Bank of Baroda net doubles at ~5 billion

Public sector lender Bank of Baroda's net profit more than doubled at ~5.28 billion in the first quarter ended June, 2018, on improvement in its interest margin. The stabilisation of asset quality leading to a fall in provisions for bad loans also helped the bank report a robust growth in net profit. The bank had posted a net profit of ~2.03 billion in the year-ago quarter. ABHIJIT LELE writes

Public sector lender Bank of Baroda's net profit more than doubled to ~5.28 billion in the first quarter ended June, 2018, on improvement in its interest margin. The stabilisation of asset quality leading to a fall in provisions for bad loans also helped the bank report a robust growth in net profit.

The bank had posted a net profit of ~2.03 billion in the year-ago quarter. Its net interest income rose by 28.7 per cent at ~43.81 billion in the first quarter of 2018-19 fiscal year.

The bank's net interest margin (NIM) improved to 2.65% during the quarter from 2.51% in the year-ago period. NIM of international operations also increased to 1.49 per cent from 1.14 per cent during the last quarter despite a decline in international business, BOB said in an analyst presentation.

Its other income, comprising treasury income, and commissions saw a sharp fall at ~3.54 billion during the quarter from ~8.71 billion in the corresponding period last year due to hardening of yields.

The bank's advances rose by 9.8 per cent to ~4.14 trillion while deposits rose by 1.9 per cent to ~5.81 trillion.

Gross non-performing assets (NPAs) were at 12.46 per cent as on June 30, 2018, against 12.26 per cent in the last quarter (March 2018), indicating stabilisation in NPA levels. Net NPA ratio declined to 5.40 per cent from 5.49 per cent during the last quarter. The provisions for NPAs saw a fall on yearon-year (Y- o-Y) basis and sequential basis (Q- o- Q) basis. They declined by 18.41 per cent Y-o-Y to ~17.59 billion. The fall was sharper sequentially of 75.05 per cent.

Provision coverage ratio (PCR) continues to be high. PCR, including that for the two written- off accounts, increased to 69.11 per cent, while the ratio, excluding the two, increased to 59.94 per cent as on June 30, 2018 from 58.42 per cent as on March 31, 2018.

Capital adequacy ratio of the bank at 12.13 per cent and CET-1 at 9.27 per cent continues to be above regulatory norms. Its stock closed almost flat (0.6 per cent lower) at ~138 per share.