Bank of Baroda Q3 Results- Net Profit Jumps 18.8% to ₹4,579 Crore

Bank of Baroda Q3 Results Key Highlights:

1. Global Business Growth:

The global business of the company expanded by 10.7% to INR 22,94,627 crore as of December 31, 2023, showcasing a steady upward trajectory in market presence and operations.

2. Net Profit Growth:

Q3FY24 witnessed a significant growth in net profit, reaching INR 4,579 crore, marking an 18.8% year-on-year increase, highlighting efficient financial management and operational performance.

3. Return on Assets (ROA) and Return on Equity (ROE):

ROA for the quarter stood at 1.20%, while ROE saw a substantial increase by 168 basis points year-on-year to 18.70% for 9MFY24, indicating improved profitability and effective asset utilisation.

4. Operating Income Growth:

The company experienced a healthy growth in operating income, rising by 18.8% year-on-year in 9MFY24, supported by robust operating performance across various segments.

5. Non-Interest Income Growth:

Non-interest income surged by approximately 1.5 times to INR 10,304 crore in 9MFY24, contributing significantly to the overall profitability and revenue diversification.

6. Operating Profit Growth:

Healthy growth in income combined with controlled operational expenses resulted in a commendable operating profit growth of 21.7% year-on-year for 9MFY24, underscoring operational efficiency.

7. Cost to Income Ratio Improvement:

The cost to income ratio decreased by 123 basis points year-on-year to 47.13% for 9MFY24, reflecting effective cost management practices and enhanced operational efficiency.

8. Net Interest Margin (NIM) Improvement:

Global NIM witnessed a sequential improvement of 3 basis points, standing at 3.10% in Q3FY24, with a cumulative NIM of 3.14% for 9MFY24, indicating improved interest income management.

9. Asset Quality Enhancement:

The bank demonstrated significant improvement in asset quality, with a reduction in Gross Non-Performing Assets (GNPA) by 145 basis points year-on-year to 3.08% in Q3FY24, strengthening its financial stability.

10. Provision Coverage Ratio (PCR) and Credit Cost:

The bank maintained a healthy Provision Coverage Ratio (PCR) of 93.39%, ensuring robust risk management, with credit cost remaining below 1% at 0.69% for 9MFY24 and 0.39% for the quarter.

11. Liquidity Coverage Ratio (LCR):

BOB maintained a healthy Liquidity Coverage Ratio (LCR) at 133% as of December 31, 2023, ensuring sufficient liquidity to meet its financial obligations and regulatory requirements.

12. Advances Growth and Retail Loan Book:

Global advances registered a growth of 13.6% year-on-year in Q3FY24, primarily driven by robust retail loan book growth, with organic retail advances growing by 22%, showcasing strong performance across key focus areas including Auto Loan, Home Loan, Personal Loan, Mortgage Loan, and Education Loan.

Additional Read: Q3 Results Dashboard

Profitability:

1. Standalone Net Profit Growth:

BOB’s standalone net profit surged to INR 4,579 crore in Q3FY24 from INR 3,853 crore in Q3FY23, demonstrating a robust year-on-year growth. For 9MFY24, the net profit reached INR 12,902 crore, reflecting a significant 38.2% increase compared to the same period last year.

2. Net Interest Income (NII) and Non-Interest Income Growth:

NII grew by 2.6% year-on-year to INR 11,101 crore in Q3FY24 and by 10.4% for 9MFY24, while non-interest income for 9MFY24 stood at INR 10,304 crore, marking an impressive 57.1% year-on-year growth.

3. Net Interest Margin (NIM) and Operating Income:

Global NIM improved to 3.10% in Q3FY24, with a cumulative NIM of 3.14% for 9MFY24. Yield on Advances increased to 8.51% in Q3FY24, while operating income for Q3FY24 reached INR 13,912 crore and INR 43,233 crore for 9MFY24, showcasing steady growth.

4. Operating Profit and Cost Management:

Operating profit for Q3FY24 stood at INR 7,015 crore, with a notable increase for 9MFY24 by 21.7% to INR 22,859 crore. The cost-to-income ratio was 49.57% for Q3FY24, reflecting efficient cost management practices.

5. Return on Assets (ROA) and Return on Equity (ROE):

ROA improved to 1.20% in Q3FY24 from 1.13% in Q3FY23, with ROE standing at 19.91% for Q3FY24 and increasing by 168 basis points year-on-year to 18.70% for 9MFY24, indicating enhanced profitability and effective asset utilisation.

