BoI Q4 net jumps 142% on better asset quality

The bank made provisions of Rs 1,541 crore, which were lower by 4% on year. The state-owned lender’s pre-provisioning profits rose nearly 40% to Rs 2,466 crore in Q4FY22.

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BoI’s global advances grew 11% on year to Rs 4,57,014 crore.

Bank of India (BoI) said on Tuesday its net profit for the quarter ended March increased 142% on year to Rs 606 crore on account of lower provisioning. The bank made provisions of Rs 1,541 crore, which were lower by 4% on year. The state-owned lender’s pre-provisioning profits rose nearly 40% to Rs 2,466 crore in Q4FY22.

On a sequential basis, however, the bank’s provisioning rose 360% to Rs 1,541 crore. This led to a 40% sequential slump in its bottomline. In Q3FY22, the bank had posted a net profit of Rs 1,027 crore and had made provisions of Rs 335 crore. BoI’s net interest margin (NIM) improved 57 basis points on year to 2.58% in the March quarter. Domestic NIM improved 74 basis points to 2.90% while overseas NIM deteriorated 22 basis points to 0.88% from 1.10% a year ago.

The lender is targeting 3% NIM and 10-12% credit growth in the current financial year, MD & CEO Atanu Kumar Das told reporters. It has witnessed growth in the retail and MSME segments and is planning to supplement loan growth by focusing on corporates.

BoI’s global advances grew 11% on year to Rs 4,57,014 crore. Domestic advances grew 8.7% on year to Rs 3,93,991 crore, led by near 20% increase in agriculture and retail sector loans. Corporate loans, which form a bulk of the domestic advances, declined marginally in Q4FY22. Overseas advances grew 31% to Rs 63,023 crore.The Mumbai-based lender witnessed improvement in asset quality as its gross non-performing asset (NPA) ratio fell 48 basis points quarter on quarter to 9.98% in Q4FY22 from 10.46%.

The decline in gross NPA was mainly because bad loans in the corporate and overseas account declined. Net NPA ratio fell 32 basis points sequentially to 2.34% during the March quarter. The bank’s fresh slippages fell to Rs 1,502 crore from Rs 1,760 crore a quarter ago. In the year-ago period, fresh slippages stood at Rs 7,332 crore. The bank has a baseline target for loan recoveries of up to Rs 12,000 crore in FY23, the management said.

BoI has an exposure of Rs 1,045 crore to the Future Group for which it has made 100% provision and has Rs 963 crore exposure to the Srei Group companies and it has made 50% provision for the account, Das said. Future Retail and two Srei group companies are facing separate insolvency petitions before the National Company Law Tribunal.

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