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Bank of Baroda (BoB) slipped into the red in the third quarter, reporting a net loss of ₹1,407 crore due to a jump in provisions for bad loans and diminution in the value of all restructured accounts. Fresh slippages also rose substantially.
The public sector bank had reported a net profit of ₹471 crore in the year-ago period and ₹737 crore in the preceding quarter (July-September 2019).
The loss in the reporting quarter (October-December 2019) comes despite a ₹790-crore write-back in provision for taxes.
Net interest income up
The bank’s third quarter results cannot be compared with the year-ago period as the amalgamation of Dena Bank and Vijaya Bank with BoB was effective only from April 1, 2019.
Net interest income — the difference between interest earned and expended — was up 9 per cent year-on-year at ₹7,128 crore in the reporting quarter.
Total non-interest income, comprising total fee income and other non-interest income, rose 28 per cent Y-o-Y at ₹2,741 crore.
Provision for non-performing assets (NPAs) and bad debts written-off jumped 47 per cent Y-o-Y at ₹6,621 crore.
Fresh slippages were at ₹10,387 crore in the reporting quarter against ₹6,001 crore in the preceding quarter. Reduction in NPAs via write-offs, recovery and upgradation increased to ₹8,649 crore (₹7,004 crore in the preceding quarter).
The net addition in NPAs (after taking into account additions and reductions) was ₹3,171 crore.
Gross NPAs increased to 10.43 per cent of gross advances in the reporting quarter against 10.25 per cent in the preceding quarter. Net NPAs rose to 4.05 per cent of net advances against 3.91 per cent in the preceding quarter.
Global advances increased by 2.69 per cent Y-o-Y to ₹6,54,465 crore. Global deposits edged up 1.10 per cent Y-o-Y to ₹8,96,162 crore.
Divergence
Meanwhile, in a disclosure in asset classification and provisioning of NPAs, the bank said its gross NPAs were higher by ₹5,250 crore as at March-end 2019, after the RBI’s assessment. The central bank assessed that the bank’s provisioning requirement for FY19 should be higher by ₹4,090 crore.
Hence, the net loss for FY19 widened to ₹10,998 crore against ₹8,339 crore reported earlier.
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