Bank of Baroda to raise ₹5,000 cr via long-term infra bonds

The board of state-owned lender Bank of Baroda has approved the proposal to raise long-term bonds for the financing of infrastructure and affordable housing to the tune of ₹5,000 crore in single or multiple tranches during the financial year 2022-23. These bonds will be senior, unsecured and will not form part of the capital of the bank.

"...board of directors in their meeting held today has approved the proposal of raising of long term bonds for the financing of infrastructure and affordable housing to the tune of ₹5,000 crore in single or multiple tranches during financial year 2022-23," says BoB in a stock exchange filing.

Reacting to the development, the Bank of Baroda stock is trading 0.85% up at ₹100.85 today. The PSU stock has risen 6.44% in the past five days, despite lower sentiments in the broader market. The stock has risen 19.85 points, or 24.41%, in the past six months, while it has been up 16.85 points, or 21.11%, in the year-to-date period. Bank of Baroda's current market cap stands at ₹52,075.62 crore. The PSU stock had risen to its 52-week high of ₹122.65 on April 11, 2022, and to its 52-week low of ₹72.50 on August 23, 2021.

The announcement to raise funds comes days after the PSU lender reported a net profit of ₹7,272 crore for FY22 ending on March 31 as compared to ₹829 crore in FY21. For Q4 FY22, net profit was ₹1,779 crore on lower provisions and loan growth, as compared to a ₹1,047 crore loss during the same period last year. The bank's net interest income grew by 21.2% to ₹8,612 crore in Q4 FY22 and 13.2% YoY to ₹32,622 crore in FY22.

Advances grew by 8.9% YoY in FY22 BoB's organic retail advances dipped 17% in FY22, led by growth in high focus areas such as home loans, personal loans, auto loans and education loans. The domestic CASA ratio of the bank improved by 137 bps YoY to 44.24%, while gross NPA at 6.61% reduced by 226 bps YoY. The bank's net interest margin improved by 32 bps YoY to 3.03% in FY22. The bank's board of directors also recommended a dividend of ₹1.20 per equity share (60%) for the year ended March 31, 2022.

On June 22, 2022, the bank raised the key marginal cost of funds-based lending rate (MCLR) by up to 20 basis points. Updated overnight MCLR stands at 6.80%, while one-month MCLR is at 7.20%. Three-month, six-month, and one-year MCLR tenors stand at 7.25%, 7.35%, and 7.50%, respectively.