Bank of Baroda's Q3 profit before tax rises 34% to Rs 5,748 crore

Posts net loss due to jump in NPA provisions on divergence

Bank of Baroda’s (BoB’s) pre-tax profit rose 34.61 per cent to Rs 5,748 crore for the December 2019 quarter (Q3FY20), against Rs 4,270 crore in Q3FY19. But, the bank posted net loss of Rs 1,407 crore in the quarter, against net profit of Rs 436 crore for Q3FY19, mainly on the back of higher provisioning.

The figures are for the amalgamated entity as the three-way merger of Bank of Baroda, Vijaya Bank, and Dena Bank came into effect in the first quarter (Q1FY20). 

The comparison is being made with the combined results of the three banks during the corresponding quarter last year.

Shares of the public sector lender closed at Rs 95.6 apiece on the BSE, up 0.84 per cent from the previous close. The results were announced after the markets closed. The bank had to make higher provisions for non-performing assets (NPAs) for accounts which the Reserve Bank of India flagged in annual financial inspection for FY19. It reported divergence of Rs 5,250 crore in NPAs, pushing up the provisions for bad loans to Rs 6,621 crore, a rise of 47 per cent over Rs 4,505 crore in Q3FY19. The provisions coverage ratio of NPAs stood at 77.77 per cent.

Gross NPA stood at Rs 73,140 crore (10.91 per cent), while the net NPA ratio was 4.75 per cent for the quarter. Net interest income (NII) increased 9 per cent to Rs 7,128 crore in Q3, while net interest margin (NIM) improved by 19 basis points to 2.8 per cent, from 2.62 per cent in Q3FY19.

Domestic advances showed meagre growth at Rs 5.44 trillion in Q3FY20, from Rs 5.44 trillion a year ago. Retail loans grew 15.3 per cent.

Domestic deposits increased 1.3 per cent year-on-year to Rs 7.82 trillion as of December 31, 2019. The share of low-cost Current Account Savings Account (CASA) deposits stood at 38.8 per cent in Q3.

The capital adequacy ratio was at 13.48 per cent, and Common Equity Tier 1 (CET-1) at 9.85 per cent in the quarter.