Bank of Baroda begins post-merger innings on a strong wicket; stock rises

Despite a few misses, the Street seems to be pleased with Bank of Baroda’s (BoB’s) consolidated numbers. The BoB stock has risen 7.5 per cent in a week. While the merger with Dena Bank and Vijaya Bank was concluded mostly in line with the management’s guidance, it does throw up fresh challenges for the bank.

First, reserves of the two banks were marked down by 86 per cent and 24 per cent, respectively, to synchronise the asset quality and accounting practices (particularly retirement-related benefits), with BoB.

This has eaten into the capital adequacy of the consolidated bank, which fell to 9.7 per