5
1.7
2.2
2.4
2.2
1.5
2.2
0.8
1.7
1.1
1.4
1.2
0.9
0.8
0.7
0.3
0.8
0.4
0.6
0.7
0.6
0.9
0.8
0.3
0.7
0.6
9

10. Net slippages (ex SBIN) stable QoQ
Net Slippages (INR b)
Net Slippage Ratio (%)
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
SBIN
56.5
30.5
65.0
61.9
-3.4
75.6
3.6
1.9
3.8
3.4
-0.2
3.9
PNB
8.4
5.3
2.7
13.2
23.4
13.0
1.4
1.1
0.5
2.4
3.9
2.1
CBK
11.7
8.0
7.4
3.2
5.1
8.4
2.2
1.9
1.7
0.7
1.0
1.6
BoB
5.1
3.9
4.0
6.5
11.0
10.0
0.9
0.8
0.8
1.3
1.9
1.7
BoI
6.4
13.3
23.8
1.2
-5.2
11.9
1.2
3.0
5.2
0.3
-1.0
2.2
UNBK
3.0
4.6
15.9
3.6
4.1
11.7
0.8
1.5
5.0
1.1
1.1
3.2
OBC
6.2
2.6
12.6
1.8
8.9
2.8
2.6
1.2
5.8
0.8
3.7
1.1
INBK
2.8
0.8
2.8
2.3
10.0
-1.2
1.5
0.5
1.6
1.3
5.3
-0.6
ANDB
1.6
1.8
9.7
-1.0
-0.8
6.9
0.9
1.3
6.4
-0.6
-0.4
3.6
101.6
70.7
143.9
92.8
53.1
139.1
2.4
1.6
3.2
2.0
1.0
2.7
PSBs (Ex-SBIN)
45.1
40.3
78.9
30.9
56.5
63.5
1.8
1.5
2.8
1.1
1.7
1.9
ICICIBC
N.A.
2.7
1.2
1.8
0.6
4.7
N.A.
0.6
0.2
0.4
0.1
0.8
2.5
2.0
3.3
4.1
-0.8
3.9
1.0
0.8
1.2
1.3
-0.2
1.2
PSBs
AXSB
10

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

16. CD ratio: Moderated QoQ - a seasonal phenomenon
YoY Loan Growth (%)
CD Ratio (%)
2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13
SBIN*
19.0
21.3
19.8
18.0
16.1
16.5
14.7
18.9
74.7
77.2
76.3
76.7
75.8
78.6
78.5
77.8
PNB
27.6
29.8
29.7
23.4
19.3
18.7
21.3
21.2
76.4
76.6
77.4
74.9
72.9
73.7
77.4
76.4
CBK
20.2
28.8
24.8
23.7
23.8
15.5
10.0
4.9
70.7
72.1
72.0
71.6
69.7
69.5
71.1
67.4
BOB*
29.6
32.7
30.6
25.2
23.9
25.8
25.7
23.0
68.8
70.6
72.6
71.3
69.1
70.7
72.1
70.5
BOI*
22.7
22.8
26.2
21.6
17.7
20.9
16.3
22.9
70.6
70.3
65.3
65.6
64.6
67.2
71.5
68.5
UNBK
27.1
25.6
26.2
16.7
16.5
16.8
18.3
19.5
71.1
71.7
75.6
73.1
75.3
76.1
81.2
78.3
OBC
14.3
15.6
15.0
14.1
20.8
21.9
16.7
16.0
69.6
70.2
69.6
67.9
70.7
70.9
72.5
72.0
INBK
29.8
28.6
20.9
21.3
23.4
19.1
20.4
13.8
71.4
73.2
71.6
74.7
74.3
74.0
75.5
73.9
ANDB
26.6
27.7
27.7
32.5
22.1
20.7
17.4
14.4
77.6
79.9
78.3
83.3
78.9
80.2
80.0
80.4
PSBs (Ex- SBIN)
24.8
27.1
26.2
22.3
20.8
20.0
18.5
17.7
73.1
74.1
74.0
73.6
72.7
73.9
76.2
74.8
PSBs
22.5
24.8
23.7
20.7
19.0
18.6
17.1
18.1
75.5
77.2
76.5
76.2
75.7
77.6
78.5
77.7
ICICIBC*
1.8
15.3
19.4
19.7
20.5
19.1
17.3
21.6
68.0
75.0
75.0
75.5
72.3
71.1
76.1
76.6
HDFCB
38.2
33.1
27.1
20.0
20.0
22.1
22.2
21.5
80.4
82.8
76.7
83.1
81.7
83.6
79.2
82.8
AXSB
36.5
45.7
36.5
21.4
26.7
20.4
19.2
29.8
70.5
79.3
75.3
71.8
72.0
71.3
77.1
76.9
YES
86.2
66.3
54.8
26.1
12.7
15.3
10.5
16.4
75.8
78.9
74.8
76.0
77.6
76.4
77.3
76.7
IIB
33.4
31.0
27.3
31.4
28.5
29.7
34.0
31.2
75.0
81.5
76.1
80.5
78.5
79.9
82.8
82.6
VYSB
23.5
22.5
27.5
25.5
22.8
22.6
21.8
22.9
77.6
78.7
78.2
76.1
80.9
83.1
81.6
81.6
FB
7.2
8.5
18.6
17.8
21.6
17.6
18.2
19.0
76.5
76.5
74.3
74.5
71.1
71.0
77.2
75.2
Private Banks
22.1
28.0
27.1
21.0
21.6
20.5
19.5
23.3
79.5
85.0
81.7
82.9
82.5
82.6
84.5
85.6
Coverage Banks
22.4
25.6
24.5
20.7
19.6
19.1
17.6
19.4
76.4
78.9
77.7
77.7
77.2
78.7
79.9
79.5
Industry
19.1
24.6
21.5
20.1
21.2
16.0
19.5
16.5
72.7
75.7
75.7
74.5
73.8
75.3
77.0
76.4
* Domestic CD ratio
16

17. 78.5
SBIN*
71.5
CBK
BOB*
BOI*
UNBK
OBC
INBK
ANDB
AXSB
YES
IIB
VYSB
77.2
81.6
77.3
HDFCB
82.8
77.1
ICICIBC*
79.2
76.1
76.9
76.1
75.2
74.5
82.8
81.6
82.6
80.5
76.7
76.0
71.8
76.6
83.1
80.4
83.3
1QFY13
75.5
73.9
74.7
72.0
67.9
78.3
13.8
4.9
16.0
16.4
16.5
18.1
18.9
19.0
19.4
19.5
ANDB
OBC
YES
INDUSTRY
PSBs
SBIN
FB
C.BANKS
UNBK
21.2
ICICIBC
23.0
22.9
11.5
UNBK
13.5
CBK
15.0
VYSB
15.9
16.1
SBIN
17.8
C.BANKS
PNB
19.4
18.9
ANDB
22.0
AXSB
22.3
27.8
HDFCB
21.3
PVT.BANKS
18.5
FB
16.7
ICICIBC
16.1
PSBs
15.7
YES
BoI
15.2
INBK
14.6
INDUSTRY
11.5
OBC
IIB
BoB
IIB
31.2
29.8
PVT.BANKS
AXSB
23.3
BoB
BoI
22.9
21.6
HDFCB
VYSB
21.5
PNB
9.4
14.4
INBK
CBK
Strong growth for Private Banks; PSBs lag (%)
80.0
75.5
72.5
73.1
68.5
65.6
70.5
71.3
67.4
4QFY12
81.2
72.1
PNB
71.6
76.4
1QFY12
71.1
77.4
74.9
77.8
76.7
Healthy loan growth; Cap on bulk deposit can act as constraint
Deposit growth remains healthy (%)
*C.BANKS: MOSL Coverage
Though CD ratio has moderated, it remains at an elevated level (%)
FB
*Domestic CD ratio
17

