Bank of Baroda jumps 8% after Q1 net profit soars to Rs 528.3 crore

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Shares of Bank of Baroda soared almost 8 percent on Monday morning as investors cheered its strong results for the June quarter.

The stock touched an intraday high of Rs 150.00 and an intraday low of Rs 144.75.

The public sector bank reported a 160 percent jump in net profit to Rs 528.3 crore for the quarter ended June, beating analyst estimates. In the same quarter last year, profit was Rs 203.4 crore.

The profit was driven by healthy net interest income (NII), stable loan growth and lower provisions.

NII, the difference between interest earned and expended, rose 28.6 percent year-on-year (YoY) to Rs 4,381 crore for the quarter from Rs Rs 3,405 crore in Q1 last year. The Reuters polls suggested an increase to Rs 4,201 crore.

Provisions toward bad loans declined 8.5 percent to Rs 2,166 crore versus compared to Rs 6,672 in the March quarter and Rs 2,368 crore last year same quarter.

Hit by treasury income during the period, non-interest income or other income decreased by 26 percent to Rs 1,147.8 crore from Rs 1,551 crore in the same quarter last year.

A Reuters’ poll had projected the lender to report a net loss of Rs 102.6 crore while a Motilal Oswal report expected a 32 percent fall in net profit to Rs 138 crore. The poll expected a jump in loan loss provisions of 29 percent to Rs 3,061 crore from Rs 2,368 crore in June quarter a year ago.

Gross non-performing assets (GNPA) for the quarter rose to Rs 55.875 crore. In terms of percentage of the total loans, it worsened to 12.46 percent from 12.26 percent in the March quarter and 11.40 percent in the June quarter last year.

Net non-performing assets for the quarter was Rs 22,384 crore. This translates to 5.4 percent of the total loans compared to Rs 23,483 crore or 5.49 percent in the March quarter and 5.17 percent a year ago.

Brokerage: Deutsche Bank | Rating: Buy | Target: Rs 180

The global research firm said that gross NPLs are down but slippages are elevated. Going ahead, it expects 7/12 percent RoE in FY19/20.

Brokerage: Morgan Stanley | Rating: Equalweight | Target: Rs 165

The brokerage said that better margin & fees led the key surprise. Improvement In PPoP, IFRS Implementation Will Drive Double-digit RoE In FY20.

The stock has risen 29 percent in the past one month, while in the past three days, it has risen 13 percent. At 09:55 hrs Bank Of Baroda was quoting at Rs 148.80, up Rs 10.75, or 7.79 percent, on the BSE.