Bank of Baroda Q3 profit marginally up at Rs 1,048 crore

MUMBAI: State-owned Bank of Baroda reported a 3.6% rise in December quarter earnings, boosted by doubling of profits from treasury operations even as lending to corporates remained in losses. The bank said net profit rose to Rs 1,048 crore from Rs 1,012 crore a year ago.

The results were near analysts expectations of Rs 1,020 crore. Shares fell 0.9% to Rs 537.75. Net interest income, the difference between interest earned on lending and interest paid for funds, rose 7.6% to Rs 3,057 crore.

"The bank has delivered whatever they guided earlier in terms of asset quality," said Alpesh Mehta, a banking analyst at Motilal Oswal. "On operational parameters, numbers are more or less in line with expectations. But we need to look for more details on credit quality."

Indian banks are under strain as companies are struggling to meet payment obligations in an economy that has slowed to a decade low.

With more companies seeking liberal terms to repay, banks are incurring losses in lending to companies. But the volatile markets have lent a helping hand for many banks with treasury gains. "What is important in our Q3 results is the consistency of guidance," said S S Mundra, chairman and managing director, Bank of Baroda.

"Growth rate may be a little more for retail and SME segments. Overall, we would grow 2-3 % above industry, but not at a break-neck speed." Domestic net interest margin, a measure of profitability, stood at 2.95% compared with 3.08% last year and 2.85% in the second quarter.