2QFY2012 Result Update | Banking

November 9, 2011

Bank of India
Performance Highlights

Particulars (` cr) NII Pre-prov. profit PAT

Source: Company, Angel Research

ACCUMULATE
CMP Target Price
% chg (qoq) 3.4 11.1 (5.1) 2QFY11 1,776 1,380 617 % chg (yoy) 7.2 12.5 (20.4)

`325 `346
12 Months

2QFY12 1,904 1,552 491

1QFY12 1,841 1,396 518

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 18,646 1.0 529/290 142,795 10 17,563 5,289 BOI.BO BOI@IN

For 2QFY2012, Bank of India posted a disappointing performance, with net profit declining by 20.4% yoy due to a sharp increase in provisioning expenses as the bank completed the exercise of switchover to system-based NPA recognition during 2QFY2012. Write-back of tax provisions amounting to `75cr and recognition of MAT credit entitlement worth `77cr supported bottom-line growth. We recommend an Accumulate rating on the stock with a target price of `346 Asset quality disappoints again; NIM improves post the battering in 1QFY2012: The banks business growth remained slow during the quarter, with advances declining by 0.3% qoq (up 18.1% yoy) and deposits increasing by 2.0% (up 24.1% yoy). Domestic NIM of the bank improved by 34bp qoq in 2QFY2012, following a sharp drop of 95bp qoq in 1QFY2012, to 2.8% on the back of a sharp uptick in yield on advances (up 85bp qoq) to and better yields on investments. Overall, other income performance was robust, with fee income growing by 19.0% qoq (up 8.3% yoy) during 2QFY2012. Recoveries from writtenoff accounts nearly trebled sequentially to `88cr, although on a low base. Treasury income gains also rose sharply during 2QFY2012 to `154cr (up 40.7% qoq). During 2QFY2012, overall asset quality deteriorated, with annualized slippage ratio rising sharply to 5.3% from 3.2%. During the quarter, the bank completed the exercise of switchover to system-based NPA recognition, which contributed to the substantially higher slippages. Management attributed ~58% of the slippages during 2QFY2012 to accounts worth `10lakhs and below. Outlook and Valuation: We have cut our estimates for FY2012 and FY2013 by 16.1% and 3.1%, respectively, to factor in the higher-than-expected run rate of slippages. We have kept our NIM assumption intact; however have increased the slippages estimate to 2.3% from 1.8% for FY2012. At the CMP, the stock is trading at 1.0x FY2013 ABV. We recommend Accumulate on the stock with a revised target price of `346, giving an upside of 6.4%.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 65.9 12.4 15.3 6.5

Abs. (%) Sensex BOI

3m 3.0 (7.1)

1yr (17.1) (37.8)

3yr 64.8 15.4

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

FY2010 5,756 4.7 1,741 (42.1) 2.4 33.1 9.8 1.4 0.7 14.2

FY2011 7,811 35.7 2,489 42.9 2.6 45.5 7.2 1.1 0.8 17.3

FY2012E 7,786 -0.3 2,188 (12.1) 2.1 40.0 8.1 1.1 0.6 13.0

FY2013E 9,092 16.8 3,201 46.3 2.1 58.5 5.6 1.0 0.7 16.9

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

Bank of India | 2QFY2012 Result Update

Exhibit 1: 2QFY2012 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 - Provisions for Investments - Other Provisions PBT Provision for Tax PAT Effective Tax Rate (%)
Source: Company, Angel Research

2QFY12 1QFY12 % chg (qoq) 2QFY11 % chg (yoy) 6,886 4,886 1,843 133 24 4,982 1,904 842 687 326 154 88 274 2,746 1,194 728 467 1,552 1,154 824 151 179 397 (94) 491 (23.7) 6,634 4,596 1,641 220 177 4,793 1,841 660 550 274 110 31 246 2,501 1,105 700 405 1,396 567 388 90 89 829 311 518 37.6 3.8 6.3 12.3 (39.5) (86.6) 4.0 3.4 27.5 24.9 19.0 40.7 180.8 11.6 9.8 8.1 3.9 15.2 11.1 103.5 112.4 67.8 101.0 (52.1) (130.2) (5.1) 5,156 3,660 1,307 188 3,380 1,776 585 549 301 36 30 218 2,361 981 603 378 1,380 527 286 63 178 852 235 617 27.6 33.6 33.5 41.0 (29.3) 10,187.0 47.4 7.2 44.0 25.3 8.3 328.9 191.0 25.9 16.3 21.7 20.6 23.5 12.5 118.9 187.8 140.4 0.6 (53.4) (139.9) (20.4) -

