Money & Banking

BoI Q1 net profit declines 15% y-o-y to ₹720 crore

Our Bureau Mumbai | Updated on August 03, 2021

Due to a decline in net interest income and a rise in provisions towards bad, doubtful and standard assets

Bank of India (BoI) reported a 15 per cent year-on-year (yoy) decline in standalone net profit at ₹720 crore in the first quarter ended June 30, 2021, due to a decline in net interest income and a rise in provisions towards bad, doubtful and standard assets. The public sector bank had reported a standalone net profit of ₹844 crore in the year-ago quarter. The net profit in the reporting quarter, however, soared about three times vis-a-vis the fourth quarter’s ₹250 crore.

Net interest income falls

Net interest income (difference between interest earned and interest expended) declined about 10 per cent yoy to ₹3,144 crore (₹3,481 crore in the year-ago quarter). Total non-interest income (comprising income from commission, exchange & brokerage, profit from the sale of investments, profit from exchange transactions, recovery in written-off accounts, and other non-interest income) rose 39 per cent yoy to ₹2,377 crore (₹1,707 crore).

Within total non-interest income, profit from exchange transactions jumped 126 per cent yoy to ₹754 crore (₹333 crore), recovery in written-off accounts soared 477 per cent yoy to ₹173 crore (₹30 crore).

Also read: Bank of India posts Q4 profit of ₹250 crore

MD & CEO Atanu Kumar Das said total non-interest income includes a one-time inflow of ₹406 crore received on account of redemption of security receipts of an aviation account. Das observed that BoI will see an overall credit growth of 6-7 per cent in FY22, with the retail, agriculture, and MSME (RAM) segment expected to grow by about 14 per cent and corporate advances by about 5-6 per cent. Fresh slippages at ₹3,942 crore during the reporting quarter were lower vis-a-vis ₹7,368 crore in the fourth quarter (Q4) FY21 but substantially higher than year-ago quarter’s ₹402 crore. Slippages from the micro, small and medium enterprise (MSME) sectors accounted for 41 per cent of the total quarterly slippages, followed by agriculture (25 per cent), retail (16 per cent), corporate & others (10 per cent), and overseas (8 per cent).

PR Rajagopal, Executive Director, said the second Covid wave had a significant impact on retail and MSME borrowers. But collection efficiency in the retail segment is now at about 92 per cent. The Bank, which restructured loans aggregating ₹5,963 crore under RBI’s resolution framework 1.0 for Covid-related stress and ₹5,299 crore under the resolution framework 2.0, expects to recast about ₹5,000 crore more loans in the rest of FY22, he added.

Provisions towards bad and doubtful, and standard assets together were up 16 per cent yoy at ₹1,771 crore (₹1,526 crore).

Gross non-performing assets (GNPAs) level improved to 13.51 per cent of gross advances as at June-end 2021 against 13.91 per cent as at June-end 2020.

Net NPA level too improved to 3.35 per cent of net advances against 3.58 per cent.

Global deposits were up about 5 per cent yoy to ₹6,23,385 crore, with current account, savings account (CASA) deposits rising to 43.22 per cent of domestic deposits against 40.60 per cent in the year-ago period.

Global advances declined a shade (about 0.18 per cent yoy) to ₹4,14,697 crore, with domestic advances nudging up 1.65 per cent yoy and overseas advances declining 12 per cent yoy.

Published on August 03, 2021

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like