Bank of Baroda Q4 net profit zooms 168 pc; sets aside Rs 500 cr for Go First exposure
State-owned Bank of Baroda on Tuesday reported a 168 per cent jump in its March quarter net profit at Rs 4,775 crore, helped by decline in money set aside for loan losses.
The lender's net profit for the full financial year 2022-23 also nearly doubled to Rs 14,110 crore.
In the reporting quarter, it's core net interest income grew 33.8 per cent to Rs 11,525 crore, aided by a growth in advances of nearly 19 per cent and an expansion in the net interest margin (NIM) to 3.53 per cent as against 3.07 per cent in the year-ago period.
The bank's fee income stood at Rs 1,714 crore, up 4.6 per cent from the year-ago period's Rs 1,638 crore.
Its managing director and chief executive Sanjiv Chadha told reporters that he was himself surprised with the higher NIMs, and will aim to protect the 3.5 per cent level in FY24.
The bank is aiming for a loan growth of 13-14 per cent in FY24, which will include 11-13 per cent growth in the corporate advances, officials said.
In the fourth quarter of FY23, the bank's overall provisions for bad debts decreased by 94 per cent to Rs 320 crore as against Rs 5,200 crore in the year-ago period. Chadha said the credit cost for FY23 came at 0.5 per cent, much below the 1 per cent expectation, and the bank will strive to keep it under 1 per cent in the long term as well.
The gross non-performing assets ratio improved to 3.79 per cent as of March 31, as against 6.61 per cent in the year-ago period and 4.53 per cent in December.
Chadha said the bank's recoveries and upgrades have exceeded the fresh slippages, and the lender will seek to continue with the same performance going ahead as well.
He said Bank of Baroda has a Rs 1,300-crore exposure to the bankrupt carrier Go First, for which it has set aside Rs 500 crore as provisions.
Over Rs 1,000 crore of the exposure is covered with guarantees and has strong underlying securities, he said.
Amid heightened concerns on unsecured lending, Chadha said the bank's bad debt from the personal loan segment stands at 0.89 per cent while the same in housing loans is 1.5 per cent.
The personal loan segment, where it doubled the book in FY23 albeit on a lower base, is also helping the interest margins now, Chadha said, adding that it will continue to grow on this.
Chadha said the bank is witnessing a healthy growth in the business at GIFT City branch, and the total business now stands at USD 5 billion. The GIFT City operation is already the fourth biggest pocket of its global presence and will become the third biggest by end of FY24, he said.
Its overall capital base stood at 16.24 per cent as of March 31, 2023 and it does not have any plans of approaching the markets for a new infusion, Chadha said.
The bank expects progress on stake sales in credit cards and Nainital Bank in the next 2-3 months, Chadha said, adding that both the proposals have gathered good interest.
The bank will take a call on listing its life insurance arm depending on the market conditions, Chadha said, adding that it has time till March 2024 for the IPO.
The Bank of Baroda scrip closed 1.39 per cent up at Rs 186.35 a piece on the BSE as against a 0.66 per cent correction on the benchmark.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)