Bank of India reports 62% jump in Q3 net profit

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Bank of India (BoI) reported a 62 per cent year-on-year (y-o-y) jump in third quarter standalone net profit at ₹1,870 crore against ₹1,151 crore in the year-ago quarter.

The public sector bank’s bottomline was supported by a sharp decline in provision for non performing asset and write-back in provision for standard advances even as net interest income (NII) was a shade lower and other income declined.

NII (difference between interest earned and interest expended) nudged down about 2 per cent y-o-y to ₹5,463 crore (₹ 5,596 crore in the year-ago quarter).

Other income, comprising fee-based income, treasury income and other non-interest income, declined about 17 per cent y-o-y to ₹1,193 crore (₹1,432 crore).

Provisions decline

Total provisions before tax fell 73 per cent y-o-y to ₹501 crore (₹1,879 crore). 

Under this head, provisions for bad and doubtful assets declined 44 per cent y-o-y to ₹612 crore (₹1,087 crore). The bank received a write-back of ₹307 crore from provision for standard assets (against a provision of ₹806 crore).

However, provision for non performing investment rose to ₹196 crore (against a ₹14 crore write-back).

Rajneesh Karnatak, MD and CEO, observed that the BoI has a sanctioned loans pipeline of ₹50,000 crore even as resource raising is a challenge.

The bank has excess SLR securities of ₹30,000 crore and a part of this can be channelised to support loan growth.

Global net interest margin (NIM) in the reporting quarter declined to 2.85 per cent from 3.28 per cent a year ago.

Karnatak expects to maintain a net interest margin of 3 per cent +/- 5-10 basis points

Gross non-performing assets (NPAs) position improved to 5.35 per cent of gross advances as on December-end 2023 against 7.66 per cent as on December-end 2022.

Net NPA position too improved to 1.41 per cent of net advances against 1.61 per cent

Global advances rose 11.28 per cent y-o-y to stand at ₹5,65,060 crore as on December-end 2023, with domestic and international growing 11.34 per cent (to ₹4,75,012 crore) and 11 per cent (to ₹90,048 crore), respectively.

Global deposits were up 8.28 per cent to stand at ₹7,07,827 crore, with domestic deposits and international deposits increasing 7.62 per cent (to ₹5,99,137 crore) and 12.07 per cent (to ₹1,08,690 crore), respectively.