Interest income growth spurts BoB net by 11%

BS 200 SCORECARD

Backed by robust growth in interest income, Bank of Baroda (BoB) posted 11.31 per cent rise in net profit for the second quarter (ended September 30, 2006) at Rs 288.36 crore against Rs 259.07 crore in the quarter ended September 2005.

The total income in the quarter rose 25.16 per cent to Rs 2,507.66 crore from Rs 2,003.59 crore a year ago. The interest income increased an impressive 29.04 per cent to Rs 2,185.92 crore. But, the interest expenses too rose, by 41.97 per cent to Rs 1,295.15 crore.

Besides hefty rise in income from advances, the earnings from international operations also contributed to profit growth, BoB Chairman and Managing Director Anil Khandelwal said.

The global deposits increased 24.96 per cent to Rs 1,07681.5 crore. The share of low-cost deposits "� savings and current accounts "� improved marginally to 41.76 per cent from 40.75 per cent a year ago, while the cost of deposits rose to 4.43 per cent from 4.12 per cent.

While advances shot up 44.95 per cent to Rs 70,956 crore, retail deposits jumped 55.6 per cent, and they now form 19.2 per cent of the bank's total domestic advances.

The yield on advances improved to 8.12 per cent from 7.58 per cent a year ago. However, the net interest margin dipped to 3.11 per cent from 3.37 per cent owing to re-pricing of deposits at higher rates and the impact of redemption losses in fixed-income securities.

While BoB's gross non-performing assets (NPAs) slumped to 3.44 per cent from 6.34 per cent a year ago, its net NPAs too were down to 0.77 per cent from 1.13 per cent. The capital adequacy of the bank improved slightly to 12.93 per cent from 12.79 per cent.