Bank of baroda

Six months ended September 30,
2004
2005
(in Rs. million)
Interest income
30,765.52
33,672.76
Interest expense
17,052.16
18,268.16
Net interest income
13,713.36
15,404.60
The increase in net interest income was primarily due to 9.45% increase in total interest income from Rs. 30,765.52
million in the six months ended September 30, 2004 to Rs. 33,672.76 million in the six months ended September 30,
2005, partially offset by an 7.13% increase in interest expense.
Net interest margin increased slightly from 3.23% in the six months ended September 30, 2004 to 3.37% in the six
months ended September 30, 2005 and our spread increased from 3.01% in the six months ended September 30, 2004
to 3.09% in the six months ended September 30, 2005.
Interest Income
The following table sets forth the components of our interest income:
Six months ended September 30,
2004
2005
(in Rs. million)
Interest and Discount on advances/bills
14,231.28
17,237.86
Income on Investment
14,594.49
14,863.01
Interest on balance with RBI and other Inter Bank Lending
1,209.51
1,303.80
Interest on Income Tax Refund
99.71
0.02
Others
630.53
268.07
Total interest income
30,765.52
33,672.76
Interest and discount on advances and bills increased by 21.13% from Rs. 14,231.28 million in the six months ended
September 30, 2004 to Rs. 17,237.86 million in the six months ended September 30, 2005, reflecting a 15.28% increase
in our average advances from Rs. 394,449 million in the six months ended September 30, 2004 to Rs.454,729 million in
the six months ended September 30, 2005 and an increase in average yield from 7.22% to 7.58%. Interest on investment
increased slightly from Rs.14,594.49 million in the six months ended September 30, 2004 to Rs. 14,863.01 million in the
six months ended September 30, 2005, due to a 2.19% increase in our average investments from Rs.376,982 million in
the six months ended September 30, 2004 to Rs.385,223 million in the six months ended September 30, 2005. This
increase was partially offset by a decrease in our average yield, which fell from 7.74% in the six months ended September
30, 2004 to 7.72% in the three months ended September 30, 2005. The decrease in average yield was due to a general
softening of interest rates during this period.
Interest on balances with the RBI and other inter-bank lending increased by 7.80% from Rs. 1,209.51 million in the six
months ended September 30, 2004 to Rs. 1,303.80 million in the six months ended September 30, 2005 because of an
increase in the volume of inter-bank placements as well as higher earnings on placements in Rupee and forex markets.
Other interest includes interest on swaps and interest on other assets. Other interest decreased by 57.48% from Rs.
630.53 million in the six months ended September 30, 2004 to Rs. 268.07 million in the six months ended September 30,
2005.

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Interest Expense
Our interest expense increased by 7.13% from Rs. 17,052.16 million in the six months ended September 30, 2004 to
Rs.18,268.16 million in the six months ended September 30, 2005, mainly due to an increase in volumes partially offset
by a decrease in average cost of funds.
Our average deposits increased by 5.34% from Rs.779,320 million in the six months ended September 30, 2004 to Rs.
820,933 million in the six months ended September 30, 2005. Our average cost of deposits increased from 4.12% in the
six months ended September 30, 2004 to 4.14% in the six months ended September 30, 2005 due to a marginal
increase in interest rates on deposit.
Average cost of funds increased from 4.24% in the six months ended September 30, 2004 to 4.27% in the six months
ended September 30, 2005 also due to higher cost of deposits.
Our other interest expense increased by 5.10% from Rs. 868.38 million in the six months ended September 30, 2004 to
Rs. 912.72 million in the six months ended September 30, 2005.
Other Income
Our other income decreased by 31.26% from Rs. 7,540.61 million in the six months ended September 30, 2004 to Rs.
5,183.21 million in the six months ended September 30, 2005. The following table sets forth the components of our other
income: