1. Bank of Baroda Q1 net down 23% at Rs 1,052 cr

Bank of Baroda Q1 net down 23% at Rs 1,052 cr

State-run Bank of Baroda today said its net profit fell by 23 per cent to Rs 1,052 crore in the quarter ended June 30, dragged down by fall in treasury income and on higher staff expenses.

By: | Published: July 30, 2015 10:11 PM

State-run Bank of Baroda today said its net profit fell by 23 per cent to Rs 1,052 crore in the quarter ended June 30, dragged down by fall in treasury income and on higher staff expenses.

The bank had reported a profit after tax of Rs 1,362 crore in the same period last year.

“The whole of the last year or so we have seen an increase in NPA and restructured books. Therefore, it’s not that profit has declined only in this quarter, rather for the last three or four quarters the profits have been declining,” bank’s Managing Director and CEO Ranjan Dhawan told reporters here.

Other income in the quarter declined by 6 per cent to Rs 967.23 crore from Rs 1,024.54 crore last year same quarter.

Its trading profit fell by 30 per cent to Rs 157 crore from Rs 224 crore.

Staff expenses rose by 22 per cent to Rs 1,345 crore in the period from Rs 1,106 crore.

Net interest income of the bank marginally grew by 4 per cent to Rs 3,460 crore from Rs 3,328 crore a year ago.

Domestic net interest margin improved to 2.89 per cent from 2.76 per cent.

In the quarter, the bank saw its asset quality worsening with gross non performing asset at 4.13 per cent as against 3.11 per cent. Net NPA level declined to 2.07 per cent from 1.58 per cent.

Fresh slippages in the quarter stood at Rs 1,685 crore from Rs 1,881 crore in the same period. It restructured Rs 147 crore worth of accounts in the period.

“In future also restructuring will occur. There are certain accounts, where restructuring will be required,” Dhawan said.

The bank upgraded Rs 527 crore worth of accounts while wrote off Rs 69 crore loans. Cash recovery was Rs 300 crore against Rs 563 crore in the same period last year.

Total business grew by 7.29 per cent to Rs 10,01,475 crore. Total deposits were up 7.51 per cent at Rs 5,93,087 crore, while total advances increased by 7 per cent to Rs 4,08,388 crore in the period.

Commenting on the bank’s results, Angel Broking’s Vaibhav Agarwal said: “Lower net interest income and increase in employee expenses were the main reasons for the fall in profit. We see pressure on the NPA front to continue for the next two to three quarters for the bank as they have around 7 per cent exposure to metal and steel sectors which are still not performing well.”

Bank of Baroda’s CEO Dhawan said it plans to raise Rs 4,000-5,000 crore through tier I and tier II bonds this year.

It has also refinanced Rs 4,100 crore of loans under 5:25 rule in the first quarter.

Dhawan also said the bank has received board approval to open a subsidiary to manage accounts opened under Pradhan Mantri Jandhan Yojana.

“We are in the process of opening a wholly-owned subsidiary to manage Jandhan accounts. It would be a payment and a micro finance company,” he said.

The bank has opened nine million Jandhan accounts with a total deposit of around Rs 1,400-1,500 crore in those accounts.

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