Dena Bank (DENBAN) - ICICI Directcontent.icicidirect.com/mailimages/IDirect_DenaBank...Dena Bank was able to manage its asset quality well during FY10-12 wherein the GNPA ratio ranged

May 20, 2015

ICICI Securities Ltd | Retail Equity Research

Result Update

Weak financials; visibility uncertain • Dena Bank continues to surprise negatively on the earnings front in

Q4FY15. At the PBT level, it incurred a loss of | 100 crore due to provisioning expenses increasing two-fold QoQ to | 478 crore

• On the back of | 156 crore tax write-back, PAT was in the green at | 56 crore (down 70% YoY, 27% QoQ) but significantly below our expectations of | 86 crore. NII and other income was at | 609 crore and | 201 crore, respectively, in line with estimate

• GNPA & NNPA ratio declined 15 bps sequentially to 5.45% and 3.82%, respectively. However, absolute GNPA increased to | 4393 crore from | 4230 crore in Q3FY15 as slippages stayed elevated at | 1028 crore vs. 748 crore in Q3. PCR stood at 53% as on Q4FY15

• Credit traction at 1.8% YoY to | 78934 crore for the bank may probably be the lowest in the industry

Business traction strong in past; expect moderation to stay, going head Dena Bank is a mid-sized PSU bank with over 1600 branches. Around 60% of the network is in the well industrialised states of Gujarat and Maharashtra, enabling the bank to clock healthy business growth in the past. Credit increased at a CAGR of 22% while deposit grew at 21% CAGR in the past five years till FY14. As on FY15, advances were at | 78934 crore & deposit at | 115936 crore. Credit book has been mainly skewed towards priority sector (37%) followed by corporate (32%), SME (18%) and retail (13%). In the past couple of years, owing to a weak economy, business growth has moderated to as low as 4% in FY15. We believe that any major improvement in the traction is still two to three quarters away. Edge on liability front diminishing; margins to remain below 3% One of the key strengths of Dena Bank used to be its strong CASA franchise due to its higher presence in the cash rich western states. The CASA ratio was at ~35% in FY09-12, which was one of the highest among peers. This enabled it to maintain healthy margins of 2.9-3%. However, in the past two years there has been a marked decline in its CASA ratio to ~28% due to heavy competition. A declining CASA ratio combined with heavy deterioration in asset quality (slippages of ~| 6100 crore in the past two years) took its toll on margins, which have now fallen to as low as 2.13%. Going ahead, we believe NIMs will stay below 2.4% considering the lingering asset quality pressure. No major respite in asset quality expected in near term Dena Bank was able to manage its asset quality well during FY10-12 wherein the GNPA ratio ranged between 1.7% and 1.9%. However, during pFY13-14, the ratio rose to 3.3%. The reasons include higher infra exposure of ~20% and higher corporate segment, which has been worst affected in the past two years of the economic down cycle. Further, by FY15, GNPA has surged to 5.5% and RA to 11.4% of credit. We believe any major respite in asset quality is not seen in FY16 for the bank. RoEs expected to stay in single digits ahead; dropping coverage….. Dena Bank’s operational performance has weakened in the past two years (margins declining to the lowest ever, cost-to-income ratio rising and asset quality is deteriorating sharply). Consequently, return ratios have declined significantly (RoE, RoA at 3.6% and 0.2%- FY15). We believe business traction of the bank will stay below industry as it will focus on cleaning up its balance sheet first. We expect return ratios to stay in single digits with RoEs of 5.3% even until FY17E. We suspend coverage on the stock. Investors currently holding the stock may look at larger PSU banks like Bank of Baroda and private banks like Axis Bank and Yes Bank.

