Dena Bank reported a 28.9% year-over-year increase in net profit for the second quarter of fiscal year 2011, ahead of estimates, driven by better-than-expected operating performance and healthy growth in low-cost deposits. Net interest income grew 93.5% year-over-year due to a substantial improvement in net interest margins from increased CASA deposits and core fee income rose 34.9% year-over-year. While gross NPAs rose slightly, slippages declined and provision coverage improved. The bank plans to receive capital infusions that will boost its capital adequacy ratio.
Ceat Q1FY15: Higher opex impact margins; Book profitsIndiaNotes.com
CEAT reported results which were below expectations. Sales were broadly in line with expectations but EBITDA margin declined by 160 bps QoQ. Book profits at current levels as there is no substantial upside from current levels.
Zensar Technologies Q1FY15: Results in line with our expectations, buyIndiaNotes.com
USD Revenues grew by 3.8% led by good growth seen in the enterprise business which grew 6.6% QoQ. During the quarter, the IM services grew by 2.5% QoQ whereas IM Products business grew by 1% QoQ.
LIC Housing Finance Q1FY15 performance in line with estimates; buyIndiaNotes.com
LIC Housing Finance’s 1QFY15 operational performance was in line with estimates. Lower than expected Net interest income (3% below estimate) compensated by 5% below estimated opex. Operating profits grew 13% YoY to INR4.97b (in-line).
Ceat Q1FY15: Higher opex impact margins; Book profitsIndiaNotes.com
CEAT reported results which were below expectations. Sales were broadly in line with expectations but EBITDA margin declined by 160 bps QoQ. Book profits at current levels as there is no substantial upside from current levels.
Zensar Technologies Q1FY15: Results in line with our expectations, buyIndiaNotes.com
USD Revenues grew by 3.8% led by good growth seen in the enterprise business which grew 6.6% QoQ. During the quarter, the IM services grew by 2.5% QoQ whereas IM Products business grew by 1% QoQ.
LIC Housing Finance Q1FY15 performance in line with estimates; buyIndiaNotes.com
LIC Housing Finance’s 1QFY15 operational performance was in line with estimates. Lower than expected Net interest income (3% below estimate) compensated by 5% below estimated opex. Operating profits grew 13% YoY to INR4.97b (in-line).
ING Vyasa Bank Q2FY14 Result: Maintain neutralIndiaNotes.com
ING Vysya Bank’s (VYSB) 2QFY15 PAT was 9% above estimate at INR1.8b (+2% YoY) led by better-than-expected NIM (+10bp) and lower provisioning. Reported NIM improved 17bp QoQ to 3.54%. However, adjusted for interest reversal on account of stressed accounts in 1QFY15, NIM was stable QoQ at 3.54%.
Bajaj Finance reported net profit of Rs 211.4 cr (+20.3% YoY) in Q1FY15 which was above expectations primarily due to higher than expected Net Interest Income (NII). NII increased 23.2% YoY and 23.0% QoQ with increase in consumer durable segment.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
Latino Buying Power - May 2024 Presentation for Latino CaucusDanay Escanaverino
Unlock the potential of Latino Buying Power with this in-depth SlideShare presentation. Explore how the Latino consumer market is transforming the American economy, driven by their significant buying power, entrepreneurial contributions, and growing influence across various sectors.
**Key Sections Covered:**
1. **Economic Impact:** Understand the profound economic impact of Latino consumers on the U.S. economy. Discover how their increasing purchasing power is fueling growth in key industries and contributing to national economic prosperity.
2. **Buying Power:** Dive into detailed analyses of Latino buying power, including its growth trends, key drivers, and projections for the future. Learn how this influential group’s spending habits are shaping market dynamics and creating opportunities for businesses.
3. **Entrepreneurial Contributions:** Explore the entrepreneurial spirit within the Latino community. Examine how Latino-owned businesses are thriving and contributing to job creation, innovation, and economic diversification.
4. **Workforce Statistics:** Gain insights into the role of Latino workers in the American labor market. Review statistics on employment rates, occupational distribution, and the economic contributions of Latino professionals across various industries.
5. **Media Consumption:** Understand the media consumption habits of Latino audiences. Discover their preferences for digital platforms, television, radio, and social media. Learn how these consumption patterns are influencing advertising strategies and media content.
