Bank of Baroda net profit rises 88% in Q1 on strong NII

Domestic advances rose nearly 17% year-on-year to `8.1 trillion as on June 30.

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The bank’s net interest margin rose to 3.4% in April-June from 3.07% a year ago. (Express File Photo)

The net profit of Bank of Baroda rose 88% year-on-year in April-June owing to a growth in its net interest income.
The public sector bank posted a bottomline of `4,070 crore in the quarter under review. The net profit was lower than `4,775 crore in the March quarter.

Net interest income, difference between interest earned and interest expended rose 24.4% year-on-year to `10,997 crore in the quarter under review. The bank’s net interest margin rose to 3.4% in April-June from 3.07% a year ago.
The net interest income was lifted by a growth in the bank’s advances.

Domestic advances rose nearly 17% year-on-year to `8.1 trillion as on June 30. Among specific categories, personal loans rose nearly 83% year-on-year, the highest among all categories. Similarly, gold loans rose 64% year-on-year, and automobile loans rose 22.1% year-on-year as on June 30.

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Of the overall loans, retail loan portfolio rose 25% year-on-year to `1.8 trillion as on June 30.
Retail loans comprise 27.3% of the bank’s loan book. Corporate loans comprise nearly 43% of the bank’s overall loan book. Domestic deposits rose nearly 16% year-on-year to `10.5 trillion as on June 30.

Low-cost current account savings account deposits rose nearly 6% year-on-year to `4.2 trillion as on June 30.
Current account savings account (CASA) ratio fell to 40.3% as on June 30 from 44.2% a year ago as a sizeable proportion of customers preferred to shift to term deposits amid the rising interest rate cycle.
Term deposits comprise 60% of overall deposits as on June 30.

The domestic cost of deposits rose to 4.74% as on June 30 from 3.81% a year ago. The gross non-performing asset ratio improved to 3.5% as on June 30 from 6.26% a year ago.

Net non-performing asset ratio improved to 0.78% as on June 30 from 1.58% a year ago. Credit cost improved to 0.70% in the June quarter from 0.75% a year ago.

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The June quarter marks Debadatta Chand’s first address as the managing director and chief executive officer of the state-owned bank. In his previous role, he served as the executive director of the bank.

The bank’s recoveries were `2600 crore in the June quarter, lower than `3,014 crore a year ago. It is targeting recoveries of `12,000 crore in 2023-24 (April-March). In the current financial year, the bank is targeting a higher cash flow and higher fee income even as Chand did not specify a target for the same.

The bank has made additional provisions of around `620 crore in the quarter under review. The provision coverage ratio of the bank stood at 93.23% as on June 30. Capital adequacy ratio rose to 15.84% as on June 30 from 15.46% a year ago. FE

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