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Bank of Baroda — Q2 FY25
Bank of Baroda reported a strong Q2 FY25 with PAT crossing INR 5,000 crore for the first time, growing 23.2% YoY.
bullish
high
✓ Verified against BSE filing
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Bank of Baroda reported a strong Q2 FY25 with PAT crossing INR 5,000 crore for the first time, growing 23.2% YoY. Domestic advances grew 12.5% YoY, driven by retail (20%) and corporate (10.6%). NIM stood at 3.10%, within the guided range of 3.15% ±5 bps, despite a 5 bps drag from penal interest reclassification. Asset quality improved with GNPA at 2.5% and net NPA at 0.6%. Management revised full-year deposit growth guidance down to 9-11% and loan growth to 11-13%, citing systemic deposit constraints. Credit cost remained below 0.75% and ROA at 1.30%. Key risks include elevated deposit competition and potential slippages from small-ticket retail/agri loans.
बैंक ऑफ बड़ौदा ने दूसरी तिमाही में शानदार प्रदर्शन किया। पहली बार इसका मुनाफा 5,000 करोड़ रुपये से ज्यादा हुआ, जो पिछले साल से 23.2% ज्यादा है। लोगों और कंपनियों को दिए गए कर्ज में 12.5% का इजाफा हुआ, खासकर रिटेल (20%) और कॉरपोरेट (10.6%) कर्ज बढ़े। ब्याज कमाई का मार्जिन 3.10% रहा, जो बैंक के अनुमान के करीब है। बैंक के खराब कर्ज (NPA) में कमी आई - कुल खराब कर्ज 2.5% और शुद्ध खराब कर्ज 0.6% रहा। बैंक ने जमा और कर्ज बढ़ोतरी के अनुमान थोड़े कम कर दिए हैं, क्योंकि बाजार में जमा पाना मुश्किल हो रहा है। मुनाफा बनाए रखने की लागत कम है और कमाई पर अच्छा रिटर्न मिल रहा है। मुख्य चुनौतियां हैं - जमा के लिए कड़ी प्रतिस्पर्धा और छोटे कर्जों के डिफॉल्ट का खतरा।
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Systemic deposit constraints
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Domestic Advances Growth
12.5%
+12.5% YoY
Domestic loan book grew 12.5% year-over-year, driven by retail (20%) and corporate (10.6%).
CASA Ratio
40%
flat YoY
CASA ratio remained strong at 40%, supporting low-cost deposit base.
Gross NPA
2.5%
-82 bps YoY
Gross NPA improved to 2.5% from 3.32% a year ago, reflecting better asset quality.
Slippage Ratio
1.07%
-21 bps YoY
Slippage ratio was within the guided range of 1-1.25%, down from 1.28% in H1.
What Changed vs Last Quarter
UPDATED
Deposit growth guidance revised to 9-11% for FY25
Management lowered deposit growth guidance from 10-12% to 9-11%, citing systemic deposit constraints, but aims to operate at the upper end of 11%.
UPDATED
Loan growth guidance revised to 11-13% for FY25
Advances growth guidance reduced from 12-14% to 11-13%, with a target to operate at 13%, driven by domestic growth and moderation in international book.
UPDATED
NIM guidance maintained at 3.15% ±5 bps
Net interest margin guidance remains unchanged at 3.15% plus/minus 5 basis points, supported by ALM management and expected moderation in deposit costs.
UPDATED
Credit cost guidance maintained below 0.75%
Credit cost guidance remains below 0.75%, with slippage ratio guided at 1-1.25% and ROA above 1% (target 1.10%).
NEW RISK
Systemic deposit constraints
Deposit growth is under pressure due to savers shifting to capital markets, leading to a downward revision in deposit guidance.
NEW RISK
Elevated personal loan slippages
Personal loan slippages have increased to ~INR 250 crore per quarter from ~INR 100 crore earlier, though still small relative to total book.
NEW RISK
International margin compression
International NIM declined to ~2% from 2.13-2.14% due to repricing in overseas markets, with further moderation expected.
NEW RISK
Prudential provisioning impact on earnings
Higher prudential provisions (floating and standard asset) were taken this quarter, which could pressure earnings if sustained.
RISK GONE
Retail slippage increase
Retail slippages rose substantially in Q1, partly due to seasonal factors and subsidy-dependent assets, but could persist.
RISK GONE
MSME asset quality concerns
MSME slippages remain elevated at ~4% run rate, though management says it has stabilized; any deterioration could impact credit cost.
RISK GONE
Margin pressure from competitive pricing
Credit yield fell 25bps sequentially due to shedding of high-yield assets and competitive pricing, potentially pressuring NIM.
Fast read
Guidance and risk preview
Management lowered deposit growth guidance from 10-12% to 9-11%, citing systemic deposit constraints, but aims to operate at the upper end of 11%.
Deposit growth is under pressure due to savers shifting to capital markets, leading to a downward revision in deposit guidance.
View Risks →