BANK OF BARODA 2022-23 Annual Report Analysis

Sun, 11 Jun

BANK OF BARODA has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the bank during the year 2022-23.

BANK OF BARODA Income Statement Analysis

• Interest income during the year rose 28.3% on a year-on-year (YoY) basis.
• Interest expenses were up by 28.7% YoY during the same period.
• Operating expenses increased by 23.4% YoY during the year.
• The bank's net interest income (NII) increased by 27.8% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 3.2% in FY23 as against 3.0% in FY22.
• Other income increased by 15.6% YoY during the year.
• Net profit for the year increased by 89.9% YoY.
• Net profit margins during the year increased to 15.8% in FY23 from 10.7% in FY22.

BANK OF BARODA Income Statement – 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Interest Income	Rs m	733,855	941,386	28.3%
Other Income	Rs m	143,947	166,394	15.6%
Interest Expense	Rs m	388,155	499,422	28.7%
Net Interest Income	Rs m	345,700	441,964	27.8%
Operating Expense	Rs m	248,388	306,445	23.4%
Pre-provision Operating Profit	Rs m	241,259	301,913	25.1%
Provisions & Contingencies	Rs m	164,257	155,035	-5.6%
Profit before tax	Rs m	100,083	205,645	105.5%
Tax	Rs m	23,081	58,767	154.6%
Profit after tax	Rs m	78,497	149,052	89.9%
Minority Interest	Rs m	-833	-1,000	-20.1%
Net Interest Margin	%	3.0	3.2
Net profit margin	%	10.7	15.8

Dear Reader: If You Invest in Midcap Stocks, this is for You

BANK OF BARODA Balance Sheet Analysis

• The bank's deposits during FY23 stood at Rs 12,346.8 bn as compared to Rs 10,758.0 bn in FY22, thereby witnessing an increase of 14.8%.
• Advances for the year stood at Rs 9,636.5 bn as compared to Rs 7,972.8 bn during FY22, a rise of 20.9%.
• Cost of deposits for BANK OF BARODA rose 8.6% and stood at 3.5%, while yield on advances rose to 6.8%.
• The lender's investments rose to Rs 3,974.9 bn during the year from Rs 3,475.9 bn in FY22.
• Borrowing stood at Rs 1,079.1 bn, a fall of 1.5% as compared to previous year.
• Overall, the total assets and liabilities for FY23 stood at Rs 15,258.8 bn as against Rs 13,401.4 bn during FY22, thereby witnessing a rise of 13.9%.

BANK OF BARODA Balance Sheet – as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	918,681	1,050,547	14.4%
Advances	Rs m	7,972,809	9,636,518	20.9%
Deposits	Rs m	10,758,044	12,346,820	14.8%
Yield on advances	%	6.4	6.8
Cost of Deposits	%	3.2	3.5
Investments	Rs m	3,475,871	3,974,872	14.4%
Borrowings	Rs m	1,095,261	1,079,102	-1.5%
Total Assets	Rs m	13,401,371	15,258,790	13.9%

Current Valuations for BANK OF BARODA

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 28.8, an improvement from the EPS of Rs 15.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 184.9, stands at 5.0 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 0.9 times, while the price to income ratio stands at 0.8 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Income per share (Unadj.)	Rs	141.9	182.0
Earnings per share (Unadj.)	Rs	15.2	28.8
Diluted earnings per share	Rs	15.2	28.8
Avg P/E ratio	Rs	6.0	5.0
Avg P/ABV ratio	Rs	0.6	0.9
Avg Market Cap	Rs	467,103	742,349
Dividends per share (Unadj.)	Rs	2.85	5.50

Ratio Analysis for BANK OF BARODA

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio improved and stood at 78.0x during FY23, from 74.1x during FY22. The credit/deposit ratio tells us how much money a bank has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The bank's debt to equity ratio decreased and stood at 12.78x during FY23, from 12.90x during FY22. The debt to equity ratio of a bank tells us how much debt a bank uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): BANK OF BARODA's capital adequacy ratio (CAR) was at 16.2% as on 31 March 2023 as compared to 15.8% a year ago. This ratio helps measure the financial strength of the bank or any finance company to meet their obligations using their assets and capital.

  A bank that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the bank's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a bank sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the bank is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that banks hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the bank improved and stood at 14.2% during FY23, from 8.5% during FY22. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the bank improved and stood at 0.98% during FY23, from 0.59% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the bank improved and stood at 13.33% during FY23, from 8.12% during FY22. The ROCE measures the ability of a bank to generate profits from its total capital (shareholder capital plus debt capital) employed in the bank.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a bank's gross NPAs to gross advances. BANK OF BARODA's gross NPA ratio stood at 3.8% as of 31 March 2023 compared to 6.6% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a bank's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the bank has made provisions.

  The net NPA ratio of BANK OF BARODA was 0.9% in financial year 2023. This compared with 1.7% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Credit/Deposit Ratio	x	74.1	78.0
Debt to Equity Ratio	x	12.9	12.8
Loans / Deposits	x	0.1	0.1
Capital Adequacy Ratio	%	15.8	16.2
Return on Equity	%	8.5	14.2
Return on Assets	%	0.6	1.0
Return on Capital Employed	%	8.1	13.3
% of Gross NPAs	%	6.6	3.8
% of Net NPAs	%	1.7	0.9
Yield on Advances	x	6.4	6.8
Yield on Investments	x	6.5	6.6

To see how BANK OF BARODA has performed over the last 5 years, please visit here.

BANK OF BARODA Share Price Performance

Over the last one year, BANK OF BARODA share price has moved up from Rs 105.1 to Rs 184.9, registering a gain of Rs 79.8 or around 75.9%.

Meanwhile, the S&P BSE BANKEX is trading at 49,874.1 (down 0.0%). Over the last one year it has moved up from 39,735.8 to 49,874.1, registering a gain of 10,138.3 points (up 25.5%).

Overall, the S&P BSE SENSEX is up 14.1% over the year.

(To know more, you can check out historical annual results for BANK OF BARODA here and quarterly results for BANK OF BARODA here)

Read: Latest Annual Report Analysis of BANK OF BARODA