Bank of India Q1 result surprises as profit is up 8%, shares slump 9%
Gross bad loans as a percentage of total loans rose to 16.66% at end-June, from 16.58% in the previous quarter, and 13.05% a year ago
Bengaluru/Mumbai: Bank of India’s June quarter (Q1) profit rose 8.4% as the public sector bank recomputed tax provisions made a year earlier. Net profit was ₹ 95.11 crore ($13.86 million) in Q1 compared with ₹ 87.71 crore a year earlier, it said in a statement. Analysts, on average, were looking for a loss of ₹ 1,260 crore, according to estimates by Thomson Reuters I/B/E/S.
Bank of India’s income, however, fell to ₹ 10,842.96 crore, down 2.4%, from ₹ 11,106.61 crore in the year-ago period mainly due to a decline in income from “other sources” and lower interest from balances with Reserve Bank of India and other inter-bank funds. Interest income rose by ₹ 211.30 crore.
Gross bad loans as a percentage of total loans rose to 16.66% at end-June, from 16.58% in the previous quarter, and 13.05% a year ago. Non-performing assets (NPAs) held by India’s banks rose to ₹ 10.36 trillion at the end of March, the government said last week, with state-backed lenders accounting for more than 86% of the total NPAs.
A rise in bad loans also led to higher provisioning—at ₹ 2,259.66 crore during Q1 FY19 from ₹ 2,156.21 crore in the same period a year ago. Overall, the contingencies and provisions during the quarter increased to ₹ 2,564.19 crore from ₹ 2,245.28 crore year-ago first quarter.
Bank of India said its NPAs increased by ₹ 211.30 crore during the quarter as it changed the method of appropriation of recovery in bad loans. The provision coverage ratio of the bank as on 30 June 2018 is 66.67%.
On Tuesday, Bank of India shares fell 8.95%, or ₹ 9.25, to ₹ 94.15 on the BSE while the benchmark Sensex once again rose to a record high of 37,606.58 points, up 0.30%—or 112.18 points—from previous close.
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