You are on page 1of 12

Please refer to important disclosures at the end of this report

1


 
Particulars (` cr) 4QFY14 3QFY14 % chg (qoq) 4QFY13 % chg (yoy)
NII 3,047 2,719 12.1 2,476 23.1
Pre-prov. profit 1,996 2,144 (6.9) 2,075 (3.8)
PAT 558 586 (4.8) 757 (26.3)
Source: Company, Angel Research
For 4QFY2014, Bank of India (BOI) reported asset quality pressures, with
annualised slippage rate at 5.0% (vs 2.4% in 3QFY2014). On the operating front,
the NII for the bank grew healthy by 23.1% yoy (12.1% growth qoq) on back of
28.1% yoy growth in advances. The other income excluding treasury de-grew by
11.3% yoy. Continuing the trend of last three quarters, the opex grew higher by
31.4% yoy. Overall the earnings for the bank de-grew by 26.3% yoy.
Strong business growth; Global NIM declines 4bp qoq: During 4QFY2014, the
bank registered a strong 28.1% yoy growth in its overall advances, aided by a
robust growth in its international loan book (at 24.8% yoy partly on back of INR
depreciation). Even overall deposits for the bank grew at a strong pace of 24.9%
yoy. The CASA ratio for bank dipped sequentially by 34bp to 22.1%. Domestic
NIM declined by 4bp sequentially to 2.9%. Overall global NIMs declined 4bp qoq
to 2.3%. The bank’s performance on the non-interest income (excluding treasury)
front was weak, as it witnessed de-growth of 11.3% yoy to `831cr. On the asset
quality front, the bank witnessed pressure as absolute Gross and Net NPA levels
increased 16.5% and 20.7% yoy sequentially. Slippages for the bank came at
`3,600cr (annualised slippage ratio at 5.0% compared to 2.4% in 3QFY2014
and 2.0% in 2QFY2013). The bank’s recoveries/upgrades for the quarter were at
`1,300cr as compared to `1,104cr in 3QFY2014 and `889cr in 2QFY2014. The
PCR decreased sequentially by 509bp to 58.7%; as a result, absolute Net NPA
levels increased 20.7% sequentially. During the quarter, the bank sold off `1,071cr
worth of assets to ARCs. During the quarter, the bank restructured advances worth
`2,400cr (compared to `1,146cr restructured in 3QFY2014), thereby taking its total
standard restructured book to ~`13,557cr (~4.4% of its loan book). Going ahead,
as per the Management, the restructuring pipeline stands at ~`1,100cr.
Outlook and valuation: BOI’s asset quality performance over the last two quarters
has been reasonable (aided by healthy recoveries/upgrades largely on back of
asset sale to ARCs, while slippages and incremental restructuring still remain
elevated). Going ahead, the Management has guided for a stable to improving
outlook on its asset quality. Inspite of the recent run up in the stock price, the bank
is trading at relatively cheap valuations of 0.7x FY2016E ABV. We recommend a
Buy rating on the stock with a target price of `413.
Key financials (Standalone)
Y/E March (` cr) FY2013 FY2014 FY2015E FY2016E
NII 9,024 10,831 12,104 13,635
% chg 8.5 20.0 11.8 12.6
Net profit 2,750 2,729 3,462 4,038
% chg 2.7 (0.7) 26.9 16.6
NIM (%) 2.2 2.2 2.1 2.0
EPS (`) 46.1 42.4 53.8 62.8
P/E (x) 7.5 8.1 6.4 5.5
P/ABV (x) 1.0 0.9 0.8 0.7
RoA (%) 0.7 0.5 0.6 0.6
RoE (%) 13.0 10.6 11.5 12.2
Source: Company, Angel Research; Note: CMP as of May 23, 2014

BUY
CMP `345
Target Price `413
Investment Period 12 Months

Stock Info
Sector
Bloomberg Code
Shareholding Pattern (%)
Promoters 66.7
MF / Banks / Indian Fls 15.4
FII / NRIs / OCBs 11.4
Indian Public / Others 6.6
Abs. (%) 3m 1yr 3yr
Sensex 20.2 25.5 37.1
BOI 107.3 12.3 (18.2)
Banks
Market Cap (` cr) 22,181
Beta 1.6
52 Week High / Low 353/127
Avg. Daily Volume 658,554
Face Value (`) 10
BSE Sensex 24,693
Nifty 7,367
Reuters Code BOI.NS
BOI@IN





















