Canara Bank Results inline at P&L front; Slippages remain higher : Emkay,

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Canara Bank

Results inline at P&L front; Slippages remain higher

HOLD

CMP: Rs469                                        Target Price: Rs500

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n     CBK results ahead of expectation at P&L front with NII at Rs19.6bn and Net profit at Rs8.5bn, however continues to disappoint on asset quality side

n     NII grew by 9.4%qoq (-2.1%qoq) to Rs19.6bn ahead of consensus led by 22bps expansion in NIM’s, albeit advances grew by just 1.4%qoq

n     Slippages remain higher at 2.4%. Building in 2% slippage rate for FY12, reco/upgrades rate at 80% of opening NPAs can surprise positively on credit costs

n     Lowering earnings by 20%/ 7.6% for FY12/13 for higher prov. However better recoveries can give positive surprise to our numbers. Maintain HOLD with TP of Rs500