by Suman Gupta
Key Highlights
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MUMBAI, 3rd FEBRUARY, 2023 : Bank of Baroda (BOB) today reported a healthy third-quarter earnings with double-digit growth in the bottom line on strong growth in net interest income and improvement in asset quality. Mr Sanjiv Chadha, Managing director (MD) and CEO of Bank of Baroda (BoB) said Banking for the corporate sector is at its best.
BoB reported a 75 percent rise in its net profit for the third quarter at Rs 3,853 crore. According to the media release, net profit stood at Rs 9,334 crore, registering a strong year-on-year (YoY) growth of 69.9 percent.
In the second quarter, BOB reported a net profit of Rs 3,313.42 crore with an increase of 58.7 percent.
Net Interest Income (NII) has risen by 26.5 percent to Rs 10,818 crore in the third quarter. However, the public sector lender’s NII jumped 34.5 percent to Rs 10,714 crore for the second quarter.
Moreover, operating profit jumped by 50.1 percent YoY in the third quarter to Rs. 8,232 crore.
BUSINESS IN NUTSHELL:
Total Business is a sum of total deposits and total advances
Business Performance
- Global Advances of the Bank increased to INR 9,23,878 crore, +19.7% YoY.
- Domestic Advances of the Bank increased to INR 7,60,249 crore, +16.2% YoY.
- International advances grew by 4.4% sequentially in Q3FY23 as against 8.6% in Q2FY23 and stands at INR 1,63,629 crore.
- Global Deposits increased by 17.5% YoY to INR 11,49,507 crore.
- Domestic Deposits increased by 14.5% YoY to INR 10,03,737 crore in Dec’22.
- International Deposits grew by 43.6% on a YoY basis to INR 1,45,770 crore in Dec’22.
- Domestic CASA registered a growth of 7.6% YoY and stands at INR 4,17,812 crore with Domestic Savings accounts deposits registering a growth of 9.2% on a YoY basis in Dec’22.
- Organic Retail Advances grew by 29.4%, led by growth in high focus areas such as Auto Loan (27.5%), Home Loan (19.6%), Personal Loan (169.6%), Mortgage Loan (20.5%), Education Loan (24.1%) on a YoY basis.
- Agriculture loan portfolio grew by 12.8% YoY to INR 1,19,197 crore.
- Total Gold loan portfolio (including retail and agri.) stands at INR 35,134 crore, registering a growth of 29.8% on a YoY basis.
- Organic MSME portfolio grew by 11.1% YoY to INR 1,03,003 crore.
Profitability
- Net Interest Income (NII) grew by 26.5% YoY to INR 10,818 crore in Q3FY23. NII registered a growth of 24.2% YoY for 9MFY23 and stands at INR 29,831 crore.
- Fee based Income for the quarter increased by 9.4% to INR 1,539 crore. It stands at INR 4,332 crore for 9MFY23 with a growth of 12.2% YoY.
- Operating Income for Q3FY23 stands at INR 14,370 crore, increase of 29.8% YoY.
- Yield on Advances increased to 7.78% in Q3FY23 as against 6.92% in Q3FY22.
- Cost of Deposits stands at 4.01% in Q3FY23 as against 3.50% in Q3FY22.
- Cost to Income ratio declined to 42.71% for Q3FY23 as against 50.47% for Q3FY22.
- Operating Profit for Q3FY23 stands at INR 8,232 crore, increase of 50.1% on a YoY basis. Operating Profit for 9MFY23 stands at INR 18,791 crore up by 12.2% YoY.
- Bank reported a standalone Net Profit of INR 3,853 crore in Q3FY23 as against a profit of INR 2,197 crore in Q3FY22.
- Global NIM stands at 3.37% in Q3FY23, increase of 24 bps YoY. NIM for 9MFY23 stands at 3.23% against 3.01% for 9MFY22.
- Return on Assets (annualised) improved to 1.13% in Q3FY23 from 0.74% in Q3FY22. Return on Assets for 9MFY23 stands at 0.93%.
- Return on Equity (annualised) for 9MFY23 increased by 504 bps YoY to 17.02%.
- For the consolidated entity, Net Profit stood at INR 4,306 crore in Q3FY23 as against INR 2,464 crore in Q3FY22.
