Bank Of Baroda Posts 19 Pc Rise In Net Profit To Rs 4,579 Cr In Q3

State-owned Bank of Baroda on Wednesday reported a 19 per cent increase in net profit to Rs 4,579 crore for the December quarter, mainly due to a 72 per cent write-back of provisions.

This is the fourth consecutive quarter that the city-headquartered lender logged a net profit of over Rs 4,000 crore, senior bank officials told reporters in an earnings call.

The bank is ready to race ahead with a strong and sustainable growth path, they said, adding that the bank's total net profit was at Rs 12,902 crore in the April-December period.

The bank made steady progress on the asset quality front with lower-than-expected slippages and higher-than-targeted recoveries and write-backs.

The reporting quarter saw the bank making 72 per cent increase in write-backs from provisions, meaning it recovered that much money more from previous provisions, Debadatta Chand, the Chief Executive of the second largest state-run bank in the country, told reporters.

The bank's gross Non-Performing Assets (NPAs) declined 145 bps to 3.08 per cent to Rs 32,318 crore. Net NPAs came down 29 bps to 0.70 per cent as against 0.99 per cent a year ago, Chand said, adding that the bank will comfortably close the fiscal with much better set of numbers.

The lender's total income rose to Rs 31,416 crore during the reporting quarter from Rs 27,092 crore a year ago, led by interest income of Rs 28,605 crore, which rose from Rs 23,540 crore.

Bank of Baroda Chief Financial Officer Ian Desouza said recoveries and write-backs stood at Rs 2,800 crore in the quarter and slippages at Rs 2,363 crore, and expressed confidence that the bank will maintain slippages at or below 1 per cent.

He said the recovery target of Rs 12,000 crore will be achieved during the fiscal and Rs 9,000 crore has been covered.

bank of Baroda's global business grew 10.7 per cent to Rs 22.95 lakh crore, and global net interest margin improved 3 bps to 3.10 per cent.

The balance sheet remained robust with a healthy provision coverage ratio of 93.39, the lender said.

Global advances grew 13.6 per cent to Rs 10,49,327 crore, led by robust retail loans.

Ajay Khurana, an executive director of the bank, said the asset quality of the personal loan book is good with only 2.2 per cent delinquencies.

The impact of the November 21, 2023 Reserve Bank of India move will have around 17 bps impact on the capital, he added.

Despite a good loan run rate and the yield on advances increasing to 8.51 per cent during the third quarter of the ongoing fiscal from 7.78 per cent year-on-year, the key net interest income inched up only 2.6 per cent to Rs 11,101 crore.

Desouza said this was primarily because of the rising deposit cost, which increased to 4.96 per cent from 4.01 per cent.

Slippage ratio declined to 1.06 for the nine months this fiscal as against 1.22.

Global deposits increased 8.3 percent to Rs 12,45,300 crore and domestic deposits rose 6.3 per cent to Rs 10,67,371 crore.

International deposits grew 22.1 per cent to Rs 1,77,929 crore.

The bank's agriculture loan portfolio grew 12.6 per cent to Rs 1,34,240 crore, while the gold loan book jumped 28.3 per cent to Rs 45,074 crore.

The MSME portfolio grew 12.6 per cent to Rs 1,15,995 crore and corporate advances grew 10.2 per cent to Rs 3,62,813 crore.