**[investwise]** Ing Vysya Bank-Moves North With 60 New Branches. (IDFC targets Rs 450/share)

 

Ing Vysya Bank-The Men In Orange Move Up-North, IDFC puts a 12 month price target of Rs 450 From a private sector bank almost entirely operating from South and West India, Ing is incrementally looking to expand its footprint in West and North India (of the 60 licenses received last year, 50 were non-South). At present 75 per cent of ING Vysya Bank's (VYSB) branches are based in the south, which management believes is a sub-optimal strategy. Management indicated that their strategy has been three pronged: (1) strengthen liability franchise in terms of retail/low-cost, (2) clean-up asset quality, and (3) grow at industry levels. On the back of enhancing productivity of branches and strategic focus, CASA ratio has improved to 34% in June 2010 from 27% in March 2009. Management intends to double their loan book over the next 3 years and is looking to add 80-100 branches per year (resulting in cost to income ratio remaining around 59%). Of the total loan book as of June 2010, 42% is large and mid-corporate segment (50% each) and another 26% is SME (VYSB's erstwhile foothold). VYSB is leveraging ING's brand name/ relationships to grow the large and mid-corporate book. Management is not concerned on the quality of the SME portfolio as it believes it is well collateralized. Safe Harbor Statement: Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.   Nothing in this article is, or should be construed as, investment advice.

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