Bank of Baroda Financial Results
Q2 and H1, 2014-15 (FY15)
November 7, 2014
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Operating Profit at Rs 2,403 crore in Q2, FY15, up 13.1% (y-o-y)
Net Interest Income at Rs 3,401 crore in Q2, FY15, up 17.5% (y-o-y)
Net Profit at Rs 1,104 crore in Q2, FY15 versus Rs 1,168 crore in Q2, FY14
Total Business at Rs 9,52,692 crore at end-Sept, 2014, up 15.5%, (y-o-y)
NIM (Domestic)further improved to 3.02% from 2.94% last quarter
Gross NPA at 3.32% & Net NPA at 1.74%
Provision Coverage Ratio at a relatively higher level of 65.39%
ROAA (annualized) at 0.75% in H1, FY15
ROE (annualized) at 13.11% in H1, FY15
CRAR (Basel II) at 12.69% and CRAR (Basel III) at 12.19%
Bank of Baroda has announced its reviewed results for the second quarter of 2014-15 (Q2,
FY15) following the approval of its Board of Directors on November 7, 2014.
Results at a Glance
Particular
Total Income
Interest
Income
Interest
Expenses
Net Interest
Income
Other
Income
Total
Expenses #
Operating
Expenses #
Staff
Expenses
Operating
Profit #
Provision for
Tax
Provision
(other than
tax) &
contingencies
Net Profit
Q2:FY15
(Rs cr)
11817.32
Quarterly Results
Q2:FY14
(Rs cr)
10447.31
%
Change
13.1
H1:FY15
(Rs cr)
23499.82
Half-Yearly Results
H1:FY14
(Rs cr)
21164.80
%
Change
11.0
10825.67
9473.45
14.3
21483.63
18960.39
13.3
7424.56
6578.66
12.9
14754.21
13176.50
12.0
3401.11
2894.79
17.5
6729.42
5783.89
16.3
991.65
973.86
1.8
2016.19
2204.41
-8.5
9414.39
8322.73
13.1
18617.29
16588.60
12.2
1989.83
1744.07
14.1
3863.08
3412.10
13.2
1107.83
1030.15
7.5
2213.33
2044.13
8.3
2402.93
2124.58
13.1
4882.53
4576.20
6.7
410.67
80.10
412.7
1001.68
330.44
203.1
888.04
860.83
3.2
1414.75
1878.69
-24.7
1104.22
1,168.10
-5.5
2466.10
2335.97
5.6
.
Note: #: excludes the exceptional items of Rs 15.55 crore for Q2, FY14 as a share of the total deficit of Rs 186.58 crore
on account of the take-over by the Bank of the specified Assets & Liabilities of “The Memon Co-operative Bank Ltd.”
as per the approval granted by RBI vide letter no. DBOD.No.BP.1311/21.04.048/2010-11 dated 25th July 2011.
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PROFIT
In spite of subdued industrial growth and anaemic credit offtake for the Indian banking sector,
Bank of Baroda could richly grow its Operating Profit by 13.1% (y-o-y) in Q2, FY15 to Rs
2,402.93 crore by posting good gains in Net Interest Income and controlling Operating
Expenses. Even its Net Profit attained the level of Rs 1,104.22 crore in Q2, FY15 despite higher
tax and non-tax provisions.
INCOME
The Bank’s Total Income grew decently by 13.1% (y-o-y) to Rs 11,817.32 crore in Q2, FY15
supported by a rich growth of 17.5% (y-o-y) in Net Interest Income to Rs 3,401.11 crore on the
back of efficient management of deposit franchise and loan-book. Other Income, however,
increased modestly by 1.8% to Rs 991.65 crore primarily due to changed dynamics of financial
markets and weaker fee-based income on account of lacklustre credit growth.
EXPENSES
The Bank’s Total Expenses grew at the controlled pace of 13.1% (y-o-y) to Rs 9,414.39 crore in
Q2, FY15 aided by a modest growth of 14.1% (y-o-y) in Operating Expenses to Rs 1, 989.83
crore and relatively slower growth of 12.9% (y-o-y) in Interest Expenses to Rs 7,424.56 crore.
Relatively slower growth in Interest Expenses was achieved by improving the CASA (domestic)
share to 31.89% and sharply reducing the holding of high-cost bulk deposits during Q2, FY15. A
growth of 7.5% (y-o-y) in Staff Expenses (at Rs 1,107.83 cr) factors in the AS-15 provisions that
the Bank is consistently making since the first quarter of the previous year (FY14).
PROVISIONS AND CONTINGENCIES
Provisions and Contingencies (excluding tax provisions) made by the Bank stood at Rs 888.04
crore in Q2, FY15 versus Rs 860.83 crore in Q2, FY14 reflecting a growth of 3.2%. An increase in
non-tax provisions during Q2, FY15 was mainly on account of higher provisions against
investment depreciation on equity portfolio during Q2, FY15. It may be noted that the index
returns became negative in September, 2014 after almost eight months.
Provisions against “NPAs/Bad Debts written off” stood at Rs 584.25 crore in Q2, FY15 in line
with the mandatory requirements.
The Bank’s Tax Provisions expanded by more than five times in Q2, FY15 to Rs 410.67 crore, as
the Bank had to create a DTL on Special Reserve and the usual deduction of Bad Debt Written
Off was not available due to the recent legislative changes.
PROVISION COVERAGE RATIO (PCR)
The Bank’s prudent provisioning practices prompted it to protect its Provision Coverage Ratio
(PCR) at 65.39% in Q2, FY15 – the highest level in the large-sized PSU banking segment.