Rating matrix Rating : Dropping CoverageTarget : NATarget Period : NAPotential Upside : NA

What’s Changed? Target NAEPS FY16E NAEPS FY17E NARating Changed from Hold to Dropping Coverage

Quarterly Performance

Q4FY15 Q4FY14 YoY (%) Q3FY15 QoQ (%)NII 609 614 -0.9 602 1.1Other income 201 272 -26.1 196 2.6PPP 378 448 -15.6 320 18.1PAT 56 187 -70.2 77 -27.1

Key Financials | Crore FY14 FY15 FY16E FY17ENII 2,505 2,448 2,510 2,827 PPP 1,774 1,327 1,249 1,453 PAT 552 265 318 402

Valuation summary

FY14 FY15 FY16E FY17EP/E 4.9 10.6 8.8 7.0P/ABV 0.6 0.8 0.8 0.7 RoA 0.5 0.2 0.2 0.3RoE 8.5 3.6 4.3 5.3

Stock data Market Capitalisation | 2755 Crore GNPA (Q4FY15) | 4393 Crore NNPA (Q4FY15) | 3014 Crore NIM (Q4FY15) 2.3 52 week H/L 94.4/46.8 Equity Capital | 560 Crore Face value | 10 DII Holding (%) 15.7 FII Holding (%) 7.2 Price performance (%)

1M 3M 6M 12MDena Bank -7.6 -13.4 -25.5 -21.4Syndicate Bank 0.5 -8.7 -17.5 4.5Indian Overseas Bank -6.4 -19.2 -30.2 -29.7Bank of India -4.9 -20.8 -31.6 -15.9

Dena Bank (DENBAN) | 50

Research Analyst

Kajal Gandhi [email protected]

Vasant Lohiya [email protected]

Vishal Narnolia [email protected]

ICICI Securities Ltd | Retail Equity Research Page 2

Variance analysis Q4FY15 Q4FY15E Q4FY14 YoY (%) Q3FY15 QoQ (%) Comments

NII 609 616 614 -0.9 602 1.1NIM (%) 2.3 2.3 2.3 -7 bps 2.2 2 bpsOther Income 201 219 272 -26.1 196 2.6

Net Total Income 810 835 887 -8.6 799 1.4Staff cost 228 259 260 -12.3 303 -24.8Other Operating Expenses 205 208 179 14.1 176 16.2

PPP 377.8 368.2 447.7 -15.6 319.9 18.1 Operational performance was in line with estimates

Provision 478.0 289.6 570.3 -16.2 241.3 98.1 Provisions increased two fold QoQ largely owing to increased provision on NPAs... PBT -100.2 78.6 -122.6 -18.3 78.6 -227.6 …..which led to losses at PBT levelTax Outgo -156.0 -7.5 -309.9 NA 2.0 NA

PAT 55.8 86.1 187.3 -70.2 76.6 -27.1 Tax write-bank enables PAT to be in the green

Key Metrics

GNPA 4,393.0 4,593.7 2,616.0 67.9 4,229.9 3.9Asset quality continued to worsen with fresh slippage of | 1028 crore vs. | 748 crore in Q3FY15. GNPA ratio stood above industry average at 5.45%

NNPA 3,014.3 3,350.2 1,818.9 65.7 2,928.5 2.9 PCR stood at 53%. Total Restructured assets 8,752.6 8,700.0 7,637.0 14.6 8,588.6 1.9 Restructured book stands at ~11% of advances Source: Company, ICICIdirect.com Research Change in estimates

(| Crore) Old New % Change Old New % Change Comments

Net Interest Income 3,044 2,510 -17.5 3,647 2,827 -22.5Lowered NII estimates as we reduce our credit traction and expect margins to remain steady at ~2.1%

Pre Provision Profit 1,626 1,249 -23.2 1,921 1,453 -24.4NIM (%) 2.2 2.1 -15 bps 2.3 2.1 -22 bpsPAT 472 318 -32.7 584 402 -31.1ABV (|) 64.7 63.8 -1.5 74.8 69.0 -7.8

FY16E FY17E

Source: Company, ICICIdirect.com Research Assumptions

FY13 FY14 FY15E FY16E FY15E FY16E

Credit growth (%) 16.0 17.9 1.8 11.0 14.9 14.8Credit traction estimates reduced as bank would concentrate on cleaning up balance sheet first

Deposit Growth (%) 26.0 13.2 5.4 11.7 15.4 15.6CASA ratio (%) 29.0 28.2 28.0 28.2 28.9 29.1NIM Calculated (%) 2.6 2.3 2.1 2.1 2.4 2.4Cost to income ratio (%) 42.8 48.2 58.1 62.1 49.8 51.1

GNPA (| crore) 1,452.5 2,616.0 4,395.2 5,096.0 4,175.1 5,044.7Asset quality pressure significantly impacted earnings, slippages to continue though at lower pace

NNPA (| crore) 917.2 1,818.9 3,014.7 3,171.4 2,770.1 3,074.4Slippage ratio (%) 2.0 3.7 4.7 2.8 3.2 2.8Credit cost (%) 0.7 1.1 1.4 0.8 1.2 0.8

Current Earlier

Source: Company, ICICIdirect.com Research


Company Analysis Business traction to continue to moderate from past trends….

