Bank of Baroda Q2 net profit jumps 127% to Rs 1,679 crore; NII rises 7%

Public sector lender Bank of Baroda has more than doubled its second-quarter net profit at Rs 1,679 crore on the back of lower provisions and a stable net interest income.

In the corresponding period of the previous financial year (Q2FY20), the bank had reported a net profit of Rs 737 crore, while it logged a net loss of Rs 864 crore in the previous quarter.

Net interest income rose almost 7 per cent to Rs 7,508 crore, compared to Rs 7,028 crore in Q2Fy20. It reported a net interest margin of 2.96 per cent, up 33 basis points from last quarter. Shares of the lender closed 2.02 per cent up at Rs 42.90 on the BSE after the results announcement.

Provisions and contingencies fell almost 29 per cent to Rs 3,002 crore in Q2FY21, compared to Rs 4,209 crore in Q2FY20 and Rs 5,628 crore in Q1FY21. Provisions for non-performing assets (NPA) also saw a fall both sequentially and on a year-on-year basis to Rs 2,277 crore. Covid-19-related provisions stood at Rs 1,728 crore and the bank has total additional provisions of Rs 293.12 crore.

Asset quality improved from the past quarters as gross NPAs stood at 9.14 per cent, compared to 9.39 per cent in Q1FY21. And, net NPAs have also come down to 2.51 per cent.

Following the Supreme Court’s order on a standstill in asset classification, the bank has made a contingent provision of Rs 195.20 crore for accounts which have not been classified as NPAs. Had the bank classified such accounts as NPAs, its gross NPAs for the quarter would have been 9.33 per cent and net NPAs would have been 2.67 per cent. Provision coverage ratio has increased to 85.35 per cent in the current quarter.

“The collection of the bank has rebounded sharply to 91 per cent as against 94 per cent last year. So, we are near to normal collection efficiency,” said Sanjiv Chadha, MD & CEO of Bank of Baroda.