January 27, 2017 / 17:26 IST
INBK reported PAT of INR 3.7b (in line) v/s INR 485m in 3QFY16 (subdued due to the RBI’s AQR), led by strong trading gains of INR 2.9b (60% of PBT) and controlled opex (-4% QoQ; +5% YoY). While reported NIM contracted 12bp QoQ (+20bp YoY) to 2.5%, it was largely stable after adjusting for one-off interest income reversal (INR 820m) on SDR/S4A accounts.
Outlook
Focus on balance sheet consolidation and core operating parameters is leading to stable to improving earnings despite challenging macros. Capitalization is best-in -class with Tier I ratio of 11.8%. We expect RoAs to be the best among PSBs at 0.7%; however, RoEs are likely to be in line with other PSBs due to low leverage. Maintain Buy with TP of INR 330 (0.9x December 2018 BV) based on RI model.
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