6. **Education:** Examine the educational achievements and challenges within the Latino community. Review statistics on enrollment, graduation rates, and fields of study. Understand the implications of education on economic mobility and workforce readiness.
7. **Home Ownership:** Explore trends in Latino home ownership. Understand the factors driving home buying decisions, the challenges faced by Latino homeowners, and the impact of home ownership on community stability and economic growth.
This SlideShare provides valuable insights for marketers, business owners, policymakers, and anyone interested in the economic influence of the Latino community. By understanding the various facets of Latino buying power, you can effectively engage with this dynamic and growing market segment.
Equip yourself with the knowledge to leverage Latino buying power, tap into their entrepreneurial spirit, and connect with their unique cultural and consumer preferences. Drive your business success by embracing the economic potential of Latino consumers.
**Keywords:** Latino buying power, economic impact, entrepreneurial contributions, workforce statistics, media consumption, education, home ownership, Latino market, Hispanic buying power, Latino purchasing power.
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
how can I sell my pi coins for cash in a pi APPDOT TECH
You can't sell your pi coins in the pi network app. because it is not listed yet on any exchange.
The only way you can sell is by trading your pi coins with an investor (a person looking forward to hold massive amounts of pi coins before mainnet launch) .
You don't need to meet the investor directly all the trades are done with a pi vendor/merchant (a person that buys the pi coins from miners and resell it to investors)
I Will leave The telegram contact of my personal pi vendor, if you are finding a legitimate one.
@Pi_vendor_247
#pi network
#pi coins
#money
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
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Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
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1. Please refer to important disclosures at the end of this report 1
Particulars (` cr) 2QFY11 1QFY11 % chg (qoq) 2QFY10 % chg (yoy)
NII 465 360 29.1 240 93.5
Pre-prov. profit 326 239 36.5 161 101.7
PAT 161 139 15.7 125 28.9
Source: Company, Angel Research
For 2QFY2011, Dena Bank reported healthy net profit growth of 28.9% yoy,
ahead of our estimates, on account of better-than-expected operating
performance. Healthy CASA accretion and consequent NIM expansion were the
key positives of the results. We maintain an Accumulate on the stock.
Better-than-expected NII growth: On a sequential basis, advances de-grew 4.4%
and deposits recorded a marginal growth of 0.4% compared to industry growth
of advances (2.0% qoq) and deposits (3.4% qoq). CASA deposits registered a
strong 29.9% yoy and 10.0% qoq growth leading to a substantial ~340bp qoq
improvement in CASA ratio to 39.1% from 35.7% as of 1QFY2011. Reported
NIM improved by a substantial 70bp qoq to 3.52%. Consequently, NII grew by a
robust 93.5% yoy and 29.1% qoq to `465cr despite a ~230bp sequential
decline in the CD ratio. Core fee income and recoveries from written-off
accounts grew at healthy rates of 34.9% yoy and 40.9% yoy, respectively.
Absolute gross NPAs increased by 3.1% qoq to `826cr. Slippages came down
considerably with a slippage rate of 1.6% in 2QFY2011 compared to 2.7% in
1QFY2011 and 2.2% in FY2010.
Outlook and Valuation: Dena Bank, with a strong CASA ratio of 39.1%, is better
placed than peers to protect its NIM in a rising interest rate environment. After
the proposed capital infusion, the bank's tier-I ratio will improve to 9.1% by
end-FY2011 from 8.2% in FY2010, and enable it to maintain its CAR well above
12% levels until FY2012. At the CMP, the stock is trading at 6.5x FY2012E EPS of
`21.3 and 1.2x FY2012E ABV of `115.1. We maintain an Accumulate on the
stock with a Target Price of `150. We have assigned a target multiple of 1.3x
FY2012E ABV, translating into 8.7% upside from current levels.
