MUMBAI: Bank of Baroda, the amalgamated entity, posted a net profit of Rs 710 core in the first quarter of the current fiscal year against a net loss of Rs 49 crore a year ago. Vijaya and Dena Bank were effectively merged with BoB from April 1, and the first quarter results shows the combined numbers of all three.
Announcing the results, the bank said that a common organisation structure has been put in place for the amalgamated bank, with synergy and benefit realised from a reduction in common administrative offices. The number of administrative offices have come down to 119 from 153, after it closed down 32 offices. Around 2,600 employees have been redeployed in outbound sales functions and branch operations and branch sales.
The bank also has to decide on branch rationisation and is looking at around 200 to 250 branches that are within 300 metres of each other, and 1,400 to 1,500 branches close to each other. Whether the bank closes of retains them will depend on location, business and other parameters, said managing director P S Jayakumar.
Net interest income of the bank rose 2.6 per cent year-on-year to `6,496 crore, but net interest margin dropped to 2.73 per cent from 2.78 per cent in the previous quarter. This, Jayakumar said, was due to high cost bulk deposits of Vijaya Bank. BoB had also reduced the deposit rates by 0.25 per cent recently, and the same is expected to improve margins.
“We are anticipating a lower interest rate regime,” said Jayakumar commenting on the reason for the cut in deposit rates. Consequently, lending rates would also see a reduction, he said, adding that a lower interest rate regime could spur growth.
Biocon Q1 net profit rises 72% to Rs 206.3 cr
Biocon on Thursday reported a 72.34 per cent rise in consolidated net profit to Rs 206.3 crore for the quarter ended on June 30, 2019, mainly on account of robust growth of biologics and small molecules segments. The company had posted a net profit of Rs 119.7 crore for the corresponding period of the previous fiscal. Consolidated total income of the company stood at Rs 1,490 crore for the quarter. “Robust performance by our biologics and small molecules business segments fuelled the 25 per cent growth in Q1FY20 revenue,” Biocon Chairperson and MD Kiran Mazumdar-Shaw said.