Hello and welcome. You're watching Business Today Television. I'm Sakshi Batra and this is an earning special conversation that we're going to be having. Today we put the spotlight on Bank of Baroda for its Q4 numbers. We have seen a healthy quarter that's resulted with a strong growth across the parameters for the bank. NII is up by 9% and this is coming at 12,493 crores. The net profit is improved by 11% at 5,615 crore rupees. In fact, it's been the highest-ever quarterly profit for the bank and the gross NPA has also shrunk to about 1.89%. We were sequentially, you know, a number that we seen at 2.04% in the last quarter. We've also seen a dividend payout and, you know, a lot of other factors that we're going to be discussing with the top management that we have with us now. Dr. Adip Datta Chand is now with us. He's the MD and the CEO of Bank of Baroda. Welcome to you, sir, and thank you so much for taking the time out for this conversation. Nachiket is also with us to drive this conversation forward along with me. And first up, I'd like to understand from you, sir, on the quarterly profit that you posted. The strongest-ever profit for this quarter. And give me an understanding what are the factors that drove this profit for you and whether it will be sustainable as we've stepped into FY27.
Thanks for inviting me. And as you said, right, this is one of the strongest quarter we had in the last 10 quarters. So, whether it is loan advances growth or deposit growth, we had one of the strongest quarter. At the same time, in terms of profitability also, if you look at there's a growth in NII. There's a growth in operating profit and there's a growth in net profit. And the margin again as compared to the last quarter of 2.79, it has upsized to 2.89. So, in terms of profitability also, I think the bank has done well. And we achieved two critical milestones in this year. One is that our business crossed 30 lakh crore of business, right? At the same time, the net profit has been full year has been more than 20,000 crore of net profit. So, I think it's one of the good, I mean, in terms of what we have done for last many years now. So, couple of things that really helped the bank to achieve: we have a on the liability management, something that we wanted to focus more and try to optimize on the liability front. And that typically, if you look at this quarter, the rise in interest income has been higher than the percentage growth of interest income has been higher than the interest expenses. That is what actually getting reflected in the growth in NII. So, one way the business growth has been very strong. At the same time, we optimize on the profitability. And the ROI continues to be more than one. And this is duly supported by the asset quality, which is again one of the best in last many quarters. So, in that way, overall, the bank has done well in terms of the performance parameter. And thanks to the economy, even if there are geopolitical issues for at least 1 and a half months in last financial year, but the Indian economy has been resilient, and so is the bank's book has been quite resilient.
Okay.
One question. Absolutely a very strong quarter you have had, but your provisions have doubled year on year. Could you give us a sense of that? And is there something related to the crisis that we have seen in West Asia? If you could also elaborate a bit on what is the kind of impact that you expect from this ongoing crisis?
You said right, actually, our credit cost for the full year has been 0.46 as compared to 0.47 last year. But as the provision has gone up, not because of the loan side provision, it is because we have created a floating provision of 1,500 crore. And floating provision has been created to buffer the balance sheet in terms of its balance sheet strength. We had opportunity this quarter this year also we created with this the floating provision is now 2,500 crore. So I think it's a significant buffer to the balance sheet in creating floating provision. And precisely for that reason only it has gone up, the provision has gone up, not because of the loan losses because loan losses if you exclude floating provision the credit cost is 0.32 which is below that of the last quarter. So I think on the asset quality and the provision the bank is running a good cycle of asset quality and consequent requirement of provision. With regard to sustainability of profit and all we are very hopeful or rather very optimistically that the bank would maintain because we upsize the loan guidance and also the deposit guidance by 100 bps on the upper side. So with the growth that we are expecting I think one of the key guidance that we give to the market that we will maintain ROA more than one. And we've been maintaining ROA more than one for last 16 quarters. And I think going forward also our ROA guidance would continue to be more than one unless and until significant geopolitical impacts the bank's book significantly because we run our businesses across the globe also including some of the impacted countries also. So I think the bank otherwise the Indian economy is resilient and so is the bank's book. But saying so if geopolitical issue continues for a longer term then possibly there would be impact. But we have time to rethink realign with those impact. As on today it looks like things are, I mean, in terms of asset quality looks good both in Indian book at the same time the overseas book including a country where we operate big time as a local bank a retail bank. So the book seems as on today as usual so there is no impact but if continues for a longer time, then you have to realign our forecasting guidance.