18. CASA: Decline in CA; Mid size Private Banks outpace in SA
 Better cash management by corporate, advance technology, and increased competition in CA deposits segment is
leading to structural decline in CA share in overall deposits across banks. Large Private Banks continue to show
healthy performance on SA front however, decline in CA share is leading to overall moderation in CASA ratio .
 Continued decline in CASA ratio despite moderation in balance sheet growth (especially for PNB and CBK) is a
worrying factor for PSBs. Aggressive new Private Banks are gaining market share on cost of PSBs. SBIN performance
on SA is commendable (+8% QoQ).
 YES, IIB and KMB witnessed strong traction in SA deposits. Post deregulation of saving deposit rate, over last 3
quarter share of SA in overall deposits increased by 250-400bp for these banks.
CA Dep
Growth (%)
SA Dep
Growth (%)
CASA Dep
Growth (%)
CASA ratio (%)
(INR b)
QoQ
YoY
(INR b)
QoQ
YoY
(INR b)
QoQ
YoY
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
SBIN
835
-15.0
-2.9
3,904
8.5
13.4
4,739
3.4
10.1
47.9
47.6
47.5
46.6
46.1
PNB
257
-9.7
-2.5
1,074
1.7
13.2
1,331
-0.7
9.8
37.4
36.3
35.3
35.3
34.6
CBK
114
-23.1
-25.0
665
2.6
9.2
779
-2.1
2.4
25.4
25.8
23.9
24.3
23.3
BoB
242
-16.3
12.3
756
1.3
15.1
998
-3.6
14.4
33.9
34.0
34.1
33.2
32.2
BoI
159
6.4
3.9
673
1.4
14.4
832
2.3
12.2
30.5
31.6
32.4
34.3
32.0
UNBK
182
-5.7
4.6
506
0.3
11.3
687
-1.4
9.5
31.5
32.1
32.5
31.3
30.9
OBC
99
5.6
11.5
281
-0.6
12.9
380
1.0
12.5
23.4
22.9
22.3
24.1
24.0
INBK
63
-9.1
n.a.
309
3.3
n.a.
372
1.0
10.4
30.5
29.8
30.2
30.5
29.3
ANDB
63
-1.6
12.3
225
4.2
14.0
288
3.1
13.9
27.8
26.1
26.6
26.4
26.8
PSBs (Ex-SBIN)
1,179
-8.7
6.9
4,489
1.6
21.2
5,668
-0.7
10.2
PSBs
2,014
-11.4
2.6
8,393
4.7
17.4
10,407
1.2
10.2
ICICIBC
308
-12.1
3.3
779
2.5
16.6
1,087
-2.1
12.5
40.0
38.3
39.0
39.0
39.1
HDFCB
417
-8.2
7.4
767
3.6
18.4
1,184
-0.9
14.2
49.1
47.3
48.6
48.4
46.0
AXSB
36.0
342
-14.1
8.4
528
2.1
23.0
869
-4.9
16.8
37.0
38.3
37.0
38.0
YES
52
5.7
25.7
30
19.9
359.2
82
10.5
71.5
10.9
11.0
12.6
15.0
16.3
IIB
74
8.0
10.4
51
9.5
59.2
126
8.6
26.3
28.2
27.7
26.5
27.3
27.9
VYSB
66
2.9
19.4
53
-5.3
5.5
119
-0.9
12.7
33.8
32.6
32.6
34.2
33.3
FB
25
-1.3
11.9
120
9.6
26.7
145
7.5
23.9
27.2
26.4
28.7
27.5
28.7
1,283
-8.9
8.1
2,328
3.3
20.7
3,611
-1.4
15.9
Private Banks
18

19. 9.5
9.8
10.1
10.2
10.4
12.2
12.5
12.5
12.7
13.9
14.2
14.4
15.9
16.8
UNBK
PNB
SBIN
PSBs
INBK
BoI
ICICIBC
OBC
VYSB
ANDB
HDFCB
BoB
PVT. BANKS
AXSB
27.5
30.5
34.3
33.2
34.2
35.3
38.0
39.0
FB
INBK
BoI
BoB
VYSB
PNB
AXSB
ICICIBC
46.6
27.3
IIB
49.1
46.1
47.9
46.0
39.1
40.0
36.0
37.0
34.6
37.4
33.3
33.8
32.2
33.9
32.0
30.5
29.3
30.5
28.7
27.2
27.9
28.2
26.8
27.8
1QFY13
SBIN
26.4
ANDB
24.0
23.4
4QFY12
48.4
24.1
OBC
25.4
23.3
1QFY12
HDFCB
24.3
CBK
16.3
… leading to moderation in CASA growth (% YoY)
10.9
13.4
14.0
14.4
15.1
16.6
17.4
18.4
UNBK
OBC
PNB
SBIN
ANDB
BoI
BoB
ICICIBC
PSBs
HDFCB
PVT. BANKS
AXSB
-2.9
-25.0
359.2
59.2
PNB
3.3
7.4
HDFCB
11.9
11.5
10.4
YES
VYSB
25.7
19.4
12.3
BoB
ANDB
12.3
FB
OBC
IIB
AXSB
8.4
4.6
UNBK
PVT.BANKS
3.9
BoI
8.1
2.6
ICICIBC
PSBs
-2.5
SBIN
CBK
YES
IIB
26.7
13.2
CBK
FB
12.9
23.0
9.2
11.3
20.7
5.5
VYSB
PSBs lag in savings deposit growth...
YES
30.0
26.3
IIB
YES
23.9
FB
15.0
2.4
CBK
CASA: Growth moderated for system led by CA float decline
…and so do on current account deposits …
CASA ratio – strong growth for midsize Private Banks (%)
19

