Bank of Baroda Q1 net profit increases 79.3% to Rs 2,168 crore; NII up 12%

Posts 12% YoY growth in net interest income; Bad loan Provisions down on improved asset quality

Bank of Baroda (BoB) on Saturday reported a 79.3 per cent year on year (YoY) growth in its net profit at Rs 2,168 crore in the quarter ended June (Q1FY23) on the back of dip in provisions for bad loans.

The Mumbai-based public sector lender had posted a net profit of Rs 1,209 crore during the same period last year (Q1FY22). 

The bank’s stock had closed 0.81 per cent lower at Rs 116.25 per share on BSE on Friday.

Its net interest income (NII) was up 12 per cent in Q1FY23 to Rs 8,838 crore from Rs 7,982 crore in Q1FY22. Its net interest margin (NIM) moderated to 3.02 per cent in Q1FY23 from 3.04 per cent a year ago. It also fell from 3.08 per cent in March 2022. 

Sanjiv Chadha, managing director and chief executive, said the bank expects to improve NIMs by 10 basis points in FY23.

BoB's non-interest income fell sharply to Rs 1,182 crore in Q1FY23, from Rs 2,863 crore in Q1FY22. It's treasury revenues, which have significant share in other income, was hit due to hardening of bond yields. It booked mark to market (MTM) losses on bond portfolio.

The bank’s asset quality profile improved with gross non-performing assets (GNPAs) at 6.26 per cent till June 2022 from 8.86 per cent in the year-ago quarter. Net NPAs dipped to 1.58 per cent in June 2022 from 3.03 per cent a year ago.

NPA provisions were down by 39 per cent to Rs 1,560 crore in Q1FY23 from Rs 2,557 crore in Q1FY22. The provision coverage ratio rose to 89.38 per cent for the quarter under review from 83.14 per cent a year ago.

The bank’s loan portfolio grew 18 per cent YoY, higher than the rate at which the banking system’s loan book expanded (14.4 per cent YoY) in June 2022. The outstanding advances stood at Rs 8.39 trillion as of June 2022. 

Bank expects banking systems credit to expand by 10-12 per cent in FY23 and it would be grow loan book at pace higher than that of industry.

The deposits grew by 10.9 per cent YoY to Rs 10.32 trillion in June 2022. The credit-to-deposit ratio (C\D rwtio) was 80 per cent at the end of June 2022. Chadha said bank has maintained C\D ratio above 75 per cent and the ratio would be at around 80 per cent in Fy23, he said.

The bank’s total capital adequacy ratio (CAR) stood at 15.46 per cent in June 2022, up from 15.40 per cent in June 2021. The 

Internal accruals are adequate to support growth. Some AT1 bonds would be maturing througj course of the year which will be replaced, Chadha added.