Fourth quarter and full year results from Bank of Baroda (BoB) underlines the margin pressures being faced by banks, especially PSU banks. However, BoB managed to substantially improve its bottom line for the last quarter through higher treasury income and lower provisioning.
For the quarter ended 31 March 2006, BoB has reported a net profit of Rs 208.8 crore - an increase of 106.65 per cent over Rs 101.04 crore reported for the previous year's comparative quarter. Total income increased 16.24 per cent to Rs 2,358.45 crore from Rs 2,028.95 crore for the previous year quarter.
Net interest income declined marginally by 1.2 per cent during the quarter. Income from treasury operations and other income increased 50.53 per cent to Rs 401.12 crore from Rs 266.48 crore.
Operating profits declined 4.96 per cent to Rs 603.46 crore from Rs 634.98 crore for the previous year quarter. Core operating expenses increased 30.42 per cent while other operating expenses rose substantially by 69.04 per cent. Staff costs for the quarter were higher by 11.44 per cent.
BoB managed to double its bottom line for the quarter mostly through a substantial reduction in provisioning for doubtful debts and other provisions. Total provisioning for the quarter declined 35.66 per cent to Rs 341.1 crore from Rs 530.16 crore for the previous year quarter.
For the full year 2005-06, standalone net profits increased 22.18 per cent to Rs 826.96 crore, or Rs 27.1 per share, from Rs 676.84 crore, or Rs 23.08 per share for the previous year. Total income increased 7.18 per cent to Rs 8,291.69 crore from Rs 7,736.24 crore for the previous year.
Net interest income for the full year increased 8.24 per cent. Full year operating profits declined 11.73 per cent to Rs 2,031.85 crore from Rs 2,301.91 crore. Despite this, the bank managed to protect its bottom line as provisions fell sharply by 36.25 per cent to Rs 917.25 crore from Rs 1,438.79 crore.
Consolidated profits for the full year 2005-06 increased 20.62 per cent to Rs 904.69 crore from Rs 750.02 crore for the previous year. Total income rose 7.79 per cent to Rs 8,661.37 crore from Rs 8.,035.44 crore.