Bank of India (BoI) on Friday reported a 7.6% rise in its net profit to Rs 2,554 crore for the September quarter, aided by a sharp fall in provisions and an improvement in the asset quality. Provisions for the quarter fell nearly 58% to Rs 441 crore.
The net interest income declined 1% on year to Rs 5,912 crore. The net interest margin moderated to 2.41% from 2.55% a quarter ago. “There is still some deposit repricing left. We expect the NIM to improve from Q4 onwards,” Rajeesh Karnatak, managing director and CEO, said in the post-earnings call.
The bank will focus on low-cost deposits, safeguard margins, improve the asset quality and maintain good corporate governance.
Within advances, the retail, agriculture and MSME (RAM) segment grew 17.02% while the corporate and other segments saw a growth of 11.7%. As on September 30, the share of RAM to total advances stood at 58.21%, higher than 57.07% in the year-ago period.
Total retail advances were up 19.96% to Rs 1.45 lakh crore as on September 30. Within retail, the highest year-on-year growth was seen in the mortgage loan segment.
Within deposits, the share of current account and savings account deposits stood at 39.39%, compared to 39.88% a quarter ago. The global cost of deposits was unchanged on quarter at 4.85% while cost of funds inched up to 4.84% from 4.66% in April-June.
The asset quality ratios improved on a sequential basis. The gross non-performing asset ratio improved to 2.54% from 2.92% a quarter ago, while the net NPA ratio stood at 0.65% from 0.75%. The provision coverage ratio stood at 93.39%.
The bank has a board approval to raise Rs 20,000 crore in this financial year. Karnatak, however, said the bank has no plans yet to tap the market. The Basel-III capital adequacy ratio stood at 16.69% as on September 30.
On the draft ECL guidelines, Karnatak said it would impact the cash reserve ratio (CRR) by 1 percentage point on an annual basis. “So, our 1% point on the CRR comes to around Rs 4,600-4,700 crore. Given that we have earned a net profit of around Rs 4,800 crore in the first half, and are estimating a net profit of around Rs 10,000 crore in FY26, the impact on CRR will be only 1%,” Karnatak said.
