Hold Corporation Bank: Indiabulls Securities

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Indiabulls Securities Research has come out with a research report on Corporation Bank . The research firm has reiterated hold rating on the stock, in its report dated November 16, 2009.

"Corporation Bank's (CorpBank's) results exceeded our expectations with net profit increasing by 52.3% yoy to Rs 2.9 billion, driven by the healthy growth in net interest income and non-interest income. In addition, the bank reported both sequential and yearly improvement in deposits, loanbook, and NPA ratios. In the upcoming quarters, we expect the bank's core-fee income to continue its upward trend led by the introduction of new fee-based businesses. Further, we anticipate the costs of funds to decline on the back of the bank's increasing focus to push for higher share of low-interest bearing current and savings account. As a result, we have upgraded our estimates and our fair-value estimate stands at Rs 488, implying an upside of 10.5% from the present level. Currently, the stock trades at a P/B of 1.2x, which is close to its historical five year average. Therefore, we reiterate our rating to hold", says Indiabulls Securities Research.

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