MUMBAI: Improvement in asset quality and non-interest income boosted the bottom line of the state-run Bank of India by almost 63 percent to Rs 2,374 crore. Its year-ago net profit stood at Rs 1,458 crore. While non-interest income jumped 49.15 percent to Rs 2,518 crore, net income was also supported by a healthy 143 bps decline in the bad loan pile in the September quarter.
The healthy set of numbers comes despite the bank seeing steep decline in its margins with the key profitability metric net interest margin declining to 3.14 percent from 3.47 percent, as the bank paid more to attract deposits than it could gain from lending money. This was visible from its falling yield on advances to 8.45 percent from 8.54 percent as the cost of deposits rose to 4.95 percent from 4.49 percent.
The city-headquartered bank told reporters Monday that its gross bad loans (GNPAs) came down by 143 bps to 4.41 percent, helping it reduces its net NPAs by 60 bps to 0.94 percent and improve the provision coverage ratio to 92.22.
In absolute terms, gross NPAs fell by 13 percent from Rs 31,719 crore to Rs 27,456 crore and net NPAs declined by 29 percent from Rs 7,978 crore to Rs 5,649 crore, the management said.
The bank said the key net interest income increased by 4 percent to Rs 5,986 crore and non-interest income rose 49 percent to Rs 2,518 crore as against Rs 1,688 crore.
While advances increased by 15.03 percent, led by retail and SME advances grew 19.74 percent and constitutes 57.70 percent of the total assets. Of this, retail credit grew 21.61 percent, agriculture credit grew 21.46 percent and MSME credit grew by 15.42 percent.
The low cost Casa deposits increased 7.26 percent and the Casa ratio stood at 41.18.
With the key profitability metric net interest margin declining to 3.14 percent from 3.47 percent, the cost to income ratio rose to 51.22 from 49.44.
Slippage ratio stood at 0.44 as against 0.34 and as a result the credit cost rose to 0.97 percent from 0.54 percent.
The bank's capital adequacy ratio improved by 100 bps and stood at 16.63, while CET-1 ratio stood at 13.52.