BoI Q1 net up 8.44% at Rs 95 cr on interest income growth

State-run Bank of India today reported a 8.44 per cent rise in net profit at Rs 95 crore in the June quarter, helped by growth in interest income.

The company had reported a net profit of Rs 88 crore in the same period last year.

The lender reported profits in the June quarter after two consecutive quarterly losses.

"We have done well this quarter and have come back to black. Growth in profits were on account of higher interest income, recovery from Bhushan Steel and reduction in costs," the bank's managing director and chief executive officer, Dinabandhu Mohapatra, told reporters here today.

The bank recovered Rs 1,500 crore from resolution of Bhushan Steel which was facing insolvency resolution process in the NCLT.

Its net interest income rose 32.41 per cent to Rs 3,354 crore, from Rs 2,533 crore in the year-ago period.

The bank's global net interest margin (NIM) improved to 2.49 per cent from 1.99 per cent, while its domestic NIM stood at 3.05 per cent, against 2.39 per cent last year.

Gross non-performing assets (NPAs) of the bank was at 16.66 per cent in the reporting quarter, compared with 13.05 per cent last year, while its net NPAs stood at 8.45 per cent, against 6.70 per cent.

"Our NPAs have stabilised to a great extent and it would significantly come down in the second quarter," said Mohapatra.

Fresh slippages in the June quarter for the bank stood at Rs 6,671 crore, while its provision coverage ratio improved to 66.67 per cent.

The lender has identified Rs 8,000 crore of NPAs to be sold to asset reconstruction company (ARC) in the second quarter, according to Mohapatra.

Recovery in the quarter was Rs 2,699 crore and the upgradation was to the tune of Rs 1,774 crore.

The bank expects a recovery of around Rs 6,000 crore in the September quarter, which includes Rs 4,000 crore from NCLT accounts.

Mohapatra said the bank is looking to raise Rs 500 crore in the second quarter through monetisation of some of its non-crore assets.

The bank's business de-grew by 6.04 per cent to Rs 8,78,351 crore, compared with Rs 9,34,796 crore last year.

Its domestic advances increased to Rs 2,91,688 crore in the June quarter, from Rs 2,81,570 crore in the same period last year.

The overseas advances, however, decreased to Rs 72,059 crore, from Rs 1,09,492 crore, on account of bank's plan to rationalise overseas operation as also due to the impact of RBI's restriction on buyer's credit, he said.

The bank has already closed two representative offices and Mohapatra said it is re-looking at the operations of seven to eight overseas offices.

On media reports that the RBI has given a list of accounts to banks to act on, Mohapatra denied of any such list but said the apex bank is examining books of all the banks as a regular practise.

"There is no list. Every year after March, RBI does a routine inspection of banks' books, wherein they examine various accounts. This is a routine examination of accounts which happens every year," he said.

The lender's scrip ended 8.75 per cent down at Rs 94.35 apiece on the BSE today, against 0.30 per cent rise in the benchmark.