by NR INDRAN / INT
Net Profit up 17.1% to Rs 2,198.93 crore in H1, FY12

Net Profit up 14.4% to Rs 1,166.08 crore in Q2, FY12

Total Business up 22.9% to Rs 5,68,306 crore

Total Income up 36.4% to Rs 15258.42 crore in H1, FY12

Total Income up 36.7% to Rs 7,985.78 crore in Q2, FY12

NII up 24.8% to Rs 4,864.10 crore in H1, FY12

NII up 25.9% to Rs 2,566.91 crore in Q2, FY12

Net NPAs at 0.47% on 30 Sept, 2011

Capital Adequacy Ratio at 12.73% on 30 Sept, 2011

NIM (Domestic) at 3.67% in Q2 & at 3.53% in H1, FY12

NIM (Global) at 3.07% in Q2 & at 2.97% in H1, FY12

ROAA at 1.18% during H1, 2011.12

ROAA at 1.23% during Q2, 2011-12

ROE at 19.60% (annualized) during Apr-Sept, 2011

Bank of Baroda has announced its reviewed results for the second quarter of 2011-12 (Q2, FY12) and for the half year ended September 30, 2011 (H1, FY12), following the approval of its Board of Directors on October 31, 2011.

Profits

Despite steadily deteriorating economic scenario, the Bank’s Operating Profit grew healthily by 24.7% (y-o-y) to Rs 3,971.25 crore in H1, FY12. Its Operating Profit for Q2, FY12 also grew decently by 29.2% (y-o-y) to Rs 2,139.97 crore. The Net Profit for H1, FY12 and Q2, FY12 too grew in line with the guidance given by the Bank, notably, by 17.1% and 14.4% respectively, to Rs 2,198.93 crore in H1, FY12 and to Rs 1,166.08 crore in Q2, FY12. The growth in profits was supported by a relatively stronger growth in Net Interest Income, Core Fee-based Income, and continuation of vigorous control over Total Expenses.

Income

During H1, FY12, while Interest Income of the Bank grew richly by 40.4% to Rs 13,883.21 crore, its  Interest Earned on Advances grew at a pace of 42.6% (to Rs 10,559.58 cr) reflecting the Bank’s continued thrust on lending. The Bank’s Interest Income grew at 40.6% to Rs 7,251.44 crore in Q2, FY12 and within this, the Interest Earned on Advances was up 42.8% to Rs 5,482.35 crore.

The Bank’s efficient loan pricing and prudent management of liabilities enabled it to expand its Net Interest Income by 25.9% (to Rs 2,566.91 crore) in Q2, FY12 and by 24.8% (to Rs 4,864.10 crore) in H1, FY12 despite difficult credit conditions. As a result, the Bank’s Net Interest Margin (as % of interest earning assets) improved from 2.87% in Q1, FY12 to 3.07% in Q2, FY12 in global operations. Moreover, the Bank’s Net Interest Margin in domestic operations improved from 3.39% in Q1, FY12 to 3.67% in Q2, FY12.

Expenditure

During H1, FY12, the Bank’s Interest Expended (at Rs 9,019.11 cr) reflected a strong growth of 50.6% on the back of elevated term deposit rates for around eleven months in the system. However, its Employee Cost, grew at the controlled pace of 4.8%. Factoring in both the effects, its Total Expenses grew by 41.1% and reached the level of Rs 11,287.17 crore in H1, FY12.

During Q2, FY12, the Bank’s Interest Expended, Employee Cost and Total Expenses stood at Rs 4,684.53 crore, Rs 646.61 crore and Rs 5,845.81 crore respectively.

Provisions and Contingencies

Provisions and Contingencies (excluding tax provisions) for the Bank have nearly doubled during H1, FY12 on y-o-y basis to Rs 874.40 crore on account of much higher provisions against investment depreciation as well as NPLs. During Apr-Sept, 11, while the yield on the 10-year GoI benchmark paper hardened by 44 bps, the benchmark stock index (Sensex) lost more than 15.0%.

