Bank Of Baroda Q3 Results: Profit Rises 18.8% On Lower Provisions

Bank of Baroda's third-quarter net profit rose, beating analysts' estimates.

The public sector lender's standalone net profit jumped 18.8% year-on-year to Rs 4,579 crore, according to an exchange filing on Wednesday. Analysts polled by Bloomberg estimated a profit of Rs 4,127.4 crore.

Bank of Baroda Q3 FY24 Key Highlights (Standalone)

• Net profit up 18.8% at Rs 4,579.3 crore (YoY).

• Net interest income rose 2.6% to Rs 11,101 crore (YoY).

• Gross NPA at 3.08% vs 3.32% (QoQ).

• Net NPA at 0.70% vs 0.76% (QoQ).

Net interest income, or core income, for the bank rose 2.6% year-on-year to Rs 11,101 crore. Other income fell 20.8% year-on-year to Rs 2,810.4 crore.

Asset quality for the lender improved, with the gross non-performing asset ratio falling 24 basis points sequentially to 3.08%. Net NPA, too, fell 6 bps quarter-on-quarter to 0.70% from the previous 0.76%.

Provisions for the quarter fell 72.2% to Rs 666.3 crore. The bank made a contingent provision of Rs 50 crore for an alternate investment fund. It also held an additional provision of Rs 705 crore over and above IRAC norms for certain stressed standard advances.

The net interest margin improved 3 bps quarter-on-quarter to 3.10%.

In the quarter ended December, the lender's fresh slippages stood at Rs 2,363 crore, down 45.4% quarter-on-quarter.

Credit costs for the bank, too, fell 53 basis points to 0.39% sequentially from the previous 0.92%. The capital adequacy ratio stood at 14.72% for the quarter ended December. Of this, the CET-1 ratio stood at 11.11%.

The lender's domestic gross advances increased 13.4% year-on-year to Rs 8,62,086 crore in Q3. Of this, retail advances stood at Rs 2,03,627 crore, up 22% year-on-year.

Ian De Souza, chief financial officer at Bank of Baroda, said that it has consciously moderated growth of wholesale advances (corporate) to 10.2%, as compared with 16% quarter-on-quarter.

The bank has also reduced bulk deposits around Rs 14,000 crore and that has helped in improving NIM, he said.

The focus of the lender continues to be growing retail deposit franchise, according to Debadatta Chand, managing director and chief executive officer. "We maintain our guidance for credit growth at 14%-16%," he said.

In terms of personal loans, Chand said that the bank has moderated its growth and would want to keep it within 30%-35% year-on-year. The capital impact of this has been 70 bps, whereas the overall impact which includes unsecured loans and NBFCs has been 68 bps.

It also intends to grow corporate loan book by 14% year-on-year in Q4, he told reporters.

Domestic deposits for the lender grew 6.3% year-on-year to Rs 10,67,371 crore. Of this, domestic CASA deposits grew 4% year-on-year to Rs 4,34,337 crore.

The domestic CASA ratio stood at 40.69%, up 81 bps quarter-on-quarter.

The bank doesn't anticipate deposit rates to go higher from current levels, according to Lalit Tyagi, executive director, Bank of Baroda. The cost of deposits has peaked out and most parts have been repriced, he said.

On the BoB World app, Chand said that they hope to resume customer onboarding on the app.

"We have submitted compliance to the regulator regarding BoB World App. We hope to start onboarding of customers very soon," he said.

In Q4, Bank of Baroda plans to raise Rs 7,500 crore, according to Chand. Of this, it has already raised Rs 5,000 crore via infrastructure bonds.