Bank of India Q1 net profit falls 15% on lower NII, higher provisions

Deposits increased 6.7% y-o-y to Rs 5.52 lakh crore at the end of June 2020. The current account savings account (CASA) ratio stood at 43.22% at the end of Q1FY22, higher than 40.61% a year ago.

Public-sector lender Bank of India (BoI) on Tuesday reported a net profit of Rs 720 crore in the June quarter of FY22, down 14.7% year-on-year (y-o-y), owing to a 9.65% decline in net interest income (NII) on a y-o-y basis to Rs 3,145 crore. The bottomline was also hit by higher provisions, which rose 13% y-o-y to Rs 1,709 crore.

BoI’s domestic net interest margin (NIM), a key measure of profitability, rose 19 basis points (bps) sequentially to 2.35%. This was, nonetheless, lower than the 3%-plus levels seen a year ago.

The bank’s domestic advances as on June 30 were at Rs 3.66 lakh crore, up 1.65% on a y-o-y basis. AK Das, MD & CEO, BoI, said, “We expect a business growth of 6-7% in the current year with reorientation in liability and asset structure.” Along with this, better collection and recovery mechanisms will enable the bank to improve its NIM to about 2.5%, Das added.

Deposits increased 6.7% y-o-y to Rs 5.52 lakh crore at the end of June 2020. The current account savings account (CASA) ratio stood at 43.22% at the end of Q1FY22, higher than 40.61% a year ago.

The bank has restructured 19,077 accounts with an exposure of Rs 401.67 crore under resolution framework 2.0.BoI’s provision coverage ratio (PCR) fell to 86.17% from 86.24% at the end of March. Slippages fell to Rs 3,942 crore from Rs 7,368 crore in the previous quarter. The bank made recoveries worth Rs 851 crore in Q1FY22, down from 975 crore in Q4FY21.

The lender showed an improvement on the asset quality front in Q1, with the gross non performing asset (NPA) ratio falling 26 bps sequentially to 13.51%. The net NPA ratio remained flat sequentially at 3.35%.

The capital adequacy ratio of BoI as per Basel III, stood at 15.07% as on June 30, up from 12.76% a year ago, and its common equity tier-I (CET-I) ratio was at 11.52%, up from 9.46% a year ago. BoI’s shares ended 0.2% higher than their previous close at Rs 74.35 on the BSE on Tuesday.