4QFY2013 Result Update | Banking

May 10, 2013

South Indian Bank

Performance Highlights

NEUTRAL
CMP Target Price
% chg (qoq) (5.4) (12.4) 19.9 4QFY12 285 163 122 % chg (yoy) 17.3 26.4 26.1

`25 -

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

4QFY13 334 206 154

3QFY13 353 235 128

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

Source: Company, Angel Research

Banking 3,212 0.9 31/20 775,280 1 20,083 6,065 SIBK.BO SIB@IN

South Indian Bank (SIB) reported modest set of numbers for the quarter, as their earnings at PBT level declined by 7.0% yoy, however, aided by tax-write back (of `14cr for the quarter, as against tax expense of `29cr for 4QFY2012), the bank posted Net profit growth of 26.1%. NIMs stable; Asset quality witnesses pressures: During 4QFY2013, the banks business growth remained healthy, with advances growing by 16.6% yoy and deposits growing by 21.3% yoy. Despite healthy 20.9% yoy growth in current deposits, the growth in overall CASA deposits came in at 14.4% yoy, due to relatively lower 13.0% yoy growth on the savings deposits front. CASA ratio moderated by 112bp yoy and 199bp qoq to 18.6% yoy. Reported NIMs for FY2013 remained stable at 3.2%. Going ahead, the management expects NIMs to come down by 10bp over next few quarters. During 4QFY2013, the bank registered a strong performance on the non-interest income (excl. treasury) front, with a growth of 45.8% yoy to `107cr, which was aided largely by strong 41.4% yoy growth in fee income. During the quarter, the bank faced asset quality pressures, as annualized slippage ratio spiked to 2.2%, as against annualized slippage ratio of 0.8% in 3QFY2013. Recoveries/upgrades also came in lower at `47cr as compared to `73cr in last quarter. Despite sequentially higher slippages and lower recovery/upgrades, Gross NPA levels, on an absolute basis declined by 8.6%, on back of higher write-offs. PCR for the bank dipped sharply by 1,608bp, while Net NPA levels jumped up by 26.9% qoq. The bank added ~`293cr to its restructured book in 4QFY2013, thereby taking its restructured book to `1,641cr. Outlook and valuation: After witnessing improvement during the last quarter, the asset quality for the bank has again witnessed pressures. Aggressive yields on non-gold loan portfolio (78% of total) and significant gold price correction on gold loan book (22% of total), could further increase provisioning expenses and hence provide downside risk to the banks ROA. The stock currently trades at valuations of 0.9x FY2015E ABV. We recommend Neutral rating on the stock.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 12.3 46.2 41.5

Abs. (%) Sensex SIB

3m 3.1 (10.1)

1yr 22.3 5.0

3yr 15.9 63.8

Vaibhav Agrawal
022 3935 7800 Ext: 6808 vaibhav.agrawal@angelbroking.com

Key financials (standalone)

Particulars (` cr) NII % chg Net profit % chg NIM (%) EPS (`) P/E (x) P/ABV (x) RoA (%) RoE (%)
Source: Company, Angel Research

FY2012 1,022 29.2 402 37.3 2.9 3.5 6.8 1.3 1.1 21.6

FY2013 1,281 25.4 502 25.0 2.9 3.8 6.4 1.2 1.1 20.6

FY2014E 1,513 18.1 560 11.5 2.9 4.2 5.7 1.0 1.0 18.2

FY2015E 1,719 13.7 602 7.6 2.8 4.5 5.3 0.9 1.0 17.0

Sourabh Taparia
022 3935 7800 Ext: 6872 sourabh.taparia@angelbroking.com Akshay Narang 022 3935 7800 Ext: 6829 akshay.narang@angelbroking.com Harshal Patkar 022 3935 7800 Ext: 6847 harshal.patkar@angelbroking.com

Please refer to important disclosures at the end of this report

South Indian Bank | 4QFY2013 Result Update

Exhibit 1: 4QFY2013 performance (standalone)

