Bank of Baroda has on boarded 41 lakh new users on its digital platform during Q4FY20, out of which 34 lakh users were boarded between April-May 2020, a testimony to the wide acceptance and traction of digital banking services. Additionally, 88% of eligible saving bank accounts were opened through TAB banking.
The bank has witnessed a 16% growth in UPI transactions in the fourth quarter of financial year 2019-20 and an 8% growth in mobile banking transactions. As such, Bank of Baroda Mobile app now ranks among the top 3 among large banks. Significantly, the bank has registered a 280% Q-on-Q growth in UPI channel on-boarding of merchants, a 118% jump in Bhim Aadhar and 36% in payment gateway, due to the push of government on digital India and the increasing preference of consumers to shop online.
Bank of Baroda announced its Q4FY20 earnings on June 23. The bank reported a net profit of ₹507 crore for the January-March quarter as against a loss of ₹8,875 crore in the same period last year. The bank, with its well diversified credit portfolio across corporate, MSME, retail, agriculture and others, witnessed a growth across all these businesses in the January-March quarter vis-à-vis the corresponding period in 2019.
The bank is also among the top three PSU banks that are offering MSME loans under Prime Minister Shri Narendra Modi’s Atmanirbhar Bharat economic stimulus package. The bank will continue to focus on providing lending support to the MSME sector and ranks highest in terms of sanction, disbursement under the PSB59 portal.
The bank has a strong domestic presence through 9,482 branches & 13,193 ATMs and cash recyclers supported by self-service channels and a committed workforce of 84,283 employees. The bank’s financial inclusion outreach spans to 51.2 million accounts, with total deposits of ₹18,731 crore and average balance of ₹3,658.
Bank of Baroda’s provisions declined 36% on a year-on-year (y-o-y) basis to ₹6,844 crore. Its provisions for bad loans also declined 69% on a y-o-y basis to ₹3,190 crore. The bank’s gross bad loan ratio or total bad loans as a percentage of total advances, fell 103 basis points (bps) sequentially to 9.4%. The bank does not expect slippages in FY21 to exceed that of FY20. Currently, 65% of loan book is under moratorium and this ratio is expected to drop to 35% by August.
New cards issuances grew by 65% from Q4FY19 to Q4FY20. As of Q4FY20, the bank continues to be the 10th largest issuer in terms of incremental monthly Credit Card issuances. Interestingly, Q4FY20 spends grew by more than 100% compared to Q4FY19.
The bank’s efforts towards innovation in digitization, include that of introduction of dedicated start-up branches, with customized banking products specially designed for the start-up ecosystem to target the young entrepreneurs and satisfy their financial needs. Bank of Baroda has connected with over 1500 start-ups successfully and continues to increase this reach.
On the integration front, the bank has successfully migrated all corporate and common NPA accounts into Bank of Baroda. All ATMs from eVijaya Bank and eDena Bank have also been migrated to Bank of Baroda. Constant customer communication ensured that no major customer grievances related to integration was reported.
Baroda DigiNext Cash Management has also seen rapidly increasing market-share. 2,341 customers across CFS, PSU, Government departments and Emerging Corporates used Baroda DigiNext in 2019-20.
Baroda Global Shared Services in GIFT City at Gandhinagar lent support to the bank’s efforts to sustain banking operations during lockdown to ensure business continuity without any adverse impact while taking all required precautions. Uninterrupted digital operations were ensured by maintaining ATM uptime higher than 88%. The bank initiated cross selling of agri products, while Aadhar Enrolment centres at branches was managed through automated platform to provide better services centrally. CKYC remediation for the Bank undertaken, ensured clearing of 10,000 cases on daily basis to address the pendency within aggressive timelines.
Other key highlights of the Q4FY20 earnings were:
PCR continues to be high.
Slippage ratio fell to 2.97% in FY20 compared to 4.34% in FY19.
Global advances increased by 5.95% led by international and domestic retail loans (ex-portfolio purchase) which grew by 21.4% and 16.05% respectively.
Within retail, home loans (ex-portfolio purchase) and auto loans increased by 11.48% and 41.24% respectively.
Domestic cost of deposits in Mar’20 is lower by 33bps y-o-y at 5.20% on the back of higher domestic CASA ratio at 39.1%.
Capital Adequacy Ratio of the Bank stood at 13.30% and CET-1 at 9.44 % as on March 31, 2020.