Asset Quality:

1. Reduction in Gross NPA and Net NPA:

The Gross NPA of the Bank decreased by 22.8% year-on-year to INR 32,318 crore in Q3FY24, with the Gross NPA Ratio improving to 3.08%. The Net NPA Ratio stood at a low 0.70% in Q3FY24, showcasing improved asset quality.

2. Provision Coverage Ratio (PCR) and Slippage Ratio:

The Provision Coverage Ratio of the Bank stood at 93.39%, indicating robust risk management. The slippage ratio declined to 1.06% for 9MFY24, with credit cost at 0.39% for Q3FY24 and 0.69% for 9MFY24, reflecting improved asset quality and provisioning.

Capital Adequacy:

1. CRAR and LCR:

The CRAR of the Bank stood at 14.72% in Dec’23, with Tier-I at 12.67% and Tier-II at 2.05%. The Liquidity Coverage Ratio (LCR) consolidated stood at 133%, ensuring adequate capital adequacy and liquidity to meet regulatory requirements.

Business Performance:

1. Advances and Deposits Growth:

Global Advances of the Bank increased to INR 10,49,327 crore, with domestic advances reaching INR 8,62,086 crore. Global Deposits increased by 8.3% year-on-year to INR 12,45,300 crore, with domestic deposits growing by 6.3% year-on-year to INR 10,67,371 crore.

2. Retail and MSME Portfolio Growth:

Organic Retail Advances grew by 22%, driven by various sectors including Auto Loan, Home Loan, Personal Loan, Mortgage Loan, and Education Loan. MSME portfolio grew by 12.6% year-on-year to INR 1,15,995 crore, indicating robust growth in key focus areas.

3. Agriculture and Gold Loan Portfolio:

Agriculture loan portfolio grew by 12.6% year-on-year to INR 1,34,240 crore, while the total Gold loan portfolio registered a growth of 28.3% year-on-year, reaching INR 45,074 crore, showcasing diversification and growth in key sectors.

4. Corporate Advances Growth:

Corporate advances registered a growth of 10.2% year-on-year, standing at INR 3,62,813 crore, highlighting sustained growth and business expansion in corporate segments.

Financial result for Quarter ended 31st December 2023

Particulars (INR crore)	Q3FY23	Q2FY24	Q3FY24	YoY(%)	9MFY23	9MFY24	YoY(%)
Interest Income	23,540	27,862	28,605	21.5	63,732	83,023	30.3
Interest Expenses	12,722	17,031	17,504	37.6	33,901	50,094	47.8
Fee Income	1,490	1,996	1,543	3.6	4,284	5,046	17.8
Net Interest Income (NII)	10,818	10,831	11,101	2.6	29,831	32,929	10.4
Operating Income	14,370	15,002	13,912	-3.2	36,391	43,233	18.8
Operating Expenses	6,138	6,982	6,897	12.4	17,600	20,373	15.8
Operating Profit	8,232*	8,020	7,015	-14.8	18,791	22,859	21.7
Total Provisions (other than tax) and contingencies	2,404	2,161	666	-72.3	5,717	4,774	-16.5
of which, Provision for NPA Bad Debts Written-off	817	2,285	1,007	23.3	4,031	4,986	23.7
Profit before Tax	5,828	5,859	6,349	8.9	13,074	18,085	38.3
Provision for Tax	1,976	1,606	1,769	-10.5	3,740	5,183	38.6
Net Profit	3,853	4,253	4,579	18.8	9,334	12,902	38.2

*Excluding reversal of MTM Provision Operating Profit for Q3FY23 would have been INR 7,482 crore 

Additional Check: Bank of Baroda Share Price

About Bank of Baroda

Bank of Baroda, established on July 20, 1908, stands as a cornerstone of India’s banking landscape, operating as a state-owned financial institution. Headquartered in Vadodara, Gujarat, formerly known as Baroda, the bank has played a pivotal role in the country’s economic development. In line with the government’s ‘Alternative Mechanism’ scheme, Bank of Baroda underwent a significant transformation with the amalgamation of Vijaya Bank and Dena Bank, effective from April 1, 2019. Today, Bank of Baroda boasts a formidable presence with 8,211 branches and 11,030 ATMs and Cash Recyclers nationwide, complemented by a robust international network of 92 offices across 17 countries, solidifying its position as one of India’s largest and most influential banks.

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Sources: https://www.bankofbaroda.in/-/media/project/bob/countrywebsites/india/pdfs2/2024/24-01/press-release-2.pdf