Dena Bank’s advances (| 77556 crore as on FY14) and deposit (| 110029 crore) market share has increased from 1% and 1.1% in FY09 to 1.4% and 1.6% levels, respectively, as on FY14. This is due to the bank’s consistently higher business growth recorded during FY09-14. Credit CAGR was 22% vs. industry CAGR of 17% while deposit CAGR was 21% compared to 15% industry CAGR during these years. However, during FY15, the business traction dipped significantly below industry at 3.9% YoY with credit increasing at merely 1.8% YoY to | 78934 crore. One of the distinguishing factors for the bank is its large presence (~60% of 1600 branches) in the well industrialised cash rich western states of Gujarat and Maharashtra. This has enabled the bank to clock strong loan growth compared to its peers even in a weak economic cycle. Further, it also enabled the bank to maintain a healthy CASA franchise of ~35-36% of total deposits, which has now declined to ~28% as on FY15. The credit book has largely been tilted towards the corporate segment comprising 36% as on FY14 followed by priority sector (34%), SME (17%) and retail (13%). Until FY12, the corporate segment accounted for 45% of the loan mix, which has been pared down in the past two years due to rising stress in the segment owing to a strained economic environment. The focus shifted towards the retail, SME and agri segments whose proportion has accordingly been rising. Going ahead, the management has indicated the focus would continue to remain towards the retail & SME segment, which would allow the bank to have diversified lending opportunities. We have lowered our loan book CAGR to 12% from 14% earlier over FY15-17E to | 98274 crore.

Exhibit 1: Business traction expected to moderate, going ahead

56,6

93

65,7

81

77,5

54

7535

0.96

7536

6.98

7535

6.28

78,9

34

87,5

98

98,2

74

43,0

51

51,3

44

64,2

10

77,1

67

97,2

07

110,

028

1057

18

1064

60.7

1069

06.7

115,

937

129,

550

145,

631

28,8

78

35,4

62

44,8

28

25.422.8

26.4 26.5

16.017.9

12.013.7

11.3

1.8

11.0 12.2

26.8

19.3

25.1

20.2

26.0

13.216.0

12.4

16.3

7.85.4

11.7

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

FY09 FY10 FY11 FY12 FY13 FY14 Q1FY15 Q2FY15 Q3FY15 FY15 FY16E FY17E

(| c

rore

)

0

5

10

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20

25

30

(%)

Advances Deposits Advances Growth (RHS) Deposits Growth (RHS)


Credit CAGR was 22% vs. industry CAGR of 17% while

deposit CAGR was 21% compared to 15% industry CAGR

during the past five years, now taking toll on asset quality


Exhibit 2: Break up of advances portfolio

35.9 37.4 45.2 43.4 40.3 36.4 35.6 31.6

15.2 13.712.8 11.7 12.5 12.7 12.8 13.3

15.9 15.114.6 16.2 17.0 16.8 17.2 18.3

33.0 33.8 27.3 28.7 30.2 34.0 34.4 36.9

0

20

40

60

80

100

120

FY10 FY11 FY12 FY13 FY14 Q1FY15 Q2FY15 Q3FY15

(%)

Corporate Retail SME Priority Sector


On the deposit front, the edge on the CASA front reduced as the CASA ratio declined to 28% from 35-36% on account of increased competition from private, savings de-regulation and slower growth in CA balances due to a weak economy. CASA deposits CAGR has fallen to 12% during FY11-14 vs. 20% seen during FY08-FY11. Over FY16-17E, we have factored in a marginal improvement in CASA ratio to 29% owing to increased focus on CASA mobilisation and an enhanced branch network. Exhibit 3: Expect 14% CAGR in CASA deposits over FY15-17E

