Buy ING Vysya Bank; target of Rs 500: Nirmal Bang

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Buy ING Vysya Bank; target of Rs 500: Nirmal Bang

Nirmal Bang is bullish on ING Vysya Bank and has recommended buy rating on the stock with a target of Rs 500 in its July 19, 2011 research report.

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RELATED NEWS Buy Greenply Industries; target of Rs 326: Angel Broking Buy Dena Bank; target of Rs 98-108: SMC Global Buy Tata Steel; target of Rs 701: PINC Research ALSO READ See previous views by Nirmal Bang See what other Experts & Brokerages are saying about ING Vysya Bank See messages about ING Vysya Bank ING Vysya Bank BSE | NSE 31/05/12 Are Mutual Funds betting on ING Vysya Bank?

Nirmal Bang is bullish on ING Vysya Bank and has recommended buy rating on the stock with a target of Rs 500 in its July 19, 2011 research report.

"ING VYSYA bank (IVBL) results were in-line with our expectations. Net profit of the bank in Q1FY12 increased 37% on YoY basis to Rs 94 crs on account of lower provisioning. However, on a QoQ basis PAT declined 3%. Net interest income increased by 10% on YoY basis and declined 2% on QoQ basis to Rs 262 crs due to increasing interest rate environment. Cost to income ratio has decreased from 67.4% in Q4FY11 to 63.5% in Q1FY12 resulting into an increase in pre provisioning profit by 3% on QoQ basis."

"Net Interest Income increased by 10.0% on a YoY basis but declined 2.4% on a sequential basis in Q1FY12 to Rs 262 crs. Net Interest Margin (NIM) of the bank declined sequentially to 3.02% in Q1FY12 from 3.3% in Q4FY11. Management indicated that henceforth they do not expect any pressure on NIMs in the coming quarters. Cost to income ratio of the bank stood at 63.5% for Q1FY12, as compared to 67.4% in Q4FY11 and 59% in Q1FY11. The asset quality of the bank continued to improve resulting in high reduction in provisions at Rs. 6.2 crs against Rs. 43.9 crs in Q1FY11. The provisions in Q1FY12 were primarily towards higher standard asset provisioning norms. Gross NPA ratio and Net NPA ratio were at 2.15% and 0.35% respectively in Q1FY12. In June 2011 the bank successfully raised additional capital of around Rs. 970 crs through a combination of Qualified Institutional Placement (QIP) and Preferential issue to ING Group. Following this, the Capital Adequacy Ratio (CAR) of the Bank improved to 15.89% in Q1FY12."

"The bank has shown improvement in its financial and operational parameters and we believe that going forward the bank will continue to impress with its strong financials. We believe that at current levels the stock is trading at attractive levels and therefore we continue to maintain BUY on the stock. Our target price for the stock is Rs 500 based on a P/ABV multiple of 1.9x on its FY12 adjusted book value of Rs 265 per share," says Nirmal Bang research report.

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To read the full report click on the attachment