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

Harshal Patkar
022 – 3935 7800 Ext: 6847
harshal.patkar@angelbroking.com

Bank of India
Performance Highlights
4QFY2014 Result Update | Banking
May 24, 2014




Bank of India | 4QFY2014 Result Update

May 24, 2014
2
Exhibit 1: 4QFY2014 performance (Standalone)
Particulars (` cr) 4QFY14 3QFY14 % chg (qoq) 4QFY13 % chg (yoy) FY2014 FY2013 % chg (yoy)
Interest earned 10,360 9,769 6.1 8,172 26.8 37,910 31,909 18.8
- on Advances / Bills 7,281 7,017 3.8 5,926 22.9 27,119 23,139 17.2
- on investments 2,185 2,207 (1.0) 1,720 27.0 8,405 7,261 15.8
- on balance with RBI & others 513 546 (6.0) 398 28.8 2,003 1,257 59.4
- on others 382 (0) (1,273,433.3) 127 201.7 382 251 52.1
Interest Expended 7,313 7,050 3.7 5,696 28.4 27,080 22,885 18.3
Net Interest Income 3,047 2,719 12.1 2,476 23.1 10,831 9,024 20.0
Other income 914 1,097 (16.7) 1,094 (16.5) 4,292 3,766 14.0
Other income excl. treasury 831 970 (14.4) 937 (11.3) 3,497 3,319 5.4
- Fee Income 408 354 15.3 380 7.4 1,426 1,263 12.9
- Treasury Income 83 127 (34.6) 157 (47.2) 795 447 77.9
- Recoveries from w/o accounts 168 226 (25.7) 195 (13.9) 761 844 (9.9)
- Others 255 390 (34.7) 362 (29.6) 1,310 1,212 8.1
Operating income 3,961 3,816 3.8 3,570 11.0 15,122 12,790 18.2
Operating expenses 1,965 1,672 17.5 1,495 31.4 6,699 5,332 25.7
- Employee expenses 1,143 989 15.6 855 33.7 3,991 3,131 27.5
- Other Opex 822 684 20.2 640 28.4 2,708 2,201 23.0
Pre-provision Profit 1,996 2,144 (6.9) 2,075 (3.8) 8,423 7,459 12.9
Provisions & Contingencies 1,547 1,404 10.2 1,511 2.4 4,878 4,451 9.6
- Provisions for NPAs 1,135 1,173 (3.2) 1,089 4.2 3,970 3,726 6.5
- Provisions for Investments 163 34 379.4 258 (36.8) 72 76 (5.8)
- Other Provisions 249 197 26.7 164 52.3 836 648 29.0
PBT 449 740 (39.4) 565 (20.5) 3,545 3,008 17.9
Provision for Tax (109) 154 (170.4) (192) (43.4) 816 258 215.7
PAT 558 586 (4.8) 757 (26.3) 2,729 2,749 (0.7)
Effective Tax Rate (%) (24.2) 20.9 (4509)bp (34.0) 981bp 23.0 8.6 1442bp
Source: Company, Angel Research

Exhibit 2: 4QFY2014 Actual vs. Estimates
Particulars (` cr) Actual Estimates Var (%)
NII 3,047 2,792 9.1
Non-interest income 914 1127 (19.0)
Operating income 3,961 3,919 1.1
Operating expenses 1,965 1,788 9.9
Pre-prov. profit 1,996 2,131 (6.3)
Provisions & cont. 1,547 1,210 27.8
PBT 449 920 (51.2)
Prov. for taxes -109 200 (154.3)
PAT 558 720 (22.6)
Source: Company, Angel Research





Bank of India | 4QFY2014 Result Update

May 24, 2014
3
Exhibit 3: 4QFY2014 performance analysis (Standalone)
Particulars 4QFY14 3QFY14 % chg (qoq) 4QFY13 % chg (yoy)
Balance sheet

