MUMBAI: The share price of Bank of Baroda plunged by over 10% at close on Tuesday after tanking 15% intra-day as the second largest public sector lender reported a muted set of numbers. Earnings inched up a mere 3.3% to Rs 5,048 crore on-year in the March quarter, that too with the help of lower tax outgoes and a massive valuation gain in its forex trading book. Despite above average loan sales, the lender’s core income declined 6.6% to Rs 11,020 crore.
Though the management led by chief executive Debadatta Chand and chief financial officer Manoj Chayani tried to talk up the shares in their opening remarks at the earnings presser here this afternoon, the damage could not be contained and the counter saw deep cuts to the tune of 10.3% to close at Rs 223.65 on the BSE.
The muted bottom line was helped by a steep 20.1% decline in taxes to Rs 1,533 crore from Rs 1,745 crore in the year-ago period. Similarly, the provisions for bad loans also declined 12.7% to Rs 1,297 crore, taking the total provisions and contingencies, lower by 19.2% to Rs 1,552 crore.
During the quarter, the bank's total income increased to Rs 35,852 crore, from Rs 33,775 crore a year ago of which the interest income grew to Rs 30,642 crore, from Rs 29,583 crore but the core net interest income (NII) declined 6.6% to Rs 11,020 crore, from Rs 11,793 crore in the same period a year ago, Chayani said.
Other income was the biggest contributor to the bottom line as it soared 24.3% to Rs 5,210 crore boosted by a doubling of the treasury income to over Rs 1570 crore from Rs 740 crore a year ago and a Rs 364 crore valuation gains in the forex book as against a Rs 37 crore net loss a year ago.
With deposit prices still averaging 7.3%, its margins came down to 2.86% from 3.27% on-year and from 2.94% sequentially.
Advances rose a bit more than the guidance of 11-13% to 13.7% and Chand refused to offer a guidance given the falling interest rate regime and said he expects to do so for both loans and deposits only in the second half of the year.
Domestic deposits printed in at 9.3% to Rs 12.42 trillion, while domestic advances clipped at Rs 13.7% to Rs 10.21 trillion. Chand expects both the numbers to trend down in the first half of the current fiscal and close the current fiscal at 12-14% and 9-11%.
On the asset quality front, gross non-performing assets moderated to 2.26% from 2.92% and net NPAs came down to 0.58% of net advances from 0.68% a year ago, which Chand said are the lowest numbers in the past 13 years. This has helped the bank improve the provision coverage ratio to 93.29.
For the full financial year, the bank reported a 10% increase in standalone net profit at Rs 19,581 crore from Rs 17,789 crore in the previous year on a total income of Rs 1,38,089 crore, up from Rs 1,27,101 crore a year ago.