BoI Q3 net up 60.8 pc at Rs 653 crore

MUMBAI: Public sector lender Bank of India (BoI) today posted a 60.80 per cent jump in net profit to Rs 653 crore for the December quarter, driven largely by the base effect and other factors like a rise in interest income.

The bank's net profit in the October-December period last year was Rs 406 crore.

The Mumbai-headquartered bank's Chairman and Managing Director, Alok Misra, attributed the jump in net profit to a 33 per cent rise in net interest income to Rs 1,987 crore.

In addition, the upgrade of two or three large corporate accounts involving advances of about Rs 600 crore, also resulted in lower provisioning for NPAs, at Rs 124 crore this quarter, compared to Rs 446 crore in the corresponding period of the previous year, which helped the bottomline, Misra said.

The bank's net non-performing assets (NPAs) were down to 0.88 per cent of its total loan liability in the reporting quarter, he said.

BoI's net interest margins widened to 3.09 per cent from 2.60 per cent in the year-ago period and it hopes to improve on the same in the next quarter, Misra said.

The statement assumes significance, as many of BoI's peers, especially those from the private sector like Axis Bank, are also concerned over margins in a scenario where the Reserve Bank is likely to tighten its key rates further.

The bank has been cautious while lending to the real estate and other high-risk sectors, Misra said, adding it is targeting an up to 22 per cent jump in lending and deposits in the fourth quarter.

The share of cheaper CASA (current and savings account) deposits improved to 32.49 per cent during the quarter, Misra said.

Going forward, the bank will focus on rural and semi-urban areas, increasing the CASA share and lending to SMEs, agriculture and retail customers, he added.