Q1'FY24: Bank of India net profit surges nearly threefold to Rs 1,551 cr

The net interest income of the Bank of India rose 45 percent to Rs 5,915 crore and non-interest income increased 27 percent to Rs 1,462 crore
Profit season for Public Sector Banks is here (Bank of India)
Profit season for Public Sector Banks is here (Bank of India)PSUWatch/ File

New Delhi: State-owned Bank of India Friday reported a nearly three-fold surge in net profit at Rs 1,551 crore in the June 2023 quarter, due to a decline in bad loans and higher margins following repricing of existing assets.

The city-based lender said its total income rose to Rs 15,821 crore against Rs 11,124 crore in the same period a year ago. Of this, the key profitability metric net interest income rose 45 percent to Rs 5,915 crore and non-interest income increased 27 percent to Rs 1,462 crore.

The yield on advances rose by 157 bps, boosting its net profit by 176 percent to Rs 1,551 cr in the reporting period.

The bottom line was also buoyed by a 49 bps increase in global NIM to 3.03 per cent, while domestic NIM improved 51 bps to 3.37 percent, chief executive and managing director Rajneesh Karnatak told reporters in post-earnings a con call this later afternoon.

The bank saw major improvement in asset quality with gross NPAs falling by 22.14 percent to Rs 34,583 crore from Rs 44,415 crore and net NPAs declined by 16.96 percent to Rs 8,119 crore from Rs 9,775 crore.

Profit season for Public Sector Banks is here (Bank of India)
Road to Recovery: Banks recover over Rs 10 lakh crore in last 9 years

In percentage terms, the gross NPA ratio improved 263 bps to 6.67 from 9.30 and the net NPA ratio improved by 56 bps to 1.65 in June 2023 from 2.21 in June 2022. The provision coverage ratio improved by 156 bps to 89.52 from 87.96, Karnatak said, adding the bank's core capital ratio stood at 15.60 with CET-1 ratio at 13.02.

Karnatak said its global business crossed Rs 12 lakh crore mark, increased by 8.61 percent to Rs 5,18,264 crore and global deposits increased 8.71 percent to Rs 6,96,544 crore.

But gross advances inched up by 8.48 percent and the management said this is planned as better-rated borrowers were demanding loans at repo rate. Domestic deposits increased by 7.98 percent to Rs 5,89,517 crore, of which Casa rose 7.56 percent to Rs 2,60,615 crore. Domestic advances increased 7.98 percent to Rs 4,33,246 crore.

"We've decided that we will not increase our asset base at the cost of the bottom line. Accordingly, we've been saying now to low-priced loans," Karnatak told PTI. But for the full year, he expects 12-13 percent credit growth and 7-8 percent deposit growth.

Profit season for Public Sector Banks is here (Bank of India)
PSBs profit tripled to Rs 1.04 lakh in nine years; need to continue momentum to fuel economy: FM

Retail, agri, and MSME advances, which constitute 55.4 percent of the loan book, grew by 11.75 percent with retail growing 15.05 percent, agriculture 10.10 percent, and MSME 9.19 percent.

The slippage ratio improved to 0.53 percent from 0.69 percent. In absolute terms, the bank saw Rs 2,379 crore of fresh slippages, but this was almost cushioned by cash recovery of Rs 1,120 crore, and upgrades of Rs 700 crore. It wrote off Rs 3,800 crore in the quarter.

The bank has set a target of Rs 2,000 crore quarterly recoveries and is hopeful of yanking down gross NPAs under-6 per cent for the full year.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)

PSU Watch