Thursday, May 6, 2010

Vijaya Bank: Growth That Needs to be Steadied

VIJAYA BANK: (BSE: 532401 | NSE: VIJAYABANK)
Here we find growth, but that needs to be steadied. Q4 net up both sequentially and YoY, but the sequentially alternating dips and recoveries need to be convincingly eliminated.

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South Indian Bank: What Went Wrong?

SOUTH INDIAN BANK: (BSE: 532218 | NSE: SOUTHBANK)
Something went seriously wrong here. All that new costly image-building exercises and now the worst performing quarter in 2½ years. With a sequential drop of 38.20% and a YoY drop of 23%, nobody except the management knows what went wrong here. The market has already started on a severe correction on the scrip, which is expected to gather momentum unless a comprehensive explanation is delivered.

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Bank of Maharashtra: Back to Health?

BANK OF MAHARASHTRA: (BSE: 532525 | NSE: MAHABANK)
The YoY jump in net profit is insignificant at 1%, but this quarter marks a back-to-healthy step, as it further reinforces the turnaround that started in the December 09 quarter, after two consecutive quarters of poor performance. Still, a long way to go.

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IFCI: A Breakout, But Will it Ever Reach Old Glory?

IFCI: (BSE: 500106 | NSE: IFCI)
At first looks, the quarterly growth – both sequential and YoY - is impressive here, but the important question is whether net profit’s breakout from the 100s to the 200s will also prove to be a breakout from the last six quarters’ seesawing of dips and recoveries, to head on to pre-2008 glory when net played in the 600s.

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Dena Bank: Predictable & Steady

DENA BANK: (BSE: 532121 | NSE: DENABANK)
Repeats a predictable and steady performance. No big upmoves here, but all the moves – both sequential & YoY – are northwards.

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Andhra Bank: A Reversal in Fortune?

ANDHRA BANK: (BSE: 532418 | NSE: ANDHRABANK)
Seems to be encountering a reversal in fortune. Q4 net jumps YoY, but the deceleration in the previous quarters seems to be turning into a reversal, with this time's sequential dip.

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Allahabad Bank: A Shocking Dip

ALLAHABAD BANK: (BSE: 532480 | NSE: ALBK)
Here it is a shocking dip this time. Q4 net dips drastically, both sequentially and YoY, after three quarters of blistering performance.

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Syndicate Bank: Previous Quarters Save the Show

SYNDICATE BANK: (BSE: 532276 | NSE: SYNDIBANK)
Previous Quarters Save the Show here. Despite fourth quarter dipping drastically here – both sequentially as well as YoY – the overall picture is not so bleak, thanks to the good to moderate results of the first three quarters. Still, the quarterly seesawing of dips and recoveries should stop.

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Indian Overseas Bank: Finally, Turning Around?

INDIAN OVERSEAS BANK: (BSE: 532388 | NSE: IOB)
After four quarters of alarming performance, a tiny hint of a turnaround here.
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Oriental Bank of Commerce: A Convincing Performance

ORIENTAL BANK OF COMMERCE: (BSE: 500315 | NSE: ORIENTBANK)
The YoY jump is due to the low base, but sequentially this is going northwards. Overall, a convincing performance.

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United Bank of India: IPO Affects Results?

UNITED BANK OF INDIA: (BSE: 533171 | NSE: UNITEDBNK)
The performance seems to be distracted by the IPO. After a robust IPO, this kind of results – a 65% YoY plunge - is unpardonable. It seems that while the bank was immersed in the IPO business, dangers like higher provisioning and lower treasury crept in. Seriously needs to get it act together, before the market corrects the scrip with a possible over-reaction.

Also Read: How 24 Indian Banks Actually Performed in Q4
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Yes Bank: Can This Move Into the Big League?

YES BANK: (BSE: 532648 | NSE: YESBANK)
The efforts to move into the big league is evident. Q4 further proves that the growth march in net profit still goes ahead undeterred, both sequentially and YoY.
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ING Vysya Bank: Will the Breakout Sustain?

