After a decline in profit for three successive quarters, state-owned Bank of India (BoI) has reported a 24 per cent increase in net profit to Rs 725 crore for quarter ended June 30 as compared with Rs 584 crore in the same period of the previous year.
The growth was mainly driven by a 20 per cent growth in loans, though non-interest income fell 9.29 per cent. The performance was aided by nearly 100 basis points (bps) drop in cost of funds. Net interest margin improved from 2.42 per cent to 2.89 per cent.
“We will aim to retain our NIM (net interest margins) at least at the current level,” said Alok Mishra, chairman and managing director, Bank of India.
Mishra said the bank was expected to see reasonably good profit growth in the future.
The focus would be to maintain asset quality and provisioning would come down in the subsequent quarters, the bank’s management said. Provisioning towards non-performing assets came down significantly in this quarter. It was at Rs 178 crore, down from Rs 308 crore in the same period of the previous year. In addition, recovery from written off accounts, at Rs 691 crore, was higher than slippages, which were Rs 618 crore.
“Asset quality is going to be a challenge and so NPA (non-performing asset) management is going to be in focus. The effort will be for higher recovery,” Mishra said.