Bank of Baroda announces Financial Results for the Quarter ended 30th September 2023

Key Highlights

• Bank of Baroda (BOB) quarterly Net profit higher by 28.4% YoY at INR 4,253 crore in Q2FY24. Net Profit for H1FY24 grew by 51.8% to INR 8,323 crore.
• BOB has delivered ROA of more than 1% and ROE around 20%, consistently for last 5 quarters. ROA for Q2FY24 stands at 1.14% and ROE at 19.74%.
• The growth in profitability was supported by healthy Operating Income growth of 25% YoY in Q2FY24.
• Operating income growth was augmented by ~2x YoY growth in Non-Interest Income in Q2FY24.
• Non-Interest Income growth in Q2FY24 was driven by robust YoY growth in Fee Income (+31.7%), Trading Gains (+69.5%) and Recovery from TWO (~2x)
• Strong growth in Income coupled with subdued increase in Opex has resulted in robust Operating profit growth of 33% YoY for Q2FY24. Operating profit for H1FY24 higher by 50.1% YoY.
• The Bank has been able to effect a reduction in the Cost to Income ratio by 320 bps YoY to 46.54% for Q2FY24. Cost to Income ratio for H1FY24 is also declined by 608 bps YoY to 45.97%
• BOB has witnessed significant improvement in its Asset quality with reduction in GNPA by 199 bps YoY to 3.32%. Bank’s NNPA improved to 0.76%, a reduction of 40 bps YoY.
• BOB’s balance sheet remained robust with healthy Provision Coverage Ratio (PCR) of 93.16% with TWO & at 77.64% without TWO.
• Credit cost remains below 1% at 0.92% for Q2FY24.
• BOB’s Global Advances registered a strong YoY growth of 17.3% in Q2FY24 led by robust retail loan book growth. Bank’s organic Retail Advances grew by 22.2%, driven by growth in high focus areas such as Auto Loan (21.1%), Home Loan (16.1%), Personal Loan (67.2%), Mortgage Loan (13.3%), Education Loan (18.3%).
• Bank achieved a total business of INR 22,74,148 crore as of 30th Sep 2023, registering a growth of 15.8% YoY.

Profitability

• BOB reported a standalone Net Profit of INR 4,253 crore in Q2FY24 as against a profit of INR 3,313 crore in Q2FY23. Net Profit for H1FY24 stands at INR 8,323 crore (+51.8% YoY) as against INR 5,482 crore in H1FY23.
• Net Interest Income (NII) grew by 6.5% YoY to INR 10,831 crore in Q2FY24. NII for H1FY24 registered a growth of 14.8% and stands at INR 21,827 crore.
• Non-Interest Income grew ~2x to INR 4,171 crore in Q2FY24 as against INR 1,826 crore in Q2FY23. Non-Interest Income for H1FY24 stands at INR 7,493 crore.
• Global NIM stands at 3.07% in Q2FY24.
• Yield on Advances increased to 8.43% in Q2FY24 as against 7.22% in Q2FY23.
• Cost of Deposits increased to 4.92% in Q2FY24 as against 3.59% in Q2FY23.
• Operating Income for Q2FY24 stands at INR 15,002 crore, increase of 25% YoY. Operating Income for H1FY24 grew by 33.2%.
• Operating Profit for Q2FY24 stands at INR 8,020 crore, increase of 33% on a YoY basis. Operating Profit for H1FY24 increased by 50.1% to INR 15,844 crore.
• Cost to Income ratio reduced to 46.54% for Q2FY24 as against 49.74% for Q2FY23.
• Return on Assets (annualised) improved to 1.14% in Q2FY24 from 1.01% in Q2FY23.
• Return on Equity (annualised) for Q2FY24 increased by 18 bps YoY to 19.74%.
• For the consolidated entity, Net Profit stood at INR 4,394 crore in Q2FY24 as against INR 3,400 crore in Q2FY23.

Asset Quality

• The Gross NPA of the Bank reduced by 26.8% YoY to INR 33,968 crore in Q2FY24 and Gross NPA Ratio improved to 3.32% in Q2FY24 from 5.31% in Q2FY23.
• The Net NPA Ratio of the Bank stands at 0.76% in Q2FY24 as compared with 1.16% in Q2FY23.
• The Provision Coverage Ratio of the Bank stood at 93.16% including TWO and 77.64% excluding TWO in Q2FY24.
• Slippage ratio declined to 1.28% for H1FY24 as against 1.53% in H1FY23.
• Credit cost for the Q2FY24 stands at 0.92%.

Capital Adequacy

• CRAR of the Bank stands at 15.30 % in Sep’23. Tier-I stood at 13.19% (CET-1 at 11.57%, AT1 at 1.62%) and Tier-II stood at 2.11% as of Sep’23.
• The CRAR and CET-1 of consolidated entity stands at 15.74% and 12.11% respectively
• The Liquidity Coverage Ratio (LCR) consolidated stands at 132%.

Business Performance

• Global Advances of the Bank increased to INR 10,24,501 crore, +17.3% YoY.
• Domestic Advances of the Bank increased to INR 8,34,723 crore, +16.5% YoY.

• Global Deposits increased by 14.6% YoY to INR 12,49,647 crore.
• Domestic Deposits increased by 12.0% YoY to INR 10,74,114 crore in Sep’23.
• International Deposits grew by 33.8% on a YoY basis to INR 1,75,533 crore in Sep’23.
• Organic Retail Advances grew by 22.2%, led by growth in high focus areas such as Auto Loan (21.1%), Home Loan (16.1%), Personal Loan (67.2%), Mortgage Loan (13.3%), Education Loan (18.3%) on a YoY basis.
• Agriculture loan portfolio grew by 13.7% YoY to INR 1,30,694 crore.
• Total Gold loan portfolio (including retail and agri.) stands at INR 43,884 crore, registering a growth of 31.0% on a YoY basis.
• Organic MSME portfolio grew by 12.1% YoY to INR 1,13,512 crore.
• Financial result for Quarter ended 30^th September 2023

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• Business position

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• Key Ratios