Bank of Baroda Shares Q3 Results

Let us start with the top line. For the Dec-21 quarter, Bank of Baroda reported a marginal 1.18% increase in total revenues at Rs.22,073 crore on a YoY consolidated basis. In terms of top line, BOB witnessed marginal growth in revenues from treasury and wholesale banking. However, revenues from retail banking were lower YoY. The revenues of Bank of Baroda were higher by 0.34% on a sequential basis.

While the overall domestic advances were up by 3.36% YoY in the Dec-21 quarter, it was the  retail advances segment that showed impressive growth of 11.13%. On YoY basis, CASA ratio (ratio of current and savings accounts) to total deposits, stood was higher by 308 basis points at 44.28%. This is a trend that indicates falling cost of funds, since CASA funds are low cost. Net interest income or NII for the quarter increased by 14.38% YoY at Rs.8,552 crore.

Let us now turn to the operating performance of BOB. For the Dec-21 quarter, operating profits increased by 1.27% at Rs.5,980 crore showing marginal operational traction. The critical Net interest margins or NIMs improved by 36 basis points on YoY basis at 3.13%. However, this is much lower than the private banking peer group, which enjoys NIM levels of close to 4% on an average. 

The return on equity or ROE of Bank of Baroda improved by an impressive 525 bps on YoY basis at 14.37% in the Dec-21 quarter. The cost of deposits tapered lower to 3.5% while the yield on advances were broadly robust at 6.92% ensuring a good spread. The cost to income ratio or C/I ratio stood at 50.47% for Bank of Baroda. Operating margin or OPM was almost flat at a level of 27.09% in the Dec-21 quarter. OPM was higher on sequential basis.

Finally let us come to the bottom line of the company. Profit after tax (PAT) for the Dec-21 quarter was up by 106%; more than doubling YoY at Rs.2,464 crore. This was largely on account of a very steep 35% fall in provisions for loan losses in the quarter at a much lower level of Rs.2,688 crore.

Gross NPAs of Bank of Baroda standalone tapered lower to 7.25% in the quarter but remains high on absolute basis. However, the net NPA ratio hints at substantial pain already provided for in the form of loan loss provisions.  PAT margins for the bank improved sharply from 5.48% to 11.16% on a YoY basis. Net margins were also higher on a sequential basis by a good 131 basis points.