ING VYSYA BANK: (BSE: 531807 | NSE: INGVYSYABK)
Here, there is a chance for a breakout from the usual pattern. The YoY jump of Q4 is impressive, but the more important question is whether the breakout seen from the last five quarters’ seesawing of dips and recoveries will gain strength. It should, hopefully, taking into account the higher highs seen sequentially.

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IndusInd Bank: Growing, But Needs a Shift to Overdrive

INDUSIND BANK: (BSE: 532187 | NSE: INDUSINDBK)
Growing, but the need for a shift to overdrive is evident. After years of lull, growth is here both YoY and sequentially, but it is the predictable, unexciting kind of growth, with the risk of another slowdown.

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UCO Bank: At a Historical High

UCO BANK: (BSE: 532505 | NSE: UCOBANK)
Q4 net has surged by 269%, but that can be explained away on the low base. What is surprising is the steady sequential growth exhibited throughout FY’ 2010, which has now culminated in an almost historical high – at least since 2002 – quarterly performance, in absolute numbers.

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Indian Bank: Growing, But Growth Slowing?

INDIAN BANK: (BSE: 532814 | NSE: INDIANB)
Growing still, but the growth seems to be slowing down. A healthy performance, but YoY has barely grown, while sequential net profit drops after two straight quarters of growth.

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IDBI Bank: On a Comeback, But Miles to Go

IDBI BANK: (BSE: 500116 | NSE: IDBI)
Here, it is a definite comeback, but there are still miles to go. Sequential results jump, but that jump is not enough to move much above the corresponding Q4.
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Corporation Bank: Steady But Slow Growth

CORPORATION BANK: (BSE: 532179 | NSE: CORPBANK)
Continues to be both steady and slow. The YoY jump is impressive here, and that is not just by the low base, but still the sequential pace still has much room for improvement. Otherwise, a reversal in fortune can happen in the coming quarters.
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Canara Bank: Unpredictable Moves, Again

CANARA BANK: (BSE: 532483 | NSE: CANBK)
Here the quarterly moves continue to be unpredictable. Q4 dips drastically both YoY and sequential, and is almost the worst performance in two years.

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Bank of Baroda: Making Up for Lost Time?

BANK OF BARODA: (BSE: 532134 | NSE: BANKBARODA)
Q4 net jumps YoY, further reversing the downtrend in the first and second quarters. More than makes up for the lost time.

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Axis Bank: Moving Into Its True League?

AXIS BANK: (BSE: 532215 NSE: AXISBANK)
Finally, indications of moving into its true league are visible here. The convincing Q4 numbers, both sequentially and YoY, point to catching up with ICICI Bank & HDFC Bank, and there are no signs of fatigue here.
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Central Bank of India: Again, The March Pullback

CENTRAL BANK OF INDIA: (BSE: 532885 | NSE: CENTRALBK)
The March quarter is again proving to be problematic here. Despite Q4 profits jumping almost three-fold YoY, nobody here is claiming victory, as it is almost solely due to the low base. The quarter ending March has again come to haunt here, with a serious sequential dip from the excellent performance of the last two consecutive quarters.

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HDFC Bank: Impressive, But Expect Lesser?

HDFC BANK: (BSE: 500180 | NSE: HDFCBANK)
Is it time to expect lesser here? The YoY jump is impressive as it is not on a much low base, but the sequential jumps are getting smaller. Still, can’t complain. But with parent HDFC Ltd as well as offspring HDFC Bank having majority foreign ownership – with a whopping 73% foreign ownership in HDFC Bank, and it existing as ‘Indian’ only on a proposed RBI exemption, it needs to move carefully during these times when financial markets worldwide are holding their breath on Greece, Spain & Euro.

Also Read: How 24 Indian Banks Actually Performed in Q4

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ICICI Bank: Back in Reckoning?

ICICI BANK: (BSE: 532174 | NSE: ICICIBANK)
Seems to be back in the reckoning. YoY jump is on low base, but the steady sequential growth hints at again being the heavyweight it once was. No wonder even RBI is encouraging with more time for attaining 70% PCR. But with 67% foreign ownership, and the bank existing as ‘Indian’ only on a proposed RBI exemption, it needs to tread carefully during these times when capital markets worldwide are holding their breath on Goldman Sachs.