1846

1

2281

0

2666

4

2815

3

3101

1

2877

0

3002

7

3013

8

3250

2

3654

7

4224

9

36.0 35.5 34.6

29.0 28.2 27 27 28 28.0 28.2 29.0

05000

100001500020000

250003000035000

4000045000

FY10 FY11 FY12 FY13 FY14 Q1FY15Q2FY15Q3FY15 FY15 FY16E FY17E

(| c

rore

)

0

5

10

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35

40

(%)

CASA amount CASA ratio


Pressure on margins to stay

Dena Bank had one of the lowest CoF of ~6% during FY09-12 largely on account of its strong CASA franchise of ~35% of total deposits. Accordingly, margins of the bank were healthy at around ~2.8-3%. However, in the past two years, the CASA ratio fell drastically to ~28%. Along with a sharp rise in NPA slippages (| 1120 crore in FY13 and | 2420 crore in FY14 & further to | 3674 crore in FY15E), this took a toll on margins (down to 2.1% by FY15). Going ahead, we believe asset quality pressure may continue to put pressure on NIM. We have factored in NIMs will stay flat at 2.1% in FY15-17E.

Over FY15-17E, we have factored in a marginal

improvement in CASA ratio to 29% owing to increased

focus on CASA mobilisation and enhanced branch network

We have factored in calculated NIMs of ~2.1% in FY15-

17E


Exhibit 4: Margins to stay low

9.18.5 8.7

9.4 9.89.3 9.4 9.1 8.9

6.0 6.0 5.56.4

7.0 6.8 7.1 6.8 6.6

2.8 2.33.0 2.9 2.6 2.3 2.1 2.1 2.1

0.0

2.0

4.0

6.0

8.0

10.0

12.0

FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16E FY17E

(%)

Yield on average assets Average cost of funds NIM (calculated)


Exhibit 5: Other income break up

Q2FY13 Q3FY13 Q4FY13 Q1FY14 Q2FY14 Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15

Commission 105.6 45.0 52.0 44.2 48.6 47.4 54.8 49.8 54.4 48.0

Process Fees 22.1 20.0 30.0 12.2 24.6 24.6 42.0 15.0 24.3 20.0

Trading gains 19.2 23.0 83.0 248.4 18.5 5.9 11.9 30.3 23.1 46.4

Recovery in w/off 9.1 13.0 16.0 11.2 12.5 17.5 117.3 5.2 6.2 9.4

Total 133.9 144.5 235.5 365.5 149.9 129.0 272.4 144.4 179.4 196.2


Asset quality pressure to continue in near term…

Dena Bank was able to manage its asset quality well during FY10-12 wherein the GNPA ratio ranged between 1.7% and 1.9%. However, in FY13-14, the ratio rose to as high as 3.3%, which further rose 5.45% as on FY15E. The reasons include the higher corporate segment, which have been the worst affected segment in the past two years of the economic down cycle. Further, higher infra exposure of ~20% was also a major reason. Asset quality continues to deteriorate with slippages of | 3674 crore in FY15 leading to GNPA rise to 5.5% of credit (highest since FY07). The company has booked | 191 crore as NPA against the Malabar hill fraud in the previous three quarters. Restructured assets (RA) at ~| 8750 crore as on FY15 account for ~11% of total advances, which is one of the highest in the industry. Within RA, the major culprit was the power sector, which accounts for 40% of total RA followed by iron & steel sectors (~12%) and textile (9.2%). We have increased our GNPA ratio estimates higher to 5.8% of credit in FY16E. However, we expect slippages accretion to be lower than seen in FY16-17E. Asset quality pressure may continue to linger as stressed assets (RA+GNPA) have increased considerably to ~17% of credit in FY15 from 13% of credit as at the end of FY14.

Restructured assets (RA) account for ~11% of total

advances, which is one of the highest in the industry


Exhibit 6: Concern on asset quality to linger

842

957

1,45

2

2,61

6

3169

3861

4230

4,39

5

5,09

6

5,58

7

549

572

917

1,81

9

2175

2648

2929

3,01

5

3,17

1

3,13

0

1.88 1.692.21

3.37

4.21

5.125.61 5.57 5.82 5.69

1.22 1.011.39

2.352.94

3.593.97 3.82 3.62

3.18

0

1,000

2,000

3,000

4,000

5,000

6,000

FY11 FY12 FY13 FY14 Q1FY15 Q2FY15 Q3FY15 FY15 FY16E FY17E

(| c

rore

)

