State-owned Bank of India has on Friday reported Rs 250 crore profit for the March quarter compared to a loss of Rs 3571 crore in the year ago period, thanks to lower provisions against bad loans.
The bank's net interest margin, a key profitability parameter, has fallen to 2.01% for the quarter as against 2.90%.
About 4.5 times lower provisions including those to cover bad loans saved the day for the bank. The bank made provisions of Rs 1831 crore during the quarter against Rs 8142 crore last time with improvement in asset quality over the one year period. Gross non-performing assets ratio stood at 13.77% at the end of March, compared with 14.78% a year back. The ratio however rose from December 2020's 13.25%.
Provisions coverage ratio however remained healthy at 86.24% compared with 83.75% over the same period.
The bank's advances shrunk 1.5% to Rs 4.1 lakh crore as of end of March, on account of contraction in overseas lending to Rs 48,075 crore from Rs 58,852 crore while dometic lending grew a modest 1.35 to Rs 3.6 lakh crore. The muted credit growth is largely due to 15% fall in corporate loan demand.
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