Bank of Baroda: Faster reduction in credit costs may lead to re-rating

Credit costs estimated at 1.7% for FY20 may be the highest among peers, says Credit Suisse

Bank of Baroda (BoB), now also comprising Vijaya Bank and Dena Bank, caught the eyes of investors, with its stock gaining over 4 per cent on its debut as a merged entity on Monday. As the advantages of the merger, which include the amalgamated entity being elevated as the second largest public sector bank and third largest lender in terms of balance sheet, are well-known to investors, the focus hereon shifts to the bank’s growth and asset quality.

The Street, for now, is divided over these factors. Analysts at Credit Suisse have in a recent report, slashed