According to Mr. M.D. Mallya, Chairman and Managing Director, Bank of Baroda's net profit jumped 61 per cent to Rs 1,019 crore in the quarter ended September 30, 2010, against Rs 634 crore in the corresponding quarter last year. The robust growth in profits was driven by core business activity and equitable growth in all asset segments.
The bank cut down bulk deposits which, in turn, helped bring down the cost of deposits. The cost of deposits fell to 4.5 per cent (5.15 per cent).
The incremental slippage in bad loans during the second quarter was to the tune of Rs 300 crore; most of these loans were extended to the small and medium enterprises segment and to export-oriented companies. In fact, provisions for non-performing assets were lower at Rs 142 crore (Rs 172 crore).
The bank's robust credit origination and credit monitoring helped keep delinquency under control.
Unlike most of its peers, BoB's non-interest income showed a rise thanks to an increase in fee income. The total fee-based income increased by 24 per cent to Rs 402 crore (Rs 324 crore). Profit on exchange transactions grew 19 per cent to Rs 100 crore (Rs 84 crore). However, income from trading fell marginally to Rs 110 (Rs 120 crore).
As on September 30, 2010, the overseas operations contributed 24.8 per cent to the bank's total business.
This year BoB is looking at deposit growth of 20-22 per cent, credit growth of 23-24 per cent and 25 per cent growth in fee-based income.
The bank will add 300 more branches to its network in the current fiscal and 500 branches next year. It is looking to hire 4,200 staff in the next fiscal.
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