Bank of Baroda stock price reacted positively to the stock despite the drop in profitability because it is enthused with the improvement in asset quality. The Bank’s Net NPA was at 1.89% v/s 2.11% (QoQ) and Gross NPA also reduced from 3.85% to 3.72%. Provisions for bad loans in the quarter rose to Rs.1817 crore, up 44% (QoQ) and up 57% (YoY), this was on account higher restructuring – it restructured assets to the tune of Rs.4000 crore, up 150% (QoQ); this stood at Rs.7843 crore in FY15 of which major came from the infra and steel sector. Its provision coverage ratio was at 64.99%. During the year, the Bank has sold financial assets with net book value of Rs.185 crore to assets reconstruction companies on cash and security receipt basis v/s NIL in previous quarter.

In terms of profitability, net profit for the quarter was down 48% (YoY) at Rs.598 crore and this was due to an increase in non-performing loan (NPLs) provision. Its NII was up 1.5% at Rs.3171 crore.

The Bank’s slippages, thanks to betterment in asset quality was down 55% (QoQ) at Rs.1359 crore and for FY15, it stood at Rs.8039 crore, up 24%.