Banking stock today hits 52-week high on 5 out of 6 sessions. Do you own?

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Stock market today: Bank of Baroda shares have been in uptrend for last three months. Stock price of the state-owned bank has risen from around 90 apiece levels to 141.70 apiece levels, logging around 56 per cent rise in this time. Bank of Baroda share price today opened upside and went on to hit new 52-week high of 141.70 within few minutes of stock market opening bell today. In this course, the banking stock today hit 52-week high on second straight session. It has climbed to new 52-week high today on 5 out of six sessions as the PSU stock has hit new 52-week high on all last six sessions except on 7th September 2022.

Bank of Baroda share price history

The banking stock has been in uptrend after ushering in the year 2022. In year-to-date (YTD) time, this PSU banking stock has shot up from around 84 to 141.70 levels, ascending to the tune of 65 per cent in YTD time. Likewise, in last one year, Bank of Baroda share price has surged from around 79 to 141.70 apiece levels, logging near 75 per cent jump in this period.

As per the Care Edge ratings available on BSE website, “The Bank of Baroda has seen improvement in its capitalisation levels over the past three years post its amalgamation with Dena Bank and Vijaya Bank with sufficient capital cushion over the regulatory limits. The bank raised equity capital of 4,500 crore during FY21 through the QIP (non-government) route which led to reduction of the GoI’s stake. BOB also raised by AT1 bonds of 3,375 crore during FY21 and 2,749 crore during FY22 supported by improvement in internal accruals. BOB reported Capital Adequacy Ratio (CAR) of 15.68% (P.Y.: 14.99%) with Common Equity Tier I (CET I) Ratio of 11.42% (P.Y. 10.94%) as on March 31, 2022 and CAR of 15.46% and CET I Ratio of 11.24% as on June 30, 2022 as against minimum regulatory requirement of 11.5% for CAR and 8% for CET I Ratio respectively indicating adequate cushion to absorb any unexpected losses. The comfortable capital cushion has enhanced its ability to absorb asset quality pressures as well as support growth in the near term.”

 

On profitability matrices, the Care Edge ratings says, “During FY22, BOB saw 9% growth in advances largely driven by retail lending which constituted 47% of total advances as on March 31, 2022. The bank’s net interest margin (NIM) improved at 2.69% for FY22 against 2.50% for the previous year due to higher fall in cost of deposit as compared to fall in yields in a decreasing interest rate scenario except for the last quarter for FY22 when the interest rates started rising. The bank’s non-interest income fell by 11% during FY22 despite the fee income registering a growth due to significant lower treasury income (mark-to-market losses during Q4FY22) as compared to the previous year. However, supported by NII, the BOB’s Pre-Provisions Operating Profit (PPOP) improved from 21,199 for FY21 to 22,389 crore for FY22. Due to improving asset quality, credit cost reduced to 1.07% from 1.36% in FY21 resulting in PBT to improve in FY22 over the previous year. The bank changed tax regime in FY21 wherein it saw significant tax outgo (one-off) resulting in lower PAT of 829 crore which improved significantly to 7,272 crore for FY22 translating into ROTA of 0.60% in FY22 as against 0.07% in FY21.”

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