- 17 May 2023
- ICICI Securities
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BANK OF BARODA REPORTS BEAT ON ALL FRONTS; ROBUST PERFORMANCE WITH ALL-TIME HIGH ROA
BANKBARODA - 239 Change: -1.44 (-0.60 %)News: NII was up 33.8% YoY and 6.5% QoQ to Rs 11525 crore; this was mainly driven by strong credit growth and margins accretion of 16bps QoQ / 45bps YoY at 3.5%. Opex was up 25.8% YoY at Rs 6918 crore. However, due to high income levels, C/I ratio declined to 46% vs. 49% in Q4FY22. Provisions declined both QoQ and YoY at Rs 1421 crore but NPA provisions declined substantially to Rs320 crore vs. Rs 817 crore in Q3FY23 and Rs 5200 crore in Q4FY22. Credit cost further declined to 0.14% vs. 0.37% in Q3FY23. The bank reported highest quarterly net profit of Rs 4775 crore, up 2.7x YoY and 24% QoQ (ahead of our estimates). GNPA and NNPA declined 74 bps and 10 bps QoQ to 3.79% and 0.89%, respectively. Slippages for the quarter were at Rs 2242 crore (~1% annualised) vs. Rs 2172 crore in Q3FY23. Strong credit offtake was driven by 27% YoY rise in retail loans led by growth in personal loan portfolio at 101.5%, auto loan by 24.4%, education loan by 21.8%, home loan by 19.5% on a YoY basis. Gold segment also reported strong growth of 28% YoY. International loans (~18% of total book) reported healthy growth of 30% YoY. Deposit book jumped 15.5% YoY, primarily led by 70% YoY growth in bulk deposits.
Views: The bank posted yet another highest quarterly profit led by strong business growth and improvement in margins. Healthy growth momentum coupled with improvement in margin & asset quality is expected to aid RoA. The management has guided for credit growth of 13-14% YoY and NIMs to remain largely steady at 3.5% levels.
Impact: Positive