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Bank of India reported a net loss of ₹2,341 crore in the third quarter ended December 31, 2017, due to a jump in loan-loss provisioning and decline in non-interest income. It had reported a net profit of ₹102 crore in the year-ago period.
Loan-loss provisions, including towards divergence in non-performing assets (NPAs) as assessed by the bank and the RBI as on March 31, 2017, shot up to ₹4,373 crore against ₹2,546 crore in the year-ago period.
During the reporting quarter, slippages amounted to ₹18,329 crore.
Of this, ₹14,057 crore is due to divergence in gross NPAs. Further, out of this divergence, the public sector bank said since mid-January 2018, it has realised ₹4,751 crore by invoking standby letters of credit (SBLCs) of other banks. It will be invoking SBLCs worth ₹4,654 crore during this quarter.
The bank’s net interest income (difference between interest earned and interest expended) declined 13 per cent year-on-year (y-o-y) to ₹2,501 crore against ₹2,863 crore in the year-ago period.
Non-interest income dropped 41 per cent to ₹1,041 crore (₹1,769 crore).
Global (domestic and foreign) deposits dipped 3 per cent y-o-y to ₹5,26,003 crore as at December-end 2017. Global advances were down 2 per cent to ₹3,79,538 crore.
Dinabandhu Mohapatra, MD and CEO, said domestic advances nudged up mainly on the back of growth in retail, agriculture and micro, small and medium enterprise (RAM) advances, which collectively went up 10.52 per cent y-o-y. Corporate advances declined 6.40 per cent, and foreign advances fell 11 per cent. To come out of the restrictive prompt corrective action, which was imposed on the bank in December 2017, Mohapatra said the bank is taking a host of measures, including closing down 200 unviable ATMs, rationalising foreign operations (including nine branches and subsidiaries), putting non-core assets (such as STCI) on the block, and reducing risk-weighted assets.
The bank is expecting about ₹400 crore from the sale of its stake in STCI.
The board has taken a decision to close down its overseas subsidiaries in New Zealand, Botswana and Uganda.
As at December-end 2017, the bank’s GNPAs shot up to 16.93 per cent of gross advances as at December-end 2017 against 12.62 per cent as at September-end 2017.
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