Particulars (` cr) Interest earned - on Advances / Bills - on investments - on balance with RBI & others Interest Expended Net Interest Income Other income Other income excl. treasury - Fee Income - Treasury Income - Others Operating income Operating expenses - Employee expenses - Other Opex Pre-provision Profit Provisions & Contingencies - Provisions for NPAs - Provisions for Investments - Provisions for Standard Assets - Other Provisions PBT Provision for Tax PAT Effective Tax Rate (%)
Source: Company, Angel Research

4QFY13 1,165 943 197 25 832 334 121 107 95 14 12 455 249 163 86 206 66 42 10 15 (1) 140 (14) 154 (9.7)

3QFY13 1,128 924 183 21 775 353 66 53 50 13 3 419 183 108 75 235 45 26 2 10 8 190 62 128 32.5

% chg (qoq) 3.3 2.1 7.5 22.5 7.3 (5.4) 82.8 102.5 92.2 4.1 252.8 8.6 35.5 50.4 14.2 (12.4) 44.8 61.8 548.7 57.8 (26.2) (122.1) 19.9 -

4QFY12 994 803 164 26 709 285 83 74 67 9 6 367 204 128 76 163 12 14 (10) 12 (3) 151 29 122 19.1

% chg (yoy) 17.3 17.4 19.9 (3.9) 17.3 17.3 46.6 45.8 41.4 53.5 93.3 23.9 21.8 27.0 13.0 26.4 434.4 192.8 33.9 (7.0) (147.4) 26.1 -

FY2013 4,434 3,576 746 112 3,153 1,281 335 277 50 58 227 1,616 767 473 295 849 193 142 11 33 6 656 154 502 23.4

FY2012 3,583 2,868 621 94 2,562 1,022 247 206 38 41 168 1,269 617 374 243 652 79 25 14 40 0 572 171 402 29.8

% chg (yoy) 23.7 24.7 20.2 18.8 23.1 25.4 35.6 34.4 30.6 41.6 35.2 27.3 24.3 26.3 21.2 30.2 143.4 468.7 (20.2) (18.1) 14.6 (10.0) 25.1 -

Exhibit 2: 4QFY2013 Actual vs. Angel estimates

Particulars (` cr) Net interest income Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Company, Angel Research

Actual 334 121 455 249 206 66 140 (14) 154

Estimates 365 91 456 207 249 47 201 65 136

% chg (8.6) 33.2 (0.3) 20.0 (17.1) 39.4 (30.4) (120.8) 13.1

May 10, 2013

South Indian Bank | 4QFY2013 Result Update

Exhibit 3: 4QFY2013 performance analysis (standalone)

Particulars Balance sheet Advances (` cr) Deposits (` cr) Credit-to-Deposit Ratio (%) Current deposits (` cr) Saving deposits (` cr) CASA deposits (` cr) CASA ratio (%) CAR (%) Tier 1 CAR (%) Profitability Ratios (%) Cost of deposits# Yield on advances# Reported NIM Asset quality Gross NPAs (` cr) Gross NPAs (%) Net NPAs (` cr) Net NPAs (%) Provision Coverage Ratio (%) Slippage ratio (%) Loan loss provision to avg. assets (%) 434 1.4 250 0.8 42.5 2.2 0.4 475 1.6 197 0.7 58.6 0.8 0.2 (8.6) (26)bp 26.9 10bp (1,608)bp 140bp 13bp 267 1.0 77 0.3 71.4 1.3 0.2 62.4 39bp 226.1 50bp (2,887)bp 87bp 22bp
#

4QFY13 31,816 44,262 71.9 1,526 6,685 8,211 18.6 13.9 12.1 8.3 12.7 3.2 54.7

3QFY13 29,039 38,940 74.6 1,500 6,500 8,000 20.5 13.9 11.8 8.3 12.8 3.2 43.8

% chg (qoq) 9.6 13.7 (269)bp 1.7 2.8 2.6 (199)bp 6bp 27bp 0bp (10)bp 0bp 1087bp

4QFY12 27,281 36,501 74.7 1,262 5,917 7,179 19.7 14.0 11.5 7.9 12.5 3.1 55.6

% chg (yoy) 16.6 21.3 (286)bp 20.9 13.0 14.4 (112)bp (9)bp 51bp 36bp 20bp 10bp (92)bp

