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3QFY2012 Result Update | Banking

February 2, 2012

Canara Bank
Performance Highlights
 
Particulars (` cr) NII Pre-prov. profit PAT
Source: Company, Angel Research

ACCUMULATE
CMP Target Price
% chg (qoq) (2.2) (1.8) 2.7 3QFY11 2,119 1,513 1,106 % chg (yoy) (9.5) 4.2 (20.8)

`483 `528
12 months

3QFY12 1,919 1,577 876

2QFY12 1,962 1,605 852

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 20,887 1.0 668/349 78,476 10 17,301 5,236 CNBK.BO CBK@IN

For 3QFY2012, Canara Bank posted a poor set of results with net profit declining by 20.8% yoy to `876cr. While asset quality improved during the quarter, higher MTM losses on investments and NPV loss on account of restructuring of GTL dented the bottom line. We maintain our Accumulate
recommendation on the stock. NIMs remain under pressure; Slippage levels continue to decline: For 3QFY2012, the bank’s overall business growth remained muted with advances growing by 0.6% qoq (15.5% yoy) and deposits growing by 0.9% qoq (19.7% yoy). On the deposits side, the volatile current account deposits decreased by 33.7% qoq (down 38.1% yoy). Saving account deposits also decreased sequentially by 1.1% qoq (up 8.2% yoy), leading to calculated CASA ratio declining by 224bp qoq to 23.6%. The bank’s reported NIMs slipped by 12bp to 2.5% during 3QFY2012 on account of 14bp rise in the cost of deposits to 7.3%. Commission and brokerage income remained muted during the quarter growing by 0.5% qoq (21.2% yoy) to `205cr. Recoveries from written-off accounts which have been strong over the past few quarters, halved sequentially to `68cr. The banks slippage levels at `862cr (~250cr due to 2 accounts and expected to be upgraded in 4QFY2012) declined for the 3rd consecutive quarter. The bank took a hit of `185cr on MTM losses during 3QFY2012. The bank restructured `1,559cr worth of accounts during 3QFY2012, of which `1,000 was on account of restructuring of GTL (also led to NPV loss of ~`150cr). The outstanding restructured book as of 3QFY2012 stands at `9,555cr. Outlook and valuation: The stock has considerably underperformed the peers (Bank Nifty by 15% over the past one year), primarily due to concerns regarding NIMs and asset quality. Though a weakening domestic macro-economic environment and consequently slower credit growth and ailing asset quality are likely to cap near-term upsides, but cyclically moderate valuations of 1.0x FY2013E ABV vs. 5-year average of 1.15x and range of 0.8-1.4x, in our view largely factor in the negatives. Hence, we recommend Accumulate on the stock with a target price of `528. Key financials
Y/E March (` cr) NII % chg Net profit % chg NIM (%) EPS (`) P/E (x) P/ABV (x) RoA (%) RoE (%)
Source: Company, Angel Research

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 67.7 11.3 13.6 7.4

Abs. (%) Sensex Canara Bank

3m (1.0) (1.3)

1yr (4.0) (20.3)

3yr 83.6 161.6

FY2010 5,681 20.4 3,021 45.8 2.4 73.7 6.5 1.6 1.2 26.8

FY2011 7,823 37.7 4,026 33.2 2.7 90.9 5.3 1.2 1.3 26.4

FY2012E 7,676 (1.9) 3,305 (17.9) 2.2 74.6 6.5 1.1 0.9 17.2

FY2013E 8,735 13.8 3,454 4.5 2.1 78.0 6.2 1.0 0.8 15.8

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

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Canara 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 - Recov. from written off a/cs - Others Operating income Operating expenses - Employee expenses - Other Opex Pre-provision Profit Provisions & Contingencies - Provisions for NPAs - Other Provisions PBT Provision for Tax PAT Effective Tax Rate (%)
Source: Company, Angel Research

