Bank of Baroda's Q1 PAT likely to grow 4% to Rs 1071 cr

Public sector lender Bank of Baroda will announce its results today for the quarter ended June 2012. Analysts on an average expect the profit after tax to grow by 4% year-on-year to Rs 1,071 crore in the quarter.

Pressure on bottom-line is due to higher provisions YoY, but lower tax rate could help. Earlier the management had guided for lower tax rate in FY13. In the fourth quarter, the bank had a tax write back of Rs 322 crore.

Net interest income is likely to rise by 19% to Rs 2,723 crore from Rs 2,297 crore during the same period. 

Analysts expect the bank to make provisions in the range of Rs 520-715 crore for the quarter. In the fourth quarter of FY12, the bank had made provisions of Rs 844 crore while the average of last two quarters stood at Rs 800 crore. The provision in the second quarter of last financial year was Rs 483 crore and in the first quarter Rs 391 crore.

Investors should watch out for asset quality of the bank.

Most brokerages expect net interest margin to fall in the quarter by 10 to 15 basis points due to declining rates and rising competition.

Global net interest margin stood at 2.97% in the financial year 2011-12.