State Bank of India Performance Highlights potx

Please refer to important disclosures at the end of this report

1



Particulars (` cr) 4QFY12 3QFY12 % chg (qoq)

4QFY11

% chg (yoy)

NII 11,704 11,466 2.1

8,058

45.2

Pre-prov. profit* 9,597 8,130 18.0

6,080

57.8

PAT 4,050 3,263 24.1

21

NA

Source: Company, Angel Research; Note:*write back on investments netted from treasury loss in 3QFY2012
During 4QFY2012, SBI’s reported standalone net profit of `4,050cr as against
`21cr in 4QFY2011, which was ahead of ours as well as street estimates. Sign of
improvement witnessed on the asset quality front, with decline in both gross and net
NPA ratios on sequentially lower slippages, was the key positive from the result. We
recommend a Buy on the stock with a target price of `2,486.
NIM decline by 16bp qoq; NPA ratios improves sequentially on reduced
slippages: During 4QFY2012, the bank’s net advances grew by 14.7% yoy driven by
healthy growth in segments such as International, Agricultural and SME. Overall
deposits accretion remained moderate, registering a growth of 11.7% yoy. The
reported domestic CASA ratio stood at 46.6% (47.9% in 3QFY2012 and 49.8% in
4QFY2011). The bank’s NIM contracted for both domestic (down by 11bp qoq to
4.28%) and foreign operations (down by 24bp qoq to 1.53%). Consequently, overall
NIMs for the bank contracted by 16bp to 3.89%. The banks’ non-interest income
(excl. treasury) grew strongly by 18.1% yoy mainly on account of healthy 13.0% yoy
growth in fee income. On the asset-quality front, the bank’s annualized slippage ratio
for the quarter came at 2.3%, significantly lower than 4.3% in 3QFY2012 and 4.2%
in 2QFY2012. The NPA ratios improved sequentially with both gross and net NPA
levels decreasing on an absolute basis by 1.1% and 15.9%, respectively. The PCR
(incl. technical write-offs) also improved by 558bp qoq to 68.1%. The bank
restructured accounts worth `5,134cr during 4QFY2012, which included Air India’s
`1,215cr, thereby taking its total restructured book to `42,744cr. The slippages from
the restructured book during 4QFY2012 stood at `1,361cr.
Outlook and valuation: At the CMP, the stock is trading at 1.2x FY2014E ABV
(adjusting for value of subsidiaries 1.1x FY2014E ABV) vis-à-vis its historic range
of 1.3–2.3x and median of 1.7x. Also, considering the bank’s dominant position
and reach, high fee income, superior earnings quality and recent signs of
improvement in asset quality, we recommend a Buy on the stock with a target
price of `2,486.

Key financials
Y/E March (` cr) FY2011 FY2012

FY2013E

FY2014E

NII 32,526 43,291

50,951

60,037

% chg 37.4 33.1

17.7

17.8

Net profit 8,265 11,707

15,874

18,967

% chg (9.8) 41.7

35.6

19.5

NIM (%) 3.0 3.6

3.7

3.7

EPS (`) 130.1 174.5

236.6

282.7

P/E (x) 15.4 11.5

8.5

7.1

P/ABV (x) 2.1 1.7

1.4

1.2

RoA (%) 0.7 0.9

1.1

1.1

RoE (%) 13.3 16.7

18.6

19.3

Source: Company, Angel Research

BUY
CMP `2,007

Target Price `2,486

Investment Period 12 Months


Stock Info

Sector Banking

Market Cap (` cr) 134,706

Beta 1.2

52 Week High / Low 2530/1576

Avg. Daily Volume 713,026

Face Value (`) 10

BSE Sensex 16,183

Nifty 4,906

Reuters Code SBI.BO

Bloomberg Code SBIN@IN


Shareholding Pattern (%)

Promoters

61.6

MF / Banks / Indian Fls 17.1

FII / NRIs / OCBs 11.4

Indian Public / Others

9.9


Abs. (%) 3m

1yr

3yr

Sensex (12.3)

(11.9)

17.6
SBI (20.8)

(16.4)

