Bank of Baroda net profit dips by 60%; shares down over 9%

State-owned Bank of Baroda shares on Thursday dipped over 9% soon after the bank reported 59.74% decline in net profit during the quarter ended on June 30.

At 1034 hours the shares of the bank were trading at Rs 145.5 per piece, down by 9.20% as against the previous close at Rs 160.30 on BSE.

The bank posted net profit of Rs 423.6 crore for the quarter ended on June 30, 2016 as against to Rs 1052.1 crore for the quarter ended on June 30, 2015. In percentage terms, the bank's Gross Non-performing assets rose to 11.15% at the end of June 2016 as against the previous quarter in March 2016, where it was 9.99%. On yearly basis, the gross NPAs in June 2015 stood at 4.13%.

The Gross NPA of the bank stood at Rs 42,991 crore as on June 2016 as compared to Rs 40,521 crore as on March 31, 2016. "The ratios have increased partly on account of the conscious reduction in the asset base during the year", the bank said.

The total income decreased from Rs 12243.7 crore in Q1FY16 to Rs 11877.9 crore in Q1FY17, a decline of 2.9%.

"The Bank has rundown high-cost liabilities to improve the deposit mix leading to reduction in cost of domestic deposits from 6.61% as at March 31, 2016 to 6.21% as at June 30, 2016 and also improvement in ratio of domestic CASA deposits on average basis at 33% as compared to an average of 29.09% as at June 30, 2015 and 29.4% as at March 31, 2016. On a terminal basis, Domestic CASA was at
33.83%. Domestic Savings bank deposit saw a robust growth of 14.08% y-o-y on an average basis", Bank of Baroda said in a statement.

The provisions and contingencies made by bank stood at Rs 2004 crore in Q1FY17 and Provisions against bad debt written off stood at Rs 1986 crore. 

The bank has launched Project Navoday to span business strategy, products and services and processes. Following the launch, the bank believes that with this, the benefits will start flowing from Q4FY17.