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 : Dismal FY01 performance - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Jun 29, 2001

    BOB : Dismal FY01 performance

    Bank of Baroda (BOB), has posted a 45% drop in FY01 profits after writing off Rs 2.7 bn as VRS cost. Its topline too rose by a marginal 10%. The interest income growth of the bank was adversely affected in 4QFY01 with a slowdown in the economic activity.

    (Rs m) FY00 FY01 Change 4QFY00 4QFY01 Change
    Interest Income 52,202 57,573 10.3% 13,984 14,339 2.5%
    Other Income 6,414 7,063 10.1% 2,248 3,020 34.4%
    Interest Expenditure 35,066 38,196 8.9% 9,236 9,422 2.0%
    Operating Profit (EBDIT) 17,136 19,378 13.1% 4,748 4,917 3.6%
    Operating Profit Margin (%) 32.8% 33.7%   34.0% 34.3%  
    Other Expenditure 13,033 14,327 9.9% 3,689 4,195 13.7%
    Profit before Tax 10,517 12,114 15.2% 3,307 3,742 13.1%
    Provisions & Contingencies 3,088 5,767 86.7% 918 3,227 251.4%
    Provision for VRS - 1,749   - 1,749  
    Tax 2,401 1,851 -22.9% 1,081 311 -71.2%
    Profit after Tax/(Loss) 5,028 2,747 -45.4% 1,308 (1,546)  
    Net profit margin (%) 9.6% 4.8%   9.4% -10.8%  
    No. of Shares (eoy) 294 294   294 294  
    Diluted Earnings per share* 17.1 9.3   17.8 -  
    P/E (at current price)   5.7     -  

    During the year, the bank's deposits and advances grew by 14% and 16% respectively. Its credit to deposits ratio also rose to 51% from 48% in the previous year. BOB's lending to priority sector was on the higher side at 49% compared to 40% prescribed by RBI's norms. Saving account deposits, which contributed 23% of total deposits witnessed a growth of 12%.

    Higher proportion of saving account deposits led to a rise of over 80 basis points in BOB's operating margins in FY01. The bank's average cost of deposit declined from 7.2% in FY00 to 7% in FY01. This has contributed to 13% growth in operating profits.

    The bank's net profit growth was however, adversely affected by 87% jump in provisioning amount and write off of Rs 1.7 bn for VRS expenses. Concerted efforts in the direction of cost control fetched good results with the cost to income ratio declining from 55% to 54% (excluding VRS expenses). BOB's future profitability is also likely to improve with the reduction in wage bills.

    In FY01, BOB's net NPAs to net advances ratio declined to 6.7% from 7% in FY00. Its capital adequacy ratio at 12.7% is also well above the 10% norm required by the RBI by FY02.

    At the current market price of Rs 53 BOB is trading at a P/E of 6x and Price/Book value ratio of 0.5x. BOB has declared a dividend of Rs 4 per share. This translates into dividend yield ratio of 7.5%.



    Equitymaster requests your view! Post a comment on "BOB : Dismal FY01 performance". Click here!


    More Views on News

    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%.

    SBI: Merger Pushes up Bad Loans (Quarterly Results Update - Detailed)

    May 23, 2017

    State Bank of India (SBI) ended FY17 on a healthy note but concerns on bad loans from associate banks remain.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    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


    Aug 18, 2017 (Close)


    • 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



    Detailed Financial Information With Charts