RBS Equities (India) puts 'buy' on IDBI Bank
RBS Equities (India) has rated IDBI Bank a ‘buy’, saying it gradually appeared to be shedding the development financial institution legacy.
By ET Bureau |
IDBI BANK
CMP: RS 124.80
TARGET PRICE: RS 160
RBS Equities (India) has rated IDBI Bank a ���buy���, saying it gradually appeared to be shedding the development financial institution legacy. ���The largely wholesale funded bank (88% of interest bearing liabilities are term/bulk deposits and borrowings as of March 2009) appears to be in a sweet spot in the current interest rate cycle. This is a medium-term positive, but we believe the bank���s focus on branch expansion and on building a retail base will gradually improve its retail deposit and overall liability mix in the long term,��� an RBS note to clients said.
���We assume steady improvement in margins in FY09-12 from 62 basis points to 1.04%, as we expect most of the bank���s interest-bearing liabilities to be repriced lower in FY10. The bank could also productively use the Rs 3,000 crore it is likely to receive from the Stressed Asset Stabilisation Fund (SASF) over the next couple of years,��� the note added.
CMP: RS 124.80
TARGET PRICE: RS 160
RBS Equities (India) has rated IDBI Bank a ���buy���, saying it gradually appeared to be shedding the development financial institution legacy. ���The largely wholesale funded bank (88% of interest bearing liabilities are term/bulk deposits and borrowings as of March 2009) appears to be in a sweet spot in the current interest rate cycle. This is a medium-term positive, but we believe the bank���s focus on branch expansion and on building a retail base will gradually improve its retail deposit and overall liability mix in the long term,��� an RBS note to clients said.
���We assume steady improvement in margins in FY09-12 from 62 basis points to 1.04%, as we expect most of the bank���s interest-bearing liabilities to be repriced lower in FY10. The bank could also productively use the Rs 3,000 crore it is likely to receive from the Stressed Asset Stabilisation Fund (SASF) over the next couple of years,��� the note added.
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