Key Financials
Y/E March (` cr) FY2009 FY2010 FY2011E FY2012E
NII 1,064 1,100 1,686 1,745
% chg 23.9 3.3 53.3 3.5
Net Profit 423 511 598 610
% chg 17.5 21.0 16.9 2.1
NIM (%) 2.5 2.1 2.8 2.5
EPS (`) 14.7 17.8 20.8 21.3
P/E (x) 9.3 7.7 6.6 6.5
P/ABV (x) 2.2 1.9 1.4 1.2
RoA (%) 1.0 1.0 1.0 0.8
RoE (%) 24.0 23.5 22.8 19.8
Source: Company, Angel Research
ACCUMULATE
CMP `138
Target Price `150
Investment Period 12 Months
Stock Info
Sector Banking
Market Cap (` cr) 3,950
Beta 1.5
52 Week High / Low 140/55
Avg. Daily Volume 10,93,043
Face Value (`) 10
BSE Sensex 20,221
Nifty 6,082
Reuters Code DENA.BO
Bloomberg Code DBNK@IN
Shareholding Pattern (%)
Promoters 51.2
MF / Banks / Indian Fls 9.9
FII / NRIs / OCBs 18.1
Indian Public / Others 20.8
Abs. (%) 3m 1yr 3yr
Sensex 12.2 20.8 5.1
Dena Bank 38.7 100.3 132.2
Vaibhav Agrawal
022 – 4040 3800 Ext: 333
vaibhav.agrawal@angelbroking.com
Amit Rane
022 – 4040 3800 Ext: 326
amitn.rane@angelbroking.com
Shrinivas Bhutda
022 – 4040 3800 Ext: 316
shrinivas.bhutda@angelbroking.com
2QFY2011 Result Update | Banking
October 26, 2010
Dena Bank
Performance Highlights
2. Dena Bank | 2QFY2011 Result Update
October 26, 2010 2
Exhibit 1: 2QFY2011 performance
Particulars (` cr) 2QFY11 1QFY11 % chg (qoq) 2QFY10 % chg (yoy)
Interest earned 1,221 1,115 9.6 963 26.9
Interest expenses 756 754 0.3 722 4.7
NII 465 360 29.1 240 93.5
Non-interest income 119 107 11.0 125 (5.1)
Operating income 584 468 24.9 366 59.7
Operating expenses 259 229 12.9 204 26.6
Pre-prov. profit 326 239 36.5 161 101.7
Provisions & cont. 73 43 70.1 1 4,889.7
PBT 253 196 29.1 160 58.0
Prov. for taxes 92 57 61.7 35 160.7
PAT 161 139 15.7 125 28.9
EPS (`) 5.6 4.8 15.7 4.3 28.9
Cost-to-income ratio (%) 44.3 49.0 55.9
Effective tax rate (%) 36.5 29.1 22.1
Net NPA (%) 1.5 1.5 1.2
Source: Company, Angel Research
Exhibit 2: 2QFY2011 actual v/s Angel estimates
Particulars (` cr) Actual Estimates Var. (%)
NII 465 377 23.5
Non-interest income 119 90 32.1
Operating income 584 467 25.2
Operating expenses 259 224 15.3
Pre-prov. profit 326 242 34.3
Provisions & cont. 73 46 58.5
PBT 253 196 28.7
Prov. for taxes 92 59 56.4
PAT 161 138 16.8
Source: Company, Angel Research
Advances and deposits growth sluggish on a sequential basis
In 2QFY2011, on a sequential basis advances de-grew by 4.4% and deposits
recorded a marginal growth of 0.4% compared to industry growth of advances
(2.0% qoq) and deposits growth (3.4% qoq). On a yoy basis, advances growth
(21.0%) and deposits growth (18.2%) was in line with industry growth. On account
of growth in deposits compared to de-growth in advances on a sequential basis,
credit-to-deposit (CD) ratio fell to 67.7% in 2QFY2011 from 71.1% in 1QFY2011.
Growth in advances was driven by agricultural loans (25.5% yoy) and retail loans
(18.0% yoy).
On the deposits side, CASA deposits registered a strong 29.9% yoy and 10.0%
qoq growth leading to a substantial ~340bp qoq improvement in CASA ratio to
39.1% from 35.7% as of 1QFY2011.
3. Dena Bank | 2QFY2011 Result Update
October 26, 2010 3
Exhibit 3: Advances and deposits growth sluggish qoq
Source: Company, Angel Research
Exhibit 4: Strong traction in CASA deposits
Source: Company, Angel Research
On the back of improvement in CASA ratio, re-pricing of bulk deposits and higher
focus on retail and SME lending, reported NIM improved by a substantial 70bp
qoq to 3.52% in 2QFY2011 from 2.82% in 1QFY2011. Consequently, the bank’s
NII grew by a robust 93.5% yoy and 29.1% qoq to `465cr despite a ~230bp
sequential decline in CD ratio.
