Bank of Baroda, 1Q FY 2014

7/27/2019 Bank of Baroda, 1Q FY 2014

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Please refer to important disclosures at the end of this report 1

Particulars (` cr) 1QFY14 4QFY13 % chg (qoq) 1QFY13 % chg (yoy)NII 2,889 2,814 2.7 2,798 3.3Pre-prov. profit 2,452 2,182 12.4 2,253 8.8

PAT 1,168 1,029 13.5 1,139 2.5Source: Company, Angel Research

Bank of Baroda reported a moderate operating performance for the 1QFY2014.Its NII grew by 3.3% yoy but Non-interest income growth of 59.6% yoy (aided bytreasury gains of `409cr as compared to `82cr in 1QFY2013) enabled the bankto register a pre-provisioning profit growth of 8.8% yoy. The asset qualitydeteriorated significantly during the quarter as Gross and Net NPA levelsincreased by 22.3% and 29.8% qoq, respectively. Provisioning expenses grew by14.0% yoy and hence, the bottom-line grew by a marginal 2.5% yoy. Domestic NIM declines qoq; Asset quality pressures continue:During 1QFY2014,the bank registered a moderate 10.0% yoy growth in its domestic loan book(aided by growth in SME advances), while its international loan book grew by17.7% yoy (aided by INR depreciation). Domestic CASA deposits witnessed agrowth of 12.8% yoy, however as the banks total domestic deposits grew at arelatively healthy pace, the domestic CASA ratio declined by 106bp yoy to 31.2%.The domestic NIM for the bank declined by 9bp sequentially at 2.8%. Its overseasNIM declined by 17bp qoq to 1.3%. Consequently, the banks overall NIMdeclined by 10bp qoq to 2.4%. The bank reported a healthy performance on thenon-interest income (excluding treasury) front, with a growth of 19.2% yoy, onaccount of a robust increase of 40.9% yoy in recoveries and 31.4% yoy growth in

profit on exchange transactions. During the quarter, the annualized slippage ratiofor the bank remained elevated at 2.6%, compared to 2.9% in 4QFY2013 and1.8% in 1QFY2013. Of the total slippages of `1,965cr, four chunky accountscontributed around `800cr. The Gross NPA ratio increased by 59bp qoq to 3.0%, whilethe Net NPA increased by 41bp qoq to 1.7%. The PCR declined by 460bp qoq to63.6%. Going ahead, the Management exhibited caution on asset quality for2QFY2014 and expects to contain slippages and improve asset quality from 3QFY2014onwards. Additionally, the bank restructured loans worth ~`1,996cr, during the quarter,taking its total outstanding restructured book to `25,155cr. Going ahead, as per theManagement, the restructuring pipeline remains sizable at ~`2,000cr.

Outlook and valuation: Earlier, BOB had outperformed its peers on the assetquality front, however, over the last three quarters, it has witnessed higher assetquality pressures. Having said that, even after the recent asset quality pain

witnessed by the bank, NPA ratios for the bank remain better than other largePSUs. But, in any case, we believe that the asset quality pressures for the bankingsector are unlikely to abate as quickly as was expected earlier, as we take intoaccount recent macro developments amidst an overall weak macro environment.Hence, we recommend Neutral on the stock.Key financials (Standalone)Y/E March (` cr) FY2012 FY2013 FY2014E FY2015ENII 10,317 11,315 12,189 13,851% chg 17.2 9.7 7.7 13.6

Net profit 5,007 4,481 4,030 5,255% chg 18.0 (10.5) (10.1) 30.4

NIM (%) 2.6 2.3 2.2 2.3

EPS (`) 121.4 106.0 95.4 124.4P/E (x) 4.3 4.9 5.4 4.1

P/ABV (x) 0.8 0.7 0.7 0.6

RoA (%) 1.2 0.9 0.7 0.8

RoE (%) 20.6 15.1 12.0 14.2

Source: Company, Angel Research, CMP as of August 3, 2013

NEUTRALCMP `488

Target Price -

Investment Period -

S tock Info

Sector

B loomberg Code

S hareholding Pattern (%)

