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Bank of India Q2 net up 98% to Rs 526 cr on higher net interest income

Gets requests for loan recasts of over Rs 5,000 cr

Bank of India | Q2 results

Abhijit Lele  |  Mumbai 

Bank of India, BOI
The lender said it would work to compensate margin pressures by increase in loan volume. A BOI branch is seen in this representational image.

Government-owned posted a 97.7 per cent growth in net profit at Rs 526 crore for the second quarter ended September 2020 (Q2FY21) on an increase in net interest income (NII) and an uptick in non-interest income.

Its profit after tax stood at Rs 266 crore in Q2FY20. The net profit for Q1FY21 was Rs 844 crore.

The bank’s stock was trading 3.26 per cent higher at Rs 41.26 per share on the BSE.

The NII was up 6.55 per cent to 4,113 crore in Q2FY21, from Rs 3,860 crore in Q2FY20 and Rs 3,481 crore in Q1FY21. The net interest margin (NIM) fell to 2.66 per cent in Q2FY21, from 2.99 per cent in Q2FY20. The transmission of rates (reduction in lending rates) impacted margins and NIMs will remain under pressure due to subdued demand for credit and competition, said its managing director and chief executive A K Das in a media interaction post

The lender said it would work to compensate margin pressures by increase in volumes of loans. The NIM is expected to be between 2.75-3 per cent.

Non-interest income for the reporting quarter was up 21.55 per cent at Rs 1,613 crore in Q2FY21, from Rs 1,327 crore a year ago. The non-interest income was bolstered by growth in treasury income. It was Rs 1,707 crore in Q1FY21.

Provisions and contingencies rose to Rs 2,312.3 crore in Q2FY21 from Rs 2,052.7 crore in Q2FY20. The provision coverage ratio (PCR) was 87.91 per cent this September, against 77.12 per cent a year ago, and 84.87 per cent in Q1FY21.


The bank’s gross non-performing assets (NPAs) declined to 13.79 per cent in September 2020, from 16.31 per cent in September 2019, and 13.91 per cent in June 2020.

Net NPAs declined to 2.89 per cent from 5.87 per cent in September 2019. It was 3.58 per cent in June 2020.

Bank expects to bring down Gross NPA below five per cent and Net NPAs below two per cent by March 2021.

BOI executives said the loans eligible for one-time restructuring (OTR) of Rs 24,000 crore while it has received requests for restructuring of loans worth over Rs 5,000 crore from corporates.

Commenting on response to OTR P R Rajagopal, executive director, said retail and MSME customers are happy with moratorium and reschedulement granted to them respectively and few are opting for restructuring.

Credit grew 17.28 per cent (on a year-on-year basis) to ~6.07 trillion. Total deposits grew 8.2 per cent to Rs 4.07 trillion in 12 months to September 2020.

Overall capital adequacy ratio (CAR) was at 12.8 per cent with tier I of 9.67 per cent at the end September 2020.

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First Published: Fri, November 06 2020. 15:35 IST