The growth in net profit for the state-run, Bank of Baroda (BoB) has been remarkable during the last quarter of the fiscal 2008-09. BoB has reported 172% rise to Rs 752.6 crore in its net profit at the back of increased flow in net interest income and substantial treasury profits.

As on March 31st 2009, the net profit for the year stood at Rs 2,227 crore against Rs 1,435 crore during the previous year, a rise by 55%.

The net interest income of the bank during the fourth quarter rose by 42% to Rs 1,471 crore from Rs 1,029 crore, a year ago. The higher net interest income enabled the bank's net interest margin on the global balance sheet to increase from 2.78% to 3.17%.

Further the treasury profits that marked a rise of 130% to Rs 387 crore from Rs 168 crore helped the bank to witness an amazing growth. The income tax refund of Rs 108 crore received in the last quarter also surged the net profits.

The net non-performing assets (NPAs) of the bank also dropped from 0.47% to 0.31%. In absolute terms, the net NPAs declined to Rs 451 crore from Rs 494 crore, a year ago.

The bank's Chairman, MD Mallya said that the cautious approach in lending helped the bank to report a decline in its bad loans. "We did not chase unreasonable growth in lending in the past few years... which is why our bad loans will not increase disproportionately," he said.

Mallya said that the bank will have to closely monitor its asset quality at these times of slowdown. One of the biggest challenges for the future would be to perform better than the industry. The bank targets a credit growth between 23% and 25% against 20% credit target set by the RBI for banks.

In the previous fiscal 2008-09, he credit portfolio of the bank increased by 35% to Rs 1,43,986 crore. The deposit base witnessed a rise of 26.6% to Rs 1,92,397 crore.

Experiencing a substantial rise in its profits, BoB board has suggested a 90% dividend per share. Last year the bank distributed 70% dividend a share.