pnb_20062012

7/28/2019 PNB_20062012

1/14

Punjab National BankCMP: INR760 TP: INR964 BuyBSE SENSEX S&P CNX

16,706 5,064

Stock performance (1 year)

Bloomberg PNB IN

Equity Shares (m) 339.2

52-Week Range (INR) 1,200/703

1,6,12 Rel.Perf.(%) 2/-14/-21

M.Cap. (INR b) 257.8

M.Cap. (USD b) 4.6

Asset quality deteriorates; asset-liability well-matchedHighlights of FY12 Annual Report

Though growth in overall industrial exposure moderated, funded exposure growth

remained high in the Power and NBFC segments. These two segments constituted

over 25% of incremental funded exposure and 15% of overall funded exposure.

Net slippages increased from 1.5% in FY11 to 1.8%. Outstanding restructured loans

increased to 7.9% (of which 3% relate to state government entities) v/s 4.2% in FY11.

Discounting factor for pension liability increased to 8.8% and is in line with 8.7-9% for

peers. However, salary escalation assumption at 5% is higher than peers 4%.

Healthy core operating performance would enable better absorption of credit cost.

Expect RoA of 1.1% and RoE of ~19% in FY13/14. Maintain Buy.

Strong growth in exposure to Power and NBFC segments: The funded exposure

details of Punjab National Bank (PNB) reveal highly concentrated growth in the

Power (including electricity - up 28%) and NBFC (up 93%) segments. Growth in

other industrial segments moderated/declined, and these two segments

constituted over 25% of incremental funded exposure and 15% of overall funded

exposure. Since FY08, funded exposure to the Power segment has increased

from 4.2% to 9.8%. Funded exposure to Textiles (down 32%) and Gems & Jewelry

(down 45%) declined, while exposure to Commercial Real Estate was stable.

Exposure to 100%+ risk weight assets (RWAs) increased to 11% v/s 6.9% in FY11.

Growth in overall RWAs was 17% v/s 21%+ growth in loans and balance sheet.

Net slippages at 1.8%; higher restructuring led by state government entities:

Net slippage increased significantly from 1.5% in FY11 to 1.8%, led by sharp rise

in slippages in 2HFY12, though recoveries and upgradations improved (INR22b

v/s INR15.8b in FY11). Restructuring relating to some large-ticket government

entity accounts led to sharp increase in outstanding restructured loans to 7.9%

(of which 3% relate to state government entities) v/s 4.2% in FY11. During the

year, PNB restructured loans of INR21b under the CDR (corporate debt

restructuring) mechanism, on which it took a sacrifice of INR2.9b (14% of loans

restructured under CDR). GNPAs increased across segments, with sharp increasesin Services (3.5% v/s 1.4% in FY11) and Agriculture (5% v/s 3.6% in FY11).

Other highlights: (1) Employee benefit assumption largely in line with peers,

with discount rate at 8.8% v/s 8.7-9% for peers and salary escalation at 5% v/s 4%

for peers, (2) Concentration of top-20 deposit accounts up from 4.9% to 7.9%;

domestic CASA ratio at 36% (v/s 39% in FY11), (3) Well-matched asset-liability

39% of deposits and 35% of loans maturing within a year, (4) Proportion of

secured loans up from 87.6% in FY11 to 91.6%, (5) Core tier-I ratio stood at 8.6%.

Trades at 0.7x FY14E BV, with RoE of ~19%; maintain Buy: In the current

macroeconomic environment, higher upgradations and recoveries would be

the key for asset quality. Healthy core operating performance would enable

better absorption of higher credit cost. We expect RoA to remain healthy at

~1.1% and RoE at ~19% in FY13/14, led by superior margins and fee income growth.

