X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
BoB: Topline under pressure - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Jun 5, 2002

    BoB: Topline under pressure

    Bank of Baroda has reported a strong 73% rise in pre tax profits on the back of its cost control initiatives. However, subdued interest income growth and pressure on interest margins depressed the overall performance of the bank

    (Rs m) 4QFY01 4QFY02 Change FY01 FY02 Change
    Income from operations 14,339 15,303 6.7% 57,573 59,555 3.4%
    Other Income 3,020 3,098 2.6% 7,063 9,932 40.6%
    Interest expense 9,422 10,698 13.5% 38,196 40,761 6.7%
    Net interest income 4,917 4,604 -6.4% 19,378 18,794 -3.0%
    Other expenses 5,945 3,963 -33.3% 16,076 15,634 -2.8%
    Operating Profit (1,028) 642 - 3,302 3,161 -
    Operating Profit Margin (%) -7.2% 4.2%   5.7% 5.3%  
    Provisions and contingencies 3,227 1,735 -46.2% 5,767 5,136 -10.9%
    Profit before Tax (1,234) 2,005 - 4,598 7,956 73.0%
    Tax 311 937 201.2% 1,851 2,497 34.9%
    Extraordinary items 265 - - 265 -  
    Profit after Tax/(Loss) (1,281) 1,067 - 3,011 5,459 81.3%
    Net profit margin (%) -8.9% 7.0%   5.2% 9.2%  
    No. of Shares (m) 294.3 294.3   294.3 294.3  
    Diluted Earnings per share* -17.4 14.5   10.2 18.5  
    P/E Ratio   3.6     2.8  
    *(annualised)            

    During the quarter, the bank managed to report a double digit growth in interest income on the back of an improvement in credit demand. This compared against a marginal 2% rise recorded by the bank in the first nine months of FY02. During the year, the bank total advances registered a healthy growth of 23%, better than its PSU peers in the industry. BoB's total deposits too increasted by 14%.

    Contribution of fee based income to total income increased to 14% and treasury operations of the bank accounted for 43% of domestic income. The higher ratio was achievable due to favourable interest rates and active trading in the debt market. The bank could have to make provision for trading losses in the current year due to volatile government security prices. In FY02, the bank has transfeered Rs 2.2 bn to Invesment Flucuation Reserve to cushion against any future losses due to adverse movement in interest rates.

    Income breakup
    (Rs m) 4QFY01 4QFY02 Change FY01 FY02 Change
    Interest on advances 7,392 8,262 11.8% 29,383 30,596 4.1%
    Income from investments 5,062 6,003 18.6% 21,508 23,677 10.1%
    Interest on balance with RBI 1,780 864 -51.4% 6,128 4,290 -30.0%
    Others 105 173 65.4% 554 993 79.2%
    Total 14,339 15,303 6.7% 57,573 59,555 3.4%

    In FY02, BoB's effective tax rate declined to 31% from 40% in the previous year, as the bank has accounted for deferred tax assets which reduced its total tax provision by Rs 76 m. Excluding this and extraordinary adjustment of previous year (pertaining to investment fluctuation reserve), the bank's earnings are higher by 96%.

    Among its IT initiatives, the bank has computerized 58% of its branch network, accounting for 77% of its business. The bank has also networked 300 branches in 7 citites and installed 40 ATMs across the country.

    At the current market price of Rs 53, BoB is trading at a P/E of 3x and price to book value ratio of 0.4x. The bank's lower valuations are the result of its high NPA ratio of 5%. Although, the bank has reduced the ratio from 6.8% in the previous year, it still stands on the higher side. Also, relatively low level of computerization and subdued topline growth has trimmed its valuations.

     

     

    Equitymaster requests your view! Post a comment on "BoB: Topline under pressure". Click here!

      
     

    More Views on News

    SBI: Asset Quality and Slow Credit Remain Achilles' Heel (Quarterly Results Update - Detailed)

    Aug 22, 2017

    State Bank of India (SBI) continues to battle sliding asset quality and sluggish credit growth.

    IDFC Bank: Strong Trading Income Shields Credit Slowdown (Quarterly Results Update - Detailed)

    Aug 10, 2017

    IDFC Bank is taking steps to address contracting NIMs and successfully transition in to a retail bank.

    ICICI Bank: Loan Slippages Trending Downwards (Quarterly Results Update - Detailed)

    Aug 10, 2017

    Asset quality will be the key thing to watch out for going forward.

    Axis Bank: Outside Watchlist Slippages a Big Worry (Quarterly Results Update - Detailed)

    Jul 31, 2017

    Almost 74% of the watchlist as provided by the bank of Rs 226 billion in FY16 has turned into non-performing assets.

    HDFC Bank: Asset Quality Deteriorates due to Farm Loan Waiver (Quarterly Results Update - Detailed)

    Jul 25, 2017

    Asset quality was under pressure on account of farm loan waivers. Despite the higher provisioning, the company reported a healthy profit growth of 20%.

    More Views on News

    Most Popular

    This Small Cap Can Drive Chinese Players Out of India (and Make a Fortune in the Process)(The 5 Minute Wrapup)

    Aug 17, 2017

    A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    It's the Best Time to Buy IT Stocks(Daily Profit Hunter)

    Aug 16, 2017

    The IT Sector could be in an uptrend till February 2019. Are you prepared to ride the trend?

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    BANK OF BARODA SHARE PRICE


    Aug 23, 2017 (Close)

    TRACK BANK OF BARODA

    • Track your investment in BANK OF BARODA with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks

    MORE ON BANK OF BARODA

    BANK OF BARODA - PUNJAB & SIND BANK COMPARISON

    Compare Company With Charts

    COMPARE BANK OF BARODA WITH

    MARKET STATS