Bank of Baroda to Consider Capital Raising Plan on July 5

Bank of Baroda, one of India’s largest public sector banks, has announced that its board of directors will convene on July 5, 2024. The primary agenda of this meeting is to deliberate and approve the capital plan for the FY25. A key component of this plan is raising funds through Additional Tier 1 and Tier 2 Debt Capital Instruments, with an interchangeability option.

Capital Raising Details

The plan for capital raising includes proposals to generate funds through Additional Tier 1 and Tier 2 Debt Capital Instruments, with an option for interchangeability,  aimed at strengthening the bank’s capital base to support its growth plans and ensure compliance.

Market Presence

Bank of Baroda has an extensive domestic network with 8,243 branches and 11,033 ATMs and Cash Recyclers. Additionally, the bank offers self-service channels to cater to its wide customer base. Internationally, the Bank of Baroda has a huge presence, operating 91 global offices across 17 countries.

Government Stake and Performance

As of March 31, 2024, the Government of India held a 63.97% stake in Bank of Baroda. In Q4FY24, the bank reported a standalone net profit of Rs.4,886.49 crore, marking a 2.33% increase compared to Q4FY23. The bank’s total income for Q4FY24 rose by 15.18% to Rs.33,774.87 crore compared to Q4FY23.

Improved Asset and Margins 

In Q4FY24, the bank’s Net Interest Margin (NIM) improved to 3.27%, up from 3.10% in the previous quarter. The Gross Non-Performing Assets (NPA) ratio decreased to 2.92%, down from 3.08% in the prior quarter. The net NPA ratio also saw an improvement, standing at 0.68% in Q4FY24 compared to 0.89% in Q4FY23. Additionally, the Provision Coverage Ratio reached a good 93.30%.

Rise in Slippages

However, the quarter witnessed an increase in slippages, which rose to Rs.3,200 crore from Rs.2,618 crore quarter-on-quarter. Consequently, the slippage ratio in Q4 increased to 1.12%, up from 0.95% in Q3.

Conclusion: In conclusion, the upcoming board meeting on July 5 is important as Bank of Baroda plans to strengthen its financial health. The decisions made in this meeting will play a crucial role in the bank’s ability to boost its capital structure and maintain its competitive edge in the banking sector.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.