Bank of Indias net profit has spurted 58 per cent to Rs 448 crore for the financial year ending March 31, 1997, compared with Rs 276 crore posted last year.
Treasury operations contributed nearly 35 per cent to the banks profitability. Another 25 per cent of the profits came via foreign branch operations.
The secret of profitability is that our treasury operations are fine-tuned. We are regularly borrowing from the inter-bank call money at low rates and are able to lend even to FIs for longer durations. That apart, we have already deployed the entire share capital money and the overall returns is a minimum 20 per cent, said the banks incumbent chairman and managing director, G Kathuria.
Kathuria has forecast BoIs net profit of Rs 650 crore for the current financial year.
Meanwhile, BoI, too, has cut its prime lending rate by 100 basis points to 15 per cent after the credit policy was announced on April 15.
The new rate is effective from today. The maximum spread over PLR of the bank would be 4 per cent. The banks global deposits touched Rs 30,950 crore during the 1996-97 financial year while advances stood at Rs 18,961 crore.
Domestic deposits grew by over 17 per cent while non-food credit expanded by about 14 per cent.
The banks ratio of priority sector advances to net credit stood at a comfortable level of 44.6 per cent against the RBIs stipulation of 40 per cent.
BoIs export credit stood at Rs 1,786 crore at the end of March 1997 which was higher than the stipulated ratio of 12 per cent laid down by the RBI.
The bank also managed to reduce its non-performing assets from 7 per cent at the end of 1995-96 to 5 per cent at the end of the year 1996-97.
BoI achieved its largest ever reduction of non-performing assets during the last three years of Rs 776 crore. Its reduction of NPAs through cash recoveries stood at Rs 311 crore at the end of the 1996-97 financial year.
BoI, which completed its maiden public issue of Rs 675 crore in February has seen its capital adequacy ratio increase to 11 per cent with the infusion of this capital.
This is against the minimum stipulation of 8 per cent set by the RBI.
The public issue will help the bank leverage its lending powers by Rs 3,000 crore.
BoI also upgraded some of its branches during the year. The number of computerised branches have gone up to 483 branches, while telebanking services are offered at more than 60 branches.
BoI also has SWIFT connectivity with 23 domestic branches and six foreign centres. The branch network of the bank stood at 2,455 at the end of the 1996-97 financial year.
It has opened 11 branches during the year. BoI has also started operating eight corporate banking branches which function under the direct control of the corporate office.