Cost-to-income ratio

Source: Company, Angel Research; Note# : On a cumulative basis

Healthy business growth; NIMs stable for FY2013

During 4QFY2013, the banks business growth remained healthy, with advances growing by 16.6% yoy and deposits growing by 21.3% yoy. Despite healthy 20.9% yoy growth witnessed in current deposits, the growth in overall CASA deposits came in moderate at 14.4% yoy, due to relatively lower 13.0% yoy growth on the savings deposits front. CASA ratio moderated by 112bp yoy and 199bp qoq to 18.6% yoy. Going forward, the management ambitiously plans to grow its loan book at 25% yoy. The bank has been seeing weakness in its NRE savings account franchise since the de-regulation in the NRE-TD rates. The NRE-SB deposits grew by 5.1% yoy during 4QFY2013, but have declined by 2.6% on a sequential basis due to the deregulation which came in 3QFY2012. High cost NRE term deposit grew by 276.8% yoy, it now comprises ~60% of the NRI deposit portfolio. Reported NIMs for FY2013 remained stable at 3.2%. Going ahead, the management expects NIMs to come down by 10bp over next few quarters. Cost of deposits for FY2013 stood stable at 8.3%, while yield on advances for FY2013 reduced marginally to 12.7% from 12.8% reported for 9MFY2013.

May 10, 2013

South Indian Bank | 4QFY2013 Result Update

Exhibit 4: NRI Deposit breakup

Deposit type (` cr) NRE SB NRO SB FCNR (B) +RFC LOW COST TERM DEPOSIT LOW COST NRI DEPOSIT (SUB TOTAL) HIGH COST NRE TERM DEPOSIT NRO TERM DEPOSIT TOTAL NRI DEPOSIT
Source: Company, Angel Research

4QFY13 3QFY13 2QFY13 1QFY13 1,427 225 348 64 2,064 3,904 554 6,522 1,465 219 321 80 2,086 3,346 563 5,994 1,372 207 333 128 2,040 2,978 661 5,680 1,536 200 400 100 2,236 2,232 932 5,400

4QFY13 1,358 188 411 348 2,305 1,036 1,275 4,617

The banks overall priority sector lending stands at ~30.0%. The management plans to take it to 40% levels of its overall loan book by increasing focus on housing, Gold and Vehicle loan segment within the PSL loans. Gold loan portfolio for the bank stands at ~22% of overall loan book, of which (non PSL) has improved on a qoq basis and now stands at ~`6,372cr, whereas the Agri/PSL continued to decline steadily owing to stiff competition from PSU banks and now stands at ~`600cr, down from `1,000cr in previous quarter. Owing to the recent correction in Gold prices, the average LTV for the bank on its Gold loan portfolio has gone up to ~85% (as compared to origination LTV of ~70%). As per the management, none of its Gold loan book has LTV more than 95%.

Exhibit 5: Advances growth remains above systems

35.0 30.0 25.0 20.0 15.0 10.0 Advances yoy growth (%,) Deposits yoy growth (%)

