1QFY2014 Result Update | Banking

August 6, 2013

Canara Bank
Performance Highlights

Particulars (` cr) NII Pre-prov. profit PAT 1QFY14 1,991 1,898 792 4QFY13 2,091 1,698 725 % chg (qoq) (4.8) 11.8 9.2 1QFY13 1,844 1,394 775 % chg (yoy) 8.0 36.2 2.2

NEUTRAL
CMP Target Price
Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Banking 10,601 1.1 550/230 103,193 10 18,733 5,542 CNBK.BO CBK@IN

`239 -

Source: Company, Angel Research

Canara Bank reported a moderate operating performance for 1QFY2014; however, asset quality performance exhibited weakness. NII grew at a moderate 8% yoy. Non-interest income grew strongly by 79% yoy, boosted by treasury gains of `444cr as against `99cr in 1QFY2013. Overall, the pre-provisioning profit for the bank grew strongly by 36% yoy. The bank witnessed significant asset quality pain during the quarter, as Gross and Net NPA levels increased sequentially by around 17% each. Consequently, the provisioning expenses more than doubled on a yoy basis and hence, the bottom-line grew by a marginal 2% yoy. Significant asset quality deterioration on back of heavy slippages: During 1QFY2014, the banks advance book increased by 10.8% yoy, while deposits book grew by 14.2% yoy; hence, the credit-to-deposits ratio dipped by 199bp yoy to 65.4%. CASA deposits grew by 13.4% yoy and hence, the calculated CASA ratio declined by 106bp qoq to 23.1%. The NIM for the bank declined by 18bp sequentially to 2.2%, largely on back of a 39bp sequential decline in yield on advances to 10.7%. Non-interest income (excl. treasury) witnessed an increase of 33.8% yoy to `794cr, on back of higher recoveries from written off accounts (at `80cr as compared to `47cr in 1QFY2013) and robust growth in forex income (37.1% yoy to `178cr). Fee income for the bank witnessed a muted growth of 2.4% yoy to `200cr. During 1QFY2014, slippages came in at `2,688cr (annualized slippage rate of 4.4%) much higher compared to `1,086cr in 4QFY2013 (annualized slippage rate of 1.9%). Of the slippages during the quarter, three chunky corporate accounts contributed ~`1,000cr. Recoveries/upgrades came in at `1,359cr, much higher compared to `520cr in 4QFY2013 and were broadly in-line with the Managements guidance. Despite healthy recovery and upgrades performance, heavy slippages resulted in significant deterioration of asset quality, as the sequential increase in absolute Gross and Net NPA levels came in at around 17%. The PCR for the bank declined sequentially by 317bp to 58.2%. Additionally, the bank restructured advances worth `1,683cr during the quarter, thereby taking its outstanding restructured book to `19,884cr. Going forward, the restructuring pipeline for the bank over the next few quarters remains sizeable at ~`5,000cr. Outlook and valuation: We believe that the asset quality pressures for the banking sector are unlikely to abate as quickly as was expected earlier, considering the recent macro developments amidst an overall weak macro environment. Moreover, the banks exposure to stressed sectors/companies is also high. Hence, we recommend a Neutral rating on the stock. Key financials (Standalone)
Y/E March (` cr) NII % chg Net profit % chg NIM (%) EPS (`) P/E (x) P/ABV (x) RoA (%) RoE (%) FY2012 7,689 (0.1) 3,283 (18.5) 2.2 74.1 3.2 0.5 0.9 17.0 FY2013 7,879 2.5 2,872 (12.5) 2.1 64.8 3.7 0.5 0.7 13.2 FY2014E 8,186 3.9 2,320 (19.2) 2.0 52.4 4.6 0.5 0.5 9.8 FY2015E 8,980 9.7 2,682 15.6 2.0 60.5 4.0 0.4 0.6 10.4

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 67.7 13.3 12.8 6.2

Abs. (%) Sensex Canara Bank

3m (4.8)

1yr 7.6

3yr 3.2

(38.9) (33.9) (49.7)