13.3




Vaibhav Agrawal
022 – 3935 7800 Ext: 6808


Varun Varma
022 – 3935 7800 Ext: 6847


Sourabh Taparia
022 – 3935 7800 Ext: 6872

State Bank of India
Performance Highlights
4QFY2012 Result Update
|

Banking
May 21, 2012




State Ban
k

of India
|
4QFY2012

Result Update

May 21, 2012
2
Exhibit 1: 4QFY2012 performance
Particulars (` cr) 4QFY12

3QFY12 % chg (qoq) 4QFY11

% chg (yoy)

Interest earned 28,696

27,661 3.7 21,721

32.1

- on Advances / Bills 22,141

20,891 6.0 16,257

36.2

- on investments 6,205

6,413 (3.2) 5,218

18.9

- on balance with RBI & others 102

107 (5.2) 87

16.8

- on others 248

250 (0.8) 160

55.0

Interest Expended 16,992

16,196 4.9 13,663

24.4

Net Interest Income 11,704

11,466 2.1 8,058

45.2

Other income 5,264

2,996 75.7 4,815

9.3

Other income excl. treasury 5,290

3,216 64.5 4,481

18.1

- Fee Income 4,216

2,642 59.6 3,731

13.0

- Treasury Income* (26)

(221) (88.2) 335

(107.8)

- Forex Income 335

286 17.3 245

37.0

- Others 739

289 155.5 505

46.3

Operating income 16,968

14,462 17.3 12,874

31.8

Operating expenses 7,371

6,332 16.4 6,794

8.5

- Employee expenses 5,431

3,911 38.9 4,219

28.7

- Other Opex 1,940

2,420 (19.9) 2,575

(24.7)

Pre-provision Profit 9,597

8,130 18.0 6,080

57.8

Provisions & Contingencies 3,140

3,277 (4.2) 4,157

(24.5)

- Provisions for NPAs 2,837

3,006 (5.6) 3,264

(13.1)

- Provisions for Investments* 27

- NA 304

(91.1)

- Provisions for Std. Assets 375

195 92.6 631

(40.6)

- Other Provisions (98)

76 (228.8) (43)

131.4

PBT 6,456

4,853 33.0 1,923

235.8

Provision for Tax 2,406

1,590 51.4 1,902

26.5

PAT 4,050

3,263 24.1 21

NA

Effective Tax Rate (%) 37.3

32.8 451bp 98.9

(6165)bp


Source: Company, Angel Research; Note:*write back on investments netted from treasury loss in

3QFY2012

Exhibit 2: 4QFY2012 Actual vs. Angel estimates
Particulars (` cr) Actual Estimates

Var (%)

Net interest income 11,704 11,990

(2.4)

Non-interest income 5,264 3,958

33.0

Operating income 16,968 15,948

6.4

Operating expenses 7,371 7,216

2.1

Pre-prov. profit 9,597 8,731

9.9

Provisions & cont. 3,140 3,977

(21.0)

PBT 6,456 4,754

35.8

Prov. for taxes 2,406 1,205

99.6

PAT 4,050 3,549

14.1


Source: Company, Angel Research





State Ban

k

of India
|
4QFY2012

Result Update

May 21, 2012
3
Exhibit 3: 4QFY2012 performance analysis
Particulars 4QFY12

3QFY12 % chg (qoq) 4QFY11

% chg (yoy)

Advances (` cr) 867,579

846,266 2.5 756,719

14.7

Deposits (` cr) 1,043,647

1,000,965 4.3 933,933

11.7

Credit-to-Deposit Ratio (%) 83.1

84.5 (142)bp 81.0

210bp

Current deposits (` cr) 98,273

79,462 23.7 107,059

(8.2)

Saving deposits (` cr) 359,847

367,896 (2.2) 323,394

11.3

CASA deposits (` cr) 458,120

447,358 2.4 430,453

6.4

Reported dom. CASA ratio (%)

46.6

47.9 (133)bp 49.8

(320)bp

CAR (%) 13.9

11.6 226bp 12.0

188bp

Tier 1 CAR (%) 9.8

7.6 220bp 7.8

202bp

Profitability Ratios (%)





