Despite a rise in bad loans, Bank of India today reported a 26 per cent jump in net profit at Rs 786 crore for the three months to September 2014, boosted by higher core income which rose 20 per cent.
The public sector bank had posted a net profit of Rs 621.77 crore in the year-ago bank.
The core net interest income grew 20 per cent to Rs 3,031 crore from Rs 2,527 crore in the year-ago period as its advances grew 15 percent during the quarter.
In spite of a rise in bad assets, which rose to 3.54 per cent, its provisions for the period came down by 9 per cent to Rs 1,350 crore from Rs 1,481 crore as the bank had write-back of Rs 40 crore on provisions made for depreciation on its investments.
The bank saw stress on its asset quality rising in the period with gross non-performing assets jumping to 3.54 per cent from 2.93 per cent, and net NPAs jumped to 2.32 per cent up from 1.85 a year ago.
"Though NPAs have grown, the pace of resolution of stressed assets during the quarter has also accelerated," bank's Chairperson and Managing Director VR Iyer told reporters here.
Fresh slippages in the quarter stood at Rs 2,971 crore and the bank sold Rs 106 crore of NPAs to asset reconstruction companies.
She said the bank is aiming a gross NPA of under 3 per cent and net NPAs below 2 per cent this fiscal but admitted that "these targets are bit ambitious and I see gross NPA at 3.15 per cent".
The bank domestically restructured Rs 1,358 crore assets in the reporting period and has a CDR pipeline of Rs 1,500 crore for the current quarter.
Domestic net interest margin improved to 2.73 per cent from 2.45 per cent, while global NIM improved to 2.31 per cent from 2.29 per cent.
"We are targeting a domestic NIM of 2.75 per cent and international at 1.5 per cent in this fiscal," Iyer said. Brokerages lapped the numbers and gave a buy call on the BoI stock.
"The bank reported results with net income growth of 26.4 per cent to Rs 786 crore, mainly on account of 19.9 per cent growth in NII and de-growth in provisions," Angel Broking's Vaibhav Agrawal said.
