Bank of Baroda (BoB) 2QFY16 result was way below our and street estimates due to sharp increase in provision expenses by 113% yoy and 215.4% qoq to Rs18.9bn. This was due to sharp increase in incremental slippages to Rs69.6bn (slippage ratio of 6.8%) v/s Rs19.1bn (slippage ratio of 1.8%) in 1QFY16 and Rs18.5bn (slippage ratio of 1.94%) in 2QFY15. Higher slippage was primarily due to classification of a loan account as fraud along with higher impairment in large corporate portfolio. Further the bank has only done provision of 25% on loan account declare as a fraud and hence 2HFY6E earnings will continue to get negatively impact by higher provisions. Hence,...