Agencies
Mumbai: Shares public sector undertaking (PSU) banks have rallied by up to 8% on the National Stock Exchange (NSE) in early morning trade after the Bank of Baroda on Friday reported a more than two-fold jump in net profit at Rs 5.28 billion for the first quarter of 2018-19 (Q1FY19) as provisions for bad loans dropped.
The bank had reported a net profit of Rs 2.03 billion in the same quarter of 2017-18. It had reported a net loss of Rs 31.02 billion in last quarter (March 2018).
The stabilisation of asset quality leading to a fall in provisions for bad loans also helped the bank report a robust growth in net profit.
The bank’s net interest income rose by 28.7% at Rs 43.81 billion in Q1FY19. Net Interest Margin (NIM) improved by 14 bps to 2.65% in Q1FY19 from 2.51% during previous quarter.
Gross non-performing assets (NPAs) were at 12.46% as on June 30, 2018, against 12.26% in the last quarter (March 2018), indicating stabilisation in NPA levels. Net NPA ratio declined to 5.40% from 5.49% during the last quarter.
Slippages during the quarter cooled of sequentially to Rs 28.7 billion against around Rs117.7 billion during last quarter. Credit cost also eased to around 154bps against around 658bps last quarter. Though overall slippage trend may ease, credit costs to stay elevated in near term.
Last week, Canara Bank and Vijaya Bank had also reported a better-than-expected financial result for the quarter ended June 2018.
Post Q1 results, shares of Bank of Baroda (BOB) have rallied 8% to Rs 149 on the National Stock Exchange (NSE) in early morning trade. State Bank of India (SBI), Punjab National Bank, Syndicate Bank, Bank of India, Indian Bank, Union Bank of India and Canara Bank were up in the range of 2% to 3%.
At 09:48 am; Nifty PSU Bank index, the largest gainer among sectoral indices, was up 2.8% at 3,181 points, after surging 4% in intra-day trade on the NSE. On comparison, the Nifty 50 index was up 0.15%, while Nifty Private Bank index up marginally by 0.08%.
In past 10 trading sessions, Nifty PSU Bank index surged 18% as compared to 3.3% gain in the Nifty 50 index.
(Except for the headline, this story has not been edited by The Kashmir Monitor staff and is published from a syndicated feed.)
