BoI Reports 61 % Jump in Q2 Profit Aided by Non-Core Income

Bank of India on Monday reported a 61 per cent jump in its consolidated net profit for the September quarter at Rs 2,421 crore, helped by non-core income growth.

The state-run lender's profit after tax on a standalone basis increased to Rs 2,373 crore from Rs 1,458 crore in the year-ago period.

Total income increased to Rs 19,872 crore in the July-September quarter of the current fiscal, from Rs 16,659 crore in the corresponding quarter of the previous fiscal.

Its core net interest income grew by 4 per cent to Rs 5,986 crore, restricted by 26 basis points narrowing in the net interest margin to 2.82 per cent. Advances rose by 14.5 per cent in the quarter.

Bank of India managing director and chief executive Rajneesh Karnatak said he is hopeful of expanding the key metric of NIM to 2.90 per cent by the end of the fiscal on a slew of measures including regular monitoring of advances book.

In the reporting quarter, some corporate advances got repaid in early-July itself and were not reploughed into fresh loans which led to an extended period of the bank having had to 'carry' the funds without earning interest, he explained.

It has now devised a system of weekly monitoring of loans to ensure that such instances are not repeated, Karnatak said.

The bank's non-interest income growth came at 49 per cent to Rs 2,518 crore, which was aided by Rs 685 crore of recoveries from written-off accounts and Rs 730 crore of gains on the treasury front, he said.

Amid the 'war for deposits', the bank was able to grow its domestic deposits by 12.33 per cent, Karnatak said, adding that it is retaining its deposit and credit growth targets for FY24 at 13 per cent and 14 per cent, respectively.

The bank has a pipeline of over Rs 70,000 crore of advances across all lines, Karnatak said, stressing that it is not worried with its elevated credit deposit ratio of 80 per cent.

With the challenges on the deposit growth continuing, it has appointed 82 specialised officers to monitor and push the liabilities accretion across its network, identified 1,000 branches having a concentration of high networth individuals and aims to open 200 new branches to its network of 5,191 this year, Karnatak said.

On the asset quality front, the fresh slippages went up to Rs 2,357 crore, majorly on the back of a Rs 1,000 crore, state-run telco's default, he said, adding that discussions are on among lenders for a resolution or restructuring.

The bank had to take a provision of Rs 200 crore on the account as per the RBI norms, the MD said, adding that this, along with setting aside more money for unsecured loans exposures increased the overall provisions to Rs 1,427 crore from Rs 678 crore in the year-ago period.

The bank's overall capital adequacy had stood at 16.63 per cent including the tier-I at 13.52 per cent, and Karnatak said it has no plans for a core buffer raise. It will be raising Rs 2,500 crore through tier-I bond issuance and Rs 5,000 crore of infra bonds, he said.

Bank of India shares closed 0.63 per cent higher at Rs 112.25 apiece on the BSE against a 0.01 per cent gain on benchmark Sensex.