Bank of Baroda Q4 results: PAT up 3% YoY to Rs 5,048 crore; board announces Rs 8.35 dividend per share

State-run Bank of Baroda (BoB) reported a weaker-than-expected set of numbers for the March 2025 quarter, triggering a steep selloff in public sector banking stocks. The bank’s core performance missed analyst estimates on key parameters, including Net Interest Income (NII) and profitability, despite a decline in bad loans.

The stock crashed over 10 per cent on Tuesday, closing at Rs 224.21, eroding nearly Rs 10,000 crore in market capitalisation. The broader PSU banking space took a knock of Rs 58,000 crore in market value post the earnings disappointment.

NII drops 6.6% YoY, below Street expectations

Bank of Baroda’s NII, the difference between interest earned and paid declined 6.6 per cent year-on-year to Rs 11,019 crore. This was sharply below the CNBC-TV18 poll estimate of Rs 11,678 crore, pointing to weaker lending profitability.

In contrast, the bank saw a 24 per cent jump in other income, which rose to Rs 5,210 crore in Q4FY25, providing partial support to the bottom line.

Gross NPA improves, but provisions spike

On the asset quality front, Bank of Baroda showed improvement. Gross NPA stood at 2.26 per cent in Q4FY25 versus 2.43 per cent in Q3. Net NPA was flat at 0.58 per cent. However, gross slippages rose sequentially to Rs 3,159 crore from Rs 2,915 crore in the December quarter.

Total provisions surged to Rs 1,552 crore in Q4, compared to Rs 1,082 crore in Q3FY25. Write-offs also climbed to Rs 1,662 crore from Rs 1,167 crore in the previous quarter.

NIM at multi-quarter low, growth in advances fails to lift sentiment

Bank of Baroda’s Net Interest Margin (NIM) for FY25 fell to 3.02 per cent, the lowest in 14 quarters. For the March quarter alone, NIM stood at 3.27 per cent, higher than last year’s 2.86 per cent but still down on an annual basis from 3.18 per cent at the end of FY24.

Advances grew 12.8 per cent year-on-year in Q4, while deposits rose 10.9 per cent. However, this growth failed to excite the market as core profitability metrics remained under pressure.

Street view: Mostly bullish, but near-term caution advised

Out of 37 analysts tracking the stock, 29 have a “buy” rating, 6 maintain “hold” and 2 recommend “sell.” Most brokerages believe the medium-term story remains intact but advise caution due to earnings volatility and margin pressures.

Investors are expected to track upcoming commentary from management, especially around loan book quality and NIM trajectory, amid a tough macro environment.