Beat on all front; robust performance with all time high RoA
Q4FY23 Earnings Summary
Net interest income was up 33.8% YoY and 6.5% QoQ to Rs 11525 crore; this was mainly driven by strong credit growth and margins accretion of 16bps QoQ / 45bps YoY at 3.5%. Other income jumped 37% YoY partly driven by recovery from technical written off accounts which increased 58% YoY QoQ to Rs 1447 crore
Opex was up 25.8% YoY at Rs 6918 crore; however due to high income levels, C/I ratio declined to 46% vs 49% in Q4FY22. Provisions declined on both QoQ and YoY basis at Rs1421 crore, however, NPA provisions declined substantially to Rs320 crore vs Rs817 crore in Q3FY23 and Rs5200 crore in Q4FY22. Credit cost further declined to 0.14% vs 0.37% in Q3FY23. Bank reported highest quarterly net profit of Rs 4775 crore, up 2.7x YoY and 24% QoQ (ahead of our estimates). The bank reported all time high RoA of 1.34% vs 0.57% in Q4FY22
Asset quality continued to show sequential improvement. GNPA and NNPA declined 74 bps and 10 bps QoQ to 3.79% and 0.89%, respectively. Slippages for the quarter were at Rs 2242 crore (~1% annualised) vs Rs 2172 crore in Q3FY23, while recoveries and upgrades were at Rs2802 crore vs Rs 2635 crore in Q3FY23. SMA1&2 declined from 0.4% in Q3FY23 to 0.32% in Q4FY23. Collection efficiency (ex-agri) was steady at 98%
Overall global loan book (gross) growth was healthy at 18.5% YoY to Rs 9.69 lakh crore. Strong credit offtake was driven by 27% YoY rise in retail loans led by growth in Personal loan portfolio at 101.5%, Auto loan by 24.4%, Education loan by 21.8%, Home loan by 19.5% on a YoY basis. Gold segment also reported strong growth of 28% YoY. International loans (~18% of total book) reported healthy growth of 30% YoY. Deposit book jumped 15.5% YoY, primarily led by 70% YoY growth in bulk deposits. Domestic deposits was up 13% YoY to Rs 10.5 lakh crore. Domestic CASA growth was at 7.9% YoY and its share to total domestic deposits was at 42.25% vs 41.63% in Q3FY23 and 44.24% in Q4FY22
ICICIdirect Research view on Bank of Baroda Stock
View: The bank posted yet another highest quarterly profit led by strong business growth and improvement in margins. Management outlook and guidance on growth in key segments to be watchful.
Impact: Positive
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