3QFY2012 Result Update | Banking

February 1, 2012

Allahabad Bank
Performance Highlights

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

Source: Company, Angel Research

NEUTRAL
CMP Target Price
% chg (qoq) 4.7 8.5 14.8 3QFY11 1052 788 416 % chg (yoy) 31.3 30.6 34.8

`164 -

3QFY12 1,381 1,030 560

2QFY12 1,318 949 488

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 7,802 1.1 240/114 108,766 10 17,301 5,236 ALBK.BO ALBK@IN

For 3QFY2012, Allahabad Bank reported 34.8% yoy growth in its net profit to `560cr, ahead of our estimates primarily due to lower-than-expected effective tax rate. On the PBT level, results were below our estimates due to higher-thanexpected provisioning expenses. Though operating income came in-line with expectations, with NIM remaining stable sequentially, asset quality deteriorated with slippages remaining elevated and restructuring rising sharply. We maintain our Neutral stance on the stock. NIM steady; Slippages rise further: During the quarter, advances growth was moderate at 4.9% qoq and 15.7% yoy. On the deposits side, growth was higher at 20.1% yoy. CASA deposits growth remained moderate at 10.6% yoy. Saving account deposits increased by 14.4% yoy, while current account deposits declined by 4.8%, leading to a 264bp yoy dip in CASA ratio at 30.6%. The 35bp qoq decline in yield on advances was largely compensated by the 32bp fall in cost of deposits, leading to a sequentially stable reported NIM of 3.7%. On the assetquality front, annualized slippage ratio increased to 2.5% from 2.2% registered in 2QFY2012. Management attributed ~60% of the slippages arising to the priority sector advances. Gross and net NPA ratios increased marginally to 1.9% and 0.8%, respectively. Provision coverage ratio, including technical write-offs, declined by 155bp qoq to 78%. The bank restructured loans of ~`1,049cr during 3QFY2012, much higher than the average run rate of `260cr of restructuring over the past six quarters.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 58.0 17.8 12.0 12.2

Abs. (%) Sensex

Allahabad Bank

3m (1.0) 9.9

1yr (4.0) (17.7)

3yr 83.6 234.0

Outlook and valuation: Positives for Allahabad Bank include moderate CASA
ratio of 30.6% and better-than-peer average fee income at 0.8-0.9% of assets. Also, the banks return ratios are on the higher side; however, higher estimated provisioning expenses are expected to dent profitability going forward. The bank is trading at valuations of 0.7x FY2013E ABV, which we feel do not provide adequate margin of safety from the risk of asset-quality deterioration over FY2012-13. Hence, we have a Neutral recommendation 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

FY2010 2,650 22.8 1,206 57.0 2.5 27.0 6.1 1.2 1.1 22.2

FY2011 4,022 51.8 1,423 18.0 3.0 29.9 5.5 1.0 1.0 21.0

FY2012E 5,282 31.3 1,927 35.4 3.4 40.5 4.1 0.9 1.2 23.0

FY2013E 5,866 11.1 1,695 (12.0) 3.3 35.6 4.6 0.7 0.9 17.3

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

Allahabad Bank | 3QFY2012 Result Update

Exhibit 1: 3QFY2012 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 - Recoveries 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

3QFY12 2QFY12 % chg (qoq) 3QFY11 % chg (yoy) 3,912 2,927 935 38 11 2,531 1,381 348 327 213 21 98 16 1,729 699 490 209 1,030 421 306 63 52 609 48 560 7.9 3,893 2,961 907 20 5 2,575 1,318 309 302 257 7 23 22 1,627 678 467 211 949 412 302 82 28 538 50 488 9.2 0.5 (1.2) 3.1 90.0 148.3 (1.7) 4.7 12.7 8.3 (17.1) 200.0 317.9 (24.7) 6.2 3.1 4.8 (0.7) 8.5 2.3 1.3 (23.2) 88.9 13.2 (2.7) 14.8 (130)bp 2,855 2,131 712 11 2 1,804 1,052 258 238 174 20 63 1 1,309 521 320 201 788 236 175 36 25 553 137 416 24.7 37.0 37.4 31.4 253.0 480.1 40.3 31.3 35.2 37.8 22.4 5.0 55.6 2,459.4 32.1 34.2 53.3 3.9 30.6 78.6 74.7 76.9 108.4 10.2 (64.7) 34.8 (1,682)bp

