Bank of Baroda quarterly net jumps, outlook firm

Bank of Baroda quarterly net jumps, outlook firm

Mumbai: State-run Bank of Baroda posted a 61% rise in July-September net profit on growing interest income and non-core income on Wednesday.

Net profit rose to Rs6.34 billion from Rs3.95 billion a year ago.

“We maintained a 22.5% rise in interest income at a time when the banking industry was showing sluggish growth," chairman M.D. Mallya said.

“Its loans for the half-year ended 30 September rose by a quarter when the industry-wide growth clocked 11%," Mallya said, adding the growth came from lending to farm and small businesses, while retail lending also helped.

The bank’s non-core incomes rose 25% to Rs5.95 billion.

“The bank’s capital adequacy ratio was at 14.8% and there was no immediate need to raise capital," Mallya said.

Streamlining ahead

“With repricing of deposits our margins are improving every quarter," and the bank expects to maintain net interest margin at 2.89-2.90% in the next two quarters," Mallya said.

The bank’s cost of deposits have come down to 5.89%, from 6.2% a year ago.

“It also expects to maintain a delinquency ratio at less than 1.25% in the current fiscal," he said.

The bank would also maintain provision coverage of 79.9% in the next two quarters.

Shares in the bank ended up 2.14% at Rs497.15 in the Mumbai market that ended down 0.43%.