BoB Net Falls 52% on Surge in Pro­vi­sions

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Mumbai: Pub­lic sec­tor lender Bank of Bar­oda (BoB) on Fri­day re­ported a 52% fall in quar­terly net profit amid a surge in pro­vi­sions against loans for which re­pay­ments are not hap­pen­ing on time, and no rise in in­come from its lend­ing busi­ness.

The bank posted a net profit of .₹ 203.4 crore at the end of June against .₹ 423.6 crore last year.

“We are see­ing high-qual­ity credit on the cor­po­rate side, the re­tail book is grow­ing in a healthy man­ner but some le­gacy is­sues are drag­ging down the book,” said PS Jayaku­mar, MD, Bank of Bar­oda. “The im­pact would have been lesser if some of the larger ac­counts got re­solved.”

Pro­vi­sion­ing in­creased 18% to .₹ 2,368 crore against .₹ 2,004 crore in the same pe­riod last year. The bank man­aged to check its bad loan growth, with net NPA fall­ing marginally to 5.1% from 5.7% last year. How­ever, its gross bad as­sets rose to 11.4% from 11.1% of the to­tal as­sets de­ployed. In ab­so­lute terms, net NPA stood at .₹ 19,519 crore while gross NPA was at .₹ 46,172 crore. Its spe­cial men­tion ac­count II cat­e­gory stood at .₹ 9,300 crore.

“I think the worst is over and we would be able to con­tain our gross NPAs within .₹ 50,000 crore," added Jayaku­mar. “But the NPA as­sets that we have got will take sev­eral years to get re­solved. So, we need to keep work­ing on them.”

The bank’s net in­ter­est mar­gin or the mea­sure of its prof­itabil­ity stood at 2.5% for the first quar­ter of this year. The bank also re­ported a less than 1% in­crease in net in­ter­est in­come or the dif­fer­ence be­tween in­ter­est earned and in­ter­est ex­pended of .₹ 3,405 crore ver­sus .₹ 3,372 crore last year. The bank’s share of low cost de­posits or de­posits from cur­rent ac­counts and sav­ings ac­counts in­creased to 38.7% of its to­tal de­posits from 33.8% last year.

The to­tal ad­vances de­ployed in­creased 4% to .₹ 3.7 lakh crore against .₹ 3.6 lakh crore in the same pe­riod last year. HIGHS & LOWS

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