Bank of Baroda shares scaled a 52-week high on Monday after the state-run lender reported its quarterly financial results during the weekend. The Bank of Baroda stock jumped as much as 10 percent to Rs 117.3 on BSE, the latest in a series of 52-week highs last week surpassing an earlier high of Rs 108 in November 2021.

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The stock finished the day with a gain of 5.9 percent at Rs 112.9 apiece.

On Saturday, Bank of Baroda reported a net profit of Rs 2,197 crore for the October-December period, as against a net profit of Rs 1,061.1 crore for the corresponding period a year ago.

Its net interest income increased 14.4 percent on year to Rs 8,552.1 crore, according to a regulatory filing.

Loan growth

Bank of Baroda expects the momentum in loan growth to continue going forward, MD and CEO Sanjiv Chadha told CNBC-TV18. He expects loan growth of 7-10 percent for Bank of Baroda in FY22.

Going into FY23, he expects double-digit loan growth for the industry and believes Bank of Baroda's loan growth will be at 10-12 percent.

Asset quality

Bank of Baroda posted the best asset quality in 24 quarters.

The lender's gross non-performing assets as a percentage of total loans came down to 7.25 percent in the third quarter of FY22, from 8.11 percent in the previous three months. Its net NPAs dropped 16 percent to Rs 16,464.9 crore in the December quarter sequentially.

Its slippages came down to Rs 3,491 crore in Q3 from Rs 5,802 crore in the previous quarter.

Kotak Institutional Equities has an 'add' call on Bank of Baroda, and raised its target price for the stock to Rs 125. The brokerage said the lender's earnings growth was relatively strong, and its slippages at two percent signal a return to normalcy.

Bank of Baroda's return ratios will lag SBI but directionally, both lenders appear to be in the same trend, according to Kotak Institutional Equities.

Technical analyst Prakash Gaba recommends buying Bank of Baroda shares for a target price of Rs 118 with a stop loss at Rs 110.

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(Edited by : Sandeep Singh)

First Published:Feb 7, 2022 1:48 PM IST