Bank of Baroda Q1 results: Net profit rises 9.5% at Rs 4,458 crore
The lender’s provisions for non-performing assets (NPAs) declined by 25 per cent from Rs 1,693 crore in Q1 FY24 to Rs 1,269 crore in Q1 FY25. Sequentially, they also fell marginally from Rs 1,485 crore in Q4 FY24.
Bank of Baroda’s net profit during the quarter ended June 30 (Q1 FY25) grew by 9.5 per cent year-on-year (Y-o-Y) to Rs 4,458 crore on lower credit costs. It had posted a net profit of Rs 4,070 crore in the quarter ended June 2023 (Q1 FY24).
Sequentially, the Mumbai-based public-sector lender’s profit declined from Rs 4,886 crore in the quarter ended March 2024 (Q4 of FY24). Its stock closed 0.94 per cent lower at Rs 253.85 per share on BSE.
Its net interest income (NII) expanded by 5.5 per cent to Rs 11,600 crore in Q1 FY25 against Rs 10,997 crore in the same quarter a year ago. Sequentially, NII declined from Rs 11,793 crore in Q4 FY24, according to a press statement.
Net interest margin (NIM) fell by nine basis points (bps) to 3.18 per cent in Q1 FY25 against 3.27 per cent in the quarter ended June 2023 (Q1 FY24). Sequentially, NIM was flat at 3.27 per cent in Q4 FY24.
In a post-results virtual media interaction, Debadatta Chand, the bank’s managing director and chief executive, said the bank has now got control of the cost of deposits and reduced the dependency on bulk deposits. The lender has guided for an NIM of about 3.15 per cent in FY25.
Its non-interest income fell by 25.1 per cent to Rs 2,487 crore in Q1 FY25, from Rs 3,322 crore in Q1 FY24. Sequentially, it fell from Rs 4,191 crore in Q4 FY24.
The lender’s provisions for non-performing assets (NPAs) declined by 25 per cent from Rs 1,693 crore in Q1 FY24 to Rs 1,269 crore in Q1 FY25. Sequentially, they also fell marginally from Rs 1,485 crore in Q4 FY24.
Advances grew by 8.1 per cent Y-o-Y to Rs 10.71 trillion in Q1 FY25. The retail lending portfolio increased by 20.9 per cent Y-o-Y to Rs 2.2 trillion as of the end of June 2024. The corporate loan book expanded by 2.5 per cent Y-o-Y in Q1 FY25, according to a bank statement.
Total deposits increased by 8.9 per cent Y-o-Y to Rs 13.06 trillion at the end of June 2024. The share of low-cost deposits — current account and savings account (CASA) — improved marginally to 40.62 per cent at the end of June 2024 from 40.33 per cent a year ago.
Chand said the overall loan book is expected to grow at a faster pace of 12-14 per cent in FY25. The corporate portfolio loan book will show 10-12 per cent growth. He, however, did not give the size of sanctioned corporate credit.
The share of retail, agriculture and MSME (RAM) and corporate was 59:41 per cent and is likely to move to 64:36 per cent. However, he did not elaborate on the timeline for reaching the intended level.
The asset quality profile improved, with gross NPAs declining to 2.88 per cent in June 2024 from 3.51 per cent in June 2023. Net NPAs also declined to 0.69 per cent in June 2024 from 0.78 per cent a year ago.
The bank is working to improve asset quality further by reducing the gross NPAs to 2.5 per cent. The recoveries from written-off accounts are expected to be Rs 600-700 crore per quarter, he said.
The provisioning coverage ratio (PCR) including written-off accounts improved to 93.32 per cent in June 2024 from 93.23 per cent in June 2023.
BoB’s capital adequacy ratio stood at 16.82 per cent with common equity tier-1 (CET1) capital at 13.08 per cent at the end of June 2024. The bank board has given a nod to raise up to Rs 7,500 crore through AT1 and tier II bonds to replace debt capital maturing this year.
First Published: Jul 31 2024 | 6:54 PM IST