A big jump in provisions towards bad loans pulled down Bank of Baroda’s second quarter net profit by 89 per cent to ₹124 crore in the second quarter ended September 30, 2015, against ₹1,104 crore in the year-ago period.

Net interest income (the difference between interest earned and expended) was down about 5 per cent to ₹3,244 crore (₹3,401 crore in the corresponding quarter last year).

Non-interest income, comprising commission, exchange, brokerage, trading gains and forex profits, was up 15 per cent at ₹1,144 crore (₹992 crore). Net interest margin declined to 2.08 per cent from 2.40 per cent.

BB Joshi, Executive Director, said net interest income came down because of the slippages and reversal of interest. The other factor has been the lag effect of reduction in the rate of interest on assets as well as liabilities side.

Year-on-year, total deposits increased 8 per cent to ₹6,12,458 crore. Advances were up 7.55 per cent to ₹4,14,900 crore.

The public sector bank saw a surge in fresh slippages, which aggregated to ₹6,816 crore (₹1,685 crore).

The incremental slippages were mainly in the iron and steel, infrastructure, mining, textiles and electronics sectors. Consequently, provision for non-performing loans and bad debts written-off jumped 216 per cent to ₹1,843 crore (₹584 crore).

Of the total provisions towards bad loans, the bank provided ₹94 crore towards an account (an Ahmedabad-based textile company) that has been declared fraudulent. The bank’s total exposure to this account is ₹374 crore.

Gross non-performing assets (GNPAs) rose to 5.56 per cent of total loans as at September-end 2015, against 3.32 per cent as at September-end 2014.

Net NPAs too rose to 3.08 per cent as at September-end 2015, against 1.74 per cent as at September-end 2014.

Shares of BoB closed at ₹167.40 apiece on Friday, 4.94 per cent higher than the previous close, on the BSE.

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