Bank of Baroda Q3 Results | “આ ત્રિમાસિકમાં બિઝનેસ ઘણો મજબૂત રહ્યો” | Dr. Debadatta Chand

You have rightly said. Actually, looking at Bank of Baroda's Q3 numbers, whether it is business or profitability, our core theme has been to strengthen the bank's core fundamentals and provide a consistent and stable business outlook. These numbers are in line with what has been consistent over the last 10-12-13 quarters. Speaking about this quarter, our business numbers are one of the strongest in the last eight quarters. At the same time, the profitability, with a net profit of Rs 555 crore, is entirely from core operations. There is no one-off income from other interest or non-interest income. In that sense, I believe the core fundamentals of the bank are reflected in the outcomes. Profitability depends on a few factors. One, our CASA at the end of Q3 is 38.45%, which is among the top quartile in the industry. At the same time, the cost of deposits is 4.75%, one of the lowest in the industry. Looking at margins, Q3 margins are slightly lower than Q2, but in absolute terms, they are within our guidance of 2.85-3%. For nine months, it is 2.88%, and the absolute number is still in the top quartile. So when I look at the numbers, I think the core theme of strengthening fundamentals and delivering consistent business outcomes is reflected. Asset quality is at a multi-year low in terms of percentage, the best asset quality. Margins are good, growth numbers are good, with asset growth of 14.7% in advances. I think it has been a very good quarter. Going forward, as we have said earlier, Q3 and Q4 are productive quarters for the bank, and we will be able to deliver similar performance in Q4.

Look, Q3 loan growth has been quite strong at 14.7%. It has two broad components. One is RAM – Retail, Agri, and MSME – which grew 17.5%. The corporate growth was 8.1%, which was a bit muted in Q2. We had also discussed in Q2 that after the GST cut and the RBI repo rate cut, there was a strong consumption demand. That demand is now visible in our numbers, with agriculture growing almost 19%, MSME 15.4%, and retail 17.5%. These are strong numbers. For corporate, we had said that Q3 and Q4 are productive periods. In Q3 we achieved around 8.1%, and I think we will achieve 10% in Q4. So, taking the same kind of growth in RAM at 17.5% and corporate at 10%, I think we will deliver similar advance growth next quarter. On a guidance basis, we are giving a loan growth guidance of 11-13% with upside. As we had upside this quarter, I also expect it in Q4.

Look, we have rightly said that the deposit market growth is lower, both for the system and for Bank of Baroda, for the last two to three years. We had earlier said that when we design our growth pattern, we will keep dependency on bulk deposits low. That policy continues and is consistent. At the same time, we will focus on low-cost deposits. Particularly, talking about savings deposits, our growth in this quarter is 7.4%. CASA growth is 8.6%, which is better than last quarter and also better than the system median. Our focus on low-cost deposits will continue. We have taken multiple strategies: improving service, bundling products, introducing new products, using our brand ambassador to attract deposits, and improving customer service. These strategies will continue to focus on low-cost deposits. Secondly, the deposit growth in the market is low, but in the wholesale market, liquidity is quite available, though the cost is obviously higher. So the bank can design a pattern where alternate resources are also available. For example, we recently announced a Rs 15,000 crore infra bond and we can also do refinance. So, resources are available for advance growth, but how much we take from which market will depend on cost optimization. I think in Q4, the pattern will be similar to Q3.

Look, you have rightly said that the NII cut and NIM squeeze is systemic, it is for all banks, and ours as well. But our cut is not that significant. Still, our NIM for nine months is 2.88%, which is one of the top quartile in the industry, particularly among large peers. I think our core objective of profitability and margin sustainability remains, and will continue. The absolute number of our NIM is good and its ranking is good. But the margin squeeze going forward is market dependent. In December, there has been a repo rate cut, and the asset-liability replacement will take some time to fully reflect, which may happen in Q4. However, there is also some upside. Our cost of deposits is the lowest at 4.75%. Over 1 lakh crore of deposits will be repriced, and they will be repriced at lower cost. Also, the wholesale market is a bit elevated. Net to net, what I see is that our overall guidance of 2.85-3% should be maintained in Q4 as well.