Exhibit 6: CASA ratio* witnesses pressure

(%) 24.0 21.0 18.0 15.0 21.1 19.7 20.0 20.5 18.6

33.1

22.8

23.5

17.5

20.6

16.5

17.5

15.1

16.6

5.0 -

21.3

12.0 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

Source: Company, Angel Research

Source: Company, Angel Research; Note* : Excluding FCNR, RFC

May 10, 2013

South Indian Bank | 4QFY2013 Result Update

Exhibit 7: NIM trends*

(%) 3.3 3.1 2.9 2.7 2.5 FY2012 1QFY13 1HFY13 9MFY13 FY2013 3.10 3.20 3.09 3.21

Exhibit 8: Trend in yield on advances*

(%) 13.5 12.5 11.5 10.5 9.5 8.5 FY2012 1QFY13 1HFY13 9MFY13 FY2013 12.5 13.0 12.8

3.15

12.8

12.7

Source: Company, Angel Research; Note* On cumulative basis

Source: Company, Angel Research; Note* On cumulative basis

Strong performance on non-interest income (excl. treasury) front

During 4QFY2013, the bank registered a strong performance on the non-interest income (excl. treasury) front, with a growth of 45.8% yoy to `107cr, which was aided largely by strong 41.4% yoy growth in fee income. Treasury income for the bank came in higher at `14cr in 4QFY2013, as against `9cr in 4QFY2012. Overall, non-interest income grew strongly by 46.6% yoy to `121cr.

Exhibit 9: Break-up of non-interest income

Particulars (` cr) Fee Income Treasury gains Profit on exchange transactions Non-interest income Excluding treasury
Source: Company, Angel Research;

4QFY13 95 14 12 121 107

3QFY13 % chg (qoq) 50 13 4 66 53 92.2 4.1 171.5 82.8 102.5

4QFY12 % chg (yoy) 67 9 6 83 74 41.4 53.5 93.3 46.6 45.8

Asset quality faces pressure, as slippages rise

During the quarter, the bank faced asset quality pressures, as slippages came in at `148cr (annualized slippage ratio of 2.2%), as against `53cr in 3QFY2013 (annualized slippage ratio of 0.8%) and `67cr in 4QFY2012 (annualized slippage ratio of 1.3%). Recoveries/upgrades for the bank also came in lower at `47cr as compared to `73cr in 3QFY2013. Despite sequentially higher slippages and lower recovery/upgrades, Gross NPA levels, on an absolute basis declined by 8.6%, on back of higher write-offs. PCR for the bank dipped sharply by 1,608bp, while Net NPA levels jumped up by 26.9% qoq. The bank added ~`293cr to its restructured book in 4QFY2013, thereby taking its cumulative restructured book to `1,641cr. On the NAFED exposure, the bank has provided ~`90cr in FY2013 and plans to provide for ~`60cr by FY2014. On the employee related fraud worth `30cr in FY2013, which the bank has provided for in full, it has managed to recover ~`5cr during FY2013.

May 10, 2013

South Indian Bank | 4QFY2013 Result Update

Exhibit 10: Asset quality under pressure

Gross NPAs (` cr) 525 450 375 300 225 150 75 4QFY12 71.4 67.7 Net NPA (` cr) PCR (%, RHS) 74.0

Exhibit 11: ...as Slippages rise

(%) 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 1.3 1.3 0.8 2.2 S l ippage ratio (%) 3.4

496

475

69.0

58.6

434

64.0 59.0 54.0 49.0 44.0 39.0

267

295

51.2

242

197

77

1QFY13

95

42.5

2QFY13

3QFY13

4QFY13

Source: Company, Angel Research

250

Source: Company, Angel Research

Exhibit 12: Opex. to average asset trends

(%)

Exhibit 13: Cost to income ratio trends

(%) 55.6 54.7

2.5 2.0 1.5 1.0 0.5 -

2.1 1.6 1.6 1.7

2.1

54.0 48.0 42.0 36.0 30.0 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 44.2 46.1 43.8

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

Source: Company, Angel Research

Source: Company, Angel Research

Exhibit 14: Capital adequacy ratio trends

(%)
16.0 12.0 8.0 11.5 4.0 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 10.9 12.3 11.8 12.1 12.0 2.5 Tier-I CAR 14.0 2.3 Tier-II CAR 13.2 2.1 14.4 2.1 13.9 1.9

Source: Company, Angel Research

May 10, 2013

South Indian Bank | 4QFY2013 Result Update

Investment arguments
Healthy business growth
The bank grew its advances and deposits at a healthy rate of 16.6% and 21.3% yoy, respectively, in FY2013. The gold loan portfolio of the bank has increased at 50.3% CAGR over FY200913. The gold loan portfolio now constitutes 22% of the overall loan book. The management indicated that they would like to maintain the gold loan portfolio at 22-25% levels of the overall loan book and hence would now increase focus on the corporate segment and to drive the banks loan book growth. The banks tier-1 ratio, post the capital raising (`440cr via QIP during 2QFY2013) stands at a healthy 12.1%, thereby giving enough headroom for the bank to grow at a healthy pace going ahead.

