Public sector lender Bank of Baroda (BoB) on Friday reported a net loss of Rs 3,230.14 crore in the three months to March, with provisions more than trebling year-on-year to Rs 6,857.66 crore, up from Rs 1,817.5 crore. The bank reported a loss in the March quarter despite a R1,055-crore tax writeback with the loss before tax coming in at Rs 4,285.20 crore.
Of the total provisions, Rs 4,880 crore has been set aside for loan losses. This is higher than the number that analysts had pencilled in of Rs 3,100 crore. BoB MD and CEO P Jayakumar had indicated after the bank’s Q3FY16 results announcement that the worst was over and that the bank made the entire provisioning as required by the Reserve Bank of India (RBI) under asset quality review (AQR) in Q3. The central bank had suggested lenders should spread out the provisions over two quarters. Following the announcement, shares of BoB had surged over 24% intra-day on the Monday following the results declaration on Saturday, February 13.
BoB’s asset quality deteriorated when looked at both from a year-on-year perspective as well as sequentially.
While the gross non-performing asset (NPA) ratio rose 627 basis points (bps) y-o-y to 9.99% of gross advances, net NPAs rose to 317 bps to 5.06%. “The management believes that asset quality has stabilised and it foresees growth & profitability in FY2017,” the bank said in a statement on Friday. “We have taken up the provision coverage ratio to 60%,” Jayakumar said at a media interaction.
In Q4FY16, the lender’s total income stood at Rs 12,789 crore, an increase of 6% y-o-y. The bank’s net interest income (NII) — the difference between interest earned and interest paid for deposits — stood at Rs 3,330.38 crore in Q4, up 5% y-o-y.
The bank’s total deposits fell 6.9% y-o-y and stood at Rs 5.74 lakh crore as on March 31, 2016. Its domestic CASA deposit on average basis grew 11.95% y-o-y and the share of domestic CASA deposits stood at 33.48% in Q4.
Total advances at Rs 3.83 lakh crore as on March 2016 was down 10.3% y-o-y. Retail advances stood at Rs 50,850 crore and constituted 18.1% of gross domestic advances.
BoB shares on the BSE closed at Rs 154.95, down 1.74% from its previous close.