Cost of deposits 6.0

5.9 5bp 5.3

69bp

Yield on advances 11.1

10.9 12bp 9.6

149bp

Reported NIM (global) 3.9

4.1 (16)bp 3.1

82bp

Cost-to-income ratio 43.4

43.8 (34)bp 52.8

(933)bp

Asset quality





Gross NPAs (` cr) 39,676

40,098 (1.1) 25,326

56.7

Gross NPAs (%) 4.4

4.6 (17)bp 3.3

116bp

Net NPAs (` cr) 15,819

18,803 (15.9) 12,347

28.1

Net NPAs (%) 1.8

2.2 (40)bp 1.6

19bp

Provision Coverage Ratio (%) 68.1

62.5 558bp 65.0

315bp

Slippage ratio (%) 2.3

4.3 (200)bp 3.3

(100)bp

Credit cost (%) 0.9

0.9 (8)bp 1.1

(24)bp

Source: Company, Angel Research

Advances growth moderate
During 4QFY2012, the bank’s net advances grew by 14.7% yoy, driven by healthy
24.1% yoy growth in International loan book, 23.3% yoy growth in Agricultural
advances and 16.3% yoy growth in SME loans. Growth in retail advances was
however lower at 10.8% yoy on account of relative slower yoy growth in home
loans (14.3%) and education loans (13.2%) as compared to healthy growth of
20.9% in auto loans.
The bank’s loan book continues to remain well diversified, with no segment
accounting for more than 20% of the total loan book.
Overall deposits accretion remained moderate during 4QFY2012, registering a
growth of 11.7% yoy. Domestic saving deposits growth was modest at 11.3% yoy
which coupled with 8.2% yoy decline witnessed in volatile domestic current account
deposits lead the domestic CASA deposits to grow at subdued pace of 6.4% yoy.
The reported domestic CASA ratio as of 4QFY2012 stood at 46.6% (47.9% in
3QFY2012 and 49.8% in 4QFY2011)




State Ban
k

of India
|
4QFY2012

Result Update

May 21, 2012
4
Exhibit 4: Business growth moderates
Source: Company, Angel Research

Exhibit 5: CASA ratio declines
Source: Company, Angel Research


Exhibit 6: Segment-wise advances growth
Segment (%)
Large corporate 15.0
Mid-corporate 6.4
SME 16.3
Agri 23.3
International 24.1
Home 14.3
Auto 20.9
Education 13.2
Overall advances (net) 16.5

Source: Company, Angel Research

Exhibit 7: Loan book remain well-diversified
Source: Company, Angel Research


Overall NIMs dip by 16bp sequentially

The bank’s NIM contracted for both domestic (down by 11bp qoq to 4.28%) and
foreign operations (down by 24bp qoq to 1.53%). Consequently, overall NIMs for
the bank contracted by 16bp during the quarter to 3.89%. Contraction of 11bp
qoq in domestic NIMs was as a result of relatively higher sequential increase
registered in domestic cost of deposits and borrowings compared to 12bp qoq
increase witnessed in domestic yield on advances. As of 4QFY2012, the banks’ the
bulk deposits stand at a low of ~11% of the overall deposits book.
Exhibit 8: Overall reported NIM dip by 16bp qoq
Source: Company, Angel Research

Exhibit 9: partly on sequentially higher domestic CoD

Source: Company, Angel Research


21.3
19.8
18.0
16.1
16.5
14.7
14.0
16.1
16.5
13.8
13.9
11.7
82.7
81.0
81.1

81.2
84.5
83.1
76.0
80.0
84.0
88.0
-
5.0
10.0
15.0
20.0
25.0
3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12
Advances YoY growth (%) Deposits YoY growth (%)
49.8
47.9
47.8
47.9
46.6
24.2
18.8
6.4
12.0
6.4
-
7.0
14.0
21.0
28.0

30.0
34.0
38.0
42.0
46.0
50.0
54.0
4QFY11 1QFY12 2QFY12 3QFY12 4QFY12
Reported domestic CASA ratio (%) CASA yoy growth (%, RHS)
International
15%
Mid-
Corporate
19%
Large
Corporate
14%
SME
16%
Agricultural
13%
Retail
20%
Others
3%
3.07
3.62
3.79
4.05
3.89

