BoI Q3 net up 12% at Rs 803 cr on growth in fee, interest incomes

 

Bank of India (BoI) posted a 12.15 per cent growth in its net profit at Rs 803 crore in the third quarter ended December 2012 on modest growth in interest and fee-based income.

 

The Mumbai-based public sector lender had posted a net profit of Rs 716 crore for the same quarter of in 2011-12.

The total income for reporting quarter rose to Rs 8,959.83 crore from Rs 8,002.27 crore in Q3 of FY12, said BoI’s chairperson and managing director V Iyer. The net interest income rose by 11.65 per cent to Rs 2,308 crore. However, the net interest margin (NIM) declined to 2.36 per cent for Q3 from 2.55 per cent a year ago period. The bank expects to claw back NIMs to around 2.6 per cent at end of March 2013, Iyer said.

The increase in interest income from deployment of funds in inter-bank market Rs 297 crore as against Rs 182 crore (Q3 of FY12) and tax benefits of Rs 124 crore versus outgo of Rs 45 crore helped to grow interest income.

The non-interest income, comprising fees, commissions and treasury revenues rose by about 10 per cent to Rs 937 crore.

BoI share was down by 2.5 per cent to Rs 355.25 at the close of trading on the Bombay Stock Exchange.

BoI’s deposits grew by 13.63 per cent to Rs 3,07,252 crore. The bank estimates deposit growth at 15 per cent for FY13. The share of low cost deposits – saving and current deposits – improved to 33.84 per cent from 32.41 per cent at end of December 2011. It has shed high cost deposits worth Rs 21,000 crore since June 2012.

The loan book rose by 20.27 per cent to Rs 2, 80,356 crore. It expects to clock 17-18 per cent growth in credit for FY13. The bank wants to raise credit to deposit ratio of 74-75 per cent from present 70 per cent level.

The bank restructured loans worth Rs 2,000 crore (on gross basis) in Q3. It recast loans of one textile group worth Rs 800 crore. The outstanding restructured portfolio was Rs 18,136 crore, about 6.47 per cent of advances.

The gross Non-performing assets (NPAs) as proportion of advances rose to 3.08 per cent from 2.74 per cent year ago. The bank has given guidance to bring it down to the level of 2.9 per cent by March.

Iyer said slippages from restructured portfolio to NPA category was about 18 per cent. It will stabilise as there are no big accounts seating on the fence.

Its capital adequacy was 10.59 per cent with a tier of 7.64 per cent at the end of December 2012. The government is infusing about Rs 806 crore before end of March 2013.

Referring to plans to shore up capital base, she said the bank does not need extra capital atleast till September 2013. It may visit the market in the second half of 2013-14 with a capital offering through routes like Qualified Institutional Placement (QIP), she added.