BoB net up 4% at Rs 163.32 crore

Bank of Baroda (BoB) has posted a marginal 4.07 per cent rise in net profit at Rs 163.32 crore for the quarter ended June 30, 2006 against Rs 156.94 crore in April-June 2005 owing to impact of higher provision for taxes and dip in income from treasury operations.

Faced with rising cost of resources, the bank will hike its prime lending rate (PLR), home loan rates in the first week of August. At present, its PLR is 11 per cent.

Total income for the reporting quarter rose to Rs 2,297.62 crore from Rs 1,882.01 crore a year ago. The interest earned on advances grew by robust 42.2 per cent at Rs 1,189.41 crore as against Rs 836.33 crore.

The income on investments declined to Rs 698.46 crore from Rs 750.57 crore in Q1 of 2005-06. The treasury income impacted the net profit.

The interest expenditure grew by 24.4 per cent to Rs 1,137.77 crore. The tax provisions more than doubled to Rs 87.11 crore from Rs 41.53 crore, chairman and managing director Anil K Khandelwal said.

The public sector bank's deposits grew by 23.09 per cent to Rs 99,778.40 crore. The cost of deposits rose to 4.41 per cent from 4.24 per cent. The advances moved to Rs 61,379 crore from Rs 44,647 crore a year ago. The yield on advances improved to 8.21 per cent from 7.56 per cent.

The net non-performing assets reduced to 0.92 per cent from 1.47 per cent. The capital adequacy grew to 12.43 per cent from 11.99 per cent at end of June 2005.

The bank plans to raise additional capital of Rs 1,000 crore through combination of hybrid capital including $ 100 million in foreign currency.

As a part of business expansion plans, it is negotiating with Japanese insurance companies to establish life insurance joint venture company.

BOB has set one year time frame to set up life insurance JV.