Bank of India (BoI) has reported a 63 per cent rise in net profit at Rs 135.16 crore in the second-quarter ended September 30, 2001, compared with Rs 82.97 crore in the corresponding quarter in the previous fiscal.
In the half year ended September 30, 2001, the bank has logged a 70 per cent jump in net profit at Rs 259.65 crore compared with Rs 153.06 crore in the corresponding half in the previous fiscal.
During the reporting quarter, interest earned by the bank rose by only 6.77 per cent to Rs 1,452.95 crore (Rs 1,360.70 crore), while other income (income from treasury operations) rose substantially by 56.40 per cent to Rs 260.37 crore (Rs 166.47 crore).
The bank has managed to keep its total expenditure (excluding provisions and contingencies) at Rs 1,332.83 crore (Rs 1,305.80 crore). Provisions and contingencies made by the bank shot up by 81.94 per cent at Rs 193.77 crore (Rs 106.50 crore).
K V Krishnamurthy, the chairman and managing director of the bank, said: "We have surpassed in six out of the seven efficiency parameters set by the Varma Committee, except for the net interest margin, which, at 2.84 per cent, is marginally short of the 3.02 per cent benchmark."
He pointed out that under the current economic slowdown many borrowal accounts had either come up for restructuring or sought interest concessions.
Krishnamurthy said the bank had made provisioning for the six months assuming the slippages to be at Rs 500 crore.
The net non-performing assets as a percentage of net advances has been brought down to 6.69 per cent (8.15 per cent), while in absolute terms they stand at Rs 2,255 crore (Rs 2,138 crore). The capital adeqaucy ratio of the bank as on September 30, 2001 stood at 12.10 per cent (10.35 per cent). The average cost of funds of the bank has come down to 5.98 per cent (6.29 per cent).
The board of directors of Bank of India have decided to merge the wholly owned subsidiary, BoI Finance Ltd, with itself. The bank has initiated appropriate steps for giving effect to the merger, including obtaining necessary regulatory and other approvals.
The bank is also awaiting the government's response to its plea for returning Rs 300 crore by way of equity capital. Once the capital is returned to the Centre, the public's stake in the bank will move up to 46 per cent, while the goverment's stake will come down to 54 per cent from 76 per cent.
