Bank of Baroda's Q2 net jumps 58.7% aided by rise in NII, dip in provisions

Public sector lender Bank of Baroda reported a 58.7 per cent year-on-year (YoY) jump in net profit in July – September (Q2FY23) quarter, aided by robust rise in Net Interest Income (NII) and dip in provisions burden. Its net profit totaled to Rs 3,313 crore in Q2, a record high for the bank, compared to Rs 2,088 crore in the year-ago period.

NII of the lender was up 34.5 per cent YoY to Rs 10,714 crore, on the back of healthy growth in advances. In the year-ago period, its NII was to the tune of Rs 7,566 crore. Its domestic Net Interest Margins (NIMs) for the quarter under review stood at 3.41 per cent, up 34 basis points sequentially, as the hike in lending rates was passed on to the borrowers but deposit rates have gone up with a lag. Global NIMs was up 31 basis points during this period at 3.33 per cent.

Provisions of the lender declined 41 per cent YoY to Rs 1,628 crore in Q2FY23.

The bank saw its asset quality improve as gross Non-Performing Assets (NPAs) ratio improved to 5.31 per cent, down 95 basis points sequentially. Net NPAs also dropped by 42 basis points sequentially to 1.16 per cent. The slippage ratio declined to 1.53 per cent in H1FY23 as against 2.45 per cent in H1FY22.

Provision coverage ratio of the bank stood at 91.73 per cent, including technical write offs.

Advances of the lender increased 19 per cent YoY to Rs 8.73 trillion, with domestic advances growing at 15 per cent YoY and international advances growing by 42 per cent. Among segments, retail loans grew 28.4 per cent YoY; agriculture loans grew 14 per cent YoY; MSME loans grew 13.4 per cent YoY; and corporate loans grew 10.5 per cent YoY.

However, deposits growth was seen trailing loan growth. Global deposits increased by 13.6 per cent YoY, with domestic deposits growing by 11 per cent YoY; and international deposits growing by 38.3 per cent.