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Bank of India reported a turnaround performance in the third quarter, logging a net profit of ₹102 crore as against a net loss of ₹1,505.58 crore in the year-ago period.
The bottomline was boosted in good measure by non-interest income and lower bad loans provisioning. The public sector bank’s net profit in the reporting quarter, however, was lower than the preceding quarter’s ₹127 crore.
Net interest income (the difference between interest earned and interest expended) nudged up 6 per cent to ₹2,863 crore (₹2,708 crore in the year-ago quarter).
Non-interest income jumped 69 per cent to ₹1,769 crore (₹1,047 crore). This includes ₹324 crore (net of taxes) received from sale of part-stake (18 per cent) in its life insurance joint venture Star Union Dai-ichi, and ₹519 crore (net of taxes) arising from sale of certain securities.
As at December-end 2016, gross non-performing assets (NPAs) rose to ₹51,781 crore from ₹36,519 crore as at December-end 2015.
Gross NPA jumped to 13.38 per cent of gross advances as against 9.18 per cent as at December-end 2015. NPA provision burden was lower at ₹2,546 crore (₹3,506 crore).
Melwyn Rego, MD & CEO, underscored that while slippages were tapering off, accounts were also getting upgraded and recoveries taking place. In the reporting quarter, the slippages were at ₹3,260 crore (₹3,963 crore in the preceding quarter) while recoveries amounted to ₹3,700 crore (₹1,133 crore).
Slippages during the quarter came from accounts in, among others, the oil & gas and steel sectors.
As at December-end 2016, advances declined by about 5 per cent year-on-year (y-o-y) to ₹3,60,189 crore (₹3,80,746 crore as at December-end 2015).
One of the main reasons for the decline in advances is that non-resident Indian customers repaid the loans they had raised from the bank’s overseas branches for deploying in the special foreign currency non-resident (FCNR) deposit scheme in India in 2013.
The loan repayment follows maturing of the FCNR deposit scheme.
Deposits nudged up by 3 per cent y-o-y to ₹5,42,627 crore (₹5,28,772 crore). Rego said the bank received ₹30,000 crore worth of deposits in the net during the demonetisation period and the funds will be deployed in retail, agriculture and micro, small and medium enterprise segments.
Bank of India shares closed at ₹136.75 apiece, up 3.09 per cent over the previous close, on the BSE.
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