2QFY2012 Result Update | Banking

November 2, 2011

Oriental Bank of Commerce

Performance Highlights

Particulars (` cr) NII Pre-prov. profit PAT

Source: Company, Angel Research

ACCUMULATE
CMP Target Price `286 `301
12 months
% chg (yoy) (8.1) (5.9) (57.8)

2QFY12 989 758 168

1QFY12 1,018 801 355

% chg (qoq) (2.8) (5.4) (52.7)

2QFY11 1,077 806 398

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 8,347 1.0 545/275 81,152 10 17,465 5,258 ORBC.BO OBC@IN

For 2QFY2012, OBC reported a disappointing set of results with net profit dipping by 57.8% yoy due to considerably higher-than-expected provisioning expenses. On the pre-provision profit level, results were in-line with our expectations. A sharp surge in slippages and the consequent interest income reversal leading to a qoq decline in reported NIM were the key negatives of the results. We recommend Accumulate on the stock on inexpensive valuations. Higher slippages dent overall profitability: On the business side, the banks net advances showed healthy momentum rising by 6.4% qoq (up by reasonable 20.6% yoy) as compared to deposits increasing by 3.5% qoq (up 18.9% yoy), leading to a 195bp qoq expansion in CD ratio. CASA deposits growth was muted both on a sequential (just 1.3%) and on a yoy (7.1%) basis. Consequently, calculated CASA ratio dipped by 252bp yoy (down 49bp qoq) to 22.9%. The recognition of slippages under the system-based NPA recognition platform led to an interest income reversal of `137cr, which partly dragged down the banks reported NIM. Sequentially, cost of funds rose by 29bp vs. a 12bp rise in yield on funds, leading to a 30bp fall in reported NIM to 2.6%. On the asset-quality front, the bank surprised negatively by reporting annualized slippage ratio of 6.3%, which was considerably higher than the 1.8% witnessed in FY2011. Absolute gross and net NPAs rose sharply by 52.9% and 86.8% qoq, respectively, and the PCR (including technical write-offs) dipped sharply to 63.8%. Outlook and valuation: We believe the current inexpensive valuations of 0.7x FY2013E ABV largely factor in the asset-quality stress faced by the bank. Going forward, incremental slippages are expected to moderate on completion of the migration exercise; and with our expectation of interest rates peaking at the current levels, the bank is expected to benefit from the stable to declining trend in wholesale interest rates going forward. Hence, we recommend an Accumulate rating on the stock with a target price of `301.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 58.0 25.4 9.9 6.7

Abs. (%) Sensex OBC

3m (3.6) (17.1)

1yr (14.2) (45.9)

3yr 78.4 135.0

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

FY2010 2,907 45.6 1,134 25.3 2.4 45.3 6.3 1.0 0.9 16.5

FY2011 4,178 43.7 1,503 32.5 2.9 51.5 5.6 0.8 1.0 17.1

FY2012E 4,119 (1.4) 1,190 (20.8) 2.5 40.8 7.0 0.8 0.7 11.1

FY2013E 4,483 8.8 1,660 39.5 2.3 56.9 5.0 0.7 0.8 14.1

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

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

Varun Varma
022 3935 7800 Ext: 6847 varun.varma@angelbroking.com

Please refer to important disclosures at the end of this report

Oriental Bank of Commerce | 2QFY2012 Result Update

Exhibit 1: 2QFY2012 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 - Provisions for Investments - Other Provisions PBT Provision for Tax PAT Effective Tax Rate (%)
Source: Company, Angel Research

2QFY12 3,801 2,873 829 98 1 2,812 989 277 259 192 18 26 41 1,267 509 278 230 758 485 342 80 63 273 105 168 38.5

2QFY12 % chg (qoq) 3,597 2,684 769 110 34 2,578 1,018 324 252 147 72 39 66 1,342 541 320 221 801 314 135 134 45 487 132 355 27.2 5.7 7.1 7.9 (10.9) (97.9) 9.1 (2.8) (14.3) 2.8 30.7 (74.5) (33.3) (38.1) (5.6) (5.9) (12.9) 4.2 (5.4) 54.4 152.8 (40.0) 39.0 (44.0) (20.6) (52.7) 1,135bp