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

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

Harshal Patkar
022 3935 7800 Ext: 6847 harshal.patkar@angelbroking.com

Source: Company, Angel Research, CMP as of August 6, 2013

Please refer to important disclosures at the end of this report

Canara Bank | 1QFY2014 Result Update

Exhibit 1: 1QFY2014 performance (Standalone)

Particulars (` cr) Interest earned - on Advances / Bills - on investments - on balance with RBI & others Interest Expended Net Interest Income Other income Other income excl. treasury - Fee Income - Treasury Income - Recov. from written off a/cs - Others Operating income Operating expenses - Employee expenses - Other Opex Pre-provision Profit Provisions & Contingencies - Provisions for NPAs - Provisions for Investments - Other Provisions PBT Provision for Tax PAT Effective Tax Rate (%)
Source: Company, Angel Research

1QFY14 9,270 6,450 2,482 338 7,278 1,991 1,238 794 200 444 80 514 3,229 1,331 887 444 1,898 916 417 88 411 982 190 792 19.3

4QFY13 8,465 6,073 2,307 85 6,374 2,091 1,007 755 232 252 133 390 3,097 1,399 888 511 1,698 752 346 84 322 945 220 725 23.3

% chg (qoq) 9.5 6.2 7.6 297.0 14.2 (4.8) 23.0 5.3 (13.8) 76.2 (39.8) 32.0 4.3 (4.9) (0.2) (13.1) 11.8 21.8 20.5 4.8 27.6 3.9 (13.6) 9.2 (392)bp

1QFY13 8,473 6,229 2,040 204 6,629 1,844 693 594 195 99 47 352 2,536 1,142 743 399 1,394 419 477 (205) 147 975 200 775 20.5

% chg (yoy) 9.4 3.5 21.7 65.8 9.8 8.0 78.8 33.8 2.4 349.3 70.9 46.3 27.3 16.5 19.4 11.2 36.2 118.9 (12.6) NA 180.6 0.7 (5.0) 2.2 (116)bp

FY2013 34,078 24,380 9,112 585 26,199 7,879 3,153 2,477 797 676 303 1,377 11,032 5,142 3,254 1,888 5,890 2,218 1,861 (370) 727 3,672 800 2,872 21.8

FY2012 30,851 23,443 7,053 353 23,161 7,689 2,928 2,604 798 324 363 1,443 10,617 4,674 2,973 1,701 5,943 1,860 1,294 154 413 4,083 800 3,283 19.6

% chg (yoy) 10.5 4.0 29.2 65.6 13.1 2.5 7.7 (4.9) (0.1) 108.6 (16.5) (4.6) 3.9 10.0 9.4 11.0 (0.9) 19.2 43.9 NA 76.1 (10.1) (12.5) 219bp

Exhibit 2: 1QFY2014 Actual vs. Estimates

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

Actual 1,991 1,238 3,229 1,331 1,898 916 982 190 792

Estimates 2,116 914 3,029 1,299 1,730 715 1,015 264 751

Var (%) (5.9) 35.5 6.6 2.5 9.7 28.1 (3.3) (28.0) 5.4

August 6, 2013

Canara Bank | 1QFY2014 Result Update

Exhibit 3: 1QFY2014 performance analysis (Standalone)

Particulars Balance sheet Advances (` cr) Deposits (` cr) Credit-to-Deposit Ratio (%) Current deposits (` cr) Saving deposits (` cr) CASA deposits (` cr) Calculated CASA ratio (%) CAR (%) Tier 1 CAR (%) Profitability Ratios (%) Cost of deposits Yield on advances Yield on investments Yield on funds Cost of funds Reported NIMs Cost-to-income ratio Asset quality Gross NPAs (` cr) Gross NPAs (%) Net NPAs (` cr) Net NPAs (%) PCR incl. tech. w/offs (%) Slippage ratio (%) NPA to avg. assets (%)
Source: Company, Angel Research

1QFY14 249,891 381,972 65.4 14,374 73,938 88,312 23.1 11.4 9.0 7.5 10.7 8.0 8.8 6.9 2.2 41.2 7,329 2.9 6,209 2.5 58.2 4.4 0.4