20. NIMs: PSBs disappoint; Private Banks fare well
 Despite lower base (due to FITL, higher slippages) of
previous quarter and benefit of capital infusion and
CRR reduction, PSBs disappointed with dismal margin
performance on a sequential basis.
 Lag impact of higher bulk deposits taken during tight
liquidity conditions in 4QFY12, continued asset quality
deterioration and moral suasion to reduce lending
rates marred the PSBs NIM performance.
 Sharp increase in slippages led to high 30bp+ QoQ
decline in margins for SBIN. Strong margins were one
of the key strength for SBIN to counter higher credit
cost so far. CBK, BOI and ANDB also disappointed.
Net Interest Margins
(%)
SBIN
PNB
CBK*
BoB
BoI
UNBK
OBC
INBK
ANDB
Private Banks
ICICIBC
HDFCB
AXSB
YES
IIB
VYSB
FB
* Cumul a ti ve
 Benign asset quality, continued strong growth in high
yielding products helped Private Banks to report better
than expected margin performance.
 After the sharp (+30bp QoQ) improvement in NIM in
4QFY12, flattish NIM QoQ for ICICIBC was a positive
surprise. AXSB margin decline was on expected lines.
 HDFCB, VYSB and YES surprised positively with stable
to improving margins QoQ. FB was one of the key
disappointment where NIM contracted sharply QoQ.
 As PSBs are not expected to be aggressive, Private
Banks having higher reliance on bulk deposits likely to
be key beneficiaries in a falling interest rate.
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
3.2
3.9
3.0
2.9
2.9
3.0
3.3
3.7
3.7
3.4
4.1
3.2
3.0
2.8
3.4
3.3
3.8
3.9
3.6
4.1
3.6
3.2
3.1
3.4
3.1
3.8
3.9
3.1
3.9
3.1
3.1
2.9
3.4
3.0
3.9
3.7
3.6
3.8
2.4
2.9
2.2
3.1
2.9
3.4
3.8
3.8
4.0
2.5
3.1
2.4
3.2
2.6
3.8
3.8
4.1
3.9
2.5
3.0
2.6
3.3
2.9
3.6
3.8
3.9
3.5
2.5
3.0
2.9
3.3
2.7
3.2
3.3
3.6
3.6
2.4
2.7
2.3
3.0
2.8
3.3
3.3
2.5
4.3
3.7
3.1
3.3
3.3
4.2
2.6
4.2
3.7
3.0
3.4
3.3
4.4
2.6
4.2
3.8
2.8
3.6
3.1
4.3
2.7
4.2
3.4
2.8
3.5
3.3
4.0
2.6
4.2
3.3
2.8
3.4
3.0
3.9
2.6
4.1
3.8
2.9
3.4
3.4
3.8
2.7
4.1
3.8
2.8
3.3
3.5
3.9
3.0
4.2
3.6
2.8
3.3
3.3
3.6
3.0
4.3
3.4
2.8
3.2
3.3
3.4
Change in (bp)
QoQ
-32
10
-10
-23
-59
-25
11
14
-1
0
10
-18
0
-7
0
-14
YoY
-5
-24
-2
-14
8
-9
-15
-13
-44
40
10
9
0
-19
27
-45
20

21. Lending Yields: Largely stable to marginal improvement
 On a QoQ basis, Private Banks
showed improvement in yield
on loans (YOL) due to higher
retail loan growth.
 PSBs YOL fell QoQ due to
continued deterioration in
asset quality and cut in
lending rates.
 Sharp improvement of ~40bp
in YOL for INBK was on lower
base
(4QFY12
significant
interest reversals happened)
Most of the banks reduced lending rate in 1QFY13 (%)
(%)
SBIN
PNB
CBK*
BoB
BoI
UNBK*
OBC
INBK
ANDB
Private Banks
ICICIBC*
HDFCB*
AXSB*
YES
IIB
VYSB
FB
* Qua rterl y Ca l cul a ted
10.8
10.5
10.8
10.5
UNBK
BoI
INBK
PNB
BoB
CBK
10.0
9.8
ICICIBC
10.8
10.5
10.0
9.8
HDFCB
10.8
10.5
10.0
10.0
SBIN
10.8
10.5
1QFY13
10.7
10.5
4QFY12
1QFY11
9.3
10.2
9.4
8.2
8.4
9.0
10.0
10.1
10.9
2QFY11
9.7
10.6
9.9
8.4
8.5
9.0
10.3
10.2
11.0
3QFY11
9.7
10.6
9.8
8.6
8.8
9.6
10.3
10.4
11.1
4QFY11
9.5
10.8
9.9
8.7
8.8
9.8
10.8
10.6
11.6
1QFY12
10.4
11.4
10.5
9.1
8.9
10.2
11.6
11.1
12.2
2QFY12
11.1
11.9
10.9
9.6
9.4
10.7
11.7
11.5
12.5
3QFY12
11.2
12.0
11.1
9.5
9.5
10.8
12.2
11.7
12.8
4QFY12
11.4
11.4
11.2
9.3
9.7
10.6
12.3
10.9
12.3
1QFY13
10.9
11.5
11.1
9.1
8.9
10.8
12.4
11.3
12.1
Chg. QoQ
-55
12
-5
-25
-88
27
4
39
-25
Chg. YoY
43
14
62
-3
-4
65
76
15
-15
8.3
9.7
8.7
9.6
12.2
9.6
10.8
8.3
9.7
8.9
9.5
12.1
9.8
11.2
8.3
10.0
8.9
10.0
12.3
10.1
11.1
8.6
10.4
9.2
10.7
12.9
10.7
11.2
9.0
10.8
10.1
11.6
13.5
11.1
12.0
9.5
11.0
10.8
12.2
13.8
11.4
12.7
9.5
11.3
11.0
12.4
13.8
11.7
12.9
9.8
11.5
10.7
12.5
13.9
11.8
12.5
9.9
11.9
10.9
12.4
14.0
12.0
12.5
8
35
16
-10
4
19
0
86
110
73
80
43
88
54
21

22. Cost of Deposits: Increased further, putting pressure on NIMs
 Higher intake of bulk deposits in a stressed liquidity situation in 4QFY12 and moderation in low cost deposits growth
led to pressure on cost of deposits in 1QFY13.
 Among large PSBs (except for BoB and BoI – who have large intl. ops.), SBIN enjoys the lowest cost of funds on the
back of its strong CASA base.
 Healthy growth in SA deposits for Private Banks partially negated the impact of higher cost of term deposits. YES
managed to keep cost of funds stable QoQ despite higher share of corporate liabilities which is commendable. IIB
reported sharp increase in cost of deposits impacting the margins during the quarter.
 Improving liquidity situation, moderation in credit growth, lowering of SLR limit, GOI directive (for PSBs) of capping
bulk proportion etc will lead to lowering of cost of deposits in the coming quarters.
(%)
Change in (bp)
QoQ
14
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
SBIN
5.3
5.2
5.1
5.4
5.7
6.0
6.0
6.1
6.2
PNB
CBK*
5.0
5.7
5.0
5.7
5.2
5.6
5.6
6.2
6.3
7.1
6.5
7.2
6.7
7.6
6.8
7.6
7.0
7.9
18
30
70
84
BoB
BoI
UNBK*
4.4
4.8
5.0
4.5
5.0
5.1
4.5
5.0
5.2
4.8
5.3
5.5
5.4
6.0
6.2
5.6
6.1
6.3
5.7
6.0
6.4
5.8
6.0
6.5
5.9
5.9
6.5
8
-4
0
53
-7
38
OBC
INBK
5.6
5.3
5.9
5.4
6.1
5.4
6.5
5.6
7.2
6.4
7.6
6.6
7.9
6.9
8.0
6.8
8.0
7.0
-1
23
79
60
ANDB
Private Banks
ICICIBC**
5.5
5.7
5.8
6.5
7.0
7.5
7.6
7.9
7.7
-20
72
5.2
5.3
5.5
5.7
6.1
6.4
6.3
6.2
6.4
11
22
HDFCB**
4.3
4.5
4.7
4.9
5.5
6.2
6.4
6.1
6.5
46
104
AXSB
YES
IIB
VYSB
4.6
6.3
6.0
4.7
4.8
6.7
6.0
4.9
4.8
7.1
6.2
5.4
5.6
7.8
7.0
6.0
6.1
8.5
7.7
6.8
6.2
8.6
8.2
6.9
6.3
8.9
8.2
6.9
6.5
9.0
8.3
7.3
6.7
9.0
8.9
7.5
25
0
59
26
57
50
115
74
FB
5.8
5.9
6.0
6.2
7.0
7.4
7.6
7.6
7.6
0
53
YoY
58
* Reported ** Ca l cul a ted CoF
22

