Moneycontrol
Feb 09, 2018 08:28 PM IST | Source: Moneycontrol.com

Bank of Baroda Q3 profit sinks 56% on high provisions; NPAs marginally higher

Net interest income growth of 40.2 percent year-on-year at Rs 4,394 crore was ahead of CNBC-TV18 poll of Rs 3,745.3 crore.

Public sector lender Bank of Baroda said profit in third quarter fell sharply by 56 percent to Rs 111.8 crore, dented by higher provisions but supported by net interest income and operating income. It lower than CNBC-TV18 estimates of Rs 282.6 crore.

Profit in year-ago quarter stood at Rs 252.7 crore.

Net interest income growth of 40.2 percent year-on-year at Rs 4,394 crore was ahead of CNBC-TV18 poll of Rs 3,745.3 crore, with total loan growth of 14 percent YoY at Rs 3.99 lakh crore whereas deposits declined 2.8 percent to Rs 5.73 lakh crore in Q3.

"Domestic credit registered YoY growth of 16.38 percent driven by retail loans growth of 33.37 percent," the bank said, adding net interest margin for global and domestic operations improved by 41 bps & 56 bps, respectively.

It further said net interest margin improved by 41 bps sequentially to 2.72 percent in Q3FY18, with domestic operations NIM rising by 56 bps to 3.24 percent QoQ.

Cost to income ratio improved to 39.84 percent at the end of December quarter, from 44.26 percent in September quarter.

Asset quality remained at elevated levels. Gross non-performing assets for the quarter were higher at 11.31 percent compared to 11.16 percent in previous quarter while net NPAs were lower at 4.97 percent against 5.05 percent on sequential basis.

In absolute terms, gross NPAs increased 4.7 percent to Rs 48,480.4 crore and net NPAs rose 1.4 percent to Rs 19,852.15 crore compared to previous quarter.

Provisions for bad loans shot up 70.8 percent sequentially and 92.7 percent year-on-year to Rs 3,155.28 crore for quarter ended December 2017.

Other income (non-interest income) during the quarter declined 5.7 percent to Rs 1,673 crore while operating profit grew by 40.6 percent to Rs 3,650.11 crore compared to previous year, driven by interest and fee income.
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