Bank of India(BoI) Q2 Net profit jumps 63% , asset quality improves

 

Bank of India’s (BoI) net profit during the second quarter of financial year 2024-25 (Q2 FY25) rose 63 per cent year-on-year (Y-o-Y) to Rs 2,374 crore, backed by a 49 per cent rise in non-interest income, including treasury gains and recoveries.

 

Sequentially, the Mumbai-based lender’s net profit increased by 39.4 per cent from Rs 1,703 crore in June 2024 (Q1 FY25). Its stock closed 0.63 per cent higher at Rs 112.25 per share on the BSE on Monday.

 

BoI’s net interest income (NII) expanded four per cent Y-o-Y to Rs 5,986 crore in Q2 FY25 compared to Rs 5,740 crore in the same quarter a year ago. Net interest margin (NIM) declined to 2.82 per cent in Q2 FY25 from 3.08 per cent in Q2 FY24. Sequentially, NIM declined from 3.07 per cent in Q1 FY25.

Referring to pressure on NII and margins, Rajneesh Karnatak, managing director and chief executive, BoI, said, “Corporate loans worth Rs 20,000 crore were paid off in July, and credit growth mostly happened in August and September. Now, disbursements have picked up, which will enhance NII and margins. NIMs will rise to 2.9 per cent by the end of FY25,” Karnatak said in a post-results virtual media interaction.

 

The bank’s non-interest income increased by 49 per cent Y-o-Y to Rs 2,518 crore. Gains from the sale and revaluation of investments grew multifold to Rs 730 crore in Q2 FY25 from Rs 81 crore in Q2 FY24. Recovery from written-off accounts grew 22 per cent Y-o-Y to Rs 685 crore, according to an analyst presentation.

The lender’s provisions for non-performing assets (NPAs) more than doubled to Rs 1,427 crore in Q2 FY25 compared to Rs 678 crore in Q2 FY24. The bank made Rs 200 crore in provisions for a lumpy telecom public sector unit (PSU) account that became an NPA.

Karnatak said the bank has a Rs 1,000 crore exposure to this telecom PSU account and is in dialogue with the management for resolution. The bank also front-loaded ageing provisions for accounts that had already become NPAs.

 

The asset quality profile improved, with gross NPAs declining to 4.41 per cent in September 2024 from 5.84 per cent in September 2023. Net NPAs also declined from 1.54 per cent in September 2023 to 0.94 per cent in September 2024. The provision coverage ratio (PCR), including written-off accounts, improved to 92.22 per cent in September, compared to 89.58 per cent a year ago.

Advances grew by 14.51 per cent Y-o-Y to Rs 6.21 trillion in Q2 FY25. Retail advances grew by 21.61 per cent Y-o-Y to Rs 1.21 trillion in September 2024. The bank expects overall credit growth to be 14 per cent in FY25, backed by a pipeline of sanctioned credit of Rs 70,000 crore in corporate, retail, agriculture, and micro, small, and medium enterprises (MSME) segments, he said.

 

Total deposits increased by 10.15 per cent Y-o-Y to Rs 7.75 trillion. The share of low-cost deposits — current account and savings account (CASA) — in domestic business declined to 41.18 per cent in September 2024 from 43.13 per cent a year ago.

The bank has guided for a 13 per cent growth in deposits for FY25 and will also raise Rs 5,000 crore through infrastructure bonds to finance credit.

 

The bank’s capital adequacy stood at 16.63 per cent, with common equity tier-1 at 13.52 per cent at the end of September 2024. The bank plans to raise debt capital of Rs 2,500 crore by issuing Tier-I bonds in the second half. There are no plans for raising equity capital, Karnatak added.

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BOI Cashier Accused of Rs 11 Lakh Embezzlement in Patna

 

Naresh Kumar, a cashier at the Bank of India branch on Gardanibagh Kalibari Road, Patna, has been accused of embezzling Rs 11.7 lakh. The incident came to light after Kumar fled the branch on the pretext of going to the toilet. Following the discovery, the branch manager, Vandana Ranjan, lodged a formal complaint with Gardanibagh police, who registered a case on October 14.