23. BoI
Change in bp
19
8 12 16
0 4 4
-25
-25
27
-88
-55
59
35 39
46
YoL impacted due to higher slippages
-10 -5
8
11
14
18
23
25
26
30
Margins surprise negatively for PSBs
0
0
0
14
11
10
10
BoI
CBK*
BoB
OBC
YES
UNBK
ICICIBC
IIB
VYSB
INBK
ANDB
AXSB
FB
SBIN
PNB
HDFCB
ANDB
CBK
FB
OBC
BoI
INBK
PSBs (Ex- SBIN)
PSBs
UNBK
SBIN
C.BANKS
PNB
BoB
HDFCB
IIB
PVT. BANKS
AXSB
VYSB
ICICIBC
YES
2.3
2.4
2.7
2.8
2.8
3.0
3.0
3.2
3.3
3.3
3.3
3.4
3.4
3.6
3.6
YoY Gr. (%)
4.3
3.1
4.2
6.9
10.6
11.0
12.0
13.6
14.0
14.6
14.6
17.2
18.6
21.8
22.3
24.1
26.0
26.4
31.0
32.4
33.3
0.0
0.1
1.6
2.7
2.8
2.8
2.8
4.2
5.3
5.4
6.5
7.5
11.6
Healthy NII growth YoY (%)
ANDB -20
BoI
-4
OBC
-1
UNBK
YES
FB
BoB
ICICIBC
SBIN
PNB
INBK
AXSB
VYSB
CBK
HDFCB
IIB
0
0
0
BoI -18.3
CBK
-9.6
-4.1
SBIN
UNBK
-2.9
-2.4
PSBs
PSBs (Ex-SBIN)
-1.1
C.BANKS
-0.9
BoB
FB
AXSB
ANDB
PVT. BANKS
HDFCB
ICICIBC
IIB
YES
OBC
INBK
VYSB
PNB
QoQ NII growth muted (%)
BoI
SBIN
BoB
ANDB
YES
CBK
FB
OBC
IIB
ICICIBC*
PNB
AXSB*
VYSB
UNBK*
HDFCB*
INBK
INBK
OBC
PNB
-1
-7
-10
-14
-18
-25
-23
-32
Change in bp
HDFCB
VYSB
YES
ICICIBC
ANDB
IIB
CBK*
-59
QoQ Gr. (%)
FB
AXSB
BoB
UNBK
SBIN
Margins surprised negatively for PSBs
NIMs decline from an elevated level (%)
*C.BANKS: MOSL Coverage
QoQ Change bp for NIM, YOL and COD
CoD continues to rise
23

24. NII: Pressure on margins leading to moderate growth
 Higher deposit cost and significantly higher slippages led to pressure on margins of PNB, BoI, CBK and SBIN’s. Strong
NII growth for PNB and INBK was on a lower base (due to elevated slippages in 4Q).
 IIB reported moderation in NIMs, but strong volume growth partially offset the impact. YES and VYSB NIM
performance was commendable. AXSB NIMs decline QoQ was on expected lines.
QoQ Growth (%)
YoY Growth (%)
1QFY13
(INR M)
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
SBIN
111,189
-11.0
20.4
8.1
9.9
0.6
-4.1
19.9
32.8
29.2
27.3
43.8
14.6
PNB
36,951
-5.4
2.8
10.8
2.4
-6.4
11.6
22.4
19.9
16.0
10.4
9.3
18.6
CBK
18,435
-7.0
-9.0
10.9
-2.2
6.3
-9.6
21.7
4.4
-0.5
-8.2
5.0
4.2
BoB
27,981
14.0
-12.1
11.7
3.5
5.3
0.0
49.8
23.6
25.9
15.8
7.0
21.8
BoI
20,436
16.1
-20.2
3.4
8.6
21.0
-18.3
48.7
5.8
7.2
4.1
8.4
11.0
UNBK
18,217
6.2
-7.4
4.5
7.2
5.4
-2.9
22.9
18.0
8.2
10.2
9.3
14.6
OBC
11,258
-1.6
0.5
-2.8
15.2
-6.3
5.4
2.4
-3.7
-8.1
10.7
5.4
10.6
INBK
11,532
7.1
-7.3
10.2
3.1
-7.5
6.5
21.8
13.9
15.5
12.8
-2.6
12.0
ANDB
9,385
2.6
5.7
4.5
3.4
-7.1
2.7
31.3
23.7
21.4
17.1
6.1
3.1
PSBs (Ex-SBIN)
154,195
3.6
-7.0
7.7
4.3
2.2
-1.1
28.9
13.7
11.3
8.2
6.8
13.6
PSBs
265,384
-2.1
2.7
7.9
6.6
1.5
-2.4
25.6
20.9
18.1
15.7
20.0
14.0
ICICIBC
31,929
8.6
-3.9
4.0
8.2
14.5
2.8
23.3
21.1
13.7
17.3
23.7
32.4
HDFCB
34,841
2.3
0.3
3.4
5.8
8.7
2.8
20.8
18.6
16.6
12.2
19.3
22.3
AXSB
21,799
-1.9
1.4
16.4
6.6
0.3
1.6
16.5
13.9
24.3
23.5
26.2
26.4
YES
4,722
7.8
1.6
8.9
10.9
4.8
5.3
42.7
35.1
23.1
32.3
28.6
33.3
IIB
4,841
6.9
0.5
7.5
2.7
7.8
4.2
42.2
31.9
27.1
18.6
19.7
24.1
VYSB
3,433
9.1
-2.4
15.9
6.6
-1.4
7.5
8.6
10.1
19.4
31.6
18.9
31.0
FB
4,916
0.1
2.7
3.2
11.3
-7.0
0.1
9.3
11.2
8.2
18.1
9.7
6.9
Private Banks
106,480
3.7
-0.6
7.0
7.0
7.1
2.8
21.1
18.7
17.7
18.0
21.9
26.0
Coverage Banks
371,864
-0.6
1.8
7.6
6.7
3.0
-0.9
24.3
20.4
18.0
16.3
20.5
17.2
Coverage Banks (Ex-SBIN)
260,675
3.6
-4.7
7.5
5.4
4.1
0.4
25.9
15.6
13.6
11.8
12.4
18.4
24