NIMs likely to have peaked out

SIBs NIMs have consistently been healthy above 3% for last few quarters despite its relatively lower CASA deposits (18.6%) due to increasing share of high-yielding gold loans (21.7%). However, increasing competition in the gold loan space and entry of several players is likely to reduce the so-far above-average profitability of this segment going forward. Also move of deregulating interest rates on NRE deposits has already diminished the competitive cost advantage of these deposits, in our view. The bank has managed the NIM impact by increasing its yield on advances; however continuing to rely on this strategy going forward would likely have asset quality implications. Eventually, either on account of decline in NIMs or increase in asset quality pressures, we expect downside risks to banks RoA.

Outlook and valuation

After witnessing improvement during the last quarter, the asset quality for the bank has again witnessed pressures. Aggressive yields on non-gold loan portfolio (78% of total) and significant gold price correction on gold loan book (22% of total), could further increase provisioning expenses and hence provide downside risk to the banks ROA. The stock currently trades at valuations of 0.9x FY2015E ABV. We recommend Neutral rating on the stock.

May 10, 2013

South Indian Bank | 4QFY2013 Result Update

Exhibit 15: Key assumptions

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

Earlier estimates FY2014E 20.0 20.0 18.0 3.0 2.4 16.0 16.0 1.5 64.8 FY2015E 20.0 20.0 17.0 2.9 16.1 15.0 15.0 1.5 66.4

Revised estimates FY2014E 20.0 16.0 17.7 2.9 (2.6) 15.0 12.5 1.5 57.3 FY2015E 20.0 16.0 17.3 2.8 14.1 14.0 12.5 1.4 62.7

Exhibit 16: Change in estimates

FY2014 Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Angel Research

Earlier Revised Var. (%) estimates estimates 1,514 1,513 (0.1) 312 1,826 842 984 169 815 277 538 326 1,839 875 964 164 800 240 560 4.6 0.7 3.9 (2.0) (2.9) (1.9) (13.4) 4.1

Earlier estimates 1,719 362 2,081 968 1,113 203 910 309 601

FY2015 Revised Var. (%) estimates 1,719 0.0 372 2,091 992 1,099 186 913 310 602 2.7 0.5 2.5 (1.3) (8.1) 0.2 0.2 0.2

Exhibit 17: P/ABV band

Price (`) 40 35 30 25 20 15 10 5 0
Oct-08 Feb-07 Nov-10 Sep-06 Feb-12 Sep-11 May-08 May-13 Dec-07 Aug-09 Mar-09 Dec-12 Oct-13 Jan-10 Jun-10 Apr-06 Apr-11 Jul-07 Jul-12

