Mumbai: Bank of India’s September quarter net profit rose 41% from a year ago after the lender set aside less money to cover the risk of default on bad loans.
The state-owned lender reported a net profit of Rs179.07 crore in the quarter, compared with Rs126.84 crore a year ago. The bank had been expected to post a profit of Rs98.93 crore, based on a Bloomberg poll of seven analysts.
Net interest income (NII), or the core income a bank earns by giving loans, increased 7% to Rs2,908.24 crore from Rs2,719.74 crore last year. Non-interest income declined 15.1% to Rs1,706.38 crore from Rs2,010.63 crore in the same period last year.
Provisions and contingencies fell 15% to Rs1,953.30 crore from Rs2,296.22 crore a year ago. On a quarter-on-quarter basis, the figure dropped 13% from Rs2,245.28 crore.
According to the Reserve Bank of India’s directions for initiating insolvency process against defaulters, the bank is required to make an additional provision of Rs572.58 crore over three quarters starting from the three months ended September. Bank of India set aside Rs190.86 crore to meet the directive.
Asset quality improved during the quarter. As a percentage of total loans, gross non-performing assets fell to 12.62%, compared with 13.05% in the previous quarter and 13.45% in the year-ago quarter.
Gross NPAs stood at Rs49,306.90 crore, down 5.7% from Rs52,261.95 crore a year ago and Rs51,019.11 crore a quarter ago.
Advances in the quarter edged up 0.3% to Rs3.65 trillion from a year ago. Deposits rose 7.6% to Rs5.44 trillion.
Bank of India shares fell 1.9% to Rs196.25 at close of trading on BSE on a day the benchmark Sensex rose 0.19% to 33,314.56 points