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State run lender Bank of Baroda has reported 10% year-on-year decline in its net profit to Rs 1,168 crore for the second quarter of the current financial year mainly due to higher provisioning and higher expenses.
Provisions were up 33% on year to Rs 860 crore while operating expenses also went up by 33% to Rs 1,744 crore. The bank's management said the bank is making provisions progressively for wage revision.
According to SS Mundra, chairman and managing director of Bank of Baroda, the worst mat be over so far as asset quality is concerned and performance would stabilise over the next few years.
"Slippages have shown a downward trend with Rs 1,600 crore slippage in Q2, which is lower that what it was in Q1 (Rs 1,800 crore)," Mundra said.
The bank expected to improve its net interest margin going forward as it is cutting down high cost bulk deposits. In Q2, NIM was 2.85% as compared to 2.84% of the previous quarter.
