Bank of Baroda’s net profit rose 75.4% y-o-y in October-December due to strong loan growth and lower bad loan provisions.
The state-owned bank posted a bottom-line of Rs 3,853 crore in the quarter under review, up 16.2% on quarter.
Domestic advances rose 16.2% y-o-y to Rs 7.6 trillion as on December 31.
Organic retail advances posted a rise of 29.4% y-o-y in the quarter, led by a growth in automobile loans, home loans, personal loans, mortgage loans, and education loans.
Personal loans witnessed a 170% y-o-y rise, the highest among all retail loan categories. Automobile loans rose nearly 28% y-o-y and education loans rose 24.1% y-o-y. Agricultural loans grew nearly 13% y-o-y and gold loans rose nearly 30%.
Loans to micro, small and medium-sized enterprises spiraled 11.1% y-o-y.
Domestic deposits rose nearly 15% y-o-y to Rs 10 trillion as on December 31.
Domestic current account savings account (CASA) deposits rose 8% y-o-y to nearly Rs 4.2 trillion as on December 31. Domestic savings account deposits rose 9.2% y-o-y.
Net interest income grew nearly 27% y-o-y to Rs 10,818 crore in December quarter. Net interest margin rose to 3.37% in the December quarter from 3.13% a year ago.
The bank’s annualised return on assets rose to 1.13% in the December quarter from 0.74% a year ago.
The bank’s gross non-performing asset ratio fell to 4.53% as on December 31 from 7.25% a year ago. Net non-performing asset ratio fell to 0.99% as on December 31 from 2.25% a year ago.
In absolute numbers, gross non-performing assets fell 25.3% y-o-y to Rs 41,858 crore as on December 31.
The bank’s slippage ratio fell to 1.05% as on December 31 from 1.68% a year ago. The credit cost reduced to 0.37% in the December quarter from 2.33% a year ago.
The bank saw fresh slippages worth Rs 2,172 crore in December quarter. Recoveries and upgrades were Rs 2,635 crore in the December quarter.
Corporate slippages fell sharply to Rs 13 crore in the December quarter from Rs 602 crore a year ago.
In recent weeks, there has been much discussion on the banking industry’s exposure to the Adani group.
While Bank of Baroda Managing director and chief executive officer Sanjiv Chadha did not specifically mention the group, he said that there are currently no issues with regard to the banks’ exposure to large corporates.
Also read: Super food brand Nourish You raises $2mn in seed round
RBI’s large exposure framework mandates that the sum of all the exposure values of a bank to a group of connected counterparties not be higher than 25% of the bank’s tier-1 capital base.
A back of the envelope calculation puts the bank’ exposure to the Adani group at Rs 5,000-Rs 5,500 crore.
The bank’s provision coverage ratio rose to 92.34% as on December 31 from 85.95% a year ago.
The bank’s capital-to-risk weighted assets ratio stood at 14.93% as on December 31. Return on assets rose 39 basis points y-o-y to 1.13% as on December 31.