4QFY2011 Result Update | Banking

May 6, 2011

Canara Bank
Performance Highlights

Particulars (` cr) NII Pre-prov. profit PAT 4QFY11 1,973 1,695 899 3QFY11 2,119 1,513 1,106 % chg (qoq) (6.9) 12.0 (18.7) 4QFY10 1,598 1,430 503 % chg (yoy) 23.5 18.5 78.7

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 25,680 1.0 844/345 1,16,112 10 18,519 5,551 CNBK.BO CBK@IN

`580 -

Source: Company, Angel Research

For 4QFY2011, Canara Bank posted a disappointing set of results with high slippages and a sharp decline in reported NIM on a sequential basis. We recommend a Neutral rating on the stock due to its weak liability franchise and persistently high slippages. Healthy business growth but NIM and high slippages disappoint: Business momentum during 4QFY2011 was healthy, with advances and deposits growing by 11.9% qoq (25.5% yoy) and 11.6% qoq (25.3% yoy), respectively. Saving deposits were flat sequentially; and on a yoy basis, growth moderated to 17.5% yoy from 27.5% yoy in 3QFY2011. Due to year-end surge in current account deposits, the bank was able to sustain its reported CASA ratio above 30%. Reported NIM fell by ~30bp qoq to 2.99% due to a sharp rise in cost of funds. During FY2011, the bank took a hit of `890cr towards second pension option liability and `138cr towards enhancement of gratuity limits. Slippages ratio for the quarter was high at 4.4% compared to 1.2% in 3QFY2011 and 1.3% in 9MFY2011. The sharp rise in slippages can be partly attributed to switchover to system-based NPA recognition for accounts above `10lakhs. There were no major chunky accounts in slippages, as accounts above `1cr, which slipped into NPAs during 4QFY2011, accounted for only `350cr out of the total slippages of over `1,800cr. However, recoveries picked up sharply both on a qoq as well as yoy basis, which aided the bank in containing gross NPA ratio at 1.5%. The provision coverage ratio including technical write-offs declined by ~300bp qoq to 73.0%. Outlook and valuation: At the CMP, the stock is trading at 1.1x FY2013E ABV of `531.1 compared to its five-year range of 0.81.4x with a median of 1.2x. Taking into account the persistently high slippages and expected NIM pressures, we believe the stock is fairly priced near its five-year median trading multiple. Hence, we recommend a Neutral rating on the stock. Key financials
Y/E March (` cr) NII % chg Net profit % chg NIM (%) EPS (`) P/E (x) P/ABV (x) RoA (%) RoE (%)
Source: Company, Angel Research

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 67.7 11.5 15.0 5.8

Abs. (%) Sensex Canara Bank

3m 2.8 3.1

1yr 9.0 32.1

3yr 6.6 138.7

FY2010 5,681 20.4 3,021 45.8 2.4 73.7 7.9 2.1 1.2 26.8

FY2011 7,823 37.7 4,026 33.2 2.7 90.9 6.4 1.4 1.3 26.4

FY2012E 8,422 7.7 4,020 (0.1) 2.4 90.7 6.4 1.2 1.1 20.6

FY2013E 9,211 9.4 3,978 (1.0) 2.2 89.8 6.5 1.1 0.9 17.6

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

Shrinivas Bhutda
022 3935 7800 Ext: 6845 shrinivas.bhutda@angelbroking.com

Please refer to important disclosures at the end of this report

Canara Bank | 4QFY2011 Result Update

Exhibit 1: 4QFY2011 performance

Particulars (` cr) Interest earned - on Advances / Bills - on investments - on balance with RBI & others - on 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 - Other Provisions PBT Provision for Tax PAT Effective Tax Rate (%)
Source: Company, Angel Research

