Bank of Baroda meets forecast, Q2 net down 10% to Rs 1168cr

Moneycontrol Bureau

Public sector lender Bank of Baroda's July-September quarter net profit fell 10.25 percent year-on-year, lower than analysts' expectations, to Rs 1,168 crore, led by higher other income, lower tax expenses and provisions.

Net interest income rose over 1 percent Y-o-Y to Rs 2,895 crore in three-month period ended September 2013, meeting analysts' expectations.

According to a CNBC-TV18 poll, analysts on an average had expected the bank to report 33 percent degrowth year-on-year in profit after tax of Rs 870 crore and net interest income to rise 2 percent Y-o-Y to Rs 2,916 crore for the quarter.

Other income of the bank jumped 17.6 percent on yearly basis to Rs 974 crore during the quarter. Tax expense dropped significantly to Rs 80 crore from Rs 250.3 crore in June quarter and Rs 422 crore in a year ago period.

Provisions and contingencies declined sequentially 15.4 percent (up 33.2 percent year-on-year) to Rs 861 crore in the quarter gone by. Provision coverage ratio stood at 61.68 percent as of September 30.

Asset quality slighly worsens Q-o-Q

Gross non-performing advances (NPA) as a percentage of gross advances increased 16 basis points Q-o-Q (up 117 bps Y-o-Y) to 3.15 percent while in absolute term, gross NPAs jumped 11.5 percent on sequential basis (up 85 percent on yearly basis) to Rs 10,888 crore during September quarter.

Net NPAs as a percentage of net advances grew 17 bps Q-o-Q (up 104 bps Y-o-Y) to 1.86 percent and in absolute term, that rose 16 percent sequentially (up 165 percent year-on-year) to Rs 6,315 crore in second quarter.

The bank says net slippages were lower sequentially and the current trend of slippages will continue. Domestic slippages were Rs 1,611 crore for the quarter as against Rs 1,835 crore in June quarter while international slippages were Rs 252 crore during the quarter, of which Rs 130 crore were due to forex volatility.

Restructured loans were Rs 1,484 crore in September quarter as against Rs 1,997 crore in June quarter. "Loans worth Rs 717 crore slipped into NPAs in restructured accounts," the bank said in a press conference.

Total restructured loans stands at Rs 26,600 crore as on September 30. Bank of Baroda expects an improved trend in asset quality.

Capital adequacy ratio (as per Basel III) was 12.07 percent in second quarter as against 12.46 percent in first quarter of financial year 2013-14.

At 11:49 hours IST, the stock rose 1.34 percent to Rs 588.50 on the BSE.