Also Read: How 24 Indian Banks Actually Performed in Q4

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Wednesday, May 5, 2010

How 24 Indian Banks Actually Performed in Q4


When the fourth quarter results from private and state-promoted banks of India started pouring in, everything seemed to look up. But on a closer analysis and with more results coming in, the overall picture is not so rosy. It is a mix of under performance, reasonable performance, and rare instances of over performance. While some underperformers hid behind improvement in core numbers like Net Interest Income (NII) or total revenue, some others had to present an overall bleak picture. The overall theme running around this time is that only a few banks were able to survive the double-whammy of lower treasury returns and higher provision coverage ratio (PCR). But for investors in the Indian stock markets, who are looking upon the country’s banking sector as perhaps the highest-rated long-term value play, the results came as not much encouraging. Again, it is a case fit for bank-by-bank analysis. Here is the actual picture of the first 24 publicly-listed Indian banks whose results are out. Coverage includes ICICI Bank, HDFC Bank, Central Bank Of India, Axis Bank, Bank Of Baroda, Canara Bank, Corporation Bank, IDBI Bank, Indian Bank, UCO Bank, IndusInd Bank, ING Vysya Bank, Yes Bank, United Bank Of India, Oriental Bank Of Commerce, Indian Overseas Bank, Syndicate Bank, Allahabad Bank, Andhra Bank, Dena Bank, IFCI, Bank Of Maharashtra, Vijaya Bank, and South Indian Bank.

ICICI BANK: (BSE: 532174 | NSE: ICICIBANK)
Seems to be back in the reckoning. YoY jump is on low base, but the steady sequential growth hints at again being the heavyweight it once was. No wonder even RBI is encouraging with more time for attaining 70% PCR. But with 67% foreign ownership, and the bank existing as ‘Indian’ only on a proposed RBI exemption, it needs to tread carefully during these times when capital markets worldwide are holding their breath on Goldman Sachs.

HDFC BANK: (BSE: 500180 | NSE: HDFCBANK)
Is it time to expect lesser here? The YoY jump is impressive as it is not on a much low base, but the sequential jumps are getting smaller. Still, can’t complain. But with parent HDFC Ltd as well as offspring HDFC Bank having majority foreign ownership – with a whopping 73% foreign ownership in HDFC Bank, and it existing as ‘Indian’ only on a proposed RBI exemption, it needs to move carefully during these times when financial markets worldwide are holding their breath on Greece, Spain & Euro.

CENTRAL BANK OF INDIA: (BSE: 532885 | NSE: CENTRALBK)
The March quarter is again proving to be problematic here. Despite Q4 profits jumping almost three-fold YoY, nobody here is claiming victory, as it is almost solely due to the low base. The quarter ending March has again come to haunt here, with a serious sequential dip from the excellent performance of the last two consecutive quarters.

AXIS BANK: (BSE: 532215 NSE: AXISBANK)
Finally, indications of Moving Into its True League are visible here. The convincing Q4 numbers, both sequentially and YoY, point to catching up with ICICI & HDFC, and there are no signs of fatigue here.

BANK OF BARODA: (BSE: 532134 | NSE: BANKBARODA)
Q4 net jumps YoY, further reversing the downtrend in the first and second quarters. More than makes up for the lost time.

CANARA BANK: (BSE: 532483 | NSE: CANBK)
Here the quarterly moves continue to be unpredictable. Q4 dips drastically both YoY and sequential, and is almost the worst performance in two years.

CORPORATION BANK: (BSE: 532179 | NSE: CORPBANK)
Continues to be both steady and slow. The YoY jump is impressive here, and that is not just by the low base, but still the sequential pace still has much room for improvement. Otherwise, a reversal in fortune can happen in the coming quarters.

IDBI BANK: (BSE: 500116 | NSE: IDBI)
Here, it is a definite comeback, but there are still miles to go. Sequential results jump, but not enough to jump much above the corresponding Q4.

INDIAN BANK: (BSE: 532814 | NSE: INDIANB)
Growing still, but the growth seems to be slowing down. A healthy performance, but YoY has barely grown, while sequential net profit drops after two straight quarters of growth.

