State-owned Bank of Baroda on Wednesday reported a 24.4% year-on-year rise in net profit for the quarter ended 30 September to `2,088 crore, backed by higher other income. The lender had reported a net profit of Rs 1,209 crore in the June quarter.
The lender’s other income, which includes fees from third party products, treasury income and others, rose 23% on year to Rs 3,579 crore. During the reporting quarter, Bank of Baroda’s global gross advances rose 2.10% on year to Rs 7.34 lakh crore. Retail loans, that accounted for Rs 1.23 lakh crore of total loans, grew 10.3% on year, while corporate loans amounting to 2.73 lakh crore grew 0.3%.
In a post earnings conference, managing director and chief executive officer Sanjiv Chadha said since big businesses are returning to normalcy and companies are starting to make maximum capacity utilisation, the outlook for corporate credit growth looks positive. Chadha said the bank’s credit growth will likely be in the range of 7 to10% in the current financial year, in line with the industry.
On the liabilities side, the bank’s total deposits stood at Rs 9.59 lakh crore as on September-end, higher 0.5% on year. Global low-cost current account and savings account (CASA) ratio stood at 41.70% as on September 30, higher than 36.71% a year ago.
As a result of sluggish loan growth, BoB’s net interest income—difference between interest earned and expended—grew 2.1% on year to Rs 7,566 crore in the reporting quarter. Global net interest margin, on the other hand, grew to 2.85% in the reporting quarter from 2.78% in the corresponding period a year ago.
The lender’s asset quality improved in the reporting quarter with the gross non-performing assets (NPAs) falling to Rs 59,504 crore as on September-end from Rs 65,698 crore a year ago. The bank saw fresh slippages of Rs 5,223 crore in the reporting quarter.
In percentage terms, Bank of Baroda’s gross NPA ratio improved to 8.11% as on September-end from 9.14% last year. Net NPA ratio, however, rose 32 basis points on a yearly basis to 2.83% as on September 30.
The bank’s management stated that its total restructured loan book stood at Rs 20,500 crore as on September-end and that only 20% of these accounts were under the doubtful special mention account-1 and special mention account-2 category.
The provision coverage ratio, including technically written off accounts, stood at 83.42% as on September-end, lower than 85.35% a year ago. Further, the bank’s credit cost, as on September-end, stood at 1.46%. The bank has maintained 1.5%-2% credit cost guidance for the current financial year.
Bank of Baroda’s capital adequacy ratio stood at 15.55%.