Bank of Baroda Q1 net flat at Rs 1,167 crore

Gross NPAs rise to 2.99% of advances in the June quarter against 2.4% in the March quarter

Bank of Baroda posted net profit of Rs 1,168 crore for the quarter ended June 2013 against Rs 1,139 crore in the same quarter last year, posting a flat growth of 2.5%.
 
The growth was mainly on account of non-interest income, which grew by 60% to Rs 1,230 crore (Rs 770 crore). Since both equities and bond markets saw a rally in the April-June quarter, the bank was able to make treasury gains by active churning of the portfolio, said an official from the bank.

The bank's Net Interest Income grew by a 3% to Rs 2,889 crore from Rs 2,798 crore. The term deposit rates which continued to be elevated led to higher interest expenses which grew by over 14%. The total advances increased by 12%, while total deposits grew by 22%.

Net NPA ratio increased to 1.69% in Q1 13-14 from 0.65% last year same quarter.

The bank's cautious approach of not lending to high yielding sectors saw yield on advances coming down more sharply than deposit costs, which saw Net Interest Margin (NIM) dipping slightly. In Q1 13-14 domestic NIM was at 2.84%, against 2.93% in Q4 12-13 and 3.22% in Q1 13-14.

The bank shed high cost deposits worth Rs 22,363 crore in the first quarter. Higher staff expenses on account of higher provision against AS-15 requirements and a wage hike also impacted net profit. Staff expenses increased by 33%.

Further, provisions increased to Rs 1,018 crore from Rs 894 crore, an increase of 14%. The rise was mainly on account of higher provisions against standard assets.