Bank of India Q2 net doubles to Rs 1,051 cr on spike in non-interest income

However, NII fell by 14.32% in the reporting quarter to Rs 3,523 crore

Public sector lender Bank of India posted a 99.89 per cent year-on-year rise in net profit, at Rs 1,051 crore, for second quarter ended September 30, 2021 (Q2FY22), on higher non-interest income and fall in provisions for bad loans.

The lender had posted a net profit of Rs 526 crore in the same quarter last financial year (Q2FY21). Sequentially, net profit was up 45.97 per cent from Rs 720 crore in the June 2021 quarter (Q1FY22).

However, the bank's net interest income (NII), the interest earnings minus expense, fell by 14.32 per cent in the reporting quarter to Rs 3,523 crore in Q2FY22, from Rs 4,113 crore in Q2FY21. But it rose sequentially by 12.06 per cent from Rs 3,144 crore in Q1FY22.

In a post-result media call, A K Das, managing director and CEO of Bank of India, said the growth in advances was muted which impacted interest income. Its advances rose just by 2.7 per cent YoY to Rs 4,18,895 crore by September 2021, less than over six per cent growth of the Indian banking system.

The bank has guided for a 6-7 per cent rise in advances in FY22 on the back of pick up in demand and credit outreach programme. Its deposits rose by 0.89 per cent YoY to Rs 6,12,961 crore in September 2021.

Its stock closed 3.48 per cent up at Rs 62.5 per share on BSE.

The non-interest income covering fees, commission, profit from sale of investments and recoveries from written-off accounts rose 58.71 per cent YoY to Rs 2,136 crore in Q2, but declined sequentially from Rs 2,320 crore a Q1FY21.

Its provisions for NPAs declined to Rs 241 crore in Q2FY22 from Rs 2,134 crore in Q2FY21 and Rs 873 crore in Q1FY22. Its Provision Coverage Ratio (PCR) was stable at 87.81 per cent in September 2021 against 87.91 per cent a year ago and 86.17 per cent in June 2021.

Its asset quality showed improvement with Gross Non-performing Assets (NPAs) declining to 12 percent in September 2021 from 13.79 per cent a year ago and 13.51 per cent in June 2021. The net NPAs improved to 2.79 per cent in September 2021 from 2.89 per cent in September 2020 and 3.35 per in June 2021.

Das said GNPAs are expected to decline below 10 per cent and net NPAs below two per cent by March 2022.

The lender's total Capital Adequacy Ratio (CRAR) was at 17.05 per cent in September 2021.