OREANDA-NEWS. January 23, 2012. Results at a Glance

•           Net Profit during Q3FY12 rose to 1,102 crores from 891 crores in Q3FY11, registering a growth of 24% YOY. Net Profit for 9MFY12 stood at 2,965 crores, up by 25% from 2,368 crores for 9MFY11.

•           Demand Deposits grew by 32% YOY to 86,756 crores during Q3FY12 from 65,931 crores during Q3FY11, with Savings Bank deposits growing by 21% YOY and Current Account deposits by 47%. CASA ratio as a result moved up to account for 42% of aggregate deposits.

•           The YOY growth in Net Interest Income and Fee Income during Q3FY12 was 23% and 26% respectively. Net Interest Margin during Q3FY12 was 3.75% compared to 3.81% in Q3FY11 and 3.78% in Q2FY11.

•           The Bank is well-capitalised with a Capital Adequacy Ratio of 11.78% (without reckoning 9MFY12 profit, as stipulated by Reserve Bank of India) as at the end of 9MFY12 compared to 12.46% as at the end of 9MFY11 and 11.35% at the end of Q2FY12. Tier-I capital was 8.25% as at the end of 9MFY12, as against 8.86% at the end of 9MFY11 and 8.48% at the end of Q2FY12. Capital Adequacy including 9MFY12 profits would have been 13.11% with Tier-I capital ratio of 9.58%.

Financial Highlights

• Net Interest Income (NII) and Net Interest Margin (NIM)

The Bank continued to extend its presence across the country and at the end of Q3FY12, had a network of 1,493 domestic branches and extension counters and 8,324 ATMs situated in 971 cities and towns. During the quarter, the Bank added 47 branches and 730 ATMs. The daily average balances of Savings Bank deposits during the quarter grew 19% YOY and those of Current Account deposits grew 4% YOY. Demand deposits constituted 37% of the aggregate daily average deposits during Q3FY12, as against 38% in the previous quarter. At the end of the quarter, Current Account and Savings Bank deposits together accounted for 42% of the total deposits of the Bank. The Bank posted a NIM of 3.75% during Q3FY12, compared to 3.81% during Q3FY11 and 3.78% during Q2FY12.

The Bank's advances grew 20% YOY from 1,23,533 crores as on 31st December 2010 to 48,739 crores as on 31st December 2011 while investments rose to 90,263 crores from 59,623 crores over the same period,

registering a growth of 51% YOY. The NII rose 23% YOY to 2,140 crores during Q3FY12 from 1,733 crores during Q3FY11.

•           Fee Income

Fee income registered a growth of 26% YOY, rising to 1,223 crores during Q3FY12 compared to 968 crores in Q3FY11, with contributions from all the major businesses in the Bank. Fee income from Large and Mid Corporate Credit (including Infrastructure) grew 34% YOY, Retail banking fees grew 26% YOY, Treasury and Debt Capital Markets fees grew 25% YOY and Agriculture & SME Banking fees grew 13% YOY. Fees in Business Banking grew 15% YOY. Fee income from Equity Capital Markets (including Trusteeship Services) contracted 12% YOY. Compared to 2,559 crores during 9MFY11, fee income during 9MFY12 stood at 3,400 crores, up by 33% YOY.

•           Trading Profits

The Bank generated 118 crores of trading profits during Q3FY12, as compared to  135 crores during Q3FY11, a decline of 13% YOY. The share of trading profits to operating revenue was 3% in Q3FY12, compared to 5% in Q3FY11.

•           NPAs and Restructured Assets

Net NPAs, as a proportion of net customer assets were 0.39% as on 31st December 2011against 0.34% as on 30th September 2011. Gross NPAs as a proportion of gross customer assets stood at 1.10% as on 31st December 2011, compared to 1.09% as on 31st December 2010 and 1.08% as on 30th September 2011. The Bank had provision coverage of 75.28% as on 31st December 2011 (as a proportion of Gross NPAs including prudential write-offs). The provision coverage (as a proportion of Gross NPAs) before accumulated write-offs was 87.68%.