P romoters 55.4

MF / Banks / Indian Fls 19.0

FII / NR Is / OCBs 15.9

Indian P ublic / Others 9.8

Abs . (% ) 3m 1yr 3yr

S ens ex (2.9) 11.3 6.0

BOB (31.4) (25.7) (36.2)

Banking

Market Cap (`cr) 20,545

Beta 1.0

52 Week High / Low 900/483

Avg. Daily Volume 135,499

Face Value (`) 10

BSE Sens ex 19,164

Nifty 5,678

R euters Code BOB.BO

BOB@IN

Vaibhav Agrawal022 3935 7800 Ext: 6808

[email protected]

Sourabh Taparia022 3935 7800 Ext: 6872

[email protected]

Harshal Patkar022 3935 7800 Ext: 6847

[email protected]

Bank of BarodaPerformance Highlights

1QFY2014 Result Update | Banking

Aug 5, 2013


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Bank of Baroda | 1QFY2014 Result Update

August 5, 2013 2

Exhibit 1:1QFY2014 performance (Standalone)Particulars (` cr) 1QFY14 4QFY13 % chg (qoq) 1QFY13 % chg (yoy) FY2013 FY2012 % chg (yoy)Interest earned 9,487 9,072 4.6 8,558 10.9 35,197 29,674 18.6- on Advances / Bills 6,669 6,516 2.3 6,427 3.8 25,867 22,369 15.6- on investments 2,101 1,984 5.9 1,732 21.3 7,483 6,185 21.0

- on balance with RBI & others 512 413 23.9 288 77.8 1,443 837 72.3

- on others 206 158 30.3 112 84.5 403 282 42.9

Interest Expended 6,598 6,258 5.4 5,760 14.6 23,881 19,357 23.4Net Interest Income 2,889 2,814 2.7 2,798 3.3 11,315 10,317 9.7Other income 1,231 1,191 3.3 771 59.6 3,631 3,422 6.1Other income excl. treasury 821 903 (9.0) 689 19.2 3,013 2,816 7.0

- CEB 315 376 (16.4) 276 14.1 1,257 1,226 2.6

- Treasury Income 409 288 42.0 82 402.1 617 607 1.7

- Recoveries from written off a/cs 117 130 (10.2) 83 40.9 352 328 7.3

- Others 390 396 (1.6) 330 17.9 1,404 1,261 11.3

Operating income 4,120 4,005 2.9 3,569 15.4 14,946 13,739 8.8Operating expenses 1,668 1,823 (8.5) 1,316 26.8 5,872 5,109 14.9- Employee expenses 1,014 1,139 (11.0) 761 33.2 3,450 2,986 15.5

- Other Opex 654 684 (4.3) 555 17.9 2,422 2,123 14.1

Pre-provision Profit 2,452 2,182 12.4 2,253 8.8 9,074 8,630 5.1Provisions & Contingencies 1,033 1,636 (36.8) 906 14.0 4,243 2,605 62.9- Provisions for NPAs 673 1,097 (38.6) 812 (17.1) 3,449 1,865 84.9

- Provisions for Standard adv. 228 220 3.4 3 6,722.2 394 448 (12.1)

- Provisions for Investments 118 211 (44.0) 76 55.7 225 236 (4.6)

- Other Provisions 14 107 (87.2) 15 (7.2) 399 291 37.1

PBT 1,418 546 159.6 1,347 5.3 4,831 6,026 (19.8)Provision for Tax 250 (483) (151.9) 208 20.3 351 1,019 (65.6)

PAT 1,168 1,029 13.5 1,139 2.5 4,481 5,007 (10.5)Effective Tax Rate (%) 17.7 (88.3) 10597bp 15.4 220bp 7.3 16.9 (965)bp

