Bank of Baroda announces Financial Results for the Quarter ended 31 March 2023

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Financial Highlights

  • Bank of Baroda (BOB) reported a ~2x growth in profits for FY23 and declared its highest ever quarterly and annual net profit of INR 4,775 crore (+168% YoY) and INR     14,110 crore (+94% YoY) respectively.
  • As a result of this significant improvement in profitability, the Bank’s Return on Assets (ROA) for FY23 improved by 43 bps YoY to 1.03% (FY23); RoA for Q4FY23 improves by 77 bps YoY to 1.34%
  • Similarly, Bank’s Return on Equity (RoE) for FY23 increases by 648 bps YoY to 18.34%; RoE for Q4FY23 stands at 24.82%, up by 1321 bps YoY
  • This robust growth in profitability was supported by healthy Net Interest Income (NII) growth of 33.8% & 26.8% for Q4FY23 & FY23 respectively.
  • Sustained NII growth is attributable to growth in advances of 18.5% (YoY) coupled with traction in Net Interest Margins (NIM), which grew 16 bps QoQ / 45 bps YoY to end the quarter at 3.53% and 28 bps YoY for the full year FY23.
  • Strong growth in Income coupled with a subdued increase in Opex has resulted in robust Operating profit growth of 43.3% YoY for Q4FY23 and 20% YoY for the financial year 2023.
  • The Bank has been able to effect a reduction in the Cost to Income ratio by 152 bps and reported a Cost to Income ratio of 47.72% for FY23.
  • BOB has witnessed significant improvement in its Asset quality with a sharp reduction in GNPA by 282 bps YoY & 74 bps QoQ to 3.79%. Bank’s NNPA improved to    0.89% with a reduction of 83 bps YoY and 10 bps QoQ.
  • BOB’s Provision Coverage Ratio (PCR) remained healthy at 92.43% with TWO & at 77.19% without TWO.
  • This strong and sustainable improvement in asset quality has resulted in record-low Credit costs for the Bank at 0.14% for Q4FY23 & 0.53% for FY23.
  • BOB’s Global Advances registered a strong YoY growth of 18.5% in Q4FY23 led by robust retail loan book growth. Bank’s organic Retail Advances grew by 26.8%, driven by growth in high focus areas such as Auto Loans (24.4%), Home Loan (19.5%), Personal Loan (101.5%), Mortgage Loan (18.0%), Education Loan (21.8%).
  • Bank achieved a total business of INR 21,73,236 crore as of 31st March 2023, registering a growth of 16.6% YoY.
  • The Board of the Bank has recommended declaring a dividend of INR 5.5 per share, subject to requisite approval

Profitability

  • BOB reported a standalone Net Profit of INR 4,775 crore in Q4FY23 as against a profit of INR 1,779 crore in Q4FY22. It grew by 94% YoY and stands at INR 14,110 crore for FY23.
  • Net Interest Income (NII) grew by 33.8% YoY to INR 11,525 crore in Q4FY23. NII registered a growth of 26.8% YoY for FY23 and stands at INR 41,355 crore. 
  • Global NIM stands at 3.53% in Q4FY23, an increase of 45 bps YoY. NIM for FY23 stands at 3.31% against 3.03% for FY22.
  • Domestic NIM stands at 3.65% in Q4FY23, an increase of 51 bps YoY. NIM for FY23 stands at 3.42% against 3.09% for FY22.
  • The yield on Advances increased to 8.47% in Q4FY23 as against 6.81% in Q4FY22.  
  • Cost of Deposits stands at 4.43% in Q4FY23 as against 3.53% in Q4FY22.
  • Operating Income for Q4FY23 stands at INR 14,991 crore, an increase of 34.6% YoY. It registered a growth of 16.5% YoY for FY23 and stands at INR 51,381 crore.
  • Operating Profit for Q4FY23 stands at INR 8,073 crore, an increase of 43.3% on a YoY basis. Operating Profit for FY23 stands at INR 26,864 crore up by 20% YoY.
  • The cost to Income ratio reduced to 46.15% for Q4FY23 as against 49.39% for Q4FY22. It declined by 152 bps YoY and stands at 47.72% for FY23.
  • Return on Assets (annualized) improved to 1.34% in Q4FY23 from 0.57% in Q4FY22. Return on Assets for FY23 stands at 1.03% up by 43 bps YoY.
  • Return on Equity (annualized) for FY23 increased by 648 bps YoY to 18.34%.
  • For the consolidated entity, Net Profit stood at INR 14,905 crore in FY23 as against INR 7,850 crore in FY22.

