Bank of Baroda bounces back

Bank of Baroda, which posted the highest net loss for a quarter by any Indian bank for Q3FY16 is today the top gainer on the BSE. The stock went up over 18% to an intra da high at Rs.136.15 and currently hovers around the same levels.

After providing for Rs.6474 crore for bad loans, up over 5 times YoY, the company posted a net loss of Rs.3324 crore. In terms of asset quality, Net NPA jumped up from 3.85% (YoY) to 9.68% while fresh slippages rose to Rs.15,603 crore.

Despite all this, the stock is up in the green and this is thanks to the MD, during the Press Conference stating that he has cleaned up the entire bag of bad loans at one go as required by RBI and he expects the bank to jump back to profits FY14  profits in FY17. What is even more significant is that he has informed the Govt that BoB would not be needing any more capital infusion and he also does not foresee any capital dilution for at least the next two years.

The market was more enthused with this confidence of the MD. It has decided to look beyond the loss of current Q3 and take things in a more positive spirit, which is what we are seeing in its stock price today.