0

1

2

3

4

5

6

7

(%)

GNPA NNPA GNPA ratio NNPA ratio



Outlook and valuation Dena Bank’s operational performance has weakened in the past two years with margins declining to the lowest ever, cost-to-income ratio rising to 58% from 43% in FY12 and asset quality deteriorating sharply. PAT dipped by >50% YoY to | 265 crore in FY15. Consequently, return ratios have declined significantly (RoE, RoA at 3.6% and 0.2%- FY15). We believe the business traction of the bank will stay below industry as it will focus on cleaning up its balance sheet first. Any major recovery in financials would depend on an economic revival. We expect return ratios to stay in single digits with RoEs of 5.3% even until FY17E. Hence, we suspend our coverage on the stock. Investors currently holding the stock may look at larger PSU banks like Bank of Baroda and private banks like Axis Bank and Yes Bank. Exhibit 7: Return ratios estimated to stay subdued

0.951.02

0.81

0.46

0.21 0.23 0.26

19.5 19.7

15.8

8.5

3.6 4.3 5.30.0

0.2

0.4

0.6

0.8

1.0

1.2

0

5

10

15

20

25

RoA RoE


Exhibit 8: Valuation

NII Growth PAT Growth P/E ABV P/ABV RoA RoE(| cr) (%) (| cr) (%) (x) (|) (x) (%) (%)

FY14 2,505 5.1 552 (31.9) 4.9 83.9 0.6 0.5 8.5 FY15 2,448 (2.3) 265 (52.0) 10.6 63.5 0.8 0.2 3.6 FY16E 2,510 2.5 318 19.9 8.8 63.8 0.8 0.2 4.3 FY17E 2,827 12.6 402 26.7 7.0 69.0 0.7 0.3 5.3



Company snapshot

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140

160

Jan-

05

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-05

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-06

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-09

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-15

Source: Bloomberg, Company, ICICIdirect.com Research

Key events Date EventFY97 Dena Bank came out with an IPO to raise capital of | 180 crore at the price of | 30/shareFY06 The stock remained stuck in a narrow range in FY03-06 as PAT remained volatile. However, PAT rose from | 73 crore in FY06 to | 360 crore in FY08 on the back of

lower provision as asset quality improved. This supported the upward movement in stock priceFY09 Stock falls sharply in line with the crash in markets. No major NPA accretion was witnessed by Dena Bank. Financials remained healthy

FY11 Stock makes all-time highs as market and economy recover from recession. Also, Dena was posting healthy 20% PAT growth with stable asset quality

May-11 First sign of rise in NPA seen in Q4FY11 results. Dena then posted couple of steady quarters but from then it has been suffering on asset quality frontJan-13 Stock rallies as there were expectations that asset quality has peaked out. Also, it appeared attractive on valuation but NPA woes continued laterMay-13 G-sec yields spike post Fed announcement on May 22 of its intention to taper QE and tight liquidity measures by RBI. MTM risk and CoF rise. Also, asset quality of

Dena continued to deteriorate and market realised that asset quality woes are here to stay for longer than expectedSep-13 Stock recovers as new Governor announces measure to tackle rupee volatility, eases liquidity. Risk of further rise in CoF subsides but MTM risk stayJan-14 Raised | 700 crore and | 366 crore from GoI (at price of | 59) & LIC (At price of | 52), respectively, via preferential allotment.


Top 10 shareholders Shareholding Pattern Rank Name Latest Filing Date % O/S Position (m) Change (m)1 Government of India 31-Mar-15 59.8 335.3 23.32 Life Insurance Corporation of India 31-Mar-15 12.66 71.1 0.53 General Insurance Corporation of India 31-Mar-15 2.9 16.5 0.04 Jupiter Asset Management Ltd. 28-Feb-15 1.78 10.0 -2.05 Ruane, Cunniff & Goldfarb, Inc. 31-Mar-15 1.6 9.0 0.06 Dimensional Fund Advisors, L.P. 31-Mar-15 0.70 3.9 -0.57 Van Eck Associates Corporation 30-Apr-15 0.3 1.5 0.08 Mellon Capital Management Corporation 30-Apr-15 0.13 0.7 0.09 Taurus Asset Management Co. Ltd. 31-Mar-15 0.0 0.2 0.210 Emerging Global Advisors, LLC 31-Mar-15 0.02 0.1 0.0

