Bank of Baroda bobs up

Bank of Baroda toasted to a solid Q3 performance on Wednesday, but even so, the scrip failed to maintain its high of Rs 79.30.

The scrip of the nationalised commercial bank was still higher by 2.5% at Rs 76.90 early afternoon, in any case. Around 550,000 Bank of Baroda shares were traded on BSE so far.

BoB has been a firm feature of the market of late, having surged over the last few months after the Securitisation Bill was passed in Parliament in November 2002. The bill has prompted a re-rating of the banking sector as a whole on the bourses. Both operators and funds are now active in bank PSU shares following the passage of the bill. It paves the way for recovery of sticky assets of banks and should go a long way in improving their financials.

For Q3 ended 31 December 2002, BoB has posted a 60.8% leap in net profit to Rs 254.38 crore (Rs 2.54 billion) on a 11.7% rise in total income to Rs 1,905 crore (Rs 19.05 billion). The market was , in fact, expecting a wee bit 1.2% growth in net profit to Rs 160.10 crore (Rs 1.6 billion). However, the growth in total income was below market expectations.

Among the largest commercial banks in the country, BoB recently effected a cut in deposit as well as lending rates. It cut deposit rates on various maturities by 0.5%. The bank slashed interest rate on loans of up to Rs 200,000 by 0.5%. The rate for small borrowers will now be 0.5% below the bank's prime lending rate of 11%.

Late last month, media reports surfaced that the bank was planning to draw up accounts according to the US Generally Accepted Accounting Practices. This seems the first step by the bank towards making an issue of American depository receipts. Earlier, there were reports that BoB was planning an ADR issue.

As on 30 September 2002, the government held 66.22% stake in BoB. While the public and domestic institutions held 14.80% and 11.07%, respectively.

BSE Code:

BSE Code: 532134