0.5x

0.8x

1.1x

1.4x

1.7x

Source: Company, Angel Research

May 10, 2013

South Indian Bank | 4QFY2013 Result Update

Exhibit 18: Recommendation summary

Company 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 Reco. Buy Neutral Neutral Buy Neutral Neutral Buy Neutral Buy Accumulate Neutral Accumulate Neutral Accumulate Neutral Neutral Buy Neutral Neutral Accumulate Buy Accumulate Neutral Neutral Accumulate Accumulate Neutral CMP (`) 1,468 456 703 1,166 24 509 123 91 705 337 57 423 72 406 93 88 160 63 1,361 259 771 2,294 128 74 240 60 53 Tgt. price (`) 1,714 1,357 520 142 815 360 461 453 186 282 945 2,572 264 64 Upside (%) 16.7 16.4 2.1 15.1 15.6 6.8 8.9 11.6 16.0 9.2 22.6 12.2 10.3 6.9 FY2015E P/ABV (x) 1.6 1.0 3.3 1.7 0.9 2.2 0.5 0.6 0.7 0.7 0.6 0.7 0.6 0.5 0.5 0.5 0.5 0.4 1.0 0.5 0.7 1.3 0.6 0.8 0.7 0.4 0.6 FY2015E Tgt. P/ABV (x) 1.9 2.0 2.2 0.6 0.9 0.8 0.8 0.6 0.6 0.6 0.9 1.4 0.8 0.4 FY2015E P/E (x) 9.6 7.7 16.5 12.1 5.3 10.6 3.4 3.9 4.9 4.9 4.3 4.9 4.0 3.8 3.5 4.7 3.8 3.1 6.8 4.1 4.4 8.2 4.5 5.1 5.0 2.9 4.8 FY2013-15E EPS CAGR (%) 17.3 10.0 22.8 15.5 11.4 14.9 12.6 4.2 17.0 21.8 14.8 14.0 42.8 8.3 4.3 15.2 6.5 53.3 (5.2) 17.5 12.4 16.4 (3.5) 36.9 21.2 40.4 21.2 FY2015E RoA (%) 1.6 1.2 1.8 1.5 1.0 1.3 0.8 0.8 1.0 0.8 0.6 0.8 0.6 0.8 0.8 0.7 1.0 0.7 1.2 0.8 1.0 1.0 0.7 0.6 0.8 0.7 0.5 FY2015E RoE (%) 17.6 13.7 21.8 15.6 17.1 22.1 14.2 13.4 16.0 15.1 15.6 14.1 13.3 14.4 15.3 11.3 14.9 13.1 16.0 13.1 16.3 17.0 15.2 12.6 15.3 14.7 11.7

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

Company Background
South Indian Bank (SIB) is a small old generation private sector bank with ~85% of its branches in southern India (large base in Kerala). Like Federal Bank, SIB also has a large NRI customer base (approx. 15% of total deposits). Of late, the bank has aggressively started focusing on the gold loan portfolio - a highly profitable and secured loan segment. Gold loans accounted for ~22% of the bank's loan book as of FY2013.

May 10, 2013

South Indian Bank | 4QFY2013 Result Update

Income statement (standalone)

Y/E March (` cr) Net Interest Income - YoY Growth (%) Other Income - YoY Growth (%) Operating Income - YoY Growth (%) Operating Expenses - YoY Growth (%) Pre - Provision Profit - YoY Growth (%) Prov. and Cont. - YoY Growth (%) Profit Before Tax - YoY Growth (%) Prov. for Taxation - as a % of PBT PAT - YoY Growth (%) FY09 523 32.7 164 15.2 687 28.0 328 32.4 359 24.3 57 0.7 301 30.0 107 35.4 195 28.4 FY10 568 8.7 208 26.9 777 13.0 366 11.5 411 14.5 43 (24.5) 367 21.9 134 36.4 234 20.0 FY11 791 39.2 197 (5.6) 988 27.2 463 26.3 525 27.9 80 84.4 446 21.3 153 34.3 293 25.1 FY12 1,022 29.2 247 25.6 1,269 28.4 617 33.5 652 24.0 79 (0.7) 572 28.5 171 29.8 402 37.3 FY13E 1,281 25.4 335 35.6 1,616 27.3 767 24.3 849 30.2 193 143.4 656 14.6 154 23.4 502 25.0 FY14E 1,513 18.1 326 (2.6) 1,839 13.8 875 14.0 964 13.6 164 (15.0) 800 22.0 240 30.0 560 11.5 FY15E 1,719 13.7 372 14.1 2,091 13.7 992 13.4 1,099 14.0 186 13.7 913 14.1 310 34.0 602 7.6

Balance sheet (standalone)

