Bank of Baroda Q3 turns around to net profit of Rs1,196cr on lower provisioning
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For the Dec-20 quarter, the operating profits were up 21.96% at Rs6,410.30cr. This growth in operating profits was on account of sharply lower interest costs in line with falling rates and surplus liquidity in the system. As a result, operating margin or OPM expanded from a level of 22.72% in Dec-19 to 29.04% in Dec-20 quarter.
Profit after tax (PAT) for the Dec-20 quarter turned around to Rs.1,195.96cr in contrast to a loss of Rs1,219cr in the Dec-29 quarter. This sharp turnaround happened on the back of sharply lower provisioning in the Dec-20 quarter at Rs4,619cr compared to Rs7,234cr in the Dec-19 quarter. Consequently, the PAT margins turned around to 5.42% in Dec-20.
Financial highlights for Dec-20 compared yoy and sequentially
|
Bank of Baroda |
|||||
|
Rs in Crore |
Dec-20 |
Dec-19 |
YOY |
Sep-20 |
QOQ |
|
Total Income (Rs cr) |
₹ 22,070.52 |
₹ 23,134.67 |
-4.60% |
₹ 21,853.79 |
0.99% |
|
Operating Profit (Rs cr) |
₹ 6,410.30 |
₹ 5,255.91 |
21.96% |
₹ 5,509.79 |
16.34% |
|
Net Profit (Rs cr) |
₹ 1,195.96 |
₹ -1,219.04 |
N.A. |
₹ 1,771.21 |
-32.48% |
|
Diluted EPS (Rs.) |
₹ 2.59 |
₹ -3.20 |
₹ 3.83 |
||
|
Operating Margins |
29.04% |
22.72% |
25.21% |
||
|
Net Margins |
5.42% |
-5.27% |
8.10% |
||
|
Gross NPA Ratio |
8.48% |
10.43% |
9.14% |
||
|
Net NPA Ratio |
2.39% |
4.05% |
2.51% |
||
|
Return on Assets |
0.37% |
-0.52% |
0.59% |
||
|
Capital Adequacy |
13.60% |
13.98% |
14.00% |
||
Key takeaways from the Dec-20 quarter results
-
For the Dec-20 quarter, the domestic advances grew by 8.31% while the credit deposit ratio improved to 81.5% in the quarter. The share of CASA deposits in the total deposit mix improved by 240 bps at 41% in the quarter.
-
The gross NPAs have fallen by nearly 200 bps to 8.43% on a yoy basis but this is still high in absolute terms. However, if the COVID stress accounts are also considered, then the gross NPAs would be closer to 9.5%.
-
While the bank has seen ROA above 0.35%, it is still lower than the banking median of 0.5%. The capital adequacy is just about 13.6% and that is likely to put pressure on the bank’s ability to expand its asset book.
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