Loss of Rs 56 crore on account of provisioning
State-owned Bank of India (BoI) has reported a loss of Rs 56.14 crore in the quarter-ended March against a profit of Rs 557.51 crore in the same period in last fiscal on the back of higher provisioning for non-performing assets (NPAs).
BoI had reported a net profit of Rs 173.38 crore in the December quarter. This is the first loss posted by the bank since March 2001 when it had reported a Rs 30.24 crore loss.
The net interest margin (NIM) stood at 2.49% in FY15 whereas for the fourth quarter, it stood at 2.24% — a drop of 50 basis points from the same period in FY14.
The net interest income (NII) — the difference between interest earned and interest expended — fell 6.60% to Rs 2,846.29 crore while the non-interest income increased 22.82% to Rs 1,122.15 crore. Total income rose 8.98% to Rs 12,286.98 crore. Operating profit fell 28.53% to Rs 1,426.55 crore in the fourth quarter. Asset quality deteriorated with the gross NPAs as a percentage of gross advances increasing by 132 basis points to 5.39% on a sequential basis.
Gross NPAs also witnessed a rise of 224 bps y-o-y.
The net NPAs as a percentage of net advances rose 86 bps on a sequential basis to 3.36% and rose 136 bps y-o-y.
The bank pointed out that 45% of the fresh accretion to NPAs in the fourth quarter was from the infrastructure sector while 41% was due to technical reasons like payment coming just after the expiry of the 90-day period at which point an account is usually classified as an NPA.
Provisions and contingencies have increased 45.7% to Rs 2,255.49 crore in Q4 compared with Rs 1,547.27 crore on a y-o-y basis. BoI expects NIMs for FY16 to be at 2.60% and looks forward to bring gross NPAs down to 4.5% and net NPAs down to 2.75%. The bank expects a loan growth of 12% and a deposit growth of 14%. The stock fell 5.89% to close at Rs 191.40 on BSE.