Bank Of Baroda Q1 Results: Reports Loss As Provisions Rise
The state-run lender reported a loss of Rs 864 crore in the quarter ended June.
Bank of Baroda reported a loss in the quarter ended June on the back of a rise in provisioning.
The state-run lender’s loss was Rs 864 crore in the three months through June, it said in an exchange filing. That compares with a profit of Rs 710 crore a year ago.
The bank made provisions worth Rs 1,811 crore against standard assets in the first quarter. According to Sanjiv Chaddha, the lender’s managing director and chief executive officer, half of it was towards accounts that weren’t downgraded to non-performing asset category due to the Reserve Bank of India’s asset quality standstill arrangement.
The remainder was against a government guaranteed loan account, Chaddha said. Total provisions rose 71% from last year to Rs 5,628 crore.
Net interest income—or core income—rose 5% year-on-year to Rs 6,816 crore. Other income fell 5% from a year ago to Rs 1,818 crore.
The bank’s asset quality conditions improved. Gross non-performing assets fell marginally to Rs 69,132 crore as on June 30, compared with Rs 69,381 crore as on March 31. As a ratio of total assets, gross NPA stood at 9.39%, from 9.4% a quarter ago.
Fresh slippages fell to Rs 2,740 crore compared with Rs 3,050 crore in the fourth quarter and Rs 5,583 crore in June 2019.
On the loan moratorium announced by the RBI, Chaddha said the bank had earlier allowed all customers to access the benefit due to which nearly 65% of its outstanding advances were under moratorium.
“In the April-June quarter we reviewed our position and allowed an opt out of the moratorium only to customers with outstanding debt of less than Rs 10 lakh,” he said. “This helped the bank reduce its moratorium numbers significantly.”
According to Chaddha, only 21% of the bank’s book is covered under the moratorium, with most of these loans being above Rs 10 lakh. A third of all loans under moratorium are toward retail customers, he said.
As on June 30, the bank’s total advances rose 8.6% year-on-year to Rs 7.36 lakh crore, while total deposits 4.3% from last year to Rs 9.34 lakh crore. The bank has kept its deposit growth lower since credit offtake has been slow and the bank has considerable liquidity.
Still, CASA (current and savings account) deposits rose 12% year-on-year to Rs 3.21 lakh crore. The bank also saw a 13.5% increase in retail loans from a year ago, which stood at Rs 1.07 lakh crore as on June 30.
The bank is looking to complete all the formalities with respect to its merger with Vijaya Bank and Dena Bank this financial year, Chaddha said. The process of amalgamation had suffered due to the coronavirus, according to the CEO. So far, 800 branches have been rationalised out of a total of 1,300 branches as part of the merger, he said.