Asset Quality
- The Gross NPA of the Bank reduced by 25.3% YoY to INR 41,858 crore in Q3FY23 and Gross NPA Ratio improved to 4.53% in Q3FY23 from 7.25% in Q3FY22.
- The Net NPA Ratio of the Bank improved to 0.99% in Q3FY23 as compared with 2.25% in Q3FY22.
- The Provision Coverage Ratio of the Bank stood at 92.34% including TWO and 78.85% excluding TWO in Q3FY23.
- Slippage ratio declined to 1.05% for Q3FY23 as against 1.68% in Q3FY22. Slippage ratio of 9MFY23 improved by 72 bps and stands at 1.22%.
- Credit cost for the Q3FY23 stands at 0.37%.
Capital Adequacy
- CRAR of the Bank stands at 14.93% in Dec’22. Tier-I stood at 12.62% (CET-1 at 10.83%, AT1 at 1.79%) and Tier-II stood at 2.31% as of Dec’22.
- The CRAR and CET-1 of consolidated entity stands at 15.44% and 11.45% respectively
Business position
| Particulars (INR crore) | Dec 31 2021 | Sep 30, 2022 | Dec 31, 2022 | YoY (%) |
| Domestic deposits | 8,76,555 | 9,58,967 | 10,03,737 | 14.5 |
| Domestic CASA | 3,88,169 | 4,10,151 | 4,17,812 | 7.6 |
| Global deposits | 9,78,034 | 10,90,172 | 11,49,507 | 17.5 |
| Domestic advances | 6,54,315 | 7,16,737 | 7,60,249 | 16.2 |
| Of which, retail loan portfolio (Organic) | 1,28,960 | 1,58,506 | 1,66,861 | 29.4 |
| Global advances | 7,71,994 | 8,73,496 | 9,23,878 | 19.7 |
| NIM Global % | 3.13 | 3.33 | 3.37 | 24 bps |
Financial result for Quarter ended 31st December 2022
| Particulars (INR crore) | Q3FY22 | Q2FY23 | Q3FY23 | YoY(%) |
| Interest Income | 17,963 | 21,254 | 23,540 | 31.0 |
| Interest Expenses | 9,411 | 11,080 | 12,722 | 35.2 |
| Fee Income | 1,407 | 1,515 | 1,539 | 9.4 |
| Net Interest Income (NII) | 8,552 | 10,174 | 10,818 | 26.5 |
| Operating Income | 11,071 | 12,000 | 14,370 | 29.8 |
| Operating Expenses | 5,588 | 5,969 | 6,138 | 9.8 |
| Operating Profit | 5,483 | 6,031 | 8,232 | 50.1 |
| Total Provisions (other than tax) and contingencies | 2,506 | 1,628 | 2,404 | -4.1 |
| of which, Provision for NPA Bad Debts Written-off | 4,283 | 1,654 | 817 | -80.9 |
| Profit before Tax | 2,976 | 4,403 | 5,828 | 95.8 |
| Provision for Tax | 779 | 1,090 | 1,976 | — |
| Net Profit | 2,197 | 3,313 | 3,853 | 75.4 |
Key Ratios
| Particulars | Dec 31 2021 | Sep 30, 2022 | Dec 31, 2022 |
| CRAR (%) | 15.47 | 15.25 | 14.93 |
| Tier-1 (%) | 13.24 | 12.81 | 12.62 |
| CET-1 (%) | 11.3 | 10.95 | 10.83 |
| Gross NPA (%) | 7.25 | 5.31 | 4.53 |
| Net NPA (%) | 2.25 | 1.16 | 0.99 |
| PCR (with TWO) (%) | 85.95 | 91.73 | 92.34 |
About Bank of Baroda
Bank of Baroda (“The Bank”) established on July 20, 1908 is an Indian state-owned banking and financial services organization, headquartered in Vadodara (earlier known as Baroda), in Gujarat, India. Under the ‘Alternative Mechanism’ scheme, the Government announced the amalgamation of Vijaya Bank and Dena Bank with Bank of Baroda which came into effect on April 1, 2019.
Bank of Baroda is one of India’s largest banks with a strong domestic presence spanning 8,178 branches and 11,456 ATMs and Cash Recyclers supported by self-service channels. The Bank has a significant international presence with a network of 94 overseas offices spanning 17 countries.
