State-run Bank of Baroda on Thursday reported a standalone profit after tax of Rs 1,679 crore for the quarter ended September, helped by lower provisions.
The lender had posted a standalone net profit of Rs 737 crore in the same quarter of the previous fiscal. In the first quarter of FY21, it had incurred a loss of Rs 864 crore.
On a consolidated basis, the bank's profit after tax stood at Rs 1,771 crore in the July-September period.
"What seems to be clear from the (Q2) results is that there has been a sharp recovery after the lockdown in Q1. That recovery has been reflected in a few key parameters of fee income.
"The fee income of the bank had dropped sharply in Q1 and we see a sharp rebound in Q2 and also a reasonable improvement as compared to the similar period last year. This reflects the rebound in the activities of our clients," the bank's Managing Director and CEO Sanjiv Chadha told reporters.
The bank has rebounded sharply from the challenges faced in Q1 and "we are pretty much close to our normal trajectory in terms of most key parameters", he added.
Net interest income grew 6.83 per cent to Rs 7,508 crore in the reporting quarter, as against Rs 7,028 crore in the year-ago period.
While domestic net interest margin improved to 2.96 per cent, global NIM stood at 2.86 per cent.
The bank's fee income increased by 3.9 per cent year-on-year and 22.2 per cent quarter-on-quarter.
Gross non-performing assets (NPA) ratio stood at 9.14 per cent against 10.25 per cent in the same period last year. Net NPA ratio reduced to 2.51 per cent from 3.91 per cent.
Fresh slippages during the quarter were at Rs 899 crore, including Rs 500 crore from its international book.
The bank's recovery during the quarter stood at Rs 2,500 crore. It expects Rs 5,000 crore of recoveries from NCLT accounts in the third and the fourth quarters.
Provision coverage ratio (PCR) increased to 85.35 per cent as on September 30, 2020, as compared to 77.88 per cent during the same quarter of the last fiscal. COVID-19 related provisions stood at Rs 1,748 crore. Total provisions and contingencies declined to Rs 3,002 crore, compared to Rs 4,209 crore. Provisions for bad loans dropped to Rs 2,277 crore as against Rs 3,425 crore.
Speaking about the one-time restructuring, Chadha said, "So far, we have seen very little in terms of actual applications coming in by way of restructuring. As of now, how restructuring is likely to play out, it is probably too early to say. But having said that, if one were to look at a broad impression, we would tend to believe that restructuring is likely to be lower than what we might have anticipated." Retail sanctions and disbursements in the second quarter of FY21 were at 119 per cent of last year's level compared with 37 per cent in Q1 FY21, indicating a broad normalisation of economic activity, the bank said.
"To the extent that the bank has been emphasising growth in the retail portfolio to balance its corporate book, I see this recovery and growth momentum that we see in terms of loan growth continuing," Chadha said.
Domestic CASA (current account and savings account) ratio increased to 39.78 per cent, up by 190 basis points year-on-year.
The bank is targeting credit and deposit growth of 7 per cent during this fiscal.
The lender's scrip ended at Rs 42.90 apiece, up 2.02 per cent on BSE.