MUMBAI: A 30% growth in fee income helped the state-owned lender Bank of India report a 7.47% on-year growth in net income at Rs 2,705 crore in the December quarter.
Core net interest income rose 6.43% to Rs 6,461 crore, while non-interest income surged 30% to Rs 2,279 crore. This was driven by a sharp increase in profits from the sale and revaluation of investments, which contributed Rs 473 crore, along with higher other non-interest income of Rs 788 crore. As a result, total income increased 3% year-on-year to Rs 2,165 crore, compared with Rs 2,093 crore in the same period last year.
Provisions of the lender stood at Rs 576 crore up from Rs 441 crore.
Asset quality of the lender improved, with gross non-performing assets declining by 28 bps to 2.26% and the net NPAs declined by 5 bps to 0.60%, Karnatak said.
Net interest margin, the key measure of profitability of banks, stood at 2.57% up 16 bps from the previous quarter, the bank management led by chief executive Rajneesh Karnatak told reporters.
“We have improved our NIM from 2.41% which was the global NIM as of September. Despite the kind of pressure that already exists on NIMs, we still expect it to be around 2.60%,” he added.
Global advances grew 13.63%, with domestic advances rising 15.16% and total global business was at Rs 16.27 trillion. Overseas advances increased 5.70% and deposits grew 11.64%, with domestic deposits up 12.80%.
On the domestic front, retail advances grew 20.64%, agriculture advances rose 16.69%, MSME loans rose 15.77%, and corporate advances grew 11.325%. The proportion of retail, agriculture, and MSME loans increased to 58.54%.
On the impact of expected credit loss Karnatak said the impact would be around 2% of the CRAR over a five-year term, which translates to an annualized impact of about 0.4%.
“We have already made a profit of Rs 7,500 crore in the first nine months. Therefore, it will not have much impact on the overall core capital, similar to ECL, and we will be able to absorb it in a very comfortable manner,” he said.