10 August 2020 Bank of Baroda (BOB) reported weak operating performance, with subdued margins and revenue growth; elevated provisions led to net loss of INR8.6b. On the asset quality front, slippages were trending lower, primarily on account of the asset classification benefit; however, NPL formation in the international portfolio stood elevated. The moratorium book declined to 21.4% and remains a key overhang on asset quality. Furthermore, CET-I declined to ~9.1%, which raises concerns regarding the banks capitalization levels and its ability to absorb further loss as we expect credit cost to remain elevated. We cut the EPS estimate for FY21/FY22 by 66%/31%, primarily as we factor higher credit cost and moderate our business growth/margin estimates. BOB reported a weak quarter with net loss of INR8.6b, affected by weak operating performance and elevated provisions. NII grew at 5% YoY (flat QoQ) to INR68.2b, with global NIMs declining by 8bp QoQ to 2.55%.