Bank of Baroda, has come out with modest results for the quarter ended June 11 with 20% increase in Net Profit at Rs 1032.85 crore over 24% increase in NII at Rs 2297.19 crore. NIM slipped sharply to 2.87% in quarter under review against 3.45% in quarter ended March 11 and from 2.90% in corresponding previous quarter. Dip in the trading gains by 42% to Rs 74.02 crore and recovery from PWO by 49% to Rs 28.76 crore has restricted other income growth to marginal 4% to Rs 640.87 crore despite healthy 28% increase in core fee income at Rs 398.08 crore. Further spike in the provisions and contingencies by 56% to Rs 391.05 crore and Rs 13.01 crore of charge owing to take over of Memon Co operative bank has paved Net Profit up by 20% on y-o-y basis.
Asset Quality
Bank of Baroda has reported modest performance for the quarter ended June 11 with 20% increase in the net Profit at Rs 1032.85 crore over 24% increase in NII at Rs 2297.19 crore. Interest earned inched up by robust 40% to Rs 6631.77 crore while that of Interest expended spurred faster at 51% to Rs 4334.58 crore and resulted in the curtailing growth in NII. The other income marginally grew by 4% to Rs 640.87 crore and led Net Total income up by 19% to Rs 2938.06 crore. While the fee based income grew by healthy 28% to Rs 398.08 crore, dip in both, the trading gains by 42% to Rs 74.02 crore and recovery from PWO by 49% to Rs 28.76 crore had curtailed growth in other income to a smaller digit. The share of other income to net total income has declined to 21.8% against 24.9% in the corresponding previous year.
The bank has charged Rs 45.05 crore against transactional liability according to revised AS 15 employee benefits and Rs 91.50 crore against additional pension liability in quarter under review. Thus the employee cost has inched up by 12% to Rs 645.38 crore and the other operating expenses moved up by 24% to Rs 461.40 crore. The operating expenses grew by 17% to Rs 1106.78 crore leading cost to income ratio down by 60 bps to 37.7%. Thus the operating profits were up by 20% to Rs 1831.28 crore.
While the provisions for NPA's and Bad debts have slipped by 52% to Rs 131.95 crore, provisions on standard advances have surged by 292% to Rs 112.94 crore. Further, the bank has provided provision of Rs 138.54 crore on depreciation on investments in quarter under review against write back of Rs 58.91 crore in the corresponding previous quarter. Resultantly, provisions and contingencies leaped up by 56% to Rs 391.05 crore in the quarter under review. During the quarter, the bank has taken over the specified Assets and liabilities of Memon Co operative bank as per the approval granted by RBI (4 March 11). Out of the deficit of Rs 156.06 crore arising on said takeover, the bank has proportionately charged a sum of Rs 13 crore (1/12th of the said deficit) to P&L during the quarter. The remaining Rs 143.06 crore will be charged proportionately during the remaining period till FY14. Thus PBT inched up 12% to Rs 1427.22 crore. Finally, effective tax rate declined by whooping 500 bps to 27.6% and led Net Profit up by 20% to Rs 1032.85 crore.
Yearly Performance:
For the year ended March 2011, Bank of Baroda has reported 48% increase in NII at Rs 8802.26 crore and 39% increase in the Net Profit at Rs 4241.68 crore. The other income grew by small 3% to Rs 2809.18 crore and led Net total income up by 34% to Rs 11611.44 crore. Further 410 bps dip in the cost to income ratio at 39.9% has boosted Operating profit up by 44% to Rs 6981.61 crore. The provisions and contingencies have zoomed by 91% to Rs 1331.29 crore. After accounting nil EO income during the year against Rs 81.45 crore on the back of profit on sale on investment in the corresponding previous year, PBT was up by 33% to Rs 5650.32 crore. Finally, 19% increase in the taxation at Rs 1408.64 crore has made net up by 39% on y-o-y basis.