Source: Company, Angel Research

Exhibit 2:1QFY2014 Actual vs. EstimatesParticulars (` cr) Actual Estimates Var. (%)NII 2,889 2,946 (1.9)

Non-interest income 1231 861 42.9

Operating income 4,120 3,807 8.2Operating expenses 1,668 1,472 13.3

Pre-prov. profit 2,452 2,335 5.0Provisions & cont. 1,033 894 15.5

PBT 1,418 1,441 (1.6)

Prov. for taxes 250 303 (17.3)

PAT 1,168 1,138 2.6Source: Company, Angel Research


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August 5, 2013 3

Exhibit 3:1QFY2014 performance analysis (Standalone)Particulars 1QFY14 4QFY13 % chg (qoq) 1QFY13 % chg (yoy)Balance sheetAdvances (` cr) 321,314 328,186 (2.1) 285,813 12.4Deposits (`cr) 467,026 473,883 (1.4) 382,739 22.0

Credit-to-Deposit Ratio (%) 68.8 69.3 (45)bp 74.7 (588)bp

Current deposits (`cr) 34,669 35,678 (2.8) 24,214 43.2

Saving deposits (` cr) 83,530 84,303 (0.9) 75,562 10.5

CASA deposits (`cr) 118,199 119,981 (1.5) 99,776 18.5

Global CASA ratio (%) 25.3 25.3 (1)bp 26.1 (76)bp

Domestic CASA ratio (%) 31.2 30.4 79bp 32.2 (106)bp

CAR (%) 12.7 13.3 (60)bp 13.7 (104)bp

Tier 1 CAR (%) 9.7 10.1 (45)bp 10.1 (45)bp

Profitability Ratios (%)Dom. Cost of deposits 7.2 7.4 (18)bp 7.3 (7)bp

Dom. Yield on advances 11.2 11.3 (18)bp 11.7 (50)bp

Dom. Yield on investments 7.9 7.9 8bp 7.8 10bp

Dom. Reported NIM 2.8 2.9 (9)bp 3.2 (38)bp

Cost-to-income ratio 40.5 45.5 (503)bp 36.9 362bp

Asset qualityGross NPAs (`cr) 9,763 7,983 22.3 5,319 83.5

Gross NPAs (%) 3.0 2.4 59bp 1.8 115bp

Net NPAs (` cr) 5,441 4,192 29.8 1,845 195.0

Net NPAs (%) 1.7 1.3 41bp 0.7 104bp

PCR incl. tech. w/offs (%) 63.6 68.2 (460)bp 79.0 (1538)bp

Annualized slippage ratio (%) 2.6 2.9 (31)bp 1.8 82bp

NPA prov. to avg. assets (%) 0.5 0.8 (35)bp 0.7 (23)bp


Advance growth remains moderate

During 1QFY2014, the bank registered a moderate 10.0% yoy growth in its

domestic loan book (aided by healthy SME lending), while the international loan

book grew at a healthy pace of 17.7% yoy (aided by INR depreciation).Within

domestic advances, advances to SMEs witnessed a strong growth of 37.0%, while

Retail advances grew at a healthy pace of 16.0% yoy; agri advances de-grew by

2.3% yoy. For FY2014, the Management has guided for advance growth rate to be

150-200bp higher than the industry growth rate.

Growth in domestic saving deposits remained moderate at 10.4% yoy, while

growth in domestic current deposits came in at a healthy 24.2% yoy. Domestic

CASA deposits witnessed a growth of 12.8% yoy. However as the banks total

domestic deposits grew at a relatively healthy pace, the domestic CASA ratio

declined by 106bp yoy to 31.2%.

On a global basis, current deposits witnessed a strong growth of 43.2% yoy, which

coupled with a moderate growth of 10.6% yoy in saving deposits, led to an 18.5%yoy growth in CASA deposits. Global CASA ratio declined by 76bp yoy (flat

sequentially) to 25.3%, as growth in aggregate deposits was higher at

22.0% yoy.


