Bank of Baroda’s net profit fell 60 per cent to Rs.424 crore for the three months ended June due to a three-fold increase in provisions for bad loans.
The state-owned lender had reported Rs.1,052 crore profit in the corresponding period of the previous financial year. Total provision almost doubled to Rs.2,246 crore during the reporting period as compared to Rs.1,150 crore during the same period of the previous year. Bad loan provision increased from Rs.568 crore to Rs.1,986 crore.Non-interest income rose by about 50 per cent to Rs.1,444 crore led by gains in treasury profits which were Rs.557 crore during the quarter as compared to Rs.157 crore a year ago.
Though the lender returned to profit after two successive quarters of loss, its asset quality further worsened as gross NPAs increased to Rs.42,991 crore (11.15% of gross advances) as on June as compared to Rs.40,521 crore (9.99%) in March on the back of Rs.5,527 crore fresh slippages during the April-June period. At the same time, there was almost Rs.2,500 crore of recovery and upgradation during the quarter as compared to Rs.827 crore in the same period of the previous year.
The bank’s loan loss ratio was steady at 60.17 per cent, at the end of the quarter.“We believe slippages will continue to remain high and consequently higher provisions will keep bottom-line under pressure,” said Siddharth Purohit, senior equity research analyst at Angel Broking.The lender trimmed down its business to Rs.9.24 lakh crore from Rs.10.01 lakh crore a year ago, on account of “planned and structured rundown of assets and liabilities,” according to a statement from the lender.
Another Mumbai-based state-run lender, IDBI Bank reported 78 per cent increase in net profit to Rs.241 crore during the first quarter mainly due to Rs.1,200 crore of tax write-back. Its net interest income (NII) for increased by 14.20% to Rs.1,706 crore from Rs.1,494 crore, recorded in the year-ago period.
Asset quality worsened further for the lender with gross NPA as on June 30, 2016 stood at 11.92 per cent or Rs.27,275 crore as compared to 10.98 per cent or Rs.24,875 crore as at March 31, 2016. On a year-on-year basis, gross NPAs went up 93.3% from Rs.14,112.18 crore.
During the quarter the bank had made a provision of Rs.1,225 crore as compared to Rs.1,003 crore a year ago.
Suven Life Sciences has posted a net profit of Rs.32.57 crore in the quarter ended June 30, 2016 against Rs.20.60 crore in the corresponding period of the previous year, an increase of 58 per cent.
Total income rose 31.7 per cent to Rs.133.22 crore from Rs.101.17 crore. A release from the biopharmaceutical firm said Rs.14.7 crore was spent during the quarter on drug discovery related research and development.