Public sector lender Bank of Baroda (BoB) posted a 20.4 per cent rise in net profit for the quarter ended March on the back of a steady performance of its core operations. A one-time gain of Rs 81.45 crore through sale of its stake in UTI AMC and UTI Trustee also helped the bank to increase its profit to Rs 906.28 crore from Rs 752.69 crore in the year-ago period.
Net interest income grew 19 per cent to Rs 1,745 crore, while income from treasury operations came down to Rs 206 crore from Rs 301 crore during the period under review. The state-run bank, which has not seen mark-to-market losses in its bond portfolio despite hardening yields, expects no such losses going ahead.
“The modified duration of our available-for-sale portfolio was 2.18 years as on March 31. Even if yields harden to 8.5 per cent, we will be able to absorb that, so no provisions are required for mark-to-market losses,” said Chairman and Managing Director MD Mallya. The bank also benefited from a write-back in provisions of Rs 200 crore during the year.
The fourth quarter saw healthy growth in the bank’s loan portfolio, as more than 50 per cent of the total loan disbursal of Rs 32,000 crore for 2009-10, took place in the last quarter.
Overall, there was a fall of 10.16 per cent in non-interest income during the March quarter at Rs 767 crore, compared with Rs 853 crore during the same period of the previous year.
Net interest margin (NIM) from domestic operations improved sequentially to 3.5 per cent in the fourth quarter, compared with 3.4 per cent in the third quarter on the back of a drop of 87 basis points in domestic cost of funds.
The bank would aim for sustaining the 3.5 per cent NIM for 2010-11, Mallya said. For 2009-10, its NIM was 2.74 per cent.