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.
Corp. Bank: Beats expectations - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Oct 23, 2001

    Corp. Bank: Beats expectations

    Corporation Bank has beaten our expectations and posted a 31% jump in net profits. After encouraging earnings report from HDFC Bank, Corp. Bank became the second bank to post higher than forecasted results.

    (Rs m) 2QFY01 2QFY02 Change 1HFY01 1HFY02 Change
    Operating Income 4,335 4,875 12.5% 8,810 9,582 8.8%
    Other Income 687 1,007 46.6% 1,309 1,839 40.5%
    Interest Expenses 2,804 3,216 14.7% 5,971 6,445 7.9%
    Operating Profit (EBDIT) 1,531 1,659 8.4% 2,838 3,137 10.5%
    Operating Profit Margin (%) 35.3% 34.0%   32.2% 32.7%  
    Other expenses 917 946 3.2% 1,668 1,832 9.9%
    Profit before Tax 1,301 1,720 32.2% 2,479 3,144 26.8%
    Other provisions 248 340 37.2% 500 644 28.6%
    Tax 343 448 30.7% 644 788 22.4%
    Profit after Tax/(Loss) 710 932 31.3% 1,335 1,713 28.3%
    Net profit margin (%) 16.4% 19.1%   15.2% 17.9%  
    Diluted number of shares 120.0 120.0   120.0 120.0  
    Diluted Earnings per share* 23.7 31.1   22.3 28.5  
    P/E (at current price)   4.0     4.3  

    The bank's interest income in the current quarter reported a double digit growth, after a dismal 5% rise in 1QFY02 topline. A 47% rise in other income further fueled the bottomline. Corp. Bank's operating margins however declined by 130 basis points. In the scenario of falling interest rates and declining lending opportunities, the bank's operating margins are likely to remain under pressure.

    Corp. Bank has been successful in reducing its cost to income ratio to 36% in the current quarter from 41% in 2QFY01. Consequently, the bank's other expenses moved up by a marginal 3%. Its effective tax rate also remained at the same level (26%). However, the figure for provisions on non-performing assets jumped by 37%. This indicates the bank's asset quality has been already affected by a downturn in the industrial activity.

    At the current market price of Rs 124 Corporation Bank is trading at a P/E multiple of 5 times FY02 projected earnings on Price/Book value ratio of 1x. We have projected a 20% rise in the bank's net profits in the current year. However, in light of the bank's better than expected performance in the first half of the current year, we need to revisit the numbers.

    Corporation Bank is holding its analyst meet today. We will post a detailed update on the bank tomorrow, when the information on the bank's latest initiatives is available.



    Equitymaster requests your view! Post a comment on "Corp. Bank: Beats expectations". Click here!


    More Views on News

    SBI: Asset Quality and Slow Credit Remain Achilles' Heel (Quarterly Results Update - Detailed)

    Aug 22, 2017

    State Bank of India (SBI) continues to battle sliding asset quality and sluggish credit growth.

    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%.

    More Views on News

    Most Popular

    This Small Cap Can Drive Chinese Players Out of India (and Make a Fortune in the Process)(The 5 Minute Wrapup)

    Aug 17, 2017

    A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    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.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    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


    Aug 23, 2017 09:41 AM


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



    Compare Company With Charts