Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
Bank of Baroda
B etter than peers
Event: Q1 results largely in line
Q1FY12 net profit of Rs10.3bn (+20%y/y) was ahead of UBS-e of Rs10bn,
however margin decline of 30bps was sharper than expected. Other key highlights:
1) loans grew 25%y/y, 1.6% q/q, 2) LLP low at 23bp, Provision coverage declined
to 82.5%, 3) core fee income grew 36% y/y, 4) Domestic casa stable at 34%, 5)
incremental slippage of 1% (annualised), 6) loan approvals declined 70% y/y.
Impact: Cutting margins and raising LLP
We are building in 19% loan CAGR for FY12-13E and cut margin expectation to
2.85% from 2.95% earlier. We are raising loan loss provisioning in FY13E from
55bps to 65bps given the increasing asset quality risks. Resultantly we cut earnings
by 3%/5% in FY12E and FY13E respectively. We would be watchful of impact on
sector headwinds on the bank’s earnings.
Action: Better managed than peers
BOB has been reporting better numbers than PSU peers and therefore warrants a
premium. The stock trades at 1.5x FY12E book and 7.5x FY12E earnings. We
maintain our PT of Rs1050 and Buy rating on the stock considering relatively
stronger asset quality trends among PSU banks.
Valuation: Maintain Buy, PT Rs1050
We are rolling over PT to mid-FY13E and value the stock using residual income
method at Rs1050, which implies 1.5x FY13E book and 7.5x FY13E earnings.
Bank of Baroda
Bank of Baroda (BoB) is a public sector bank with a presence across India:
Maharashtra (11.9% of BoB's network), Gujarat (23.9%), Uttar Pradesh and
Uttaranchal (22.1%), Rajasthan (12%) and South India (11.3%). It has a network
of 3,029 domestic branches and 1,183 ATMs.
Statement of Risk
We believe a sustained economic slowdown could impact the banking and
finance sector on several fronts: lead to a slowdown in credit, increase NPL risk,
impact fee income, and exert pressure on NIM.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
Bank of Baroda
B etter than peers
Event: Q1 results largely in line
Q1FY12 net profit of Rs10.3bn (+20%y/y) was ahead of UBS-e of Rs10bn,
however margin decline of 30bps was sharper than expected. Other key highlights:
1) loans grew 25%y/y, 1.6% q/q, 2) LLP low at 23bp, Provision coverage declined
to 82.5%, 3) core fee income grew 36% y/y, 4) Domestic casa stable at 34%, 5)
incremental slippage of 1% (annualised), 6) loan approvals declined 70% y/y.
Impact: Cutting margins and raising LLP
We are building in 19% loan CAGR for FY12-13E and cut margin expectation to
2.85% from 2.95% earlier. We are raising loan loss provisioning in FY13E from
55bps to 65bps given the increasing asset quality risks. Resultantly we cut earnings
by 3%/5% in FY12E and FY13E respectively. We would be watchful of impact on
sector headwinds on the bank’s earnings.
Action: Better managed than peers
BOB has been reporting better numbers than PSU peers and therefore warrants a
premium. The stock trades at 1.5x FY12E book and 7.5x FY12E earnings. We
maintain our PT of Rs1050 and Buy rating on the stock considering relatively
stronger asset quality trends among PSU banks.
Valuation: Maintain Buy, PT Rs1050
We are rolling over PT to mid-FY13E and value the stock using residual income
method at Rs1050, which implies 1.5x FY13E book and 7.5x FY13E earnings.
Bank of Baroda
Bank of Baroda (BoB) is a public sector bank with a presence across India:
Maharashtra (11.9% of BoB's network), Gujarat (23.9%), Uttar Pradesh and
Uttaranchal (22.1%), Rajasthan (12%) and South India (11.3%). It has a network
of 3,029 domestic branches and 1,183 ATMs.
Statement of Risk
We believe a sustained economic slowdown could impact the banking and
finance sector on several fronts: lead to a slowdown in credit, increase NPL risk,
impact fee income, and exert pressure on NIM.
No comments:
Post a Comment