2QFY11 % chg (yoy) 2,992 2,209 702 81 0 1,915 1,077 214 213 165 1 18 30 1,291 485 276 209 806 226 220 0 7 580 182 398 31.4 27.0 30.1 18.1 21.5 46.8 (8.1) 29.6 21.5 16.4 42.2 36.6 (1.9) 4.8 0.7 10.3 (5.9) 114.5 55.8 843.3 (52.9) (42.2) (57.8) 713bp

Exhibit 2: 2QFY2012 Actual vs. Angel estimates

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

Actual 989 277 1,267 509 758 485 273 105 168

Estimates 1,026 255 1,281 536 745 265 480 156 324

Var. (%) (3.6) 8.9 (1.1) (5.1) 1.8 83.1 (43.1) (32.4) (48.2)

November 2, 2011

Oriental Bank of Commerce | 2QFY2012 Result Update

Exhibit 3: 2QFY2012 performance

Particulars (` cr)
Advances (` cr) Deposits (` cr) Credit-to-Deposit Ratio (%) Current deposits (` cr) Saving deposits (` cr) CASA deposits (` cr) CASA ratio (%) CAR (%) Tier 1 CAR (%) Profitability Ratios (%) Cost of deposits Yield on advances Yield on investments Yield on funds Cost of funds Reported NIM Cost-to-income ratio Asset quality Gross NPAs (` cr) Gross NPAs (%) Net NPAs (` cr) Net NPAs (%) Provision coverage ratio (%) Annualized slippage ratio (%)

2QFY12 1QFY12 % chg (qoq) 2QFY11 % chg (yoy) 104,530 69.9 8,624 25,558 34,182 22.9 12.6 9.9 7.6 11.7 7.5 9.1 6.7 2.6 40.2 3,111 3.0 1,978 1.9 63.8 6.3 0.8 98,216 67.9 8,880 24,875 33,755 23.4 13.6 10.8 7.2 11.4 7.4 8.9 6.4 2.9 40.3 2,035 2.1 1,059 1.1 75.1 1.6 0.3 6.4 195bp (2.9) 2.7 1.3 (49)bp (105)bp (85)bp 44bp 27bp 2bp 12bp 29bp (30)bp (14)bp 52.9 88bp 86.8 81bp (1,131)bp 469bp 48bp 86,703 68.9 9,261 22,660 31,921 25.4 12.8 9.4 5.9 10.3 7.3 8.3 5.3 3.3 37.6 1,457 1.7 607 0.7 81.0 1.5 0.6 20.6 18.9 97bp (6.9) 12.8 7.1 (252)bp (21)bp 52bp 177bp 137bp 13bp 74bp 138bp (66)bp 257bp 113.5 128bp 226.1 120bp (1,723)bp 475bp 19bp 149,552 144,554 3.5 125,786

NPA to avg. assets (%)

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

November 2, 2011

Oriental Bank of Commerce | 2QFY2012 Result Update

Advances growth picks up a bit; NIM declines on interest income reversal on fresh slippages
The banks advances showed healthy momentum, rising by 6.4% qoq (up by a reasonable 20.6% yoy) during the quarter. Sequential growth in advances was driven by large and mid corporates, rising by 25.7% yoy and 15.3% yoy, respectively. Growth in retail credit was muted at 7.2% yoy; in fact, sequentially retail outstanding credit declined by 2.6% qoq. On the deposits side, growth was relatively slower at 3.5% qoq and 18.9% yoy. CASA deposit growth for the bank fell to sub-10% levels, thereby denting the already weak liability franchise of the bank. Incremental CASA ratio for the quarter and on a yoy basis was at sub-10% levels. Savings account growth was moderate at 12.8% yoy (up 2.7% qoq); however, current account witnessed a decline of 6.9% yoy (down 2.9% qoq). Moderating CASA deposits trend and a higher share of bulk deposits in deposits growth led to a 44bp qoq rise in cost of deposits to 7.6%. The rise in yield on advances was restricted to 27bp qoq partly on account of reversal of interest income of `137cr on technical slippages witnessed during the quarter. Consequently, reported NIM fell sequentially by 30bp to 2.6% a deviation from the trend witnessed in case of almost all the banks.

