BoI net profit down 15%

Bank sells bad loans of Rs 1,744 cr

Public sector lender Bank of India (BoI) posted a 27.02 per cent drop in net profit at Rs 586 crore for the third quarter ended December 31, on the back of higher provisions for stressed loans. Net profit for the corresponding period of the previous financial year was Rs 803 crore. Provisions for bad and doubtful assets grew to Rs 1,173 crore in Q3 of FY14, which was Rs 591 crore in Q3 of FY13. The bank stock nosedived to close 10.47 per cent down at Rs 186.35 on the BSE.

V R Iyer, chairperson and managing director, BOI, said the bank has made provisions for some accounts that have been referred to corporate debt restructuring (CDR) until the package is finalised for these accounts. After approval of package some of the provisions will be released, Iyer said.

Its non-performing assets stood at 2.81 per cent of the total at end the of December 2013, down from 3.08 per cent at the end of December 2012. It sold NPAs worth Rs 1,744 crore to asset reconstruction companies in the quarter. Its provisions coverage ratio improved to 63.77 per cent at the end of Q3 of FY14 up from 60.74 per cent in Q3 of FY13.

Referring to the impact of elongated economic slowdown, Iyer said there was stress and things looked muted. The bank is concentrating on controlling slippages and improving recoveries, Iyer added.

The standard restructured loan portfolio stood at Rs 16,394 crore (4.6 per cent of advances). The bank restructured advances worth Rs 1,146 crore in the third quarter. The pipeline of restructuring for the fourth quarter was Rs 1,500 crore.

Its net interest income grew 18.86 per cent in the quarter to Rs 7,783 crore from Rs 6,548 crore in the corresponding period of the previous financial year. Its net interest margin (NIM) for domestic operations stood at 2.89 per cent over 2.73 per cent in Q3 ended December 2012.

The non-interest income grew 26.42 per cent from Rs 2,672 crore in December 2012 to Rs 3,378 crore in December 2013. Its capital adequacy (Basel III) stood at 10.84 per cent at end of 2013.