4QFY13 242,177 355,856 68.1 14,893 71,168 86,061 24.2 12.4 9.8 7.7 11.1 8.1 9.1 7.0 2.4 45.2 6,260 2.6 5,278 2.2 61.4 1.9 0.3

%chg (qoq) 3.2 7.3 (263)bp (3.5) 3.9 2.6 (106)bp (100)bp (74)bp (18)bp (39)bp (13)bp (28)bp (5)bp (18)bp (396)bp 17.1 34bp 17.6 30bp (317)bp 257bp 4bp

1QFY13 225,584 334,619 67.4 11,398 66,504 77,902 23.3 13.2 10.1 7.9 11.1 8.1 9.1 7.1 2.4 45.0 4,498 2.0 3,756 1.7 66.5 2.6 0.5

%chg (yoy) 10.8 14.2 (199)bp 26.1 11.2 13.4 (16)bp (182)bp (103)bp (35)bp (38)bp (10)bp (30)bp (21)bp (19)bp (382)bp 63.0 93bp 65.3 82bp (835)bp 186bp (11)bp

Moderate advance growth; NIM declines qoq

During 1QFY2014, the banks advance book increased by 10.8% yoy, while deposits book grew at a relatively higher 14.2% yoy; hence, the credit-to-deposits ratio for the bank dipped by 199bp yoy and 263bp qoq to 65.4%. Advance growth was aided by a strong growth of 38.0% yoy in the Agri loan book and healthy growth of 16.0% yoy in MSME advances. Retail loans grew at a rather moderate pace of 10.4% yoy, largely aided by robust growth in other personal loans (27.1% yoy) and vehicle loans (28.7% yoy). Going forward, the Management has guided for advance growth to be in the range of 16-18% yoy for FY2014. Current deposits grew by 26.1% yoy (declined sequentially by 3.5%), while the saving deposits grew by 11.2% yoy (3.9% qoq). Consequently, the overall CASA deposits grew by 13.4% yoy (2.6% qoq). The Calculated CASA ratio for the bank declined by 106bp qoq (16bp yoy) to 23.1%. The banks yield on advances declined by 39bp sequentially to 10.7%, largely on back of interest reversals on slippages (~`100cr) and also as the full impact of base rate cut in February, 2013 was felt during the quarter under review. Overall, the yield on funds for the bank declined by 28bp qoq to 8.8%. As the bank
August 6, 2013

Canara Bank | 1QFY2014 Result Update

reduced its reliance on bulk deposits significantly during the quarter (share of high costs deposits and CDs as a proportion of deposits reduced to 13% from 20% as of FY2013 end), its cost of deposits came in lower sequentially by 18bp to 7.5%. The Cost of funds for the bank declined by 5bp qoq to 6.9%. Overall, the NIM for the bank declined by 18bp sequentially to 2.2%. The Management targets an NIM of around 2.5-2.6% by year end.

Exhibit 4: Moderate growth in loan book

Adv. yoy chg (%) 21.0 67.4 14.0 65.4 7.0 64.1 67.4 Dep. yoy chg (%) 68.1 CDR (%, RHS) 70.0 68.0 66.0 64.0 62.0 60.0 4QFY13 1QFY14

Exhibit 5: Calculated CASA ratio declines sequentially

Calculated CASA ratio 30.0 27.5 25.0 22.5 20.0 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14 3.4 7.6 CASA yoy growth (%, RHS) 13.4 15.0 8.1 10.0 5.0 (5.0)

4.9 11.5

7.7

2.7

4.2 8.8

10.8 14.2

2.4

23.3

24.8

25.1

24.2

(1.0)

(7.0) 1QFY13

2QFY13

3QFY13

Source: Company, Angel Research

(0.5)

Source: Company, Angel Research

Exhibit 6: NIM declines by 18bp qoq, due to...

