Bank of Baroda back in the black with Q1 profit at Rs 710 cr, but asset quality weakens

Bank said fresh slippages for the June quarter at Rs 5,583 crore, which fell on a quarter-on-quarter basis, and provision for NPA stood at Rs 3,168 crore in Q1.

Public sector lender Bank of Baroda was back in the black in the June quarter 2019 with a profit after the amalgamation of Rs 710 crore. However, asset quality weakened sequentially.


On a comparable basis, the amalgamated bank (standalone) made a loss of Rs 49 crore in June quarter 2018, the bank said. The loss (mentioned in the statement) for March quarter was Rs 991.37 crore.

Dena Bank and Vijaya Bank had been merged into Bank of Baroda last year.

Net interest income during the quarter grew 2.6 percent to Rs 6,496 crore compared to a year ago. This resulted in a drop in NIM to 2.73 percent in Q1FY20 from 2.78 percent (adjusted for IT refund) in the previous quarter, the public sector lender said in its BSE filing.

The bank said while YoY credit growth of the amalgamated entity moderated to 6.4 percent, Bank of Baroda (solo) continued to grow in line with its trend rate of growth.

Domestic advances grew by 5.18 percent year-on-year to Rs 5.33 lakh crore in June quarter, led by retail loans which grew 20.54 percent YoY. Domestic deposits increased by 8.87 percent YoY to Rs 7.85 lakh crore in Q1.

According to the lender, with the adoption of common business strategy, processes and unified organization structure, erstwhile Dena Bank and Vijaya Bank are also likely to show traction in the coming quarters.

Asset quality deteriorated further with gross non-performing assets (NPA) as a percentage of gross advances rising 26 basis points (bps) sequentially to 10.28 percent and net NPA increasing 30 bps QoQ to 3.95 percent in Q1.

Credit cost slightly inched up to 2.04 percent in the June quarter, from 2.03 percent in March quarter, the bank said.

Fresh slippages for the June quarter were Rs 5,583 crore, down on a quarter-on-quarter basis. Provision for NPA stood at Rs 3,168 crore.

"Exposure in accounts under NCLT-1 list was Rs 5,820 crore and NCLT-2 list was Rs 6,957 crore as on June quarter 2019. Provision coverage under NCLT-1 and NCLT-2 list was 97.42 percent and 84.86 percent, respectively," it added.

Standalone operating profit at Rs 4,276 crore for Q1 increased by 3.8 percent YoY and 34.38 percent sequentially mainly due to controlled operating expenses growth, the bank said, adding customer fee income increased by 7.86 percent YoY to Rs 1,276 crore in Q1.

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