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Bank of Baroda scores on performance metrics
June 22, 2023
Bank of Baroda‘s (BoB) overall market capitalisation breached the ₹1-trillion mark on June 19, making it the second PSU bank to have achieved this feat after the State Bank of India.
The bank’s shares ended trading 1.65% higher at ₹198 on the Bombay Stock Exchange on Wednesday. According to Vaishali Parekh, vice-president of Technical Research at Prabhudas Lilladher, the bank’s stock is currently in its resistance zone from where it will need a decisive breakout to carry on the momentum ahead.
“The near-term support will be near ₹189 levels and with the overall trend maintained positive, one can hold on the long position till 182 level (50 EMA) is sustained,” she said.
A combination of factors has led to the overall market rally in the bank’s stocks, experts say, including the successful merger of Vijaya Bank and Dena Bank with the bank in 2019. “With the support of the government and mergers creating large players, banks were able to write off bad loans and clean up their books,” says Sanjay Agarwal, senior director at CareEdge Ratings.
Agarwal added that the merger also brought in a decent amount of upgrades in PSU banks’ processes. A research paper released by the Reserve Bank of India (RBI) in December also corroborated the fact that the efficiency of acquirer banks improved post-merger due to an increase in scale and productive capacity, and also simultaneously increased acquiree banks’ shareholders’ wealth.
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