State-run lender Bank of Baroda today reported a whopping 68.1 per cent fall in net profit at Rs 334 crore in the December quarter on account of higher provisioning for non-performing assets and taxes.
The city-based bank's profit after tax stood at Rs 1,048 crore in the same period last year.
"The decline in net profit was mainly contributed by increased provisions for NPAs at Rs 331 crore and higher tax provision of Rs 375 crore during the quarter," bank executive director, Ranjan Dhawan, told reporters here today.
The bank had to make higher provisioning on taxes as the Dubai government levied retrospective tax on its UAE branch, he added.
"There was an opening of the tax assessments from 2007 onwards and the Dubai tax authorities have decided to levy tax retrospectively on us. So, we have made this one-off provision this year," Dhawan explained.
Net interest margin fell to 2.92 per cent from 2.95 per cent.
Reacting to the poor set of numbers, shares of BoB tanked over 11 per cent to Rs 193.35 on the BSE whose main gauge Sensex shed 499 points on profit booking and negative global cues.
The bank also saw its asset quality worsening in the period due to the stresses in the economic environment and the ongoing structural issues.
Gross non-performing assets (NPAs) stood at 3.85 per cent as against 3.32 per cent while net NPAs was at 2.11 per cent as against 1.88 per cent.
