Bank Of Baroda Q1FY15 Net Profit Up By 16.6% Y-o-Y

Bank of Baroda (BOB) posted healthy net profit growth on yearly basis for the first quarter of FY15 on back of lower provisions and contingencies. BOB posted net profit of Rs 1361.88 crore for Q1FY15 against Rs 1167.87 crore posted in the same quarter previous year, registering a growth of 16.6%, which was way above 3% that the street was expecting. This was primarily aided by the sharp decline in provisions and contingencies in the same period, which declined by 48.3% to Rs 526.71 crore in Q1FY15.

Net interest income, the difference between interest earned and expended, grew by 15.2% on yearly basis to Rs 3328.61 crore for the quarter ended June 2014. Domestic net interest margin (NIM) of the bank improved from 2.84% in the previous quarter to 2.94% for the quarter ended June 2014. Fall in the other income, however, restricted substantial rise in net profit. Other income, which forms little than 10% of total income has dropped by 16.7% on yearly basis.
Asset quality of the bank weakened in the quarter on sequential basis. Gross non-performing assets (NPA) and net NPA ratio of the bank increased by 17 basis points and 6 basis points compared to the quarter ending March 2014 and stood at 3.11% and 1.58% respectively. In absolute terms gross NPA has increased by 1.8% on Q-o-Q basis, however, net NPA declined marginally by 0.2% in the same period. 

Shares of BOB are currently trading at Rs 866.95, which is 1.07x of its book value.