In the latest financial update, Bank of Baroda has reported a standalone net profit of Rs 4,886.49 crore for the fourth quarter of FY24, marking a growth of 2.3% from the previous year. Despite this positive performance, the banking stock witnessed a decline of 5.36% to Rs 248.55 on the BSE, leading to a decrease in the market cap of the lender to Rs 1.30 lakh crore. Let’s delve deeper into the details of Bank of Baroda’s Q4 earnings:
Operating Profit and Net Interest Income
The operating profit of the lender saw a modest increase of 0.4% to Rs 8106 crore in Q4FY24 compared to Rs 8073 crore in Q4FY23. Additionally, the net interest income (NII) for Q4FY24 rose by 2.3% to Rs 11,793 crore from Rs 11,525 crore in the corresponding period of the previous fiscal. Moreover, the global Net Interest Margin (NIM) experienced a sequential growth of 17 basis points (bps), reaching 3.27% in Q4FY24 from 3.10% in Q3FY24.
Asset Quality and Provisioning
Bank of Baroda showcased improvements in asset quality, with gross non-performing assets (GNPA) declining to 2.92% in Q4FY24 from 3.79% in Q4FY23. Similarly, net NPAs fell to 0.68% in Q4FY24 from 0.89% on a year-on-year basis. However, the bank reported a net profit margin decrease to 14.47% in Q4 compared to 16.29% in the March 2023 quarter. Notably, the bank has maintained additional provisions of Rs 899.56 crore as of March 31, 2024, over and above the IRAC norms in certain stressed standard advances on a prudent basis.
Dividend Announcement and Market Performance
The board of directors of Bank of Baroda recommended a dividend of Rs 7.60 per share (380%) for the fiscal year ended March 31, 2024, subject to requisite approvals from shareholders. Despite this positive news, the stock ended 2.84% lower at Rs 255.20 on the BSE, leading to a decrease in the bank’s market cap to Rs 1.31 lakh crore. It’s worth noting that the stock opened higher at Rs 265 on BSE, indicating fluctuations in market sentiment. However, with a beta of 0.9, the banking stock demonstrates low volatility, even as it has gained 43.01% over the past year and risen by 9.11% in the current year.
In conclusion, while Bank of Baroda’s Q4 earnings reflect a mixed performance, the dividend announcement underscores the bank’s commitment to rewarding its shareholders. As the bank navigates through market fluctuations and strives for sustainable growth, investors remain poised to monitor its future trajectory closely.
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