Exhibit 4: Advances growth gains momentum

Adv. qoq chg (%) 8.0 6.0 4.0 2.0 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12
Source: Company, Angel Research

Exhibit 5: Moderation in CASA continues

CASA ratio 26.0 24.5 23.0
24.9 20.5 13.7 12.7 7.1

Dep. qoq chg (%)

CDR (%, RHS) 75.0 69.9 70.0 65.0 60.0

CASA yoy growth (%, RHS) 30.0 22.5 15.0

68.9

70.2

69.0

67.9

25.4

25.2

24.6

23.4

0.7 2.2

4.7 2.8

5.6 7.5

2.4 4.0

6.4 3.5

55.0

20.0 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12

Source: Company, Angel Research

22.9

21.5

7.5 -

Exhibit 6: Higher cost of deposits leads to...

8.00 7.50 7.00 6.50 6.00 5.50 5.00 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 5.86 6.08 6.51 7.19 7.63

Exhibit 7: .... a 30bp sequential drop in reported NIM

(%) 3.50 3.30 3.10 3.00 2.98 2.94 2.64 2.50

2.00 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12

Source: Company, Angel Research

Source: Company, Angel Research

November 2, 2011

Oriental Bank of Commerce | 2QFY2012 Result Update

Fee and forex income drive other income growth

Other income growth for the bank was healthy at 29.5%, driven by higher forex and recoveries from written-off accounts. Fee income showed healthy traction on a sequential basis, increasing by 30.7% qoq and 16.4% yoy. Management had in 1QFY2012 guided for 25% growth in fee income for FY2012.

Exhibit 8: Reasonable growth in fee income

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

2QFY12 192 18 39 26 2 277 259

1QFY12 147 72 48 39 18 324 252

% chg (qoq) 30.7 (74.5) (18.3) (33.3) (90.0) (14.3) 2.8

2QFY11 165 1 27 18 3 214 213

% chg (yoy) 16.4 2,186.3 43.9 42.2 (35.3) 29.5 21.5

Asset quality deteriorates

The bank disappointed on the asset-quality front, with absolute gross and net NPAs ballooning by 52.9% and 86.8% qoq, respectively. Consequently, gross and net NPA ratios increased considerably to 3.0% (from 2.1% in 1QFY2012) and 1.9% (from 1.1% in 1QFY2012). Provision coverage ratio (including technical write-offs) dipped by more than 11% sequentially to 63.8%. We were building in higher slippages considering the pending migration for accounts below `10lakhs and the slowing domestic economic growth environment; however, slippages came in considerably higher than expected. The banks annualized slippage ratio surged to 6.3% from 1.8% in FY2011. During the quarter, the bank completed migration of loan accounts below `10lakhs to system-based NPA recognition platform and attributed around half of the slippages to this exercise. Even excluding the one-off, slippages rate at over 3% remained above manageable levels. In addition to this, the bank also restructured loans of `550cr during the quarter (as compared to `88cr in 1QFY12), taking outstanding restructured loans to 3.9%.

Exhibit 9: NPA ratios deteriorate; PCR dips ~1,100bp

Gross NPAs (%) 3.0 2.5 2.0 1.5 1.0 81.0 77.4 76.8 75.1 63.8 Net NPAs (%) PCR (%, RHS) 90.0 80.0 70.0 60.0

Exhibit 10: Huge surge in slippages

Slippages (%) 6.5 5.2 3.9 2.6 0.6 0.5 0.3 1.0 0.8 Credit cost (%, RHS) 1.2 1.0 0.8 0.6 0.4

1.7 0.7

1.9 0.9

2.0 1.0

2.1 1.1

3.0 1.9

1.5

2.2

3.1

1.6

2QFY11 3QFY11 4QFY11 1QFY12 2QFY12

50.0

2QFY11 3QFY11 4QFY11 1QFY12 2QFY12

6.3

0.5

1.3

0.2 -

Source: Company, Angel Research; Note: PCR incl. technical write-offs

Source: Company, Angel Research

November 2, 2011

Oriental Bank of Commerce | 2QFY2012 Result Update

The bank could not resort to aggressive write-offs, considering the weakened profitability for the quarter. The overall pace of deductions in gross NPAs was considerably lower than fresh slippages. With the completion of migration to system-based NPA recognition platform, we expect the pace of incremental slippages to moderate a bit, going forward. Also, recoveries and upgrades are expected to pick up given the technical nature of at least some portion of fresh slippages witnessed over 1HFY2012.

