Key Highlights
- Bank of Baroda (BOB) quarterly Net profit higher by 87.7% YoY at INR 4,070 crore in Q1FY24.
- BOB has delivered ROA of more than 1% and ROE around 20%, consistently for last 4 quarters.
- This robust growth in profitability was supported by healthy Operating Income growth of 42.9% YoY in Q1FY24.
- Operating income growth was driven by strong Net Interest Income (NII) growth of 24.4% YoY in Q1FY24 coupled with robust growth in Non-Interest Income which grew 2.8x YoY.
- Sustained NII growth is attributable to growth in advances of 18.0% (YoY) coupled with traction in Net Interest Margins (NIM), which grew 25 bps YoY at 3.27%.
- Strong growth in Income coupled with subdued increase in Opex has resulted in robust Operating profit growth of 73% YoY for Q1FY24.
- The Bank has been able to effect a reduction in the Cost to Income ratio (excluding Revaluation of Investment) by 166 bps YoY to 47.43% for Q1FY24.
- BOB has witnessed significant improvement in its Asset quality with reduction in GNPA by 275 bps YoY to 3.51%. Bank’s NNPA improved to 0.78% with a reduction of 80 bps YoY.
- BOB’s balance sheet remained robust with healthy Provision Coverage Ratio (PCR) of 93.23% with TWO & at 78.52% without TWO.
- This strong and sustainable improvement in asset quality has resulted in 5 bps YoY declined in Credit Cost at 70bps for Q1FY24. Excluding prudential provisions credit cost would have been 44 bps in Q1FY24.
- BOB’s Global Advances registered a strong YoY growth of 18.0% in Q1FY24 led by robust retail loan book growth. Bank’s organic Retail Advances grew by 24.8%, driven by growth in high focus areas such as Auto Loan (22.1%), Home Loan (18.4%), Personal Loan (82.9%), Mortgage Loan (15.8%), Education Loan (20.8%).
- Bank achieved a total business of INR 21,90,896 crore as of 30th June 2023, registering a growth of 17.0% YoY.
Profitability
- BOB reported a standalone Net Profit of INR 4,070 crore in Q1FY24 as against a profit of INR 2,168 crore in Q1FY23.
- Net Interest Income (NII) grew by 24% YoY to INR 10,997 crore in Q1FY24.
- Global NIM stands at 3.27% in Q1FY24, increase of 25 bps YoY.
- Domestic NIM stands at 3.41% in Q1FY24, increase of 34 bps YoY.
- Yield on Advances increased to 8.40% in Q1FY24 as against 6.58% in Q1FY23.
- Cost of Deposits stands at 4.68% in Q1FY24 as against 3.46% in Q1FY23.
- Operating Income for Q1FY24 stands at INR 14,319 crore, increase of 42.9% YoY.
- Operating Profit for Q1FY24 stands at INR 7,824 crore, increase of 72.8% on a YoY basis.
- Cost to Income ratio reduced to 45.36% for Q1FY24 as against 54.81% for Q1FY23. Cost to Income ratio (ex-treasury) by 168 bps YoY to 47.41% for Q1FY24.
- Return on Assets (annualised) improved to 1.11% in Q1FY24 from 0.68% in Q1FY23.
- Return on Equity (annualised) for Q1FY24 increased by 640 bps YoY to 20.03%.
- For the consolidated entity, Net Profit stood at INR 4,452 crore in Q1FY24 as against INR 1,944 crore in Q1FY23.
Asset Quality
- The Gross NPA of the Bank reduced by 33.8% YoY to INR 34,832 crore in Q1FY24 and Gross NPA Ratio improved to 3.51% in Q1FY24 from 6.26% in Q1FY23.
- The Net NPA Ratio of the Bank stands at a record low of 0.78% in Q1FY24 as compared with 1.58% in Q1FY23.
- The Provision Coverage Ratio of the Bank stood at 93.23% including TWO and 78.52% excluding TWO in Q1FY24.
- Slippage ratio declined to 1.05% for Q1FY24 as against 1.71% in Q1FY23.
- Credit cost for the Q1FY24 stands at 0.70%. Excluding prudential provisions credit cost would have been 44 bps in Q1FY24.
