Money & Banking

Bank of India posts ₹266-cr profit in Q2

Our Bureau Mumbai | Updated on November 01, 2019 Published on November 01, 2019

Bank of India reported a net profit of ₹266 crore in the second quarter ended September 30, 2019, against a net loss of ₹1,156 crore in the year-ago period. Healthy growth in both net interest income and non-interest income, coupled with lower provisioning burden towards bad and doubtful debt and depreciation on investment, supported the bottomline.

Net interest income (difference between interest earned and interest expended) rose 32 per cent to ₹3,860 crore, against ₹2,927 crore in the year-ago period. Non-interest income (comprising commission, exchange and brokerage, profit from exchange transactions, profit from sale of investments, among others) was up 29 per cent at ₹1,327 crore (₹1,030 crore in Q2 FY2019).

Gross non-performing assets (GNPAs) declined by ₹592 crore during the quarter to stand at ₹61,476 crore as of September-end 2019. Slippages during the quarter were at ₹3,166 crore (₹3,683 crore in the preceding quarter).

Provisioning towards bad and doubtful debt and depreciation on investment was lower at ₹1,452 crore (₹2,828 crore in the year ago-quarter) and ₹49 crore (₹547 crore), respectively. The public sector bank’s portfolio of special mention accounts (SMAs) jumped to ₹16,309 crore (from 218 accounts) as of September-end 2019, against ₹6,875 crore (from 187 account) as of June-end 2019.

Total SMA portfolio

Neelam Damodharan, Executive Director, said of the total SMA portfolio of ₹16,309 crore, three accounts, including a public sector aviation company, with a total exposure of about ₹6,000 crore, are expected to come out of this classification in the current quarter.

In FY2020, the bank is eyeing a business (deposits plus advances) growth of 10 per cent, operating profit of ₹9,500 crore and a net profit of ₹1,500 crore, he added. Damodharan observed that his bank has proactively made a 5 per cent provision towards its ₹4,000-crore exposure to the troubled Dewan Housing Finance Corporation Ltd.

Though the bank faced valuation hurdles and lack of investor appetite in selling some of its non-core assets, Atanu Kumar Das, Executive Director, said he was confident of garnering ₹1,500 crore through disinvestment in FY2020.

Chaitanya G Chintapalli, Executive Director, said the bank had sanctioned ₹2,000 crore for purchase of high-rated pooled assets of financially sound non-banking finance companies. GNPAs edged lower to 16.31 per cent of gross advances in the reporting quarter against 16.50 per cent in the preceding quarter.

Net NPAs nudged up to 5.87 per cent of net advances in the reporting quarter, against 5.79 per cent in the preceding quarter.

Published on November 01, 2019
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