Bank of Baroda Q3: Net profit rises 5.6% on non-interest income support

Reports muted NII growth; Guides for NIM of 3.0-3.10%

Public sector lender Bank of Baroda’s (BoB) net profit rose by 5.6 per cent year-on-year (Y-o-Y) to Rs 4,837 crore during the third quarter ended (Q3FY25), driven by robust growth in non-interest income covering fees, commissions and treasury.

 

Sequentially, the Mumbai-based lender’s net profit declined by 7.6 per cent from Rs 5,238 crore in Q2FY25. Its stock closed flat at Rs 222.45 per share on the BSE on Thursday. The results were announced post-market hours.

 

Issuing a statement, the bank said its net interest income (NII) grew marginally by 2.8 per cent Y-o-Y to Rs 11,417 crore in Q3FY25, compared to Rs 11,101 crore in Q3FY24. Its net interest margin (NIM) moderated to 2.94 per cent in Q3FY25, down from 3.1 per cent in Q3FY24.

   

Debadatta Chand, managing director and chief executive officer (MD & CEO), BoB, in a post-result virtual media call said the NII has shown muted growth due to higher interest expenses. The margins were impacted by tight market conditions (liquidity) and operating range for NIMs will be 3.0-3.10 per cent for FY25. Earlier, it had given guidance of 3.1-3.2 per cent for FY25.

 

BoB’s non-interest income — including fees, commissions, treasury revenues, and recoveries — rose by 34.1 per cent Y-o-Y to Rs 3,769 crore. The treasury income grew to Rs 936 crore in Q3FY35 from Rs 410 crore in Q3FY24.

 

The lender’s provisions for non-performing assets (NPAs) declined to Rs 871 crore in Q3FY25, compared to Rs 1,007 crore in Q3FY24. The asset quality profile improved, with gross NPAs declining to 2.43 per cent in December 2024 from 3.08 per cent in December 2023. Net NPAs also declined to 0.59 per cent in December 2024, compared to 0.7 per cent in December 2023. The provision coverage ratio (PCR), including written-off accounts, stood at 93.51 per cent in December 2024, compared to 93.39 per cent a year ago.

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BoB’s advances grew by 11.8 per cent Y-o-Y to Rs 11.73 trillion in Q3FY25. Retail advances grew by 19.5 per cent Y-o-Y to Rs 2.43 trillion in December 2024.

 

Chand said the bank has been going slow in the personal loan segment. It grew by 24 per cent Y-o-Y. The corporate loan book expanded by 6.8 per cent. The pace of corporate loans is expected to improve to 10 per cent Y-o-Y by the end of FY25.

 

The share of Retail, Agriculture, and MSME (RAM) is 59 per cent in total loans, up from 57 per cent a year ago. The bank is working to grow RAM’s share to 65 per cent. The total loan book will grow by 11-13 per cent in FY25, he added.

 

Total deposits increased by 11.8 per cent Y-o-Y to Rs 13.92 trillion. The bank has guided for 9-11 per cent growth in FY25. The share of low-cost deposits — current account and savings account (CASA) — in domestic operations declined to 39.68 per cent in December 2024 from 40.69 per cent a year ago.

 

The bank’s capital adequacy stood at 15.96 per cent, with Common Equity Tier-1 (CET-1) at 12.38 per cent at the end of December 2024.