Valuation summary (INR b)

Y/E March 2012 2013E 2014E

NII 134.1 156.5 182.3

OP 106.1 121.2 141.0

NP 48.8 53.6 65.1

EPS (INR) 144 158 192

EPS Gr. (%) 2.9 9.8 21.4

P/E (x) 5.3 4.8 4.0

BV/Sh. (INR) 777 911 1,072

P/BV (x) 1.0 0.8 0.7

RoE (%) 21.1 18.7 19.4

RoA (%) 1.2 1.1 1.1

19 June 2012

Annual Report Update | Sector: Financials

Alpesh Mehta ([email protected]) +91 22 3982 5415

Sohail Halai ([email protected]) +91 22 3982 5430

Shareholding pattern % (Mar-12)

Domestic

Inst, 21.8

Others,

4.7Foreign,

17.4

Promoter

56.1

1

7/28/2019 PNB_20062012

2/14

Punjab National Bank

19 June 2012 2

Other highlights

Has achieved priority sector lending (PSL) targets: Loans to priority sectors

constitute 40.7% of PNBs adjusted net bank credit against the regulatory

requirement of 40%. The bank has also met the targets for all the sub-segments.

Priority sector lending (%)

Achieved

Target FY11 FY12

PSL 40.0 40.7 40.7

Of which

Agri 18.0 19.3 19.3

Direct 13.5 14.8 14.8

Credit to weaker section 10.0 10.1 10.4

Credit to women benficiaries 5.0 5.1 5.1

Source: Company/MOSL

Continues to focus on expanding international footprint: The share of international

loans in PNBs overall loan book has increased from 2.5% in FY09 to 7.4% in FY12.

Overseas business (including subsidiaries) grew 40% in FY12 to USD8b, whereas

PAT more than doubled to USD49m. The bank is currently present in 10 destinations

abroad, and is planning to set up its second wholly-owned subsidiary in Canada

and representative offices in other overseas locations.

Contract with Metlife to distribute life insurance products: In FY12, PNB entered

into a contract with MetLife India Insurance Company as against LIC earlier to

distribute life insurance policies. PNBs aggregate premium collection grew 1.5x

in FY12 to INR2.9b (64,898 policies sold) and it earned INR212m from this activity. Income of INR550m from debt syndication/appraisal: PNB gave in-principle

approvals for debt syndication/appraisal aggregating to INR504b. Income on the

syndication/appraisal activities amounted to INR550m. Further, fees of INR290m

are receivable out of the mandates in hand.

Valuation and view

In FY12, PNBs core operating profits grew 18%, led by healthy growth in business and

fee income. NIM contracted by just 10bp despite higher slippages and tight liquidity

conditions, depicting PNBs strong asset-liability management capabilities. The

management has reiterated its NIM guidance of 3.5%+ going forward. We model ~10bpNIM decline in FY13 and estimate ~17% CAGR in NII over FY13-14.

Slippage ratio increased sharply to 2.8% in FY12 v/s average slippage ratio of 1.9% for

FY07-11 a negative surprise. In the current macroeconomic environment, while

slippages and restructuring may remain at an elevated level, higher upgradations and

recoveries would be the key for asset quality. We model slippage ratio of ~2.3% and

credit cost of 100bp/90bp for FY13/14. Superior NIM and healthy fee income growth

would enable PNB to absorb the impact of asset quality shocks. Despite factoring in

higher credit costs, RoA would remain healthy at ~1.1% and RoE at ~19% over FY13/14.

Maintain Buy.

7/28/2019 PNB_20062012

3/14


19 June 2012 3

PNB: One year forward P/E PNB: One year forward P/BV

Dupont analysis: Return ratios to remain healthy, led by strong core operating performance (%)Y/E March 2007 2008 2009 2010 2011 2012 2013E 2014E

