Bank of Baroda posts Rs 864 crore loss on higher provisioning

Bank of Baroda (BoB), the third-largest public sector lender, on Monday posted a net loss of Rs 864 crore for the June quarter because of extra provisioning of Rs 1,811 crore on standard accounts. Total provisions in the quarter rose 72% year-on-year (y-o-y) to Rs 5,628 crore. The operating profit remained flat at Rs 4,320 crore, compared with Rs 4,276 crore in the comparable quarter last year.

The lender reported a sharp decline in the loan book under moratorium. Total 21% of the loan book stood under moratorium in the second phase, as against 65% in the first phase.

Sanjiv Chadha, managing director and chief executive officer, said the bank had taken a conservative approach in counting loans under moratorium. “Even if a borrower has not paid one out of three months, we have counted it under moratorium,” he said. The Reserve Bank of India had allowed lenders to grant moratorium relief to borrowers for three months from March 1 in the first phase. The regulator extended the moratorium period by three months till August in the second phase.

The net interest income (NII) improved 5% y-o-y to Rs 6,816 crore. The net interest margin (NIM), however, declined 7 basis points (bps) in the June quarter to 2.55%, compared to 2.62% in the same quarter last year.


Gross non-performing assets (NPAs) remained almost at the same level sequentially at 9.39%, compared to 9.4% in the March quarter. However, net NPAs in the June quarter came down 30 bps sequentially to 2.83%. The provision coverage ratio (PCR) in the quarter under review improved to 83.3%, compared to 77.34% in the same quarter last year.

Chadha said half of Rs 1,811-crore provisioning was done on account of a government-guaranteed loan. “The impact of special provisioning should be neutralised in the current financial year.” The bank has also decided to provide Rs 1,261 crore on account of fraud, to be spread in four quarters. The slippage ratio fell to 1.64% in the June quarter, compared with 3.56% in the same quarter last year.

Advances grew 8.6% y-o-y in Q1 to Rs 6.87 lakh crore, with organic retail loans growing at 13.5% y-o-y. Total deposits stood at Rs 9.34 lakh crore, an increase of 4.35% y-o-y. Domestic current account savings account (CASA) ratio increased 294 bps y-o-y to 39.49%.

Other income, which includes core fee income, stood at Rs 1,816 crore during the quarter under review, compared with Rs 1,918 crore in the year-ago period.

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