Capital Adequacy
- CRAR of the Bank stands at 15.84% in Jun’23. Tier-I stood at 13.64% (CET-1 at 11.94%, AT1 at 1.70%) and Tier-II stood at 2.20% as of Jun’23.
- The CRAR and CET-1 of consolidated entity stands at 16.31% and 12.51% respectively
- The Liquidity Coverage Ratio (LCR) consolidated stands at 143.6%.
Business Performance
- Global Advances of the Bank increased to INR 9,90,988 crore, +18.0% YoY.
- Domestic Advances of the Bank increased to INR 8,12,626 crore, +16.8% YoY.
- Global Deposits increased by 16.2% YoY to INR 11,99,908 crore.
- Domestic Deposits increased by 15.5% YoY to INR 10,50,306 crore in Jun’23.
- International Deposits grew by 21.0% on a YoY basis to INR 1,49,602 crore in Jun’23.
- Domestic CASA deposits registered a growth of 5.5% YoY and stands at INR 4,23,600 crore.
- Organic Retail Advances grew by 24.8%, led by growth in high focus areas such as Auto Loan (22.1%), Home Loan (18.4%), Personal Loan (82.9%), Mortgage Loan (15.8%), Education Loan (20.8%) on a YoY basis.
- Agriculture loan portfolio grew by 15.1% YoY to INR 1,27,583 crore.
- Total Gold loan portfolio (including retail and agri.) stands at INR 40,652 crore, registering a growth of 32.1% on a YoY basis.
- Organic MSME portfolio grew by 12.7% YoY to INR 1,09,220 crore
Financial result for Quarter ended 30th June 2023
| Particulars (INR crore) | Q1FY23 | Q4FY23 | Q1FY24 | YoY(%) |
| Interest Income | 18,937 | 25,857 | 26,556 | 40.2 |
| Interest Expenses | 10,099 | 14,332 | 15,559 | 54.1 |
| Fee Income | 1,277 | 1,714 | 1,507 | 18.0 |
| Net Interest Income (NII) | 8,838 | 11,525 | 10,997 | 24.4 |
| Operating Income | 10,020 | 14,991 | 14,319 | 42.9 |
| Operating Expenses | 5,492 | 6,918 | 6,495 | 18.3 |
| Operating Profit | 4,528 | 8,073 | 7,824 | 72.8 |
| Total Provisions (other than tax) and contingencies | 1,685 | 1,421 | 1,946 | 15.5 |
| of which, Provision for NPA Bad Debts Written-off | 1,560 | 320 | 1,693 | 8.5 |
| Profit before Tax | 2,843 | 6,652 | 5,878 | 106.7 |
| Provision for Tax | 675 | 1,877 | 1,807 | 167.7 |
| Net Profit | 2,168 | 4,775 | 4,070 | 87.7 |
Business position
| Particulars (INR crore) | Jun 30 2022 | Mar 31 2023 | Jun 30 2023 | YoY (%) |
| Domestic deposits | 9,09,095 | 10,47,375 | 10,50,306 | 15.5 |
| Domestic CASA | 4,01,622 | 4,42,511 | 4,23,600 | 5.5 |
| Global deposits | 10,32,714 | 12,03,688 | 11,99,908 | 16.2 |
| Domestic advances | 6,95,493 | 7,95,560 | 8,12,626 | 16.8 |
| Of which, retail loan portfolio (Organic) | 1,47,535 | 1,78,037 | 1,84,091 | 24.8 |
| Global advances | 8,39,785 | 9,69,548 | 9,90,988 | 18.0 |
| NIM Global % | 3.02 | 3.53 | 3.27 | 25 bps |
Key Ratios
| Particulars | Q1FY23 | Q4FY23 | Q1FY24 |
| Return on Assets (%) | 0.68 | 1.34 | 1.11 |
| CRAR (%) | 15.46 | 16.24 | 15.84 |
| CET-1 (%) | 11.24 | 12.24 | 11.94 |
| Gross NPA (%) | 6.26 | 3.79 | 3.51 |
| Net NPA (%) | 1.58 | 0.89 | 0.78 |
| PCR (with TWO) (%) | 89.38 | 92.43 | 93.23 |