4QFY11 3QFY11 % chg (qoq) 4QFY10 % chg (yoy) 6,418 4,823 1,521 73 1 4,445 1,973 933 951 249 (18) 327 375 2,906 1,211 783 428 1,695 546 541 5 1,149 250 899 21.8 5,908 4,326 1,531 51 0 3,789 2,119 537 508 169 29 72 267 2,656 1,143 784 359 1,513 157 130 27 1,356 250 1,106 18.4 8.6 11.5 (0.6) 42.5 544.4 17.3 (6.9) 73.8 87.3 47.3 NA 354.2 40.6 9.4 6.0 (0.2) 19.3 12.0 247.1 316.2 (81.8) (15.3) (18.7) 332bp 4,797 3,545 1,180 54 17 3,199 1,598 710 596 213 114 149 234 2,308 877 498 379 1,430 727 596 131 703 200 503 28.4 33.8 36.0 28.9 34.4 (96.6) 38.9 23.5 31.4 59.5 16.9 NA 119.5 60.1 25.9 38.0 57.1 13.0 18.5 (24.9) (9.2) (96.2) 63.4 25.0 78.7 (669)bp

May 6, 2011

Canara Bank | 4QFY2011 Result Update

Exhibit 2: 4QFY2011 performance analysis

Particulars Advances (` cr) Deposits (` cr) Credit-to-Deposit Ratio (%) Current deposits (` cr) Saving deposits (` cr) CASA deposits (` cr) Reported CASA ratio (%) CAR (%) Tier 1 CAR (%) Profitability Ratios (%) Calculated NIM Cost-to-income ratio Asset quality Gross NPAs (` cr) Gross NPAs (%) Net NPAs (` cr) Net NPAs (%) Provision Coverage Ratio (%) Slippage ratio (%) Credit cost (%)
Source: Company, Angel Research

4QFY11

3QFY11

% chg (qoq)

4QFY10 % chg (yoy) 25.5 25.3 11bp 33.3 17.5 21.8 45bp 195bp 233bp (3)bp 366bp 19.3 (7)bp 30.4 5bp (471)bp 254bp (26)bp

212,467 189,882 293,973 263,497 72.3 24,500 58,617 83,117 30.3 15.4 10.9 2.6 41.7 3,089 1.5 2,347 1.1 73.0 4.4 0.7 72.1 17,938 58,558 76,496 30.5 13.0 8.3 3.0 43.0 2,753 1.4 1,991 1.1 75.9 1.2 0.2

11.9 169,335 11.6 234,651 21bp 36.6 0.1 8.7 (20)bp 236bp 260bp (43)bp (136)bp 12.2 1bp 17.9 6bp (292)bp 313bp 50bp 72.2 18,386 49,875 68,261 29.9 13.4 8.5 2.6 38.0 2,590 1.5 1,800 1.1 77.7 1.8 0.9

Healthy business growth but margins slide sequentially

The banks business momentum further picked up pace in 4QFY2011. Advances growth at 11.9% qoq (25.5% yoy) and deposits growth at 11.6% qoq (25.3% yoy) were well above the industrys growth rate. Healthy sequential loan growth was driven by corporates and priority sector advances. Consequent to the reclassification of short-term lending to the infrastructure sector, the share of infra to total loans of the bank came down to 16.3% from 22.7% in 3QFY2011.

Exhibit 3: Traction in business growth maintained

Adv. qoq chg (%) 15.0 12.0 9.0 6.0 72.2 72.8 72.1 70.7 Dep. qoq chg (%) CDR (%, RHS) 74.0 72.3 72.0

Exhibit 4: CASA deposits growth moderates

Calculated CASA ratio 30.0 29.0 28.0 27.0 21.5 28.8 22.9 CASA yoy growth (%, RHS) 27.7 21.8 35.0 28.0 21.0 14.0

70.0

14.9 11.7

11.9 11.6

29.1

29.0

28.9

29.0

2.6 1.8

1.3 4.3

7.8 5.7

3.0 -

68.0 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11

25.0 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11

Source: Company, Angel Research

28.3

26.0

7.0 -

Source: Company, Angel Research

On the deposits side, saving deposits were flat sequentially and their growth moderated to 17.5% yoy from 27.5% yoy in 3QFY2011. However, the bank was

May 6, 2011

Canara Bank | 4QFY2011 Result Update

able to sustain its reported CASA ratio at ~30% levels on a yoy basis due to 33.3% yoy growth in current account deposits.

