You are here: Home » Companies » Results
Business Standard

Bank of India Q2 net up 41% at Rs 179 cr, asset quality improves

Net interest margin flat at 2.15%; deposits down 2%

Nikhat Hetavkar  |  Mumbai 

Bank of India Q2 net up 41% at Rs 179 cr, asset quality improves

Public sector lender (BoI) had a good second quarter with a rise in net profit and improvement in asset quality. BoI’s net profit rose 41 per cent to Rs 179 crore in the September quarter, as against Rs 127 crore in the year-ago quarter. BoI has also dropped its initial plans of raising Rs 8,000 crore after the government recently announced a Rs 2.11-lakh-crore recapitalisation plan for state-owned banks. “Earlier, we had planned to add Rs 8,000 crore to our existing capital base, both for replenishment as well as for growth. However, in view of the recent recapitalisation plan of the government, we will work out a suitable capital mobilisation plan to not only take care of haircuts for existing and potential NPAs but also to meet the growth capital requirement for encashing the upcoming opportunities,” said BoI Managing Director and Chief Executive Dinabandhu Mohapatra. The bank recently raised Tier-1 bonds of Rs 500 crore from the market. The bank’s asset quality improved as gross non-performing assets (NPAs) ratio stood at 12.62 per cent as on September 2017, against 13.45 per cent as on September 2016. The gross NPAs were Rs 49,307 crore in September 2017, as against Rs 52,262 crore in the previous quarter. The slippages for the current quarter were Rs 2,141 crore, a fall both sequentially and year-on-year (y-o-y).

The bank has eight accounts with an aggregate exposure of Rs 8,200 crore in the first list and 17 accounts with an aggregate exposure of Rs 3,300 crore in the second list of stressed accounts specified by the Reserve (RBI). Mohapatra said recapitalisation would augment credit growth, especially for productive sectors, and prompt speedier resolution of NPAs under the Insolvency and Bankruptcy Code (IBC). Total deposits, including domestic and foreign, for the quarter rose 7.61 per cent to Rs 543,716 crore, with current and savings accounts growing 20.76 per cent over the previous year. Total advances, including domestic and foreign, grew 0.51 per cent to Rs 390,687 crore as on September 30, 2017. “Great diversification is happening so that risk is spread out and we are moving towards less corporate and more retail,” said Mohapatra. The bank plans to focus on retail, small and medium enterprises and agriculture sectors as part of its de-risking process. Net interest income for the quarter rose 6. 9 per cent y-o-y to Rs 2,908 crore. Other income, which includes fees and commissions, fell 15 per cent y-o-y to Rs 1,707 crore due to a fall in profit on sale of investments. The bank’s (CAR) was at 12.23 per cent and Tier-I CAR at 8.86 per cent as on September 30.

First Published: Sat, November 11 2017. 01:17 IST