Bank of India (BoI) reported a 12 per cent increase in third quarter net profit at ₹1,151 crore on the back of robust growth in net interest income.

The net profit came despite a sharp increase in provisions, including towards bad & doubtful assets and standard assets and others, and decline in non-interest income.

Net interest income (difference between interest earned and interest expended) rose 64 per cent year-on-year (y-o-y) to ₹5,596 crore (₹3,408 crore in the year ago quarter).

Non-interest income, including commission, exchange and brokerage; profit from sale and revaluation of investments; profit from exchange transactions; recovery in w/o accounts; and other non-interest income, declined 22 per cent y-o-y to ₹1,432 crore (₹1,835 crore).

Provisions for “bad & doubtful assets” and “standard assets & others” rose to ₹1,087 crore (₹693 crore) and ₹806 crore (against write-back of ₹531 crore), respectively.

Domestic and overseas net interest margin (NIM) increased to 3.72 per cent (2.51 per cent) and 1.25 per cent (0.96 per cent), respectively.

Gross non-performing assets (GNPAs) level improved to 7.66 per cent of gross advances against 8.51 per cent in the preceding quarter. Net NPAs position too improved to 1.61 per cent of net advances against 1.92 per cent.

As at December-end 2022, global advances were up 16.08 per cent yoy to ₹5,07,750 crore. Within this, domestic advances grew 11.57 per cent and overseas advances jumped 47 per cent.

Domestic advances growth came on the back of increase in retail advances (21 per cent y-o-y growth), corporate & others (19 per cent), agriculture (9 per cent) and MSME (8 per cent).

Global deposits nudged up 4.91 per cent yoy to ₹6,53,691 crore. Within this, domestic deposits growth was relatively muted at 2.08 per cent and overseas deposits rose 24.72 per cent.

AK Das, MD & CEO, said: “We expect 11-12 per cent credit growth in the current year. Along with increase in size and yield of the credit portfolio, management of asset quality is also of significant importance

“We expect GNPA ratio to be contained below 7 per cent (and NNPA below 1.5 per cent)…We aim to maintain NIM between 3.25 per cent and 3.50 per cent, thus ensuring sustainable growth in profit.”

M. Karthikeyan, Executive Director, said the bank expects recovery from a paper company (via the National Asset Reconstruction Company Ltd route) and a non-banking finance company (via the IBC process) in the current quarter.