Bank of India (BoI) on Tuesday reported a steep 84 per cent fall in its first quarter profit for FY16 at ₹130 crore, dragged down by a surge in bad loans. Net profit was at ₹806 crore in the year-ago quarter. The public sector lender had reported a loss of ₹829 crore in the fourth quarter last fiscal and continued to witness pressure on asset quality.

“Despite optimism, the Indian economy is still not out of stress. Five sectors — infrastructure, mining, power, iron and steel — continue to account for over 40 per cent of the total stressed assets,” said BoI MD and CEO BP Sharma.

Provisioning during the first quarter jumped 70 per cent to ₹1,515 crore from ₹893 crore in the same period last fiscal.

The gross non-performing assets (GNPAs) as a percentage of total loans spiked to 6.80 per cent during the June quarter (3.28 per cent). Net NPAs also worsened to 4.11 per cent from 2.14 per cent. The bank witnessed de-growth in the chemical and chemical products and construction sectors, among others.

“This quarter, the recovery was not as expected…Going forward, our focus will be on recovery and merit-based restructuring. We will be stringent on risky accounts…Slippage will be there going forward, but the rate of slippage will come down,” said Sharma.

Net interest income, or the difference between interest earned and expended, increased 8 per cent to ₹2,913 crore (₹2,686 crore).

Other income (including income from fees, trading in foreign exchange and gain on revaluation or sale of investments) fell 18 per cent to ₹841 crore from ₹1,024 crore in the same period last year.

BoI shares ended 5.68 per cent weaker at ₹154.50 apiece on the BSE on Tuesday.

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