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Bank of Baroda + Yes Bank Q3 Result Review

January 31, 2008

Bank of BarodaBoB’s 3Q08 net profit is up 52% yoy, well ahead of expectations and likely driven by strong treasury and asset recovery gains. Qualitatively, the quarter appears fairly robust in terms of both P&L and balance sheet quality and growth. While margins are down a bit yoy and qoq, this was expected with no meaningful surprises.

BoB continues to grow loans rapidly, up 23% yoy and almost 6% qoq, and impressively continues to maintain asset quality. Deposits show fair momentum, 4% qoq growth, suggesting balanced balance sheet growth.

Yes Bank
Yes Bank’s profits were driven by stable and relatively high margins, continued growth in fees – especially in treasury and a reduction in costs. Yes Bank’s NIMs have remained largely stable at 290bps, helped by a stable interest rate and liquidity environment. Yes’ high pace of asset accretion (14% qoq), with stable margins, nil NPLs (especially commendable given its mid-market exposure) suggests strong management focus on quality.

Overall, it was a strong quarter with Yes consistently delivering revenues, growth and quality ahead of estimates, supported by a benign funding environment.

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