State-run Bank of India today reported a massive 84 per cent plunge in its April-June quarter net profit at Rs 130 crore, dragged by an increase in provisioning and higher non-performing assets.
"Higher provisioning and rise in NPAs were the main contributors to the fall in profit in the reporting quarter," acting managing director and chief executive BP Sharma told reporters here today.
In the quarter ended March 2015, the bank had reported a net loss of Rs 56 crore, while in the year ago period its net profit stood at Rs 806 crore.
Total income of the bank rose to Rs 11,659 crore during June quarter, from Rs 11,328 crore in the same quarter of 2014-15 fiscal.
Total provisions in the period rose 25.42 per cent to Rs 1,574 crore as against Rs 1,255 crore in the same period last year.
Provisions for bad and doubtful assets rose 147.26 per cent to Rs 2,119 crore from Rs 857 crore last year.
Gross non-performing assets doubled to 6.80 per cent from 3.28 per cent last year, while net NPA stood at 4.11 per cent as against 2.14 per cent last year.
Recovery in the quarter was of Rs 468 crore while upgrades and write-offs stood at Rs 1,193 crore and Rs 178 crore, respectively.
The bank sold bad loans worth Rs 64 crore to asset reconstruction companies in the quarter and Sharma said the bank will not be engaging ARCs going forward as the bank is looking for 100 per cent upfront payment.
"Though the pace of accreation in NPAs has not reduced, the momentum of recovery and upgradation has improved and will be maintained," Sharma said.
