ING Vysya Bank - March 2013 Results Preview - Motilal Oswal

- On a YoY basis, loan growth is expected to be above industry average at ~20%. In line with loans, deposits are expected to grow at 22%.

- Margins are expected to moderate by ~10bp QoQ (though would be up 30bp YoY) to 3.5%, as bank builds its priority sector loan portfolio. Thus, NII is expected to grow 4% QoQ and 31% YoY.

- While VYSB's performance on asset quality front has been strong over the past few quarters, high exposure to SME segment could lead to some pressure on asset quality. Hence, on a conservative basis, we have built higher slippages and higher provisions.

- Non-interest income growth is expected to remain muted as fee income (ex-forex) is expected to be largely flat.

- The stock trades at 1.7x FY14E and 1.5x FY15E BV, and 12.3x FY14E and 10.7x FY15E EPS. Maintain Buy.

Source : Equity Bulls

Keywords