Management expects to sustain NIM above 3%+ levels for FY2011 on the back of
higher focus on CASA deposits accretion and retail and SME lending.
Exhibit 5: NIMs surprise on the upside
Source: Company, Angel Research
Lower treasury, but healthy core fee and recoveries
Core fee income and recoveries from written-off accounts grew at healthy rates of
34.9% yoy and 40.9% yoy, respectively. However, total non-interest income
declined by 5.1% yoy to `119cr because of minor losses in treasury compared to
profit of `38cr in 2QFY2010.
Management is expecting recoveries from written-off accounts to the tune of
`100cr+ in FY2011 out of which `45cr has been achieved during 1HFY2011.
Also, the bank is planning to extend depository services in 57 additional branches
compared to a total of 49 branches offering the facility as of now. The bank also
has plans to launch on-line trading facility shortly. These initiatives are likely to
help the bank in sustaining the traction in non-interest income.
29,925
30,924
35,462
37,884
36,210
45,251
47,844
51,344
53,311
53,498
66.1
64.6
69.1
71.1
67.7
60.0
63.0
66.0
69.0
72.0
-
15,000
30,000
45,000
60,000
2QFY10 3QFY10 4QFY10 1QFY11 2QFY11
Advances (` cr) Deposits (` cr) CD ratio (%, RHS)
35.2
35.6 35.5
36.0 35.7
39.1
32.0
34.0
36.0
38.0
40.0
1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11
2.3
2.5
2.8 2.8
3.5
-
1.0
2.0
3.0
4.0
2QFY10 3QFY10 4QFY10 1QFY11 2QFY11
4. Dena Bank | 2QFY2011 Result Update
October 26, 2010 4
Exhibit 6: Strong traction in other income despite minor loss in treasury
Particulars (` cr) 2QFY11 1QFY11 % chg (qoq) 2QFY10 % chg (yoy)
CEB 92 79 15.8 68 34.9
Treasury (0) 10 NA 38 NA
Recoveries 27 18 51.5 19 40.9
Total 119 107 11.0 125 (5.1)
Source: Company, Angel Research
Slippages come down
The bank’s absolute gross NPAs increased marginally by 3.1% sequentially to
`826cr in 2QFY2011. The annualised gross slippage ratio came down to 1.6%
during the quarter from 2.7% in 1QFY2011 and from 2.2% in FY2010. Fresh
slippages amounted to `143cr out of which majority belonged to the corporate
advances. Recoveries were up from `37cr in 1QFY2011 to `53cr in
2QFY2011.Consequently, gross NPA ratio deteriorated to 2.3% (from 2.1% in
1QFY2011).
On account of aggressive provisioning charges, net NPAs reduced by 4.2%
sequentially to `538cr. Net NPA ratio was stable sequentially at 1.5%. The NPA
provision coverage ratio including technical write-offs improved to 75.4% (from
74.1% as of 1QFY2011). The bank’s cumulative restructured advances stood at
`1,306cr and formed 3.6% of advances and 45.1% of net worth. During the
quarter, there were slippages of `67cr from restructured accounts, taking the total
slippages from restructured accounts to 7.7% of restructured advances.
Exhibit 7: Trend in asset quality
Source: Company, Angel Research Note: Coverage ratio for excluding write-offs till 3QFY2010
Improved productivity
During the quarter, total operating expenses increased by 12.9% qoq and 26.6%
yoy to `259cr, driven by 34.2% increase in employee costs and 15.4% rise in other
operating expenses. However, the cost-to-income ratio improved substantially both
on a yoy and qoq basis to 44.3% in 2QFY2011 (from 49.0% in 1QFY2011 and
55.9% in 2QFY2010). The bank added 20 more branches increasing its branch
network to 1,257 during the quarter. Currently, the bank has 46 branch licenses
pending and aims to utilise all of them during 3QFY2011. The bank also opened
20 new ATMs during the quarter taking its ATM network to 441.
