BoB Q3 Results: Bank of Baroda Net Profit doubles as provisions fall

Profit more than doubles: Bank of Baroda reported a 107% jump in net profit to Rs 2,197.03 crore in Q3FY22. The higher bottomline was aided by higher net interest income and lower provisions. In the year-ago period, BoB reported a net profit of Rs 1,061.11 crore. Operating Income of the Bank increased by 6.57% YoY to Rs 11,071 crore.

Net interest income rises: A bank’s primary business is to borrow money and lend the same at a rate higher than the rate at which they borrowed. The income generated from this differential is known as net interest income. Net interest income (NII) for the bank rose 14.38% on year to Rs 8,552.03 crore. The net interest margin (NIM) for the bank during the December quarter rose 36 basis points to 3.13%. Other income for the quarter fell 13.45% to Rs 2,519.26 crore. 

Asset Quality improves: BoB reported gross Non-Performing Asset ratio at 7.25% in the third quarter of FY22, down by 86 basis points sequentially and 123 basis points YoY. Post-provisions, the net NPA ratio was at 2.25% in Q3, against 2.83% in the September quarter of FY22 and 2.39% in the year-ago quarter.

Advances: Total advances rose 4.75% YoY to Rs 7.32 lakh crore. Retail loans increased 11.43% from a year earlier and stood at Rs 1.28 lakh crore. The bank's corporate loan book was flat from a year ago to Rs 2.91 trillion. Home loans and auto loans grew 6.57% and 20.54% respectively. Small business loans rose marginally 2.4% while gold loans increased 28%. 

Deposits and CASA: Deposits grew 2.43% year-on-year at Rs 9.78 lakh crore. CASA capital is the cheapest source of capital for banks. The higher the number, the more profit a bank can earn. The current account and savings account deposits increased by 12.86% to Rs 3.22 lakh compared to last year's same period. 

Bank of Baroda Q3 Results Review:

Bank of Baroda reported a good set of numbers and good growth both in its topline and bottomline. The net income doubled on year while the asset quality also improves. The yield on advances improved sequentially to 6.92% in the quarter from 6.5%. Capital Adequacy Ratio improved to 15.47% from 12.93% in Q3FY21. The bank's fresh slippages stood at Rs 2,830 crore as compared to Rs 5,223 crore in the last quarter and Rs 3,986 crore in the year ago. Its recoveries and upgrades from NPAs during the quarter were Rs 2,032 crore and Rs 1,272 crore respectively.

Bank of Baroda's share price closed 2.88% lower on Friday at Rs 106.40 per share.