Bank of Baroda (BoB) reported a 79 per cent year-on-year (YoY) jump in first quarter (Q1FY23) standalone net profit at ₹2,168 crore against ₹1,209 crore in the year-ago period on the back of growth in net interest income and sharp decline in provisions.
Net interest income (difference between interest earned and interest expended) was up 12 per cent YoY at ₹8,838 crore (₹7,892 crore).
Other income, comprising recoveries made in written off accounts, commission/ fee income, earnings from foreign exchange transactions, profit and loss on sale of investments, etc., declined 59 per cent YoY to ₹1,182 crore (₹2,864 crore).
“It has been a reasonably satisfactory quarter for us. More so because we had some headwinds in terms of increase in interest rates, which has obviously impacted the treasury income, with market-to-market implications,” Sanjiv Chadha, MD & CEO, said.
The bank had a good beginning in FY23 in terms of having both growth as well as good margins, he added.
Chadha emphasised that net interest margin at 3.02 per cent was steady (3.04 per cent in Q1FY21), credit cost was at an all-time low (0.75 per cent), and there was an improvement in credit cycle.
The public sector bank booked a loss of ₹588 crore in treasury income due to rising bond yields. In the year-ago period, the treasury income was at ₹1,245 crore.
Gross non-performing assets (GNPAs) declined to 6.26 per cent of gross advances as at June-end 2022 against 6.61 per cent as at March-end 2022. Net NPAs too eased to 1.58 per cent against 1.72 per cent.
Fresh slippages during the reporting quarter were lower at ₹3,266 crore (₹4,514 crore in the preceding quarter). Reduction in NPAs via recovery, upgradation and write-offs was lower at ₹5,820 crore (₹7,717 crore).
Total provisions, including for NPA and bad debts written-off; standard advances; investment; and other provisions, fell 58 per cent YoY to ₹1,685 crore (₹4,006 crore).
Chadha said the credit cost would be in the 1.25-1.50 per cent range in the current financial year.
Ajay K. Khurana, Executive Director, said the bank has set a recovery target of ₹13,000 crore in FY23. Of this, recovery in the reporting quarter was at about ₹3,200 crore.
Global advances were up 18 per cent YoY and stood at ₹8,39,785 crore as at June-end 2022.
The BoB chief underscored that advances grew in double digits across all segments—retail (23 per cent), agriculture (14 per cent), MSME (11 per cent), corporate (17 per cent) and international advances (31 per cent).
Global deposits increased by 11 per cent YoY and stood at ₹10,32,714 crore. Domestic current account, savings account deposits increased to 44.18 per cent as at June-end 2022 from 43.21 per cent as at June-end 2021.