"Net profit dips to Rs 586 crore on account of higher provisioning in the quarter," V R Iyer, Bank of India Chairperson, told reporters here today.
"Some of the CDR (corporate debt restructuring) account we have taken out from standard category, as per the RBI guidelines, to sub-standard category and made much higher provision. Had we taken them as the normal standard assets, as per the industry practice, the our profit would have higher by Rs 110 crore," she said.
The total provision in the quarter increased by 48 per cent to Rs 1,558 crore against Rs 1,052 crore in the same period last year. Bank's provision coverage ratio grew 63.77 per cent in the quarter as against 60.74 per cent last year.
The bank's global net interest margin (NIM) improved to 2.37 per cent from 2.35 per cent last year whereas domestic NIM stood at 2.89 per cent as against 2.73 per cent last ago.
"Our domestic NIM is likely to reach 3 per cent by March end," Iyer said. The bank's net interest income grew 17.81 per cent to Rs 2,719 crore from Rs 2,308 crore. Non-interest income improved 17 per cent to Rs 1,097 crore from Rs 937 crore.
Gross NPA ratio improved to 2.81 per cent from 3.08 per cent while net NPA stood at 1.75 per cent as against 1.97 per cent. Iyer said the banking industry is likely to see pressure on asset front for a few more quarters.
"It is very difficult to give any guidance on asset quality. We don't anticipate any increase in NPA levels. We will try to maintain and reduce the NPA level," she said.