PSU banks decline after Bank of Baroda's weak Q3 results

Eighteen PSU bank stocks declined by 0.83% to 12.12% at 12:25 IST on BSE after PSU bank major, Bank of Baroda announced weak Q3 results.

Meanwhile, the S&P BSE Sensex was down 369.77 points or 1.25% at 29,312.

Among shares of public banks, Corporation Bank (down 1.79%), State Bank of India (down 4.32%), Union Bank of India (down 3.91%), Punjab National Bank (down 4.37%), Bank of India (down 4.33%), IDBI Bank (down 2.4%), Indian Bank (down 6.7%), UCO Bank (down 2.33%), Allahabad Bank (down 4.29%), Syndicate Bank (down 4.1%), Andhra Bank (down 4.38%), Dena Bank (down 2.07%), Canara Bank (down 3.62%), Bank of Maharashtra (down 1.43%), Central Bank of India (down 2.31%), Vijaya Bank (down 2.15%), and Punjab & Sind Bank (down 0.83%) edged lower.

Bank of Baroda slumped 12.12% after net profit declined 68.12% to Rs 333.98 crore on 11.16% growth in total income to Rs 11808.34 crore in Q3 December 2014 over Q3 December 2013. Bank of Baroda's (BOB) net profit during the quarter was dragged down by sharp surge in provisions and spike in tax liability. The Q3 result was announced during market hours today, 30 January 2015.

The bank's provisions and contingencies jumped 65.67% to Rs 1262.25 crore in Q3 December 2014 over Q3 December 2013. Non performing loan provisioning coverage stood at 62.37% as on 31 December 2014.

BOB's tax liability jumped 99.56% at Rs 742.81 crore in Q3 December 2014 over Q3 December 2013. Tax expense in Q3 December 2014 includes an amount of Rs 374.86 crore levied by Dubai Income Tax Authorities, pertaining to earlier years. In addition, penalty of Rs 38.44 crore was also levied by the tax authority, which is included in other operating expenses, BOB said.

BOB's ratio of gross non-performing assets (NPAs) to gross advances stood at 3.85% as on 31 December 2014 compared with 3.32% as on 30 September 2014 and 3.32% as on 31 December 2013. The ratio of net NPAs to net advances stood at 2.11% as on 31 December 2014 compared with 1.74% as on 30 September 2014 and 1.88% as on 31 December 2013.

BOB's Capital Adequacy Ratio (CAR) as per Basel III stood at 12.42% as on 31 December 2014 compared with 12.19% as on 30 September 2014 and 12.01% as on 31 December 2013.

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