25. Fee income: Dismal growth – led by lower economic activities
 On a QoQ basis, fee income dropped sharply due to
seasonal factors. Lower sanctions, fall in third party
distribution related fees, lower economic growth is
leading to muted fee income growth on a YoY basis.
 HDFCB, YES and IIB continue to surprise positively on
the fee income whereas, AXSB, FB and ICICIBC
disappointed on fees.
SBIN
PNB
CBK
BoB
BoI
UNBK
OBC
1QFY13
(INR m)
26,027
7,310
4,171
4,142
4,104
2,952
1,850
1QFY12
-29.4
4.3
-12.4
-17.4
-21.0
-24.0
-7.4
2QFY12
-1.2
-16.5
-7.0
14.3
21.3
0.4
17.4
 Lower loan processing fees, lowering of account
maintenance charges and lower transaction banking
fees impacted SBINs fee income growth.
 Muted loan growth, macro economic uncertainty,
changes in the charges for government business and
higher focus on asset quality (rather than revenue) will
lead to moderation in fee income growth in FY13.
QoQ Growth (%)
3QFY12
4QFY12
1.6
59.6
11.1
15.3
3.6
-1.7
-0.6
8.7
4.4
13.1
27.7
24.8
-6.8
27.8
1QFY13
-38.3
2.1
-6.3
-15.7
-23.0
-26.8
-19.9
1QFY12
9.3
27.9
28.4
27.8
16.9
65.8
5.3
2QFY12
-11.7
4.4
11.3
13.2
10.9
-11.8
15.5
YoY Growth (%)
3QFY12
4QFY12
6.6
13.0
23.9
11.5
31.2
-17.1
18.1
2.0
19.0
13.1
16.4
21.7
20.1
29.5
1QFY13
-1.1
9.2
-11.3
4.0
10.3
17.2
12.0
INBK
1,663
-15.2
29.5
-32.8
44.2
-28.9
-27.5
8.4
-18.4
6.4
-10.8
ANDB
PSBs (Ex- SBIN)
PSBs
ICICIBC
HDFCB
AXSB
YES
IIB
VYSB
FB
Private Banks
Coverage Banks
1,410
27,601
53,629
16,469
11,482
11,540
1,936
2,690
1,155
667
45,939
99,568
-26.1
-13.0
-22.0
-11.9
-7.0
-14.2
-13.6
13.5
-19.1
-6.5
-10.7
-17.5
7.8
3.3
1.0
7.7
6.8
6.1
23.1
14.8
15.3
10.7
8.2
4.1
23.7
3.9
2.8
0.1
14.2
9.0
-5.7
16.5
16.2
-4.9
6.5
4.4
0.8
13.8
35.9
1.6
9.0
8.6
21.1
5.4
-0.8
18.4
6.3
22.3
-22.1
-14.7
-28.0
-4.7
-7.3
-13.0
-2.0
1.9
-9.8
-15.9
-7.4
-19.8
3.0
19.5
14.2
11.6
16.8
40.2
16.0
44.4
8.2
3.7
20.4
16.8
5.0
7.2
-2.9
6.9
15.6
31.9
48.0
31.7
9.9
1.6
16.9
5.1
12.2
17.8
12.2
4.7
20.7
26.3
35.2
45.7
22.9
-2.9
16.7
14.2
-0.6
6.3
10.0
-3.5
23.6
7.7
21.4
60.1
7.6
16.5
9.3
9.7
4.7
4.2
1.5
4.4
23.3
9.3
37.7
43.8
19.9
4.8
13.4
6.7
25

26. Treasury income: Contribution remains muted
G-sec Yield (%)
30-Jun-11
30-Sep-11
1 year
8.1
8.3
5 year
8.4
8.3
10 year
8.3
8.4
31-Dec-11
8.5
8.4
8.6
31-Ma r-12
8.2
8.6
8.5
30-Jun-12
16-Aug-12
8.0
8.0
8.2
8.2
8.2
8.3
SBIN
PNB
CBK
BoB
BoI
UNBK
OBC
INBK
ANDB
PSBs (Ex- SBIN)
PSBs
ICICIBC
HDFCB
AXSB
YES
IIB
VYSB
FB
Private Banks
Coverage Banks
4QFY11
302
310
-310
863
1,188
980
-521
256
649
3,415
3,717
-1,960
86
-229
241
192
30
13
-1,627
2,090
Net Investment Gains (INR m)
1QFY12
2QFY12
3QFY12
-8,791
-4,302
-2,205
-860
-840
-560
-865
827
-280
-645
-1,550
1,614
197
34
-478
430
180
280
-619
-618
-538
-220
-750
-359
333
194
-28
-2,249
-2,523
-348
-11,040
-6,825
-2,553
-250
-800
-650
-413
-13
-818
332
-520
750
247
410
483
278
239
131
6
30
50
7
72
-76
207
-582
-130
-10,832
-7,407
-2,683
4QFY12
-537
3,610
2,020
4,083
-35
2,350
624
253
-137
12,768
12,231
1,580
-715
2,480
688
274
30
464
4,801
17,032
 Despite the fall in yields across maturities banks have
reported muted contribution of Investment profits (incl.
MTM) to PBT. CBK, BOI and OBC are the only banks which
have reported more than 20% trading profits contribution.
 BOB has reported muted contribution after reporting
significantly higher contribution in 4QFY12.
 Among the Private Banks except AXSB, IIB, and FB others
have reported muted trading profits.
1QFY13
7,416
1,930
3,038
55
2,360
-110
1,185
197
107
8,763
16,179
-210
665
2,170
945
497
58
468
4,592
20,771
4QFY11
2
1.7
-2.7
6.4
16.3
13.7
-18.4
3.3
15.9
4.7
4.1
-10.2
0.5
-1.5
7.9
7.5
2.2
0.5
-2.7
1
Net Investment Gains as a % to PBT
1QFY12
2QFY12
3QFY12
4QFY12
-28
-11
-5
-1
-5.4
-4.6
-3.2
18.9
-9.3
7.9
-2.6
19.6
-4.5
-9.4
9.2
34.1
2.4
0.9
-4.6
-0.3
5.8
3.1
9.0
21.7
-12.7
-22.6
-12.1
28.4
-3.6
-10.7
-5.3
10.7
6.4
4.5
-0.6
-3.3
-3.2
-3.7
-0.5
17.3
-10.8
-6.2
-2.1
8.8
-1.4
-3.9
-2.8
6.0
-2.6
-0.1
-4.0
-3.4
2.4
-3.8
4.6
13.1
7.6
11.8
12.8
17.1
10.4
8.4
4.3
8.2
0.4
1.7
2.8
1.8
0.3
2.5
-2.5
13.0
0.4
-0.9
-0.2
6.1
-7
-4
-1
8
1QFY13
13.0
10.7
31.2
0.4
19.6
-1.5
21.0
2.8
2.2
11.2
11.9
-0.8
3.2
12.7
22.0
14.2
3.0
16.5
6.1
10
26