3QFY12 2QFY12 % chg (qoq) 3QFY11 % chg (yoy) 7,812 5,946 1,810 56 5,894 1,919 779 622 205 157 68 349 2,698 1,121 713 408 1,577 501 142 359 1,076 200 876 18.6 7,614 5,826 1,730 59 5,653 1,962 828 679 204 149 135 340 2,790 1,185 767 418 1,605 553 477 76 1,052 200 852 19.0 2.6 2.1 4.6 (4.2) 211.1 4.3 (2.2) (5.9) (8.4) 0.5 5.4 (49.6) 2.6 (3.3) (5.4) (7.1) (2.2) (1.8) (9.4) (70.2) 370.4 2.2 2.7 (41)bp 5,908 4,326 1,531 51 3,789 2,119 537 508 169 29 72 267 2,656 1,143 784 359 1,513 157 130 27 1,356 250 1,106 18.4 32.2 37.4 18.2 10.0 211.1 55.6 (9.5) 45.2 22.5 21.3 441.4 (5.6) 30.9 1.6 (1.9) (9.1) 13.7 4.2 218.7 9.2 1,216.6 (20.7) (20.0) (20.8) 15bp

Exhibit 2: 3QFY2012 Actual vs. Estimates
Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Company, Angel Research

Actual 1,919 779 2,698 1,121 1,577 501 1,076 200 876

Estimates 2,022 795 2,817 1,206 1,612 457 1,155 243 912

Var (%) (5.1) (2.0) (4.2) (7.0) (2.2) 9.7 (6.9) (17.5) (4.0)

February 2, 2012

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Canara Bank | 3QFY2012 Result Update

Exhibit 3: 3QFY2012 performance analysis
Particulars Balance sheet Advances (` cr) Deposits (` cr) Credit-to-Deposit Ratio (%) Current deposits (` cr) Saving deposits (` cr) CASA deposits (` cr) Calculated 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 (%) PCR incl. tech. w/offs (%) Slippage ratio (%) NPA to avg. assets (%)
Source: Company, Angel Research

3QFY12 219,253 315,456 69.5 11,096 63,361 74,457 23.6 13.2 9.5 7.3 10.9 7.9 8.8 6.6 2.5 41.6 3,999 1.8 3,265 1.5 67.9 1.6 0.2

2QFY12 217,937 312,577 69.7 16,732 64,043 80,775 25.8 12.8 9.2 7.1 10.7 7.9 8.8 6.6 2.6 42.5 3,793 1.7 3,117 1.4 68.6 2.3 0.5

%chg (qoq) 0.6 0.9 (22)bp (33.7) (1.1) (7.8) (224)bp 44bp 33bp 14bp 13bp 4bp 3bp 4bp (12)bp (91)bp 5.4 8bp 4.8 6bp (76)bp (70)bp (39)bp

3QFY11 189,882 263,497 72.1 17,938 58,558 76,496 29.0 13.0 8.3 5.7 9.7 7.7 8.1 5.3 3.2 43.0 2,753 1.4 1,991 1.1 75.9 1.2 0.2

%chg (yoy) 15.5 19.7 (256)bp (38.1) 8.2 (2.7) (543)bp 20bp 121bp 161bp 118bp 25bp 67bp 133bp (69)bp (148)bp 45.3 37bp 64.0 44bp (805)bp 40bp (2)bp

Business growth muted; NIMs decline on continued cost pressures
For 3QFY2012, the bank’s overall business growth remained muted with advances growing by 0.6% qoq (15.5% yoy) and deposits growing by 0.9% qoq (19.7% yoy). All segments expect corporate, which grew by 3.2% qoq, witnessed a sequential contraction during 3QFY2012.

Exhibit 4: Only corporate book grows sequentially
Particulars (` cr) Agri SME Corporate Retail Net advances
Source: Company, Angel Research

3QFY12 31,179 39,017 24,950

2QFY12 % chg (qoq) 32,796 39,770 25,102 (4.9) (1.9) (0.6)

3QFY11 % chg (yoy) 27,056 35,348 23,183 15.2 10.4 19.0 7.6 15.5

124,107 120,269 219,253 217,937

3.2 104,295 0.6 189,882

February 2, 2012

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Canara Bank | 3QFY2012 Result Update

On the deposits side, the volatile current account deposits decreased by 33.7% qoq (down 38.1% yoy). Saving account deposits also declined sequentially by 1.1% qoq (up 8.2% yoy), leading to calculated CASA ratio declining by 224bp qoq to 23.6%.

