February 23, 2017 / 10:38 IST
Total loan book declined by 9% YoY (within expected lines) as the bank continued to consolidate its balance sheet with selective lending and greater thrust on profitable customers. International loan book remained under pressure (↓20% YoY) due to repayment of FCNR linked advances. Domestic loan book also decreased by 4% YoY owing to subdued credit demand across industries.
Outlook
As a result, we expect the RoA and RoE to improve to 0.5% and 8%, respectively by FY19E. Hence, we continue to maintain BUY rating with a revised upwards TP of Rs 195 (as we rollover our number to FY19E) and value the bank at P/ABV of 1.3x for FY19E.
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