BoI net up 45.75% to Rs 251.88 crore

Our Banking Bureau

Mumbai, June 6: BANK of India has registered a 45.75 per cent growth in its net-profit to Rs 251.88 crore in 2000-2001, up from Rs 172.82 crore in the preceding fiscal. The board of the bank has accepted the results on Wednesday and recommended a 15 per cent dividend to the shareholders.

There has been increasing apprehension on BoI’s performance, after the 137-crore pay-order scam related to Madhavpura Mercantile Cooperative Bank and big bull, Ketan Parekh. However, the bank has absorbed the impact of the crisis by making full provision for probable losses. It is also hopeful of recouping the amount in due course of time. Net-profit would have been higher by Rs 134.46 crore if the bank has not been hit by the scam.

Said BoI’s chairman and managing director, KV Krishnamurthy: “Despite all odds and the 137-crore pay-order scam, the bank performed well due to the inherent strength. Growing international banking along with treasury business helped the bank to notch up this net-profit”.

Global deposits grew by 8.24 per cent to Rs 51,679 crore while global advances grew by 20.94 per cent to Rs 31,823 crore. Capital market exposure of the bank is less than 0.5 per cent, Mr Krishnamurthy said.

The bank has also written off Rs 330.13 crore expenses conforming to voluntary retirement scheme, which saw 7,768 employee opting for the scheme. Total VRS expenses was pegged at Rs 855 crore and the balance will be absorbed over the next three-four years. However, had the bank planned to amortise the VRS expenses over five years beginning from fiscal 2001-2002, the net-profit would have registered a whopping 236.79 per cent growth to Rs 582 crore.

Operating profit of the bank grew by 13.04 per cent to 772 crore, despite being an unfavourable year from the business point of view. Net non-performing assets (NPAs) stood at 6.7 per cent as compared to 8.6 per cent in last fiscal. The bank has recovered Rs 1,038 crore during the year, including Rs 97 crore in written-off accounts. Total income of the bank stood at Rs 6,178.78 crore (Rs 5,522.53 crore) while total expenditure, excluding provisions and contingencies stood at Rs 5,406.76 crore (Rs 4,839.54 crore).

During the fiscal, the bank has expanded its gamut of services and launched various products. There are corporate loans for highly rated corporates, discounting future cash flows, dual currency swing limits for interchanging borrowing facility between US dollars and rupee to take advantage of the fluctuation of the forex market.

The bank is planning to bring down the government state holding to 51 per cent from the current holding of 76 per cent. “Focus will be given to increase shareholders’ value. We are planning to persuade the government on this”. The move, if it materialises, will see BoI returning Rs 150 crore to the Centre.