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Bank of Baroda Q4 Results Review - Earnings Momentum Robust; Margin Expands 16 Basis Point QoQ: Motilal Oswal

Net interest margins expand 16 bps QoQ; provision coverage ratio stable at 77%.

<div class="paragraphs"><p>Bank of Baroda headquarters in Mumbai. (Source: BQ Prime)</p></div>
Bank of Baroda headquarters in Mumbai. (Source: BQ Prime)

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Motilal Oswal Report

Bank of Baroda reported a strong quarter as pre-provision operating profit grew 43% YoY, aided by higher other income and lower provisions. These resulted in strong earnings beat.

Business growth was healthy with loans rising 5.6% QoQ and margins expanding 16 basis point QoQ in Q4 FY23.

Bank of Baroda's asset quality improved as slippages remained controlled at Rs 27.4 billion, which coupled with healthy recoveries/upgrades resulted in gross non-performing asset/net non-performing asset ratio moderating to 3.8%/0.9%. provision coverage ratio was stable at ~77% in Q4 FY23.

Total special mention account I/II (more than Rs 50 million) was controlled at 32 bps of loans, while restructured book moderated to 1.5% of loans during the quarter.

We maintain our earnings estimate on the stock and estimate FY25 return on asset/ return on equity of 1.1%/16.4%.

Click on the attachment to read the full report:

Motilal Oswal Bank of Baroda Q4FY23 Results Review.pdf
Opinion
Bank Of Baroda Q4 Results: Net Profit Jumps 168%, Asset Quality Improves

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