Bank of Baroda reported a 19.70% rise in after-tax profits for 2016, on the back of a bumper performance in its treasury department, financials released on Friday showed.
Net profit was Shs49.23bn compared to Shs41.13bn in 2015. The bank’s revenue increased by 16.43% to Shs169.54bn, driven by a 41.23% growth in interest income from marketable securities which came in at Shs54bn.
Income earned from deposits and placements with other financial institutions was Shs9.96bn, rising by 76.44% from 2015. Baroda also earned Shs14.63bn from fees and placements, with that category improving 6.58% from the previous year.
The bank’s largest income category, interest income from loans and advances, increased slightly by 3.94% to Shs87.52bn from Shs84.2bn in 2015. This was due to a decline in loans and advances to customers by 4% to Shs584.16bn from Shs608.73bn.
Expenses rose 21.46% to Shs110.58bn, largely as a result of loan loss provisions which were increased to Shs12.71bn from a decrease of Shs97.22m. The increase in loan loss provisions was inevitable: non-performing loans surged to Shs77.65bn from Shs7.06bn in 2015.
A 12.29% rise in interest paid on demand deposits to Shs59.9bn also pushed up expenses, as did operating expenses which increased to Shs17.73bn from Shs12.13bn. Profit before tax was up 8% to Shs58.95bn.
Total assets rose to Shs1,476.13bn from Shs1,202.5bn on a 70.41% increase in marketable securities available for sale to Shs424.89bn. Baroda also increased its balances with other banking institutions to Shs244.55bn from Shs210.5bn.
Customer deposits, on the other hand, increased to Shs1,163bn from Shs947.97bn, driving the 22.15% growth in liabilities to Shs1,199.12bn.
Shareholders equity went up by 25.44% to Shs277bn. Bank of Baroda is listed on the Uganda Securities Exchange. Its majority shareholder, with an 80% stake, is Bank of Baroda – India. The remaining 20% are owned by individual and institutional investors.
Earnings per share rose 19.70% to Shs19.69. The bank’s board proposed a dividend payout of Shs6.25bn.