Bank of India sees 10-12 pc growth in advances in current fiscal

State-owned Bank of India expects advances to grow by 10-12 percent in the current fiscal year with corporate loans yet to pick up, top official said in an analysts call. The bank's year-to-date YTD loan growth stood at about 5 percent mainly driven by Retail sector advances, Agricultural and MSME loans RAM. Advances growth guidance will be in the range of 10 to 12 percent for the full year.

State-owned Bank of India expects advances to grow by 10-12 percent in the current fiscal year with corporate loans yet to pick up, a top official said in an analysts call.

The bank's year-to-date (YTD) loan growth stood at about 5 percent mainly driven by Retail sector advances, Agricultural and MSME loans (RAM).

''Advances growth guidance will be in the range of 10 to 12 percent for the full year. So far up to June, we had YTD growth of about 5 percent, but that is mostly on the back of good RAM growth. Corporate is yet to pick up. We believe that from this quarter onwards, there could be some movement in the corporate book,'' A K Das, Managing Director & Chief Executive Officer (MD&CEO), told analysts in post Q1FY23 earnings conference call.

The bank's gross advances (global and domestic) stood at Rs 4,77,746 crore in end-June 2022.

In the first quarter ended in June of the current fiscal year, the lender registered a decline of 22 percent in net profit at Rs 561 crore as against Rs 720 crore in the year-ago quarter.

Exuding confidence that it won't be difficult to achieve the loan growth target for 2022-23, Das said the bank expects a Net Interest Margin (NIM) of 2.90 percent domestically and global NIM of 2.75 percent.

In Q1FY23, the bank's domestic and global NIMs stood at 2.88 percent and 2.55 percent, respectively.

Das said a lot of repricing in the loan book is happening on both sides and it would be good if the bank could maintain the guidance on its NIMs. In terms of asset quality, the bank said it has set a target of a Rs 2,500 crore reduction in bad loans every quarter.

Of this, Rs 1,700 crore will come from upgradation and cash recoveries and the rest will be through various OTS (One Time Settlement) programs which the lender has lined up already, M Karthikeyan, Executive Director, said.

''We are sure that during this year, about Rs 3,000 crore will come through resolutions through NCLT, that's what our guidance is,'' he added.

At end of June 2022, the bank's gross Non-Performing Assets (NPAs) improved to 9.30 percent of the gross advances, translating to Rs 44,415 crore. It was at 13.51 per cent (Rs 56,042 crore) by end of June 2021.

Likewise, the net NPAs fell to 2.21 percent (Rs 9,775 crore) as against 3.35 percent (Rs 12,424 crore).

Fresh slippages during the quarter were lower at Rs 2,465 crore as against a year ago's Rs 3,528 crore.

For the full year, the Bank of India expects slippages not to cross Rs 8,000 crore. Besides, there were cash recoveries of Rs 1,219 crore, upgradation of Rs 465 crore, and write-off of Rs 2,340 crore, leading to a total reduction of Rs 4,024 crore in the June quarter.

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