Other information:
Asset Quality
- Asset Quality of the bank has deteriorated in the quarter under review. Gross NPA has increased by 29% y-o-y and 9% q-o-q to Rs 3425.46 crore for the quarter ended June 11. The slippages during the quarter were to the tune of Rs 584.82 crore of which Rs 566.19 crore were fresh slippages. Further, Reductions from recovery at Rs 125.47 crore, up gradation Rs 71.48 crore, PWO and WO at Rs 114.91 crore amounted to Rs 311.86 crore. Slippages ratio for the quarter stood at 1% in quarter under review. % GNPA has also moved up to 1.46% against 1.41% a year ago and 1.36% a quarter ago.
- Net NPA has leaped up 43% y-o-y and 30% q-o-q to Rs 1024.42 crore in the quarter ended June 11. The %NNPA stood high at 0.44% against 0.39% a year ago and 0.35% a quarter ago. The provision coverage ratio including technical write off is 82.52% at end of June 11 against 85% at end of March 11.
- The Outstanding restructured book stood at Rs 7166.28 crore at end of June 11. Of this Rs 454.85 crore loans were restructured in the quarter under review. Nearly Rs 897.88 crore of restructured loan accounts (of Rs 1 crore and above) slipped in to NPA.
- Business of the bank has improved by 24% y-o-y and 2% q-o-q to Rs 545283 crore at end of June 11. Domestic business grew 22% y-o-y and 0.6% q-o-q to Rs 405156 crore and overseas business grew by 29% y-o-y and 6.7% q-o-q to Rs 140127 crore in the quarter under review.
- Balance sheet has improved by 24% y-o-y and 3% q-o-q to Rs 269831 crore for the quarter ended June 11.
- Advances grew by 25% y-o-y and 2% q-o-q to Rs 232340.1 crore for the quarter ended June 11. Overseas advances grew 7.5% q-o-q and 28% y-o-y to Rs 63719 crore in quarter under review. The domestic advances grew 25.2% y-o-y and 1.6% q-o-q to Rs 232340 crore. Retail credit grew 24% y-o-y and slipped by 4.6% q-o-q to Rs 30934 crore of which housing loans grew 20% y-oy and 3% q-o-q to Rs 12910 crore. SME credit grew by 31.4% y-o-y and 3.7% q-o-q to Rs 28367 crore.
- Global Deposits grew by 23% y-o-y and 2.5% q-o-q to Rs 312943 crore at end of June 11. Domestic deposits grew 20.6% y-o-y and 1.4% q-o-q to Rs 236536 crore while domestic CASA deposits grew 16% to Rs 80225 crore in quarter ended June 11. The Overseas deposits grew 36% y-o-y and 6% q-o-q to Rs 76407 crore while that of Overseas CASA deposits grew 23.4% and fell 5.5% q-o-q to Rs 6996 crore in the quarter under review. Share of domestic CASA deposits stood at 33.92% in terms of aggregate deposits and at 35.90% in terms of core deposits as on 30 June 11.
- Global cost of deposits inched up from 4.39% in quarter ended June 10 to 5.36% in quarter ended June 11. Domestic cost of deposits inched up from 5.09% in June 10 to 5.63% in March 11 to 6.41% in June 11. On the other hand, overseas cost of deposits declined to 1.80% in quarter under review against 1.83% at in quarter ended March 11 and 1.95% in quarter ended June 10.
- Global yield on advances inched up from 8.17% in June 10 to 8.74% in March 11 to 9.11% in June 11. Domestic yield on advances have inched up from 9.79% to 10.65% in March 11 to 11.23% in June 11.
- Global NIM slipped from 2.90% in June 10 and 3.45% in March 11 to 2.87% in the quarter under review. The domestic NIM has also declined from 3.43% in June 10 and 4.16% in March 11 to 3.39% in June 11.
- Capital Adequacy ratio as per Basel II norms was 13.10% at end of June 11 against 13.25% in the corresponding previous year and 14.52% at end of March 11.
- ROA stood at 1.13% for the quarter ended June 11 against 1.19% in the corresponding previous quarter. ROE stood at 19.88% against 23.46% a year ago.
