Bank of Baroda reported an 87.7% rise in net profit to Rs 4,070.07 crore for the fiscal first quarter ended June on the back of strong growth in its core income and non-interest revenues.

In the year-ago quarter, the state-owned lender had posted a net profit of Rs 2,168.13 crore.

NII and NIM

Net interest income (NII) rose 24.4% to Rs 10,997 crore in the quarter ended June 2023, from Rs 8,838 crore in the year-ago period. This came on the back of an 18% growth in global advances and a traction in net interest margin (NIM). 

The global NIM rose 25 basis points year-on-year to 3.27%. The domestic NIM stood at 3.41% in the June 2023 quarter, up 34 basis points year-on-year.

Non-interest income, which includes trading gains or profit from sale of investments, forex income, income from commission and brokerage, rose to Rs 3,322 crore from Rs 1,182 crore a year ago.

Asset Quality

The bank’s asset quality improved with the ratio of gross non-performing assets (NPAs) declining to 3.51 % from 6.26% a year ago and 3.79% a quarter ago.

In absolute terms, gross NPAs fell 33.8% year-on-year to Rs 34,832.16 crore in Q1 FY24. 

The bank’s net NPA ratio stood at a record low of 0.78% in Q1FY24 as against 1.58% in Q1FY23.

Slippage ratio declined to 1.05% in the June 2023 quarter from 1.71% a year before.

Provision coverage ratio (PCR) stood at 93.23% including technical write-offs and 78.52% excluding technical write-offs in Q1FY24. 

Loan growth

The bank’s global advances grew 18% year-on-year on the back of a robust retail loan book growth. The organic retail advances grew by 24.8%, driven by growth in high-focus areas such as auto loans (22.1%), home (18.4%), personal (82.9%), mortgage (15.8%) and education loans (20.8%).

Bank of Baroda managing director and CEO Debadatta Chand said the bank was targeting an overall loan growth of 14-15% in FY24. The corporate book is likely to grow by 12-13% and the retail portfolio by 18-20%. International lending is expected to grow at 15%.

Deposit growth

Bank of Baroda’s global deposits grew 16.2% year-on-year to Rs 11,99,908 crore while domestic deposits rose 15.5% to Rs 10,50,306 crore in the June 2023 quarter.

The bank’s total business grew 17% year-on-year to Rs 21,90,896 crore.