Opex under control

Operating expenses for the bank were within control, rising by just 4.8% yoy on the back of largely stable employee expenses. Due to the 1.9% yoy decline in operating income as compared to 4.8% yoy growth in operating expenses, the banks cost-to-income ratio increased to 40.2% from 37.6% in 2QFY2012. However, opex-to-average assets ratio improved (to 1.2% from 1.4% in 2QFY2011) on the back of higher assets base.

Exhibit 11: Operating costs remain under control

Staff expenses (` cr) Other opex (` cr)

Exhibit 12: Stable cost ratios

Cost-to-income ratio (%)
42.5 1.4 1.3

Opex to average assets (%, RHS)

1.3 1.4 1.3 1.2 1.2 1.2

600

221

209

210

228

230

450 300 150 -

40.0 37.5 35.0

276

277

242

320

278

32.5 30.0 37.6 2QFY11 38.6 3QFY11 35.8 4QFY11 40.3 1QFY12 40.2 2QFY12

1.1 1.0

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

Source: Company, Angel Research

Source: Company, Angel Research

Investment concerns
Modest CASA franchise and fee income
OBC is relatively more exposed to NIM pressures in the current higher interest rate environment on account of bulk deposits comprising a substantial 27.2% of deposits at the end of 2QFY2012 and CASA ratio being one of the lowest amongst peers (22.9%). The banks weaker liability franchise came to the fore in 2QFY2012, wherein it witnessed a 44bp qoq rise in cost of deposits (relatively higher than peers). The banks fee income, at 0.6% of average assets in FY2011, is amongst the lowest in PSU banks.

Outlook and valuation

We have cut our estimates for FY2012 by 15% to factor in the disappointing performance on the asset-quality front. In spite of the miss on NIM in 2QFY2012, we maintain our NIM estimate for FY2012, as we expect recoveries from fresh slippages to gain momentum going forward, leading to recognition of interest income reversed during 2QFY2012. We expect the bank to report a muted 5.1% CAGR in earnings over FY2011-13E on account of the weak liability franchise leading to NIM pressures and incremental stress on asset quality due to migration to system-based NPA recognition platform and the deteriorating domestic macroeconomic environment.
November 2, 2011

Oriental Bank of Commerce | 2QFY2012 Result Update

Having said that, we believe the current inexpensive valuations of 0.7x FY2013E ABV largely factor in the asset-quality stress faced by the bank. Going forward, incremental slippages are expected to moderate on completion of the migration and with our expectation of interest rates peaking at the current levels, the bank is expected to benefit from the stable to declining trend in wholesale interest rates going forward. Hence, we recommend an Accumulate rating on the stock with a target price of `301.

Exhibit 13: Key assumptions

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

Earlier estimates FY2012 17.0 14.0 24.4 2.5 17.9 18.0 10.0 1.8 76.0 0.2 FY2013 18.0 14.0 23.9 2.3 11.8 12.0 15.0 1.8 75.0 0.2

Revised estimates FY2012 19.0 14.0 24.4 2.5 19.6 17.0 10.0 3.1 65.0 0.2 FY2013 16.0 14.0 23.9 2.3 10.4 12.0 15.0 2.5 70.0 0.2

Treasury gain/(loss) (% of investments)

Source: Angel Research

Exhibit 14: 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

Earlier estimates
4,136 1,132 5,269 2,166 3,103 1,019 2,083 676 1,408

Revised Earlier Var. (%) estimates estimates

4,119 1,148 5,267 2,155 3,112 1,350 1,762 572 1,190 (0.4) 1.4 (0.0) (0.5) 0.3 32.4 (15.4) (15.4) (15.4) 4,499 1,265 5,764 2,453 3,311 839 2,472 802 1,670

FY2013 Revised Var. (%) estimates

4,483 1,268 5,751 2,442 3,309 851 2,458 797 1,660 (0.3) 0.2 (0.2) (0.5) (0.0) 1.5 (0.6) (0.6) (0.6)