Exhibit 5: MSME and agriculture witness strong traction

Particulars (` cr) Agri SME Corporate Retail Net advances
Source: Company, Angel Research

4QFY11 29,656 37,684 113,555 31,572

3QFY11 % chg (qoq) 27,056 35,348 98,529 28,949 9.6 6.6 15.3 9.1

4QFY10 % chg (yoy) 25,052 31,074 87,504 25,705 18.4 21.3 29.8 22.8 25.5

212,467 189,882

11.9 169,335

Reported NIM for the quarter slipped by ~30bp qoq to 2.99% due to rising cost of funds for the system as a whole and the banks relatively weak liability franchise. Due to a lower CASA base, the banks reliance on bulk deposits and certificate of deposits (CDs) is relatively on the higher side, at ~24.5% of total deposits. Management is confident of maintaining NIM over 3% for FY2012. However, on a conservative basis, we are building in a ~30bp decline in NIM for FY2012 and a ~15bp further fall for FY2013, considering the higher interest rate regime and the relatively weak liability franchise of the bank.

Strong traction in fee income sequentially on the back of revision in charges; recoveries also pick up sharply
Fee income showed healthy 47.3% qoq growth as the bank had revised charges across the board in January 2011. However, on a yoy basis fee income growth (16.9%) continued to lag loan growth (25.5%). Recoveries from written-off accounts witnessed a sharp pick-up both on a sequential (up 354.2%) and yoy basis (up 119.5%) to `327cr. For FY2011 as a whole, recoveries from written-off accounts rose by 36.7% to `555cr. For FY2012, management is confident of achieving even higher recoveries on the back of technically written-off account pool of over `5,000cr.

Exhibit 6: Treasury income trebles yoy; recoveries also pick up sharply

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

4QFY11 3QFY11 249 (18) 327 375 933 951 169 29 72 267 537 508

% chg (qoq) 4QFY10 47.3 NA 354.2 40.6 73.8 87.3 213 114 149 234 710 596

% chg (yoy) 16.9 NA 119.5 60.1 31.4 59.5

Slippages jump up
Slippages for the quarter rose substantially to over `1,800cr from aggregate slippages of `1,670cr in 9MFY2011. Slippages were abnormally high, as slippages from accounts over `1cr constituted for only ~`350cr. The rise in slippages can be partly attributed to switching to system-based NPA recognition for
May 6, 2011

Canara Bank | 4QFY2011 Result Update

accounts above `10lakhs. However, on account of strong recoveries of over `800cr during the quarter, the bank was able to contain the gross NPA ratio at 1.5%. Provision coverage ratio including technical write-offs declined to 73.0% from 75.9% in 3QFY2011.

Exhibit 7: Sharp rise in slippages

Slippages (%) 5.0 4.0 3.0 2.0 0.2 0.3 0.2 0.9 0.7 Credit cost (%, RHS) 1.0 0.8 0.6 0.4

Exhibit 8: PCR dips by ~300bp sequentially

Gross NPAs (%) 2.0 77.7 1.5 1.0 0.5 78.0 Net NPAs (%) PCR (%, RHS) 80.0 77.1 75.9 73.0 77.5 75.0 72.5

2.2

1.2

1.5

1.2

4.4

1.5 1.1

1.5 1.0

1.5 1.1

1.4 1.1

4QFY10 1QFY11 2QFY11 3QFY11 4QFY11

4QFY10 1QFY11 2QFY11 3QFY11 4QFY11

1.5 1.1
70.0 1.5

1.0

0.2

Source: Company, Angel Research

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

Restructured advances declined by ~`670cr during the quarter; ~`550cr was reduction on account of rectification of double counting earlier and ~`150cr was deduction due to technicalities.

