BoB tumbles over 9% in two sessions

Bank of Baroda fell 1.37% to Rs 140.25 at 11:55 IST on BSE, extending yesterday's losses triggered by the bank's dismal Q4 results.

The result was announced after market hours on Friday, 13 May 2016. The Bank of Baroda (BoB) stock fell 8.23% to Rs 142.20 on Monday, 16 May 2016. The stock has fallen 9.49% in two sessions from Rs 154.95 on Friday, 13 May 2016.

Meanwhile, the BSE Sensex was up 159.69 points, or 0.62%, to 25,812.92.

On BSE, so far 23,000 shares were traded in the counter, compared with an average volume of 11.72 lakh shares in the past one quarter. The stock hit a high of Rs 629.80 and a low of Rs 615.80 so far during the day. The stock hit a 52-week high of Rs 635.35 on 13 May 2016. The stock hit a 52-week low of Rs 396.50 on 25 August 2015. The stock had underperformed the market over the past one month till 16 May 2016, falling 6.72% compared with 0.10% rise in the Sensex. The scrip had also underperformed the market in past one quarter, rising 8.55% as against Sensex's 10.61% rise.

The large-cap company has an equity capital of Rs 460.83 crore. Face value per share is Rs 2.

BoB reported net loss of Rs 3230.14 crore in Q4 March 2016 compared with net profit of Rs 598.35 crore in Q4 March 2015. The result was announced after market hours on Friday, 13 May 2016. BoB said that its asset quality has stabilized and that the management expects the bank to return to black during the current financial year. The state-run bank posted a massive net loss of Rs 5395.55 crore in the year ended 31 March 2016 (FY 2016) as against a net profit of Rs 3398.43 crore in the year ended 31 March 2015 (FY 2015). The reason for the massive net loss was due to additional provisions that the state-run bank made with respect to certain loans in Q3 December 2015 and Q4 March 2016 as a part of an asset quality review (AQR) being carried out by the Reserve Bank of India for the banking sector as a whole. The provision coverage ratio (PCR) of the bank improved to 60.09% as on 31 March 2016 from 52.7% as on 31 December 2015. The bank proposes to maintain provision coverage ratio (PCR) above 60% in FY 2017.

The total restructured standard assets of the bank dropped to Rs 13735 crore on 31 March 2016 from Rs 17135 crore as on 31 December 2015. In a post result conference call, BoB's management said that it has high performance confidence for Rs 7300 crore of restructured advances. The SMA 2 category (interest payment overdue by 60 days) advances of the bank stands at Rs 13153 crore at end March 2016, with high confidence for Rs 5750 crore of advances. Thus, the bank has about balance Rs 6434 crore of restructured advances and Rs 7394 crore of SMA 2 category advance under watch list together at Rs 13828 crore. On the basis of accounts under watchlist, the bank expects fresh slippages likely to be around Rs 15000 crore for FY 2017 lower than Rs 26863 crore in FY 2016. The bank is expecting strong recoveries and upgradation of Rs 10000 crore in FY 2017. The bank has deployed about 1,000 employees to focus on recoveries across the country.

The bank expects to improve domestic net interest margins (NIMs) to 3% in the year ending March 2017 (FY 2017) from 2.6% in the year ended 31 March 2016 (FY 2016). It proposes to improve overseas NIM to 1.25% in the immediate term and 1.75% in the medium term. The bank expects return on equity (RoE) at 7-8% for FY 2017 and 14-15% in the year ending March 2018 (FY 2018).

The Government of India held 59.24% in Bank of Baroda (as per the shareholding pattern as on 31 March 2016).

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