MOSL: BANK OF INDIA (Neutral)-Asset quality pressures subside-margin performance drives PAT beat
​Bank of India: Asset quality pressures subside; margin performance drives PAT beat
(BOI IN, Mkt Cap USD3.2b, CMP INR196, TP INR201, 3% Upside, Neutral)
- BOI reported PAT of INR1.8b (higher than estimate), as NII picked up (+15% QoQ, 13% beat), and other income grew 6% sequentially, backed by treasury gains. Provisions were in line with estimate.
- Key highlights for the quarter: a) Global NIM expanded 15bp QoQ to 2.15%, as 1Q was impacted by high NPA related interest income reversals. b) Stronger-than-expected trading gains of INR7.4b (33% of PPoP) led to a 24% beat in other income. c) Loan growth remained muted at 0%/0% QoQ/YoY; however, retail loans grew 16.9% YoY.
- Slippages declined sharply to INR21.4b (2.4% slippage ratio annualized) from INR40.4b in 1Q, while recoveries and up-gradations were muted at INR10.7b (v/ INR27.4b in the previous quarter), despite 1Q being the seasonally strongest quarter for recoveries. However, high write-offs of INR27.9b led to sequentially lower absolute GNPLs/NNPLs. OSRL book was almost flat at INR118.2b (stood at 2.9% of loans).
- Other highlights: a) During the quarter, the bank raised INR15b from the GoI via preferential allotment, b) CASA deposits grew 21% YoY, led by robust growth in SA deposits (+23% YoY); reported CASA ratio declined marginally by 10bp QoQ to 39.0%.
Bank of India provides various banking products and services in India and internationally. Co. operates through Treasury Operations, Wholesale Banking, and Retail Banking segments. Co. accepts various deposit products, such as saving, current, term, and tax saving deposits; and offers home loans, property loans, education loans, vehicle loans, personal loans, pensioner loans, holiday loans, loans for vocational studies, housing loans to NRIs/ PIOs, trade finance, as well as provides deposit schemes for NRIs. It also offers cash management services, project finance and syndication services, and bullion banking services; credit, debit, and prepaid cards; and other services.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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