(in %) Mar-14 Jun-14 Sep-14 Dec-14 Mar-15Promoter 58.0 58.0 58.0 58.0 59.8FII 7.2 9.0 7.7 7.6 7.2DII 17.0 16.7 16.4 16.4 15.7Others 17.8 16.3 17.8 18.0 17.3

Source: Reuters, ICICIdirect.com Research

Recent Activity

Investor name Value Shares Investor name Value SharesGovernment of India 19.05m 23.33m L&T Investment Management Limited -1.85m -2.77m Life Insurance Corporation of India 0.41m 0.51m Jupiter Asset Management Ltd. -1.80m -2.00m Taurus Asset Management Co. Ltd. 0.13m 0.15m Fidelity Management & Research Company -1.11m -1.52m

Union Investment Luxembourg S.A. -1.06m -1.22m Kotak Mahindra Asset Management Company Ltd. -0.89m -1.08m

Buys Sells

Source: Reuters, ICICIdirect.com Research


.

Financial summary Profit and loss statement | Crore (Year-end March) FY14 FY15 FY16E FY17E

Interest Earned 9,978.5 10,763.5 11,050.8 12,190.3

Interest Expended 7473.4 8315.4 8540.5 9362.9

Net Interest Income 2,505.1 2,448.1 2,510.3 2,827.4

Growth (%) 5.1 -2.3 2.5 12.6

Non Interest Income 916.7 721.5 782.5 875.2

Fees and advisory 195.0 214.5 242.4 276.3

Treasury Income 284.6 156.6 140.9 112.7

Other income 437.1 350.4 399.2 486.1

Net Income 3421.8 3169.6 3292.8 3702.5

Employee cost 1005.0 1118.2 1244.4 1371.4

Other operating Exp. 642.8 724.1 799.7 877.7

Operating Income 1774.0 1327.3 1248.7 1453.4

Provisions 1516.1 1265.7 825.3 894.6

PBT 258.0 61.6 423.4 558.8

Taxes -293.7 -203.2 105.8 156.5

Net Profit 551.7 264.8 317.5 402.3

Growth (%) -31.9 -52.0 19.9 26.7

EPS (|) 10.3 4.7 5.7 7.2


Key ratios (Year-end March) FY14 FY15 FY16E FY17E

ValuationNo. of Equity Shares 53.8 56.1 56.1 56.1EPS (Rs.) 10.3 4.7 5.7 7.2BV (Rs.) 117.7 117.2 120.3 124.8ABV (Rs.) 83.9 63.5 63.8 69.0P/E 4.9 10.6 8.8 7.0P/BV 0.4 0.4 0.4 0.4P/adj.BV 0.6 0.8 0.8 0.7

Yields & Margins (%)

Net Interest Margins 2.3 2.1 2.1 2.1Yield on assets 9.3 9.4 9.1 8.9

Avg. cost on funds 6.8 7.1 6.8 6.6

Yield on average advances 10.3 10.2 10.0 9.9

Avg. Cost of Deposits 6.9 7.1 6.8 6.7

Quality and EfficiencyCost to income ratio 48.2 58.1 62.1 60.7Credit/Deposit ratio 70.5 68.1 67.6 67.5GNPA (%) 3.4 5.6 5.8 5.7NNPA (%) 2.3 3.8 3.6 3.2ROE (%) 8.5 3.6 4.3 5.3

ROA (%) 0.5 0.2 0.2 0.3


Balance sheet | Crore (Year-end March) FY14 FY15 FY16E FY17E

Sources of Funds

Capital 537.8 561.2 561.2 561.2

Reserves and Surplus 6604.7 6813.4 6967.5 7206.4

Networth 7142.5 7374.6 7528.6 7767.6

Deposits 110027.7 115936.7 129550.2 145631.2

Borrowings 5160.9 3436.0 3783.5 4225.0

Other Liabilities & Provisions 2532.4 3107.8 3538.9 4201.7

Total 124863.5 129855.0 144401.3 161825.5

Application of Funds

Fixed Assets 1144.8 1154.6 1274.9 1409.4

Investments 36612.1 36498.8 40512.7 45702.5

Advances 77553.8 78934.2 87598.0 98274.4

Other Assets 3180.1 3591.7 4264.5 4453.5

Cash with RBI & call money 6372.7 9675.8 10751.2 11985.7

Total 124863.5 129855.0 144401.3 161825.5


Growth ratios (% growth) (Year-end March) FY14 FY15 FY16E FY17E

Total assets 10.1 4.0 11.2 12.1Advances 17.9 1.8 11.0 12.2Deposit 13.2 5.4 11.7 12.4Total Income 14.0 5.4 3.0 10.4

