BOB reported a steady quarter with earnings of INR 5.3bn driven by healthy recoveries and lower slippages. Specific credit cost declined substantially to 1.8% (annualised), which was the lowest since 3QFY17. Fresh slippages declined to INR 28.6bn (2.8% annualised) and 85% came from the watchlist, which now stands at INR 86bn ( down -INR 14bn QoQ). Non-NPL stress (Watchlist + NFB exposures to NPLs) on BoB's loan book is now at 2.8%. Management remains upbeat on NPL recoveries, with recoveries on two large steel accounts expected to flow through in upcoming quarters. We remain constructive on BoB, given its strong stress recognition (PCR of ~60%), reduction in unprovided residual stress and strong incremental...