The Hindu Business Line : BoB shifts Rs 8,450-cr G-Secs to HTM basket

BANK of Baroda has transferred Rs 8,450 crore worth of government securities to the `Held to Maturity' category basket from its `Available for Sale' basket, last week.

The bank had booked a depreciation of Rs 518 crore in its G-Secs portfolio during the third quarter, December 31, 2004.

Post-transfer of securities to the HTM category, the bank booked an additional depreciation of Rs 70 crore.

The average duration of the bank's portfolio has been brought down to 3.55 years from 5.65 years earlier.

"We have transferred only 15 per cent of SLR securities to the HTM category.

"The remaining 85 per cent is still in the AFS category, as our view is that yields will soften in the medium term," said Mr P.S. Shenoy, Chairman and Managing Director, Bank of Baroda, at an analyst meet here today.

Explaining the rationale of making the transfer despite the banks view on the yields, Mr Shenoy said, the transfer was being done only on a small portion of securities that had seen some depreciation, to hedge against a further rise in yields before the fourth quarter.

Commenting on the bank's plans for consolidation, Mr Shenoy said, that BoB is looking for banks with a strong presence in the East and North and ruled out any merger plans with banks in the West.

"I don't see any merit in mergers with banks in the West as we already have a significant presence in this region," he said.

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