Exhibit 2: 3QFY2012 Actual vs. 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 1,381 348 1,729 699 1,030 421 609 48 560

Estimates 1,360 341 1,700 667 1,033 368 665 213 452

Var. (%) 1.5 2.3 1.7 4.7 (0.3) 14.4 (8.4) (77.3) 24.0

February 1, 2012

Allahabad Bank | 3QFY2012 Result Update

Exhibit 3: 3QFY2012 performance analysis

Particulars (` cr) Balance sheet 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 (%) NPA prov. to avg. assets (%)
Source: Company, Angel Research

3QFY12 100,448 69.1 7,558 36,936 44,494 30.6 12.8 8.9 6.8 12.2 7.6 10.5 6.8 3.7 40.4 1,887 1.9 796 0.8 78.0 2.5 0.8

2QFY12 % chg (qoq) 95,717 67.4 7,609 35,875 43,484 30.6 13.0 8.9 7.1 12.6 7.6 10.9 7.1 3.7 41.7 1,715 1.8 664 0.7 79.6 2.2 0.8 4.9 175bp (0.7) 3.0 2.3 1bp (24)bp (2)bp (32)bp (35)bp 1bp (35)bp (33)bp 5bp (124)bp 10.0 9bp 19.9 10bp (155)bp 32bp (2)bp

3QFY11 % chg (yoy) 86,837 71.8 7,940 32,290 40,230 33.3 12.8 8.1 6.0 10.6 7.1 9.3 5.9 3.4 39.8 1,540 1.8 507 0.6 80.2 2.0 0.5 15.7 20.1 (267)bp (4.8) 14.4 10.6 (264)bp (3)bp 77bp 85bp 163bp 44bp 117bp 84bp 29bp 65bp 22.5 9bp 57.1 20bp (219)bp 52bp 22bp

145,300 142,043

2.3 120,948

Moderate business growth

During the quarter, advances growth of the bank was moderate at 4.9% qoq and 15.7% yoy. Growth in MSE loans was healthy at 35.8% yoy, followed by retail credit at 20.7% yoy. On a sequential basis, agri loans grew by healthy 6.3% qoq, while loans to the telecommunication sector declined of 9.1% qoq.

Exhibit 4: Moderate business growth

Adv. qoq chg (%) 10.0 7.5 5.0 71.8 71.0 67.4 Dep. qoq chg (%) 73.8 CDR (%, RHS) 75.0 69.1 70.0

Exhibit 5: Deterioration of CASA ratio continues

CASA ratio 34.0
21.6 20.7 15.6

CASA yoy growth (%, RHS) 30.0

32.0

20.0 10.3 10.6 10.0

5.8 6.4

7.8 9.0

5.5 1.5

6.1

2.5 -

4.9 2.3

65.0

(3.1)

33.3

33.5

32.0

30.6

(2.5) (5.0)

55.0 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12

28.0 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12

Source: Company, Angel Research

30.6

60.0

30.0

Source: Company, Angel Research

February 1, 2012

Allahabad Bank | 3QFY2012 Result Update

On the deposits side, growth was higher at 20.1% yoy. CASA deposits growth remained moderate at 2.3% qoq and 10.6% yoy. Saving account deposits increased by 14.4% yoy, while current account deposits declined by 4.8%. CASA ratio remained steady sequentially at 30.6%, but declined by 264bp on a yoy basis from 33.3% in 3QFY2011.

NIM remains stable

The 35bp qoq decline in yield on advances was largely compensated by the 32bp fall in cost of deposits, leading to a sequentially stable reported NIM of 3.7%. Stable NIM was also aided by improvement in CD ratio (by 175bp qoq) and stable share of CASA deposits on a sequential basis.

Exhibit 6: Lower cost of deposits...

