Bank of Baroda (BoB) reported a 6 per cent year-on-year (y-o-y) increase in third quarter (Q3FY25) standalone net profit at ₹4,837 crore amid relatively muted growth in net interest income (NII) and robust growth in non-interest income.
The public sector bank had reported a net profit of ₹4,579 crore in the year-ago quarter (Q3FY24). Net profit in the reporting quarter, however, is down 8 per cent vis-a-vis preceding quarter’s ₹5,238 crore.
Debadatta Chand, MD & CEO, Bank of Baroda, emphasised that the Bank posted net profit exceeding ₹4,000 crore for the eighth successive quarter. He expects to end FY25 with a deposit and credit growth of 9-11 per cent and 11-13 per cent, respectively.
Net interest income (difference between interest earned and interest expended) moved up about 3 per cent y-o-y to ₹11,417 crore (₹11,101 crore in the year-ago quarter).
Non-interest income, comprising fee-based income, treasury income and other non-interest income, was up about 34 per cent y-o-y to ₹3,769 crore (₹2,810 crore).
Net interest margin (NIM) declined to 2.94 per cent against 3.10 per cent in Q3FY24. Chand noted that there is a bit of a squeeze on NIM because of the market conditions (higher cost of deposits). However, the Bank expects to end FY25 with a NIM of 3.00-3.10 per cent.
Total provisions (other than tax) in Q3FY25 jumped 62 per cent y-o-y to ₹1,082 crore (₹666 crore). But it was sharply lower than ₹2,336 crore in Q2FY25.
“So there is no concern at all with regard to the provisioning. The asset quality is very strong at this point of time,” Chand said.
NPAs improve
Gross non-performing assets (NPAs) position improved to 2.43 per cent of gross advances as on December-end 2024 against 3.08 per cent as on December-end 2023.
Net NPA position too improved to 0.59 per cent of net advances against 0.70 per cent.
Global advances rose 11.8 per cent y-o-y to stand at ₹11,73,034 crore as on December-end 2024, with domestic and international advances growing 11.9 per cent (to ₹9,64,869 crore) and 11.2 per cent (to ₹2,08,165 crore), respectively.
Within domestic advances, organic retail advances reported the highest growth of 19.5 per cent, followed by MSME (13.6 per cent), agriculture (12.5 per cent) and corporate (6.8 per cent).
The BoB Chief said the Bank wanted to go slow on the finely priced corporate credit as the cost of deposit is on the higher side.
Global deposits were up 11.8 per cent to stand at ₹13,92,461 crore, with domestic deposits and international deposits increasing 9.2 per cent (to ₹11,65,874 crore) and 27.3 per cent (to ₹2,26,588 crore), respectively.
CASA (current account, savings account) deposits declined to 39.68 per cent of domestic deposits as on December-end 2024 against 40.69 per cent per cent as on December-end 2023.
Shares of BoB closed at ₹222.45 apiece, down 0.04 per cent over previous close on BSE.