market

Bank of Baroda profit surges on strong loan growth, fall in provisions


(BoB) reported a 79% jump in net profit on the back of strong loan growth and fall in provisions as asset quality improved.

Net profit increased to Rs 2,168 crore in the quarter ended June 2022 from Rs 1,209 crore helped by a 12% rise in net interest income (NII) to Rs 8,838 crore as both corporate as well as retail loans grew.

The bank’s loan book increased 18% to Rs 8.39 lakh crore led by a 23% growth in retail loans and also a 17% increase in corporate loans.

CEO Sanjiv Chadha said demand from sectors like cement, steel and roads have been strong together with demand for international loans from Indian companies abroad.

“Since last year when corporate margins were low we explored high rated sydicated loans like external commercial borrowings from

Indian companies abroad where margins were good and we have seen growth in that segment,” he said.

Asset quality improved as net NPA ratio fell to 1.58% in June 2022 from 3.03% a year ago. Total provisions fell 58% to Rs 1685 crore making up for a Rs 1168 crore hit the bank had to take on treasury income due to a fall in bond prices during the quarter.

Other income fell 59% to Rs 1182 crore largely due to the hit the bank took on its treasury income even as fee income rose 16% year on year.

Credit costs decreased to 0.75% of loans in the first quarter much below the 1.25% to 1.50% outlook given by the bank.

Chadha said though there are headwinds in terms of rising rates, loan growth is expected to remain strong with BoB growing at or higher than the 12% growth expected for the industry.



READ SOURCE

This website uses cookies. By continuing to use this site, you accept our use of cookies.