Asset Quality

  • The Gross NPA of the Bank reduced by 32% YoY to INR 36,764 crore in Q4FY23 and Gross NPA Ratio improved to 3.79% in Q4FY23 from 6.61% in Q4FY22.
  • The Net NPA Ratio of the Bank stands at a record low of 0.89% in Q4FY23 as compared with 1.72% in Q4FY22.
  • The Provision Coverage Ratio of the Bank stood at 92.43% including TWO and 77.19% excluding TWO in Q4FY23.
  • The slippage ratio declined to 1.02% for Q4FY23 as against 2.52% in Q4FY22. The slippage ratio for FY23 was reduced by 54 bps and stands at 1.07%.
  • Credit cost for the Q4FY23 stands at 0.14% and 0.53% for the full year.

Capital Adequacy

  • CRAR of the Bank stands at 16.24% in Mar’23. Tier-I stood at 13.99% (CET-1 at 12.24%, AT1 at 1.75%) and Tier-II stood at 2.25% as of Mar’23.
  • The CRAR and CET-1 of the consolidated entity stand at 16.73% and 12.83% respectively
  • The Liquidity Coverage Ratio (LCR) consolidated stands at 135.4%.

Business Performance

  • Global Advances of the Bank increased to INR 9,69,548 crore, +18.5% YoY.
  • Domestic Advances of the Bank increased to INR 7,95,560 crore, +16.3% YoY.
  • International advances grew by 6.3% sequentially in Q4FY23 standing at INR 1,73,988 crore.
  • Global Deposits increased by 15.1% YoY to INR 12,03,688 crore.
  • Domestic Deposits increased by 13% YoY to INR 10,47,375 crore in Mar’23.
  • International Deposits grew by 31.4% on a YoY basis to INR 1,56,313 crore in Mar’23.
  • Domestic CASA deposits registered a growth of 7.9% YoY and stood at INR 4,42,511 crore.
  • Domestic Saving deposits grew by 7.6% on a YoY basis in Mar’23 and Domestic Current deposits registered a growth of 9.2% YoY.
  • Organic Retail Advances grew by 26.8%, led by growth in high-focus areas such as Auto Loan (24.4%), Home Loans (19.5%), Personal Loans (101.5%), Mortgage Loans (18%), Education Loans (21.8%) on a YoY basis.
  • The agriculture loan portfolio grew by 13.2% YoY to INR 1,24,247 crore.
  • Total Gold loan portfolio (including retail and agri.) stands at INR 38,251 crore, registering a growth of 30.5% on a YoY basis.
  • The organic MSME portfolio grew by 11.7% YoY to INR 1,08,196 crore.

Financial result for Quarter ended 31st March 2023

Particulars (INR crore)Q4FY22Q3FY23Q4FY23YoY(%)FY22FY23YoY(%)
Interest Income18,17423,54025,85742.369,88189,58928.2
Interest Expenses9,56212,72214,33249.937,25948,23329.5
Fee Income1,6381,5391,7144.65,4865,9979.3
Net Interest Income (NII)8,61210,81811,52533.832,62241,35526.8
Operating Income11,13414,37014,99134.644,10651,38116.5
Operating Expenses5,4996,1386,91825.821,71624,51812.9
Operating Profit5,6358,2328,07343.322,38926,86420.0
Total Provisions (other than tax) and contingencies3,7362,4041,421-62.013,0027,137-45.1
of which, Provision for NPA Bad Debts Written-off5,200817320-93.814,6404,351-70.3
Profit before Tax1,8995,8286,6529,38719,727
Provision for Tax1201,9761,8772,1145,617
Net Profit1,7793,8534,7757,27214,11094.0

Business position

Particulars (INR crore)Mar 31 2022Dec 31, 2022Mar 31, 2023YoY (%)
Domestic deposits9,27,01110,03,73710,47,37513.0
Domestic CASA4,10,1234,17,8124,42,5117.9
Global deposits10,45,93911,49,50712,03,68815.1
Domestic advances6,84,1537,60,2497,95,56016.3
Of which, retail loan portfolio (Organic)1,40,3991,66,8611,78,03726.8
Global advances8,18,1209,23,8789,69,54818.5
NIM Global %3.083.373.5345 bps

Key Ratios

ParticularsQ4FY22Q3FY23Q4FY23
Return on Assets (%)0.571.131.34
CRAR (%)15.6814.9316.24
CET-1 (%)11.4210.8312.24
Gross NPA (%)6.614.533.79
Net NPA (%)1.720.990.89
PCR (with TWO) (%)88.7192.3492.43

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