Bank of Baroda Increases its Net Profit by 107% with Reduction in Provisions

One of India 12 nationalised banks, Bank of Baroda, has registered a net profit of 107% for the December quarter. This result comes on the back of reduced provisions and increased net interest income. Resultantly, the net profit for this third quarter of FY 2022 stands at Rs. 2,197.03 crores compared to that of Rs. 1,061.03 crores in the previous financial year.

Dissecting the Balance Sheet

Net interest income, which is the difference between interest expended and interest earned, has increased 14.38% year-on-year to Rs. 8,552.03 crores.

Another key indicator of profitability, the net interest margin, stands at 3.13%, which is a YOY jump of 36 basis points.

On the other hand, contingencies and provisions have been reduced by 27.33% to Rs. 2,507.04 crores from the previous year.

Other incomes that include miscellaneous income, trading profit, and various fees have been lowered by 13.45% to Rs. 2,519.26 in this third quarter of FY 2022.

The credit portfolio of Bank of Baroda has registered a year-on-year increase of 4.75% to Rs. 7.32 trillion. In this, the growth of the retail loan section is 11.13% to Rs. 1.28 trillion. Alternatively, this financial institution’s corporate loan segment has not seen much movement as it remains standstill at Rs. 2.91 trillion. The housing and vehicle loans segment has also grown by 6.57% and 20.54%, respectively. Moreover, the small business loan category registered a 2.39% increase and gold loans by 28%.

Moving ahead, the yield on advances shows a sequential improvement to 6.92% from 6.5% in this quarter. Also, improvement in terms of deposits is 2.45% YoY to Rs. 9.78 trillion.

Fresh slippages of Bank of Baroda in Q3 of FY 2022 stood at Rs. 2,830 crores as compared to Rs. 5,223 crores in Q2, and Rs. 3,986 crores in the third quarter of FY 2021. Furthermore, its sequential recovery and upgrades from non-performing assets (NPAs) in this quarter were Rs. 2,032 crores and Rs. 1,272 crores, respectively. This segment was at Rs. 1,966 crores and Rs. 2,016 crores in the last fiscal year.

Lastly, write-offs in this quarter stand at Rs. 3,694 crores against Rs. 5,213 crores in the Q2 of FY 2022. Also, it was Rs. 4,708 crores in the previous year.

Bottom Line

Considering the performance of the Bank of Baroda in this quarter, one can hope that this financial institution will close this fiscal year on a positive note. However, it will be essential to factor in the effect of Budget 2022 and RBI’s stance on monetary policy to get the full picture.

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Frequently Asked Questions

1. What is the current market capitalization of the Bank of Baroda?

The current market capitalization of Bank of Baroda on 7 February 2022 is Rs. 59,212 crores.

2. What is the face value of Bank of Baroda shares?

The face value of Bank Baroda’s shares is Rs. 2 per equity share.

3. What is the book value per share for the Bank of Baroda?

The book value per share for the Bank of Baroda is Rs. 160.16.

Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.