Bank of Baroda- 24% rise in PAT| Potential to grow more?
A solid earnings growth of 24% YoY from Rs.1,679 crore to Rs.2,088 crore, was reported by the bank along with a 6% YoY increase in operating profit. The revenue increased by 8% YoY and the non-interest income also grew by 23% YoY due to higher treasury gains and more recoveries from write-offs.
The gross non performing loans decreased by 75bps QoQ to 8.1% and the Non performing loans fell by 20bps to 2.8%. The collection efficiency increased in Q2 FY22 to 96% from the 93% in Q1 FY22.
According to the management, a recovery of Rs.10-15 billion from the corporate NPA accounts can be expected. The bank has no contingency provision buffer. There is a 10% YoY growth in retail loans which was driven by 23% YoY increase in auto loans, 5% rise in home loans, 6% increase in mortgages and 11% YoY increase in educational loans.
The domestic deposit growth was a small 3% YoY which was supported by a strong CASA growth of 13% YoY. The Capital adequacy ratio increased by 110bps QoQ to 15.5%. The NII increased by 2% to Rs.7,566 crore. The Rs.877 crore recovery from DHFL was very welcomed by the bank.
The CEO, Sanjiv Chadha said that he expects the bank’s loan growth to be very close to double digits this financial year.
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