Money & Banking

Our Bureau | Mumbai, May 13 | Updated on: May 13, 2022

Sharp rise in interest income lifts profitability

Mumbai, May 13

Bank of Baroda has reported a standalone net profit of Rs 1,778.77 crore for the fourth quarter of 2021-22 as against a net loss of Rs 1,046.5 crore a year ago.

However, on a sequential basis, the lender’s net profit fell 19 per cent from Rs 2,197.03 crore in the third quarter of last fiscal.

Its net profit for the full fiscal 2021-22 surged to Rs 7,272.28 crore from just Rs 828.92 crore in 2020-21.

The bank’s profitability came on the back of a sharp rise in interest income.

For the quarter ended March 31, 2022, net interest income grew 21.2 per cent to Rs 8,612 crore from Rs 7,107 crore a year ago.

Global net interest margin declined to 3.08 per cent in the quarter ended March 31, 2022 compared to 3.13 per cent in the December 2021 quarter. Global NIM was at 2.72 per cent in the fourth quarter of 2020-21.

Sanjiv Chadha, Managing Director and CEO, Bank of Baroda said profitability has been from all round improvement in most metrics.

On the marginal decline in NIM on a sequential basis, he said that there was a slight overestimation of NIM by 10 basis points due to certain recoveries in the December 31, 2021 quarter. “There is no decline in NIM. It remains consistent on an adjusted basis in line with what we said in December,” he told reporters on Friday.

Non-interest income, however, fell 72.3 per cent year-on-year to Rs 2,522 crore, primarily due to a fall in other non-interest income.

Total provisions increased 5.1 per cent to Rs 3,736 crore in the January to March 2022 quarter, from Rs 3,555 crore in the fourth quarter of 2020-21.

Asset quality improves

Gross non-performing assets stood at Rs 54,059.39 crore as on March 31, 2022, or 6.61 per cent of gross advances, as against 8.87 per cent as on March 31, 2021.

Net NPAs also declined to 1.72 per cent of net advances as on March 31, 2022, as compared to 3.09 per cent as on March 31, 2021.

Provision Coverage Ratio of the bank stood at 88.71 per cent including technical write off of accounts and 75.28 per cent excluding technical write off of accounts in the fourth quarter of 2021-22. Slippages for the year was contained at 1.61 per cent.

Chadha said the bank is adequately capitalised and is not looking to raise capital as of now.

The bank’s CRAR improved to 15.98 per cent in March 22 from 14.99 per cent in March 2021.

The Board of Directors have recommended a dividend of Rs 1.20 per equity share (60 per cent) for the year ended March 31 2022, subject to necessary approvals.

Published on May 13, 2022