Advances (` cr) 370,734 351,725 5.4 289,368 28.1
Deposits (` cr) 476,974 454,140 5.0 381,840 24.9
Credit-to-Deposit Ratio (%) 77.7 77.4 28bp 75.8 194bp
Domestic current deposits (` cr) 18,331 19,819 (7.5) 16,769 9.3
Domestic saving deposits (` cr) 87,136 82,138 6.1 77,031 13.1
Domestic CASA deposits (` cr) 105,467 101,957 3.4 93,800 12.4
Global CASA ratio (%) 22.1 22.5 (34)bp 24.6 (245)bp
CAR (%) 10.0 10.8 (87)bp 11.0 (105)bp
Tier 1 CAR (%) 7.2 7.9 (61)bp 8.2 (96)bp
Profitability Ratios (%)

Dom. cost of deposits 7.1 7.3 (16)bp 7.3 (12)bp
Dom. yield on advances 11.2 11.3 (8)bp 11.5 (28)bp
Dom. yield on investments 8.3 8.4 (1)bp 7.9 41bp
Dom. yield on funds 8.9 9.2 (34)bp 9.1 (25)bp
Dom. cost of funds 6.4 6.7 (27)bp 6.6 (18)bp
Dom. Reported NIMs 2.9 2.9 (4)bp 2.8 5bp
Cost-to-income ratio 49.6 43.8 579bp 41.9 773bp
Asset quality

Gross NPAs (` cr) 11,672 10,023 16.5 8,765 33.2
Gross NPAs (%) 3.2 2.8 34bp 3.0 16bp
Net NPAs (` cr) 7,417 6,147 20.7 5,947 24.7
Net NPAs (%) 2.0 1.8 25bp 2.1 (6)bp
Provision Coverage Ratio (%) 58.7 63.8 (509)bp 60.9 (224)bp
Slippage Ratio 5.0 2.4 256bp 2.7 228bp
LLP to avg assets (%) 0.8 0.9 (8)bp 1.0 (18)bp
Source: Company, Angel Research; Note: Profitability ratios excluding CIR for domestic operations

Strong business growth; Global NIM declines sequentially
During 4QFY2014, the bank registered a strong 28.1% yoy growth in its overall
advances, aided by a robust growth in its international loan book (at 24.8% yoy
partly on back of INR depreciation). Domestic advances for the bank grew strong
by 29.5% yoy, aided by strong growth in corporate, agri and retail segments which
grew by 30.7%, 33.4% and 32.4% yoy respectively. Going ahead, the
Management has guided for an advances growth of 18-20% for FY2015.
The overall deposits for the bank grew at a strong pace of 24.9% yoy. CASA
deposits grew moderate at 12.4% yoy, with savings deposits growth at 13.1% yoy
and current account growth at 9.3% yoy. Consequently, the CASA ratio for the
bank dipped sequentially by 34bp to 22.1%.
Domestic NIMs declined by 4bp sequentially to 2.9%, as the domestic cost of funds
declined by 27bp qoq. The domestic yield on advances came in lower by 8bp qoq
to 11.2%. Global NIMs also declined 4bp qoq to 2.3%. Going ahead, the
Management has guided at a domestic NIM of 3.0% and international NIM of
1.3% for FY2015.



Bank of India | 4QFY2014 Result Update

May 24, 2014
4
Exhibit 4: Business grows strong on back of high C/D
Source: Company, Angel Research
Exhibit 5: CASA ratio improves
Source: Company, Angel Research

Exhibit 6: Strong Gr. in Corporate and Agri aides Domestic loan growth
Particulars (` cr) 4QFY14 3QFY14 % chg (qoq) 4QFY13 % chg (yoy) 4QFY14
Agricultural 36,071 32,387 11.4 27,041 33.4 36,071
SME 45,081 39,735 13.5 37,230 21.1 45,081
Corporate 153,508 137,754 11.4 117,415 30.7 153,508
Retail 29,600 25,527 16.0 22,350 32.4 29,600
Domestic advances 264,260 235,403 12.3 204,036 29.5 264,260
International 106,474 116,322 (8.5) 85,332 24.8 106,474
Global advances 370,734 351,725 5.4 289,368 28.1 370,734
Source: Company, Angel Research

