Bank of India Q2 results: Profit nearly doubles to Rs 1,051 crore, asset quality pressure eases

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The bank reported a sharp fall in provisions and contingencies for the quarter at Rs 894 crore, declining 46 percent from Rs 1,652 crore in Q1FY22 and falling 56.3 percent from Rs 2,045 crore in Q2FY21

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Public sector lender Bank of India on November 2 has reported profit at Rs 1,051 crore for the quarter ended September 2021, almost double from Rs 525.8 crore in the year-ago period, on falling slippages and decline in provisions.

Its net interest income, the difference between the interest earned from lending activities and the interest paid to depositors, fell 14.3 percent year-on-year to Rs 3,523.5 crore in September 2021 quarter, with a 2.7 percent YoY increase in gross advances and 0.89 percent rise in deposits. Net interest margin at 2.42 percent improved by 26 basis points (bps) sequentially but dropped 24 bps YoY. One basis point is a hundredth of a percentage point.

“Advances increased to Rs 4.18 lakh crore in September 2021 quarter, from Rs 4.07 lakh crore in same the quarter last year, while deposits jumped to Rs 6.12 lakh crore from Rs 6.07 lakh crore in the same period,” the bank told the BSE.

Asset quality improved with the gross non-performing assets (NPAs) as a percentage of gross advances falling 151 bps sequentially to 12 percent and net NPA declining 56 bps QoQ to 2.79 percent in the quarter ended September 2021.

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Slippages dropped significantly to Rs 1,307 crore as of September 2021, compared to Rs 3,942 crore in June 2021 quarter, which as a percentage of standard advances was at 0.36 percent against 1.09 percent respectively, said the bank, adding credit cost declined further to 0.26 percent in Q2FY22, from 0.95 percent in Q1FY22.

The bank reported a sharp fall in provisions and contingencies for the quarter at Rs 894 crore, declining 46 percent from Rs 1,652 crore in Q1FY22 and falling 56.3 percent from Rs 2,045 crore in Q2FY21.

Provisions refer to the amount banks need to set aside to cover the losses from a loan account. When an account turns into an NPA, the provisions required will equal the full loan amount.?

Bank of India said non-interest income increased by 58.71 percent YoY to Rs 2,136 crore for the September 2021 quarter. However, pre-provision operating profit at Rs 2,678 crore fell by 5.4 percent YoY.

The stock reacted positively to numbers, rising 3.73 percent to trade at Rs 62.65 on the BSE, at 14.45 pm.