Bank of Baroda (BoB) reported a 19 per cent year-on-year (yoy) increase in third-quarter standalone net profit at ₹4,579 crore, against₹3,853 crore in the year-ago quarter.

The public sector bank’s bottomline was supported by a sharp decline in provision for non performing investments, write-back in provision for standard advances, and lower tax provisions even as net interest income (NII) nudged up and other income declined.

NII (difference between interest earned and interest expended) moved up about 3 per cent y-o-y to ₹11,101 crore (₹10,818 crore in the year-ago quarter).

Other income, comprising fee-based income, treasury income and other non-interest income, declined about 21 per cent y-o-y to ₹2,810.5 crore (₹3,552 crore).

Total provisions (other than tax) and contingencies fell 72 per cent y-o-y to ₹666 crore (₹2,404 crore). Under this head, provisions for bad loans and bad debts written-off rose 23 per cent y-o-y to ₹1,007 crore (₹817 crore). However, provision for non performing investment declined 97 per cent to Rs 38 crore (Rs 1,409 crore). 

The bank received a write-back of Rs 417 crore from provision for standard advances (against a provision of Rs 124 crore). Tax provisions declined 10.5 per cent to Rs 1,769 crore (₹1,976 crore).

“We have posted net profit in excess of ₹4,000 crore consecutively for the last four quarters. In the nine months of FY24, we have achieved almost 91 per cent of FY23’s full year net profit. This shows the sustainability of the Bank’s profit going forward,” said Debadatta Chand, MD and CEO.

The global net interest margin (NIM) declined to 3.1 per cent from 3.37 per cent in the year-ago quarter.

The gross non-performing assets (NPAs) position improved to 3.08 per cent of gross advances as on December-end 2023, against 4.53 per cent as of December-end 2022.

The net NPA position, too, improved to 0.7 per cent of net advances, against 0.99 per cent earlier.

Global advances rose 13.57 per cent y-o-y to stand at ₹10,49,327 crore as of December-end 2023, with domestic and international growing 13.4 per cent (to ₹8,62,086 crore) and 14.4 per cent (to ₹1,87,240 crore), respectively.

“The growth in advances is marginally below our guidance of 14-16 per cent. In this quarter, we reduced our bulk deposits to the extent of ₹20,000 crore….because of that we had to realign our corporate book. So, this is the reason why our credit growth is below the guidance. But, for the full year, we maintain our credit growth target at 14-16 per cent,” said Chand. 

Within domestic advances, organic retail advances reported the highest growth of 22 per cent, followed by agriculture and organic MSME (12.6 per cent each) and corporate (10.2 per cent).

Global deposits were up 8.3 per cent at ₹12,45,300 crore, with domestic deposits and international deposits increasing 6.3 per cent (to ₹10,67,371 crore) and 22.1 per cent (to ₹1,77,929 crore), respectively.

CASA (current account, savings account) deposits declined to 40.69 per cent of domestic deposits as of December-end 2023, against 41.62 per cent as of December-end 2022.