Bank Of Baroda’s Net Down By 32%

Bank of Baroda (BOB) joined the long list of public sector banks that have posted a bad set of financials for Q4FY13. The bank’s net profit for Q4FY13 has declined by 32 per cent on a yearly basis to Rs 1028.85 crore. The fall would have been worse had there been no tax write-backs to the tune of Rs 482.52 crore for the recently concluded quarter against Rs 321.67 crore in the corresponding quarter previous year. 

Even at the operating level, the bank saw a much muted growth. Its operating profit grew by a mere 6% on a yearly basis to Rs 2182 crore, primarily aided by the 33% increase in other income to Rs 1190.93 crore in the same period. Even the net interest income (NII) of the bank, the difference between interest earned by the company and the interest expended grew at an anaemic rate of 1% on a yearly basis to Rs 2814.01 crore. Another factor that led to such a drop in the profit for the bank is higher provisioning. The provisions of the bank have increased by 208% on a yearly basis to Rs 2598.4 crore. 

The asset quality of the bank continued to deteriorate as its gross and net NPA increased by 9% and 25% on a sequential basis. As a percentage of advances, the NNPA on a sequential basis has increased by 16 basis points to 1.28%. 

The board of the bank has recommended a dividend of Rs 21.5 per share, which brings a dividend yield of 3% at the current market price of the bank's share. The CMP of BOB is trading at a price to book value of 1x, which looks slightly expensive as compared to other PSU banks.