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Bank of Baroda posts Q4 net loss of Rs 1,047 crore on shift to lower tax rate regime

The bank booked a profit before tax (PBT) of Rs 2,680 crore during the quarter against a loss of Rs 1,723 crore in the year-ago period. PBT stood at Rs 5,556 crore for FY21 against a loss of Rs 1,802 crore in FY20.

By: ENS Economic Bureau | New Delhi |
May 30, 2021 3:00:08 am
For the full fiscal, net profit grew 52 per cent to Rs 829 crore from Rs 546 crore in FY20.

Bank of Baroda reported a standalone net loss of Rs 1,047 crore in the quarter ended March 2021, as it shifted to a new tax regime. The state-run lender had reported a standalone profit-after-tax of Rs 507 crore in the year-ago period.

For the full fiscal, net profit grew 52 per cent to Rs 829 crore from Rs 546 crore in FY20.

The bank booked a profit before tax (PBT) of Rs 2,680 crore during the quarter against a loss of Rs 1,723 crore in the year-ago period. PBT stood at Rs 5,556 crore for FY21 against a loss of Rs 1,802 crore in FY20.

“Given the fact that we had a PBT of Rs 5,556 crore (in FY21), we thought this is the right time to transit to a lower tax rate regime. But the movement to the new tax regime means we have to make a DTA (Deferred Tax Assets) adjustment, which was of the order of Rs 3,500 crore for the full year. Because of that, we are reporting an accounting loss of around Rs 1,000 crore in Q4 FY21.

“But for the DTA impact, we would have a profit after tax of Rs 2,200 crore in the last quarter,” the bank’s managing director and CEO, Sanjiv Chadha, told reporters.

Net interest income (NII) rose 4.54 per cent to Rs 7,107 crore against Rs 6,798 crore a year ago. Global net interest margin (NIM) rose to 2.72 per cent from 2.63 per cent in Q4FY20 led by margin expansion in international business to 1.57 per cent in Q4 FY21.

Domestic NIM declined to 2.73 per cent as against 2.76 per cent in the fourth quarter of FY20.

Gross NPA ratio fell to 8.87 per cent as against 9.40 per cent and net NPA ratio to 3.09 per cent from 3.13 per cent. Fresh slippages during the quarter stood at Rs 11,656 crore in the fourth quarter of FY21.

The lender’s slippage ratio declined to 2.71 per cent in FY21 from 2.97 per cent in FY20. Credit cost decreased to 1.68 per cent in FY21 from 2.35 per cent in FY20.

“Slippages will come down very significantly during the current year (FY22) despite the second wave,” Chadha said.

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