Public sector lender Bank of India disappointed street on Monday by posting a huge loss of Rs 1,126 crore during July-September quarter against profit Rs 786 crore in year-ago period. Not only higher provisions but also lower other income and operating profit hit profitability.
Net interest income, the difference between interest earned and interest expended, declined marginally to Rs 3,019.7 crore during the quarter from Rs 3,030.7 crore in same quarter last fiscal. It was in-line with expectations According to analysts polled by CNBC-TV18, profit was estimated at Rs 379.4 crore and net interest income at Rs 3,012 crore for the quarter. Global net interest margin during the quarter improved sequentially to 2.29 percent from 2.12 percent and domestic net interest margin also improved to 2.77 percent from 2.52 percent. Other income (non-interest income) was down 22.7 percent year-on-year to Rs 778.1 crore and operating profit fell 31.7 percent to Rs 1,458.3 crore in quarter gone by.
Provisions for bad loans were quite high at Rs 3,237 crore, up 113.7 percent over preceding quarter and 236 percent over a year-ago period. Bank of India says provision coverage ratio stood at 55.08 percent at the end of September quarter against 52.15 percent in June quarter. Asset quality deteriorated in July-September quarter. Gross non-performing assets increased 75 basis points sequentially (up 401 bps year-on-year) to 7.55 percent. Net NPA climbed 20 bps quarter-on-quarter (up 199 bps on yearly basis) to 4.31 percent in quarter gone by. Tax write back during the quarter was at Rs 652.9 crore against expenses of Rs 386.11 crore in same quarter last fiscal. The stock closed at Rs 133.45, down Rs 0.95, or 0.71 percent on the BSE ahead of earnings that announced after market hours.