bank of baroda

Bank of Baroda's net profit rose 20 per cent to Rs 1,033 crore in the April-June 2011 quarter, against Rs 859 crore in the corresponding quarter last year. The growth in profit was on account of robust increase in interest and core fee income.Unlike peer public sector banks, whose net was weighed down by higher provisions for bad loans and lower net interest margins, BoB bucked the trend. The bank reported relatively stable margins and only a marginal rise in bad loans. Speaking to reporters after announcing the bank's results, Mr M.D. Mallya, Chairman and Managing Director, BoB, said given the high interest rate scenario, it is a challenge for banks to maintain business growth and asset quality.



As interest rates are ruling high, CASA (current and savings account) growth is difficult to come by. We have seen pressure on Net Interest Margin as we have not been able to pass on all the interest rates hikes to borrowers,'' he said.The growth in low-cost CASA deposits has come down from around 27 per cent last year to around 16 per cent this year, due to the migration of deposits from savings bank to term deposits, on account of higher interest rates. A significantly high core fee income — commissions, fees on sale of third party products, etc — helped the bank offset lower income from treasury. The core fee income was Rs 398 crore, recovery from written off accounts was Rs 29 crore and income from treasury was Rs 214 crore.

bank of baroda