The share price of Bank of Baroda rallied nearly 9 percent on Wednesday after the public sector lender reported a profit in its March quarter earnings, with improved asset quality.

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The stock gained 8.9 percent to Rs 54.80 per share on the NSE. However, it soon pared gains, trading 6.04 percent higher at Rs 53.55 per share, at 9:38 am.

The PSU bank's net profit for the quarter ended March 2020 stood at Rs 506.6 crore as against the net loss of Rs 8,875 crore in the same period last year.

The profit in Q4FY20 was supported by lower provisions, tax write-back and higher operating income .

The net interest income (NII) during Q4FY20 rose 5.02 percent year-on-year (YoY) to Rs 6,798 crore on the back of decline in interest expenses.

Asset quality of the bank improved as its gross non-performing assets (GNPAs) declined 103 basis points sequentially to 9.40 percent while net NPA slipped 92 bps to 3.13 percent quarter-on-quarter.

Provisions and contingencies also declined 36 percent YoY to Rs 6,844 crore. Meanwhile, its provisions for bad loans also fell 69 percent on a y-o-y basis to Rs 3,190 crore.

Sanjiv Chadha, MD & CEO, Bank of Baroda, said, “For all customers who have loan outstanding up to Rs 10 lakhs, would continue to avail ‘opt out’ scheme on moratorium.” Chadha added, “We expect the number to decline by 35 percent in the June to August Period.”

The bank has made provisions of Rs 6,844 crore, out of which Rs 800 crore is provided for COVID-19 pandemic.

“The bank has availed standstill for special mention accounts-2 (SMA-2) accounts worth Rs 4,000 crore, and provided 20 percent on that front, ” Chadha added.

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First Published:Jun 24, 2020 10:03 AM IST