Bank of India (BoI) has identified assets worth Rs 30,000 crore for sale in the current financial year (FY20), even as the bank posted profit in the fourth quarter (Q4) of FY19.
“Unless we sell assets, we will not get the benefit from this kind of non-performing assets (NPA)," said Dinabandhu Mohapatra, the bank's managing director and chief executive officer. BoI posted a profit of Rs 251.8 crore in the Q4, as against a loss of Rs 3,969.27 crore in the year-ago quarter. The bank, which came out of the prompt corrective action (PCA) on January 31 this year, had posted a loss of Rs 4,737.56 crore in the Q3 of FY19.
The bank managed to sell only Rs 1,700 crore of assets to asset reconstruction companies in FY19, about one-tenth of what it planned.
The state-owned bank reported gross NPA ratio of 15.84 per cent, lower than Q3's 16.31 per cent. However, owing to its high provision coverage ratio, which stood at 77 per cent by March-end, the net NPA ratio was at 5.61 per cent.
The reason why provision coverage is high is also because the bank made additional provision of Rs 4,817 crore in the year "in view of uncertainty of recovery and deterioration in value of underlying assets in respect of 213 accounts," the bank said.
"We are proactive in making provisions, which is reflected in our high provision coverage ratio. Importantly, we are fully provided for RBI's first and second list cases and when those cases get resolved in National Company Law Tribunal (NCLT), we will start having a healthy write back," Mohapatra said.
To start with, the bank expected recovery of Rs 2,000 crore through resolution in NCLT in the present quarter itself, the management guided.
Now free of PCA restrictions, the bank plans to grow its credit book at 15 per cent, the deposit growth should also be in commensurate measure, according to Mohapatra, who said the PCA regime was good for the bank as even under the restrictions, the bank managed to grow its credit book by 12 per cent.
The bank's exposure to a 'private' airline in trouble, which can be interpreted as Jet Airways, was Rs 276 crore, against which the bank had made a provision of Rs 40 crore.
With respect to the RBI's first and second list of cases referred to Insolvency and Bankruptcy Code, the bank's exposure was at Rs 6,150.88 crore, which was fully provided for.
The bank's stock rose 1.94 per cent to Rs 81.65 a piece on the BSE.