Bank of Baroda Q2 net plunges 89% as provisions, NPAs soar

Mumbai: State-run Bank of Baroda on Friday reported a massive 89 percent dip in net profit at Rs 124.48 crore for the September quarter, marred by increase in provisioning for bad loans.

Total provisions soared by a whopping 70 percent to Rs 2,212.54 crore in the second quarter ended September 30 from Rs 1,298.71 crore a year ago, while provisions for NPAs and bad debts shot up 215.58 percent to Rs 1,843.80 crore.

"This is not some kind of kitchen sinking exercise. We all know the PSU banks are going through tough phase in terms of NPAs. We have at least two quarters that is going to be tough," newly-appointed Managing Director and Chief Executive P S Jayakumar told reporters.

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Gross NPA was 5.56 percent, while net NPA ratio stood at 3.08 percent.

In the period under review, the domestic NIM was at 2.69 percent while in international operations it was at 0.85 percent. Net interest income marginally fell by 4.61 percent to Rs 3,244 crore from Rs 3,401 crore a year ago.

Fresh slippages during the quarter were higher at Rs 6,816 crore, reflecting continued stress in corporate portfolio both in domestic and overseas loan book.

Recovery in the period stood at Rs 334 crore, while it upgraded Rs 79.33 crore worth of loans. The lender wrote off Rs 108.37 crore worth of loans in the quarter.

Under the 5/25 scheme, the bank had refinanced Rs 4,100 crore worth of loans in the first quarter, but in the second quarter it did not refinance any account. It restructured one account under the strategic debt restructuring scheme in Q2.

The CRAR (capital to risk weighted assets ratio) was at 12.51 percent as on September 30. Of this, the share of Tier 1 capital was 9.9296 percent and that of CET 1 Capital 9.42 percent. The public lender's total business grew by 7.84 percent to Rs 10,27,358 crore in the period under review.

Domestic CASA share held steady at 31.95 percent.

The bank declared a borrower account as fraud wherein it total exposure is Rs 374.48 crore. The bank has made a provision of 25 percent amounting to Rs 93.59 crore in the quarter. The balance provision will be made over a period of next three quarters.

The bank also detected a fraud in its Ashok Vihar branch in Delhi. It has estimated a loss of Rs 11 crore which has been fully provided for. In the wake of frauds, the bank is now centralising all its processes, Jayakumar said.