Bank of India celebrates early Diwali: Net profit doubles to Rs 622 cr

Mumbai: Bank of India today said net profit doubled to Rs 622 crore in the quarter to September, helped by higher growth in net interest income and other income. The bank had posted a profit of Rs 301.85 crore a year earlier.

Total income increased to Rs 10,339.55 crore from Rs 8,899.55 crore, BOI said in a filing to the BSE. Net interest income at Rs 2,527 crore grew 15.07 per cent from Rs 2,196 crore in the year-ago period.

Chairperson and Managing Director Vijayalaxmi Iyer said the good set of numbers came even after making a provision of Rs 466.16 crore for mark-to-market losses of Rs 647.88 crore in its investment portfolio.

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[caption id=“attachment_1205593” align=“alignleft” width=“380”]  A screengrab of Bank of India website.[/caption]

The Reserve Bank of India has allowed banks to distribute the net depreciation on investment portfolios in equal instalments over the year. “Had we taken the option given to us by the RBI, then we would have to provide only Rs 92 crore for the MTM loss…So, correspondingly our profit would have been that much higher,” Iyer told reporters.

Bank of India shares surged 21.26 percent to Rs 209.90 at the close on the BSE. “The bank reported better-than-expected numbers both on the operating as well as on the asset quality front,” said Vaibhav Agrawal, Vice President - Banking at Angel Broking. “Growth in other income was a surprise at 23 per cent y-o-y, largely aided by strong performance on the recoveries front, which have more than doubled to Rs 346 crore.”

Non-interest income rose 23.04 per cent to Rs 1,100 crore from a year ago. BOI’s global business increased almost 30 per cent to Rs 7,69,105 crore. Global deposits grew 30 per cent to Rs 4,32,282 crore, while advances increased from Rs 2,60,379 crore to Rs 3,36,823 crore. The bank’s loan portfolio quality improved with gross non-performing assets (NPAs) declining to 2.93 per cent of gross advances as against 3.42 per cent in the year-ago period.

Net non-performing assets declined to 1.85 per cent from 2.04 per cent. Global net interest margins improved from 2.35 per cent to 2.39 per cent, while domestic NIM to 2.93 per cent in the second quarter from 2.70 per cent a year ago. “We want our NIM to be at 3.10 per cent by March,” Iyer said.

PTI