Bank Of India Q1 Profit Rises 156% On Lower Provisioning

Bank of India (BoI) reported a 156 per cent jump in first quarter standalone net profit on the back of robust growth in other income and lower provisioning burden.

The public sector bank’s net profit rose to ₹243 crore in the reporting quarter, against ₹95 crore in the year-ago period. Net interest income edged up 4 per cent year-on-year (y-o-y) to ₹3,485 crore.

Bolstered by growth in treasury income as well as core fee-based income, non-interest income soared 93 per cent y-o-y to ₹1,195 crore. Loan-loss provisions declined 17 per cent y-o-y to ₹1,873 crore.

Net interest margin improved to 2.67 per cent in the June 2019 quarter, against 2.49 per cent in the year-ago quarter.

During the quarter under review, the bank reported higher slippages aggregating ₹6,671 crore (₹3,102 crore in the March 2019 quarter).

However, on the back of recovery, upgradation, and write-off, BoI managed higher reduction of ₹8,395 crore in non-performing assets (NPAs), against ₹3,239 crore in the March 2019 quarter.

As of June-end 2019, gross NPAs stood at ₹62,068 crore, against ₹60,661 as of March-end 2019. GNPAs rose to 16.50 per cent as of June-end 2019, against 15.84 per cent as of March-end 2019.

Net NPAs nudged up to 5.79 per cent as at June-end 2019, from 5.61 per cent as at March-end 2019.

The board of directors has approved standard assets provision of 5 to 100 bps over and above the regulatory minimum, in respect of the bank’s stress sectors identified based on SMA (special mention account) classification, against the previous practice of 10 bps.

Accordingly, an additional provision of ₹60.43 crore has been held as of June 30, 2019.

The stress sectors identified by the bank are: telecommunication, textile, iron and steel, commercial real estate, other metal and metal products, gem and jewellery, roads and ports, vehicle and vehicle parts, mining and quarrying, and power industry.