Result Analysis: Bank Of Baroda Result Update Q2FY22
Particulars (In ₹. Cr) Q2FY22 Q1FY22 Q2FY21 QoQ % YoY%
Interest Income 16692.00 17053.00 17820.00 -2.12% -6.33%
Other Income 541.00 605.00 488.00 -10.58% 10.86%
Total Income 17233.00 17658.00 18308.00 -2.41% -5.87%
Interest Expenses 9126.00 9161.00 10410.00 -0.38% -12.33%
Net Interest Income 7566.00 7892.00 7410.00 -4.13% 2.11%
Operating Income 11145.00 10755.00 10320.00 3.63% 7.99%
Operating Expense 5476.00 5154.00 4958.00 6.25% 10.45%
Operating Profit 5669.00 5601.00 5362.00 1.21% 5.73%
Operating profit Margin 50.87% 52.08% 51.96% -2.33% -2.10%
Profit After Tax 2088.00 1209.00 1679.00 72.70% 24.36%
PATM (%) 18.73% 11.24% 16.27% 66.66% 15.15%
Basic EPS (in Rs.) 4.04 2.34 3.63 72.65% 11.29%
Business Details Q2FY22 Q1FY22 Q2FY21 QoQ % YoY%
Domestic Deposit 864603 837803 835894 3.20% 3.43%
Domestic CASA 375766 362044 332493 3.79% 13.01%
CRAR 15.55 15.4 13.26 0.97% 17.27%
Gross NPA 8.11 8.86 9.14 -8.47% -11.27%
Net NPA 2.83 3.03 2.51 -6.60% 12.75%

Result Highlight:

  • BOB Consolidated Interest Income fall by 6.33% YoY to ₹ 16692 crore – in line with the estimates. Other Income rose 10.86% Y-o-Y to ₹541

  • The net interest income (NII) for the quarter stood at ₹ 7566 crore compared to ₹ 7,410 crore in the previous year, representing a growth of 2.11%.

  • During the quarter company reported Global NIM at 2.85% and Domestic NIM came in at 2.90%.

  • Net profit rose 24.36% YoY to ₹2088 crore for the September quarter compared with ₹ 1679 crore in the same quarter last

  • Operating Profit of the Bank increased to INR 5,669 crore in Q2FY22, up by 5.76% on a YoY basis.

  • The Gross NPA of the Bank reduced to ₹59,504 crore in Q2FY22 from the level of ₹65,698 crore in Q2FY21. Subsequently the Gross NPA Ratio improved to 8.11 % in Q2FY22 from 9.14% in Q2FY21.

  • The Net NPA Ratio of the Bank stood at 2.83% in Q2FY22 as compared with 2.51 % in Q2FY21.

  • The Provision Coverage Ratio of the Bank stood at 83.42%.

  • CRAR of the Bank improved to 15.55% in Sep’21 from 13.26% in Sep’20.

  • Return on Assets improved to 0.73% in Sep21 from 0.59% in Sep20.

  • Organic Retail loan portfolio of the Bank grew by 10.25% on a YoY basis, led by growth in Personal loan, 23.17% growth in Auto loan and 11.09% in Education loan.

  • Cost to Income Ratio stood at 8.2% vs 8.5%.

Management commentary:

  • Sharp decline in yields this quarter was due to NBFC slippage- as interest reversal, Adjusted for the one-offs, domestic NIM for the quarter will be upwards of 3%.

  • Management said Bank saw good growth in retail segment while home loan segment saw muted growth.

  • Recoveries during the quarter increased to ₹3246 crore including ₹1246 crore from written off account, which is higher than the recoveries of same quarter last year.
  • Management expect loan growth to be close to double digit led by growth in retail loan.

  • Of the ₹18000 Corporate GNPA, NCLT process going on in many. Hopeful of good recovery from NCLT and OTS. Expect Rs1000-1500 of incremental recovery in FY22. From the international book NPA, 20-30% of upgrades expected in FY23.

  • The bank has provided ₹600 against 3 specific standard accounts which are likely to slip, provision levels differ across exposures bank has provided 100% for 1 account, and two are power companies.

  • Bank has ₹ 2000 crore of exposure in SREI infra against which 50% has already been provided.

  • Bank has guided that Credit costs will continue to trend downwards, expect it to be at 1.5-2%. Expect a better second half vs first half on slippages Maintain slippage guidance of 2%. Rs7000-8000 of recovery/upgrades expected in second half of FY22


Bank of Baroda reported good profit which was supported by lower provision where loan growth was tepid of only 2% which was mainly led by SME and retail loan, company reported flattish NII growth mainly led by elevated interest reversals from a NBFC slippage. Higher growth in other income at 28% YoY was led by good treasury gains and healthy recoveries. PAT benefitted from lower provisions, and as write back from DHFL recovery, bank ROA is constantly improving and this time it came at 0.73%, both gross as well as net NPA also improved in this quarter, as economy is picking up loan growth is expected to improve going forward, bank has also guided for improvement in credit cost, and as NCLT process will speed up more recoveries are expected going forward.

Bank of Baroda trade at a very low multiple compared to private bank it has a very strong liability franchise and a good balance sheet size which will get benefit from economic recovery and good credit growth, BOB is trading at P/E multiple of 7x and P/B at 0.6x Valuing the company at 8x FY23E EPS, we recommend buy on BOB at CMP of for the Target Price of ₹ 132.

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