Bank of Baroda - Q3FY21 First Cut - ICICI Direct

(CMP - Rs. 74; MCap - Rs. 34122 crore)

Bank of Baroda posted good operating performance, barring some deterioration in asset quality.

Q3FY21 Earnings Summary

- Bank of Baroda posted improved performance for Q3FY21 with NII growing by 8.7% YoY to Rs. 7749 crore, on the back of improved margins. The global net interest margin improved by ~7 bps on a YoY basis to 2.87%, while sequentially it was largely flat. Domestic margins posted healthy expansion of ~11 bps QoQ to 3.07%. Other income growth was miniscule at 5.6% YoY to Rs. 2896 crore. Provisions for the quarter remained at elevated levels and increased by 31.8% QoQ to Rs. 3957 crore. PAT during the quarter stood at Rs. 1061 crore, compared to a loss of Rs. 1407 crore in the previous quarter last year

- Total covid-19 related provisions stand at Rs. 1709 crore (~24 bps of advances). The bank holds provisions worth Rs. 1521crore (~22 bps of advances) as contingent provisions towards accounts not classified as NPA due to SC order. Further, it also has provisions worth Rs. 10128 crore for accounts under IBC and is 100% of the outstanding. PCR remains healthy at 85.46% as of Q3FY21

- Asset quality performance was a slight disappointment though headline numbers indicate otherwise. GNPA and NNPA (headline) declined to 8.48% and 2.39% as against 9.14% and 2.51% QoQ. However, on proforma basis, GNPA ratio increased by ~30 bps QoQ to 9.63%. Restructuring advances stands at 1.39% of standard advances. Corporate segment accounts for 82% of the total restructuring. SMA1 and SMA2 increased from 2.88% to 4.41% QoQ

- Loan growth for the quarter showed improvement on sequential basis as they were up by 4.3% QoQ to Rs. 698652 crore, while yearly growth was largely in-line with the industry at 6.8% YoY. Retail segment loan growth was healthy at 13.7% YoY, driven by auto loans, while agri loans also increased steadily by 14.1% YoY aided by gold loans (up 29% YoY). Deposit growth for the quarter was 6.5% YoY at Rs. 954561 crore, with domestic CASA leading the way at a growth of 13.2% YoY. Domestic CASA ratio thus improved by ~140 bps QoQ to 41.20%

We will be coming out with a detailed report soon.

Shares of BANK OF BARODA was last trading in BSE at Rs.73.85 as compared to the previous close of Rs. 73.8. The total number of shares traded during the day was 3399926 in over 9008 trades.

The stock hit an intraday high of Rs. 75.45 and intraday low of 72. The net turnover during the day was Rs. 251169215.

Source : Equity Bulls

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