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Bank of Baroda’s fourth-quarter net profit dropped by about a third as it set aside more money to cover potential loan losses.
For the January-March quarter, the public sector bank’s net profit decreased to Rs 1,029 crore from Rs 1,519 crore, a year ago.
The bank set aside Rs 1,598 crore to cover potential loan losses in the quarter, up from Rs 844 crore it set aside in the same period last year.
Slippages during the reporting quarter increased 79 per cent to Rs 7,983 crore from Rs 4,465 crore in the corresponding quarter last year.
BAD DEBTS
The rise in non-performing assets (NPAs) in the quarter was due to poor performance of the bank’s overseas portfolio from where the bank gets about 29 per cent of its total business. The bank’s overseas NPA increased to Rs 880 crore in the quarter ended March from Rs 225 crore, a year ago.
“Domestic NPAs will stabilise around the current levels for the next two quarters, after which it will improve,” S. S. Mundra, Chairman and Managing Director, said.
Slightly over 50 per cent of the new slippages during the quarter came from the corporate loan portfolio, reflecting prolonged industrial slowdown.
The bank said it wrote off loans worth Rs 1,200 crore in the quarter.
The bank restructured loans worth Rs 2,843 crore in the quarter ended March 31,2013, compared with Rs 5,280 crore in the same period last year, Mundra said.
Mundra said that the bank’s deposit and credit growth will be about two per cent more than the industry average.
The RBI, in its annual policy on May 3, said it expects deposits of scheduled commercial banks to grow at 14 per cent and credit growth at 15 per cent in the FY’2014.
The bank’s board has recommended a dividend of Rs 21.50 per equity share. The bank’s peers in the public sector also saw a decline in quarterly net profit due to higher provisions. Punjab National Bank’s Q4 net dropped 21 per cent, while Canara Bank’s Q4 net dropped 12.5 per cent. India’s largest lender, State Bank of India, will declare its quarterly and annual results on May 22.
Shares of the bank closed at Rs 691.85, down 1.82 per cent, on the Bombay Stock Exchange.
satyanarayan.iyer@thehindu.co.in
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