Exhibit 7: Trend in yield and cost ratios (Domestic)
Particulars (%) 4QFY14 3QFY14 % chg (qoq) 4QFY13 % chg (yoy)
Cost of deposits 7.1 7.3 (16)bp 7.3 (12)bp
Yield on advances 11.2 11.3 (8)bp 11.5 (28)bp
Yield on investments 8.3 8.4 (1)bp 7.9 41bp
Yield on funds 8.9 9.2 (34)bp 9.1 (25)bp
Cost of funds 6.4 6.7 (27)bp 6.6 (18)bp
Reported NIM 2.9 2.9 (4)bp 2.8 5bp
Source: Company, Angel Research

1
6
.
3

1
6
.
9

2
9
.
7

2
7
.
2

2
8
.
1

2
0
.
0

2
2
.
4

2
9
.
9

3
0
.
1

2
4
.
9

75.8
73.6
76.8
77.4
77.7
70.0
72.0
74.0
76.0
78.0
80.0
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
4QFY13 1QFY14 2QFY14 3QFY14 4QFY14
Adv. yoy chg (%) Dep. yoy chg (%) CDR (%, RHS)
3
1
.
9

3
0
.
6

2
9
.
7

3
1
.
6

3
2
.
7

15.3
16.2
13.9
15.9
12.4
-
5.0
10.0
15.0
20.0
25.0
27.0
29.0
31.0
33.0
35.0
4QFY13 1QFY14 2QFY14 3QFY14 4QFY14
Domestic CASA ratio (%) CASA yoy growth (%, RHS)



Bank of India | 4QFY2014 Result Update

May 24, 2014
5
Exhibit 8: Yileds on advances decline by 8bp qoq
Source: Company, Angel Research
Exhibit 9: Domestic NIM declines 4bp qoq
Source: Company, Angel Research

De-growth in non-interest income (excl. treasury)
The bank posted a de-growth of 11.3% yoy in non-interest income (excluding
treasury) to `831cr. CEB income grew moderate by 7.4% yoy to `408cr. Income
from the Forex segment de-grew by 55.2% yoy to `83cr. Income from the others
segment remained largely flat at `172cr. Treasury income came in at `83cr
against `157cr in 4QFY2013. Overall, the non-interest income for the bank
de-grew by 16.5% yoy to `914cr. Going ahead, the Management has guided for a
fee-income growth of 20% for FY2015.
Exhibit 10: Moderate performance on other income (excl. Treasury)
Particulars (` cr) 4QFY14 3QFY14 % chg (qoq) 4QFY13 % chg (yoy)
CEB 408 354 15.3 380 7.4
Treasury 83 127 (34.6) 157 (47.2)
Forex 83 207 (59.9) 185 (55.2)
Recoveries 168 226 (26) 195 (13.9)
Others 172 183 (6.0) 176 (2.4)
Other income 914 1,097 (16.7) 1,094 (16.5)
Other income excl. treasury 831 970 (14.3) 937 (11.3)
Source: Company, Angel Research
Asset quality witnesses pressure
During the quarter, the banks’ asset quality witnessed pressure as absolute Gross
and Net NPA levels increased 16.5% and 20.7% yoy sequentially. Slippages for the
bank came in at `3,600cr (annualised slippage ratio at 5.0% compared to 2.4% in
3QFY2014 and 2.0% in 2QFY2013). The bank’s recoveries/upgrades for the
quarter stood at `1,300cr as compared to `1,104cr in 3QFY2014 and `889cr in
2QFY2014. The bank’s PCR decreased sequentially by 509bp to 58.7%; as a
result, absolute Net NPA levels increased 20.7% sequentially. The Gross and Net
NPA ratios increased by 34bp and 25bp respectively to 3.2% and 2.0% on a
sequential basis.. During the quarter, the bank sold off `1,071cr worth of assets to
ARCs (around `1,700cr in 3QFY2014).
During the quarter, the bank restructured advances worth `2,400cr (compared to
`1,146cr restructured in 3QFY2014), thereby taking its total standard restructured
11.52
11.32
11.36
11.32
11.24
10.0
10.2
10.4
10.6
10.8
11.0
11.2
11.4
11.6
4QFY13 1QFY14 2QFY14 3QFY14 4QFY14
(%)
2.8
3.07
2.93
2.89
2.85
1.5
1.8
2.0
2.3
2.5
2.8
3.0
3.3
4QFY13 1QFY14 2QFY14 3QFY14 4QFY14
Reported NIM (%)



