ING Vysya Bank Post Robust Q3FY13 Numbers

ING Vysya bank posted a robust set of Q3FY13 numbers yesterday at post market hours. Most of the bank parameters like asset quality, Net Interest Margin and profit witnessed a stupendous growth in the Dec 2012 quarter. Market participations were also expecting better numbers which led to the stock closing higher today at 1.84% to Rs 573.4 per share. We at DSIJ believe, that following the result announcement one could see a good upside on the counter in trade. Following are some of the key financial parameters of the bank:

Asset quality of the bank continued to strengthen. For the Dec 2012 quarter, Gross and Net NPA of the bank decreased by 13 and 8 basis points to 1.77% and 0.05% respectively on a sequential basis which is quite commendable. One should note that bank has consistently maintained its asset quality in the past and its Net NPA level is the second best in the industry (after Yes bank, whose Net NPA stands at 0.04%). Provision Coverage Ratio (PCR) of the bank also stands at a around 97% which is way above the RBI guidelines of maintaining at 70% which is very good. 

Net Interest Margin (NIM) of the bank also expanded. NIM increased by 16 basis points to 3.61% on a sequential basis while the same increased by 12 basis points on a YoY basis. As on Dec 31, 2012, Capital Adequacy Ratio (CAR) of the bank stood at 12.47% with Tier 1 CAR standing at 9.56%. The bank had raised Tier 1 funds of around Rs 300 crore in the Dec 2012 quarter which has lifted the overall CAR. For their business growth, the management would raise funds but that would be in next fiscal (FY14).

On the segmental front, Treasury segment performed extremely well as revenue from the same grew by 23% to Rs 1076 crore while Profit stood at Rs 30 crore against Rs 7 crore in the similar period last year. While it faced some pressure on the retail front as revenue from the same grew by 9% to Rs 919 crore while Profit de-grew by 10% to Rs 70 crore.

Overall we believe that the bank posted a good set of numbers for the Dec 2012 quarter. On the valuation front, the bank is currently available at a Price to book value of around 1.97x which we believe is fairly valued. We had recommended ING bank in our Vol 27, Issue 17 dated Aug 12, 2012 at Rs 391 per share. At the current market of Rs 573, it is yielding a handsome return of 47% in merely 6 months. We believe that the bank currently has healthy financials and would continue to post good numbers going ahead. Hence, we would advise our readers to remain invested in the counter.