Exhibit 2: 2QFY2012 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 1,904 842 2,746 1,194 1,552 1154 397 (94) 491

Estimates 1,879 671 2,550 1,168 1,382 456 925 300 625

Var (%) 1.3 25.4 7.7 2.2 12.3 153.1 (57.1) (21.4)

November 9, 2011

Bank of India | 2QFY2012 Result Update

Exhibit 3: 2QFY2012 performance analysis

Particulars Balance sheet Advances (` cr) Deposits (` cr) Credit-to-Deposit Ratio (%) Domestic current deposits (` cr) Domestic saving deposits (` cr) Domestic CASA deposits (` cr) Global 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 (%) Provision Coverage Ratio (%) Slippage ratio (%) LLP to avg assets (%) 6,548 3.0 4,245 2.0 59.1 5.3 0.9 5,791 2.7 2,690 1.3 66.8 3.2 0.4 13.1 33bp 57.8 71bp (763)bp 214bp 50bp 4,870 2.6 2,070 1.1 70.0 1.9 0.4 34.5 38bp 105.0 84bp (1090)bp 335bp 54bp 7.1 11.7 8.0 9.2 6.5 2.8 43.5 6.9 10.8 7.5 8.6 6.3 2.4 44.2 20bp 85bp 45bp 62bp 21bp 34bp (69)bp 5.7 10.0 7.5 8.1 5.3 3.2 41.6 142bp 165bp 47bp 115bp 115bp (40)bp 194bp 214,332 214,936 299,074 293,098 71.7 13,140 63,513 76,652 25.6 12.0 8.3 73.3 15,329 58,838 74,168 25.3 11.6 8.0 (0.3) 181,437 2.0 241,071 (167)bp (14.3) 7.9 3.4 33bp 40bp 24bp 75.3 13,915 54,153 68,068 28.2 13.0 8.4 18.1 24.1 (360)bp (5.6) 17.3 12.6 (261)bp (107)bp (12)bp 2QFY12 1QFY12 % chg (qoq) 2QFY11 % chg (yoy)

Source: Company, Angel Research; Note: Profitability ratios excluding CIR for domestic operations

Business growth remains slow

The banks business growth remained slow during the quarter, with advances declining by 0.3% qoq (up 18.1% yoy) and deposits increasing by 2.0% (up 24.1% yoy). As a result of the decline in advances sequentially, credit-to-deposit (CD) ratio decreased by ~167bp qoq to 71.7%. Domestic gross advances declined by 2.0% qoq and yoy growth slowed to 9.1%. International advances growth was healthy at 4.9% qoq and 53.5% yoy. Share of international advances in the total loan book moved up to 26.3% as of 2QFY2012 from 20.3% as of 2QFY2011. On the deposits side, domestic CASA deposits grew rather moderately by 12.6% yoy; however, domestic saving account deposits grew at a relatively better pace of 17.3% yoy. Domestic CASA ratio improved sequentially to 31.3% in 2QFY2012 from 30.2% in 1QFY2012.

November 9, 2011

Bank of India | 2QFY2012 Result Update

Exhibit 4: Business momentum remains slows

Adv. qoq chg (%) 76.3 20.0 75.3 15.0 Dep. qoq chg (%) CDR (%, RHS) 77.0 73.3 74.0 71.0

Exhibit 5: Domestic CASA ratio improves

Doemstic CASA ratio (%) 34.0 32.0 30.0 28.0 26.0 24.0 22.0 65.0 20.0 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12
Source: Company, Angel Research

CASA yoy growth (%, RHS) 30.0

29.0 22.2 18.3 14.3 12.6

3.2

0.9

5.0

6.2 4.8

10.6 18.4

10.0

71.3

71.7

20.0 10.0

2.0

2.6

33.2

32.3

28.9

30.2

(5.0)

(1.9)

(0.3)

31.3

68.0

2QFY11 3QFY11 4QFY11 1QFY12 2QFY12

Source: Company, Angel Research

Exhibit 6: Strong traction in the international segments advances

Particulars (` cr) Agricultural SME Corporates Retail Domestic advances International Global advances
Source: Company, Angel Research

