Bank of Baroda posts Q3 net profit of ₹1,061 crore

Bank of Baroda (BoB) reported a standalone net profit of ₹1,061 crore in the third quarter against a net loss of ₹1,407 crore in the year-ago quarter.

A 69 per cent decline in provision towards bad loans and bad debts written-off and 55 per cent increase in trading gains helped boost the bottomline.

Provision towards bad loans and bad debts written-off was at ₹2,080 crore (₹6,621 crore in the year-ago quarter) and trading gains were at ₹925 crore (₹596 crore).

The net profit in the reporting quarter was, however, down 37 per cent compared with the preceding quarter’s ₹1,679 crore.

Net interest income (the difference between interest earned and interest expended) was up 9 per cent year-on-year (yoy) to ₹7,749 crore (₹7,132 crore).

Non-interest income, comprising total fee income, dividend income, trading gains, recovery from technically written-off accounts, increased 6 per cent y-o-y to ₹2,896 crore (₹2,738 crore).

Bad loans decline

Gross non-performing assets (GNPAs) declined ₹2,516 crore during the reporting quarter.

GNPAs declined to 8.48 per cent of gross advances as of December-end 2020 against 9.14 per cent as of September-end 2020.

Net NPAs declined to 2.39 per cent of net advances as of December-end 2020 against 2.51 per cent as of September-end 2020.

With proforma slippages (adjusted for the Supreme Court’s interim order), Gross and Net NPA ratio would have been 9.63 per cent and 3.36 per cent, respectively.

Sanjiv Chadha, MD & CEO, said: “We do recognise the fact that going ahead some stress will play out in the MSME and retail loan book. But we do believe that going ahead the credit costs which might accrue on this account will be offset by lower credit costs from the corporate book.

“We believe that we have a fair handle on the corporate book and are fairly confident about the asset quality going ahead.”

There was no fresh slippage in the reporting quarter in the domestic loan book, but there were slippages aggregating ₹3,986 crore in the international loan book.

Restructuring invoked under the Reserve Bank of India’s Covid-19 framework stood at ₹9,501 crore, with the corporate segment accounting for 82 per cent of the total restructuring. Restructuring of Retail and MSME advances were at 12 per cent and 6 per cent, respectively, of the total restructuring.

Global net interest margin (NIM) edged up to 2.87 per cent as at December-end 2020 against 2.80 per cent as of December-end 2019.

Chadha emphasised that it is the combination of retail driven loan growth and CASA (current account, savings account) driven deposit growth that has helped protect BoB NIMs in these difficult times and that is going to be fundamental principal on which the Bank will construct its business strategy going forward.

Global advances increased 6.30 per cent y-o-y to ₹7,45,420 crore. Within this, domestic advances were up 8.31 per cent on the back of growth in retail and agriculture loans (about 14 per cent each), micro, small and medium enterprises (about 9.5 per cent), and corporate (7 per cent). However, international advances declined about 4 per cent.

Global deposits rose about 6.50 per cent y-o-y to ₹9,54,561 core. Within this, domestic and international deposits were up 7 per cent and 4 per cent, respectively.