Corporation Bank - Q3FY12 Result Update - Emkay

Reco: ACCUMULATE
CMP: Rs 427
Target Price: Rs 520

Results inline; lower recoveries and LLP negative

- CRPBK's NII/PPoP at Rs8.6/8.3bn significantly ahead of est. Driven by higher provisions on NPLs and restr, the PAT at Rs4bn was inline

- Continues to suffer from sharp rise in costs as CoD went up by another 8bps on high of 7.5%. However expansion in CDR by 500bps to 73%, aided 23bps expansion in NIM's to 2.7%

- The GNPLs (1.4%) remained under check driven by write offs. Key –ves – sharp drop in reco+upgrades and lower LLPs at 50% of incremental net NPLs

- Sharp improvement in margins over last two quarters is positive, the sustainability of the same is under doubt given lower CASA levels. Maintain ACC with PT of Rs520.

Source : Equity Bulls

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