2.00
2.50
3.00
3.50
4.00
4.50
4QFY11 1QFY12 2QFY12 3QFY12 4QFY12
(%)
5.26
5.66
5.83
5.90
5.95
4.8
5.0
5.2
5.4
5.6
5.8
6.0
4QFY11 1QFY12 2QFY12 3QFY12 4QFY12
(%)



State Ban
k

of India
|

4QFY2012

Result Update

May 21, 2012
5
Healthy growth in fee Income and higher dividend income drive
strong growth in non-interest income
During 4QFY2012, non-interest income (excl. treasury) for the bank grew strongly
by 18.1% yoy to `5,290cr, mostly on account of healthy 13.0% yoy growth in fee
income to `4,216cr, strong growth of 37.0% in forex income to `335cr and
significantly higher dividend income at `515cr in 4QFY2012 as compared to
`163cr in 4QFY2011. However, treasury registered a loss of `26cr during the
quarter as against profit of `335cr in 4QFY2011.
Exhibit 10: Strong gr. in non-int. income driven by healthy gr. in fee income
Particulars (` cr) 4QFY12

3QFY12

% chg (qoq) 4QFY11

% chg (yoy)

CEB 4,216

2,642

59.6 3,731

13.0

Treasury* (26)

(221)

(88.2) 335

(107.8)

Forex 335

286

17.3 245

37.0

Dividend 515

53

873.0 163

216.4

Others 224

236

(5.2) 342

(34.5)

Other income 5,264

2,996

75.7 4,815

9.3

Other income excl. treasury

5,290

3,216

64.5 4,481

18.1


Source: Company, Angel Research; Note:*write back on investments netted from treasury loss in

3QFY2012

NPA ratios improve sequentially on reduced slippages
On the asset-quality front, the bank’s annualized slippage ratio for the quarter
came at 2.3%, significantly lower than 4.3% witnessed in 3QFY2012 and 4.2%
registered in 2QFY2012. Almost 90.1% slippages were witnessed in the

Corporate, SME and Agri segments. However on a sequential basis, slippages
from both the segments- Corporate as well as SME- nearly halved to `2,417cr
from `3,948cr and to `1,072cr from `2,078cr, respectively. Decline in slippages
from the Agri segment was relatively higher at 58.9% qoq to `462cr. Even
amongst the corporate and SME segments slippages, major industries witnessing
sequentially higher slippages were infrastructure (`554cr vs. `124cr in 3QFY2012)
and textiles (`814cr vs. `462cr in 3QFY2012).
The NPA ratios improved sequentially with both gross and net NPA levels
decreasing on an absolute basis by 1.1% and 15.9% qoq, respectively. As of
4QFY2012 gross NPA ratio stands at 4.4% (4.6% in 3QFY2012), while net
NPA ratio stands at 1.8% (2.2% in 3QFY2012). The provisioning coverage
ratio (incl. technical write-offs) also improved by 558bp during 4QFY2012 to
68.1%.
The bank restructured accounts worth `5,134cr during 4QFY2012 which
included Air India’s `1,215cr and took their total restructured book to `42,744cr.
The slippages from the restructured book during 4QFY2012 stood at `1,361cr.




State Bank of India | 4QFY2012 Result Update

May 21, 2012
6
Exhibit 11: Slippages decline on a sequential basis
Source: Company, Angel Research

Exhibit 12: NPA ratios improve sequentially
Source: Company, Angel Research

Exhibit 13: Break-up of provisioning expenses
Particulars (` cr) 4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy)
NPA 2,837 3,006 (5.6) 3,264 (13.1)
Standard assets 375 195 92.6 631 (40.6)
Investments* 27 - NA 304 (91.1)
Others (98) 76 (228.8) (43) 131.4
Total Provisions 3,140 3,277 (4.2) 4,157 (24.5)

Source: Company, Angel Research; Note:*write back on investments netted from treasury loss in
3QFY2012

Cost ratios remained at normalized levels
During the quarter, staff expenses increased by 8.8% yoy to `3,821cr, while other
opex increased by 15.9% yoy to `2,420cr. The bank added 325 branches during
the quarter (645 during FY2012) to bolster its already strong branch network to
14,097 branches.
Exhibit 14: Opex growth trends
Particulars (` cr) 4QFY12 3QFY12
% chg
(qoq)
4QFY11
% chg
(yoy)
Payment to employees 3,017 3,055 (1.3) 2,827 6.7
Contrib. for employees 805 860 (6.4) 685 17.5
Total staff expenses (A)
3,821 3,914 (2.4) 3,512 8.8
Rent, taxes and lighting 508 529 (3.8) 436 16.5
Dep. on property 266 240 10.9 244 9.1

