 |
|
Bank of Baroda, India's second-largest state-run lender, reported a 2.3% year-on-year (YoY) increase in its standalone net profit to ₹4,886.49 crore for the fourth quarter of the financial year 2023-24 (Q4FY24). This represents a modest growth from the ₹4,775.33 crore net profit recorded in the same period of the previous year.
The bank's net interest income (NII), a key measure of its core lending and borrowing operations, also witnessed a 2.3% YoY increase to reach ₹11,793 crore in Q4FY24, compared to ₹11,525 crore in Q4FY23. Bank of Baroda attributed this growth primarily to higher credit growth and an improvement in its net interest margin (NIM). The bank's global NIM improved by 17 basis points (bps) sequentially to stand at 3.27% in Q4FY24, compared to 3.10% in Q3FY24.
Pre-provisions operating profit (PPOP), which reflects the bank's operating performance before making provisions for bad loans, rose by a marginal 0.4% YoY to ₹8,106.10 crore during the quarter, compared to ₹8,072.88 crore in Q4FY23. This indicates that the bank's core operating income remained largely stable during the period.
Bank of Baroda's asset quality also showed signs of improvement, with Gross non-performing assets (GNPA) declining by 1.5% to ₹31.833,63 crore in Q4FY24, compared to ₹32,317.56 crore in Q3FY24. Net NPA also inched marginally higher by 0.1% to ₹7,213.34 crore, compared to ₹7,208.31 crore in the previous quarter. This suggests that the bank has been making progress in reducing its exposure to stressed assets and improving its overall asset quality.
Gross NPA as a percentage of gross advances fell by 16 basis points (bps) to 2.92% in Q4FY24, from 3.08% in Q3FY24, while net NPA as a percentage of net advances declined by 2 bps to 0.68% from 0.7%, sequentially. These reductions indicate an improvement in the quality of the bank's loan portfolio.
The bank's provisions, which are set aside to cover potential loan losses, stood at ₹1,301.94 crore in Q4FY24, compared to ₹666.34 crore in the previous quarter and ₹1,420.71 crore in Q4FY23. The higher provisions in Q4FY24 may reflect the bank's prudent approach to managing its credit risk.
Bank of Baroda's slippage ratio, which measures the percentage of loans that have turned bad during the quarter, increased to 1.12% in Q4FY24 from 0.95% in Q3FY24, indicating a rise in the number of loans that have defaulted. This may be a concern for the bank going forward.
The bank's total domestic deposits grew by 7.7% YoY to reach ₹11.28 lakh crore in Q4FY24, compared to ₹10.47 lakh crore in the same period of the previous year. Domestic advances also grew by 12.9% YoY to ₹8.98 lakh crore in Q4FY24, compared to ₹7.95 lakh crore in Q4FY23. This indicates a healthy growth in the bank's loan book.
Domestic CASA (current account savings account) deposits registered a growth of 5.4% YoY to stand at ₹4.66 lakh crore as of March 31, 2024. CASA deposits are considered to be a more stable source of funding for banks, as they are less likely to be withdrawn quickly.
The bank's board of directors has recommended a dividend of ₹7.60 per equity share of face value ₹2 each fully paid up for the financial year 2023-24. The record date for the dividend payment has been set as June 28, 2024.
The announcement of the Q4 results was met with a negative reaction from the stock market, with Bank of Baroda's share price dropping over 2%. On Friday, Bank of Baroda shares ended 2.67% lower at ₹255.65 apiece on the BSE.
Overall, Bank of Baroda's Q4 results paint a mixed picture. While the bank reported a modest increase in net profit and NII, its asset quality showed signs of improvement, but its slippage ratio increased. The bank's growth in deposits and advances was healthy, but its share price declined after the announcement of the results.