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Sector: Financials
Sector view: Positive
Sensex: 26,169
52 Week h/l (Rs): 106/84
Market cap (Rscr) : 5,108
6m Avg vol (‘000Nos): 669
Bloomberg code: CUBK IN
BSE code: 532210
NSE code: CUB
FV (Rs): 1
Prices as on Dec 1, 2015
Company rating grid
Low High
1 2 3 4 5
Earnings Growth
RoA Progression
B/S Strength
Valuation appeal
Risk
Share price trend
80
100
120
140
Nov‐14 Mar‐15 Jul‐15 Oct‐15
CUB SENSEX
Share holding pattern
Dec‐14 Mar‐15 June‐15
Promoters 0 0 0
Institutions 44.8 47.1 46.1
Others 55.2 52.9 53.9
Rating: BUY Target (12months): Rs115
CMP: Rs85
Upside: 34.7%
Research Analyst: Franklin Moraes
Rajiv Mehta [email protected]
City Union Bank Ltd
Company Report
December 2, 2015
This report is published by IIFL ‘India Private Clients’ research desk. IIFL has other business units with independent research teams separated by 'Chinese walls' catering to different sets of customers having varying objectives, risk profiles, investment horizon, etc. The views and opinions expressed in this document may at times be contrary in terms of rating, target prices, estimates and views on sectors and markets.
Initiating Coverage
A safer haven!
A focused Bank with strong operations City Union Bank stands out in comparison to other small private banks owing to its higher and well‐managed MSME exposure (51% of advances). Its strong regional presence (more than two‐third branches in Tamil Nadu) and existence for more than 100 years has helped it gain immense knowledge and understanding on the way businesses are run locally. Being witness to a number of business cycles during the course of its existence has helped the bank manage asset quality risks effectively while taking advantage of higher yields. CUB’s low exposure to Corporate (6.5% of advances) and Infra (1% of advances) is a huge relative positive in the light of stress plaguing these segments. Underpinned by the above strengths and efficient cost management, CUB has been able to maintain RoA at impressive 1.5% even in current challenging environment.
Strengthening of asset mix has made NIMs resilient CUB’s loan growth has slowed down significantly (FY13‐15 CAGR of just 9%) on account of de‐growth in gold loan and corporate portfolios, both of which were consciously curtailed to contain asset quality risks. On other side, the bank has been growing its MSME and Mortgage book at brisk pace thus significantly improving their share in overall advances. In our view, the credit growth should improve over FY16‐18 as economic activity in focused regions picks up. CUB’S NIM has improved materially over the past one and a half year to 3.7% led by reduction in TD rates, improvement in CASA ratio (driven by sustained branch adds) and stable portfolio yield (aided by shift in asset mix). NIM, however, should settle around 3.5% in the medium term.
Asset quality risks appear modest; current valuation attractive The prolonged economic slowdown did have an impact on CUB’s asset quality with slippage ratio breaching 2% in FY14/15. However, stabilizing pace of delinquencies, management’s indication of a modest stress assets pipeline (~Rs. 100cr) and low restructured stock (~1.3% of advances) provide comfort. Credit cost will gradually moderate over FY16‐18 and support a stable RoA delivery. Bank’s capital position is robust with Tier‐I capital at ~15%, which should suffice asset growth recovery over next three years. RoE is therefore expected to improve by 150‐200bps by FY18. For a niche, well‐managed and profitable banking franchise, we believe current valuation of 1.4x FY18 P/ABV is attractive.