4/12


August 5, 2013 4

Exhibit 4:Moderate loan book growth continues


Exhibit 5:Domestic CASA ratio lower yoy


Domestic NIM declines 9bp qoq

During 1QFY2014, the banks domestic yield on advances declined by 18bp qoq

to 11.2% (on account of interest reversal on higher slippages), but the domestic

cost of deposits decreased by 18bp qoq to 7.2%. Domestic NIM for the bank

declined by 9bp sequentially at 2.8%. The banks overseas NIM declined by 17bp

qoq to 1.3%, due to a 19bp qoq decline in overseas yield on advances to 2.9%

even as the overseas cost of deposits declined by 17bp qoq to 1.3%. The global

NIM (overall NIM) for the bank declined by 10bp qoq to 2.4%.

Exhibit 6:Domestic YoA lowersequentially by 18bp...


Exhibit 7:..hence Domestic NIM declines by 9bp qoq


Healthy increase in Non-interest income (excl treasury) on higher

recoveries and higher growth in profit on exchange

The bank reported a healthy performance on the non-interest income (excluding

treasury) front, with a growth of 19.2% yoy to `821cr, on account of a robust

increase of 40.9% yoy in recoveries and 31.4% yoy growth in profit on exchange

transactions. Recoveries from written-off accounts came in at `117cr and exchange

profits came in at `252cr. Fee income grew at a moderate pace of 14.1% yoy to

`315cr. Trading profits (treasury gains) increased four times to `409cr compared

to `82cr in 1QFY2013. Hence, the overall non-interest income for the bank

increased by 59.6% yoy to `1,231cr.

23.0

22.2

14.8

14.2

12.4

22.3

24.0

18.8

23.1

22.0

74.7

71.672.2

69.3 68.8

64.0

66.0

68.0

70.0

72.0

74.0

76.0

-

7.0

14.0

21.0

28.0

1QFY13 2QFY13 3QFY13 4QFY13 1QFY14

Adv. yoy chg (%) Dep. yoy chg (%) CDR (%, RHS)

32.2

31.7

32.2

30.4

31.2

11.611.7

9.5

11.712.8

-

10.0

20.0

29.0

30.0

31.0

32.0

33.0


Domestic CASA ratio CASA yoy growth (%, RHS)

11.6511.75

11.5711.33

11.15

9.50

10.50

11.50


(%)

3.22 3.23

3.08

2.93

2.84

2.50

2.70

2.90

3.10

3.30


(%)


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August 5, 2013 5

Exhibit 8:Healthy growth in non-interest income excluding treasuryParticulars (`cr) 1QFY14 4QFY13 % chg (qoq) 1QFY13 % chg (yoy)CEB 315 376 (16.4) 276 14.1

Treasury 409 288 42.0 82 402.1

Forex 252 247 2.2 192 31.4

Recoveries 117 130 (10.2) 83 40.9

Others 137 130 5.3 138 (0.7)

Other income 1,231 1,172 5.0 771 59.6Other income excl. treasury 821 884 (7.1) 689 19.2


Asset quality pressure continues

The bank witnessed significant asset quality pressure during the quarter, as its

gross and net NPA levels increased sequentially by 22.3% and 29.8%, respectively.

The Annualized slippage ratio for the bank remained elevated at 2.6%, compared

to 2.9% in 4QFY2013 and 1.8% in 1QFY2013. Of the total slippages of `1,965cr,

four chunky accounts contributed around `800cr. The Gross NPA ratio increased

by 59bp qoq to 3.0%, while the Net NPA ratio increased by 41bp qoq to 1.7%.

The PCR for the bank declined by 460bp qoq to 63.6%. Going ahead, the

Management exhibited caution on asset quality for 2QFY2014 and expects to

contain slippages and improve asset quality from 3QFY2014 onwards.

