Overview
- Net profit fell 8.2% year-on-year to Rs 4,809 crore, but net interest income rose 2.7% to Rs 11,954 crore with reported NIM expanding 5 bps quarter-on-quarter to about 2.96%.
- Asset quality improved as gross NPA eased to 2.16% and net NPA to 0.57%, while a sharp drop in provisions kept credit cost around 40–41 bps.
- To prepare for expected credit loss norms, BoB created Rs 400 crore of floating provisions in Q2, taking the total to Rs 1,000 crore, and guided for only about a 75 bps capital impact spread over five years.
- Nomura upgraded the stock to Buy with a Rs 320 target after a core PPOP of Rs 6,250 crore beat its estimates; Investec, Citi and UBS also lifted targets, with cited ranges up to Rs 350.
- The Nifty PSU Bank index climbed roughly 2% as BoB jumped 4–5% and peers including Canara Bank advanced, with sentiment also aided by media reports of possible higher FDI limits and consolidation discussions.