Financial summary Y/e 31 Mar (Rs cr) FY15 FY16E FY17E FY18E
Total operating income 1,212 1,341 1,506 1,798
yoy growth (%) 16.7 10.6 12.3 19.4
Operating profit (pre‐provisions) 693 775 867 1,031
Net profit 391 427 497 606
yoy growth (%) 10.8 9.1 16.4 22.0
Adj.BVPS (Rs) 41.3 46.6 52.5 60.3
P/E (x) 13.3 11.9 10.3 8.4
P/BV (x) 2.1 1.8 1.6 1.4
ROE (%) 16.3 14.9 15.3 16.5
ROA (%) 1.5 1.5 1.5 1.5 Source: Company, India Infoline Research
City Union Bank Ltd
2
A credible presence in MSME lending City Union Bank (CUB) is an old private sector SME‐focused bank incorporated as early as 1904. It took over ‘Commonwealth Bank Ltd’ in 1957 and later in 1965, ‘The City Forward Bank Ltd.’ and ‘Union Bank Ltd.’ was amalgamated with it. CUB has a heavy regional concentration with more than two‐thirds of its branches located in the state of Tamil Nadu. Its decades of experience in a single geographical region has helped it gain immense knowledge and understanding on the way local businesses are run. It has withstood a number of business cycles during the course of its existence, thereby understanding the upswings and downswings within each cycle. The rich experience has empowered CUB to profitably grow in MSME segment.
The customers that form part of this portfolio mainly include small manufacturers and ancillary units. The bank provides mostly working capital loans to such enterprises with a maximum duration of one year. The MSME book is granular in nature with the Top 10 borrowers accounting for just 5%. The average ticket size of the portfolio is ~Rs. 35 lakhs. With focus on building granularity, CUB has been averse to risky lumpy exposures within the segment. The loans are adequately secured by a mix of hard and soft collaterals, the combined value of which typically is ~125‐130% of the loan amount. The bank enjoys healthy yields in this segment ranging 13.5‐14%.
About 53% of CUB’s advances are oriented towards the MSME sector (includes MSME lending and exposure to Wholesale/Retail Traders as reported by the bank). This is a significantly higher proportion as no other bank has MSME exposure greater than 35% of their loan book. The perceived riskiness of MSME segment and the requirement of deep local knowledge, tailored set‐up and difficulty in credit appraisal have acted as key deterrents for banks. Aided by rich experience, micro knowledge and strong risk management, CUB has been able to manage and grow its MSME portfolio well over the past few years notwithstanding the challenging external environment.
A very old private sector bank having major presence in Tamil Nadu
Strong customer profile in the MSME segment with healthy yields
Rich experience has enabled CUB to grow its MSME portfolio well amidst challenges
Branch network predominantly in Tamil Nadu Demographic distribution of the network
324
56
2617
52
Tamil Nadu
Andhra Pradesh
Karnataka
Maharashtra
Others
16%
26%
39%
19%
Metro
Urban
Semi Urban
Rural
Source: Company, India Infoline Research
City Union Bank Ltd
3
Mix has been led by overall MSME
19 16 16 16
159 7 7
77 9 10
1619 17 15
44 48 51 53
0%
20%
40%
60%
80%
100%
FY13 FY14 FY15 H1 FY16
Others Industries Retail Agri Overall MSME
Source: Company, India Infoline Research Break‐up of the overall MSME portfolio of Rs. ~10,000cr
68%
22%
10%
MSME
Wholesale Traders
Retail Traders
Source: Company, India Infoline Research Higher exposure to MSME segment behind higher portfolio yield for CUB
13.212.6 12.2 12.1
11.5
10.1 9.8
0
3
6
9
12
15
City Union DCB Yes Karur Vysya Federal Axis ICICI
(%)FY15 Yields for various banks
Source: Company, India Infoline Research
City Union Bank Ltd
4