2QFY12 19,641 25,214 96,614 16,395 157,864 56,468 214,332

% to total 9.2 11.8 45.1 7.6 73.7 26.3 100.0

NIM improves sequentially post the battering in 1QFY2012

Domestic NIM of the bank improved by 34bp qoq in 2QFY2012 (a sharp drop of 95bp qoq in 1QFY2012) to 2.8% on the back of a sharp uptick in yield on advances (up 85bp qoq) to 11.7% and better yields from investments (up 45bp qoq) to 8.0% during the quarter. There was reversal of accrued interest income of ~`100cr during the quarter, which marginally dragged down the banks reported NIM. Going forward, the bank is targeting to maintain its global NIM at 2.6% (2.4% as of 2QFY2012)

Exhibit 7: Trend in yield and cost ratios (Global)

Particulars (%) Cost of deposits Yield on advances Yield on investments Yield on funds Cost of funds Reported NIM
Source: Company, Angel Research

2QFY12 6.1 9.4 7.8 8.1 5.6 2.4

1QFY12 6.0 8.9 7.4 7.6 5.5 2.2

% chg (qoq) 8bp 52bp 45bp 45bp 10bp 25bp

2QFY11 5.0 8.5 7.3 7.3 4.8 2.8

% chg (yoy) 110bp 94bp 56bp 81bp 85bp (37)bp

November 9, 2011

Bank of India | 2QFY2012 Result Update

Exhibit 8: Sharp uptick in domestic yield on advances...

12.0 11.5 11.0 10.5 10.0 9.5 9.0 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 10.35 10.04 10.67 10.84 11.69

Exhibit 9: ...leads to 34bp qoq increase in domestic NIM

(%) 4.00 3.50 3.00 2.50 2.00 1.50 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 2.43 3.49 3.17 3.38 2.77

Source: Company, Angel Research

Source: Company, Angel Research

Other income helps support bottom line

Overall, other income performance was robust, with fee income growing by 19.6% qoq (up 8.3% yoy) during 2QFY2012. Recoveries from written-off accounts nearly trebled sequentially to `88cr, although on a low base. Treasury income gains also rose sharply during 2QFY2012 to `154cr (up 40.7% qoq), while gains from forex transactions remained flat at `148cr. The bank wrote-off accounts worth `1,596cr during 2QFY2012 (against the usual run-rate of `150cr-300cr); however, management termed these write-offs as soft and is expecting 60-65% of these written-off accounts to be recovered over the next 2-3 quarters. Hence, we expect recoveries to be strong going forward and have factored in growth in other income excluding treasury to grow by 17.1% and 18.1% in FY2012 and FY2013, respectively.

Exhibit 10: Moderate fee income growth

Particulars (` cr) CEB Treasury Forex Recoveries Others Other income Other income excl. treasury
Source: Company, Angel Research

2QFY12 1QFY12 326 154 148 88 126 842 687 274 110 147 31 98 660 550

% chg (qoq) 2QFY11 19.0 40.7 0.8 180.8 27.7 27.5 24.9 301 36 111 30 107 585 549

% chg (yoy) 8.3 328.9 33.5 191.0 17.9 44.0 25.3

Slippages shoot up sequentially; Write-offs substantially higher during 2QFY2012

During 2QFY2012, overall asset quality deteriorated with annualized slippage ratio rising sharply to 5.3% from 3.2%. During the quarter, the bank completed the exercise of switchover to system-based NPA recognition, which contributed to the substantially higher slippages. Management attributed ~58% of the slippages during 2QFY2012 to accounts worth `10lakhs and below. The bank wrote-off accounts worth `1,596cr during 2QFY2012 (against the usual run-rate of `150cr-300cr); however, management termed these write-offs as soft and is expecting 60-65% of these written-off accounts to be recovered in the next
November 9, 2011

Bank of India | 2QFY2012 Result Update

2-3 quarters. Provision coverage ratio (including technical write-offs) slipped by 763bp qoq to 59.1% as of 2QFY2012. The banks effective tax rates were negative during 2QFY2012 (negative 23.7% compared to 37.6% in 1QFY2012) as the bank wrote back tax provisions amounting to `75cr and recognized MAT credit entitlement worth `77cr in 1HFY2012.