The bank has charged Rs 45.05 crore against transactional liability according to revised AS 15 employee benefits and Rs 91.50 crore against additional pension liability in quarter under review. Thus the employee cost has inched up by 12% to Rs 645.38 crore and the other operating expenses moved up by 24% to Rs 461.40 crore. The operating expenses grew by 17% to Rs 1106.78 crore leading cost to income ratio down by 60 bps to 37.7%. Thus the operating profits were up by 20% to Rs 1831.28 crore.
While the provisions for NPA's and Bad debts have slipped by 52% to Rs 131.95 crore, provisions on standard advances have surged by 292% to Rs 112.94 crore. Further, the bank has provided provision of Rs 138.54 crore on depreciation on investments in quarter under review against write back of Rs 58.91 crore in the corresponding previous quarter. Resultantly, provisions and contingencies leaped up by 56% to Rs 391.05 crore in the quarter under review. During the quarter, the bank has taken over the specified Assets and liabilities of Memon Co operative bank as per the approval granted by RBI (4 March 11). Out of the deficit of Rs 156.06 crore arising on said takeover, the bank has proportionately charged a sum of Rs 13 crore (1/12th of the said deficit) to P&L during the quarter. The remaining Rs 143.06 crore will be charged proportionately during the remaining period till FY14. Thus PBT inched up 12% to Rs 1427.22 crore. Finally, effective tax rate declined by whooping 500 bps to 27.6% and led Net Profit up by 20% to Rs 1032.85 crore.
Yearly Performance:
For the year ended March 2011, Bank of Baroda has reported 48% increase in NII at Rs 8802.26 crore and 39% increase in the Net Profit at Rs 4241.68 crore. The other income grew by small 3% to Rs 2809.18 crore and led Net total income up by 34% to Rs 11611.44 crore. Further 410 bps dip in the cost to income ratio at 39.9% has boosted Operating profit up by 44% to Rs 6981.61 crore. The provisions and contingencies have zoomed by 91% to Rs 1331.29 crore. After accounting nil EO income during the year against Rs 81.45 crore on the back of profit on sale on investment in the corresponding previous year, PBT was up by 33% to Rs 5650.32 crore. Finally, 19% increase in the taxation at Rs 1408.64 crore has made net up by 39% on y-o-y basis.
Other information:
- The scrip is hovering at Rs 875.4 on BSE.
- Considering EPS of Rs 105.2, PE stands at 8.3 times.
- At Book value per share of Rs 560.3 and Adjusted Book Value per share of Rs 488.6 at end of June 2011, the P/BV and P/ABV works out to be 1.6 and 1.8 respectively.
| Particulars | 1106 (3) | 1006 (3) | Var % | 1103 (12) | 1003 (12) | Var % |
| Interest Earned | 6631.77 | 4726.96 | 40 | 21885.92 | 16698.34 | 31 |
| Interest Expended | 4334.58 | 2868.97 | 51 | 13083.66 | 10758.86 | 22 |
| Net Interest Income | 2297.19 | 1857.99 | 24 | 8802.26 | 5939.48 | 48 |
| Other Income | 640.87 | 617.24 | 4 | 2809.18 | 2724.91 | 3 |
| Net Total Income | 2938.06 | 2475.23 | 19 | 11611.44 | 8664.39 | 34 |
| Operating Expenses | 1106.78 | 947.36 | 17 | 4629.83 | 3810.58 | 21 |
| Operating Profits | 1831.28 | 1527.87 | 20 | 6981.61 | 4853.81 | 44 |
| Provisions & Contingencies | 391.05 | 251.33 | 56 | 1331.29 | 697.20 | 91 |
| EO | -13.01 | 0.00 | -100 | 0.00 | 81.45 | -100 |
| Profit Before Tax | 1427.22 | 1276.54 | 12 | 5650.32 | 4238.06 | 33 |
| Provision for Tax | 394.37 | 417.38 | -6 | 1408.64 | 1179.73 | 19 |
| Net Profit | 1032.85 | 859.16 | 20 | 4241.68 | 3058.33 | 39 |
| EPS*(Rs) | 105.2 | 87.5 | 108.0 | 77.9 | ||
| * Annualized on current equity of Rs 392.81 crore. Face Value of Rs 10. Figures in Rs crore Source: Capitaline Corporate Database | ||||||
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