Corporation Bank|Q2FY15 First Cut Analysis | Asset quality pressure continues to persist, however tax reversals of Rs 429 mn helped to report higher than expected net profit :: IndiaNivesh

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Valuation:
Overall, the bank reported weak operating performance backed by poor asset quality
numbers. Asset quality pressure for the bank have accelerated over the last two
quarters as Gross and Net NPA ratios of the bank have increased by 103 bps and 60
bps, respectively. Moreover, with continued pressure on asset quality, the
provisioning expenses are also likely to increase in H2FY15E which may affect its
profits also. At CMP of Rs 333/-, the stock is trading at P/ABV of 0.9x and 0.8x for
FY15E and FY16E respectively. We don’t have any formal rating on the stock.

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