BoB grapples with staff, infotech costs

The bank, however, has no plans to increase lending rates for now.

Bank of Baroda (BoB) has now begun to feel the pinch of escalation in staff costs and spending on technology and branding. The bank, however, has no plans to increase the lending rates for now.

"The margins have been under pressure throughout the current financial year. The rent for the premises has gone up substantially, and we are taking effort to reduce the controllable costs through austerity measures," BoB Chairman Anil Khandelwal told reporters today.

"There would not be any knee-jerk reaction (hike in lending rate). We are closely monitoring the interest rate trends," Khandelwal said. The bank's net interest margin is around 3.3 per cent.

For the December 2005 quarter, BoB posted 190.9 per cent rise in its net profit to Rs 202.18 crore from Rs 69.50 crore in the same period of the last financial.

Total income rose 9.11 per cent to Rs 2,407.66 crore from Rs 1,876.68 crore in October-December 2004. The net interest income rose to Rs 815.48 crore from Rs 728.28 crore in the same period a year ago.

BoB recently inducted 40 MBAs at senior levels, and the board has also approved strategic plans for organisation-wide reforms/interventions in human resources.

Besides, it is currently carrying out a high-profile campaign with its brand ambassador Rahul Dravid, the captain of the national cricket team.