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Bank of Baroda looks to improved profitability in fiscal 2019

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Bank of Baroda looks to improved profitability in fiscal 2019

Bank of Baroda is hoping to see a turn around in profitability after reporting a net loss for the fiscal year ended March 31 even with the risk of further provisions for bad loans in the next fiscal year, Mint reported May 30, citing the bank's CEO and managing director, P.S. Jayakumar.

The CEO is positive about the bank's performance in fiscal 2018-2019, saying that the probability is "biased towards [a] good financial year," and the Indian lender is aiming for 10% return on equity. The bank has taken large provisions for its bad loans and the number of accounts in the special mention accounts have gone down, the CEO said.

Bank of Baroda had reported a consolidated net loss of 18.87 billion rupees, or 8.17 rupees per share, for the fiscal year ended March 31. Provisions for the year rose to 156.67 billion rupees from 94.40 billion rupees, while provisions for nonperforming assets increased to 143.35 billion rupees from 78.24 billion rupees.

Jayakumar pointed out that with a number of accounts going through a forensic audit, any fraudulent accounts could lead to an increase in provisions. "It may not necessarily increase NPAs, but it can affect short-term profitability," he said.

The bank will focus on selling noncore assets, particularly in exiting its investments in an asset management company and other financial institutions, the CEO said. The bank's growth plan is based on organic growth, he added.