BoB up on asset quality improvement

In this highly volatile market, Bank of Baroda (BoB) is the top gainer on the BSE currently, touching an intra day high at Rs.136.80, going up 8.5%.

Despite most analysts predicting that BoB would turn back to profits in Q4FY19, the Bank remained in the red. It posted a loss of Rs.991 crore, which thankfully was much lower than the loss of Rs.3102 crore posted in Q4FY18. The loss was mainly on account of accelerated specific provisions on NPLs at Rs 5,550 crore from Rs 3,416 crore in the previous quarter.

Yet, the stock is the big gainer because its asset quality showed a sharp improvement. The Gross NPA came down from 11.01% to 9.61% (QoQ) while Net NPA declined to 3.33% from 4.26%.

Fresh slippage for the quarter and the financial year was at Rs.3,192 crore and Rs.10,138 crore respectively. Provision for NPAs was at Rs.5,550 crore for the quarter. However, Credit cost for the financial year 2019 declined to 2.43% from 3.48% in 2018.

Exposure in accounts under NCLT 1 list was Rs.3,908 crore and NCLT 2 list was INR 3,831 crore as on March 31, 2019.

Provision coverage under NCLT 1 and NCLT 2 list was 95.63% and 84.11% respectively.

Capital Adequacy Ratio of the Bank stood at 13.42% and CET-1 at 10.38% v/s 11.67% and 8.65% in December 31, 2018. Consolidated CET-1 and Capital Adequacy Ratios improved in March 2019 at 11.60% (9.74% in December 2018) and 14.52% (12.62% in December 2018) respectively.