Exhibit 5: Business growth slow during 9MFY2012
Adv. qoq chg (%) 15.0 12.0 9.0 6.0 69.7 69.5 72.1 72.3 71.6 72.0 Dep. qoq chg (%) CDR (%, RHS) 74.0

Exhibit 6: CASA growth slips into negative territory
Calculated CASA ratio 30.0 27.5 9.7 25.0 70.0 27.7 21.8 12.2 (2.7) CASA yoy growth (%, RHS) 30.0 20.0 10.0 (10.0) 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12

11.9 11.6

29.0

28.3

25.4

25.8

7.8 5.7

1.2 2.1

1.4 4.1

3QFY11 4QFY11 1QFY12 2QFY12 3QFY12
Source: Company, Angel Research

0.6 0.9

3.0

68.0

20.0

Source: Company, Angel Research

The bank’s NIMs have been under pressure lately as moderating CASA growth over the last one year has led to higher cost of deposits for the bank. The bank’s reported NIMs slipped by 12bp to 2.5% during 3QFY2012 on back of 14bp rise in the cost of deposits to 7.3%. The management attributed the declining trend in CASA ratio to mostly flight of saving deposits to higher yielding term deposits and difficulty in sustaining the current account balances at current levels.

Exhibit 7: Higher cost of deposits for 3QFY2012...
(%) 7.50 6.50 5.66 5.50 4.50 3.50 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 7.05 5.80 7.13 7.27

Exhibit 8: ...leads to qoq contraction in reported NIM
(%) 3.50 3.00 2.50 2.00 1.50 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 2.42 3.21 3.12 2.64 2.52

Source: Company, Angel Research

Source: Company, Angel Research

Fee income declines sequentially
Commission and brokerage income remained muted during the quarter growing by 0.5% qoq (21.2% yoy) to `205cr. Recoveries from written-off accounts which have been strong over the past few quarters, halved sequentially to `68cr. Treasury income posted a healthy performance growing by 5.4% qoq to `157cr. Overall the core fee income declined sequentially by 8.4% qoq to `622cr.

February 2, 2012

23.6

22.5

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Canara Bank | 3QFY2012 Result Update

Exhibit 9: Fee income performance sluggish for 3QFY2012
Particulars (` cr) CEB Treasury Recoveries Others Other income Other income excl. treasury
Source: Company, Angel Research

3QFY12 2QFY12 205 157 68 349 779 622 204 149 135 340 828 679

% chg (qoq) 3QFY11 0.5 5.4 (49.6) 2.6 (5.9) (8.4) 169 29 72 267 537 508

% chg (yoy) 21.3 441.4 (5.6) 30.9 45.2 22.5

Slippage levels continue their downward trend
The banks slippage levels at `862cr declined for the 3rd consecutive quarter. The annualised slippage ratio as of 3QFY2012 stands at 1.6% (as high as 4.4% in 4QFY2011). The credit costs consequently reduced to 0.2% (0.5% in 2QFY2012) for 3QFY2012. The management also mentioned that ~`250cr of these slippages were due to 2 accounts which are expected to be restructured through the CDR mechanism in the next quarter and hence will be upgraded in the NPA book for 4QFY2012. The bank took a hit of `185cr on MTM losses during 3QFY2012, of which 102cr were due to MTM on G-Sec securities, while the rest `83cr were on account of MTM on equity losses. The bank restructured `1,559cr worth of accounts during 3QFY2012, of which `1,000 was on account of restructuring of GTL. The outstanding restructured book as of 3QFY2012 stands at `9,555cr. The bank also took a hit of `150cr as NPV loss during 3QFY2012 on account of restructuring of the GTL account. The bank did not restructure any SEB accounts during 3QFY2012, but expects some restructuring to occur in 4QFY2012 as the bank has exposure to utilities such as Rajasthan and Uttar Haryana SEBs which were restructured by other banks during 3QFY2012. However, the management also mentioned that the CDR pipeline for the bank is relatively smaller than most of the other banks.

