Bank of India turns corner, Q2 profit at Rs 127cr, slippages dip

Public sector lender Bank of India has reported profit in July-September quarter for the first time since Q2FY16 on account of other income and fall in slippages despite higher provisions. Profit stood at Rs 126.8 crore for the quarter against loss of Rs 1,126.2 crore in same period last fiscal. Net interest income during the quarter declined 10 percent year-on-year to Rs 2,719.74 crore while other income shot up 158.4 percent to Rs 2,010.6 crore and operating profit grew by 71 percent to Rs 2,492.84 crore. Treasury income aided other income in Q2 on account of decline in government bond yields. Provisions for non-performing assets increased 112.55 percent to Rs 2,189.65 crore compared to year-ago period but fell 10.7 percent on sequential basis. Provisioning coverage ratio improved to 55.23 percent from 53.1 percent on sequential basis. Asset quality improves a bit in July-September quarter. Net non-performing assets (NPA) as a percentage of net advances declined 22 basis points sequentially to 7.56 percent, though gross NPAs increased marginally to 13.45 percent from 13.38 percent. In absolute terms, net NPAs declined 2.8 percent quarter-on-quarter to Rs 27,467 crore while gross NPAs rose 0.7 percent to Rs 52,262 crore in Q2. Earnings beat analysts’ estimates. A CNBC-TV18 poll had estimated loss of Rs 305.5 crore for the quarter and slippages below Rs 6,000 crore for the quarter. Slippages for the quarter stood at Rs 3,963 crore, which were far lower than Rs 6,233 crore reported in previous quarter. Domestic net interest margin during the quarter improved to 2.62 percent from 2.54 percent in previous quarter while global net interest margin contracted to 2.15 percent from 2.2 percent QoQ. At 15:29 hours IST, the stock was quoting at Rs 124.65, up Rs 14.75, or 13.42 percent amid high volumes on the BSE.

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