Others 1,646 1,692 (2.7) 1,407 16.9
Other opex (B) 2,420 2,461 (1.6) 2,088 15.9
Total opex (A)+(B) 6,242 6,375 (2.1) 5,599 11.5

Source: Company, Angel Research

Exhibit 15: Cost ratios remain at normalized levels
Source: Company, Angel Research


3.6 3.3 4.2 4.3 2.3
1.1
0.9
0.9
0.9
0.9
-
0.3
0.6
0.9
1.2
-
1.0
2.0
3.0
4.0
5.0
4QFY11 1QFY12 2QFY12 3QFY12 4QFY12
Slippages (%) Credit cost (%, RHS)
3.3

3.5
4.2
4.6
4.4
1.6
1.6
2.0
2.2
1.8
65.0
67.3
63.5
62.5
68.1
56.0
60.0
64.0
68.0
72.0
-
1.0
2.0
3.0
4.0
5.0
4QFY11 1QFY12 2QFY12 3QFY12 4QFY12
Gross NPAs (%) Net NPAs (%) NPA coverage (%, RHS)
52.8
45.3
46.0

43.8
43.4
2.3
1.9
2.1
2.0
2.2
1.7
1.8
1.9
2.0
2.1
2.2
2.3
2.4
-
10.0
20.0
30.0
40.0
50.0
60.0
4QFY11 1QFY12 2QFY12 3QFY12 4QFY12
Cost-to-income ratio (%) Opex to average assets (%, RHS)



State Ban
k

of India
|
4QFY2012

Result Update

May 21, 2012
7
Performance overview of subsidiaries
 SBI Life reported PAT of `556cr for FY2012, (growth of 52% yoy). The AUM as
of 4QFY2012 stood at `46,576cr as against `40,163cr in 4QFY2011.
 SBI Capital Markets registered a sharp 28% yoy decline in PAT to `251cr
during FY2012, reflecting the poor capital market activity.
 SBI Cards and Payment Services posted PAT of `38cr for FY2012 as against
~`7cr in FY2011.
 SBI DFHI recorded PAT of `44cr (de-growth of 23% yoy).
 SBI Funds Management’s average AUM as of 4QFY2012 stood at `42,042cr
(`41,671 in 4QFY2011). The company recorded a PAT figure of `61cr for
FY2012 (decline of 23% yoy).
 The overall SBI Group recorded net profit of `5,234cr and `15,973cr,
respectively during 4QFY2012 and entire FY2012.

Investment arguments
Strong CASA franchise
SBI has a strong CASA franchise (45%+) on account of its huge nationwide branch
network (14,097 as of FY2012). Even in FY2012, the bank domestic CASA ratio
stood at 46.6%, highest amongst all other PSU banks.

Strongest fee income among PSU banks
SBI has a relatively strong share of fee income, owing to its strong corporate and

government business relationships. In FY2012, the bank continued its dominance
with non-interest income/assets at 1.2% (highest among PSU banks).

Outlook and valuation
We expect SBI to outperform on account of its stronger core competitiveness and
ample levers to deliver healthy operating income growth while managing its
provisioning requirements. At the CMP, the stock is trading at 1.2x FY2014E ABV
(adjusting for value of subsidiaries 1.1x FY2014E ABV) vis-à-vis its historic range of
1.3–2.3x and median of 1.7x. Also, considering the bank’s dominant position and
reach, high fee income, superior earnings quality and recent signs of improvement
in asset quality, we recommend a Buy on the stock with a target price of `2,486.