Operating costs rise yoy due to employee benefit provisions

Employee expenses rose substantially on a yoy basis due to pension and gratuity-related liabilities. The bank has determined gratuity and pension liabilities at `2,373cr and `681cr, respectively. Of these, ~`520cr pertained to pension liability for retired employees, `370cr was towards one-fifth amortisation of pension liability for serving employees and `138cr was for one-fifth amortisation of gratuity liability for serving employees; these have been charged off in the profit and loss account for FY2011 itself. The balance liabilities carried forward on account of pension and gratuity amount to `1,483cr and `544cr, respectively, which will be amortised over the next four years.

Exhibit 9: Network expansion at a moderate pace

3,300 3,200 3,100 3,000 2,900 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11 3,061 3,066 3,174 3,257

Exhibit 10: Cost ratios rise sharply on a yoy basis

Cost-to-income ratio (%) 44.0 42.0 40.0 38.0 1.4 1.5 1.6 Opex to average assets (%, RHS) 1.6 1.6 1.6 1.5 1.5 1.4 1.4 1.3 1.3 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11
Source: Company, Angel Research

3,046

38.0

39.7

43.4

43.0

34.0

Source: Company, Angel Research

May 6, 2011

41.7

36.0

Canara Bank | 4QFY2011 Result Update

Comfortable capital adequacy

The bank did a Qualified Institutional Placement (QIP) of `1,993cr during the quarter, which has helped in shoring up the tier-I capital ratio at over 10.5%. Though the governments holding in the bank has come down to 67.7% post the QIP, there is still substantial headroom for raising tier-I capital, going forward.

Investment concerns
Weak liability franchise likely to accentuate NIM pressures
The bank has a relatively weaker liability profile with a calculated CASA base of sub-30% at 28.3%. In fact, in 4QFY2011, saving deposits were flat sequentially; on a yoy basis, their growth moderated to 17.5% from 27.5% in 3QFY2011. Even the relatively low CASA ratio as of 4QFY2011 was aided by year-end surge (36.6% qoq) in the more volatile current account deposits. The bank has a relatively higher proportion of more costly bulk deposits and CDs at ~25% of deposits, which makes the bank more vulnerable to faster rise in cost of funds in the current rising interest rate scenario. Margin pressures were evident from the ~30bp sequential NIM reduction in 4QFY2011. Accordingly, we are building in a ~30bp decline in NIM for FY2012 and a further ~15bp fall in FY2013.

Outlook and valuation

At the CMP, the stock is trading at 1.1x FY2013E ABV of `531.1 compared to its five-year range of 0.81.4x with a median of 1.2x. Taking into account the persistently high slippages and expected NIM pressures, we believe the stock is fairly priced near its five-year median trading multiple. Hence, we recommend a Neutral rating on the stock.

May 6, 2011

Canara Bank | 4QFY2011 Result Update

Exhibit 11: Key assumptions

Particulars (%) Credit growth Deposit growth CASA ratio NIMs Other income growth Growth in staff expenses Growth in other expenses Slippages Treasury gain/(loss) (% of investments)
Source: Angel Research

Earlier estimates FY2012 19.0 20.0 28.4 2.7 15.5 22.0 18.0 1.6 0.2 FY2013 19.0 20.0 26.9 2.6 17.4 15.0 16.0 1.4 0.2

Revised estimates FY2012 20.0 18.0 27.3 2.4 12.7 (2.5) 15.0 1.9 0.2 FY2013 20.0 17.0 26.6 2.2 17.8 15.0 15.0 1.9 0.2

Exhibit 12: Change in estimates

FY2012 Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Angel Research

FY2013 Earlier estimates 10,574 3,263 13,837 6,071 7,766 1,385 6,381 2,070 4,311 Revised Var. (%) estimates 9,211 (12.9) 3,589 12,800 5,250 7,550 1,662 5,889 1,911 3,978 10.0 (7.5) (13.5) (2.8) 20.0 (7.7) (7.7) (7.7)