Exhibit 11: Slippages jump up significantly in 2QFY12

Slippages (%) 3.5 2.8 2.1 0.6 1.4 0.7 (0.0) 1.9 1.1 0.4 0.2 2.4 0.4 3.2 0.4 0.3 5.3 0.9 Credit cost (%, RHS) 1.2 0.9

Exhibit 12: Overall asset quality deteriorates

Gross NPAs (%) 3.5 3.0 2.5 2.0 1.5 1.0 59.1 70.0 74.5 Net NPAs (%) PCR (%, RHS) 79.0 72.2 66.8 75.0 71.0 67.0 63.0 59.0 55.0 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12
Source: Company, Angel Research

2.6 1.1

2.4 0.9

2.2 0.9

2.7 1.3

2QFY11 3QFY11 4QFY11 1QFY12 2QFY12

Source: Company, Angel Research

Exhibit 13: Provisioning expenses rise on NPA and investment depreciation

Particulars (` cr) NPA Investment related Others Total 2QFY12 824 151 179 1,154 1QFY12 388 90 89 567 % chg (qoq) 112.4 67.8 101.1 103.5 2QFY11 286 63 178 527 % chg (yoy) 187.8 140.4 0.6 118.9

Source: Company, Angel Research

Exhibit 14: Trend in opex

Staff expenses (` cr) Other opex (` cr)

Exhibit 15: Cost ratios at normalized levels

Cost-to-income ratio (%) 70.0 60.0 50.0 40.0 30.0 20.0 10.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12
Source: Company, Angel Research

41.6

47.3

61.5

44.2

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

43.5

2,100 1,800 1,500 1,200 900 600 300 -

41.6

47.3

464

61.5 44.2 43.5

2.4

Opex to average assets (%, RHS) 2.5 2.0 1.3 1.4 1.5 1.0 0.5 -

409

1.7 1.4

603 378

1,462

837

700

405

Source: Company, Angel Research

November 9, 2011

728

467

3.0 2.0

0.5

Bank of India | 2QFY2012 Result Update

Sufficient capital adequacy

The bank is well capitalized with a CAR of 12.0% and tier-I capital of 8.3% (forming 69.0% of total CAR). Post the recent capital infusion by the government, its shareholding in the bank has increased to 65.9%, further increasing the headroom for raising tier-I capital in future. The bank had approached the government during 1QFY2012 for raising `4,500cr either through QIP/FPO or a rights issue to fund growth over the next 2-3 years.

Investment arguments
Lower provisions to drive RoE
During the 2008 global meltdown, the bank faced severe asset-quality pressures and reported a slippage rate of 2.9% in FY2010 (from 1.8% in FY2009). As a result, NPA provision/assets increased to 0.7% in FY2010 from 0.3% in FY2009, in turn exerting pressure on the banks RoE. While, the bank managed to improve the slippage ratio for FY2011 to 1.7% from 2.9% in FY2010, it has again risen above 5% for 2QFY2012, primarily on account of the switchover to systembased NPA recognition system. Hence, we expect slippages to stabilize in FY2013 and aided by strong recoveries, we expect NPA provision/assets to decline to 0.5% by FY2013, leading to improvement in RoE to 16.9% by FY2013 from 14.2% in FY2010.

Reasonably high fee income with a moderate funding mix

The banks international operations contribute a substantial ~26.0% to the banks advances. International operations enable a wider spectrum of fee-based services to the banks domestic corporate and retail customers, foreign currency fund-based services to Indian corporates and savings products to the banks PIO clients abroad. The bank has a relatively decent funding mix, with domestic CASA ratio at 31.3% as of 2QFY2012.

Outlook and valuation

The banks RoEs are expected to improve over the coming quarters on the back of declining NPA provisions (as witnessed in FY2011). The sharp spike in slippages over the past couple of quarters has been primarily on account of the switchover to system-based NPA recognition. These pressures are likely to moderate considerably in 2HFY2012 as the bank has completed migration of all loan accounts. Further healthy recoveries are expected to aid in lowering the provisioning expenses going ahead. We have cut our estimates for FY2012 and FY2013 by 16.1% and 3.1%, respectively, to factor in the higher-than-expected run rate of slippages. We have kept our NIM assumption intact; however have increased the slippages estimate to 2.3% from 1.8% for FY2012. At the CMP, the stock is trading at 1.0x FY2013 ABV. We recommend Accumulate on the stock with a revised target price of `346, giving an upside of 6.4%.