27. Fee income moderates; Non core income contribution – a mixed bag
-6.3
-4.7
CBK
ICICIBC
2.1
PNB
-7.3
HDFCB
IIB
-7.4
PVT.BANKS
YES
-9.8
-13.0
AXSB
VYSB
-13.2
PSBs (Ex-SBIN)
-15.7
BoB
-19.9
-19.4
OBC
C.BANKS
-15.9
-22.1
ANDB
FB
-23.0
-26.8
UNBK
BoI
-27.4
PSBs
-2.0
43.8
-28.9
PVT.BANKS
INBK
OBC
SBIN -38.3
12.0
BoI
IIB
10.3
AXSB
37.7
9.3
PNB
YES
9.2
C.BANKS
23.3
7.2
PSBs (Ex- SBIN)
HDFCB
6.0
FB
19.9
4.8
ANDB
VYSB
4.7
ICICIBC
17.2
4.4
BoB
UNBK
4.0
13.4
2.5
PSBs
SBIN -1.1
INBK-10.8
CBK-11.3
1.9
Fee income declines (QoQ, %) - seasonal in nature
Fee income growth moderates (YoY, %)
*C.BANKS: MOSL Coverage
Recoveries from written-off accounts remains healthy
34.1
Net trading income to PBT remains stable / improve (%)
1QFY13
21.7
10.7
2.8
1.8
3.0
-3.4
3.2
4.8
5.2
18.9
10.7
17.3
11.2
8.8
11.3
13.1
12.7
-0.8
13.0
8.2
14.2
13.0
16.5
-0.3
19.6
28.4
21.0
17.1
22.0
19.6
31.2
4QFY12
PNB
Recoveries (INR m)
4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13
2,210
1,090
680
920
2,410
870
CBK
YES
OBC
BoI
FB
IIB
SBIN
AXSB
PSBs
PSBs (Ex-SBIN)
PNB
PVT.BANKS
HDFCB
VYSB
INBK
ANDB
0.4
-3.3
2.2
BoB
6.0
-0.8
ICICIBC
-1.5
3,270
617
1,350
BoB
859
288
1,220
711
1,064
830
6.2
BoI
919
312
876
1,858
1,906
2,367
19.7
UNBK
980
590
420
900
1,620
580
7.7
OBC
UNBK
980
468
4.8
CBK
574
390
260
299
301
1,967
34.9
INBK
110
180
400
1,030
460
341
4.9
ANDB
178
45
41
86
200
450
9.1
9,100
3,512
5,247
6,484
8,941
7,874
5.8
PSBs (Ex-SBIN)
680
% of
PBT
4.8
27

28. Opex: Private Banks focusing on cutting the flab
 Private Banks opex growth was largely on the expected
lines. Most of the mgmt commented of restricting opex
growth to counter expected moderation in top-line
growth. For, AXSB, YES, KMB and ICICIBC on a growing
retail business cutting cost will be difficult in our view.
 ICICIBCs’ opex grew 17% YoY (-5% QoQ), led by
moderation in other opex (up just 5% YoY and flat
QoQ). Sharp drop of 11% QoQ in employee expenses
was on a higher base.
SBIN
PNB
CBK
BoB
BoI
UNBK
OBC
INBK
ANDB
PSBs (Ex- SBIN)
PSBs
ICICIBC
HDFCB
AXSB
YES
IIB
VYSB
FB
Private Banks
Coverage Banks
 PNB made higher AS 15 related provisioning leading to
strong QoQ growth of 22%. Sharp drop of 25% QoQ in
employee expense led to overall decline for BOB.
 AXSB opex was one of the key factor for higher than
expected profitability. However, on a growing retail
business sustainability remains a question.
 YES opex increased sharply with aggressive branch
expansion and top level recruitment for retail branch
expansion.
QoQ Growth (%)
YoY Growth (%)
Cost to core Income ratio (%)
1QFY13
(INR m) 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13
64,410
-11.8
6.4
-0.7
16.4
-12.6
23.3
10.6
13.1
8.5
7.5
48.6
48.7
44.7
46.6
46.9
20,203
3.5
5.1
0.0
-9.1
22.5
23.9
13.7
6.1
-1.0
17.1
45.6
45.2
43.6
41.0
45.6
11,424
-13.3
12.9
-5.4
17.7
-13.4
7.3
9.0
-1.9
8.9
8.8
46.9
49.4
47.3
53.1
50.5
13,281
-25.5
4.9
3.0
36.8
-19.8
18.2
10.5
8.3
10.1
18.6
41.5
38.9
38.9
50.3
41.3
12,109
-42.6
8.1
-0.5
22.4
-16.7
20.7
21.7
-4.7
-24.5
9.6
49.9
50.7
46.8
47.9
49.3
10,459
-37.2
5.4
13.8
-5.1
1.2
22.9
4.6
28.4
-28.6
15.1
49.3
50.0
51.8
45.3
49.4
6,377
15.0
-5.9
19.5
8.2
-3.1
20.3
4.8
24.8
39.9
17.9
45.7
43.0
46.0
50.6
48.6
5,356
3.9
11.8
-3.1
9.7
-9.6
12.1
5.5
13.7
23.5
7.5
41.0
40.4
40.5
45.0
40.6
4,708
-4.8
3.4
2.1
6.9
-2.5
-1.5
7.9
9.6
7.5
10.1
40.9
40.3
38.8
44.1
43.6
83,916
-19.4
6.2
2.4
10.3
-5.1
17.0
10.9
7.8
-3.4
13.8
45.5
45.1
44.3
47.0
46.2
148,326
-16.2
6.3
1.0
13.0
-8.5
19.8
10.8
10.1
1.7
11.0
46.8
46.7
44.5
46.8
46.5
21,235
-1.4
4.0
1.3
15.9
-4.4
22.7
20.5
11.6
20.4
16.7
45.6
45.0
43.4
46.0
43.9
24,326
-3.2
4.9
6.3
14.3
-1.4
17.8
20.9
17.8
23.5
25.7
51.2
51.5
50.7
53.3
52.5
15,517
0.2
10.0
3.0
12.3
-8.5
25.3
26.2
23.6
27.5
16.4
48.0
46.9
45.0
48.9
46.5
3,007
4.2
10.0
12.4
18.3
5.8
23.8
31.3
38.4
52.4
54.7
39.3
38.3
40.7
44.0
45.2
3,989
8.1
10.8
6.5
8.9
5.7
29.9
33.9
29.4
38.9
35.8
50.9
51.3
50.9
51.8
53.0
2,967
-13.5
8.2
2.0
4.8
0.3
19.6
5.1
11.4
0.0
16.1
71.4
66.7
62.4
66.1
64.7
2,695
-6.7
3.4
7.4
13.0
-3.5
18.5
16.5
16.5
17.1
21.1
42.5
42.2
41.6
49.0
48.3
73,736
-1.8
6.3
4.1
13.7
-3.3
21.7
21.9
18.0
23.6
21.8
48.4
47.9
46.7
49.7
48.4
222,062
-12.2
6.3
2.0
13.2
-6.8
20.4
14.0
12.5
7.8
14.3
47.3
47.1
45.2
47.7
47.1
28