Exhibit 10: Slippages continue their downward trend
Slippages (%) 5.0 4.0 3.0 2.0 1.0 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 0.2 0.3 0.2 0.7 0.5 Credit cost (%, RHS) 0.8 0.6 0.4 0.2 -

Exhibit 11: Sequentially stable NPA ratios
Gross NPAs (%) 2.0 1.5 1.0 0.5 77.1 75.9 73.0 69.5 68.6 Net NPAs (%) PCR (%, RHS) 80.0 75.0 70.0 65.0

1.2

4.4

2.6

2.3

1.6

1.5 1.1

1.4 1.1

1.5 1.1

1.7 1.3

2QFY11 3QFY11 4QFY11 1QFY12 2QFY12

1.7 1.4
60.0

Source: Company, Angel Research

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

February 2, 2012

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Canara Bank | 3QFY2012 Result Update

Exhibit 12: Strong rise in branch network
3,650 3,500 3,350 3,200 3,050 2,900 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 3,174 3,257 3,277 3,437 3,569

Exhibit 13: Cost ratios largely in check
Cost-to-income ratio (%) 46.0 44.0 42.0 1.6 1.5 1.2 Opex to average assets (%, RHS) 2.0 1.4 1.2 1.5 1.0

43.0

41.7

45.2

42.5

38.0 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12
Source: Company, Angel Research

41.6

40.0

0.5 -

Source: Company, Angel Research

Investment concerns
Weak liability franchise likely to keep the NIM under pressure
The bank has a relatively weaker liability profile with a calculated CASA base at 23.6%. In fact, in 3QFY2012, overall CASA deposits growth turned negative at 2.7% yoy as compared to 27.7% yoy growth witnessed in 3QFY2011. The bank has a relatively higher proportion of more costly bulk deposits and CDs at ~30% of deposits, which makes the bank more vulnerable to a faster rise in cost of funds in the current high interest rate scenario. Margin pressures were evident in 3QFY2012 also with the NIMs declining by 12bp as cost pressures continued to mount. Accordingly, we have built in a ~50bp dip in NIM for FY2012 over FY2011 levels.

Outlook and valuation
The bank has embarked on a relatively aggressive network expansion plan. Over the past one year the bank has added over 395 branches and 500+ ATMs. In fact, in 3QFY2012 itself the bank added 132 branches (312 in 9MFY2012). The relatively better pace of network expansion should augur well, in our view, for strengthening the bank’s relatively weaker liability franchise. The stock has considerably underperformed the peers (Bank Nifty by 15% over the past one year), primarily due to concerns regarding NIMs and asset quality. Though a weakening domestic macro-economic environment and consequently slower credit growth and ailing asset quality are likely to cap near-term upsides, but cyclically moderate valuations of 1.0x FY2013E ABV vs. 5-year average of 1.15x and range of 0.8-1.4x, in our view largely factor in the negatives. Hence, we recommend Accumulate on the stock with a target price of `528.

February 2, 2012

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Canara Bank | 3QFY2012 Result Update

Exhibit 14: Key assumptions
Particulars (%) Credit growth Deposit growth CASA ratio NIMs Other income growth Growth in staff expenses Growth in other expenses Slippages Coverage
Source: Angel Research

Earlier estimates FY2012 18.0 16.0 27.8 2.2 11.0 2.0 15.0 2.6 67.0 FY2013 15.0 16.0 27.3 2.2 12.9 15.0 15.0 2.7 63.0

Revised estimates FY2012 15.0 15.0 28.0 2.2 8.0 (3.0) 13.0 2.6 67.0 FY2013 16.0 16.0 27.5 2.1 10.2 15.0 15.0 1.9 68.0