Stable deposit franchise; CASA ratio has been ticking up CUB has a very stable deposit franchise owing to it being largely retail in nature. Bulk deposits forms just 2‐3% of total deposits and there is no dependence on CDs. The CASA, which had been lying low, has started showing signs of improvement supported by almost doubling of the branch network over the past four and a half years. The number of branches, which stood at 250 in FY11 has now touched 475 as of Q2 FY16. CASA ratio has jumped from 16.8% in FY13 to 19.5% in Q2 FY16. A closer observation reveals that large part of the CASA benefit has come in from the increase in Savings Account share, which has gone up from 10.2% to 12.2% of total deposits during the corresponding period. Branch network has nearly doubled since FY11
250
300
375
425
475 485
0
100
200
300
400
500
600
FY11 FY12 FY13 FY14 FY15 Q2 FY16
(no)
Source: Company, India Infoline Research
Strong growth in branch network ensures CASA improvement and reduces dependence on bulk deposits
Steady improvement in CASA ratio since Q2 FY14 CASA improvement led by Savings Account
18.1
16.8
18.5
19.5
15.0
15.5
16.0
16.5
17.0
17.5
18.0
18.5
19.0
19.5
20.0
Q2FY13 Q2FY14 Q2FY15 Q2FY16
(%)
10.7 10.3 11.4 12.2
7.46.4
7.17.3
0.0
3.0
6.0
9.0
12.0
15.0
18.0
21.0
Q2FY13 Q2FY14 Q2FY15 Q2FY16
(%)Savings Account (%) Current Account (%)
Source: Company, India Infoline Research
City Union Bank Ltd
5
Cost/Income ratio reflects the operating efficiency In spite of substantial investment in nearly doubling of the branch network, CUB has been able to sustain the cost/income ratio in an impressive band of 40‐45%. Many of the old private sector banks with regional concentration are operating at a much higher range of 50‐60%. The fact that CUB has a granular lending franchise (courtesy 60% of loans being MSME + Retail) further enhances the feat of maintaining lean operations. CUB is not part of the bi‐partite agreement between IBA and the bank unions, which have been constituted for wage settlement. Other regional players are part of this wage settlement where wages are revised upwards once every five years, salary increases are linked to inflation and negotiations carried out by the involved parties, having lead to higher employee cost structure for them. The average age of CUB’s employees is around 27 years and the bank has significantly migrated the day‐to‐day banking transactions to alternative channels such as ATM, net banking, mobile banking etc which has contributed to low cost/income ratio. The benefit of operating at a lower cost/income ratio goes a long way in supporting a higher RoA profile for CUB. C/I ratio is the lowest among all old private sector banks
42.8
50.153.9 54.9 56.2 56.9 58.7
0
10
20
30
40
50
60
70
City Union Federal Karur Lakshmi Vilas SIB Karnataka Bank DCB
(%)
Source: Company, India Infoline Research CUB has one of the best Opex/Avg. Earnings assets (average for FY12‐15)
1.9 2.0
2.3
2.8 2.9
3.0
1.5
1.9
2.3
2.7
3.1
3.5
CUB Federal Axis IndusInd DCB HDFC Bank
(%)
Source: Company, India Infoline Research
CUB exhibits an operational efficiency much better than its peers
City Union Bank Ltd
6
NIM has been on upward trajectory underpinned by change in asset mix, lower cost of funds City Union has been generating healthy NIMs averaging out 3.46% for the last 14 quarters now, with the broader range being 3.3% to 3.7%. The NIM trajectory has particularly moved towards the upper end of the range in the recent quarters led by a) change in asset mix and b) decline in the cost of deposits. The asset profile has seen a marked shift towards the MSME and Retail segment at the cost of decline in the share of corporate and gold loans. The combined share of MSME + Retail loans has significantly increased from 51% as of end FY13 to 63% currently. The cost of deposits has come‐off materially over the past five quarters with the bank reducing peak rates on term deposits from 9.5% to 8% and improving the contribution of lower‐costing CASA deposits. CUB also raised Rs. 350cr of equity capital via QIP issue priced at Rs. 75/share during Q2 FY15. The issue has lowered balance sheet leverage thus aiding the NIM.
