Bank of Baroda Q1 net profit up over two-times at Rs 5.28 bn as NPAs drop

The bank had reported a huge net loss of Rs 31.02 bn in the previous January-March quarter

Public sector lender Bank of Baroda on Friday reported a more than two-fold jump in net profit at Rs 5.28 billion for the first quarter of 2018-19 as provisions for bad loans dropped.

The bank had reported a net profit of Rs 2.03 billion in the same quarter of 2017-18.

The bank had reported a huge net loss of Rs 31.02 billion in the previous January-March quarter.

Total income for the April-June period of 2018-19 edged up to Rs 127.87 billion from Rs 121.03 billion in the same period of preceding fiscal, the bank said in a regulatory filing.

The net interest income (NII) increased by 28.66 per cent year on year and 9.47 per cent quarter on quarter. Operating income (NII and other income) increased by 11.56 per cent from a year ago.

Net Interest Margin (NIM) improved to 2.65 per cent in June 2018 quarter from 2.51 per cent during previous quarter, the bank said. Core fee income increased by 16.76 per cent to Rs 7.94 billion.

Bank's provisions for bad loans were brought down to Rs 17.6 billion for the first quarter of current fiscal from Rs 21.56 billion for the same period of 2017-18.
 

Gross NPAs in value terms dropped to Rs 558.74 billion at June-end this year from Rs 564.80 billion at end-March, but were up compared to Rs 461.72 billion at the end of June 2017.

Overall provisions and contingencies also came down to Rs 21.65 billion from Rs 23.68 billion.

The asset quality of the lender worsened with the gross non-performing assets (NPAs) rising to 12.46 per cent of the gross advances as on June 30, 2018, from 11.40 per cent of the gross loans as on June 30, 2017.

Net NPAs of the bank were 5.40 per cent as on end-June 2018 (Rs 22,384.10 crore) from 5.17 per cent as on June 30, 2017 (Rs 195.19 billion).

"During the quarter the bank has made provision of Rs 5.22 billion (previous corresponding quarter Rs 0) in respect of 26 borrower accounts under the provisions of Insolvency and Bankruptcy Code (IBC) and RBI Directions. The total provision made on these accounts is Rs 8.31 billion (previous corresponding quarter Rs 0)," the bank said in the filing.

The return on assets improved to 0.29 per cent by June 2018, both annually and sequentially from 0.12 per cent and (-)1.77 per cent respectively.

Provisioning coverage ratio is 69.11 per cent as on June 30, 2018. (June 30, 2017: 66.28 per cent), the bank said.

Domestic advances grew by 19.84 per cent to Rs 3,264 billion as on June 30, 2018, from Rs 2723.69 billion as on June 30, 2017.

Total advances as on June 30, 2018 were Rs 4,145.17 billion, an increase of 9.77 per cent from Rs 3,776.07 billion as at June 30, 2017.

The bank said its risk profile of corporate credit portfolio as well as of retail loan portfolio has improved for the quarter under review.

"Significant progress has been achieved in the comprehensive business transformation journey which commenced in 2016," it said.

Shares of the bank closed 0.58 per cent down at Rs 138.05 on BSE.