Bank of Baroda
FY operating profit up by 9%
Bank of Baroda reported a 13% y-o-y increase in net profits at Rs 276.44 crore for the fourth quarter-ended Mar'08. The NII for the quarter declined by 2% to Rs 1028.50 crore and the other income by 24% to Rs 554.63 crore. Further with moderate 1% rise in operating expenses, the operating profit increased by 9% to Rs 814.45 crore.
Performance Highlights
- The global business was up by 24% to Rs 258735 crore as on FY08 with the global deposits up by 22% to Rs 152034 crore and advances up by 28% to Rs 106701 crore.
- Domestic business was up by 24% to Rs 206982 crore with the domestic deposits up by 23% to Rs 122479 crore and domestic advances up by 26% to Rs 84503 crore.
- Domestic CASA share stood at the level of 36%.
- Return on average assets improved from 0.80% to 0.89% y-o-y.
- Book value per share improved to Rs 261.54 as on FY08 compared to Rs 231.59 per share as on FY07.
- Return on equity at 15.07% compared to 12.17% in the corresponding previous period
- Capital adequacy ratio stood at 12.94% with tier I capital at 7.64% for FY08.
- Cost to income ratio declined from 51.30% to 49.21% for the period.
- Gross NPA ratio declined to 1.84% from 2.47% and Net NPA ratio declined to 0.47% from 0.60%. The NPA coverage stands at the level of 74.07%.
- During the year FY08, the cost of deposit in global operation increased from 4.77% to 5.69%. While the yield on advances improved from 8.37% to 9.53%.
- Net interest margin in the global operations stood at 2.90% as on FY08as against 3.05% as on FY07.
- Cash recovery in NPAs during 2007-08 is at 28.14% of the opening gross NPA as against 16.77% during 2006-07.
- Business per branch for FY08 stood at Rs 893 million (Rs 752 million in FY07). The net profit per branch stood at Rs 4.95 million (compared to 3.70 million in FY07).
Financial performance: quarter ended Mar'08
Bank of Baroda registered 2% y-o-y dip in NII at Rs 1028.50 crore for Q4FY08 as against Rs 1053.53 crore in Q4FY07 of the preceding year. The Interest earned for the quarter rose by 27% at Rs 3331.07 crore largely aided by 30% hike in interest on advances at Rs 2326.73 crore reflecting the banks timely revisions in lending rates. However the interest expended for the quarter advanced by 47% to Rs 2302.57 crore due to high levels of interest rates on term deposits, thus pulling down the NII.
Other income of the Bank for Q4FY08 increased by 24% to Rs 554.63 crore backed by healthy treasury operations and good recovery from prudentially written off accounts. This helped the Net total income to increase by 5% to Rs 1583.13 crore. Further with the operating expenses for the quarter witnessed a marginal rise of 1% to Rs 768.68 crore the operating profits jumped by 9% to Rs 814.45 crore.
The provision and contingencies including that of NPA provisioning increased by 36% to Rs 424.95 crore. However with the tax provision for the quarter declining by 39% to Rs 113.06 crore, the net profit grew by 13% to Rs 276.44 crore.
Financial performance: year ended Mar'08
For the year ended Mar'08, NII increased by 9% to Rs 3911.80 crore. The net total income increased by 20% to Rs 5962.84 crore with other income increasing by 48% to Rs 2051.04 crore. The operating expenses increased 15% to Rs 2934.29 crore restricting the operating profit by 25% to Rs 3028.55 crore. Further with the provision for contingencies increasing by 8% to Rs 821.40 crore and provision for tax increasing by 23% to Rs 771.63 crore, the net profit settled at Rs 40% to Rs 1435.52 crore.
Proposed business objectives for FY09
- Deposits to grow by 18% and advances 22%
- To grow net profit by 22%
- To improve CASA share from 36% to 38%, which entails a growth of 25% in CASA deposit in FY09.
- To protect the banks NIM around 3% of the banks interest bearing assets.
- To continue trust on overseas business and take its share to 25% in the next three years from the current 20%.
- To improve the share of retail business in the total loan book from the present 13.8% to 15.5% by end of FY09.
The Banks scrip currently trades at Rs 286
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