Drop in cost of funds on deposit rate cuts
7.67.5 7.5
7.4
7.2 7.37.2
7.0 7.1
6.86.7
6.0
6.4
6.8
7.2
7.6
8.0
Q4 FY13
Q1 FY14
Q2 FY14
Q3 FY14
Q4 FY14
Q1 FY15
Q2 FY15
Q3 FY15
Q4FY15
Q1FY16
Q2 FY16
(%)
Source: Company, India Infoline Research
Very healthy NIMs witnessed over various credit cycles
NIMs inched up in the recent past due to change in asset mix and decline in cost of deposits
Stable NIMs witnessed over various credit cycles NIM has moved higher off‐late
3.60
3.40 3.35
3.503.44
3.7
2.00
2.40
2.80
3.20
3.60
4.00
FY11 FY12 FY13 FY14 FY15 Q2 FY16
(%)
3.3 3.3
3.53.5
3.4
3.6
3.7
3.00
3.20
3.40
3.60
3.80
4.00
Q4 FY14
Q1 FY15
Q2 FY15
Q3 FY15
Q4FY15
Q1FY16
Q2 FY16
(%)
Source: Company, India Infoline Research
City Union Bank Ltd
7
Superior profitability profile as compared to peers CUB has persistently generated RoAs of about 1.5%, which is much higher than any other regional bank. The underpinning factors behind bank’s superior profitability have been a well‐managed substantial SME exposure (key reason for higher portfolio yield and NIM) and better cost efficiency (driven by higher Opex/Avg. Earning assets and regional concentration). CUB also has a track‐record of generating 20%+ RoE, which is a feat achieved by only few banks. Even after the capital raising in Q2 FY15, the bank has been operating at 15‐16% RoE, which is extremely healthy considering that Tier‐1 capital ratio has been maintained at strong 14‐15%. Traditionally a high RoA generating bank
1.67 1.711.58
1.44 1.49 1.5
0.00
0.40
0.80
1.20
1.60
2.00
FY11 FY12 FY13 FY14 FY15 Q2 FY16
(%)
Source: Company, India Infoline Research Bank’s performance on asset mix and quality has been impressive during the ongoing credit cycle CUB’s credit growth has moderated significantly over the last couple of years on account of de‐growth in gold loan and corporate lending portfolio. As compared to the brisk CAGR of 28% witnessed over FY11‐13, bank’s advances grew by modest 9% pa during FY13‐15. Due to high volatility and a sharp correction in gold prices, the jewelry loan portfolio was ramped down. The corporate loan portfolio also declined substantially on account of a) significant tightening of risk management processes b) slippages of some large tickets accounts which were eventually sold to ARCs c) bank’s averseness to infra lending and d) decline in opportunities due to intensified slowdown in the economy. The combined share of both these portfolios has come down from 37% of total advances in FY13 to 23% of total advances in FY15. A large part of this growth headwind was offset by CUB through strong growth in MSME and Retail loan segments whose combined share in the advances has risen to 63% from 51% as at the end of FY13.
A well managed substantial SME exposure and better cost efficiency underpins superior RoA profile compared to peers
Shift in the asset mix from the jewelry and corporate loan portfolio towards the MSME and Retail loans during the ongoing credit cycle
City Union Bank Ltd
8
The sharp deterioration in macroeconomic conditions also impacted asset quality of CUB but not as severely as was the case with some other small private banks. Slippage ratio averaged 2.7% during FY14‐15 as against 1.5% during FY12‐FY13 with impairment mainly seen in bank’s iron & steel exposure. Consequently, the gross NPLs moved up from 1.1% to 2% in the past couple of years. Given that CUB had only marginal exposure to the infra sector, the restructured stock of the bank currently stands at negligible Rs. 246cr ie 1.3% of advances. A prudent lending strategy, stringent credit appraisal and strong risk management has underpinned the resilient asset quality performance of the bank in the current credit cycle. NPL ratios have inched‐up in the recent years
1.2 1.0 1.1
1.8 1.9 2.1
0.5 0.4 0.6
1.2 1.3 1.3
1.5 1.4
1.6
2.9
2.5
1.9
‐
0.5
1.0
1.5
2.0
2.5
3.0
3.5
‐
0.4
0.8
1.2
1.6
2.0
2.4
FY11 FY12 FY13 FY14 FY15 Q2 FY16
(%)(%)
Gross NPA (%) Net NPA (%) Slippage Ratio ‐RHS
Source: Company, India Infoline Research
A prudent lending strategy, stringent credit appraisal and strong risk management has impacted the asset quality less compared to some other small private banks
Advances growth has slowed down in the last two years... ...led by de-growth in three segments
9,329 12,222 15,343 16,224 18,089 18,935 ‐
5
10
15
20
25
30
35
40
‐
3,000
6,000
9,000
12,000
15,000
18,000
21,000
FY11 FY12 FY13 FY14 FY15 Q2 FY16
(%)(Rs. Cr)
Advances Growth rate (%) ‐RHS
3403
2964
2482
