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Bank of Baroda Q3 loss at Rs 3342cr; provisions surge 225%

Narration of the Photograph, L 2 R : Shri P S Jayakumar (3rd left) Managing Director & CEO of Bank of Baroda is seen during the announcement of Financial results of the Bank for Q3 FY 15-16 alongwith Shri B B Joshi (Right), Shri Mayank K Mehta (2nd left), Executive Directors of Bank and Shri V S Narang, General manager (Planning) at Baroda Corporate Centre, Mumbai.Picture by GNS MumbaiNarration of the Photograph, L 2 R : Shri P S Jayakumar (3rd left) Managing Director & CEO of Bank of Baroda is seen during the announcement of Financial results of the Bank for Q3 FY 15-16 alongwith Shri B B Joshi (Right), Shri Mayank K Mehta (2nd left), Executive Directors of Bank and Shri V S Narang, General manager (Planning) at Baroda Corporate Centre, Mumbai.Picture by GNS Mumbai
Bank of Baroda posted a quarterly net loss of Rs 3342 crore, compared to Rs 124 crore quarter on quarter. The loss was driven by a 225 percent increase in provisions, which rose from Rs 1,891 crore in the previous quarter to Rs 6164 crore.

Post provisioning, net NPAs were at 5.67% at the end of the December quarter compared to 3.08% in the September quarter and 2.11% in the year ago quarter.

Mumbai, ( GNS ) : Bank of Baroda, the country’s second largest public sector bank, on Saturday reported a loss of Rs.3,342 crore as bad loans and provisions against such loans surged. The reported loss would have been higher if it wasn’t for a tax write back of Rs.1,118 crore taken during the quarter.

BoB MD cum CEO P S Jaykumar  told mediapersons  here today that, “The surge in reported gross non-performing assets (NPAs) and provisions followed an asset quality review conducted by the Reserve Bank of India across the banking sector. Following the review, the RBI has asked banks to provide for visible stressed assets and classify them as NPAs rather than delaying recognition. The RBI wants banks to clean up their books by March 2017.At Bank of Baroda, net loss for the quarter was at Rs.3,342 crore compared to a net profit of Rs.334 crore in the same quarter last year. In the September-ended quarter, the bank had reported a net profit of Rs.124.48 crore.

He further stated, “In absolute terms, gross NPAs at Bank of Baroda surged 64% over the previous quarter to Rs.38,934 crore compared to Rs.23, 710 crore at the end of the September quarter. The gross NPA ratio, as a percentage of total loans, jumped to 9.68% from 5.56% in the previous quarter and 3.85% in the year ago quarter.Provisions against bad loans in the December-ended quarter stood at Rs.6,164.55 crore compared to Rs.1,891.70 crore in the September quarter.Post provisioning, net NPAs were at 5.67% at the end of the December quarter compared to 3.08% in the September quarter and 2.11% in the year ago quarter.Net interest income, or the core income a bank earns from the lending business, also fell sharply by 17.6% to Rs.2,706 crore in the December quarter compared to Rs.3,286 crore in the year-ago period.

. Total Eusiness at19,73,959 crore at end-De.,2015,. Domestic CASA rhare e129.97%, . Gross NPA at 9.6896 & Net NPA at 5.67% , . Piovision Coverage Ratio at 52.7096, . Oper.ting Protit { 1,7(X rror€ in q3, FY16 . t Proflt at (-l 13,:!12 crorr in q3, FY16 . CRAR (Basel ll) at 12.95% and CRAR (Baselltl) at 12.ft{ . Management vier ls that no furdter i$u.nce o{ €quity capital ir r€quired in the foreseeable tuture and hai also advii€d tte Govemment of lndia that no further suppon by way of irrusion ot equity c.pltal ls requlr€d, Bank of Baroda aDnounced its reviewed results for the th,rd quarter of 2015-76 (Q3, FY16)

Total lncome Lt 72635 1tg}8.34 36,271,O7 35,3O4,15

lntereit lncome 10,514.()4 10,717.5 33,(X5’89 32,m1.52

lnterest Erpens€’ 7,N.m 7,$1.45 23,64r.4 2ltfi.8

l\let lntercst lnaome 47OS.v 3,8.14 9,M.4t 10,ols.s5

Other lncome 1,112-91 L(m3s 3,224,L4 3.(r.s4

Total Expenses 10,02231 9,,t59.3 :to,o27.!t5 24,(86,S9

Operatlng Expens€s 2,LL4.1L LO37.45 5,390,5 tgoo.s3

ofwhich,

Oper.tih8 Profit 1,7011.14 2.3i,9.U 5,2tt.tt 7,221.57

Provision tor NPA 6,t74-ta \l|I)42 8186 2,106

Provision tor Tax -1,118.37 742.al -247.17 1.7,,.49

Net Profit -3,y2.U 38.lla -2,165.41 2,8lD.Oa

L,t5r’..79 1,119.ra 1543.85 3,333.11

Emolovee Cost

BUSINESS EXPANSION

The Bank’s Total Eusiness expanded by 1.64% (y-o-y) to i 9,73,959 crore in Q3, FY16.