According to the complaint, the incident occurred on October 9 when a customer approached the branch requesting a withdrawal of Rs 10 lakh. Kumar, a resident of PC Colony in Kankarbagh, informed the customer that the branch did not have sufficient cash at the time. However, after checking the cash register, branch manager Ranjan found that the cash safe had enough funds and instructed Kumar to proceed with the payment.

In a sudden turn of events, Kumar told bank staff that he needed to use the toilet, leaving the keys to the cash cabin and cash safe behind. He then quietly fled the branch. Upon further inspection of the cash register, it was discovered that Rs 11.7 lakh were missing.

The police have launched an investigation, and the station house officer (SHO) confirmed that efforts are underway to track down the accused. “The case is under investigation, and the accused will be arrested once the inquiry is complete,” the SHO stated.

The incident has left bank staff and customers in shock, with authorities tightening security measures to prevent further such cases. This is a developing story and more details will be provided soon. 

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CBI Registers Case Against ZM and other officials of PSU bank in Corruption Case

The Central Bureau of Investigation (CBI) has filed a corruption complaint against three former senior Bank of India (BOI) officials in a recent development. The Lokpal, India's anti-corruption watchdog tasked with looking into claims of wrongdoing against officials of the central government, has directed this action.

Based on a complaint that had been made the previous year, the case was started following Lokpal's ruling on August 29. Lokpal gave the CBI instructions to look into three former BOI officers' and other unidentified people's possible involvement in a corruption offence. The chief manager of the Satara branch, the deputy zonal manager of the Kolhapur zone, and the previous zonal manager of the Kolhapur zone are the three authorities. The inquiry also includes any potential involvement from unidentified private citizens and official employees. In accordance with certain provisions of Indian law, the CBI filed a case, which included:

* Section 420 of the Indian Penal Code (IPC): This covers cheating and criminal conspiracy.Section 7 of the Prevention of Corruption Act: This focuses on the abuse of official position by public servants.

* These charges indicate serious allegations of misconduct, with the officials accused of abusing their positions for personal gain.

The complainant's and the accused public workers' identities must be kept private per the Lokpal's direction. This is compliant with the Lokpal (Complaint) Rules, 2020, which are designed to safeguard the parties' identities for as long as necessary to comply with legal requirements. This case highlights the continuous endeavors of anti-corruption organizations in India to make public servants responsible for their abuse of authority. In the upcoming days, more information should become available as a result of the investigation.

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Bank of India(BoI) Q1 net profit rises 10%

 

State-owned Bank of India (BoI) reported a 10 per cent year-on-year (YoY) growth in net profit for the quarter ending June 2024 (Q1FY25), aided by lower tax outgo. Its net profit for the quarter stood at Rs 1,703 crore, as against Rs 1,551 crore in the corresponding period a year ago.

Net interest income (NII) was up 6 per cent YoY to Rs 6,275 crore in Q1FY25, compared to Rs 5,915 crore in Q1FY24, aided by robust growth in advances. However, its non-interest income was down 12 per cent YoY to Rs 1,302 crore.

Its net interest margin – a measure of profitability of banks – stood at 3.07 per cent in Q1FY25, up 14 basis points (bps) from the preceding quarter.

Provisions of the lender increased 57 per cent on a YoY basis and declined 29 per cent sequentially in Q1FY25 to Rs 1,293 crore.

Gross slippages for the quarter stood at Rs 2,973 crore in Q1FY25, out of which Rs 1,056 was from the MSME sector, Rs 588 crore was from the retail portfolio, and Rs 737 crore was from the agriculture portfolio. Corporate slippages for the quarter stood at Rs 564 crore.

Gross Slippages in Q1FY25 was lower than Q4FY24 and Q1FY24. The bank had reported gross slippages to the tune of Rs 3,309 crore in Q4FY24, and Rs 4,030 crore in Q1FY24.

Asset quality of the lender improved, with gross non-performing assets (NPAs) ratio at 4.62 per cent in Q1FY25, down 36 bps from the preceding quarter. Net NPAs were also down 23 bps at 0.99 per cent in Q1FY25. Provision coverage ratio (PCR) of the lender improved to 92.11 per cent in Q1FY25, as against 90.59 per cent in Q4FY24.

