The Hindu Business Line : Bank of Baroda net rises 41%

Mumbai, Jan. 29 Bank of Baroda recorded an increase of 41 per cent in net profit at Rs 708 crore for the quarter ended December 31, 2008, against Rs 501 crore in the corresponding period last year.

The growth is on account of equitable distribution across all segments, said Mr M.D. Mallya, Chairman and Managing Director.

The bank also had an exceptional income of Rs 69 crore in the third quarter, which was profit from winding up of its Hong Kong subsidiary.

Speaking to presspersons, Mr Mallya said the bank has been able to achieve a qualitative transformation of the business mix — on both the liabilities and asset side.

“We have put in place a monitoring mechanism for NPAs. This has helped restrict the incremental slippages in NPAs,” he said.

NPAs

In the third quarter, gross NPAs were down to Rs 1,921 crore (Rs 2,040 crore) and the ratio of gross NPAs to total advances was 1.5 per cent (2.11 per cent). Net NPAs were also down to 472 crore (Rs 517 crore).

The total provision other than tax was Rs 350 crore (Rs 157 crore). Of the total provision, about Rs 250 crore was for marked-to-market losses in equity in the domestic operations and for Credit Linked Notes in the overseas market. The loan loss provision was about Rs 77 crore.

The bank also made additional provision of Rs 39.77 crore in certain identified NPA accounts.

“As a proactive measure, we have provided for all NPA accounts. It is an accelerated provision, more than prudential provision,” Mr Mallya said.

The total fee income was Rs 916 crore (Rs 618 crore) and treasury gains, including forex operations, was Rs 553 crore (Rs 258 crore).

The net interest margin increased to 3.3 per cent (3 per cent).

Cost of deposits for the nine month period ended-December was 6.25 per cent (5.77 per cent).

The bank has no direct or indirect exposure to Satyam, Mr Mallya said. When asked if the bank would lend to Satyam, Mr Mallya said that there has been no request so far, and the bank would evaluate any request when it comes up.

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