State-owned Bank of India on Friday reported 97.74 per cent jump in standalone profit at Rs 526 crore for September quarter helped by improvement in asset quality and higher net interest income.
The lender’s net profit in the year-ago period stood at Rs 266 crore.
“Good operating efficiencies and asset quality improvement have given us a good shape in Q2 and we wish to consolidate that further,” Managing Director and CEO A K Das told reporters.
“This (Q2) PAT looks little understated because on the provision side we have done more than the required provisioning. Extra provisions that we have made are to the tune of Rs 800 crore,” he added.
Das said the higher provisioning will help the bank absorb any future shocks and safeguard any asset quality concerns going ahead.
Net interest income grew 6.55 per cent to Rs 4,113 crore from Rs 3,860 crore in the year-ago quarter.
Domestic net interest margin stood at 2.88 per cent compared with 3.36 per cent during the year-ago period.
He said the bank has done a lot of rate transmission which has impacted the margins.
“There is also a lot of competition in the market and demands are also not that great, especially from the manufacturing side. Margins will therefore continue to be under stress but we will make attempts to cover it up through volume growth in advances.
“So, once our volumes grow, I think we will be able to offset the margin pressure considerably and to that extent our margins will continue to hover between 2.75-3 per cent,” Das said.
Gross non-performing assets of the bank improved to 13.79 per cent from 16.31 per cent. Net NPA were at 2.89 per cent as against 5.87 per cent.
The bank expects gross NPA at 12 per cent and net NPA below 2 per cent by the end of this fiscal.
Fresh slippages in the second quarter were Rs 274 crore.
Total provisions stood at Rs 2,312 crore as against Rs 2,053 crore in the same quarter of the previous fiscal. Provisions for bad loans were at Rs 2,134 crore compared to Rs 1,452 crore.
Provision coverage ratio (PCR) improved to 87.91 per cent as against 77.12 per cent.
Its recoveries during the quarter were Rs 1,172 crore and upgradation stood at Rs 247 crore.
“In Q2, our recovery efforts were good despite the COVID-19 challenges. We have got Rs 12,000 crore NPA reduction target for the entire year, out of which we are almost through with 50 per cent. In the second half of this fiscal, we are expecting recoveries of around Rs 6,000 crore,” Das said.
On one-time restructuring, he said 3.10 lakh accounts worth around Rs 24,000 crore are eligible for recast. Out of these accounts, almost 80-85 per cent are retail and MSMEs.
So far, the bank has received 500 restructuring requests – 34 accounts worth Rs 5,141 crore in the corporate segments and 474 accounts worth Rs 62 crore in the non-corporate segment.
Capital Adequacy Ratio (CAR) as per Basel-III stood at 12.80 per cent in the quarter under review.
Das said the bank expects a credit growth of 7 per cent and deposit growth of 8 per cent in the current fiscal.
";