Advances of the lender was up 15.82 per cent YoY and 2.50 per cent sequentially to Rs 6 trillion. And, deposits were up 9.91 per cent YoY and 2.89 per cent sequentially to 6.47 trillion during Q1FY25.

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Bank of India(BoI) Q4 net profit grows 7%, declares dividend

 

State-owned Bank of India on Friday (May 10) reported a 7% year-on-year (YoY) increase in net profit at ₹1,439 crore for the fourth quarter that ended March 31, 2024. In the corresponding quarter, Bank of India posted a net profit of ₹1,350 crore, the lender said in a regulatory filing.

Net interest income (NII), which is the difference between the interest income a bank earns from its lending activities and the interest it pays to depositors, increased by 7%, coming at ₹5,937 crore against ₹5,523 crore in the corresponding quarter of FY23.

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Bank of India's net interest margin (NIM) at a global level witnessed a decline, standing at 2.92% in Q4 of FY24, compared to 3.15% in Q4 of FY23. It was 2.85% in Q3 of FY24. Similarly, the NIM for the domestic segment also experienced a decrease, registering at 3.30% in Q4 of FY24, down from 3.59% in Q4 of FY23, but up from 3.21% in Q3 of FY24.

The global return on assets (RoA) dipped slightly to 0.61% in Q4 of FY24 from 0.63% in Q4 of FY23. The cost to income ratio at the global level rose to 53.73% in Q4 of FY24, compared to 51.48% in Q4 of FY23.

Bank of India’s yield on advances at a global level improved by 52 basis points (bps) year-on-year (YoY), reaching 8.47% in Q4 of FY24, up from 7.95% in Q4 of FY23. However, the cost of deposits witnessed a notable increase, standing at 4.71% in Q4 of FY24, compared to 3.91% in Q4 of FY23.

The global return on assets (RoA) dipped slightly to 0.61% in Q4 of FY24 from 0.63% in Q4 of FY23. The cost to income ratio at the global level rose to 53.73% in Q4 of FY24, compared to 51.48% in Q4 of FY23.

Bank of India’s yield on advances at a global level improved by 52 basis points (bps) year-on-year (YoY), reaching 8.47% in Q4 of FY24, up from 7.95% in Q4 of FY23. However, the cost of deposits witnessed a notable increase, standing at 4.71% in Q4 of FY24, compared to 3.91% in Q4 of FY23.

The board has recommended a dividend of ₹2.80 (i.e. 28%) per equity share  of face value of ₹10 each for the FY2023-24 subject to the approval of shareholders. 

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CBI files chargesheet against former CMD of PSU Bank

 The Central Bureau of Investigation (CBI) has filed a charge sheet against Alok Kumar Misra, the former chairman and managing director (CMD) of Bank of India (BOI) and Oriental Bank of Commerce (OBC), along with 33 other individuals and companies. This charge sheet is related to the alleged bank fraud committed by Dewan Housing Finance Ltd (DHFL), which is worth nearly ₹35,000 crore. The fraud was allegedly carried out by the Wadhawan brothers, Kapil and Dheeraj, who ran DHFL. The charge sheet also exonerates 49 other companies that were originally named as accused in the case.

According to the CBI, Alok Kumar Misra allegedly received a benefit of ₹1.5 crore from DHFL in the form of a discounted flat for his son in Mumbai. This benefit was allegedly given to him in exchange for sanctioning loans in his capacity as the head of BOI and OBC. Misra served as the CMD of BOI from 2009 to 2012 and OBC from 2007 to 2009.

The CBI’s investigation revealed that between January 2010 and December 2019, a consortium of 17 banks extended credit facilities worth ₹42,871 crore to DHFL. The Wadhawan brothers allegedly siphoned off the funds to shell companies known as ‘Bandra Book Entities,’ causing a loss of ₹34,926 crore to the consortium. 

The charge sheet also names other companies and individuals who helped the Wadhawan brothers divert funds.

It is important to note that the charge sheet against Alok Kumar Misra was filed after obtaining sanction under section 17A of the Prevention of Corruption Act, which is mandatory for investigating a public servant. However, a sanction under section 19 of the PC Act, which is mandatory for prosecuting a public servant, is still pending.

The charge sheet was taken cognizance of by a Delhi court on April 27.

