Q1 preview: What to expect from Bank of Baroda results on July 31? Details

Bank of Baroda Q1 results 2025: Bank of Baroda's Q1 FY25 net profit may fall up to 16 per cent Q-o-Q

Bank of Baroda Q1 results preview: State-owned lender Bank of Baroda (BoB) is scheduled to report its June quarter (Q1) results for the current financial year (2024-25) on Wednesday, July 31, 2024.

The bank, according to analysts, may report a weak set of earnings for Q1FY25 with net profit rising anywhere between 1 per cent and 13 per cent on a year-on-year basis. This would translate into up to 16 per cent quarter-on-quarter (Q-o-Q) decline in profit after tax (PAT).

The pressure on bottom-line, analysts said, would be on account of weak operational performance due to tepid loan and deposit growth in the quarter under review.

 

Meanwhile, on the bourses, Bank of Baroda share price has risen 10.7 per cent on the BSE thus far in calendar year 2024 (YTD) as against 12.6 per cent gain in the benchmark BSE Sensex.

Here is what to expect from Bank of Baroda Q1 results:

Nomura

Weighed by a mere 3 per cent Y-o-Y rise in net interest income (NII), Nomura expects Q1FY25 net profit to rise 8 per cent to Rs 4,390 crore. On a sequential basis, NII may fall 4 per cent, while profit may slump 10 per cent.

Net profit was Rs 4,070.1 crore in Q1FY24 and Rs 4,886.5 crore in Q4FY24.

Nomura also expects a 12-basis points contraction in NIM in Q1, on both Y-o-Y and Q-o-Q basis, amid sequential decline in loan and deposit book. NIM is seen at 3.2 per cent.

Loan book is seen at Rs 10.47 trillion, up 9 per cent Y-o-Y and down 2 per cent Q-o-Q. Deposit book, too, is seen at Rs 13.05 trillion, up 9 per cent Y-o-Y/down 2 per cent Q-o-Q.

Prabhudas Lilladher

This brokerage, too, sees a 7.6-per cent Y-o-Y rise in NII at Rs 11,831.4 crore compared to Rs 10,996.7 crore reported in Q1FY24. On a Q-o-Q basis, NII may be up 0.3 per cent from Rs 11,792.8 crore.

This would be on the back of 8.7 per cent Y-o-Y rise, but 1.7 per cent Q-o-Q drop, in Bank of Baroda's Q1 loan book. Loans stood at Rs 9.63 trillion at the end of Q1FY24 and Rs 10.65 trillion at the end of Q4FY24.

Prabhudas Lilladher, however, expects NIM to contract 10bps Y-o-Y but rise 2bps Q-o-Q to 3.24 per cent. NIM was 3.33 per cent last year and 3.22 per cent in the March quarter of FY24.

"PAT could contract by 8.7 per cent Q-o-Q to Rs 4,461.8 crore due to lower other income and higher provisions. Gross non-performing asset (GNPA) could worsen by 3bps Q-o-Q to 2.95 per cent while credit costs could increase by 20bps to 0.69 per cent," it added.

Prabhudas Lilladher projects provisions to soar 38.3 per cent Q-o-Q to Rs 1,800 crore from Rs 1,301.9 crore. On a Y-o-Y basis, provisions may fall 7.5 per cent from Rs 1,946.8 crore.

Kotak Institutional Equities

The brokerage expects Bank of Baroda's operating profit to decline nearly 9 per cent Y-o-Y to Rs 7,125.9  crore as there would be pressure on revenue growth (NIM decline, lower recovery from written-off loans and higher operating expenses).

"We are building NIM to decline 20 bps Q-o-Q (last quarter one-off). We also expect loan growth at 11 per cent Y-o-Y (slower growth in segments such as NBFC and unsecured loans). We should see the cost of funds stable hereon," it added.

Operating profit was Rs 7,824.3 crore in Q1FY24 and Rs 8,106.1 crore in Q4FY24.

Bank of Baroda's Q1FY25 NII, Kotak Institutional Equities said, may rise just 5.3 per cent Y-o-Y, but fall 1.8 per cent Q-o-Q to Rs 11,581.9 crore.

Besides, its Fee income may improve 8 per cent Y-o-Y (down 22 per cent Q-o-Q) to Rs 805 crore, while Treasury income may slide 67 per cent Y-o-Y and 39 per cent Q-o-Q to Rs 316.1 crore.

This would put an overall cap on net profit growth at 0.7 per cent Y-o-Y/down 16 per cent Q-o-Q to Rs 4,100 crore, the brokerage anticipated.

"Bank of Baroda may report slippages at 1.5 per cent (Rs 4,200 crore) mostly driven from retail and SME. Credit costs would decline Q-o-Q as the bank had made higher provisions for a specific account. Key discussion would be the loan growth, deposit-related challenges and NIM outlook in the near term," the brokerage said.

Motilal Oswal Financial Services

The brokerage expects earnings growth to moderate in Q1FY25 with margins likely moderating slightly. It, however, expects Bank of Baroda's asset quality to remain steady with GNPA and NNPA ratios seen flat at 2.9 per cent and 0.7 per cent, respectively, in Q1FY25.

Provision Coverage ratio, it said, may rise slightly to 77.5 per cent from 77.3 per cent Q-o-Q. Credit costs are likely to remain in control, it added.

In absolute terms, it projects NII at Rs 11,620 crore, Operating profit at Rs 7,770 crore, and Net Profit at Rs 4,600 crore.

Nuvama Institutional Equities

The brokerage said Bank of Baroda is likely to report NII growth of 0.5 per cent Q-o-Q / 8 per cent Y-o-Y. Including other income, total income may be Rs 14,541.7 crore in Q1FY25 vs Rs 14,318.9 crore in Q1FY24 (up 2 per cent) and Rs 15,984.3 crore in Q4FY24 (down 9 per cent).

It forecasts margins to decline by 6bp Q-o-Q, while Slippages are expected to decline slightly.

It projects pre-provision profit at Rs 7,676.6 crore for the quarter, with core net profit seen at Rs 4,677.6 crore.