(%) 7.5 7.0 7.1 6.8

Exhibit 7: ...aids in maintaining stable NIM

(%) 3.9 3.6 3.3 3.0 2.7 3.4 3.5 3.7 3.4 3.7

6.5

6.0

6.0

5.5

4.5 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

Source: Company, Angel Research

Source: Company, Angel Research

Slippages remain elevated; Restructuring crosses `1,000cr

Slippages for the quarter rose from `520cr witnessed in 2QFY2012 to `596cr in 3QFY2012, despite the bank having completed migration to system-based NPA recognition platform in 2QFY2012 itself. Annualized slippage ratio increased to 2.5% in 3QFY2012 from 2.2% registered in 2QFY2012. Management attributed around 60% of the slippages arising to priority sector advances. On the back of aggressive write-offs of `251cr during the quarter, the rise in gross NPAs was contained at 10% qoq. Net NPAs on an absolute basis rose by 19.9% qoq and a sharp 57.1% yoy to `796cr. Gross and net NPA ratios increased marginally to 1.9% and 0.8%, respectively. Provision coverage ratio, including technical writeoffs, declined by 155bp qoq to 78%. The bank restructured loans of ~`1,049cr during 3QFY2012, much higher than the average run rate of `260cr of restructuring over the past six quarters. Restructuring carried out pertained across sectors viz. iron and steel, pharma, textile and infrastructure amongst others. Cumulatively, the bank has restructured loans of `3,823cr, of which `259cr have slipped into NPAs.

February 1, 2012

Allahabad Bank | 3QFY2012 Result Update

Exhibit 8: Asset quality deteriorates a bit

Gross NPAs (%) 2.0 80.2 1.5 1.0 0.5 75.7 79.9 79.6 78.0 Net NPAs (%) PCR (%, RHS) 85.0 80.0 75.0 70.0

Exhibit 9: Slippages remain elevated

5.0 4.0 3.0 2.0 1.0 2.0 4.5 0.6 2.2 2.5 0.5 0.4 Slippages (%) 0.9 Credit cost (%, RHS) 1.0 0.8 0.7 0.8 0.6 0.4 0.2 -

1.8 0.6

1.7 0.8

1.6 0.6

1.8 0.7

3QFY11 4QFY11 1QFY12 2QFY12 3QFY12

1.9 0.8
65.0

3QFY11 4QFY11 1QFY12 2QFY12 3QFY12

Source: Company, Angel Research

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

Opex to remain high on employee additions and other benefit-related provisions; Branch expansion picking up
Staff expenses continued the sharp rising trend, increasing by 53.3% yoy. Even, overall operating expenses rose considerably by 34.2% yoy. However, on the back of healthy operating performance, the cost-to-income ratio improved by 124bp qoq to 40.4% and opex-to-average assets ratio remained steady sequentially at 1.7%.

Exhibit 10: Branch expansion modest

2,500 2,450 2,402 2,400 2,350 2,300 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 2,415 2,441 2,416 2,477

Exhibit 11: Cost ratios remain steady

Cost-to-income ratio (%) 2.3 60.0 45.0 30.0 1.5 1.5 Opex to average assets (%, RHS) 2.5 1.7 1.7 2.0 1.5 1.0

39.8

51.9

39.1

41.7

40.4

15.0 -

0.5 -

3QFY11 4QFY11 1QFY12 2QFY12 3QFY12

Source: Company, Angel Research

Source: Company, Angel Research

The bank added 36 branches in 3QFY2012. The bank plans to open 155 branches in FY2012, which is likely to be back-ended, in economically stronger states such as Gujarat, Maharashtra (particularly Mumbai), Haryana, Karnataka and Andhra Pradesh. This will also enable the bank to geographically establish a wider branch network, as it is hardly present in these states. The bank added 62 branches in 9MFY2012.

