Bank of Baroda Q2 results on Friday, Oct 25; what are key expectations?

Bank of Baroda Q2 results preview: Bank of Baroda is expected to see near flat growth in net profit, on a quarter-on-quarter (Q-o-Q) basis, in the July-September quarter of financial year 2024-25

Bank of Baroda Q2 results preview: Public sector bank, Bank of Baroda, is expected to see near flat growth in net profit, on a quarter-on-quarter (Q-o-Q) basis, in the July-September quarter of financial year 2024-25 on the back of rise in provisions, analysts said.

On a year-on-year (Y-o-Y) basis, Bank of Baroda's Q2 net profit could rise around 7-8 per cent to Rs 4,600 crore from Rs 4,252.9 crore seen in Q2 FY24. In Q1 FY25, BoB's net profit was Rs 4,458.2 crore.

Bank of Baroda Q2 results date:

Bank of Baroda is scheduled to report its Q2 results for 2024-2025 (Q2 FY25) on Friday, October 25, 2024.

 

Bank of Baroda Q2 results 2024 expectations:

Here is what leading brokerages expect from Bank of Baroda Q2 results on October 25:

Nomura

Weighed by 49 per cent Q-o-Q surge in provisions, Nomura expects net profit to rise barely 2 per cent to Rs 4,540 crore for the quarter ended September 30, 2024. On a yearly basis, this would be a 7 per cent rise in PAT.

Provisions, as per the brokerage, may stand at Rs 1,510 crore at the end of Q2 FY25 as against Rs 1,010 crore Q-o-Q and Rs 2,160 crore Y-o-Y.

Operationally, net interest income (NII) is expected to rise 4 per cent Q-o-Q and 11 per cent Y-o-Y to Rs 12,040 crore. Pre-provision operating profit (PPOP), meanwhile, is seen rising 6 per cent Q-o-Q but down by the same percentage Y-o-Y to Rs 7,560 crore.

Business-wise, Nomura anticipates Bank of Baroda's loan book to rise 12 per cent on year and 7 per cent on quarter to Rs 11.18 trillion. Deposits, meanwhile, could rise 9 per cent on year and 4 per cent on quarter to Rs 13.63 trillion.

With this, net interest margin (NIM) is expected to contract 6 basis points (bps) Q-o-Q to 3.1 per cent. It would, however, be a 5-bps Y-o-Y rise.

Motilal Oswal Financial Services

Giving a slightly better estimate, Motilal Oswal Financial Services said Bank of Baroda's Q2 profit may rise 8.3 per cent Y-oY to Rs 4,600 crore.

It sees Q2 NII at Rs 11,530 crore (up 6.4 per cent Y-o-Y) and PPOP at Rs 7,510 crore (down 6.4 per cent Y-o-Y).

The brokerage, further, sees 8 per cent Y-o-Y growth each in Loan Book and Deposit Book to Rs 10.85 trillion and Rs 13.49 trillion, respectively.

"We expect cost ratios to remain under control. Margins likely to moderate slightly, but expect asset quality to improve further. Credit costs, too, are expected to remain in control. Business growth will be the key monitorable from the management commentary," said the brokerage.

MOFSL expects gross non-performing asset (GNPA) ratio to improve by 10bps Q-o-Q to 2.8 per cent, while NNPA is expected to stay flat at 0.7 per cent.

Dolat Capital

The brokerage anticipates Bank of Baroda's reported loan growth to be around 12 per cent  Y-o-Y and 6 per cent Q-o-Q, with 4.5 per cent sequential growth in retail book.

NIM, it said, is likely to remain stable at 3.15 per cent for the quarter.

The brokerage sees slippages to be contained at 1.25 per cent, with benign credit costs of 50 bps aided by healthy return on assets (RoAs) of around 1.1 per cent.

Traction in retail deposits, it said, will remain the key monitorable.

Overall, net profit is seen at Rs 4,301 crore (up 1.1 per cent Y-o-Y/down 3.5 per cent Q-o-Q); PPOP at Rs 7,333.8 crore (down 8.6 per cent Y-o-Y/up 2.4 per cent Q-o-Q); and NII at Rs 11,770.5 crore (up 8.7 per cent Y-o-Y/1.5 per cent Q-o-Q).
 

Elara Capital

In-line with most estimates, Elara Capital expects BoB's Q2 profit to rise 7 per cent Y-o-Y to Rs 4,553.1 crore, aided by 18.6 per cent Y-o-Y rise in Treasury income (Rs 350 crore) and 39.4 per cent yearly drop in provisions (Rs 1,209.9 crore.

The brokerage said loan growth traction may sustain, but deposit growth may be slightly lower as the bank chooses to use excess liquidity buffers. It pegs NII at Rs 11,486.1  crore (up 6 per cent Y-o-Y/down 1 per cent Q-o-Q).

NIM could moderate around 6-7bp Q-o-Q, given the impact of penal charge regulations.

"We expect curtailed slippages (ex-of agri slippages), which with steady recovery and upgrade are likely to help GNP. The recovery trend could spring a positive surprise," it said.
 

Investors should watch for management commentary on ROE trajectory, asset quality trends, and continued business momentum.

Kotak Institutional Equities

Foreseeing a sharp decline of 9 per cent Y-o-Y in NII to Rs 11,776 crore, the brokerage expects net profit to fall 2.5 per cent Y-o-Y and 7 per cent Q-o-Q to Rs 4,146.1 crore.

"We expect operating profit to decline 7 per cent Y-o-Y as there would be pressure on revenue growth (NIM compression, lower recovery from written-off loans and lower fee income). We expect NIM to decline 10 bps Q-o-Q, led by marginal changes to cost of funds," it said.

Meanwhile, the brokerage believes reported loan growth of 11 per cent Y-o-Y was relatively strong, while deposits grew 9 per cent Y-o-Y.

"We expect slippages of around 1.5 per cent (Rs 4,000 crore), mostly driven by retail and SME. Credit costs should decline as the coverage ratio is comfortable. Key discussion would be loan growth, deposit-related challenges and NIM outlook in the near term," it said.