Bank of India nets Rs88 cr Q1 profit on lower NPA provisioning

Bank of India (BoI), the country's sixth-largest lender by assets, reported a net profit of Rs87.7 crore for fiscal first quarter ended 30 June, helped by strong other incomes and some improvement in asset quality.

The state-run lender had reported a loss of Rs741 crore in the year-ago quarter.

Mumbai-based Bank of India said higher income – both from normal operations as well as other sources - and lower provisioning for bad loans helped improve performance during the quarter.

Net interest income of the bank, however, was down 8.7 per cent year-on-year at Rs2,533 crore compared with same quarter last year.

BoI said its asset quality improved on a sequential basis as gross non-performing assets (NPAs) as a percentage of gross advances fell to 13.05 per cent from 13.22 per cent in the previous quarter and net NPA declined to 6.7 per cent from 6.9 per cent in the quarter ended June 2017.

In absolute terms, gross NPAs slowed down by 1.7 per cent to Rs51,019 crore at the end of the June quarter from Rs51,875 crore in the same quarter in the previous year. NPAs were lower by 2 per cent quarter-on-quarter while net NPA dropped 3.7 per cent to Rs24,370 crore in Q1FY18.

Provisions and contingencies declined 19 per cent to Rs2,245.28 crore from Rs2,770.19 crore in the same quarter of the previous year. Quarter-on-quarter, it slumped 53 per cent from Rs4,736.21 crore. Other income surged 30.08 per cent to Rs1,610.96 crore year-on-year.

Other income (non-interest income) during the quarter jumped 30 per cent to Rs1,610.96 crore compared with same quarter previous fiscal.

Operating income shot up 44 per cent year-on-year to Rs2,379.43 crore due to sharp fall in employee costs (down 28.5 per cent).

Net interest income (NII), or the core income a bank earns by giving loans, decreased 8.7 per cent to Rs2,533.03 crore from Rs2,775.17 crore last year.

Advances for the quarter were mostly unchanged at Rs3.64 trillion from a year ago. Deposits rose 9.2 per cent to Rs5,44,000 crore.

Bank of India said it has reversed Rs196.6 crore of unrealised interest in stressed accounts.

In afternoon trade the stock was quoting at Rs157.35, up Rs4.65, or 3.05 per cent on the BSE.