February 1, 2012

Allahabad Bank | 3QFY2012 Result Update

Investment arguments
Healthy retail deposit base
Allahabad Bank has a substantial 41% of its branches in the CASA deposit-rich rural areas, which ensure higher sustainability of the low-cost deposits reservoir, also reflected in the strong 24.0% CAGR in the banks saving account deposits over FY200911. Although the banks CASA market share reduced by 25bp over FY20061HFY2012 to 2.4%, the decline in market share has been one of the lowest in its peer group. Recently, the bank has secured a mandate from the West Bengal State Government for opening accounts for disbursal of salaries. These initiatives are expected to at least sustain the CASA ratio at current levels. Also, the bank has a relatively lower share of wholesale deposits and CDs at 12.8%. The bank is now planning to diversify its branch network by expanding in the economically vibrant states of Gujarat, Maharashtra (particularly Mumbai), Haryana, Karnataka and Andhra Pradesh. The banks better CASA ratio, of 3233%, is also likely to help in moderating the expected NIM pressures. As compared to peers such as IOB, OBC, Corporation Bank and UCO Bank, the bank has a higher structural CASA share.

Moderate fee income

Growth in fee income (other income excluding treasury income) has been strong at a 45.8% CAGR over FY200911 (0.9% of average assets for FY2011). However, we have factored in lower growth in fee income than peers, as a large part of the banks high fee income was driven by above-average recoveries from written-off accounts (0.24% of average assets for FY2011), which could decline going forward.

Higher yielding loans could lead to higher NPAs

Allahabad Bank had one of the highest reported yield on advances for 3QFY2012 (12.2%) amongst all PSU banks. The banks yield on advances has risen by 185bp yoy, the highest increase within the PSU segment, indicating increased risk taking in the form of higher yielding loans over the past one year. While the banks provisioning costs are on the higher side (0.95% for 9MFY2012 compared to average of ~0.8% for PSUs), risk-adjusted yields are still well above sector average, indicating the possibility of any negative surprises on the asset-quality front. As a result, with no additional room for expansion in yields, and asset quality expected to further see deterioration due to higher risk taking, higher-than-peer average return ratios for the bank could come under pressure.

Outlook and valuation

Management indicated that it had paid ~`300cr extra for income tax in FY2011, which is likely to be refunded in 2HFY2012. The effective tax rate for FY2012 is expected to be on the lower side at 21-22% on account of taking benefits of various exemptions. Accordingly, the effective tax rate for 3QFY2012 was just 7.9%, which propped up the overall bottom line. We have increased our earnings estimate for FY2012 by ~5% to factor in the lower-than-expected effective tax rate.

February 1, 2012

Allahabad Bank | 3QFY2012 Result Update

Positives for Allahabad Bank include moderate CASA ratio of 30.6% and better-than-peer average fee income at 0.8-0.9% of assets. Also, the banks return ratios are on the higher side; however, higher estimated provisioning expenses are expected to dent profitability going forward. The bank is trading at valuations of 0.7x FY2013E ABV, which we feel do not provide adequate margin of safety from the risk of asset-quality deterioration over FY2012-13. Hence, we have a Neutral recommendation on the stock.

Exhibit 12: 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 14.0 11.0 35.0 3.4 (2.5) 12.0 15.0 2.4 0.2 FY2013 14.0 14.0 35.5 3.3 4.9 13.0 15.0 3.1 0.1

Revised estimates FY2012 14.0 11.0 35.0 3.4 (2.5) 17.0 8.0 2.5 0.6 FY2013 14.0 14.0 35.5 3.3 4.9 13.0 15.0 3.0 0.1

Exhibit 13: Change in estimates

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
5,252 1,336 6,588 2,642 3,946 1,473 2,473 643 1,830

FY2012 FY2013 Revised Earlier Revised Var. (%) Var. (%) estimates estimates estimates
5,282 1,336 6,618 2,666 3,952 1,544 2,408 482 1,927 0.6 0.5 0.9 0.2 4.8 (2.6) (25.1) 5.3 5,831 1,401 7,232 3,004 4,228 1,700 2,529 820 1,708 5,866 1,401 7,267 3,029 4,238 1,729 2,509 814 1,695 0.6 0.5 0.8 0.2 1.7 (0.8) (0.8) (0.8)

