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Dolat Capital Report
Bank of Baroda's operating metrics were in-line with net interest income growth at 21% YoY and healthy fee income traction.
Profit after tax however was sharply behind despite the benefit of Rs 10 billion from provision reversal against Air India due to higher provisions as Bank of Baroda provided fully against Future Retail non-performing asset (20% earlier).
Core pre-provision operating profit improved sequentially to 1.8%. Slippages at 3% were higher than expectations, primarily from corporate and micro, small and medium enterprise segments (~74% of total).
Slippages from restructured book at ~15% were elevated. Even ex of Future retail NPA this quarter, slippages from retirement savings account were slightly above some public sector undertaking peers as stress in the MSME segment plays out.
However, incremental stress in corporate portfolio seems to be low as overdue loans are at multi quarter lows.
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