The Hindu Business Line : Bank of India net rises 61 pc on higher interest income

Mr M. Balachandran (right), Chairman & Managing Director, Bank of India, and Mr K.R. Kamath, Executive Director, announcing the bank's results in Mumbai on Friday. - Shashi Ashiwal

Mumbai , Oct. 27

Higher interest income boosted the net profit of Bank of India by 61 per cent to Rs 212.13 crore (Rs 132.18 crore) for the second quarter ended September 30.

The bank trimmed its net non-performing assets by over 40 per cent to Rs 788.75 crore (Rs 1,333.41 crore) with the net NPA as a proportion of total assets standing at 1.07 per cent (2.25 per cent).

Net interest margin improved to 2.86 per cent (2.34 per cent). "We were able to contain our cost of deposits by going retail," said Mr M. Balachandran, Chairman and Managing Director

Total deposits

Total deposits moved up 20 per cent to Rs 1,03,293 crore (Rs 85,856 crore). Low cost deposits (current account and savings account) constitute 40.4 per cent of aggregate deposits.

Cost of deposits inched up marginally to 4.53 per cent (4.22 per cent) owing to floats of subordinate debt and upper Tier II bonds, Mr Balachandran said.

The yield on advances improved to 8.45 per cent (7.43 per cent). "The two mark ups in the prime lending rate in May and August have enhanced yields on accounts linked to the PLR," he added.

Advances grew 24 per cent to Rs 75,097 crore (Rs 60,614 crore).

Retail credit increased 56 per cent, SME was up 26.8 per cent and agriculture credit grew by 22 per cent.

The capital adequacy ratio was 11.85 per cent (11.4 per cent).

International business now forms 18 per cent of the bank's total business.

The bank is looking to upgrade its representative office in Shenzen, China, to a full-fledged branch.

Wider reach

It is also in the process of setting up a subsidiary in Tanzania and a representative office each in South Africa and Belgium. There are plans to set up branches in Dhaka and Dubai, a subsidiary in Canada and a representative in Doha.

The bank has received the RBI approvals for these initiatives, Mr Balachandran said.

Shares of Bank of India ended at Rs 164.7 up 5.51 per cent from the previous close of Rs 156.10 on the BSE on Friday.

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