29. Core operating profit: Private Banks leading the pack
 Strong margin performance and control over opex led
to healthy core PPP growth for Private Banks.
 Pressure on asset quality, moderation in loan growth
and higher opex pressure led to moderation in Core
PPP growth for PSBs.
 Growth for SBIN moderated led by sharp moderation
in margins and muted fee income growth.
SBIN
PNB
CBK
BoB
BoI
UNBK
OBC
INBK
ANDB
PSBs (Ex- SBIN)
PSBs
ICICIBC
HDFCB
AXSB
YES
IIB
VYSB
FB
Private Banks
Coverage Banks
1QFY13
(INR m)
72,806
24,059
11,183
18,841
12,431
10,711
6,732
7,838
6,087
97,880
170,686
27,163
21,996
17,822
3,651
3,543
1,620
2,889
78,684
249,370
4QFY11
-15.7
0.5
-1.7
2.3
-24.9
-42.5
4.1
11.7
1.1
-6.4
-10.1
10.7
-2.3
8.4
20.1
5.3
-6.1
-8.9
5.4
-5.4
QoQ Growth (%)
1QFY12 2QFY12
26.9
5.8
2.8
6.7
-6.3
2.1
-1.1
17.3
29.8
4.8
55.5
2.5
-10.9
5.0
-15.6
14.2
3.8
6.0
4.2
7.7
12.6
6.9
-11.7
6.7
0.1
3.5
-9.7
14.8
-7.5
14.8
0.8
8.9
11.9
34.5
8.6
4.6
-6.2
8.4
6.3
7.4
3QFY12
16.7
6.6
3.0
2.7
16.3
6.1
5.6
-3.4
8.8
5.8
10.3
7.9
9.7
11.4
1.6
8.4
23.5
10.5
9.4
10.0
 Healthy margins and lower opex growth led to strong
core PPP growth for AXSB and ICICIBC despite
moderation in fee income. IIB and VYSB continue to
demonstrate healthy performance.
 Sequentially strong Core PPP growth for BOB is on
account of higher opex base of 4QFY12.
4QFY12
7.8
1.4
-6.7
-13.9
17.0
22.8
-10.0
-8.6
-14.0
-0.9
2.9
4.6
3.1
-4.0
3.1
4.9
-11.1
-16.3
0.8
2.2
1QFY13
-13.7
1.3
-4.2
15.3
-21.3
-14.1
5.0
8.3
-0.6
-1.9
-7.3
4.0
1.9
0.4
1.0
0.9
7.0
-0.8
2.2
-4.5
4QFY11
19.8
7.3
13.0
33.1
-13.6
-35.9
4.8
10.8
35.2
6.0
10.7
21.0
18.0
30.3
54.5
55.9
-29.4
-3.4
22.2
14.3
1QFY12
30.6
19.1
10.0
28.9
-3.1
22.8
-15.9
0.2
42.6
12.7
19.5
12.9
18.6
20.3
32.7
42.2
-9.4
4.9
17.1
18.8
YoY Growth (%)
2QFY12 3QFY12
26.6
32.1
14.6
17.5
-5.0
-3.2
34.1
21.8
-3.4
18.9
5.4
-2.9
-11.2
2.8
20.9
4.0
27.9
21.1
10.4
11.1
16.5
19.4
4.0
12.5
11.8
11.0
27.5
25.2
29.0
29.7
23.5
25.2
50.1
74.5
1.4
14.4
13.6
17.2
15.6
18.7
4QFY12
68.9
18.5
-8.1
2.6
85.2
107.6
-11.1
-14.9
2.9
17.6
36.6
6.4
17.2
10.9
11.4
24.8
65.2
5.1
12.1
28.3
1QFY13
14.8
16.8
-6.0
19.6
12.2
14.7
4.7
9.1
-1.4
10.7
12.4
25.2
19.3
23.2
21.5
25.0
57.9
-4.0
22.0
15.3
Core operating profits = NII + Fees (ex forex) -Opex
29

30. PAT: Qualitatively wide divergence in PSBs and Private Banks
 Private Banks profits were largely inline with est. and
positive surprise came from ICICIBC and VYSB. NIM
and healthy asset quality were the key drivers in both
banks. Dividend income from ICICI Canadian
subsidiary also boosted profitability.
 For PSBs lower than expected margins had put
pressure on operating profits, however, lower
provisions (led by lower restructuring and MTM
reversals) led to inline PBT. Lower tax rate for certain
banks came as a relief.
PAT
SBIN
PNB
CBK
BoB
BoI
UNBK
OBC
INBK
ANDB
PSBs
PSBs (Ex-SBIN)
ICICIBC
HDFCB
AXSB
YES
IIB
VYSB
FB
Private Banks
Coverage Banks
Coverage Banks (Ex-SBIN)
1QFY13
(INR m)
37,516
12,457
7,752
11,389
8,875
5,116
3,914
4,617
3,618
95,254
57,738
18,151
14,174
11,535
2,901
2,363
1,301
1,904
52,328
147,582
110,066
1QFY12
N.A.
-8.0
-19.3
-20.2
4.8
-22.3
6.3
-7.3
23.3
17.6
-10.4
-8.3
-2.7
-7.6
6.2
5.0
3.0
-14.9
-5.4
7.7
-8.2
2QFY12
77.5
9.0
17.4
12.9
-5.1
-24.1
-52.7
15.2
-18.0
19.1
0.5
12.9
10.5
-2.3
8.8
7.2
22.7
30.8
9.1
15.3
4.3
 Within PSBs large divergence was witnessed. BOI
(lower provisions despite higher stress) and OBC (one
off incomes) posted significant outperformance, while
BOB (lower trading profits and higher opex) and UNBK
(higher stress on asset quality) disappointed.
 PNB disappointed on asset quality, however positive
surprise on other income provided cushion. Despite
weaker than expected core operating income, PAT was
higher than expected for SBIN led by compromise on
PCR and write-back on investment.
QoQ Growth (%)
3QFY12
4QFY12
16.1
24.1
-4.6
23.8
2.7
-5.3
10.6
17.7
45.8
33.0
-44.1
292.5
111.2
-25.2
12.2
-34.3
-4.1
12.0
10.8
21.0
7.8
19.1
15.0
10.0
19.2
1.6
19.8
15.9
8.1
7.0
6.7
8.5
3.6
6.6
5.6
17.7
15.7
8.9
12.5
16.6
11.5
14.2
1QFY13
-7.4
-12.5
-6.5
-25.0
-6.9
-33.8
47.8
33.7
6.5
-9.3
-10.4
-4.6
-2.5
-9.7
6.7
5.8
2.1
-19.9
-4.7
-7.7
-7.8
1QFY12
-45.7
3.4
-28.4
20.2
-28.6
-22.8
-2.4
10.5
20.4
-20.1
-6.1
29.8
33.7
27.0
38.2
52.0
36.1
10.8
30.8
-6.3
7.3
2QFY12
12.4
12.1
-15.4
14.4
-20.4
16.2
-57.8
12.7
4.3
2.5
-2.3
21.6
31.5
25.2
33.3
45.0
53.3
36.2
27.8
10.3
9.7
YoY Growth (%)
3QFY12
4QFY12
15.4
N.A.
5.5
18.6
-20.8
-7.8
20.7
17.3
9.7
93.0
-66.0
29.4
-13.2
-20.6
7.0
-21.3
-8.4
8.6
1.4
87.7
-5.5
15.7
20.3
31.0
31.4
30.4
23.7
25.2
32.9
33.6
33.9
30.1
44.0
39.5
41.1
38.4
26.4
30.0
9.4
62.9
7.6
21.9
1QFY13
136.9
12.7
6.8
10.3
71.5
10.2
10.4
13.5
-6.2
44.8
15.6
36.3
30.6
22.4
34.3
31.1
38.4
30.2
31.0
39.6
22.4
30

