A robust growth in other income and tight control on operating expenses helped Bank of Baroda report a 21 per cent increase in net profit at Rs 1,290 crore in the October-December 2011 period, against Rs 1,069 crore in the corresponding year ago period.
In the reporting three months period, its net interest income (difference between interest earned and interest expended) increased by 16 per cent to Rs 2,656 crore (Rs 2,292 crore in the corresponding year ago period).
Other income, which includes income from sale of investments and foreign exchange income, jumped 70 per cent to Rs 1,149 crore (Rs 676 crore).
Operating expenses, which includes employee cost and other operating expenses, nudged up by 7 per cent to Rs 1,197 crore (Rs 1,117 crore).
Liquidity amounting to Rs 1600 crore will get unlocked for the bank on account of the cash reserve ratio cut by the RBI. The resources will be channelled into productive sectors of the economy, said Mr M.D. Mallya, Chairman and Managing Director.
Though the RBI has scaled down the March-end 2012 non-food credit growth projection for the banking sector to 16 per cent from 18 per cent, Bank of Baroda expects to achieve a year-on-year credit growth of 18-19 per cent.
NPAs, provisions increase
During the quarter, non-performing assets (gross) increased by Rs 492 crore to Rs 3,895 crore.
In the nine-months ended December-end 2011, NPAs rose by Rs 1,125 crore.
Overall, provisions and contingencies made by the bank in the October-December 2011 period jumped by 175 per cent to Rs 837 crore (Rs 304 crore).
The rise in provisions and contingencies is on account of provisions of about Rs 500 crore towards NPAs.
This includes an additional provision of Rs 78 crore on a secured sub-standard advance.
Bank of Baroda's scrip closed 1.24 per cent down at Rs 789.90 a share on the BSE, against the previous close of Rs 799.85.