State-owned Bank of Baroda is expected to post a net loss of ₹161 crores for the March quarter of fiscal 2020, as against a loss of ₹991 crores in the same period last year, according to an average of estimates by 11 analysts polled by Bloomberg. The bank will declare its Q4 results on Tuesday. However, analysts at the brokerage firm, Emkay Global, declared in a preview report on 11 April that a relatively moderate non-performing asset (NPA) formation and migration to the new tax regime may help the bank return to profitability, partly offset by higher staff costs due to a recent wage revision. The report added that slippages may fall sequentially in absence of NPA divergence for FY19 like in Q3 and some relief in agriculture bad loans.
According to Emkay, the bank’s net interest income – the difference between interest earned and expended – is expected to grow 45.9% year-on-year (YoY) to ₹7,392 crores in the March quarter. The public-sector lender is also likely to report a net interest margin (NIM) – a key indicator of profitability – of 2.8% for the quarter under review. Sanjiv Chadha, chief executive officer (CEO), Bank of Baroda had said on 23 May that close to 65% of the bank’s customers by value have opted for loan moratorium. After initially allowing a three-month moratorium, the Reserve Bank of India (RBI) had extended it by three months to 31 August. “We have not seen the kind of deceleration that you normally see (in credit) in the month of April and May. As of now, we are growing by about 9% YoY, which is a little faster than the system growth,” Chadha had told Mint in an interview earlier this month.