BoB net up 12.5% on non-core income, better asset quality

State-run Bank of Baroda today reported a 12.5 per cent rise in March quarter net profit at Rs 1,157.3 crore, boosted by an improvement in asset quality and non-interest income.
Net interest income (NII) growth was 11 per cent at Rs 3,124.3 crore, while the core non-interest income was up 15 per cent at Rs 602 crore.
Chairman and Managing Director S S Mundra said a push in cost of funds limited the NII growth in the reporting quarter. He, however, did not comment when asked if the bank was mulling any hike in lending rates.
Fresh slippages declined for the fourth consecutive quarter, resulting in an improvement in gross non-performing assets ratio to 2.94 per cent from 3.32 per cent a year ago.

"We expect the NPA situation to keep on improving," said Mundra, who is widely speculated to be appointed as a Reserve Bank Deputy Governor.
Fresh slippages got contained to Rs 1,294 crore in the reporting quarter as against Rs 2,082 crore in the year ago period and Rs 1,553 crore in the preceding quarter.

Restructured assets also dropped to Rs 1,157 crore from the preceding quarter's Rs 1,213 crore, while recovery stood at Rs 627 crore, a tad higher than that of the entire fiscal 2012-13.
The bank also sold Rs 375 crore of assets to asset reconstruction companies.
The actions on the NPA management front led to a reduction in the provisions for NPA and bad debts by 41.91 per cent at Rs 637.42 crore for the reporting quarter, which helped its bottom line.

Net profit for the quarter was, however, impacted by a Rs 62.20 crore hit taken on account of takeover of the Memon Co-operative Bank, Mundra said, adding the takeover is now complete.
The bank scrip gained 4.59 per cent to close at Rs 877.90 on the BSE, whose 30-share benchmark ended the session up 1.36 per cent.