November 9, 2011

Bank of India | 2QFY2012 Result Update

Exhibit 16: Key assumptions

Particulars (%) Credit growth Deposit growth CASA ratio NIMs Other income growth Growth in staff expenses Growth in other expenses Slippages
Source: Company, Angel Research

Earlier estimates FY2012 19.0 18.0 24.7 2.1 8.1 (13.0) 13.0 2.3 FY2013 20.0 18.0 24.0 2.1 16.9 15.0 15.0 1.8

Revised estimates FY2012 18.0 16.0 25.1 2.1 13.3 (15.0) 15.0 3.2 FY2013 19.0 18.0 24.4 2.1 13.3 14.0 14.0 2.6

Exhibit 17: Change in estimates

FY2012 Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT Earlier estimates 7,731 2,856 10,587 4,823 5,763 1,900 3,863 1,253 2,610 Revised estimates 7,786 2,994 10,780 4,786 5,994 3,115 2,879 691 2,188 % chg 0.7 4.8 1.8 (0.8) 4.0 63.9 (25.5) (44.9) (16.1) Earlier estimates 9,012 3,340 12,352 5,547 6,805 1,914 4,891 1,587 3,304 FY2013 Revised estimates 9,092 3,393 12,485 5,456 7,029 2,290 4,739 1,537 3,201 % chg 0.9 1.6 1.1 (1.6) 3.3 19.6 (3.1) (3.1) (3.1)

Source: Company, Angel Research

Exhibit 18: P/ABV band

Price (`) 800 0.8x 1.1x 1.4x 1.7x 2x

600

400

200

Dec-03

Dec-10

Jul-04

Apr-06

Aug-08

Oct-02

Mar-02

Mar-09

Oct-09

Feb-05

Jul-11

Sep-05

May-03

Nov-06

Source: Company, Angel Research

November 9, 2011

May-10

Feb-12

Jun-07

Jan-08

Bank of India | 2QFY2012 Result Update

Exhibit 19: Recommendation summary

Company Reco. 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 Buy Accumulate Neutral Buy Accumulate Buy Neutral Neutral Buy Accumulate Accumulate Accumulate Neutral Buy Neutral Neutral Accumulate Accumulate Neutral Neutral Accumulate Buy Buy Neutral Accumulate Buy Neutral CMP (`) 1,112 403 477 862 23 307 166 114 789 325 49 477 100 424 77 111 213 101 817 297 968 1,863 103 71 224 70 59 Tgt. price (`) 1,414 444 1,114 24 355 918 346 55 523 498 227 107 1,106 2,194 123 245 82 Upside (%) 27.2 10.1 29.2 5.3 15.9 16.3 6.4 13.0 9.8 17.4 6.5 6.2 14.2 17.8 19.3 9.2 17.1 FY2013E P/ABV (x) 1.8 1.1 3.2 1.6 1.1 1.9 0.8 0.8 1.1 1.0 0.6 0.9 0.7 0.7 0.6 0.7 0.8 0.6 0.9 0.7 1.1 1.5 0.7 0.8 0.8 0.6 0.7 FY2013E Tgt P/ABV (x) 2.3 1.2 2.0 1.2 2.3 1.3 1.0 0.7 1.0 0.8 0.9 0.7 1.3 1.7 0.8 0.9 0.7 FY2013E P/E (x) 9.7 8.2 16.6 12.7 6.7 10.2 4.4 5.1 5.6 5.6 4.2 5.6 5.1 4.3 3.6 5.2 4.8 4.0 5.1 5.2 5.7 8.0 4.5 4.2 5.1 4.1 6.2 FY2011-13E EPS CAGR (%) 17.7 19.5 30.5 23.3 15.6 19.9 12.2 (1.0) 14.2 13.4 38.1 (3.0) (16.1) 1.5 7.5 12.3 7.4 20.0 12.0 5.1 9.9 33.9 11.8 15.9 5.2 13.4 3.9 FY2013E RoA (%) 1.5 1.2 1.7 1.4 1.0 1.3 1.0 0.9 1.2 0.7 0.6 0.9 0.5 0.8 0.8 0.7 1.3 0.6 1.3 0.8 1.1 0.9 0.7 0.7 0.8 0.6 0.4 FY2013E RoE (%) 20.0 14.0 20.9 15.4 18.2 20.8 18.4 15.6 20.7 16.9 16.5 17.2 13.9 16.6 16.4 14.0 19.4 15.9 17.8 14.1 20.6 20.0 16.3 16.7 17.0 14.1 11.7

Source: Company, Angel Research; Note:*Target multiples=SOTP Target Price/ABV (including subsidiaries), #Without adjusting for SASF

November 9, 2011

Bank of India | 2QFY2012 Result Update

Income statement
Y/E March (` cr) NII - 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
4,229 22.9 2,117 35.4 6,346 26.8 2,645 1.4 3,701 54.5 1,017 17.9 2,685 75.1 675 25.2 2,009 78.9

