South Indian Bank - 3QFY2014 results - Angel Broking

Views of Mr. Vaibhav Agrawal (VP- Research - Banking, Angel Broking) on South Indian Bank 3QFY2014 results:

"South Indian Bank reported in line operating performance, while asset quality surprised positively. On the operating front, Net Interest Income for the bank remained flat yoy, while non-interest income grew by 28% yoy, leading to operating income growth of 4% yoy. Operating expenses grew 20% yoy, in-line with expectations. Pre-provisioning profit expectedly de-grew by 8% yoy. On the asset quality front, the bank reported improvement, as not only slippages came in lower (annualised slippages at 1.3% in 3QFY2014 lower compared to 3.3% in 2QFY2014) but also recoveries and upgrades performance improved. Overall, the bank reported ~10% decline in both absolute Gross & Net NPA levels. Provisioning expenses came in at just Rs. 2cr as compared to Rs. 20cr in 2QFY2014, which enabled the bank to clock earnings growth of 10% yoy. We await clarity from the management particularly regarding provisioning expenses during the quarter. At the CMP, the stock is trading at 0.8x FY2015E ABV. We recommend Buy rating on the stock."

Source : Equity Bulls

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