November 2, 2011

Oriental Bank of Commerce | 2QFY2012 Result Update

Exhibit 15: P/ABV band

Price (`) 700 600 500 400 300 200 100 0 0.4x 0.7x 1x 1.3x 1.6x

Oct-09

Nov-06

May-10

Dec-10

Aug-08

Source: Company, Angel Research

Exhibit 16: Recommendation summary

Company AxisBk FedBk HDFCBk ICICIBk* SIB YesBk AllBk AndhBk BOB BOI BOM CanBk CentBk CorpBk DenaBk IDBI IOB J&KBk OBC PNB SBI* SynBk UcoBk UnionBk UtdBk VijBk
#

Reco. Buy Accumulate Neutral Buy Neutral Buy Accumulate Neutral Accumulate Accumulate Accumulate Accumulate Neutral Buy Neutral Neutral Neutral Accumulate Neutral Accumulate Accumulate Buy Buy Neutral Accumulate Buy Neutral

CMP (`) 1,128 412 483 887 23 308 161 118 800 333 50 482 101 428 82 115 215 100 823 286 979 1,909 107 74 225 71 60

Tgt. price (`) 1,414 444 1,114 355 169 881 362 55 510 498 107 301 1,106 2,239 123 238 82 -

Upside (%) 25.4 7.9 25.6 15.4 5.2 10.1 8.7 10.9 5.9 16.3 7.3 5.3 13.0 17.3 15.3 5.8 15.2 -

FY2013E P/ABV (x) 1.8 1.1 3.3 1.6 1.1 1.9 0.7 0.8 1.1 0.9 0.7 0.9 0.7 0.7 0.6 0.7 0.9 0.6 0.9 0.7 1.1 1.4 0.7 0.9 0.9 0.6 0.8

FY2013E Tgt P/ABV (x) 2.3 1.2 2.0 2.3 0.8 1.2 1.0 0.7 1.0 0.8 0.7 0.7 1.3 1.7 0.8 0.9 0.7 -

FY2013E P/E (x) 9.9 8.4 16.8 13.0 6.8 10.2 4.3 5.3 5.7 5.5 4.3 5.6 5.2 4.4 3.9 5.4 5.5 4.0 5.2 5.0 5.8 7.3 4.7 4.4 5.1 4.2 7.3

Mar-09

FY2011-13E EPS CAGR (%) 17.7 19.5 30.5 23.3 15.6 19.9 12.2 (0.9) 14.2 15.2 38.1 (3.0) (16.1) 1.5 7.5 12.3 0.2 20.0 12.0 5.1 9.9 41.4 11.8 15.9 5.2 13.4 (3.2)

FY2013E RoA (%) 1.5 1.2 1.7 1.4 1.0 1.3 1.0 0.9 1.2 0.7 0.6 0.9 0.5 0.8 0.8 0.7 1.1 0.6 1.3 0.8 1.1 1.0 0.7 0.7 0.8 0.6 0.4

FY2013E RoE (%) 20.0 14.0 20.9 15.4 18.2 20.8 18.4 15.8 20.7 17.1 16.5 17.2 13.9 16.6 16.4 14.0 17.4 15.9 17.8 14.1 20.6 21.9 16.3 16.7 17.0 14.1 10.5

IndBk

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

November 2, 2011

Feb-12

Jun-07

Jan-08

Apr-06

Jul-11

Oriental Bank of Commerce | 2QFY2012 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 (%) Reported PAT - YoY Growth (%) FY07 FY08 FY09 FY10 FY11 FY12E FY13E

1,691 5.4 612 10.6 2,303 6.7 998 3.3 1,305 9.5 252 10.8 1,053 9.2 226 21.5 827 2.9 581 4.2

1,682 (0.6) 628 2.6 2,310 0.3 1,080 8.2 1,230 (5.7) (32) 1,262 19.9 421 33.3 841 1.7 353 (39.2)

1,997 18.7 1,071 70.7 3,068 32.8 1,383 28.1 1,685 37.0 526 1,159 (8.1) 254 21.9 905 7.6 905 156.3

2,907 45.6 1,200 12.0 4,107 33.9 1,686 21.9 2,421 43.7 818 55.6 1,604 38.3 469 29.3 1,134 25.3 1,134 25.3

4,178 43.7 960 (20.0) 5,138 25.1 1,892 12.2 3,245 34.0 1,208 47.8 2,037 27.0 534 26.2 1,503 32.5 1,503 32.5

4,119 (1.4) 1,148 19.6 5,267 2.5 2,155 13.9 3,112 (4.1) 1,350 11.7 1,762 (13.5) 572 32.4 1,190 (20.8) 1,190 (20.8)