Net Interest Income 3.4 3.1 3.1 3.1 3.5 3.2 3.2 3.1

Fee income 0.8 0.8 0.8 0.8 0.8 0.8 0.7 0.7

Fee income to core income 18.5 19.9 20.1 20.4 17.9 19.0 18.4 18.1

Core Operating Income 4.2 3.8 3.8 3.9 4.3 4.0 3.9 3.8

Trading and others 0.4 0.3 0.6 0.5 0.3 0.3 0.2 0.2

Net Income 4.5 4.2 4.4 4.4 4.6 4.2 4.1 4.0

Operating Expenses 2.2 2.0 1.9 1.8 1.9 1.7 1.6 1.6

Cost to Core Income Ratio 52.0 51.0 49.2 44.7 44.2 42.3 42.1 41.6

Employee cost 1.5 1.4 1.3 1.1 1.3 1.1 1.1 1.0

Employee cost to Opex 70.7 69.8 69.5 65.5 70.1 67.5 66.4 65.1

Other operating expenses 0.6 0.6 0.6 0.6 0.6 0.5 0.5 0.6

Core operating Profits 2.0 1.9 1.9 2.2 2.4 2.3 2.2 2.2

Operating Profits 2.4 2.2 2.6 2.7 2.7 2.5 2.4 2.4

Provisions 0.9 0.4 0.4 0.5 0.7 0.9 0.9 0.8

NPA provisions 0.4 0.2 0.4 0.4 0.6 0.6 0.6 0.6

Other Provisions 0.6 0.2 0.0 0.2 0.1 0.3 0.2 0.2

PBT 1.4 1.8 2.1 2.2 1.9 1.7 1.6 1.6

Tax Rate 0.4 0.7 0.8 0.7 0.6 0.5 0.5 0.5

RoA 1.0 1.1 1.4 1.4 1.3 1.2 1.1 1.1

Leverage (x) 16.0 17.3 18.6 18.5 18.6 18.0 17.3 17.3

RoE 16.0 19.6 25.8 26.6 24.5 21.1 18.7 19.4


Margin to remain one of

the best in the industry

Fee income to average

assets higher than other

large PSBs, however

ample scope for

improvement remains

Pressure on asset quality

to remain; improvement

in upgradation and

recoveries - a key

Return ratios to

moderate but

remain healthy

7/28/2019 PNB_20062012

4/14


19 June 2012 4

Domestic loan growth remains above industry average, driven

by strong growth in SME and large corporate segments

Increased focus on international operations and partial

benefit from currency depreciation in FY12 led to strong growth

of 68%+ in international loan book

Consistently increasing market share in loans (%) Proportion of international loans increasing at a faster pace (%)

Loan growth above industry average; loan book well-diversified

Proportion of secured loan has increased by 840bp+ over the

last five years is now one of the highest amongst peers

Loan mix shifts in favor of working capital financing and secured loans (%)

Diversified loan mix (%) Break-up of industrial loans (%)

Agriculture (+29%) and SME (+27%) segments drove the strong

loan growth in FY12

Industrial exposure is well diversified. Proportion of

Infrastructure in overall loans has increased 200bp to 16.6%

over the last two years

Proportion of working capital loans has increased by 500bp

over the last two years

7/28/2019 PNB_20062012

5/14


19 June 2012 5

Systemic increase in interest rates led to strong inflow of

retail deposits

At 18%, incremental SA ratio was significantly below historical

average; incremental CA ratio was just 2.5%

CASA growth moderates (YoY, %) Incremental CASA ratio at 21% - lowest in 10 years (%)

Liability profile and asset-liability management

Though PNBs CASA per branch has been increasing, it remains

significantly lower than SBIN and private sector banks

CASA ratio down 500bp+ in last two years CASA per branch largely in line with large PSBs (INR m)

Asset-liability remains well-matched (%)

While the proportion of short-term deposits (less than one year) has increased in FY12 (39.4% v/s 36.6% in FY11), loan re-pricing

of ~35% in FY12 keeps asset-liability well-matched

Decline in CASA ratio was offset by similar increase in

proportion of retail deposits; proportion of bulk deposits

was largely stable

FY11 FY12

7/28/2019 PNB_20062012

6/14


19 June 2012 6

Increase in net slippages and restructured loan book was

led by stress in the large corporate segment (especially state

government entities)

NPV loss of ~15% on CDR cases; however, overall NPV loss

was contained at ~3% of restructured loans

Pressure on asset quality increases (% of opening loans) Restructuring during the year (INR b)

Asset quality pressure remains high

GNPAs increased across segments; Services and Agriculture

most impacted

NPAs in sub-standard and doubtful categories increase (%) Segment-wise NPAs (%)

PCR declines significantly Net slippage ratio one of the highest amongst peers

Though credit cost remained elevated for three years, PCR

continued to decline due to increase in net slippages

Average slippage ratio of 2.5% over FY11-12 led to increase in

the proportion of sub-standard and doubtful loans

Significant increase in gross slippages (INR67b vs INR43b in

FY11) led to pressure on asset quality

Figures in bracket indicates percentage NPV losses on

restructured loan

(3.7)

(3.7)

(3.2)

7/28/2019 PNB_20062012

7/14


19 June 2012 7

Fund-based exposure (% of total and YoY growth)

