The Hindu Business Line : Bank of India’s net doubles on all round growth

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Bank of India’s net doubles on all round growth

Our Bureau

Mumbai, Oct. 29 Bank of India’s net profit has surged by 100 per cent for the quarter ended September 30, to Rs 425 crore from Rs 212 crore in the same quarter last year. The growth was due to a rise in interest income and robust growth in other income.

Mr R.S. Narayanasami, Chairman and Managing Director, Bank of India, said: “We had good credit growth, good net interest income and robust fee income. Our NPA management has helped reduce gross NPAs, which too has added to the bottomline.”

The bank saw a net interest income of Rs 986 crore (Rs 850 crore), a growth of 16 per cent. Other income increased by 50 per cent to Rs 528 crore (Rs 353 crore). “We are focusing on fee income in relation to core banking and from sale of third party products. We also had good treasury profits, the bulk of which we used to cover NPAs. But we may not have the same profits from treasury every quarter,” Mr Narayanasami said.

Deposits grew by 25 per cent to Rs 1,29,590 crore (Rs 1,03,293 crore), while advances grew by 27.6 per cent to Rs 95,816 crore (Rs 75,097 crore).

Cost of funds increased to 5.53 per cent (4.40 per cent), due to the high interest rates of deposits. Yield on advances also increased to 9.99 per cent (8.86 per cent).

The share of low-cost deposits (current account savings account) to total deposits fell to 37 per cent from 40 per cent. “As long as aggregate deposits increase, banks will find it difficult to maintain CASA at same levels,” Mr Narayanasami said.

Net NPAs declined to 0.75 per cent (1.27 per cent). The bank had a cash recovery of Rs 158 crore from written off assets in the second quarter against Rs 59 crore last year. Capital adequacy ratio was 12.57 per cent (12.01 per cent).

BoI will sign the agreement for its life insurance joint venture with Union Bank of India and Dai Ichi Mutual next month, Mr Narayanasami said.

The bank is also looking at a marginal dilution of government stake from 69 per cent to 64 per cent in order to raise capital., Mr Narayanasami said.

Shares of BoI closed at Rs 315.95 on the BSE on Monday, up 2.78 per cent, from the previous close of Rs 307.4. on the BSE.

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