Stock Review: CORPORATION BANK

Corporation Bank has outgrown its industry's loan book growth consistently during the past four quarters. The bank grew its loan book by 32% in the quarter ended September 30, 2010. This has helped the bank in maintaining its profit growth at an average 21%. The bank is relying on infrastructure and auto for growing its loan book. Its ad-vances growth has been complimented by its asset quality as bad loans formed 0.4% of net advances in the quarter ended September. Moreover, 93% of its non-performing assets are system recognised now. This means that negative surprises in asset quality might be limited in the current fiscal. At a price-to-book value of 1.4, the bank's stock is trading at a discount to its peers such as Bank of Baroda, which is valued at 1.9 times the book value.