Earlier estimates 9,099 2,778 11,877 5,264 6,613 942 5,671 1,560 4,112

Revised Var. (%) estimates 8,422 (7.4) 3,047 11,470 4,565 6,905 1,545 5,360 1,340 4,020 9.7 (3.4) (13.3) 4.4 64.0 (5.5) (14.1) (2.2)

Exhibit 13: P/ABV band

Price (`) 1000 800 600 400 200 0 0.75x 1x 1.25x 1.5x 1.75x

Dec-02

Aug-04

Aug-07

Dec-10

Apr-06

Apr-09

Jul-10

Oct-03

Feb-10

Oct-11

Mar-04

Mar-07

Nov-05

Nov-08

May-03

Source: Company, Angel Research

May 6, 2011

May-11

Mar-12

Sep-06

Sep-09

Jun-05

Jan-05

Jan-08

Jun-08

Canara Bank | 4QFY2011 Result Update

Exhibit 14: Recommendation summary

Company AxisBk FedBk HDFCBk ICICIBk* SIB YesBk AllBk BOB BOI CanBk CorpBk DenaBk IDBI# IndBk IOB J&KBk OBC PNB SBI* UcoBk UnionBk UtdBk VijBk Reco. Buy Accumulate Accumulate Buy Accumulate Accumulate Accumulate Buy Buy Neutral Buy Buy Neutral Neutral Accumulate Accumulate Buy Buy Buy Neutral Accumulate Accumulate Reduce CMP (`) 1,254 403 2,299 1,081 23 300 203 870 422 580 570 98 137 237 156 783 337 1,100 2,643 100 320 100 77 Tgt. price (`) 1,661 453 2,582 1,355 25 334 227 1,053 488 670 116 171 877 402 1,326 3,199 356 111 71 Upside (%) 32.4 12.2 12.3 25.3 9.7 11.2 11.9 21.0 15.8 17.6 18.4 9.5 12.0 19.2 20.6 21.0 11.4 10.5 (7.9) FY2013E P/ABV (x) 2.0 1.1 3.1 2.0 1.2 1.9 1.0 1.2 1.1 1.1 0.9 0.7 0.9 1.0 1.0 0.8 0.8 1.2 1.7 1.0 1.1 0.8 1.0 FY2013E Tgt P/ABV (x) 2.7 1.2 3.5 2.5 1.3 2.2 1.1 1.5 1.3 1.1 0.9 1.1 1.0 0.9 1.5 2.1 1.3 0.9 0.9 FY2013E P/E (x) 10.0 7.9 16.2 15.7 7.0 10.7 5.8 6.6 6.4 6.5 5.3 4.8 6.2 5.1 6.1 5.8 5.3 6.3 9.1 6.5 6.4 5.9 7.5 FY2011E-13E EPS CAGR (%) 23.1 22.6 29.5 24.0 11.7 16.0 7.8 10.2 20.0 (0.6) 6.5 6.1 14.3 9.7 16.7 3.5 11.2 11.5 27.3 14.2 10.3 13.5 8.5 FY2013E RoA (%) 1.6 1.4 1.7 1.5 0.9 1.2 0.9 1.1 0.8 0.9 0.9 0.8 0.7 1.4 0.7 1.2 0.9 1.1 1.2 0.6 0.8 0.6 0.5 FY2013E RoE (%) 21.6 14.2 20.7 15.6 17.3 19.7 17.4 19.4 18.2 17.6 18.0 16.1 14.5 20.2 16.0 15.6 15.1 21.2 21.1 17.6 18.3 13.9 12.7