YoY % of % of

Gr. (%) overall incremental

INR m FY12 FY11 FY12 FY11 FY12 FY11 FY12

Power (including electricity) 293,206 82.5 27.7 9.4 9.8 18.6 11.8

Infra (ex-power) 225,229 32.8 16.1 8.0 7.6 8.6 5.8

telecom 78,966 46.4 -6.1 3.4 2.7 4.8 -1.0

roads and ports 72,498 28.4 11.5 2.7 2.4 2.6 1.4

Others 73,765 18.2 64.5 1.8 2.5 1.2 5.4

Metals 191,914 59.4 11.0 7.1 6.4 11.6 3.5

NBFCs 153,957 45.0 93.3 3.3 5.2 4.4 13.8

Trading 113,814 15.6 11.2 4.2 3.8 2.5 2.1

All engg. 45,724 24.2 -23.5 2.4 1.5 2.1 -2.6

Textiles 45,234 27.1 -32.1 2.7 1.5 2.5 -4.0

Food processing 37,419 16.4 -2.5 1.6 1.3 1.0 -0.2

Construction 36,862 64.1 -5.5 1.6 1.2 2.7 -0.4

Petroleum 21,815 224.2 -37.7 1.4 0.7 4.3 -2.5Sugar 20,865 51.5 -37.3 1.4 0.7 2.0 -2.3

Chemicals, dyes 19,068 -0.9 -34.6 1.2 0.6 0.0 -1.9

Other indsutries 306,394 25.4 11.8 11.2 10.3 10.0 6.0

Total Industries 1,511,501 40.7 11.7 55.5 50.7 70.4 29.3

Other Loans 1,467,425 17.9 35.1 44.5 49.3 29.6 70.7

Total Funded Exposure 2,978,926 29.6 22.1 100.0 100.0 100.0 100.0


Non-fund-based exposure (% of total and YoY growth)

YoY % of % of

Gr. (%) overall incremental

INR m FY12 FY11 FY12 FY11 FY12 FY11 FY12

Metals 104,954 58.3 13.5 15.6 13.7 32.6 7.2

Power (includ. electricity) 62,882 31.5 25.7 8.5 8.2 11.5 7.4

Trading 41,694 0.7 16.8 6.0 5.4 0.2 3.5

All engg. 39,118 37.2 -25.8 8.9 5.1 13.7 -7.8

Infra (ex-power) 33,190 -52.4 21.5 4.6 4.3 -28.8 3.4

telecom 24,689 -30.5 21.0 3.4 3.2 -8.6 2.5

roads and ports 12,951 -77.3 405.5 0.4 1.7 -8.3 6.0

Textiles 6,789 31.4 -17.9 1.4 0.9 1.9 -0.9

Chemicals, dyes 5,738 39.3 -51.3 2.0 0.7 3.2 -3.5

Food processing 5,618 2.2 -34.4 1.4 0.7 0.2 -1.7

Construction 3,313 144.1 12.9 0.5 0.4 1.7 0.2

NBFCs 1,620 -85.2 30.6 0.2 0.2 -6.8 0.2

Petroleum 1,355 831.3 -78.6 1.1 0.2 5.4 -2.9

Sugar 999 -55.4 -64.8 0.5 0.1 -3.4 -1.1

Other indsutries 87,929 23.7 2.3 14.5 11.5 15.8 1.1

Total Industries 395,198 14.6 2.3 65.3 51.6 47.2 5.2

Other Loans 370,121 36.6 80.0 34.7 48.4 52.8 94.8

Total Non-Funded Exposure 765,319 21.4 29.3 100.0 100.0 100.0 100.0


Strong growth in power

segment continues

Proportion of NBFC's

exposure has increase

from 2.9% in FY10 to 5.2%

in FY12

Exposure in textile

segment declines sharply

Growth in overall

industrial exposure

moderates

Metals remain as one of

the highest contributor

Exposure in petroleum

segment decline sharply

7/28/2019 PNB_20062012

8/14


19 June 2012 8

Equity infusion of INR22.5b and strong internal accruals

(INR40.1b) led to higher core tier-I capital

The growth in RWAs remains lower than the growth in balance

sheet and loans

Adequately capitalized - core tier-I at 8.6% Proportion of RWAs falls after three years (YoY growth, %)

