Bank of Baroda Q4 result preview: Analysts see weak operational performance

Bank of Baroda Q4 result preview: Citi expects BoB's net profit to fall 5 per cent sequentially to Rs 2,098 crore. It also expects PPoP to decline 6 per cent QoQ to Rs 4,138.3 crore

Bank of Baroda Q4 preview: Bank of Baroda (BoB) is scheduled to report its March quarter result on Friday, May 13, amid expectations of a weak operational performance and lagging loan growth.

The lender had reported net loss of Rs 1,047 crore in the year-ago period, and a profit of Rs 2,197 crore in Q3FY22. Net interest income (NII), meanwhile, was Rs 7,107 crore in Q4FY21, and Rs 8,552 crore in Q3FY22, and pre-provision profit (PPoP) was Rs 6,266 crore and Rs 5,483 crore in Q4FY21 and Q3FY22, respectively.

Here's what leading brokerages expect:
 

Citi

The global brokerage expects BoB’s net profit to fall 5 per cent sequentially to Rs 2,098 crore. It also expects PPoP to decline 6 per cent QoQ , but rise 31 per cent YoY, to Rs 4,138.3 crore.  Loan growth, too, is seen at 8 per cent YoY/5 per cent QoQ at Rs 7.65 trillion. 

Credit Suisse

Analysts here expect a modest growth of 3 per cent YoY and 7 per cent QoQ in NII at Rs 11,358.5 crore for the quarter under review.  Net profit and PPoP, meanwhile, are projected at Rs 2,271.2 crore and Rs 5,384.6 crore, respectively.

Morgan Stanley

The brokerage expects PAT of Rs 1,968.6 crore in Q4FY22, along with sequential growth in loans at 3.5 per cent QoQ (as against a 5.5 per cent jump in Q3FY22).
 

Margin, it says, should be a touch lower at 2.97 per cent relative to 3.02 per cent sequentially. NII may grow over 15 per cent YoY (down 1 per cent QoQ) to Rs 8,196.6 crore.  
 

On asset quality, it expects slippages of Rs 4,000 crore (2.3 per cent of loans, annualized) versus Rs 3,500 crore last quarter. Credit cost could remain broadly stable at 113bps.

Nomura

Loan growth will likely pick up versus prior quarter but could still remain lower than sector average. Overall loan growth is seen at 7 per cent YoY and 3.2 per cent QoQ at Rs 7.5 trillion. 

It expects slippages to remain flat, but provisions will be higher sequentially at Rs 2,720 crore to reduce net NPLs.

Net profit is estimated at Rs 2,337 crore, NII at Rs 8,790 crore, and PPoP at Rs 5,784 crore. 

Motilal Oswal Financial Services

The domestic brokerage has baked-in around 25 per cent YoY growth in NII at Rs 8,860 crore, but has factored-in nearly 8 per cent YoY decline in operating profit at Rs 5,780 crore. 
 

Besides, a sequential increase of 13 per cent in provision to Rs 2,830 crore (from Rs 2,510 crore) could limit PAT at Rs 2,220 crore.

The brokerage expects loan growth of 7 per cent YoY, and deposit growth of 3.5 per cent YoY.

Gross non-performing asset (GNPA) ratio is seen at 7.1 per cent vs 7.3 per cent QoQ, and NNPA ratio is seen at 2.2 per cent vs 2.3 per cent QoQ.

JM Financial

The brokerage sees around 24 per cent YoY/3 per cent QoQ growth in NII at Rs 8,800.4 crore, while PPoP is seen at Rs 5,455 crore, down 13 per cent YoY/0.5 per cent QoQ. 

Net profit, too, could slip 2.5 per cent quarter-on-quarter at Rs 2,142.2 crore. 

The brokerage has the most bullish loan growth projection of 8.5 per cent YoY and around 5 per cent QoQ at Rs 7.6 trillion, while deposits may grow 6 per cent YoY and 5 per cent QoQ at Rs 10.25 trillion.