Bank of Baroda shares slide 8% after NIM pressure dents Q4 earnings
Bank of Baroda shares declined following the release of its March-quarter earnings. The bank reported a rise in net profit.
Bank of Baroda's shares plummeted 8.1% following its Q4FY25 results, which revealed a 3.3% increase in net profit to Rs 5,048 crore. However, a 6.6% drop in net interest income to Rs 11,020 crore due to margin pressures overshadowed the positive aspects. Despite improved asset quality, increased provisions and the NII decline triggered investor concern.
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Shares of Bank of Baroda slipped as much as 8.1% on Tuesday to Rs 229 on the BSE after the state-run lender reported margin pressures that weighed on its March-quarter earnings despite a rise in net profit.Bank of Baroda (BoB) reported a 3.3% year-on-year rise in standalone net profit for the quarter ended March 2025 (Q4FY25), at Rs 5,048 crore compared with Rs 4,886 crore in the same period last year. However, its net interest income (NII) — the key measure of a bank's core earnings — fell 6.6% to Rs 11,020 crore from Rs 11,793 crore a year earlier, reflecting the pressure on net interest margins (NIM).BoB earned Rs 30,642 crore in interest income during the March quarter, up 3.6% from Rs 29,583.40 crore a year ago, but its interest expenses surged 10% to Rs 19,622.39 crore from Rs 17,790.57 crore, crimping the NII.The bank's asset quality showed improvement, with gross non-performing assets (NPAs) declining to 2.26% from 2.43% on a sequential basis, while net NPAs eased slightly to 0.58% from 0.59%. Provisions, however, rose to Rs 1,551.51 crore compared with Rs 1,301.94 crore a year ago.BoB, India's second-largest public sector lender by market capitalisation, announced a final dividend of Rs 8.35 per equity share for FY2024-25 and set June 6, 2025, as the record date for payment.Despite the improvement in bottom-line profit and asset quality, the market focused on the squeeze in margins and NII decline, triggering sharp selling in the stock.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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