Bank of Baroda on Wednesday reported an 18.8% rise in net profit to Rs 4,579 crore in the third quarter of current financial year, aided by a healthy loan growth. The public sector lender beat expectations as Bloomberg analysts expected the bank to post Rs 4,127 crore net profit in the quarter.
Net interest income, the difference between interest earned and paid, rose 2.6% to Rs 11,101 crore from Rs 10,818 crore a year ago. Net interest margin (NIM) contracted to 3.23% compared to 3.54% a year ago.
“Going forward, in January-March, generally we see a lot of traction in terms of deposit growth. We had given a guidance of 12-14% growth for deposits and we hope to maintain around 12% deposit growth to maintain advances growth of 14-16%,” said Debadatta Chand, MD & CEO, Bank of Baroda, in an earnings call on Wednesday.
The bank improved its asset quality during the quarter as gross non-performing assets (NPAs) declined to 3.08% of gross loans by the end of December 2023 from 4.53% a year ago. Similarly, net NPAs or bad loans came down to 0.70% from 0.99% a year ago.
However, the bank’s capital adequacy ratio moderated to 14.72% against 14.93% at the end of December 2022. During the December quarter of FY24, the bank made a contingent provision of Rs 50.49 crore in respect to its investment in alternate investment fund (AIF) pursuant to an RBI circular dated December 19, 2023.
The lender witnessed a strong loan growth as its domestic advances increased by 13.4% year-on-year to Rs 8.62 trillion as of December 31, 2023, while global advances grew 13% to Rs 10.49 trillion. Domestic deposits increased by 6.3% to Rs 10.67 trillion while international deposits grew 22.1% to Rs 1.77 trillion.
Retail advances grew by 22%, led by growth in auto loan, home loan, personal loan, mortgage loan and education loan. Corporate advances registered a growth of 10.2% to reach Rs 3.62 trillion as of December end.