BoI Q2 profit doubles to ₹1,051 cr on decline in loan-loss provisions

Bank of India’s standalone net profit almost doubled to ₹1,051 crore in the second quarter against ₹526 crore in the year-ago period on the back of robust growth in other income and steep decline in loan-loss provisions.

During the reporting quarter, there was a reduction of ₹5,771.50 crore in gross non-performing assets (GNPAs), net of slippages.

The Mumbai-headquartered public sector bank’s net interest income declined 14 per cent year-on-year (y-o-y) to ₹3,523 crore (₹4,113 crore in the year-ago quarter).

Other income, including profit/ loss on sale of assets, profit/ loss on revaluation of investments (net), earnings from foreign exchange and derivative transactions, recoveries from accounts previously written off and dividend income, jumped 59 per cent y-o-y to ₹2,136 crore (₹1,346 crore).

GNPA position improved to 12 per cent of gross advances as of September-end 2021 against 13.51 per cent in the preceding quarter. Net NPAs position, too, improved to 2.79 per cent of net advances against 3.35 per cent in the preceding quarter.

Global deposits (domestic plus overseas) edged up by about one per cent y-o-y to ₹6,12,961 crore.

Global advances increased 2.70 per cent y-o-y to ₹4,18,895 crore, mainly on the back of growth in RAM advances (retail, agriculture and micro, small and medium). Corporate advances portfolio saw a de-growth.

Corporate loans

Atanu Kumar Das, MD and CEO, observed that out of the corporate loan sanctions pipeline of ₹35,000 crore, disbursement was less than ₹10,000 crore. However, Das expects corporate loan disbursements to gain traction in the third and the fourth quarters, which will help the bank end FY22 with an overall credit growth of 6-7 per cent.

M Karthikeyan, Executive DIrector, expects GNPAs to reduce by about ₹4,500 crore in the third quarter and about ₹5,000 crore in the fourth quarter.

In the current quarter, out of the recovery of ₹3,218 crore, the bank received ₹1,880 crore on account of resolution of DHFL.

Exposure to SREI Group

Karthikeyan said BoI has direct exposure of ₹1,024 crore to the SREI Group, which is undergoing corporate insolvency resolution process, and ₹970 crore via the pooled route.

The bank has made 50 per cent provision on its direct exposure.

On a consolidated basis, including the results of four domestic subsidiaries, four overseas subsidiaries, one joint venture and six associates, BoI reported a 97 per cent jump in net profit at ₹1,073 crore (₹543 crore).