Mhm.
Dr. Shaw, if I have to ask you on the margins front, specifically on NIM, which is coming at 2.89%, what is the outlook that you have looking at the kind of risks that we face because of this conflict, inflationary pressures that are upon us, and how the RBI is going to probably maneuver all this? We have constantly seen the rupee depreciation at this point in time. That's adding on to the pressure. Import bill is rising. How are you looking at all of that factor into the margins going forward? Will you continue to have the supporting factors that you had in FY26 to continue to grow your NIMs in FY27?
See, as on time, suppose I look into, keeping everything as it is in terms of both asset pricing and liability pricing, our NIM as on March was 2.89. But there is also a interest on IT refund which, I mean, added to some bit of income there in. Which may continue the same, what you can say, quantum or a lower in this year, I mean, '26-'27. So, considering the impact of this volatility, we've given a guidance of 2.75 to 2.95 for '26-'27. So, as against 2.89, I'm giving a guidance of 2.75, which is lower than 2.89. At the same time, the upper range can be 2.95. So, this is what is the guidance, but there are two other factors to be accounted for. If you look at the deposit market as on today, I think earlier, I used to talk about moderating the deposit cost. Actually, we had one of the lowest deposit cost in the system. But now we say that the deposit cost going to be sticky in the sense that further moderation we are not looking at based on the current market scenario. At the same time, on the asset side, look, the repo linked will be the same unless and until we change the spread based on the RBI guidelines. The MCLR again based on a model that's on the cost of deposit. The only segment of market which can see some kind of a realignment on the upper side is a corporate loan book which is not linked to the MCLR. Which is typically linked with T-bill or a G-Sec or any other form of benchmark. So, if you're able to realign those rates along with the stickiness of the deposit cost that I talked about, I think we'll be right on the band of 2.75 to 2.95.
Dr. Chanda, one question on the remittances front, has there been any impact that you have seen on remittances especially from the West Asian region during the quarter and what is the outlook there?
See, particularly we have bigger remittance from some of the retail operations, not on the wholesale where we operate. So, many of the centers we are on wholesale. So, there is no remittance per se on that. So, some of the retail operations wherever we operate, yes, there are some impact, but we need to see whether it is a temporary blip or a significant continuation of those impact. So, as far as our baseline assumption with regard to the geopolitical issue that we see, we may look at it different once we go forward, but that things should improve maybe in coming days or coming quarters. So, that's something driving us to be slightly more optimistic with regard to growth guidance. And many of the factors of profitability including some of the fee that we talked about on the remittance. So, I think we have to watch for June quarter just to slightly revalidate, rehouse couple of assumptions that we have taken internally as a house view and projecting all these numbers.
Okay. Sir, also wanted to ask you off late, this is a side of the earnings, we'll come back to it, but very importantly, recently we've seen the finance minister meeting all the heads of PSU banks as well as private banks. We've heard about MyThos and the entire impact on the financial ecosystem, which we want to stay protected. What have you heard from the finance minister? What are the kind of steps that are being taken at the PSU banks? And what are you particularly doing in dealing with the newer technologies that are emerging in AI like MyThos? Is there a kind of a risk that you've looked at? Are we ahead in terms of planning how to mitigate it at this point in time? How would you look at it, sir?
See, cybersecurity is something core to the bank's resilient system. So, we have been preparing, measuring ourselves vis-à-vis the cyber threat. And these risks are elevated not at today, it was also a couple of months like these risks always to be elevated. So, as a bank, we are quite prepared to deal with all these challenges going forward. And I'm referring to the particular threat that you are referring, actually the IBA, where we are part of the IBA, it has been tasked to measure and prepare a holistic plan for the banking system. So, we are contributing our because of the global operation, wherever there have been some of the significant guidances issued on the matter. We are helping IBA, we are supporting with data to figure out holistic measures for banks. But as a bank, we are well prepared. We have all the cybersecurity measures in place. And this is not only, actually a year back, the threat was much higher elevated at that time. Also, the system dealt with that. So I think the banks are well prepared to deal, but again cybersecurity is something always take our attention in terms of how to create a resilient system and we are preparing ourselves for that.
Dr. Chanda, from a business perspective, how is AI being implemented across the various segments within the bank, whether it is at the back end or in the retail? Could you give us a sense of that?
