The Hindu Business Line : Bank of Baroda net surges 102.6%

Growing strong: Dr Anil K. Khandelwal (right), Chairman and Managing Director, Bank of Baroda, and Mr Satish Chandra Gupta, Executive Director, announcing the bank’s results in Mumbai on Saturday. — Shashi Ashiwal

Our Bureau

Mumbai, July 28 Backed by a strong growth in net interest income and other income, Bank of Baroda posted 102.6 per cent growth in its net profit for the quarter ended June 30, 2007, at Rs 330.84 crore from Rs 163.32 crore in the corresponding quarter of the previous year.

The other income went up by 64.38 per cent to Rs 370.19 crore from Rs 225.20 crore. Net interest income was up 15.5 per cent to Rs 958.6 crore from Rs 829.9 crore.

Total income for the quarter grew by 37.94 per cent to Rs 3,024.8 crore (Rs 2,192.87 crore). The net interest margin was at 3.2 per cent (3.19 per cent). The bank has set a target to keep its NIM over 3 per cent. Operating profit was up 28 per cent to Rs 644.46 crore (Rs 503.52 crore).

Its capital adequacy ratio (CAR) stood at 14.33 per cent. “We would like to keep the CAR at around 12 per cent level post-Basel II implementation. We are in no need to raise capital now but we have adequate headroom in Tier-I and Tier-II,” said Dr A.K. Khandelwal, Chairman and Managing Director, Bank of Baroda.

Deposits went up by 22.7 per cent to Rs 1,22,462 crore and advances rose 27.5 per cent to Rs 78,259 crore. The proportion of low cost current account and savings account to advances stood at 38 per cent (39-40 per cent). The fee-based income was up at Rs 108 crore (94 crore).

The bank’s net non-performing assets (NPA) for the quarter went down to 0.67 per cent (0.92 per cent). “We would want to keep the net NPA below 0.5 per cent,” said Dr Khandelwal. Provisions and contingencies saw a decline of 44.1 per cent to Rs 141.4 crore (Rs 253.1 crore) on account of “write-backs” on depreciation of investment portfolio and lower NPA provisions resulting from improved recovery.

The contribution of the bank’s international operations to the net profit was at 21.3 per cent, while it contributed 19.5 per cent to the total business.

The bank is likely to name its insurance venture as Baroda L&G Life Insurance.

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