Bank of India reports Rs3,587 Q4 net loss

Bank of India (BoI), the country's third biggest state-run lender by assets, reported a fourth-quarter net loss of Rs3,587 crore ($529.92 million), registering the third straight quarterly loss as the bank set aside more money to cover mounting bad loans.

Bank of India had reported a net loss of Rs56.14 crore in the similar quarter of the previous year.

Despite continuing losses, BoI hopes a gradual upturn in the economy will help to ease the burden of bad loans in its new financial year.

With this, the country's 12 state-run banks have now posted combined losses of Rs20,643 crore in the quarter ended 31 march 2016, partly due to higher provisioning in line with Reserve Bank of India's directive to clean up accounts.

Melwyn Rego, chief executive of the bank, said he was "cautiously optimistic" about an improved performance in the current fiscal year with an improvement in asset quality.

Bank of India's gross bad loans rose to 13.07 per cent in the quarter ended March, from 9.18 per cent in December. Provisions, including for loan losses, more than doubled from a year earlier to Rs5,470 crore.

BoI's stressed assets, which include bad loans and restructured loans, stood at Rs57,586 crore or 15 per cent of total loans as of end-March, the bank said.

The bank has started lowering exposure to companies and is instead growing its comparatively safer retail loan book, including housing loans, Rego said.

"Our recovery efforts have moved up substantially," Rego said.

BoI aims to recover Rs17,500 crore of its non-performing loans in the current fiscal year ending March 2017 by upgrading some weak accounts to performing ones, compared with Rs10,920 crore the previous year, Rego said.

Bank of India also planning to transfer Rs1,000 crore worth of non-core assets in the current fiscal year.

It is looking to raise as much as Rs8,500 crore of capital this fiscal year, including up to Rs5000 crore via share sale, Rego said.