Bank of India posted a 38.5% drop in profit at Rs 301.8 crore for the second quarter ended September 2012 ON sharp rise in provisioning for bad loans.
Mumbai-based public sector lender had reported net profit of Rs 491.1 crore for second quarter of 2011-12 (June 2012).
Its total income in Q2 rose to Rs 8,899 crore from Rs 7,728 crore in Q2 of 2011-12. Its net interest income was up 15.34% to Rs 2,196 crore from Rs 1,903 crore in Q2 of FY 12.
Gauri Shankar, chief financial officer, said the interest income which reflects performance in operations has shown good growth. But, the provisions made dent in net profit.
The total provisions, including that for non-performing assets, rose almost 50% to Rs 1,552 crore from Rs 1,064 crore in. July-September 2011.
BOI share was down 3.8% at Rs 276 per share on Bombay Stock Exchange.
Its Gross NPAs rose to 3.42% from 3.02% a year ago. In absolute terms Gross NPAs were up at Rs 8,898 crore from Rs 6,548 crore at end of September 2011. The slippages were much higher compared to quarter ended June 2012. Gross NPA’s stood at Rs 6,751 crore at end of June 2012.
The provision coverage ratio of NPAs improved to 60.96% from 59.1%.
The economy has slowed down. It has affected the various segments. Many companies have been facing difficulties in making payments, now bank has made adequate provision for slippages, the CFO said.
Its capital adequacy ratio (Basel II) was 11.20% (tier I at 8.07%) in September 2012. CAR was 11.97% (tier I 8.26%.
