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Dolat Capital Report
Bank of Baroda reported strong quarter with robust loan growth of 6.5% QoQ/22% YoY, core net interest margin expansion of 20 basis points QoQ to 3.3%, higher other income and contained opex aiding pre-provision operating profit growth of 37% QoQ/50% YoY. Return on asset stood at 1.1% for the quarter.
Sequential growth was driven by domestic corporate (9% QoQ), followed by retail (5% QoQ).
Bank of Baroda's asset quality trends were steady with continued decline in gross non-performing asset ratio by 80 basis points to 4.5%, low slippages at 1.3%, slight moderation in restructured book to 1.9% of advances, and sequentially stable provision coverage ratio at 79%. Exposure to Adani group is limited at Rs 54 billion or 0.6% of advances.
Sharp decline in net non-performing asset levels to sub 1%, and limited corporate stress to aid credit costs of ~1% for FY23-25E. With 80% of loans floating rate (50% linked to Marginal Cost of Funds Based Landing Rate), near term NIM outlook remains strong.
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