Friday, November 14, 2008

Arihant Capital Markets Views on Smallcap Banking Sector

INDIAN BANK

Although the banking sector has seen huge corrections in the market but Indian Bank remains one of the shining stars in the small cap space. A healthy level of CASA ratio reflects that the bank is less dependent on bulk deposits and has a high fee based income. The bank also has a healthy NIM of 3.2% and low level of net non performing assets.

Bank Of India

Bank Of India (BOI) has become a good bet among the PSU Banks. The bank has a sound balance sheet, and a good CASA ratio of 34%. Even the FII holdings are very low., just around 16%. Bank of India’s growth in aggregate business is reflected in its healthy NIM of 3.3%. The net non performing assets also stand at just 0.52%.

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