Robust growth in net interest income and a sharp decline in loan-loss provisions helped Bank of India (BoI) report a turnaround performance, posting a net profit of ₹252 crore in the fourth quarter, against a net loss of ₹3,969 crore in the year-ago quarter.
In the reporting quarter, the public sector bank reported a 58 per cent year-on-year (y-o-y) jump in net interest income at ₹4,044 crore.
Total non-interest income (including commission, exchange and brokerage, profit from sale of investments, profit from exchange transactions, recovery in written-off accounts, and other non-interest income) was up 17 per cent y-o-y at ₹1,603 crore.
Provisioning
Loan-loss provisions declined sharply to ₹1,503 crore (₹6,699 crore in the year-ago quarter).
Gross non-performing assets fell to 15.84 per cent of gross advances, against 16.31 per cent in the preceding quarter. Net non-performing assets declined to 5.61 per cent of net advances, against 5.87 per cent in the preceding quarter.
“Bank of India has come back to the growth-and-profit path, and this has been possible by progress and improvement every quarter. We are in a better position vis-a-vis asset quality, current account, savings account (CASA), profit, net interest income, and capital. So, we are in a better position to grow and give better returns to the stakeholders,” said Dinabandhu Mohapatra, MD and CEO.
Mohapatra underscored that many big accounts are at the end of the resolution process at the National Company Law Tribunal (NCLT), and that the bank has provided around 100 per cent provision in all the NCLT accounts (list 1 and 2).
“And when these accounts will be resolved, we are expecting good write-back to our profit….Going forward, we will be showing good improvement in recovery. So, as a result, we will be in a position to grow; maybe, if macro-economic conditions improve, we can target to grow (loans) around 15 per cent in future,” he added.
Impaired assets
To clean-up its balance sheet further, BoI will be putting ₹30,000 crore worth of impaired assets, including those referred to the NCLT, on sale in FY20 to asset reconstruction companies.
In FY2019, it had put assets aggregating ₹17,000 crore on the block and recovered ₹1,700 crore.
In the reporting quarter, the public sector bank reported a 58 per cent year-on-year (y-o-y) jump in net interest income at ₹4,044 crore.
Total non-interest income (including commission, exchange and brokerage, profit from sale of investments, profit from exchange transactions, recovery in written-off accounts, and other non-interest income) was up 17 per cent y-o-y at ₹1,603 crore.
Provisioning
Loan-loss provisions declined sharply to ₹1,503 crore (₹6,699 crore in the year-ago quarter).
Gross non-performing assets fell to 15.84 per cent of gross advances, against 16.31 per cent in the preceding quarter. Net non-performing assets declined to 5.61 per cent of net advances, against 5.87 per cent in the preceding quarter.
“Bank of India has come back to the growth-and-profit path, and this has been possible by progress and improvement every quarter. We are in a better position vis-a-vis asset quality, current account, savings account (CASA), profit, net interest income, and capital. So, we are in a better position to grow and give better returns to the stakeholders,” said Dinabandhu Mohapatra, MD and CEO.
Mohapatra underscored that many big accounts are at the end of the resolution process at the National Company Law Tribunal (NCLT), and that the bank has provided around 100 per cent provision in all the NCLT accounts (list 1 and 2).
“And when these accounts will be resolved, we are expecting good write-back to our profit….Going forward, we will be showing good improvement in recovery. So, as a result, we will be in a position to grow; maybe, if macro-economic conditions improve, we can target to grow (loans) around 15 per cent in future,” he added.
Impaired assets
To clean-up its balance sheet further, BoI will be putting ₹30,000 crore worth of impaired assets, including those referred to the NCLT, on sale in FY20 to asset reconstruction companies.
In FY2019, it had put assets aggregating ₹17,000 crore on the block and recovered ₹1,700 crore.
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