Bank of Baroda (BoB) unexpectedly reported that
accumulation of bad loans in the fourth quarter fell to the lowest level in a
year, sending the stock higher by 17%, even as profit declined 48% because the
state-run lender set aside more money to cover bad loans.
Net profit fell to
Rs.598.35 crore in the quarter ended 31 March from Rs.1,157.27 crore in the
year-ago period. The Bank of Baroda stock rose to Rs.169.5 on BSE.
Fresh slippages, or good loans turned bad, in
the fourth quarter was at Rs.1,359 crore, the lowest since the quarter ended
March 2014. The lender reported Rs.3,042 crore in slippages in the preceding
three months. The arrest in slippages also surprised the bank’s management.
Shares of Bank of Baroda has moved higher by 12%
to Rs 163 on the NSE after the state-owned bank said that the bank's assets
quality improved during the quarter ended March 2015 on a sequential basis.
The percentage of gross and net non-performing
assets ratios stood at 3.72% and 1.89% during the March 2015 quarter from 3.85%
and 2.11% respectively in the December 2014 quarter, Bank of Baroda said in a
statement.
However, the bank’s
gross non-performing asset (NPA) improved to 3.72 percent from 3.85 percent in
the last quarter. Its net NPA was at 1.89 percent compared to 2.11
percent (Q-o-Q).
The net profit during the quarter under review,
however, declined sharply by 48% year on year at Rs 598 crore on account of
higher provisioning for bad loans and flat net interest income. The bank had
reported profit of Rs 1,157 crore in the year-ago quarter.
The bank’s net interest income (interest earned
minus interest expended) grew 1.5% to Rs 3,172 crore from Rs 3,125 crore in the
year-ago quarter. The provisions went up 58% to Rs 1,818 crore during the March
quarter compared to Rs 1,153 crore a year ago.
On Friday, the stock hit
a 52-week low of Rs 143 on the NSE ahead of Q4 results. A combined 1.61 million
shares changed hands on the counter on the NSE and BSE.
The board has
recommended a dividend at Rs 3.20 per equity share of the face value of Rs 2 each
fully paid-up for FY15.
To earn rich returns in futures precise stock futures tips of market experts can be helpful.
ReplyDelete