Bank of Baroda (BoB) has posted a net profit Rs 710 crore for the quarter ended June 2019 as compared to a loss of Rs 49 crore in the year-ago period after the merger of two other PSU banks — Vijaya Bank and Dena Bank — with BoB last year.
Net interest income, or the difference between interest earned on loans and that paid on deposits, increased 2.61 per cent to Rs 6,496 crore from Rs 6331 crore in the corresponding period of last year.
Gross non-performing assets (NPAs), as a percentage of total advances, were at 10.28 per cent in the June quarter as against 10.02 per cent on March 31, 2019. In absolute numbers, gross NPAs were Rs 69,714 crore as of June 2019 compared to Rs 69,924 crore as on March 31, 2019.
“Fresh slippages for the quarter were at Rs 5,583 crore. Provision for NPAs was at Rs 3,168 crore for the quarter. The exposure in accounts under NCLT 1 list was Rs 5,820 crore and NCLT 2 list was Rs 6,957 crore as on June 30, 2019,” the bank said.
On the bank’s merger process, it said, “the bank’s transformation journey continues with standardization of processes/ functions of erstwhile Dena and Vijaya Bank to the Bank of Baroda platform. Treasury has already been merged. Corporate banking is being centralised for eDB and eVB so that customers can be offered broader range of products and services.”
“Shared services centre, the first of its kind in public sector banking space is being leveraged to upscale or migrate back office functions of the erstwhile Vijaya and Dena Bank branches. This has its own benefits in terms of economies of scale and scope. This will also ensure common underwriting standards across all branches. With migration of back office processes, employees will be in a position to spend more time on micro marketing initiatives at the branch level,” the Bank of Baroda said.
Domestic deposits of the bank stood at Rs 785,861 crore as of June 2019 up by 8.87 per cent from Rs 721,885 crore in June 2018. Domestic advances grew by 5.18 per cent to Rs 533,054 crore as of June 2019 from Rs 506,779 crore as of June 2018.
“The increase was led by retail loans which grew by 20.54 per cent,” the bank said. Net interest margin (NIM) declined to 2.62 per cent in June 2019 from 2.69 per cent in June 2018.