Bank of Baroda recorded a 28 per cent increase in its net profit after tax on a year-on-year (YoY) basis in its second quarter (Q2) earnings on Saturday, revealed via an exchange filing. It logged a net profit of Rs 4,252.89 crore for the September quarter in the current financial year (FY24) against a net profit of Rs 3,313.42 crore in the second quarter of the previous fiscal year (FY23).
The bank stated that it’s Gross Non-Performing Assets (GNPAs) improved and stood at 3.32 per cent, against 5.31 per cent for the same period a year earlier. The lender’s Net NPA stood at 0.76 per cent for the reporting quarter, down from 1.16 per cent on a year-on-year (YoY) basis. NPAs are loans or advances issued by the bank that are subject to late repayment or unlikely to be repaid by the borrower in full.
The lender clocked a 6 per cent growth in its net interest income (NII) from Rs 10,174 crore in Q2FY23 to Rs 10,831 crore in Q2FY24. NII is a reflector of interest earned by the bank after measuring the difference between the interest borrowers pay to the bank and the interest paid by the bank to its depositors.
The bank stated in it’s earnings that it’s global advances gained 17.3 per cent in the reporting quarter on a YoY basis credited to the strong growth in the retail loan book. The organic retail advances of the lender increased by 22.2 per cent, with personal loans (67.2 per cent) and auto loans (21.1 per cent) driving the growth.
Amongst deposits, global deposits logged a 14.6 per cent increase, while domestic deposits escalated by 12 per cent, both on a YoY basis. Provisions for the bank increased from Rs 1,628 crore in Q2FY23 to Rs 2,161 crore in the quarter under review. Provisions are set amounts maintained by the bank to cover probable losses on bad assets.
The slippage ratio for the lender worsened marginally to 1.81 per cent in the reporting quarter, from 1.77 per cent in the corresponding period a year earlier. The slippage ratio represents the rate at which a good loan becomes bad. A sharp increase in slippage affects the banks’ provisioning and net profit, while a low or no slippage is indicative of the bank’s good asset qualities.
Also Read : Unveiling The Reality Of Zero Cost EMI, A Look Into The Hidden Charges Involved