Bank of Baroda (BANKBARODA) Q4 08/09 earnings summary

Executive summary

• FY09 global business grew 30.01% to Rs 3,36,383 crore; reported net profit rose 55.2% YoY to Rs 2,227.20 crore.

• Global net NPA ratio improved to 0.31% from 0.47%, while Basel II capital adequacy reached 14.05%.

Financial highlights

• Total income was Rs 17,849.24 crore vs Rs 13,864.51 crore; interest earned Rs 15,091.57 crore vs Rs 11,813.48 crore.

• Gross profit was Rs 4,305.01 crore and reported net profit Rs 2,227.20 crore; profit before tax was Rs 3,342.94 crore.

• Net profit included Rs 95.01 crore of exceptional gains, net of tax Rs 62.70 crore, from winding up the Hong Kong subsidiary and selling a 51% stake in BOB AMC.

• Deposits rose 26.55% to Rs 1,92,396.95 crore; advances grew 34.94% to Rs 1,43,985.90 crore, including currency-depreciation effects on overseas balances.

• EPS increased to Rs 61.14 from Rs 39.41; proposed dividend was Rs 9 per share, with total payout including tax of Rs 383.56 crore.

Outlook and guidance

• FY10 priorities: grow with quality, build low-cost deposits, reduce bulk-funding dependence, protect asset quality through tighter credit origination, and improve fee-based income.

• Strategy also targets loan-book diversification, customer growth through technology, unbanked segments, and balance-sheet discipline through NIM, risk-profile and cost-income management.

• RBI projected FY10 GDP growth of 6.0% assuming a normal monsoon and WPI inflation of 4.0% by fiscal year-end.