Bank of Baroda Q1 net profit rises 34% to ₹710 crore2 min read . Updated: 25 Jul 2019, 09:13 PM IST
- The bank saw slippages to the tune of ₹5,583 crore in the June quarter
- The bank has an exposure of ₹4,200 crore to stressed NBFCs
Mumbai: Public sector lender Bank of Baroda on Thursday said that its June quarter net profit for the merged entity stood at ₹710 crore, compared to a loss of ₹49 crore in the same period last year on the back lower provisions.
On 1 April, 2019, Bank of Baroda merged with two other state-owned banks, Dena Bank and Vijaya Bank. This is the first quarterly earnings report of the merged bank.
On a standalone basis, the bank had posted a net profit of ₹528 crore in Q1FY19.
The bank's profit was lower than ₹857 crore estimated by a Bloomberg poll of 17 analysts.
Net interest income -- difference between interest earned on loans and that paid on deposits -- increased 2.61% to ₹6,496 crore from ₹6,331 crore in the corresponding period last year.
Gross non-performing assets (NPAs), as a percentage of total advances, were at 10.28% in the June quarter and net npa ratio stood at 3.95% in the June quarter.
The bank saw slippages to the tune of ₹5,583 crore in the first quarter of FY20. The largest account that slipped in the quarter was an IL&FS road asset of over ₹400 crore.
P.S. Jayakumar, managing director and chief executive, Bank of Baroda, said the slippages were reasonably consistent with industry levels. "Recovery has been a tad lower, even as some of it came through in July. It will be a much better Q2 from a recovery standpoint," said Jayakumar.
He added that the bank has a watchlist of ₹16,440 crore as of 30 June, 2019, of which ₹10,700 were from Bank of Baroda standalone entity, ₹2,884 from erstwhile Dena Bank and ₹2,856 crore from Vijaya Bank.
Provisions during the quarter decreased 14.22% year-on-year to ₹3,566 crore as against ₹4,167 crore in the year-ago quarter.
The bank has signed 12 intercreditor agreements (ICA) with other lenders and has an exposure of ₹4,200 crore to stressed non-banking finance companies (NBFCs). However, it did not specify to how many non-banks these exposure were to.
The bank's capital adequacy ratio stood at ₹11.5% and plans to raise ₹6,000 crore in the near term as growth capital.
The bank, Jayakumar said, has identified around 1,400 locations where there are more than one branch of the merged entity and the bank is working on a rationalisation plan for these.
On Thursday, shares of the bank lost 0.68% to close at ₹109.55 apiece, while the benchmark Sensex index lost 0.04% to close at 37,830.98 points.