Public sector lender Bank of Baroda has reported a 12.5 per cent rise in net profit for the fourth quarter ended March 2014, at Rs 1,157 crore driven by lower provisions towards bad loans.
The net profit in the fourth quarter in FY13 was at Rs 1,086 crore.
The provisions (money set aside for potential bad loans) were down 28 per cent to Rs 1,153 crore from Rs 1,598 crore. “We got many recoveries and upgradations during the quarter. Hence, our provisions also keep getting reduced as we write-off our earlier provisions,” said SS Mundra, Chairman and Managing Director of the Bank.
Net interest income, or the difference between interest earned and expended, was up 11 per cent to Rs 3,124 crore. Other income was also up 11 per cent to Rs 1,326 crore backed by core fee income growth.
Gross NPAs (non-performing assets) ratio deteriorated year-on-year to 2.94 per cent of the total advances as on March-end 2014 from 2.40 per cent a year ago.
However, sequentially both gross and net NPAs declined.
As on March end, 2014, year-on-year total advances grew 21 per cent on the back of healthy 21 per cent growth in both retail and small and medium enterprise (SME) sector loans. Total deposits increased 20 per cent driven by increased current and savings accounts.
“Given the environment, restructuring is a fact of life which we have to live with for some time. Our restructuring pipeline is at Rs 1,300-1,400 crore for the first quarter,” Mundra said. The bank restructured during the fourth quarter of 2014 was at Rs 1,157 crore.
The bank recovered Rs 1,262 crore worth of bad loans during the year. Also, the bank sold Rs 671 crore worth bad loans to asset reconstruction companies; of this, it received a consideration of Rs 522 crore.
Full year results
Similar to the fourth quarter, for the full year, the Baroda-based bank net profit has increased by 1 per cent at Rs 4,541 crore as compared with Rs 4,480 crore in FY13.
During the year, the bank added 601 branches and 3,624 ATMs to its network. It plans to add 400 branches more in FY15.
Bank of Baroda scrip rallied to end at Rs 877.90 per share, 4.6 per cent higher over its previous close on BSE.