Mumbai: State-run lender Bank of Baroda on Friday reported a 5.46 percent fall in its net profit at Rs 1,104.22 crore in the second quarter ended September 30 due to higher tax provisions.
The bank had reported a net profit of Rs 1,168.1 crore in the same quarter last fiscal.
"The decline in profit is contributed by higher tax provisions. Last year, our tax provision stood at Rs 80 crore whereas this year it was Rs 410 crore in the reporting period, as we have not availed any of the concessions that are available on written-off accounts during the first two quarters," executive director P Srinivas told reporters here.
Its provisions (other than tax) and contingencies also increased to Rs 888.04 crore from 860.83 crore, on account of higher provisions against investment depreciation on the equity portfolio.
Provisions against non-performing assets/write-offs stood at Rs 584.25 crore in the quarter. Provision coverage ratio stood at 65.39 per cent, much below the RBI provisions.
Total income grew 13.1 per cent to Rs 11,817.32 crore supported by a 17.5 per cent rise in net interest income of Rs 3,401.11 crore on the back of efficient management of deposit franchise and loan-book, while total advances rose 13.5 percent to Rs 3,85,766 crore and deposits increased 16.9 percent to Rs 5,66,926 crore.
However, the city-based lender reported a spike in its domestic net interest margin (NIM) to 3.02 percent from 2.85 per cent. Srinivas attributed the increase in NIM to better management of liabilities and assets.
The gross NPAs worsened to 3.32 percent in the quarter from 3.15 percent last year, while net NPAs improved to 1.74 percent from 1.86 percent.
The bank saw fewer amount by way of fresh slippages at Rs 1,758 crore, which was Rs 1,863 crore a year ago, with domestic slippages at Rs 1,600 crore and international at Rs 155 crore.
Globally, bank restructured Rs 1,175 crore of advances in the quarter and has a pipeline of Rs 1,100-1,200 crore. Total recovery stood at Rs 278 crore and upgrades stood at Rs 235 crore. The bank wrote off Rs 368 crore of loans during the period.
Commenting on the results, Angel Brokings' Vaibhav Agrawal said, "effective tax rate was higher at 27.11 percent in the period compared to 6.4 percent in the year-ago period, which resulted in poor net income."
Srinivas said the bank has sought Rs 500 crore capital infusion from the government this year.
The BoB counter rose 1.65 percent to Rs 968.45 on the BSE, whose benchmark gauge declined 0.17 percent on profit booking.