Total Deposits increased by 4.44% (y-o-y) to I 5,8!r,687 crore. However, the y-o-y growth in

total Domesti. Deposits on average basis {based on daily averages) was at 72.79%. Tolal

Deposits on averaSe basis grew by 9.49%.

On year-on-year (y-o-y) basis groMh in CASA (Domestic) deposit on average basis was 72.07%.

Share of Domestic CAsA deposits stood at 29.97% as of December 31, 2015 and on daily

average basis Domestic CASA share stood at 29,10%.

TotalAdvances decreased by -2.38 % (y-o-y) to 13,84,272 dore. However, on Average basis,

y-o-y growth in Domestic Advance was 6-66%. Total Advances growth on average basis stood

at 7.59%. Retail Credit increased by 6.14% (y-o-y) to i 51,728 crore and formed 18.9 % of its

Gross Domestic Credit as on 31″ Dec,2015. Within Retail Credit, the home loan portfolio

increased by 12.53%. Farm Oedit grew by 11.8396 (y-o-y) to I :14,8:!5 crore.

The Bank’s Overseas Buslness continued to occupy a si8nificant position in its overall business.

As at December 31, 2015, the Overseas Operations contributed 31% to the Eank’s Total

Business.

INCOME

The Bank’s Total lncome stood at i 11,727 crore in Q3, FY16 and Net lnterest lncome stood at

12,705 crore. (Xher lncome increased by 2.07% to t 1,113 crore.

EXPENSES

The Bank’s Total Expens€s grew by 5.85% (y-o-y) to l1O,O23 crore in Q3, FY16, Operating

Expenses grew by 3.766/” to < 2,174 crore and lnterest Elpehses grew by 6.42% to 17,9C) crorc.

ASSET QUALITY

Gross NPA ofthe Bank stood at l3&934 crore as on December 31, 2015. Fresh slippage during

the quarter was at <1t5O3 crore, The Grors NPA ratio stood at 9.68% as on 315t Dec, 2015,

while the Net lilPA ratio stood at 5.67%. Gross PA of ove6eas businEs was 4.89 % in q3,

FYIS while net NPA was 2.75%.

Total Restructured standard Assets of the Bank decreased from 122,930 crore as on

September 30, 2015 to I 17,135 crore as on December 31, 2015.

PROVISIONS ANO CONTINGENCIES

Proviilons and Contingencies (excluding tax prorisions) made by the Bank stood at 16,164

sore in Q3, FY16 versus I 1,262 crore in Q3, FY15. Provisions against “NpAs/ Bad Debts

written off” stood at I 6,474 crote in Q3, FY16. The provision for Q3 FY 16 (excluding one

timers) amounts to < 3,708 crore (comparable to Q3 FY 15 – < 1,150 crore).

,\ 2

Provision CoyeraSe Ratio (PCR) ofthe Bank was at 52.7096 as on

Bank’s Tax Provision was at (-) t 1,118 crore due to write back.

PROFIT

The Bank’s Operating Profit was i1,704 crore in Q3, FY16 as against 12,339 crore in Q3, FY15.

Its Net Profit for Q3, FY16 stood at (-) t 3,:t42 crore.

While the Bank does not provide any forward guidance, the management is confident that the

Bank will make profit in Q4 FY16 and expects to provide reasonable return on clpital in FY17.

CAPITAL ADEQUACY

The CRAR (Basel lll) was at 12.18% as on December 31, 2015. Out of this, the share of Tier 1

capital was 9.57% and that of CET l Capital was 9.04%. Based on existing position of capital

including CET1, the mana8ement has advised the Government that the Sank does not currently

require additional support by way of subscription to equity capital.

KEY FINANCIAT RATIOS

The Bank’s Net Worth stood at < 35,579 crore as on Oecember 31, 2015-

The Bank’s Bookvalue per Share stood at I 154.41as on December 31, 2015.

December 31, 2015.

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