Bank of India’s net profit declined 8.65 per cent year-on-year (YoY) to Rs 960 crore in the July-September quarter (second quarter, or Q2) of 2022-23 (FY23) on increase in provisioning, especially for state accounts that are standard assets.


The Mumbai-based public sector lender had posted a net profit of Rs 1,051 crore in Q2 of 2021-22 (FY22). Sequentially, it rose 71 per cent over Rs 561 crore in the April-June quarter (first quarter, or Q1) of FY23.


A K Das, managing director and chief executive officer, in a media call said after inspection by the regulator, the bank increased the provisions for some state accounts. This pushed the total provisions to Rs 1,912 crore in Q2FY23, from Rs 894 crore a year ago.


Sequentially, provisions were up from Rs 1,322 crore in Q1FY23.


The bank’s stock closed 4.83 per cent higher at Rs 64 per share on the BSE on Thursday.


Its net interest income improved 44 per cent YoY to Rs 5,083 crore for Q2FY23, against Rs 3,523 crore a year ago. On a sequential basis, it increased 25 per cent, from Rs 4,072 crore in Q1FY23.


Its net interest margin improved 62 basis points (bps) to 3.04 per cent in Q2FY23, against 2.42 per cent a year ago. It improved 49 bps on a sequential basis, from 2.55 per cent in Q1FY23.


Its non-interest income for the reporting quarter declined sharply to Rs 1,417 crore for Q2FY23, from Rs 2,136 crore a year ago. On a sequential basis, it increased 23 per cent, from Rs 1,152 crore in Q1FY23.


Its advances increased 17.89 per cent YoY, from Rs 4.18 trillion in Q2FY22 to Rs 4.93 trillion in Q2FY23. The bank expects credit to grow 11-12 per cent for FY23.


Global deposits expanded 5.64.per cent YoY, from Rs 6.12 trillion in Q2FY22 to Rs 6.47 trillion in Q2FY23.


On the wide gap between credit and deposit growth, Das said the bank will step up efforts to mobilise resources to about Rs 10,000 crore by December. The bank has guided for 7.5-8 per cent growth in deposits.


Its asset quality profile improved, with gross (NPAs) declining to 8.51 per cent in Q2FY23, from 12 per cent a year ago and 9.3 per cent in Q1FY23.


The net NPA ratio declined to 1.92 per cent at the end of Q2FY23, from 2.79 per cent a year ago and 2.21 per cent in Q1FY23.


The provision coverage ratio for bad loans stood at 88.96 per cent in Q2FY23, against 87.81 per cent a year ago and 87.96 per cent in Q1FY23.


As on September 30, the bank’s total capital adequacy ratio was at 15.51 per cent in Q2FY23, against 17.05 per cent a year ago and 15.61 per cent in Q1FY23.



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