Exhibit 15: Change in estimates
FY2012 Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Angel Research

FY2013 Earlier estimates 9,021 3,389 12,409 5,403 7,007 2,031 4,975 1,493 3,483 Revised Var. (%) estimates 8,735 3,217 11,951 5,199 6,752 1,818 4,934 1,480 3,454 (3.2) (5.1) (3.7) (3.8) (3.6) (10.5) (0.8) (0.8) (0.8)

Earlier estimates 7,865 3,001 10,866 4,698 6,168 1,827 4,341 912 3,430

Revised Var. (%) estimates 7,676 2,919 10,595 4,521 6,074 1,891 4,183 878 3,305 (2.4) (2.7) (2.5) (3.8) (1.5) 3.5 (3.6) (3.6) (3.6)

Exhibit 16: P/ABV band
Price (`) 1000 800 600 400 200 0 0.75x 1x 1.25x 1.5x 1.75x

Feb-07

Oct-08

May-08

Nov-10

Dec-07

Source: Company, Angel Research

February 2, 2012

Mar-09

Aug-09

Feb-12

Sep-06

Sep-11

Apr-06

Jan-10

Jun-10

Jul-07

Apr-11

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Canara Bank | 3QFY2012 Result Update

Exhibit 17: 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 Reduce Accumulate Neutral Accumulate Neutral Accumulate Accumulate Neutral Accumulate Accumulate Accumulate Neutral Neutral Accumulate Reduce CMP (`) 1,072 399 498 902 23 339 167 109 756 350 50 483 86 416 71 97 230 87 821 281 954 2,073 99 72 234 71 56 Tgt. price (`) 1,361 1,061 367 907 53 528 79 450 107 91 877 1,036 2,359 106 75 52 Upside (%) 27.0 17.6 8.3 19.9 7.9 9.4 (7.5) 8.1 10.3 5.1 6.9 8.6 13.8 7.4 6.5 (7.7) FY2013E P/ABV (x) 1.7 1.1 3.4 1.7 1.1 2.1 0.8 0.8 1.0 1.1 0.7 1.0 0.8 0.7 0.5 0.6 0.9 0.6 0.8 0.7 1.1 1.7 0.7 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 0.8 0.7 0.6 0.9 1.2 1.9 0.7 0.7 0.7 FY2013E P/E (x) 9.3 8.6 17.4 14.1 6.9 11.2 4.7 5.3 5.8 7.3 5.0 6.2 5.5 4.5 3.7 4.8 5.5 4.5 4.7 6.2 6.0 10.0 4.2 4.6 5.9 4.9 6.3 FY2011-13E EPS CAGR (%) 18.2 16.2 30.4 19.5 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 FY2013E RoA (%) 1.5 1.2 1.8 1.4 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 14.5 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 2, 2012

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Canara 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 (%) FY08 3,538 (12.1) 2,308 52.7 5,846 5.6 2,791 8.8 3,055 2.7 1,150 (11.7) 1,905 14.0 340 17.8 1,565 10.1 FY09 4,718 33.4 2,427 5.1 7,145 22.2 3,065 9.8 4,080 33.5 1,507 31.1 2,572 35.0 500 19.4 2,072 32.4 FY10 5,681 20.4 2,858 17.7 8,538 19.5 3,478 13.5 5,061 24.1 1,239 (17.8) 3,821 48.6 800 20.9 3,021 45.8 FY11 7,823 37.7 2,703 (5.4) 10,526 23.3 4,419 27.1 6,107 20.7 1,081 (12.8) 5,026 31.5 1,000 19.9 4,026 33.2 FY12E 7,676 (1.9) 2,919 8.0 10,595 0.7 4,521 2.3 6,074 (0.5) 1,891 74.9 4,183 (16.8) 878 21.0 3,305 (17.9) FY13E 8,735 13.8 3,217 10.2 11,951 12.8 5,199 15.0 6,752 11.2 1,818 (3.9) 4,934 18.0 1,480 30.0 3,454 4.5