February 1, 2012

Allahabad Bank | 3QFY2012 Result Update

Exhibit 14: P/ABV band

Price (`) 350 300 250 200 150 100 50 0 0.3x 0.6x 0.9x 1.2x 1.5x

Aug-08

Dec-10

Apr-06

Mar-09

Jul-11

Nov-06

Source: Company, Angel Research

Exhibit 15: Recommendation summary

Company AxisBk FedBk HDFCBk ICICIBk* SIB YesBk AllBk AndhBk BOB BOI BOM CanBk CentBk CorpBk DenaBk IDBI# IndBk IOB J&KBk OBC PNB SBI* SynBk UcoBk UnionBk UtdBk VijBk Reco. Buy Neutral Neutral Buy Neutral Accumulate Neutral Neutral Buy Neutral Accumulate Accumulate Neutral Accumulate Neutral Accumulate Neutral Neutral Accumulate Neutral Accumulate Accumulate Accumulate Neutral Neutral Accumulate Reduce CMP (`) 1,088 401 497 888 23 335 164 102 755 341 48 472 85 416 69 100 227 88 811 269 956 2,077 98 71 234 70 56 Tgt. price (`) 1,361 1,061 367 907 53 528 450 107 877 1,036 2,359 106 75 52 Upside (%) 25.2 19.5 9.3 20.1 11.4 11.9 8.1 7.2 8.1 8.4 13.6 8.5 7.7 (8.2) FY2013E P/ABV (x) 1.8 1.1 3.4 1.6 1.1 2.1 0.7 0.8 1.0 1.1 0.7 0.9 0.8 0.7 0.5 0.7 0.9 0.6 0.8 0.7 1.1 1.7 0.6 0.9 1.0 0.7 0.8 FY2013E Tgt P/ABV (x) 2.2 2.0 2.3 1.3 0.8 1.1 0.8 0.7 0.9 1.2 1.9 0.7 0.7 0.7 FY2013E P/E (x) 9.4 8.7 17.3 14.0 6.9 11.1 4.6 5.0 5.8 7.2 4.9 6.0 5.5 4.5 3.6 4.9 5.4 4.6 4.7 5.9 6.0 10.1 4.1 4.6 5.9 4.8 6.4
#

FY2011E-13E EPS CAGR (%) 18.2 16.2 30.4 19.2 13.5 20.1 9.1 (4.8) 9.8 2.3 26.3 (7.4) (25.1) (1.8) 2.4 9.9 3.8 5.3 16.7 (5.9) 6.4 26.0 13.7 10.9 0.1 4.3 0.7

May-10

FY2013E RoA (%) 1.5 1.2 1.8 1.3 0.9 1.4 0.9 0.8 1.1 0.6 0.7 0.8 0.4 0.8 0.8 0.7 1.2 0.5 1.4 0.7 1.0 0.8 0.7 0.6 0.7 0.6 0.4

FY2013E RoE (%) 20.2 13.2 21.0 14.4 17.5 20.6 17.3 14.6 19.3 13.7 16.9 15.8 11.4 15.5 14.9 13.4 18.4 12.8 19.0 11.3 19.4 17.9 16.5 15.4 15.8 12.1 11.1

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

February 1, 2012

Feb-12

Oct-09

Jun-07

Jan-08

Allahabad Bank | 3QFY2012 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 (%) FY07 1,751 11.0 376 (22.0) 2,127 3.3 1,027 (0.8) 1,100 7.4 265 (17.2) 835 18.5 85 10.2 750 6.2 FY08 1,672 (4.5) 965 156.3 2,637 24.0 1,158 12.7 1,480 34.5 357 35.1 1,122 34.3 147 13.1 975 29.9 FY09 2,159 29.1 1,142 18.4 3,301 25.2 1,399 20.9 1,901 28.5 825 131.0 1,076 (4.1) 307 28.6 769 (21.1) FY10 2,650 22.8 1,516 32.7 4,166 26.2 1,618 15.6 2,549 34.1 777 (5.9) 1,772 64.7 565 31.9 1,206 57.0 FY11 4,022 51.8 1,370 (9.6) 5,393 29.4 2,338 44.5 3,055 19.9 1,124 44.7 1,931 9.0 508 26.3 1,423 18.0 FY12E 5,282 31.3 1,336 (2.5) 6,618 22.7 2,666 14.0 3,952 29.4 1,544 37.4 2,408 24.7 482 20.0 1,927 35.4 FY13E 5,866 11.1 1,401 4.9 7,267 9.8 3,029 13.6 4,238 7.2 1,729 12.0 2,509 4.2 814 32.4 1,695 (12.0)