2,107
12931,124
174 169 127
0
800
1600
2400
3200
4000
FY13 FY14 FY15
(Rs. Cr) Total Gold loan Large Industries Infra
Source: Company, India Infoline Research
City Union Bank Ltd
9
Expect asset quality pressure to ease from here on As per the bank, most of stress on the balance sheet has been recognized already and slippages should likely moderate in the coming quarters. Further, consolidation of growth over the past couple of years and effected change in the asset mix has strengthened the balance sheet and should reflect on asset quality in the future. A small restructured book and modest stressed assets watch list (2 accounts worth Rs. 50cr each) also provide comfort. High granularity of loan book should also stand in good stead; Top 20 borrowers account for just 8% of bank’s advances. A low infrastructure book is assuaging too as most banks have seen significant slippages emanating from here. We expect delinquency ratio to start trending lower from FY17. Worst behind on the asset quality front
1.0 1.1
1.8 1.92.2 2.2
1.9
0.40.6
1.2 1.3 1.3 1.31.1
1.4
1.6
2.9
2.5
2.1
1.8 1.7
0.0
0.5
1.0
1.5
2.0
2.5
3.0
0.0
0.4
0.8
1.2
1.6
2.0
2.4
FY12 FY13 FY14 FY15 FY16E FY17E FY18E
(%)(%)
Gross NPA (%) Net NPA (%) Slippage ratio ‐ RHS
Source: Company, India Infoline Research CUB’s asset quality has been more resilient as compared to peers
7.28.9 7.9 7.8
3.4
14.7
17.6
7.8 8.4 8.8
0.0
4.0
8.0
12.0
16.0
20.0
SIB Karnataka Bank Karur Federal CUB
(%)
GNPA+Restr. to total adv Net NPA to Networth
Source: Company, India Infoline Research
Consolidation of the book, small restructured stock, modest stressed assets and granular book will lead to easing of asset quality pressures
City Union Bank Ltd
10
Loan growth to improve materially from FY17 Advances growth may remain modest in FY16 as credit risks still persist and growth opportunities are limited. Corporate capex cycle is yet to kick‐start, so a growth recovery in this segment is few quarters away. However, the growth in MSME and Retail segments is likely to remain strong in the near term given management’s thrust and still a benign base. Overall, the momentum in loan growth is expected to improve from FY17 coinciding with the macro recovery. We estimate CUB’ credit growth at 12% in FY16, but improving to 18% in FY17 and 25% in FY18. The strong Tier‐I capital of 15% and impressive RoEs will ensure that the bank would not require any fresh equity capital to fund the envisaged asset growth. Rather, as per our estimate, CUB would still have a healthy Tier‐1 capital ratio of 14% at the end of FY18. Pick up in advances to be back ended
12,137
15,246 16,097 17,966
20,121
23,743
29,679
‐
5.0
10.0
15.0
20.0
25.0
30.0
35.0
‐
5,000
10,000
15,000
20,000
25,000
30,000
35,000
FY12 FY13 FY14 FY15 FY16E FY17E FY18E
(%)(Rs. Cr)Advances Advances growth (%) ‐ RHS
Source: Company, India Infoline Research City Union has one of the best Tier I capital position
16.015.0
14.213.6
12.812.1
11.5
0.0
4.0
8.0
12.0
16.0
20.0
City Union Federal DCB Karur ICICI Axis Yes
(%)
Source: Company, India Infoline Research
CUB’s loan growth will improve materially from FY17, coinciding with the macro recovery
City Union Bank Ltd
11
NIMs to settle at 3.5% in the longer run At 3.74% in Q2 FY16, CUB’s NIM currently stands at the upper end of the recent historic band of 3.3‐3.7%. However, the margin is likely to moderate towards 3.5% in the coming quarters as Base Rate reductions would re‐price portfolio yield lower. The band has recently cut its Base Rate by 25bps to 10.5% and there could be further reduction in the near term. About 80% of the advances are linked to the Base Rate, implying that portfolio yield has high sensitivity to alteration in the benchmark rate. In the longer term though, the bank should be able to effectively combat the pressure on margin through tailwinds of improving CASA profile and favourable asset mix shift. NIMs to stay in a range of 3.5‐3.55%
3.6
3.4 3.4
3.5 3.44
3.54 3.50 3.53
2.0
2.4
2.8
3.2
3.6
4.0
FY11 FY12 FY13 FY14 FY15 FY16E FY17E FY18E
(%)
Source: Company, India Infoline Research Strong business model to continue to drive earnings; Initiate BUY with a target price of Rs. 115 With moderation in NIM being largely offset by some decline in credit cost, the RoA would remain steady at 1.5%. RoE, on the other hand, should improve by 150‐200bps over the period aided by absorption of capital. The earnings growth over FY15‐18 at 16% pa would largely mirror the loan growth.
