Why Did Bank of Baroda’s Stock Plummet by 11% Following Disappointing Q4 Results?
Click to start listening
Synopsis
Bank of Baroda's recent financial report has led to a dramatic stock decline, raising concerns among investors. This article delves into the key financial indicators that contributed to the bank's disappointing quarter and examines the implications for its future performance.
Key Takeaways
- Stock dropped by 10.91% after weak Q4 results.
- Net profit increased by 3.3% year-on-year.
- Net interest income fell by 6.6% to Rs 11,020 crore.
- Gross NPA reduced by 12.6% YoY.
- Total deposits reached Rs 14.72 trillion.
New Delhi, May 6 (NationPress) Bank of Baroda experienced a significant decline in its shares, plummeting by 10.91 percent on Tuesday after the public sector bank disclosed its unsatisfactory financial outcomes for the March quarter (Q4 FY25).
The bank reported a modest 3.3 percent year-over-year rise in net profit, reaching Rs 5,048 crore in Q4, compared to Rs 4,886 crore in the preceding quarter (Q3).
This slight increase in net profit was overshadowed by escalating provisions and a lackluster net interest income (NII).
Bank of Baroda's NII stood at Rs 11,020 crore in Q4 FY25, reflecting a 6.6 percent decline from Rs 11,793 crore reported during the same period last year.
On a quarterly basis, NII also saw a drop from Rs 11,417 crore in Q3 FY25.
The bank’s domestic net interest margin (NIM) decreased to 3.02 percent from 3.11 percent on a quarterly basis. The operating profit remained stable at Rs 8,132 crore compared to Rs 8,106 crore in Q4 FY24.
The gross non-performing assets (NPA) of the bank fell by 12.6 percent year-on-year to Rs 27,835 crore in FY25, with the gross NPA ratio improving to 2.26 percent in FY25 from 2.92 percent in FY24.
Additionally, the net NPA ratio was recorded at 0.58 percent in FY25, down from 0.68 percent in FY24.
As of March 2025, Bank of Baroda reported total deposits worth Rs 14.72 trillion, marking a 10.3 percent increase year-on-year and 4.9 percent quarter-on-quarter.
Total advances reached Rs 12.30 trillion, including global advances, reflecting a 12.8 percent year-on-year rise and 4.9 percent quarter-on-quarter growth.
The board has proposed a dividend of 418 percent, pending necessary approvals.
Bank of Baroda’s global advances reported a growth of 12.8 percent year-on-year, with domestic advances surging by 13.7 percent in FY25, driven by strong retail loan growth.
Point of View
I observe that Bank of Baroda's financial performance raises critical questions about its operational efficiency and market strategies. While the reduction in NPAs is a positive sign, the decline in net interest income and profitability indicates underlying challenges that need to be addressed. Stakeholders must remain vigilant as the bank navigates these turbulent waters.
NationPress
06/05/2025
Frequently Asked Questions
What caused Bank of Baroda's stock to drop?
The stock dropped due to weak Q4 results, including a significant decline in net interest income and higher provisions.
What is Bank of Baroda's net profit for Q4 FY25?
Bank of Baroda reported a net profit of Rs 5,048 crore for Q4 FY25, which is a 3.3% increase year-on-year.
How much did the net interest income decrease?
The net interest income decreased by 6.6% to Rs 11,020 crore compared to the same period last year.
What are the total deposits of Bank of Baroda?
As of March 2025, Bank of Baroda's total deposits stood at Rs 14.72 trillion.
What dividend has Bank of Baroda proposed?
The bank has proposed a dividend of 418%, subject to necessary approvals.