During its investigation, the CBI found that out of the 131 companies originally named in the first information report (FIR) filed in June 2022, 49 companies were “genuine” borrowers without any bad intentions. These companies had entered into actual loan transactions with DHFL, following the necessary procedures and guidelines set by the Reserve Bank of India (RBI). 

The court has exonerated these companies from any criminal liability based on the CBI’s findings. The CBI has identified genuine loan transactions worth ₹13,425 crore, out of which ₹5,836 crore has already been repaid by these 49 companies to DHFL or the Resolution Professional.

The CBI has filed 2,70,000 pages of fresh documentary evidence in 20 trunks in the court, along with a list of 521 new witnesses to support its case against the accused.

It is worth mentioning that Alok Kumar Misra has held several high-level positions in the banking sector, including the chairman and managing director of Bank of India and Oriental Bank of Commerce.

The ownership of DHFL has changed since the bank fraud case came to light, as it was taken over and sold under India’s bankruptcy code.

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Gold Loan Fraud of Rs. 1.24 crore in PSU Bank

A significant gold loan fraud case was recently discovered at the Bank of India. In the Bank of India branch in Saraidhela, 28 individuals turned in 3.5 kg of phony gold in exchange for a Rs. 1.24 crore bank loan. A police report has been made against the business correspondent, gold valuer, and borrowers who were complicit in this fraud.

The accounts turned non-performing and the gold secured by the loan was revalued, which is when the issue was discovered. The fact that the gold being held in safe custody was counterfeit stunned the branch officers. Vishwa Pratap Singh, the senior branch manager, filed a police report at the Saraidhela station.

From January 2022 to January 2023, loans were made secured by counterfeit jewelry. Loan accounts quickly became non-performing assets (NPAs) due to non-payment by borrowers. The bank sent notifications to the loan holders to collect the unpaid balance in response to the circumstances. The loan holders received notice that if the installments were not deposited, their jewels would be put up for auction. When the loan holders ignored the notices, though, bank officials were taken aback.

In order to open the sealed packages containing the mortgaged valuables, a committee was established. The jewelry was reassessed and a video was completed. Reassessment revealed that the jewelry was, in fact, phony.

In March, the Reserve Bank of India had asked banks to share with it information on frauds reported in gold loans, actions taken by them to recover the money and defaults in the portfolio.

The RBI also asked banks to review their lending processes to check if they are in compliance with the regulator’s gold loan guidelines. The RBI sought this information after it found that employees of two state-run banks manipulated its system to meet gold loan targets.

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BoB, PNB among 6 PSU banks with high NPAs

Non Performing asset (NPA) is a loan or advance for which the principal or interest payment has remained overdue for a period of 90 days or more. According to data from Trendlyne, SBI, Bank of Baroda, and PNB are among the 6 PSU banks that reported the highest NPAs in Q3 of FY24. Here's the list:

Bank of India(BoI)

The net NPA of Bank of India stood at 1.41% in Q3FY24, which is the highest among PSU Banks. The PE ratio of the stock is 9.66. Bank of India has a market cap of Rs 61,870 crore.

Union bank of India

Union Bank of India reported a net NPA of 1.08% in Q3FY24. The PE ratio of the stock is 7.74. The firm's market cap is at Rs 1,02,773 crore.

Punjab National Bank (PNB)

Punjab National Bank (PNB) reported a net NPA of 0.96% in Q3FY24. The PE ratio of the stock is at 17.76. Punjab National Bank's market cap is at Rs 1,35,490 crore.

Bank of Baroda(BoB)

The net NPA ratio of Bank of Baroda stood at 0.7% in the December quarter of FY24. The PE ratio of the stock is 7.3. It has a market cap of Rs 1,38,153 crore.

State Bank of India (SBI) 

The net NPA ratio of the State Bank of India (SBI) stood at 0.64% in Q3FY24. The PE ratio of the stock is 10.26. SBI has a market cap of Rs 6,65,731 crore.

Indian Overseas Bank(IOB)

Indian Overseas Bank reported a net NPA of 0.62% in the December quarter of FY24. The PE ratio of the stock is at 50.36, while its market cap is at Rs 1,26,457 crore.

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