Bank of Baroda के Q3 Results, बिज़नेस विस्तार योजना और मुनाफे पर MD & CEO Debadatta Chand का Outlook

Thank you for inviting me. Before talking about margins, I would like to provide some context on the bank's third quarter performance. The numbers you see in Q3 show the strongest business growth in the last eight quarters. At the same time, the profitability is from core operations. There is no one-off in our profitability. In that scenario, the bank's performance, our business model, which has a stable outlook, a consistent business model, is the result of the numbers we have shown in Q3 this time. As far as margins are concerned, there are two factors. One, our CASA percentage is 38.45%, which is one of the top quartile numbers in the industry. At the same time, the cost of deposits is 4.75%, which is one of the lowest in the industry. So both these factors significantly influence margins. Our earlier guidance for margins was 2.85 to 3%. And the Q3 margin is 2.79. The nine-month margin is 2.88, which is within the range of 2.85 to 3%. In this context, when we look at Q4, we also expect that the bit of our more than 1 lakh crore of deposits that is yet to be repriced. Taking cost of deposits at 4.75, there is upside in terms of reduction in interest expenses. At the same time, advances are also resetting downward, in the sense their yield is going down. That impact can also come. But net to net, we are still hopeful that we will be able to achieve the earlier guidance of 2.85 to 3%. And one more thing to factor in is that there are headwinds in the market, global headwinds. So considering that, we think this margin guidance is conservative, but at the same time, the bank will be able to achieve it.

See, you are right about ECL. It is draft guidelines. When the final guidelines come, the exact number will be known. But as a backup, envelope calculation and thumb rule calculation, we will take the impact of ECL. ECL has two impacts. One is a one-time impact on CRAR, and one is a recurring impact on income. So, the one-time impact on CRAR, based on the draft guidelines' rules and models, the impact can be around 100 basis points on CRAR. At the same time, RBI has another draft guideline regarding credit risk rationalization. And if we calculate that, we might get a pullback of 40 basis points. So net to net, the one-time impact on CRAR for ECL will be 60 basis points, which as per draft guidelines can be spread over 5 years. That said, the recurring provisioning impact is roughly our calculation that our normalised credit cost could increase by about 18 basis points. So the ECL impact is twofold: one is a one-time impact of 60 basis points on CRAR which can be spread over 5 years, and the recurring impact on credit cost could be 18 basis points.

See, our RoA has been more than 1% for the last 14 consecutive quarters, and this quarter also it is above 1%. And these 14 quarters consecutively it has been more than 1%. As I mentioned earlier, our business model has a stable outlook, a consistent model. So I expect that going forward, we have a guidance of more than 1%, and RoA will remain above 1%. Now talking about this quarter, our profit, whether it is operating profit or net profit, both are from core operations. There is no one-off. So considering that, I am quite hopeful that in the coming quarters also, RoA will remain above 1%.