Bank of India reported a 41% year-on-year rise in its net profit for the second quarter at Rs 179.07 crore on Friday on the back of lower provisions for bad loans and strong growth in business. In the previous quarter, the bank’s net profit stood at Rs 87.71 crore. The state-run bank’s net interest income, or the difference between interest earned and interest expended, stood at Rs 2,908 crore in July-September, up 6.9% from the corresponding period last year. In the first quarter, the net interest income was Rs 2,533.03 crore. “We made a promising start in fiscal 2018 with a profit of Rs 88 crore in the first quarter. We have kept up the positive trend with a higher profit in the second quarter,” Dinabandhu Mohapatra, MD & CEO of Bank of India said. The bank’s total income during the quarter was Rs 11,600.47 crore, up 1.1 % from the year-ago period and up 4.4% from the April-June quarter.
Bank of India said its provisions for bad loans fell to Rs 1,866.82 crore from Rs 2,189.65 crore a year ago. In the previous quarter, provisions for bad loans was Rs 2,156.21 crore. The Mumbai-based lender’s gross non-performing assets (NPA) fell to 12.62% of total advances from 13.45% in the year-ago period and 13.05% in the previous quarter. The net NPA during the quarter was 6.47%, down 109 basis points from the year-ago period and down 23 basis points from the first quarter. Fresh slippages during the quarter fell to Rs 2,141 crore from Rs 3,963 crore in the year-ago period and Rs 4,037 in the April-June quarter.
The bank’s provision coverage ratio improved to 65.23% from 55.23% in the year-ago period. “We are one of the few banks that have covered 65% of the exposure. It is a unique advantage that we have. In some of the big NCLT accounts, we have 100% provisioning. We stand to benefit from the resolution of these accounts that is going to happen in December or January,” Mohapatra said.
The government’s 2.11 lakh crore recapitalisation programme for public sector banks has come as a huge relief and a confidence boosting measure, he said, adding that it will augment credit growth, especially to sectors such as the small and medium enterprises and infrastructure. Bank of India’s gross advances stood at Rs 3.91 lakh crore as on September 30, 2017, up from Rs 3.88 lakh crore a year ago. The share of loans to retail, agriculture and the micro, small and medium enterprises sector as a percentage of total advances increased to 53.35% from 48.80% a year ago.
“This is a great diversification happening so that risk is spread out and we are moving towards less corporate banking and more retail banking, which is the call of the day,” Mohapatra said.
Total deposits at the end of the second quarter was Rs 5.44 lakh crore, up 7.61% year-on-year. The bank said the share of low cost current account and savings account deposit improved to 39% in September 2017, from 36% a year earlier. Shares of the bank ended at Rs 198.60 on Friday, down 0.72% from the previous close.