Bank of Baroda

Bank of Baroda posted a set of very good numbers for Q4FY14. It reported a 12% (YoY) jump in net profit at Rs.1157 crore. More than the profit, the improvement of the asset quality, especially when majority of the PSU banks have reported further deterioration, was very encouraging. Its Gross NP, QoQ, fell from 3.32% to 2.94% and Net NPA also improved from 1.88% to 1.52%. Following these numbers, many brokerage houses put out a ‘buy’ call on the stock, increasing the target price.

The Bank’s NII (interest earned over interest paid) was up 11% (YoY) at Rs.3132 crore. Its net profit and NII came in much higher than what most of the analysts had expected. NIM came in at 2.87% v/s 2.95% in Q3. The Bank sold NPAs worth Rs.254 crore to asset reconstruction companies on cash and securities receipt basis on this sale, it booked a profit of Rs.4.26 crore. Provisions and contingencies during the quarter was at Rs.1153 crore, down 28% (YoY). CAR as per Basel III norms stood at 12.28% v/s 12.01% (QoQ). The Bank ended FY14, with a 1.35% rise in net profit at Rs.4541 crore and total income rose 12%. As at end of FY14, Govt of India held 56.26% stake in the Bank, down marginally from 55.41% stake held in Q3.