Mumbai: Bank of India swung to a surprise profit in the December quarter from a loss in the year earlier as asset quality improved.
Net profit was Rs101.72 crore in the three months ended 31 December compared to a Rs1,505.58 crore loss in the year-ago period. The bank was expected to post a net loss of Rs11.19 crore, according to estimates of 14 Bloomberg analysts.
Net interest income (NII), or the core income a bank earns by giving loans, rose 5.7% to Rs2,862.61 crore in the December quarter from Rs2,708.04 crore last year.
“Government has decided to infuse Rs1,784 crore as equity capital in our bank out of which Rs1,338 crore was received in September and balance amount Rs446 crore is expected to infuse this quarter… During this quarter we are planning to raise between Rs1,000-1,500 crore additional tier one capital and equal amount would be raised by way of tier two bonds,” said Melwyn Rego, managing director and chief executive of Bank of India.
In the September quarter, the bank had sold its 18% stake in Star Union Dai-ichi Life Insurance to Life Insurance Corp. of India, earning Rs495 crore pre-tax profit.
Other income increased 69% to Rs1,769.25 crore in the third quarter from Rs1,047.27 crore in the same period last year.
Slippages for the December quarter stood at Rs3,210 crore whereas recovery stood at Rs3,700 crore.
Gross non-performing assets (NPAs) at Bank of India declined 0.92% to Rs51,781.06 crore at the end of the December quarter from Rs52,261.95 crore in the September quarter. As a percentage of total loans, gross NPAs were 13.38% at the end of the December quarter compared with 13.45% in the previous quarter and 9.18% a year ago.
Provisions and contingencies increased marginally to Rs2,302.57 crore in the third quarter from Rs2,296.22 crore a quarter ago. Net NPAs rose to 7.09% in the December quarter compared with 7.56% in the previous quarter and 5.25% in the same quarter last year.