Bank of India | 4QFY2014 Result Update

May 24, 2014
6
book to ~`13,557cr (~4.4% of its loan book). Going ahead, as per the
Management, the restructuring during the next quarter is likely to be ~`1,100cr.
Exhibit 11: Slippages increase substantially qoq
Source: Company, Angel Research
Exhibit 12: NPA ratios increase; PCR decline qoq
Source: Company, Angel Research

Exhibit 13: Cost to income ratio rises qoq
Source: Company, Angel Research
Exhibit 14: Capital adequacy trends
Source: Company, Angel Research * Basel III hence not comparable


2.7 2.7 2.0 2.4 5.0
0.5
0.5
0.8
0.9
0.8
-
0.2
0.4
0.6
0.8
1.0
1.2
(0.0)
0.7
1.4
2.1
2.8
3.5
4QFY13 1QFY14 2QFY14 3QFY14 4QFY14
Slippages (%) Credit cost (%, RHS)
3
.
0

3
.
0

2
.
9

2
.
8

3
.
2

2
.
1

2
.
1

1
.
9

1
.
8

2
.
0

60.9
61.0
63.3
63.8
58.7
55.0
59.0
63.0
67.0
-
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4QFY13 1QFY14 2QFY14 3QFY14 4QFY14
Gross NPAs (%) Net NPAs (%) PCR (%, RHS)
4
1
.
9

4
1
.
4

4
2
.
0

4
3
.
8

4
9
.
6

1.4
1.3
1.2
1.3
1.4
1.0
1.1
1.2
1.3
1.4
1.5
36.0
38.0
40.0
42.0
44.0
46.0
48.0
50.0
52.0
4QFY13 1QFY14 2QFY14 3QFY14 4QFY14
Cost-to-income ratio (%) Opex to average assets (%, RHS)
8.2 8.0 8.1
7.9
7.2
2.8
2.7
3.2
3.0
2.7
11.0
10.7
11.3
10.8
10.0
-
4.0
8.0
12.0
4QFY13 1QFY14 2QFY14* 3QFY14* 4QFY14*
Tier-I CAR (%) Tier-II CAR (%)



Bank of India | 4QFY2014 Result Update

May 24, 2014
7
Investment arguments
Reasonably high fee income with a moderate funding mix
International operations contribute a substantial ~30% (25.9% yoy growth in
4QFY2014, partly on account of INR depreciation at a high C/D rate of 98.7%) to
the bank’s advances. International operations enable a wider spectrum of
fee-based services to the bank’s domestic corporate and retail customers; further,
they enable foreign currency fund-based services to Indian corporate, and savings
products to the bank’s PIO clients abroad. The bank has a moderate funding mix,
with domestic CASA ratio at 32.7% as of 4QFY2014.
Investment concerns
Asset quality remains on the radar on back of pressures
witnessed in 4QFY2014
After moderating in FY2011, asset quality pressures have again resurfaced for the
bank. In FY2012, while the annualized slippage ratio for the bank came in at
2.5%, for FY2013 it increased to 2.9%. During FY2014, the annualized slippage
rate has come in higher at 3.0%, even the recoveries/upgrades performance came
in lower yoy. As a result, absolute NPAs increased by 35.4% yoy. Going ahead,
while the bank’s Management has guided for a stable to improving outlook on
asset quality, we remain watchful on the incremental asset quality pressures
(slippages and incremental restructuring) for the bank, as we take into account
past volatility witnessed in bank’s asset quality performance, its high exposure to
stressed sectors, and overall weak macro-economic environment.