Capitalization, risk-weighted assets and concentration

Since FY09, there has been a significant increase in the

proportion (+700bp) of loans with more than 100% risk weight

Proportion of off-balance sheet in RWA increases YoY (%) Credit risk exposure (%)

Concentration of loans and exposure becomes

Top 4 GNPA accounts (%) more granular (%)

Strong growth in off-balance sheet (+64% YoY), led by 94% and

28% growth in forex contract and guarantees

Rising delinquency in large corporate portfolio led to

increasing proportion of top 4 accounts in overall GNPA

While the proportion of deposits in top-20 accounts has

increased significantly in FY12, it remains in line with peers

of

7/28/2019 PNB_20062012

9/14


19 June 2012 9

PNB has added 1,500+ branches over FY08-12; ~480 branches

were added in FY12 itself

ATM to branch ratio improved from 0.5x to 1.1x over the last

three years, despite continuous expansion in branch network

Strong expansion in branch network continues ATM network expanding rapidly

Expanding franchise

Increase in customer base and rapid expansion in ATM

network has led to significant growth in card base

Rapid franchise expansion led to strong customer additions Card base has increased 2.5x

Net addition of 5,000+ employees v/s flat/declining

employee base since FY03 Improving productivity (INR m)

In view of higher retirement in the coming years and strongbranch expansion, PNB has been building its workforce to

support future growth

There has been significant increase in profitability per branchand per employee despite continous expansion

PNB's customer base has increased nearly 1.9x over the last

three years

(x)

7/28/2019 PNB_20062012

10/14


19 June 2012 10

Tight liquidity conditions and higher slippages led to 15bp

decline in NIM

Cost of deposits increased at a faster pace due to higher

reliance on term deposits, while yield on loans was impacted

due to reversal of interest income

Margins remain superior Cost of deposits rises faster than yield on loans (%)

Earnings

Absence of one-off provisions for employee expenses

(INR5.5b for retired employees) as in FY11 and containment

of opex led to improvement in cost to average assets

Fee income growth below balance sheet growth (%) Significant improvement in cost to average assets (%)

Fee income growth has moderated, as a percentage to average

assets and remains well below SBIN and private sector peers

Core profitability remains healthy (%) Return ratios moderate (%)

While core-operating performance remains strong, highercredit cost over past three years have led to moderation in

PAT growth

Even though return ratios has moderated it remains as oneof the best among peers

(in bps)

(ex-forex)

7/28/2019 PNB_20062012

11/14


19 June 2012 11

Financials and Valuation

Income Statement (INR Million)

Y/E March 2009 2010 2011 2012 2013E 2014E

Interest Income 191,272 214,221 269,865 364,280 420,419 483,260

Interest Expense 122,953 129,440 151,791 230,131 263,922 300,930

Net Interest Income 68,319 84,781 118,073 134,149 156,497 182,330

Change (%) 23.4 24.1 39.3 13.6 16.7 16.5

Non Interest Income 30,647 36,101 36,126 42,026 45,351 51,260

Net Income 98,966 120,882 154,199 176,175 201,848 233,590

Change (%) 31.4 22.1 27.6 14.3 14.6 15.7

Operating Expenses 42,062 47,619 63,642 70,028 80,685 92,590

Pre Provision Profits 56,904 73,263 90,557 106,148 121,163 141,000

Change (%) 42.0 28.7 23.6 17.2 14.1 16.4

Provisions (excl tax) 9,235 14,215 24,920 35,773 42,309 45,252

PBT 47,669 59,048 65,637 70,375 78,854 95,748

Tax 16,760 19,994 21,302 21,528 25,233 30,639Tax Rate (%) 35.2 33.9 32.5 30.6 32.0 32.0

PAT 30,909 39,054 44,335 48,847 53,621 65,109

Change (%) 50.9 26.4 13.5 10.2 9.8 21.4

Equity Dividend (Incl tax) 7,378 8,101 8,101 8,672 8,658 10,665

Core PPP* 46,957 62,069 82,432 97,614 111,845 130,916

Change (%) 38.7 32.2 32.8 18.4 14.6 21.4

*Core PPP is (NII+Fee income-Opex)

