Public sector lender, Bank of India on Saturday reported a 52% year-on-year rise in net profit at Rs 1,458 crore for the second quarter of the current financial year, supported by fall in provisions for bad loans.
The net profit was below expectations as Bloomberg analysts expected the lender to post Rs 1,650 crore net profit in the second quarter.
The bank had posted a net profit of Rs 960 crore in the second quarter of the previous financial year.
The provisions by the bank for standard and sub-standard assets declined to Rs 818 crore in the second quarter of the current financial year from Rs 1,912 crore in the same quarter of previous financial year.
The bank improved its asset quality during the quarter. Its Gross NPA (non-performing assets) declined to 5.84% in the second quarter from 8.51% in the same quarter in the previous financial year. The net NPA ratio fell to 1.54 % as on September 30, 2023, as against 1.92 % in a year ago period. In absolute terms, gross NPAs declined to Rs 31,719 crore as on September 30, 2023 from Rs 42,014 crore as on September 30, 2022.
The bank’s management expects to see strong credit growth in the second half of the year.
“We have given a guidance of 11-12% credit growth for the current financial year and currently we are growing in double digits,” said Rajneesh Karnatak, managing director and chief executive officer, Bank of India, in an earnings call on Saturday.
He added that the bank has a strong loan pipeline and it has already sanctioned loans worth Rs 17,000 crore which will be disbursed in the next two quarters.
Net interest income, the difference between interest earned and paid, rose 13% to Rs 5,740 crore in the second quarter of current fiscal from Rs 5,083 crore in the same quarter of the previous fiscal.
The non-interest income increased by 19% to Rs 1,688 crore in the second quarter of the current fiscal from Rs 1,417 crore in the same quarter of the previous fiscal.
The net interest margin of the bank expanded to 3.08% during the second quarter compared to 3.04% in the same quarter the previous year and 3.03% in the first quarter of the current financial year.
Domestic deposits increased by 8.61% from Rs 5.51 trillion in September 2022 to Rs 5.99 trillion in September 2023.
Domestic advances increased by 9.80 % from Rs 4.12 trillion in September 2022 to Rs 4.53 trillion in September 2023.