Views on Bank of Baroda 3QFY2014 results - Angel Broking

Views of Mr. Vaibhav Agrawal (VP- Research - Banking, Angel Broking) on Bank of Baroda 3QFY2014 results:

"Bank of Baroda's (BOB) operating numbers came slightly above estimates, while asset quality performance came broadly in-line with management's guidance. On the operating front, NII for bank grew by 7.6% yoy (vs. loan book growth of 18%) slightly ahead of our estimates. As witnessed in past, opex growth for the bank remained higher compared to peers at 26% yoy, but was in line our estimates. Overall the Pre-Provisioning operating profit de-grew by 3% yoy (slightly higher than our estimates aided by higher-than-estimated operating income). On the asset quality front, slippages came in lower at Rs. 1,553cr while incremental restructuring came in sequentially at Rs. 1,213cr which was lower than ours and street's expectations. Gross and Net NPAs increased sequentially by 10% and 5%, qoq respectively during the quarter. Provisioning expenses de-grew 25% yoy in-line with our expectations. PBT level Earnings for the bank grew by 17% yoy, however 84% yoy increase in tax expense (on back of Rs. 272cr deferred tax liability for special reserve created during quarter) limited the earnings growth to modest 4% yoy. We await management comments regarding the outlook on the asset quality going ahead. We maintain our Accumulate rating on the stock."

Source : Equity Bulls

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