4,483 8.8 1,268 10.4 5,751 9.2 2,442 13.3 3,309 6.3 851 (36.9) 2,458 39.5 797 32.4 1,660 39.5 1,660 39.5

(112.6) (1748.9)

Balance sheet
Y/E March (` cr) Share Capital Reserves & 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 (%) FY07 251 5,350 27.5 623 1,476 2,242 5,336 2,173 FY08 251 5,525 21.7 1,840 1,726 3,507 7,322 2,892 FY09 251 7,153 26.3 722 2,250 3,838 6,880 5,345 28,489 68,500 25.5 1,384 1,984 24.1 FY10 251 7,987 22.3 2,337 2,550 4,048 8,087 6,513 35,785 83,489 21.9 1,394 2,162 22.1 FY11 292 10,805 15.6 2,589 3,050 5,553 9,515 9,574 42,075 95,908 14.9 1,398 2,874 17.4 FY12E 292 11,741 14.0 3,672 3,630 5,755 10,304 9,181 45,183 19.0 1,543 3,270 13.8 FY13E 292 13,063 14.0 4,179 4,210 6,496 11,746 10,448 48,943 16.0 1,703 3,722 13.8

63,996 77,857

98,369 120,258 139,054

158,522 180,715

73,936 90,705 112,583 137,431 161,343

183,612 208,954

19,808 23,951 44,138 54,566 31.5 383 2,098 25.4 23.6 387 1,587 22.7

114,131 132,392

73,936 90,705 112,583 137,431 161,343

183,612 208,954

November 2, 2011

Oriental Bank of Commerce | 2QFY2012 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 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 (x) RoE

FY07 2.7 43.3 1.2 15.4 30.3 69.0 12.5 10.1 3.2 0.5 1.1 (0.3) 85.2 33.0 223.5 4.7 8.7 1.3 1.6 2.5 0.4 2.2 0.2 2.3 0.8 3.1 1.5 1.6 0.3 1.2 12.3 15.4

FY08 2.1 46.7 1.0 14.8 27.9 70.1 12.1 9.3 2.3 1.0 1.3 (0.2) 57.9 33.6 4.7 8.5 1.3 1.6 2.0 (0.0) 2.1 0.2 2.3 0.6 2.8 1.3 1.5 0.5 1.0 14.5 14.8

FY09 2.0 45.1 0.9 14.8 23.7 69.6 11.4 8.0 1.5 0.6 0.9 0.2 58.2 36.1 7.3 7.9 1.1 2.6 2.0 0.5 1.4 0.5 1.9 0.6 2.5 1.4 1.1 0.2 0.9 16.6 14.8

FY10 2.4 41.1 0.9 16.5 25.0 69.4 11.8 8.7 1.7 0.9 1.6 0.4 76.7 45.3 9.1 6.3 1.0 3.2 2.3 0.7 1.7 0.3 2.0 0.6 2.6 1.3 1.3 0.4 0.9 18.2 16.5

FY11 2.9 36.8 1.0 17.1 24.6 69.0 13.3 10.5 2.0 1.0 1.8 0.6 76.8 51.5 10.4 5.6 0.8 3.6 2.8 0.8 2.0 0.1 2.0 0.6 2.6 1.3 1.4 0.4 1.0 17.0 17.1

FY12E 2.5 40.9 0.7 11.1 24.4 72.0 13.9 10.7 3.7 2.3 3.1 0.6 65.0 40.8 360.5 7.5 7.0 0.8 2.6 2.4 0.8 1.6 0.1 1.7 0.6 2.3 1.2 1.0 0.3 0.7 16.2 11.1

FY13E 2.3 42.5 0.8 14.1 23.9 73.3 13.8 10.4 3.8 2.8 2.5 0.4 70.0 56.9 415.6 10.0 5.0 0.7 3.5 2.3 0.4 1.9 0.0 1.9 0.6 2.5 1.2 1.3 0.4 0.8 16.6 14.1

221.8 250.4

292.2 350.0

November 2, 2011

10

Oriental Bank of Commerce | 2QFY2012 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

Oriental Bank of Commerce No No No No

3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

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

Ratings (Returns):

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

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

Neutral (-5 to 5%)

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