Bank of India Q2 PAT jumps 52% to Rs 1,458 cr as asset quality improves

The Bank of India on Saturday reported a 52 per cent year-on-year (y-o-y) growth in net profit to Rs 1,458 crore for the quarter ended September 30, compared with Rs 960 crore in the corresponding quarter of the last year, mainly on the back of an improvement in asset quality.

The state-owned bank experienced a 6 per cent decline in net profit on a sequential basis.

The gross non-performing assets (NPA) ratio stood at 5.84 per cent compared to 8.51 per cent in the same period last year.

Furthermore, the net NPA ratio fell to 1.54 per cent, against 1.92 per cent in the corresponding period last year and 1.65 per cent in the previous quarter.

 

Net interest income (NII) grew by 13 per cent y-o-y to Rs 5,740 crore. Non-interest income was up 19 per cent to Rs 1,688 crore.

During the quarter, the bank's operating profit reached Rs 3,756 crore, marking an 11 per cent increase from Rs 3,374 crore in the same period of the previous year.

Provisions for the quarter ending September 30 stood at Rs 818 crore, against Rs 1,912 crore a year ago. “This reduction in provisions is due to a decrease in fresh slippages and the fact that we have already provided for legacy NPAs,” said Rajneesh Karnatak, Managing Director and Chief Executive Officer of Bank of India.

The provision coverage ratio was 89.58 per cent at the end of September 30, against 88.96 per cent in a year-ago period.

Net interest margin (NIM) for Q2 stood at 3.08 per cent against 3.04 per cent for Q2 of FY23. It was 3.03 per cent for Q1 of FY24. “While the margin has decreased from September 2022, we aim to protect the domestic NIM, expecting it to be around 3.35 per cent due to the prevailing hardening interest rate scenario,” said Karnatak.

Yield on assets was 0.67 per cent for Q2 against 0.47 per cent for the corresponding quarter of the previous year.

Global Deposits of the bank surged by 8.68 per cent, growing from Rs 6.5 trillion to Rs 7.03 trillion. Additionally, Global Advances marked a growth of 10 per cent, escalating from Rs 4.94 trillion to Rs 5.43 trillion.

On the domestic front, Domestic Deposits saw a rise of 8.61 per cent y-o-y, climbing from Rs 5.51 trillion in September 2022 to Rs 5.99 trillion in September 2023. Simultaneously, Domestic Advances experienced a growth of 9.80 per cent, increasing from Rs 4.12 trillion to Rs 4.53 trillion during the same period.

“Our unsecured advances constitute 22.8 per cent of the total gross global advances, which is lower than the industry average. As for raising savings or term deposit rates, we are continuously evaluating our options. We are proactively managing our deposit mix to ensure stability and growth in our deposit base,” said B Kumar, Chief Financial Officer at the Bank of India.