FY09
5,499 30.0 3,052 44.2 8,551 34.7 3,094 17.0 5,457 47.4 1,292 27.1 4,164 55.1 1,157 27.8 3,007 49.7

FY10
5,756 4.7 2,617 (14.3) 8,373 (2.1) 3,668 18.5 4,705 (13.8) 2,211 71.1 2,494 (40.1) 753 30.2 1,741 (42.1)

FY11
7,811 35.7 2,642 1.0 10,452 24.8 5,068 38.2 5,384 14.4 1,889 (14.6) 3,495 40.2 1,007 28.8 2,489 42.9

FY12E
7,786 (0.3) 2,994 13.3 10,780 3.1 4,786 (5.6) 5,994 11.3 3,115 64.9 2,879 (17.6) 691 24.0 2,188 (12.1)

FY13E
9,092 16.8 3,393 13.3 12,485 15.8 5,456 14.0 7,029 17.3 2,290 (26.5) 4,739 64.6 1,537 32.4 3,201 46.3

Balance sheet
Y/E March (` cr) Share Capital Reserves & 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
526 10,063 150,012 25.1 7,172 4,946 6,110 178,830 11,742 5,976 41,803 113,476 33.6 2,426 3,407 178,830 26.3

FY09
526 12,969 189,708 26.5 9,487 6,186 6,625 225,502 8,915 12,846 52,607 142,909 25.9 2,532 5,692 225,502 26.1

FY10
526 13,704 229,762 21.1 14,079 8,320 8,590 274,982 15,603 15,628 67,080 168,491 17.9 2,352 5,829 274,982 21.9

FY11
547 16,743 298,886 30.1 12,862 9,160 12,975 351,173 21,782 15,528 85,872 213,096 26.5 2,481 12,413 351,173 27.7

FY12E
547 18,455 346,708 16.0 14,832 10,809 13,631 404,981 22,536 17,907 99,032 251,453 18.0 2,775 11,278 404,981 15.3

FY13E
547 20,988 409,115 18.0 17,451 12,862 15,522 476,486 26,592 21,068 113,159 299,230 19.0 3,167 13,269 476,486 17.7

November 9, 2011

10

Bank of India | 2QFY2012 Result Update

Ratio analysis
Y/E March 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 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 (x) RoE
2.6 0.6 2.0 0.2 2.2 1.1 3.3 1.7 1.7 0.4 1.3 22.0 27.6 2.7 0.6 2.1 0.4 2.4 1.1 3.6 1.5 2.1 0.6 1.5 19.6 29.2 2.3 0.9 1.4 0.2 1.7 0.8 2.5 1.5 1.0 0.3 0.7 20.4 14.2 2.5 0.6 1.9 0.1 2.0 0.7 2.7 1.6 1.1 0.3 0.8 21.8 17.3 2.1 0.8 1.2 0.1 1.3 0.7 2.0 1.3 0.8 0.2 0.6 22.5 13.0 2.1 0.5 1.5 0.0 1.6 0.7 2.3 1.2 1.1 0.3 0.7 23.3 16.9 8.5 1.9 1.2 5.7 1.5 2.5 9.8 1.4 2.2 7.2 1.1 2.1 8.1 1.1 2.3 5.6 1.0 3.2 38.2 167.8 4.0 57.2 215.2 8.0 33.1 229.4 7.0 45.5 287.1 7.0 40.0 297.0 7.5 58.5 337.7 10.5 1.7 0.5 1.6 0.4 75.6 1.7 0.4 1.8 0.3 56.1 2.9 1.3 2.9 0.7 65.5 2.2 0.9 1.7 0.3 72.2 4.0 2.0 3.2 0.7 65.0 4.5 2.0 2.6 0.5 65.0 30.6 75.6 13.0 8.2 26.8 75.3 12.1 8.3 27.8 73.3 12.0 7.9 25.4 71.3 11.4 7.8 25.1 72.5 12.0 7.9 24.4 73.1 11.8 7.6

FY08
2.7 41.7 1.3 27.6

FY09
2.8 36.2 1.5 29.2

FY10
2.4 43.8 0.7 14.2

FY11
2.6 48.5 0.8 17.3

FY12E
2.1 44.4 0.6 13.0

FY13E
2.1 43.7 0.7 16.9

November 9, 2011

11

Bank of India | 2QFY2012 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

Bank of India 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%)

November 9, 2011

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