The bank posted a net profit of Rs 203.4 crore at the end of June against Rs 423.6 crore last year.
“We are seeing high-quality credit on the corporate side, the retail book is growing in a healthy manner but some legacy issues are dragging down the book,” said PS Jayakumar, MD, Bank of Baroda. “The impact would have been lesser if some of the larger accounts got resolved.”
Provisioning increased 18 per cent to Rs 2,368 crore against Rs 2,004 crore in the same period last year. The bank managed to check its bad loan growth, with net NPA falling marginally to 5.1 per cent from 5.7 per cent last year. However, its gross bad assets rose to 11.4 per cent from 11.1 per cent of the total assets deployed.
In absolute terms, net NPA stood at Rs 19,519 crore while gross NPA was at Rs 46,172 crore. Its special mention account II category stood at Rs 9,300 crore.
“I think the worst is over and we would be able to contain our gross NPAs within Rs 50,000 crore,” added Jayakumar. “But the NPA assets that we have got will take several years to get resolved. So, we need to keep working on them.”
The bank’s net interest margin or the measure of its profitability stood at 2.5 per cent for the first quarter of this year. The bank also reported a less than 1 per cent increase in net interest income or the difference between interest earned and interest expended of Rs 3,405 crore versus Rs 3,372 crore last year.
The bank’s share of low cost deposits or deposits from current accounts and savings accounts increased to 38.7 per cent of its total deposits from 33.8 per cent last year.
The total advances deployed increased 4 per cent to Rs 3.7 lakh crore against Rs 3.6 lakh crore in the same period last year.