Bank of Baroda - Q1FY2014 Result Review - Angel Broking

Bank of Baroda reported moderate operating performance for the quarter, however, asset quality performance was weak. NII for the bank expectedly grew by 3.3% yoy. Non-interest income grew strongly by 60% yoy, probably aided by treasury gains. Overall, pre-provisioning profit for the bank grew at moderate pace of 9% yoy, which was on expected lines. The bank witnessed significant asset quality deterioration during the quarter, as Gross and Net NPA levels increased sequentially by 22% and 30%, respectively. The provisioning expenses for the bank grew by 14% yoy and hence, the bottom-line grew by marginal 3% yoy.

Given the recent macro developments in an overall weak environment, we believe that asset quality pressures are unlikely to abate as quickly as was expected earlier. Hence, we recommend a Neutral recommendation on the stock.

Source : Equity Bulls

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