Bank of Baroda Q1FY24 proft rises 87.7% on growth in net interest income

The non-interest income almost tripled YoY to Rs 3,322 crore. Sequentially, it was down from Rs 3,466 crore in Q4FY2

Public sector lender Bank of Baroda’s net profit rose by 87.7 per cent on a year-on-year (YoY) basis at Rs 4,070 crore in quarter ended June 2023 (Q1FY24) on robust growth in net interest income as well as non-interest income.

Sequentially, the public sector lender’s profit went down from Rs 4,775 crore in the quarter ended March 2023 (Q4FY23).

In a statement, the bank said that its net interest income (NII) expanded by 24.4 per cent to Rs 10,997 crore in Q1FY24 from Rs 8,838 crore in the same quarter a year ago. NII fell from Rs 11,525 crore in Q4FY23 on a sequential basis.

Net Interest Margins (NIMs) expanded to 3.27 per cent in Q1FY24 from 3.02 per cent in Q1FY23. The NIMs were down from 3.53 per cent in Q4FY23, according to the bank's statement.

Repricing of deposits happens with lag, increasing cost of funds but resetting of rates for loans benchmarked to MCLR will provide upside benefit. This would partly compensate cost push. Keeping in mind the effect of these two aspects factors, bank is hopeful to maintain margins to be around 3.3 per cent for Fy24, Debadatta Chand, its managing director and chief executive said in post result media interaction.

The non-interest income almost tripled YoY to Rs 3,322 crore. It was down from Rs 3,466 crore in Q4FY23. As part of strategy of focus on “Fees and Flows”, the aim is to capture cash-flows of customers, helping to enhance fee-based income, bank officials said.

Bank of Baroda’s provisions for non-performing assets (NPAs) rose from Rs 1,560 crore in Q1FY23 to Rs 1,693 crore in Q1FY24.

The bank's advances expanded by 18 per cent YoY to Rs 9.9 trillion in Q1FY24. Out of these, domestic retail loan portfolio jumped by 24.8 per cent to Rs 1.84 trillion. Chand said bank is looking at overall loan book to grow at 14-15 per cent with corporate book expanding at 12-13 per cent and retail segment at 18-20 per cent.

Bank of Baroda’s total deposits increased by 16.2 per cent YoY to Rs 11.99 trillion. 

The share of low-cost deposits — current account and saving accounts (CASA) declined at 40.33 per cent at the end of June 2023, from 44.18 per cent a year ago.

The asset quality profile of the bank improved with gross non-performing assets (NPA) declining to 3.51 per cent in June 2023 from 6.26 per cent in June 2022. The net NPAs also declined to 0.78 per cent in June 2023 from 1.58 per cent a year ago.

The provision coverage ratio (PCR) improved to 93.23 per cent in June 2023 from 89.38 per cent a year ago.

The capital adequacy ratio stood at 15.84 per cent with the common equity tier I (CET1) at 11.94 per cent by the end of June 2023.

On Friday (August 04, 2023), Bank of Baroda's stock closed 0.93 per cent lower at Rs 191.45 per share on BSE.