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

May 6, 2011

Canara Bank | 4QFY2011 Result Update

Income statement
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 (%) FY08 3,538 (12.1) 2,308 52.7 5,846 5.6 2,791 8.8 3,055 2.7 1,150 (11.7) 1,905 14.0 340 17.8 1,565 10.1 FY09 4,718 33.4 2,427 5.1 7,145 22.2 3,065 9.8 4,080 33.5 1,507 31.1 2,572 35.0 500 19.4 2,072 32.4 FY10 5,681 20.4 3,001 23.6 8,681 21.5 3,478 13.5 5,204 27.6 1,382 (8.3) 3,821 48.6 800 20.9 3,021 45.8 FY11 7,823 37.7 2,703 (9.9) 10,526 21.3 4,419 27.1 6,107 17.4 1,081 (21.8) 5,026 31.5 1,000 19.9 4,026 33.2 FY12E 8,422 7.7 3,047 12.7 11,470 9.0 4,565 3.3 6,905 13.1 1,545 42.9 5,360 6.6 1,340 25.0 4,020 (0.1) FY13E 9,211 9.4 3,589 17.8 12,800 11.6 5,250 15.0 7,550 9.4 1,662 7.6 5,889 9.9 1,911 32.4 3,978 (1.0)

Balance sheet
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 (%) FY08 410 10,090 154,072 8.2 2,517 6,115 7,175 180,380 13,365 4,513 49,812 107,238 8.9 2,917 2,536 180,380 8.8 FY09 410 11,798 186,893 21.3 7,057 6,944 6,498 219,599 10,037 6,623 57,777 138,219 28.9 2,929 4,014 219,599 21.7 FY10 410 14,262 234,651 25.6 1,041 7,399 6,944 264,708 15,719 3,934 69,677 169,335 22.5 2,859 3,184 264,708 20.5 FY11 443 19,597 293,973 25.3 4,977 9,284 7,805 336,079 22,015 8,693 83,700 212,467 25.5 2,844 6,359 336,079 27.0 FY12E 443 22,742 346,888 18.0 5,873 11,141 9,486 396,573 22,548 10,258 98,047 254,961 20.0 3,256 7,504 396,573 18.0 FY13E 443 25,844 405,859 17.0 6,872 13,369 11,603 463,990 26,381 12,002 107,180 305,953 20.0 3,695 8,779 463,990 17.0

May 6, 2011

Canara Bank | 4QFY2011 Result Update

Ratio analysis
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 2.0 0.7 1.4 0.3 1.6 1.1 2.7 1.6 1.1 0.2 0.9 21.1 19.1 2.4 0.8 1.6 0.3 1.9 0.9 2.8 1.5 1.3 0.3 1.0 21.8 22.6 2.3 0.6 1.8 0.4 2.1 0.9 3.0 1.4 1.6 0.3 1.2 21.4 26.8 2.6 0.4 2.2 0.1 2.3 0.8 3.1 1.5 1.7 0.3 1.3 19.7 26.4 2.3 0.4 1.9 0.0 1.9 0.8 2.7 1.2 1.5 0.4 1.1 18.8 20.6 2.1 0.4 1.8 0.0 1.8 0.8 2.6 1.2 1.4 0.4 0.9 19.0 17.6 15.2 3.1 1.4 11.5 2.6 1.4 7.9 2.1 1.7 6.4 1.4 1.9 6.4 1.2 2.9 6.5 1.1 2.9 38.2 188.4 8.0 50.5 221.3 8.0 73.7 277.7 10.0 90.9 400.3 11.0 90.7 468.2 17.0 89.8 531.1 17.0 1.3 0.9 1.4 0.5 34.5 1.6 1.1 2.2 0.5 30.5 1.5 1.1 2.4 0.6 77.7 1.4 1.1 2.1 0.3 73.0 2.1 1.1 1.9 0.3 72.0 2.6 1.2 1.9 0.3 70.0 31.5 69.6 13.3 7.0 30.1 74.0 13.0 7.4 29.1 72.2 12.5 7.9 28.3 72.3 15.4 10.9 27.3 73.5 13.2 8.6 26.6 75.4 13.2 8.5 2.1 47.7 0.9 19.1 2.4 42.9 1.0 22.6 2.4 40.1 1.2 26.8 2.7 42.0 1.3 26.4 2.4 39.8 1.1 20.6 2.2 41.0 0.9 17.6 FY08 FY09 FY10 FY11 FY12E FY13E

May 6, 2011

10

Canara Bank | 4QFY2011 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 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 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 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 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 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 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 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%)

May 6, 2011

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