Mumbai: Bank of Baroda, the country’s third largest public sector lender, reported a 25.4% rise in profit to Rs859.16 crore for the three months ended June 2010, backed by improvement in its core operation.

However, bad debts of the bank, as a percentage of advances and after setting aside funds against them, increased from 0.27% to 0.39% for the quarter.

Net interest income, or the interest earned minus interest expended, rose 54.2% to Rs1,858 crore.

The bank’s provisions, excluding for tax, zoomed to Rs251.33 crore in the quarter from a negative Rs38.96 crore. This was largely because of lower trading income which fell due to higher government bond yields, and also because the bank wrote back some provisions.

Net interest margin, a key indicator of profitability, rose to 2.9% from 2.3% for global its operations, while that for domestic operations was 3.34%.

The bank’s domestic loans and deposits grew at an identical 28.2%.

BoB’s chairman and managing director M.D. Mallya said the bank plans to raise Rs2,000 crore in the current fiscal to shore up its capital adequacy ratio which stood at 13.25% for at the end of the June quarter.

—Anup Roy

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Shoppers’ Stop posts 25% rise in revenue

New Delhi: Shoppers’ Stop Ltd, India’s largest department store operator, Thursday reported a 25% increase in revenues to Rs386 crore for the first quarter of the current fiscal year compared to the same quarter last year while profits jumped 297% to Rs10 crore for the April to June months.

Shoppers’ Stop said a renewed consumers confidence led to higher volumes at its outlets and sales at stores that existed for a year or more grew by 21%.

Shoppers’ Stop is the country’s second largest listed retail company and it runs 3 million sq ft of various retail formats in several cities.

—Staff Writer

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Central Bank net increases 26.22%

Mumbai: Aided by its core operations, state-run Central Bank of India on Thursday reported profit of Rs337 crore for the quarter ended June, a 26.22% incrase from the corresponding period last fiscal.

However, the results were marred by loans that turned badin the three months ended June 2010.

Net interest income, or the interest earned minus interest expended, grew 94% from the year-ago period to Rs1,119 crore. Bad debts as a percentage of advances, after making provisions for them, rose to 0.77% against 0.70% a year ago. The bank also increased its deposit rates between 0.25% to 0.75%.

Net interest income of the bank improved to 2.86% from 1.84% a year ago. However, the bank is yet to decide on a lending rate hike, said chairman and managing director S. Sridhar.

Sridhar said the bank had to book Rs289 crore as bad debt in the June quarter, against Rs71 crore a year ago, largely due to Rs100 crore slippage by an engineering procurement and construction company. He did not name the company. Provisions towards bad debts rose to Rs232.01 crore from Rs64.52 crore a year ago. Advances rose 23.12% and deposits rose 13.09% over the last year.

Anup Roy

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Ashok Leyland to buy 26% stake in UK firm

Mumbai: Chennai-based Ashok Leyland Ltd, the flagship firm of London-based Hinduja group, will acquire a 26% stake in UK-based bus manufacturer Optare Plc for about $7.5 million, the company informed the Bombay Stock Exchange on Thursday. Ashok Leyland will supply mid-size and full-size city buses to other global locations through the deal. Optare will have access to the Indian bus maker’s low-cost supply chain. Optare has a turnover of about $125 million and manufactures low-floor, mid-size buses. R. Seshasayee, managing director, Ashok Leyland and executive vice chairman, Hinduja Automotive said,”This strategic alliance is a critical part of our Global Bus programme, which is under development.” According to an analyst at a domestic brokerage house : ”The JNNURM (Jawaharlal Nehru National Urban Renewal Mission) scheme has led Ashok leyland to go in for a backward integration through which it can manufacture the bus body, something that Optare specializes in.” Shares of Ashoke Leyland on Thursday ended 0.69% lower on the Bombay Stock Exchange to close at Rs72 each, while the benchmark Sensex closed .0.19% higher at 17,992 points.

—Harini Subramani

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