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BOB Q4 net up 12.5% on better net interest income

Beating market estimates, Bank of Baroda posted a 12.5% rise in net profit at Rs 1,157 crore for fourth quarter ended March 2014 on better growth in net interest income, recoveries and control on operating expenses.

It had posted a net profit of Rs 1,028 crore in fourth quarter of 2012-13.

Rahul Shah, Vice President -Equity Advisory Group, Motilal Oswal Securities said net profit at Rs 1,157 crore were above our estimates of Rs 1,139 crore. The bank closed higher by 4.6% at Rs 877.9 on Bombay Stock Exchange today.

The public sector lender reported a flat growth (1.3%) in net profit for Fy14 at Rs 4,541 crore as against Rs 4,480 crore for FY13.

The board of bank recommended a final dividend of 105% on share of face value of Rs 10 each. The total dividend for 2013-14 would be 215%, including interim dividend of 110% announced in January 2014, said its chairman and managing director S S Mundra.

The net interest income (NII) in quarter rose by 11% to Rs 3,124 crore from Rs 2,813 crore in January-March 2013. The net interest margin for domestic operations was 2.84% for Q4.

The other income expanded by 11.4% to Rs 1,326 crore in Q4 FY14 supported by a robust growth in recoveries from written off accounts and core fees, Mundra said.

The provisions and contingencies declined by 28% in fourth quarter to Rs 1,153 crore on lower incidence of fresh slippages and lesser technical write-offs.

Referring to growth in business, he says total deposits increased by 20.1 to Rs 5, 68,894 crore at end of March 2014. The share of low-cost deposits — Current Account and Savings Account – improved to 31.76% at end of March 2014 from 30.38% a year ago.

The advances rose by 21% to Rs 3, 97, 006 crore at end of March 2014. BOB chief said consistent efforts for recoveries and up-gradation have begun to positive effect inform of improvement in asset quality, despite worsening of macroeconomic situation. Gross non performing asset ratio stood at 2.94% in Q4, FY14 versus 3.32% in Q3, FY14.

The restructured assets stood at Rs 22,553 crore at end of March 2014. The Provision Coverage Ratio (PCR) improved to 65.5% at and of Q4 from 62.22% in Q3.

The capital adequacy stood at 12.28% under Basel III with core tier I equity of 8.95%. The capital adequacy is comfortable above the nine% prescribed by regulator to support growth. Bank has sought equity infusion from the government of about Rs 1,200 crore, he said.

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