UCO BANK: (BSE: 532505 | NSE: UCOBANK)
Q4 net has surged by 269%, but that can be explained away on the low base. What is surprising is the steady sequential growth exhibited throughout FY’ 2010, which has now culminated in an almost historical high – at least since 2002 – quarterly performance, in absolute numbers.

INDUSIND BANK: (BSE: 532187 | NSE: INDUSINDBK)
Growing, but the need for a shift to overdrive is evident. After years of lull, growth is here both YoY and sequentially, but it is the predictable, unexciting kind of growth, with the risk of another slowdown.

ING VYSYA BANK: (BSE: 531807 | NSE: INGVYSYABK)
Here, there is a chance for a breakout from the usual pattern. The YoY jump of Q4 is impressive, but the more important question is whether the breakout seen from the last five quarters’ seesawing of dips and recoveries will gain strength. It should, hopefully, taking into account the higher highs seen sequentially.

YES BANK: (BSE: 532648 | NSE: YESBANK)
The efforts to move into the big league is evident. Q4 further proves that the profit growth march here goes ahead undeterred, both sequentially and YoY.

UNITED BANK OF INDIA: (BSE: 533171 | NSE: UNITEDBNK)
The performance seemed to be distracted by the IPO. After a robust IPO, this kind of results – a 65% YoY plunge - is unpardonable. It seems that while the bank was immersed in the IPO business, dangers like higher provisioning and lower treasury crept in. Seriously needs to get it act together, before the market corrects the scrip with a possible over-reaction.

ORIENTAL BANK OF COMMERCE: (BSE: 500315 | NSE: ORIENTBANK)
The YoY jump is due to the low base, but sequentially this is going northwards. Overall, a convincing performance.

INDIAN OVERSEAS BANK: (BSE: 532388 | NSE: IOB)
After four quarters of alarming performance, a tiny hint of a turnaround here.

SYNDICATE BANK: (BSE: 532276 | NSE: SYNDIBANK)
Previous Quarters Save the Show here. Despite fourth quarter dipping drastically here – both sequentially as well as YoY – the overall picture is not so bleak, thanks to the good to moderate results of the first three quarters. Still, the quarterly seesawing of dips and recoveries should stop.

ALLAHABAD BANK: (BSE: 532480 | NSE: ALBK)
Here it is a shocking dip this time. Q4 net dips drastically, both sequentially and YoY, after three quarters of blistering performance.

ANDHRA BANK: (BSE: 532418 | NSE: ANDHRABANK)
Seems to be encountering a Reversal in Fortune. Q4 net jumps YoY, but the deceleration of the previous quarters seems to be turning into a reversal, with the sequential dip.

DENA BANK: (BSE: 532121 | NSE: DENABANK)
Repeats a predictable and steady performance. No big upmoves here, but all the moves – both sequential & YoY – are northwards.

IFCI: (BSE: 500106 | NSE: IFCI)
At first looks, the quarterly growth – both sequential and YoY - is impressive here, but the important question is whether net profit’s breakout from the 100s to the 200s will also prove to be a breakout from the last six quarters’ seesawing of dips and recoveries, to head on to pre-2008 glory when net played in the 600s.

BANK OF MAHARASHTRA: (BSE: 532525 | NSE: MAHABANK)
The YoY jump in net profit is insignificant at 1%, but this quarter marks a back-to-healthy step, as it further reinforces the turnaround that started in the December 09 quarter, after two consecutive quarters of poor performance. Still, a long way to go.

VIJAYA BANK: (BSE: 532401 | NSE: VIJAYABANK)
Here we find growth, but that needs to be steadied. Q4 net up both sequentially and YoY, but the sequentially alternating dips need to be convincingly eliminated.

SOUTH INDIAN BANK: (BSE: 532218 | NSE: SOUTHBANK)
Something went seriously wrong here. All that new costly image-building exercises and now the worst performing quarter in 2½ years. With a sequential drop of 38.20% and a YoY drop of 23%, nobody except the management knows what went wrong here. The market has already started on a severe correction on the scrip, which is expected to gather momentum unless a comprehensive explanation is delivered.

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Wednesday, January 27, 2010

Results from 15 Indian Banks: What Went Wrong & Right?

