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Bank of Baroda Q4 net surges

Mumbai, May 27: Riding on the back of handsome gain in non-interest income and lower expenses, Bank of Baroda (BoB) has put up a strong performance for the fourth quarter ended March 31, 2003. Net profit of the bank soared by 86 per cent to Rs 198.36 crore as against Rs 106.75 crore in the corresponding period of the previous year.

The bank is planning to return Rs 91.9 crore of equity to the government which will reduce the latter’s stake to 51 per cent from the existing 67 per cent. This follows the trend set by Punjab National Bank and Oriental Bank of Commerce. The return of capital to the government means that BoB cannot raise funds from the equity markets through a public issue.

Briefing newspersons here today, an upbeat P. S. Shenoy, chairman and managing director of BoB, said this year the bank is aiming at enlarging the balance-sheet by 20 per cent. It is also targeting a growth of 25 per cent in operating profits and 35 per cent in net profits, he added.

The non-performing assets (NPA) of the bank are slated to come down further. The net NPA ratio will fall to 2 per cent from the existing 3.72 per cent, Shenoy said. Further BoB is envisaging a dividend payout of 25 per cent of its net profits.

Shenoy noted that the return of capital to the government will not affect the bank as it has been ploughing back roughly Rs 400 crore into its reserves.

For the reporting quarter, total income of BoB increased to Rs 1,852.15 crore from Rs 1,840.05 crore in the corresponding previous quarter. Of this, interest income came down to Rs 1,514 crore (Rs 1,530.27 crore).

For the last fiscal, BoB posted a net profit of Rs 772.78 crore, up by 41 per cent over Rs 545.92 crore in the previous fiscal.

Total income during the period increased to Rs 7,359.25 crore against a total income of Rs 6,948.71 crore in the previous year. Of this total non-interest income, including profit from sale of investments, aggregated to Rs 1,261.70 crore against Rs 993.16 crore, a growth of 27 per cent. Gross NPAs of the bank came down to Rs 4,168 crore from Rs 4,498 crore and they were placed at 11.02 per cent of the advances.

Despite the encouraging results, BoB scrip, however, slipped by 4.42 per cent to Rs 125.50 in the BSE today from Rs 131.30 yesterday due to profit booking. The bank has also set a total dividend of Rs 6 per share, including an interim dividend of Rs 2 per share. The dividend of 60 per cent is the highest ever declared by the bank in its history.

Shenoy also revealed that the bank’s emphasis on retail finance will see its share surging to over 16 per cent of its domestic credit portfolio from the existing 8.8 per cent.

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