31. 47.2
2.6
-6.2
22.1
PSBs (Ex SBIN)
10.4
12.7
13.5
15.6
OBC
PNB
INBK
PSBs (ex- SBIN)
31.0
31.1
34.3
36.3
38.4
39.6
PVT.BANKS
IIB
YES
ICICIBC
VYSB
C.BANKS
SBIN
BoI
136.9
71.5
44.8
30.6
HDFCB
PSBs
30.2
FB
22.4
10.3
BoB
AXSB
10.2
UNBK
6.8
Write back on MTM and lower provision on restructured
loan helps contain provisions
CBK
7.5
16.1
16.4
16.7
17.1
17.9
18.6
C.BANKS
UNBK
VYSB
AXSB
ICICIBC
PNB
OBC
BoB
FB
PVT.BANKS
ANDB
VYSB
ICICIBC
57.9
25.2
25.0
23.2
AXSB
IIB
22.0
PVT.BANKS
16.8
PNB
21.5
15.5
C.BANKS
YES
14.8
SBIN
19.6
14.7
UNBK
BoB
12.7
PSBs
19.3
12.2
BoI
54.7
HDFCB
11.2
9.1
35.8
PSBs (Ex- SBIN)
INBK
4.7
-1.4
FB
OBC
-4.0
CBK
YES
IIB
-6.0
15.1
PSBs (Ex- SBIN)
25.7
14.3
PSBs
HDFCB
13.8
21.8
11.0
21.1
10.1
9.6
BoI
ANDB
8.8
INBK
CBK
7.5
SBIN
Opex for Private Banks increase due to expansion
ANDB
60.0
21.5
CBK
VYSB
21.0
UNBK
50.0
20.0
IIB
BoB
16.7
ANDB
AXSB
15.6
9.9
PVT.BANKS
PNB
9.8
HDFCB
-9.7
C.BANKS
5.7
-13.1
PSBs
OBC
-16.7
BoI
ICICIBC
-17.7
INBK
SBIN -40.9
FB -53.2
Profitability impacted due to higher provisions
Core operating profitability moderates for PSBs
Private Banks profitability remains robust
*C.BANKS: MOSL Coverage
31

32. PSBs trading at/significant discount to 10 year average P/BV
P/B (x)
Min(x)
2.9
1.7
1.6
0.7
P/B (x)
6.2
5.0
3.8
2.6
1.4
Avg(x)
Peak(x)
Avg(x)
Peak(x)
1.7
1.1
0.3
0.6
Aug-12
Aug-12
Min(x)
Jul-11
0.6
Jul-11
Jun-10
Dec-02
0.4
P/B (x)
2.0
1.5
1.0
0.5
0.0
May-10
1.0
HDFCB above average valuation
Peak(x)
Aug-02
May-03
Feb-04
Oct-04
Jul-05
Mar-06
Dec-06
Aug-07
May-08
Jan-09
Oct-09
Jun-10
Mar-11
Dec-11
Aug-12
4.0
3.0
2.0
1.0
0.0
Avg(x)
Min(x)
1.7
Apr-09
2.0
1.5
1.0
0.5
0.0
Aug-02
May-03
Feb-04
Oct-04
Jul-05
Mar-06
Dec-06
Aug-07
May-08
Jan-09
Oct-09
Jun-10
Mar-11
Dec-11
Aug-12
ICICIBC near average valuation
Peak(x)
May-09
0.7
0.3
Avg(x)
May-08
1.0
P/B (x)
Apr-07
Min(x)
1.8
Mar-06
Peak(x)
Feb-05
Avg(x)
0.8
0.3
UNBK at significant discount to LPA
CBK at 35%+ discount to LPA
Jan-04
P/B (x)
2.0
1.5
1.0
0.5
0.0
Min(x)
1.8
Mar-08
BoI at 30%+ discount to LPA
0.8
0.3
Peak(x)
1.0
Feb-07
Aug-02
May-03
Feb-04
Oct-04
Jul-05
Mar-06
Dec-06
Aug-07
May-08
Jan-09
Oct-09
Jun-10
Mar-11
Dec-11
Aug-12
1.0
Avg(x)
Jan-06
0.4
1.2
P/B (x)
2.4
1.8
1.2
0.6
0.0
Dec-04
1.2
1.8
Nov-03
2.3
2.0
1.5
1.0
0.5
0.0
Min(x)
Aug-02
May-03
Feb-04
Oct-04
Jul-05
Mar-06
Dec-06
Aug-07
May-08
Jan-09
Oct-09
Jun-10
Mar-11
Dec-11
Aug-12
Min(x)
BoB at 15% discount to LPA
Peak(x)
Sep-02
Peak(x)
Avg(x)
Aug-02
May-03
Feb-04
Oct-04
Jul-05
Mar-06
Dec-06
Aug-07
May-08
Jan-09
Oct-09
Jun-10
Mar-11
Dec-11
Aug-12
Avg(x)
P/B (x)
AXSB ~15% discount to LPA
Min(x)
5.0
3.7
3.2
1.9
Aug-02
May-03
Feb-04
Oct-04
Jul-05
Mar-06
Dec-06
Aug-07
May-08
Jan-09
Oct-09
Jun-10
Mar-11
Dec-11
Aug-12
P/B (x)
3.0
2.3
1.5
0.8
0.0
PNB at 35%+ discount to LPA
4.8
3.6
2.4
1.2
0.0
P/B (x)
Avg(x)
Peak(x)
Min(x)
4.0
2.0
0.8
1.6
Aug-02
May-03
Feb-04
Oct-04
Jul-05
Mar-06
Dec-06
Aug-07
May-08
Jan-09
Oct-09
Jun-10
Mar-11
Dec-11
Aug-12
SBIN trading at 15% disc to LPA
32

33. THANK YOU
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33