During the quarter, the bank restructured loans worth ~`1,996cr. As of

1QFY2014, the total outstanding restructured book stands at `25,155cr, within

which the international restructured loan book stands at `4,213cr. Going ahead,

as per the Management, the restructuring pipeline for the bank would remain

sizable at ~`2,000cr.

Exhibit 9:NPA ratios higher sequentially


Exhibit 10:Slippages remain elevated


1.8

2.0

2.4

2.4

3.0

0.7

0.8

1.1

1.3

1.7

79.075.7

70.968.2

63.6

50.0

60.0

70.0

80.0

90.0

-

0.4

0.8

1.21.6

2.0

2.4

2.8

3.2


Gross NPAs (%) Net NPAs (%) PCR (%, RHS)

1.8

2.0

2.8

3.0

2.6

0.7

0.6 0.7

0.8

0.49

-

0.2

0.4

0.6

0.8

1.0

-

0.4

0.8

1.21.6

2.0

2.4

2.8

3.2


Slippages (%) Credit cost (%, RHS)


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August 5, 2013 6

Exhibit 11:Branch expansion slowed in 1QFY2014


Exhibit 12:Cost ratio improves sequentially


Investment arguments

Managements focus on channel improvement & CASA

The Management is focusing on new business, customers and technology

initiatives to further strengthen its operations and leverage its considerable

domestic footprint. The bank offers multiple service channels such as Baroda

Connect (Internet Banking), Phone Banking, Baroda Cash Management Services,

NRI Services and Depository Services. The bank has implemented an Integrated

Global Treasury Solution in its major overseas territories. The bank has also started

providing online institutional trading to its corporate customers. This has aided the

bank to register a healthy CASA at a 20.4% CAGR over FY200813 and a decline

in opex-to-average assets from 2.0% in FY2007 to 1.2% in 1QFY2014.

Going forward, the bank has strong branch network expansion plans, which in our

view, augurs well for CASA market share gains. The bank opened 373 branches

during FY2013 (lower than guidance of 582) and aims to open another 625

branches in FY2014, which in our view, should help the bank clock similar growth

levels as witnessed in the past, going ahead.

Credit market share gain, but now asset quality catching up with

peers

During FY2008-13, the bank clearly outpaced the sector in terms of credit growth,

by growing at a CAGR of ~25.0% vs 18.0% for the sector, thereby leading to

credit market share gains of ~160bp. Until 2QFY2013, the bank had been

outperforming on the asset quality front, quarter after quarter, as its Gross and Net

NPA ratios stood at 2.0% and 0.8% respectively, much lower than Gross and Net

NPA ratio of 4.0% and 2.1% for all large PSUs taken together. During the last

three quarters, the bank has witnessed higher asset quality pressures, as its NPA

ratios have increased 100bp over the same period (the increase is though lower

than what has been witnessed in the industry).

Going ahead, we believe that the asset quality pressures for the banking sector are

unlikely to abate as quickly as was expected earlier, as we take into account recent

macro developments amidst an overall weak macro environment.

3,913

4,021

4,134

4,276 4,289

3,600

3,750

3,900

4,050

4,200

4,350


36.9

35.4

38.7

45.5

40.5

1.2 1.1 1.2

1.4

1.2

-

0.5

1.0

1.5

25.0

31.0

37.0

43.0

49.0


Cost-to-income ratio (%) Opex to average assets (%, RHS)


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August 5, 2013 7

Outlook and valuation

Earlier, BOB had outperformed its peers on the asset quality front, however, over

the last three quarters, it has witnessed higher asset quality pressures. Having said

that, even after the recent asset quality pain witnessed by the bank, NPA ratios forthe bank remain better than other large PSUs. But, in any case, we believe that the

asset quality pressures for the banking sector are unlikely to abate as quickly as

was expected earlier, as we take into account recent macro developments amidst

an overall weak macro environment. Hence, we recommend Neutral on the stock.Exhibit 13:Key assumptionsParticulars (%) Earlier estimates Revised estimatesFY2014E FY2015E FY2014E FY2015ECredit growth 17.0 17.0 17.0 16.0

