Bank of Baroda Q2 Review - Strong Pickup In Loan Growth; Lower Provisions Drive Earnings: Motilal Oswal
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Motilal Oswal Report
Bank of Baroda reported a strong earnings performance, supported by lower provisions and higher other income, even as net interest income remained under pressure.
Domestic net interest margin moderated by 22 basis points QoQ to 2.9%. business trends, however, improved, with advances growing at 4% QoQ.
Asset quality witnessed an overall improvement. Fresh slippage stood at Rs 52.2 billion (annualised slippage rate at 3%).
However, Bank of Baroda's higher write-offs and recoveries resulted in an improvement in asset quality.
The gross/net non performing asset ratio declined by 75 bps/20 bps QoQ, while provision coverage ratio was stable ~67%.
Total special mention account-I/II (over Rs 50 million) declined to 1.87%, while the restructured book stands at Rs 205 billion (2.95% of loans).
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