Relief rally for Bank of Baroda- Is it justified? :: BL

Please Share::

�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��

��

-->

Bank of Baroda reported a huge loss of ₹3,342 crore in the latest December quarter, due to sharp rise in provisioning for bad loans. The fresh slippages of about ₹15,000 crore took the bank’s gross non-performing assets, as a percentage of loans, to 9.6 per cent in the December quarter from 5.5 per cent in the September quarter. But the bank’s poor performance was to a large extent expected, given that many state-owned lenders reported similar spikes in bad loans in the December quarter, following the RBI’s asset quality review. What was surprising though was the sharp rally in the stock, after the weak results.

The over 20 per cent jump in the stock was mainly due to the bank’s decision to recognise all its bad loans in the December quarter itself, thus taking all the pain at one go. The new MD and CEO’s focus on asset quality, rebalancing of portfolio and use of technology are also seen as key triggers for the bank’s growth over the next one to two years.