BOI Q1FY21 pre-tax profit up 271% to Rs 1,332 cr on higher other income

Lower provisions support the better Q1 show; net profit up almost 3.5x to Rs 843 cr

Bank of India (BoI) on Monday reported a fourfold jump in profit before tax (PBT) to Rs 1,332.45 crore in the quarter ended June (Q1Fy21) owing to rise in other income and lower provisions and contingencies. The public sector bank had posted PBT of Rs 359.3 crore in the June quarter last financial year.

The lender's net profit for the reporting quarter rose to Rs 843.6 crore from net profit of Rs 242.6 crore in the year-ago period. 

The bank’s stock closed 2.02 per cent higher at Rs 48.05 apiece on the BSE. The bank’s capital adequacy ratio stood at 12.76 per cent as of June 30.

The net interest income (NII) remained almost flat year on year at Rs 3,481.1 crore in Q1FY21, from Rs 3,485.4 crore in the same quarter a year ago. 

Net interest margin (NIM) for domestic operations fell to 2.73 per cent in June 2020 against 3.03 per cent in the year-ago month. Bank’s Managing Director and Chief Executive A K Das said the decline in NIM was due to factors like somewhat muted growth in loan book and efforts towards effective rate transmission. However, the other income comprising fees and commissions rose to Rs 1,707.2 crore in Q1FY21 from Rs 1,194.7 crore in Q1FY20.  

The bank has estimated the impact of such wage revision arrears amounting Rs 1,461.63 crore till June 30, 2020. It made additional provision of Rs 161.63 crore in Q1FY21. The provisions, including for non-performing assets, and contingencies dipped to Rs 1,512.07 crore in the first quarter of FY21, from Rs 1,911.18 crore in Q1FY20. 

The lender made Covid-19 provisions of Rs 620.30 crore in the June quarter for Special Mention Accounts where moratorium was extended, it said in a BSE filing.

The bank held the total provision of Rs 1,034.78 crore for the Covid-19 pandemic. The provisions are higher than what is required by the RBI’s guidelines to cushion the balance sheet from the impact of pandemic.

Bank to raise Rs 8,000 crore

Bank of India plans to raise Rs 7,000-8,000 crore to meet regulatory norms and support business growth. It may tap equity market with qualified institutional placement, raise money through additional tier I bonds.  The government participation in infusing capital is also one option if Centre decides on recapit­alisation plans, said Managing Director & Chief Executive A K Das. BS Reporter