Bank of Baroda - Q1 FY 2023 Review

Bank of Baroda Limited reported net revenue of ₹19,984.39 crores for the quarter ended June 30, 2022, compared to ₹18,025.78 crores for June 30, 2021. Profit After Tax was ₹1,943.90 crores for the quarter ended June 30, 2022, compared to ₹1,186.54 crores during the corresponding quarter of the previous year, respectively.

Bank of Baroda - Investment Summary

Bank of Baroda - Overview

• Services offered by the Bank of Baroda include Personal banking, corporate banking, international banking, small and medium business (SME) banking, rural banking, non-resident Indian (NRI) services, and treasury services.

• The bank has 8,204 branches, 9,825 ATMs, 1650 recyclers, and 79,176 employees as of June 30, 2022.

• Through the issuance of infrastructure and affordable housing bonds, the Bank of Baroda raised Rs 1000 crore. These bonds were distributed on August 17, 2022.

Bank of Baroda - Quarterly Summary

Business

• Bank of Baroda was incorporated as a private bank on July 20, 1908. The bank was established with a paid-up capital of ₹ 1 million and was founded by Maharaja Sayajirao III of Baroda.

• The Bank opened its first-ever branch in Ahmedabad in 1910 and opened its first branch in Mumbai City in 1919.

• The bank, along with 13 other major Indian commercial banks, was nationalized by the Indian government on July 19, 1969, and is now considered a profitable public sector operation.

• The Bank established its first international office in Mombasa, Kenya, in 1953.

• With an Initial Public Offering in December 1996, the Bank debuted on the capital market.

• At its meeting on September 27, 2014, the Board of Directors of Bank of Baroda gave its principal approval for splitting one equity share with a face value of ₹10 into five equity shares with a face value of ₹2.

• The Reserve Bank of India fined the bank Rs 5 crore, according to a statement released by Bank of Baroda on July 25, 2016. The RBI conducted the inquiry and noted the shortcomings that were indicative of flaws and failures in internal control procedures concerning certain AML rules, such as monitoring of transactions and timely reporting to FIU, as well as awarding UCIC to clients. In a statement, the Bank of Baroda stated that the bank has put in place a thorough corrective action plan to enhance internal controls and guarantee that such occurrences don't happen again.

• As a first move toward consolidating public sector banks, the government announced the first three-way merger of Vijaya Bank, Dena Bank, and Bank of Baroda during FY19. The merged bank, which began operations on April 1, 2019, is one of the biggest PSBs in India in terms of scale, raising the institution's systemic relevance.

  The business segment of the Bank of Baroda is as follows:

  • Corporate/ Wholesale Banking:

    • The lending operations of borrowers with exposure exceeding 7.50 crores are included in the corporate/wholesale banking section.

  • Retail Banking:

    • Borrower accounts with exposure up to 7.50 crores are included in the retail banking segment.

  • Treasury:

    • The whole investment portfolio, as well as trading in derivative contracts and foreign currency contracts, are all part of the Treasury Segment.

    • The fees, profits, and losses from trading activities and interest income from the investment portfolio make up the majority of the treasury segment's revenue.

  • Other Banking Operations:

    • Banking transactions that fall outside the aforementioned segments are included in this category.

• Out of the total revenue, 31% has been generated from Corporate/Wholesale banking, 35% from Retail Banking, 29% from Treasury, 4%, and 5% from Other Banking Operations in FY 2022 compared to 33%, 33%, 30%, and 4% in FY 2021, respectively.

  

• Out of the total revenue, the contribution from domestic operations was 95% and 6% from international operations in FY 2022 compared to 93% and 7% in FY 2021, respectively.

  

Bank of Baroda - SWOT ANALYSIS

• Strength

  • Strong customer base.

  • Improving profit from last two years

  • Diversified branch network.

  • Government support.

• Weakness

  • Moderate asset quality.

  • Weak internal control.

  • Exposure to forex fraud in the past.

• Opportunity

  • Investment in digital technology.

  • Improving asset qualities of PSU Banks.

  • Increasing capital expenditure by the companies.

• Threat

  • Increasing competition in the financial sector.

  • Ongoing uneven circumstances globally (e.g., Inflation).

Bank of Baroda - Revenue Trend

Bank of Baroda - Ratio Analysis