Bank of Baroda records a net loss of Rs 1,047 cr in Q4
Mumbai, May 29 (PTI) Baroda State Bank reported an autonomous net loss of Rs 1,047 crore in the quarter ended March 2021 as it moved to a new tax regime.
The lender had reported an autonomous after-tax profit of Rs 507 crore during the period of the previous year.
For the full year, net profit increased 52 percent to Rs 829 crore from Rs 546 crore in FY20.
The bank recorded a profit before tax (PBT) of Rs 2,680 crore in the quarter against a loss of Rs 1,723 crore the previous year. PBT stood at Rs 5,556 crore for FY21 against a loss of Rs 1,802 crore in FY20.
“Given that we had a PBT of Rs 5,556 crore (in FY21), we thought it was a good time to switch to a lower tax rate regime. But the shift to the new tax regime means that we have to do a DTA (Adjustment of Deferred Tax Assets), which was in the order of Rs 3,500 crore for the entire year, which is why we report an accounting loss of around Rs 1,000 crore in Q4 FY21.
“But for the impact of the DTA, we would have an after-tax profit of Rs 2,200 crore in the last quarter,” chief executive and CEO of the bank, Sanjiv Chadha, told reporters.
Net Interest Income (NII) rose 4.54 percent to Rs 7,107 crore from Rs 6,798 crore a year ago.
The global net interest margin (NIM) improved to 2.72% from 2.63% in the fourth quarter of FY20, thanks to the expansion of the margin in international business to 1, 57% in the fourth quarter of the year21.
The national NIM fell to 2.73 percent from 2.76 percent in the fourth quarter of fiscal 20.
The gross NPA ratio fell to 8.87% from 9.40% and the net NPA ratio to 3.09% from 3.13%.
Further slippages during the quarter amounted to Rs 11,656 crore in the fourth quarter of FY21.
The lender’s slippage ratio fell to 2.71% in FY21 from 2.97% in FY20. The cost of credit fell to 1.68% in FY21, from 2.35% in FY20.
“Slippage is going to go down very significantly in the current year (FY22) despite the second wave. I think we should move towards 2 percent or less in FY22,” said Chadha.
He expects credit costs to be between 1.5% and 2% in FY22.
Total provisions and contingencies declined 46.03 percent to Rs 3,586 crore in the fourth quarter from FY21 compared to Rs 6,645 crore the previous year.
Advances in the domestic market increased 4.91 percent year-over-year, driven by organic retail and agricultural loans, which increased by 14.35 and 13, respectively. , 22 percent.
In the area of personal loans, auto loans increased 27.79% year-on-year and personal loans increased 27.21% year-on-year.
Chadha said the bank’s collection efficiency improved to 93 percent in the March quarter. He expects some impact on the collections during the April-June quarter of FY22.
He said that despite the impact of the second wave, the bank’s business portfolio is likely to remain strong.
“Last year we weren’t confident about what was to come to the corporate sector. This time around, we can confidently say that the second wave largely left large companies untouched. Even in terms of relatively weaker accounts. and restructured., I don’t believe we would need to revisit the restructuring in most cases, ”noted Chadha.
He said, however, that the bank’s area of concern remains the MSME sector and, to a lesser extent, the retail sector.
“What we’ve been through is that people, especially in the retail segment, can fall back on certain payments, but ultimately they get away with it. Our assessment is that a very large percentage of our retail borrowers will get away with it and, for a minority, we might need to do some sort of restructuring. But when it comes to MSMEs, the impact is greater and the restructuring will also be greater, ”he added.
Chadha expects credit growth of 7-10% in FY22 for the bank, if the economy grows in double digits.
Regarding the capital raising plans for the current fiscal year, he said a large part of the financing needs will be through internal regularizations.
The bank’s capital / risk (weighted) asset ratio (CRAR) stood at 14.99% in FY21 versus 13.30%.
Speaking about the RBI’s announcement of a pressurized liquidity window of Rs 50,000 crore to support health infrastructure, he said the lender had received board approval on it and that ‘he was engaging with businesses.
The bank is targeting 50% growth in its loans to the health sector.
“Our current exposure to the industry is Rs 7,000-8,000 crore. I think we should consider targeting growth between Rs 3,000 and 5,000 crore there,” Chadha said. PTI HV MKJ
Warning :- This story has not been edited by Outlook staff and is auto-generated from news agency feeds. Source: PTI