(%) 3.00 2.50 2.00 1.50 1.00 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14
Source: Company, Angel Research

Exhibit 7: ...28bp sequential fall in yield on funds

(%) 9.20 9.17 9.10 9.09 9.08

2.40

2.53

2.36

2.39

9.10 2.21 9.00 8.90 8.80 8.70 8.60

23.1

8.80

1QFY13

2QFY13

3QFY13

4QFY13

1QFY14

Source: Company, Angel Research

Strong growth in non-interest income (excl. treasury) on back of higher recoveries and robust growth in forex income
During 1QFY2014, Non-interest income (excluding treasury) witnessed an increase of 33.8% yoy to `794cr, on back of higher recoveries from written off accounts and robust growth in forex income. Recoveries from written-off accounts came in at `80cr as compared to `47cr in 1QFY2013, while profit on exchange transactions came in at `178cr, registering a robust growth of 37.1% yoy. Fee income for the bank witnessed a muted growth of 2.4% yoy to `200cr. The bank reported treasury income of `444cr during the quarter compared to `99cr in 1QFY2013. Aided by substantially higher treasury income, the overall non-interest income for the bank witnessed a strong growth of 78.8% yoy to `1,238cr.

August 6, 2013

Canara Bank | 1QFY2014 Result Update

Exhibit 8: Non-interest income increases on higher treasury gains

Particulars (` cr) Fee Income Treasury Recoveries Others Other income Other income excl. treasury
Source: Company, Angel Research

1QFY14 200 444 80 514 1,238 794

4QFY13 232 252 133 390 1,007 755

% chg (qoq) (13.8) 76.2 (39.8) 32.0 23.0 5.3

1QFY13 195 99 47 352 693 594

% chg (yoy) 2.4 349.3 70.9 46.3 78.8 33.8

Significant asset quality deterioration on back of heavy slippages

The bank witnessed significant asset quality deterioration during the quarter, as slippages for the bank came in at `2,688cr (annualized slippage rate of 4.4%) much higher compared to `1,086cr in 4QFY2013 (annualized slippage rate of 1.9%). Of the slippages during the quarter, three chunky corporate accounts contributed ~`1,000cr. Recoveries/upgrades came in at `1,359cr, much higher compared to `520cr in 4QFY2013 and was broadly in-line with the Managements guidance. Despite healthy recovery and upgrades performance, heavy slippages resulted in significant deterioration of asset quality, as the sequential increase in absolute Gross and Net NPA levels came in at around 17%. Gross and Net NPA ratios increased by 34bp and 30bp, respectively to 2.9% and 2.5%. PCR for the bank declined sequentially by 317bp to 58.2%. Additionally, the bank restructured advances worth `1,683cr during the quarter, thereby taking its outstanding restructured book to `19,884cr. Going forward, the restructuring pipeline for the bank over the next few quarters remains sizeable at ~`5,000cr, which comprises ~`4,000cr worth power sector advances (of which ~`3,000cr would be from discom restructuring under FRP).

Exhibit 9: Slippages elevate to 4.4% in 1QFY2014

Slippages (%) 5.00 4.00 3.00 2.00 1.00 0.2 0.6 0.5 0.5 0.3 0.6 0.4 0.4 Credit cost (%, RHS) 0.8

Exhibit 10: NPA levels deteriorate sequentially

Gross NPAs (%) 3.5 3.0 2.5 2.0 1.5 1.0 0.5 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14 66.5 63.0 61.5 61.4 58.2 Net NPAs (%) PCR (%, RHS) 80.0 74.0 68.0 62.0 56.0 50.0

2.0 1.7

2.6 2.1

2.8 2.4

2.6 2.2

2.6

3.3

2.3

1.9

1QFY13

2QFY13

3QFY13

4QFY13

1QFY14

Source: Company, Angel Research

4.4

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

August 6, 2013

2.9 2.5

Canara Bank | 1QFY2014 Result Update

Exhibit 11: Steady branch expansion continues

3,950 3,800 3,650 3,500 3,350 3,200 3,050 2,900 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14
Source: Company, Angel Research

Exhibit 12: Costs ratio trends

Cost-to-income ratio (%) Opex to average assets (%, RHS) 1.4 1.4 1.3 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14 3,770 50.0 45.0 40.0 35.0 30.0 1.2

