Bank of Baroda Q2 net profit rises 23% YoY to Rs 5,238 cr on strong NII, improved asset quality
Mumbai: Bank of Baroda (BoB) reported a 23.2% year-on-year (YoY) increase in net profit for the second quarter of FY2024-25, reaching Rs 5,238 crore, driven by higher non-interest income and reduced provisions for stressed loans, media reports said.
Sequentially, BoB’s net profit rose by 17.5% from Rs 4,458 crore in Q1FY25. On Friday, the bank's stock closed 2.26% lower at Rs 239.5 on the BSE, reported Business Standard.
Net interest income (NII) rose by 7.33% YoY to Rs 11,622 crore in Q2FY25, up from Rs 10,831 crore a year prior.
The bank’s net interest margin (NIM) improved slightly to 3.10% in Q2FY25 from 3.07% in Q2FY24 but declined by 8 basis points sequentially from 3.18% in Q1FY25.
Managing Director and CEO Debadatta Chand noted that deposit costs may have peaked, with a likelihood of easing ahead, adding that BoB maintains a NIM guidance of 3.15% ± 5 basis points for FY25.
BoB’s non-interest income increased by 24.2% YoY to Rs 5,181 crore, largely supported by recovery from written-off accounts, which more than doubled to Rs 2,525 crore from Rs 1,231 crore in Q2FY24.
Provisions for non-performing assets (NPAs) decreased by 24.2% to Rs 1,733 crore, compared to Rs 2,285 crore in the same period last year.
Asset quality improved, with gross NPAs down to 2.5% in September 2024 from 3.32% a year earlier, and net NPAs decreasing from 0.76% to 0.60% over the same period.
The provision coverage ratio (PCR), including written-off accounts, was 93.61% in September, slightly up from 93.16% in the previous year.
Total advances grew by 11.6% YoY, reaching Rs 11.43 trillion in Q2FY25, with retail advances up 19.9% YoY to Rs 2.32 trillion.
Chand projected overall credit growth between 11-13% for FY25, with retail lending expected to expand by over 20%.
BoB plans to accelerate growth in agriculture and micro, small, and medium enterprises (MSME) loans to 12-14% from the current 11-12%, while corporate lending is forecasted to grow around 10% YoY.
Deposits rose by 9.1% YoY to Rs 13.63 trillion, with the share of low-cost deposits (CASA) remaining stable at 39.84% in September 2024.
BoB’s capital adequacy ratio stood at 16.26%, including a Tier-I capital ratio of 14.18%. The bank has no plans to raise equity capital due to its strong common equity Tier-I base but has approval to raise Rs 7,500 crore through debt instruments, according to Chand.
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