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Paul Noronha

Credit growth to slow: Mr M. D. Mallya (right), CMD, Bank of Baroda, and Mr. V. Santhana Raman, Executive Director, at a press conference in Mumbai on Tuesday.-

Our Bureau

Mumbai, July 29 Despite a sharp increase in provisions and contingencies, Bank of Baroda’s first quarter net profit rose 12.1 per cent as fee-based earnings grew substantially.

Net profit rose to Rs 370.86 crore from Rs 330.84 crore in the same year-ago quarter.

Provisions and contingencies (excluding tax provisions) at Rs 280.31 crore (Rs 141.44 crore) nearly doubled on account of higher provisions for depreciation of the bank’s investment portfolio. Marked-to-market losses in the first quarter amounted to Rs 181 crore, the Chairman & Managing Director, Mr M.D. Mallya, said.

According to figures provided by the bank, the fee-based income grew by 45 per cent to Rs 155 crore.

For the quarter under review, the bank’s net interest income grew by 10 per cent to Rs 1057.012 crore (Rs 958.55 crore). However, net interest margin (NIM) for the quarter fell to 2.76 per cent from 3.02 per cent in the corresponding period last year.

Other income grew by 38 per cent to Rs 512.55 crore.

Current Account Savings Account (CASA) deposits accounted for 36.86 per cent of total deposits, down from 38.37 per cent. The bank is aiming to improve its credit base and credit quality, increase the ratio of CASA deposits and further increase its fee-based income in an effort to protect margins, said Mr Mallya.

“Considering the challenging market conditions, we are aiming at sustaining NIM at current levels,” he added.

Total advances grew 42.1 per cent while total deposits were up 26.5 per cent.

Commenting on the impact of the hike in repo and CRR, Mr Mallya said he expects credit growth to decelerate with a possible slowdown in the consumer and personal loan segments.

Despite the hike in rates, we are targeting a credit growth of 20-22 per cent for the current fiscal, Mr Mallya added.

More Stories on : Financial Performance | Public Sector Banks

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