Beating the analysts’ expectations, Bank of Baroda on Friday announced a 23% year-on-year rise in net profit to Rs 5,238 crore in the second quarter of the current financial year, driven by healthy growth in advances.
Analysts polled by Bloomberg had estimated the bank to post Rs 4,452 crore net profit in the quarter.
Net interest income, the difference between interest earned and paid, rose 7% to Rs 11, 622 crore during the September quarter against Rs 10,831 crore in the corresponding quarter of previous fiscal.
Non-interest income of the bank grew by 24% during the quarter to Rs 5,181 crore in September.
Net interest margins of the lender came at 3.10% as on September 30, 2024, which was down from 3.18 % in a quarter ago period, but up from 3.07 % in a year ago period.
The public sector lender has reduced credit growth guidance to 11-13% for the current financial year compared to 12-14% earlier and cut deposit growth guidance to 9-11% from 10-12%.
“Deposits are not growing because the savers’ money is going into capital markets. As we calibrate the loan growth guidance, we have brought down the deposit guidance as well since we are mindful of the margin guidance which we have,” said Debadatta Chand, MD & CEO, Bank of Baroda, in earnings call.
Domestic gross advances grew 13% annually and 6.5% sequentially to Rs 9.38 lakh crore.
Among this, retail continued to grow at the highest pace of 20% annually to Rs 2.32 lakh crore, followed by MSME rising at 12% to Rs 1.26 lakh crore.
Corporate and agricultural loans both rose nearly 11% to Rs 3.88 lakh crore and Rs 1.44 lakh crore, respectively. Gold loans rose over two-fold to Rs 6,659 crore. Personal loans were up 25% to Rs 32,062 crore.
Domestic deposits increased by 7.1% year-on-year to Rs 11.51 lakh crore, from Rs 10.74 lakh crore. International deposits jumped sharply by 21.2% on-year to Rs 2.12 lakh crore.
Asset quality of the bank witnessed improvement with gross non-performing assets (NPAs) falling to 2.50 % of gross advances at the end of the September quarter of 2024 as against 3.32% a year ago.