3,609

3,655

3,681

3,728

1.3

45.0

50.0

46.5

45.2

25.0 20.0

Source: Company, Angel Research

Investment concerns
Weak liability franchise and asset quality pressures likely to keep NIM under check
The bank has a relatively weak liability profile with a calculated CASA base at 23.1% as of 1QFY2014. Due to low credit-deposit ratio of 65.4% in 1QFY2014 and elevated slippages, margins continued to remain under check at under 2.2%. The banks margins are likely to find some support on account of significant reduction in its high-cost bulk deposits portfolio, which as of 1QFY2014 stands at 13% of aggregate deposits. Also, the bank has embarked on a relatively aggressive network expansion plan. Over the past two years, the bank has added ~500 branches and around 1,250 ATMs. Such a pace of network expansion should augur well, in our view, for strengthening the banks relatively weak liability franchise. Also, the bank plans to take the number of branches from 3,770 now to 5,000 by March 2015 which should give a thrust to its low cost deposits profile.

Outlook and valuation

We believe that the asset quality pressures for the banking sector are unlikely to abate as quickly as was expected earlier, considering the recent macro developments amidst an overall weak macro environment. Moreover, the banks exposure to stressed sectors/companies is also high. Hence, we recommend a Neutral rating on the stock.

August 6, 2013

41.2

Canara Bank | 1QFY2014 Result Update

Exhibit 13: Key assumptions

Particulars (%) Credit growth Deposit growth CASA ratio NIMs Other income growth Growth in staff expenses Growth in other expenses Slippages Coverage
Source: Angel Research

Earlier estimates FY2014E 18.0 8.0 25.4 2.1 1.7 7.5 7.5 2.0 63.5 18.0 12.0 26.1 2.2 9.6 7.5 7.5 1.7 65.0

Revised estimates 14.0 10.0 24.9 2.0 3.6 7.5 7.5 3.0 57.5 16.0 9.0 26.4 2.0 4.0 7.5 7.5 2.3 60.0

FY2015E FY2014E FY2015E

Exhibit 14: Change in estimates

FY2014E Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Angel Research

FY2015E Earlier estimates 9,979 3,515 13,495 5,942 7,552 1,756 5,797 1,970 3,826 Revised Var. (%) estimates 8,980 (10.0) 3,397 12,378 5,942 6,435 2,372 4,063 1,381 2,682 (3.4) (8.3) (14.8) 35.1 (29.9) (29.9) (29.9)

Earlier estimates 8,838 3,206 12,045 5,528 6,517 1,923 4,594 1,195 3,400

Revised Var. (%) estimates 8,186 (7.4) 3,268 11,454 5,528 5,927 2,834 3,093 773 2,320 1.9 (4.9) (9.1) 47.4 (32.7) (35.3) (31.8)