Outlook and valuation
BOI’s asset quality performance over the last two quarters has been reasonable
(aided by healthy recoveries/upgrades largely on back of asset sale to ARCs, while
slippages and incremental restructuring still remain elevated). Going ahead, the
Management has guided for a stable to improving outlook on its asset quality.
Inspite of the recent run up in the stock price, the bank is trading at relatively cheap
valuations of 0.7x FY2016E ABV. We recommend a Buy rating on the stock with a
target price of `413.



Bank of India | 4QFY2014 Result Update

May 24, 2014
8
Exhibit 15: Key assumptions
Particulars (%)
Earlier estimates Revised estimates
FY2015E FY2016E FY2015E FY2016E
Credit growth 15.0 15.0 15.0 15.0
Deposit growth 15.0 15.0 16.0 16.0
CASA ratio 23.3 23.4 22.0 21.9
NIMs 2.1 2.0 2.1 2.0
Other income growth (1.8) 12.0 (1.7) 13.6
Growth in staff expenses 10.0 12.5 7.5 10.0
Growth in other expenses 10.0 12.5 10.0 12.5
Slippages 2.4 2.2 2.5 2.3
Coverage 67.5 70.0 60.0 62.5
Source: Company, Angel Research

Exhibit 16: Change in estimates
Particulars (` cr)
FY2015E FY2016E
Earlier
estimates
Revised
estimates
% chg
Earlier
estimates
Revised
estimates
% chg
NII 12,051 12,104 0.4 13,564 13,635 0.5
Non-interest income 4,427 4,217 (4.7) 4,960 4,790 (3.4)
Operating income 16,477 16,321 (0.9) 18,524 18,426 (0.5)
Operating expenses 7,175 7,270 1.3 8,072 8,071 (0.0)
Pre-prov. profit 9,302 9,052 (2.7) 10,452 10,355 (0.9)
Provisions & cont. 4,437 4,243 (4.4) 4,843 4,586 (5.3)
PBT 4,865 4,809 (1.2) 5,609 5,768 2.8
Prov. for taxes 1,411 1,346 (4.6) 1,683 1,730 2.8
PAT 3,454 3,462 0.2 3,926 4,038 2.8
Source: Company, Angel Research

Exhibit 17: P/ABV band
Source: Company, Angel Research

0
200
400
600
800
1000
M
a
r
-
0
4
A
u
g
-
0
4
J
a
n
-
0
5
M
a
y
-
0
5
O
c
t
-
0
5
M
a
r
-
0
6
J
u
l
-
0
6
D
e
c
-
0
6
A
p
r
-
0
7
S
e
p
-
0
7
J
a
n
-
0
8
J
u
n
-
0
8
N
o
v
-
0
8
M
a
r
-
0
9
A
u
g
-
0
9
D
e
c
-
0
9
M
a
y
-
1
0
O
c
t
-
1
0
F
e
b
-
1
1
J
u
l
-
1
1
N
o
v
-
1
1
A
p
r
-
1
2
S
e
p
-
1
2
J
a
n
-
1
3
J
u
n
-
1
3
O
c
t
-
1
3
M
a
r
-
1
4
Price (`) 0.3x 0.7x 1.1x 1.5x 1.9x



