Bank of Baroda (BANKBARODA) Q4 00/01 earnings summary

Executive summary

• FY01 focused on balance-sheet quality over expansion; total business grew 14.65%, while reported net profit fell to ₹301.13 crore from ₹502.77 crore, reflecting VRS costs and higher provisions.

• Excluding ₹174.94 crore of amortized VRS costs, operating profit was ₹1,211.41 crore and net profit ₹407.49 crore; net interest margin rose to 3.15%.

Financial highlights

• Total income was ₹6,463.62 crore vs ₹5,860.80 crore; interest income ₹5,757.34 crore vs ₹5,177.98 crore, and non-interest income ₹706.28 crore vs ₹682.82 crore.

• Total expenses were ₹5,427.15 crore vs ₹4,809.12 crore; provisions and contingencies rose to ₹761.81 crore from ₹548.90 crore.

• Operating profit after VRS amortization was ₹1,036.47 crore vs ₹1,051.67 crore; pre-VRS operating profit reached ₹1,211.41 crore vs ₹1,051.67 crore.

• Net profit after VRS was ₹301.13 crore vs ₹502.77 crore; pre-VRS net profit was ₹407.49 crore. The reported FY01 result included ₹26.46 crore transferred from the Investment Fluctuation Reserve.

• Balance-sheet size reached ₹63,322.04 crore; global deposits were ₹53,985.78 crore and global advances ₹27,420.68 crore at March 2001.

Outlook and guidance

• FY02 business plan centered on customer-relationship banking, CRM and a Customer Information System to improve retention, cross-selling and identification of profitable customers.

• Planned technology initiatives included BOB @ Payments, intercity applications and expanded core banking and ATM capabilities; 74% of business was already computerized.

• Retail lending, capital-market products, and technology-led payment and collection services were identified as future business priorities; insurance business awaited RBI clearance and a joint-venture partner decision.

• Management saw potential for Indian growth above 6%, conditional on a good monsoon and a satisfactory US and global economic trend.