Bank of Baroda reported a 36% rise in net profit for the July-September quarter, helped largely by a one-time gain from selling part of its holding in the National Stock Exchange (NSE). The state-run lender announced the numbers on Friday.
Profit came in at ₹6,532 crore, compared with ₹4,809 crore in the same quarter a year earlier.
Other income nearly doubles
The main driver was a sharp jump in non-interest income, which rose to ₹6,881 crore from ₹3,515 crore a year ago. The bank booked ₹1,340 crore from selling a part of its NSE stake, and this one-off item accounted for a notable share of the increase.
Recoveries from accounts that had already been written off also helped. These rose 48% over the year, adding to the bank’s earnings.
Together, the NSE gain and the higher recoveries more than offset a 9% fall in fee-based income during the period.
Core lending income grows, margin slips
Net interest income, the difference between what the bank earns on loans and pays on deposits, rose 9% to ₹13,026 crore. This also supported the bottom line.
However, the bank’s net interest margin, a key measure of lending profitability, narrowed to 2.74% from 2.96% a year ago. A lower margin means the bank is earning less on its lending relative to its assets than it did last year.
Higher growth outlook
Along with its results, Bank of Baroda raised its projections for credit and deposit growth for the current financial year.
The quarter’s profit growth, therefore, owes much to items that may not repeat, such as the stake sale gain, while the core interest business grew at a more modest pace and faced pressure on margins.
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