Balance Sheet (INR Million)

Y/E March 2009 2010 2011 2012 2013E 2014E

Equity Share Capital 3,153 3,153 3,168 3,392 3,392 3,392

Reserves & Surplus 143,383 174,076 211,917 274,779 319,742 374,186

Net Worth 146,536 177,229 215,086 278,171 323,134 377,578

Deposits 2,097,605 2,493,298 3,128,987 3,795,887 4,403,229 5,239,843

Change (%) 26.0 18.9 25.5 21.3 16.0 19.0

of which CASA Dep 814,599 1,018,500 1,203,250 1,341,293 1,528,250 1,778,280

Change (%) 13.8 25.0 18.1 11.5 13.9 16.4

Borrowings 124,597 192,624 315,897 372,643 425,791 489,368

Other Liabilities & Prov. 100,448 103,177 123,283 135,239 164,640 200,509

Total Liabilities 2,469,186 2,966,328 3,783,252 4,581,940 5,316,794 6,307,298

Current Assets 214,131 234,736 296,912 288,280 290,171 352,193

Investments 633,852 777,245 951,623 1,226,295 1,410,239 1,621,775

Change (%) 17.4 22.6 22.4 28.9 15.0 15.0Loans 1,547,030 1,866,012 2,421,067 2,937,748 3,466,542 4,159,851

Change (%) 29.5 20.6 29.7 21.3 18.0 20.0

Fixed Assets 23,971 25,135 31,056 31,689 32,328 32,462

Other Assets 50,202 63,201 82,594 97,929 117,515 141,017

Total Assets 2,469,186 2,966,328 3,783,252 4,581,940 5,316,794 6,307,298

Asset Quality (%)

GNPA (INR m) 25,069 32,144 43,794 87,196 125,137 169,350

NNPA (INR m) 2,639 9,817 20,386 44,542 53,275 65,669

GNPA Ratio 1.58 1.67 1.77 2.93 3.54 3.97

NNPA Ratio 0.17 0.53 0.84 1.52 1.54 1.58

PCR (Excl Tech. write off) 89.4 69.0 53.0 48.0 57.4 61.2

PCR (Incl Tech. Write off) 81.2 73.2 62.7 66.2 67.4

E: MOSL Estimates

7/28/2019 PNB_20062012

12/14


19 June 2012 12

Financials and Valuation

Ratios

Y/E March 2009 2010 2011 2012 2013E 2014E

Spreads Analysis (%)

Avg. Yield-Earning Assets 9.6 8.7 8.8 9.5 9.1 8.9

Avg. Yield on loans 10.6 9.8 9.8 10.6 10.2 9.8

Avg. Yield on Investments 7.3 6.5 6.5 7.1 6.9 6.9

Avg. Cost-Int. Bear. Liab. 6.1 5.3 5.0 6.0 5.9 5.7

Avg. Cost of Deposits 6.1 5.2 4.9 6.2 6.0 5.8

Interest Spread 3.4 3.4 3.9 3.4 3.3 3.2

Net Interest Margin 3.4 3.4 3.85 3.5 3.4 3.4

Profitability Ratios (%)

RoE 25.8 26.6 24.5 21.1 18.7 19.4

RoA 1.4 1.4 1.3 1.2 1.1 1.1

Int. Expense/Int.Income 64.3 60.4 56.2 63.2 62.8 62.3Fee Income/Net Income 17.4 17.9 16.7 17.9 17.5 17.2

Non Int. Inc./Net Income 31.0 29.9 23.4 23.9 22.5 21.9

Efficiency Ratios (%)

Cost/Income* 47.3 43.4 43.6 41.8 41.9 41.4

Empl. Cost/Op. Exps. 69.5 65.5 70.1 67.5 66.4 65.1

Busi. per Empl. (INR m) 55.9 70.3 86.9 98.9 113.0 128.6

NP per Empl. (INR lac) 5.3 6.9 7.8 7.9 8.3 9.7

* ex treasury and recoveries

Asset-Liability Profile (%)

