Public sector lender Bank of India posted a net loss of ₹1,156 crore in the second quarter of this fiscal against a net profit of ₹179 crore logged in the same period last year due to a steep rise in bad loan provisioning.
Its net profit in the June quarter was at ₹95.11 crore. “The net profit was impacted by higher loan loss provisions due to non-performing assets and mark-to-market provisioning,” the lender said, adding that the recovery of ₹1,800 crore from the sale of assets being processed under the NCLT has been postponed to the third quarter of the fiscal.
Total income down 7%
Total income fell by nearly 7 per cent to ₹10,800 crore for the quarter ended September 30, from ₹11,600 crore in the same period a year ago.
Net interest income was ₹2,927 crore, against ₹2,908 crore in the same period a year ago, while non-interest income stood at ₹1,030 crore in the quarter under review, which was lower than ₹1,706 crore in September 2017, “primarily due to persistent hardening of G-Sec yield”, the bank said.
The lender’s provisioning rose by 71 per cent to ₹3,343 crore (₹1,953.30 crore). Gross non-performing assets (NPA) soared to ₹61,561 crore, or 16.36 per cent of gross advances by September-end 2018. It was significantly lower at 12.62 per cent last year.
However, on sequential basis, gross NPAs were down compared to 16.66 per cent as on June 30, 2018. Net NPAs also rose to ₹25,994.15 crore, or 7.64 per cent of net assets, against 6.47 per cent a year ago.
Recovery and upgradation
The lender said this is the first time the recovery and upgradation during the quarter, at ₹2,698 crore, surpassed fresh slippages of ₹2,624 crore.
Bank of India was placed under the prompt corrective action norms by the Reserve Bank of India in December last year due to “high net NPA, insufficient CET1 Capital and negative ROA for two consequent years”.
On Monday, the lender’s scrip fell 4.85 per cent to close at ₹87.25 on the BSE.