Bank of Baroda gets Securities income boost

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 recently.
Net profit was Shs49.23bn compared to Shs41.13bn in 2015. The bank’s revenue increased by 16.43 percent to Shs169.54bn, driven by a 41.23 per cent 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 per cent from 2015. Baroda also earned Shs14.63bn from fees and placements, with that category improving 6.58 per cent from the previous year.
The bank’s largest income category, interest income from loans and advances, increased slightly by 3.94 percent to Shs87.52bn from Shs84.2bn in 2015.
Expenses rose 21.46 percent 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 percent 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 per cent to Shs58.95bn.
Total assets rose to Shs1, 476.13bn from Shs1, 202.5bn on a 70.41 per cent 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 per cent growth in liabilities to Shs1, 199.12bn.
Shareholders equity went up by 25.44 per cent to Shs277bn. Bank of Baroda is listed on the Uganda Securities Exchange. Its majority shareholder, with an 80 per cent stake, is Bank of Baroda – India. The remaining 20 per cent are owned by individual and institutional investors.
Earnings per share rose 19.70 per cent to Shs19.69. The bank’s board proposed a dividend payout of Shs6.25bn. By Drake Nyamugabwa

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