BoB’s 3QFY17 results remained disappointing. The bank continues to face
headwinds on asset quality on one hand, while on the other hand the balance
sheet continued to de-grow as the management intentionally downsized some low
margin business. Coming few quarters might be challenging for the bank. With continued pressure on asset quality and resultant
credit cost the earnings of the bank might remain under pressure in the near term
Further as the bank is looking to downsize the low margin business the overall
loan growth might disappoint and the stock might remain range bound. At the
current market price, the stock is trading at 1.7x FY2018E ABV.We have a
NEUTRAL rating on the stock.

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