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Elevated CD ratio and tight liquidity
View Risks →Bank of Baroda — Q3 FY25
Bank of Baroda reported a steady Q3 FY25 with PAT of ₹4,837 crore (+5.6% YoY) and operating profit growth of 9.3% YoY.
bullish
high
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Bank of Baroda reported a steady Q3 FY25 with PAT of ₹4,837 crore (+5.6% YoY) and operating profit growth of 9.3% YoY. Domestic advances grew 11.9% YoY, driven by retail (+20%), agri (+13%), and MSME (+14%), while corporate growth moderated to 7%. Net interest margin (NIM) for 9M FY25 stood at 3.08%, slightly below the earlier guidance due to a 5-6 bps impact from penal interest accounting changes and a one-off recovery in Q2. Management revised full-year NIM guidance to 3.00-3.10% with an upside bias. Asset quality improved with gross NPA at 2.43% (down 65 bps YoY) and credit cost at 0.30% (well below 0.75% guidance). Slippage ratio improved to 0.90%. The bank maintained its deposit growth guidance of 9-11% and advance growth of 11-13%. A key risk is the elevated CD ratio (84.24%) and tight liquidity, which could pressure margins if deposit costs remain high.
बैंक ऑफ बड़ौदा ने तीसरी तिमाही में 4,837 करोड़ रुपये का शुद्ध लाभ कमाया, जो पिछले साल से 5.6% ज्यादा है। कर्ज देने में 11.9% की बढ़ोतरी हुई, खासकर रिटेल, कृषि और छोटे-मध्यम उद्योगों को ज्यादा कर्ज दिया गया। ब्याज से कमाई (NIM) 3.08% रही, जो पहले के अनुमान से थोड़ी कम है। बैंक ने अब पूरे साल के लिए NIM 3.00-3.10% रहने का अनुमान लगाया है। बैड लोन घटकर 2.43% हो गए हैं, जो पिछले साल से 0.65% कम है। बैंक जमा में 9-11% और कर्ज में 11-13% बढ़ोतरी की उम्मीद कर रहा है। लेकिन जमा के मुकाबले ज्यादा कर्ज देने (84.24%) और तरलता की कमी से ब्याज दरों पर दबाव बना रह सकता है।
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Read Transcript →Quarter Snapshot
Domestic Advances Growth
11.9%
+11.9% YoY
Domestic advances grew 11.9% YoY, driven by retail (+20%), agri (+13%), and MSME (+14%).
CASA Ratio
40%
+6.5% YoY
CASA ratio maintained at ~40% with 6.5% YoY growth, better than peers.
Gross NPA Ratio
2.43%
-65 bps YoY
Gross NPA improved to 2.43%, down 65 bps YoY, with provision coverage ratio at 93.51%.
Slippage Ratio
0.90%
-10 bps YoY
Slippage ratio improved to 0.90% (guidance 1-1.25%), reflecting better asset quality.
What Changed vs Last Quarter
NEW
Full-year NIM guidance revised to 3.00-3.10%
Management guided NIM for FY25 at 3.05% ± 5 bps (3.00-3.10%), with an upside bias due to potential rate cuts and improved liquidity.
UPDATED
Deposit growth guidance maintained at 9-11%
Management reiterated deposit growth guidance of 9-11% for FY25, with continued focus on reducing bulk deposit dependency.
UPDATED
Advance growth guidance maintained at 11-13%
Management reiterated advance growth guidance of 11-13% for FY25, with focus on RAM (retail, agri, MSME) segments.
UPDATED
Credit cost guidance maintained below 0.75%
Management maintained credit cost guidance of less than 0.75% for FY25, despite 9M credit cost of 0.47%.
DROPPED
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.
NEW RISK
Elevated CD ratio and tight liquidity
CD ratio at 84.24% and tight liquidity conditions could pressure margins if deposit costs remain high.
NEW RISK
Rising personal loan NPAs
Personal loan GNPA rose to 3.9% from 3.16% QoQ, though management downplayed it as small in absolute terms.
NEW RISK
Potential regulatory changes in gold loans
RBI discussions on collateral-free agri loans and stricter gold loan norms could impact business, but management declined to comment.
NEW RISK
Margin pressure from one-off recovery normalization
Q2 had a one-off recovery of ~₹350 crore boosting interest income; its absence in Q3 contributed to margin decline.
RISK GONE
Systemic deposit constraints
Deposit growth is under pressure due to savers shifting to capital markets, leading to a downward revision in deposit guidance.
RISK GONE
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.
RISK GONE
International margin compression
International NIM declined to ~2% from 2.13-2.14% due to repricing in overseas markets, with further moderation expected.
RISK GONE
Prudential provisioning impact on earnings
Higher prudential provisions (floating and standard asset) were taken this quarter, which could pressure earnings if sustained.
🤫 Topics management stopped discussing
Mentioned in Q1 FY25, Q2 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%.
Fast read
Guidance and risk preview
Management guided NIM for FY25 at 3.05% ± 5 bps (3.00-3.10%), with an upside bias due to potential rate cuts and improved liquidity.
CD ratio at 84.24% and tight liquidity conditions could pressure margins if deposit costs remain high.
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