During the quarter, the Bank added 535 crores to Gross NPAs. Recoveries and upgrades of 121 crores and write-offs of 243 crores during the quarter resulted in a closing position of 1,915 crores of Gross NPAs on 31st December 2011, as against  1,744 crores at the end of September 2011.

The Bank restructured loans aggregating 295 crores during Q3FY12. The cumulative value of assets restructured till 31st December 2011, rose to 2,701 crores (1.55% of gross customer assets). 69% of these loans were restructured upto Q3FY11 and were more than a year old.

The segment-wise break-up of restructured assets as on 31st December 2011 is as follows:

Large and Mid-Corporate Credit

75%

SME

9%

Agri. including Micro finance

11%

Capital Markets

5%

The sector-wise breakup of restructured assets as on 31st December 2011 was as follows:

Shipping

17%

Petroleum

17%

Textiles

16%

Micro finance

8%

Iron & Steel

5%

Others

37%

• Investment Portfolio

The book value of the Bank's investment portfolio as on 31st December 2011 was 90,263 crores, of which, 55,919 crores related to government securities while 34,344 crores were invested in other securities such as corporate bonds, equities, preference shares, mutual funds etc. 82% of the government securities have been classified in the HTM category while 96% of the Bonds & Debentures portfolio have been classified in the AFS category. The distribution of the investment portfolio in the three categories as well as the modified duration as on 31st December 2011 in each category was as follows:

Category

Percentage

Duration*

HFT

6.19%

4 years

AFS

37.38%

2.9 years

HTM

56.43%

5.2 years

* Excluding mutual funds and equity investment

Business Overview Placement / Syndication

The Bank arranged debt aggregating 30,297 crores during Q3FY12 rising 45% over Q3FY11. The Bank was assessed as the No.1 Debt Arranger for Calendar Year 2011 by Bloomberg. The bank was assessed No.2 debt arranger for the half year ended September 2011 by Prime Database. The Bank also won awards for the "Best Domestic Bank - India 2011" & "Best Domestic Bond House - India; 2011" from 'The Asset Triple A Country Awards 2011' instituted by the Asset Magazine.

The Bank was also adjudged "Bank of the year - India 2011" by the Banker magazine and also won the award for the "Best Bank in the Private Sector" by NDTV- Profit.

Retail Business

The number of Savings Bank accounts grew from 91.96 lacs as on 31st December 2010 to 113.97 lacs as on 31st December 2011. Retail advances grew from 25,191 crores as on 31st December 2010 to 33,264 crores

as on 31st December 2011, a growth of 32% YOY. Retail Advances accounted for 22% of the total advances of the Bank as on 31st December 2011. The Bank's International Debit Card issuance has risen to 114 lac debit cards as on 31st December 2011, as compared to 96 lac debit cards in force as on 31st December 2010. The Bank had over 7.23 lac credit cards in force as on 31st December 2011. The Bank offers personal investment products including life insurance products, general insurance products, online trading accounts and mutual funds of leading manufacturers as also wealth advisory services and Mohur - gold coins and bars - through select branches.

International Business

The Bank has seven international offices - branches at Singapore, Hong Kong, Dubai (at the DIFC) and Colombo and representative offices at Shanghai, Dubai and Abu Dhabi which focus on corporate lending, trade finance, syndication, investment banking, risk management and liability businesses. The total assets under overseas operations were USD 5.42 billion as on 31st December 2011, as compared to USD 4.99 billion as on 31st December 2010, a growth of 9%.

• Capital and Shareholders' Funds

The Shareholders' Funds of the Bank were 22,134 crores as on 31st December 2011 growing 19% YOY from 18,622 crores as on 31st December 2010. The Capital Adequacy Ratio (CAR) for the Bank was 11.78%, as on 31st December 2011, compared to 12.46% as on 31st December 2010. The Tier-I capital adequacy ratio was 8.25% as on 31st December 2011, compared to 8.86% as on 31st December 2010. The profit of 9M for both financial years has not been reckoned for computation of Tier-I capital, as stipulated by Reserve Bank of India. If the net profit of 2,965 crores for 9MFY12 is included, the total CAR and Tier-I CAR as on 31st December 2011 would have been 13.11% and 9.58% respectively.