Public-sector lender Bank of India (BoI) on Tuesday posted a 155% year-on-year (y-o-y) rise in its net profit to Rs 243 crore in Q1FY20 on account of a rise in total income and a fall in provisions.
The lender’s pre-provisioning operating profit rose by 21.5% y-o-y to Rs 2,271 crore, led by a 95% jump in its other income to Rs 1.19 lakh crore. Total income rose 8.4% to Rs 11,526 crore. The bank’s net interest income (NII) — the difference between interest earned and interest paid by the bank — rose by 4% y-o-y to Rs 3,485 crore.
Total advances grew 3.3% y-o-y to Rs 3.7 lakh crore, primarily led by an uptick in the lender’s retail loan portfolio. Retail loans grew by 16% y-o-y to Rs 56,897 crore, with home loans growing 18.75% to Rs 32,904 crore. The average yield on advances improved by 36 bps q-o-q to 8.27% in Q1FY20. The lender came out of the Reserve Bank of India’s prompt corrective action (PCA) framework since January 2019. Under the PCA framework, banks had limitations on increasing their risk-weighted assets.
BoI’s asset quality deteriorated with the gross non-performing asset (NPA) ratio rising 70 basis points (bps) q-o-q to 16.5%. The total gross NPAs for the quarter amounted to Rs 62,068 crore, higher by nearly Rs 2,000 crore from the previous quarter. Bank of India CFO KV Raghavendra said: “NPAs have risen sequentially as some resolution money that was supposed to be realised this quarter from NCLT accounts and from some accounts in the MSME and agricultural sector have not been received.” Net NPAs rose by 18 bps q-o-q to 5.79%.
Slippages rose 19% on a sequential basis to Rs 3,683 crore in Q1FY20. Recoveries worth Rs 1,052 crore and upgrades worth Rs 535 crore were made during the quarter, while the value of written-off loans stood at Rs 689 crore. BoI has retained a Rs 173-crore exposure to Delhi Airport Metro Express as standard on directions from the Supreme Court. The exposure would have slipped were it not for the dispensation.
The public-sector lender’s provisions fell 25.5% y-o-y to Rs 1,911 crore. At the same time, the bank mentioned that it has maintained 100% provision towards its exposure for NCLT accounts amounting to nearly Rs 6,000 crore. The bank’s provision coverage ratio (PCR) improved sequentially by 23 bps to 77.18%. BoI also said it has exposures amounting to Rs 4,000 crore each to Indiabulls Housing Finance and Dewan Housing Finance. Lending towards the infrastructure sector had the maximum share of the total gross domestic advances at 15.73%, or Rs 51,012 crore.
Total deposits fell 1.66% y-o-y to Rs 5.12 lakh crore. The current accounts and savings accounts (Casa) grew by 6% y-o-y to Rs 1.8 lakh crore, while the Casa ratio improved to 43.11% against 41.76% for the corresponding quarter in the previous year.
The capital to risk-weighted assets ratio (CRAR) improved to14.35%in June 2019 from 14.19% in March 2019 .
