Bank of India Q2 net drops 39% on higher provisioning

Our Bureau Updated - March 12, 2018 at 01:54 PM.

Rs 810-crore worth loan accounts restructured in the quarter

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Bank of India’s net profit declined 39 per cent in the second-quarter as it made higher provisions to cover potential bad loans. For the July-September quarter, the Mumbai-based bank reported a net profit of Rs 302 crore against Rs 491 crore, a year ago.

The public sector bank set aside Rs 1,552 crore, or about 34 per cent more, towards provisions and contingencies. In the corresponding quarter of the previous year, the bank had set aside Rs 1,154 crore.

“We have done prudential provisioning. Not much of this (restructured accounts) will turn into non-performing loans,” N. Seshadri, Executive Director, said.

We wrote off only Rs 10 crore in the second quarter and we do not expect to write off substantial amounts in this quarter and the next, he said.

“There is a considerable amount of stress in some of our mid-cap accounts in the metal and metal products segment. However, Bank of India will continue to support the industry,” Seshadri said.

The bank restructured accounts worth Rs 810 crore in the July-September quarter. Of this, a single loan account belonging to the hospitality sector accounted for about Rs 471 crore.

Restructured accounts comprise about 7.8 per cent of the bank’s total loan book of Rs 2,56,148 crore.

Gross non-performing assets (NPA) as a percentage of total advances climbed Rs 2,147 crore in the reporting quarter to Rs 8,899 crore.

“Gross NPA may go up slightly in this quarter and next. We expect it to be between 3.30 per cent and 3.40 per cent this fiscal,” Seshadri said.

The bank expects growth in advances and deposits to be 17-18 per cent in the fiscal.

The bank will focus on lending to the micro, medium and small scale enterprises, B. P. Sharma, Executive Director, said.

Shares of the bank, closed at Rs 279.90, down 2.46 per cent on the Bombay Stock Exchange.

satyanarayan.iyer@thehindu.co.in

Published on October 29, 2012 09:19