The share price of Bank of Baroda rose 5 percent intraday on May 16 as investors were impressed by the continuous improvement in the lender’s asset quality in the quarter ended March.
Bank of Baroda reported gross non-performing assets (GNPA) ratio of 6.6 percent for the quarter as against 7.3 percent in the previous quarter despite new slippages rising to Rs 4,500 crore.
The rise in slippages at over 5 percent on year to Rs 3,736 crore weighed on net profit, which was below analysts’ expectations. In the quarter ended March, Bank of Baroda reported a net profit of Rs 1,779 crore against a net loss of Rs 1,047 crore. The lender’s net interest income grew 21 percent on-year to Rs 8,612 crore.
“BOB reported a steady operating performance, while higher provisions impacted net earnings adversely. Business growth was strong at 6 percent QoQ led by healthy trends across segments while margin witnessed a slight decline,” brokerage firm Motilal Oswal Financial Services said in a note.
Click here for live market updates
“The performance of the bank is broadly mirroring SBI but with a lag of 1-1.5 years,” Kotak Equities said.
The lender’s management indicated that its loan book would grow by 10-12 percent in the current financial year, while credit cost would be limited to 1.5 percent.
Brokerage firm JM Financial Services said in a note that it expects higher credit growth, re-balancing of portfolio in favour of retail and moderation in credit costs to improve BoB’s return trajectory.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Copyright © e-Eighteen.com Ltd All rights resderved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express writtern permission of moneycontrol.com is prohibited.
