Bank of Baroda - Q4FY20 First Cut - ICICI Securities

(CMP - Rs. 51, MCap - Rs. 23311 crore)

Bank of Baroda (BoB) reported mixed set of Q4FY20 numbers led by strong business growth and reduced opex while higher moratorium was a dampener. As the bank has been merged with Dena Bank & Vijaya bank the numbers are not comparable YoY. In terms of merger integration process, the bank expects IT integration process to complete by the end of FY20-21.

Q4FY20 Earnings Summary

- The bank has disclosed that 65% of the total loan book is under moratorium and has provided Rs. 810.6 crore for the same as against the minimum RBI requirement of Rs. 202.6 crore. The management expects the moratorium book to reduce to 35% by August 2020. Total provisioning was down 4.4% to Rs. 6844 crore. However, improvement of asset quality on account of standstill asset classification led PCR to increase from 77.77% in Q3FY20 to 81.33% in Q4FY20

- Fresh slippages slumped 62% QoQ to Rs. 4485 crore with slippage ratio improving from 6.78% in Q3FY20 to 1.94% in Q4FY20. 90% of the slippages was attributable to the amalgamated book. On the back of higher moratorium, asset quality improved with GNPA ratio declining 103 bps QoQ to 9.4%.On an absolute basis, GNPA and NNPA stood at Rs. 69381.4 crore and Rs. 21576.6 crore respectively. Watchlist for the quarter stood at Rs. 12500 crore, up 19% QoQ

- Exposure in accounts under NCLT 1 and NCLT 2 list stood at Rs. 4878 crore and Rs. 6060 crore respectively (down Rs. 1278 crore QoQ). Provision coverage under NCLT 1 and NCLT 2 list is 99.57% and 93.01% respectively

- Domestic advances was healthy at 4.7% QoQ to Rs. 570341 crore mainly on the back of strong sequential growth in retail and foreign advances at 4.3% and 9.1% respectively. Domestic deposit growth was steady at 3.4% QoQ to Rs. 808706 crore. CASA ratio was up 23 bps sequentially to 39.07%

- NII for the quarter came in a tad lower at Rs. 6798.2 crore, down 4.6% QoQ on account of contractions in margins. NIMs declined by 13 bps sequentially to 2.67% on account of drop in yields. Led by a lower opex, the bank reported operating profit of Rs. 5121 crore, up 3.3% QoQ. Other income growth was steady at 3.4% QoQ at Rs. 2837 core on account of strong growth in treasury income. Higher provision impact was offset by utilisation of tax credit which led PAT to come in at Rs. 506.5 crore as against a loss of Rs. 1406.9 crore in Q3FY20

We will be coming out with a detailed report soon.

Shares of BANK OF BARODA was last trading in BSE at Rs.51.6 as compared to the previous close of Rs. 50.45. The total number of shares traded during the day was 6986304 in over 45026 trades.

The stock hit an intraday high of Rs. 55 and intraday low of 51.2. The net turnover during the day was Rs. 371156431.

Source : Equity Bulls

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