Bank of Baroda share price target

We hosted two public sector banks, Bank of Baroda and Indian Bank, at our PSU Day conference, to understand their outlook mainly on growth and asset quality post unlocking leading to rally in banking stocks, including typically laggard PSBs, on the back of the improving pace of economy recovery. Management indicated that the overall growth outlook remains upbeat, driven by retail and some early signs of pickup even seen in corporate. The asset quality so far has been better than expected in terms of fresh slippages and restructuring, though caution is needed in case of any tail-end risk in FY22. After Canara, PNB and IDBI, we expect BOB and Indian Bank may also raise equity capital for growth, though not immediately. Merger integration has...

as collection efficiencies front. Moreover, reported gross slippages declined to 15.2bn v/s 30bn 1QFY21) and NNPA (2.51% v/s 2.83% in 1QFY21) declined substantially along with higher PCR (incl. TWO) of 85.4%. The bank has witnessed stable net advances (5.1% YoY) and strong deposit growth...

NII increased 6.8% YoY and 10.1% QoQ to | 7508 crore on the back of an improvement in net interest margin (NIM). NIMs during the quarter increased 31 bps QoQ to 2.86% on account of a steeper decline in cost of funds than yields. Other income jumped 54.1% QoQ to | 2802 crore, on account of 22.2% QoQ rise in fee income while trading gains were up 85.9% QoQ. Recovery from written-off account also improved from | 94 crore in the previous quarter to | 341 crore in Q2FY21. Provisions declined 49% QoQ as a result of lower slippages. This coupled with higher income led the bank...

Bank of Baroda (BOB) reported strong earnings, led by higher treasury gains and steady NII growth as domestic margins expanded by 33bp and lower provisions. On the business front, loan growth trends remained muted, mainly due to 7% QoQ decline in corporate advances. The pickup in retail...

NIM was sequentially higher by 30 bps to 2.86% due to lower slippages at 2% (including standstill NPAs) and improved spreads. Without standstill on NPAs, gross NPAs would be at 9.33% against...

high provisioning, although asset quality improved with continued PCR significantly as offering morat on selected basis. NII performance was decent but lower other income & higher staff opex led to mediocre PPOP. Concerns...

Total provisioning for Q1FY21 was down 17.8% YoY to | 5628 crore. The bank has provided | 996 crore for Covid-19 during the quarter. As on June 30, 2020, total Covid provisioning was at | 1806 crore (~25 bps of advances). PCR increased from 81.3% in Q4FY20 to 83.3% in Q1FY21. Fresh slippages slumped 10.2% QoQ to | 2740 crore with ~| 2121 crore attributable to the international book. Amid moratorium, GNPA remained flat QoQ at | 6913 crore (GNPA ratio 9.39%), NNPA ratio declined 30 bps QoQ to 2.83%. Watchlist for the quarter was at | 13000 crore, up 4% QoQ....

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%.

BoB's reported a loss of Rs86 bn in Q1FY21 led by higher provisions. Though domestic slippages were muted owing to ongoing loan moratorium, two-third of slippages in 1QFY21 pertained to the international portfolio. Slippages from overseas book have been elevated over the last few quarters. The quarter also saw high additions to watch-list from the NBFC and power sector. The NBFC addition pertained to a single well rated infra financing NBFC account, where the bank has so far made 35%...

BoB reported a loss at PBT level of of Rs17.2bn in 4QFY20 led by higher provisions, though tax reversal resulted in a PAT of Rs5bn. Slippages were lower at 2.6%, partly benefitting from asset quality...