MUMBAI, Nov 17: The Bank of Baroda (BoB), a public sector bank which has listed its shares on the stock exchanges after a mega public issue last year, has reported an operating profit of Rs 442.60 crore during the first half (H1) of 1997-98. However, it has not revealed the actual net profit after making the provisioning for increased non-performance assets (NPA) and taxation.

Explaining the non-disclosure of its net profit, BoB chairman K Kannan said the bank ``is following a consistent policy of making provisions towards taxation and NPA as at the year end''. It may recalled that Bank of India, Corporation Bank and Dena Bank had announced their profit figures for the first half.

As per the listing norms of the stock exchanges, a listed company will have to provide all operational figures including the net profit. ``The idea is to give a broad picture of the performance of the company to its investors,'' said a broker. Due to the poor corporate performance, BoB's bad debts have increased by at least Rs 50 crore during the first half alone. ``Last year, we had problems with acquaculture units because many of them are from Gujarat. This year, we don't have similar problems. A clear picture will come only in the second half,'' Kannan said, adding, ``we have made full provision for the exposure to CRB Capital market.'' The bank has only a small exposure to the non-banking finance companies, he claimed.

The bank's total net profit during 1996-97 was Rs 276.34 crore after making full provisioning. While the bank's balance sheet size has been expanded after a mega public issue of Rs 850 crore, the interest income has increased to Rs 1994.68 crore against Rs 1912.81 crore last year. Other income of the bank increased to Rs 249.15 crore.

While the bank has been flush with funds, there has been no corresponding increase in the credit offtake. The lower credit offtake in India has been compensated through higher investments both in SLR and non-SLR securities. Total investments of the bank has risen by Rs 3072 crore during April-September 1997.

While global deposits of the bank have increased by Rs 4,055 crore (13.25 per cent) to Rs 34,662 crore, global advances of the bank reached Rs 17,286 crore showing a rise of Rs 2,082 crore (13.7 per cent). Having a large pool of FCNR deposits the bank was able to lend about Rs 2000 crore in foreign currency to domestic corporates for meeting their funds requirements at international rates.

Talking abaout the current economic scenario, he said the liberalisation of customs and import duties is creating lot of problems for the Indian companies.

``There is a new generation of companies trying to issue any sort of debt instruments on private placement basis. We are carefully avoiding such companies,'' he said, adding, ``we don't believe in any of the credit rating agencies because they don't see anything beyond three months in ahead. We have our own credit rating system to decided investment and advances.''

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.