Net interest income 5.1 -2.3 2.5 12.6Operating expenses 26.8 11.8 11.0 10.0Operating profit 2.0 -25.2 -5.9 16.4Net profit (31.9) -52.0 19.9 26.7Net worth 28.9 3.9 2.6 3.8

EPS (55.7) (54.0) 19.9 26.7



ICICIdirect.com coverage universe (Banking) CMP M Cap(|) TP(|) Rating (| Cr) FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E

Bank of India (BANIND) 206 255 Hold 12,282 39 46 52 5.3 4.5 4.0 0.8 0.7 0.6 0.4 0.4 0.4 8 9 10Bank of Baroda (BANBAR) 160 220 Buy 33,669 15 20 24 10.4 7.8 6.7 1.2 1.0 0.9 0.5 0.6 0.6 9 11 12Dena Bank (DENBAN) 49 NA NA 2,755 5 6 7 10.4 8.7 6.8 0.8 0.8 0.7 0.2 0.2 0.3 4 4 5Punjab National Bank (PUNBAN) 150 177 Buy 27,065 17 21 28 9.1 7.2 5.3 1.2 1.1 1.0 0.5 0.6 0.7 8 10 12Syndicate Bank (SYNBN) 112 124 Buy 6,720 23 27 35 4.9 4.1 3.2 0.9 0.9 0.8 0.5 0.6 0.6 12 13 15Indian Bank (INDIBA) 158 221 Buy 6,776 21 24 30 7.5 6.6 5.2 0.7 0.7 0.6 0.5 0.6 0.6 7 8 9Axis Bank (UTIBAN) 558 690 Buy 131,621 31 35 41 18.0 15.9 13.5 3.0 2.6 2.2 1.7 1.7 1.7 18 17 17City Union Bank (CITUNI) 100 110 Buy 4,830 7 9 11 14.6 11.5 9.3 2.4 2.0 1.7 1.5 1.7 1.8 17 18 18DCB Bank (DCB) 130 160 Buy 3,366 7 8 9 19.2 16.4 13.8 2.6 2.2 2.0 1.3 1.3 1.3 14 14 14Federal Bank (FEDBAN) 142 164 Buy 12,116 12 14 17 12.1 10.0 8.3 1.6 1.5 1.3 1.3 1.4 1.4 14 15 16HDFC Bank (HDFBAN) 1,022 1,225 Buy 255,463 41 50 60 25.1 20.4 17.0 4.2 3.6 3.1 1.9 2.0 2.0 19 19 19IndusInd Bank (INDBA) 853 1,000 Buy 44,707 34 43 55 25.2 19.9 15.6 4.3 3.7 3.1 1.8 1.9 2.0 18 20 21Jammu & Kashmir Bank(JAMKAS) 103 119 Buy 4,988 10 21 26 9.8 4.8 4.0 1.0 0.9 0.8 0.7 1.3 1.3 9 16 17Kotak Mahindra Bank (KOTMAH) 1,391 1,437 Hold 106,647 24 29 36 57.6 47.2 38.6 7.8 6.8 5.8 1.9 2.0 2.0 14 15 16Yes Bank (YESBAN) 872 950 Buy 36,273 48 61 77 18.2 14.3 11.3 3.1 2.7 2.2 1.6 1.7 1.8 21 20 21

Sector / CompanyRoE (%)EPS (|) P/E (x) P/ABV (x) RoA (%)



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Pankaj Pandey Head – Research [email protected]

ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC, Andheri (East) Mumbai – 400 093

[email protected]


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Documents

Dena Bank (DENBAN) - ICICI Directcontent.icicidirect.com/mailimages/IDirect_DenaBank...Dena Bank was able to manage its asset quality well during FY10-12 wherein the GNPA ratio ranged