The non-interest income of the bank saw an increase of 28.8% y-o-y to Rs 1,327 crore, aided by higher profits from treasury operations and commission income.
Public sector lender Bank of India (BoI) on Friday reported a net profit of Rs 266 crore for the September quarter, against a net loss of Rs 1,156 a year ago, led by a 32% y-o-y rise in net interest income (NII) and a 38.6% reduction in provisions.
The bank’s NII — the difference between interest earned and interest expended — came in at Rs 3,860 crore, while the domestic net interest margin (NIM) for the quarter stood at 3.36% — up 33 basis points (bps) sequentially.
The non-interest income of the bank also saw an increase of 28.8% y-o-y to Rs 1,327 crore, aided by higher profits from treasury operations and commission income. The operating profit of the bank went up 49.36% y-o-y to Rs 2,460 crore.
During the period, gross non-performing asset (NPA) ratio of the bank fell by 19 bps sequentially to 16.31%, while net NPA rose by eight bps to 5.87%. Provisions increased 7.43% sequentially to Rs 2,053 crore in Q2FY20, including a provision of Rs 201 crore for one standard housing finance company (HFC) account.
Executive director N Damodharan said that about 5% provision cover had been made for the HFC account where the bank has an exposure of Rs 4,000 crore. “The provision has been made proactively while the account is in the standard category,” he said. BoI’s provision coverage ratio (PCR) improved to 77.12% at the end of September 2019 from 69.12% a year ago.
Damodharan said the slippages have been contained over the past year. He said in the June quarter, Rs 6,000 crore in agriculture waivers were expected to come from state governments, which would improve the bank’s asset quality in its agri loan book. “Going forward, our recovery will be improving month after month and quarter after quarter,” he said.
Slippages declined 14.04% sequentially to Rs 3,166 crore. Write-offs jumped 262% sequentially to Rs 2,498 crore from Rs 689 crore.
Gross advances showed only a marginal growth, rising 0.22% y-o-y to Rs 3.77 lakh crore. Gross deposits grew 1.15% y-o-y to Rs 5.18 lakh crore. The share of current account savings account deposits in the bank’s overall deposits rose to 42.35% from 41.44% a year ago.
Bank of India’s (BoI) capital adequacy ratio stood at 14.09% at the end of Q2FY20, up from 10.93% a year ago and its common equity tier 1 (CET 1) ratio came in at 11%, up from 7.53% at the end of September 2018.
Following the announcement of the results on Friday, shares of Bank of India closed 0.42% lower than the previous close at Rs 71 on BSE.