BoI net dips 26 pc to Rs 558 cr on asset quality troubles

State-run Bank of India today reported 26 per cent drop in net profit at Rs 558 crore in the January-March quarter driven down by asset quality woes.
"Lower profit is due to increased provisioning on the slippages which were higher in the quarter," bank's chairperson and MD V R Iyer told reporters here.
Total provisioning in the quarter stood at Rs 1,439 crore, up 9.18 per cent as against Rs 1,318 crore in the year ago period.
Fresh slippages in the quarter stood at Rs 3,500 crore, she said, exuding confidence that Rs 1,500 crore of those assets will turn standard in the next few quarters.

These are "technical slippages" due to factors like promoters not being able to bring in their equity which rendered their account as non-performing, she added.
It restructured Rs 2,394 crore of loans in the period, she said, adding that total restructured assets during the year declined to Rs 5,115 crore as against Rs 8,447 crore.

In the first quarter of FY15, the bank is anticipating a restructuring of Rs 1,100 crore, she said.
The bank sold Rs 852 crore worth of NPAs to asset reconstruction companies during the reporting quarter. It upgraded Rs 50 crore of loans during the three months to March and wrote off Rs 469 crore of loan in the period.

For the full year, net profit marginally decreased by 0.73 per cent to Rs 2,729 crore as against Rs 2,749 crore as its provision for taxation increased by whopping 215 per cent to Rs 816 crore from Rs 259 crore.
Net interest income improved to Rs 3,047 crore from Rs 2,476 crore. Non-interest income stood at Rs 914 crore in the quarter as against Rs 1,094 crore.
The bank's domestic net interest margins improved to 2.85 per cent from 2.80 per cent. The bank expects it's margins to improve to 3 per cent in the current fiscal.
Gross non performing assets deteriorated to 3.15 per cent from 2.99 per cent last year, while net NPA marginally improved to 2 per cent from 2.06 per cent.

In the current fiscal, the bank sees its GNPA level improving to below 3 per cent and net NPAs to 1.75 per cent.
Provision coverage ratio stood at 58.68 per cent as of March 2014 as compared to 60.92 per cent.