X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
ING Vysya: Internal focus - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Oct 21, 2003

    ING Vysya: Internal focus

    ING Vysya Bank, one of the largest banks in the southern region, has reported encouraging performance of the September quarter as well as for the 1HFY04. While the bank has reported a marginal fall in topline the bottomline has risen by nearly 40% in the September quarter on a YoY basis. The bank has been able to reduce its interest expenses that have further helped it improve its net interest income as well as margins. Strong growth in other income too has aided the bottomline growth.

    (Rs m) 2QFY03 2QFY04 Change 1HFY03 1HFY04 Change
    Income from Operations 2,250 2,210 -1.8% 4,428 4,549 2.7%
    Other Income 753 919 22.1% 1,559 1,982 27.1%
    Interest Expenses 1,693 1,619 -4.4% 3,507 3,359 -4.2%
    Net interest income 557 592 6.2% 921 1,190 29.3%
    Other Expenses 746 840 12.6% 1,410 1,597 13.2%
    Operating Profit (189) (248)   (490) (407)  
    Operating Profit Margin (%) -8.4% -11.2%   -11.1% -8.9%  
    Provisions and Contingencies 313 359 14.9% 467 760 62.8%
    Profit before Tax 251 311 24.3% 603 815 35.3%
    Tax 69 58 -16.4% 198 231 16.3%
    Profit after Tax/(Loss) 182 254 39.7% 404 585 44.6%
    Net Profit Margin (%) 8.1% 11.5%   9.1% 12.9%  
    No. of Shares (m) 22.6 22.6   22.6 22.6  
    Diluted Earnings per share* 32.1 44.9   35.8 51.7  
    P/E Ratio         9.3  
    *(annualised)            

    While the bank's bottomline performance in the September quarter has been encouraging, the fall in topline is concerning. A fall in interest from investments has been the cause of the fall in topline. However what is encouraging is that the bank's interest income from advances has risen by 17% in the same period. This has been mainly brought about by a 36% rise in advances till date on a YoY basis. The retail lending market has been the main growth driver for the advances growth. The concerning factor however has been the fact that, the bank seems to be facing competitive pressures as seen from the marginal rise in advances from the wholesale segment.

    Due to increasing contribution from retail demand as well as savings deposits (23% of total deposits, up from 21% in the same period last year) the cost of deposits have been brought down significantly, thus helping improve net interest income as well as margins. Cost of deposit has been pared to 6.6% (8%). Net interest margin has also improved to 2.5% (2%). There has been a strong improvement in the bank's other income in the September quarter, this has been mainly brought about by a rise in profits from sale of investments. devoid of this (profits from sale of investments) other income growth has been marginal. This is a cause of concern, as once profits from sale of investments dry up, it may severely impact bottomline growth.

    The bank in order to reduce its NPAs has been aggressively provisioning in the last few years. This has continued in the current year also. Provisioning has risen in the September quarter as well as the half year period also. While this has helped the bank to reduce its net NPAs to advances ratio (currently 3.3% compared to 3.5% the same period last year), it still continues to be one of the highest among private sector banks.

    The stock is currently trading at Rs 480, a P/E ratio of 9x its annualised 1HFY04 earnings. The bank has reported strong results in the September quarter, however lack of growth in the wholesale lending segment as well as high dependence of bottomline on other income are concerning. At an adjusted price to book ratio of 1.9x we believe that the stock may have factored in all the growth prospects of the bank for the future. Further upside from here will be dependent on how the bank manages to reduce its dependence of other income on profit from sale of investments as well as increase its share in the wholesale lending pie. The bank's NPA management startegies also need to be taken in to consideration. for more on the company please refer to our newly initiated research coverage on the same.

     

     

    Equitymaster requests your view! Post a comment on "ING Vysya: Internal focus". Click here!

      
     

    More Views on News

    IDFC Bank: Strong Trading Income Shields Credit Slowdown (Quarterly Results Update - Detailed)

    Aug 10, 2017

    IDFC Bank is taking steps to address contracting NIMs and successfully transition in to a retail bank.

    ICICI Bank: Loan Slippages Trending Downwards (Quarterly Results Update - Detailed)

    Aug 10, 2017

    Asset quality will be the key thing to watch out for going forward.

    Axis Bank: Outside Watchlist Slippages a Big Worry (Quarterly Results Update - Detailed)

    Jul 31, 2017

    Almost 74% of the watchlist as provided by the bank of Rs 226 billion in FY16 has turned into non-performing assets.

    HDFC Bank: Asset Quality Deteriorates due to Farm Loan Waiver (Quarterly Results Update - Detailed)

    Jul 25, 2017

    Asset quality was under pressure on account of farm loan waivers. Despite the higher provisioning, the company reported a healthy profit growth of 20%.

    SBI: Merger Pushes up Bad Loans (Quarterly Results Update - Detailed)

    May 23, 2017

    State Bank of India (SBI) ended FY17 on a healthy note but concerns on bad loans from associate banks remain.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    ING VYSYA BANK SHARE PRICE


    Apr 15, 2015 (Close)

    TRACK ING VYSYA BANK

    • Track your investment in ING VYSYA BANK with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks

    MORE ON ING VYSYA BANK

    ING VYSYA BANK 8-QTR ANALYSIS

    Detailed Quarterly Results With Charts

    COMPARE ING VYSYA BANK WITH

    MARKET STATS