Bank of India today said net profit doubled to Rs 622 crore in the quarter to September, helped by higher growth in net interest income and other income.
The bank had posted a profit of Rs 301.85 crore a year earlier. Total income increased to Rs 10,339.55 crore from Rs 8,899.55 crore, BOI said in a filing to the BSE.
Net interest income at Rs 2,527 crore grew 15.07 per cent from Rs 2,196 crore in the year-ago period.
Chairperson and Managing Director Vijayalaxmi Iyer said the good set of numbers came even after making a provision of Rs 466.16 crore for mark-to-market losses of Rs 647.88 crore in its investment portfolio.
The Reserve Bank of India has allowed banks to distribute the net depreciation on investment portfolios in equal instalments over the year.
"Had we taken the option given to us by the RBI, then we would have to provide only Rs 92 crore for the MTM loss...So, correspondingly our profit would have been that much higher," Iyer told reporters.
Bank of India shares surged 21.26 per cent to Rs 209.90 at the close on the BSE.
"The bank reported better-than-expected numbers both on the operating as well as on the asset quality front," said Vaibhav Agrawal, Vice President - Banking at Angel Broking. "Growth in other income was a surprise at 23 per cent y-o-y, largely aided by strong performance on the recoveries front, which have more than doubled to Rs 346 crore."
Non-interest income rose 23.04 per cent to Rs 1,100 crore from a year ago. BOI's global business increased almost 30 per cent to Rs 7,69,105 crore.
Global deposits grew 30 per cent to Rs 4,32,282 crore, while advances increased from Rs 2,60,379 crore to Rs 3,36,823 crore.
The bank's loan portfolio quality improved with gross non-performing assets (NPAs) declining to 2.93 per cent of gross advances as against 3.42 per cent in the year-ago period. Net non-performing assets declined to 1.85 per cent from 2.04 per cent.
Global net interest margins improved from 2.35 per cent to 2.39 per cent, while domestic NIM to 2.93 per cent in the second quarter from 2.70 per cent a year ago.
"We want our NIM to be at 3.10 per cent by March," Iyer said.
Bank of India's provision coverage ratio improved to 63.29 per cent from 60.96 per cent in the same quarter last year.
In the reporting quarter, fresh slippages stood at Rs 1,469 crore while the recovery was Rs 426 crore.
"In the current quarter we have Rs 1,100 crore of restructuring assets in the pipeline," Iyer said.
"The bank's asset quality performance has been impressive during the quarter. However, we await the management comments regarding the sustainability of such asset quality performance going ahead," Agrawal said.
Agrawal maintains a neutral rating on the bank's stock, given the macro-economic challenges.
The bank has raised USD 1.3 billion from the FCNR-B swap window so far.
Iyer said the bank is likely to get additional capital infusion of Rs 1,000 crore from the government and there was no need to raise funds in the rest of the current fiscal.
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