568
585
621
629
598
586
642
801
826
248
266
313
353
372
365
428
561
53856.3 54.6
49.5
43.9
37.8 37.7
78.6
74.1 75.4
10.0
30.0
50.0
70.0
90.0
-
300
600
900
2QFY09
3QFY09
4QFY09
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
Gross NPAs (` cr) Net NPAs (` cr) Provision coverage (%, RHS)
5. Dena Bank | 2QFY2011 Result Update
October 26, 2010 5
Exhibit 8: Trend in productivity
Source: Company, Angel Research
Capital infusion expected in 3QFY2011
During the quarter, Dena Bank’s CAR stood at 12.3%, with tier-I capital of 8.0%
(forming 65% of the total CAR). The bank’s CAR is expected to increase with the
likely capital infusion of `600cr in the form of preference capital by the
government in FY2011. Over FY2012–13, management expects to receive further
`700cr from the government by way of preference capital. The cost of this capital
is expected to be linked to the repo rate as per management indications.
Accordingly, we have assumed the cost of preference capital to be 7%. After the
proposed capital infusion, the bank's tier-I ratio will improve to 9.1% by
end-FY2011 from 8.2% in FY2010.
91
116
144
117
130
121
132
128
145
163
70
75
81
75
74
83
87
92
84
96
56.6 56.0
45.9
50.5 50.4
55.9
52.5
44.1 49.0
44.3
36.0
44.0
52.0
60.0
-
50
100
150
200
250
300
1QFY09
2QFY09
3QFY09
4QFY09
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
Staff expenses (` cr) Other opex (` cr) Cost-to-income ratio (%, RHS)
6. Dena Bank | 2QFY2011 Result Update
October 26, 2010 6
Investment Arguments
Structurally strong CASA
Dena Bank has maintained its CASA ratio at healthy 35%+ levels (FY2010) on
account of having higher concentration of its branches in rural and semi-urban
areas (mainly in Gujarat and Maharashtra), where the prosperity levels are
relatively high. Further, during 2QFY2011, the bank was able to increase the
CASA ratio to 39.1%. In the last two years, the bank has maintained a CASA
market share of 1.1% despite intense competition from the private banks. This
structural advantage is reflected in the bank's cost of funds at 5.9% in FY2010,
which is one of the lowest amongst its peers.
Capital infusion to enable further growth
Dena Bank's CAR at 12.3% comprising only 8.0% of tier-I capital is below optimum
levels (reflected in 22x leverage of the bank for FY2010). Moreover, the
government’s holding at 51% had prevented the bank from further diluting the
government stake. This constraint on raising equity for growth was an overhang on
the stock. However, the government has been reiterating its intention to infuse
capital in PSU banks. Consequently, Dena Bank is expected to receive `600cr over
the next three months. Post the capital infusion, the bank's tier-I will improve to
9.1% in FY2011 from 8.2% in FY2010, enabling it to grow its advances more-or-
less in line with peers in the medium term.
Lower provisioning to aid bottom-line growth
Dena Bank's gross and net NPAs stood at 2.3% and 1.5% respectively, in
2QFY2011, with cumulative restructured advances at `1,306cr (3.6% of loans). As
per a recent RBI circular, the bank's effective provision coverage, including
technically written-off portfolio, is 75.4% as against the mandatory 70%, due to
which an adjustment to book value for NPAs is not required. Further, this portfolio
is expected to yield outsized income from recoveries relative to peers. Given the
improving economic outlook, we believe lower incremental provisioning costs will
aid the bank in maintaining its profitability levels.
Outlook and Valuation
Dena Bank, with a strong CASA ratio of 39.1%, is better placed than peers to
protect its NIM in a rising interest rate environment. After the proposed capital
infusion, the bank's tier-I ratio will improve to 9.1% by end-FY2011 from 8.2% in
FY2010, and enable it to maintain its CAR well above 12% levels until FY2012. At
the CMP, the stock is trading at 6.5x FY2012E EPS of `21.3 and 1.2x FY2012E
ABV of `115.1. We maintain an Accumulate on the stock with a Target Price of
`150. We have assigned a target multiple of 1.3x FY2012E ABV, translating into
8.7% upside from current levels.
11. Dena Bank | 2QFY2011 Result Update
October 26, 2010 11
Research Team Tel: 022 - 4040 3800 E-mail: research@angeltrade.com Website: www.angeltrade.com
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Disclosure of Interest Statement Dena Bank
1. Analyst ownership of the stock No
2. Angel and its Group companies ownership of the stock Yes
3. Angel and its Group companies' Directors ownership of the stock No
4. Broking relationship with company covered No
Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.
Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
Reduce (-5% to 15%) Sell (< -15%)