- 05 Nov 2022
- ICICIdirect Research
Bank of Baroda reported robust operational and business growthBANKBARODA - 167 Change: 4.35 (2.67 %)
Net interest income was up 34.5% YoY and 15.1% QoQ to Rs 10174 crore; this was mainly driven by healthy credit growth and significant improvement in NIMs by 48 bps YoY and 31 bps QoQ to 3.33%. Other income sharply declined by 49% YoY (owing to treasury loss of Rs 435 crore in Q2FY23) and witnesses a jump of 54.5% QoQ to Rs 1826 crore aided by fee income
· Opex increased 9% YoY at Rs 5969 crore; C/I ratio remained flattish on YoY basis, sequentially witnessed improvement of 507 bps to 49.74%. Provisions declined 40.9% YoY and 3.4% QoQ to Rs 1628 crore. Thus, higher interest income and steady credit cost boosted net profit to Rs 3313 crore, up 58.7% YoY and ahead of our estimates
· Asset quality showed a sequential improvement. GNPA and NNPA declined 95 bps and 42 bps QoQ to 5.31% and 1.16%, respectively. Slippages for the quarter were down to Rs 3479 crore vs. Rs 5223 crore in Q2FY22, while recoveries and upgrades were at Rs 2047 crore and Rs 3313 crore, respectively. SMA1&2 declined from 0.48% in Q1FY23 to 0.42% in Q2FY23. Collection efficiency (ex-agri) was steady at 98%
· Overall global loan book (gross) growth was healthy at 19% YoY to Rs 8.7 lakh crore. Strong credit offtake was driven by 28% YoY rise in retail loans led by growth in Personal loan portfolio by 172.8%, Auto loan by 29.2%, Education loan by 23.2%, Home loan by 19% on a YoY basis. International loans (~18% of total book) also reported healthy growth of 41% YoY. Deposit book jumped 13.6% YoY in which domestic deposits were up 10.9% YoY to Rs 9.6 lakh crore. Domestic CASA growth was at 9.2% YoY and its share to total domestic deposits was at 42.8%
Sequential jump of 31 bps in margin remain highlight of the quarter which has boosted earnings. However, clarity of sustainability of the same is awaited. Strong improvement in GNPA numbers and healthy credit growth driven by international and retail segment bodes well.