Balance sheet
Y/E March (` cr) Share Capital Reserve & Surplus Deposits - Growth (%) Borrowings Tier 2 Capital Other Liab. & Prov. Total Liabilities Cash Balances Bank Balances Investments Advances - Growth (%) Fixed Assets Other Assets Total Assets - Growth (%) FY08 410 10,090 154,072 8.2 2,517 6,115 7,175 180,380 13,365 4,513 49,812 107,238 8.9 2,917 2,536 180,380 8.8 FY09 410 11,798 186,893 21.3 7,057 6,944 6,498 219,599 10,037 6,623 57,777 138,219 28.9 2,929 4,014 219,599 21.7 FY10 410 14,262 234,651 25.6 1,041 7,399 6,977 264,741 15,719 3,934 69,677 169,335 22.5 2,859 3,217 264,741 20.6 FY11 443 19,597 293,973 25.3 5,198 9,063 7,805 336,079 22,015 8,693 83,700 212,467 25.5 2,844 6,359 336,079 26.9 FY12E 443 22,181 338,069 15.0 5,999 10,423 10,707 387,821 21,974 10,032 100,537 244,337 15.0 3,184 7,756 387,821 15.4 FY13E 443 24,888 392,160 16.0 6,947 12,090 12,572 449,099 25,490 11,617 116,003 283,431 16.0 3,576 8,982 449,099 15.8

February 2, 2012

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Canara 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 (75% cover.) DPS Valuation Ratios PER (x) P/ABVPS (x) Dividend Yield DuPont Analysis NII (-) Prov. Exp. Adj. NII Treasury Int. Sens. Inc. Other Inc. Op. Inc. Opex PBT Taxes RoA Leverage RoE 2.0 0.7 1.4 0.3 1.6 1.1 2.7 1.6 1.1 0.2 0.9 21.1 19.1 2.4 0.8 1.6 0.3 1.9 0.9 2.8 1.5 1.3 0.3 1.0 21.8 22.6 2.3 0.5 1.8 0.4 2.2 0.8 3.0 1.4 1.6 0.3 1.2 21.5 26.8 2.6 0.4 2.2 0.1 2.3 0.8 3.1 1.5 1.7 0.3 1.3 19.7 26.4 2.1 0.5 1.6 0.1 1.7 0.7 2.4 1.2 1.2 0.2 0.9 18.8 17.2 2.1 0.4 1.7 0.0 1.7 0.7 2.4 1.2 1.2 0.4 0.8 19.1 15.8 12.4 2.5 1.7 9.3 2.1 1.7 6.4 1.5 2.1 5.2 1.2 2.3 6.3 1.1 3.0 6.0 0.9 3.1 38.2 188.4 8.0 50.5 221.3 8.0 73.7 305.8 10.0 90.9 401.1 11.0 74.6 442.2 14.0 78.0 502.6 14.5 1.3 0.9 1.4 0.5 34.5 1.6 1.1 2.2 0.5 30.5 1.5 1.1 2.4 0.6 77.7 1.4 0.8 2.1 0.3 73.0 2.3 1.6 2.6 0.4 67.0 2.9 1.6 1.9 0.4 68.0 31.5 69.6 13.3 7.0 30.1 74.0 14.1 8.0 29.1 72.2 13.4 8.5 28.3 72.3 15.4 10.9 28.0 72.3 15.4 10.7 27.5 72.3 15.2 10.4 2.1 47.7 0.9 19.1 2.4 42.9 1.0 22.6 2.4 40.7 1.2 26.8 2.7 42.0 1.3 26.4 2.2 42.7 0.9 17.2 2.1 43.5 0.8 15.8 FY08 FY09 FY10 FY11 FY12E FY13E

February 2, 2012

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Canara 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

Canara Bank No No No No

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

Ratings (Returns):

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

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

Neutral (-5 to 5%)

February 2, 2012

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