Bank of Baroda share price target

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,...

Bank of Baroda reported a PAT of Rs 598 crs down by 48.3% Y-o-Y lower than expectations due to higher provisions. Key highlights: 1) NII depicted a slow growth of 1.5% Y-o-Y & declined by 3.5% Q-o-Q owing to slow credit growth and high interest reversals...

BOBs core & net earnings were above estimates by 5/30%

BOBs core & net earnings were above estimates by 5/30% with better NIM performance and lower provisions, despite sharp rise in opex. Higher than estimated staff cost ( 22/45% YoY/QoQ) was a negative surprise vs.

BoB's Q1FY16 results were in- line with estimates as earnings declined by 22.7% YoY (75.8% QoQ growth on lower base) to Rs 10.5 bn. Asset quality deteriorated as GNPA and NNPA increased sequentially to 4.13% and 2.07% respectively.

BOBs domestic business has witnessed considerable weakness over the last couple of years. Its FY15 annual report suggests that risks have only increased. We cut earnings by 9/4% for FY16/17E respectively as we raise our slippages (and hence) provisioning assumptions.

BOBs core & net earnings were below estimates by 7/33% with slower loan growth & higher provisions. However, stable asset quality (with controlled slippages) and improved PCR (65%) was a positive surprise, especially given that a sharp deterioration was reported by one of its peers.

Though BoB's Q4FY15 results were below estimates as the earnings declined by 48% YoY (79% QoQ growth on lower base) to Rs 6 bn, asset quality improved as GNPA and NNPA declined sequentially to 3.72% and 1.89% respectively.

against expectation ofRs33.7bn/Rs7.5bn.The underperformance in NII was due to16bps qoqdeclineindomesticNIMsto2.76%andmoderategrowthof7.2%indomesticadvances. MoreoverwithsignificantlyhigherprovisionsatRs18.2,netprofitcameinloweratRs6.0bn....