Bank of Baroda Announces It’s Financial Results For The Quarter (Q3FY17) And Nine Months Ended, 31st December, 2016

MUMBAI, 10th February, 2017 (GPN) : BANK OF BARODA ANNOUNCES FINANCIAL RESULTS FOR Q3 FY 2017AND 9M (Apr-Dec 2016)

Highlights (Standalone Basis)

Operating profit of INR 2,595crore, up by 52.29% Y-o-Y.
Profit after Tax of INR 253crore.
Net Interest Income (NII) up by 15.86% Y-o-Y.
Non-interest income up by 59.48% Y-o-Y.
Gross NPA at INR 42,642 crore during the quarter end was below June 2016 and September 2016 levels.GNPA ratio at 11.40%.
Net NPA at INR 19,006 crore also down on Q-o-Q basis by 1.73%.Net NPA ratio at 5.43%.
Provision Coverage Ratio (PCR) improved to 64.50%as at December 31, 2016from 62.95%as at September 30, 2016 and 60.17% &60.09% as at June 30, 2016 and March 31, 2016 respectively.
Domestic CASA grew by 43.19% (on Y-o-Y basis) and 27.94% (on Q-o-Q basis) driven by growth in both Current accounts and Savings Bank deposit.
Domestic CASA as a percentage of domestic deposits stood at40.46% as compared to 29.97% as at December 31, 2015 and 34.23% as at September 30, 2016. On average basis, Domestic CASA percentage stood at 37.08% as at December 31, 2016.
Continued focus on recovery and collections, portfolio rebalancing in international book and improving profitability.
CRAR (Basel III) stoodat 12.55%with Tier I ratio of 10.04% and CET-1 of9.28%, excluding profits of 9 months period ended December 31, 2016.

Bank of Baroda announced its unaudited reviewed results for the Q3 of FY 2017, following the approval of its Board of Directors on February 10, 2017.

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BUSINESS

The Bank’s Total Business stood at INR9,39,819 crore as at December 31, 2016 down from INR 9,73,959 crore as at December 31, 2015 on account of planned and structured rundown of assets and liabilities.

Total Deposits stood at INR5,89,859 crore as at December 31, 2016 as against INR 5,89,687crore as at December 31, 2015. Corresponding figures for Average Deposits (based on daily averages) were INR5,72,946 crore and INR 5,87,116crore.

During the quarter, CASA deposits showed robust growth driven by deposit of cash after demonetization. The quarter also saw repayment of FCNR (B) deposits of over INR11,500 Crore mobilised during Q3 FY 2013-14.

Percentage of CASA deposits to total domestic deposits as at December 31, 2016 was 40.46% as against 34.23% as at September 30,2016.

Total Advances (Net) were INR3,49,960crore as at December 31, 2016 against INR 3,84,272crore as at December 31, 2015. The quarter saw a turnaround in domestic credit growth and domestic advances (net) were INR 2,50,033 crore as at December 31,2016 against INR 2,46,494 croreas at September 30,2016.

The Bank’s International Business continued to witness rebalancing of portfolio. As at December 31, 2016, the International Operations contributed 26.78% to the Bank’s Total Business against 29.34% as at September 30, 2016.

INCOME

The Bank’s Total Income stood at INR12,181crore in Q3 FY17. Net Interest Income stood at INR 3,134crore up by 15.86% y-o-y. Other Income increased by59.48% on y-o-y basis to INR 1,775crore, driven by improved core fee income as well as trading gains.

EXPENSES

The Bank’s Total Expenses declined by 4.36% (y-o-y basis) to INR9,586crore in Q3 FY 17 driven primarily by reduction in cost of deposits. The interest expenses reduced by 8.05% (y-o-y basis) from INR7,909crore as at December 31, 2015 to INR7,272 crore as at December 31, 2016.

PROFIT

Prudent management of assets and liabilities as detailed above has led to improvement in profitability. The Bank’s Operating Profit was INR 2,595crore in Q3 FY17 (as against INR1,704 crore in Q3 FY 16).

The Bank posted a Net Profit of INR 253crore for Q3 FY 17.

NET INTEREST MARGIN

The Net Interest Margin (NIM) for Domestic operations stood at 2.49% while global margin stoodat2.06%.

ASSET QUALITY

Gross NPA (GNPA) of the Bank marginally reduced to INR 42,642 crore as on December 31, 2016 as compared to INR 42,949 crore as at September 30, 2016. The Gross NPA ratio stood at 11.40% as compared to 11.35% as at September 30, 2016. The corresponding figures of the Net NPA ratio stood at 5.43% and 5.46% respectively.
Total Restructured Standard Assets of the Bank were INR14,059 crore as on December 31, 2016. The total Stressed Assets (GNPA + Restructured Standard Assets) were 15.16% of the Gross Advances.

PROVISIONS AND CONTINGENCIES

Provisions and Contingencies (excluding tax provisions) made by the Bank stood at INR2,079 crore in Q3 FY17. Provisions against NPAs/ Bad Debts written off stood at INR1,638 crore in Q3 FY17. Provision for tax was INR 263 crore.

The ProvisionCoverage Ratio (PCR) improved to64.50% as at December 31, 2016 as compared to 62.95% last quarterand60.17% in June 2016 and 60.09% in March 16

CAPITAL ADEQUACY

The CRAR on standalone basis (Basel III) is 12.55% as at December 31, 2016. Out of this, the Tier 1 capital was 10.04% and CET 1 Capital was 9.28%.

TRANSFORMATION OF THE BANK

The Bank continues to make progress on the execution of Project Navoday – a comprehensive business transformation that seeks to deliver a differentiated world-class customer experience enabled by an energised and engaged team and driven by technology.

The Bank has re-organizedthe Corporate Banking vertical with various initiatives which include: Centralized Processing Centre (CPC) being fully operational for credit processing, Relationship Manager (RM) coverage expanded pan-India across Large Corporate and Emerging Large Corporate branches, Sales Management Process and Credit Processes institutionalized and being monitored through the Lead Tracker Tool, and Pricing Task Force being set up for pricing optimisation.

The Bank is focusing on expanding the mortgage and car loan portfolio,aided by Analytics.

Strategic partnerships with MSME as well as with key players in the agricultural sector are being forged for building the rural banking ecosystem across Agro Processing, Warehouse Financing, Market Intelligence, and Minor Irrigation.The Bank is also putting in place partnerships with E-Commerce, M-Commerce and Fintech firms to augment the growth of the MSME and Retail business.

The Bank has also started adopting villages and converting them to a cashless ecosystem through education and promotion of digital products.

The Trade Finance Back Office for issuance of Import LCs, Advance Remittance against Imports and Clean Remittance is now operational with enhanced control.

The Bank has also instituted the Sayajirao Gaekwad Fellowship Programmeto encourage young professionals with entrepreneurship / start-up ideas to gain a one year experience of the financial and banking industry world and also obtain organisational support in developing their start up idea.

The Bank continues to focus on increasing employee engagement throughProject Anubhuti (encompassing “Zero Hour”, “Employee of the Month” and other initiatives), which has been well-received.

The Bank’s transformation is aimed at improved market share, quality growth of balance sheet, diversified portfolio, enhanced fee income, strengthened internal controls and compliance, and on the back of implementing cutting-edge digital technology solutions.

About the Author

Sachin Murdeshwar
Sachin Murdeshwar is a Sr.Journalist and Columnist in several Mainline Newspapers and Portals.He is an ardent traveller and likes to explore destinations to the core.