State-owned Bank of India (BOI) swung into black by registering a standalone net profit of Rs 87.71 crore for the first quarter ended June as bad loans were brought down year-on-year.
The bank had reported a net loss of Rs 741.36 crore in the April-June quarter of previous fiscal due to bad assets and higher provisioning to cover it.
Compared sequentially also, the performance has been good as there was a net loss of Rs 1,045.54 crore on bank's balance sheet during March quarter of previous fiscal, the bank said in a regulatory filing.
While for the full year 2016-17, there was a net loss of Rs 1,558.34 crore on its books.
Earnings-wise, bank's total income during April-June quarter of 2017-18 increased to Rs 11,106.61 crore from Rs 10,664.36 crore in the same period a year earlier.
The bank improved on its asset front with gross non- performing assets falling to 13.05 per cent of the gross advances as on June 30, 2017 from 13.38 per cent at the end- June 2016.
Net NPAs or bad loans also fell to 6.70 per cent of the net advances by June end this year, as against 7.78 per cent a year ago.
Thus, provisions to cover bad loans came down to Rs 2,245.28 crore for June quarter, compared to Rs 2,770.19 crore, which the bank had parked for the first quarter of 2016-17.
"In terms of RBI circular,...The board of directors of the bank has approved standard assets provision of 0.10 per cent over and above the regulatory minimum in respect of bank's advances pertaining to textiles, iron & steel and telecommunications sectors. Accordingly, an additional provision of Rs 13.23 crore has been made," the bank said.
"As per RBI directions for initiating Insolvency Process-Provisioning Norms...The bank is required to make additional provisions estimated to Rs 915 crore in respect of accounts covered under provisions of Insolvency and Bankruptcy Code to be proportionately spread over three quarters from second quarter, i.E. September 2017, so that the required provisions are fully in place by March 2018," the lender said.
The lender said it has made a preferential allotment of 1.75 crore equity shares to the LIC of India for a total consideration of Rs 221.92 crore during the first quarter of current fiscal.
Also, it received Rs 1,500 crore from the government as capital infusion money in lieu of preferential allotment of shares.
Stock of the bank jumped 2.19 per cent up to Rs 156.05 on BSE post earnings announcement.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)