Bank of Baroda Net Profit Up by 60.4% to Rs 634 crore in Q2, FY10

Mumbai, October 28, 2009: Bank of Baroda has announced its reviewed results for the second quarter of 2009-10 (Q2, FY10) and for the half year ended September 30, 2009 (H1, FY10), following the approval of its Board of Directors on October 28, 2009.


The Bank posted Operating Profit of Rs 2,041.53 crore in H1, FY10 reflecting a growth of 28.7% on year-on-year basis (y-o-y). Its Operating Profit for Q2, FY10 at Rs 1,031.59 crore was also healthily up 31.3% (y-o-y). The Net Profit for H1, FY10 and Q2, FY10 grew strongly by 72.2% and 60.4% respectively, to Rs 1,319.56 crore in H1, FY10 and to Rs 634.18 crore in Q2, FY10. The growth in profits was supported by a well balanced growth in Net Interest Income & Other Income and also through a good control over operating expenses.


During H1, FY10, while Interest Income of the Bank grew by 19.3% to Rs 8,167.53 crore, its Interest Earned on Advances grew at a pace of 20.9% (to Rs 6,137.94 cr) despite a significant slowdown in credit growth for the banking system. The Bank’s Interest Income stood at Rs 4,135.42 crore in Q2, FY10 and within this, the Interest Earned on Advances was Rs 3,101.35 crore. However, the Bank’s prudent management of deposit costs enabled it to expand its Net Interest Income by 22.5% (to Rs 1,388.60 crore) in Q2, FY10 and by 18.4% (to Rs 2,593.30 crore) in H1, FY10. Despite a subdued growth in credit, the Bank’s Net Interest Margin (as % of interest earning assets) improved from 2.37% in Q1, FY10 to 2.63% in Q2, FY10 in global operations. Moreover, the Bank’s Net Interest Margin in domestic operations improved from 2.57% in Q1, FY10 to 2.89% in Q2, FY10.


During H1, FY10, the Bank’s Interest Expended (at Rs 5,574.23 crore) reflected a modest growth of 19.8% on account of timely repricing of deposits and a reduction of dependence on bulk deposits. Its Employee Cost, however, grew at 13.7% in line with the past trend. Total Expenses grew by 18.8% and reached the level of Rs 7,424.37 crore in H1, FY10. During Q2, FY10, the Bank’s Interest Expended, Employee Cost and Total Expenses stood at Rs 2,746.82 crore, Rs 595.75 crore and Rs 3,699.16 crore respectively.

Provisions and Contingencies

Provisions and Contingencies (excluding tax provisions) for the Bank have sharply declined by 80.8% to Rs 77.38 crore in H1, FY10 due to a sizeable “write-back” in depreciation provision on investment portfolio, especially from the foreign operations. The Bank’s Loan Loss Coverage Ratio stood at the healthy level of 79.29% at end-September 2009. However, the Bank’s Provisions for Tax increased 54.4% during H1, FY10 to Rs 644.59 crore in line with the growth of its Operating Profit. During Q2, FY10, the Bank’s Tax Provisions increased by 34.9%.

Business Expansion

On a y-o-y basis, Total (Global) Business of the Bank increased by 27.3% to Rs 3,56,274 crore in H1, FY10 from Rs 2,79,820 crore in H1, FY09. While Global Deposits increased by 28.7% to Rs 2,07,355 crore as on end-September, 2009 from Rs 1,61,069 crore as on end-September 2008, Global Advances increased by 25.4% to Rs 1,48,919 crore at end-September, 2009 from Rs 1,18,751 crore at end-September, 2008.

The Bank’s Retail Credit increased decently by 20.6% (Y-o-Y) in H1, FY10 to Rs 21,403 crore and now forms 19.22% of the Bank’s Gross Domestic Credit. On year-to-year basis, while the Bank’s Credit to SMEs expanded by 31.4% to Rs 16,666 crore, its Farm Credit was up by 27.0% and attained the level of Rs 18,575 crore in H1, FY10.


(This is a press release from Bank of Baroda)