Loans/Deposit Ratio 73.8 74.8 77.4 77.4 78.7 79.4

CASA Ratio 38.8 40.8 38.5 35.3 34.7 33.9

Investment/Deposit Ratio 30.2 31.2 30.4 32.3 32.0 31.0

G-Sec/Investment Ratio 87.1 85.5 83.9 81.5 78.1 80.8

CAR 14.0 14.2 12.4 12.6 12.6 12.0

Tier 1 9.0 9.1 8.4 9.3 9.6 9.5

Valuation

Book Value (INR) 416.7 513.0 632.5 777.4 910.6 1,071.7

Change (%) 21.9 23.1 23.3 22.9 17.1 17.7

Price-BV (x) 1.0 0.8 0.7

Adjusted BV (INR) 411.3 492.7 590.7 692.0 808.5 945.9

Price-ABV (x) 1.1 0.9 0.8

EPS (INR) 98.0 123.9 139.9 144.0 158.1 192.0

Change (%) 50.9 26.4 13.0 2.9 9.8 21.4

Price-Earnings (x) 5.3 4.8 4.0

Dividend Per Share (INR) 20.0 22.0 22.0 22.0 21.8 26.9

Dividend Yield (%) 2.9 2.9 3.5

E: MOSL Estimates

7/28/2019 PNB_20062012

13/14


19 June 2012 13

N O T E S

7/28/2019 PNB_20062012

14/14


19 June 2012 14

DisclosuresThis report is for personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. This research report does not constitute an offer, invitation or inducement

to invest in securities or other investments and Motilal Oswal Securities Limited (hereinafter referred as MOSt) is not soliciting any action based upon it. This report is not for public distribution and has been

furnished to you solely for your information and should not be reproduced or redistributed to any other person in any form.

Unauthorized disclosure, use, dissemination or copying (either whole or partial) of this information, is prohibited. The person accessing this information specifically agrees to exempt MOSt or any of its affiliates

or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSt or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOSt

or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays.

The information contained herein is based on publicly available data or other sources believed to be reliable. While we would endeavour to update the information herein on reasonable basis, MOSt and/or its

affiliates are under no obligation to update the information. Also there may be regulatory, compliance, or other reasons that may prevent MOSt and/or its affiliates from doing so. MOSt or any of its affiliates or

employees shall not be in any way responsible and liable for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report . MOSt or any of its affiliates

or employees do not provide, at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation the implied warranties of merchantability, fitness

for a particular purpose, and non-infringement. The recipients of this report should rely on their own investigations.

This report is intended for distribution to institutional investors. Recipients who are not institutional investors should seek advice of their independent financial advisor prior to taking any investment decision

based on this report or for any necessary explanation of its contents.

MOSt and/or its affiliates and/or employees may have interests/positions, financial or otherwise in the securities mentioned in this report. To enhance transparency, MOSt has incorporated a Disclosure of Interest

Statement in this document. This should, however, not be treated as endorsement of the views expressed in the report.

Disclosure of Interest Statement Punjab National Bank

1. Analyst ownership of the stock No2. Group/Directors ownership of the stock No

3. Broking relationship with company covered No

4. Investment Banking relationship with company covered No

Analyst Certif icat ionThe views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or

will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report. The research analysts, strategists, or research associates principally responsible

for preparation of MOSt research receive compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues.

Regional Disclos ures (outside India)This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to

law, regulation or which would subject MOSt & its group companies to registration or licensing requirements within such jurisdictions.

For U.K.

This report is intended for distribution only to persons having professional experience in matters relating to investments as described in Article 19 of the Financial Services and Markets Act 2000 (FinancialPromotion) Order 2005 (referred to as "investment professionals"). This document must not be acted on or relied on by persons who are not investment professionals. Any investment or investment activity to

which this document relates is only available to investment professionals and will be engaged in only with such persons.

For U.S.MOSt is not a registered broker-dealer in the United States (U.S.) and, therefore, is not subject to U.S. rules. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange

Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S.,

Motilal Oswal has entered into a chaperoning agreement with a U.S. registered broker-dealer, Marco Polo Securities Inc. ("Marco Polo").

This report is intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional

investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major

institutional investors and will be engaged in only with major institutional investors.

The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer, Marco

Polo and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research analyst account.

Motilal Oswal Securities LtdMotilal Oswal Tower, Level 9, Sayani Road, Prabhadevi, Mumbai 400 025

Phone: +91 22 3982 5500 E-mail: [email protected]

pnb_20062012

Documents