Equity Analysis

• The bank has witnessed increase in fresh slippages of loans mainly contributed by IL&FS exposure getting classified as NPA, while elevated agri slippages also contributed to fresh slippages in Q4FY2019.
• The corporate segment contributed slippages of Rs 1010 crore, of which Rs 530 crore came from IL&FS. Retail book contributed fresh slippages of Rs 200 crore, while the retail book also recorded higher recoveries of NPAs. The SME and agriculture segment contributed slippages of Rs 700 crore in Q4FY2019.
• The recoveries relating to Alok Industries and Bhushan Power are now postponed to Q1FY2019, which were earlier expected in Q4FY2019.
• The bank has made provisions of Rs 1000 crore exposure to Bhushan, Alok and Essar Steel. The bank has made Rs 1875 crore of accelerated provisions on RCom, Aircel and Videocon in Q4FY2019. Further, the bank has made provisions of Rs 250 crore for fraud, while provisions for SME exposure were Rs 1400 crore.
• The bank has exposure of Rs 4570 crore to IL&FS, while Vijaya Bank and Dena Bank has combined exposure of another Rs 1220 crore to IL&FS. Of this total combined exposure, the exposure to red and amber category firms stands at Rs 2300 crore which is stressed. However, the remaining exposure is towards green and yellow category companies which is not so challenging as the bank is a secured creditor.
• The bank is carrying 25% provisioning cover on Rs 2200 crore worth of exposure to IL&FS which is classified as NPA.
• Exposure of the three banks combined towards Reliance Home Finance and Reliance Commercial Finance is Rs 2000 crore.
• The exposure of the bank to Religare is not significant.
• The exposure to DHFL stands at Rs 3000 crore in addition to Vijaya Bank and Dena Bank's exposure of Rs 1000 crore. The bank is looking swap its exposure by taking over the loan portfolio.
• The bank stated that provisioning coverage in Vijaya Bank and Dena Bank is close to that of Bank of Baroda standards.
• The bank does not have any exposure to Jet Airways.
• The stock of technically written off accounts stands at Rs 25000 crore end March 2019.
• On MUDRA loans front, the lower ticket size loans are showing higher stress, while large ticket size loans are performing well.
• On combined basis, the GNPA ratio for Bank Of Baroda, Vijaya Bank and Dena Bank together stood at 10.02% and NNPA at 3.65% end March 2019. The net NPAs in absolute terms were at Rs 23800 crore.
• The bank expects to reduce net NPA ratio to 2.75% by end March 2020.
• The deposits stood at Rs 9 lakh crore and loan book at Rs 7 lakh crore end March 2019.
• The risk weighted assets stood at Rs 5.7 lakh crore end March 2019.
• The bank is targeting double digit loan growth for the combined entity at 15% for FY2020.
• The bank expects to achieve RoE of 10% in FY20. The credit cost is expected at 1% for FY2020.
• The bank expects to achieve operating profit of Rs 16000-18000 crore on standalone basis in FY2020.
• As per the bank, about 800-900 branches overlaps and they would most likely be relocated.
• The total AUM of Bank of Baroda AMC stood at Rs 12000-13000 crore of which 60% is debt and 40% is equity.

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