Exhibit 15: P/ABV band

1200 1000 800 600 400 200 0 Price (`) 0.65x 0.9x 1.15x 1.4x 1.65x

Dec-07

Aug-09

Dec-12

Apr-06

Apr-11

Jul-07

Jul-12

Mar-09

Nov-10

May-08

Source: Company, Angel Research

August 6, 2013

May-13

Mar-14

Oct-08

Feb-07

Sep-06

Sep-11

Feb-12

Oct-13

Jan-10

Jun-10

Canara Bank | 1QFY2014 Result Update

Exhibit 16: Recommendation summary

Company AxisBk FedBk HDFCBk ICICIBk* SIB YesBk AllBk AndhBk BOB BOI BOM CanBk CentBk CorpBk DenaBk IDBI# IndBk IOB J&KBk OBC PNB SBI* SynBk UcoBk UnionBk UtdBk VijBk Reco. Buy Neutral Buy Buy Neutral Neutral Neutral Reduce Neutral Neutral Neutral Neutral Reduce Neutral Neutral Neutral Neutral Neutral Neutral Neutral Neutral Neutral Neutral Neutral Neutral Neutral Neutral CMP (`) 1,090 338 608 866 20 274 67 57 488 166 40 239 54 268 45 57 70 39 1,063 137 521 1,641 75 54 113 34 36 Tgt. price (`) 1,255 745 1,038 51 50 Upside (%) 15 23 20 (10) (8) FY2015E P/ABV (x) 1.2 0.8 2.9 1.2 0.8 1.2 0.3 0.4 0.6 0.4 0.5 0.4 0.5 0.3 0.3 0.3 0.3 0.3 0.8 0.3 0.5 0.9 0.4 0.5 0.4 0.3 0.4 FY2015E Tgt. P/ABV (x) 1.4 3.5 1.5 0.4 0.5 FY2015E P/E (x) 6.9 6.5 13.5 9.0 4.8 5.5 2.2 3.4 3.9 2.7 3.4 4.0 3.4 2.7 2.1 2.6 2.1 2.5 5.2 2.6 3.2 5.8 3.2 3.5 2.8 1.7 4.1 FY2013-15E EPS CAGR (%) 19.1 2.9 26.3 15.8 5.7 16.9 12.6 (15.1) 8.3 16.2 5.4 (3.4) 40.1 2.3 (3.3) 25.1 (4.2) 57.5 (3.5) 7.4 10.8 17.5 (16.0) 66.4 6.2 54.6 (0.4) FY2015E RoA (%) 1.6 1.0 1.9 1.6 0.9 1.3 0.6 0.5 0.8 0.7 0.5 0.6 0.5 0.7 0.6 0.8 0.8 0.5 1.3 0.6 1.0 1.0 0.6 0.6 0.6 0.6 0.4 FY2015E RoE (%) 18.1 12.3 22.8 15.4 16.2 22.8 12.4 10.0 14.2 13.9 14.1 10.4 12.8 13.5 13.2 13.3 12.4 10.5 16.3 11.1 15.7 17.0 12.8 13.5 13.4 14.7 9.8

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

Company Background
Canara Bank is the largest south India -based PSU bank (overall fifth largest bank in India), with a balance sheet size of around `4.3lakh cr. The bank has a reasonably large pan-India presence with about 45% of its 3,700+ branches outside South India. The bank also has over 3,700 ATMs across the country.

August 6, 2013

Canara Bank | 1QFY2014 Result Update

Income statement (Standalone)

Y/E March (` cr) Net Interest Income - YoY Growth (%) Other Income - YoY Growth (%) Operating Income - YoY Growth (%) Operating Expenses - YoY Growth (%) Pre - Provision Profit - YoY Growth (%) Prov. & Cont. - YoY Growth (%) Profit Before Tax - YoY Growth (%) Prov. for Taxation - as a % of PBT PAT - YoY Growth (%) FY10 5,681 20.4 2,858 17.7 8,538 19.5 3,478 13.5 5,061 24.1 1,239 (17.8) 3,821 48.6 800 20.9 3,021 45.8 FY11 7,699 35.5 2,811 (1.6) 10,511 23.1 4,419 27.1 6,091 20.4 1,066 (14.0) 5,026 31.5 1,000 19.9 4,026 33.2 FY12 7,689 (0.1) 2,928 4.1 10,617 1.0 4,674 5.8 5,943 (2.4) 1,860 74.6 4,083 (18.8) 800 19.6 3,283 (18.5) FY13 7,879 2.5 3,153 7.7 11,032 3.9 5,142 10.0 5,890 (0.9) 2,218 19.2 3,672 (10.1) 800 21.8 2,872 (12.5) FY14E 8,186 3.9 3,268 3.6 11,454 3.8 5,528 7.5 5,927 0.6 2,834 27.8 3,093 (15.8) 773 25.0 2,320 (19.2) FY15E 8,980 9.7 3,397 4.0 12,378 8.1 5,942 7.5 6,435 8.6 2,372 (16.3) 4,063 31.4 1,381 34.0 2,682 15.6

Balance sheet (Standalone)