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BUSINESS EXPANSION
The Bank’s Total Business expanded by 15.5% (y-o-y) to Rs 9,52,692 crore in Q2, FY15. Out of
this, Total Deposits increased by 16.9% (y-o-y) to Rs 5,66,926 crore, whereas Total Advances
increased by 13.5% (y-o-y) to Rs 3,85,766 crore. Domestic CASA Deposits share improved
sequentially to 31.89% due to a dedicated effort at the field level and capacity-building. The
growth in domestic loan-book was well-balanced and diversified. For instance, the Bank’s
Retail Credit increased by 15.8% (y-o-y) to Rs 47,379 crore and formed 17.85% of its Gross
Domestic Credit as on 30th Sept, 2014. While the Bank’s Farm Credit grew by 28.5% (y-o-y) to
Rs 33,539 crore, its Credit to MSME sector grew by 13.5% (y-o-y) to Rs 58,899 crore. It may
be noted that the y-o-y growth in Farm Credit appears stronger primarily on account of the
new guidelines of RBI that now allow SCBs to include funds with RIDF, NABARD, etc., into the
definition of Farm Credit.
ASSET QUALITY
Gross NPA of the Bank increased to Rs 13,057.57 crore as on Sept 30, 2014 from Rs 12,086.81
crore as on June 30, 2014 in line with the Bank’s guidance based on the assessment of its own
portfolio and economic conditions. The Gross NPA ratio stood at 3.32% as on 30th Sept, 2014,
while the Net NPA ratio stood at 1.74%.
CAPITAL ADEQUACY
The Bank’s Capital Adequacy Ratio (Basel II) was at 12.69% on 30th Sept, 2014 with Tier 1 ratio
at 9.47%.
The CRAR (Basel III) was at 12.19% as on 30th Sept, 2014. Out of this, the share of Tier 1 capital
was 9.26% and that of Core Tier 1 Capital was 8.94%.
KEY FINANCIAL RATIOS
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The Bank’s Net Worth expanded by 9.5% (y-o-y) to Rs 37,612 crore as on 30th Sept, 2014.
In annualized terms, the Bank’s Return on Equity stood at 13.11% in H1, FY15.
In annualized terms, the EPS stood at Rs 114.86.
Its Return on Average Assets stood at 0.75% in H1, FY15.
The Bank’s Book Value per Share improved to Rs 875.9 as on 30th Sept, 2014 from Rs
815.22 as on 30th Sept, 2013 (up 7.4% y-o-y).
OVERSEAS BUSINESS
The Bank’s Overseas Business continued to occupy a significant position in its overall business.
It posted a y-o-y growth of 18.9% as at end-Sept, 2014. During Q2, FY15, the Overseas
Operations contributed 32.98% to the Bank’s Global Business, 24.94% to its Gross Profit and
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23.81% to its Core Fee Income. The Gross NPA (%) in overseas business marginally increased to
1.25% in Q2, FY15 from 1.18% in Q1, FY15.
As on 30th Sept, 2014, the Bank’s Overseas Operations were spread across 24 countries through
104 offices. During H1, FY15, the Bank opened two new branches in its overseas subsidiaries,
notably in Kenya and Tanzania.
MAJOR STRATEGIC INITIATIVES in H1, FY15
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During H1, FY15, the Bank’s term deposits with preferential rate of interest declined
sharply from Rs 11,792 crore to Rs 9,460 crore; even the share of CDs to Term Deposits fell
from 7.5% at end-Mar’14 to 1.9% at end-Sept’14.
The Bank gave boost to its retail business by launching loan campaigns in
home/car/traders’ loans, opening 15 new Retail Loan Factories (taking the network to
60), and streamlining the schemes for housing/educational loans and strengthening its
lending automation processing system (LAPS).
To promote the growth of its MSME loan-book, it focused on micro/CGTMSE accounts
and introduced area-specific schemes for MSME units in the sectors like ceramic tiles,
marbles, plastic, textiles, agro- based industries, automobile, RTO, minerals, brass, hosiery,
tea processing, shoe-making, etc.
It opened 147 new branches in its Domestic Operations and set up 771 new ATMs and
1,530 new POS machines (Point of Sale Machines) in H1,FY15. It also opened 6 new eLobbies during this period to offer 24*7 basic banking operations. In its overseas
operations, it opened a new branch at Meru in its subsidiary in Kenya and Mwanza in its
subsidiary in Tanzania.
During H1, FY15, the Bank focused on massive recruitment and talent acquisition to take
care of the HR gap and further strengthened its systems of training & skill development for
the existing as well as new employees.
The Bank converted 22 more Metro and Urban branches into Baroda Next branches during
H1, FY15 taking the total number of such high-tech branches to 1,457.
As on 30th Sept 2014, 18,599 villages were covered under the Bank’s Financial Inclusion
drive and the Bank set up 2,571 Ultra Small Branches across the country to support this
initiative. Under Prime Minister Jan Dhan Yojna (PMJDY), the Bank has opened 28.31 lakh
accounts and issued 22.2 lakh RuPay cards.
Select AWARDS H1, FY15
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The Bank received Golden Peacock National Training Award on 23rd May, 2014 from
Institute of Directors, New Delhi for its novel initiatives in training and skilling of its
employees.
It received Order of Merit in India’s Best Financial Inclusion & Financial Deepening
Projects 2014 by Skoch Consultancy Services Pvt. Ltd. on 20th June, 2014.
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The Bank was awarded “Best PSU for MSME” by India SME Forum on 11th July, 2014 at
New Delhi.
The Bank received “Best Bank – Global Business Development (Public Sector)” & “Best
Bank – Overall (Public Sector)” Award in Dun & Bradstreet – Polaris Financial Technology
Banking Awards 2014, held in Mumbai on 27th August, 2014.
November 7, 2014
Mumbai
P. Srinivas
Executive Director
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