Bank of India (BoI) on Tuesday reported a 20.4% y-o-y decline in its net profit to R491.11 crore for the quarter ended September 30, 2011, due to a sharp increase in provisioning for loan losses.
The bank?s gross non-performing assets (npas) stood at 3.02 %, up 33 basis points sequentially, while net npas stood at 1.98%, up 71 basis points sequentially. The provision coverage is 59.06%.
?We have seen a 39% y-o-y increase in provisions, but should benefit from recoveries and lower provisions going ahead,? said Alok Kumar Misra, chairman and managing director, BoI, adding that the bank had completed the migration to the automated system for recognising npas.
The bank posted a 7.2% y-o-y rise in its net interest income to R1,904 crore, while the total income increased 34.6% y-o-y to R7,728.16 crore.
The net interest margin (NIM) rose from 2.19% at the end of June to 2.44% in September. The operating profit grew 12.5% y-o-y to R1,551.52 crore. The bank’s share of low-cost Casa deposits was 31.64%, and was up by 116 bps sequentially in the quarter ending September.
The bank’s capital adequacy ratio (CRAR) stood at 11.97%. It plans to increase its retail loan portfolio and has acquired additional 5.6 million customers in the first half of the current year.
On restructured accounts, Misra said that sectors, such as textile, services and engineering, have contributed R485 crore for fresh restructuring in the September quarter and dispelled any major contribution from the power sector.
The bank’s total exposure to state electricity boards is around R8,000 crore. The bank is also expecting a capital infusion of around R1,000 crore from the government.