Y/E March (` cr) Share Capital Reserve & Surplus Deposits - Growth (%) Borrowings Tier 2 Capital Other Liab. & Prov. Total Liabilities Cash Balances Bank Balances Investments Advances - Growth (%) Fixed Assets Other Assets Total Assets - Growth (%) FY10 410 14,262 234,651 25.6 1,041 7,399 6,977 264,741 15,719 3,934 69,677 169,335 22.5 2,859 3,217 264,741 20.6 FY11 443 19,597 293,437 25.1 5,198 9,063 8,207 335,945 22,015 8,693 83,636 211,268 24.8 2,844 7,488 335,945 26.9 FY12 443 22,247 327,054 11.5 6,558 8,967 8,891 374,160 17,795 10,384 102,057 232,490 10.0 2,858 8,576 374,160 11.4 FY13 443 24,435 355,856 8.8 11,573 8,711 11,325 412,343 15,406 19,309 121,133 242,177 4.2 2,863 11,456 412,343 10.2 FY14E 443 26,236 391,442 10.0 12,912 8,493 13,532 453,057 17,615 11,326 132,397 276,081 14.0 3,051 12,587 453,057 9.9 FY15E 443 28,322 426,671 9.0 14,058 8,281 15,487 493,262 19,200 12,332 124,550 320,254 16.0 3,222 13,704 493,262 8.9

August 6, 2013

Canara Bank | 1QFY2014 Result Update

Ratio analysis (Standalone)

Y/E March Profitability ratios (%) NIMs Cost to Income Ratio RoA RoE B/S ratios (%) CASA Ratio Credit/Deposit Ratio CAR - Tier I Asset Quality (%) Gross NPAs Net NPAs Slippages Loan Loss Prov. /Avg. Assets Provision Coverage Per Share Data (`) EPS ABVPS (75% cover.) DPS Valuation Ratios PER (x) P/ABVPS (x) Dividend Yield DuPont Analysis NII (-) Prov. Exp. Adj. NII Treasury Int. Sens. Inc. Other Inc. Op. Inc. Opex PBT Taxes RoA Leverage RoE 2.3 0.5 1.8 0.4 2.2 0.8 3.0 1.4 1.6 0.3 1.2 21.5 26.8 2.6 0.4 2.2 0.1 2.3 0.9 3.1 1.5 1.7 0.3 1.3 19.7 26.4 2.2 0.5 1.6 0.1 1.7 0.7 2.5 1.3 1.1 0.2 0.9 18.4 17.0 2.0 0.6 1.4 0.2 1.6 0.6 2.2 1.3 0.9 0.2 0.7 18.1 13.2 1.9 0.7 1.2 0.1 1.3 0.7 2.0 1.3 0.7 0.2 0.5 18.2 9.8 1.9 0.5 1.4 0.1 1.5 0.7 2.1 1.3 0.9 0.3 0.6 18.4 10.4 3.2 0.8 4.2 2.6 0.6 4.6 3.2 0.5 4.6 3.7 0.5 5.4 4.6 0.5 4.2 4.0 0.4 4.8 73.7 305.8 10.0 90.9 401.1 11.0 74.1 448.1 11.0 64.8 473.6 13.0 52.4 486.7 10.0 60.5 535.7 11.5 1.5 1.1 2.4 0.6 77.7 1.5 1.1 2.1 0.3 73.0 1.7 1.5 2.2 0.4 67.6 2.6 2.2 2.5 0.5 61.4 3.6 2.7 3.0 0.4 57.5 4.0 2.5 2.3 0.4 60.0 29.1 72.2 13.4 8.5 28.3 72.0 15.4 10.9 24.3 71.1 13.8 10.4 24.2 68.1 12.4 9.8 24.9 70.5 11.9 9.6 26.4 75.1 11.7 9.5 2.4 40.7 1.2 26.8 2.6 42.0 1.3 26.4 2.2 44.0 0.9 17.0 2.1 46.6 0.7 13.2 2.0 48.3 0.5 9.8 2.0 48.0 0.6 10.4 FY10 FY11 FY12 FY13 FY14E FY15E

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Canara Bank | 1QFY2014 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Pvt. Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Pvt. Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Pvt. Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Pvt. Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Pvt. Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Pvt. Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Pvt. Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

Canara Bank No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to -15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

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