Bank of India | 4QFY2014 Result Update

May 24, 2014
9
Exhibit 18: Recommendation summary
Company Reco.
CMP
(`)
Tgt. price
(`)
Upside
(%)
FY2016E
P/ABV
(x)
FY2016E
Tgt.
P/ABV
(x)
FY2016E
P/E (x)
FY2014-
16E
EPS CAGR
(%)
FY2016E
RoA (%)
FY2016E
RoE (%)
HDFCBk Neutral 790 - - 3.2 - 14.2 25.2 2.0 23.4
ICICIBk* Buy 1,461 1,797 23.0 1.9 2.4 12.2 18.6 1.6 16.0
YesBk Buy 564 666 18.0 1.9 2.3 9.1 17.8 1.5 23.4
AxisBk Buy 1,865 2,300 23.3 1.7 2.2 10.2 17.5 1.7 18.2
J&KBk Accumulate 1,873 2,003 7.0 1.2 1.3 6.5 7.1 1.5 19.1
SBI* Neutral 2,755 - - 1.6 - 11.1 32.4 0.8 14.0
FedBk Neutral 127 - - 1.3 - 10.4 11.6 1.1 13.0
SIB Buy 28 36 30.3 0.9 1.2 5.7 13.4 0.9 16.7
BOB Neutral 955 - - 1.0 - 7.0 13.8 0.7 13.9
PNB Accumulate 1,035 1,135 9.6 0.9 1.0 6.5 31.3 0.8 14.2
UcoBk Neutral 111 - - 0.8 - 5.1 8.3 0.7 16.1
BOI Buy 345 413 19.7 0.7 0.9 5.5 21.6 0.6 12.2
UnionBk Buy 228 264 15.7 0.7 0.9 5.4 22.4 0.6 12.9
CanBk Accumulate 470 528 12.4 0.7 0.8 6.3 19.0 0.6 11.0
IDBI# Accumulate 95 107 12.0 0.6 0.7 7.2 37.0 0.5 8.7
DenaBk Accumulate 84 94 12.1 0.7 0.8 5.5 22.4 0.6 11.6
Source: Company, Angel Research; Note:*Target multiples=SOTP Target Price/ABV (including subsidiaries),
#
Without adjusting for SASF

Company Background
Bank of India is amongst the five largest banks in India, with a balance sheet size
of over `5.7lakh cr. The bank has a pan-India network of around 4,500 branches,
of which around two-third are located in rural and semi-urban areas. The bank
also has considerable presence overseas, which accounts for ~30% of its total
advances.























Bank of India | 4QFY2014 Result Update

May 24, 2014
10


Income statement (Standalone)
Y/E March (` cr) FY11 FY12 FY13 FY14 FY15E FY16E
NII 7,811 8,313 9,024 10,831 12,104 13,635
- YoY Growth (%) 35.7 6.4 8.5 20.0 11.8 12.6
Other Income 2,642 3,321 3,766 4,292 4,217 4,790
- YoY Growth (%) 1.0 25.7 13.4 14.0 (1.7) 13.6
Operating Income 10,452 11,635 12,790 15,122 16,321 18,426
- YoY Growth (%) 24.8 11.3 9.9 18.2 7.9 12.9
Operating Expenses 5,068 4,941 5,332 6,700 7,270 8,071
- YoY Growth (%) 38.2 (2.5) 7.9 25.7 8.5 11.0
Pre - Provision Profit 5,384 6,694 7,459 8,423 9,052 10,355
- YoY Growth (%) 14.4 24.3 11.4 12.9 7.5 14.4
Prov. & Cont. 1,889 3,116 4,451 4,878 4,243 4,586
- YoY Growth (%) (14.6) 65.0 42.8 9.6 (13.0) 8.1
Profit Before Tax 3,495 3,578 3,008 3,545 4,809 5,768
- YoY Growth (%) 40.2 2.3 (15.9) 17.9 35.7 19.9
Prov. for Taxation 1,007 900 258 816 1,346 1,730
- as a % of PBT 28.8 25.2 8.6 23.0 28.0 30.0
PAT 2,489 2,678 2,750 2,729 3,462 4,038
- YoY Growth (%) 42.9 7.6 2.7 (0.7) 26.9 16.6

Balance sheet (Standalone)
Y/E March (` cr) FY11 FY12 FY13 FY14 FY15E FY16E
Share Capital 547 575 597 643 643 643
Reserves & Surplus 16,743 20,387 23,322 29,280 32,029 35,240
Deposits 298,886 318,216 381,840 476,974 553,290 641,816
- Growth (%) 30.1 6.5 20.0 24.9 16.0 16.0
Borrowings 12,862 22,749 25,889 39,186 45,031 51,865
Tier 2 Capital 9,160 9,366 9,478 9,241 9,010 8,785
Other Liab & Prov. 12,975 13,243 11,477 17,866 18,676 20,299
Total Liabilities 351,173 384,535 452,603 573,190 658,678 758,648
Cash balances 21,782 14,987 21,967 19,073 27,664 32,091
Bank balances 15,528 19,725 32,869 42,309 39,521 45,519
Investments 85,872 86,754 94,614 114,152 130,705 146,999
Advances 213,096 248,833 289,368 370,734 430,051 498,859
- Growth (%) 26.5 16.8 16.3 28.1 15.0 15.0
Fixed Assets 2,481 2,772 2,870 5,786 6,450 7,206
Other Assets 12,413 11,466 10,916 21,136 24,288 27,974
Total Assets 351,173 384,535 452,603 573,190 658,678 758,648
- Growth (%) 27.7 9.5 17.7 26.6 14.9 15.2







