Wednesday, May 6, 2009

Stock Idea: Bank of Baroda

For all the doomsday predictors, this financial performance of Bank of Baroda for the year ended 31st March 2009 would have come like a cruel joke. Despite the slowdown and the various predictions of rising NPAs, this bank has done very well for itself.

The Bank’s total Income grew 28.7% at Rs.17,849.24 crore in 2008-09. Of this, Interest Earned on Advances increased by 33.1% (y-o-y), non-interest income increased by 34.5%, its fee-based rose by 39.5%. The Bank’s recovery from Prudentially Written off Accounts stood at Rs.263.15 crore in 2008-09. Operating Profit was up 47% at Rs.4,305.00 crore.
Net Profit of the Bank in 2008-09 was Rs.2,227. 20 crore, up 55.2%. What is noteworthy is that net profit for Q4 was up by a whopping 172% at Rs.752.69 crore.

Provisions and Contingencies (including tax provisions) for the Bank have increased by 39.2% primarily due to higher provisions for depreciation on investments (both international & domestic equity books) and higher provisions against the NPAs.

Total deposits increased by 26.6% to Rs.1,92,397 crore on March 31, 2009 while total advances have increased by 34.9% to Rs.1,43,986 crore. Bank’s Capital Adequacy Ratio was at 14.05% (as per Basel II) at end-March 2009. Net Worth grew by 19.5% (y-o-y) and reached the level of Rs.11,387.19 crore. Gross NPAs of the Bank have come down to Rs.1,842.92 crore as on March 31, 2009, reflecting a reduction of 7%. Net NPAs too have declined from 0.47% at end-March 2008 to 0.31% at end-March 2009. Its Loan Loss Coverage stood at 75.52% on 31stMarch 2009. The Bank restructured a total number of 40,423 accounts during 2008-09 amounting to the total outstanding of Rs.2,659 crore. Of these, 38.3% belonged to wholesale, 31.5% to SME, 18.9% to retail and 11.3% to agriculture sector.

As on 31/03/09, the Bank had a domestic branch network of 2226 of which 73 were added during FY09. Total count of ATMs stands at 1179. In FY10, it proposes to add 168 new branches.
At the current rate and in the current time, BoB remains a good buy.

Source: (By S P Tulsian)

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