Surge in overseas profits boosts Bank of India net

A surge in overseas profits on the back of improved margins and strong credit growth helped Bank of India post a 61 per cent rise in net profit in the quarter ended December 31, 2010.

The bank's net profit during the just-ended quarter increased to Rs 653 crore from Rs 406 crore in the quarter ended December 31, 2009.

Overseas operations contributed Rs 130 crore to the bank's overall net profit, constituting about 19 per cent of the overall net profit.

“Margins from overseas operations have seen a substantial improvement,'' said Mr Alok Misra, Chairman and Managing Director, BoI.

This fiscal the bank is looking at deposit and advances growth of 21-22 per cent. The focus would be on driving the share of low-cost current and savings account deposits.

On the loans side, the bank will focus on the retail, rural, agri, small and medium enterprises and mid-corporate segments, which will help improve yields, Mr Misra said.

The bank has reduced the share of bulk deposits in its total deposits from 1.65 per cent as on March 2010 to 0.66 per cent as on December 2010 and will reduce it further going ahead.

Profits from the sale of investments fell to Rs 59 crore (Rs 137 crore) due to the rising yields on Government securities.

However, non-interest income improved due to transaction banking revenues, which increased to Rs 127 crore (Rs 76 crore).

Upgradation in the asset classification of a host of bad accounts aggregating Rs 611 crore during the quarter helped reduce the provisioning towards NPAs to Rs 124 crore (Rs 446 crore), Mr Misra said.

Shares of BoI closed at Rs 461.45, up 6.5 per cent from the previous close of Rs 433.3, on the BSE, on Friday.