CUB has always traded at a premium valuation to other regional banks owing to its superior business profile and operating efficiency. Current valuation of the bank at 1.7x 1‐year rolling forward P/Adj. BV is near the five‐year mean. This we believe is quite attractive given that earnings growth and RoE is expected to improve and also that bank has demonstrated impressive resilience in the current credit cycle wherein peers’ profitability and balance sheet has been significantly dented. The valuation multiple of CUB therefore should see a material expansion over the next couple of years. We initiate coverage on the stock with a 12‐month target of Rs. 115.
NIMs will settle down at the long term mean of 3.5%
RoA will remain steady, RoEs will improve aided by absorption of capital
The valuation multiple of CUB should see a material expansion over next couple of years given the improvement in earnings growth and RoEs
City Union Bank Ltd
12
Relative comparison highlights the favourable risk‐reward Bank M‐Cap
(Rs. Cr) Advances (Rs. Cr)
Advances CAGR FY15‐
17 (%)
RoA FY17
RoE FY17
P/ABV FY17 (X)
P/E FY17 (X)
Tier I (%)^
DCB 2,370 11,181 25.0 0.7 9.8 1.3 12.3 14.2
Axis 1,09,788 2,98,066 22.0 1.7 18.3 2.1 12.2 12.1
Yes 31,856 80,015 28.0 1.7 21.0 1.9 9.7 11.5
ICICI* 1,58,932 3,03,011 19.0 1.9 16.5 1.2 7.2 12.8
CUB 5,108 18,935 15.0 1.5 15.3 1.6 10.4 16.0
Federal 10,086 50,867 18.3 1.2 14.2 1.1 8.0 14.4
KVB 4,771 37,519 16.9 1.2 15.7 1.0 7.5 12.3 Source: Company, India Infoline Research *on a standalone basis ^as on FY15
City Union trades at premium valuations compared to peers owing to superior profitability
DCBICICI ‐ standalone
City Union
Federal Karur
0.0
0.5
1.0
1.5
2.0
2.5
0.0
0.5
1.0
1.5
2.0
2.5
FY17E P/ABV
FY17E RoA Source: Company, India Infoline Research
1‐year rolling P/ABV band Trading near 5‐year mean
0
Apr‐10
Dec‐10
Aug‐11
Apr‐12
Dec‐12
Aug‐13
Apr‐14
Dec‐14
Aug‐15
(Rs)
2.1x
1.9x
1.6x
1.3x
1x
‐
0.8
1.6
2.4
3.2
4.0
Apr‐10 Apr‐11 Apr‐12 Apr‐13 Apr‐14 Apr‐15
1‐yr rolling P/ABV Mean
Source: Company, India Infoline Research
City Union Bank Ltd
13
Financials Income statement Y/e 31 Mar (Rs cr) FY15 FY16E FY17E FY18E
Interest income 2,699 2,902 3,213 3,799
Interest expense (1,891) (1,979) (2,178) (2,536)
Net interest income 807 923 1,036 1,262
Non‐interest income 404 418 470 535
Total op income 1,212 1,341 1,506 1,798
Total op expenses (519) (566) (639) (767)
Op profit (pre‐prov) 693 775 867 1,031
Provisions (176) (190) (186) (200)
Profit before tax 517 585 681 831
Taxes (126) (158) (184) (224)
Net profit 391 427 497 606
Balance sheet Y/e 31 Mar (Rs cr) FY15 FY16E FY17E FY18E
Total cash & equivalents 2,537 2,403 2,590 2,955
Investments 6,365 7,129 8,270 10,337
Advances 17,966 20,121 23,743 29,679
Total int‐earning assets 26,867 29,653 34,603 42,971
Fixed assets 210 221 232 244
Other assets 793 912 1,049 1,259
Total assets 27,871 30,787 35,884 44,474
Net worth 2,696 3,039 3,438 3,925
Deposits 24,075 26,482 30,984 38,731
Borrowings 169 194 229 277
