On Friday, the Bank of Baroda reported a net profit of Rs 1,778.77 for the quarter ended March 2022, compared to a net loss of Rs 1,046.50 for the period the year before. The lender reported strong growth in net interest income (NII).
NII grew by 21.18% on an annual basis to Rs 8,611.67, from Rs 7,106.62 during the same period last year. However, non-interest income showed a decrease of over 47% on an annual basis to Rs 2,522.29. The net interest margin (NIM) rose by 36 basis points to 3.08% from 2.72% during the fourth quarter of FY21. On a quarterly basis, it saw a decline of 5 points from 3.13%.
The bank’s provisions (excluding tax) increased by 5.10% to Rs 3,736.38 crore for the period under review, compared with Rs 3,555.06 crore for Q4FY21.
Asset quality improved when gross NPA decreased to Rs 54,059 crs during Q4FY22 from Rs 66,671 crore in Q4FY21, and the gross NPA ratio improved to 6.61% from 8.87%. Gross NPA amounted to Rs 55,997 million during Q3FY22.
While domestic current account deposits amounted to Rs 68,780, which registered an increase of 11.6% on an annual basis, domestic savings bank deposits grew by 11.4% to Rs 3,41,343. The total domestic CASA grew by 11.4%.
Speaking at a virtual press conference after declaring the results, CEO & CEO Sanjiv Chadha said that the bank ensured that asset growth took place in the segments that continued to provide good margins. “On the deposit side, our deposit growth was actually slower because we wanted to make sure that we did not accumulate excessive deposits at a time when growth was being challenged. Deposit growth came largely from CASA deposits, ”said Chadha.
On the asset side, he said, there were challenges on the corporate side in terms of margins due to liquidity positions. “And that’s why most of our growth actually came from non-companies – it came from retail. Car loans increased by 20% and unsecured private loans, which have the best margins, rose by 108%. I think this was really the basis on which we could improve our NIM in one year, where liquidity was plentiful and margins were challenged, ”he said.