Y/E March (` cr) Share Capital Reserve & 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 (%) FY09 113 1,191 19.4 257 155 571 998 1,038 6,075 13.3 136 284 19.2 FY10 113 1,372 27.2 1 330 706 1,391 597 7,156 33.6 153 415 25.3 FY11 113 1,734 29.2 25 265 962 1,828 638 8,924 29.5 357 585 28.5 FY12 113 2,057 22.8 323 265 1,111 1,572 1,069 FY13E 134 2,872 21.3 1,026 258 1,242 1,697 2,639 FY14E 134 3,316 51,344 16.0 1,188 252 1,392 57,625 2,310 3,054 12,786 38,179 20.0 458 838 57,625 15.7 FY15E 134 3,786 59,559 16.0 1,373 246 1,524 66,621 2,680 3,531 13,097 45,814 20.0 530 969 66,621 15.6

18,092 23,012 29,721 36,501 44,262

20,379 25,534 32,820 40,370 49,795

9,400 12,523 33.1 378 671 23.0 16.6 396 724 23.3

11,848 15,823 20,489 27,281 31,816

20,379 25,534 32,820 40,370 49,795

May 10, 2013

10

South Indian Bank | 4QFY2013 Result Update

Ratio Analysis (standalone)

Y/E March Profitability ratios (%) NIMs Cost to Income ratio RoA RoE B/S ratios (%) CASA ratio Credit/Deposit ratio Net worth/ Assets CAR - Tier I Asset Quality (%) Gross NPAs Net NPAs Slippages NPA prov / avg. assets Provision Coverage Per Share Data (`) EPS ABVPS (75% cover) 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 RoE 2.8 0.3 2.5 0.2 2.7 0.7 3.4 1.8 1.6 0.6 1.0 15.4 16.0 2.5 0.2 2.3 0.3 2.6 0.6 3.2 1.6 1.6 0.6 1.0 16.7 17.0 2.7 0.3 2.4 0.1 2.6 0.5 3.1 1.6 1.5 0.5 1.0 18.4 18.5 2.8 0.2 2.6 0.1 2.7 0.6 3.3 1.7 1.6 0.5 1.1 19.7 21.6 2.8 0.4 2.4 0.1 2.5 0.6 3.2 1.7 1.5 0.3 1.1 18.4 20.6 2.8 0.3 2.5 0.0 2.6 0.6 3.1 1.6 1.5 0.4 1.0 17.4 18.2 2.8 0.3 2.5 0.0 2.5 0.6 3.1 1.6 1.5 0.5 1.0 17.5 17.0 13.9 2.2 1.2 11.6 1.9 1.7 9.3 1.6 2.1 6.8 1.3 2.5 6.4 1.2 2.9 5.7 1.0 3.1 5.3 0.9 3.5 1.7 10.8 0.3 2.1 12.9 0.4 2.6 15.0 0.5 3.5 17.8 0.6 3.8 20.7 0.7 4.2 23.9 0.8 4.5 27.5 0.9 2.2 1.1 1.6 0.1 48.4 1.3 0.4 1.5 0.2 70.8 1.1 0.3 0.7 0.1 73.9 1.0 0.3 0.8 0.1 71.4 1.4 0.6 2.0 0.3 54.2 1.5 0.6 1.5 0.2 57.3 1.6 0.6 1.4 0.2 62.7 23.8 65.5 15.4 14.8 13.2 23.1 68.8 16.7 15.4 12.4 21.5 68.9 18.4 14.0 11.3 19.7 74.7 19.7 14.0 11.5 18.6 71.9 18.4 15.4 13.3 17.7 74.4 17.4 15.3 13.4 17.3 76.9 17.5 15.0 13.2 2.9 47.8 1.0 16.0 2.5 47.1 1.0 17.0 2.8 46.8 1.0 18.5 2.9 48.7 1.1 21.6 2.9 47.5 1.1 20.6 2.9 47.6 1.0 18.2 2.8 47.5 1.0 17.0 FY09 FY10 FY11 FY12 FY13E FY14E FY15E

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South Indian Bank | 4QFY2013 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

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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

South Indian Bank 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%)

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