Deposit growth 12.0 12.0 7.0 12.0

CASA ratio 25.5 26.1 26.7 27.4

NIMs 2.2 2.3 2.2 2.3

Other income growth 0.9 13.8 2.1 10.5

Growth in staff expenses 14.0 13.0 17.5 10.0

Growth in other expenses 10.5 13.0 9.0 10.0

Slippages 1.8 1.4 2.3 1.5

Coverage ratio 71.0 72.5 64.5 67.0


Exhibit 14:Change in estimates

Particulars (` cr)FY2014E FY2015E

Earlierestimates Revisedestimates % chg Earlierestimates Revisedestimates % chgNII 12,623 12,189 (3.4) 14,539 13,851 (4.7)

Non-interest income 3,664 3,707 1.2 4,168 4,097 (1.7)

Operating income 16,287 15,896 (2.4) 18,707 17,947 (4.1)Operating expenses 6,692 6,775 1.2 7,562 7,453 (1.4)

Pre-prov. profit 9,595 9,121 (4.9) 11,145 10,495 (5.8)Provisions & cont. 2,710 3,747 38.3 1,888 2,533 34.2

PBT 6,885 5,373 (22.0) 9,257 7,961 (14.0)Prov. for taxes 1,790 1,343 (25.0) 3,147 2,706 (14.0)PAT 5,095 4,030 (20.9) 6,111 5,255 (14.0)



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August 5, 2013 8

Exhibit 15:P/ABV band

Source: Company, Angel Research;

Exhibit 16:Recommendation summaryCompany Reco. CMP(`) Tgt. price(`) Upside(%) FY2015EP/ABV (x) FY2015ETgt. P/ABV (x) FY2015EP/E (x) FY2013-15EEPS CAGR (%) FY2015ERoA (%) FY2015ERoE (%)AxisBk Buy 1,104 1,302 17.9 1.2 1.4 7.0 19.1 1.6 18.1

FedBk Neutral 350 343 (2.1) 0.8 0.8 6.7 2.9 1.0 12.3

HDFCBk Buy 631 745 18.1 3.0 3.5 14.0 26.3 1.9 22.8

ICICIBk* Buy 887 1,068 20.4 1.3 1.5 9.2 15.8 1.6 15.4

SIB Neutral 21 21 2.6 0.8 0.8 5.0 5.7 0.9 16.2

YesBk Neutral 308 321 4.2 1.3 1.4 6.2 16.9 1.3 22.8AllBk Neutral 67 66 (1.7) 0.3 0.3 2.2 12.6 0.6 12.4

AndhBk Reduce 58 51 (11.2) 0.4 0.4 3.5 (15.1) 0.5 10.0

BOB Neutral 488 488 0.1 0.5 0.6 3.9 8.3 0.8 14.2BOI Neutral 170 174 2.3 0.4 0.4 2.7 16.2 0.7 13.9

