Motilal Oswal: Bank Of Baroda Posts Operationally Weak Q1 Performance; Uncertain Asset Quality Outlook
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Motilal Oswal Report
Bank of Baroda reported weak operating performance, with subdued margins and revenue growth; elevated provisions led to net loss of Rs 8.6 billion.
On the asset quality front, slippages were trending lower, primarily on account of the asset classification benefit; however, non-performing loan formation in the international portfolio stood elevated.
The watchlist size increased further to Rs 130 billion (1.9% of loans). The moratorium book declined to 21.4% and remains a key overhang on asset quality.
Furthermore, Common Equity Tier-1 declined to approximately 9.1%, which raises concerns regarding the bank’s capitalisation levels and its ability to absorb further loss as we expect credit cost to remain elevated.
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