Bank of India net profit inches up 6 pc on lower provisions; core income slips

Mumbai, Oct 17 (PTI) Bank of India's consolidated net profit increased by 6.41 per cent to Rs 2,576.69 crore during the September quarter, helped by a drop in provisions.

The state-owned lender had delivered a consolidated net profit of Rs 2,421.29 crore in the year-ago period.

On a standalone basis, the bank's net profit moved up by around 8 per cent to Rs 2,554 crore from Rs 2,374 crore registered in the year-ago period.

Its managing director and chief executive Rajneesh Karanatak told reporters that the profit is up due to an increase in other income and also a sharp drop in provisions as the asset quality improves.

The core net interest income slipped by 1 per cent on-year to Rs 5,912 crore, largely owing to the impact of the interest rate cuts, Karnatak said, adding that 63 per cent of the bank's book is tied to external benchmark which moves immediately with RBI rate cuts.

The net interest margin of the bank compressed to 2.41 per cent from 2.81 per cent a year ago and 2.55 per cent in the preceding quarter.

Other income dropped 12 per cent to Rs 2,220 crore, driven largely by more than doubling of the profit made through exchange transactions at Rs 160 crore.

The overall provisions for bad and doubtful debt dropped by 67 per cent to Rs 472 crore during the reporting quarter, which was attributed by Karnatak to write-back from money set aside previously as the asset quality improved.

The fresh slippages declined to Rs 887 crore from Rs 2,357 crore in the year-ago period and Rs 2,080 crore recorded in the preceding three-month period. The bank's gross non-performing assets ratio improved to 2.54 per cent from 2.92 per cent three months ago.

The bank's MD said the corporate book has grown by double digits, and it has a piepeline of Rs 50,000 crore across sectors like data centres, warehousing, solar PV, renewable energy, battery manufacturing, electric vehicles, natural gas and lease rental discounting.

Karnatak acknowledged that the bank is also facing teething troubles with the new cheque clearing method, but added that the system should stabilise in the coming week.

The BoI scrip closed 1.67 per cent down at Rs 123.30 apiece on the BSE, as against a 0.58 per cent gain in the benchmark. PTI AA HVA