Bank of Baroda, a leading public sector lender, showcased a remarkable 87.7% year-on-year (YoY) surge in its net profit, reaching Rs 4,070 crore for the quarter ending June 2023 (Q1FY24). This impressive growth was driven by robust expansions in both net interest income and non-interest income.
The bank’s net interest income (NII) witnessed substantial growth, rising by 24.4% to Rs 10,997 crore in Q1FY24, compared to Rs 8,838 crore during the same period last year. However, NII marginally declined from Rs 11,525 crore in the preceding quarter, Q4FY23.
Net Interest Margins (NIMs) showed a positive trend, expanding to 3.27% in Q1FY24 from 3.02% in Q1FY23, but marginally decreased from 3.53% in Q4FY23.
The managing director and chief executive, Debadatta Chand, expressed optimism in maintaining margins around 3.3% for FY24, taking into account the repricing of deposits and the upside benefits from the resetting of rates for loans benchmarked to MCLR.
Non-interest income nearly tripled YoY, reaching Rs 3,322 crore, while witnessing a slight decrease from Rs 3,466 crore in Q4FY23. The bank officials attributed this surge to their strategic focus on “Fees and Flows,” aiming to capture customers’ cash-flows and enhance fee-based income.
Provisions for non-performing assets (NPAs) increased from Rs 1,560 crore in Q1FY23 to Rs 1,693 crore in Q1FY24. Despite this, Bank of Baroda remains confident in sustaining its growth momentum and financial strength.