Bank of Baroda reports Q4 net profit of Rs 506 crore despite Covid provisioning

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Published: June 24, 2020 4:10 AM

Sanjiv Chadha, MD & CEO, Bank of Baroda, said, “For all customers who has loan outstanding up to Rs 10 lakhs would continue to avail ‘opt out’ scheme on moratorium.”

“The bank has availed standstill for special mention accounts-2 (SMA-2) accounts worth Rs 4,000 crore, and provided 20% on that front, ” Chadha said.“The bank has availed standstill for special mention accounts-2 (SMA-2) accounts worth Rs 4,000 crore, and provided 20% on that front, ” Chadha said.

Bank of Baroda (BoB) on Tuesday a reported a net profit of Rs 506.6 crore in the quarter ended March, compared to a loss of Rs 991 crore in the same quarter a year ago, due to decline in the expenses. Its operating profit for March quarter came in at Rs 5,121 crore, an increase of 47% year-on-year. The operating expense declined 23.21% to Rs 5,876 crore y-o-y. The bank maintained that it has provided moratorium to 65% of customers.

The bank is going to change its policy from ‘opt out’ to ‘opt in’ for providing moratorium to its customers. This means customers will have to reach out to the bank for availing the moratorium from June to August period. However, there will be no change for retail customers up to Rs 10 lakh.

Sanjiv Chadha, MD & CEO, Bank of Baroda, said, “For all customers who has loan outstanding up to Rs 10 lakhs would continue to avail ‘opt out’ scheme on moratorium.”

Chadha said, “We expect the number to decline by 35% in the June to August Period.” The bank has made provisions of Rs 6,844 crore, out of which `800 crore is provided for Covid-19 pandemic.

“The bank has availed standstill for special mention accounts-2 (SMA-2) accounts worth Rs 4,000 crore, and provided 20% on that front, ” Chadha said.

The bank said its net interest income (NII) during Q4FY20 increased to Rs 6,798 crore, an increase of 5% on a year-on-year basis. The net interest margin (NIM) improved to 2.67% in the March quarter, showing year-on-year growth of 5 basis points (bps).

The bank also showed significant improvement in the asset quality. Its gross NPA ratio fell to 9.4% as on March 31, 2020 against 10.43% as on December 31, 2019 and 10.02% as on March 31, 2019.The bank’s net NPA ratio dropped to 3.13%, against 4.05% as on December 31, 2019, and 3.65% as on March 31, 2019.

“ Our slippages in financial year 2021, should be lower than financial year 2020,” said Chadha.

The provisioning coverage ratio (PCR) stood at 81.33% as on March 31, 2020. The domestic deposits stood at `8,08,706 crore as on March 31, 2020 up by 1.8% y-o-y.

The domestic advances stood at Rs 5,70,341 crore as on March 31, 2020 which was Rs 5,44,726 crore as on December 31, 2019. The capital Adequacy Ratio of the Bank stood at 13.30%. The domestic current account and savings account (CASA) ratio of the bank remained at 39.1%.

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