Bank of Baroda (Q1 FY13)

India Infoline News Service | Mumbai |

Weaker than expected loan growth led by decline in domestic credit

CMP Rs673, Target Rs800, Upside 18.5%

  • Weaker than expected loan growth led by decline in domestic credit
  • NIM correction in-line with expectation; bank confident of sustaining NIM 
  • Fee growth muted; C/I ratio improve substantially on opex decline 
  • Larger than expected deterioration in asset quality was the key disappointment; RoA decline to multi-quarter low
  • Downgrade BV estimates but retain BUY with 9-month target to Rs800
Result table
(Rs m) Q1 FY13 Q4 FY12 % qoq Q1 FY12 % yoy
Total Interest Income 85,576 81,185 5.4 66,318 29.0
Interest expended (57,595) (53,211) 8.2 (43,346) 32.9
Net Interest Income 27,981 27,974 0.0 22,972 21.8
Other income 7,708 8,978 (14.1) 6,409 20.3
Total Income 35,689 36,952 (3.4) 29,381 21.5
Operating expenses (13,157) (16,443) (20.0) (11,068) 18.9
Provisions (8,938) (8,437) 5.9 (3,911) 128.6
PBT 13,594 12,073 12.6 14,402 (5.6)
Tax (2,081) 3,217 (164.7) (3,944) (47.2)
Adjusted PAT 11,513 15,289 (24.7) 10,459 10.1
Exceptional items (124) - - - -
Reported PAT 11,389 15,289 (25.5) 10,459 8.9
EPS 27.9 37.1 (24.7) 26.6 4.9

(Rs bn) Q1 FY13 Q4 FY12 % qoq Q1 FY12 % yoy
Loans 2,858 2,874 (0.5) 2,323 23.0
Deposits 3,827 3,849 (0.6) 3,129 22.3
- Domestic CASA 896 929 (3.7) 802 11.6

Key Ratios Q1 FY13 Q4 FY12 chg qoq Q1 FY12 chg yoy
NIM (%) 2.7 3.0 (0.23) 2.9 (0.14)
Global YoA 9.1 9.3 (0.3) 9.1 (0.0)
Global YoI 7.7 7.5 0.2 7.5 0.2
Global CoD 5.9 5.8 0.1 5.4 0.5
Domestic CASA (%) 32.2 33.2 (0.9) 33.9 (1.7)
C/D (%) 74.7 74.7 0.0 74.2 0.4
Non-interest income (%) 21.6 24.3 (2.7) 21.8 (0.2)
Cost to Income (%) 36.9 44.5 (7.6) 37.7 (0.8)
RoA (%) 1.0 1.4 (0.4) 1.1 (0.1)
CAR (%) 13.7 14.7 (0.9) 13.1 0.6
Gross NPA (%) 1.8 1.5 0.3 1.5 0.4
Net NPA (%) 0.7 0.5 0.1 0.4 0.2
Source: Company, India Infoline Research

Weaker than expected loan growth led by decline in domestic credit

BOB’s advances were flat (-0.5%) sequentially while representing a robust 23% growth yoy. Domestic advances contracted by 3% qoq driven by a sharp decline in retail (-8% qoq) and agri (-4% qoq) segments. With the bank being cautious in expanding domestic balance sheet due to challenging credit conditions, it targets to grow marginally ahead of the system in the current year. International advances increased by 5% qoq most likely reflecting the sharp rupee depreciation


Deposits mirrored loan growth; ~100bps decline in domestic CASA on sequential basis

Deposits were also flat on sequential basis. However, on yoy basis 18% growth in domestic deposits indicated relatively strong mobilization by the BOB. Domestic CASA declined by 100bps for second consecutive quarter to 32% on account of 21% qoq decline in current accounts balance. Savings deposits growth of 15% yoy was healthy in the light of intensified competition and widened rate differential of retail TDs. In our view, CASA ratio would improve in the longer term aided by easing of liquidity cond

BSE 167.45 [0.05] ([0.03]%)
NSE 167.45 0 (0%)

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