BOM Neutral 40 40 0.0 0.4 0.5 3.1 10.0 0.6 15.3

CanBk Neutral 242 242 (0.0) 0.4 0.4 2.8 15.4 0.8 14.2

CentBk Reduce 57 52 (8.2) 0.6 0.5 3.6 40.1 0.5 12.8

CorpBk Neutral 280 288 2.9 0.3 0.4 2.9 2.3 0.7 13.5

DenaBk Neutral 47 46 (0.6) 0.3 0.3 2.2 (3.3) 0.6 13.2

IDBI# Neutral 60 61 1.9 0.3 0.4 2.7 25.1 0.8 13.3

IndBk Neutral 70 72 2.1 0.3 0.3 2.1 (4.2) 0.8 12.4

IOB Neutral 40 41 3.6 0.3 0.3 2.6 57.5 0.5 10.5

J&KBk Neutral 1,099 1,123 2.1 0.8 0.9 5.4 (3.5) 1.3 16.3

OBC Neutral 137 143 4.5 0.3 0.3 2.2 17.0 0.8 12.9

PNB Neutral 524 546 4.2 0.5 0.5 3.2 10.8 1.0 15.7

SBI* Accumulate 1,681 1,930 14.8 0.9 1.1 5.9 17.5 1.0 17.0

SynBk Neutral 75 77 3.0 0.4 0.4 3.2 (16.0) 0.6 12.8

UcoBk Neutral 58 58 0.9 0.5 0.6 3.7 66.4 0.6 13.5

UnionBk Neutral 117 119 2.0 0.4 0.4 2.9 6.2 0.6 13.4

UtdBk Neutral 33 34 2.3 0.2 0.3 1.7 54.6 0.6 14.7

VijBk Neutral 38 36 (3.4) 0.4 0.4 4.2 (0.4) 0.4 9.8

Source: Company, Angel Research; Note:*Target multiples=SOTP Target Price/ABV (including subsidiaries), #Without adjusting for SASF

0

200

400

600

800

1,000

1,200

1,4001,600

1,800

Apr-04

Oct-04

Apr-05

Oct-05

Apr-06

Oct-06

Apr-07

Oct-07

Apr-08

Oct-08

Apr-09

Oct-09

Apr-10

Oct-10

Apr-11

Oct-11

Apr-12

Oct-12

Apr-13

Oct-13

Price (`) 0.5x 0.8x 1.1x 1.4x 1.7x


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August 5, 2013 9

Company Background

Bank of Baroda (BoB) is the second-largest public sector bank in India, with a

balance sheet size of ~`5.5lakh cr. The bank has a network of ~4,300 domestic

branches and 3,000 ATMs, mainly in western India (~42% of total branch

network). The bank has a strong presence overseas, with more than 30% of its

advances coming from overseas branches.


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August 5, 2013 10

Income statement (Standalone)

Y/E March (` cr) FY10 FY11 FY12 FY13 FY14E FY15ENII 5,939 8,802 10,317 11,315 12,189 13,851- YoY Growth (%) 15.9 48.2 17.2 9.7 7.7 13.6Other Income 2,806 2,809 3,422 3,631 3,707 4,097- YoY Growth (%) 1.8 0.1 21.8 6.1 2.1 10.5

Operating Income 8,746 11,612 13,739 14,946 15,896 17,947- YoY Growth (%) 11.0 32.8 18.3 8.8 6.4 12.9

Operating Expenses 3,811 4,630 5,159 5,947 6,775 7,453- YoY Growth (%) 6.6 21.5 11.4 15.3 13.9 10.0

Pre - Provision Profit 4,935 6,982 8,581 8,999 9,121 10,495- YoY Growth (%) 14.6 41.5 22.9 4.9 1.4 15.1

Prov. & Cont. 697 1,331 2,555 4,168 3,747 2,533- YoY Growth (%) (27.5) 90.9 91.9 63.1 (10.1) (32.4)

Profit Before Tax 4,238 5,650 6,026 4,831 5,373 7,961- YoY Growth (%) 26.8 33.3 6.6 (19.8) 11.2 48.2

Prov. for Taxation 1,180 1,409 1,019 351 1,343 2,706- as a % of PBT 27.8 24.9 16.9 7.3 25.0 34.0

PAT 3,058 4,242 5,007 4,481 4,030 5,255- YoY Growth (%) 37.3 38.7 18.0 (10.5) (10.1) 30.4

Balance sheet (Standalone)

Y/E March (` cr) FY10 FY11 FY12 FY13 FY14E FY15EShare Capital 366 393 412 423 423 423