State Ban
k

of India
|
4QFY2012

Result Update

May 21, 2012
8
Exhibit 16: SOTP valuation summary
Particulars Target multiple Value/share (`)

SBI 1.4x FY14E ABV 2,145

Associate Banks 0.7x-1.0x FY14E ABV 229

Life Insurance 13.0x FY14ENBP 72

Others (AMC, Cap Mkt, Factors, Cards)

40

SOTP value

2,486


Source: Angel Research

Exhibit 17: Key assumptions
Particulars (%)
Earlier estimates
Revised estimates
FY2013 FY2014 FY2013

FY2014

Credit growth 17.0 18.0 16.0

17.0

Deposit growth 19.0 19.0 18.0

18.0

CASA ratio 48.0 47.3 45.5

45.3

NIMs 3.7 3.7 3.7

3.7

Other income growth 21.2 16.8 18.3

14.3

Growth in staff expenses 10.0 15.0 16.0

16.0

Growth in other expenses 17.0 15.0 16.0

16.0

Slippages 3.7 3.6 3.4

3.3


Source: Angel Research

Exhibit 18: Change in estimates

Particulars (` cr)
FY2013
FY2014
Earlier
estimates

Revised
estimates

Var. (%)
Earlier
estimates
Revised
estimates

Var. (%)

Net interest income 52,746

50,951

(3.4) 61,829 60,037

(2.9)

Non-interest income 16,822

17,973

6.8 19,616 20,528

4.6

Operating income 69,568

68,925

(0.9) 81,445 80,565

(1.1)

Operating expenses 29,802

30,240

1.5 34,272 35,078

2.4

Pre-prov profit 39,766

38,685

(2.7) 47,173 45,487

(3.6)

Provisions & cont. 18,024

15,390

(14.6) 20,597 17,633

(14.4)

PBT 21,742

23,295

7.1 26,576 27,853

4.8

Prov. for taxes 6,917

7,421

7.3 8,472 8,886

4.9

PAT 14,825

15,874

7.1 18,104 18,967

4.8

Source: Angel Research




State Ban
k

of India
|
4QFY2012

Result Update

May 21, 2012
9
Exhibit 19: P/ABV band
Source: Company, Angel Research

Exhibit 20: P/E band
Source: Company, Angel Research

Exhibit 21: Premium/Discount to Sensex
Source: Company, Angel Research

0
1,000
2,000
3,000
4,000

5,000
Apr-06
Nov-06
Jun-07
Jan-08
Aug-08
Mar-09
Oct-09
May-10
Dec-10
Jul-11
Feb-12
Sep-12
Price (`)
1.0x 1.5x 2.0x 2.5x 3.0x
0
1,000
2,000
3,000
4,000
5,000
Jan-05
Sep-05
May-06
Jan-07
Sep-07
May-08
Jan-09
Sep-09
May-10

Jan-11
Sep-11
May-12
Price (`) 9x 12x 15x 18x
(70)
(60)
(50)
(40)
(30)
(20)
(10)
0
10
20
Apr-06
Dec-06
Aug-07
Apr-08
Dec-08
Aug-09
Apr-10
Dec-10
Aug-11
Apr-12
Discount to Sensex Avg. Historical Discount



State Ban
k

of India
|
4QFY2012

Result Update

May 21, 2012
10
Exhibit 22: Angel EPS forecast vs. consensus
Year Angel forecast

Bloomberg consensus

Var (%)

FY2013E
236.6 217.7 8.7
FY2014E
282.7 263.0 7.5

Source: Bloomberg, Angel Research

Exhibit 23: Recommendation summary
Company Reco.
CMP
(`)
Tgt. price
(`)
Upside

(%)

FY2014E

P/ABV (x)

FY2014E

Tgt. P/ABV (x)

FY2014E

P/E (x)

FY2012-14E
EPS CAGR (%)
FY2014E

RoA (%)

FY2014E

RoE (%)

