>THIRD QUARTER FINANCIAL YEAR 2012 REVIEW: Healthy core operations overshadows higher restructuring

Slippages decline sequentially; Sharp rise in restructuring


■ Key highlights for private banks: (1) Largely stable NIM QoQ, (2) Asset quality continues to be strong, with GNPA% stable/declining QoQ, (3) Business growth robust, investment book growth remains healthy, as large corporate funded by credit substitutes, (4) Mid-cap private banks report strong growth in SA Deposit post deregulation of SB rates.


■ Key highlights for state-owned banks: (1) Largely stable margins QoQ, (2) strong fee income performance QoQ, (3) loan growth improves QoQ, however remains low on a YoY basis. (4) fall in CA deposits leading to muted CASA growth, (5) On a higher base (slippages were at an elevated level as in 2QFY12 most of the state owned banks migrated to system based recognition of NPA), slippages declines sharply QoQ (6) Addition of ~100bp of loans to restructured loans largely led by one large telecom account.


■ Positive surprises: (1) ICICIBC: Improvement in margins (+10bp QoQ) and strong performance on asset quality. (2) SBIN: Strong margin improvement (+26bp QoQ) (3) BoB: NIM stable QoQ, and robust fee income growth YoY. Among other banks FB, SIB and VYSB also delivered strong NIM and asset quality performance.


■ Negative surprises: (1) UNBK: Higher provisions due to restructuring of loans (it had taken an NPV hit of 25% on one large telecom account restructured visa–vis 10-15% by its peers). (2) CBK: Sharp contraction in NIM (cal) by 20bp QoQ (3) BoI: Addition to restructured loans of INR30b in 3QFY12.


To read full report: INDIAN FINANCIALS