Reserves & Surplus 14,741 20,651 27,064 31,547 34,665 38,738

Deposits 241,262 305,439 384,871 473,883 507,055 567,902

- Growth (%) 25.4 26.6 26.0 23.1 7.0 12.0

Borrowings 6,160 12,906 14,171 17,178 18,425 20,612

Tier 2 Capital 7,190 9,402 9,402 9,402 9,167 8,937

Other Liab & Prov. 8,598 9,606 11,400 14,703 17,135 19,922

Total Liabilities 278,317 358,397 447,322 547,135 586,869 656,534Cash balances 13,540 19,868 21,651 13,452 22,817 25,556

Bank balances 21,927 30,066 42,517 71,947 55,753 62,371

Investments 61,182 71,397 83,209 121,394 131,052 131,622

Advances 175,035 228,676 287,377 328,186 364,286 422,572

- Growth (%) 22.2 30.6 25.7 14.2 11.0 16.0

Fixed Assets 2,285 2,300 2,342 2,453 2,552 2,770

Other Assets 4,347 6,090 10,225 9,704 10,409 11,644

Total Assets 278,317 358,397 447,322 547,135 586,869 656,534- Growth (%) 22.8 28.8 24.8 22.3 7.3 11.9


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Ratio analysis (Standalone)

Y/E March FY10 FY11 FY12 FY13 FY14E FY15EProfitability ratios (%)NIMs 2.4 2.8 2.6 2.3 2.2 2.3Cost to Income Ratio 43.6 39.9 37.5 39.8 42.6 41.5

RoA 1.2 1.3 1.2 0.9 0.7 0.8

RoE 21.9 23.5 20.6 15.1 12.0 14.2

B/S ratios (%)CASA Ratio 29.6 28.7 26.9 25.3 26.7 27.4

Credit/Deposit Ratio 72.5 74.9 74.7 69.3 71.8 74.4

CAR 14.4 14.5 14.7 12.1 12.1 11.9

- Tier I 9.2 10.0 10.8 9.2 9.4 9.5

Asset Quality (%)Gross NPAs 1.4 1.4 1.5 2.4 3.6 3.7

Net NPAs 0.3 0.3 0.5 1.3 1.8 1.6

Slippages 1.2 1.1 1.5 2.4 2.3 1.5

Loan Loss Prov. /Avg. Assets 0.4 0.3 0.4 0.6 0.5 0.3

Provision Coverage 74.9 85.0 80.1 68.2 64.5 67.0

Per Share Data (`)EPS 83.7 108.0 121.4 106.0 95.4 124.4

ABVPS (75% cover.) 413.2 535.7 666.3 735.5 784.1 887.2

DPS 15.0 16.5 17.0 21.5 18.5 24.0

Valuation RatiosPER (x) 6.2 4.8 4.3 4.9 5.4 4.1

P/ABVPS (x) 1.2 1.0 0.8 0.7 0.7 0.6

Dividend Yield 2.9 3.2 3.3 4.2 3.6 4.6

DuPont AnalysisNII 2.4 2.8 2.6 2.3 2.1 2.2

(-) Prov. Exp. 0.3 0.4 0.6 0.8 0.7 0.4

Adj. NII 2.1 2.3 1.9 1.4 1.5 1.8

Treasury 0.3 0.1 0.2 0.1 0.1 0.0

Int. Sens. Inc. 2.4 2.5 2.1 1.6 1.6 1.9

Other Inc. 0.8 0.7 0.7 0.6 0.6 0.6

Op. Inc. 3.2 3.2 2.8 2.2 2.1 2.5

Opex 1.5 1.5 1.3 1.2 1.2 1.2PBT 1.7 1.8 1.5 1.0 0.9 1.3

Taxes 0.5 0.4 0.3 0.1 0.2 0.4

RoA 1.2 1.3 1.2 0.9 0.7 0.8Leverage 18.0 17.6 16.6 16.7 16.9 16.7

RoE 21.9 23.5 20.6 15.1 12.0 14.2


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Disclosure of Interest Statement Bank of Baroda

1. Analyst ownership of the stock No

2. Angel and its Group companies ownership of the stock No

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Documents

Bank of Baroda, 1Q FY 2014