AxisBk Buy 963 1,476 53.3

1.3

2.0

6.9

16.4 1.5

20.3

FedBk Neutral 411 - -

1.0

-

7.2

12.5 1.3

14.5

HDFCBk Accumulate 497 567 13.9

2.9

3.3

14.0

27.0 1.7

22.1

ICICIBk* Buy 811 1,174 44.8

1.3

1.9

10.0

20.4 1.5

16.0

SIB Neutral 22 - -

1.0

-

5.9

4.5 0.8

17.5

YesBk Buy 321 450 40.1

1.6

2.3

7.7

22.5 1.4

23.3

AllBk Accumulate 146 166 13.5

0.6

0.7

3.5

6.2 0.9

17.6

AndhBk Neutral 107 - -

0.6

-

4.2

3.3 0.9

16.0

BOB Buy 666 925 39.1

0.8

1.1

4.4

11.1 1.1

18.2

BOI Buy 353 411 16.3

0.7

1.0

4.5

23.3 0.8

16.9

BOM Accumulate 48 53 10.5

0.6

0.7

3.7

45.3 0.7

17.2

CanBk Buy 393 522 33.0

0.7

0.9

4.2

11.8 0.9

16.4

CentBk Neutral 76 - -

0.7

-

3.7

100.1 0.5

14.4

CorpBk Buy 406 486 19.7

0.5

0.7

3.6

5.3 0.8

16.5

DenaBk Buy 86 111 28.9

0.5

0.7

3.3

6.6 0.9

17.0

IDBI# Buy 90 117 30.6

0.5

0.7

3.7

22.7 0.9

14.8

IndBk Accumulate 183 197 7.7

0.7

0.7

4.2

4.8 1.1

16.9

IOB Buy 80 96 19.9

0.5

0.6

3.7

28.3 0.6

13.9

J&KBk Accumulate 896 952 6.2

0.8

0.9

4.9

5.5 1.2

17.6

OBC Buy 219 274 24.7

0.5

0.6

3.4

27.7 0.8

14.3

PNB Buy 723 1,015 40.5

0.7

1.0

4.1

10.3 1.0

18.1

SBI* Buy 2,007 2,486 23.8

1.2

1.5

7.1

27.3 1.1

19.3

SynBk Buy 89 131 46.8

0.5

0.7

3.0

17.3 0.8

17.1

UcoBk Neutral 68 - -

0.7

-

3.8

13.0 0.6

15.4

UnionBk Buy 203 276 35.7

0.7

0.9

4.0

24.8 0.8

17.5

UtdBk Buy 57 78 36.6

0.4

0.6

2.5

22.5 0.7

16.5

VijBk Neutral 54 - -

0.6

-

4.4

13.5 0.5

13.7


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




State Ban
k

of India
|
4QFY2012

Result Update

May 21, 2012
11
Income statement
Y/E March (` cr) FY09

FY10

FY11 FY12 FY13E

FY14E

Net Interest Income 20,873

23,671

32,526 43,291 50,951

60,037

- YoY Growth (%) 22.6

13.4

37.4 33.1 17.7

17.8

Other Income 12,691

14,968

15,825 15,221 17,973

20,528

- YoY Growth (%) 35.0

17.9

5.7 (3.8) 18.1

14.2

Operating Income 33,565

38,640

48,351 58,512 68,925

80,565

- YoY Growth (%) 27.0

15.1

25.1 21.0 17.8

16.9

Operating Expenses 15,649

20,319

23,015 26,069 30,240

35,078

- YoY Growth (%) 24.1

29.8

13.3 13.3 16.0

16.0

Pre - Provision Profit 17,916

18,321

25,336 32,443 38,685

45,487

- YoY Growth (%) 29.7

2.3

38.3 28.1 19.2

17.6

Prov. & Cont. 3,736

4,396

10,385 13,960 15,390

17,633

- YoY Growth (%) 10.8

17.7

136.2 34.4 10.2

14.6

Profit Before Tax 14,180

13,925

14,951 18,483 23,295

27,853

- YoY Growth (%) 35.8

(1.8)

7.4 23.6 26.0

19.6

Prov. for Taxation 5,058

4,759

6,686 6,776 7,421

8,886

- as a % of PBT 35.7

34.2

44.7 36.7 31.9

31.9

PAT 9,121

9,166

8,265 11,707 15,874

18,967

- YoY Growth (%) 35.5

0.5

(9.8) 41.7 35.6

19.5


Balance sheet
Y/E March (` cr) FY09

FY10

FY11 FY12 FY13E

FY14E

Share Capital 635

635

635 671 671

671

Reserves & Surplus

57,313

65,314

64,351 83,280 96,045

111,200

Deposits 742,073

804,116

933,933 1,043,647 1,231,504

1,453,175

- Growth (%) 38.1

8.4

16.1 11.7 18.0

18.0

Borrowings 53,714

71,031

79,945 80,622 94,892

111,760

Tier 2 Capital 30,344

31,980

39,624 46,384 53,805

62,952

Other Liab & Prov.

