State-owned Bank of Baroda is gearing up to unveil its Q4 financial results for the fiscal year 2024-2025, with the board meeting scheduled for May 6. This announcement is highly anticipated, especially as the board will also deliberate on the potential dividend for the fiscal year. Analysts are bracing for underwhelming earnings figures, forecasting a decline in both net profit and net interest income (NII) along with tighter margins.

Expectations for Bank of Baroda’s Q4 Results

As we look forward to the results, estimates suggest that Bank of Baroda’s net profit for the quarter ending March 2025 could reach ₹4,628 crore. This represents a 5.3% decrease from the ₹4,886 crore reported in the same quarter last year, according to insights from Axis Securities.

• Pre-Provisions Operating Profit (PPOP) is anticipated to drop by 6.1% year-on-year to ₹7,613 crore.
• Net Interest Income (NII) is expected to decline by 1%, projected at ₹11,679 crore, compared to ₹11,793 crore from the previous year.
• The bank’s net interest margin (NIM) is also likely to contract slightly.

According to Axis Securities, “NII growth is projected at around 3% quarter-on-quarter, while NIM is expected to see a minor decline. However, PPOP growth is anticipated to remain robust due to improved operational efficiency and increased non-interest income.”

Asset Quality and Provisions Outlook

In terms of provisions, Bank of Baroda is expected to increase its reserves to ₹1,315 crore in Q4FY25, marking a 21.5% rise from the previous quarter and a 1.0% increase year-over-year. There is a silver lining, as asset quality is projected to improve, with credit costs remaining manageable.

Brokerage firm Motilal Oswal Financial Services predicts a slight reduction in the bank’s Gross Non-Performing Assets (GNPA) ratio, forecasting it to decrease to 2.3% from 2.4% in the previous quarter. Similarly, the Net NPA ratio is expected to drop to 0.5% compared to 0.6% in Q3FY25.

Growth in Advances and Deposits

Looking at the broader picture, advances and deposit growth are expected to align with industry trends. MOFSL estimates that Bank of Baroda will experience a 12.1% increase in loan growth, alongside a 9.8% rise in deposits during this quarter.

Analysts will be particularly attentive to management’s commentary on asset quality and the retail loan segment, as these factors could significantly affect investor sentiment.

Bank of Baroda’s Stock Performance

Reflecting on the stock market, Bank of Baroda’s share price has shown resilience, climbing 13% over the past month and gaining 4% year-to-date. However, the stock has dipped 10% over the past year. Over a two-year span, shares have appreciated by more than 36%, with a remarkable 467% increase over the past five years.

As of Monday, Bank of Baroda’s share closed 0.46% higher at ₹249.65 on the Bombay Stock Exchange (BSE).

In summary, while the upcoming Q4 results may not paint the rosiest picture, the focus on asset quality improvement and growth potential in loans and deposits will be critical for both the bank’s future performance and investor confidence.