Interest income boosts BoI profit

BS 200 Scorecard

The huge growth in interest income on advances and control on costs of funds helped Bank of India (BoI) post 60.48 per cent rise in net profit at Rs 212.13 crore in the second quarter ended September against Rs 132.18 crore in the same period a year ago.

The total income for the September quarter rose to Rs 2,611.4 crore from Rs 1,964.51 crore in July-September 2005. The interest income on advances grew substantially to Rs 1,575.51 crore from Rs 1,101.28 crore a year ago. The yield on advances rose to 8.45 per cent from 7.43 per cent in the same quarter last year.

Besides growth in credit in Q2, the re-pricing of loans after raising prime lending rate twice between April and September helped the bank improve its income on advances, BOI CMD M Balachandran said.

The bank's interest expenses also rose 30.11 per cent to Rs 1,408.82 crore from Rs 1,082.76 crore last year. The interest on investment grew to Rs 599.02 crore from Rs 525.72 crore. The other income rose marginally to Rs 353.25 crore from Rs 303.12 crore a year ago.

The deposits grew 20 per cent to Rs 1,03,293 crore. The low cost deposits "� savings and current accounts "� rose 22 per cent and now at 40.40 per cent of aggregate deposits. The cost of deposits rose to 4.53 per cent from 4.22 per cent in the same quarter last year, Balachandran said.

The advances increased 24 per cent to Rs 75,097 crore from Rs 60,614 crore a year ago. The retail credit shot up 56.3 per cent to Rs 18,539 crore. The credit-deposit ratio stood at 72 per cent.

The bank's provisions showed a negligible rise at Rs 158.65 crore at end of Q2 from Rs 152.06 crore a year ago. BoI's gross NPAs (non-performing assets) declined to 2.96 per cent from 4.63 per cent. The net NPAs also fell to 2.25 per cent from 1.07 per cent.

In the quarter, the bank raised upper tier-II capital of Rs 750 crore in the domestic market and Rs 1,108 crore in the foreign market. Its capital adequacy ratio improved to 11.85 per cent at the end of September 2006 from 11.4 per cent a year ago.