Public sector lender Bank of Baroda (BoB) posted a 5.6% year-on-year (YoY) increase in net profit, reaching Rs 4,837 crore for the third quarter of FY25. The growth was driven by a strong performance in non-interest income, including fees, commissions, and treasury revenues.
However, on a sequential basis, BoB’s net profit declined by 7.6% compared to Rs 5,238 crore in Q2FY25. The bank’s stock closed flat at Rs 222.45 per share on the BSE on Thursday, with results announced post-market hours.
Key Financial Highlights
Metric | Q3FY25 | Q3FY24 | YoY Change (%) |
Net Profit (PAT) | Rs 4,837 Cr | Rs 4,580 Cr | +5.6% |
Net Interest Income (NII) | Rs 11,417 Cr | Rs 11,101 Cr | +2.8% |
Net Interest Margin (NIM) | 2.94% | 3.1% | - |
Non-Interest Income | Rs 3,769 Cr | - | +34.1% |
Treasury Income | Rs 936 Cr | Rs 410 Cr | +128% |
Gross NPAs | 2.43% | 3.08% | Improved |
Net NPAs | 0.59% | 0.7% | Improved |
Provision Coverage Ratio (PCR) | 93.51% | 93.39% | - |
Advances | Rs 11.73 Trn | - | +11.8% |
Retail Advances | Rs 2.43 Trn | - | +19.5% |
Total Deposits | Rs 13.92 Trn | - | +11.8% |
Business Growth & Asset Quality
Loan Growth: BoB’s advances grew by 11.8% YoY, with retail loans expanding 19.5% YoY to Rs 2.43 trillion. Personal loans grew by 24% YoY, while corporate loans increased by 6.8% and are expected to grow by 10% by the end of FY25.
RAM Segment: The share of Retail, Agriculture, and MSME (RAM) loans rose to 59%, up from 57% a year ago. The bank aims to increase this to 65% in the near future.
Deposits & CASA Ratio: Total deposits grew by 11.8% YoY to Rs 13.92 trillion, while the CASA ratio in domestic operations declined slightly to 39.68% from 40.69% a year ago.
Asset Quality: Gross NPAs improved to 2.43% from 3.08% in December 2023, while net NPAs declined to 0.59% from 0.7% in the same period. Provisions for NPAs dropped to Rs 871 crore from Rs 1,007 crore in Q3FY24.
Capital Position & Outlook
Capital Adequacy: BoB’s capital adequacy ratio stood at 15.96%, with a Common Equity Tier-1 (CET-1) ratio of 12.38% at the end of December 2024.
Growth Projections: The bank expects overall loan growth of 11-13% in FY25, while deposit growth is guided at 9-11%.
Net Interest Margin (NIM) Outlook: Managing Director & CEO Debadatta Chand noted that NIM was impacted by higher interest expenses and tight liquidity conditions. The bank now projects an operating NIM range of 3.0-3.10% for FY25, revising its earlier guidance of 3.1-3.2%.
Conclusion
Despite challenges in interest margins and a slight sequential decline in profit, Bank of Baroda’s strong non-interest income growth and improved asset quality underscore its financial stability. With an optimistic outlook on corporate loan growth and strategic shifts towards RAM lending, BoB remains on track for steady expansion in FY25.
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