Total int‐bearing liabs 24,244 26,677 31,213 39,008 Other non‐int‐bearing liabs 932 1,072 1,232 1,540
Total liabilities 25,176 27,748 32,446 40,548
Equity + Total liabilities 27,871 30,787 35,884 44,474
Key ratios Y/e 31 Mar FY15 FY16E FY17E FY18E
Growth matrix (%)
Net interest income 6.3 14.3 12.2 21.9
Total op income 16.7 10.6 12.3 19.4 Op profit (pre‐provision) 19.4 11.9 11.9 18.9
Net profit 10.8 9.1 16.4 22.0
Advances 11.6 12.0 18.0 25.0
Deposits 9.3 10.0 17.0 25.0
Total assets 11.5 10.5 16.6 23.9
Profitability Ratios (%)
NIM 3.2 3.3 3.2 3.3
Non‐int inc/Total inc 33.4 31.2 31.2 29.8
Return on Avg Equity 16.3 14.9 15.3 16.5
Return on Avg Assets 1.5 1.5 1.5 1.5
Per share ratios (Rs)
EPS 6.4 7.2 8.3 10.2
Adj.BVPS 41.3 46.6 52.5 60.3
DPS 1.1 1.2 1.4 1.7
Other key ratios (%)
Credit/Deposits 74.6 76.0 76.6 76.6
Cost/Income 42.8 42.2 42.4 42.7
CASA 19.2 19.2 19.7 20.2
CAR 16.5 17.2 17.1 16.3
Tier‐I capital 16.0 16.4 15.9 14.7
Gross NPLs/Loans 1.9 2.2 2.2 1.9
Total prov/Avg loans 1.0 1.0 0.9 0.8
Net NPLs/Net loans 1.3 1.3 1.3 1.1
Tax rate 24.4 27.0 27.0 27.0
Dividend yield 1.3 1.4 1.6 2.0
‘Best Broker of the Year’ – by Zee Business for contribution to brokingNirmal Jain, Chairman, IIFL, received the award for The Best Broker of the Year (for contribution to broking in India) at India's Best Market Analyst Awards 2014 organised by the Zee Business in Mumbai. The award was presented by the guest of Honour Amit Shah, president of the Bharatiya Janata Party and Piyush Goel, Minister of state with independent charge for power, coal new and renewable energy.
'Best Equity Broker of the Year' – Bloomberg UTV, 2011IIFL was awarded the 'Best Equity Broker of the Year' at the recently held Bloomberg UTV Financial Leadership Award, 2011. The award presented by the Hon'ble Finance Minister of India, Shri Pranab Mukherjee. The Bloomberg UTV Financial Leadership Awards acknowledge the extraordinary contribution of India's financial leaders and visionaries from January 2010 to January 2011.
'Best Broker in India' – Finance Asia, 2011IIFL has been awarded the 'Best Broker in India' by Finance Asia. The award is the result of Finance Asia's annual quest for the best financial services firms across Asia, which culminated in the Country Awards 2011
Other awards
2012BEST BROKING HOUSE WITH
GLOBAL PRESENCE
2009, 2012 & 2013BEST MARKET
ANALYSTBEST BROKERAGE,
INDIAMOST IMPROVED,
INDIABEST BROKER,
INDIA
2009FASTEST GROWING
LARGE BROKING HOUSE
Recommendation parameters for fundamental reports:
Buy – Absolute return of over +15%
Accumulate – Absolute return between 0% to +15%
Reduce – Absolute return between 0% to ‐10%
Sell – Absolute return below ‐10%
Call Failure ‐ In case of a Buy report, if the stock falls 20% below the recommended price on a closing basis, unless otherwise specified by the analyst; or, in case of a Sell report, if the stock rises 20% above the recommended price on a closing basis, unless otherwise specified by the analyst
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