Recovery and upgradation of bad loans will be the focus for Bank of India, which returned to the black in the first quarter ended June 30, according to MD and CEO Dinabandhu Mohapatra.
The public sector bank reported a net profit of ₹88 crore in the reporting quarter against a net loss of ₹741 crore in the year-ago period. The factors that helped the bank turn around include robust ‘other income’, relatively lower loan-loss provisioning burden and recovery and upgradation of bad loans.
While net interest income (difference between interest earned and interest expended) declined 9 per cent year-on-year (y-o-y) to ₹2,533 crore in the reporting quarter, non-interest income rose 30 per cent to ₹1,611 crore. Provisioning was lower at ₹2,246 crore (₹2,770 crore in the year-ago quarter).
Net interest margin declined to 1.99 per cent (2.20 per cent).
During the quarter, slippages were lower at ₹4,037 crore (₹6,915 crore in the preceding quarter and ₹6,233 crore in the year-ago quarter).
Mohapatra said the bank has an exposure of ₹8,200 crore to 10 of the 12 large stressed accounts that the RBI has asked banks to proceed against under the Insolvency and Bankruptcy Code (IBC).
It has made provisioning of between 60 and 100 per cent in these accounts.
Stressed assets as a percentage of total advances declined a tad to 16.03 per cent from 16.47 per cent in the preceding quarter.
While it has a comfortable capital adequacy ratio, Mohapatra said the bank is planning to raise up to ₹8,000 crore this fiscal, which includes ₹2,500 crore capital infusion by the government, sale of non-core assets, qualified institutional placement, and follow-on public offer.
Shares of Bank of India closed at ₹158.45 apiece, up 3.77 per cent over the previous close on the BSE.