Even as Bank of Baroda net slipped 48%, the shares surged 17% on account of a sequential jump of 79% in the profit.
The bank reported a net profit of R598 crore in Q4FY15 against R1,157 crore in the same period last year. It had reported a net profit of Rs 334 crore in the previous quarter. Domestic NIM stood at 2.76%. Net interest income rose 2% y-o-y to Rs 3,172 crore and fell 3% q-o-q.
About 52% of the total credit disbursed by the bank is with the large corporate houses, however, Bank of Baroda’s managing director and CEO Ranjan Dhawan said the bank will continue to ramp up its efforts to increase retail credit.
“As a commercial strategy, we have decided to target retail advances this year. Also, retail advances as a percentage of loan book is very low — about 14%. Some public sector banks have 22-23%, some private sector banks have 40-50% also,” said Dhawan on Monday.
Dhawan reiterated his earlier stance that it would take a couple of quarters for the economy to rebound.
“The problem with corporate loan book is that when you face a huge number of NPAs, banks get cautious,” Dhawan said.
Provisions and contingencies for the quarter rose 57% y-o-y to R1,817 crore. While fresh slippages in the financial year were to the tune of R8,039 crore, it stood at R1,359 crore in the fourth quarter.
Asset quality improved sequentially but worsened year-on-year. The bank’s gross NPA ratio stood at 3.72% in Q4FY15 against 2.94% in Q4FY14. Net NPA ratio stood at 1.89% in Q4FY15 against 2.11% in the third quarter and 1.52% in Q4FY14.
The shares of the bank surged 17% to close at R169.65 and were poised for the biggest gain since 2009. The bank was the biggest gainer on the 12-stock S&P BSE Bankex Index on Monday.