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 447 4,030 22.8 257 1,582 1,804 4,068 874 FY08 447 4,774 20.3 1,792 1,862 2,448 6,289 753 FY09 447 5,405 18.6 937 2,912 2,975 5,115 1,521 29,651 58,802 18.3 1,110 1,449 17.7 FY10 447 6,306 24.8 1,424 4,012 3,455 7,184 1,984 38,429 71,605 21.8 1,118 1,379 24.6 FY11 476 8,031 24.4 3,006 3,912 3,974 7,901 3,126 43,247 93,625 30.8 1,148 2,239 24.3 FY12E 476 9,515 11.0 3,348 4,460 4,270 9,516 3,369 45,113 14.0 1,240 2,493 11.4 FY13E 476 10,822 14.0 3,814 5,084 4,852 10,848 3,839 51,365 14.0 1,371 2,840 13.9

59,544 71,616

84,972 106,056 131,887

146,395 166,890

67,664 82,939

97,648 121,699 151,286

168,463 191,938

18,746 23,400 41,290 49,720 41.7 1,056 1,629 22.4 20.4 1,071 1,705 22.6

106,732 121,675

67,664 82,939

97,648 121,699 151,286

168,463 191,938

February 1, 2012

Allahabad Bank | 3QFY2012 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 3.0 48.3 1.2 22.6 38.0 69.3 12.5 8.1 2.6 1.1 1.9 0.1 57.0 16.8 76.0 3.0 9.8 2.2 1.8 2.8 0.4 2.4 (0.1) 2.4 0.7 3.0 1.7 1.4 0.1 1.2 18.5 22.6

FY08 2.3 43.9 1.3 24.6 36.0 69.4 12.0 7.7 2.0 0.8 1.5 0.4 58.6 21.8 93.5 3.5 7.5 1.8 2.1 2.2 0.5 1.7 0.6 2.4 0.7 3.0 1.5 1.5 0.2 1.3 19.0 24.6

FY09 2.5 42.4 0.9 16.5 34.6 69.2 13.1 8.0 1.8 0.7 1.7 0.3 59.5 17.2 107.7 2.5 9.5 1.5 1.5 2.4 0.9 1.5 0.6 2.1 0.6 2.7 1.5 1.2 0.3 0.9 19.4 16.5

FY10 2.5 38.8 1.1 22.2 34.5 67.5 13.6 8.1 1.7 0.7 2.1 0.8 79.0 27.0 131.7 5.5 6.1 1.2 3.4 2.4 0.7 1.7 0.5 2.2 0.9 3.1 1.5 1.6 0.5 1.1 20.2 22.2

FY11 3.0 43.4 1.0 21.0 33.5 71.0 13.0 8.6 1.7 0.8 2.4 0.6 75.7 29.9 160.5 6.0 5.5 1.0 3.7 2.9 0.8 2.1 0.1 2.2 0.9 3.1 1.7 1.4 0.4 1.0 20.2 21.0

FY12E 3.4 40.3 1.2 23.0 35.0 72.9 13.7 9.1 2.9 1.0 2.5 0.7 78.0 40.5 191.7 8.0 4.1 0.9 4.9 3.3 1.0 2.3 0.0 2.4 0.8 3.2 1.7 1.5 0.3 1.2 19.1 23.0

FY13E 3.3 41.7 0.9 17.3 35.5 72.9 13.7 9.1 4.5 1.4 3.0 0.9 75.0 35.6 219.1 7.0 4.6 0.7 4.3 3.3 1.0 2.3 0.0 2.3 0.7 3.1 1.7 1.4 0.5 0.9 18.4 17.3

February 1, 2012

10

Allahabad Bank | 3QFY2012 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

Allahabad 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%)

February 1, 2012

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