The Bank’s Loan Loss Coverage Ratio stood at the comfortable level of 67.12% (without technical write-offs) and at 81.97% (with technical write-offs) at end-September 2011. The Bank’s Provisions for Tax increased by just 0.30% during H1, FY12 to Rs 871.91 crore. During Q2, FY12, the Bank’s Tax Provisions increased by 5.7% to Rs 477.54 crore.

Business Expansion

On a y-o-y basis, Total (Global) Business of the Bank increased by 22.9% to Rs 5,68,306  crore in H1, FY12 from Rs 4,62,619 crore in H1, FY11. While Total Deposits increased by 22.1% to Rs 3,29,185 crore as at end-September, 2011 from Rs 2,69,660 crore as at end-September 2010, Total Advances increased by 23.9% to Rs 2,39,120 crore at end-September, 2011 from Rs 1,92,959 crore at end-September, 2010.

The Bank’s Retail Credit increased by a modest 9.9% (Y-o-Y) in H1, FY12 to Rs 29,885 crore (primarily due to the increased cost of borrowings) and formed 17.4% of the Bank’s Gross Domestic Credit. On year-on-year basis, while the Bank’s Credit to SMEs expanded by 28.3% to Rs 30,149 crore, its Farm Credit was up 4.9% and attained the level of Rs 22,619 crore by end-Sept, 2011.

Asset Quality

Gross NPAs of the Bank stood at Rs 3,402.10 crore at end-Sept, 2011 and as “per cent to gross advances” it was at a comfortable level of 1.41%. The Net NPAs (%) too were in line with the expectations at 0.47% (or at Rs 1,118.58 crore). The Cash Recovery (from NPA plus from the written off Accounts) during H1, FY12 stood at the healthy level of Rs 421.55 crore.

Capital Adequacy

The Bank’s Capital Adequacy Ratio was at 12.73% (as per Basel II) as of September 30, 2011 despite a growth of 23.9% in the Bank’s loan book on year. Its Tier 1 too was at the healthy level of 8.82%. Kindly note that these ratios do not reflect the profits earned by the Bank during Apr-Sept, 2011, as per the RBI’s new norms. If added, the Bank’s actual CRAR & Tier 1 would go up sharply by 86 bps.

Overseas Business

Currently, the Bank is present in 25 countries through its 86 offices. During the financial year so far, the Bank has opened a branch in Uganda at Ovino Market on June 2, 2011. The Bank has received an approval in principle from the Russian regulator to set up a subsidiary in Russia. Besides, it has received approvals from the RBI but waiting to receive approvals from the host countries to open offices in various places like UAE, Mauritius, Australia, Qatar, Oman and China.

During H1, FY12 the Bank’s Overseas Operations contributed 27.20% to its Total Business, 20.09% to its Operating Profits and 35.98% to its Core Fee-based Income.

Awards and Accolades

The Bank has received several prestigious awards during the current financial year so far like (1) Best Public Sector Bank by the CNBC-TV18 & MCX, (2) Golden Peacock Award for Excellence in Corporate Governance (received at London), (3) Dainik Bhaskar India Pride Award for 2011, (4) Most Efficient Bank in Kenya, (5) Best Initiatives in Inclusive Banking- FIBC Banking Award, (6) Dun & Bradstreet’s Leading Public Sector Bank in “Global Business Development Category” and (7)  National Award for Performance under SME Business.

Besides, the Bank’s Chairman & Managing Director too received several esteemed awards like (1) Outstanding Financial Professional-2010 by CNBC-TV18 & MCX, (2) Best Banker Award (T. A. Pai Memorial Award) by Karnataka State Open University and (3) Lifetime Achievement Award by Dainik Bhaskar India Pride Awards during the half-year ended September, 2011.

You can contact author @ [email protected]