Bank of India | 4QFY2014 Result Update

May 24, 2014
11
Ratio analysis
Y/E March FY11 FY12 FY13 FY14 FY15E FY16E
NIMs 2.6 2.4 2.2 2.2 2.1 2.0
Cost to Income Ratio 48.5 42.5 41.7 44.3 44.5 43.8
RoA 0.8 0.7 0.7 0.5 0.6 0.6
RoE 17.3 15.0 13.0 10.6 11.5 12.2
B/S ratios (%)

CASA Ratio 25.4 26.7 25.6 22.1 22.0 21.9
Credit/Deposit Ratio 71.3 78.2 75.8 77.7 77.7 77.7
CAR 12.2 12.0 11.4 10.7 10.0 9.4
- Tier I 8.3 8.6 8.4 8.3 7.9 7.6
Asset Quality (%)

Gross NPAs 2.2 2.3 3.0 3.2 3.9 4.4
Net NPAs 0.9 1.5 2.1 2.0 2.1 2.1
Slippages 1.7 2.5 2.9 3.0 2.5 2.3
Loan Loss Prov./Avg. Assets 0.3 0.6 0.9 0.7 0.6 0.6
Provision Coverage 72.2 64.2 60.9 58.7 60.0 62.5
Per Share Data (`)

EPS 45.5 46.6 46.1 42.4 53.8 62.8
ABVPS 288.3 324.1 345.2 401.4 436.7 486.3
DPS 7.0 7.0 10.0 5.0 9.5 11.0
Valuation Ratios

PER (x) 7.6 7.4 7.5 8.1 6.4 5.5
P/ABVPS (x) 1.2 1.1 1.0 0.9 0.8 0.7
Dividend Yield 2.0 2.0 2.9 1.4 2.8 3.2
DuPont Analysis (%)

NII 2.5 2.3 2.2 2.1 2.0 1.9
(-) Prov. Exp. 0.6 0.8 1.1 1.0 0.7 0.6
Adj. NII 1.9 1.4 1.1 1.2 1.3 1.3
Treasury 0.1 0.1 0.1 0.2 0.0 0.0
Int. Sens. Inc. 2.0 1.5 1.2 1.3 1.3 1.3
Other Inc. 0.7 0.8 0.8 0.7 0.6 0.6
Op. Inc. 2.7 2.3 2.0 2.0 2.0 2.0
Opex 1.6 1.3 1.3 1.3 1.2 1.1
PBT 1.1 1.0 0.7 0.7 0.8 0.8
Taxes 0.3 0.2 0.1 0.2 0.2 0.2
RoA 0.8 0.7 0.7 0.5 0.6 0.6
Leverage (x) 21.8 20.6 19.7 19.9 20.5 21.4
RoE 17.3 15.0 13.0 10.6 11.5 12.2






Bank of India | 4QFY2014 Result Update

May 24, 2014
12


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 Pvt. Ltd., 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 Pvt. Ltd. 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 Pvt. Ltd. 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 Pvt. Ltd. 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 Pvt. Ltd. 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 Pvt. Ltd., 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 Pvt. Ltd. and its affiliates may have
investment positions in the stocks recommended in this report.

Disclosure of Interest Statement Bank of India
1. Analyst ownership of the stock No
2. Angel and its Group companies ownership of the stock No
3. Angel and its Group companies' Directors ownership of the stock No
4. Broking relationship with company covered No
Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
Reduce (-5% to -15%) Sell (< -15%)

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