Banks Beating Estimates, Banks Failing Targets



With the third quarter results pouring in, one thing is sure. The banking industry as a whole has done better than analyst expectations. But at the same time, some heavyweights are expected to fail even their targets. Seasonal Magazine brings an in-depth compilation cover story about the third-quarter results and how the projected performance will be in the fourth quarter and beyond.


ICICI BANK
When Treasury Slips, Profits Slip
Theoretically, ICICI Bank did everything perfectly. It shed almost 10,000 crores of high-cost deposits, it didn’t increase its lending mindlessly, it had a lower tax outgo, but still the country’s second-largest lender failed to register profits as treasury slipped. But all the theory is going to help sooner rather than later.

HDFC BANK
Interest Income Surges, Treasury Slips
While income from treasury and other operations slipped significantly, the second-largest private sector lender could post a 31% rise in net profit owing to better net interest income, and maintenance of NIM and NPA levels.

AXIS BANK
Profit & Margins Rise, But NPAs Jump Again
The third-largest private lender’s aggressive stance was not only evident in a 31% rise in net profit on strong margins, but also in its NPA levels that jumped yet again, this time by 49%.

UCO BANK
Overall Good Q3 Might Pave Way for the FPO
The overall good performance of 43% growth in net profit will now pave way for capital augmentation at UCO Bank. It has three ways before it – raising it on its own by way of Tier-1 & 2 bonds, capital infusion by the Government, or a glamorous FPO that can change its fortunes at the bourses.

IDBI BANK
Investment Income Up, NPAs & NIM Troubling
IDBI is still to get its act together it seems. The once-public now-private-sector lender had to rely on investments alone to survive the quarter, even while its NIM and NPA challenges deepen.

CORPORATION BANK
Needs Significant Capital to Grow Further
The public sector lender had a healthy though modest quarter that registered 18.92% growth in net profit, but to further kick-start growth it need to raise around Rs. 4000 crore in capital.

ALLAHABAD BANK
Treasury Losses Sink Profits
Whatever gains it had made in interest income was washed out by a major dip in treasury, and this exposed the chink in armour of this PSB. The bank’s NIM is troubling, even though it is trying to address the issue by shedding high-cost deposits.

INDIAN BANK
Interest, Expense Cuts Help Survive Treasury Dip
It seems Indian Bank had braced well for the treasury dip. It survived and posted a 26% rise in net profit, largely relying on expense cuts and a good performance on the interest income front.

VIJAYA BANK
Interest Income Up, NPAs Challenging
The STCL account continued to weigh down on Vijaya Bank numbers, even though the net interest income was up by 45%. With the treasury also dipping this time, it accounted for a net profit dip, but the bank continues to get healthier by the day.

SOUTH INDIAN BANK
Corporate Banking Up, Expenditure Weighs Down
If not for the higher expenditure, South Indian Bank would have posted a better than 15.23% growth in Q3. But with the profit for the first three quarters already surpassing last annual profit, the bank has some leeway.

INDUSIND BANK
Profits Surge on Low Base, Rising Yields Hurt
IndusInd bank is steadily playing catch-up to its bigger peers, by an overall good performance except from treasury operations. But, of course, the 95% jump in net profit was also helped by the low base effect.

YES BANK
Interest Up, Non-Interest Down, Cost Control Saves
While the young private sector lender could significantly grow its interest income and income from corporate banking, a huge dip in treasury dip weighed it down. But Yes Bank was smart enough to contain costs tight this time around.

KOTAK MAHINDRA BANK
Interest Static, Treasury Jumps, NPAs Worrying
Kotak Mahindra’s was the contrarian play of Q3. While most banks were hit by a dip in treasury and boost in interest income, this NBFC turned bank experienced almost stagnant growth in interest income and a surge in treasury. But the bank’s NPAs continue to trouble.

DHANALAKSHMI BANK
Shocking Expenditure Melts Profits
This once-traditional private sector bank could increase its income for the third quarter from 124 crore to 156 crore YoY. But this now-new-gen bank almost doubled its expenses from 29.20 crore to 53 crore, thereby melting away whatever profits were possible. The culprit was the expansion program that added expenses by way of new branches, ATMs, and employees. However, the expansion was long-pending and the bourses too had taken kindly to the results.

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