80,353

80,337

105,248 80,915 94,893

111,228

Total Liabilities 964,432

1,053,414

1,223,736 1,335,519 1,571,810

1,850,985

Cash balances 55,546

61,291

94,396 54,076 49,260

58,127

Bank balances 48,858

24,898

28,479 43,087 50,714

59,728

Investments 275,954

295,785

295,601 312,198 396,689

474,895

Advances 542,503

631,914

756,719 867,579 1,006,392

1,177,478

- Growth (%) 30.2

16.5

19.8 14.7 16.0

17.0

Fixed Assets 3,838

4,413

4,764 5,467 6,241

7,130

Other Assets 37,733

35,113

43,778 53,113 62,514

73,626

Total Assets 964,432

1,053,414

1,223,736 1,335,519 1,571,810

1,850,985

- Growth (%) 33.8

9.2

16.2 9.2 17.7

17.8









State Ban
k

of India
|
4QFY2012

Result Update

May 21, 2012
12

Ratio analysis
Y/E March FY09

FY10 FY11 FY12 FY13E

FY14E

Profitability Ratios (%)






NIMs 2.6

2.5 3.0 3.6 3.7

3.7

Cost to Income Ratio 46.6

52.6 47.6 44.6 43.9

43.5

RoA 1.1

0.9 0.7 0.9 1.1

1.1

RoE 18.2

15.7 13.3 16.7 18.6

19.3

B/S ratios (%)






CASA Ratio 41.6

47.3 49.4 46.6 45.5

45.3

Credit/Deposit Ratio 73.1

78.6 81.0 83.1 81.7

81.0

CAR 14.3

13.4 12.0 13.9 13.7

13.6

- Tier I 9.4

9.5 7.8 9.2 8.9

8.7

Asset Quality (%)






Gross NPAs 2.9

3.0 3.3 4.5 5.5

6.3

Net NPAs 1.8

1.7 1.6 1.8 1.8

1.8

Slippages 2.6

2.2 2.8 3.5 3.4

3.3

Loan Loss Prov./Avg. Assets 0.3

0.5 0.7 0.9 1.0

1.0

Provision Coverage 39.2

59.2 65.0 68.1 72.5

75.0

Per Share Data (`)






EPS 143.7

144.4 130.1 174.5 236.6

282.7

ABVPS 824.2

972.5 967.6 1,200.1 1,416.5

1,667.1

DPS 29.0

30.0 30.0 35.0 45.5

55.0

Valuation Ratios






PER (x) 14.0

13.9 15.4 11.5 8.5

7.1

P/ABVPS (x) 2.4

2.1 2.1 1.7 1.4

1.2

Dividend Yield 1.4

1.5 1.5 1.7 2.3

2.7

DuPont Analysis (%)






NII 2.5

2.4 2.9 3.4 3.5

3.5

(-) Prov. Exp. 0.4

0.4 0.9 1.1 1.1

1.0

Adj. NII 2.0

1.9 2.0 2.3 2.5

2.5

Treasury 0.3

0.2 0.1 (0.0) 0.0

0.0

Int. Sens. Inc. 2.4

2.1 2.0 2.3 2.5

2.5

Other Inc. 1.2

1.3 1.3 1.2 1.2

1.2

Op. Inc. 3.5

3.4 3.3 3.5 3.7

3.7

Opex 1.9

2.0 2.0 2.0 2.1

2.1

PBT 1.7

1.4 1.3 1.4 1.6

1.6

Taxes 0.6

0.5 0.6 0.5 0.5

0.5

RoA 1.1

0.9 0.7 0.9 1.1

1.1

Leverage (x) 17.2

17.7 19.1 18.8 17.4

17.8

RoE 18.2

15.7 13.3 16.7 18.6

19.3

State Ban
k

of India
|
4QFY2012

Result Update

May 21, 2012
13



Research Team Tel: 022 - 39357800 E-mail: Website: www.angelbroking.com

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Disclosure of Interest Statement State Bank of India
1. Analyst ownership of the stock No
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4. Broking relationship with company covered No

Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%)

Neutral (-5 to 5%)

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

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