Bank of Baroda Q2 net profit down 35%
Bank of Baroda (BoB) saw its net profit fall by 35.7 per cent to ~357 crore in the September quarter due to a sharp rise in provisions and contingencies. It had reported a net profit of ~552 crore in the year-ago quarter.
The public sector lender said the bank would be fine even if capital infusion by the government did not happen.
The bank’s net interest income for the quarter rose 8.58 per cent to ~3,720 crore from ~3,426 crore in the corresponding period of the previous year. Other income, which includes fees and commissions, rose 11.2 per cent to ~1,737 crore.
Its net interest margin in the September quarter improved to 2.31 per cent, from 2.12 per cent in the year-ago period and 2.12 in the previous June quarter. The bank’s asset quality improved as gross nonperforming assets (NPA) ratio and net NPA ratio stood at 11.16 per cent and 5.05 per cent as on September 2017, as against 11.35 per cent and 5.46 per cent, respectively, as on September 2016.
Slippages were at ~3,451 crore at the end of September quarter. Fresh slippages also declined sharply on a sequential basis but were up from the year-ago quarter. “Going forward we will be able to contain slippages and try to ensure we have a better recovery figure,” said Papia Sengupta, executive director at the bank. The Reserve Bank of India’s audit of the bank’s accounts is over but the bank is still in discussion with the regulator, said Jayakumar.
Provisions and contingencies stood at ~2,32,935 crore as on September 30. This was a rise of nearly 30 per cent against ~1,79,584 crore in the year-ago quarter. However, the bank's provisioning for NPAs increased only by 13 per cent.
The public sector bank has 10 accounts in the first list of bad accounts with an aggregate exposure of ~7,694 crore and 18 accounts in the second list with aggregate exposure of ~4,274 crore. The bank's watchlist amounts to almost ~10,000 crore.