BoB profit rises 11.2 pc in Q4, ups FY27 credit growth target to over 12 pc

State-run Bank of Baroda on Friday reported a 11.2 per cent jump in March quarter profit to Rs 5,616 crore. The overall provisions doubled to Rs 3,150 crore during the March quarter from Rs 1,552 crore in the year-ago period, and, Chand said, this included Rs 1,500 crore in floating provisions created on the back of a tax write-back.

State-run Bank of Baroda on Friday reported a 11.2 per cent jump in March quarter profit to Rs 5,616 crore. The public sector bank had reported a net profit of Rs 5,048 crore in the year-ago period. Its core net interest income increased nearly 9 per cent to Rs 12,494 crore during the quarter on the back of a 16 per cent advances growth and a compression in the net interest margin to 2.89 per cent from 2.98 per cent on-year. The bank's Managing Director and Chief Executive Debadatta Chand said it is encouraged by the FY26 performance to up its loan growth guidance to 12-14 per cent as against 11-13 per cent at present. He said the bank is expecting the ongoing Middle East conflict to not continue for a long period of time and growth to come back. Chand said there is also a shift of funds back to the banking system, which is leading to a surge in deposits, and giving it more confidence to up the credit growth target. He said the bank will seek to achieve a 10-12 per cent jump in deposits in the new fiscal year and maintain the NIMs in the 2.75-2.95 per cent range. The non-interest income declined 16.2 per cent to Rs 3,967 crore during the quarter under review, due to a 97.2 per cent drop in treasury income to Rs 44 crore. From an asset quality perspective, its fresh slippages inched up to Rs 2,944 crore in January-March from Rs 2,676 crore in the quarter-ago period and Rs 2,873 crore in the year-ago period. The gross non-performing assets ratio improved to 1.89 per cent from the year-ago's 2.25 per cent. The overall provisions doubled to Rs 3,150 crore during the March quarter from Rs 1,552 crore in the year-ago period, and, Chand said, this included Rs 1,500 crore in floating provisions created on the back of a tax write-back. He declined to specify the reason why the Rs 1,500-crore provision has been made, and added that the money can only be used after regulatory nod. The bank has sufficient strength through its profits to take care of the requirements of the transition to expected credit loss (ECL)-based system, he said, without specifying the exact quantum of funds required. The overall capital adequacy of the bank stood at 15.82 per cent as of March-end. The bank board has decided to raise up to Rs 6,000 crore by way of additional tier-I bonds or tier-II bonds. The bank scrip closed 2.33 per cent down at Rs 264.05 apiece on the BSE, as against 0.66 per cent correction on the benchmark.