Bank of Baroda Q2 profit up 31% to Rs 6,737 cr on NSE stake-sale

New Delhi: State-owned Bank of Baroda on Friday reported a 31 percent jump in September quarter consolidated net profit at Rs 6,737.28 crore helped by its stake sale in largest equity bourse NSE.

On a standalone basis, the lender reported its highest-ever quarterly net profit of Rs 6,532 crore, registering a growth of 35.8 percent year-on-year.

The core net interest income went up by 9 percent to Rs 13,026 crore on the back of 18.3 percent growth in advances and a 0.22 percent compression in net interest margin at 2.74 percent.

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Chief executive and managing director Debadatta Chand said the bank upped its loan growth guidance to 13-15 percent for FY27 from the 12-14 percent earlier on strong loan growth in the first half of the fiscal, which is typically the softer growth phase.

Net Interest Margin (NIM) will stay within the earlier guided band of 2.75-2.95 percent, he said, adding that the number will expand in the second half of the fiscal amid RBI's rate hike as 38 percent of its overall loanbook is linked to external benchmark.

The other income jumped 96 percent to Rs 6,881 crore during the quarter, which was largely on the back of NSE's listing. Chand said the bank booked a cash profit of Rs 1,340 crore on the part-sale of its holdings in the bourse, and additionally, there were valuation gains on the residual stake as well.

The bank utilized the windfall to make prudential provisions of Rs 1,300 crore which can be of use in its transition to expected credit loss (ECL) system due from April 1 next year. Additionally, it also provided Rs 300 crore in contingency provision.

Chand said the bank, which was already carrying a Rs 2,500 crore of excess provisions, requires about Rs 12,500 crore for the transition to ECL and will keep looking for opportunities to provide the money.

Overall provisions for the quarter stood at Rs 2,382 crore including the extra provisions of Rs 1,600 crore.

It raised USD 8 billion in FCNR(B) deposits under RBI's limited period concessional swap scheme, and the diaspora borrowed over Rs 60,000 crore using the leverage facility. Chand said the bank will incur an interest outgo of over USD 350 million per year, but exuded confidence on being able to manage the payouts, pointing out that the leveraged loans will also accrue in interest.

The bank will deploy the funds raised under the scheme over Q3 and Q4 of the fiscal, Chand said, adding that at present it has parked the liquidity to reduce its cost of borrowings.

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It sees an overall corporate loan pipeline of Rs 60,000 crore, he said, adding that its overall corporate loan growth declined to 6.4 percent for Q2 because of slowdown in large entities' pick-up due to factors including the ask for aggressive rates.

The bank, which had a 15 percent growth in corporate advances in Q1, is maintaining the FY27 guidance of 10 percent growth on the large value loans, he said.

From an asset quality perspective, fresh slippages reduced to Rs 2,392 crore from Rs 3,183 crore in the quarter-ago period, and the gross non-performing assets ratio improved to 1.78 percent from 1.99 percent at June-end.

The BoB scrip closed 1.24 percent down at Rs 238.50 on the BSE, as against gain of 0.42 percent on the benchmark.

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