Bank of Baroda board approves raising Rs 5,000 crore by March 2024

The capital will be raised when the market is conducive, the bank said

The board of Bank of Baroda on Friday approved its plan to raise Rs 5,000 crore via additional tier-1 (AT-1) or Tier-2 debt instruments by March 31, 2024.

"Board of directors of Bank of Baroda at its meeting held today, June 2, 2023, inter-alia considered and approved raising of additional capital up to Rs 5,000 crore by way of Additional Tier I (AT-I) or Tier-II debt capital instruments with an interchangeability option in India/overseas, in suitable tranches up to March 31, 2024, and beyond if found expedient," the bank said in a regulatory filing.

"The above capital will be raised when the market is conducive," it said.

In the quarter that ended on March 31, the bank's net profit grew 168 per cent year-on-year (YoY) to Rs 4,775 crore, owing to healthy growth in advances and net interest income (NII).

This was the highest quarterly net profit reported by the bank. In the whole year, its net profit grew 94 per cent to Rs 14,110 crore from Rs 7,272 crore in the previous year.

The board of directors recommended a dividend of Rs 5.5 per share (of face value Rs 10 each) for FY23, subject to requisite approvals, the bank said.

Its capital adequacy ratio (CAR) stood at 16.24 per cent with a common equity tier-I of 12.24 per cent at the end of March. While the bank did not hint at any plans to raise capital through equity shares, it would raise up to Rs 2,000 crore through debt capital instruments like additional tier-I bonds and tier-II bonds in FY24.

Last week, the bank said it expects 12-15 per cent credit growth during the current financial year.

"We aim at credit growth of 12-15 per cent while deposits are expected to grow at 12-13 per cent," Lalit Tyagi, the bank's executive director said on the sidelines of "Bank of Baroda Rashtrabhasha Samman" Awards 2023.