Bank of India's Q4 net profit marginally rises by 7% despite declining non-core income

Bank of India's net profit rose 7% in Q4 FY23 to Rs 1,439 cr, impacted by provisions and non-core income decline. For FY23, net profit surged 57% to Rs 6,318 cr. Despite a narrowing net interest margin, core NII grew 7%. The bank aims for 13-14% credit growth and 12-13% deposit growth. Provisions rose 274% due to ageing asset provisions. Gross NPA ratio improved to 4.98% in March 2024. The bank has a loan pipeline of Rs 50,000 cr, including Rs 38,000 cr in corporate loans. Capital adequacy stood at 16.96%, including a 14.93% core buffer. The board proposed a dividend of Rs 2.80 per share.

State-owned lender Bank of India on Friday reported only a 7 per cent rise in net profit to Rs 1,439 crore for the March quarter, impacted by higher provisioning and a decline in non-core income.

For fiscal 2023-24, the bank's net profit rose 57 per cent to Rs 6,318 crore.

In the reporting quarter, the core net interest income (NII) grew 7 per cent to Rs 5,937 crore as a 0.23 per cent narrowing of net interest margin to 2.92 per cent was offset by a 13.52 per cent growth in global advances.

Its managing director and chief executive Rajneesh Karnatak told reporters that it will be targeting to maintain a credit growth between 13-14 per cent levels, and aims for 12-13 per cent deposit growth from the 10.21 per cent in FY24.

The non-interest income declined by 43 per cent to Rs 1,751 crore in the January-March period, dragged down by a sharp decline in profit from the sale of investments, which the bank management attributed to one-off gains on the security receipts front in the year-ago period.

The overall provisions for bad and doubtful assets rose 274 per cent to Rs 2,043 crore for the reporting quarter due to ageing provisions on assets and benefits from writebacks on standard asset provisions and depreciation on non-performing investments helped the bank's bottom line.

The gross non-performing assets ratio improved to 4.98 per cent at the end of the fiscal year from 5.35 per cent in December 2023.

Karnatak said the bank has a loan pipeline of Rs 50,000 crore, including Rs 38,000 crore in corporate loans, while the rest is from the retail and small business front.

The bank has spent Rs 2,600 crore over the last two fiscals to take care of its IT and technology requirements, he said.

The overall capital adequacy stood at 16.96 per cent as of March 2024, including the core buffer at 14.93 per cent.

The bank said the RBI proposals on project loans can impact the core buffer by 0.20 per cent and can also hurt credit costs. However, there will be an engagement with the regulator where the banks are pointing to its concerns.

The board has recommended a dividend of Rs 2.80, or 28 per cent, per equity share of face value Rs 10 each for the 2023-24, subject to approval at the ensuing annual general meeting.

The BoI scrip closed 0.11 per cent down at Rs 138.85 apiece on the BSE.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)